United States Court of Appeals
for the Federal Circuit
__________________________
TODD CONSTRUCTION, L.P.,
(FORMERLY KNOWN AS TODD CONSTRUCTION CO.,
INC.),
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
__________________________
2010-5166
__________________________
Appeal from the United States Court of Federal
Claims in case no. 07-CV-324, Judge George W. Miller.
__________________________
Decided: August 29, 2011
___________________________
MARVIN LAWS, Hayes Magrini & Gatewood, of Okla-
homa City, Oklahoma argued for plaintiff-appellant.
With him on the brief was ROBERT L. MAGRINI.
MATTHEW H. SOLOMSON, Trail Attorney, Commercial
Litigation Branch, Civil Division, United States Depart-
ment of Justice, of Washington, DC, argued for defendant-
appellee. With him on the brief were TONY WEST, Assis-
tant Attorney General, JEANNE E. DAVIDSON, Director,
and FRANKLIN E. WHITE, JR., Assistant Director.
TODD CONSTRUCTION v. US 2
__________________________
Before LINN, DYK, and PROST, Circuit Judges.
DYK, Circuit Judge.
Todd Construction, L.P. (“Todd”) is a government con-
tractor. Todd filed suit in the Court of Federal Claims
(“Claims Court”) under the Tucker Act, 28 U.S.C. § 1491,
and the Contract Disputes Act (“CDA”), 41 U.S.C. § 601 et
seq., alleging that the United States Army Corps of Engi-
neers (the “government”) gave it an unfair and inaccurate
performance evaluation. The Claims Court held that the
CDA provided it with subject matter jurisdiction over
such a claim, but dismissed Todd’s complaint for lack of
standing and failure to state a claim. Todd Constr. L.P. v.
United States, 85 Fed. Cl. 34 (2008) (“Todd I”); Todd
Constr. L.P. v. United States, 88 Fed. Cl. 235 (2009)
(“Todd II”); Todd Constr. L.P. v. United States, 94 Fed. Cl.
100 (2010) (“Todd III”). We affirm both the Claims
Court’s determination that it had jurisdiction under the
CDA and its dismissal of Todd’s complaint on the grounds
of lack of standing and failure to state a claim.
BACKGROUND
In 2003, Todd entered into two task order contracts
with the government on two construction projects for roof
repairs of government buildings. The parties refer to
these projects as “Building 2121” and “Building 3611.”
The government agreed to amended completion dates,
making the completion dates June 25, 2004, for the Build-
ing 2121 project and July 30, 2004, for the Building 3611
project. Due to a series of delays (some of which Todd
alleges were caused by its subcontractors, the govern-
ment, or other circumstances outside of its control), the
projects were not completed and accepted by the govern-
3 TODD CONSTRUCTION v. US
ment until September 30, 2005, and October 14, 2005,
respectively.
At the time, the Federal Acquisition Regulations
(“FAR”) required that for “each construction contract” for
“$550,000 or more,” a “[performance] report shall be
prepared . . . in accordance with agency procedures” and
that “[e]ach performance report shall be reviewed to
ensure that it is accurate and fair.” 1 48 C.F.R. § 36.201
(2006). The government issued ER 415-1-17 to implement
FAR § 36.201 and establish procedures for contractor
performance evaluations. See U.S. Army Corps of Engi-
neers Regulation 415-1-17 (“ER 415-1-17”). That regula-
tion, inter alia, required: (1) “[N]oti[ce] [to] the
contractor . . . of the performance elements against which
his performance will be evaluated;” (2) a conference with
the contractor prior to the issuance of interim unsatisfac-
tory performance ratings; (3) “re-evaluation of [any]
interim unsatisfactory rating every three months;” (4) and
issuance of a final evaluation within sixty days of “sub-
stantial completion of the work.” Id. 415-1-17(5)(a)–(c). It
also permitted contractors to “submit written comments,
which should be addressed and included in the report,”
and allowed contractors to appeal a final unsatisfactory
performance evaluation “to one level above the Contract-
ing Officer.” Id. 415-1-17(5)(c)(2), (3)(f). The regulation
explained that the evaluations would typically be pre-
pared by the “resident engineer” and reviewed and ap-
proved by the contracting officer. Id. 415-1-17(5)(c)(1).
1 In 2009, the regulation was amended and no
longer contains the same language. The FAR regulatory
requirements for performance evaluations for government
contracts in general (rather than merely construction
contracts) can currently be found at 48 C.F.R. § 42.1502.
We consider the regulation as it existed during the perti-
nent events of this case.
TODD CONSTRUCTION v. US 4
This was apparently the case with Todd’s evaluations.
The final evaluations are filed in a central database
where the information is stored for at least six years. 48
C.F.R. § 36.201(c); ER 415-1-17(5)(c)(1). The information
is then used by contracting officers in determining future
contract awards. See 48 C.F.R. §§ 42.1501–1503.
Todd received negative interim performance evalua-
tions from the resident engineer for both projects on
February 5, 2004. On March 26, 2006, the resident
engineer issued his proposed negative final performance
evaluations for both projects pursuant to 48 C.F.R.
§ 36.201 and ER 415-1-17. On April 20, 2006, Todd
submitted comments protesting the proposed evaluations.
These comments primarily took issue with the purported
lack of timeliness of its performance, asserting that its
subcontractors and “other problems” that were “beyond
Todd’s control” caused the delays. J.A. 41–43. Todd also
asserted that it “took extraordinary steps to supervise,
manage, coordinate and control its subcontractors,” that it
was “responsive to the Government’s concerns,” and that
its “quality control system” was adequate. Id. The
evaluations were not changed as a result of Todd’s com-
ments.
In the final performance evaluations, the resident en-
gineer assigned Todd an overall performance rating of
unsatisfactory. The resident engineer also assigned
unsatisfactory ratings for each project in fifteen individ-
ual performance categories. Many of these categories
(e.g., “adherence to approved schedule,” “correction of
deficient work in a timely manner,” and “resolution of
delays”) related to the timeliness of Todd’s performance.
J.A. 35. Todd was also given unsatisfactory ratings in
categories such as “coordination and control of subcon-
tractor[s],” “quality of workmanship,” “management of
resources/personnel,” and “cooperation and responsiv-
5 TODD CONSTRUCTION v. US
ness.” Id. The resident engineer also included specific
comments expanding on the negative ratings. For exam-
ple, the resident engineer stated that “[the] [f]irst submit-
tal was not received until 22 Dec 03,” that the
“[c]ontractor did not start work until the week of 29
March 04,” and that the “[c]ontractor’s quality control
system allowed subcontractors to field paint damaged roof
panels without government approval.” Id.
Following internal reviews within the Department of
the Army, the final evaluations were issued on July 23,
2006. Todd sought review by the contracting officer. On
April 25, 2007, the contracting officer issued a “final
decision regarding [Todd’s] performance,” concluding that
“the [u]nsatisfactory performance appraisal [was] justified
and all required procedures were followed.” J.A. 59.
On May 25, 2007, Todd filed a complaint in the
Claims Court, alleging that the government failed to
follow the proper procedures and that the unsatisfactory
performance evaluations were arbitrary and capricious
and seeking, inter alia, a declaratory judgment. In this
complaint, Todd did not challenge any particular per-
formance ratings. Instead, it merely pled that the gov-
ernment issued overall unsatisfactory performance
evaluations and that these ratings were arbitrary and
capricious. In an initial opinion, the Claims Court held
that it had subject matter jurisdiction over the suit under
the CDA because the claim that the performance evalua-
tions were inaccurate and improper “relat[ed] to the
contract,” as required by the CDA. Todd I, 85 Fed. Cl. at
44–45. However, it also determined that the complaint
failed to state a claim for relief under Court of Federal
Claims Rule 12(b)(6). Todd II, 88 Fed. Cl. at 249–50.
On August 14, 2009, Todd filed its amended complaint
as permitted by the Claims Court. Although Todd added
TODD CONSTRUCTION v. US 6
a series of factual allegations, it again did not specifically
identify which unsatisfactory ratings were arbitrary and
capricious. The complaint appeared to challenge primar-
ily the unsatisfactory ratings related to Todd’s timeliness
of performance. 2 For each project, Todd asserted that
particular delays were caused by its subcontractors, the
government, or other “unforeseeable event[s] [ ] not
caused by Todd.” J.A. 108. For example, it alleged that it
had to terminate a subcontractor for default because of
unsatisfactory performance; that the government delayed
decisions about how to approach differing site conditions
discovered at one project site; and that forty days of
inclement weather made work impracticable during one
period. In sum, Todd alleged that there were “significant
problems with the . . . unsatisfactory ratings on account of
the delays which were caused by unforeseen events, many
of which were neither the fault nor the responsibility of
Todd.” J.A. 113. Todd also alleged that the government
failed to comply with the procedural requirements of ER
415-1-17.
In its third and final opinion, the Claims Court reaf-
firmed that it had subject matter jurisdiction over Todd’s
complaint. See Todd III, 94 Fed. Cl. 107–112. However,
the Claims Court also held that Todd lacked standing to
sue for the alleged procedural violations because “there
[was] no discernible injury to the plaintiff from the error.”
Id. at 113. With respect to Todd’s claim that the perform-
ance evaluation was unfair and inaccurate, the Claims
2 The only apparent exception was a conclusory
statement that Todd’s problems with its subcontractors
were not “a reflection on [its] management or supervisory
capabilities.” J.A. 108, 110. This statement appeared to
take issue with its negative evaluation for “coordination
and control of subcontractor[s]” and “effectiveness of job
site supervision.” Id. at 114.
7 TODD CONSTRUCTION v. US
Court held that Todd did have standing. Id. at 107–112.
However, the court held that Todd failed to state a claim
under Rule 12(b)(6) because Todd was responsible for the
acts of its subcontractors as a matter of law and “there
[was] nothing in the amended complaint beyond Todd’s
bare assertion of non-responsibility to support any conclu-
sion that assigning ‘unsatisfactory ratings’ was an abuse
of discretion.” Id. at 115.
Todd timely appealed to this court, and we have juris-
diction pursuant to 28 U.S.C. § 1295(a)(3).
DISCUSSION
We review de novo the Claims Court’s determination
that it had subject matter jurisdiction, its dismissal of a
complaint on the grounds of standing, and its dismissal
for failure to state a claim under Rule 12(b)(6). M. Ma-
ropakis Carpentry, Inc. v. United States, 609 F.3d 1323,
1327 (Fed. Cir. 2010); Bank of Guam v. United States, 578
F.3d 1318, 1325 (Fed. Cir. 2009).
I
We first consider the government’s contention that
the Claims Court lacked subject matter jurisdiction under
the CDA. The Tucker Act provides the Claims Court with
jurisdiction over “any claim by or against, or dispute with,
a contractor arising under [the CDA], including . . . non-
monetary disputes on which a decision of the contracting
officer has been issued under section 6 of [the CDA].” 28
U.S.C. § 1491(a)(2). The CDA, however, does not define
such a “claim.” We held in H.L. Smith, Inc. v. Dalton, 49
F.3d 1563, 1564–65 (Fed. Cir. 1995), that the definition of
the term “claim” in the FAR governs. The FAR defines
“claim” as “a written demand or written assertion by one
of the contracting parties seeking, as a matter of right,
the payment of money in a sum certain, the adjustment or
TODD CONSTRUCTION v. US 8
interpretation of contract terms, or other relief arising
under or relating to the contract.” 48 C.F.R. § 2.101
(emphasis added). The government does not dispute on
appeal that there was a final decision of the contracting
officer or a “written demand” seeking relief “as a matter of
right.” The sole dispute here is whether Todd’s requested
relief––in essence a declaratory judgment that the
government’s performance evaluations were unfair and
inaccurate––“relat[es] to the contract.” 3 If so, it is a
“claim” under the CDA, and the Claims Court has
jurisdiction under the Tucker Act.
Congress’ overall purpose to confer comprehensive
jurisdiction under the CDA confirms that we should read
the definition of “claim” broadly. We have previously
recognized that “[i]n defining the jurisdiction of the
[Claims Court] over CDA disputes, Congress has chosen
expansive, not restrictive, language.” Alliant
Techsystems, Inc. v. United States, 178 F.3d 1260, 1268
(Fed. Cir. 1999). The Tucker Act provides jurisdiction to
“render judgment upon any claim by or against . . . a
contractor arising under section 10(a)(1) of the [CDA],
including . . . nonmonetary disputes on which a decision of
the contracting officer has been issued under section 6 of
the [CDA].” 28 U.S.C. § 1491(a)(2) (emphases added). In
Alliant, the government argued that “nonmonetary
disputes” should be read narrowly to exclude “disputes
arising prior to the completion of work on a contract” and
3 The Claims Court held that injunctive relief was
not available. Todd II, 88 Fed. Cl. at 243. Todd did not
object to this conclusion on appeal. Hence, we need not
decide whether an injunction was available pursuant to
the Claims Court’s “power to remand appropriate matters
to any administrative or executive body or official with
such direction as it may deem proper and just.” 28 U.S.C.
1491(a)(2).
9 TODD CONSTRUCTION v. US
“disputes that have not yet ripened into a monetary
dispute but . . . could” if the contractor “could convert the
claim into one for monetary relief” by its own actions. 178
F.3d at 1268 (internal quotation marks omitted). We
rejected this narrow reading, emphasizing that the
provision “begins by broadly granting the court
jurisdiction over ‘any claims,’” uses the “nonrestrictive
term (‘including’),” and ends the provision with “equally
nonrestrictive language” concerning “nonmonetary
disputes.” Id. We also explicitly recognized that “[t]he
FAR has . . . ensured that review of contract claims will
be relatively easy to obtain, by defining the term ‘claim’
broadly, to include a demand or assertion seeking . . .
relief arising under or relating to the contract.” Id. at
1271. Therefore, the broad language of the statute and
FAR provision supports a broad reading of the term
“claim.”
The legislative history of the CDA and Tucker Act
also supports a broad reading of the term “claim.” Both
the House and Senate Reports explained that the CDA
was intended to “implement[ ] recommendations of the
Commission on Government Procurement.” S. Rep. No.
95-1118, at 1 (1978), reprinted in 1978 U.S.C.C.A.N. 5235;
see also H.R. Rep. No. 95-1556, at 1 (1978). The
Commission on Government Procurement had
recommended that Congress “[e]mpower ...
administrative forums to decide all claims or disputes
arising under or growing out of or in connection with the
administration of [government contracts].” 4 Report of
the Commission on Government Procurement 22 (1972).
In 1992, when Congress amended the Tucker Act to
provide jurisdiction over “nonmonetary disputes on which
a decision of the contracting officer has been issued under
TODD CONSTRUCTION v. US 10
section 6 of [the CDA],” 4 the bill’s sponsor reiterated the
broad scope of disputes covered by the CDA. He noted
that the bill would “amend the Tucker Act to clarify the
power of the Court of Federal Claims to hear appeals of
all contracting officers’ final decisions, regardless of
whether the dispute involves a claim for money currently
due.” 138 Cong. Rec. S17799 (daily ed. Oct. 8, 1992)
(emphasis added).
Not only is the term “claim” broad in scope, the
“relating to” language of the FAR regulation itself is a
term of substantial breadth. The term “related” is
typically defined as “associated; connected.” See Random
House Webster’s Unabridged Dictionary 1626 (2d ed.
1998); see also Black's Law Dictionary 1288 (6th ed. 1991)
(defining “related” as “[s]tanding in relation; connected;
allied; akin”); Oxford English Dictionary 1695 (3d ed.
1947) (defining “relation” as “any connection,
correspondence, or association, which can be conceived as
naturally existing between things”).
The Supreme Court has interpreted the term “related
to” broadly. See, e.g., Celotex Corp. v. Edwards, 514 U.S.
300, 307–08 (1995) (holding that Congress’ jurisdictional
grant to bankruptcy courts to hear proceedings “related
to” a bankruptcy case “suggests a grant of some breadth”
and includes, inter alia, suits between third parties which
have an effect on the bankruptcy estate); Morales v. Trans
World Airlines, Inc., 504 U.S. 374, 383–84 (1992) (holding
that preemption provision of Airline Deregulation Act––
preempting laws “relating to rates, routes, or services” of
any air carrier––should be broadly construed); Shaw v.
Delta Air Lines, Inc., 463 U.S. 85, 96–97 (1983) (holding
that state law “relates to” an employee benefit plan and is
4 See Federal Courts Administration Act, Pub. L.
No. 102-572 § 907 (Oct. 29, 1992).
11 TODD CONSTRUCTION v. US
therefore preempted by ERISA “if it has a connection
with, or reference to, such a plan”). Similarly, in Tyco
HealthCare Group LP v. Ethicon Endo-Surgery, 587 F.3d
1375, 1378 (Fed. Cir. 2009), we recognized that “[i]n
general, ‘related to’ means one thing has some . . .
connection to another thing,” and “[i]n legal parlance,” the
term has “similar breadth.” We therefore interpreted the
contractual phrase “related to pending litigation” broadly.
Id. at 1379.
In line with this authority, we have previously held
that to be a claim “relating to the contract” under the
CDA, the claim “must have some relationship to the terms
or performance of a government contract.” Applied Cos. v.
United States, 144 F.3d 1470, 1478 (Fed. Cir. 1998). 5 The
performance evaluations at issue have a direct connection
and association with Todd’s government contracts and,
under this “ordinarily broad understanding of the
phrase,” Tyco, 587 F.3d at 1379, appear to be “relat[ed] to
the contract.” While the unsatisfactory performance
evaluations may not relate to the terms of the contract
itself, they relate to Todd’s performance under the
contract. As the Claims Court recognized:
5 In Applied, the government made two overpay-
ments to the contractor because of a computer error. 144
F.3d at 1473. The government decided to discharge the
contractor’s debt on these overpayments “by setting it off
against the amount the government had agreed to pay
[the contractor] pursuant to” a settlement agreement on
another contract. Id. at 1472. Applied argued that the
government’s attempt to recoup the overpayments in this
fashion was a “claim” under the CDA and that CDA
procedures should apply. Id. at 1477. However, we
rejected this argument because the overpayments had no
relationship to the parties’ performance under the con-
tract, as the overpayments were not due under a contract
and were not for work performed under a contract. Id. at
1478.
TODD CONSTRUCTION v. US 12
The subject of the evaluations is the quality of the
contractor’s performance under the terms of the
contract . . . . As a matter of logic, a performance
evaluation relates to the contractor’s performance
under the contract, in the same way that any
evaluation relates to the thing evaluated.
BLR Grp. of Am., Inc. v. United States, 94 Fed. Cl. 354,
373 (2010) (quoting Todd I, 85 Fed. Cl. at 44–45).
The government does not contend that the contracting
officer’s decision regarding the negative performance
evaluations bore no relationship to Todd’s performance
under the contract. Rather, relying on Paragon Energy
Corp. v. United States, 645 F.2d 966 (Ct. Cl. 1981), the
government argues that Todd’s claim cannot “relat[e] to
the contract” unless it is based on a “valid contractual
theory,” (e.g., breach of contract or mistake). Paragon
imposes no such limitation. While as a general matter
Paragon found that the CDA statute “should not be
interpreted quite so broadly as its language at first blush
would suggest,” it recognized that the “language is
obviously quite broad.” Id. at 971. It found that a
narrower interpretation was required only in one respect–
–the term “claim” should not be interpreted to include a
challenge that the legislative history showed Congress
intended to exclude. Id. at 973–75.
Specifically, the Court of Claims held that a challenge
to the government’s denial of a request for contract
modification under Public Law 85-804 was not a “claim”
under the CDA. Id. at 972. Public Law 85-804 gave
government agencies the discretionary authority to
modify contracts if the modifications would facilitate the
national defense. Id. at 968. Congress was concerned
that a bill which granted CDA jurisdiction over Public
Law 85-804 challenges would allow “agencies to settle
13 TODD CONSTRUCTION v. US
claims independent of their legal or contractual merits,”
i.e. “horse trade settlements”, which could only be done
“through resort to Public Law 85-804 with its [attendant]
safeguards including congressional review.” Paragon, 645
F.2d at 973 (quoting S. Rep. No. 95–1118, at 5).
Therefore, Congress passed a final version of the bill that
“address[ed] the concerns expressed by [several Senate
committees] that the Act not permit the Contracting
Officer or the Agency Boards to grant the discretionary
relief . . . authorized by Public Law 85-804.” Id. at 974
(quoting 124 Cong. Rec. 18639–41 (daily ed. Oct. 12,
1978)).
In Paragon, while holding that the Public Law 85-804
claim was not within the scope of the CDA, the court also
held that the CDA did confer jurisdiction over the contrac-
tor’s claim for a contract reformation. Id. at 972, 975.
The court concluded that “Congress could not have ex-
pressed itself more clearly to the effect that all contractor
claims based upon a valid contractual theory fall within
[its] jurisdiction under the [CDA].” Id. at 975. Contrary
to the government’s contention, Paragon merely confirms
that all claims which are based on a valid contractual
theory provide the Claims Court with CDA jurisdiction.
Paragon does not require a claim to be based on “valid
contractual theory” in order to “relat[e] to a contract.” As
we made clear in Applied Companies, CDA jurisdiction
exists when the claim has “some relationship to the terms
or performance of a government contract.” 144 F.3d at
1478 (emphasis added). 6 A contractor’s claim need not be
6 The government suggests that this approach im-
properly reads the performance evaluation regulation into
the contract under G.L. Christian & Associates v. United
States, 312 F.2d 418 (Ct. Cl. 1963), and its progeny. In
holding that the Claims Court has jurisdiction under the
CDA, we do not suggest that the performance evaluation
TODD CONSTRUCTION v. US 14
based on the contract itself (or a regulation that can be
read into the contract) as long as it relates to its
performance under the contract. 7
Lastly, the government asserts that even if
performance evaluations “relat[e] to the contract” under
the CDA, the performance evaluation regulations cannot
provide Todd with a cause of action because they “[exist]
primarily for the benefit of the [g]overnment.” Appellee’s
Br. 42. The government relies on our decisions in
Freightliner Corp. v. Caldera, 225 F.3d 1361, 1365 (Fed.
Cir. 2000), Cessna Aircraft Co. v. Dalton, 126 F.3d 1442,
1451 (Fed. Cir. 1997), and Rough Diamond Co. v. United
States, 351 F.2d 636, 640–42 (Ct. Cl. 1965), in which we
held that particular plaintiffs could not sue under a
statute or regulation if the law was not intended to
benefit that class of plaintiffs. See also United States v.
N.Y. & Porto Rico S.S. Co., 239 U.S. 88 (1915). Those
regulation should be read into the contracts. Rather, the
regulation applies of its own force and directly governs
the parties’ performance under the contracts. Our deci-
sions in Precision Pine & Timber, Inc. v. United States,
596 F.3d 817 (Fed. Cir. 2010), and Agredano v. United
States, 595 F.3d 1278 (Fed. Cir. 2010), are inapplicable
here. In those cases, the regulations were not designed to
benefit the contractor and there was no claim that the
regulations themselves created rights enforceable by the
contractors apart from the contracts.
7 The government analogizes a performance evalua-
tion challenge to a debarment challenge, which we have
held in a non-precedential opinion does not provide the
Claims Court with CDA jurisdiction. See Schickler v.
Davis, 10 Fed. Appx. 944 (Fed. Cir. 2001). The CDA only
applies if there is “a decision of the contracting officer.”
28 U.S.C. § 1491(a)(2). Unlike a performance evaluation,
the determination to debar a contractor, is made by an
agency’s so-called “debarring official,” rather than the
contracting officer. See 48 C.F.R. § 9.406.
15 TODD CONSTRUCTION v. US
cases established that a law or regulation must “protect or
benefit a class of persons in order for that class to be able
to bring suit against the government” and that the class
must be more than an “incidental beneficiary” of the
regulation. Cessna Aircraft, 126 F.3d at 1451–52.
However, it is possible for a regulation or law to benefit
both the government and a class of private parties. See
Rough Diamond, 351 F.3d at 640. That is the case with
performance evaluations.
48 C.F.R. § 42.1502 is the current regulation
providing for mandatory performance evaluations under
certain government contracts, including construction
contracts. Subpart 42.15 of the FAR was added in 1995 to
“implement[ ] Office of Federal Procurement Policy Letter
92–5.” 48 C.F.R. § 42.1500 (1996). In that letter, the
Office of Federal Procurement Policy explained that
“policies and procedures for collecting, recording, and
using past performance information [which many
agencies have already established] . . . are extremely
important to both the Government and to contractors, and
requirements are necessary to help ensure their integrity
and fairness.” Past Performance Information, 58 Fed.
Reg. 3,573-02, 3,575 (Jan. 11, 1993) (emphasis added). As
this history demonstrates, even the government viewed
fair and accurate performance evaluations as providing
substantial benefits to contractors. This is not a situation
in which the contractors are merely “incidental
benefi[ciaries]” of the regulations. Cessna Aircraft, 126
F.3d at 1452. Performance evaluation regulations were
intended to directly and significantly benefit contractors.
II
The government argues that we should nonetheless
dismiss Todd’s complaint for lack of standing (with
TODD CONSTRUCTION v. US 16
respect to its procedural allegations) and failure to state a
claim (with respect to its substantive allegations).
As explained above, Todd alleged that the government
failed to follow four procedural requirements listed in ER
415-1-7. These were notifying Todd of the performance
elements that would be used to evaluate it; holding a
conference with Todd before issuing an interim unsatis-
factory performance rating; re-evaluating the interim
unsatisfactory rating every three months; and issuing of a
final evaluation within sixty days after project comple-
tion. In general, standing requires that the plaintiff show
an injury in fact, “a casual connection between the injury
and the conduct complained of,” and that his injury would
likely be redressable by court action. Lujan v. Defenders
of Wildlife, 504 U.S. 555, 560 (1992). However, the Su-
preme Court has also explained that a “person who has
been accorded a procedural right to protect his concrete
interests can assert that right without meeting all the
normal standards for redressability and immediacy.” Id.
at 573 n.7. Some courts of appeals have accordingly
relaxed the causation requirement when determining
standing for procedural injuries, finding it satisfied when
following the correct procedures plausibly may have
changed the result. See, e.g., Ctr. for Food Safety v.
Vilsack, 636 F.3d 1166, 1172 (9th Cir. 2011); Friends of
Tims Ford v. TVA, 585 F.3d 955, 968 (6th Cir. 2009); Pub.
Citizen v. U.S. Dep’t of Justice, 491 U.S. 440, 44–49
(1989).
These relaxed standards have been applied, however,
in cases involving fundamental procedural rights, such as
the right to a hearing, see Lujan, 504 U.S. at 572, 573 n.7,
the right to an environmental impact statement, Ctr. for
Food Safety, 636 F.3d at 1172, and the right to have a
decisionmaker free from ex parte contacts in formal
administrative hearings, Elec. Power Supply Ass’n v.
17 TODD CONSTRUCTION v. US
FERC, 391 F.3d 1255, 1262 (D.C. Cir. 2004). 8 No case
has been called to our attention that has applied these
relaxed standards to minor procedural violations of the
type involved in this case. For example, in Labatt Food
Service, Inc. v. United States, 577 F.3d 1375, 1377–78
(Fed. Cir. 2009), a bid protestor challenged an agency’s
contract award to another bidder on the ground that the
agency failed to follow the proper procurement procedures
by accepting proposal revisions from other bidders via e-
mail when revisions were required to be sent by mail or
facsimile. We held that in these circumstances the plain-
tiff had no standing because it could not “show that it was
prejudiced by a significant error” (i.e., “that but for the
error, it would have had a substantial chance of securing
the contract”). Id. at 1378, 1380. The alleged procedural
violations here do not fall into the category of fundamen-
tal procedural rights. Hence, we conclude that Todd is
required to show prejudice.
In fact, Todd has alleged nothing to indicate that the
outcome of the performance evaluations would have been
any different if the purported procedural errors had not
occurred. Todd did not allege that government compli-
ance with its procedural standards would have changed
its actions. Although Todd alleged it was not provided “an
opportunity to cure any perceived deficiencies in its
performance,” J.A. 109, Todd did not allege that if the
required procedures had been followed, it would have
taken curative action or that the performance evaluation
8 See also Richard J. Pierce, Jr., Making Sense of
Procedural Injury, 62 Admin. L. Rev. 1, Winter 2010
(“Each of the contexts in which courts have applied [the
relaxed standard] . . . involved deprivation of a fundamen-
tal procedural right. Each of the procedural rights at
issue was either . . . constitutionally required or the
subject of a statute in which Congress required the agency
to provide the procedure.”)
TODD CONSTRUCTION v. US 18
would have been different. Therefore, Todd lacks stand-
ing to sue with respect to the procedural violations.
Todd clearly does have standing to sue based on its
substantive allegation that the government acted arbi-
trarily and capriciously in assigning an inaccurate and
unfair performance evaluation. However, the government
contends that Todd failed to state a claim entitling it to
relief. We must dismiss a complaint for failure to state a
claim where the complaint does not “state a claim to relief
that is plausible on its face,” i.e., where the plaintiff fails
to “plead[ ] factual content that allows [a] court to draw
the reasonable inference that the defendant is liable for
the misconduct alleged.” Ashcroft v. Iqbal, 129 S.Ct.
1937, 1949 (2009). Here, Todd must plead facts which
give rise to a plausible inference that the government
abused its discretion in awarding the negative perform-
ance ratings.
The government argues that Todd failed to meet this
burden because it failed to “allege that the performance
evaluations at issue . . . were based solely––or even sub-
stantially––upon the specific performance difficulties”
that Todd claimed were not its fault. Appellee’s Br. 56–
57. Comparing the factual allegations in the complaint
with the performance evaluations, we conclude that the
government is correct. All of the facts alleged by Todd
could be true and yet it does not follow that any of the
unsatisfactory ratings were an abuse of discretion or
should be changed.
Todd’s complaint raised issues related to the timeli-
ness of its performance (e.g., “adequacy of initial progress
schedule,” “adherence to approved schedule,” “submission
of required documentation,” and “resolution of delays”).
J.A. 114. In this respect, Todd merely alleged that the
“delays . . . were caused by unforeseen events, many of
19 TODD CONSTRUCTION v. US
which were neither the fault nor the responsibility of
Todd.” Id. at 113 (emphasis added). Although Todd
alleged that numerous specific delays were not Todd’s
responsibility, those allegations cannot change the fact
that Todd admits in its appeal brief that some delays
were not the government’s fault but were instead caused
by Todd’s subcontractors. We have previously explained
that “a contractor is responsible for the unexcused per-
formance failures of its subcontractors.” See, e.g., John-
son Mgm’t Grp. CFC Inc. v. Martinez, 308 F.3d 1245, 1252
(Fed. Cir. 2002). Todd has failed to allege facts that
would excuse its subcontractors’ delays. Todd’s bare
assertion that it is not responsible for the actions of its
subcontractors is a legal conclusion, and we are not re-
quired to assume that legal conclusions are true. See
Iqbal, 129 S.Ct. at 1949–50. Todd also specifically admit-
ted in the complaint that it delivered only “the majority
[i.e., not all] of the [required] submittals” to the govern-
ment on time. J.A. 107, 110. The performance evalua-
tions do not specify how much delay the government
attributed to Todd; they simply indicate that Todd’s
performance was untimely. To raise a plausible inference
that the ratings were arbitrary and capricious, the con-
tractor would, at the very least, need to allege facts indi-
cating that all of the substantial delays were excusable. 9
Todd has not done so, and we therefore agree with the
Claims Court that its complaint was properly dismissed
under Rule 12(b)(6).
9 Apart from Todd’s allegations on delay, Todd also
specifically asserts that its problems with subcontractors
did not reflect poorly on its management or supervisory
capabilities. Again, Todd’s conclusory statement that the
performance of its subcontractors could not reflect nega-
tively on its own performance does not support a claim
that its performance ratings for effectiveness of manage-
ment and control of subcontractors should be changed.
TODD CONSTRUCTION v. US 20
AFFIRMED
COSTS
No costs.