# In the United States Court of Federal Claims

No. 18

- 927C (Filed: September 18 , 20 20 )

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

ELECTRA

- MED CORPORATION, et al.

,

Plaintiffs

,

v.

THE UNITED STATES,

Defendant

,

and

AMERICAN MEDICAL DEPOT, et al.

,

Intervenors

. * * * * * * * * * * * * * * * * * * * * * *

Eric S. Crusius , Tysons Corner, VA, for plaintiffs. David S. Black

, Gregory R. Hallmark

, and Mary Beth Bosco

, of counsel.

David M. Kerr , Trial Attorney, United States Department of Justice, Civil Division, Commercial Litigation Branch, Washington, DC, with whom

were Ethan P. D avis , Acting Assistant Attorney General, Robert E. Kirschman, Jr. , Director, Claudia Burke , Assistan t Director, for defendant. Jason Fragoso , U.S. Department of Veterans Affairs, Office of General Counsel, of counsel.

ORDER

Plainti ff s filed the ir bid protest complaint on June 27, 2018, alleging that the Dep artment of Veterans Affairs ( “ VA ” ) imp roperly modified four already

- existing prime vendor contracts to avoid competition for th e items

that t hose vendors would be distr ibuting to the VA . The contract modifications had the effect of putting the s election of items and supp liers

for its VA hospital formulary in the h ands of the prime vendors in stead of

s elec ting those suppliers and items through normal federal contracting

processes. B id protest; P rime vend or
contracts; C ontract
modif ication; In

junction;

B alance of harms ;
R emand after appeal;

J urisdiction; M ootness.2 We eventually agreed with the protesto rs that the justification for having done so was i nsu fficient

, meaning that the contract modifications were an illegal attempt at avoiding competition and veteran preference requirements for VA contracting. Electra

- Med Corp

. v. United States , 140 Fed. Cl. 94, 104

- 106 (2018). W e did not afford relief, however, because the government establish ed that the harm to th e VA from an in junction wou l d outweigh the harm to th e p laintiffs

. Id. at 106

- 107 (the V A ’ s inability to centralize and standardize its medical supply chain outweighed plaintiff s ’ loss of opportunity to compete). We n o te d in our consideration of the harm to the p lain tiffs that , although th e loss of opportunity to compete was irreparable

, it was somewhat lim ited by the potent ial that the plain tiffs might

still be select ed by the prime vendors as suppliers for particular items and by

the fact that the contrac ts modified by the VA would , if the option periods

went unexercise d, exp ire in 18 months. Id. at 106. We a lso found that the

pu blic h ad a weighty interest in the provision of “ high quality health care to

veterans ” that was, in this instance, greater than the public ’ s interest in a lega lly sound pr oc u rement. Id. at 107. The weigh ing of th o se factors did not favor an injunction , and thus relief was denied.

Plaintiffs appealed . The Federal Circuit aff ir med, f inding no abuse

of discretion in our weighing of th e equities, especially considering the v e r y

t e m p o r a r y n a t u r e o f the prime vendor contracts

. 791 Fed. App ’ x 179, 18 2 (Fed. Cir. 2019). At the t ime of the circuit ’ s decision, only six months

remained on t h e prime vendor contracts if the options we nt un exercise d. Id.

G i ven the possibility that the life of the prime vendor contract s might be

extended , however, the court remanded the matter for thi s court to retain jurisdiction and conside r whether the harms still favored the government should the options be exer ci sed. Id. at 182

- 83.

In a May 2020 status report, defendant reported that the VA cho se not
to exercise the prime vendor cont ract options and instead put four “ short

term bridge contracts in p lace to fill the gap until it can award the MSPV 2.0

vendor con tra cts

. ” J oint Status Rep ort at 1 (May 11, 2020) (ECF No. 72).

T h e parties reported that the VA intende d to award the new cont racts in September. I

d

. Defendant an d intervenors indicated that they believed that the protest should no w be dismisse d due to the expiration o f the prior prime vendor contracts, while plaintif fs represented that thei r position was that the bridge contrac ts were an extension of the status quo in all but name only and

that the y continued to be harm ed by the VA ’ s ac tions

. Id. at 2

- 3. We held a status conference on July 29, 2020, at which the parties reiter at ed the se3

positions. We th u s dire cted defendant to file a motion to dismiss. T hat

motion (ECF No. 74) is now fully briefed; oral argument is unnecessary.

Def endant ’ s point is that th e m odified contracts , which gave rise to the protest

, are now at an end. Th e agency did not ex ercise the option

p eriods because it intend s to award new prime vendor contracts

— we assume compliant with procurement statu tes an d regulations

— well before the

e xp iration of the option period (N ovember 2021). In fact, the motion and

att ached affidavit o f the VA ’ s Dr. Jamie Wilbur represent that the VA intends

to award as soon as practicable after a General Accountabi lity Office ( “ GAO ” ) protest is reso lved in October 2020 . Because there was a gap between the March expiration and the expected award of the new pri me vendor contract s , the agency executed four short

- term bridge c ontracts to meet its medical supply distribut ion needs in the interim. Defendant argues

that the F ederal Circuit ’ s concern that the harms might shift if the option

p eriods were exercised has not and cannot materialize

, and thus this protest

is moot. If plaintiffs have an issue with the bridge c ontracts

, defendant

argues
, tha t the challenge must be a separate protest becau se those contracts are not the subje ct of this bid protest. We agree.

Plai ntiffs ’ response is , once again, that they continue to be har med by

the VA ’ s use of non

- competitive measures to fill its medi cal supply needs.

Whether denomi nated as bridge contract s or extension s of the prime vendor contracts, plaintiff s urge that the status quo is u nch anged. Thus, the F e deral

Circuit ’ s concern that the conti nued passage of time would , in effect

, increase the harm to plaintiffs beyond that contemplate d by our prior order continues

to be relevant , argue the protestors

. They believe we should retain jurisdiction and reconsider our prior holding that an injunction was

u nmerited. Plaintiffs g o f ur ther and r aise th e specter of a new legal issue resulting from the Defense Logistic s Agency ’ s ( “ DLA ” ) announcement of future p urchasing for the VA. Plaintiff s aver th at some of that purcha sing will cover work included in the prime vendor contracts and will be yet another dodge of competition requirements by the VA . Plaintiffs thus conclude by ask ing the court to gra nt plaintiff ’ s motion for a preliminary inju nction. 1

1 It is unclear whether this was stated in error at the end o f plaintiff ’ s opposition or whether it was in fact a request to reactive plaintiffs ’ 2018

requ est for preliminary relief (ECF No. 4). We denied that request on the

record on J u ly 12, 2018, and the case conti nued to resolution through motion s for judgment on the administrati ve rec ord. See Order Deny ing M ot . for4 Although we appreciate plaintiffs ’ perspective that the harm to them

continue s unabated

, the part ies ’ legal rights have changed. The contract

modifi cations that harmed plaintiffs are no longer at issue becau se t he prime

vendor contra cts have exp ired of their own terms. Plaintiffs ’ re ques t that

we consider the legality of the bridge c ontra cts or even t he all eged new actions taken

, or soon to be taken

, by DLA with respe ct to VA ’ s purchasing of medical supplies beli es the ir point

. T h e legality of those actions i s unrelated to our re sol ution of plaintif f ’ s 2018 bid protest complaint

. We do not sit as an age ncy o mbudsman reviewing each VA contracting decision as it happens

. There is no agency action with respect to the prior pr ime vendor

contracts that we could enjoin

. The new short

- term bridge con tracts ar e separate vehicles and their legality is unrelated to the contract modifications that are the subject of this bid protest

. In other words, no possibility of relief

remains in this case

. There is thus no longer a present case or controversy that would supply the necessary jurisdictional hook to keep plaintiffs ’ complaint alive. In the absence of such, we must dismiss. See Arkham

Tech. Ltd. v. United States , 145 Fed. Cl. 751, 755 (2019 ) ( denying plain tiff ’ s motion to reopen the judgment b ecause no relief was available and thus no case or controversy remained).

Accordingly, defen dant ’ s motion to dismiss is granted. 2 The Clerk

of Court is directed to dismiss the complaint and to enter ju dgment

accordi ngly. N o costs.

s/Eric G. Bruggink Eric G. Bruggink Senior Judge

Prelim . Inj. ( July 13, 2018 ) (ECF No . 35).

2 Earlier today, plaint iff s fi led a request (ECF No. 77) to present supplemental briefing regarding a GAO r epo rt that

, they allege, details continuing pr oblems with the award of the new pr ime vendor contracts and

states that the contracts will now not be awarded until early next year. N o

respo nse is necess ary , howev e r, because , even if we as sume these allegations to be true, they would not change our holding t hat the court has lost jurisdiction due to the expiration of the originally

- protested contracts

. The

m o tion is thus denied.