Kellogg Brown & Root Services, Inc. v. United States

117 Fed. Cl. 764, 2014 U.S. Claims LEXIS 747, 2014 WL 3846056
United States Court of Federal Claims·Decided August 6, 2014·No. 1:13-cv-00236·Published·Cited by 16 cases

Opinion

Dismissal for lack of subject-matter jurisdiction, RCFC 12(b)(1); contract closeout; contract administration; no bid protest jurisdiction, 28 U.S.C. § 1491(b); Contract Disputes Act, 41 U.S.C. §§ 7101-7109; standing; no competitive injury alleged.

MEMORANDUM OPINION AND ORDER

WOLSKI, Judge.

This case has been brought in the guise of a pre-award bid protest. Plaintiff, Kellogg Brown & Root Services, Inc. (KBR), challenges what it claims to be a solicitation for a proposal to conduct closeout activities for KBR’s contract DAAA09-02-D-0007, more commonly known as the LOGCAP III contract (LOGCAP III). The government has moved to dismiss the case for lack of subject-matter jurisdiction under Rule 12(b)(1) of the Rules of the United States Court of Federal Claims (RCFC), contending, inter alia, that KBR lacks standing to bring these claims as a bid protest, and that the case concerns matters of contract administration. See Def.’s Second Mot. to Dismiss (Def.’s Mot.) at 8-20, 23-25. The government argues that KBR, as a contract awardee, must resolve any disputes related to the closeout of the LOGCAP III contract under the procedures contained in the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109. Def.’s Mot. at 15-20. Defendant also argues that KBR lacks standing to challenge the government’s action because the contractor has not alleged *766 that the action inflicted the requisite injury to support prejudice. Id. at 23-25. The Court agrees with these arguments, and for the reasons that follow GRANTS defendant’s motion to dismiss this case.

I. BACKGROUND

Under LOGCAP III, KBR provided support services and logistics to the United States Army (Army) in connection with the wars in Iraq and Afghanistan. Am. Compl. ¶¶ 11-13. The contract was largely conducted on a cost-reimbursement basis. Id. ¶ 9. The performance period for the contract ran from December of 2001 through December 13, 2011. Id. The contract did not address how its closeout would be conducted. Id. ¶ 18. Although there were discussions prior to the end of the contract, no final agreement regarding closeout was reached before the end of contract performance in December, 2011. Id. ¶¶ 18-22. The LOGCAP III closeout activities had since that time been paid for under a series of modifications to Task Order 160, which had been issued December 10, 2010, to create a small program management office unrelated to closeout. 1 Id. ¶¶ 33, 35-38; App. to Def.’s Mot. (DA) 16; Tr. (May 31, 2013) (Tr.) at 41-42.

On December 11, 2012, the Army’s Contracting Officer for LOGCAP III sent KBR a “Request for Alternate Proposal” under Task Order 160, concerning calendar year 2013 “Administrative Close Out.” Am. Compl. ¶ 39; DA 25-26. This letter stated that “[t]he key objectives of administrative closeout are to identify and resolve any uncompleted obligations or pending liabilities on the part of either the Government and the contractor,” and added that closeout “also ensures that any issues related to the contract, including outstanding claims or litigation, have been properly documented.” DA 25. Similar to an October 2011 request for a proposal covering closeout for calendar year 2012, see Am. Compl. ¶ 20, this request sought “a Labor Basis of estimate (BOE), Management Approach narrative, critical milestones and industry assumptions with impaet statements,” id ¶ 39. Unlike the earlier request, the Army now wanted KBR to submit a firm-fixed price, rather than a cost-reimbursement, proposal for LOGCAP III closeout. Id.; see DA 25-26. The contractor was told that its proposal must be received no later than January 31, 2013, although after discussions this deadline was extended to March 1, 2013. Am. Compl. ¶¶ 39-40,42.

When the notion of performing closeout on a firm-fixed price basis was first raised by the Army five months earlier, KBR responded that this was inappropriate, insisting there was “no way to accurately define the scope or duration of work” and explaining that “[ljegal, administrative, compliance, audit response, vendor issues, subcontract close-out, and dispute resolution ... are all unknowns.” Id. ¶ 34; DA 31. Litigation uncertainties included lawsuits with subcontractors as well as the defense of tort claims arising from the performance of LOGCAP III. Am. Compl. ¶29. Exacerbating audit costs, the Defense Contract Audit Agency had decided to audit every invoice, and the process was expected to last eight to ten years. Id. ¶¶ 26-27.

Plaintiff did not submit the requested proposal, but instead filed a bid protest with the Government Accountability Office (GAO). Id. ¶¶ 44-45. Among other things, KBR argued that the Army was improperly soliciting a fixed price proposal, and that the task order to be awarded was beyond the scope of the expired LOGCAP III contract. Id. ¶ 45; DA 10. The GAO dismissed the protest on March 27, 2013, on the ground that KBR’s claims concerned matters of contract administration and thus could not be heard under the GAO’s bid protest jurisdiction. See DA 11-12. The Army gave KBR a new deadline of April 3, 2013, for submitting a closeout proposal. Am. Compl. ¶ 54. Plaintiff did not submit a proposal by that date, and the following day filed a complaint in our court. See Compl. After the government moved to dismiss the complaint, an amended complaint was filed. See Am. Compl.

*767 Plaintiff alleges that the government’s request for a proposal concerning reimbursement of closeout costs constitutes a new procurement, which it challenges under our bid protest jurisdiction over objections to solicitations, and to violations of statute or regulation in connection with a procurement. Id. ¶¶ 1, 7 (citing 28 U.S.C. § 1491(b)(1)). 2 The complaint contains five separate counts. First, KBR alleges that the Army’s decision to reimburse closeout costs on a firm-fixed price basis was unreasonable and violates the applicable provisions of the Federal Acquisition Regulation (FAR). See Am. Compl. ¶¶ 31-32 (citing 48 C.F.R. §§ 16.103(b), 16.301-2); id. ¶¶ 34, 56-65. Second, plaintiff argues that the Army’s request is an improper attempt to increase the scope and period of performance of Task Order 160, which plaintiff contends expired in December, 2011. Id. ¶¶ 66-71. Third, KBR argues that the Army’s request would extend the performance period of LOGCAP III beyond December, 2011, in violation of a statutory limit on the duration of ID/IQ contracts. Id. ¶¶ 72-77.

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Kellogg Brown & Root Services, Inc. v. United States, 117 Fed. Cl. 764, 2014 U.S. Claims LEXIS 747, 2014 WL 3846056 (uscfc 2014).

117 Fed. Cl. 764 (Kellogg Brown & Root Services, Inc. v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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