Advn Mgmt Technol v. FAA

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 6, 2000 Decided May 12, 2000

No. 99-1314

Advanced Management Technology, Inc.,
Petitioner

v.

Federal Aviation Administration and
Jane F. Garvey, Administrator,
Federal Aviation Administration,
Respondents

On Petition for Review of Orders of the
Federal Aviation Administration

Efrem M. Grail argued the cause for petitioner. With him
on the briefs was L. James D'Agostino. Leigh T. Hansson
entered an appearance.

Christine N. Kohl, Attorney, U.S. Department of Justice,
argued the cause for respondent. With her on the brief were

David W. Ogden, Acting Assistant Attorney General, and
Anthony J. Steinmeyer, Attorney.

Before: Silberman, Williams and Sentelle, Circuit Judges.

Opinion for the Court filed by Circuit Judge Williams.

Williams, Circuit Judge: In 1998 the Federal Aviation
Administration ("FAA") adopted a subordinate office's find-
ings that petitioner Advanced Management Technology, Inc.
("AMTI") had made misrepresentations in a bid proceeding in
which AMTI eventually won a multi-million dollar contract.
Because of the misrepresentations, the bidding was reopened.
But because the FAA believed AMTI had not intended to
defraud the government, it allowed AMTI to compete in the
new round--in which AMTI again won the contract. AMTI
has no desire to relinquish the new contract in favor of the
old one, but still seeks a reversal of the earlier findings or a
new hearing with different procedures. We dismiss the
petition for want of standing.

* * *

In August 1996 the FAA began procurement of a technical
assistance contract for work with the Global Positioning
System. A group of contractors, bound by a May 1996
"teaming agreement" and including AMTI, responded. Fel-
low teammates were Innovative Solutions International
("ISI") and Overlook Systems Technologies, Inc. ("Over-
look"). Overlook was "team leader." Over the next year and
a half, AMTI's teammates fluctuated in number and identity.
In January 1998 the FAA issued its Request for Offers.
AMTI, now the team leader of a reconstituted group, submit-
ted a proposal under which it would serve as the prime
contractor and Overlook would be one of three subcontrac-
tors.

AMTI represented in its offer that it had "entered into
teaming Agreements with Overlook, ISI, and Zeta that estab-
lish goals for each subcontractor's participation in work ef-
forts on [the contract]." The agreement referred to was the
May 1996 agreement, not a new one. AMTI further offered a
chart with proposed work allocation percentages among the

subcontractors, including Overlook, and identified key person-
nel from Overlook whose services would be used. The FAA
found AMTI's proposal the best value. It nonetheless negoti-
ated with AMTI further in a quest for better terms. On May
8, 1998 AMTI submitted its "best and final offer," known in
the trade as a BAFO. This offer assured FAA that there
were no material changes in personnel availability (i.e., it
implicitly assured the FAA that key Overlook personnel
would be used), and also warranted that it had successfully
negotiated revised rates with subcontractors.

AMTI failed to mention that on April 16 Overlook had
provided AMTI its best and final offer with respect to
Overlook's labor rates--an offer quite inconsistent with
AMTI's May 8 offer to the FAA. Whereas Overlook had
offered to participate at a specified compensation rate on
condition that it receive "approximately 33 percent" of the
contract, AMTI's offer included Overlook's staffing at that
compensation rate but at less than half the usage rate on
which Overlook had conditioned its agreement. AMTI's
counsel would later attempt to justify this fact to the FAA's
Office of Dispute Resolution for Acquisition ("Dispute Resolu-
tion Office") as follows:

[B]ecause AMTI is a small, minority, woman-owned busi-
ness, it quite simply could not afford to just cover the
additional expense of the Overlook personnel.... Over-
look refused to lower the rates for its staff and thus,
AMTI was forced to make a business decision: AMTI
could bid all [SEALED] of Overlook's people at the
[SEALED] multiplier and lose the contract, or AMTI
could cut the number of Overlook's positions, and bid
them at the higher rates. AMTI could not discuss this
with Overlook, however, because no one at Overlook was
available to make the decision.

On June 2, 1998 the FAA awarded AMTI the contract.
Negotiations with Overlook continued, ultimately breaking
down on June 29 with Overlook's withdrawal from the project.
Meanwhile, competing bidders Camber Corporation and In-
formation Systems & Networks Corporation filed bid pro-
tests, alleging among other things "bait and switch"--that

AMTI had misrepresented the availability of key personnel.
Apparently the bid protests were fueled in no small part with
inside information from Overlook. FAA referred the protests
to its Dispute Resolution Office.

The FAA eventually adopted the findings of that office,
concluding that "the use AMTI made of Overlook's April 16,
1998 rates and its highly qualified key personnel was com-
pletely unauthorized. AMTI proceeded to use those rates
and personnel with no assurance that, once Overlook discov-
ered what AMTI had done, Overlook would still make those
critical individuals available[.]" Protests of Camber Corpora-
tion and Information Systems & Networks Corporation Un-
der Solicitation No. DTFA01-[96]-R-11087, Docket Nos.
98-ODRA-00079 et al., at 36 (Sept. 3, 1998). The FAA then
ordered the bid process reopened. AMTI was allowed to
continue performing under the original contract in the inter-
im. It was also allowed to recompete for the contract, as the
FAA found no "actual intent to defraud the Government."
Id. at 77. The FAA denied AMTI's motion for reconsidera-
tion, and AMTI petitioned for review here.

In the meantime, AMTI re-bid and won the contract. In
fact, the second award was more lucrative than the first.
AMTI nonetheless argues that it was the victim of findings
unsupported by substantial evidence and contrary to law, and
that it was subjected to a dispute resolution procedure (the
hearing before the Dispute Resolution Office) which violated
statutory authority1 and constitutional due process. But
AMTI does not ask us to restore the first contract. Rather,
it seeks mere reversal of the FAA's findings, or in the
alternative a remand to the FAA for a hearing that satisfies
statutory and constitutional standards.

* * *

The FAA challenges AMTI's standing, arguing that be-
cause AMTI is currently performing under a more lucrative

__________
1 The authority at issue is s 348 of the Department of Trans-
portation and Related Agencies Appropriations Act, 1996, Pub. L.
No. 104-50, 109 Stat. 460 (1995).

contract, it can't really be injured. The claim may sound like
one of mootness--a justiciable controversy existed but no
longer remains--but the timing makes AMTI's problem one
of standing. AMTI was awarded the second contract on June
24, 1999, before either the FAA's denial of reconsideration or
AMTI's filing the present petition for review (July 30, 1999).
Standing is assessed "at the time the action commences,"
Friends of the Earth, Inc. v. Laidlaw Environmental Ser-
vices (TOC), Inc., ___ U.S. ___, 120 S. Ct. 693, 709-10 (2000),
i.e., in this case, at the time AMTI sought relief from an
Article III court, when AMTI held the more lucrative second
contract.

Contrary to AMTI's assumptions, Article III courts do not
ordinarily have jurisdiction to issue, as the Seventh Circuit
has put it, "Writs of Erasure" to administrative agencies or
district courts to cleanse their opinions of material distressing
to winners. United States v. Accra Pac, Inc., 173 F.3d 630,
632 (7th Cir. 1999). AMTI "must show (1) it has suffered an
'injury in fact' that is (a) concrete and particularized and (b)
actual or imminent, not conjectural or hypothetical; (2) the
injury is fairly traceable to the challenged action of the
defendant; and (3) it is likely, as opposed to merely specula-
tive, that the injury will be redressed by a favorable deci-
sion." Friends of the Earth, 120 S. Ct. at 704. AMTI claims
reputational injury, monetary injury from the costs of litiga-
tion and rebidding, and injury to its right to a legally valid
procurement process.

1. Reputational Injury

AMTI says the FAA branded it a "fraud" and a "liar."
With this (mis)characterization of the FAA's findings, AMTI
seeks to bring itself within the reach of reputational injury
cases such as Meese v. Keene, 481 U.S. 465 (1987). See also
Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S.
123 (1951); Southern Mutual Help Ass'n, Inc. v. Califano,
574 F.2d 518 (D.C. Cir. 1977) ("SMHA"); Old Dominion
Dairy Products, Inc. v. Secretary of Defense, 631 F.2d 953
(D.C. Cir. 1980).

 Standing cannot be "inferred argumentatively" but rather
"must affirmatively appear in the record." Spencer v. Kem-
na, 523 U.S. 1, 10-11 (1998) (internal quotations omitted). All
that affirmatively appears here is AMTI's vast exaggeration
of the FAA's findings; we have no allegations, much less
evidence, as to their present or future consequences. The
FAA specifically declined to find any intent to defraud; a
"bait and switch" finding can be made solely on negligent
misrepresentations. AMTI notes that the October 5, 1998
issue of Federal Contracts Reports, which relayed the FAA's
decision to the field, quoted a remark of counsel for the
Camber Corporation that the order "vindicates the basic
principle that you can't lie to the government to get a
contract." But the government as adjudicator can hardly be
held responsible for the gloatings of a triumphant advocate.
AMTI offered no evidence that the FAA's findings cast any
shadow over its business activities, and the "all is forgiven"
message implicit in FAA's re-award of the contract suggests
the improbability of such a shadow.

With this sparse record, we need not probe the subtle
boundaries of precedent. In Meese v. Keene, for instance, the
Court found on the basis of survey data and expert affidavits
that if plaintiff were to exhibit certain imported films under
the government's mandatory label of "political propaganda,"
"his personal, political, and professional reputation would
suffer and his ability to obtain re-election and to practice his
profession would be impaired." 481 U.S. at 473-74 (internal
quotation marks omitted). In SMHA a grantor agency had
prematurely terminated plaintiff grantee's multi-year grant,
accompanying the termination with a scathing audit. Though
the termination itself--which we found required a hearing
under the agency's regulations--was surely enough, we
stressed the severity of the agency's condemnation of plaintiff
and the overwhelming probability that future applications
would receive an "inhospitable reception." 574 F.2d at 524.
Old Dominion Dairy Products similarly involved devastating
findings with present and future preclusion from Government
work. 631 F.2d at 955, 964. Cf. Kartseva v. Department of
State, 37 F.3d 1524, 1528 (D.C. Cir. 1994) (reviewing due

process merits issue when government may have "automati-
cally" precluded plaintiff from future jobs).

AMTI has not begun to show the likelihood of injury from
the FAA's characterizations of its conduct. Charitably, the
injury is "speculative"--the ultimate label for injuries too
implausible to support standing. See Alamo v. Clay, 137
F.3d 1366, 1370 (D.C. Cir. 1998); J. Roderick MacArthur
Foundation v. FBI, 102 F.3d 600, 606 (D.C. Cir. 1996). And
reputational injury alone would not get AMTI very far in
seeking a new hearing subject to constitutional due process.
See Siegert v. Gilley, 500 U.S. 226, 233 (1991) ("Defamation,
by itself, is a tort actionable under the laws of most States,
but not a constitutional deprivation."). As we shall see,
AMTI has nothing more.

2. Monetary Injury

AMTI asserts several different monetary injuries: litiga-
tion costs in the Dispute Resolution Office proceeding, costs
of rebidding, and litigation costs in defending a qui tam
lawsuit in the eastern district of Virginia allegedly spawned
by the proceeding at FAA. AMTI has offered no detail for
any of these costs, which may well be more than offset by the
award of the more lucrative second contract. But even if
AMTI has concrete and particularized monetary injuries, and
if they are fairly traceable to the FAA and its Dispute
Resolution Office,2 AMTI has only one theory of redressabili-
ty: the Equal Access to Justice Act ("EAJA"), 28 U.S.C.
s 2412. According to AMTI, if we reverse the FAA, thereby
making AMTI a "prevailing party" under EAJA, AMTI can
recover some of its litigation expenses.

__________
2 AMTI states that the "sole genesis" of the qui tam action was
the Dispute Resolution Office's "finding of a fraudulent 'bait and
switch.' " If so, this seems to mark the qui tam action as frivolous
on its face since the False Claims Act bars actions solely "based
upon" public disclosures in administrative hearings. See 31 U.S.C.
s 3730(e)(4)(A); United States ex rel. Findley v. FPC-Boron Em-
ployees' Club, 105 F.3d 675 (D.C. Cir. 1997); United States ex rel.
Siller v. Becton Dickinson & Co., 21 F.3d 1339, 1347-48 (4th Cir.
1994).

 Under AMTI's theory anyone meeting EAJA's wealth lim-
its would have constitutional standing (although often not
prudential standing) in relation to any government decision:
if they prevailed, they might recover attorneys' fees for
reversing the agency's action. EAJA does not work this way.
EAJA allows recovery of costs for prevailing parties in "judi-
cial review of agency action," 28 U.S.C. s 2412(d)(1)(A), but
the party must first prevail in a "court having jurisdiction of
that action," id. In other words, there must be standing and
otherwise proper subject matter jurisdiction for the underly-
ing action; EAJA is not a highway to federal court for
anyone wishing to uphold the rule of law. See Democratic
Senatorial Campaign Committee v. FEC, 139 F.3d 951, 953
(D.C. Cir. 1998); Lane v. United States, 727 F.2d 18, 20-21
(1st Cir. 1984). As the only means identified by AMTI for
recovery of costs is a non-starter, this injury--assuming it
exists at all on a net basis--is not redressable.

3. Right to a Legal Procurement Process

AMTI asserts finally that the FAA's creation and use of its
Dispute Resolution Office deprives AMTI of its "right to a
legally valid procurement process." National Maritime Un-
ion of America, AFL-CIO v. Commander, Military Sealift
Command, 824 F.2d 1228, 1237 (D.C. Cir. 1987). As a purely
backward-looking claim, this adds nothing to the prior discus-
sion. AMTI has identified no past injury that is within the
power of the court to redress. Compare Lujan v. Defenders
of Wildlife, 504 U.S. 555, 573 n.8 (1992) (allowing parties
standing to enforce a procedural norm "designed to protect
some threatened concrete interest").

As a forward-looking claim it fares no better. If AMTI had
alleged that it expected to seek future FAA contracts and
likely would re-encounter the offending procedure, that claim
might provide it the necessary concrete interest in removing
the alleged procedural flaw. In Scheduled Airlines Traffic
Offices, Inc. v. Department of Defense, 87 F.3d 1356, 1358-59
(D.C. Cir. 1996), we found standing for a winning bidder--but
only because it intended to bid on future similar contracts and
raised legal claims against substantive rules that it thought

were biased against its success. Not only does AMTI not
mention future bidding plans, but the procedures to which it
objects are ones triggered only by specified bidding disputes.
AMTI does no more to show a likelihood of being subjected to
these procedures than the plaintiff in Los Angeles v. Lyons,
461 U.S. 95, 105 (1983), showed a likelihood of being subjected
to future chokeholds. See also Spencer, 523 U.S. at 15-16
(dismissing as "purely a matter of speculation" whether the
petitioner would in the future appear as a civil or criminal
witness and have his parole revocation used against him).

* * *

The petition for review is

Dismissed.