In a recent decision, the Court of Federal Claims rejected the Government’s motion to dismiss a lawsuit filed under the Tucker Act seeking to recover “risk corridors” payments pursuant to §1342 of the Affordable Care Act. In Health Republic Insurance Co. v. U.S. (Jan. 10, 2017), the Court held that “HHS is required to make
Developments continue surrounding the issue of in-sourcing. Turning first to the developments at the Court of Federal Claims, Judge Horn, recently dismissed an in-sourcing claim after finding that Plaintiff was not an interested party. Triad Logistics Servs. Corp. v. United States, No. 11-43C (Crt. Fed. Cl. Apr. 16, 2011). The Court held that while it has subject matter jurisdiction over in-sourcing claims generally, with regards to the particular in-sourcing claim at issue, the Plaintiff was not an interested party because the contract had already been completed. Accordingly, the Court found that Plaintiff lacked standing and dismissed the case.
To understand the scope of the Triad decision, a brief analysis of the procedural posture presented in the case is required. Plaintiff, Triad Logistics Service Corporation provided vehicle operations and maintenance services to the Air Force. During performance under the third option year, the Air Force informed Triad that it would be in-sourcing the services provided under the contract, and therefore not exercising a fourth option year. Instead, the Air Force modified the contract to extend performance for a brief period, at which time the contract ended by its own terms. Triad initially protested at the Government Accountability Office, which was dismissed on November 24, 2010 for failure to set forth a valid basis of protest.
Triad then filed it’s first protest at the Court of Federal Claims on November 29, 2010, the same day its extended contract ended. At the initial hearing on Triad’s first protest, the Air Force admitted there were errors in the cost calculation comparing the cost of contracting for the services versus performing the services internally. The Court therefore dismissed that complaint to allow the Air Force to perform a recalculation and make a final in-sourcing decision. On December 16, 2010, the Air Force again concluded that it would be less expensive to in-source the services.
Triad filed its second protest at the Court, the one at issue here, on January 14, 2011. The Court dismissed the case, holding that Triad was not an interested party because its contract had ended and government employees had begun performing the contract functions prior to when the second complaint was filed. Therefore, the Court found that Triad no longer possessed the required direct economic interest in a contract to qualify as an interested party. The Court seems to suggest that Triad’s claim may be more akin to an out-sourcing claim, which the Appropriations Acts strongly discourage.
CORRECTION (5/15/12): A prior version of this blog post first posted on May 11, 2012, analyzed the proposed amendment to the Tucker Act discussed herein under the mistaken impression that it had been part of the committee mark version of the 2013 National Defense Authorization Act. We have since learned that the proposed amendment to the Tucker Act was not included in the bill that went to committee vote. The below analysis has been altered to examine the proposed legislation in the proper context. We apologize for the error.
On April 25, 2012, the Department of Defense submitted proposed legislation to the House Armed Services Committee for consideration in the 2013 National Defense Authorization Act (NDAA) that would dramatically amend the Tucker Act, 28 U.S.C. § 1491(b), by importing essentially all of the GAO’s rigid timeliness rules with regard to bid protest actions and applying them to protests filed before the U.S. Court of Federal Claims (COFC). Amongst the GAO timeliness rules currently contained in 4 C.F.R. § 21 that DoD proposed to be added to the Tucker Act and apply to the COFC include:
- The absolute rule that pre-award solicitation challenges must be filed before the submission date for proposals;
- The rule that any post-award protest must be filed within 10 days of when an offeror knows or should have known of the basis for protest, unless subject to a mandatory debriefing, in which case the protest must be filed within 10 days of that debriefing, and;
- In the event that an agency protest has been filed, the rule that a COFC protest must be filed within 10 days of when the offeror knew or should have known of the adverse decision in the agency protest.
Just a quick in-sourcing update for today. On March 19, 2011, in Fisher-Cal Industries, Inc. v. United States, et. al, the United States District Court for the District of Columbia issued an opinion dismissing plaintiff’s in-sourcing claim. No 11-791 (D.D.C. Mar. 19, 2012). As I discussed in my blog post about the Fifth Circuit’s decision in Rothe …
On December 29, 2011, the Fifth Circuit issued its opinion in Rothe Development, Inc. v. United States Department of Defense, No. 11-50101 (5th Cir. Dec. 29, 2011), affirming the district court’s dismissal of an in-sourcing claim for lack of subject-matter jurisdiction. Under the Tucker Act, the Court of Federal Claims is vested with exclusive…
In June I wrote about GAO’s conclusion that its protest jurisdiction over agency task and delivery order procurements will not only continue after the May 27, 2011 sunset date, but will expand. At that time, I noted that, to the extent the Court of Federal Claims agreed with GAO’s interpretation of the 41 U.S.C.…