Alatech Healthcare, LLC v. United States

89 Fed. Cl. 750, 2009 WL 4456818
CourtUnited States Court of Federal Claims
DecidedDecember 1, 2009
DocketNo. 09-332C
StatusPublished
Cited by3 cases

This text of 89 Fed. Cl. 750 (Alatech Healthcare, LLC v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alatech Healthcare, LLC v. United States, 89 Fed. Cl. 750, 2009 WL 4456818 (uscfc 2009).

Opinion

OPINION AND ORDER

HODGES, Judge.

Plaintiff filed a bid protest at the Government Accountability Office to overturn a procurement award issued by John Snow, Inc., to three foreign-based corporations. John Snow issued the award pursuant to its contract with the United States Agency for International Development. Federal law required that USAID award this contract domestically, according to plaintiff. Alateeh’s principal place of business is in Alabama.

Defendant agrees that USAID should prefer a domestic procurement, but only according to a best value analysis. Such an analysis should consider statutory requirements, such as cost, timely availability, and best health practices, the Government contends. See Pub.L. No. 108-199, 118 Stat. 3 (2004).

We denied plaintiffs petition for a preliminary injunction last month. The Agency for International Development employed reasonable methods for meeting the cost preference requirements of the statute through its prime contractor, John Snow, Inc. However, the parties have not argued or supplied sufficient information concerning the statute’s balancing factors, timely availability and best health practices. We remand this case to the contracting officer to make additional findings, or to provide such findings to the court if already made.

BACKGROUND

Congress passed legislation in 2004 designed to protect domestic corporations engaged in production of condoms. The statute provides that condom procurement awards should be awarded domestically “to the maximum extent feasible,” taking into consideration “cost, timely availability, and best health practices.” Pub.L. No. 108-199, 118 Stat. 3 (2004).

The United States Agency for International Development issued a solicitation for bidders on a contract for direct health-related services in 2006, and made the indefinite quantity contract award to John Snow, Inc. The contract included three health-related task orders, for Family Planning and Public Health, Avian Influenza, and Malaria. Snow was to purchase latex condoms for export to foreign countries pursuant to Task Order One.

USAID directed Snow to give domestic condom manufacturers a fifty-percent price preference under the task order. The Agency intended that the fifty-percent bid price bonus would satisfy the statutory requirement that domestic suppliers be preferred to the “maximum extent feasible.” Snow issued a Request for Proposals according to USAID’s directions. Three foreign corporations won portions of the contract despite the fifty-percent preference, however.

Alatech, the sole domestic bidder, filed a bid protest with the Government Accountability Office in 2008. The GAO dismissed the protest for lack of jurisdiction over an action by a non-governmental entity, John Snow, Inc. GAO did not reach the merits. Plaintiff sought preliminary and permanent injunctions, a declaratory judgment, and other forms of relief from this court. Alatech with[752]*752drew its request for a preliminary injunction after negotiations with the Agency resulted in an extension of plaintiffs existing condom procurement contract.

The parties filed cross-motions for summary judgment. We conducted a hearing on jurisdictional issues in August 2009, and ruled that case law in the Court of Appeals for the Federal Circuit authorizes this court to accept jurisdiction. See Distributed Solutions v. United States, 539 F.3d 1340 (Fed.Cir.2008).

Plaintiffs protest alleges that USAID misinterpreted the Act’s purpose by applying a fifty-percent price preference to Alateeh’s bid, which was not sufficient to guarantee plaintiff the contract. Plaintiffs cross-motion for summary judgment challenges GAO’s ruling that it lacked jurisdiction to hear plaintiffs case, and seeks a permanent injunction on the foreign-based contract award. Alatech also asks that the court issue a declaratory judgment interpreting the Act’s requirements.

The issue is whether the language in the statute, “to the maximum extent feasible,” permits USAID to condition bid acceptance on “price, timely availability, and best health practices,” as defendant contends. Plaintiff argues that award to a domestic corporation should be anticipated in every procurement. The effect of plaintiffs arguments is that USAID must award supply contracts to domestic corporations in every event.

DISCUSSION

Defendant believes that the fifty-percent “generous price preference” allowed to domestic corporations satisfies the statutory requirements, while plaintiffs view of the statute is that the statutory requirement creates a preference that all but requires award to a domestic corporation. According to plaintiff, the statutory language means if at all possible. Defendant argues that the word “feasible” suggests a balancing test taking into account the phrase, “price, timely availability, and best health practices.”

This court has jurisdiction “to render judgment on an action by an interested party objecting to a solicitation by a federal agency for bids or proposals for a proposed contract or to a proposed award of a contract or any alleged violation of statute or regulation in connection with a procurement or proposed procurement.” 28 U.S.C. § 1491(b)(1).

Defendant contends that John Snow’s efforts on behalf of USAID did not constitute a procurement action. In that event, this court would lack jurisdiction over the issues presented. The only procurement action involved, according to the Government, was between USAID and John Snow, the prime contractor. That is, USAID awarded the pi’ime contract to Snow to procure health-related services. Snow’s awards to subcontractors to fulfill task orders was a private action. Bid discussions between foreign corporations and John Snow as prime contractor were solicited and evaluated by Snow and awarded by Snow. The prime acted as a private party as to Alatech, defendant contends, and not as a government agency. For that reason, the procurement does not fall within the Tucker Act’s terms.

The Court of Appeals for the Federal Circuit held in Distributed Solutions that a procurement includes “all stages of the process of acquiring property or services, beginning with the process for determining a need for property or services.” See Distributed Solutions, 539 F.3d at 1345 (citing 41 U.S.C. § 403(2)). Though this procurement involved a third party, John Snow, it falls within the Federal Circuit’s interpretation of the Tucker Act as explained in Distributed Solutions, plaintiff argues. According to Alatech, USAID began planning this procurement in 2008 and put procurement procedures in place then. Also, USAID produced specifications for the contract and began discussing whether to task John Snow with the procurement. Moreover, a USAID official was a member of the panel that conducted the selection process, plaintiff states, thereby bringing the matter within the holding of Distributed Solutions and within the jurisdiction of this court.

Defendant attempts to distinguish Distributed Solutions by arguing that USAID did not issue its own request for proposal and then decide to use a contractor for its procurement functions, as in Distributed Solu[753]*753tions.

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Cite This Page — Counsel Stack

Bluebook (online)
89 Fed. Cl. 750, 2009 WL 4456818, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alatech-healthcare-llc-v-united-states-uscfc-2009.