Distributed Solutions, Inc. v. United States
539 F.3d 1340, 83 Fed. Cl. 1340, 2008 U.S. App. LEXIS 18520 (2008)
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Rule of Law:
An agency's actions taken during the market research phase of deciding how to acquire goods or services, including issuing a Request for Information (RFI), constitute actions "in connection with a procurement or a proposed procurement" under the Tucker Act, thereby establishing jurisdiction in the Court of Federal Claims for a bid protest.
Facts:
- The United States Agency for International Development (USAID) and the Department of State (DoS) initiated a program to develop a common computer platform, known as JAAMS.
- In 2003, the government awarded a task order to SRA International, Inc. (SRA), a prime contractor, to provide broad IT support services.
- In June 2005, the government issued a Request for Information (June RFI) to research commercial off-the-shelf software solutions for the JAAMS program, stating the RFI was for market research only and would not result in a contract.
- Distributed Solutions, Inc. (DSI) and STR, L.L.C. (STR) responded to the June RFI and provided demonstrations of their software products to the government.
- After reviewing the RFI responses, the government decided to 'pursue alternative courses of action' rather than procuring the software directly.
- The government then tasked its existing prime contractor, SRA, with the responsibility of selecting and acquiring the necessary software through subcontracts.
- SRA conducted its own process and ultimately awarded subcontracts to other vendors, not selecting DSI or STR.
Procedural Posture:
- DSI and STR separately filed bid protests with the General Accountability Office (GAO).
- The GAO dismissed the protests, finding it lacked jurisdiction because the procurement was for subcontracts by a prime contractor, not directly by a federal agency.
- The contractors consolidated their cases and filed a complaint in the United States Court of Federal Claims (the trial court).
- The government filed a motion to dismiss the complaint for lack of subject matter jurisdiction.
- The Court of Federal Claims granted the government's motion to dismiss.
- The contractors, as appellants, timely appealed the dismissal to the United States Court of Appeals for the Federal Circuit, with the government as the appellee.
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Issue:
Does a government agency's decision to use a prime contractor for procurement, made after issuing a Request for Information (RFI) to potential vendors for market research, constitute an action 'in connection with a procurement or a proposed procurement' sufficient to establish jurisdiction for a bid protest in the Court of Federal Claims under the Tucker Act?
Opinions:
Majority - Moore, Circuit Judge
Yes, a government agency's decision to delegate procurement to a prime contractor after conducting its own market research with potential vendors is an action 'in connection with a procurement or a proposed procurement.' The court reasoned that the contractors were not protesting the award of subcontracts by SRA, but rather the government's antecedent decision to delegate the procurement task to SRA instead of using a direct competitive process. Adopting the broad definition of 'procurement' from 41 U.S.C. § 403(2), the court held that a procurement begins with 'the process for determining a need for property or services.' The government's issuance of the June RFI to research solutions and determine its course of action was part of this initial process, thus qualifying as a 'proposed procurement.' Therefore, the government's subsequent decision to abandon the direct competitive path and use SRA was a decision made 'in connection with' that proposed procurement, conferring jurisdiction upon the Court of Federal Claims to hear the protest.
Analysis:
This decision significantly clarifies and broadens the scope of bid protest jurisdiction under the Tucker Act. It establishes that pre-solicitation and market research activities can be sufficient to initiate a 'proposed procurement,' making an agency's subsequent strategic decisions subject to judicial review. The ruling prevents agencies from using prime contractors to shield procurement decisions from protest after having already engaged with the market of potential offerors. This precedent empowers contractors to challenge not just final award decisions, but also fundamental, early-stage agency choices about procurement methods, ensuring greater accountability in the acquisition process.
