Vfa, Inc. v. United States

118 Fed. Cl. 735, 2014 WL 5462563
CourtUnited States Court of Federal Claims
DecidedOctober 29, 2014
Docket14-173C
StatusPublished
Cited by6 cases

This text of 118 Fed. Cl. 735 (Vfa, 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
Vfa, Inc. v. United States, 118 Fed. Cl. 735, 2014 WL 5462563 (uscfc 2014).

Opinion

Bid Protest; DoD’s Sustainment Management System; Subject Matter Jurisdiction; Standardization Decision; Distributed Solutions; Definition of Procurement.

OPINION AND ORDER

WHEELER, Judge.

Plaintiff VFA, Inc. (“VFA”) is a provider of software and process solutions that can be used to assess and manage the condition of facilities at military installations. VFA filed this action as a bid protest to challenge the decision of the Department of Defense (“DoD”) to standardize its facility condition assessment needs through the Sustainment Management System (“SMS”). The U.S. Army Corps of Engineers Construction Engineering Research Laboratory (“CERL”) developed the SMS software suite over many years, and the DoD claims ownership of SMS. The DoD uses SMS in making decisions about sustainment, restoration, and modernization of its facilities. VFA owns and markets a similar software product, and also provides inspection services for its customers. On September 10, 2013, the Under Secretary of Defense for Acquisition, Technology, and Logistics issued a memorandum to standardize the use of the SMS program at all of DoD’s military installations.

VFA filed a bid protest in this Court on March 4, 2014, alleging that the DoD’s standardization decision excludes VFA and others from competing for contracts to provide facilities management software, in violation of the Competition in Contracting Act, 10 U.S.C. § 2304 (“CICA”). Simply put, VFA contends that the DoD should be conducting competitive procurements for this software product, and that the September 2013 decision to standardize without any competition was arbitrary and capricious. On March 26, 2014, Defendant filed the certified administrative record, and on April 21, 2014, VFA moved for judgment on the administrative record. On May 12, 2014, the Government filed a motion to dismiss VFA’s protest for lack of jurisdiction and lack of standing. The Government argues that an internal standardization decision is not a “procurement” for purposes of the Court’s Tucker Act jurisdiction, and consequently VFA is not an interested party who may challenge such a decision. In the alternative, the Government filed a crpss-motion for judgment on the administrative record, arguing that the agency had a rational basis for its decision.

The issue presented in this case is whether the Government must conduct a competitive *737 procurement before using something that it already owns. By analogy, if the Government owned an apple orchard, must it go to the market to compare prices of other apples before picking in its orchard? Or, if the Government owned a fleet of cars, must it solicit prices from Hertz and Avis before driving the cars it already possesses? Although the Federal Circuit’s broad interpretation of “procurement” in Distributed Solutions, Inc. v. United States, 539 F.3d 1340, 1345-46 (Fed.Cir.2008) may make this issue worthy of discussion, in this ease there was no procurement at all. To the extent CICA had any application, it would have come into play at the time of the software’s original development, not at the time of intended use after the product had been developed.

As will be explained, the facts in this case were sufficiently muddled that the Court afforded VFA limited discovery regarding CERL’s development of the SMS program, and the way in which SMS is used among the various military departments. The Court permitted document production and a deposition of Mr. Lance Marrano, the SMS Program Manager for CERL. This fact discovery occurred following the Government’s submission of Mr. Marrano’s declaration with a reply brief in support of its motion to dismiss. Discovery consumed more time than is typical in a bid protest, but proved useful in clarifying the relevant facts. The Court also carefully considered VFA’s reliance on “standardization” decisions from this Court, and on “insourcing” decisions where this and other courts have taken jurisdiction to review agency actions bringing service contract work in house. However, following full development of the ease, the Court finds that the DoD’s decision to use an SMS program it owns instead of conducting a competitive procurement is not an action that can be challenged in this Court. Accordingly, the Court grants Defendant’s motion to dismiss VFA’s complaint.

Factual Background

CERL’s development of the SMS program began in 1975, almost 40 years ago, and is well-documented by the Government’s patents. See Administrative Record (“AR”) 1, 4, 7, 41, 1460-507, 2037-38. In the mid-1970s, CERL issued reports identifying significant building and asset management problems, prompting the need for a property management software solution. See AR 145, 177. As no suitable management systems were then available, the Government began funding the creation of its own software program. Id. Various modules of the SMS have been developed over many years, beginning with PAVER in 1977 for pavements and RAILER in 1988 for railroads. AR 41; Def.’s Mot. to Dismiss at 3. BUILDER was first released in 1990 to address real property management. Id. CERL and its contractors continue to develop and maintain these modules-today. Def.’s Mot. to Dismiss at 3.

Beginning in 2007, some of the major DoD departments began implementing various modules of the SMS program. Id. The Army, through regulation AR420-1, designated PAVER, RAILER, and ROOFER as the only acceptable condition assessment tools for their respective asset categories. AR 43, 557, 574-75, 579. Also in 2007, the DoD issued a policy memorandum identifying PAVER and RAILER as the data format standards for pavements and rails when managing linear segmentation of property. AR 43. In 2008, the Marine Corps fully implemented BUILDER at all of its installations. Id. In 2009, the Navy adopted BUILDER to replace commercial software that did not meet its requirements. AR 44. In 2011, the Defense Logistics Agency approved BUILDER for its facility condition assessments, and the Air Force also began expanding the use of BUILDER. AR 44-45. In 2012, the Army and Army Medical Command conducted BUILDER pilot programs. AR 46. In 2011, Fiateeh, a construction industry innovation organization, awarded the BUILDER module its Celebration of Engineering and Technology Innovation award for its widespread adoption and the nearly 75 percent annual savings it created for the Navy in its shore-side facility condition assessments. AR 1518-19.

In a federal agency as large as DoD, it became increasingly apparent that multiple and different facilities condition assessment tools across DoD installations generated inconsistent and incomparable data. Def.’s *738 Mot. to Dismiss at 4. For example, in 2006, the DoD commissioned a report from Black & Veateh consultants, which concluded that facilities condition assessment “methodologies differed, sometimes substantially, between Defense Components and the type of information collected [ ] was therefore different.” AR 330. These differences made “direct comparison of the results ... difficult.” AR 331. A 2007 Booz Allen & Hamilton report reached similar conclusions. AR 1018-19.

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Cite This Page — Counsel Stack

Bluebook (online)
118 Fed. Cl. 735, 2014 WL 5462563, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vfa-inc-v-united-states-uscfc-2014.