Free Motion to Dismiss - Rule 12(b)(1) - District Court of Federal Claims - federal

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No. 03-1274 Judge Baskir ______________________________________________________________________________ IN THE UNITED STATES COURT OF FEDERAL CLAIMS ______________________________________________________________________________ CW GOVERNMENT TRAVEL, INC., Plaintiff, v. THE UNITED STATES, Defendant. ______________________________________________________________________________ DEFENDANT'S MOTION TO DISMISS ______________________________________________________________________________ PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director FRANKLIN E. WHITE, JR. Assistant Director

DAVID A. LEVITT Trial Attorney U.S. Department of Justice Civil Division Commercial Litigation Branch 1100 L Street, N.W., 8th Floor Washington, D.C. 20530 Tele: (202) 307-0309 Fax: (202) 514-7965 July 23, 2003 Attorneys for Defendants

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TABLE OF CONTENTS Page(s) STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 I. II. Nature Of The Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Statement Of Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 A. B. C. The Contract Between DoD and TRW . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The Carlson-Army Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 The Standards For A Motion To Dismiss . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 I. This Court Lacks Jurisdiction To Entertain Carlson's CICA Challenge To The Modification Of The DoD-TRW Contract Because Carlson Was Not A Potential Bidder With Standing To Challenge The Modification . . . . . . . . . . . . 6 This Court Lacks Jurisdiction To Entertain Carlson's Arguments Regarding The Army's Anticipated Actions Relating To An Unexercised Option Period Of the Army-Carlson Contract Because Carlson Has Not Complied With The Mandatory Administrative Exhaustion Requirements Of The CDA, And Because The Issue Is Not Yet Ripe For Judicial Review . . . . . . . . . . . . . . . . . . . . . . . . . 12 A. Carlson Has Not Established That The Army Issued A Contracting Officer's Final Decision Regarding The Scope Of Contract Requirements That Would Be Applicable To The Option Period, Should The Option Period Be Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Even If The CDA Prerequisites Have Been Established, The Court Should Dismiss Carlson's CDA Count As Unripe For Judicial Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

II.

B.

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

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TABLE OF AUTHORITIES CASES Page(s)

Aerolease Long Beach v. United States, 31 Fed. Cl. 342 (1994) .................................................................................................... 11 Alliant Techsystems, Inc. v. United States, 178 F.3d 1260 (Fed.Cir.1999) ......................................................................................... 14 Bell v. Hood, 327 U.S. 678 (1946) .................................................................................................... 6, 10 Bradley v. Chiron Corp, 136 F.3d 1317 (Fed.Cir.1998) ........................................................................................... 6 Briscoe v. LaHue, 663 F.2d 713 (7th Cir.1981), aff'd, 460 U.S. 325 (1983) .................................................. 6 CACI Field Services, Inc. v United States, 13 Cl. Ct. 718 (1987), aff'd, 854 F.2d 464 (Fed. Cir. 1988) ............................................. 11 CCL, Inc. v. United States, 39 Fed. Cl. 780 (1997) ...................................................................................................... 7 CW Government Travel, Inc. v. United States, 46 Fed. Cl. 554 (2000) ..................................................................................................... 17 Cedars-Sinai Medical Ctr. v. Watkins, 11 F.3d 1573 (Fed.Cir. 1993) ............................................................................................. 5 Clearwater Constructors, Inc. v. United States, 56 Fed. Cl. 303 (2003) .................................................................................................... 15 Continental Collection & Disposal, Inc. v. United States, 29 Fed. Cl. 644 (1993) .................................................................................................... 15 Dawco Construction, Inc. v. United States, 930 F.2d 872 (Fed.Cir. 1991) .......................................................................................... 15 Distributors, Inc. v. United States, 38 Fed. Cl. 771 (1997) ................................................................................................ 5, 11 GPA-I, LP v. United States, 46 Fed. Cl. 762 (2000) .................................................................................................... 15 -ii-

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Gould, Inc. v. United States, 935 F.2d 1271 (Fed.Cir.1991) ........................................................................................... 5 Green Management Corporation v. United States, 42 Fed. Cl. 411 (1998) .................................................................................................... 15 Lockheed Martin IR Imaging System, Inc. v. West, 108 F.3d 319 (Fed.Cir. 1997) .......................................................................................... 11 Logan Canyon Cattle Association v. United States, 34 Fed. Cl. 165 (1995) ..................................................................................................... 16 Made In The USA Foundation v. United States, 51 Fed. Cl. 252 (2001) .................................................................................................... 13 Myers Investigative and Security Service, Inc. v. United States, 275 F.3d 1366 (Fed.Cir. 2002) ............................................................................................ 5 Northrop Grumman Corp. v. United States, 50 Fed. Cl. 443 (2001) ...................................................................................................... 7 Optimal Data Corp. v. United States, 17 Cl. Ct. 723 (1989), aff'd, 904 F.2d 45 (Fed.Cir. 1990) .............................................. 15 Phoenix Air Group, Inc. v. United States, 46 Fed. Cl. 90 (2000) ........................................................................................................ 7 Precision Instrument Manufacturing Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806 (1945) ........................................................................................................ 12 Reynolds v. Army and Air Force Exch. Service, 846 F.2d 746 (Fed.Cir. 1988) ............................................................................................. 5 Scheuer v. Rhodes, 416 U.S. 232 (1974) .......................................................................................................... 5 Sharman Company, Inc. v. United States, 2 F.3d 1564 (Fed.Cir. 1993) ............................................................................................ 14 Thomson v. Gaskill, 315 U.S. 442 (1942) .......................................................................................................... 5 -iii-

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Valley View Enterprises, Inc. v. United States, 35 Fed. Cl. 378 (1996) .................................................................................................... 13 Vanalco, Inc. v. United States, 48 Fed. Cl. 68 (2000) ............................................................................................ 6, 13, 16 Zevalkink v. Brown, 102 F.3d 1236 (Fed. Cir. 1996) ....................................................................................... 17 FEDERAL STATUTES 48 C.F.R. § 33.201 ...................................................................................................................... 14 Competition in Contracting Act ("CICA"), 10 U.S.C. § 2304 ...................................................... 1 Tucker Act, 28 U.S.C. § 1491 ....................................................................................................... 2 Contract Disputes Act ("CDA"), 41 U.S.C. §§ 601-611 ............................................................... 1 41 U.S.C. § 605§§a ...................................................................................................................... 13 41 U.S.C. § 609(a)(3) ................................................................................................................... 13 APPENDIX Letter From Mixon To Spell, 11-8-02 ......................................................................................... 1 Letter From Spell To Mixon, 11-26-02 .................................................................................... 2-5 Letter From Robinson-Burnette To Spell, 1-10-03 ........................................................................ 6 Letter From Robinson-Burnette To Spell, 1-31-03 ........................................................................ 7 E Mail From Burnette To Thompson, 5-15-03 .............................................................................. 8

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS CW GOVERNMENT TRAVEL, INC., ) ) ) ) ) ) ) ) ) ) ) )

Plaintiff, v. THE UNITED STATES, Defendant.

No. 03-1274 (Judge Baskir)

DEFENDANT'S MOTION TO DISMISS Pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims ("RCFC"), defendant, the United States, respectfully requests that the Court dismiss for lack of subject matter jurisdiction the complaint filed by plaintiff CW Government Travel, Inc. ("Carlson"). In support of our motion, we rely upon the complaint, this brief, and the attached appendix. DEFENDANT'S BRIEF QUESTIONS PRESENTED 1. Whether this Court lacks jurisdiction to entertain Carlson's counts relating to alleged violations of the Competition in Contracting Act ("CICA"), 10 U.S.C. § 2304, because Carlson has not established that it is an "interested party" with standing to assert a belated challenge to the modification of a contract between the Department of Defense ("DoD") and TRW, Inc.

1

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("TRW").1 2. Whether this Court lacks jurisdiction to entertain Carlson's count that seeks a declaratory judgment pursuant to the Contract Disputes Act ("CDA"), 41 U.S.C. §§ 601-611, because Carlson has failed to establish that it has complied with the mandatory administrative exhaustion requirements of that Act. 3. Whether, assuming that the Court would otherwise possess jurisdiction to consider Carlson's claim pursuant to the CDA, Carlson's contract claim should be dismissed as unripe for review. STATEMENT OF THE CASE I. Nature Of The Case

On May 23, 2003, Carlson filed its complaint in this Court. In its complaint, Carlson alleges that this Court possesses subject matter jurisdiction pursuant to the Tucker Act, 28 U.S.C. § 1491, and the CDA. Complaint ("Compl.") ¶ 3. Carlson's complaint is styled, in part, as a bid protest, in which Carlson seeks declaratory relief and preliminary and permanent injunctive relief relating to the modification of contract no. DAMT01-98-D-1005 (DTS DTR-6), which was awarded by the DoD to TRW, in 1998. In addition, pursuant to the CDA, Carlson's complaint challenges a purported decision of the contracting officer that relates to the interpretation of contracts that the Department of the Army ("Army"), Military Traffic Management Command ("MTMC"), awarded to Carlson in 2002. As the complaint notes, the offer which resulted in the contract was submitted by BDM International, Inc. ("BDM"). Complaint, ¶ 27. Immediately prior to submitting the offer, BDM was purchased by TRW. On December 11, 2002, TRW was acquired by Northrop Grumman Corporation ("Northrop"). Because TRW was the contractor during a majority of the performance of the contract, its name appears on the contract documents. Thus, this motion refers to the contractor performing the DOD-TRW contract as TRW, as does the complaint. 2
1

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Generally, Carlson alleges that the Government's modification of the DoD-TRW contract in early 2002 so greatly exceeded the scope of the original contract that the Government was required to conduct a competitive procurement. Carlson further alleges that the Government violated CICA when it failed to conduct a competitive procurement, and, in its complaint, requests the Court to enter, among other relief, "a preliminary, permanent injunction ordering the Army to direct TRW to cease performance of the . . . contract and immediately competitively reprocure [certain requirements contained in the modification to the TRW contract]. Compl. Prayer for Relief at p 32. In addition, Carlson alleges that the Army has misinterpreted the requirements of the Army-Carlson contracts relating to traditional travel services in three states (currently performed by Carlson) that the Army has stated may be deleted from Carlson's contracts, and incorporated into the TRW contract, during performance of a future option period that has not yet been exercised by the Army. Carlson requests, among other relief, that the Court enter "a preliminary and permanent injunction ordering the Army not to transfer the [traditional travel services requirements to the TRW contract] . . . unless and until a DTS [common user interface] . . . is implemented and able to provide all required travel services to the Army [in those three states]." Finally, in addition to the declaratory and injunctive relief sought, Carlson seeks an unspecified award for "damages and costs" and "attorneys fees." Id. at page 33. II. Statement Of Facts

A. The Contract Between DoD and TRW In 1998, DoD entered into a competitively bid contract with TRW providing that TRW would design and implement a consumer user interface to enable travelers to execute official travel without excessive dependence upon commercial travel agents. Instead, travelers would be able to access digital databases through personal computers and thus eliminate much of the 3

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paperwork for planning official travel ("common user interface"). Compl., Introductory Paragraphs, p. 2; ¶¶ 4-31. In early 2002, due to delays in developing and implementing a common user interface, DoD agreed to restructure the contract. Complaint, ¶¶ 32-43. At this time, Carlson was providing travel services to the Army in 41 states, Puerto Rico, the Virgin Islands and the Washington, D.C. Metropolitan Area, and was well-aware that the contract between TRW and DoD was being restructured. Compl., ¶ 44. Yet, the complaint fails to allege that Carlson sought to have the work subjected to a competitive procurement and the complaint alleging a cardinal change in the contract was not filed until May 23, 2003, approximately 13 months after the alleged modification. B. The Carlson-Army Contracts

In 2002, Carlson won a competitive bid to provide traditional travel management services for military installations in a number of states, including Kentucky, Missouri and Nebraska. Compl., ¶ 44. The effective date of the contracts was October 1, 2002; they were for an initial one year term with eight six-month renewal options. Comp, ¶ 45. On November 8, 2002, the Army informed Carlson that it would no longer provide traditional travel services in Kentucky, Missouri and Nebraska as of February 24, 2003, because such services would be provided under the DoD-TRW contract. Compl., ¶ 49; see Letter dated Nov. 8, 2002 from Ruby L. Mixon to Erma Spell, Defendant's Appendix ("Def. App.") p.1. On November 26, 2002, Carlson complained that these states only could be deleted once the common user interface was implemented and only after the contract's initial term. Compl., ¶ 50; see Letter dated Nov. 26, 2002 from Erma Spell to Ruby L. Mixon, Def. App., pp. 2-5. On January 10, 2003, the contracting officer affirmed that travel functions in these states would be transferred to the DoD4

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TRW contract on February 24, 2003, and, therefore, Carlson should effectuate a smooth transition. Complaint, ¶ 51; see Letter dated Jan. 10, 2003 from Jackie Robinson-Burnette to Erma Spell, Def. App., p. 6. Following further communications between Carlson and the Army, however, Carlson was advised, on January 31, 2003, that it could continue to provide traditional travel services in Kentucky, Missouri and Nebraska until the end of the initial terms of the contracts (i.e., through September 30, 2003). Complaint, ¶ 52; see Letter dated Jan. 31, 2003 from Jackie RobinsonBurnette to Erma Spell, Defendant's App., p. 7. This position was reiterated by the contracting officer on May 15, 2003. Complaint, ¶ 53; see e-mail communication dated May 15, 2003 from Jackie Burnette to Craig Thompson, Defendant's App., p. 8. At the time the complaint was filed, the Army had taken no action to modify the contracts to delete the installations from the ArmyCarlson contracts. Further, the options to extend the contracts beyond September 30, 2003, have not yet been exercised. ARGUMENT I. The Standards For A Motion To Dismiss "When considering a motion to dismiss, the court may consider all relevant evidence in order to resolve any disputes as to the truth of the jurisdictional facts alleged in the complaint. The court is required to decide any disputed facts which are relevant to the issue of jurisdiction." C C Distributors, Inc. v. United States, 38 Fed. Cl. 771, 774 (1997) (citing Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 747 (Fed.Cir. 1988)). The party asserting jurisdiction "bears the burden of establishing subject matter jurisdiction by a preponderance of the evidence . . . ." Reynolds v. Army and Air Force Exch. Serv., 846 F.2d at 748. see also Thomson v. Gaskill, 315 U.S. 442 (1942); Myers Investigative and Sec. Serv., Inc. v. United States, 275 F.3d 5

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1366, 1369 (Fed.Cir. 2002); Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1583 (Fed.Cir. 1993). Although the Court must accept all well-pled factual allegations as true and construe the facts in the light most favorable to the non-movant, see Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed.Cir.1991), "conclusory allegations unsupported by any factual assertions will not withstand a motion to dismiss." Briscoe v. LaHue, 663 F.2d 713, 723 (7th Cir.1981), aff'd, 460 U.S. 325 (1983); see also Bradley v. Chiron Corp, 136 F.3d 1317, 1322 (Fed.Cir.1998) ("Conclusory allegations of law and unwarranted inferences of fact do not suffice to support a claim"). Further, in certain situations, "it is appropriate for courts to dismiss a suit for want of jurisdiction even if the decision would involve a discussion of the merits." Vanalco, Inc. v. United States, 48 Fed. Cl. 68, 78 (2000). These include cases "where the alleged claim under the Constitution or federal statutes clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction or where such a claim is wholly insubstantial and frivolous." Bell v. Hood, 327 U.S. 678, 682-83 (1946). As we demonstrate, Carlson's complaint, at most, contains conclusory allegations that it would have bid upon the work subject to the modification of the DoD-TRW contract if it had been competitively bid, and the fact that it never bid upon the work in the original contract or complained to DoD that the modification exceeded the scope of the original contract strongly suggests that the CICA claim is simply a litigating strategy to prevent the Army from terminating its services in three states. Further, the assertions in the complaint relating to Carlson's alleged attempt to exhaust administrative remedies under the Army contracts fail to establish upon their face that the jurisdictional prerequisites for bringing an action pursuant to the CDA in this Court have been satisfied. Accordingly, this Court lacks subject matter 6

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jurisdiction to entertain all of Carlson's claims, and the complaint must be dismissed.

II.

This Court Lacks Jurisdiction To Entertain Carlson's CICA Challenge To The Modification Of The DoD-TRW Contract Because Carlson Was Not A Potential Bidder With Standing To Challenge The Modification In its complaint, Carlson alleges that the Government violated CICA by modifying the

DoD-TRW contract in a manner that so exceeded the scope of the original solicitation that the Government was required to conduct a competitive procurement. Because, as we establish below, Carlson lacks standing to maintain this challenge to a contract administration action that occurred more than a year ago, this Court should dismiss Carlson's counts I and II for lack of jurisdiction. For Carlson to have standing to assert a claim pursuant to CICA for the alleged expanded scope of the restructured contract, it must be able to demonstrate that it would have been an interested party in that work if there had been competitive bidding upon the work. See, e.g., Northrop Grumman Corp. v. United States, 50 Fed. Cl. 443, 455 (2001) ("The Tucker Act states that interested parties have standing to bring protests in this court . . . ."); see Phoenix Air Group, Inc. v. United States, 46 Fed. Cl. 90, 102 (2000) (the plaintiff must have a "readiness and ability to bid for work which plaintiff argues should be competitively procured by the Air Force"); CCL, Inc. v. United States, 39 Fed. Cl. 780, 788-89 (1997) ("it is sufficient for standing purposes if the plaintiff shows that it likely would have competed for the contract had the government publicly invited bids or requested proposals"). "The CICA defines an 'interested party' as 'an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract.'" Northrop Grumann Corp., 50 Fed. Cl. at 443 (citing 31 U.S.C. § 3551(2)). 7

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Carlson contends in the complaint that it was a "potential bidder" for the work defined in the modification because that work involved providing a common user interface through off-theshelf web based software, and that it could provide "end-to-end" travel services using web-based software as well as TRW. Compl., ¶ 61 ("As a provider of web-based end-to-end travel management solutions, Carlson is an interested party because it is a potential bidder for the work described in Modification P00028 to the DTS DTR-6 contract."). The only facts in the complaint to support the allegation concern GSA's recent solicitation for web-based travel systems which, according to the complaint, enticed a large number of bidders including traditional travel service providers such as Carlson. Compl., ¶¶ 40 and 58-59. According to Carlson, the fact that traditional providers of travel services such as Carlson were able to bid upon the GSA solicitation suggests that it would have bid upon the restructured DoD contract because that contract as well provided for end-to-end, web-based services, as did the GSA's solicitation. Carlson acknowledges in its complaint that it is a provider of traditional travel services, rather than a computer systems installer or software developer. Although Carlson contends that off-the-shelf products could be used for an internet supported travel management system, it does not allege that it has the experience or expertise to satisfy the requirements it contends apply to the modification of the TRW contract. Carlson alleges that approximately 80 potential bidders participated in a GSA solicitation for internet based travel management systems for various Federal agencies. However, there is no allegation that the GSA specifications are the same as, or similar to, the specifications for travel service management specified in the TRW modification. The complaint alleges that "[t]he GSA's ongoing procurement of a web-based Government travel management system contemplates implementation of the fully operational 8

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system commencing in December 2003." Compl., ¶ 59. No specific facts are alleged to support this conclusory allegation. Further, the complaint alleges that "[I]n December 2002, the DoD Program Analysis and Evaluation Report specifically noted that commercially available webbased travel products could perform the requirements that TRW had been unable to perform under the DTS DTR 6 contract." Compl., ¶ 40. No specific facts are alleged to support this conclusory allegation and, even if true, no specific facts are alleged concerning whether the report was consistent with other relevant studies, including a GSA study, or accepted or rejected by DoD. Moreover, assuming the specifications for the GSA solicitation referred to in the complaint are the same as, or similar to, those contained in the TRW contract modification, Carlson does not allege that it had the experience or expertise to bid upon the GSA contract or that it was awarded the contract. The motion for preliminary injunction contains no evidence that Carlson would have been qualified to bid upon the TRW contract modification had it been competitively bid. Therefore, there is no evidence to support the jurisdictional allegation that Carlson would have been a "potential bidder" if the work covered by the TRW contract modification had been competitively bid. Further, the evidence concerning Carlson's conduct in the marketplace at the time the restructuring occurred strongly suggests that it was not interested in the work covered by the modification to the DoD-TRW contract, but, rather, now uses the allegation that the restructuring of the TRW contract violated CICA, to prevent the Army from excising three states covered by the TRW contract, if it exercises the option to continue to allow Carlson to provide travel services at Army installations in three states. Thus, the complaint notes that, at the time of the modification, Carlson was providing traditional travel services in three states encompassed by 9

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the TRW contract, as well as more than 40 states, including three states encompassed by the DoD-TRW contract. Compl., Introductory Paragraph, p. 1. ¶¶ 44-53. Carlson was, therefore, well aware of the restructuring when it occurred, yet Carlson fails to allege that it contacted DoD to demand that the work be competitively bid. Instead, Carlson allowed the restructuring to occur and did nothing until November 8, 2002 ­ approximately seven months after it says the scope of the contracts was expanded ­ when it was informed by the Army that certain states would be deleted from its contracts. Only in the context of attempting to persuade the Army that it could not terminate Carlson's provisioning of traditional travel services in the states covered by the TRW contract, did Carlson make the allegation that the restructuring exceeded the scope of the original contract. Tellingly, Carlson complained directly to the Army rather than directly to DoD, and not for the purpose of competing upon the work covered by the modification to the TRW contract, but as leverage to persuade the Army not to delete certain installations from Carlson's contracts to provide traditional travel services. Complaint, ¶¶ 50-53. Thus, the cardinal change allegation was an afterthought designed to protect Carlson's interests in the three states subject to the restructured contract, rather than reflective of an effort to persuade DOD to open the work covered by the restructured contract to competitive bidding. This suggests there is a lack of evidence Carlson was, in fact, a "potential bidder" on the work covered by the restructured TRW contract and, therefore, the contention in the complaint that Carlson could provide a common user interface and was a "potential bidder" is "wholly insubstantial" and appears to be directed "solely for the purpose of obtaining jurisdiction." Bell v. Hood, 327 U.S. at 682-83. Compl., ¶ 52. Carlson now seeks to overturn the contract modification in an apparent effort to retain its 10

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monopoly over traditional travel services in the three states covered by the TRW contract. However, in these circumstances, Carlson waived its right to challenge the restructuring because, according to Carlson, the alleged violation of CICA was obvious upon its face, and it is undisputed that Carlson sat upon its hands rather the confronting DoD with the need to competitively procure the revised requirements, and only questioned the administrative action because it was threatened by the Army with losing the right to provide traditional travel services in three states covered by its contracts with the Army. As this Court recently observed in an analogous context: For many years, the courts in this Circuit have recognized a duty on the part of contractors to inquire and seek timely clarification and resolution of problems, inconsistencies, and discrepancies apparent in solicitations. '[W]hen [the contractor] is presented with an obvious omission, inconsistency, or discrepancy of significance, he must consult the Government's representatives if he intends to bridge the crevasse in his own favor. Having failed to take that route, plaintiff is now barred from recovering on this demand.' C C Distributors, Inc., 38 Fed. Cl. at 782 (quoting Beacon Constr. Co. v. United States, 161 Ct. Cl. 1, 7 (1963); see also, Aerolease Long Beach v. United States, 31 Fed. Cl. 342, 358 (1994) (an offeror who recognized an ambiguity in the solicitation but failed to file a protest waives his right to challenge the award upon that basis); Lockheed Martin IR Imaging Sys., Inc. v. West, 108 F.3d 319, 322 (Fed.Cir. 1997) (same); CACI Field Servs., Inc. v United States, 13 Cl. Ct. 718, 726-27 (1987), aff'd, 854 F.2d 464 (Fed. Cir. 1988) (same). Carlson failed to seek the right to bid the restructured contract from DoD. Its apparent objective in raising the issue was to protect its interests in the Army-Carlson contracts rather than to bid upon the restructured work. Moreover, Carlson failed to bid on the work of 11

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providing a common user interface when the contract originally was awarded to TRW in 1998. Therefore, the evidence suggests that Carlson was not a potential bidder for the work and would not have bid on the work even if the contract modification had been competitively bid, as it failed to do in 1998 when the work was competitively bid. Thus, Carlson's interest in the TRW modification fell outside the zone of interests protected by the CICA, and the effort to now maintain an action seeking to overturn the contract modification must fail. See, e.g. C C Distributors, Inc. v. United States, 38 Fed. Cl. at 774-781 (an incumbent who failed to bid upon the restructured contract lacked standing to challenge the award to a competitive bidder); cf., Travelers Indemnity Company v. United States, 16 Cl. Ct. 142, 154 (1988) ("The doctrine of 'unclean hands,' which prevents a wrongdoer from succeeding in a court of equity, has its roots in the maxim: 'He who comes into equity must come with clean hands'); Precision Instrument Manufacturing Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 814 (1945) (a party who seeks equity in a judicial forum "shall have acted fairly and without fraud or deceit as to the controversy in issue"). III. This Court Lacks Jurisdiction To Entertain Carlson's Arguments Regarding The Army's Anticipated Actions Relating To An Unexercised Option Period Of the Army-Carlson Contracts Because Carlson Has Not Complied With The Mandatory Administrative Exhaustion Requirements Of The CDA, And Because The Issue Is Not Yet Ripe For Judicial Review In count III of its complaint, Carlson seeks declaratory and anticipatory injunctive relief related to an apparent contract interpretation dispute between the Army and Carlson regarding whether portions of Carlson's traditional travel services in Kentucky, Missouri and Nebraska could be properly deleted from Carlson's contracts, and incorporated into the TRW contract, during an option period that has not yet been exercised by the Army. In asserting jurisdiction for this relief, Carlson cannot rely upon the separate 12

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jurisdictional basis it alleges supports its challenge to the contract modification under CICA. See Davis/HRGM Joint Venture v. United States, 50 Fed. Cl. 539, 544-45 (2001) (bidder protesting revised award decision was required to file a claim with the contracting officer pursuant to CDA prior to filing suit to separately challenge termination for convenience of contract initially awarded in the procurement). Rather, jurisdiction depends entirely upon whether Carlson has satisfied the elements of the CDA. Because the Government has not taken action adverse to Carlson under the Army contracts, Carlson has not filed a claim within the meaning of the CDA and the contracting officer has not issued a final decision. Accordingly, this Court lacks jurisdiction to entertain count III. Moreover, in any event, this Court should dismiss this count as not ripe for judicial review given the uncertainty surrounding future events ­ most importantly - the uncertainty whether the Army will exercise the option period of Carlson's contracts and, if it does, delete the three states from those contracts. A. Carlson Has Not Established That It Filed A Claim Or The Army Issued A Contracting Officer's Final Decision Regarding The Scope Of Contract Requirements That Would Be Applicable To The Option Period, Should The Option Period Be Exercised

Carlson has asserted that this Court possesses jurisdiction to entertain its claim regarding the Army-Carlson contracts pursuant to the CDA. Complaint, ¶ 3. However, this Court's jurisdiction pursuant to the CDA is predicated upon the contractor's submission of a written claim to the contracting officer, 41 U.S.C. § 605((a), and the agency's issuance of a final decision, 41 U.S.C. § 609(a)(3). See Vanalco, Inc. v. United States, 48 Fed.Cl. 68 (2000) (jurisdiction lacking because of the failure of the contractor to submit an administrative claim); Made In The USA Foundation v. United States, 51 Fed. Cl. 252 (2001) (contractor failed to 13

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establish either claim or request for a final decision). See also Valley View Enterprises, Inc. v. United States, 35 Fed. Cl. 378, 385 (1996) (the requirements of the CDA must be strictly construed as a waiver of sovereign immunity). Carlson contends that it presented a written claim by informing the contracting officer on November 26, 2002, that its contracts did not allow traditional travel services to be subsumed under the restructured contract. Compl., ¶¶ 62-65; see Def. App., pp. 2-4. Further, Carlson contends the contracting officer issued a final decision on May 15, 2003, when she informed Carlson that traditional travel services in Kentucky, Missouri and Nebraska would be provided under the DoD-TRW contract as of September 30, 2003. See Def. App., p. 8. As we demonstrate, however, Carlson's November 26 letter was not a written claim, and the May 15 notification was not a final decision of the contracting officer. Therefore, Carlson fails to allege that it has satisfied the mandatory administrative exhaustion requirements of the CDA. The Federal Acquisition Regulation ("FAR") defines a "claim" as: [A] written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising from or relating to the contract . . . . 48 C.F.R. § 33.201; see Alliant Techsystems, Inc. v. United States, 178 F.3d 1260, 1264-66 (Fed.Cir.1999). The Carlson letter of November 26 cannot reasonably be construed as a claim. While the letter asserts an interpretation of the contracts, it does not request relief from a contract action because no action had been taken. It instead attempts to persuade the contracting officer to repudiate notification of a contemplated action. Specifically, it requests rescission of a previous 14

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letter notifying Carlson of a proposed transfer of services in three states to the DoD-TRW contract before the end of the base year of Carlson's contracts. In fact, as requested, the contracting officer rescinded the proposed action in her letter of January 31, 2003. Moreover, the Carlson letter does not use the term "claim," nor mention the CDA nor request a final decision. Therefore, the November 26 letter cannot provide a basis for subject matter jurisdiction. See, e.g., Sharman Company, Inc. v. United States, 2 F.3d 1564, 1567-73 (Fed.Cir. 1993) (no jurisdiction in court under the CDA until there has been a final denial of an administrative claim). Carlson attempts to obviate this result by pointing out that it was notified on May 15, 2003, that all sites then being serviced in Missouri, Nebraska, and Kentucky would be removed as of the completion of the initial term. Compl., ¶ 15; see Def. App., p. 8. However, like the November 8 letter, the May 15 message does not adversely affect Carlson's rights. This notification simply advised that the Army might take certain action in the future, but, at the time the complaint was filed, the three states at issue had not been excised from the contracts. Id. ("I am in the process of preparing the modification to remove Kentucky, Missouri and Nebraska from DTRs 4 and 5 effective September 30 as we agreed earlier this year. I will need go get those modifications completed before exercising the option"). The relevant decisions indicate that a letter concerning possible future activity does not deprive a party of rights under the contract and is insufficient to support jurisdiction pursuant to the CDA. For example, in Alliant Techsystems, Inc. v. United States, 178 F.3d at 1260, the contracting officer had insisted that additional work be accomplished by exercising an option and rejected the contractor's contention that it was too late to exercise the option. Therefore, the contractor allegedly was deprived of a right under the contract not to have to perform the 15

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additional work. Similarly, in Clearwater Constructors, Inc. v. United States, 56 Fed. Cl. 303 (2003), an interpretation of a contract modification required the contractor immediately to undertake additional work which the contractor asserted it was not required to do. Further, in GPA-I, LP v. United States, 46 Fed. Cl. 762 (2000), the contractor objected to the fact that the Government had not made timely payments and therefore had violated rights under the contract. Unlike the situations in the cases cited above, Carlson has not yet suffered any deprivations under the contracts. All the May 15 notification did was advise that three states might be excised as of September 30 by virtue of a modification to the contracts. See Def. App., p. 8. This might well be irrelevant, however, as the initial term ends on September 30, and Carlson had no right to an automatic extension. See, e.g., Green Management Corporation v. United States, 42 Fed. Cl. 411, 433-34 (1998) ("[A]n option contract generally binds the option giver, not the option holder"); Optimal Data Corp. v. United States, 17 Cl. Ct. 723, 731 (1989), aff'd, 904 F.2d 45 (Fed.Cir. 1990) (same); Continental Collection & Disposal, Inc. v. United States, 29 Fed. Cl. 644, 650 (1993) (same). Therefore, the May 15 notification at most constituted an effort to seek a modification to a potential future contract which would exist after exercise of the option. Therefore, it was legally incapable of triggering the right to judicial review in this Court because the modification had not been imposed and the option had not been exercised. See Dawco Constr., Inc. v. United States, 930 F.2d 872, 878 (Fed.Cir. 1991) ("[A] claim must seek payment of a sum certain as to which a dispute exists at the time of submission."); Logan Canyon Cattle Assoc. v. United States, 34 Fed. Cl. 165, 168 (1995) ("the court . . . lacks subject matter jurisdiction over this suit because the claim is anticipatory"). Moreover, although the May 15 message is like the November 8 letter in that it merely proposes a contractual action, it is not a mere recitation of the action proposed in the earlier letter. 16

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In the November letter, the Army announced an intention to delete the three states during the base period of Carlson's contract. In its letter of November 26, Carlson argued in part that the deletion of those states during the base period violated contract provisions that arguably allowed such deletions only when the base period expires. By contrast, the May 15 message proposes action that will not occur (if it occurs at all) until the base period expires. Carlson has not asserted a claim in response to the May 15 message, nor obviously received a final decision from the contracting officer. Consequently, there plainly is no claim or final decision applicable to the action proposed (but not executed) in the May 15 message. In short, Carlson has failed to satisfy the prerequisites to this Court's jurisdiction pursuant to the CDA. Therefore, count III of the complaint, asserting a breach of the Army-Carlson contracts, must be dismissed. B. Even If The CDA Prerequisites Have Been Established, The Court Should Dismiss Carlson's CDA Count As Unripe For Judicial Review

The Court also has refused to entertain claims because they are not ripe for resolution. CW Government Travel, Inc. v. United States, 46 Fed. Cl. 554, 558 (2000) (finding that "many justiciability precepts - including mootness, standing and ripeness - have been invoked by this and other non-Article III courts on prudential grounds" and dismissing the complaint as moot); Massachusetts Bay Transp. Auth. v. United States, 21 Cl. Ct. 252, 257-58 (1990) ("['T]he Claims Court traditionally has applied the case or controversy requirement unless jurisdiction conferred by Congress demands otherwise"); Vanalco, 48 Fed. Cl. at 74 (court does not possess general equitable jurisdiction for anticipatory relief and exercises equitable relief only in certain limited situations). In finding that the Court of Federal Claims properly exercised jurisdiction over a claim 17

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that the Government improperly had exercised an option, the Federal Circuit rejected a Government argument that "prudential considerations" precluded the Court from entertaining a request for declaratory relief. However, in doing so, the court of appeals did not embrace an unlimited application of declaratory relief to contracts. It furnished the following guidance upon the appropriateness of declaratory judgments: This is not to say that the Court of Federal Claims (or an agency board of contract appeals) is required to issue a declaration of rights whenever a contractor raises a question of contract interpretation during the course of contract performance. In responding to such a request, the court or board is free to consider the appropriateness of declaratory relief, including whether the claim involves a live dispute between the parties, whether a declaration will resolve that dispute, and whether the legal remedies available to the parties would be adequate to protect the parties' interests. While a contractor may want to know ahead of time how a contract issue will be resolved - such as whether the contractor will be entitled to additional compensation under the changes clause for a particular item or work directed by the contracting officer - such cases do not ordinarily put into question whether the contractor is obligated to perform at all. In such a case, the dispute typically concerns whether the government will be obligated to grant an equitable adjustment after the ordered performance is completed. It would normally be appropriate in such cases for the court or board to decline to issue a declaratory judgment and to await a later equitable adjustment claim by the contractor. In refusing a request for declaratory relief in the absence of a need for an early declaration of the parties' rights, the court or board would be applying a principle analogous to the traditional rule that courts will not grant equitable relief when money damages are adequate. Alliant Techsystems, 173 F.3d at 1271. See also Zevalkink v. Brown, 102 F.3d 1236, 1242 (Fed. Cir. 1996) (approving adoption by United States Court of Veterans Appeals, an Article I court, of 18

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the "case or controversy" limitations upon prudential grounds). This case is not ripe for review. The Government has not issued a modification to delete requirements for service to the three states at issue from the Carlson contracts. It is unknown when, if ever, the Government will do so. If the Government eventually does delete the requirements, the circumstances of such action, e.g., the state of implementation of the TRW contract, or the means of deleting the requirement, can only be known at that time. Finally, if the Government eventually does delete the requirement, Carlson will have an adequate remedy for money damages in an equitable adjustment for termination costs, or (if appropriate) a breach of contract action. Accordingly, the request that judicial review be accorded at this juncture should be denied. CONCLUSION Carlson's complaint has failed to demonstrate standing to challenge the alleged modification of the DOD-TRW contract pursuant to CICA or the jurisdictional prerequisites to an action pursuant to the CDA. Accordingly, the complaint must be dismissed.

Respectfully submitted, PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director s/ Franklin E. White, Jr. FRANKLIN E. WHITE, JR. Assistant Director s/ David A. Levitt DAVID A. LEVITT 19

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Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit, 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Telephone: (202) 307-0309 Fax: (202) 514-7965 Attorneys for Defendant Date: July 23, 2003

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APPENDIX

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1

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2

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3

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4

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5

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6

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7

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8

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Certificate of Filing I hereby certify that on July 23, 2003, a copy of the foregoing Defendant's Motion To Dismiss was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system. s/ David A. Levitt