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MD Helicopters Inc. v. United States

Jan 24, 2020
435 F. Supp. 3d 1003 (D. Ariz. 2020)


No. CV-19-02236-PHX-JAT


MD HELICOPTERS INCORPORATED, Plaintiff, v. UNITED STATES of America, et al., Defendants.

Brett William Johnson, Colin Patrick Ahler, Derek Conor Flint, Eric Harmon Spencer, Snell & Wilmer LLP, Phoenix, AZ, for Plaintiff. Anne Elizabeth Nelson, US Attorneys Office, Phoenix, AZ, James Mackey Ives, US Dept. of the Army US Legal Services Agency, Fort Belvoir, VA, for Defendants.

Brett William Johnson, Colin Patrick Ahler, Derek Conor Flint, Eric Harmon Spencer, Snell & Wilmer LLP, Phoenix, AZ, for Plaintiff.

Anne Elizabeth Nelson, US Attorneys Office, Phoenix, AZ, James Mackey Ives, US Dept. of the Army US Legal Services Agency, Fort Belvoir, VA, for Defendants.


James A. Teilborg, Senior United States District Judge

Plaintiff MD Helicopters, Inc. ("MDHI") alleges that Defendants the United States of America, the United States Department of the Army, and the Secretaries of Defense and the Army in their official capacities (collectively, "the Army"), violated the Administrative Procedure Act ("APA") by giving arbitrary and capricious reasons for not selecting MDHI to participate in the Future Attack Reconnaissance Aircraft Competitive Prototype ("FARA CP") program. (Doc. 135 at 1–2). It seeks to compel "the Army to advance MDHI's proposal" to Phase 1 of the FARA CP program. (Doc. 1 at 5). The parties have filed cross-motions for summary judgment on this claim.


A. Statutory Background: Other Transaction Authority

At the dawn of the space race, the Soviet Union successfully launched the Sputnik satellite into Earth's orbit, prompting a growing national concern that the United States had fallen behind its rivals technologically. Heidi M. Peters, Cong. Research Serv., R45521, Department of Defense Use of Other Transaction Authority: Background, Analysis, and Issues for Congress 1 (2019), In response, Congress passed the National Aeronautics and Space Act of 1958, which established the National Aeronautics and Space Administration ("NASA"). Id. To enable NASA to pursue its mission without encountering unnecessary delay, Congress empowered it with authority to "enter into and perform contracts, leases, cooperative agreements, or other transactions as may be necessary in the conduct of its work and on such terms as it may deem appropriate." National Aeronautics and Space Act of 1958, Pub. L. No. 85-568, § 203(5), 72 Stat. 426, 430 (1958) (emphasis added). Congress has since extended the authority to enter into "other transactions" ("OTs") to several other executive agencies, including the Department of Defense ("DoD"). Peters, supra , at 1. As the Army puts it, OTs have several benefits in this context, including:

(a) attracting non-traditional defense contractors to propose prototype projects; (b) encouraging traditional defense contractors to use new and innovative techniques and processes to accelerate development of technologies that are relevant to both defense and commercial markets; and (c) using flexible business

arrangements to accelerate development and transition to production.

(Doc. 70 at 6).

Two statutes currently govern DoD's authority to enter into OTs. The first authorizes the "Secretary of Defense and the Secretary of each military department" to "enter into transactions (other than contracts, cooperative agreements, and grants) ... in carrying out basic, applied, and advanced research projects." 10 U.S.C. § 2371(a). The second authorizes OTs for "carry[ing] out prototype projects that are directly relevant to enhancing the mission effectiveness of military personnel and the supporting platforms, systems, components, or materials proposed to be acquired or developed by [DoD], or to improvement of platforms, systems, components, or materials in use by the armed forces." 10 U.S.C. § 2371b(a)(1). This second statute also authorizes the government to enter into an OT for follow-on production, which may be awarded without using competitive procedures if certain conditions are met. 10 U.S.C. § 2371b(f).

B. Factual Background: The FARA CP Program and MDHI's Proposal

In October of 2018, the U.S. Army Contracting Command–Redstone issued Solicitation No. W911W6-19-R-0001 ("the Solicitation") for proposals for the FARA CP. (Docs. 1 at 2; 71 at 3; 136 at 2). Because the Army identified the need to act quickly with respect to updating its helicopter fleet, (see Doc. 42 at 3), it structured the FARA CP program "as a phased approach with aggressive deadlines," (Doc. 136 at 2). In particular, the Army elected to use OTs for prototype projects under 10 U.S.C. § 2371b to award funding to the selected participants. (Doc. 36-3 at 3–5, 9; see also Doc. 80 at 1, 5).

As the Solicitation outlined, the FARA CP program will progressively down-select among candidates until potentially only one entity remains. That process would begin with prospective bidders submitting proposals to the Army. (Doc. 36-3 at 3). From these, the Army would select several entities for the award of OT agreements. (Id. at 4–5). The Army would then advance the recipients of the OT agreements ("Performers") to Phase 1, giving them "nine months to develop preliminary designs and provide the [Army] team with the data and insight required for the [Army] to down-select to two (or possibly more based on funding available) Performers for Phase 2." (Id. at 4–5). The Solicitation estimated that, under the OT agreements, "[e]ach Phase 1 Performer [would] receive approximately $15 [million] between" fiscal years ("FYs") 2019-20. (Id. at 9). In later phases, Performers would design, build, and test their proposed aircraft before providing them to the Army for further evaluation. (Id. at 5–6). "If executed," the final phase of the FARA CP program contemplates the potential award of a follow-on production OT to a Performer for entry into subsequent full system integration, qualification, and production efforts. (Id. at 6).

In response to the Solicitation, MDHI submitted a proposal ("the Proposal") to participate in the FARA CP program. (Doc. 1 ¶ 7). After evaluating the Proposal, the Army notified MDHI that it was not selecting MDHI to participate in the FARA CP program because "MDHI's proposed design purportedly did not meet the Solicitation's requirements." (Id. ¶ 8). Shortly thereafter, MDHI filed a "bid protest objecting to the Army's ... action with the Government Accountability Office ("GAO")." (Id. ¶ 9). The GAO dismissed the protest, reasoning that while it had jurisdiction to review "a timely pre-award protest that an agency is improperly using its [OT] authority to procure goods or services," the GAO was not statutorily authorized to review OTs because they are not "procurement contracts." (Doc. 13-1 at 3); see also 4 C.F.R. § 21.5(m) ("GAO generally does not review protests of awards, or solicitations for awards, of agreements other than procurement contracts...."). MDHI then filed a complaint in this Court, alleging that the Army "failed to properly evaluate the Proposal" and "arbitrarily and capriciously ignored or misunderstood important aspects of the Proposal." (Doc. 1 ¶ 15).


Before reaching the merits, this Court must first address the question whether it has subject-matter jurisdiction over this action. See Belleville Catering Co. v. Champaign Mkt. Place, L.L.C. , 350 F.3d 691, 693 (7th Cir. 2003) (explaining that, notwithstanding the fact that no party contested jurisdiction, "inquiring whether the court has jurisdiction is a federal judge's first duty in every case"). The parties agree that this Court possesses subject-matter jurisdiction to review the Army's decision under 28 U.S.C. § 1331 and 5 U.S.C. § 702. (Docs. 66 & 70). Intervenors to this action have, however, argued that this Court lacks jurisdiction for two independent reasons. Citing Cooper v. Haase , 750 F. App'x 600, 601 (9th Cir. 2019) and Gabriel v. General Services Administration , 547 F. App'x 829, 831 (9th Cir. 2013), intervenors assert that "district courts lack jurisdiction over APA claims challenging the award of ... contracts." (Doc. 43 at 8). Separately, citing this Court's ruling in Fire-Trol Holdings L.L.C. v. United States Department of Agriculture Forest Service , No. CV-03-2039-PHX-JAT, 2004 WL 5066232, at *3–4 (D. Ariz. Aug. 13, 2004), intervenors argue that the sunset provision of the Administrative Dispute Resolution Act of 1996 ("ADRA") eliminated district courts' jurisdiction to hear the kind of "bid protest" cases that they formerly could under their "Scanwell jurisdiction." (Doc. 43 at 8).

In response, MDHI claims that, unlike Cooper and Gabriel , this Court may properly exercise jurisdiction because MDHI has not asserted a contract with the government. (Doc. 66 at 3). The parties argue further that Plaintiff's claim is not procurement-related because OTs are "not procurement contracts" and the ADRA's sunset provision terminated district court jurisdiction only over procurement matters. (Docs. 66 at 2–3; 70 at 10–12).

a. Legal Standard

"Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause." Ex Parte McCardle , 74 U.S. (7 Wall.) 506, 514, 19 L.Ed. 264 (1868). " ‘Federal courts are courts of limited jurisdiction,’ possessing ‘only that power authorized by Constitution and statute.’ " Gunn v. Minton , 568 U.S. 251, 256, 133 S.Ct. 1059, 185 L.Ed.2d 72 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) ). Because a court lacking subject-matter jurisdiction also lacks the power to decide a case, courts "have an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party." Arbaugh v. Y & H Corp. , 546 U.S. 500, 514, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006). "The United States, as sovereign, is immune from suit save as it consents...." United States v. Sherwood , 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058 (1941) ; see also Tucson Airport Auth. v. Gen. Dynamics Corp. , 136 F.3d 641, 644 (9th Cir. 1998) ("[A] suit against the United States must start from the ... assumption that no relief is available."). Therefore, when a plaintiff sues the Federal Government, Congress's consent to suit is a necessary "prerequisite for jurisdiction." United States v. Mitchell , 463 U.S. 206, 212, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983) ; see also Lane v. Pena , 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996) ("A waiver of the Federal Government's sovereign immunity must be unequivocally expressed in statutory text ...." (citations omitted)) (emphasis added); Dunn & Black, P.S. v. United States , 492 F.3d 1084, 1090 (9th Cir. 2007) (explaining that, typically, "[o]nly Congress enjoys the power to waive the United States' sovereign immunity") (citing Army & Air Force Exch. Serv. v. Sheehan , 456 U.S. 728, 734, 102 S.Ct. 2118, 72 L.Ed.2d 520 (1982) ); Brazil v. Office of Pers. Mgmt. , 35 F. Supp. 3d. 1101, 1116 (N.D. Cal. 2014) ("[A]n agency cannot waive sovereign immunity and thus alter federal court jurisdiction.") (citing Carlyle Towers Condo. Ass'n v. FDIC , 170 F.3d 301, 310 (2d Cir. 1999) ).

Although not itself a grant of jurisdiction, the APA waives sovereign immunity for certain claims brought under the aegis of 28 U.S.C. § 1331. Tucson Airport Auth. , 136 F.3d at 645. This limited waiver of sovereign immunity applies to claims that are not for money damages, do not seek relief expressly or impliedly forbidden by another statue, and for which no adequate remedy is otherwise available. Id.

b. MDHI's Requested Relief is Impliedly Forbidden by the Tucker Act

"[T]he Tucker Act ‘impliedly forbids’ declaratory and injunctive relief and precludes [an APA-based] waiver of sovereign immunity in suits on government contracts." N. Side Lumber Co. v. Block , 753 F.2d 1482, 1485 (9th Cir. 1985) ; see also Price v. U.S. Gen. Servs. Admin. , 894 F.2d 323, 324 (9th Cir. 1990). Thus, if the claim is "contractually-based, there is no jurisdiction." Tucson Airport Auth. , 136 F.3d at 646. This is true even if the action is brought under the APA. Price , 894 F.2d at 324. To determine whether a claim is contractually-based, courts look to "the source of rights upon which the plaintiff bases its claims, and ... the type of relief sought (or appropriate)." Gabriel , 547 F. App'x at 831 (quoting Doe v. Tenet , 329 F.3d 1135, 1141 (9th Cir. 2003) ).

MDHI attempts to distinguish the case at bar from Gabriel , but the facts are virtually identical. There, the plaintiff submitted an unsuccessful bid to purchase several lighthouses and subsequently sued for equitable relief against the General Services Administration ("GSA"). 547 F. App'x at 831. The Ninth Circuit explained that the plaintiff's "source of rights stem[med] from a potential contract with the GSA" because an injunction would have required the GSA to accept his bid and sell him the lighthouses. Id. Thus, the relief requested was "just another name for specific performance" and "the natural inference follow[ed] that a contractual remedy indicate[d] a contractually-based set of claims." Id.

MDHI seeks an order directing the Army to advance it to Phase 1 of the FARA CP program. (Doc. 1 at 5). As noted, under the Solicitation, the right of an entity to even participate in Phase 1—and thus to receive the accompanying funding award and prototype evaluation—turns on whether the Army awarded that entity an OT agreement. Therefore, if the OT agreement is a contract, then the conclusion seems inescapable that MDHI seeks to force the Army to award it a contract and to obtain rights flowing from an accepted bid—the kind of relief that the Tucker Act impliedly forbids before the district court.

MDHI argues that its "claim is not based on the Tucker Act or any express or implied contract" meaning " Cooper and Gabriel are irrelevant." (Doc. 66 at 3). To the extent that MDHI argues that the relief requested is not impliedly forbidden by the Tucker Act simply because MDHI invokes the APA, its argument is misplaced. Price , 894 F.2d at 324 ; see also Doe , 329 F.3d at 1141 ("The label that is attached to a claim is not conclusive, however."); Henderson v. U.S. Air Force, DMAFB , No. CIV 06-323-TUC-FRZ, 2007 WL 2081481, at *2 (D. Ariz. July 20, 2007) ("The substance of the Complaint and not Plaintiff's characterization, defines this Court's jurisdictional review...."). To the extent that MDHI argues that OTs are not contracts, however, its argument carries some persuasive force given that OTs are statutorily defined as transactions that are "other than contracts." 10 U.S.C. § 2371(a).

Nonetheless, this position is undermined by the fact that DoD guidance and the Congressional Research Service—in documents the Army itself relied on—take the position that the word "contracts" in 10 U.S.C. § 2371(a) means "procurement contracts." See Other Transactions Guide at 38; Peters, supra , at 2 ("Other transactions are legally binding contracts...."). Indeed, DoD's guidance states: "OT agreements are not procurement contracts, but they are legally valid contracts. They have all six legal elements for a contract ... and will be signed by someone who has the authority to bind the [F]ederal [G]overnment.... The terms and conditions can be enforced by and against either party." Other Transactions Guide at 38. In reality, these sources explain, 10 U.S.C. § 2371(a) refers to OTs as "other than contracts" to indicate that they are not subject to regulations, such as the Federal Acquisition Regulation, that usually govern the acquisition process. Other Transactions Guide at 38; Peters, supra , at 4. Even the Army's supplemental brief addressing jurisdiction implicitly recognizes that OTs are contracts, citing Protect Lake Pleasant LLC v. McDonald , 609 F. Supp. 2d 895 (D. Ariz. 2009) for the proposition that district courts retain jurisdiction under the ADRA's sunset provision in non-procurement contract cases. (Doc. 70 at 8).

The Other Transactions Guide is part of this Court's record, attached to the declaration of General Walter T. Rugen. (Doc. 42-1).

Importantly, Protect Lake Pleasant LLC 's analysis of the plaintiffs' claim that Maricopa County violated the Federal Property and Administrative Services Act of 1949 is distinguishable from MDHI's case because the plaintiffs sought only to prevent the construction of a marina and yacht club, not an order requiring the government to accept its bid. 609 F. Supp. 2d. at 904–15.

Despite the broad language used in these sources, this Court need not determine whether all OTs are contracts. Instead, this Court must look to the OT agreement at issue in this case. It is in examining the terms of the OT agreement—appended to the Solicitation—that it becomes clear that MDHI seeks the award of a contract and to obtain the benefits flowing from that contract.

The OT agreement governs virtually every aspect of the business relationship between the parties but, at its most basic level, it awards funds to the Phase 1 Performer. (Doc. 36-3 at 49). In exchange for those funds, the Phase 1 Performer "shall be responsible for performance of the work set forth in this Agreement at Attachment 1." (Id. at 51). Attachment 1 lists the Army's objectives for the FARA CP program and requires the Performer to:

• Define, design, build and test prototype aircraft that meet mandatory attributes and other performance requirements as described in System Performance Specification and Initial Capability Refinement Document....

• Collaboration with the [Army] on developing cost models, physics-based

engineering models and systems engineering models.

• Ground testing, flight envelope expansion and vehicle characterization testing necessary to develop data required to demonstrate the FARA CP capabilities and requirements.

• Data to support airworthiness and acquisition planning (e.g. manufacturing readiness level, supportability, suitability) for anticipated subsequent full system qualification and production activities.

(Id. at 83). Moreover, as indicated by the Solicitation, the award is a "[f]ixed amount OT," defined in the OT agreement as an arrangement in "which the awardee agrees to complete a prototype project for an agreed upon total price and where payments are not based on amounts generated from the awardee's financial or cost records." (Id. at 53). The OT agreement goes on to state that, in the event "estimated total program costs are projected to exceed the total amount of this Agreement," the Performer need not continue performance "unless[ ] and until the [Army] notifies the Performer in writing that the amount allotted by the [Army] has been increased and specifies an increased amount, which shall then constitute the total amount allotted by the [Army] to this Agreement." (Id. at 64). The OT agreement even establishes dispute resolution procedures in the event of a disagreement between the Army and the Performer. (See id. at 65–66).

There are myriad other aspects of the business relationship controlled by the OT agreement, including patent rights to inventions conceived during the FARA CP program, (id. at 66–70), the amount of access foreign firms or institutions may have to any of the findings and technology developed, (id. 73–75), disclosure of information, (id. at 79–80), and disposition of property acquired during the FARA CP program, (id. at 76–79). The OT agreement additionally indicates that, a Performer signing or accepting funds under it, also agrees to comply with a panoply of federal laws and regulations. (Id. at 79). But the Court need not rehearse all aspects of the lengthy OT agreement; rather, given that all the features of a contract are present, the Court has little difficulty concluding that the OT agreement that MDHI seeks is a contract. The right to even have the Army evaluate a prototype project, and to receive the associated funding, stems from that potential contract. Because, just like the plaintiff in Gabriel , MDHI's source of rights stems from a potential contract with the government, the APA does not waive sovereign immunity with respect to its claim for injunctive relief in this Court.

c. The ADRA Precludes Jurisdiction

Having concluded that the limited waiver of sovereign immunity contained in the APA does not apply, this Court could normally stop its analysis and dismiss this action for lack of subject-matter jurisdiction on that basis. In seeming contradiction to the relief requested in its complaint, however, MDHI's motion for summary judgment asks this Court to issue an order to "re-open the evaluation process to provide MDHI with a proper Phase 1 evaluation." (Doc. 135 at 16). Given that this new request is somewhat ambiguous as to whether it seeks advancement to Phase 1, or a reevaluation of the Proposal, this Court will also address whether the ADRA's sunset provision deprives it of jurisdiction here. Although there is a relative lack of authority addressing the interplay between statutes authorizing OTs and the ADRA, this Court concludes that this action falls within the terms of the ADRA's sunset provision, meaning that this Court cannot exercise jurisdiction.

The ADRA states in pertinent part that

both the Unite[d] States Court of Federal Claims and the district courts of the United States shall have jurisdiction to render judgment on an action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.

28 U.S.C. § 1491(b). Federal district court jurisdiction over the actions described in this section sunset on January 1, 2001. As this and several other courts have found, if an action falls within the terms of 28 U.S.C. § 1491(b)(1), the Court of Federal Claims has exclusive jurisdiction even when the plaintiff invokes the APA. See, e.g. , Vero Tech. Support, Inc. v. U.S. Dep't of Def. , 437 F. App'x 766, 768 (11th Cir. 2011) (reasoning that "the Tucker Act ... forbid[s] relief that would otherwise be available under the APA, mainly the ability to resolve an APA claim that falls within the scope of the Tucker Act ... in a federal district court"); Sigmatech, Inc. v. U.S. Dep't of Def. , 365 F. Supp. 3d 1202, 1205–06 (N.D. Ala. 2019) ; Validata Chem. Servs. v. U.S. Dep't of Energy , 169 F. Supp. 3d 69, 75 (D.D.C. 2016) ; Fire-Trol Holdings LLC , 2004 WL 5066232, at *4 ; see also Space Exp. Techs. v. United States , 144 Fed. Cl. 433, 439 (2019) (analyzing jurisdiction under the ADRA).

It is indisputable that MDHI is objecting to "a solicitation by a Federal agency for bids or proposals for a proposed contract," given that its allegations relate entirely to the Army's rejection of the Proposal. Although such an allegation might appear to place this case squarely within the text of the ADRA, the Federal Circuit has explained that the ADRA "speaks ‘exclusively’ to ‘procurement solicitations and contracts.’ " Hymas v. United States , 810 F.3d 1312, 1317 (Fed. Cir. 2016) (quoting Res. Conservation Grp., LLC v. United States , 597 F.3d 1238, 1245 (Fed. Cir. 2010) ) (emphasis omitted). Indeed, in its review of the ADRA's legislative history, the Federal Circuit observed that the statute's sponsors clearly "sought to channel the entirety of judicial government contract procurement protest jurisdiction to the Court of Federal Claims." Emery Worldwide Airlines v. United States , 264 F.3d 1071, 1079 (Fed. Cir. 2001). Thus, while it is true that "a narrow application of [the ADRA] does not comport with the statue's broad grant of jurisdiction over objections to the procurement process," Sys. Application & Techs., Inc. v. United States , 691 F.3d 1374, 1381 (Fed. Cir. 2012), the Federal Circuit has reasoned that the types of governmental actions reviewable under the ADRA are limited to procurement decisions, Cleveland Assets, LLC v. United States , 883 F.3d 1378, 1381 (Fed. Cir. 2018) (citing Distributed Sols, Inc. v. United States. , 539 F.3d 1340, 1346 (Fed. Cir. 2008) ); Res. Conservation Grp., LLC , 597 F.3d at 1245 ("[R]elief under [ 28 U.S.C. §] 1491(b)(1) is unavailable outside the procurement context.").

This Court is "especially interested in the Federal Circuit's views on" the ADRA because that court has "exclusive appellate jurisdiction over all cases filed on or after January 1, 2001." See Baltimore Gas & Elec. Co. v. United States , 290 F.3d 734, 737 (4th Cir. 2002).

As used in the ADRA, "procurement" refers to "all stages of the process of acquiring property or services, beginning with the process for determining a need for property or services and ending with contract completion and closeout." Distributed Sols., Inc. , 539 F.3d at 1345 (emphasis and quotation omitted); see also 41 U.S.C. § 111. Therefore, the Court of Federal Claims has exclusive jurisdiction over a case when "the government [has] at least initiated a procurement[ ] or initiated ‘the process for determining a need’ for acquisition.’ " AgustaWestland N. Am., Inc. v. United States , 880 F.3d 1326, 1330 (Fed. Cir. 2018) (quoting Distributed Sols., Inc. , 539 F.3d at 1346 ).

In considering whether an objection to an OT is made "in connection with a procurement," this Court fortunately does not write on a blank slate. The Court of Federal Claims faced just such an issue in Space Exploration Technologies Corp. v. United States . There, SpaceX challenged the government's "evaluation and portfolio award decisions for a request for proposals to provide space launch services for national security missions." 144 Fed. Cl. at 435. SpaceX made its objection in the overarching context of the "National Security Space Launch program," which "is charged with procuring launch services to meet the government's national security space launch needs." Id. at 436. To accomplish this goal, the government initiated a multi-phase strategy in FY 2013 that will be completed by FY 2027. Id. at 436–37. The program's first phase involved "a competition for the development of space launch vehicles," during which the government sought to develop a prototype that could comply with national security requirements while also providing domestic commercial launch services. Id. at 437. The awardees of the competition would receive government funding for further prototype development and testing. Id. There, as here, the solicitation and resulting awards were issued under DoD's authority to enter into other transactions. Id. at 438.

In a separate and distinct part of the government's strategy, it anticipated "awarding two requirements contracts for launch services, delivering multiple national security space missions with annual ordering periods from FY 2020 through FY 2024." Id. at 437. This "Phase 2 Procurement" would be held open to "all interested offerors," meaning that even those that had not received funding awards during the competition could seek to submit a bid for the procurement. Id. at 438.

Addressing SpaceX's contention that jurisdiction was proper under the ADRA, the Court of Federal Claims first looked to the awards issued as a result of the competition. Id. at 442. Although those awards did not themselves support ADRA-based jurisdiction, the court nonetheless examined whether the awards were sufficiently "in connection with" the Phase 2 Procurement to support exercising jurisdiction over the action. Id. at 443. The court reasoned that they were not because: (1) the competition and the Phase 2 Procurement "involve[d] separate and distinct solicitations;" (2) the competition and the Phase 2 Procurement "involve[d] different acquisition strategies," including the legal requirements that governed each solicitation; (3) the competition "did not involve the procurement of any goods or services ... the [government] will not purchase or own these prototypes;" and (4) despite the fact that competition winners would receive federal funding, placing them in an advantageous position for the Phase 2 Procurement, the competition awards would not be outcome-determinative for the Phase 2 Procurement which remained a "fully open competition" and would not be limited to competition award recipients. Id. at 443–45. Acknowledging that the question before it was "a close one," the court found that the competition awards were simply too attenuated to the Phase 2 Procurement to confer jurisdiction. Id. at 445 ; see also Protect Lake Pleasant LLC , 609 F. Supp. 2d at 898–915 (explaining that a challenge to a solicitation for a concession agreement was not made in connection with a procurement even though the solicitation was authorized by an agreement that amounted to at least a partial procurement). The facts surrounding the Army's decision to reject the Proposal at issue here demonstrate that the present objection relates far more directly to an eventual procurement than the solicitation at issue in Space Exploration Technologies . The very reason the Army embarked upon the FARA CP program was an identified lack of aircraft with "the ability to conduct armed reconnaissance, light attack, and security with improved stand-off and lethal and non-lethal capabilities with a platform sized to hide in radar clutter and for the urban canyons of mega cities." (Doc. 36-3 at 3). Thus, the entire purpose of the Army's "prototyping and testing effort" is to "support a decision to enter into a formal program of record for full system integration, qualification and production as a rapid acquisition." (Id. ). Importantly, and quite unlike the solicitation at issue in Space Exploration Technologies , at each progressive stage of the FARA CP program the Army will down-select among the Performers who participated at the previous stage. (Doc. 36-3 at 4–6). Thus, a decision excluding a Performer (or, in MDHI's case, a would-be Performer) from any phase of the FARA CP program would be outcome-determinative because only entities that are "selected for the preceding phase of the FARA CP program shall be eligible for any subsequent phases," and thus any eventual procurement. (Doc. 36-3 at 4) Further unlike Space Exploration Technologies , the FARA CP program does not involve two distinct solicitations. Indeed, the Solicitation anticipates possibly awarding a "follow-on production contract or transaction without the use of competitive procedures " under 10 U.S.C. § 2371b(f) to Performers who successfully complete the prototype project. (Doc. 36-3 at 6) (emphasis added).

As its final argument in favor of jurisdiction, the Army asserts that "[i]t is legally presumed that Congress would not have used the term ‘other transactions’ if it had meant ‘procurements’ within the meaning of the Tucker Act, FGCAA, and CICA." (Doc. 70 at 12). It is generally true that "Congress is presumed to enact legislation with knowledge of the law and a newly-enacted statute is presumed to be harmonious with existing law and judicial concepts." Aectra Ref. & Mktg. v. United States , 565 F.3d 1364, 1370 (Fed. Cir. 2009). But what should be clear by now, and what this and the parties' other arguments have glossed over, is that the ADRA's applicability does not depend on the present existence of an actual procurement contract so long as the challenged action bears a sufficient connection to a procurement. Because the Court's resolution of this issue does not depend on any characterization of the OT agreement as a "procurement," there is no disharmony between the ADRA and the other laws that the Army identifies.

To be sure, the Solicitation employs contingent language regarding Phase 4 of the FARA CP program, the point at which any procurement will occur. It is nonetheless clear that the Army's decision to issue the Solicitation, to reject the Proposal, and to award OTs to other Performers, all took place within the procurement process. As indicated, the main purpose of the FARA CP program is to develop data to support a decision to integrate the next generation of light attack helicopter into the armed forces. Thus, the actions that MDHI objects to took place within the "process of determining a need for acquisition" of advanced helicopters such that the objection falls within the plain language of the ADRA.

Accordingly, the Court concludes that it lacks jurisdiction under the ADRA's sunset provision. III. CONCLUSION

Based on the foregoing,

IT IS ORDERED that this case is dismissed, without prejudice, for lack of jurisdiction in this Court. The Clerk of the Court shall enter judgment 15 days after the date of this Order unless, prior thereto, a party moves for reconsideration (see L.R. Civ. 7.2(g)) or to transfer this case to another court.

This Order creates no presumption that transfer is appropriate. Thus, any motion to transfer must cite and apply the controlling legal authority on transfer.

IT IS FURTHER ORDERED that the motions for summary judgment (filed at Docs. 135, 136 and lodged at Docs. 132 and 134) are denied without prejudice for lack of jurisdiction.

IT IS FURTHER ORDERED that because, for purposes of this Order, the Court did not consider any sealed materials, the Motions to Seal are denied as moot (Docs. 131, 133, 137, 139, 144, and 145); however, all the related documents (Docs. 132, 134, 138, 140, 143, and 146) shall remain lodged and sealed.

IT IS FINALLY ORDERED that the Clerk of the Court shall file this Order under seal. The parties must, within 14 days of the date of this Order, file a motion to seal this Order which must attach a proposed redacted version of this Order to be filed in the public record. Any motion to seal must identify why the information sought to be redacted satisfies the "compelling reasons" standard articulated in Kamakana v. City & County of Honolulu , 447 F.3d 1172, 1179 (9th Cir. 2006). The Court retains discretion to accept or reject each redaction proposed by the parties. If no motion to seal is filed within 14 days, the Clerk of the Court shall unseal this Order. The motion at Doc. 149 is GRANTED to the limited extent specified herein.

Because the Court did not rely on any sealed information in this Order, the Court does not anticipate a motion to seal. The Court has included this provision out of an abundance of caution.

Summaries of

MD Helicopters Inc. v. United States

Jan 24, 2020
435 F. Supp. 3d 1003 (D. Ariz. 2020)
Case details for

MD Helicopters Inc. v. United States

Case Details

Full title:MD Helicopters Incorporated, Plaintiff, v. United States of America, et…


Date published: Jan 24, 2020


435 F. Supp. 3d 1003 (D. Ariz. 2020)