Task Order Protests: The Trek Toward Clarity On The Court of Federal Claims’ Jurisdiction

by Pillsbury Winthrop Shaw Pittman LLP

The United States Court of Federal Claims’ July 18, 2014 decision in Orbis Sibro, Inc. v. United States, represents one of the few straightforward decisions by the court in recent months relating to the court’s subject matter jurisdiction over protests of task or delivery order procurements. The court easily dismissed plaintiff’s complaint in that case for lack of jurisdiction, citing the general statutory prohibition on task and delivery order protests described below. In several recent decisions preceding Orbis, however, the court has accepted jurisdiction over protests related to task or delivery order procurements, despite the statutory prohibition. For example, earlier this year, in SRA International, Inc. v. United States, 114 Fed. Cl. 247 (2014), the court granted jurisdiction over a bid protest challenging a federal agency’s decision to waive an alleged organizational conflict of interest (“OCI”) in the context of a task order procurement. SRA and other decisions lay the groundwork for further challenges to adverse award decisions involving task and delivery orders. Orbis, by contrast, signals that the court remains mindful of its jurisdictional limitations. On balance, the law interpreting jurisdiction over task and delivery order protests remains somewhat unsettled.

Beginning in 1994, with the passage of the Federal Acquisition Streamlining Act (“FASA”), Congress placed statutory limitations on task and delivery order protests before the Government Accountability Office (“GAO”) and before the Court of Federal Claims – the limitations on the court’s jurisdiction being significantly broader. The Court of Federal Claims lacks jurisdiction over all protests “in connection with the issuance or proposed issuance” of task and delivery orders under Federal Acquisition Regulation Part 16, unless such orders increase the scope, period, or maximum value of the underlying prime contract. 41 U.S.C. § 4106(f); 10 U.S.C. § 2304c(e). GAO has exclusive jurisdiction over task and delivery order protests under FASA, but its jurisdiction is limited to protests in connection with task and delivery orders valued in excess of $10 million (including option periods). Thus, by statute, a protester would appear to have no recourse to protest a task or delivery order procurement at the Court of Federal Claims (unless the order increases the scope, period, or maximum value of the underlying contract).

Despite this general limitation on the Court of Federal Claims’ protest jurisdiction, in several recent instances the court nonetheless has accepted jurisdiction over protests related to task or delivery order procurements. In these cases, the court has traversed the statutory bar through interpretations of the phrase “in connection with” – holding that the protested actions were not “in connection with” the issuance or proposed issuance of the orders themselves. The SRA decision follows this trend.

The SRA Decision
SRA involved a procurement for a task order under the General Services Administration’s Alliant Government-Wide Acquisition Contract to provide network infrastructure support to the Federal Deposit Insurance Corporation (“FDIC”). SRA was the incumbent. After the government announced the award of the task order, SRA learned that one of the awardee’s proposed subcontractors had recently performed an FDIC contract to conduct audits of SRA’s network security, which SRA argued provided the proposed subcontractor “access to SRA’s proprietary information” and knowledge of “how the FDIC evaluated SRA’s work.”

Because the task order was valued at greater than $10 million, SRA filed a bid protest at GAO, alleging that the subcontractor suffered from an OCI based on both impaired objectivity and unequal access to information. Ultimately, several months after SRA filed its protest, the government announced that it had decided to waive the alleged OCI. GAO then dismissed SRA’s protest as academic. SRA subsequently filed a complaint in the Court of Federal Claims seeking, among other relief, an injunction and a declaration that the OCI waiver violated ethical standards set forth in the Administrative Procedure Act and FAR 9.503. Citing the FASA bar to task order procurements, the government moved to dismiss.

The court denied the motion and found that, while the government’s alleged unlawful conduct was related to the issuance of a task order, the conduct was not “in connection with” the issuance of a task order and, thus, FASA’s jurisdictional bar did not apply. Although the United States Court of Appeals for the Federal Circuit previously described the identical phrase “in connection with” in the Court of Federal Claims’ jurisdictional statute (the Tucker Act) as “very sweeping in scope,”1 SRA dismissed this characterization as mere “dicta” as it relates to the same phrase in FASA.

The Court of Federal Claims agreed with SRA that the conduct in question – the OCI waiver – was segregable from the issuance of the task order and represented an “independent, discretionary agency action.” The court emphasized the timing of the agency’s actions, stating that “the best evidence that the Waiver was not made ‘in connection with’ the award of the Task Order . . . is th[e] fact that the Waiver was issued well after the award.” The court also reasoned that, because the agency’s waiver was discretionary, it was not a “necessary step towards issuance of the task order.” As such, the court accepted jurisdiction. The court explained that “a careful analysis of the connectedness of each challenged procurement decision to the issuance or proposed issuance of a task order is required [in determining jurisdiction].”

Circumstances That Have Avoided The Statutory Bar To Jurisdiction
The SRA decision follows several others from the Court of Federal Claims that permitted task or delivery order protests despite the statutory bar. For example, the court has found that FASA does not preclude jurisdiction over a protest of: (1) an agency’s brand name justification because the agency “began the process of determining its need for [new services] long before it issued the delivery order” – McAfee, Inc. v. United States, 111 Fed. Cl. 696, 707 (2013); (2) an agency’s decision to cancel a solicitation, which the court viewed as “a discrete procurement decision and one which could have been the subject of a separate protest” – BayFirst Solutions, Inc. v. United States, 104 Fed. Cl. 493, 507 (2012) (noting that the case was a “close question” and that “the law is not entirely clear on the application of the task order protest ban”); (3) an agency’s failure to conduct a “rule of two” analysis before conducting a small business set-aside on a task order procurement – MORI Assocs. Inc. v. United States, 102 Fed. Cl. 503, 529 (2011); (4) a modification to an existing task order – Global Computer Enters. v. United States, 88 Fed. Cl. 350 (2009). (5) The court also has found jurisdiction where plaintiff alleged a breach of contract related to a task order procurement. See Digital Technologies, Inc. v. United States, 89 Fed. Cl. 711 (2009). In Digital, the plaintiff sought damages, alleging that the government breached plaintiff’s master indefinite delivery, indefinite quantity (“ID/IQ”) contract by engaging in conduct that denied plaintiff a fair opportunity to compete for task orders under the ID/IQ contract. The Government had argued, unsuccessfully, that plaintiff’s complaint was a bid protest “thinly disguised” as a contract dispute. Digital, 89 Fed. Cl. at 717.

The Orbis Decision And Other Barred Protests
Orbis, by contrast, involved the court’s straightforward application of the FASA jurisdictional bar. Orbis involved a bid protest challenging the award of a task order by the U.S. Department of the Navy (the “Navy”) under the Navy’s Seaport-e Program. The plaintiff in that case alleged that the Navy prejudicially misevaluated its proposal, as well as that of the awardee. Unlike in the foregoing cases, the court in Orbis did not identify any relevant exceptions to the FASA bar. Rather, the court stated that it held a hearing in which “the court reviewed the complaint with protestor’s counsel count by count and confirmed with counsel that each count alleged by Orbis was a challenge to the evaluation of the protestor’s submission in response to the Solicitation, or a related claim for declaratory and injunctive relief” and, thus, that “the claims filed by Orbis are not breach of contract claims of the umbrella contract, but are ‘straight bid protest.’”

More analytically complex decisions from the Court of Federal Claims also have evidenced a strict view of the statutory bar to task and delivery order jurisdiction at the court. Most notably, DataMill, Inc. v. United States, 91 Fed. Cl. 740, 759 (2010), held an agency’s decision to proceed with a sole-source procurement was “in connection with” the agency’s proposed issuance of a delivery order designed to effect that decision. In so holding, the court cited the same “sweeping” scope of the phrase “in connection with” that SRA minimized as dicta. Other decisions have followed DataMill and concluded a protester could not challenge an agency’s choice of task order vehicle – MORI Assocs., Inc. v. United States, 113 Fed. Cl. 33, 37-38 (2013) – or an agency’s corrective action on a task order procurement. Mission Essential Pers., LLC v. United States, 104 Fed. Cl. 170 (2012).

The Court of Federal Claims’ decisions, though far from uniform, demonstrate the court’s overall willingness to consider protests related to task and delivery order procurements, where distinctive facts or circumstances are alleged, despite the FASA bar. Certain decisions, including SRA, focus on the timing of the challenged conduct in the context of the overall procurement process and the direct causal connection between the challenged conduct and issuance or proposed issuance of a task or delivery order. Other decisions, however, apply a broad a definition of “in connection with” that largely obviates such an inquiry. Still other decisions seem to focus on the substance of the challenged conduct. The BayFirst decision, itself, cited a lack of clarity in the court’s application of the FASA bar. Because judges at the Court of Federal Claims are not bound by the decisions of their fellow judges, whether the court will accept jurisdiction in a given task or delivery order protest ultimately may depend in part on which judge is assigned to the case – at least until the Federal Circuit or Congress provides further guidance in this area.

It is important for contractors who compete for task and delivery orders to know that their protest remedies may not be foreclosed. Because the Court of Federal Claims decisions in this area are evolving and are heavily fact-specific, the presentation of those facts – and their juxtaposition with existing case law – will be critical in influencing the court’s perspective on jurisdiction.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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