Per Aarsleff A/S v. United States

829 F.3d 1303, 2016 U.S. App. LEXIS 12711, 2016 WL 3869790
CourtCourt of Appeals for the Federal Circuit
DecidedJune 23, 2016
Docket2015-5111; 2015-5112; 2015-5135; 2015-5143
StatusPublished
Cited by94 cases

This text of 829 F.3d 1303 (Per Aarsleff A/S v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Per Aarsleff A/S v. United States, 829 F.3d 1303, 2016 U.S. App. LEXIS 12711, 2016 WL 3869790 (Fed. Cir. 2016).

Opinions

Concurring opinion filed by Circuit Judge REYNA.

WALLACH, Circuit Judge.

In this government contract bid protest appeal, three unsuccessful bidders challenged the decision of the United States Department of the Air Force Space Command (“Air Force”) to award a contract to the successful bidder, Exelis Services A/S (“Exelis”), for the operation and maintenance of an Air Force base in Greenland. The United States Court of Federal Claims (“Claims Court”) granted the challengers’ motions for judgment on the administrative record and enjoined the Air Force from proceeding under the contract with Exelis. The Claims Court found the award to Exelis — a wholly-owned subsidiary of a U.S.-based company — was contrary to the terms of the bid solicitation, which required that bidders “not be registered as a subsidiary of [a] foreign [i.e., non-Danish] company.” Per Aarsleff A/S v. United States, 121 Fed.Cl. 603, 612 (2015) (capitalization omitted). Because we conclude Exelis satisfied the disputed eligibility term of the bid solicitation, as properly interpreted, we reverse.

BACKGROUND

Thule Air Base is a United States Air Force base situated in a remote area of northwestern Greenland, a largely self-governing entity of the Kingdom of Denmark (“Denmark”). Exceptions to Greenland’s self-governance include foreign policy and defense, which remain under the control of the Danish government. In 1951, the United States and Denmark entered into an agreement that led to the establishment of the Thule Air Base and provided the United States rent-free use of the land on which the base is situated. A 1991 Memorandum of Understanding between the United States and Denmark, as amended following discussions in 2008 and 2009, provides that “either [p]arty may award contracts to commercial enterprises for goods and services, including construction projects, in Greenland, and shall procure directly from Danish/Greenlandic sources” whenever “feasible.” Id. at 609 (citation omitted).

In 2013, the Air Force and United States Department of State (“State Department”) entered into negotiations with the Danish Ministry of Finance to consider what criteria would be used to appropriately classify an entity as “Danish/Greenlandic” for the Thule Air Base bid solicitation. Following an expression of concern by the Danish Ministry of Foreign Affairs that an eligibility determination by the Danish government could be problematic under European Union procurement regulations,1 it was suggested that Greenland, which was not a European Union member, take the lead in eligibility criteria formulation. However, because the government of Greenland was a partial owner of Greenland Contractors I/S (“Greenland Contractors”), the incumbent contractor supporting Thule Air Base, an eligibility determination by the government of Greenland would create a conflict of interest. Id. The State Department therefore decided to itself establish a “simple, transparent checklist of requirements” to determine eligibility. Id. at 610 (internal quotation marks and citation omitted).

During the course of this effort, [[name redacted]], a State Department employee stationed at the U.S. Embassy in Denmark, informed the Air Force contracting officer by email that “[i]n the searchable part of the CVR [Det Central Virksom-hedsregister, i.e., the Danish central business register] there is an information point called ‘type of company/virksomhedsform’ that [has] ‘subsidiary of foreign company1 as a possibility, so there is a way to see if [1307]*1307the company is fully registered as Danish or acting as a foreign subsidiary in Denmark.” J.A. 25,128251. As a result, the Air Force was under the belief, later shown to be mistaken, that the CVR provided a ready means for determining whether a company was a subsidiary of a foreign company. According to Copenhagen Arctic A/S (“Copenhagen Arctic”), one of the three unsuccessful bidders, the CVR contained an option to indicate whether a firm was registering as “[fjilialer af uden-landske aktieselskaber (in English: [b]mnch of a foreign owned public limited company).” Per Aarsleff, 121 Fed.Cl. at 610 n. 8 (emphasis added). Greenland Contractors asserts the State Department employee, [[name redacted]], “appears to have mistranslated the word ‘filial’ in Danish to mean ‘subsidiary,’ when that word in fact means ‘branch’ or ‘branch office.’” Corrected Confidential Opening and Response Brief of Cross-Appellant Greenland Contractors I/S (“Greenland Contractors Br.”) 10 (footnote omitted).

The Air Force issued a draft solicitation specifying, as a condition of eligibility, that bidders provide a

[corporation certificate (Selskabscertifi-kat m. oblat) verifying that your company is registered as a business in the Kingdom of Denmark. (Det Central Virksomhedsregister (CVR); Det Grpnlandske Erhervsregister (GER); Skráseting Fproya (Skrás. Nr.)) NOTE: THE REGISTERED OFFICE OF THE ENTERPRISE SHALL BE IN THE KINGDOM OF DENMARK AND SHALL NOT BE REGISTERED AS A SUBSIDIARY OF FOREIGN COMPANY.

Per Aarsleff, 121 Fed.Cl. at 611-12. The draft solicitation further required a “[s]igned letter from an officer of a bank within the Kingdom of Denmark verifying that your company conducts business with that institution.” Id. at 612.

When a potential bidder asked “[w]hat do you mean by ‘not be registered’?,” id. the Air Force posted the following answer, which echoed the email of the State Department employee, [[name redacted]]: “In the searchable part of the CVR [ ] there is an information point called ‘type of company/virksomhedsform’ that has ‘subsidiary of foreign company1 as a possibility, so there is a way to see if the company is fully registered as Danish or acting as a foreign subsidiary in Denmark.” Per Aarsleff A/S (Per Aarsleff (GAO)), B-410782 et al., 2015 WL 1004252, at *8 (Comp. Gen. Feb. 18, 2015). When an Exelis partner asked whether a company would be eligible to bid if it is a “Danish registered company ... owned by a foreign company but” can show “[i]n the CVR register [it] is registered as. a[n] A/S[2] (limited company),” the Air Force replied by copying the eligibility requirements set forth in the draft solicitation and did not answer the question directly. Per Aarsleff, 121 Fed.Cl. at 612 (footnoted added). The final solicitation contained the same requirements set forth in the draft solicitation.

Four bidders — Per Aarsleff A/S (“Per Aarsleff’), Copenhagen Arctic, Exelis, and incumbent Greenland Contractors — each submitted a bid in response to the final solicitation. Exelis, a wholly-owned Danish subsidiary of United States-based Veetrus Systems Corporation (“Veetrus”), submitted the lowest bid and was awarded the contract. The three unsuccessful bidders each filed protests with the Government Accountability Office (“GAO”), asserting Exelis “was incorporated in Denmark only shortly before proposal submission and is a wholly-owned subsidiary of Excelis Systems Corporation [now known as Veetrus], a United States based company.” Per Aar-[1308]*1308sleff (GAO), 2015 WL 1004252, at *6. The GAO denied the protests, id. at *16, concluding the solicitation “was clear on its face as to the issue of registration” and that “nothing in the solicitation provides for consideration of [ownership or control],” id. at *8.

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829 F.3d 1303, 2016 U.S. App. LEXIS 12711, 2016 WL 3869790, Counsel Stack Legal Research, https://law.counselstack.com/opinion/per-aarsleff-as-v-united-states-cafc-2016.