Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-99-01314/USCOURTS-caDC-99-01314-0/pdf.json

Parties Involved:
Advanced Management Technology, Inc.
Petitioner
Federal Aviation Administration
Respondent
Jane F. Garvey
Respondent

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 6, 2000 Decided May 12, 2000

No. 99-1314

Advanced Management Technology, Inc.,

Petitioner

v.

Federal Aviation Administration and

Jane F. Garvey, Administrator,

Federal Aviation Administration,

Respondents

On Petition for Review of Orders of the

Federal Aviation Administration

Efrem M. Grail argued the cause for petitioner. With him

on the briefs was L. James D'Agostino. Leigh T. Hansson

entered an appearance.

Christine N. Kohl, Attorney, U.S. Department of Justice,

argued the cause for respondent. With her on the brief were

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David W. Ogden, Acting Assistant Attorney General, and

Anthony J. Steinmeyer, Attorney.

Before: Silberman, Williams and Sentelle, Circuit Judges.

Opinion for the Court filed by Circuit Judge Williams.

Williams, Circuit Judge: In 1998 the Federal Aviation

Administration ("FAA") adopted a subordinate office's findings that petitioner Advanced Management Technology, Inc.

("AMTI") had made misrepresentations in a bid proceeding in

which AMTI eventually won a multi-million dollar contract.

Because of the misrepresentations, the bidding was reopened.

But because the FAA believed AMTI had not intended to

defraud the government, it allowed AMTI to compete in the

new round--in which AMTI again won the contract. AMTI

has no desire to relinquish the new contract in favor of the

old one, but still seeks a reversal of the earlier findings or a

new hearing with different procedures. We dismiss the

petition for want of standing.

* * *

In August 1996 the FAA began procurement of a technical

assistance contract for work with the Global Positioning

System. A group of contractors, bound by a May 1996

"teaming agreement" and including AMTI, responded. Fellow teammates were Innovative Solutions International

("ISI") and Overlook Systems Technologies, Inc. ("Overlook"). Overlook was "team leader." Over the next year and

a half, AMTI's teammates fluctuated in number and identity.

In January 1998 the FAA issued its Request for Offers.

AMTI, now the team leader of a reconstituted group, submitted a proposal under which it would serve as the prime

contractor and Overlook would be one of three subcontractors.

AMTI represented in its offer that it had "entered into

teaming Agreements with Overlook, ISI, and Zeta that establish goals for each subcontractor's participation in work efforts on [the contract]." The agreement referred to was the

May 1996 agreement, not a new one. AMTI further offered a

chart with proposed work allocation percentages among the

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subcontractors, including Overlook, and identified key personnel from Overlook whose services would be used. The FAA

found AMTI's proposal the best value. It nonetheless negotiated with AMTI further in a quest for better terms. On May

8, 1998 AMTI submitted its "best and final offer," known in

the trade as a BAFO. This offer assured FAA that there

were no material changes in personnel availability (i.e., it

implicitly assured the FAA that key Overlook personnel

would be used), and also warranted that it had successfully

negotiated revised rates with subcontractors.

AMTI failed to mention that on April 16 Overlook had

provided AMTI its best and final offer with respect to

Overlook's labor rates--an offer quite inconsistent with

AMTI's May 8 offer to the FAA. Whereas Overlook had

offered to participate at a specified compensation rate on

condition that it receive "approximately 33 percent" of the

contract, AMTI's offer included Overlook's staffing at that

compensation rate but at less than half the usage rate on

which Overlook had conditioned its agreement. AMTI's

counsel would later attempt to justify this fact to the FAA's

Office of Dispute Resolution for Acquisition ("Dispute Resolution Office") as follows:

[B]ecause AMTI is a small, minority, woman-owned business, it quite simply could not afford to just cover the

additional expense of the Overlook personnel.... Overlook refused to lower the rates for its staff and thus,

AMTI was forced to make a business decision: AMTI

could bid all [SEALED] of Overlook's people at the

[SEALED] multiplier and lose the contract, or AMTI

could cut the number of Overlook's positions, and bid

them at the higher rates. AMTI could not discuss this

with Overlook, however, because no one at Overlook was

available to make the decision.

On June 2, 1998 the FAA awarded AMTI the contract.

Negotiations with Overlook continued, ultimately breaking

down on June 29 with Overlook's withdrawal from the project.

Meanwhile, competing bidders Camber Corporation and Information Systems & Networks Corporation filed bid protests, alleging among other things "bait and switch"--that

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AMTI had misrepresented the availability of key personnel.

Apparently the bid protests were fueled in no small part with

inside information from Overlook. FAA referred the protests

to its Dispute Resolution Office.

The FAA eventually adopted the findings of that office,

concluding that "the use AMTI made of Overlook's April 16,

1998 rates and its highly qualified key personnel was completely unauthorized. AMTI proceeded to use those rates

and personnel with no assurance that, once Overlook discovered what AMTI had done, Overlook would still make those

critical individuals available[.]" Protests of Camber Corporation and Information Systems & Networks Corporation Under Solicitation No. DTFA01-[96]-R-11087, Docket Nos.

98-ODRA-00079 et al., at 36 (Sept. 3, 1998). The FAA then

ordered the bid process reopened. AMTI was allowed to

continue performing under the original contract in the interim. It was also allowed to recompete for the contract, as the

FAA found no "actual intent to defraud the Government."

Id. at 77. The FAA denied AMTI's motion for reconsideration, and AMTI petitioned for review here.

In the meantime, AMTI re-bid and won the contract. In

fact, the second award was more lucrative than the first.

AMTI nonetheless argues that it was the victim of findings

unsupported by substantial evidence and contrary to law, and

that it was subjected to a dispute resolution procedure (the

hearing before the Dispute Resolution Office) which violated

statutory authority1 and constitutional due process. But

AMTI does not ask us to restore the first contract. Rather,

it seeks mere reversal of the FAA's findings, or in the

alternative a remand to the FAA for a hearing that satisfies

statutory and constitutional standards.

* * *

The FAA challenges AMTI's standing, arguing that because AMTI is currently performing under a more lucrative

__________

1 The authority at issue is s 348 of the Department of Transportation and Related Agencies Appropriations Act, 1996, Pub. L.

No. 104-50, 109 Stat. 460 (1995).

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contract, it can't really be injured. The claim may sound like

one of mootness--a justiciable controversy existed but no

longer remains--but the timing makes AMTI's problem one

of standing. AMTI was awarded the second contract on June

24, 1999, before either the FAA's denial of reconsideration or

AMTI's filing the present petition for review (July 30, 1999).

Standing is assessed "at the time the action commences,"

Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., ___ U.S. ___, 120 S. Ct. 693, 709-10 (2000),

i.e., in this case, at the time AMTI sought relief from an

Article III court, when AMTI held the more lucrative second

contract.

Contrary to AMTI's assumptions, Article III courts do not

ordinarily have jurisdiction to issue, as the Seventh Circuit

has put it, "Writs of Erasure" to administrative agencies or

district courts to cleanse their opinions of material distressing

to winners. United States v. Accra Pac, Inc., 173 F.3d 630,

632 (7th Cir. 1999). AMTI "must show (1) it has suffered an

'injury in fact' that is (a) concrete and particularized and (b)

actual or imminent, not conjectural or hypothetical; (2) the

injury is fairly traceable to the challenged action of the

defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Friends of the Earth, 120 S. Ct. at 704. AMTI claims

reputational injury, monetary injury from the costs of litigation and rebidding, and injury to its right to a legally valid

procurement process.

1. Reputational Injury

AMTI says the FAA branded it a "fraud" and a "liar."

With this (mis)characterization of the FAA's findings, AMTI

seeks to bring itself within the reach of reputational injury

cases such as Meese v. Keene, 481 U.S. 465 (1987). See also

Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S.

123 (1951); Southern Mutual Help Ass'n, Inc. v. Califano,

574 F.2d 518 (D.C. Cir. 1977) ("SMHA"); Old Dominion

Dairy Products, Inc. v. Secretary of Defense, 631 F.2d 953

(D.C. Cir. 1980).

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Standing cannot be "inferred argumentatively" but rather

"must affirmatively appear in the record." Spencer v. Kemna, 523 U.S. 1, 10-11 (1998) (internal quotations omitted). All

that affirmatively appears here is AMTI's vast exaggeration

of the FAA's findings; we have no allegations, much less

evidence, as to their present or future consequences. The

FAA specifically declined to find any intent to defraud; a

"bait and switch" finding can be made solely on negligent

misrepresentations. AMTI notes that the October 5, 1998

issue of Federal Contracts Reports, which relayed the FAA's

decision to the field, quoted a remark of counsel for the

Camber Corporation that the order "vindicates the basic

principle that you can't lie to the government to get a

contract." But the government as adjudicator can hardly be

held responsible for the gloatings of a triumphant advocate.

AMTI offered no evidence that the FAA's findings cast any

shadow over its business activities, and the "all is forgiven"

message implicit in FAA's re-award of the contract suggests

the improbability of such a shadow.

With this sparse record, we need not probe the subtle

boundaries of precedent. In Meese v. Keene, for instance, the

Court found on the basis of survey data and expert affidavits

that if plaintiff were to exhibit certain imported films under

the government's mandatory label of "political propaganda,"

"his personal, political, and professional reputation would

suffer and his ability to obtain re-election and to practice his

profession would be impaired." 481 U.S. at 473-74 (internal

quotation marks omitted). In SMHA a grantor agency had

prematurely terminated plaintiff grantee's multi-year grant,

accompanying the termination with a scathing audit. Though

the termination itself--which we found required a hearing

under the agency's regulations--was surely enough, we

stressed the severity of the agency's condemnation of plaintiff

and the overwhelming probability that future applications

would receive an "inhospitable reception." 574 F.2d at 524.

Old Dominion Dairy Products similarly involved devastating

findings with present and future preclusion from Government

work. 631 F.2d at 955, 964. Cf. Kartseva v. Department of

State, 37 F.3d 1524, 1528 (D.C. Cir. 1994) (reviewing due

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process merits issue when government may have "automatically" precluded plaintiff from future jobs).

AMTI has not begun to show the likelihood of injury from

the FAA's characterizations of its conduct. Charitably, the

injury is "speculative"--the ultimate label for injuries too

implausible to support standing. See Alamo v. Clay, 137

F.3d 1366, 1370 (D.C. Cir. 1998); J. Roderick MacArthur

Foundation v. FBI, 102 F.3d 600, 606 (D.C. Cir. 1996). And

reputational injury alone would not get AMTI very far in

seeking a new hearing subject to constitutional due process.

See Siegert v. Gilley, 500 U.S. 226, 233 (1991) ("Defamation,

by itself, is a tort actionable under the laws of most States,

but not a constitutional deprivation."). As we shall see,

AMTI has nothing more.

2. Monetary Injury

AMTI asserts several different monetary injuries: litigation costs in the Dispute Resolution Office proceeding, costs

of rebidding, and litigation costs in defending a qui tam

lawsuit in the eastern district of Virginia allegedly spawned

by the proceeding at FAA. AMTI has offered no detail for

any of these costs, which may well be more than offset by the

award of the more lucrative second contract. But even if

AMTI has concrete and particularized monetary injuries, and

if they are fairly traceable to the FAA and its Dispute

Resolution Office,2 AMTI has only one theory of redressability: the Equal Access to Justice Act ("EAJA"), 28 U.S.C.

s 2412. According to AMTI, if we reverse the FAA, thereby

making AMTI a "prevailing party" under EAJA, AMTI can

recover some of its litigation expenses.

__________

2 AMTI states that the "sole genesis" of the qui tam action was

the Dispute Resolution Office's "finding of a fraudulent 'bait and

switch.' " If so, this seems to mark the qui tam action as frivolous

on its face since the False Claims Act bars actions solely "based

upon" public disclosures in administrative hearings. See 31 U.S.C.

s 3730(e)(4)(A); United States ex rel. Findley v. FPC-Boron Employees' Club, 105 F.3d 675 (D.C. Cir. 1997); United States ex rel.

Siller v. Becton Dickinson & Co., 21 F.3d 1339, 1347-48 (4th Cir.

1994).

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Under AMTI's theory anyone meeting EAJA's wealth limits would have constitutional standing (although often not

prudential standing) in relation to any government decision:

if they prevailed, they might recover attorneys' fees for

reversing the agency's action. EAJA does not work this way.

EAJA allows recovery of costs for prevailing parties in "judicial review of agency action," 28 U.S.C. s 2412(d)(1)(A), but

the party must first prevail in a "court having jurisdiction of

that action," id. In other words, there must be standing and

otherwise proper subject matter jurisdiction for the underlying action; EAJA is not a highway to federal court for

anyone wishing to uphold the rule of law. See Democratic

Senatorial Campaign Committee v. FEC, 139 F.3d 951, 953

(D.C. Cir. 1998); Lane v. United States, 727 F.2d 18, 20-21

(1st Cir. 1984). As the only means identified by AMTI for

recovery of costs is a non-starter, this injury--assuming it

exists at all on a net basis--is not redressable.

3. Right to a Legal Procurement Process

AMTI asserts finally that the FAA's creation and use of its

Dispute Resolution Office deprives AMTI of its "right to a

legally valid procurement process." National Maritime Union of America, AFL-CIO v. Commander, Military Sealift

Command, 824 F.2d 1228, 1237 (D.C. Cir. 1987). As a purely

backward-looking claim, this adds nothing to the prior discussion. AMTI has identified no past injury that is within the

power of the court to redress. Compare Lujan v. Defenders

of Wildlife, 504 U.S. 555, 573 n.8 (1992) (allowing parties

standing to enforce a procedural norm "designed to protect

some threatened concrete interest").

As a forward-looking claim it fares no better. If AMTI had

alleged that it expected to seek future FAA contracts and

likely would re-encounter the offending procedure, that claim

might provide it the necessary concrete interest in removing

the alleged procedural flaw. In Scheduled Airlines Traffic

Offices, Inc. v. Department of Defense, 87 F.3d 1356, 1358-59

(D.C. Cir. 1996), we found standing for a winning bidder--but

only because it intended to bid on future similar contracts and

raised legal claims against substantive rules that it thought

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were biased against its success. Not only does AMTI not

mention future bidding plans, but the procedures to which it

objects are ones triggered only by specified bidding disputes.

AMTI does no more to show a likelihood of being subjected to

these procedures than the plaintiff in Los Angeles v. Lyons,

461 U.S. 95, 105 (1983), showed a likelihood of being subjected

to future chokeholds. See also Spencer, 523 U.S. at 15-16

(dismissing as "purely a matter of speculation" whether the

petitioner would in the future appear as a civil or criminal

witness and have his parole revocation used against him).

* * *

The petition for review is

Dismissed.

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