Law360, New York (April 24, 2014, 11:57 AM ET) -- In a pair of recent decisions, the U.S. Court of Federal Claims clarified the source of its jurisdiction over bid protest actions that involve pure concession contracts as well as the scope of potential relief available to concession-contract protesters. See Jordan Pond Company, LLC v. United States, Case No. 13-913 C (Apr. 8, 2014); Eco Tour Adventures, Inc. v. United States, 114 Fed. Cl. 6 (2013).
These cases make clear that the jurisdictional basis for bid protests involving pure concession contracts is Section 1491(a)(1) of the Tucker Act, which permits suits alleging breach of the government’s implied duty to fairly and honestly consider proposals, and not Section 1491(b)(1), which is the source of the court’s jurisdiction over challenges to traditional procurement contract competitions.
The identity of the statutory source of the court’s jurisdiction over concession-contract protests is significant because it dictates the scope of potential remedies available to protesters. Given that the court now has held twice that its jurisdiction over concession-contract protests arises under Section 1491(a)(1), and not Section 1491(b)(1), it would appear to be the case that concession-contract protesters generally are not entitled to declaratory or injunctive relief. Instead, concession-contract protesters generally will be limited to recovering bid preparation and proposal costs.
The contract at issue in Jordan Pond was a 10-year concession contract to provide various concession services at Acadia National Park in Maine, including a restaurant and shop at Jordan Pond House. Jordan Pond had been the concessioner at Acadia since 1932, and its most recent concession contract was due to expire at the end of December of 2012. In July 2012, the U.S. Department of the Interior, National Park Service issued a prospectus, seeking offers for the next 10-year concession contract at Acadia. The Park Service received proposals in November 2012. In September 2013, the Park Service advised Jordan Pond that it had selected another company for award.
Thereafter, Jordan Pond filed a bid protest with the U.S. Court of Federal Claims, challenging various aspects of the Park Service’s evaluation of the offerors’ proposals. Before turning to the merits of Jordan Pond’s claims, the court analyzed the source of its jurisdiction in this particular case. The court’s jurisdictional analysis relied heavily on its earlier analysis in Eco Tour.
In Eco Tour, the court explained that Section 1491(b)(1) grants the court jurisdiction “to render judgment on an action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” Thus, whether the court has jurisdiction under Section 1491(b)(1) depends on whether the solicitation at issue involves a “procurement.”
The court in Eco Tour further explained that, although Section 1491(b) does not define the term “procurement,” the U.S. Court of Federal Claims has held in nonbid-protest contexts that concession contracts are not procurement contracts. Among the reasons that concession contracts technically are not procurement contracts, according to the court, is that under pure concession contracts, “the government does not make payments to the contractor in exchange for the provision of goods or services to the government; instead, concessioners pay the government a fee for the privilege of charging the public for services provided to the public.”
In other words, “[t]he essence of [Park Service concession] contracts is not the acquisition of goods or services by the government, but the grant, for a fee, of certain rights to private contractors.” Given that the contract at issue was a pure concession contract, the court concluded that the contract was not a procurement contract and, consequently, that the court lacked jurisdiction over the bid protest under Section 1491(b).
After determining that jurisdiction did not exist under Section 1491(b), the court in Eco Tour examined Eco Tour’s argument that the court possesses jurisdiction over bid protests involving pure concession contracts under Section 1491(a), which states, in pertinent part:
The United States Court of Federal Claims shall have jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort. For the purpose of this paragraph, an express or implied contract with the Army and Air Force Exchange Service, Navy Exchanges, Marine Corps Exchanges, Coast Guard Exchanges, or Exchange Councils of the National Aeronautics and Space Administration shall be considered an express or implied contract with the United States.
28 U.S.C. § 1491(a)(1). Relying on the U.S. Court of Appeals for the Federal Circuit’s oft-cited decision in Resource Conservation Group LLC v. United States, 597 F.3d 1238 (Fed. Cir. 2010), the Eco Tour court concluded that implied-in-fact contract jurisdiction over pure concession contracts exists under Section 1491(a), because Section 1491(b) does not provide a remedy.
The plaintiff in Jordan Pond attempted, to no avail, to distinguish the concession contract at issue in Eco Tour from the one at hand in its case. The court rejected both the plaintiff’s reliance on the jurisdictional analyses of certain Interior Board of Contract Appeals and Government Accountability Office cases, as well as its attempt to argue that the concession contract at hand is a “mixed transaction” contract that encompasses both a procurement of services for the Park Service and the operation of a concession that provides funding to the Park Service. According to the Jordan Pond court, “maintenance of the concession building in Acadia is better characterized as a condition of the opportunity to operate the concession rather than as separate services provided to the Park Service.”
After rejecting the plaintiff’s arguments as to why jurisdiction properly lies under Section 1491(b), the court in Jordan Pond found, for the reasons articulated in Eco Tour, that jurisdiction exists exclusively under Section 1491(a). As such, the court concluded that Jordan Pond’s recovery (if any) was limited to bid preparation and proposal costs. The court went on to reject Jordan Pond’s arguments on the merits of the case as well, finding that Jordan Pond failed to show “that the Park Service’s selection decision was arbitrary, capricious, or an abuse of discretion, or that Jordan Pond was prejudiced by any evaluation errors or procedural flaws in the evaluation process.”
The U.S. Court of Federal Claims’ recent decisions in Jordan Pond and Eco Tour are noteworthy, then, because they make plain that the jurisdictional basis for bid protests involving pure concession contracts is Section 1491(a)(1) of the Tucker Act, and not Section 1491(b)(1). This fact is significant because it places significant limits on the potential remedies available to concession-contract protesters as compared to those remedies available to protestors challenging traditional procurement contract awards.
Regardless of whether or not the distinction between federal procurement contracts and federal concession contracts is fair, the reality is that this distinction has practical consequences for federal concession-contract protesters that bring suit at the court.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
 Jordan Pond’s incumbent contract eventually was extended through 2013.
 Senior Judge Bush presided over both Eco Tour and Jordan Pond.
 Eco Tour, 114 Fed. Cl. at 19 (citing 28 U.S.C. § 1491(b)(1)) (emphasis added by the court). 28 U.S.C. § 1491(b)(1) states:
Both the Unites [sic] States Court of Federal Claims and the district courts of the United States shall have jurisdiction to render judgment on an action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement. Both the United States Court of Federal Claims and the district courts of the United States shall have jurisdiction to entertain such an action without regard to whether suit is instituted before or after the contract is awarded.
 Eco Tour, 114 Fed. Cl. at 21.
 Jordan Pond, Case No. 13-913 C at 8.
 Id. at 35.
Republished with permission. This article first appeared in Law360 on April 24, 2014.