# In th e United States Court of Federal Cl aims

No. 18-433C (F iled: March 28, 2018)

************************************* ACETRI S HEAL TH, L L C, * Preaward B id Protest; Motion for a

* Temporary

Restraining Order and a Plaintiff, * Preliminary I njunction; Contract to Provide

* Entecavir Tablets; Procuring Ag ency

v. * I nterpretation of Solicitation’s Trade

* Ag reements Clause; Country -of-Orig in THE UNI TED STATES, * Determination; Ex c lusive J urisdiction of the

* United States Court of I n ternational Trade Defendant. *

*************************************

Stephen E. Ruscus, W ashing ton, DC, for plaintiff.

Daniel B . Volk, United States Department of Justice, W ashing ton, DC, for defendant.

OP INION AND ORDER

SWEENEY , J udg e

I n this preaward bid protest, filed on March 23, 2018, plaintiff Acetris Health, L L C challeng es the United States Department of Veterans Affairs’ (“VA”) interpretation of the Trade Ag reements clause–section 52.225-5 of the F e deral Acquisition Regulation (“F AR”)–included in the VA’s solicitation to purchase Entecavir Tablets, one of the few medications approved by the United States F ood and Drug Administration to treat chronic hepatitis B

. 1 Plaintiff contends that under the VA’s erroneous interpretation of the clause, the VA would not accept the Entecavir Tablets that plaintiff supplies to the VA under the incumbent contract.

Given the March 28, 2018 deadline for submitting proposals under the solicitation, plaintiff filed, alongwith its complaint, a motion for a temporary restrainingorder and a preliminary

injunction. I n that motion, plaintiff seeks to enjoin the VA from proceeding with the procurement using

its current interpretation of the Trade Ag reements clause. 2 B ecause defendant

1 The contract resulting

from the solicitation would provide a source of Entecavir for the VA, the United States Department of Defense, the F ederal B ureau of Prisons, and the I ndian Health Service.

2 Specifically , plaintiff seeks to enjoin the VA from (1) “interpreting the [ Trade Ag reements] Clause of the Solicitation as prohibiting purchase of U.S.-made productsrepresented to the court that the VA would not ag ree to stay

the proposal submission deadline or otherwise delay

the procurement, it is necessary for the court to rule on plaintiff’s motion. Defendant filed a combined motion to dismiss and response to plaintiff’s motion on March 27, 2018, and the court heard arg ument on March 28, 2018.

I. LEG AL STANDARD

The United States Court of F ederal Claims has the authority to award injunctive relief pursuant to 28 U.S.C. § 1491(b)(2), and is g uided in making such an award by Rule 65 of the Rules of the United States Court of F ederal Claims (“RCF C”). “[ T] he factors considered in ruling on a temporary

restraining order mirror those on motions for a preliminary injunction . . . .” 11A Charles A. W rig ht et al., F ederal Practice and Procedure § 2951 (3d ed. 2013). I n fact, when, as here, a party seeks both a temporary restrainingorder and a preliminary injunction, the opposing party

has notice of the application for a temporary restrainingorder, and the court conducts an adversarial hearing
, any temporary

restrainingorder that issues pursuant to RCF C 65(b) is akin to a preliminary injunction. See id. Thus, in ruling on plaintiff’s motion, the court will consider whether (1) plaintiff is likely to succeed on the merits; (2) plaintiff will suffer irreparable harm if the court withholds injunctive relief; (3) the balance of hardships favors the g rant of injunctive relief; and (4) it is in the public interest to g r ant injunctive relief. U.S. Ass’n of I mps. of Tex tiles & Apparel v. United States, 413 F .3d 1344, 1346 (F e d. Cir. 2005); PGB A, L L C v. United States, 389 F

. 3d 1219, 1228-29 (F ed. Cir. 2004); accord W inter v. Nat. Res. Def. Council, I nc., 555 U.S. 7, 20 (2008). None of the four factors, taken individually
, is dispositive, and a “weakness of the showing reg a rding one factor may

be overborne by

the streng th of the others.” F MC Corp. v. United States, 3 F .3d 424, 427 (F ed. Cir. 1993). Conversely , “the absence of any

one factor may

be sufficient” to deny

preliminary

injunctive relief. I d.

Ultimately , preliminary

injunctive relief is an ex traordinary and drastic remedy . I d.; Maz urek v. Armstrong , 520 U.S. 968, 972 (1997) (per curiam). Nevertheless, the decision to award such relief is within the discretion of the court. F MC Corp., 3 F .3d at 427. “W hen injunctive relief is warranted, it will only be issued upon a showing by a preponderance of the admissible evidence.” Tex tron, I nc. v. United States, 74 F ed. Cl. 277, 287 (2006).

manufactured in the U.S., including [ plaintiff’s] Entecavir Tablets”; (2) “proceeding with the contemplated procurement throug h a Solicitation that mandates rejection of any offer for which the manufacturer has not certified [ Trade Agreements Act] compliance where the offered product is a U.S.-made product manufactured in the United States,” and (3) “rely ing solely on [ United States Customs and B order Protection (“CB P”)] to interpret the [ Trade Ag reements] Clause and refusing to interpret and g ive full effect to the definition of U.S.-made end product in the [ Trade Ag reements] Clause and the first alternative criterion under that definition: the product is manufactured in the United States.” Compl. 24-25.

-2-II. DISCUSSION

A . Likelihood of

Success on the Merits

To prevail on its motion for preliminary injunctive relief, plaintiff must establish that it is likely to succeed on the merits of its bid protest. Plaintiff asserts three claims in its complaint. I ts first claim concerns the VA’s interpretation of the Trade Ag reements clause. The clause requires the contract awardee to “deliver . . . only U.S.-made or designated country end products,” and defines a “U.S.-made end product” as “an article that is . . . manufactured in the United States or that is substantially transformed in the United States.” F A R 52.225-5(b). According to plaintiff, the VA improperly interprets the Trade Ag

reements clause to prohibit the purchase of its Entecavir Tablets, which, plaintiff asserts, are manufactured in the United States. Plaintiff’s second claim concerns the following solicitation provision: “Manufacturers must also certify whether or not the end product offered in response to this solicitation is [ T r ade Ag reements Act] compliant. Offers that fail to meet this requirement before contract award shall be rejected and shall receive no further consideration.” Solicitation 51. Plaintiff contends that this provision improperly restricts offerors to proposing products from Trade Ag

r eements Act countries, thereby

precludingofferors from proposing products manufactured in the United States–a non-Trade Ag

reements Act country . I n its third claim, plaintiff alleg es that the VA is improperly

deferring to CB P to interpret the Trade Ag r eements clause, and instead should make its own determination reg arding whether a product is “manufactured in the United States” such that it qualifies as a “U.S.-made end product.”

As an initial matter, the court notes that its bid protest jurisdiction is limited to resolving disputes “in connection with a procurement or a proposed procurement,” 28 U.S.C. § 1491(b)(1) (2012), and does not ex tend to the resolution of disputes reg arding the administration of ex isting or prior contracts, see, e.g

. , Coast Prof’l, I nc. v. United States, 828 F .3d 1349, 1355 (F ed. Cir. 2016); Gov’t Tech. Servs. L L C v. United States, 90 F ed. Cl. 522, 527 (2009) (“The F ederal Circuit has made it cry stal clear that the [ Contract Disputes Act of 1978] is the ‘ex c lusive mechanism’ for the resolution of disputes arising , as here, in contract manag ement.”). Here, the basis for a portion–if not the entirety –of plaintiff’s first and third claims is the events that occurred during

the VA’s administration of the ex isting Entecavir Tablets contract. During its administration of that contract, which is ong oing
, 3 the VA questioned whether the Entecavir Tablets supplied by

plaintiff complied with the contract’s requirements, requested that plaintiff seek a determination from CB P reg arding the country of orig in of its Entecavir Tablets, received CB P’s determination that the country of orig in of plaintiff’s Entecavir Tablets was I ndia, and relied on that country -of-orig in determination in advising plaintiff that it would initiate default termination proceeding s if plaintiff did not obtain another source of Entecavir Tablets. None of these actions can be challeng ed in this bid protest. Moreover, plaintiff has challeng ed CB P’s country -of-orig in determination at the United States Court of I n ternational Trade and, as defendant notes, that court possesses ex clusive jurisdiction to entertain challeng es to such

3 The initial term of the contract ex pires on April 12, 2018.

-3-determinations by CB P. 4 28 U.S.C. § 1581(e) (“The Court of I n ternational Trade shall have

ex c lusive jurisdiction of any civil action commenced to review any final determination . . . under section 305(b)(1) of the Trade Ag reements Act of 1979[ , which is codified at 19 U.S.C. § 2515(b)(1)] .”). Plaintiff may not use this bid protest as a back door to challeng e CB P’s conclusion–adopted by

the VA–that plaintiff’s Entecavir Tablets were not manufactured in the United States. 5 I n short, the court finds it likely that it lacks jurisdiction under 28 U.S.C. § 1491(b)(1) to consider plaintiff’s first and third claims.

I n contrast, plaintiff’s second claim–that a provision in the solicitation improperly restricts offerors to proposing products from Trade Ag

reements Act countries and precludes offerors from proposing

products manufactured in the United States–may b e viable. In essence, plaintiff is arg u ing that the provision at issue conflicts with the solicitation’s Trade Ag reements clause and Trade Ag

r eements Certificate, both of which allow for the provision of “U.S.-made end products.” Alleg ed patent ambiguities within a solicitation are properly raised in a preaward bid protest. See Per Aarsleff A/S v. United States, 829 F .3d 1303, 1315 (F e d. Cir. 2016) (“A patent defect trig g ers the oblig ation to challeng e the solicitation lang u ag e and failure to do so g enerally constitutes waiver.”); B lue & Gold F leet, L .P. v. United States, 492 F

. 3d 1308, 1313 (F ed. Cir. 2007) (“[ A] party who has the opportunity

to object to the terms of a g overnment solicitation containing a patent error and fails to do so prior to the close of the bidding process

4 During oral arg

ument, the court asked the parties whether 28 U.S.C. § 1500 would preclude it from entertaining plaintiff’s claims. Plaintiff responded that its claims before the United States Court of I nternational Trade were different from its claims in this court. Defendant responded that 28 U.S.C. § 1500 mig ht be implicated in this case, but that it could not be certain without further research. The parties shall address the applicability of 28 U.S.C. § 1500 in subsequent briefing

.

5 I n its country

- of-orig in determination, CB P provided:

I n addition, y ou asked whether the Entecavir tablets are “manufactured in the United States” within the meaning of the term “U.S.-made end products”, as set forth in [ F AR 25.003] , and implemented in [ F AR] 52.225-5. As stated in 19 C.F .R. § 177.21, subpart B [ o f 19 C.F .R. part 177] is intended to be applied consistent with the [ F AR] . The definition of country of orig in in subpart B , 19 C.F .R. § 177.22(a)[ ,] has two rules (see above) as does [ F AR] 25.003. The term ‘‘manufactured in the United States” in [ F AR] 25.003 correlates to the first rule of 19 C.F .R. § 177.22(a) which provides that an article is a product of a country or instrumentality if “it is wholly the g rowth, product, or manufacture of that country or instrumentality ”. Since the production of Entecavir tablets partially occurs in I ndia, we do not find that they are manufactured in the United States.

Notice of I ssuance of F inal Determinations Concerning Certain Pharmaceutical Products, 83 F ed. Reg . 5118, 5133 (F eb. 5, 2018).

-4-waives its ability to raise the same objection in a bid protest action in the Court of F ederal Claims.”).

The provision challeng ed by plaintiff as inconsistent with the solicitations Trade Ag reements clause and Trade Ag r eements Certificate requires an offeror to certify that its proposed “end product” is “[ Trade Agreements Act] compliant.” Solicitation 51. Presumably , to determine Trade Ag

r eements Act compliance, one must look at the provisions of the Trade Ag reements Act, 19 U.S.C. ch. 13 (2012), and its implementing regulations. Particularly relevant here are the reg

ulations set forth in F A R subpart 25.4. F AR 25.402, which applies to the procurement at issue in this bid protest, 6 indicates that the President, throug h his or her authoriz ed representative, has waived “the B uy American statute and other discriminatory provisions for elig ible products from countries that have sig ned an international trade ag reement with the United States, or that meet certain other criteria,” meaning that “[ o] ffers of elig ible products receive equal consideration with domestic offers.” F A R 25.402(a)(1); see also F AR 25.003 (ex plaining that an “elig ible product” is “a foreig n end product,” and that a “foreig n end product” is “an end product other than a domestic end product”). The reg ulation that concerns the specific international trade ag reements referenced in the solicitation at issue, F AR 25.403, contains a provision indicating that g overnment purchases are restricted to “U.S.-made or desig nated country end products . . . , unless offers for such end products . . . are either not received or are insufficient to fulfill the requirements.” F AR 25.403(c). I

n other words, the description of the products deemed acceptable in the reg ulations implementing the Trade Ag reements Act mirrors the description of the products deemed acceptable in the solicitation’s Trade Ag reements clause and Trade Ag reements Certificate. Thus, Trade Ag reements Act compliance–as required by the provision challeng ed by plaintiff–does not appear to constitute a requirement that conflicts with the Trade Ag reements clause or the Trade Ag reements Certificate. B ecause there is no apparent ambig uity in the solicitation, plaintiff is unlikely to succeed on the merits of its second claim.

I n sum, plaintiff is unlikely to succeed on the merits of any of its claims.

B. Irreparable Injury

Nex t, with respect to the irreparable injury factor, a protestor “must show that without a preliminary

injunction it will suffer irreparable harm before a decision can be rendered on the merits.” Akal Sec., I

nc. v. United States, 87 F ed. Cl. 311, 319 (2009); accord I B M Corp. v. United States, 118 F ed. Cl. 677, 683-84 (2014). Plaintiff arg ues that in the absence of an award of preliminary injunctive relief, it will either be foreclosed from offering its “U.S.-made end product” in response to the solicitation, or be subject to competition from offerors proposing noncompliant products, resulting in the loss of an opportunity to fairly compete for the contract. This court has recog

niz ed that a lost opportunity to compete for a contract–and the attendant inability to obtain the profits ex pected from the contract–can constitute irreparable injury . See,

6 See F AR 25.400(a); F AR 25.402(b); F AR 52.225-5(b).

-5-e.g ., Akal Sec., 87 F ed. Cl. at 319; Heritag e of Am., L L C v. United States, 77 F ed. Cl. 66, 78

(2007); Overstreet Elec. Co. v. United States, 47 F ed. Cl. 728, 743 (2000). Thus, plaintiff has established this factor. 7

C. Balance of Harm s

I n addition to considering whether a protestor would suffer an irreparable injury absent an award of preliminary

injunctive relief, “[ t] he court must balance the harm plaintiff would suffer without preliminary

relief ag ainst the harm that preliminary relief would inflict on defendant . . . . Generally , if the balance tips in favor of defendant, a preliminary injunction is not appropriate.” Akal Sec., I

nc., 87 F ed. Cl. at 320 (citation omitted); accord Reilly ’s W holesale Produce v. United States, 73 F ed. Cl. 705, 715 (2006). Defendant, rely ing on the declaration of a contracting

official involved in the Entecavir Tablets procurement, contends that an award of preliminary

injunctive relief would harm the g overnment because it would likely create a g ap in the acquisition of Entecavir Tablets under a national contract, and a national contract is advantag eous because it would allow for the acquisition of a consistent product at low prices. See also Moreno Decl. ¶¶ 6-10 (describing the sig n ificant cost saving s provided by a national contract and the likely

adverse consequences to patient health that would arise from the VA being unable to provide patients with a consistent, standardiz e d medication). The harms described by

defendant, especially

the adverse effects to patient health that mig ht result from dispensing a new Entecavir Tablet, outweig h the harm described by

plaintiff. Thus, plaintiff has not established this factor.

D. P ublic Interest

F inally , when “employ

ing the ex traordinary

remedy of injunction,” a court “should pay particular reg ard for the public consequences” of doing so. W einberg er v. Romero-B a rcelo, 456 U.S. 305, 312 (1982). There is no dispute that “the public interest in honest, open, and fair competition in the procurement process is compromised whenever an ag ency abuses its discretion in evaluatinga contractor’s bid.” Overstreet Elec., 47 F ed. Cl. at 744; accord B ona F ide Cong lomerate, I

nc. v. United States, 96 F ed. Cl. 233, 242 (2010) (noting the “overriding public interest in preserving the integ rity

of the procurement process”). “However ‘there is a countervailingpublic interest in minimiz ing disruption [ to the ag e ncy ] .’” Akal Sec., I nc., 87 F ed. Cl. at 321 (quoting Heritag e of Am., L L C, 77 F ed. Cl. at 78); accord Aero Corp., S.A. v. United States, 38 F ed. Cl. 237, 242 (1997) (“[ A] procuringag ency should be able to conduct procurements without ex cessive judicial infring ement upon the ag ency ’s discretion.”). I t does not appear that the solicitation contains a patent ambig u ity that, left unaddressed, would compromise the procurement. F urther, as described above, an award of preliminary injunctive

7 The court recog

niz e s that plaintiff may

suffer additional harm because the issues raised in this protest are also implicated in some of its other pharmaceutical contracts with the VA. However, the court must limit its analy sis to only those injuries that plaintiff would incur from the failure to obtain preliminary injunctive relief in this bid protest.

-6-relief would cause a harmful disruption at the VA and for the patients who obtain Entecavir

Tablets throug h the VA’s national contract. Thus, plaintiff has not established that the public interest would best be served by such relief.

III. CONCLUSION

Plaintiff has failed to establish that it is likely to succeed on the merits of its claims, that the balance of harms tips in its favor, or that an award of preliminary injunctive relief is in the public interest. According ly , the court DENIES plaintiff’s motion for a temporary restraining order and a preliminary

injunction. B y no later than F riday, April 6, 2018 , the parties shall file a joint status report sug g esting a schedule for further proceeding s.

IT IS SO ORDERED.

s/ Marg aret M. Sweeney MARGARET M. SW EENEY J udg e

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