Case: 11-50101 Document: 00511709061 Page: 1 Date Filed: 12/29/2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
December 29, 2011
No. 11-50101 Lyle W. Cayce
Clerk
ROTHE DEVELOPMENT, INCORPORATED,
Plaintiff - Appellant
v.
UNITED STATES DEPARTMENT OF DEFENSE; UNITED STATES
DEPARTMENT OF AIR FORCE,
Defendants - Appellees
Appeal from the United States District Court
for the Western District of Texas
Before JONES, Chief Judge, and DAVIS and DeMOSS, Circuit Judges.
PER CURIAM:
Appellant Rothe Development, Inc. (“Rothe”) appeals the district court’s
dismissal of its complaint for lack of subject-matter jurisdiction. Rothe sued the
United States Department of Defense and the United States Air Force
(collectively “DoD”) for declaratory and injunctive relief, alleging the DoD
violated various in-sourcing procedures adopted pursuant to federal law. The
district court dismissed, concluding exclusive jurisdiction lay in the Court of
Federal Claims. We AFFIRM.
Rothe contracted with the DoD to provide information technology services
at the Minneapolis-St. Paul Air Reserve Station in Minnesota in 1987. In March
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No. 11-50101
2010, the DoD informed Rothe it intended to “in-source” Rothe’s technology
services by directly hiring federal employees in lieu of continuing to contract for
information technology services. The DoD scheduled its in-sourcing for
September 2010, at the expiration of Rothe’s contract. After unsuccessful
attempts to dissuade the DoD of its in-sourcing decision, Rothe sued under
Section 702 of the Administrative Procedure Act (“APA”), alleging the DoD’s in-
sourcing decision violated its procurement procedures promulgated under
10 U.S.C. § 2463. The district court dismissed Rothe’s suit as a bid protest under
the Tucker Act, 28 U.S.C. § 1491(b), over which the Court of Federal Claims has
exclusive jurisdiction.
We review de novo the district court’s dismissal for lack of subject-matter
jurisdiction. Dresser v. Meba Med. & Benefits Plan, 628 F.3d 705, 708 (5th Cir.
2010). We similarly review a district court’s interpretation of a statute de novo.
Id.
“A federal court has no subject matter jurisdiction over claims against the
United States unless the government waives its sovereign immunity and
consents to suit.” Danos v. Jones, 652 F.3d 577, 582 (5th Cir. 2011). The APA
waives sovereign immunity to the extent a party “adversely affected . . . by
agency action” seeks “relief other than money damages.” 5 U.S.C. § 702. The
APA limits this waiver, however, only to situations where no “other statute that
grants consent to suit expressly or impliedly forbids the relief that is sought.”
Id. The Tucker Act provides in relevant part:
[T]he United States Court of Federal Claims and the
district courts . . . 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.
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28 U.S.C. § 1491(b)(1) (emphasis added).
Congress subjected the district courts’ jurisdiction under this paragraph
to a sunset provision, terminating district court jurisdiction as of January 1,
2001. See Administrative Dispute Resolution Act of 1996, Pub L. No. 104-320,
110 Stat. 3870, 3875 (1996). Congress did not renew the district courts’
jurisdiction, and the Court of Federal Claims now retains exclusive jurisdiction
over “action[s] by an interested party” “objecting to . . . any alleged violation of
statute or regulation in connection with a procurement or a proposed
procurement.” The parties dispute whether Rothe’s challenge is such an action;
we conclude it clearly is.
Rothe first asserts that because an insourcing decision necessarily means
no contract has been assigned, Rothe is by definition not an “interested party”
under the statute. This interpretation betrays the obvious meaning of
“interested party,” whose source Rothe concedes. The Competition in
Contracting Act defines an interested party as “an actual or prospective bidder
or offeror whose direct economic interest would be affected by the award of the
contract or by failure to award the contract.” 31 U.S.C. § 3551(2)(A). Rothe’s
complaint specifically states that it seeks to “keep its scope of work in the
competitive realm in order to re-compete for the work,” as it believed it was “the
low cost provider” to the DoD for the services in question. It stated that the DoD
would “continue to receive full performance from [Rothe] as the low-cost provider
if the insourcing is enjoined.” Rothe’s complaint clearly indicates its direct
economic interest as a prospective bidder. Rightly so; if Rothe had no such
interest, it is difficult to imagine how it could demonstrate a particularized
injury necessary for Article III standing. See K.P. v. LeBlanc, 627 F.3d 115, 122-
123 (5th Cir. 2010); see also Vero Technical Support v. U.S. Dep’t of Def.,
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437 F. App’x 766, 770-71 (11th Cir. 2011) (unpublished decision).* Rothe is an
interested party for Tucker Act purposes.
Rothe briefly contests that it does not “allege a violation of . . . statutes or
regulations per se.” Instead, Rothe argues its complaint challenges the DoD’s
promulgated procedures under various federal laws, and, specifically, the DoD’s
failure to follow these procedures to its detriment. Rothe’s complaint contradicts
this argument. Rothe alleges that “Defendants’ insourcing decision is not in
accordance with insourcing procedures required by 10 U.S.C. § 2463 which
Defendants have bound themselves to.” In light of the “sweeping scope” of the
phrase “in connection with,” RAMCOR Servs. Group, Inc. v. United States,
185 F.3d 1286, 1289 (Fed. Cir. 1999), Rothe alleges a violation of a statute or
regulation as required by the Tucker Act. Vero Technical Support,
437 F. App’x at 769.
Finally, Rothe argues that because a decision to insource inherently
converts a function from outside contractor to in-house production, it “clearly
and unequivocally” exceeds the definition of “procurement.” We disagree. The
Tucker Act does not define a procurement, but the Federal Circuit has adopted
the definition of procurement now codified at 41 U.S.C. § 111, specifically that
“the term ‘procurement’ includes 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.” Distrib. Solutions,
Inc. v. United States, 539 F.3d 1340, 1345 (Fed. Cir. 2008) (interpreting
definition previously codified at 41 U.S.C. § 403(2)). Rothe’s argument ignores
that this definition specifically includes the process for determining a need for
services, which by necessity includes the choice to refrain from obtaining outside
*
Vero, an unpublished decision, is not considered binding authority in the Eleventh
Circuit. We cite it only to show the congruence of our thinking with that of another panel of
appellate judges.
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services. Vero Technical Support, 437 F. App’x at 769-70. The very processes
Rothe challenges reflect the DoD’s attempt to economically determine whether
and from whom to contract for goods and services. Rothe’s construction of
procurement would require us to believe Congress intended concurrent
jurisdiction over bid protests where the DoD determined it could execute
functions more cost-effectively with federal employees, but exclusive jurisdiction
in the Court of Federal Claims where the DoD concluded an outside contract was
more efficient. We refuse to adopt so narrow a meaning of a procurement.
Rothe’s complaint constitutes an action by an interested party alleging a
violation of a statute or regulation in connection with a procurement.
Accordingly, the Tucker Act confers exclusive jurisdiction over this action with
the Court of Federal Claims, and the APA does not waive sovereign immunity
as to Rothe’s claims. The district court therefore correctly dismissed Rothe’s
complaint for lack of subject-matter jurisdiction.
AFFIRMED.
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