Pernix Group, Inc. v. United States

121 Fed. Cl. 592, 2015 U.S. Claims LEXIS 729, 2015 WL 3616114
CourtUnited States Court of Federal Claims
DecidedJune 10, 2015
Docket15-420 C
StatusPublished
Cited by7 cases

This text of 121 Fed. Cl. 592 (Pernix Group, 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.

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Pernix Group, Inc. v. United States, 121 Fed. Cl. 592, 2015 U.S. Claims LEXIS 729, 2015 WL 3616114 (uscfc 2015).

Opinion

*594 OPINION AND ORDER

Bush, Senior Judge.

This bid protest is before the court on defendant’s and intervenor-defendant’s motions to dismiss brought under Rule 12(b)(1) of the Rules of the-United States Court of Federal Claims (RCFC). These motions have been fully briefed. For the reasons stated below, defendant’s and intervenor-de-fendant’s motions to dismiss are granted.

BACKGROUND 2

1. Introduction

Plaintiff Pernix Group, Inc. (Pernix) filed its bid protest on April 27, 2015. The protest seeks declaratory and injunctive relief regarding the proper interpretation of 22 U.S.C. § 4852(c)(2)(E) (2012) in four procurements currently, underway under the aegis of the United States Department of State (State). According to the complaint, the Government Accountability Office (GAO) recently. issued a decision advising State to interpret § 4852 in a manner that would eliminate Pernix from consideration in these procurements. The primary question before the court is whether this protest is ripe, given that State has not yet acted, and has not indicated how it will act, in response to GAO’s decision.

Caddell Construction Company (Caddell) has intervened in this protest as an interve-nor-defendant and Framaco International, Inc. (Framaco) has intervened as an interve-nor-plaintiff. State’s official response to the GAO decision is not due until June 19, 2015. The government has agreed to stay award in the procurement which was the focus of the-GAO protest through June 12, 2015. The court determined that oral argument on the ripeness issue was unnecessary.

II. GAO and this Court Have Disagreed on the Law Governing Embassy Construction Projects

A. The Governing Statute

State procurements for embassy construction are subject to 22 U.S.C. § 4852 (2012), titled “Diplomatic construction program.” Where adequate competition exists, contractors must be either “United States persons” or “qualified United States joint venture persons” in order to be eligible for such construction contracts. Id. § 4852(a). Only the statutory definition of “United States person” is relevant to this bid protest.

More specifically, only one element or requirement of the definition of “United States person” is at issue here:

(2) the term “United States person” means a person which—
(E) with respect to a construction project under subsection (a)(1) of this section, has achieved total business volume equal to or greater than the value of the project being bid in 3 years of the 5-year period before the date [of the issuance of the solicitation.]

22 U.S.C. § 4852(c)(2). Thus, under the plain meaning of the statutory terms, a minimum business volume threshold is established which screens out ineligible contractors. Since 2007, however, GAO and this court have diverged as to the proper formula to employ in determining the “total business volume” minimum threshold.

B. GAO’s Interpretation of the Total Business Volume Requirement

In March of 2007 Caddell filed a protest at GAO concerning the award of an embassy construction contract. Caddell Constr. Co., B-298949.2, 2007 CPD ¶ 119, 2007 WL 1893209, at *3 (Comp. Gen. June 15, 2007) (“Caddell I ”). In that protest, Caddell challenged State’s “approach of adding together 3 years of a company’s business receipts” to determine the total business volume of an offeror. Id. at *8. In essence,' State’s interpretation of the phrase “total business volume equal to or greater than the value of the project being bid in 3 years of the 5-year period before the date [of the issuance of the *595 solicitation],” 22 U.S.C. § 4852(c)(2)(E), allowed a company to meet the minimum threshold by aggregating three years of business receipts. Caddell I, 2007 WL 1893209, at *8. This approach can be described as a “cumulative” total business volume formula.

GAO agreed with Caddell that State’s cumulative total business volume formula was not correct and opined:

We think the ordinary and common meaning of these words is that eligible offerors will have achieved a business volume equal to or greater than the value of the project in each of 3 years within the 5-year period.

Id. at *9 (emphasis added). Thus, GAO adopted an interpretation of total business volume that requires that the minimum threshold be met annually for three individual years, not cumulatively through aggregation. GAO’s formula can therefore be described as an “annual” total business volume formula. After giving consideration to other means of statutory interpretation beyond an analysis of the plain text, GAO concluded:

[W]e think the agency’s interpretation of this provision — looking to an entity’s highest cumulative 3-year business volume within the previous 5-year period — conflicts with the [legislative history]. In short, we find that [State’s] interpretation of this statute is inconsistent with its ordinarily understood meaning, and with the legislative concerns that led to the statute’s enactment.

Id. at *10.

C. The United States Court of Federal Claims Disagrees with GAO and Adopts the Cumulative Total Business Volume Formula

Another bid protest filed later that year with this court raised the same issue, i.e., whether the total business volume threshold must be met annually, or cumulatively, in three of the five years before the issuance of the solicitation. Grunley Walsh Int’l, LLC v. United States, 78 Fed.Cl. 35 (2007). There, the protestor had been adversely affected by State’s decision to follow Caddell I and to adopt an annual total business volume threshold interpretation of § 4852(c)(2)(E). Grunley Walsh, 78 Fed.Cl. at 38. The court observed that for pure questions of law this court accords no deference to GAO opinions, and noted that GAO decisions are not binding on this court. Id. at 39 (citations omitted).

Like GAO, this court began its analysis with the plain text of the statute. Unlike GAO, the court reached this conclusion:

The word “total” before the term “business volume” indicates that the requirement is met by adding three out of the past five years to equal the offeror’s “total business volume.” If the section is read without the word “total,” it is completely unclear whether the three years are to [be] measured individually or cumulatively.

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121 Fed. Cl. 592, 2015 U.S. Claims LEXIS 729, 2015 WL 3616114, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pernix-group-inc-v-united-states-uscfc-2015.