Pernix Group, Inc. v. United States

In the United States Court of Federal Claims

No. 15-420 C

(June 10, 2015)1

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

PERNIX GROUP, INC. *

*

Plaintiff, *

*

FRAMACO INTERNATIONAL, *

INC., *

*

Intervenor-plaintiff, * Bid Protest; Justiciability; Protest

* Is Not Ripe Where the Agency

v. * Has Yet to Take a Final Action

* Adverse to the Protestor.

THE UNITED STATES, *

*

Defendant, *

*

CADDELL CONSTRUCTION *

COMPANY, *

*

Intervenor-defendant. *

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

J. Randolph MacPherson, Washington, DC, for plaintiff. Rebecca Bailey

Jacobsen, Washington, DC, of counsel.

Jonathan D. Shaffer, Tysons Corner, VA, for intervenor-plaintiff. Mark E.

Hanson and Mary Pat Buckenmeyer, Tysons Corner, VA, of counsel.

1

/ This opinion was issued under seal on May 29, 2015. Pursuant to ¶ 5 of the ordering

language, the parties were invited to identify source selection, proprietary or confidential material

subject to deletion on the basis that the material was protected/privileged. No redactions were

proposed by the parties. Thus, the sealed and public versions of this opinion are identical, except

for the publication date and this footnote.

Sosun Bae, United States Department of Justice, with whom were Benjamin

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

Director, Deborah A. Bynum, Assistant Director, Washington, DC, for defendant.

Dirk Haire, Washington, DC, for intervenor-defendant. Alexa Santora,

Sonia Tabriz, P. Sean Milani-Nia, Washington, DC, of counsel.

__________________________

OPINION AND ORDER

__________________________

Bush, Senior Judge.

This bid protest is before the court on defendant’s and intervenor-

defendant’s motions to dismiss brought under Rule 12(b)(1) of the Rules of the

United States Court of Federal Claims (RCFC). These motions have been fully

briefed. For the reasons stated below, defendant’s and intervenor-defendant’s

motions to dismiss are granted.

BACKGROUND2

I. Introduction

Plaintiff Pernix Group, Inc. (Pernix) filed its bid protest on April 27, 2015.

The protest seeks declaratory and injunctive relief regarding the proper

interpretation of 22 U.S.C. § 4852(c)(2)(E) (2012) in four procurements currently

underway under the aegis of the United States Department of State (State).

According to the complaint, the Government Accountability Office (GAO)

recently issued a decision advising State to interpret § 4852 in a manner that

would eliminate Pernix from consideration in these procurements. The primary

question before the court is whether this protest is ripe, given that State has not yet

acted, and has not indicated how it will act, in response to GAO’s decision.

2

/ The facts upon which the parties rely are undisputed. The court makes no findings of

fact in this opinion other than to determine whether plaintiff’s claims are justiciable.

2

Caddell Construction Company (Caddell) has intervened in this protest as

an intervenor-defendant and Framaco International, Inc. (Framaco) has intervened

as an intervenor-plaintiff. State’s official response to the GAO decision is not due

until June 19, 2015. The government has agreed to stay award in the procurement

which was the focus of the GAO protest through June 12, 2015. The court

determined that oral argument on the ripeness issue was unnecessary.

II. GAO and this Court Have Disagreed on the Law Governing Embassy

Construction Projects

A. The Governing Statute

State procurements for embassy construction are subject to 22 U.S.C.

§ 4852 (2012), titled “Diplomatic construction program.” Where adequate

competition exists, contractors must be either “United States persons” or

“qualified United States joint venture persons” in order to be eligible for such

construction contracts. Id. § 4852(a). Only the statutory definition of “United

States person” is relevant to this bid protest.

More specifically, only one element or requirement of the definition of

“United States person” is at issue here:

(2) the term “United States person” means a person

which –

....

(E) with respect to a construction project under

subsection (a)(1) of this section, has achieved total

business volume equal to or greater than the value

of the project being bid in 3 years of the 5-year

period before the date [of the issuance of the

solicitation.]

22 U.S.C. § 4852(c)(2). Thus, under the plain meaning of the statutory terms, a

minimum business volume threshold is established which screens out ineligible

contractors. Since 2007, however, GAO and this court have diverged as to the

proper formula to employ in determining the “total business volume” minimum

threshold.

3

B. GAO’s Interpretation of the Total Business Volume Requirement

In March of 2007 Caddell filed a protest at GAO concerning the award of an

embassy construction contract. Caddell Constr. Co., B-298949.2, 2007 CPD

¶ 119, 2007 WL 1893209, at *3 (Comp. Gen. June 15, 2007) (“Caddell I”). In that

protest, Caddell challenged State’s “approach of adding together 3 years of a

company’s business receipts” to determine the total business volume of an offeror.

Id. at *8. In essence, State’s interpretation of the phrase “total business volume

equal to or greater than the value of the project being bid in 3 years of the 5-year

period before the date [of the issuance of the solicitation],” 22 U.S.C.

§ 4852(c)(2)(E), allowed a company to meet the minimum threshold by

aggregating three years of business receipts. Caddell I, 2007 WL 1893209, at *8.

This approach can be described as a “cumulative” total business volume formula.

GAO agreed with Caddell that State’s cumulative total business volume

formula was not correct and opined:

We think the ordinary and common meaning of these

words is that eligible offerors will have achieved a

business volume equal to or greater than the value of the

project in each of 3 years within the 5-year period.

Id. at *9 (emphasis added). Thus, GAO adopted an interpretation of total business

volume that requires that the minimum threshold be met annually for three

individual years, not cumulatively through aggregation. GAO’s formula can

therefore be described as an “annual” total business volume formula. After giving

consideration to other means of statutory interpretation beyond an analysis of the

plain text, GAO concluded:

[W]e think the agency’s interpretation of this provision –

looking to an entity’s highest cumulative 3-year business

volume within the previous 5-year period – conflicts

with the [legislative history]. In short, we find that

[State’s] interpretation of this statute is inconsistent with

its ordinarily understood meaning, and with the

legislative concerns that led to the statute’s enactment.

4

Id. at *10.

C. The United States Court of Federal Claims Disagrees with GAO

and Adopts the Cumulative Total Business Volume Formula

Another bid protest filed later that year with this court raised the same issue,

i.e., whether the total business volume threshold must be met annually, or

cumulatively, in three of the five years before the issuance of the solicitation.

Grunley Walsh Int’l, LLC v. United States, 78 Fed. Cl. 35 (2007). There, the

protestor had been adversely affected by State’s decision to follow Caddell I and

to adopt an annual total business volume threshold interpretation of

§ 4852(c)(2)(E). Grunley Walsh, 78 Fed. Cl. at 38. The court observed that for

pure questions of law this court accords no deference to GAO opinions, and noted

that GAO decisions are not binding on this court. Id. at 39 (citations omitted).

Like GAO, this court began its analysis with the plain text of the statute.

Unlike GAO, the court reached this conclusion:

The word “total” before the term “business volume”

indicates that the requirement is met by adding three out

of the past five years to equal the offeror’s “total

business volume.” If the section is read without the

word “total,” it is completely unclear whether the three

years are to [be] measured individually or cumulatively.

The inclusion of the word “total” modifies the term

“volume” and informs the reader that the volume in

question will be, as plaintiff states, “a product of

addition.” Measuring the three years cumulatively gives

meaning to the word “total” and avoids a construction

that leaves language “superfluous, void, or

insignificant.”

Id. at 40 (quoting Duncan v. Walker, 533 U.S. 167, 174 (2001)) (footnote

omitted). After reviewing other potential aids to statutory construction, the court

held that the “total business volume requirement is cumulative” and sustained the

protest. Id. at 43.

5

D. GAO Comments in 2009 that the Annual Total Business Volume

Formula in Caddell I, Not the Cumulative Total Business Volume

Formula in Grunley Walsh, is Correct

In 2009, GAO was confronted again with the total business volume question

in another State Department embassy construction project protest. Caddell

Constr. Co., B-401596, 2009 CPD ¶ 187, 2009 WL 3031273 (Comp. Gen. Sept.

21, 2009) (“Caddell II”). In that protest, which also involved two of the three

offerors participating in this protest, Caddell, relying on Caddell I, suggested that

Framaco should have been eliminated from the competition because, among other

reasons, it did not meet the annual total business volume requirement (as opposed

to the cumulative total business volume requirement). Id. at *3. GAO did not

base its decision in Caddell II on Framaco’s failure to meet the annual total

business volume requirement, but relied instead on other defects in Framaco’s

qualifications. Id. at *4.

State argued before GAO that it was following Grunley Walsh and applying

the cumulative total business volume requirement, not the annual total business

volume requirement applied by GAO in Caddell I. Caddell II, 2009 WL 3031273,

at *4. GAO observed that State “recognizes that our Office reached a different

conclusion about the meaning of this statute, [but] it urges our Office to follow the

court’s interpretation” of § 4852(c)(2)(E) in Grunley Walsh. Id. GAO disagreed

with this suggestion:

Then and now, we think the ordinary and common

meaning of the words in this statute is that eligible

offerors will have achieved a business volume equal to

or greater than the value of the project in each of 3 years

within the 5-year period.

Id. (citing Caddell I) (emphasis added). Nonetheless, avoiding direct conflict with

this court’s interpretation of § 4852(c)(2)(E), GAO did not address State’s

application of a cumulative total business volume requirement; instead, GAO

sustained Caddell’s protest on other grounds. Id.

III. Protests of the Current Embassy Construction Procurement in Each

Forum

6

A. In 2014, Pernix and Framaco Satisfy the Cumulative Total

Business Volume Formula and Are Prequalified for an Embassy

Construction Contract Procurement

Pernix and Framaco were recently judged by State to have satisfied the

cumulative total business volume requirement in a competition for embassy

construction in Maputo, Mozambique (the Maputo procurement). Compl. ¶¶ 14-

15; Framaco Resp. at 4. As a result, they, along with Caddell and other offerors,

were invited to participate in Phase II of the Maputo procurement. Compl. ¶ 17;

Framaco Resp. at 5. In other words, these offerors had achieved “prequalification”

for the Maputo procurement. The Prequalification Notice listing the companies

selected to continue in the procurement was published on April 4, 2014. Compl.

¶ 17.

B. Caddell Protests the Prequalification of Pernix and Framaco at

GAO

Before Phase II proposals were submitted by the offerors in the Maputo

procurement, Caddell filed a protest at GAO arguing that Pernix and Framaco

should not have been prequalified, relying on the annual total business volume

requirement articulated in Caddell I for one of its protest grounds. Caddell

Constr. Co., B-411005.1, B-411005.2, 2015 CPD ¶ 132, 2015 WL 1874239

(Comp. Gen. Apr. 20, 2015) (Caddell III). In its decision on that protest GAO

noted the conflict between the Court of Federal Claims and GAO in interpreting

the “total business volume” term of § 4852(c)(2)(E). Caddell III, 2015 WL

1874239, at *10. As in 2009, GAO found “no basis to revise our prior

interpretation of the [law].” Id.

The reasons why GAO continues to interpret § 4852(c)(2)(E) differently

than this court in Grunley Walsh are irrelevant to the current motions under

review.3 By following Caddell I, GAO sustained Caddell’s challenge to

3

/ This court, were it to reach the merits of Pernix’s protest, would be bound by neither

Grunley Walsh nor Caddell III. Decisions in other cases before this court are not binding in this

proceeding. See W. Coast Gen. Corp. v. Dalton, 39 F.3d 312, 315 (Fed. Cir. 1994) (“Court of

Federal Claims decisions, while persuasive, do not set binding precedent for separate and distinct

cases in that court.”) (citations omitted). Nor do GAO decisions create binding precedent for this

(continued...)

7

Framaco’s prequalification, in part, because Framaco never achieved an annual

total business volume of $160 million (the value of the Maputo construction

project) although Framaco satisfied the cumulative total business volume formula.

Caddell III, 2015 WL 1874239, at *13. GAO also sustained Caddell’s challenge

to Pernix’s prequalification, for the sole reason that Pernix’s annual total business

volume never reached $160 million, although Pernix, like Framaco, satisfied the

cumulative total business volume formula. Id. at *14-16. The GAO decision

issued on April 20, 2015.

C. Pernix Files a Protest in this Court Concerning the Maputo

Procurement and Three Others

One week after GAO issued Caddell III, Pernix filed its bid protest in this

court. Although State has taken no action in response to Caddell III, and has not

publicly reacted to Caddell III, Pernix seeks an injunction and declaratory relief to

forestall any action by State that would harm its competitive interests. Should

State choose to follow the recommendation of GAO in Caddell III, Pernix would

be excluded from the Maputo procurement – thus, Pernix seeks an injunction to

preclude this occurrence. Compl. Count II, IV. Should State choose to follow the

recommendation of GAO in Caddell III, Pernix would also lose any chance of

winning contracts for State Department construction projects in three other

locations: Matamoros, Mexico; Port Moresby, Papau New Guinea; and, Niamey,

Niger. Id. Count III-IV. Pernix seeks an injunction preventing those occurrences

as well. Id. Lastly, Pernix seeks declaratory relief regarding the proper

interpretation of § 4852(c)(2)(E). Id. Count I.

D. Motions to Dismiss

Defendant and Caddell both argue that Pernix’s claims are not ripe, because

State has not yet taken any action to revoke Pernix’s prequalification for the

Maputo procurement. The government presents two additional arguments.

According to one theory, Pernix lacks standing to bring this protest because it has

3

(...continued)

court. See, e.g., Allied Tech. Grp., Inc. v. United States, 649 F.3d 1320, 1331 n.1 (Fed. Cir.

2011) (stating that GAO decisions do not create binding precedent for the United States Court of

Appeals for the Federal Circuit); XTRA Lease, Inc. v. United States, 50 Fed. Cl. 612, 618 (2001)

(stating that “GAO decisions are not binding on this court”) (citation omitted).

8

not been prejudiced by any error committed by State. Def.’s Mot. at 7-8.

According to another theory, even if Pernix’s protest of the Maputo procurement

is deemed to be justiciable, Pernix should not be allowed to include the three other

procurements in its protest. For this reason, the government argues that any of

plaintiff’s claims related to procurements for construction in Matamoros, Port

Moresby, and Niamey should be dismissed. Id. at 8. The court reserves further

discussion of these legal theories for the analysis section of this opinion.

DISCUSSION

I. Standard of Review for a Ripeness Challenge to a Bid Protest

Ripeness is a justiciability doctrine. See Fisher v. United States, 402 F.3d

1167, 1176 (Fed. Cir. 2005) (“Though justiciability has no precise definition or

scope, doctrines of standing, mootness, ripeness and political question are within

its ambit.”) (citations omitted). A 2009 decision of this court provided a succinct

description of the ripeness doctrine and applied that doctrine to a bid protest in

this court:

The justiciability doctrine of ripeness

circumscribes the court’s review to cases that present

realized rather than anticipated or hypothetical injuries.

United Public Workers of America v. Mitchell, 330 U.S.

75, 89-90, 67 S. Ct. 556, 91 L. Ed. 754 (1947). A claim

for relief is not ripe for adjudication when it rests upon

“contingent future events that may not occur as

anticipated, or indeed may not occur at all.” Thomas v.

Union Carbide, 473 U.S. 568, 581, 105 S. Ct. 3325, 87

L. Ed. 2d 409 (1985). When reviewing an administrative

action, the court evaluates two factors: (1) “the fitness of

the issues for judicial decision,” and (2) “the hardship to

the parties of withholding court consideration.” Abbott

Labs. v. Gardner, 387 U.S. 136, 149, 87 S. Ct. 1507, 18

L. Ed. 2d 681 (1967), overruled on other grounds by

Califano v. Sanders, 430 U.S. 99, 97 S. Ct. 980, 51 L.

Ed. 2d 192 (1977). A challenge to an administrative

action must satisfy both factors, under Abbott

9

Laboratories, in order to be ripe for judicial review.

Cedars-Sinai Medical Ctr. v. Watkins, 11 F.3d 1573,

1581 (Fed. Cir. 1993). Under the first factor, “an agency

decision is not ripe for judicial review until the allegedly

offending agency has adopted a final decision.” NSK,

Ltd. v. United States, 510 F.3d 1375, 1384 (Fed. Cir.

2007) (emphasis added). In turn, an agency’s decision is

final, for the purposes of ripeness, only if it (1) “marks

‘the consummation of the agency’s decision-making

process,’ i.e., it must not be merely tentative or

interlocutory, and (2) ‘the action [is] one by which rights

or obligations have been determined, or from which legal

consequences will flow.’” Id. at 1385 (quoting Bennett

v. Spear, 520 U.S. 154, 177, 117 S. Ct. 1154, 137 L. Ed.

2d 281 (1997)).

Madison Servs., Inc. v. United States, 90 Fed. Cl. 673, 678 (2009).

The basic analytical framework presented in Madison Services is the same

as the ripeness framework recently discussed by the United States Court of

Appeals for the Federal Circuit.4 The Federal Circuit decision most on point,

because of its articulation of a ripeness standard applicable to bid protests in this

court, is Systems Application & Technologies, Inc. v. United States, 691 F.3d 1374

(Fed. Cir. 2012) (SA-TECH). This precedential statement of the ripeness doctrine

is very similar to the discussion of the doctrine presented in Madison Services:

4

/ Because Madison Services cleaves to binding precedent of the Federal Circuit, the

court finds the ripeness analysis in Madison Services to be far more persuasive than the ripeness

analysis in CBY Design Builders v. United States, 105 Fed. Cl. 303 (2012), a case relied upon by

both Pernix and Framaco. The CBY Design opinion doubted whether some of the cases relied

upon in Madison Services, such as Bennett v. Spear, 520 U.S. 154 (1997), Tokyo Kikai

Seisakusho, Ltd. v. United States, 529 F.3d 1352 (Fed. Cir. 2008), and U.S. Ass’n of Imps. of

Textiles & Apparel v. U.S. Dep’t of Commerce, 413 F.3d 1344 (Fed. Cir. 2005), had “much, if

any relevance to the question of whether a bid protest is ripe.” 105 Fed. Cl. at 332. Yet these

opinions, cited approvingly in Madison Services and questioned as potentially irrelevant in CBY

Design, provide the foundational law for the Federal Circuit’s subsequent application of the

ripeness doctrine to a bid protest. Sys. Application & Techs., Inc. v. United States, 691 F.3d

1374, 1384 (Fed. Cir. 2012).

10

A claim is not ripe for judicial review when it is

contingent upon future events that may or may not occur.

Thomas v. Union Carbide Agric. Prods. Co., 473 U.S.

568, 580-81, 105 S. Ct. 3325, 87 L. Ed. 2d 409 (1985).

The purpose of the doctrine is to prevent the courts,

“through avoidance of premature adjudication, from

entangling themselves in abstract disagreements over

administrative policies, and also to protect the agencies

from judicial interference until an administrative

decision has been formalized and its effects felt in a

concrete way by the challenging parties.” Abbott Labs.

v. Gardner, 387 U.S. 136, 148-49, 87 S. Ct. 1507, 18 L.

Ed. 2d 681 (1967), overruled on other grounds by

Califano v. Sanders, 430 U.S. 99, 97 S. Ct. 980, 51 L.

Ed. 2d 192 (1977). In assessing ripeness, there are two

basic factors: “(1) the fitness of the issues for judicial

decision[;] and (2) the hardship to the parties of

withholding court consideration.” Abbott Labs., 387

U.S. at 149, 87 S. Ct. 1507.

When a party challenges government action, the

first factor becomes a question of whether the challenged

conduct constitutes a final agency action. See Tokyo

Kikai Seisakusho, Ltd. v. United States, 529 F.3d 1352,

1363 (Fed. Cir. 2008); U.S. Ass’n of Imps. of Textiles &

Apparel v. U.S. Dep’t of Commerce, 413 F.3d 1344,

1349-50 (Fed. Cir. 2005) [(Textile Importers)]. Final

agency action hinges on two points: “First, the action

must mark the ‘consummation’ of the agency’s

decision-making process – it must not be of a merely

tentative or interlocutory nature. And second, the action

must be one by which ‘rights or obligations have been

determined,’ or from which ‘legal consequences will

flow.’” Bennett v. Spear, 520 U.S. 154, 177-78, 117 S.

Ct. 1154, 137 L. Ed. 2d 281 (1997) (citations omitted).

SA-TECH, 691 F.3d at 1383-84. It is the “final agency action” or “fitness” prong

11

of the ripeness analysis which courts typically examine first.5

Next, to satisfy the hardship prong of the ripeness analysis, the government

action’s impact upon a plaintiff must be “sufficiently direct and immediate.”

Abbott Laboratories, 387 U.S. at 152. Abstract, avoidable or speculative harm is

not enough to satisfy the hardship prong. E.g., Texas v. United States, 523 U.S.

296, 301-02 (1998). Being forced to wait for an agency to issue a decision is

generally not enough to satisfy the hardship prong; the Federal Circuit has stated

that “any business uncertainty associated with awaiting a final decision from an

agency is different in kind and legal effect from the hardship identified in Abbott

Laboratories and insufficient to turn a threshold agency decision into a final

agency action ripe for review.” Textile Importers, 413 F.3d at 1350. In the bid

protest context, there is no measurable hardship, at the time of the protest, flowing

from a future, hypothetical agency decision adverse to the protestor. See Texas

Bio- & Agro-Defense Consortium v. United States, 87 Fed. Cl. 798, 806 (2009)

(dismissing a protest on ripeness grounds and finding no hardship to the protestor

because “these [lost business opportunities] are not hardships that would stem

from a dismissal without prejudice [of this protest] on ripeness grounds – they are

hardships which would be suffered if Plaintiff’s proposed site is not ultimately

selected”) (emphasis added).

Justiciability challenges focusing on ripeness are often brought under RCFC

12(b)(1), as is the case here. Justiciability, however, is not the same as subject

matter jurisdiction; ripeness and justiciability might best be described as limits on

the exercise of jurisdiction. See Madison Services, 90 Fed. Cl. at 680 n.3

(disagreeing with the government’s “characterization of either ripeness or

mootness as a per se limit on the court’s jurisdiction[,]” noting “lingering

uncertainty as to whether, and when, ripeness or mootness may operate as a limit

upon the jurisdiction of a federal court”) (citations omitted). In its most recent

pronouncement on this issue, the Federal Circuit distinguished between

5

/ If it is determined that there is no final agency action to protest, the hardship prong

appears to be of lesser importance and is sometimes omitted entirely from the court’s discussion

of ripeness. See, e.g., Madison Services, 90 Fed. Cl. at 679-80 (dismissing a protest on ripeness

grounds without considering hardship to the protestor, because there was no final agency action

to protest); see also NSK Ltd. v. United States, 510 F.3d 1375, 1385 (Fed. Cir. 2007) (affirming

the dismissal of a claim as unripe solely because the agency action was not final, without

discussing hardship to the claimant).

12

justiciability (in the sense of ripeness in particular) and subject matter jurisdiction.

See, e.g., Shinnecock Indian Nation v. United States, 782 F.3d 1345, 1348-52

(Fed. Cir. 2015) (treating these two threshold inquiries as to whether a complaint

should be dismissed as distinct). But see Morris v. United States, 392 F.3d 1372,

1375 (Fed. Cir. 2004) (stating that the Court of Federal Claims “does not have

jurisdiction over [takings] claims that are not ripe” (citing Howard W. Heck &

Assocs., Inc. v. United States, 134 F.3d 1468 (Fed. Cir. 1998)). Nonetheless, it is

clear that an unripe claim, like a claim outside this court’s jurisdictional ambit,

must be dismissed without prejudice. Shinnecock Indian Nation, 782 F.3d at 1350

(citations omitted).

II. Analysis

A. Ripeness

1. No Final Agency Action

There is no final action of State that is the subject of plaintiff’s requests for

relief in the complaint. Instead, up to this point, State has simply applied the

cumulative total business volume formula, as did this court in Grunley Walsh, and

has prequalified both Pernix and Framaco for the Maputo procurement.6 Compl.

¶¶ 14-15, 17; Framaco Resp. at 4. That action, which favors plaintiff, is not being

attacked in this lawsuit. Until and if State changes its position on the eligibility of

Pernix for the Maputo procurement pursuant to the advice provided by GAO in

Caddell III there is no final agency action that is ripe for review in this court.7 See

Madison Services, 90 Fed. Cl. at 679 (“[P]laintiff’s original protest has never been

ripe for the court’s review, because no final agency decision [regarding] the

solicitation has ever been before the court.”).

Framaco concedes that Pernix’s request for injunctive relief stated in the

complaint is not ripe, but attempts to distinguish that request from Pernix’s request

6

/ Indeed, except for a brief period between GAO’s issuance of Caddell I and this court’s

issuance of Grunley Walsh, State appears, on this record, to have consistently preferred the

cumulative total business volume interpretation of § 4852(c)(2)(E).

7

/ As Caddell correctly emphasizes, this court has no jurisdiction to review GAO

decisions such as Caddell III. Caddell Reply at 2 (citations omitted).

13

for declaratory relief regarding the proper interpretation of § 4852(c)(2)(E). The

proposition advanced by Framaco is innovative but entirely unsupported by

persuasive authority8:

The Pernix request for injunctive relief is premature

because the United States Department of State (“State”)

has not decided whether to follow the Government

Accountability Office (“GAO”) recommendation and

Pernix and Framaco currently remain prequalified for the

Maputo, Mozambique procurement . . . . On the other

hand, in light of the sharp disagreement between GAO

and this Court on a critical legal issue regarding

prequalification that impacts numerous State

procurements in a manner that materially prejudices and

harms Pernix, Framaco and similarly situated offerors,

Pernix’s request for declaratory judgment is ripe for

consideration by the Court.

Framaco Resp. at 1-2. The court finds no distinction, however, between requests

for declaratory or injunctive relief in determining the ripeness of this bid protest.

The test for ripeness stated in Abbott Laboratories and SA-TECH applies to

requests for declaratory judgments as well as to requests for injunctive relief. See

Abbott Laboratories, 387 U.S. at 138 (reviewing the ripeness of an action

requesting both declaratory and injunctive relief). The court notes that the

underlying bid protest in SA-TECH requested both declaratory and injunctive

relief, but this court chose to offer only injunctive relief because the two types of

relief would provide the same functional relief to the protestor. See Sys.

Application & Techs., Inc. v. United States, 100 Fed. Cl. 687, 720 (2011)

(“Because the practical effect of this requested [declaratory] relief is to prevent the

Army from taking the proposed corrective action, it is ‘tantamount to a request for

injunctive relief.’ Thus, the court will limit its discussion to SA-TECH’s request

for the entry of a permanent injunction prohibiting the Army from undertaking its

8

/ Framaco relies on CBY Design for its ripeness analysis. Framaco Resp. at 7. As stated

previously, the ripeness analysis presented in CBY Design diverges from Federal Circuit

precedent and is unhelpful here. See supra note 4.

14

proposed corrective action.” (quoting PGBA, LLC v. United States, 389 F.3d 1219,

1228 (Fed. Cir. 2004))). Because the two forms of relief are functionally

indistinguishable in this type of bid protest, e.g., PGBA, 389 F.3d at 1228, Pernix

cannot present an unripe claim for injunctive relief but simultaneously present a

ripe claim for declaratory relief. Pernix’s request for declaratory relief, like its

request for injunctive relief, has no final agency action at its base and must be

dismissed as unripe.

Only one other issue raised by the parties merits discussion in the court’s

review of the “fitness” prong of the ripeness analysis. Plaintiff relies on two

Federal Circuit opinions which discuss the breadth of this court’s bid protest

jurisdiction in an effort to show that its protest is ripe. See Pl.’s Resp. at 5 (citing

Distributed Solutions, Inc. v. United States, 539 F.3d 1340 (Fed. Cir. 2008);

RAMCOR Servs. Grp., Inc. v. United States, 185 F.3d 1286 (Fed. Cir. 1999)).

Neither of those opinions addressed the ripeness doctrine, and further, as

defendant points out, the bid protest scenarios in RAMCOR and Distributed are

readily distinguishable from the procurements at issue here. See Def.’s Reply at

1-2 (“But plaintiff fails to note the key distinction between those cases and the

present action, which is that, in both of the cited cases, the Federal Circuit

contemplated jurisdiction over actual decisions and alleged violations by the

Government, not hypothetical ones.”) (citations omitted). There is no aid for

Pernix’s ripeness contentions in either of these Federal Circuit opinions.

For all of the above-stated reasons, the court finds that Pernix’s protest is

not fit for adjudication because there is no final agency action for this court to

review. This finding is strong evidence that this protest is not ripe and is not

justiciable. See supra note 5. The court turns to the second ripeness factor, the

hardship prong, to confirm that dismissal of this protest without prejudice is

warranted.

2. No Hardship at This Juncture

According to plaintiff, participation in Phase I and Phase II of an embassy

construction contract procurement “requires prospective and actual offerors to

incur substantial costs.” Pl.’s Resp. at 3. There appears to be no dispute that

Pernix has invested heavily in the competitions at issue in this suit, and that

uncertainty regarding the eligibility of Pernix for the Maputo procurement, and

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uncertainty regarding its eligibility for the other State procurements noted in the

complaint, has an impact on the company. See id. Ex. 1 ¶ 6 (“The lack of clarity

regarding the legal standard for how to qualify contractors under the ‘total

business volume’ requirement is significantly impacting our company’s resources,

and will continue to do so until a final interpretation of the [statute] is achieved.”).

The parties dispute, however, whether the costs of such uncertainty satisfy the

hardship prong of the ripeness analysis. Compare Framaco Resp. at 8 (stating that

the “substantial harm” to Pernix shows that “the second factor, hardship,

overwhelmingly weighs in favor of ripeness”) and Pl.’s Resp. at 9 (“With respect

to the ‘hardship prong’ of the ripeness inquiry, the facts . . . show that it would be

the Court’s failure to act that would create hardship.”), with Def.’s Reply at 3-4

(“[A]lthough Pernix and Framaco assert hardship and injury to bolster their

arguments of both ripeness and standing, all such hardship or injury is speculative

and contingent upon State’s acceptance of the GAO’s recommendation, an action

that has not occurred yet and may not occur at all. . . . [B]ecause State could

decide to reject the GAO’s recommendation and keep Pernix and Framaco as

qualified participants, Pernix and Framaco cannot reasonably claim that they have

already been injured . . . .”) and Caddell Mot. at 4 (“In essence, Pernix has not

been harmed and shows no probability that it will be imminently harmed.”).

As noted earlier in this opinion, the ripeness doctrine protects “agencies

from judicial interference until an administrative decision has been formalized and

its effects [are] felt in a concrete way by the challenging parties.” Abbott

Laboratories, 387 U.S. at 148-49. In the dispute discussed in Abbott

Laboratories, the issue was ripe because the Commissioner of Food and Drugs

had construed a statute in a manner adverse to the plaintiffs, whereas here, State

has not yet acted to construe § 4852(c)(2)(E) in a manner adverse to Pernix.

Pernix has not yet “felt [the effects of a final agency action] in a concrete way.”

Abbott Laboratories, 387 U.S. at 148. Nor has Pernix suffered “sufficiently direct

and immediate” effects of any final agency action. Id. at 152. Under Abbott

Laboratories, Pernix has not satisfied the hardship prong of the ripeness analysis.

The general rule is that the hardship prong of the ripeness test cannot be

satisfied by contingent or speculative harm. Texas v. United States, 523 U.S. at

301-02; Texas Bio- & Agro-Defense, 87 Fed. Cl. at 806. As defendant notes, this

rule prevents courts from issuing advisory opinions on abstract legal questions.

See Def.’s Mot. at 6 (citing cases); Def.’s Reply at 2-3 (same). Here, any hardship

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to Pernix flowing from Caddell III is still speculative and contingent, and the

hardship prong of the ripeness inquiry under Texas v. United States is not

satisfied.

A similar result is obtained when this case is compared to Federal Circuit

precedent. In SA-TECH, the decision most on point, the hardship prong of the

ripeness inquiry was satisfied because the United States Army had made a final

decision affecting SA-TECH’s competitive advantages in an ongoing

procurement:

With respect to the hardship element of the ripeness

analysis, the Army asserts that SA-TECH has not

suffered a hardship because the “announced intention to

implement corrective action is an intermediate step of a

single procurement process, and the continuation of that

process, while SA-TECH remains in contention, is not a

hardship.” Appellant’s Br. 26. As discussed above, this

approach ignores the competitive hardships SA-TECH

suffers as a result of the Army’s arbitrary decision to

recompete the contract.

691 F.3d at 1385. Thus, in SA-TECH, the Army had committed to a decision

adverse to the protestor, whereas here, State has made no such commitment.

Under SA-TECH, Pernix has not satisfied the hardship prong of the ripeness

analysis.

Finally, the court finds Textile Importers to be instructive. At issue there

was the government’s decision to consider twelve petitions from domestic textile

producers requesting that the United States consult with China about certain

textile imports, a course of action which might have led to import restrictions

against those Chinese imports. A suit filed by an association of textile importers

to enjoin the consideration of those twelve petitions was found to be unripe. The

Federal Circuit provided this analysis focusing on the hardship prong of the

ripeness inquiry:

In this case, the Association cites a number of actions

taken by its members allegedly in response just to [the

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government’s] decision to consider the twelve petitions.

These actions were based on the businesses’ perceived

uncertainty concerning whether, when, and to what

extent import relief might be imposed in the future, but

not on any legally binding requirement presently

imposed by . . . the government. In contrast, Abbott

Laboratories involved a mandatory regulation with

binding legal effect that was issued after formal notice

and comment and that was utterly unambiguous. Thus,

following [Federal Trade Commission v. Standard Oil

Co. of California, 449 U.S. 232 (1980)], we hold that

any business uncertainty associated with awaiting a final

decision from an agency is different in kind and legal

effect from the hardship identified in Abbott

Laboratories and insufficient to turn a threshold agency

decision into a final agency action ripe for review.

Textile Importers, 413 F.3d at 1350. Here, there is no “legally binding

requirement” issued by State that harms Pernix – under Textile Importers, Pernix

has not satisfied the hardship prong of the ripeness inquiry. Id. As in Textile

Importers, “any business uncertainty associated with awaiting a final decision

from an agency is different in kind and legal effect from the hardship identified in

Abbott Laboratories and insufficient” to establish ripeness. Id. At this juncture,

there is no hardship to Pernix so as to render this bid protest ripe and justiciable.

B. Standing

Both the government and Caddell assert that plaintiff lacks standing to bring

this protest. Def.’s Mot. at 7-8 & n.1; Def.’s Reply at 3-4; Caddell Reply at 6-8.

Having considered the precedential Federal Circuit decisions relied upon by the

parties, the court is not convinced that the facts in the bid protests underlying

those decisions are sufficiently analogous to this case. The court therefore

declines to extend various Federal Circuit pronouncements on bid protest standing

to the somewhat unusual circumstances of this case.

Here, Pernix’s protest challenges a hypothetical elimination from

competition that has not yet occurred. That challenge is clearly barred on ripeness

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grounds. The court therefore sees no reason to reach or address the parties’ rather

convoluted arguments regarding Pernix’s standing to bring its unripe protest. See,

e.g., Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 431

(2007) (“[A] federal court has leeway to choose among threshold grounds for

denying audience to a case on the merits.”) (citations and internal quotations

omitted); Shinnecock Indian Nation, 782 F.3d at 1353 (affirming this court’s

dismissal of a suit on ripeness grounds but vacating this court’s alternative holding

that the suit should also be dismissed for lack of subject matter jurisdiction).

C. Multiple Procurement Protest

Because Pernix’s bid protest is not ripe, the threshold issue of justiciability

requires dismissal of this suit. The court therefore need not address defendant’s

and Caddell’s alternative argument that four procurements cannot be addressed in

a single protest. The court notes, however, that there have been instances in which

this court has considered challenges to multiple procurements within a single

protest. E.g., Bannum, Inc. v. United States, 60 Fed. Cl. 718, 722 & n.6 (2004);

MCS Mgmt., Inc. v. United States, 48 Fed. Cl. 506, 509 (2001).

CONCLUSION

For the foregoing reasons, it is hereby ORDERED that:

(1) Defendant’s Motion to Dismiss, filed May 5, 2015, is GRANTED;

(2) Intervenor-Defendant Caddell’s Motion to Dismiss, filed May 5,

2015, is GRANTED;

(3) Plaintiff Pernix’s Motion for Declaratory Judgment, and Preliminary

and Permanent Injunction, filed April 27, 2015, is DENIED as moot;

(4) The Clerk’s Office is directed to ENTER final judgment in favor of

defendant and intervenor-defendant, DISMISSING the complaint

without prejudice;

(5) On or before June 10, 2015, counsel for the parties shall CONFER

and FILE with the Clerk’s Office a redacted copy of this opinion,

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with any material deemed proprietary marked out and enclosed in

brackets, so that a copy of the opinion can then be prepared and made

available in the public record of this matter; and

(6) Each party shall bear its own costs.

/s/Lynn J. Bush

LYNN J. BUSH

Senior Judge

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