Indep. Rough Terrain Ctr. v. United States

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INDEPENDENT ROUGH TERRAIN CENTER, LLC, Plaintiff, v. THE UNITED STATES, Defendant, and TAYLOR DEFENSE PRODUCTS, LLC, Defendant-Intervenor.

No. 24-160

United States Court of Federal Claims

July 1, 2024

Re-issued: July 16, 2024 ^[*]

OPINION AND ORDER

KATHRYN C. DAVIS JUDGE

In this pre-award bid protest, Plaintiff Independent Rough Terrain Center, LLC ("IRTC") challenges the scope of the corrective action taken by the United States Army Materiel Command ("AMC") in relation to a follow-on production contract solicitation for Rough Terrain Container Handler ("RTCH") Modernization. Before the Court are motions to dismiss for lack of jurisdiction or, in the alternative, failure to state a claim filed by the Government and Defendant-Intervenor, Taylor Defense Products, LLC ("Taylor"). The Government and Taylor contend that the Court does not have jurisdiction over a bid protest related to a follow-on production contract solicitation issued under the Army's Other Transaction ("OT") authority. They also allege that, even if the Court does have jurisdiction, IRTC lacks standing because it violated a mandatory eligibility provision of the solicitation by allowing its System for Award Management ("SAM") registration to lapse after submitting its proposal to AMC. For the reasons outlined below, the Court DENIES IN PART and GRANTS IN PART the Motions to Dismiss.

I. BACKGROUND

A. Factual Background

On December 16, 2022, AMC issued a Request for Proposals (W56HZV-21-R-0157) ("Solicitation") for the modernization of its RTCH vehicles, which the Army primarily uses to lift and move shipping containers. Pl.'s Compl. ¶¶ 1, 5, 26, ECF No. I.^[1] The RTCH Modernization program proposal was to include an in-factory Service Life Extension Program ("SLEP") and RTCH Modernization in the Field Kit. Id. ¶¶ 6-8. Pursuant to 10 U.S.C. §§ 4021 and 4022, AMC issued the Solicitation under the Army's OT authority as a follow-on production contract after an earlier, completed OT prototype solicitation. Id. ¶ 2. Specifically, the Solicitation stated that "[t]he selection process will be executed under the authority of 10 U.S. Code 4022 as provided in the [OT prototype solicitation]; any reference to the Federal Acquisition Regulation (FAR) is for the resulting contract execution only." Pl.'s Compl., Ex. 9 at 111, ECF No. 1-1. During the initial prototype phase, both IRTC and Taylor, the only two participants, submitted prototypes of modernized RTCH vehicles. ECF No. 1 ¶¶ 3-4; ECF No. 1-1 at 111. Because AMC deemed their prototypes successful, AMC limited its selection process for the follow-on production phase at issue here to IRTC and Taylor. ECF No. 1 ¶ 2; see 10 U.S.C. § 4022(f)(2).

The Solicitation's terms included mandatory eligibility requirements for each offeror, including the incorporation of the FAR's SAM registration requirement:

Section M.1.4, Eligibility for Award: Award will only be made to an offeror who is eligible for award. To be eligible for award: a. The offeror must be determined responsible [in accordance with] Section M.4; b. The proposal must not contain any Deficiencies . . .; c. The offeror must be registered in the System for Award Management (SAM) [in accordance with] FAR 52.204-7.

ECF No. 1-1 at 292-93. FAR 52.204-7 provides that: "An Offeror is required to be registered in SAM when submitting an offer or quotation, and shall continue to be registered until time of award . . .,"^[2] FAR 52.204-7(b)(1). IRTC had an active SAM registration at the time it submitted its proposal. Def.'s Mot. to Dismiss, Ex. A at 5-6, ECF No. 26-1; Def's Mot. to Dismiss at 7, ECF No. 26.^[3]

On September 20, 2023, AMC awarded the follow-on production contract to Taylor. ECF No. 1 ¶ 32. IRTC filed an agency-level protest of the award on September 29, 2023, based on information provided in AMC's debriefing, and later filed an updated protest on October 25, 2023, after IRTC viewed Taylor's prototype. Id. ¶¶ 38,46. AMC dismissed IRTC's agency-level protest on January 22, 2024, when AMC announced it would take corrective action. Id. ¶ 47. AMC's corrective action provided the parties the opportunity to submit by February 1, 2024, revised Experience proposals under amended evaluation criteria. Id. ¶¶ 47, 49-50.

Presumably in response to the present protest, the Government reviewed IRTC's SAM registration records and discovered a lapse in IRTC's registration from May 26, 2023, to August 9, 2023. ECF No. 26-1 at 2-3; ECF No. 26 at 7; see also Def.-Intervenor's Mot. to Dismiss, Ex. 2 at 1-3, ECF No. 27-2; Def.-Intervenor's Mot. to Dismiss at 13, ECF No. 27. The Government provided documentation of this lapse to IRTC's counsel and Taylor's counsel on or about February 9,2024. ECF No. 27 at 13 n.6.

B. Procedural Background

On January 31, 2024, IRTC filed this pre-award protest with the Court alleging four counts:

(1) Defendant's announced corrective action scope unduly restricts IRTC's ability to amend its price proposal in response to updated RFP evaluation criteria guidance.

(2) Defendant has undermined fair and equal competition by failing to implement curative measures during corrective action to address the fact that offerors were assigned different versions of RTCHs in materially different conditions as the basis upon which to establish SLEP unit pricing.

(3) Defendant unlawfully permitted Taylor to participate in the follow-on RTCH Modernization P-OTA production competition without first establishing Taylor provided a successfully modernized RTCH prototype, in violation of 10 U.S.C. § 4022.

(4) Defendant's proposed corrective action fails to include steps to evaluate Taylor's follow-on production contract proposal for deficiencies beyond the experience proposal.

ECF No. 1 at 30, 34, 40, 48. The Court held an initial status conference on February 7, 2024. See Minute Entry (Feb. 7, 2024). At the conference, the parties agreed to brief the Government's and Taylor's Motions to Dismiss, addressing threshold issues of jurisdiction and standing, before briefing dispositive motions on the merits. See Scheduling Order, ECF No. 14. On March 29, 2024, the Court held oral argument on the Motions to Dismiss. See Minute Entry (Apr. 5, 2024). These motions are now ready for decision.

II. LEGAL STANDARD

A. Dismissal for Lack of Subject-Matter Jurisdiction Under Rule 12(b)(1)

Before reaching the merits of a plaintiffs action, the Court must as a threshold matter assure itself that subject-matter jurisdiction exists. See RCFC 12(b)(1), (h)(3); Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998) (affirming that subject-matter jurisdiction '"spring[s] from the nature and limits of the judicial power of the United States' and is 'inflexible and without exception'" (quoting Mansfield v. Swan, 111 U.S. 379,382 (1884))). The plaintiff bears the burden of establishing by the preponderance of evidence the Court's jurisdiction over its claim. See Estes Express Lines v. United States, 739 F.3d 689, 692 (Fed. Cir. 2014).

When deciding whether to dismiss a complaint pursuant to RCFC 12(b)(1) for lack of subject-matter jurisdiction, the Court must accept all factual allegations as true and draw all reasonable inferences in the claimant's favor. See Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995). However, if a complaint contains challenged factual allegations, for purposes of ruling on a motion to dismiss, the court may inquire into facts necessary to support jurisdiction and may resolve disputed facts. See Al Johnson Constr. Co. v. United States, 19 Cl. Ct. 732, 733 (1990); see also Indium Corp, cf Am. v. Semi-Alloys, Inc., 781 F.2d 879, 884 (Fed. Cir. 1985) (affirming that a court may consider "evidentiary matters outside the pleadings" when assessing a Rule 12(b)(1) dismissal). If the Court determines that the plaintiff has failed to meet its burden to establish the Court's jurisdiction over its claims, it must dismiss the case. See Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed. Cir. 2011).

B. Dismissal for Failure to State a Claim Upon Which Relief May Be Granted Under Rule 12(b)(6)

The Court must also dismiss an action if it fails to state a claim for which relief may be granted. RCFC 12(b)(6). To avoid dismissal under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcraft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Although a complaint need not contain detailed factual allegations to raise a plausible claim, a plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555; see Papasan v. Allain, 478 U.S. 265, 286 (1986) (holding that courts "are not bound to accept as true a legal conclusion couched as a factual allegation"). In deciding a motion under RCFC 12(b)(6), the Court may consider the complaint itself, "the written instruments attached to it as exhibits, 'documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.'" Todd Constr., L.P. v. United States, 94 Fed.Cl. 100, 114 (2010) (quoting Tellabs, Inc. v. Maker Issues &Rts. Ltd., 551 U.S. 308, 322 (2007)), cyfd, 656 F.3d 1306 (Fed. Cir. 2011). The Court must draw all reasonable inferences in favor of the non-moving party. Sommers Oil Co. v. United States, 241 F.3d 1375, 1378 (Fed. Cir. 2001).

C. Standing in a Bid Protest

The Tucker Act, as amended by the Administrative Dispute Resolution Act ("ADRA") of 1996, provides the Court of Federal Claims with "jurisdiction to render judgment on an action by an interested party objecting to . . . the award...