Bid protest; Standing; Waiver; 28

U.S.C. § 1491(b)(1); Interested

Party; Prospective Bidder.

In the United States Court of Federal Claims

No. 16-1549C

(Filed: January 25, 2017)

(Re-filed: February 3, 2017)1

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

ECOSYSTEM INVESTMENT PARTNERS,

Plaintiff,

v.

THE UNITED STATES,

Defendant,

and

CROSBY DREDGING, LLC,

Defendant-Intervenor.

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

Thomas L. McGovern, Washington, DC, with whom were Brendan M.

Lill and Katherine L. Morga, for plaintiff.

Geoffrey M. Long, United States Department ofJustice, Civil Division,

Commercial Litigation Branch, Washington, DC, with whom were Benjamin

C. Mizer, Principal Deputy Assistant Attorney General, Robert E. Kirschman,

Jr., Director, and Martin F. Hockey, Jr., Assistant Director, for defendant.

John F. Emmett, New Orleans, LA, for intervenor.

1 This opinion was originally issued under seal pursuant to the protective order

entered in this case. The parties conferred and did not propose any redactions

of protected information.
OPINION

Plaintiff, Ecosystem Investment Partners (“EIP”), protests the United

States Army Corps of Engineers’ (the “Corps”) award of a contract to 

intervenor, Crosby Dredging, LLC (“Crosby Dredging”), for the provision of

dredging and construction services as part of a compensatory environmental

mitigation plan to offset other work the Corps was doing to safeguard against

possible future storm damage. EIP was not a bidder in connection with this

dredging solicitation, but it operated an environmental mitigation credit bank,

which it argues should have been selected as part of an earlier environmental

administrative action to accomplish the necessary mitigation effects. In other

words, plaintiff has no critique to offer of the current dredge and fill

solicitation other than its argument that the solicitation would have been

unnecessary if the Corps had correctly assessed its environmental options

earlier. The case raises the novel question of whether a challenge to the

Corps’ actions in connection with developing a plan to mitigate its own

environmental impacts can be heard as a bid protest. 

On December 9, 2016, defendant moved to dismiss the complaint for

lack of subject-matter jurisdiction or, in the alternative, to dismiss the

complaint in part for failure to state a claim.

2 Oral argument was held on

January 5, 2017. As we announced at the conclusion of oral argument, we find

that plaintiff was not an “interested party” within the meaning of 28 U.S.C. §

1491(b)(1) (2012), and, in any event, waived its right to challenge the terms

of the solicitation by not filing a protest prior to bid opening. In addition, we

conclude that plaintiff’s real dispute here does not raise a matter “in

connection with a procurement or a proposed procurement” and thus we lack

subject-matter jurisdiction for a third reason. We therefore grant defendant’s

motion to dismiss for lack of subject-matter jurisdiction.

BACKGROUND

In response to the damage caused by Hurricanes Katrina and Rita in

2005, the Corps set out to build a flood risk reduction system surrounding the

New Orleans metropolitan area known as the Hurricane and Storm Damage

Risk Reduction System (“HSDRRS”). During construction of the $14.5

billion project, various wetland habitats, including wildlife refuges in the area,

2

Intervenor joined defendant’s motion without separately filing any briefing.

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were damaged. The Clean Water Act (“CWA”) and the Water Resources

Development Act of 1986 (“WRDA”), as amended, require that the Corps, as

would any private party, act to mitigate such damage by implementing a plan

to offset environmental impacts. Specifically, the Corps is required to ensure

that impacts to a particular habitat are mitigated through measures to preserve

that same type of habitat. 

Required habitat mitigation can be accomplished through different

means, including mitigation banking (buying credits from an authorized

“bank”), contracting with an “in-lieu” fee provider (explained below), or

through a Corps-constructed restoration project. In the case of mitigation

banking, the credit provider places a permanent encumbrance on its land in

exchange for a certain amount of credits, which it can then sell to private

developers, or, in this case, to the Corps itself. A second option, not relevant

in this case, is the use of in-lieu fee providers, where the credit provider is

given provisional credits that it can market. Once it completes a transaction,

the in-lieu fee provider then has the responsibility ofsecuring land and placing

a conservation easement on that land. See generally Pioneer Reserve, LLC v.

United States, 128 Fed. Cl. 483 (2016). A third option for the Corps here was

that it could design and implement its own restoration project. The mitigation

plan adopted by the Corps in this case included both the purchase of mitigation

credits and Corps-constructed restoration projects. 

One factor limiting the Corps’ options was a policy of the United States

Fish and Wildlife Service to the effect that, when the impacts occur on national

wildlife refuge property, mitigation also must take place on refuge property.

See Final Policy on the National Wildlife Refuge System and Compensatory

Mitigation under the Section 10/404 Program, 64 Fed. Reg. 49229 (September

10, 1999). As a practical matter, this policy had the effect of removing the

option of purchasing private mitigation banking credits in order to mitigate for

environmental impacts occurring on national wildlife refuge property.

The Corps’ initial proposed mitigation plan was described and

evaluated in Programmatic Individual Environmental Report #36 (“PIER

#36”), which was prepared in accordance with the National Environmental

Policy Act, 42 U.S.C. §§ 4321-4370h (2012). PIER #36’s stated purpose was

to compensate for habitat losses caused by the construction of HSDRRS. It

addressed six types of habitats: swamp, bottomland hardwood (“BLH”)-dry,

BLH-wet, fresh marsh, intermediate marsh, and brackish marsh. PIER #36

proposed to meet nearly 40% of its total mitigation needs through the purchase

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of mitigation credits for the swamp and BLH wet/dry habitat impacts. In

relevant part, the plan also proposed that the Bayou Sauvage Marsh

Restoration project would provide all the necessarymitigation for both on- and

off-refuge brackish marsh impacts. This plan meant that EIP would not be

able to sell the brackish marsh mitigation credits generated by its Chef

Menteur Pass Mitigation Bank (“Chef Bank”) in connection with the

mitigation plan. PIER #36 was released for public review and comment from

August 12, 2013 to September 25, 2013. During this time, EIP made a number

of comments, including a recommendation that PIER #36 recognize its Chef

Bank “as a source of brackish marsh mitigation available for HSDRRS use

either as the preferred alternative (subject to credit availability and price at

time ofsolicitation) or at least as a source of alternative mitigation if the corpsconstructed alternatives prove to be unfeasible or overly expenses.” AR 1509. 

On October 20, 2015, the Corps issued the Individual Environmental

Report Prepared to Supplement: Programmatic Individual Environmental

Report (PIER) 36 Bayou Sauvage, Turtle Bayou & New Zydeco Ridge

Restoration Project Saint Tammany & Orleans Parishes, Louisiana PIER 36,

Supplement 1 (“SIER 1”). SIER 1 explained that, due to increased cost

estimates, the Bayou Sauvage Marsh Restoration project was no longer

considered feasible. The Corps decided to move the location of these

restoration features within the same area in order to lower the cost of the

project. SIER 1 stated that “[t]his relocation brought the cost of the project

back down such that the exploration of other options to mitigate the

requirement was unnecessary.” AR 1924. 

The new Bayou Sauvage Floodside Brackish Marsh project, however,

only met roughly 81% of the Corps’ brackish marsh mitigation needs. The

Corps proposed to mitigate for the remaining amount of brackish marsh

impacts that the Bayou Sauvage Floodside Brackish Marsh project could not

produce, along with brackish marsh impacts incurred in order to provide

construction access for several restoration projects on national wildlife refuge

properties, by creating approximately 82.3 acres of new brackish marsh as part

of the New Zydeco Ridge Restoration project on the Big Branch Marsh

National Wildlife Refuge. EIP argues as part of this proceeding that it owned

mitigation credits that should have been used to compensate for the off-refuge

brackish marsh mitigation needs left unfulfilled by the Bayou Sauvage

Floodside Marsh project, rather than those needs being satisfied as part of the

New Zydeco Ridge Restoration project. It contends that federal law prioritizes

mitigation in a way that favors use of mitigation banks, and that the Corps’

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actions violated that law. See 33 U.S.C. §2317b (2012); 33 C.F.R. §

332.3(b)(2) (2017). It did not, however, comment on SIER 1 when it was

distributed for a 30-day comment period from July 9, 2014 to August 8, 2014. 

The Corps issued solicitation No. W912P8-16-B-0027 (the

“Solicitation”) on May 13, 2016, seeking bids for work to be performed in

connection with the New Zydeco Ridge Brackish Marsh Restoration,

mentioned above. The solicitation stated the following as its description of

work: “The work consists of wetland restoration in existing shallow open

water via borrow dredging from a designated borrow pit within Lake

Pontchartrain. . . . The work requires retention dike construction, board road

placement, and a jack-and-bore effort to provide the dredge disposal pipeline

access to the construction site.” AR 885. After several amendments to the

solicitation, the final bid opening date was set for August 4, 2016. EIP did not

submit a bid in response to the solicitation. Crosby Dredging was the lowest

bidder of the six bids submitted at the time of the bid opening and was

awarded the contract on November 18, 2016. 

Throughout the solicitation process for the dredging work, EIP was

involved in a number of discussions with the Corps attempting to reopen the

question of whether mitigation banking credits should have been used rather

than owner-initiated mitigation. It questioned both the scoring methods used

to determine the available amount and cost of credits at Chef Bank and the

Corps’ planned restoration efforts at New Zydeco Ridge. On June 16, 2016,

EIP sent a letter to the Corps expressing its concerns. The letter stated that it

was “essential that there is a consistent, fair and transparent process for the

evaluation of mitigation options.” AR 290-91. Finally, on August 3, 2016, EIP

sent a letter to the Commander and District Engineer of the New Orleans

District, Colonel Michael N. Clancy, seeking “to provide comments for the

District’s consideration on [SIER 1] and [the solicitation].” AR 293. It did not

characterize itself as a protest to the solicitation. 

After the bid opening, EIP filed a protest at the Government

Accountability Office (“GAO”) on August 15, 2016, which GAO dismissed

on November 15, 2016, as untimely because EIP had not protested the terms

of the solicitation prior to the bid opening on August 4, 2016. Specifically,

GAO held that EIP’s August 3, 2016 letter was not intended to be an agencylevel protest, and that, if it was, it failed to conform with the requirements set

out in the solicitation for an agency-level protest. Ecosystem Investment

Partners, B-413587, at 4 (Comp. Gen. Nov. 15, 2016). Three days after its

5
protest was dismissed at GAO, EIP filed the present action on November 18,

2016.

DISCUSSION

The Tucker Act, as amended in 1996, provides the Court of Federal

Claims with jurisdiction over actions “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.” 28 U.S.C. § 1491(b)(1). Thus, to establish jurisdiction under

this statute, a plaintiff must demonstrate that it is an “interested party.” This

“imposes more stringent standing requirements than Article III” of the

Constitution. Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1359 (Fed.

Cir. 2009). Although the term “interested party” is not defined within the

statute, it has been construed to consist of two elements: first, plaintiff must

establish that it “is an actual or prospective bidder” and second, that it

“possess[es]the requisite direct economic interest.” Id. (citing Rex. Serv. Corp.

v. United States, 448 F.3d 1305, 1308 (Fed. Cir. 2006)). 

There are three independent reasons we cannot entertain this protest,

although, given the unique nature of the protest, it is challenging to frame them

in traditional bid protest language. They all relate, however, to the same

deficiency: plaintiff’s real complaint is with the Corp’s administrative action

in electing to mitigate the environmental impact of its own construction

activities by doing dredge and fill on federally-owned submerged lands rather

than by purchasing mitigation credits from plaintiff. Plaintiff could not

compete for that construction work, and it did not challenge the earlier, critical

decision, namely, how to do mitigation.3

 

I. Plaintiff Is Not An “Interested Party” And Thus Lacks Standing

Defendant argues that the complaint must be dismissed because

plaintiff lacks standing. Specifically, defendant asserts that EIP cannot show

that it is an “interested party” under 28 U.S.C. § 1491(b)(1) because plaintiff

3We are not suggesting that the court would have had bid protest jurisdiction

if plaintiff had challenged the decision to reject environmental banking credits. 

Presumably, such an action would have to be brought in a district court. 

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is neither an actual nor a prospective bidder. Given that EIP did not submit a

bid in response to the solicitation, we find that EIP is not an actual bidder. 

Defendant argues that EIP also failed to establish its status as a prospective

bidder by not filing a protest prior to the close of the proposal period on

August 4, 2016. Plaintiff, on the other hand, argues that it can qualify as a

prospective bidder without having submitted a bid because it was deprived of

an opportunity to do so as a result of the Corps’ allegedly unlawful conduct. 

Plaintiff alleges that the Corps’ decision to solicit a construction restoration

project was improper because it ignored the preference for mitigation banking

by not acknowledging its Chef Bank mitigation credits as the preferred source

of compensatory mitigation.

EIP is correct in that, under certain circumstances, a plaintiff can have

standing to protest a solicitation without being eligible to bid on it. See CCL,

Inc. v. United States, 39 Fed. Cl. 780, 790 (1997) (holding that “where a claim

is made that the government violated CICA by refusing to engage in a

competitive procurement, it is sufficient for standing purposes if the plaintiff

shows that it likely would have competed for the contract had the government

publicly invited bids”). Plaintiff does not fit into this line of argument,

however, because it failed to diligently pursue its protest rights. In order for

EIP to have standing to challenge the validity of the solicitation, it needed to

either submit a bid or protest prior to the bid opening. See MCI Telecomms.

Corp. v. United States, 878 F.2d 362 (Fed. Cir. 1989) (solicitation must be

pending when protested). As discussed in more detail below, we find that the

August 3, 2016 letter that EIP’s managing partner sent to the Corps was not an

agency-level protest. EIP’s “opportunity to qualify as either an actual or a

prospective bidder end[ed] when the proposal period end[ed]” on August 4,

2016, and it failed to protest the solicitation by this date. Rex Serv. Corp., 448

F.3d 1305, 1308 (Fed. Cir. 2006) (quoting MCI Telecomms., 878 F.2d at 365). 

Accordingly, we hold that EIP did not timely establish its status as a

prospective bidder and thus lacks standing to assert its challenge to the

solicitation because it is not an “interested party” within the meaning of

§1491(b)(1). 

II. Plaintiff Waived Its Right To Challenge The Terms Of The Solicitation

For related reasons, plaintiff waived its claim by failing to file a timely

agency-level protest to the terms of the solicitation. Thus, even if we were to

find that plaintiff has standing to challenge the solicitation, plaintiff has

waived its ability to do so. In Blue & Gold Fleet, L.P. v. United States, the

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Federal Circuit recognized a waiver rule for bid protests, holding that a party

that “has the opportunity to object to the terms of a government solicitation

containing a patent error and fails to do so prior to the close of the bidding

process waives its ability to raise the same objection subsequently in a bid

protest action in the Court of Federal Claims.” 492 F.3d 1308, 1313 (Fed. Cir.

2007). Here, the Corps’ alleged error in not using brackish mitigation credits

as part of the mitigation plan was obvious when the solicitation was issued on

May 13, 2016. In order to avoid waiver, EIP was thus obligated to protest

prior to the “close of the bidding process,” which was the date of bid opening

on August 4, 2016.

Plaintiff argues that the waiver rule should not work to defeat its claim

because it diligently pursued its objections prior to the bid opening date.

Specifically, plaintiff asserts that the letter it sent to the Corps on August 3,

2016, served as an agency-level protest and preserved its right to challenge the

solicitation in this action. Defendant counters by pointing out that this letter

was not filed with the contracting officer, as directed by the solicitation and

Federal Acquisition Regulation (“FAR”) § 33.103(d)(3), and plaintiff also

failed to include certain substance required under FAR § 33.103(d)(2). 

Moreover, defendant disputes whether EIP even intended the letter to serve as

a protest. Defendant points to the first sentence of the letter, which simply

states that it was written “to provide comments for the District’s consideration”

of SIER 1 and the solicitation. AR 293.

We hold that the August 3, 2016 letter was not an agency-level protest

and that plaintiff thus waived its objections to the solicitation by not properly

asserting them prior to the August 4, 2016 bid opening date. The solicitation,

along with the relevant regulations, put EIP on notice as to the requirements

of a formal agency-level protest.4 The letter that EIP now argues was a timely

protest was not addressed to the contracting officer as required by FAR §

33.103(d)(3). Rather, the letter was sent to the Commander and District

Engineer of the New Orleans District. EIP also failed to obtain the written

acknowledgment of receipt of the letter from the contracting officer, which

was expressly required in the Solicition for agency-level protests. AR 893. Nor

4The solicitation incorporated by full text FAR § 52.233-2, which instructs that

any protests, as defined in FAR § 33.101, were to be served on the contracting

officer and must seek a written and dated acknowledgment of the contracting

officer’s receipt. AR 893.

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did the letter include the solicitation number, copies of documents relevant to

the alleged protest, or an express request for a ruling by the agency—all of

which are required under FAR § 33.103(d)(2).

In Bannum, Inc. v. United States, the Federal Circuit spoke to the

importance of protest formalities, stating that 

[r]equiring that the prescribed formal routes for protest be

followed (to avoid waiver) reduces uncertainty about whether

the issue is joined and must be resolved, and thereby helps

prevent both the wasted and duplicative expenses (of all bidders

and the government) and the delayed implementation of the

contract that would likely follow from laxer standards of timely

presentation of solicitation challenges.

779 F.3d 1376, 1380 (Fed. Cir. 2015) (holding that “mere notice of

dissatisfaction or objection is insufficient to preserve” a defective-solicitation

challenge). As discussed above, EIP’s letter disregarded numerous formal

requirements for an agency-level protest. In sum, the letter seems merely to

be the latest in a continuing series of communications between EIP and the

Corps. Accordingly, we hold that EIP waived its ability to challenge the

solicitation.

III. The Compensatory Mitigation Plan Was Not Formulated “In Connection

With A Procurement”

Even if there had been a timely protest, there is a more fundamental

problem with this suit. The government action complained of, namely, the

decision to implement a Corp-constructed project rather than purchase

mitigation credits from Chef Bank, was not an act “in connection with a

procurement or a proposed procurement” and thus we do not have jurisdiction

under 28 U.S.C. § 1491(b)(1). 

We recognize that the term “procurement” has been defined broadly,

leaving “[t]he operative phrase ‘in connection with’ . . . very sweeping in

scope.” RAMCOR Services Group, Inc. v. United States, 185 F.3d 1286, 1289

(Fed. Cir. 1999). In Distributed Solutions, Inc. v. United States, 539 F.3d 1340

(Fed. Cir. 2008), the Federal Circuit considered what constitutes a

“procurement” for the purposes of § 1491(b)(1). It borrowed the definition

that Congress provided in 41 U.S.C. § 403(2) (re-codified at 41 U.S.C. § 111),

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which relates to the creation of the Office of Federal Procurement Policy. 

Based on that definition, a procurement thus includes “all stages of the process

of acquiring property or services, beginning with the process for determining

a need for property or services and ending with contract completion and

closeout.” 41 U.S.C. § 111 (2012). 

Plaintiff alleges that the Corps violated federal law by not complying

with a regulatory preference for mitigation credits when it adopted the New

Zydeco Ridge Restoration project as part of its mitigation plan. Plaintiff

considers this to be a “violation of a statute or regulation in connection with

a procurement or a proposed procurement” because of the causal link between

the decision not to use mitigation credits and the issuance of the solicitation.

We disagree. 

Plaintiff directs the court to a handful of cases that involve claims that

it believes are analogous to its challenge to the process of forming the

mitigation plan leading to the solicitation. Unlike the present action, however,

in the cases plaintiff cites, the government was either attempting to avoid or

otherwise directly violating federal procurement law. For example, in

Distributed Solutions, the government issued a request for information but

then used the responses to determine the scope of services it required so it

could then add work to an existing contract. In effect, “the Government

initiated a type of procurement competition without actually committing to

award a contract to the best offeror, thereby circumventing applicable federal

procurement laws.” VFA, Inc. v. United States, 118 Fed. Cl. 735, 740 (2014)

(holding that “[w]hile many courts have cited Distributed Solutions for the

proposition that Tucker Act bid protest jurisdiction is broad, the holding

remains limited by the facts of the case”). Here, the Corps did not seek to

avoid a competitive procurement and EIP does not suggest the solicitation at

issue otherwise violated federal procurement law.

Plaintiff’s reliance on LABAT-Anderson, Inc. v. United States, 65 Fed.

Cl. 570 (2005), is also misplaced. There, the protester successfully challenged

the Defense Logistics Agency’s decision to perform certain distribution

services in-house without first performing a cost comparison, which it alleged

“violated numerous sources of law that mandate the procurement of supplies

and services from the private sector.” Id. at 574. Plaintiff argues that, as in

LABAT-Anderson, it has made “allegations that a Government agency violated

applicable laws during the pre-solicitation stage of a procurement.” Pl.’s Resp.

at 13. As defendant points out, however, unlike EIP’s challenge, the allegedly

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violated regulations in LABAT-Anderson were part of the agency’s overall

procurement scheme for the services it sought to acquire. Here, at the time the

Corps was considering its options, it was subject to a web of environmental

policies and regulations that have no necessary connection to the solicitation

for the subsequent dredge and fill contract.

The Corps’ decision making in connection with how to mitigate the

effects of its own hurricane protection project may have lead to a procurement

in this case, but it is a distortion of Ramcor to suggest that its preliminary

environmental decision making was done “in connection with” a procurement. 

As defendant points out, settling on an appropriate compensatory mitigation

plan involves trying to maximize ecological benefits in light of a number of

ecological factors which are wholly unrelated to the proper procurement of

services by the government. Accordingly, we hold that the alleged violation of

a statute with respect to the Corps’ decision to adopt the New Zydeco Ridge

Restoration project as part of its compensatory mitigation plan was not “in

connection with a procurement” pursuant to § 1491(b)(1). The court thus lacks

subject-matter jurisdiction over the claim.

CONCLUSION

For the reasons stated above, we grant defendant’s motion to dismiss

for lack of jurisdiction. The clerk’s office is directed to enter judgment

accordingly. No costs.

s/Eric G. Bruggink

Senior Judge

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