Court Opinion

ID: 4567311
Source: CourtListenerOpinion
Date Created: 2020-09-21 13:01:41.900783+00
Date Added: 2024-06-11T09:26:14.762081
License: Public Domain

In the United States Court of Federal Claims
                                    No. 18-927C
                            (Filed: September 18, 2020)

**********************
ELECTRA-MED CORPORATION, et al.,

              Plaintiffs,

v.
                                                  Bid protest; Prime vendor
                                                  contracts;       Contract
THE UNITED STATES,
                                                  modification; Injunction;
                                                  Balance      of    harms;
              Defendant,
                                                  Remand after appeal;
                                                  Jurisdiction; Mootness.
              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. Davis, Acting Assistant Attorney General, Robert E.
Kirschman, Jr., Director, Claudia Burke, Assistant Director, for defendant.
Jason Fragoso, U.S. Department of Veterans Affairs, Office of General
Counsel, of counsel.

                                     ORDER

        Plaintiffs filed their bid protest complaint on June 27, 2018, alleging
that the Department of Veterans Affairs (“VA”) improperly modified four
already-existing prime vendor contracts to avoid competition for the items
that those vendors would be distributing to the VA. The contract
modifications had the effect of putting the selection of items and suppliers
for its VA hospital formulary in the hands of the prime vendors instead of
selecting those suppliers and items through normal federal contracting
processes.
        We eventually agreed with the protestors that the justification for
having done so was insufficient, 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). We did not afford relief, however, because the
government established that the harm to the VA from an injunction would
outweigh the harm to the plaintiffs. Id. at 106-107 (the VA’s inability to
centralize and standardize its medical supply chain outweighed plaintiffs’
loss of opportunity to compete). We noted in our consideration of the harm
to the plaintiffs that, although the loss of opportunity to compete was
irreparable, it was somewhat limited by the potential that the plaintiffs might
still be selected by the prime vendors as suppliers for particular items and by
the fact that the contracts modified by the VA would, if the option periods
went unexercised, expire in 18 months. Id. at 106. We also found that the
public had a weighty interest in the provision of “high quality healthcare to
veterans” that was, in this instance, greater than the public’s interest in a
legally sound procurement. Id. at 107. The weighing of those factors did
not favor an injunction, and thus relief was denied.

        Plaintiffs appealed. The Federal Circuit affirmed, finding no abuse
of discretion in our weighing of the equities, especially considering the very
temporary nature of the prime vendor contracts. 791 Fed. App’x 179, 182
(Fed. Cir. 2019). At the time of the circuit’s decision, only six months
remained on the prime vendor contracts if the options went unexercised. Id.
Given the possibility that the life of the prime vendor contracts might be
extended, however, the court remanded the matter for this court to retain
jurisdiction and consider whether the harms still favored the government
should the options be exercised. Id. at 182-83.

        In a May 2020 status report, defendant reported that the VA chose not
to exercise the prime vendor contract options and instead put four “short-
term bridge contracts in place to fill the gap until it can award the MSPV 2.0
vendor contracts.” Joint Status Report at 1 (May 11, 2020) (ECF No. 72).
The parties reported that the VA intended to award the new contracts in
September. Id. Defendant and intervenors indicated that they believed that
the protest should now be dismissed due to the expiration of the prior prime
vendor contracts, while plaintiffs represented that their position was that the
bridge contracts were an extension of the status quo in all but name only and
that they continued to be harmed by the VA’s actions. Id. at 2-3. We held a
status conference on July 29, 2020, at which the parties reiterated these
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positions. We thus directed defendant to file a motion to dismiss. That
motion (ECF No. 74) is now fully briefed; oral argument is unnecessary.

       Defendant’s point is that the modified contracts, which gave rise to
the protest, are now at an end. The agency did not exercise the option
periods because it intends to award new prime vendor contracts—we assume
compliant with procurement statutes and regulations—well before the
expiration of the option period (November 2021). In fact, the motion and
attached affidavit of the VA’s Dr. Jamie Wilbur represent that the VA intends
to award as soon as practicable after a General Accountability Office
(“GAO”) protest is resolved in October 2020. Because there was a gap
between the March expiration and the expected award of the new prime
vendor contracts, the agency executed four short-term bridge contracts to
meet its medical supply distribution needs in the interim. Defendant argues
that the Federal Circuit’s concern that the harms might shift if the option
periods were exercised has not and cannot materialize, and thus this protest
is moot. If plaintiffs have an issue with the bridge contracts, defendant
argues, that the challenge must be a separate protest because those contracts
are not the subject of this bid protest. We agree.

        Plaintiffs’ response is, once again, that they continue to be harmed by
the VA’s use of non-competitive measures to fill its medical supply needs.
Whether denominated as bridge contracts or extensions of the prime vendor
contracts, plaintiffs urge that the status quo is unchanged. Thus, the Federal
Circuit’s concern that the continued passage of time would, in effect, increase
the harm to plaintiffs beyond that contemplated 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
unmerited. Plaintiffs go further and raise the specter of a new legal issue
resulting from the Defense Logistics Agency’s (“DLA”) announcement of
future purchasing for the VA. Plaintiffs aver that some of that purchasing
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 asking the court to grant plaintiff’s motion for a preliminary
injunction.1

1
  It is unclear whether this was stated in error at the end of plaintiff’s
opposition or whether it was in fact a request to reactive plaintiffs’ 2018
request for preliminary relief (ECF No. 4). We denied that request on the
record on July 12, 2018, and the case continued to resolution through motions
for judgment on the administrative record. See Order Denying Mot. for
                                      3
        Although we appreciate plaintiffs’ perspective that the harm to them
continues unabated, the parties’ legal rights have changed. The contract
modifications that harmed plaintiffs are no longer at issue because the prime
vendor contracts have expired of their own terms. Plaintiffs’ request that
we consider the legality of the bridge contracts or even the alleged new
actions taken, or soon to be taken, by DLA with respect to VA’s purchasing
of medical supplies belies their point. The legality of those actions is
unrelated to our resolution of plaintiff’s 2018 bid protest complaint. We do
not sit as an agency ombudsman reviewing each VA contracting decision as
it happens. There is no agency action with respect to the prior prime vendor
contracts that we could enjoin. The new short-term bridge contracts are
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 plaintiff’s
motion to reopen the judgment because no relief was available and thus no
case or controversy remained).

      Accordingly, defendant’s motion to dismiss is granted.2 The Clerk
of Court is directed to dismiss the complaint and to enter judgment
accordingly. No costs.

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

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

2
   Earlier today, plaintiffs filed a request (ECF No. 77) to present
supplemental briefing regarding a GAO report that, they allege, details
continuing problems with the award of the new prime vendor contracts and
states that the contracts will now not be awarded until early next year. No
response is necessary, however, because, even if we assume these allegations
to be true, they would not change our holding that the court has lost
jurisdiction due to the expiration of the originally-protested contracts. The
motion is thus denied.
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