Public Warehousing Co. K.S.C. v. Defense Supply Center Philadelphia

489 F. Supp. 2d 30, 2007 U.S. Dist. LEXIS 36953, 2007 WL 1492460
CourtDistrict Court, District of Columbia
DecidedMay 22, 2007
DocketCivil Action 07-0502 (JDB)
StatusPublished
Cited by18 cases

This text of 489 F. Supp. 2d 30 (Public Warehousing Co. K.S.C. v. Defense Supply Center Philadelphia) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Public Warehousing Co. K.S.C. v. Defense Supply Center Philadelphia, 489 F. Supp. 2d 30, 2007 U.S. Dist. LEXIS 36953, 2007 WL 1492460 (D.D.C. 2007).

Opinion

MEMORANDUM OPINION

BATES, District Judge.

Plaintiff Public Warehousing K. S.C., through its subsidiary PWC Logistics Services (collectively, “PWC”) is a United States government contractor providing food products to the U.S. military in the Middle East pursuant to contracts with the Defense Supply Center Philadelphia (“DSCP”). Plaintiff brings this action against DSCP, the Defense Logistics Agency, and the Department of Defense seeking relief from (1) DSCP’s alleged refusal to provide other government procurement agencies with past performance evaluations and information on the DSCP contracts and (2) DSCP’s inclusion of allegedly improper information in one recent evaluation. Plaintiff contends that DSCP’s actions violate the Federal Acquisition Regulations, 48 C.F.R. §§ 42.1502-.1503, and are arbitrary and capricious in violation of the Administrative Procedure Act, 5 U.S.C. § 706. Plaintiff further contends that DSCP’s actions result in constructive debarment of PWC from the government contracting industry in violation of its right to due process.

Plaintiff seeks a preliminary and permanent injunction against DSCP Defendants have moved to dismiss for lack of subject matter jurisdiction or, in the alternative, for failure to state a claim upon which relief can be granted pursuant to Fed. R.Civ.P. 12(b)(1) and (b)(6). 1 The parties have agreed to consolidate plaintiffs motion for preliminary injunction with plaintiffs request for a permanent injunction and final resolution of this action pursuant to Fed.R.Civ.P. 65(a)(2), and hence a consolidated hearing on the motions was held on April 26, 2007. For the reasons explained below, the Court will grant defendants’ motion to dismiss for lack of subject matter jurisdiction, and will deny plaintiffs motion for a preliminary or permanent injunction.

BACKGROUND

Plaintiff and DSCP have entered into three Subsistence Prime Vendor contracts covering the provision of food products and related services to U.S. military dining facilities in the Middle East. Decl. of Toby Switzer ¶¶ 5-7 (PL’s Mem., Ex. B) (“Swit-zer Decl.”). These contracts are referred to as PV1 (Contract No. SP0300-03-D-3061), PV Bridge (Contract No. SPM300-05-D3119), and PV2 (Contract No. SPM300-05-D-3128). Id. The first contract, PV1, had an estimated value of $1.4 billion, and expired on February 15, 2005. Id. ¶ 6; Contractor Performance Assessment Report for PV1 (Pl.’s Mem., Ex. K). The second contract, PV Bridge — in essence, a “bridge” contract for the continuation of services until the finalization of the next contract — had an estimated value of $1.5 billion, and expired on December 4, 2005. Switzer Decl. ¶ 2; Contractor Performance Assessment Report for PV *32 Bridge (Defs.’ Suppl. Mem., Ex. 2). The third contract, PV2, has an estimated value of $14 billion — approximately 90 percent of plaintiffs overall revenues from government contracts. Switzer Decl. ¶ 7. Plaintiff is currently providing services pursuant to PV2, which is scheduled to expire in June 2007. Id.; see also Tr. of Mot. Hr’g at 11 (Apr. 26, 2007) (“Hr’g Tr.”). DSCP has notified plaintiff, however, that DSCP intends to exercise its option to renew the contract for a period of one year. See Mem. from Dlugokecki to Switzer dated Mar. 22, 2007 (Defs.’ Notice of Filing, Ex. 1) (“Notice of Intent Mem.”). 2

The Federal Acquisition Regulations on “Contractor Performance Information” are set forth at 48 C.F.R. subpart 42.15. Section 42.1502(a) provides that agencies “shall” prepare an evaluation of contractor performance at the time the work under the contract is completed. Id. § 42.1502(a). It further recommends that “interim” evaluations “should” be prepared where the contract exceeds one year, in order to provide current information for source selection purposes. Id. In addition to interim and final evaluations, “past performance information” may be developed in the form of interviews or comment documents to assist in other contracting decisions. Id. § 42.1503(c). By regulation, agencies “shall” share past performance information with other agencies to support future award decisions. Id. Past performance information is weighed as an “indicator of an offeror’s ability to perform the contract successfully,” 48 C.F.R. § 15.305(a)(2)(i), and is thus “a significant, and often the most significant, factor in the evaluation process.” See Decl. of Pamela Cooper ¶ 6 (Pl.’s Mem., Ex. H).

PWC has received very positive feedback from DSCP until quite recently. The final DSCP performance evaluation on the PV1 contract assigned PWC an overall rating of “very good to exceptional,” and commented that, if given a choice, DSCP “definitely would award to [PWC] today” given its demonstrated ability to execute the promises made in its proposal. CPAR for PV Bridge at 5 (Pl.’s Mem., Ex. K). The Defense Logistics Agency awarded PWC the “new contractor of the year” award in 2004, and DSCP has recognized plaintiff for outstanding customer service three years in a row. Switzer Decl. ¶ 8. DSCP also sent PWC a letter of appreciation for its “significant accomplishments” in the performance of the PV Bridge contract (see Letter from Haverstick to Bland dated Nov. 18, 2005) (Pl.’s Mem., Ex. N), and PWC anticipated receiving a positive performance evaluation for its successful completion of that contract, too. However, the issuance of that evaluation was delayed until after this litigation commenced, and fell short of PWC’s expectations. See infra at 6.

Indeed, the relationship between DSCP and PWC reached a turning point in or around January 2007 when the Department of Justice (“DOJ”) initiated an investigation into PWC’s activities. Around that time, DOJ and the U.S. Attorney’s Office in Atlanta, Georgia began investigating whether certain “prompt payment” discounts that PWC received from its suppliers had been improperly withheld from DSCP and whether PWC has an affiliation with one of its suppliers, The Sultan Center, that might suggest improper pricing. Switzer Decl. ¶ 12; see also Am. Compl. ¶¶ 11-12. PWC denies that it has engaged in any wrongdoing, and has proffered a *33 detailed explanation to DSCP and the Court in its defense. 3 See Switzer Decl. ¶¶ 12-15; Pl.’s Mem. at 7-8.

In the meantime, DSCP has continued to receive requests for past performance information from other federal agencies who are considering PWC’s bids for proposed federal contracts. See Pl.’s Opp. to Defs.’ Mot. to Dismiss, Ex. A (“Pl.’s Opp.”).

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Bluebook (online)
489 F. Supp. 2d 30, 2007 U.S. Dist. LEXIS 36953, 2007 WL 1492460, Counsel Stack Legal Research, https://law.counselstack.com/opinion/public-warehousing-co-ksc-v-defense-supply-center-philadelphia-dcd-2007.