Cotton & Company, LLP v. United States
133 Fed. Cl. 133
| Fed. Cl. | 2017Background
- DFAS awarded Cotton & Company a task order (Feb 6, 2017) to perform FY2017 auditing services for DoD OIG; the task order included a government convenience-termination clause.
- A losing bidder filed a GAO protest (Feb 14, 2017); DFAS directed Cotton to stop performance under the CICA automatic stay.
- DFAS, citing delays and statutory audit deadlines, terminated Cotton’s task order for convenience (Mar 1, 2017) and later issued an amended solicitation with changed base years and added services (Apr 25, 2017).
- Cotton did not bid on the amended solicitation, protested at GAO (which dismissed for lack of jurisdiction as contract-administration matters), and then filed this pre-award bid protest in the Court of Federal Claims.
- DFAS awarded the new contract to Ernst & Young; Cotton sought a preliminary injunction to enjoin E&Y’s performance.
- The Court denied the injunction and dismissed Cotton’s complaint for lack of subject-matter jurisdiction, concluding Cotton lacked standing as to the new solicitation and that termination-for-convenience claims fall under the Contract Disputes Act (CDA).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DFAS’s termination for convenience and the later solicitation constitute a single unlawful corrective action | Cotton: both actions are one corrective action and thus challengeable as a procurement corrective action | DFAS/E&Y: termination was a convenience termination responding to delay, not corrective action fixing a procurement defect | Held: No corrective action; termination was contract administration (CDA), so not a Tucker Act corrective-action protest |
| Whether the court has jurisdiction over Cotton’s termination-for-convenience claims | Cotton: court can hear the overall protest including termination-related relief | Government: termination issues are contract-administration matters under the CDA requiring a contracting officer’s final decision | Held: Court lacks jurisdiction over termination claims because Cotton has not pursued CDA administrative remedies (no final decision) |
| Whether Cotton is an interested party re: the amended solicitation (standing) | Cotton: has standing and should be awarded/able to challenge the new solicitation | Government/E&Y: Cotton did not bid on the new solicitation and does not allege a solicitation requirement that would preclude its participation | Held: Cotton is not an interested party for the new solicitation; no standing and no Tucker Act jurisdiction |
| Whether a preliminary injunction should issue enjoining E&Y’s performance | Cotton: injunctive relief necessary pending resolution of the protest | E&Y/Government: court lacks jurisdiction; injunction inappropriate | Held: Preliminary injunction DENIED because the court lacked jurisdiction over the underlying claims |
Key Cases Cited
- Sys. Application & Techs., Inc. v. United States, 691 F.3d 1374 (Fed. Cir.) (defines procurement to include all acquisition stages)
- Distrib. Sols., Inc. v. United States, 539 F.3d 1340 (Fed. Cir.) (non-frivolous statutory/regulatory allegation suffices for Tucker Act jurisdiction)
- Rex Serv. Corp. v. United States, 448 F.3d 1305 (Fed. Cir.) (interested party requires actual/prospective bidder and direct economic interest)
- Dalton v. Sherwood Van Lines, Inc., 50 F.3d 1014 (Fed. Cir.) (CDA provides exclusive remedy for contract-administration disputes)
- Media Techs. Licensing, LLC v. Upper Deck Co., 334 F.3d 1366 (Fed. Cir.) (standing is jurisdictional)
- Boarhog LLC v. United States, 129 Fed. Cl. 130 (Fed. Cl.) (analyzing termination for convenience under the CDA)
- Amazon Web Servs., Inc. v. United States, 113 Fed. Cl. 102 (Fed. Cl.) (corrective action must address a procurement defect)
- Sheridan Corp. v. United States, 95 Fed. Cl. 141 (Fed. Cl.) (same principle on corrective action)
- Reilly v. United States, 104 Fed. Cl. 69 (Fed. Cl.) (interested-party analysis where solicitation terms would preclude participation)
- Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308 (Fed. Cir.) (waiver rule: must protest patent solicitation errors before bid close)