April 30, 2010
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The Federal Circuit’s decision in Distributed Solutions, Inc. v. United States, Fed. Cir. No. 2007-5145, August 28, 2008, has created a problem for Cases involving elements both of a Protest and of a Contract Disputes Act Claim arising under the Contract Disputes Act, 41 U.S.C. §§ 601-613. This problem has most recently manifested itself in Jones Automation, Inc. v. United States, Fed. Cl. No. 10-174C, April 22, 2010.
Jones Automation arose when an Agency decided not to exercise an available option to extend the term of a software development Contract and instead decided to satisfy its requirement for continuing services through a new, open Competition. The Jones Automation software Contractor filed a Protest with the Court of Federal Claims under 28 U.S.C. § 1491(b)(1), there asking the Court to enter a restraining order compelling the Agency to exercise the available option for continuing performance until such time that the Court could decide its challenge to the future procurement.
Under 28 U.S.C. § 1491(b)(1) the Court has Protest jurisdiction “in connection with a procurement or a proposed procurement.” And Distributed Solutions teaches that the scope of this Protest jurisdiction extends just as far as the definition of “procurement” set out in 41 U.S.C. § 403(2), viz. it “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.”
A Federal Contractor, as the Jones Automation software Contractor, can present a Contract Disputes Act Claim to the Contracting Officer under 41 U.S.C. § 605(a) and then can bring an Action on the Claim directly to the Court under 28 U.S.C. § 1491(a)(1) and 41 U.S.C. § 609(a)(1).
The Protest filed by the Jones Automation software Contractor was based on an unstated premise, that a Federal Contractor has an available election, that it can choose between proceeding under the Contract Disputes Act, or instead, proceeding with a Protest under the broad definition of “procurement” encompassed in 28 U.S.C. § 1491(b)(1) and 41 U.S.C. § 403(2).
Not so, says the Court in Jones Automation. There is dicta in a Federal Circuit decision, Dalton v. Sherwood Van Lines, Inc., 50 F.3d 1014, 1017 (Fed. Cir. 1995), which holds that “[w]hen the Contract Disputes Act applies, it provides the exclusive mechanism for dispute resolution: the Contract Disputes Act was not designed to serve as an alternative administrative remedy, available at the contractor’s option.”
Relying on this Federal Circuit dicta and on an earlier decision from the Court of Federal Claims, Government Technical Services, LLC v. United States, No. 09-630L, December 29, 2009, the Jones Automation Court holds when a Case involves elements of both a Protest and a Contract Disputes Act Claim, there is no election, and the Contract Disputes Act is the “exclusive mechanism” by which the Court can acquire jurisdiction.
