COAST PROFESSIONAL, INC., NATIONAL RECOVERIES, INC., PIONEER CREDIT RECOVERY, INC., Plaintiffs, ENTERPRISE RECOVERY SYSTEMS, INC., Plaintiff-Appellant v. UNITED STATES, FINANCIAL MANAGEMENT SYSTEMS, INC., ACCOUNT CONTROL TECHNOLOGY, INC., CONTINENTAL SERVICE GROUP, INC., GC SERVICES LIMITED PARTNERSHIP Defendants-Appellees, WINDHAM PROFESSIONALS, INC., Defendant
2015-5077, 2015-5101
United States Court of Appeals for the Federal Circuit
July 12, 2016
MOORE, REYNA, and WALLACH, Circuit Judges.
Appeal from the United States Court of Federal Claims in Nos. 1:15-cv-00207-FMA, 1:15-cv-00242-FMA, 1:15-cv-00249-FMA, 1:15-cv-00265-FMA, Senior Judge Francis M. Allegra.
Appeal from the United States Court of Federal Claims in Nos. 1:15-cv-00207-FMA, 1:15-cv-00242-FMA, 1:15-cv-00249-FMA, 1:15-cv-00265-FMA, Senior Judge Francis M. Allegra.
Decided: July 12, 2016
ROBERT J. SNECKENBERG, Crowell & Moring, LLP, Washington, DC, argued for plaintiff-appellant Enterprise Recovery Systems, Inc. in 2015-5077. Also represented by DANIEL RUBEN FORMAN, JAMES G. PEYSTER.
JONATHAN DAVID SHAFFER, Smith, Pachter, McWhorter, PLC, Tysons Corner, VA, argued for plaintiff-appellant Pioneer Credit Recovery, Inc. in 2015-5101. Also represented by MARY PAT BUCKENMEYER, NICHOLAS J. SURACE.
MICHAEL D. SNYDER, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee United States. Also represented by JANA MOSES, REGINALD T. BLADES, JR., ROBERT E. KIRSCHMAN, JR., BENJAMIN C. MIZER; JOHN K. DIPAOLO, JOSE OTERO, United States Department of Education, Washington, DC.
JEREMY CHARLES MARWELL, Vinson & Elkins LLP, Washington, DC, argued for defendants-appellees Financial Management Systems, Inc., Account Control Technology, Inc., Continental Service Group, Inc., GC Services Limited Partnership. Defendant-appellee Financial Management Systems, Inc. also represented by DAVID R. JOHNSON, JASON ALAN LEVINE.
BENJAMIN G. CHEW, Manatt Phelps & Phillips, Washington, DC, for defendant-appellee Account Control Technology, Inc. Also represented by RORY EDWARD ADAMS.
EDWARD H. MEYERS, Stein Mitchell Muse Cipollone & Beato LLP, Washington, DC, for defendant-appellee Continental Service Group, Inc. Also represented by REBECCA ANZIDEI.
STEPHEN E. RUSCUS, Morgan, Lewis & Bockius LLP, Washington, DC, for defendant-appellee GC Services Limited Partnership. Also represented by ARNOLD BRADLEY FAGG.
Before MOORE, REYNA, and WALLACH, Circuit Judges.
Pioneer Credit Recovery, Inc. (“Pioneer“) and Enterprise Recovery Systems, Inc. (“Enterprise“) separately appeal from a decision by the Court of Federal Claims dismissing their claims against the government for lack of jurisdiction. We vacate and remand.
BACKGROUND
Since 1981, the Department of Education (“Education“) has contracted with private collection agencies for services related to resolving defaulted student loans through the General Services Administration (“GSA“) Federal Supply Schedule for Financial and Business Solutions. See
In 2008, Education issued a Request for Quotations (“RFQ“) for debt collection services under Special Item Number 520-4 seeking to issue Task Orders to contractors under the existing GSA Schedule contract. The RFQ contained a detailed Statement of Work explaining the required activities and standards applicable to collection on defaulted student loans and detailed how the contractors would be evaluated. The RFQ also explained that the Task Order would include a base term and options periods but that the total term of performance under the RFQ would not exceed 60 months:
The ordering period for the task orders will be from the date of award through March 31, 2011, and an additional option period of up to 24 months. The total ordering period will not exceed 60 months from the date of the task order award. This is not a multiyear contract as defined in FAR Sub part 17.1.
J.A. 1017.1 Education awarded identical Task Orders pursuant to the RFQ to Pioneer, Enterprise, and twenty other contractors. The Task Orders contained all of the standard contract details and material terms—price, duration, obligations, and various other clauses as set forth in the RFQ though some of those terms changed from the RFQ.
The parties agree that the Task Orders contain a base term and that Section H.1 of each Task Order sets forth an Option that permits the government to unilaterally extend the term of the Task Order pursuant to that option up to 24 months for a total ordering period (base term + optional extensions) that does not exceed 60 months:
H.1 FAR 52.217-9, Option to Extend the Term of the Task Order (March 2000) Tailored
(a) The Government may extend the term of this Task Order . . .
(b) If the Government exercises this option, the extended Task Order shall be considered to include this option clause.
(c) The total duration of the first Ordering Period of performance of this Task Order, including the exercise of any optional Ordering Periods under this clause, shall not exceed 60 months from the date of contract award, excluding any award term(s) earned.
(d) The Government may, at its discretion, exercise option periods of up to 24 months, provided that the total Task Order period of performance does not exceed 60 months from the date of the award.
J.A. 1419. This option in the Task Order parallels the FAR which it expressly cites. It is undisputed that if the government exercises an option under H.1 to extend the Task Order, no new Task Order is issued. See J.A. 1419. Section “H.3 FAR 52.217-8 Option to Extend Services” similarly permits the government to unilaterally require continued performance under the Task Order for up to 6 additional
Each Task Order also included a clause entitled “H.4 Award Term Extension,” which provided that the contrac-tor could earn award-term extensions in addition to the base period and any options exercised pursuant to Sections H.1 and H.3:
the Contractor may earn performance extensions (hereinafter called “award terms“), based upon the quality of performance during the evaluation periods. If the Contractor has an average [Contractor Performance and Continuous Surveillance (“CPCS“)] rating of 752 or greater over the life of the Task Order, or the last 12 CPCS periods (whichever is shorter), the Government may[] award the Contractor an award-term extension in accordance with the terms of this clause in recognition of the Contractor‘s excellent or better quality performance.
J.A. 1419-20. Section H.4 also specified that “[a]ny award term extensions awarded under this clause will be executed in the form of a new Task Order issued by the Contracting Officer under the Contractor‘s then current GSA schedule contract.” J.A. 1420.
In December 2014, Education began secretly auditing the contractors based on recommendations by the Government Accountability Office for improved oversight. Reviewers from Education listened to roughly one hundred phone calls that each contractor made to defaulted borrowers and counted the number of times the contractor violated consumer protection laws. Education then calcu-
lated an “error rate” for each contractor based on the number of phone calls containing at least one violation. Based on their error rates, Education decided not to issue award-term Task Orders to Pioneer or Enterprise even though they scored “excellent or better” under the CPCS system.
On February 20, 2015, Education notified Pioneer and Enterprise of its decision not to issue award-term Task Orders to them. One day later, Education notified five other contractors (collectively, “the competitors“) that it intended to issue award-term Task Orders to them for a period not to exceed a specified number of months. These letters, titled Notification of Award Term Extension and each signed by the Contracting Officer, expressly stated: “If the contract is extended pursuant to H.4, it will be accomplished via a contracting action, which will specifically identify all of the terms and conditions.” J.A. 2107 (emphasis added).
In March 2015, Pioneer and Enterprise filed suit against the government in the Court of Federal Claims, based on, inter alia, Education‘s proposed issuance of award-term extensions under H.4 to the competitors. The complaints alleged that the Court of Federal Claims had jurisdiction over the claims under the Tucker Act,
DISCUSSION
We review the Court of Federal Claims’ dismissal for lack of subject matter jurisdiction de novo. Distributed Sols., Inc. v. United States, 539 F.3d 1340, 1343 (Fed. Cir. 2008). We review its factual findings for clear error. Id. We review its interpretation of contracts without defer-ence, giving unambiguous contract terms their plain and ordinary meaning. Precision Pine & Timber, Inc. v. United States, 596 F.3d 817, 824 (Fed. Cir. 2010). We review questions of statutory interpretation without deference. Res-Care, Inc. v. United States, 735 F.3d 1384, 1387 (Fed. Cir. 2013).
Under the Tucker Act, as amended, the Court of Federal Claims has bid protest jurisdiction over “action[s] 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.”
issue new Task Orders to contractors under the GSA Schedule contract falls within the plain language of
There is no dispute that the award-term extension under H.4 requires the government to issue a new Task Order for the extension of debt collection services for the competitors. The Supreme Court recently held that issuance of a new Task Order against a GSA Federal Supply Schedule contract constitutes an award of a contract. See Kingdomware Techs., Inc. v. United States, No. 14-916, 2016 WL 3317563, at *8–9 (U.S. June 16, 2016). It is thus a protestable event under
In this case, however, the Court of Federal Claims concluded that these proposed
On appeal, the government defends the Court of Federal Claims’ decision arguing that using a new Task Order is a “mere formality.” Gov‘t Br. 30. The government reasons that because the new Task Order will be subject to the same terms and conditions as the old Task Order, it should not be considered a new contract. The government argues that instead, the award-term extension issued in a new Task Order should be considered an option. Gov‘t Br. 27–30. And the government argues that it is well-settled that an agency‘s decision whether to exercise an option is a matter of contract administration which can only be challenged under the Contract Disputes Act (“CDA“). Gov‘t Br. 20–26. On this latter point, the government is correct. If a contractor wishes to contest an agency‘s decision regarding exercising an option under the contract, such a challenge is a matter of contract administration governed by the CDA. See Jones Automation, Inc. v. United States, 92 Fed. Cl. 368, 371–72 (2010) (failure to exercise an option is a matter of contract administration outside the court‘s bid protest jurisdiction); Gov‘t Tech. Servs., LLC v. United States, 90 Fed. Cl. 522,
(4th ed. 2011). We agree that Task Orders issued pursuant to a GSA Federal Supply Schedule are actions over which the Court of Federal Claims has jurisdiction.
526 (2009) (failure to exercise an option is governed by the CDA and is not a bid protest).
We cannot agree however that the award-term extension issued in the form of a new Task Order is properly treated as an option governed by the CDA. Even when a new Task Order contracts for the same work previously performed by the same contractor under the GSA Schedule contract, this new Task Order is the award of a new contract. Although the government recognizes that new rounds of Task Orders under the same GSA Schedule contract amount to a new procurement, it attempts to distinguish the award-term extension at issue from “the next round of PCA Task Orders” by arguing the award-term extensions are not the subject of a separate procurement. Gov‘t Br. 30 n.8. But H.4 expressly anticipates that the Task Orders issued for the award-term extensions will issue concurrently with Task Orders issued pursuant to additional rounds of procurement beyond the 60 months permitted under the 2009 Task Orders. “It is the Government‘s intent to time any award-term extension so that the extension period will coincide with the award date of the next round of Task Orders.” J.A. 1419. That the government
The government asks us to deviate from the established rule that new Task Orders are new contracts, and instead conclude that new Task Orders resulting from award-term extensions are “akin to options.” Gov‘t Br. 27. We do not agree that the award-term extension at issue in H.4, which requires a new Task Order to be issued, should be treated like an option. The FAR expressly defines an
Option: “Option means the unilateral right in a contract by which, for a specified time, the Government may elect to purchase additional supplies or services called for by the contract, or may elect to extend the term of the contract.”
The government points us to
Precedent counsels against treating Section H.4 as an option because the contract in fact has two separate options clauses already. The 2009 Task Orders contained two other provisions, H.1 and H.3, which are expressly called options. J.A. 1419. The appearance of the term “option” in only some of the provisions that extend the duration of the 2009 Task Orders indicates that the parties did not intend to treat “option” and “extension” as synonymous. See, e.g., Diamond Coating Techs., LLC v. Hyundai Motor Am., Nos. 2015-1844, -1861, 2016 WL
2865704, at *3 (Fed. Cir. May 17, 2016) (explaining that a contract‘s use of a term in some provisions, but not others, reflects the parties’ intent to limit the term in question). And as stated above, the substance of Section H.4 is different from provisions that meet the definition of “option” under the FAR. Compare J.A. 1419–20, with
The government has not convinced us that we ought to deviate from the definitions and conditions in the FAR to conclude that the new Task Orders which would issue pursuant to an award-term extension ought to be treated as options
Section 1491 gives the Court of Federal Claims jurisdiction over “the award or proposed award of a contract.” We conclude that issuance of a new Task Order pursuant to a GSA Federal Supply Schedule contract constitutes the award of a contract and is thus an action over which the Court of Federal Claims has jurisdiction. We see no reason to create an exception when the new Task Orders arise from an award-term extension.
CONCLUSION
Because we conclude that the Court of Federal Claims erred in concluding that the award-term Task Orders were not new Task Orders for purposes of
VACATED AND REMANDED
COSTS
Costs to Pioneer and Enterprise.