# Hvf West, LLC v. United States

> United States Court of Federal Claims · September 18, 2020

URL: https://www.frixlaw.com/law-library/cases/4567310

## Case

- **Court:** United States Court of Federal Claims
- **Decided:** September 18, 2020
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4567310

## How later opinions describe it (automated extraction)

- explaining that a federal court must satisfy itself of its jurisdiction over the subject-matter before it considers the merits of a case
- stating that the solicitation was for “two concession contracts to provide guided cross-country ski tours, including associated transportation and food services, in Grand Teton National Park”

## Opinion text

In the United States Court of Federal Claims
No. 20-541C
Filed: September 4, 2020
Redacted Version Issued for Publication: September 18, 20201

* * * * * * * * * * * * * * * * * * * *
*
HVF WEST, LLC,
*
Protestor, *
*
v. *
* Post-Award Bid Protest; Mixed-
UNITED STATES,
* Transaction Contract; Subject-Matter
* Jurisdiction; Standing; Cross-
Defendant,
* Motions for Judgment on the
v. * Administrative Record.
LAMB DEPOLLUTION, INC., *
*
*
Defendant-Intervenor. *
*
* * * * * * * * * * * * * * * * * * * *

E. Sanderson Hoe, Covington & Burling LLP, Washington, D.C., for protestor.
With him were Thomas Brugato, Andrew R. Guy, and Darby J. Rourick, also of
Covington & Burling LLP, Washington D.C.

Ioana Cristei, Trial Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice, Washington, D.C., for defendant. With her were Douglas
K. Mickle, Assistant Director, Commercial Litigation Branch, Robert E. Kirschman, Jr.,
Director, Commercial Litigation Branch, and Ethan P. Davis, Acting Assistant Attorney
General, Civil Division. Of counsel was Gregory J. Gusching, Attorney Advisor, Defense
Logistics Agency, Battle Creek, MI.

Shar Bahmani, Sacks Tierney P.A., Scottsdale, AZ, for defendant-intervenor.

1
This Opinion was issued under seal on September 4, 2020. The parties were asked to
propose redactions prior to public release of the Opinion. This Opinion is issued with the
redactions that the parties proposed in response to the court’s request and one addition
for consistency. Words which are redacted are reflected with the notation: “[redacted].”
OPINION

The post-award bid protest at issue in the above-captioned bid protest filed by
protestor, HVF West, LLC (HVF) arises out of the award of a bridge contract issued by
the Defense Logistics Agency, Disposition Services (DLA DS) of the Department of
Defense, for the removal, demilitarization, mutilation and sale of government “scrap”
awarded to defendant-intervenor, Lamb Depollution, Inc. (Lamb). HVF responded with
the highest price offer to purchase the government property to be removed from
government facilities, and subsequently demilitarized or mutilated prior to being disposed
of by the contractor, pursuant to the bridge contract No. A0008025 (the Solicitation). After
HVF was found to be “non-responsible,” the contract was awarded to the defendant-
intervenor, Lamb, which submitted the second highest price offer. Protestor argues that
in finding it non-responsible, and then awarding the bridge contract to Lamb, DLA DS
acted arbitrarily and capriciously, and seeks to permanently enjoin the award. The parties
cross-moved for judgment on the administrative record. Defendant and defendant-
intervenor also filed motions to dismiss, arguing that this court’s bid protest jurisdiction,
pursuant to 28 U.S.C. § 1491(b)(1) (2018), does not provide subject-matter jurisdiction to
hear protestor’s bid protest because the bridge contract at issue is one for the sale of
government property, and that protestor lacks standing to challenge the award to Lamb.

By way of background, the Solicitation at issue in the case currently before the
undersigned was preceded by a previous award of a solicitation by DLA DS, pursuant to
Solicitation No. A0007598 (the ‘598 Contract), which also concerned the removal,
demilitarization, mutilation, and sale of government property. The ‘598 Contract, also was
awarded to Lamb, and the award also was protested by HVF in the United States Court
of Federal Claims. See HVF West, LLC v. United States, Case No. 19-1308C. On
November 22, 2019, Chief Judge Sweeney found in favor of HVF on the protest of the
‘598 Contract, finding that the Sales Contracting Officer (SCO) for DLA DS had “acted
irrationally by not following the evaluation process set forth in the solicitation” when
evaluating Lamb for award, and that HVF was prejudiced by the SCO’s actions. See HVF
West, LLC v. United States, 146 Fed. Cl. 314, 334–39 (2019) (HVF West I), recons.
denied, 16 Fed. Cl. 451 (2020), appeal docketed, No. 20-1414 (Fed. Cir. Jan. 30, 2020).
Chief Judge Sweeney also found that the United States Court of Federal Claims had
“subject-matter jurisdiction over HVF’s protest because the resulting contract from the
solicitation at issue [the ‘598 Contract] was for a mixed transaction—the awardee would
be buying property from the government while also providing a non-de minimis service to
the government.” See id. at 328–29. Chief Judge Sweeney also found that HVF had
“demonstrated a direct economic interest in the DLA’s award of the contract,” and,
therefore, HVF had standing to challenge the previous award to Lamb. See id. at 329–
31. Chief Judge Sweeney ultimately granted HVF’s request for injunctive relief, stating
that

the appropriate remedy is for the SCO to either (1) cancel its contract with
Lamb and determine a new awardee under the existing solicitation, or (2)
cancel its contract with Lamb and rebid the procurement under a new

2
solicitation. The DLA must choose one of those options to cure the errors
noted above.

HVF West I, 146 at 341. Subsequent to Chief Judge Sweeney’s decision in HVF West I,
DLA DS did not cancel the ‘598 Contract awarded to Lamb, but issued a stop-work order
on the ‘598 Contract. On December 9, 2019, DLA DS issued the interim Solicitation in the
current protest, No. A0008025, as a bridge contract in anticipation of an appeal of Chief
Judge Sweeney’s decision to the United States Court of Appeals for the Federal Circuit,
which appeal was filed on January 30, 2020.2 After DLA DS awarded the bridge contract
to Lamb, HVF brought the above-captioned bid protest of the award of the bridge contract
in this court.3

FINDINGS OF FACT

Solicitation No. A0008025, the solicitation of the bridge contract at issue in the
above-captioned protest, No. 20-541C, stated that the “Invitation for Bid (IFB) is for a firm
fixed price sales contract where the bid price is expressed in United States dollars/cents
per pound,” and that “[t]his is a sales contract for the sale of scrap pursuant to provision
in Title 40, US Code, Chapter 5 wherein the Purchaser is agreeing to conduct
Demilitarization and mutilation of the property as a condition of sale.” (capitalization in
original). The Solicitation further stated that DLA DS “expects the Purchaser to perform
all requirements under this sales contract at the bid price provided by the Purchaser,” and
that “[t]he Agency guarantees to issue the total combined estimated annual generation of
DEMIL/MUT [Demilitarized/Mutilated] property offered in the amount of 19,000,000 lbs.
for sale within the terms of the Adjustment for Variation in Quantity or Weight clause (Sale
by Reference (SBR) Part 4, Condition 5).” (capitalization in original).

The Solicitation defined “Demilitarize (DEMIL)” as:

The act of eliminating the functional capabilities and inherent military design
features from DOD personal property. Methods and degree range from
removal and destruction of critical features to total destruction by cutting,
crushing, shredding, melting, burning, etc. DEMIL is required to prevent
property from being used for its originally intended purpose and to prevent
the release of inherent design information that could be used against the
2
The court notes that Case Number 20-1414 before the United States Court of Appeals
for the Federal Circuit refers to the appeal that Lamb filed. Subsequently, defendant filed
an appeal with the Federal Circuit, Case No. 20-1583. The Federal Circuit has
consolidated the appeals, and is considering the appeals together. See Order, HVF West,
LLC v. United States, Case No. 20-1583 (Fed. Cir. March 24, 2020).
3
The parties were orally informed that defendant’s motion to dismiss for lack of subject-
matter jurisdiction was dismissed. The parties requested the court to incorporate that
decision in writing in this Opinion. The following Opinion addresses in writing the
defendant’s motions to dismiss for lack of subject-matter jurisdiction and standing, as well
as DLA DS’ finding by the defendant of non-responsibility on the part of HVF.

3
United States. DEMIL applies to DOD personal property in both serviceable
and unserviceable condition.

(capitalization in original). “Mutilation (Scrap Classification (SCL) MUT)” is defined as a
“process that renders material unfit for its originally intended purposes by cutting, tearing,
scratching, crushing, breaking, punching, shearing, burning, neutralizing, etc. Required
to have Certificate of DEMIL or MUT signed by certifier and verifier.” (capitalization in
original).
The scrap material at issue in the Solicitation, also referred to as “property stream,”
“may consist of, but is not limited to”:

[A]luminum and steel scrap (light and heavy), copper, brass with
nonmetallic material to include plastic and textile, fiberglass, Kevlar and
body armor, satellite antennas, large weapon system and parts, wheeled
and tracked vehicles (lead acid batteries may be included), tank track,
trailers, containers, aircraft and aircraft components that are flight safety
critical aircraft parts (FSCAP) and sensitive components and textiles
requiring demilitarization and/or mutilation. This property consists of DEMIL
codes B, C, D[,] E, F and Q. Purchaser may also receive approved DEMIL
G property with Material Documented as Safe (MDAS) certificate and
DEMIL P property with declassification certificate.

(capitalization in original).

The Solicitation also explained that

[t]his sale is being offered as a bridge sale due to pending litigation involving
a previous award on Solicitation No. A0007598. If an appeal is taken in the
pending litigation the Agency does not expect it to be resolved for at least
12 month [sic]. Accordingly, the performance period of the sales contract
resulting from this IFB shall be limited to a 12-month base period, followed
by two 12-month option periods that may be exercised at the Sales
Contracting Officer’s (SCO) discretion. The sales contract also contains an
available six-month extension period that may be offered at the SCO’s
discretion at the end of each performance period, under the same terms
and conditions of the sales contract. In the event the extension is utilized,
the SCO shall advise the contractor in writing 30 calendar days prior to the
expiration of the current period of performance period [sic]. The extension
may be utilized in 30-day increments, a combination of 30-day increments,
or in its entirety. The entire length of the sales contract, if all option periods
and extension are used, shall not exceed three years.

(capitalization in original).

4
Section 3 of the Solicitation, titled: “General Terms and Conditions” stated:

This is not a service contract administered in accordance with the Federal
Acquisition Regulations (FAR). This is a sales contract for the sale of scrap
pursuant to provision [sic] in Title 40, US Code, Chapter 5 wherein the
Purchaser is agreeing to conduct Demilitarization and mutilation of the
property as a condition of sale. The Government is not responsible for any
indirect or inconsequential expenses related to performance under this
sales contract. The measure of the Government’s liability, in any case
where liability of the Government to the Purchaser has been established,
shall not exceed refund of such portion of the purchase price as the
Government may have received. Purchaser may be required to attend
special training, seminars, instructions, classes, safety orientations, etc.,
provided by the Government or to provide information to perform work or
gain access to the site. Example: Pass and ID requirements, antiterrorist
training, Environmental Management Systems (EMS) policies and/or
equipment training.

(capitalization in original).

The Solicitation at issue in the above-captioned protest required that the
“Purchaser’s facility must be located within 50 miles of DLA Disposition Services Tucson,
Arizona Centralized DEMIL Division (CDD),” and that “[b]idders must be able to receive
up to 40 direct shipments per week in addition to the 25 loads per week the bidder must
remove from Tucson CDD and at RIP [Receipt in Place] locations on and around Davis
Monthan AFB [Air Force Base].” (capitalization in original). The Solicitation further stated
that the Purchaser

is expected to DEMIL/MUT and remove a minimum of 1,585,000 pounds
per month. Weight is tracked and billed by weight tickets and DLA Form
1367 for outbound scrap removed from the site. The Purchaser is
responsible for removal and disposal of all scrap, to include all metallic and
non-metallic material resulting from the DEMIL/MUT process at no cost to
the Agency.

(capitalization in original). The Solicitation also required that “[a]ll DEMIL/MUT operations
will be conducted off Government premises” (capitalization in original), with the exception
of “downsizing,” which is the limited destruction of government property which occurs on
government premises, but which “is authorized only to the extent for property to be
properly and safely transported.” The Purchaser is “required to clean-up the workspace,
remove, and dispose of any parts or debris resulting from the Purchaser[’]s
performance/downsizing at the end of each work day.” (capitalization in original).

The Solicitation at Section 2, Subsection 1, titled: “Demilitarization/Mutilation
Section,” provided further requirements for the removal, demilitarization and mutilation of
the scrap at issue, including that the “Apparent High Bidder” “must complete training and

5
submit an appointment letter with the certifiers name and signature on it to the SCO before
work can begin.” (capitalization in original). Furthermore, “[a]gency verifier(s) must be
present for all DEMIL/MUT operations. If the Agency verifier is unavailable for any reason,
operations are to be shut down until the verifiers return.” (capitalization in original). The
Solicitation in the above-referenced Subsection also reiterated that the Purchaser was
“required to move all property located on DLA Disposition Services Tucson CDD
[Centralized DEMIL Division] and at RIP [Receipt in Place] locations on and around Davis
Monthan AFB [Air Force Base],” and that the Purchaser is “required to DEMIL/MUT all
property streams.” (capitalization in original). The Solicitation further stated that “[a]ll
military markings and data plates are to be completely destroyed during the DEMIL/MUT
process.” (capitalization in original). The “[m]ethod and degree of demilitarization will be
IAW [in accordance with] DODM 4160.28 Vol 3,” and the “appointed Agency Verifier will
have final say in the DEMIL/MUT of property.” (capitalization in original). Notably, the
Solicitation in the above-referenced Subsection stated that title to the scrap does not pass
to the Purchaser until “the DEMIL or Mutilation has been completed and the Certificate of
DEMIL or Mutilation has been signed by both the Purchaser certifier and the Agency
verifier and the [Form] 1367s is [sic] signed by both the Purchaser certifier and the Agency
verifier.” (capitalization in original).

The Solicitation contained an “Environmental and Human Safety Notice,” which
stated:

It is the responsibility of the Purchaser to ensure that the ultimate end use
of the property is performed in an environmentally compliant manner. As
such, prior to the award of any hazardous item, each high bidder’s premises
and/or the intended disposal facility may be subject to an on-site inspection
by a Government representative. All offerors are advised that they must
comply with all applicable Federal, State and local laws, ordinances,
regulations, etc. with respect to human safety and the environment during
the processing, use, or disposal of material purchased from the Department
of Defense.

(capitalization in original).

Regarding “Bid Evaluation and Award,” the Solicitation stated:

a. This is not a service contract awarded or administered in accordance with
the Federal Acquisition Regulations (FAR). This is a sales contract for the
sale of scrap that will be awarded and administered pursuant to the
provisions in Title 40, US Code, Chapter 5.

b. The Government intends that a single award will be made to a
responsible bidder with the highest priced responsive bid, unless a
determination is made to reject the bid under 41 CFR § 102-38.205.

6
c. Under 41 CFR § 102-38.205, the Agency reserves the right to accept or
reject any or all bids. The Agency may reject any or all bids when such
action is advantageous to the Government, or when it is in the public interest
to do so.

d. A responsive bid is a bid that complies with the terms and conditions of
the sales offering, and satisfies the requirements as to the method and
timeliness of the submission. Only responsive bids may be considered for
award.

e. The general standards in FAR Part 9 on contractor responsibility
determinations that are applicable to procurement contracts are not directly
applicable to sales contracts awarded under 40 U.S. Code § 545, but may
be considered by the Sales Contracting Officer in evaluating bidder
responsibility.

f. A responsible bidder is one that has the necessary organization,
experience, financial resources, accounting process, operation controls,
technical equipment and facilities, or the ability to obtain them, to perform
the requirements of the sales contract, and has no disqualifying factors (i.e.,
is not suspended, debarred or an ineligible transferee).

g. Prior to award, the Agency will conduct a pre-award survey of the
apparent high bidder. Only the high bidder will be evaluated through this
screening process and there will be no comparative analysis done on other
bidders. At a minimum, an apparent bidder must submit an End Use
Certificate (EUC), DLA Form 1822, and Statement of Intent (SOI) DLA Form
2536. The apparent high bidder shall be required to provide detailed
information on every storage location the apparent high bidder intends to
use. The pre-award survey may be conducted at the apparent high bidder’s
facility(ies) or other location(s) as deemed necessary by the Agency and
may include but is not limited to a review of a the [sic] apparent high bidder’s
facilities and equipment, financial capability or disclosure of the apparent
high bidder’s financial condition, quality assurance, safety, environmental
responsibility and transportation. The apparent high bidders shall cooperate
in the pre-award vetting process by assisting in arrangements and/or by
providing requested information in a timely manner. The apparent high
bidder is advised that accomplishment of a pre-award survey or furnishing
documents to the Agency in support of the pre-award survey is part of the
assessment of the bidder’s responsibility and is not a guarantee the bidder
will receive award of a contract. The SCO may rely upon information
obtained in the pre-award survey in making his assessment of the bidder’s
present responsibility.

(capitalization in original). The Solicitation further stated that the pre-award survey will
include, but is not limited to: the passing of “an inspection by Agency personnel prior to

7
contact [sic] award”; an “Environmental Responsibility Determination (ERD)” conducted
by DLA DS personnel; a “Trade Security Control Assessment” conducted by DLA DS
personnel; and a review of “[n]ecessary licenses, permits and certifications.” If the SCO
determined that the apparent high bidder

cannot be found affirmatively responsible, the next highest bidder will be
assessed in the same pre-award survey process. This same process of
vetting the next highest responsive bidder may continue, at the sole
discretion of the Sales Contracting Officer, until a responsive bidder is
identified and is determined to be affirmatively responsible.

Once the apparent high bidder was notified that it was the apparent high bidder, it had
three working days to:

a. Complete and return End Use Certificate (EUC), DLA Form 1822 to the
SCO. (SCO will provide these forms at notification);

b. Complete and return Statement of Intent (SOI), DLA Form 2536 to the
SCO. (SCO will provide these forms at notification); [and]

c. Provide DEMIL/MUT certifier appointment letters to the SCO.

(capitalization in original).

On December 30, 2019, DLA DS announced that pursuant to Solicitation No.
A0008025, five companies had submitted bids, including HVF and Lamb. HVF was the
apparent high bidder, offering $[redacted] per pound. Lamb’s offer was second highest,
at $[redacted] per pound.

In HVF’s SOI, HVF stated that it intended to sell the “materials recovered from
DEMIL and metals processing.” (capitalization in original). HVF’s End-Use Certificate also
stated:

Following verification and certification that DEMIL/Mutilation has been fully
completed pursuant to DoD regulations and Solicitation 8025 requirements
to the condition of scrap as defined in both said regulations and the
Solicitation, it is anticipated that the resultant scrap will be sold and used by
the purchaser as feed charge material to furnaces and melted, with the
molten metal then used in the manufacture of products.

(capitalization in original). The site where HVF intended to conduct the demilitarization
and mutilation of government property is located in Tucson, Arizona, and shares part of
its perimeter fence with Davis Monthan Air Force Base (DMAFB), one of the locations
from which the Solicitation provided for government scrap to be removed. HVF provided
DLA DS with a statement of HVF’s “Key Demilitarization/Mutilation Personnel,” which
provided the following names and information:

8
Arizona

[Redacted]
- Vice President
- 24 years of experience in operation/processing metallic/non-metallic
materials and plant management. Primary overall management
responsibility for Demil/Mut Operations.

[Redacted]
- Production Manager.
- 30 years experience in the U.S. Military: Army and Air Force
- 15 years experience in DLA in property disposal, Demil coordinator.
- 14 years experience in managing the processing of metallic/non-
metallic materials; oversight of Demil/Mut deliveries and operations.

[Redacted]
- Production and Maintenance Manager.
- Responsible for operation and maintenance of metallic
processing/demil/mut equipment.
- 14 years of experience in processing metallic/non-metallic materials.

[Redacted]
- Production and Sales Manger
- 16 years of experience in processing metallic/non-metallic materials.

[Redacted]
- Manager of Environmental compliance
- Safety and environmental training
- Operations and maintenance equipment
- 11 years of experience.

[Redacted]
- Office Manager
- 4 years of experience in processing metallic/non-metallic materials.

On site operators, welders, drivers, and security.

Michigan

[Redacted]
- President
- 50 years of experience in operation/processing metallic/non-metallic
materials.

9
[Redacted]
- Executive Vice President
- 50 years of experience in operation/processing metallic/non-metallic
materials.

[Redacted]
- Senior Vice President
- 25 years of experience in operation/processing metallic/non-metallic
materials.

[Redacted]
- Senior Vice President/General Counsel
- 35 years of experience of addressing legal matters in the metals
processing industry including agreements and contracts with agencies of
the US Government.

[Redacted]
- Vice President Environmental Affairs
- 40 years of experience of addressing environmental compliance
matters in the metals processing industry.

[Redacted]
- Associate General Counsel
- 8 years of experience of addressing legal matters in the metals
processing industry including agreements and contracts with
agencies of the US Government.

[Redacted]
- Environmental Manager
- 32 years of experience addressing environmental compliance
matters.

Full accounting department led by CPAs

(capitalization and emphasis in original).

On January 14, 2020, members of DLA DS conducted an initial inspection of HVF’s
facility. The DLA DS members present during the January 14, 2020 inspection included
David Powell, Phillip Groll, and Forrist Richardson. Also on January 14, 2020, Mr. Groll
completed a pre-award survey on DLA Form 2537 (the January 14, 2020 Form 2537).
The January 14, 2020 Form 2537 stated that the most recent regulatory inspection by the
Arizona Department of Environmental Quality (ADEQ) Pima County of the HVF site was
conducted on May 28, 2014. The January 14, 2020 Form 2537 described the result of the
May 28, 2014 inspection as follows:

10
Upon review of the records and inspection results, it was determined the
[sic] HVF is not currently a generator of hazardous waste and that no
potential Resource Conservation and Recovery Act (RCRA) violations
related to this compliance inspection were observed at the time of
inspection on May 28, 2014. The inspection determined the facility to be in
substantial compliance with the requirements of 40 CFR of the Code of
Federal Regulations, A.R.S., A.A.C., and applicable permit/license
requirements under Title 7 of Pima County Code.

(capitalization in original). The January 14, 2020 Form 2537 did not indicate any concerns
regarding HVF’s environmental responsibility, and gave HVF a “RESPONSIBLE”
environmental assessment, further stating that HVF “has processes in place to maintain
environmental responsibilities and has Emergency Response Plans and Training.”
(capitalization in original). The January 14, 2020 Form 2537 also answered the question
of whether there was “evidence of property being stored longer than 1 year,” in the
negative.

The administrative record in the above-captioned protest also contains an “Offsite
Recycling/Demilitarization Facility Inspection Form” (capitalization omitted), completed by
David Powell and Forrist Richardson on January 15, 2020, after their January 14, 2020
inspection by DLA DS. The inspection form provided the following comments:

- Visual observation: GOV Demil Scrap material still on site since last
contract ended in Dec 2018
-- Several piles of material were observed on site. Can’t determine if its [sic]
storage or pending removal. Site Contractor leadership indicated/stated
removal will be completed by 2 Feb 2020

- Over 500 Tires observed on site.
-- Recommend permit determination for waste tires/used tires.

- Perimeter fence required on east side of HVF compound. Can’t use Davis
Monthan AFB perimeter fence as their perimeter fence. Required a 5ft “clear
zone” between the perimeter fence. REF DOD 5100.76-M, Enclosure 9

- Noted/observed material (Tri-Wall lids) stacked next to fence (Southwest
end of compound), over ft high [sic], obstructing visual observation and
potential breach. Required 5 ft clear zone.

- Noted several areas on south and west perimeter fence with brush/weeds
over the top or through perimeter fence that requires removal.

(capitalization in original).

11
Also on January 14, 2020, William Elson, Senior Vice Present and General
Counsel of HVF, wrote the following email to Todd Koleski, the Sales Contracting Officer
for DLA DS assigned to the bridge contract currently at issue:

Mr. Koleski:

The visit by Mr. Dave Powell and his team of HVF West’s Tucson facility
was conducted today. We would appreciate your forwarding Mr. Powell’s
report to you summarizing his team’s visit and the completed Offsite
Recycling/Demilitarization Facility Inspection Form. During and after Mr.
Powell completed his site visit, he was asked if he required any additional
information to which he responded that he would review his notes and the
notes of his team and let us know. Mr. Powell was shown the area where
Demil/Mut work was to be performed including the current concrete pad in
that area. We advised Mr. Powell that two miscellaneous scrap material
piles located in that area would be moved. We also advised Mr. Powell of
our intention to lay crushed asphalt in front of the concrete pad. Mr. Powell
requested that demarcation implements be placed to show that the
Demil/Mut area was separated from the rest of our plant. Mr. Powell indicted
[sic] that he was looking to make a second visit to the site not later than the
end of January to confirm that the Demil/Mut site area was then ready for
receipt of government material.

In addressing the question on the Offsite Recycling/Demilitarization Facility
Inspection Form regarding the date of the most recent regulatory inspection
we, [sic] advised Mr. Groll that as best we could recollect, Pima County had
visited our site about three years ago but that we would review our files and
get back with him. In fact, the most recent regulatory inspection of our site
was conducted almost 6 years ago by Pima County. The County confirmed
in its letter of June 11, 2014, copy attached, that HVF was not a generator
of hazardous waste and that no RECRA [Resource Conservation and
Recovery Act] violations were observed. Our Joe Stead will forward the
June 11 2014 letter on to Mr. Groll.

In connection with your review of HVF West’s (“West”) responsibility under
the referenced solicitation attached are the following.

1. West’s Operational Plan describing among other matters, its operational
controls, quality assurance, safety, environmental responsibility,
transportation capabilities, technical equipment and facilities and
accounting processes.

2. Identification of key personnel at West providing a brief description of
their responsibilities and experience in demilitarization and mutilation and
in the processing of metallic and non-metallic materials.

12
3. Copies of the various permits issued for our facility.

4. A letter to you summarizing West’s financial condition and resources.

The material in number 1, 2, and 3 above, were as well delivered to Mr.
Powell today and we had advised him that we would be forwarding these
materials on to you. Item 4 above was not delivered to Mr. Powell. We
request that the letter and attachments regarding West’s financial condition
and resources remain with you and your superiors in Battle Creek and such
other personnel at DLA Disposition Services in Battle Creek who are
required to review the financial information in assisting your consideration
during the pre-award survey.

We request that should you require any additional information following your
review of the enclosed materials and the report provided to you by Mr.
Powell, please so advise by e-mail. We will respond to requests for
additional information promptly.

(capitalization in original).

On January 15, 2020, ADEQ performed an unannounced inspection of the HVF
site in response to an anonymous complaint submitted to ADEQ. The inspection
consisted of two parts: a hazardous waste inspection, and a solid waste inspection.
Pursuant to the two-part inspection, ADEQ generated a Hazardous Waste Inspection
Report and a Solid Waste Field Inspection Report, completed by ADEQ inspectors Jenna
Brickner and Anthony Stone, respectively. HVF’s on-site representative for both
inspections was Scott Laughlin. The Hazardous Waste Inspection Report stated on the
cover page that “Follow-up action is needed; please submit the requested documentation,
which is detailed on the inspection report.” In the Hazardous Waste Inspection Report,
Jenna Brickner also checked the box next to: “Check this box if there is ‘a risk to any
person, the public health, safety or welfare or the environment’ per ARS § 41-1009.” The
“Observation” section of the ADEQ Hazardous Waste Inspection Report stated:

The purpose of this inspection was respond [sic] to a complaint submitted
to ADEQ. The agency’s hazardous waste inspections unit co-inspected the
facility with the solid waste unit.

During the inspection, ADEQ observed multiple piles of assorted military
scrap metal. Some piles were placed on concrete and some piles were
placed directly on soil. Military aircraft can be painted with a product that
contains chromium and/or cadmium. ADEQ observed painted aircraft parts
and paint chips throughout the property, on and off the paved areas.

ADEQ identified a pile of painted aircraft parts that appeared to contain
more painted pieces than other piles. The paint is a lime green color which
is distinctive of aircraft paint containing chromium and/or cadmium. When

13
the tractor scoops up the metal scrap for processing, it grinds the paint chips
into a powder. The concrete slopes downward to soil to the south. At the
time of the inspection, ADEQ observed that stormwater had collected in a
surface depression of the soil located downgradient of the pile of painted
aircraft pieces.

ADEQ retrieved samples in two locations at the facility. The first location
was at the base of the pile mentioned above. The sample collected was of
the powdered layer on the concrete. The second sample was from the top
three inches of soil in the area between the concrete slab and collection of
stormwater.

ADEQ sent the samples to a third party registered environmental lab for
analysis [Eurofins TestAmerica]. The results for the sample located at the
base of the pile, are 1100 mg/Kg for total chromium and 4.2 mg/L for
cadmium by Toxicity Characteristic Leaching Procedure (TCLP). The
results for the sample from the soil downgradient of the pile, are 480 mg/Kg
for total chromium and 4.9mg/L for cadmium by TCLP. Sample analysis for
TCLP regulatory levels is an approved procedure for determining an
accurate waste determination pursuant to 40 CFR § 262.11 / A.A.C. R18-8-
262.

The sample results indicate that the facility is storing and disposing
hazardous waste without a permit. [sic] consequently disposing its
hazardous waste directly into the environment. These actions are violations
pursuant to A.A.C. R18-8-270(B)(1) and 40 CFR § 265.31 / A.A.C. R18-8-
265.

(capitalization in original). The ADEQ Hazardous Waste Inspection Report also stated
that “[p]ending the results of the sample analysis, ADEQ may require further
documentation,” and directed HVF “[g]oing forward, [to] manage, store, and dispose of
waste fluorescent lamps as universal waste and [to] discontinue disposal at the city
household hazardous waste center.”

Like in ADEQ’s Jenna Brickner’s Hazardous Waste Inspection Report on HVF’s
site, the Solid Waste Field Inspection Report, completed by Anthony Stone of ADEQ, also
stated that “Follow-up action is needed; please submit the requested documentation,
which is detailed on the Notice of Opportunity to Correct.” The following comments were
provided in the Solid Waste Inspection Report:

On January 15, 2020, Solid Waste Inspections Unit (SWU), conducted a
complaint based inspection of HVF West for compliance with Arizona’s
provisions for solid waste, used oil, waste tires, and lead acid batteries.

After the SWU identified itself and stated its purpose for the inspection,
permission was granted by Scott Laughlin, Vice President Operations, to

14
inspect the property. The SWU documented its observations with a number
of photographs. Refer to the enclosed ADEQ Photo-log.

Mr. Laughlin stated that HVF West is a metal recycling facility that is paid
by the U.S. Military to shred military aircraft and other items. The shredded
material is sorted to remove the ferrous and non-ferrous metals for
recycling. According to Mr. Laughlin, the metal processing is conducted on
an as-needed basis once the product arrives. Mr. Laughlin stated that he
was not allowed to provide information about the specifics of the process,
material being processed, when material was received, when material will
be sent out, origin of the material, or where the material will be will be [sic]
sent. However, he did state that 100 percent of the shredded piles are
considered to be product and not a waste.

During the inspection, SWU observed that HVF West had not created
sufficient measures to reduce the potential of soil contaminations from their
recycling activities. Concrete had been installed on a large portion of the
outdoor facility yard located around the processing building; however, the
majority of the material on-site appeared to be sitting directly on bare soil.

The used oil storage building contained one larger container of used oil
properly labeled with the words “used oil” and placed in functional
secondary containment. All used oil is transported by Arizona Waste Oil
Services. SWU did not observe used oil [or] contaminated soil during the
inspection. No waste batteries were on-site at the time of inspection.

Damaged tires are cut into small pieces and disposed at Los Realis landfill.
Whole tires are taken to the Pima County Waste Tire Collection site on Ina
Road. They are later collected by CRM and taken to Mesa to be processed.
Mr. Laughlin is currently working on an arrangement with CRM to directly
transport them to Mesa and bypass the Ina Road location. SWU reviewed
some waste tire manifests that demonstrated HVF West is currently
removing tires from the site and they stated all the tires will be removed by
the middle of February.

While aircraft tires are considered off-road tiers and the waste tire collection
site regulations do not apply to them, HVF must still use best management
practices to help with fire suppression. HVF should implement the same
standards as a waste tire collection site, which includes but is not limited to
fire extinguishers, “No Smoking” signs, and access routes. SWU gave Mr.
Laughlin two compliance assistance posters which will help with tire
determination, storage, and disposal.

Mr. Laughlin was informed that anything declared a waste (tires or waste
generated from shredding activities) is not allowed to remain on the property

15
longer than ninety days or it considered [sic] improper disposal of solid
waste.

(capitalization in original).

The administrative record indicates that David Powell and Forrist Richardson of
DLA DS visited HVF’s site again on January 23, 2020. In a January 24, 2020 internal DLA
DS email to Sales Contracting Officer, Todd Koleski, with the subject: “HVF Site Visit 23
Jan 2020,” David Powell of DLA DS wrote:

Todd,

Our visit with HVF’s Scott Laughlin and staff was not what Forrist and I
expected. Looking at Attachment 5 (A5) from HVF’s original layout and
given what we thought would be fixed (vegetation, piles of debris left of A5)
was not cleared. In A5 there were laydown and overnight storage areas
planned out. However, what we saw was a roped off-see Ruff Sketch (RS)-
from ground level looked very narrow. I asked Scott if this is HVFs [sic]
proposed area for DLA? He said yes. I asked him if he believed this area
can handle 90 trucks per week laydown, breakdown and stage areas and
send to hammer mill processing to include rolling stock and aircraft. His
answer was a not so confidant, yes.

I brought [sic] the fence line on the Northside of HVF stating that fence is
the border between DM and HVF. We told him about HVF using DM fence
line as a border would not be possible because the outriggers at the top
would face in towards HVF, they need to face outward [sic]. The email chain
below has HVF asking the question.

We spoke about what needs to happen to the property after hours using the
proposed DLA area all items need to go back into DLA’s area overnight if
not demiled/mutted [sic]. He was not opposed to it. Scott also mentioned
they could move the vehicle drain stations into our area. I said looking at
what you’re proposing this would shrink our foot print [sic] adding these
stations. After looking at the ground layout vs A5 I asked for a new
Planograph-measured so I know where our boundaries end and what we
have to work with. Photos were not possible but Scott did say he would
provide photos of the new area.

Concerns; [sic]

- Size of operating area. If load integrity is fluid certified timely-it could work-
-could also be a choke point

- Fenced in area and fence line Northside.

16
- If our site is completely enclosed within HVF does this satisfy DLA Security
and eliminate the need to remove-vegetation overgrowth and put to bed the
fence issue?

On January 27, 2020, DLA DS received an email from Greg Lamb, President of
defendant-intervenor Lamb, the company which had submitted the second-highest bid for
the bridge contract, and which is the defendant-intervenor in the current protest before
the court. Greg Lamb’s January 27, 2020 email stated:

I am providing the information below so that it may be reviewed and
considered when evaluating the award of the Tucson CDD DLA contract to
the apparent high bidder. It is our belief that significant non-compliance may
be occurring at the Apparent High Bidders [sic] site and they should be
thoroughly investigated before the award of any contracts. I believe the
information to be correct, compliance/environmental hazards serious and in
the best interest of the Government to thoroughly evaluate the responsibility
factors of the site operator prior to the award of the contract.

(capitalization in original). Greg Lamb’s January 27, 2020 email also provided a bullet-
point list detailing several concerns regarding HVF’s facility, including that: (1) there was
a “[p]otential accumulation of solid waste in the form of a substantial amount of tires
estimating 20,000 in quantity as well as several other potentially uncharacterized waste
piles throughout the property;” (2) “[t]he site is not permitted as a solid or special waste
disposal facility;” (3) “[a]ny residual materials generated from their recycling process may
not be characterized correctly;” (4) “[s]everal piles of Dirt and Dirt w/solid waste may be
on site, that may contain unlawful amounts of Chromium, cadmium and possibly even
PCBs depending on the age and makeup of the materials; (5) “[t]here is no reporting
under EPCRA Section 313 – TRI; (6) even though an ECHO report “shows there is no
violation . . . you will see there are also no current inspections;” and (7) a website link to
a “Pima county interactive map which is time lapsed . . . will visually demonstrate what
may be the accumulation of sloid [sic] waste over the last 10 years.” (capitalization in
original; emphasis omitted). Greg Lamb’s January 27, 2020 email also “urge[d]” DLA DS
“to contact the Arizona Department of Environmental Quality.” Attached to Greg Lamb’s
January 27, 2020 email were Google Map photos of the HVF West facility from 2014 and
2018 showing the apparent accumulation of piles of material, including tires, over time.

In an email dated January 28, 2020, Anthony Stewart of DLA DS requested
authorization from Eric Ray, DLA DS Environmental Operations Monitor, for another site
visit of HVF’s facility. Anthony Stewart wrote:

As per previous phone conversation, looking to get this done sooner than
later [sic]. Have concerns regarding scrap tire build-up[.]

Please schedule this site visit as soon as possible and contact me before
the site visit occurs so I can provide our desk audit findings.

17
The next DLA DS site visit of HVF occurred on February 3, 2020. In attendance
for DLA DS were David Powell and Lisa Henninger. In attendance for HVF were William
Elson, Senior Vice President and General Counsel, David Splan, Vice President and
Environmental Manager, and HVF managers, Scott Laughlin and Joe Stead. Lisa
Henninger of DLA DS completed a DLA Form 2537 for the February 3, 2020 site visit (the
February 3, 2020 Form 2537). The responses provided in Lisa Henninger’s February 3,
2020 Form 2537 were far more unfavorable regarding HVF’s environmental responsibility
in comparison to the responses in the January 14, 2020 DLA Form 2537 completed by
Phillip Groll after the initial site visit of HVF by DLA DS on January 14, 2020. As discussed
above, Phillip Groll provided in the January 14, 2020 Form 2537 that there were no
environmental concerns at HVF’s facility, and he had given HVF a “RESPONSIBLE”
environmental assessment. The February 3, 2020 Form 2537 completed by Lisa
Henninger concluded that HVF was “NON-RESPONSIBLE.” (capitalization in original).
The February 3, 2020 Form 2537 completed by Lisa Henninger of DLA DS also discussed
the January 15, 2020 ADEQ inspection, stating:

ADEQ performed an inspection for Solid Waste and Hazardous Waste.
Deficiencies reported; not sufficient measure to prevent soil contamination;
identified tire collection site requirements not met; observed aircraft parts
with paint containing cadmium and chromium stored directly on soil; and
observed storm water collection down gradient from pile of painted aircraft
parts. The ADEQ also collected two samples of soil which the results
included levels of chromium and cadmium. Due to the results of samples,
HVF was sited [sic] for storing and disposing HW [hazardous waste] without
a permit and disposing of HW directly into the environment.

(capitalization in original). The February 3, 2020 Form 2537 answered the question of
whether there was “evidence of property being stored longer than 1 year,” in the
affirmative, and stated:

HVF stated that the mounds of residue from scrapping processes is not
waste but is a commodity product. They stated that the commodity is
shipped for sorting to remove ferrous and non-ferrous metals for recycling.
HVF did not provide any shipment documentation for commodity removals
and could not provide any specifics for last removal time-frame or recycling
location.

The February 3, 2020 Form 2537 also stated that DLA DS was “[u]nable to determine
which commodities can be responsibly managed due to multiple environmental
concerns.” In a supplemental document to her February 3, 2020 Form 2537, Ms.
Henninger stated:

The HVF West site is a facility for scraping operations therefore some debris
and refuse is understood. The concern is property is not segregated in any
orderly fashion and designation areas for property such as tires is not
determined. . . .

18
TIRES. The HVF West site does not have a tire collection permit through
ADEQ. The need for a permit was identified in the ADEQ inspections on 1-
15-2020 and DLA survey inspection on 2-3-2020. The site states that the
tires are exempt from the permit because they are not Over The Road
(OTR) tires. Although the site does receive some aircraft tires they also
received vehicle tires which do require the site collection permit. Also, HVF
West disposes of the tires on the Waste Tire Disposal Manifest as “OTR
Tires” which contradicts their claim to being exempt.

(capitalization in original).

Lisa Henninger also detailed her concerns related to the February 3, 2020 HVF
site visit in a February 14, 2020 internal DLA DS memorandum, which stated:

I, Lisa Henninger, am an Environmental Protection Specialist at the DLA
Disposition Services Tucson site. I was assigned to perform the
environmental portion of the Pre-Award Site Survey, DLA Form 2537, for
HVF West. Area Manager, David Powell, and I conducted the survey on
Monday, February 3, 2020, from approximately 0930.

We began our survey of the HVF West site in their conference room with
company representatives Joe Stead, David Splan, William Elson and Scott
Laughlin. The DLA Form 2537 was reviewed question by question for the
HVF West Representatives to provide feedback. During this review they
informed us that they were recently inspected by ADEQ and Pima County
with no issues. They also informed us that there were soil samples taken
and that the results were not available yet. We specifically reviewed the
requirements of having a tire permit which they stated the site was exempt
from due to their tires being off road and aircraft. I provided the ADEQ
guidelines and requested them to provide documentation showing they
were exempt. The review also required HVF West to provide documentation
of their Spill Plan, outgoing invoices for waste disposal, hazardous
manifests, and employee training requirements. We also discussed the
disposal method for residue where they identified that the residue from
demilitarization was a product. They continued that the residue was actually
a commodity that they sell for metal recovery processes.

After reviewing the survey form we continued to perform a physical
inspection of the entire HVF West site. During the physical inspection I
observed the process for scrapping tires. The site has their own shredding
machine however the tires were store [sic] at multiple locations throughout
the yard. Next I evaluated the hazardous property storage space where
requirements such as spill kits, fire extinguishers, no smoking signs were
all met. Continuing the physical inspection I observed scrap property stored
on the soil and several large mounds of processed residue that was

19
identified as a commodity by HVF West representatives. These mounds
appeared to have been stored for a long period of time and would be
estimated at 150 tons of residue property. I asked HVF West
representatives how the commodity was disposed of which they answered,
the process was propriety [sic]. I continued by asking what type of facility
they use and when the last time a shipment was sent out however the
representatives could not provide any answers. My observation is the
mounds of property have been at the HVF West location for several years.
Without any documentation or guidance on the disposal process I cannot
verify that the property is being disposed of in accordance with regulations.
The final physical evaluation location was the area of the HVF West yard
that was designated for the DLA Disposition Services demilitarization
process. The area was clear of any debris and was primarily soil with an
exception of a cement pad on the South end with three walls. I informed the
HVF West representatives that my survey results are contingent on
providing the documentation to support their responses.

On February 5, 2020, I received an email from William Elson, attached were
several documents to respond to the survey questions. They include two
ADEQ reports from the inspection on January 15, 2020. The solid waste
inspection was performed by ADEQ representative Anthony Stone listing
environmental concerns to include; storage of tires, soil contamination,
potential hazardous constituents of shredding materials and declared
waste. Another concern was tires could not be stored on site more than 90
days. On February 15, 2020, Anthony Stone sited HVF with violation, A.A.C.
R18-13-303(A)- Placing, depositing, or allowing to be placed or deposited
refuse or other objectionable waste on a person’s premises or on any public
street, road or alley, and the violation was signed by Scott Laughlin. The
hazardous waste inspection was performed by ADEQ representative Jenna
Brickner. Her concerns included military scrap being placed directly on the
soil, aircraft paint chips throughout property, and storm water
contamination. During the inspection, two soil sample [sic] were retrieved
due to concerns of hazardous aircraft paint being released into the soil and
storm water. The results of the samples included levels of chromium and
cadmium that were over the regulated limit. Due to these results, HVF West
was cited for violation of storing and disposing hazardous waste without and
permit and disposing hazardous waste directly into the environment.

I reviewed other documentation provided by HVF West to include an invoice
for disposing tires, employee training checklist, Tier II reporting, and fire
extinguisher inspection. I had multiple concerns of the documentation on
waste tire disposal manifest identifying them as “OTR Tires”. However, HVF
West stated their tires were exempt because they were not over the road
tires. Other documents were fuel being shipped for disposal on an invoice
instead of a Hazardous Waste Manifest as required by EPA. The employee
training checklist provided was for an employee on “2/5/2020” which was

20
two days after our survey with two of the major training requirements written
in. HVF West provided Tier II reporting however they did not provide Tier III
reporting as listed on the survey form. HVF West stated that they do not
store or dispose of hazardous waste however the EPA number they
provided on the Statement of Intent, AZR000521872, is registered as
having RCRA activities described as “receiving hazardous waste from off-
site.”

Due to my findings during the inspection and my review of the
documentation provided by HVF West, I found the contractor to have an
environmental assessment of non-responsible. HVF West would need to
resolve the ADEQ violations and obtain a tire permit at a minimum before
consideration and reevaluation.

I, Lisa Henninger, swear that the above statements are accurate and true
to the best of my knowledge.

(capitalization in original).

Also on February 3, 2020, Mr. Elson of HVF sent the following email to DLA DS,
and provided requested documentation to DLA DS:

Further to your and Lisa Henninger’s visit this morning, you confirmed that
the product piles in our yard will not inhibit the flow of material to the site in
our 33 acre facility designated for receipt of what you had suggested could
amount to 90 truckloads per week. You commented that the area we have
designated and setoff was sufficient to accommodate the potential of
receiving 90 truckloads a week.

In an internal DLA DS email dated February 6, 2020, David Powell, however, detailed his
concerns from the February 3, 2020 HVF site visit:

My main concern is the process flow layout. Currently, we’ve been given a
plot of land. It looks large enough but the question remains-how will it be
set-up to function as a MUTB/Demil processing area? I don’t believe Scott
has grasped the idea of our flash to bang concept 12 days from induction
to demil. When I asked what his plan was to separate Demil from MUB, how
the 90 truck weekly turn-over will look like Scott said this is given post
award. I said yes but I need a macro view of HVFs [sic] plan of attack. I
reminded him once trucks begin to roll I need to know their process will
handle the operation. Once again he’s given DLA an area to work in but I
don’t see where he’s going to place certain items of equipment needed;
troch-cut, shearing, offloading box trailers and where incoming truck
property is staged offloaded and worked. Reminding him both Demil/MUTB
must be separated during the process. I asked Scott to give me a draft
process flow of how items will go into and out of HVF.

21
(capitalization in original).

In a memorandum from Mr. Elson of HVF to Ms. Henninger of DLA DS,
Environmental Specialist for DLA DS, detailing the February 3, 2020 DLA DS visit to the
HVF site, Mr. Elson stated:

A. ADEQ and PIMA County Inspections.

We opened the meeting on February 3, 2020 advising you and Dave of an
ADEQ site inspection at our facility on January 15 and a PIMA County
RECRA inspection on January 31.

We advised you that the ADEQ site visit was in follow up to a complaint filed
with the ADEQ by an individual whose name was not provided by the
ADEQ. The reports that were generated following the ADEQ inspection
were forwarded to Scott Laughlin by e-mail on January 28, 2020, consisting
of a Solid Waste Field Inspection Report and a Hazardous Waste Inspection
Report. There is information in the reports as well as pictures attached to
each of the reports which contain confidential and proprietary process
information. We consider the foregoing are consequently exempt from
disclosure under 5 USC 552(b)(4).

Notwithstanding the notation in the e-mail to Mr. Laughlin that HVF West
would receive additional materials from the ADEQ, in light of the historical
directive from senior management to be proactive in circumstances with
regulating authorities, we also advised you that following receipt of the
ADEQ reports, we did not wait for further contact from the ADEQ, but that
on January 30 we reached out to and spoke with Jenna Brickner, the
Hazardous Waste inspector to discuss next steps. Jenna instructed us to
speak with Brandon Green. We followed up with Mr. Green also on January
30 who advised us that we should follow up with Mr. Green’s supervisor,
Terry Bear. We have been in contact with Mr. Bear and expect to be meeting
with him in the next several days.

During the ADEQ visit on January 15, Ms. Brickner thought that the follow
up materials may include a request for a site assessment although she did
not know the details of the breadth or extent that the site assessment may
entail. Following our receipt of the ADEQ reports on January 28, we met
with Brown and Caldwell on January 30, 2020 at the facility for in excess of
2 hours which concluded in our engaging the firm to assist with a site
assessment and analysis, if required, and related issues that may arise in
this regard. . . .

The Investigation reports from ADEQ are not final promulgations by the
ADEQ under Arizona law. As we advised you and Dave, prior to the Arizona

22
visit on January 15, the last visit we had at our site was from PIMA County
in 2014 which resulted in a letter from PIMA County concluding that HVF
West was in compliance with the Pima County RECRA and solid waste
permit was not required. A copy of the letter from PIMA County is attached.
We had provided that letter to DLA previously. We told you and Dave that
we have full intention to work expeditiously with the ADEQ to reach an
acceptable plan of action to address these matters and that we are fully
committed to proceed as required under Arizona law. Consistent with our
initial reaction to the ADEQ reports, we will continue to be proactive with the
ADEQ to reach an acceptable plan. We have both the intent and resolve to
address and conclude these matters with the ADEQ as quickly as possible
as required under Arizona and federal law. Note that we have the ability
from a technical, financial and personnel perspective to timely address
these matters with the ADEQ and to fully implement a plan of action once
finalized.

We did not share with you during our meeting the particular technical
expertise that we have in house. [Redacted], our Vice President of
Environmental Affairs has 30 years environment experience including work
with both federal and state environmental regulations and interacting with
environmental agency representatives. [Redacted] leads our affiliated
group of companies in environmental compliance and permitting. Before
joining our affiliated group of companies on May 1, 2016, [redacted] had in
excess of 28 years experience as a regulator working at the Michigan
Department of Environmental Quality and the City of Detroit Water &
Sewage Department. [Redacted] works with [redacted] on environmental
compliance and permitting.

We have not received a report from PIMA County. Should we receive a
report from PIMA County regarding their visit addressing RECRA matters,
we will forward on to you. The Pima County inspectors who visited our site
were Mr. James Jones, Air Quality Inspector, 520-724-7348, and Ms. Nora
Atondo, RECRA Compliance Inspector, 520-724-7429. We have included
their phone numbers should you wish to follow up with them.

B. Tires

As to your question regarding the need for a permit for the tires at our facility,
attached are Arizona statute sections 44-1301 and 44-1304.01. Section
1301 defines both motor vehicle and off road motor vehicle. Section 1304
addresses requirements re 100 and 500 but is limited to only motor vehicle
tires.

On page 2 of the ADEQ Solid Waste Field Inspection Report, Mr. Anthony
Stone notes that aircraft tires, being off the road tires, are not subject to the
tire collection site regulations.

23
Further, attached are examples of documents we receive [sic] from the
Pima County Waste Tire Collection Facility at our delivery of tires. There
are two examples attached one for 100 tons and the other of 158 tons, each
of which are noted as off the road tires. We also attach a billing ticket from
the land fill showing the tires as being nonstandard tires. Note, that the
landfill has separate disposal charges for different categories of tires.
Please see the attached fee schedule from Pima County indicating that
charge for standard motor vehicle tires is $30 a ton while the charge for off
the road tires is $150 a ton.

(capitalization and emphasis in original). On February 7, 2020, Ms. Henninger of DLA DS
wrote the following internal email:

I have received the supporting documentation from the HVF representatives
in response to our recent On Site [P]re-Award Survey. I am preparing the
form DL2537 for submission however I wanted to forward the two ADEQ
inspection reports that were conducted on January 15, 2020. These initial
reports from ADEQ shows several deficiencies from HVF to include notice
of tire storage violations, SWPPP violations and a violation for refuse being
displaced on public property. The results of the inspections state a follow
up is required to determine any further violations. I wanted to share these
reports in advance so the results of the DL2537 are anticipated.

(capitalization in original).

On February 19, 2020, Mr. Elson emailed Ms. Henninger regarding the lab results
of the soil samples HVF had sent for independent testing. Mr. Elson’s February 19, 2020
email stated:

Lab results of the samples taken by ADEQ were analyzed for TCLP [Toxicity
Characteristic Leaching Procedure] cadmium and total chromium. We were
advised by the ADEQ that the State of Arizona does not have access to an
in state lab capable of conducting an analysis for the presence of
hexavalent chromium (chromium VI), and therefore the ADEQ lab results
tested only for total chromium. We however wanted to know if there was
hexavalent chromium in the samples taken by ADEQ. In response to our
inquiry, the ADEQ suggested an out of state lab recognized by the ADEQ
which had the capability of testing for chromium VI. We forwarded our split
samples associated with those taken by the ADEQ to the recommended lab
which conducted analyses for chromium VI and has determined that there
was hexavalent chromium in the sample but at levels substantially below
the State of Arizona non-residential levels identified in Arizona
Administrative Code at 18-7-205.

24
We also had our split samples analyzed for total cadmium since Arizona
Administrative Code Section 18-7-205 does not provide a level for TCLP
cadmium. Therefore, soil remediation under the foregoing rule is not
required in response to TCLP test results showing the presence of
cadmium. The results of the lab analyses do however confirm that total
cadmium, chromium VI, and trivalent chromium (chromium III) are at levels
substantially below the non-residential level established under the Arizona
Administrative Code section 18-7-205. Consequently, soils removal,
remediation or treatment with the object to bring cadmium, chromium VI,
and/or chromium III below the levels established under the foregoing rule
are not required. The report from Legend Technical Services which had
performed both total cadmium, TCLP cadmium and total chromium is
attached. Legend Technical forwarded the sample to Pace Analytical
National Tennessee who performed the TCLP for Hexavalent Chromium.
The lab results from Pace Analytical are also attached under cover from
Legend Technical.

Processed scrap metal, which includes metallic fines, is included in the
definition of excluded scrap metal under federal law and correspondingly
under Arizona law. Consequently, processed scrap metal is exempt as a
solid waste under both federal and Arizona law. As a hazardous waste must
first meet the definition of solid waste, if a material is not a solid waste it
cannot be a hazardous waste. The TCLP test is used for the purposes of
determining if a solid waste exhibits the characteristics of toxicity pursuant
to 40 CFR 261.24. If a material is not a solid waste, then the TCLP test
results are irrelevant since a material must be a solid waste in order to meet
the definition of a hazardous waste. The grab samples pulled by the ADEQ
included metallic fines which are not a solid waste and therefore cannot be
a hazardous waste. Consequently the TCLP test directed to non-waste
material was inappropriately used by ADEQ to draw a regulatory
conclusion. We therefore take issue with the Hazardous Waste Report
indication that we have stored or disposed of hazardous waste at our
property which conclusion was based upon the TCLP test performed for the
ADEQ.

(capitalization in original). On March 2, 2020, Tim Cronk of DLA DS’ Environmental Field
Office, who completed the “Final Report: Final Environmental Responsibility
Determination” on HVF’s proposed site for contract performance, discussed below, called
ADEQ regarding HVF and detailed the phone call in an internal memorandum. The March
2, 2020 internal memorandum from Mr. Cronk stated:

SUBJECT: Phone Conversation with Arizona Department of Environmental
Quality (ADEQ) Regarding HVF West.

I contacted Ms. Jenna Brickner of ADEQ on February 26, 2020 regarding
HVF West and asked if she would send me a copy of her report. ADEQ

25
received a complaint concerning HVF West and conducted an
environmental inspection on January 15, 2020.

I called Ms. Brickner on March 2, 2020 regarding her report to discuss her
findings and if there was a plan for remediation at HVF West. The following
are my questions and Ms. Brickner’s responses:

Tim Cronk (TC) – The report you provided shows the Cadmium level at a
level greater than the reportable limit yet I don’t see anything in the report
addressing the issue.

Jenna Brickner (JB) – We are working on an NOV (Notice of Violation) now
and will be issuing to HVF West. We have recommended to them that they
join our Voluntary Remediation Program which they have agreed to join. We
will then work with them regarding the remediation of the soil and how to
move forward with that remediation.

TC – So HVF West does not have a violation at this point due to the high
levels of Cadmium but ADEQ will be issuing in the future, correct?

JB – That is correct. We are drafting now and have been in contact with
HVF West recommending they join our program which they have agreed to
join. We will then work with them on getting the soil cleaned up.

TC – Are you aware of the issues with the tires? I know Mr. Stone was the
inspector but was wondering if you are aware of that situation. He stated
there were several violations but he wrote up a single violation. Do you know
if HVF West has a plan with ADEQ to remove the tires and if that plan is
underway?

JB – I’m familiar with the situation but that is not my area of work. I do know
HVF West began removing tires shortly after the inspection and have been
removing them since. They are actively working to get those removed and
get below the limit. I believe the Notice of Opportunity to Correct
Deficiencies runs out in 90 days, which will be in April.

TC – So there is no formal plan but HVF West is working that issue and
removing the tires. How do you know if they have complied with the 90 day
removal requirement?

JB – Yes, they are and have been removing tires since the inspection. They
will have to send us photos of the area to prove they have remediated the
tires and removed them. It is incumbent upon them to prove they have
removed the tires. ADEQ won’t just conduct another inspection.

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TC – Is it against the law for material to be placed directly on the soil in
Arizona?

JB – It is not against the law. As long as it is Solid Waste, it can be placed
on the soil but must have a containment system. That is allowed. If the
material contaminates the soil, then it is against the law and they must
remove the contaminants. We talked to HVF West and recommended that
once they get the soil remediated for the Cadmium, they may want to put in
a cement pad to work on. We have been in communication with them over
this issue.

TC – Do you know if HVF West has applied or will apply for a permit?

JB – I’m not sure what kind of permit you are referring to but they do not
have a Hazardous Waste Permit and I don’t believe they are going to apply
for one. They would only need a permit if they are going to treat hazardous
waste.

(capitalization and emphasis in original).

In another internal memorandum dated March 2, 2020, Mr. Cronk detailed a phone
conversation with Mr. Powell, who was present at multiple DLA DS inspections of HVF’s
proposed site for contract performance. The March 2, 2020 internal memorandum from
Tim Cronk stated:

I called Mr. Powell to ask about taking photos of HFV [sic] West from the
perimeter of the fence line. When the site visit took place in support of the
Environmental Responsibility Determination (ERD), no photos were
submitted with the report. I stated that since we did not take any photos
during the visit, could he take photos through the fence [sic]. Mr. Powell
stated that they had started taking photos during the visit and the owner of
the facility called his attorney to ask if that was acceptable. Apparently, the
attorney said no. The attorney also said to delete any photos already taken.
Mr. Powell said the owner then walked over to him and witnessed Mr.
Powell deleting the photos on his phone. The owner then stated no other
photos were allowed.

On March 12, 2020, Tim Cronk of DLA DS completed an internal memorandum
labeled: “Final Report: Environmental Responsibility Determination” (the Final
Environmental Responsibility Determination), regarding HVF. The Final Environmental
Responsibility Determination on HVF stated, in full:

This report is submitted as a result of a request from the DLA Disposition
Services Sales Contracting Traditional Branch to conduct and [sic]
Environmental Responsibility Determination (ERD) regarding Huron Valley

27
Fritz – West (HVF West). The review was conducted in accordance with
Defense Logistics Agency Standard Operating Procedure (SOP 4715.06-
01) dated September 17, 2018.

The ERD was completed on March 12, 2020 with a final recommendation
of “NOT RECOMMENDED.”

The initial ERD was assigned to and completed by Mr. Anthony Stewart of
the DLA Disposition Services Environmental Branch. His initial report
included the completion of the DLA Two-Way Memorandum from the Sales
Office to the Environmental Office to include the checklist at the bottom of
the two-way memorandum. He conducted a review of the Invitation for Bid,
the Statement of Intent, and the Enforcement and Compliance History
Online (ECHO). Mr. Stewart contacted HVF West on January 10, 2020
regarding the sale and completed the Destination Interview Questions. He
also contacted the Arizona Department of Environmental Quality (ADEQ)
on January 10, 2020 to conduct the Regulator Interview Questions. It was
during this conversation that Mr. Stewart spoke with Ms. Jenna Brickner
about HVF West and she indicated that ADEQ was scheduled to visit HVF
West in the next few days. She also indicated that ADEQ would provide
DLA Disposition Services a copy of the report when it was complete.

Two primary issues among others contributed to the “Not recommended”
as a result of the ERD. The first issue that raised concern was outlined in
the Arizona Department of Environmental Quality Hazardous Waste
Inspection Report dated 1-15-2020. The report indicated two soil samples
had been obtained from locations on HVF West’s property that had been
identified as an area to process Government property. It was also a location
where visible paint chips on the ground were identified by the ADEQ
inspector. The soil samples were sent to Eurofins TestAmerica in Phoenix,
AZ for testing. The result of the soil sample indicated there were high levels
of heavy metals to include Cadmium and Chromium. The results for the
sample located at the base of the pile (sample 1), of Cadmium was 4.2 mg/L
by Toxicity Characteristic Leaching Procedure (TCLP). The results for the
sample from the soil downgradient of the pile, 4.9 mg/L for Cadmium by
TCLP. In both instances, the level of Cadmium exceeded the maximum
concentration of contaminants for the toxicity characteristics per the
Hazardous Materials, Substances & Wastes Compliance Guide 2018/2019.
Specifically, §261.24 (Toxicity characteristic), table 1 lists the regulatory
level for Cadmium as 1.0 mg/L. The results of the soil sample 1 and soil
sample 2 for Cadmium far exceed this limit.

Although the Chain of Custody report . . . indicated both a TCLP Chromium
and a Total Chromium were ordered, only the total Chromium results were
included in the Eurofins report. The results for the sample located at the
base of the pile (sample 1), were 1100mg/kg for total Chromium. The results

28
for the sample from the soil downgradient of the pile (sample 2), were 480
mg/kg for total Chromium. The total Chromium results from the laboratory
report indicate the probability of a level of Chromium significantly greater
than the regulatory level. However, without a TCLP result, the Chromium
level report was considered in the decision to not recommend HVF West
but not as a regulatory violation as with the Cadmium.

A review of HVF West’s records did not indicate they were authorized nor
permitted by the Environmental Protection Agency nor the state of Arizona
to Transfer, Store, or Dispose of Hazardous Waste. Additionally, Mr.
Anthony Stone’s Solid Waste Field Inspection Report dated January 15,
2020 noted an observation that HVF West had not created sufficient
measures to reduce the potential of soil contamination from their recycling
activities. Concrete had been installed on a large portion of the outdoor
facility yard located around the processing building; however, the majority
of the material on-site appeared to be sitting directly on bare soil.

On January 27, 2020, DLA received an email from Greg Lamb regarding
issues at the Apparent High Bidders [sic] facility (HVF West’s facility).
Included in his email were several claims of regulatory violations regarding
“potential accumulation of solid waste in the form of tires . . .,” “solid waste
permit violations and the lack of a special waste permit,” “Automobile
Shredder Residue accumulation violations,” and “several piles of Dirt and
Dirt w/solid waste may be on site.” Included in the email were several
Google Map satellite photos of HVF West’s facility stating they were from
2014 through 2018. The photos clearly represented large piles of tires
throughout the property. DLA Disposition Services Environmental Office
then researched and retrieved Google Map Satellite photos of the same
location at HVF West dated February 2020 showing tires in the same
locations throughout the property. Some of the piles had grown in size and
there appeared to be additional tires located throughout the property that
were either in fewer numbers or not there at all in the 2014 Google satellite
photo. These photos were used to verify the presence of large piles of tires
on the property and confirm ADEQ[’]s report of accumulating solid waste on
the premises.

On January 28, 2020, DLA Disposition Services Environmental Office sent
a Memorandum to Disposition Service Director West (DSD West) directing
an on-site Survey of the HVF West facility in accordance with the SOP. In
an effort to ensure all personnel understood the tasking for the site survey,
DLA Disposition Services Environmental Office held a teleconference on
January 31, 2020 with DSD West and the Tucson survey team. On Feb 2,
2020, Disposition Services Tucson sent Ms. Lisa Henninger and Mr. David
Powell to the HVF West facility to conduct the on-site survey. Ms. Lisa
Henninger submitted her PRE-Award/Post-Award on-site HM/HW
Recycler/Processor Manufacturer report (DLA Form 2537) dated February

29
3, 2020. Included in her report were several enclosures to support her site
survey. On February 14, 2020, Ms. Lisa Henninger submitted her PRE-
AWARD/Post-Award on-site HM/HW Recycler/Processor Manufacturer
report (DLA Form 2537) dated February 3, 2020. Included in her report were
several enclosures to support her site survey. On February 14, 2020, Ms.
Lisa Henninger submitted a Memorandum for Record where she detailed
her site survey/visit and provided additional details of the visit,
conversations, and observations. In her memorandum, Ms. Henninger
addresses her concerns regarding responses from HVF West to her
questions. Her Memorandum stated HVF West would not or could not
answer specific questions about tire disposal. When pressed regarding tire
disposal, HVF West responded that the information was “proprietary.” Ms.
Henninger summed up her Memorandum by stating “due to my findings
during the inspection and my review of the documentation provided by HVF
West, I found the contractor to have an environmental assessment of non-
responsible.” These issues along with her summation of a not responsible
support the Environmental Office conclusion to not recommend this sale.

On March 2, 2020, DLA Disposition Services Environmental Office
contacted the ADEQs Resource Conservation and Recovery Act (RCRA)
inspector (Jenna Brickner) who conducted the Hazardous Waste portion of
the inspection. The ADEQ report did not address their future intentions for
the heavy metal violation. The report listed these observations but did not
address nor imply there was any kind of violation or that HVF West would
receive a Notice of Violation (NOV) for the high level of Cadmium. ADEQ’s
Ms. Jenna Brickner stated during the phone call that ADEQ was in the
process of issuing a NOV to HVF West for the heavy metal Cadmium. She
did not state when she though the NOV would be complete or when it might
be issued to HVF West. She also did not state when the remediation must
be completed but that it would be stipulated in the NOV itself. She did state
that HVF West is cooperating with the ADEQ and the two entities are
working to put a plan together for HVF West.

The second issue noted by the ADEQ cited HVF West was “Placing,
depositing, or allowing to be placed or deposited refuse or other
objectionable waste on a person’s premises or on any public street, road,
or alley.” A.A.C. R18-13-303(A). This was noted in Mr. Anthony Stone’s
Solid Waste Field Inspection Report dated Jan 15, 2020. Mr. Stone’s report
provided a synopsis of HVF West’s tire procedures and operation and
recommended best practices regarding fire suppression for tires. The report
also stated that HVF West was informed that “anything declared a waste
(tires or waste generated from shredding activities) is not allowed to remain
on the property longer than ninety days or it considered [sic] improper
disposal of solid waste.”

30
DLA Environmental Office contacted Mr. Stone on or about Feb 11, 2020
regarding this issue. Mr. Stone stated that the amount of tires and the
number of violations he noted at HVF West caused him to issue a single
Solid Waste violation for improper tire storage instead of individual citations
for each violation. During the conversation, Mr. Stone indicated that HVF
West was allusive [sic] and evasive in their responses to his questions. Mr.
Stone also stated that when HVF West was asked certain questions
regarding their processes and procedures for disposing of tires, they stated
that the information regarding the tires was “proprietary” and they would not
answer. The report provided to DLA Disposition Services by ADEQ included
a “NOTICE OF OPPORTUNITY TO CORRECT DEFICIENCIES” with the
violation:

“A.A.C. R18-13-303(A) Placing, depositing, or allowing to be placed or
deposited refuse or other objectionable waste on a person’s premises or on
any public street, road or alley.”

The Notice states: “Within 90 calendar days of the date of this notice; please
submit documentation to the ADEQ contact above demonstrating that no
violation has occurred or documentation that the alleged deficiency has
been corrected. Acceptable documentation includes, but is not limited to
photographs, receipts, standard operating procedures, and/or relevant logs.

Once ADEQ has received the requested documentation, the case will
be closed and a letter will be issued stating that the agency will take
no further action as a result of this inspection.”

On March 2, 2020 DLA Disposition Services Environmental Office
contacted our DLA Representative Mr. David Powell from the Tucson, AZ
office regarding his site visit. The subject of the conversation was the lack
of photos provided by his team during the visit. Mr. Powell stated he began
to take photos of the area where DLA Disposition Services property would
be processed by HVF West. He then stated that a representative from the
HVF West team accompanying him during the tour of the property called an
HVF West attorney and asked if photos should be allowed as part of the
tour. The representative then asked Mr. Powell to cease taking photos and
asked him to delete the photos he had already taken. To ensure Mr. Powell
deleted the photos, the representative visually observed Mr. Powell delete
the photos. This gave concern to our team that HVF West was not fully
cooperating with DLA in accordance with the Invitation for Bid (A0008025)
which states “the apparent high bidder shall cooperate fully with the
Government when informed by the Agency of an ongoing investigation by
any DOD or Federal Government Investigation service or agency or during
the Agency’s Compliance Reviews or Audits.”

31
The issue noted by the ADEQ regarding solid waste (tires) was the second
of two issues that caused DLA Disposition Services concern and resulted
in our submission of a “not recommended” in our report. HVF West had
nearly 4 times the allowable amount of Cadmium in the soil according to the
Hazardous Materials, Substances & Wastes Compliance Guide 2018/2019
at their facility. Although the Total Chromium report from Eurofins is non-
conclusive due to the report nature, it does provide concern regarding the
amount of Chromium in the soil. The facility was given 90 days to remove
the tires and submit proof to ADEQ regarding their compliance with the
citation. The DLA Environmental Office, through their Environmental
Responsibility Determination process, concludes it would not be prudent to
issue material to this company given they had just been cited by the
regulating authority in Arizona for excessive heavy metals in the ground and
a solid waste violation that is still within the remedy time frame (90 days).
This Sale is NOT RECOMMENDED.

(capitalization and emphasis in original; internal references omitted).

On March 13, 2020, Todd Koleski, the Sales Contracting Officer for DLA DS
assigned to the bridge contract at issue in the above-captioned protest, wrote a letter to
Scott Laughlin of HVF, informing him of the DLA DS non-responsibility determination with
regard to HVF. The March 13, 2020 letter stated, in full:

Dear Mr. Laughlin:

1. Upon examining HVF’s capability to perform the requirement in an
environmentally compliant manner, examining the types of information and
evidence outlined in the IFB, and review of e-mails and documents from
HVF West regarding the company’s responsibility generally and arguments
regarding ADEQ findings specifically, e.g., February 5, 10, and 19 HVF
West e-mails, I cannot make an affirmative determination that HVF West
LLC is a responsible high bidder to purchase the property and perform the
requirements of Disposition Service Invitation for Bid A0008025.

2. Section 4, paragraph 7, subparagraph g states: “prior to award, the
Agency will conduct a pre-award survey of the apparent high bidder.” The
solicitation further provided that “the pre-award survey . . . may include but
is not limited to a review of the apparent high bidder’s facilities and
equipment, financial capability or disclosure of the apparent high bidder’s
financial condition, quality assurance, safety, environmental responsibility,
and transportation. The apparent high bidders shall cooperate in the pre-
award vetting process by assisting in arrangements and/or by providing
requested information in a timely manner.” The agency takes these
measures to ensure that a potential awardee can perform the requirement
of the IFB in an environmentally compliant manner.

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3. As noted above, I am unable to make an affirmative determination that
HVF West LLC is a responsible high bidder, for the following reasons:

First, HVF West LLC did not fully cooperate in the pre-award vetting
process. Specifically, DLA personnel were not allowed to take all required
pictures required for the environmental assessment. Additionally, what few
photos were taken were required to be deleted in the presence of your
personnel. Anytime DLA personnel asked questions concerning disposal,
the reply was, “that is proprietary information.”

Second, during the environmental responsibility determination (ERD)
assessment, there were a number of deficiencies identified at your facility
that raise significant concerns with the non-complaint manner in which solid
wastes have been managed. The two primary issues identified in the ERD
are outlined below.

a. DLA learned that the Arizona Department of Environmental Quality
(ADEQ) had conducted a solid waste inspection and a hazardous waste
inspection of your facility. Their report indicated two soil samples had been
obtained from locations on HVF West’s property in areas identified in an
area used to process Government property. The soil samples were sent to
Eurofins Test America in Phoenix, AZ. The results of the soil samples
indicated that HVF West had nearly four (4) times the allowable Cadmium
in the soil per the Hazardous Materials, Substances & Wastes Compliance
Guide 2018/2019. Additionally, although the chain of custody report noted
that both TCLP Chromium and Total Chromium were ordered, only total
Chromium results were included in the Eurofins report. The total Chromium
results from the laboratory indicate the probability of chromium significantly
greater than the regulatory level. Upon contacting the ADEQ, DLA learned
that a Notice of Violation for the high level of Cadmium was forthcoming and
the NOV would require remediation.

b. The second issue was noted by the ADEQ in a Solid Waste Field
Inspection Report dated Jan 15, 2020. As a result of that report, HVF West
was cited for “Placing, depositing, or allowing to be placed or deposited
refuse or other objectionable waste on a person’s premises or on any public
street, road, or alley.” A.A.C. R18-13-303(A). The report noted an
observation that HVF West had not created sufficient measures to reduce
the potential of soil contamination from their recycling activities. Specifically,
concrete had been installed on a large portion of the outdoor facility yard
located around the processing building; however, the majority of the
material on-site appeared to be sitting directly on bare soil. The report also
noted that tires or waste generated from shredding activities were not
allowed to remain on the property longer than ninety days or it is considered
improper disposal of waste. DLA contacted the ADEQ regulator on or about
Feb 11, 2020 to discuss the report and findings. The ADEQ regulator stated

33
that the amount of tires and the number of violations he noted at HVF West
caused him to issue a single Solid Waste violation for improper tire storage
instead of individual citations for each violation. During the conversation,
the regulator indicated that HVF West was elusive and evasive in their
responses to his questions. He also stated that when HVF West was asked
certain questions regarding their processes and procedures for disposing
of tires, they stated that the information regarding the tires was “proprietary”
and they would not answer. HVF West was given 90 days to remove the
tires and submit proof to ADEQ regarding their compliance with the citation.

3. Due to the concerns raised by the above information over the non-
compliant manner in which solid wastes have been managed at the facility
HVF intends to use for recycling, the violations noted by regulators,
including ongoing or uncorrected non-compliance, there is an unacceptable
risk that property released by DLA would not be managed in a compliant
manner or would have the potential to cause the agency to incur future
liability under state or federal laws and regulations governing the
remediation or clean-up of environmentally contaminated sites. For the
above reasons, I have made the determination that your firm is not a
responsible bidder under Disposition Service Invitation for Bid A0008025.

4. This is considered a final agency action on our evaluation of you as the
apparent high-bidder under Invitation for Bid A0008025.

(capitalization in original).

After finding HVF non-responsible, DLA DS proceeded to consider Lamb for the
award of the bridge contract currently at issue, as Lamb had submitted the second-
highest offer in response to the bridge contract solicitation, No. A0008025. Lamb provided
DLA DS with the required documents, including: Statement of Intent; End-Use Certificate;
Employee Training Matrix; documents related to Lamb’s Waste and Service Vendors;
Licenses and Permits; training attendance log; and spill response and clean up.

On March 19, 2020, Jennifer Bechtel of DLA DS contacted ADEQ regarding Lamb.
A conversation record completed by Jennifer Bechtel detailed the conversation as follows:

ADEQ just got an anonymous complaint yesterday and will do an inspection
in the next few weeks on Lamb. She will send a different inspector this time
(than sent for HVF West). “Doesn’t want to be in the middle.” Will know more
in time. She will send an impartial inspector.

Also on March 19, 2020, Tim Cronk sent the following internal DLA DS email to
schedule a DLA DS conference call regarding inspecting the Lamb facility:

This meeting is to discuss the upcoming site visit at Lamb Depollution in
Tucson, AZ. (1100 Eastern Time Zone) Due to the intense scrutiny this

34
Scrap Sale is under, we want to ensure we are thorough during our visit. As
you probably know, HVF West received a “not recommended” from the
Environmental Office. I then had to provide a final report supported by 25
enclosures. The report was well over 100 pages. At any rate, want to make
sure we are on the same page as this will also get litigated at some point.

Topics to consider:

- Permit review
- Environmental Liability Insurance review
- Safety review
- Site walk-thru
- photos of site
- if photos are not allowed, detail every square
foot of property covered.
- noted areas of discolor
- noted areas of excessive scrap/clutter
- Material on hand
- Material status (on ground or concrete)
- Number of tires on hand
- Review of manifest removing property
- Review of sales receipts removing property
- Storm Water permit review
- Storm Water prevention Plan

I know I’m missing several topics but the checklist should fill
in the gap.

Also on March 19, 2020, DLA DS conducted a pre-award inspection of Lamb’s
facility, which was detailed in a March 19, 2020 DLA Form 2537, completed by Lisa
Henninger (the March 19, 2020 Form 2537). The March 19, 2020 DLA Form 2537 for
Lamb stated that “As of 3/19/2020, Lamb Depollution has not received a regulatory
inspection at their new location on Nebraska Street in Tucson, Arizona.” The March 19,
2020 Form 2537 also stated that “[a]s of 3/19/2020, Lamb Depollution has not received
an official fire/safety inspection. However, Greg Lamb advised that the site was in contact
with local authorities to schedule an inspection. The inspection date was still pending at
time of the survey.” The March 19, 2020 Form 2537, however, did not indicate any
environmental concerns at Lamb’s facility, and concluded that “Lamb Depollution can
responsibly manage the commodities of scrap and waste as long as they move the
property efficiently,” and Lamb was given a “RESPONSIBLE” environmental assessment.
(capitalization in original). In a supplemental statement in support of the responses
provided in the March 19, 2020 Form 2537, Lisa Henninger explained that there was
property being stored at Lamb’s facility, but stated that “[t]he Lamb Depollution site has
not been in operation for a year therefore it is assumed that the property present has not
been stored over a year. During survey review, the scrap we being segregated as well as
a truck being loaded. Based on these findings it would be determined that the current

35
property is actively being moved. [sic]” The supplemental statement written by Lisa
Henninger also stated:

The Lamb Depollution site is for a scrapping process [sic] therefore some
housekeeping issues is [sic] expected. During the visual survey it was
observed that the scrap was segregated and organized and employees
were using racks to ensure the areas were free from loose debris. Several
areas the scrap was on wood plates, metal plates or contained in liners [sic].
However, in the sheering operation area the scrapping process did occur
directly on the soil. Recommendation would be to ensure property with high
risk of discharge not be processed directly on the soil and that scrapping
process required to be processed on the soil not be stored for long periods
of time.

As noted above, on March 18, 2020, ADEQ received an anonymous complaint
regarding the Lamb Depollution facility. On March 23, 2020, a complaint receipt form was
generated by Jenna Brickner of ADEQ, which described the anonymous complaint as
follows:

The site has historically been used and is believed to be currently being
used [sic] to process Department of Defense aircraft aluminum, other
Department of Defense metallic and non-metallic materials and metals from
other sources. It is believed that processing takes place directly on and over
the soils. As such, the potential exists for the presence in the soils, with the
further potential exposure to surface and ground water, of metallic
constituents consisting of but not limited to cadmium, chromium, lead and
mercury, potentially constituting storage and disposal of hazardous and
solid wastes.

In response to the anonymous complaint, ADEQ performed an inspection of
Lamb’s facility on April 1, 2020. ADEQ generated a Hazardous Waste Inspection Report,
completed by Jenna Brickner. The Hazardous Waste Inspection Report stated that “[n]o
deficiencies were noted during the course of the inspection” and that “[n]o ADEQ action
will result from this inspection.” The Hazardous Waste Inspection Report also found no
“‘risk to any person, the public health, safety or welfare or the environment’ per ARS
§ 41-1009.” In the section for inspector observation and notes, the Hazardous Waste
Inspection Report stated:

At the time of the inspection, the facility was not open for business. When
operating, the facility accepts and processes end of life aircraft, avionics,
textiles, body armor, parachutes, vehicles (including tires), glass, textbooks,
et al. for recycling. Scrap is separated and stored in separate bermed areas.
Concrete barriers surround 3 sides of each pile. Both unprocessed and
processed scrap metal is stored on top of a metal sheet with the aim of
minimizing soil contamination. Mr. Lamb told ADEQ that none of the
materials brought in from their customers is waste. All materials listed above

36
are accepted at the facility to be recycled. The only exception to this is when
a vehicle arrives which still contains fuel, lubricants, or other fluids. The
facility will not accept vehicles containing these and other fluids and they
are rejected and returned to the customer. Everything is recycled except in
the event that vehicle fluid removal is needed, however, the facility policy is
to reject vehicles that still contain liquids.

The April 1, 2020 ADEQ inspection of Lamb’s proposed site for contract
performance also generated a Solid Waste Field Inspection Report, completed by
Anthony Stone. As did the Hazardous Waste Inspection Report, the Solid Waste Field
Inspection Report on Lamb also stated that “[n]o deficiencies were noted during the
course of the inspection,” and that “[n]o ADEQ action will result from this inspection.”

On April 3, 2020, Tim Cronk of DLA DS completed Lamb’s “Final Environmental
Responsibility Determination,” which stated:

This report is submitted as a result of a request from the DLA Disposition
Services Sales Contracting Traditional Branch to conduct and
Environmental Responsibility Determination (ERD) regarding Lamb
Depollution (aka Lamb Fuels). The review was conducted in accordance
with Defense Logistics Agency Standard Operating Procedure (SOP
4715.06-01) dated September 17, 2018.

The ERD was completed on April 3, 2020 with a final recommendation of
“RECOMMENDED.”

The initial ERD was received from the Sales office on March 16, 2020 and
assigned to Ms. Jennifer Bechtel of the DLA Disposition Services
Environmental Branch. Shortly after receiving the assignment, Ms. Bechtel
took a position with the Air National Guard and was re-assigned prior to
completing the ERD. Prior to her departure, she conducted a review of the
Invitation for Bid, [and] the Statement of Intent. A review of the Enforcement
and Compliance History Online (ECHO) returned no results for Lamb
Depollution. She also contacted the Arizona Department of Environmental
Quality (ADEQ) on March 19, 2020 to conduct the Regulator Interview
Questions. It was during this conversation that Ms. Bechtel was informed
by Ms. Jenna Brickner that ADEQ had received an anonymous complaint
directed at Lamb Depollution. Ms. Brickner indicated that she was not sure
when ADEQ would visit Lamb Depollution but it would be in the next two
weeks.

On March 17, 2020, DLA Disposition Services Environmental Office sent an
email to Disposition Service Director West (DSD West) directing an on-site
Survey of the Lamb Fuels facility in accordance with the SOP. In an effort
to ensure all personnel understood the tasking for the site survey, DLA
Disposition Services Environmental Office held a teleconference on March

37
19, 2020 with DSD West and the Tucson survey team. On March 19, 2020,
Disposition Services Tucson sent Ms. Lisa Henninger, Mr. David Powell,
and Mr. Forrist Richardson to the Lamb Fuels facility to conduct the on-site
survey. Ms. Lisa Henninger submitted her PRE-Award/Post-Award on-site
HM/HW Recycler/Processor Manufacturer report (DLA Form 2537) signed
March 25, 2020 with an attachment that expounded on the report itself. The
team were not allowed to take photos with their own cameras or phones but
were provided a Lamb Fuels phone to take photos. Lamb then reviewed the
photos on the phone and sent them to the Tucson Team. The Tucson Team
stated they did not believe any photos had been removed. Included in Ms.
Henninger’s report were several enclosures to support her site survey which
are available upon request (see list below). Mr. Dave Powell also submitted
a report via email and is available upon request. No negative input was
reported by Mr. Powell.

On March 30, 2020, Tim Cronk contacted the PIMA County Fire Department
in Tucson, Arizona and spoke with Willie Treach. Mr. Treach is the Fire
Marshall for PIMA County and handles permits for specific activities. He
stated that he had recently visited Lamb Fuels and was concerned over the
fact that they were missing several permits for operations they were
conducting at the site. He stated that Lamb Fuels reviewed all the
requirements with him and are working closely to obtain the necessary
permits. Lamb Fuels did not have a permit to operate a plasma cutter,
operate a secure gate, use mobile trailers onsite, and had not provided their
emergency information to the Fire Marshall. When asked about the
operations at Lamb Fuels and if the Government should sell scrap material
to this buyer, Mr. Treach had no reservation in supporting the sale. . . .

One [sic] April 1, 2020, Tim Cronk contacted Mr. Greg Lamb of Lamb Fuels
to conduct the buyer interview. Mr. Lamb was just finishing up with the
Arizona Department of Environmental Quality and after the ADEQ departed,
we completed our conversation regarding the sale. Mr. Lamb was forthright
and did not hesitate to answer questions. During the conversation, Mr.
Lamb stated he already had a copy of the ADEQ inspection that had just
concluded and would forward a copy. I noted no outstanding issues or
causes for concern during the interview.

Lamb Depollution, also known as Lamb Fuels, appears to be a responsible
partner with the City of Tucson, AZ and an environmentally responsible
business. The ADEQ report had no negative findings other than minor
admin issues. The local Fire Department had no additional issues with
Lamb Fuels other than those noted above and were confident Lamb Fuels
would continue to cooperate. The Fire Marshall had no concerns that Lamb
Fuels would obtain the necessary permits. A search of the internet revealed
no negative reviews of the company. A Google Map search did not appear
to show hazardous material, tires or debris scattered about the site.

38
Additionally, an ERD had been recently conducted at this site in July 2019
with a positive review. Below is a list of other documents available that not
[sic] included in this report.

- Business License
- Google map photos
- Responsible Recycling (R2) Assessment Report
- ADEQ Exit Debriefing with Notice of Inspection Rights
- Facility Permits and Registrations
- Tier II Reporting
- Lamb Employee Health and Safety training
- Employee Training Overview
- Lamb Depollution SPCC and Emergency Plans
- Fire Extinguisher Training and Log
- PPE Training and Certificate
- Log of Disposal Documentation
- Lamb Depollution R2 SOP
- Dave Powell Site Visit Assessment emails

Based on the information provided in this report, DLA Disposition Services
Environmental Branch finds Lamb fuels responsible and submits a
‘RECOMMENDED’ for this sale.

(capitalization in original; internal references omitted). On April 13, 2020, a “Notice of
Award, Statement, and Release Document” was issued with Lamb as the awardee of
Solicitation No. A0008025, for the bridge contract currently at issue.

DISCUSSION

As indicated above, the defendant and defendant-intervenor moved to dismiss the
above-captioned bid protest, Case No. 20-541, regarding the contract award pursuant to
the bridge contract Solicitation, Solicitation No. A0008025, for lack of subject-matter
jurisdiction. Both argue, similar to their arguments in the earlier bid protest brought by
HVF before Chief Judge Sweeney in HVF West I, that pursuant to 28 U.S.C. § 1491(b)(1),
the bridge contract Solicitation is one not for a government procurement because it is for
a sales contract, and, therefore, that this court does not have jurisdiction to review
protestor’s protest. Protestor responds in the current bridge contract case, as it did before
Chief Judge Sweeney in HVF West I with regard to the original contract, that the
Solicitation is for a “mixed-transaction,” because it involves services of removal,
demilitarization and mutilation of government property, in addition to the government’s
sale of the property. The defendant and defendant-intervenor state that the mixed-
transaction analysis, which was approved in Chief Judge Sweeney’s decision in HVF
West I, remains incorrect, and that it has never been upheld by the United States Court
of Appeals for the Federal Circuit. Alternatively, defendant and defendant-intervenor try
to argue that, even under the mixed-transaction analysis, the court still lacks jurisdiction

39
because the services provided to the government in the bridge contract at issue are not
“more than de minimis.”

It is well established that “‘subject-matter jurisdiction, because it involves a court’s
power to hear a case, can never be forfeited or waived.’” Arbaugh v. Y & H Corp., 546
U.S. 500, 514 (2006) (quoting United States v. Cotton, 535 U.S. 625, 630 (2002)).
“[F]ederal courts have an independent obligation to ensure that they do not exceed the
scope of their jurisdiction, and therefore they must raise and decide jurisdictional
questions that the parties either overlook or elect not to press.” Henderson ex rel.
Henderson v. Shinseki, 562 U.S. 428 (2011); see also Hertz Corp. v. Friend, 559 U.S. 77,
94 (2010) (“Courts have an independent obligation to determine whether subject-matter
jurisdiction exists, even when no party challenges it.” (citing Arbaugh v. Y & H Corp., 546
U.S. at 514)); Special Devices, Inc. v. OEA, Inc., 269 F.3d 1340, 1342 (Fed. Cir. 2001)
(“[A] court has a duty to inquire into its jurisdiction to hear and decide a case.” (citing
Johannsen v. Pay Less Drug Stores N.W., Inc., 918 F.2d 160, 161 (Fed. Cir. 1990)));
View Eng’g, Inc. v. Robotic Vision Sys., Inc., 115 F.3d 962, 963 (Fed. Cir. 1997) (“[C]ourts
must always look to their jurisdiction, whether the parties raise the issue or not.”). “The
objection that a federal court lacks subject-matter jurisdiction . . . may be raised by a party,
or by a court on its own initiative, at any stage in the litigation, even after trial and the
entry of judgment.” Arbaugh v. Y & H Corp., 546 U.S. at 506; see also Hymas v. United
States, 810 F.3d 1312, 1317 (Fed. Cir. 2016) (explaining that a federal court must satisfy
itself of its jurisdiction over the subject-matter before it considers the merits of a case);
Cent. Pines Land Co., L.L.C. v. United States, 697 F.3d 1360, 1364 n.1 (Fed. Cir. 2012)
(“An objection to a court's subject matter jurisdiction can be raised by any party or the
court at any stage of litigation, including after trial and the entry of judgment.” (citing
Arbaugh v. Y & H Corp., 546 U.S. at 506)); Rick’s Mushroom Serv., Inc. v. United States,
521 F.3d 1338, 1346 (Fed. Cir. 2008) (“[A]ny party may challenge, or the court may raise
sua sponte, subject matter jurisdiction at any time.” (citing Arbaugh v. Y & H Corp., 546
U.S. at 506; Folden v. United States, 379 F.3d 1344, 1354 (Fed. Cir.), reh’g and reh’g en
banc denied (Fed. Cir. 2004), cert. denied, 545 U.S. 1127 (2005); and Fanning, Phillips
& Molnar v. West, 160 F.3d 717, 720 (Fed. Cir. 1998))); Pikulin v. United States, 97 Fed.
Cl. 71, 76, appeal dismissed, 425 F. App’x 902 (Fed. Cir. 2011). In fact, “[s]ubject matter
jurisdiction is an inquiry that this court must raise sua sponte, even where . . . neither
party has raised this issue.” Metabolite Labs., Inc. v. Lab. Corp. of Am. Holdings, 370
F.3d 1354, 1369 (Fed. Cir.) (citing Textile Prods., Inc. v. Mead Corp., 134 F.3d 1481,
1485 (Fed. Cir.), reh’g denied and en banc suggestion declined (Fed. Cir.), cert. denied,
525 U.S. 826 (1998)), reh’g and reh’g en banc denied (Fed. Cir. 2004), cert. granted in
part sub. nom Lab. Corp. of Am. Holdings v. Metabolite Labs., Inc., 546 U.S. 975 (2005),
cert. dismissed as improvidently granted, 548 U.S. 124 (2006)).

The Tucker Act, 28 U.S.C. § 1491, grants jurisdiction to this court as follows:

The United States Court of Federal Claims shall have jurisdiction to render
judgment upon any claim against the United States founded either upon the
Constitution, or any Act of Congress or any regulation of an executive

40
department, or upon any express or implied contract with the United States,
or for liquidated or unliquidated damages in cases not sounding in tort.

28 U.S.C. § 1491(a)(1).

Additionally, regarding bid protests, the Tucker Act provides that this court has

jurisdiction to render judgment on an action by an interested party objecting
to a solicitation by a Federal agency for bids or proposals for a proposed
contract or to a proposed award or the award of a contract or any alleged
violation of statute or regulation in connection with a procurement or a
proposed procurement.

28 U.S.C. § 1491(b)(1). The Administrative Dispute Resolution Act of 1996 (ADRA),
codified at 28 U.S.C. § 1491(b)(1)–(4), amended the Tucker Act to establish a statutory
basis for bid protests of federal government procurements in the United States Court of
Federal Claims. See Acetris Health, LLC v. United States, 949 F.3d 719, 728 (Fed. Cir.
2020); Hymas v. United States, 810 F.3d at 1317; Palladian Partners, Inc. v. United
States, 783 F.3d 1243, 1252 (Fed. Cir. 2015); Systems Application & Technologies, Inc.
. United States, 691 F.3d 1374, 1381 (Fed. Cir. 2012); Distributed Solutions, Inc. v. United
States, 539 F.3d 1340, 1345 (Fed. Cir. 2008); Impresa Construzioni Geom. Domenico
Garufi v. United States, 238 F.3d 1324, 1330–32 (Fed. Cir. 2001).

Jurisdiction for Mixed-Transaction Contracts

Defendant and defendant-intervenor argue that the bridge contract currently
before the court for removal, demilitarization, mutilation, and sale of government property
should be governed by the United States Court of Appeals for the Federal Circuit’s ruling
in Resource Conservation Group, LLC v. United States, 597 F.3d 1238 (Fed. Cir. 2010).
In Resource Conservation Group, the protestor, Resource Conservation Group, brought
a protest of the government’s solicitation of bids to lease real property owned by the
United States Naval Academy. See id. at 1240–41. According to the discussion in the
Federal Circuit’s opinion, the United States Court of Federal Claims trial court judge “held
that it lacked jurisdiction under 28 U.S.C. § 1491(b)(1) to adjudicate bid protests involving
leases of land where the government is the lessor, because such an action is not ‘in
connection with a procurement or proposed procurement,’” and the trial court dismissed
the bid protest. See Res. Conservation Grp., v. United States, 597 F.3d at 1242 (quoting
28 U.S.C. § 1491(b)(1)). Upon appeal, the United States Court of Appeals for the Federal
Circuit considered “whether RCG’s [Resource Conservation Group’s] claim falls within
the jurisdiction conferred by section 1491(b)(1), the new jurisdictional provision enacted
by the ADRA,” and concluded that “the Court of Federal Claims correctly held that it does
not.” Res. Conservation Grp., LLC v. United States, 597 F.3d at 1243. The Federal Circuit
in Resource Conservation Group stated that 28 U.S.C. § 1491(b)(1) “expanded the
jurisdiction of the Court of Federal Claims to hear bid protest cases, ultimately giving the
court exclusive jurisdiction to review ‘the full range of procurement protest cases
previously subject to review in the federal district courts and the Court of Federal Claims.’”

41
See Res. Conservation Grp., LLC v. United States, 597 F.3d at 1243 (quoting H.R. Rep.
No. 104–841, at 10 (1996) (Conf. Rep.)). Although 28 U.S.C. § 1491(b)(1) does not define
the term “procurement,” the Federal Circuit in Resource Conservation Group applied the
definition of “procurement” as the term was defined in 41 U.S.C. § 403(2), now codified
at 41 U.S.C. § 111 (2018), as including “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.’” 41 U.S.C. § 111; Res. Conservation Grp.,
LLC v. United States, 597 F.3d at 1244 (quoting 41 U.S.C. § 403(2) (2006)). The Federal
Circuit concluded that “the Court of Federal Claims was correct in holding that relief under
1491(b)(1) is unavailable outside the procurement context,” and affirmed that portion of
the lower court’s decision. See Res. Conservation Grp., LLC v. United States, 597 F.3d
at 1245. The United States Court of Appeals for the Federal Circuit in Resource
Conservation Group reversed the portion of the Court of Federal Claims’ decision which
had found that the enactment of 28 U.S.C. § 1491(b)(1) removed the United States Court
of Federal Claims’ jurisdiction for nonprocurement-based protests under 28 U.S.C. §
1491(a)(1). See Res. Conservation Grp., LLC v. United States, 597 F.3d at 1247 (“We
conclude that the Court of Federal Claims did not have jurisdiction under 28 U.S.C. §
1491(b)(1), but had jurisdiction under section 1491(a)(1) because the implied-in-fact
contract jurisdiction in nonprocurement cases that existed prior to 1996 survived the
enactment of the ADRA.”).4

Although the Federal Circuit affirmed the lower court’s decision that the solicitation
at issue in Resource Conservation Group could not be protested under 28 U.S.C.
§ 1491(b)(1) because it did not meet the definition of a procurement for the purposes of
determining jurisdiction, nowhere in Resource Conservation Group did the Federal Circuit
state that any government contract which involves a lease, or sale, of property by the
United States is outside of the jurisdiction conferred to this court by 28 U.S.C.
§ 1491(b)(1). The solicitation at issue in Resource Conservation Group only involved the
lease of United States’ real property, and did not also involve services received by the
United States. The Federal Circuit in Resource Conservation Group did not address the
4
Some judges of the United States Court of Federal Claims, however, have found that
injunctive relief is unavailable under 28 U.S.C. § 1491(a)(1). See Eco Tour Adventures,
Inc. v. United States, 114 Fed. Cl. 6, 41 (2013) (“Although the Federal Circuit has not had
occasion to rule on the issue of whether the Court of Federal Claims has authority, post-
ADRA, to grant equitable relief in implied contract bid protests pursued under section
1491(a), this court has consistently answered that question in the negative.” (citing Terry
v. United States, 96 Fed. Cl. 131, 153 (2010) (“Under section 1491(a)(1), plaintiff is
precluded from obtaining equitable relief, which is only available for a section 1491(b)(1)
protest, and is limited to a recovery of monetary damages that comprise the costs she
incurred while preparing her proposal.”, vacated in part on other grounds, 98 Fed. Cl. 736
(2011)); FAS Support Servs., LLC v. United States, 93 Fed. Cl. 687, 694 (2010);
Overstreet Elec. Vo v. United States, 47 Fed. Cl. 728, 731 n.5 (2000); W & D Ships Deck
Works, Inc. v. United States, 39 Fed. Cl. 638, 641 (1997)). Protestor in the above-
captioned protest does not invoke this court’s implied-in-fact jurisdiction under 28 U.S.C.
§ 1491(a)(1), and only seeks injunctive relief.

42
issue of whether a mixed-transaction contract that involves the sale of government
property, but also involves the United States’ acquisition of services to its benefit, falls
within this court’s jurisdiction under 26 U.S.C. § 1491(b)(1). Therefore, although the
defendant and defendant-intervenor argue that Resource Conservation Group excludes
all sales contracts from this court’s protest jurisdiction under 28 U.S.C. § 1491(b)(1),
including the one at issue in the above-captioned protest, the Federal Circuit’s decision
in Resource Conservation Group does not resolve the issue.

Defendant and defendant-intervenor further argue that the United States Court of
Appeals for the Federal Circuit addressed this issue in the unreported, nonprecedential
decision of Creation Upgrades, Inc. v. United States, 417 F. App’x 957 (Fed. Cir. 2011).
The court notes that the contract at issue in Creation Upgrades involved the sale of
government real property, and, similar to the contract at issue in Resource Conservation
Group, did not appear to have involved significant services to be delivered to the United
States as part of the contract.5 The unreported Federal Circuit decision in Creation
Upgrades stated:

In Resource Conservation, we construed “procurement” to mean “the
process of acquiring property or services.” 597 F.3d at 1244 (quoting 41
U.S.C. § 403(2)) (emphasis omitted). Therefore, we held that a solicitation
5
Although neither the unreported Federal Circuit decision in Creation Upgrades, nor the
unreported trial court decision, see Creation Upgrades v. United States, Case No. 09-
00788C, 2010 WL 1255684 (Fed. Cl. Mar. 24, 2010), discussed any conditions of sale
which were required to be met by the awardee in connection with the solicitation that was
at issue, the defendant-intervenor in the above-captioned protest cites to the filing of the
Creation Upgrades solicitation when the case was before the trial court, and requests the
court to take “judicial notice” that the solicitation “attached conditions to the sale” of the
real property, and tries to argue a similarity between the Creation Upgrades solicitation
and the bridge contract Solicitation currently at issue. (emphasis omitted). Defendant-
intervenor in the above-captioned protest states:

Importantly, like the Solicitation in this matter, the invitation for bid in
Creation Upgrades (“IFB”) attached conditions to the sale of the Navy’s
land. . . . [A]s a condition of sale and “conveyance of title to Sale Parcel I,
the Winning Bidder [was] required to enter into a LIFOC [Lease in
Furtherance of Conveyance] . . .” (IFB at p. 5, Doc. 7-6 at p. 7.) Through the
LIFOC and sale of its land, the Navy acquired certain “protection and
maintenance services” from the awardee as a condition of the sale. (IFB at
p. 41, LIFOC at ¶ 12.1; Doc. 7-6 at p. 43.) Moreover, the LIFOC required
the awardee to provide and/or arrange for “housekeeping . . . security
protection . . . fire protection” and “other services . . .” (IFB at p. 42 at ¶
12.2.1-5; Doc. 7-6 at p. 44.) Title to the land – either in full or carve-out areas
within the parcel – would pass to the IFB awardee only after the
environmental remediation was complete. (IFB at p. 5; Doc 7-6 at p. 7.)

(first ellipses added; emphasis and alterations in original; footnotes omitted).

43
for the lease of government property was not a “procurement” under
§ 1491(b)(1) because the government was not “acquiring property or
services.” Id.

Creation Upgrades, Inc. v. United States, 417 F. App’x at 959. The Federal Circuit in
Creation Upgrades further stated that it saw “no meaningful distinction between the lease”
of government property in Resource Conservation, “and sale of government property” at
issue in Creation Upgrades, and that “Resource Conservation governs this case.” See id.
Therefore, neither Resource Conservation Group nor Creation Upgrades addresses the
issue in the case currently before the court of a mixed-transaction contract in which the
government also receives substantial services in addition to a sale of property by the
government, and therefore, neither case answers whether the current mixed-transaction,
sales contract is a “procurement” for the purposes of this court’s jurisdiction under 28
U.S.C. § 1491(b)(1).

Defendant and defendant-intervenor also try to rely on the United States Court of
Appeals for the Federal Circuit’s 2016 decision in Hymas v. United States, 810 F.3d 1312,
which held that the United States Court of Federal Claims did not have jurisdiction to
review a disappointed bidder’s protest of cooperative farming agreements (CFAs) with
the United States Department of the Interior’s Fish and Wildlife Service (FWS). In
describing the CFAs, the Federal Circuit in Hymas stated:

Beginning in the 1970s, the [Fish and Wildlife] Service entered into CFAs
with farmers to manage public lands in the National Wildlife Refuge System
for the conservation of migratory birds and wildlife, including at the Umatilla
and McNary Refuges in the Pacific Northwest. Most CFAs share identical
terms, through which the Service permits a “cooperator” to farm specific
parcels of public land with specific crops that benefit the wildlife. No
payment occurs for the performance of the CFAs; instead, cooperators
typically retain 75 percent of the crop yield for their efforts. The remaining
25 percent is left to feed migratory birds and other wildlife. The Service
continues its involvement once cooperators begin to perform the CFAs,
advising on decisions related to (1) crop selection; (2) farming methods; (3)
pesticide and fertilizer use; and (4) crop harvest.

Hymas v. United States, 810 F.3d at 1314–15 (footnote, internal citation and reference
omitted). The protestor, Mr. Hymas, “through his business Dosmen Farms, sought to
secure a CFA” with the Fish and Wildlife Service “in 2013 and 2014,” but after the FWS
considered Mr. Hymas’ offers, he was not selected. Id. at 1315-16.

The Federal Circuit in

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4567310. Public record. Not legal advice.