IN-SOURCING PROTEST DENIED

Judge Eric Bruggink of the United States Court of Federal Claims (COFC) recently has held the court has jurisdiction to hear protests of in-sourcing decisions but he has denied the contractor's motion for a preliminary injunction.  The opinion is important because Judge Bruggink joins Judge Firestone of the COFC in finding the court has jurisdiction.  He also agrees with Judge Firestone and disagrees with Judge Allegra on the issue of whether the plaintiff has standing to bring the suit.

Judge Bruggink first tackles the interpretation of the statute giving the COFC jurisdiction.  Plaintiffs are allowed to bring suit in the COFC for "any alleged violation of statute or regulation in connection with a procurement or proposed procurement."  The word procurement encompasses all stages of the process of acquiring property or services beginning with the process for determining the need and ending with the closeout of a contract.

The statutorily-required cost comparison of doing work in house versus sending it out was the beginning of the procurement process, says the court.

Next, Judge Bruggink deals with whether the plaintiff was an interested party.  He determines the plaintiff had a direct economic interest in the proposed procurement.  He also finds "prudential standing" which Judge Allegra failed to find in a similar case.  Prudential standing is used to restrict jurisdiction to cases properly brought to court.  In other words, the case should involve statutes designed to protect the interests of the plaintiff bringing the suit.

In a similar case, Judge Allegra declined jurisdiction because he said the cost comparison statute was designed to protect the government, not the contractor. Judge Firestone reached the opposite conclusion and Judge Bruggink agrees with Judge Firestone.  Contractors at a minimum have an interest in ensuring the cost analysis is done properly.

In the end, however, Judge Bruggink denies the plaintiff's motion for a preliminary injunction.  Equity favors the vigilant and here plaintiff waited 28 days before the end of the last option extension to file its complaint.  Plaintiff's complaint about how the cost comparison was done was weak.  The court also found the disorder that would result from an injunction was exacerbated by the plaintiff's delay in bringing the suit.  Finally, the court felt military readiness might be adversely affected by the granting of an injunction.

The case tells contractors that it is possible to challenge a decision to in-source; but as with any action in the COFC, the plaintiff bears a heavy burden to convince the court to intervene.

bill@spriggslawgroup.com    www.spriggsconsultingservices.com