Digital Technologies, Inc. v. United States

89 Fed. Cl. 711, 2009 WL 4785451
CourtUnited States Court of Federal Claims
DecidedDecember 9, 2009
DocketNo. 08-604C
StatusPublished
Cited by14 cases

This text of 89 Fed. Cl. 711 (Digital Technologies, Inc. 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
Digital Technologies, Inc. v. United States, 89 Fed. Cl. 711, 2009 WL 4785451 (uscfc 2009).

Opinion

OPINION

HORN, Judge.

FINDINGS OF FACT

Alleging a breach of contract, plaintiff Digital Technologies, Inc. (DTI), seeks damages for breach of a fair opportunity to compete clause under its multiple-award, Indefinite Delivery/Indefinite Quantity (ID/IQ) contract with United States Customs and Border Protection (Customs) of the United States Department of Homeland Security. The alleged breach of contract is based on [713]*713the award of a task order to DTI’s competitor, Automation Technologies, Inc. (ATI), on November 30, 2006.2 Defendant has filed a motion to dismiss, arguing that the true nature of the plaintiffs claim is not a breach of contract dispute, which is the plaintiffs characterization of the claim, but rather, a post-award protest of a task order issued under a multiple-award, ID/IQ contract. With certain exceptions not applicable here, a task order is not subject to protest, pursuant to the prohibition in the Federal Acquisition Streamlining Act of 1994 (FASA), Pub.L. No. 103-355, Title I, § 1054, 108 Stat. 3264 (1994) (codified as amended at 41 U.S.C. § 253j(d) (2006)).3

In January 2006, Customs awarded ATI a competitively bid, sole-source contract to provide computer hardware maintenance at a Customs facility in Springfield, Virginia. As an ID/IQ contract, the agreement entailed Customs issuing work orders for any required services during the term of the contract, with Customs bound to order and ATI bound to provide a certain minimum amount of work. See 48 C.F.R. § 16.504 (2006) (titled “Indefinite-quantity contracts,” and setting forth the elements of an ID/IQ contract). In the present case, ATI’s contract set a guaranteed minimum of $2,500.00 and a ceiling of $9,900,000.00 for the base year ending December 31, 2006, and for each of four one-year, extension options. Plaintiff DTI, an unsuccessful competitor for the contract, protested the January 2006 award at the GAO. Customs overrode the automatic stay that had gone into effect when the GAO protest was filed 4 and, from January through October 2006, Customs issued a number of task orders to ATI totaling nearly $7.9 million. When the GAO stated in March 2006, in an Outcome Prediction Alternative Dispute Resolution conference, that it appeared Customs had engaged in improper discussions with ATI, Customs took corrective action by amending the solicitation and reopening bidding on the procurement. The GAO subsequently dismissed the protest. See Digital Techs., Inc., Comp. Gen. B-297851 (Mar. 23, 2006).

On July 26, 2006, Customs awarded an ID/IQ contract to DTI, with terms similar to ATI’s contract, covering the same services, but with a base period of September 1, 2006, to April 30, 2007, and four one-year options. When ATI protested the award before the GAO, Customs overrode the automatic stay, reasoning that ATI would likely lose the protest and that the override would lead to cost savings that made the override in the best interests of the government. See Automation Techs., Inc. v. United States, 72 Fed.Cl. 723, 725-26 (2006) (ATI I). ATI challenged the override before this court, which found the override decision to be “unreasonable, arbitrary and capricious and invalid.” Id. at 731. After the initial override, Customs had issued a two-month task order to DTI for maintenance, to begin September 1, 2006, but following the court’s decision in ATI I, the stay on DTI’s contract was reinstated pending the GAO decision. Given the stay, Customs cancelled DTI’s task order on August 31, 2006, the day before it was to go into effect, and issued a three-month task [714]*714order to ATI as a stop-gap measure to ensure the availability of services. When the GAO ultimately dismissed ATI’s protest and denied reconsideration, Customs modified the task order then held by ATI, changing the end date from November 30, 2006, to October 31, 2006. See Automation Techs., Inc., Comp. Gen. B-298618.3 (Oct. 4, 2006); Automation Techs., Inc., Comp. Gen. B-298618, B-291618.2 (Sept. 6, 2006). ATI subsequently filed suit in this court challenging the merits of the award to DTI.

Agreeing with the reasoning of the GAO decision, this court found that ATI lacked standing because, as the holder of a valid contract covering the same services as DTI’s contract, ATI was not prejudiced by the award of a contract to DTI inasmuch as resolicitation would not improve ATI’s position. Automation Techs., Inc. v. United States, 73 Fed.Cl. 617, 623-24 (2006) (ATI II). The court found that,

[although not the original intention of Customs, under the unique facts and circumstances of this case, multiple contract awards effectively have been made to ATI and DTI.... Even the solicitation language, albeit somewhat unclearly, appeared to allow multiple awards and could be read to contemplate that possibility in the evaluation procedures.

Id. at 623.

ATI argued that if there were a multiple-award, ID/IQ scenario, then proper proee-dures were not in place to ensure that it would be given a fair opportunity to be considered for future task orders, as guaranteed by 41 U.S.C. § 253j(b) (2006).5 ATI II, 73 Fed.Cl. at 622-23. The court held that it was unable to entertain ATI’s challenge “to the extent that ATI’s actions are in the nature of a protest to future task orders under the terms of its contract....” Id. at 625 (citing A & D Fire Protection, Inc. v. United States, 72 Fed.Cl. 126, 133-34 (2006)).

On October 25, 2006, ATI submitted a protest to the Customs ombudsman. Given the finding in A27 II that Customs had effectively issued multiple-award contracts, ATI claimed that it had not been given a fair opportunity to compete for the task order issued to DTI. ATI requested that Customs modify both ATI’s and DTI’s contracts to account for the multiple-award scenario by including fair opportunity procedures. In response, Customs unilaterally modified both ATI’s and DTI’s contracts on October 27, 2006 (Modification P00001), identifying a task order ombudsman and incorporating by reference Federal Acquisition Regulation (FAR) 16.505(b)(1), which requires the government to follow certain fair opportunity procedures when soliciting task orders under a multiple-award, ID/IQ contx-act.6 Customs described the modification as reflecting “administrative changes,” which it is authorized to make unilaterally pursuant to FAR 43.103(b). On the same day as the fair opportunity procedures modification, October 27, 2006, Cus[715]*715toms issued to DTI a one-month task order totaling $669,244.30 for services to be performed during November 2006. This would be the only task order DTI received under its master contract, leading DTI to allege bad faith on the part of Customs.

On November 15, 2006, Customs issued a Request for Quotations (RFQ) to ATI and DTI for a ten-month task order and four one-year options, with bids due by November 27, 2006.

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Cite This Page — Counsel Stack

Bluebook (online)
89 Fed. Cl. 711, 2009 WL 4785451, Counsel Stack Legal Research, https://law.counselstack.com/opinion/digital-technologies-inc-v-united-states-uscfc-2009.