Court Opinion

ID: 2669126
Source: CourtListenerOpinion
Date Created: 2014-04-08 14:49:26.208582+00
Date Added: 2024-06-11T09:17:57.349540
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 18, 2013                Decided April 8, 2014

                         No. 12-5155

                FISHER-CAL INDUSTRIES, INC.,
                        APPELLANT

                               v.

             UNITED STATES OF AMERICA, ET AL.,
                       APPELLEES

         Appeal from the United States District Court
                 for the District of Columbia
                     (No. 1:11-cv-00791)

    Lawrence J. Sklute argued the cause and filed the briefs for
appellant.

     Alan Burch, Assistant U.S. Attorney, argued the cause for
appellees. With him on the brief were Ronald C. Machen, Jr.,
U.S. Attorney, and R. Craig Lawrence, Assistant U.S. Attorney.
W. Mark Nebeker, Assistant U.S. Attorney, entered an
appearance.

   Before: HENDERSON and SRINIVASAN, Circuit Judges, and
SENTELLE, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
SENTELLE.
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     SENTELLE, Senior Circuit Judge: Fisher-Cal Industries,
Inc., filed a complaint in the district court, alleging that the
United States Air Force violated the Administrative Procedure
Act when the Air Force opted not to renew a contract for
multimedia services with Fisher-Cal and decided instead to in-
source the services. The district court dismissed the complaint
pursuant to Federal Rule of Civil Procedure 12(b)(1),
concluding that Fisher-Cal’s claim falls within the exclusive
Tucker Act jurisdiction of the United States Court of Federal
Claims. We affirm.

                          Background

      In 2009 the United States Air Force entered into a contract
with appellant Fisher-Cal Industries to provide Dover Air Force
base with multimedia services. The contract had a base one-
year term with four additional one-year term options. After the
first nine months of Fisher-Cal performing under the contract,
the Air Force notified Fisher-Cal that it had decided not to
exercise its option to renew the contract after the base one-year
term expired. The Air Force explained that it would in-source
the multimedia services, having civilian government employees
perform the work. After expiration of the contract, Fisher-Cal
filed suit in the United States District Court for the District of
Columbia. In its suit Fisher-Cal alleged that the Air Force’s
decision to in-source the multimedia services was arbitrary and
capricious under the Administrative Procedure Act (“APA”)
because the Air Force had failed to perform a proper cost
analysis pursuant to 10 U.S.C. §§ 129a and 2463 (2010).

    The district court dismissed the suit for lack of subject
matter jurisdiction pursuant to Federal Rule of Civil Procedure
12(b)(1). In dismissing the suit, the district court noted that the
Tucker Act, 28 U.S.C. § 1491, as amended by the
Administrative Disputes Resolution Act of 1996, provides that
                                3

the United States Court of Federal Claims “shall have
jurisdiction to render judgment on an action by an interested
party objecting to . . . any alleged violation of statute or
regulation in connection with a procurement or a proposed
procurement.” The district court went on to note that although
the Tucker Act does not define “procurement,” the relevant
definition of the term was to be found in 41 U.S.C. § 111, which
states that “procurement” 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.”

     The terms of 28 U.S.C. § 1491 and definition of
procurement in 41 U.S.C. § 111, the district court reasoned,
provide that in-sourcing decisions are matters connected to
procurement of federal contracts. Citing Rothe Development,
Inc. v. U.S. Department of Defense, 666 F.3d 336, 339 (5th Cir.
2011), Vero Technical Support, Inc. v. U.S. Department of
Defense, 437 F. Appx. 766, 769–70 (11th Cir. 2011), and
Distributed Solutions, Inc. v. United States, 539 F.3d 1340, 1346
(Fed. Cir. 2008), the district court concluded that the Air Force’s
decision to in-source necessarily involved “determining a need
for property or services” and was therefore “in connection with
a procurement” under the Tucker Act. The district court
consequently determined that it had no subject matter
jurisdiction over the matter because “the Court of Federal
Claims has exclusive jurisdiction over challenges to the
government’s decision to insource services and thus over this
dispute,” Fisher-Cal Industries, Inc., v. United States, 839 F.
Supp. 2d 218, 224 (D.D.C. 2012). The district court dismissed
the suit.
                                 4

                            Discussion

      Fisher-Cal now appeals the district court’s dismissal of its
suit for lack of subject matter jurisdiction. Fisher-Cal states that
the question for the Air Force during the one-year base term of
the contract was whether at the expiration of that initial term the
Air Force would in-source or contract the multimedia services.
Since the Air Force opted to in-source, Fisher-Cal further states
that this court is now reviewing that decision to in-source. As
it did in the district court, Fisher-Cal asserts that the allegations
raised in its suit concerning the decision to in-source fall within
the APA jurisdiction of the district court. There is no dispute by
Fisher-Cal that the Tucker Act confers exclusive jurisdiction on
the Court of Federal Claims for suits alleging a procurement
violation. Nor does Fisher-Cal dispute that the definition of
“procurement” is that found in 41 U.S.C. § 111. Instead, Fisher-
Cal argues that the Air Force’s decision to in-source does not
fall within the Tucker Act jurisdiction of the Court of Federal
Claims because a suit involving in-sourcing does not fall within
the definition of procurement. According to Fisher-Cal, the
Tucker Act references only that which occurs after the decision
has been made to either in-source or contract.

     To arrive at this conclusion, Fisher-Cal separates § 111’s
definition of “procurement” into three separate clauses, i.e., the
term “procurement” (1) “includes all stages of the process of
acquiring property or services,” (2) “beginning with the process
for determining a need for property or services,” (3) “and ending
with contract completion and closeout.” Fisher-Cal asserts that
§ 111’s second clause, “beginning with the process for
determining a need for property or services,” must be read in
context of § 111’s first clause, “all stages of the process of
acquiring property or services,” with emphasis on the word
“acquiring.” When the second clause is thus read in context of
the first clause, according to Fisher-Cal, it describes the
                                 5

beginning of the process of acquiring the property/services
referenced in the first clause. Fisher-Cal concludes that the
definition of procurement in § 111 requires the method of
“acquiring,” and does not include the government’s internal
deliberating as to whether to select in-sourcing or contracting as
the method the government will use to obtain the property or
services. Accordingly, Fisher-Cal argues, the Air Force’s
decision to in-source does not fall within the Tucker Act
jurisdiction of the U.S. Court of Federal Claims. Like the
district court, we reject Fisher-Cal’s argument.

     Again like the district court, we accept the reasoning of the
Federal Circuit, the court with jurisdiction to review decisions
of the Court of Federal Claims, in Distributed Solutions. In that
case the Federal Circuit held that lawsuits involving decisions
whether to in-source or contract fall within the jurisdiction of the
Tucker Act. In Distributed Solutions, the government issued a
Request for Information (“RFI”) to software vendors in June
2005 to identify “acquisition and assistance” solutions for a
“common computer platform” it was developing between the
United States Agency for International Development and the
Department of State. 539 F.3d at 1342. After reviewing
vendors’ responses, however, it decided to use SRA
International, Inc., a company with which it already had a
contract, “to integrate the various acquisition and assistance
functions necessary to implement” the computer platform. Id.
at 1343. In connection with its integration role, SRA was
charged with selecting software vendors to perform different
functions, which it did after issuing a RFI of its own in August
2005. Two vendors that were not selected following the August
RFI filed suit in the Court of Federal Claims challenging the
government’s decision to award the integration work to SRA.
See id. at 1343–44.
                               6

     One issue before the Federal Circuit was whether the
vendors’ complaint had met the jurisdictional requirements of
the Tucker Act. The court stated the issue as whether the
vendors’ protest was “in connection with a procurement or
proposed procurement” under 28 U.S.C. § 1491(b). The court,
emphasizing “beginning with the process for determining a need
for property or services” in the definition of procurement,
concluded that “the phrase, ‘in connection with a procurement
or proposed procurement,’ by definition involves a connection
with any stage of the federal contracting acquisition process,
including ‘the process for determining a need for property or
services.’” Id. at 1345–46.

     Fisher-Cal argues that in Distributed Solutions the Federal
Circuit looked to the issuance of the Request for Information as
marking the beginning of the process for determining the
agency’s needs, and not the internal agency discussions that
preceded issuance of the RFI. Distributed Solutions, according
to Fisher-Cal, should therefore be read as limited to situations
where the agency has already decided to contract. Fisher-Cal’s
argument continues that the district court, as well as the Fifth
Circuit in Rothe Development and the Eleventh Circuit in Vero
Technical Support, on which the district court relied,
fundamentally misapplied Distributed Solutions to challenges to
an agency’s internal deliberations as to whether the property or
services can be in-sourced.

     While we review de novo the dismissal by the district court
for lack of subject matter jurisdiction, see Tex. Alliance for
Home Health Care Servs. v. Sebelius, 681 F.3d 402, 408 (D.C.
Cir. 2012), we reach the same conclusion. To begin, we reject
Fisher-Cal’s strained reading of § 111. The statute explicitly
specifies that the stage where the process “begin[s]” is the
“process for determining a need for property or services.”
Fisher-Cal’s proposition that the procurement process does not
                                 7

begin until after the government has already determined the
need to procure is inconsistent with the plain meaning of this
language. “[W]e must be governed by the statute and its plain
meaning.” U.S. v. Atchison, T. & S.F. R. Co., 234 U.S. 476, 488
(1914).

     Nothing in the statute suggests any presumption of
acquiring the services by contract. The statute comfortably
includes acquiring the services by either in-sourcing or
outsourcing. No appellate court has adopted Fisher-Cal’s
interpretation of the definition of procurement. Rothe
Development and Vero Technical Support, as well as Distributed
Solutions, all cited by Fisher-Cal, actually reference the plain
meaning of procurement’s definition. See Rothe Development,
666 F.3d at 339 (challenge to in-sourcing decision within scope
of Tucker Act because definition of procurement “includes the
process for determining a need for services, which by necessity
includes the choice to refrain from obtaining outside services”)
(emphasis in original); Vero Technical Support, 437 F. Appx. at
769–70 (challenge to in-sourcing decision within scope of
Tucker Act because decision to in-source involves process of
“determining a need for property or services”); Distributed
Solutions, 539 F.3d at 1346 (“the phrase, ‘in connection with a
procurement or proposed procurement,’ by definition involves
a connection with any stage of the federal contracting
acquisition process, including ‘the process for determining a
need for property or services’”).

     We conclude that Fisher-Cal’s challenge to the Air Force’s
decision to in-source is governed by the Tucker Act, and
therefore jurisdiction for the challenge lies with the U.S. Court
of Federal Claims. We note that appellees raise several other
justiciability objections to Fisher-Cal’s action, but in light of our
disposition on the jurisdictional question discussed above, we
need not reach them and express no opinion on them. Courts
                                 8

may “choose among threshold grounds for denying audience to
a case on the merits.” Ruhrgas AG v. Marathon Oil Co., 526
U.S. 574, 585 (1999).

                           Conclusion

     As the district court rightly held, if the complaint of Fisher-
Cal states a claim within the jurisdiction of any court, it is within
the exclusive Tucker Act jurisdiction of the United States Court
of Federal Claims pursuant to 28 U.S.C. § 1491. The district
court’s dismissal of Fisher-Cal’s complaint pursuant to Federal
Rule of Civil Procedure 12(b)(1) is therefore

                                                          Affirmed.