Court Opinion

ID: 4298521
Source: CourtListenerOpinion
Date Created: 2018-07-27 15:00:40.758348+00
Date Added: 2024-06-11T14:41:07.542086
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

  GEILER/SCHRUDDE & ZIMMERMAN, A JOINT
                VENTURE,
             Plaintiff-Appellant

   NANCY B. GEILER, GEILER COMPANY, INC.,
          GJV1, A JOINT VENTURE,
              Movants-Appellants

                           v.

                  UNITED STATES,
                  Defendant-Appellee

    INNOVATIVE SUPPORT SOLUTIONS, INC.,
                  Defendant
            ______________________

                      2017-2517
                ______________________

    Appeal from the United States Court of Federal
Claims in No. 1:16-cv-00186-LAS, Senior Judge Loren A.
Smith.
                ______________________

                Decided: July 27, 2018
                ______________________

   FRANK REILLY, Fort Lauderdale, FL, for plaintiff-
appellant and movants-appellants.
2           GEILER/SCHRUDDE & ZIMMERMAN   v. UNITED STATES

     MOLLIE LENORE FINNAN, Commercial Litigation
Branch, Civil Division, United States Department of
Justice, Washington, DC, for defendant-appellee. Also
represented by CHAD A. READLER, ROBERT E. KIRSCHMAN,
JR., ALLISON KIDD-MILLER.
                ______________________

    Before REYNA, BRYSON, and HUGHES, Circuit Judges.
PER CURIAM.
    Following the death of William Geiler, Jr., the U.S.
Department of Veterans Affairs adjusted the status of
several entities that he had owned, revoking their desig-
nations as Service-Disabled Veteran-Owned Small Busi-
nesses. Those entities, as well as Mr. Geiler’s widow,
challenged the status revocations in the U.S. Court of
Federal Claims by filing a supplemental complaint in an
unrelated bid protest. The Court of Federal Claims
dismissed that complaint for lack of subject matter juris-
diction after determining that none of the VA’s alleged
legal violations occurred in connection with a procure-
ment or proposed procurement. We agree and affirm.
                             I
    In June 2015, the Department of Veterans Affairs
issued a Request for Proposals (RFP) to upgrade a chiller
plant at one of its medical centers. The VA set aside this
contract for a Service-Disabled Veteran-Owned Small
Business (SDVOSB). To qualify as an SDVOSB, an entity
“must be at least 51 percent unconditionally and directly
owned by one or more . . . service-disabled veterans.” 38
C.F.R. § 74.3. After the VA verifies that an entity has the
requisite ownership structure and lists the entity in its
database of veteran-owned businesses, the entity can bid
on contracts set aside for SDVOSBs. See 38 U.S.C.
§ 8127(e); 48 C.F.R. § 804.1102.
GEILER/SCHRUDDE & ZIMMERMAN    v. UNITED STATES           3

    In response to the VA’s RFP, Geiler/Schrudde &
Zimmerman, A Joint Venture (GSZ) submitted a proposal.
At the time of its bid, the VA listed GSZ as an SDVOSB.
The VA ultimately awarded the contract to a different
bidder, Innovative Support Solutions, Inc. (ISS), whose
proposal offered a lower price.
     GSZ filed a protest with the Government Accountabil-
ity Office contesting the agency’s decision to award the
contract to ISS. GSZ’s protest alleged that ISS’s proposal
was technically unacceptable and that the VA erred by
failing to evaluate GSZ’s proposal. The GAO denied those
claims, prompting GSZ to file a complaint before the
Court of Federal Claims. GSZ’s original complaint mir-
rored its GAO protest claims.
    After GSZ filed its suit, William Geiler, Jr., the ser-
vice-disabled veteran who owned GSZ, passed away. His
death triggered the VA’s revocation of GSZ’s SDVOSB
status. Mr. Geiler also owned two other entities that the
VA had certified as SDVOSBs: The Geiler Company, Inc.
and GJV1, A Joint Venture (collectively with GSZ, the
Geiler Entities). The VA also revoked those entities’
SDVOSB statuses.
    Following the VA’s revocation of GSZ’s SDVOSB
status, the government moved to dismiss GSZ’s complaint
at the trial court for lack of jurisdiction. Under 28 U.S.C.
§ 1491(b)(1), the statute that confers bid protest jurisdic-
tion on the Court of Federal Claims, only an “interested
party” has standing to bring a bid protest suit. To qualify
as an interested party, a plaintiff must establish that it
would have had a substantial chance of “receiv[ing] the
contract award but for the alleged error in the procure-
ment process.” Info. Tech. & Applications Corp. v. United
States, 316 F.3d 1312, 1319 (Fed. Cir. 2003). The gov-
ernment argued that, because the VA’s chiller plant
contract was set aside for an SDVOSB entity, GSZ lost
any chance of receiving the contract after Mr. Geiler’s
4          GEILER/SCHRUDDE & ZIMMERMAN    v. UNITED STATES

death. Alternatively, the government moved for judgment
on the administrative record. GSZ also filed its own
motion for judgment on the administrative record.
    Several months after the government moved to dis-
miss GSZ’s original complaint, GSZ filed a supplemental
complaint challenging the VA’s decision to revoke the
Geiler Entities’ SDVOSB statuses. The supplemental
complaint added three new plaintiffs to the case: The
Geiler Company; GJV1; and Nancy Geiler, Mr. Geiler’s
widow. It alleged that the VA’s revocation of the Geiler
Entities’ SDVOSB statuses violated their due process
rights and was arbitrary and capricious. GSZ moved for
judgment on the administrative record on its supple-
mental complaint. The government moved to dismiss the
supplemental complaint for lack of jurisdiction and,
alternatively, for judgment on the administrative record.
    For GSZ’s original complaint, the trial court denied
the government’s motion to dismiss. Although GSZ lost
its SDVOSB status during its bid protest, the court rea-
soned that § 1491(b)(1) only requires a plaintiff to have
been an interested party at the time of the contract award
that it challenges. The court then granted the govern-
ment’s motion for judgment on the administrative record
and denied GSZ’s motion for the same. GSZ has not
appealed these decisions.
    For GSZ’s supplemental complaint, the trial court
granted the government’s motion to dismiss for lack of
jurisdiction. The court reasoned that the VA’s revocation
of the Geiler Entities’ SDVOSB statuses did not occur in
connection with a procurement because it did not affect
the award or performance of a contract. Because the
court determined that it lacked jurisdiction over the
supplemental complaint, it denied GSZ’s motion for
judgment on the administrative record.
    The Geiler Entities and Mrs. Geiler (collectively,
Geiler) now appeal the trial court’s dismissal of the sup-
GEILER/SCHRUDDE & ZIMMERMAN       v. UNITED STATES        5

plemental complaint.     We have jurisdiction under 28
U.S.C. § 1295(a)(3).
                             II
    We review the Court of Federal Claims’ decision to
dismiss a complaint for lack of jurisdiction de novo.
Trusted Integration, Inc. v. United States, 659 F.3d 1159,
1163 (Fed. Cir. 2011).
      The Tucker Act, as amended, confers jurisdiction on
the Court of Federal Claims to review bid protests under
28 U.S.C. § 1491(b)(1). Section 1491(b)(1) confers jurisdic-
tion over “an action by an interested party objecting to
. . . any alleged violation of statute or regulation in con-
nection with a procurement or a proposed procurement.”
“The operative phrase ‘in connection with’ is very sweep-
ing in scope.” RAMCOR Servs. Grp., Inc. v. United States,
185 F.3d 1286, 1289 (Fed. Cir. 1999). A legal violation
occurs in connection with a procurement or proposed
procurement if an agency’s actions under a statute “clear-
ly affect the award and performance of a contract.” Id.
    Although Geiler’s supplemental complaint alleges the
VA committed constitutional and statutory violations in
revoking the Geiler Entities’ SDVOSB statuses, we agree
with the trial court that Geiler failed to establish that
those alleged violations occurred in connection with a
procurement or proposed procurement. Thus, we affirm
the trial court’s holding that it lacked jurisdiction over
Geiler’s supplemental complaint.
    To start, the VA’s revocation of the Geiler Entities’
SDVOSB statuses did not affect the award or performance
of the VA’s chiller plant contract that GSZ originally
protested. GSZ lost that contract because ISS submitted
a lower priced, technically acceptable proposal. While
GSZ protested the award in its original complaint, GSZ
has not appealed the trial court’s determination that the
VA acted reasonably in awarding the contract to ISS. The
6           GEILER/SCHRUDDE & ZIMMERMAN      v. UNITED STATES

two other Geiler Entities—The Geiler Company and
GJV1—did not even bid for the contract. Thus, the Geiler
Entities’ loss of their SDVOSB statuses did not affect the
VA’s contract award decision.
    Recognizing this, Geiler now argues that the Geiler
Entities’ loss of their SDVOSB statuses affects the award
of all pending and future proposed procurements set aside
for SDVOSB entities. If the Geiler Entities are prohibited
from bidding on such contracts, Geiler argues, the VA’s
award decisions might be different because the agency
might have selected a Geiler Entities’ bid. But this is not
enough to satisfy § 1491(b)’s jurisdictional requirements.
The mere assertion that a future agency procurement
might be different as a result of a legal violation does not
establish that the violation “clearly affect[ed]” a contract’s
award or performance. RAMCOR, 185 F.3d at 1289.
     RAMCOR, the only case that Geiler cites for support,
is readily distinguishable. In that case, the U.S. Immi-
gration and Naturalization Service overrode the automat-
ic stay of a procurement that normally occurs upon filing
of a pre-award bid protest. Id. at 1287. The statute
authorizing INS to override the stay permitted that action
only upon a written finding by the agency that “‘urgent
and compelling circumstances which significantly affect
interests of the United States will not permit waiting’ for
the bid protest decision.”        Id. (quoting 31 U.S.C.
§ 3553(c)(2)). After making such a finding, INS awarded
the challenged contract to a non-protesting bidder. The
bid protester sought to preliminarily enjoin INS’s override
of the automatic stay in the Court of Federal Claims on
the ground that INS violated the statutory requirements.
Id. at 1287–89. We held that the trial court had jurisdic-
tion over the bid protester’s action for a preliminary
injunction. Even though the bid protester had not made a
“challenge on the merits” to INS’s decision of which bidder
should receive the contract, the trial court’s § 1491(b)
jurisdiction extends to alleged legal violations “in connec-
GEILER/SCHRUDDE & ZIMMERMAN    v. UNITED STATES           7

tion” with such decisions. Id. at 1289. The alleged legal
violation “clearly affect[ed]” the award of the challenged
contract because INS’s override of the automatic stay
allowed it to procure services immediately rather than
having to wait for resolution of the bid protest litigation.
Id.
    Here, the VA’s revocation of the Geiler Entities’
SDVOSB statuses had no similar effect. RAMCOR in-
volved a challenge to an actual contract award. While
INS’s decision to override an automatic stay resulted in
the immediate award of a contract that would have oth-
erwise been delayed, Geiler does not point to any effect
that the VA’s status revocation decision had on the award
or performance of any contract.
    Section 1491(b)’s other jurisdictional requirement con-
firms the view that alleged legal violations do not occur
“in connection with a procurement or a proposed pro-
curement” whenever they might affect unidentified pend-
ing and future procurements. Only an “interested party”
can sue under § 1491(b), which requires the plaintiff to
have a “direct economic interest [that] would be affected
by the award of the contract or by failure to award the
contract.” Myers Investigative & Sec. Servs., Inc. v. Unit-
ed States, 275 F.3d 1366, 1370 (Fed. Cir. 2002) (quoting
Am. Fed’n of Gov’t Employees, AFL-CIO v. United States,
258 F.3d 1294, 1301 (Fed. Cir. 2001)). To prove a direct
economic interest as a prospective bidder, the plaintiff
must establish that it had a “substantial chance” of re-
ceiving the contract. Rex Serv. Corp. v. United States, 448
F.3d 1305, 1308 (Fed. Cir. 2006). A plaintiff cannot
establish a substantial chance by “[t]he mere fact that it
might have submitted a bid in a competitive procure-
ment.” Myers, 275 F.3d at 1370. It must also show that it
is qualified to receive the contract award. Id. at 1370–71.
    These requirements for establishing that a plaintiff is
an “interested party” make clear that § 1491(b) does not
8          GEILER/SCHRUDDE & ZIMMERMAN      v. UNITED STATES

confer jurisdiction over claims alleging legal violations
that only might affect unidentified pending and future
procurements. Without challenging specific procurements
or proposed procurements, a plaintiff cannot prove that
its bid would qualify it to receive the contract award.
Thus, we decline Geiler’s invitation to interpret
§ 1491(b)’s “in connection with a procurement or a pro-
posed procurement” requirement as satisfied whenever a
plaintiff alleges a legal violation that might affect uniden-
tified pending or future procurements.
                               III
     Because Geiler’s supplemental complaint does not
challenge a specific procurement, or even allege that the
Geiler Entities were preparing to bid for a specific pro-
curement that required an SDVOSB status, Geiler has
failed to allege a legal violation in connection with a
procurement or proposed procurement as required by
§ 1491(b). We therefore affirm the trial court’s dismissal
of Geiler’s supplemental complaint for lack of jurisdiction.
                       AFFIRMED
    No costs.