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Pre-ADRA Protest Jurisdiction Survives for Nonprocurement Protests

The Court of Appeals for the Federal Circuit reversed the dismissal of a protest alleging breach of an implied contract because implied-in-fact contract jurisdiction in nonprocurement cases survived the enactment of the Administrative Dispute Resolution Act of 1996. The protest arose from a solicitation to lease federal land formerly used as a dairy to provide milk to the Naval Academy. The government refused to consider the protester's proposal because it regarded the protester's intended use of the property for sand and gravel mining to be a "disposal" of real property, which was prohibited by the statute authorizing the closure of the dairy. The protester contended the Court of Federal Claims had jurisdiction under 28 USC 1491(a)(1) to consider a claimed breach of an implied contract of fair and honest consideration. The CFC dismissed the protest, holding it no longer had jurisdiction after the enactment of the ADRA to adjudicate the claim under 1491(a)(1) (54 CCF 79,270). The CFC also held it did not have jurisdiction under 28 USC 1491(b)(1) over a bid protest involving a lease of government land, because relief under 1491(b)(1) is limited to the procurement context, and the lease of land by the government is not a procurement.

1491(b)(1): Procurement Protests

The Federal Circuit agreed that to extend the definition of "procurement" to encompass the situation where the government seeks to lease its own property "strain[ed] the ordinary meaning of 'procurement.'" Addressing the scope of 1491(b)(1), the court, as it did in Distributed Solutions, Inc., et al. v. U.S. (52 CCF 78,993), looked to the definition of "procurement" in relation to the establishment of the Office of Federal Procurement Policy (41 USC 403(2)). That definition referred to the "process of acquiring property or services." The process involved in soliciting lessees for government-owned property could not be characterized as such a process. The court also rejected an interpretation based on the theory of the last antecedent, which would apply the procurement limitation only to challenges of "statutes and regulations," and concluded "1491(b)(1) in its entirety is exclusively concerned with procurement solicitations and contracts."

1491(a)(1): Nonprocurement Protests

The court then turned to the question of implied-in-fact contract jurisdiction under 1491(a)(1), an issue it had twice reserved (45 CCF 77,812, 45 CCF 77,717). The court noted the legislative history clearly showed the ADRA was intended to unify bid protest law in one court under one standard, and 1491(b)(1) jurisdiction was to be exclusive where 1491(b)(1) provided a remedy. However, the court found it unlikely Congress intended 1491(b)(1) to deny a pre-existing remedy without providing a new remedy. In fact, the legislative history confirmed Congress did not intend to alter or restrict the CFC's existing jurisdiction in cases not covered by 1491(b)(1). Here, because the protest involved a nonprocurement solicitation, the CFC had implied-in-fact contract jurisdiction under 1491(a)(1). District courts share this jurisdiction, and while "dividing jurisdiction between the [CFC] and the district courts for nonprocurement bid protests may lead to similar problems that led to the enactment of 1491(b)(1)," an amendment "to solve this problem ... must be undertaken by Congress and not this court." (Resource Conservation Group, LLC v. U.S. , CA-FC, 54 CCF 79,271)




(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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