Rob SneckenbergLauren Harrison

When deciding where to file a bid protest, the most fundamental consideration is perhaps the most obvious one: does your desired venue have jurisdiction to hear your arguments?

In a recent decision, Cleveland Assets, LLC v. United States , the Federal Circuit may have changed that analysis for certain Court of Federal Claims (COFC) bid protests.

COFC Jurisdiction under 28 U.S.C. § 1491(b)(1)

With the notable exception of task and delivery order protests subject to the FASA bar, the COFC is often viewed as possessing broader jurisdiction than GAO.  This is due to the “sweeping” language in the Tucker Act, which grants the COFC jurisdiction over:

an action by an interested party objecting to

[1] a solicitation by a Federal agency for bids or proposals for a proposed contract or to

[2] a proposed award or the award of a contract or

[3] any alleged violation of statute or regulation

in connection with a procurement or a proposed procurement.

28 U.S.C.§ 1491(b)(1).

The Federal Circuit has clarified that the “in connection with a procurement or a proposed procurement” coda is a strict limitation that applies to all three “prongs” of the COFC’s bid protest jurisdiction.  That is, regardless of whether a protester is challenging a solicitation, an award, or a violation of statute or regulation, the protester’s challenge must be “in connection with a procurement or a proposed procurement.”  See Res. Conservation Grp., LLC v. United States, 597 F.3d 1238, 1245 (Fed. Cir. 2010) (“[28 U.S.C. §] 1491(b)(1) in its entirety is exclusively concerned with procurement solicitations and contracts”).

However, the Federal Circuit has very broadly defined that phrase.  In Distributed Solutions, Inc. v. United States, the Court explained that the term “‘procurement’ includes all stages of the process of acquiring property or services, beginning with the process for determining a need for property or services and ending with contract completion and closeout.  . . .  Therefore, the phrase, ‘in connection with a procurement or proposed procurement,’ by definition involves a connection with any stage of the federal contracting acquisition process, including ‘the process for determining a need for property or services.’”  539 F.3d 1340, 1346 (Fed. Cir. 2008) (internal citations omitted).

Thus, until recently, there was at least an argument to be made that a protester could allege a violation of any statute or regulation so long as the alleged violation was in some way connected to a federal agency’s acquisition of property or services.

That may have just changed in Cleveland Assets.

Cleveland Assets

Cleveland Assets involved a pre-award challenge to a GSA Request for Lease Proposals (RLP) to lease a building for the FBI’s Cleveland office.

Pursuant to 40 U.S.C. § 3307, “Congressional approval of proposed projects,” GSA must seek the approval of multiple congressional committees before obligating funds on a lease exceeding an amount published at GSA’s Annual Prospectus Threshold.  To secure such approval, GSA must send the congressional committees a prospectus of the proposed facility, including a brief description of the space and “an estimate of the maximum cost to the Government.”

After GSA took these steps and issued its RLP, Cleveland Assets filed its COFC protest alleging, in part, that GSA had violated § 3307.  Specifically, Cleveland Assets alleged that the RLP sought proposals for a lease that included additional space and structures not identified in the prospectus GSA submitted to the congressional committees.

The COFC dismissed this allegation on grounds not relevant here, and Cleveland Assets appealed.

On appeal, the Federal Circuit affirmed.  Specifically, the Circuit held that because § 3307 is an appropriations statute—not a procurement statute—Cleveland Assets’ allegation fell outside the COFC’s Tucker Act jurisdiction.  The Circuit acknowledged its prior precedent broadly interpreting the “in connection with a procurement or proposed procurement” language, but warned that “[i]f plaintiffs could allege any statutory or regulatory violation tangentially related to a government procurement, § 1491(b)(1) jurisdiction risks expanding far beyond the procurement context.”  Similarly, the Circuit cautioned that “[i]f we were to read § 3307 as a procurement statute, every appropriations bill and rider would become a potential source of challenge for any interested party under 28 U.S.C. § 1491(b)(1).”

Takeaways

This appears to be the first time the Federal Circuit has expressly held a protester alleging a violation of statute or regulation under 28 U.S.C. § 1491(b)(1) must specifically allege a violation of a “procurement” statute.

Prior decisions had perhaps implicitly recognized this limitation, but it was not expressly stated.  See, e.g., Sys. Application & Techs., Inc. v. United States, 691 F.3d 1374, 1381 (Fed. Cir. 2012) (“SA‑TECH also alleged violations of the Service Contract Act and procurement regulations—another basis for jurisdiction.”); Distributed Sols., 539 F.3d at 1345 (“There is also no question that the contractors have alleged a number of statutory and regulatory violations by the government in choosing to forego the direct competitive procurement process . . . .  These allegations include violations of the Competition in Contracting Act (CICA) . . . , the Small Business Act . . . , and various Federal Acquisition Regulations (FAR).”); RAMCOR Servs. Grp., Inc. v. United States, 185 F.3d 1286, 1289 (Fed. Cir. 1999) (“The operative phrase ‘in connection with’ is very sweeping in scope.  As long as a statute has a connection to a procurement proposal, an alleged violation suffices to supply jurisdiction.”).

Going forward, protesters will need to factor this potential jurisdictional limitation into their forum selection decisions.  And those defending against protests should consider whether this decision affords any new opportunities to seek dismissal of some or all of the allegations in a given protest.