OPINION
This is аn action brought pursuant to the court’s bid protest jurisdiction. Plaintiff, the incumbent contractor to provide base supply services at Joint Base Elmendorf-Richard-son Air Force Base, Alaska, asks the court to enjoin the Air Force from performing these services in-house. Although option years remain on the contract, the Air Force has notified plaintiff that when the latest option expires on June 29, 2012, the contract will not be renewed. Pending are plaintiffs motion for a preliminary injunction and defendant’s motion to dismiss under Rule 12(b)(1) and (6) of the Rules of the United. Stаtes Court of Federal Claims (“RCFC”). Defendant contends that the court’s subject matter jurisdiction does not extend to challenges to in-sourcing contract services, and that, in any event, even an incumbent contractor lacks standing to challenge an in-sourcing decision.
We heard oral argument on June 15, 2012, and ruled from the bench, denying both the motion to dismiss and the motion for preliminary injunction. For the reasons we explain below, the court possesses jurisdiction and plaintiff has the requisite standing, but the
BACKGROUND
Elmendоrf Support Services Joint Venture (“ESS”) currently provides base supply services to the Air Force at Joint Base Elmendorf-Richardson Air Force Base, Alaska (“JBER”). The contract became effective on October 1, 2005. The purpose was to provide general supply services, inventory control, customer and training services, contingency planning, and other support at JBER. The contract provided for one base year and nine option years, with the final option year ending on September 30, 2015. Plaintiff is currently in the sixth option year.
In March 2010, the Air Force conducted a “DTM-COMPARE”
The Air Force encountered budget difficulties in implementing the decision to move to in-house performance, however. In his declaration, Vincent E. Gasaway, the Chief of Manpower, Organization and Resources Division, states that the Air Force implemented a hiring freeze, which adversely аffected the ability to hire the required 93 civilian employees to assume the base supply function.
The Air Force thus temporarily suspended in-sourcing in June 2011. Due to the lack of budgeted funds in the fiscal year 2012 budget, moreover, the parties entered into a bilateral contract modification on September 29,2011, that shortened the sixth option period so that it will end on June 29, 2012, instead of September 30, 2012. It also created a new three-month option period ending on September 29, 2012. This allowed the Air Force to use remaining fiscal year 2011 funds for the new nine-mоnth extension.
The temporary suspension of in-sourcing ended in October 2011. Plaintiff was notified of this fact. The hiring freeze was also lifted in late 2011, although the Air Force predicted it would not be able to hire the required number of employees by the end of the new option period (June 29, 2012). Thus, the Air Force “determined that military manpower would be used temporarily to reduce mission risk during the transition.” Gasaway Decl. ¶ 5. According to Mr. Gasaway, the DTM-COMPARE model determined that using 74 military personnel would not exceed the cost of the contract.
The Air Force has begun hiring civilian personnel for the transition, although it is currently using a mix of military and civilian personnel to perform the services during the transition period. It has “committed to expedite all actions associated with this hiring action and complete the transition to an all civilian workforce as quickly as possible.” Gasaway Decl. ¶ 5.
On February 3, 2012, the Air Force notified plaintiff that it was unlikely to exercise the remaining options and predicted that the contract would end by its own terms on June 29, 2012. The Air Force also requested that
DISCUSSION
Plaintiff filed its complaint on June 1,2012. The gravamen is that, although the Air Force completed a DTM-COMPARE cost analysis using civilian employees, it never conducted one assuming military personnel. According to plaintiff, “in-sourcing the [s]er-viees to a military workforce is likely to involve costs above and beyond those associated with in-sourcing the [services to a government civilian workforce.” Compl. ¶ 22. Plaintiff also asserts that performance of those services by a military workforce is likely to be more costly than “performance of the [s]ervices by a private contractor such as [plaintiff].” Compl. ¶ 23. In addition to the cost consideration, plaintiff asserts that performance of the services by military personnel would “pose safety and mission risks.” Compl. ¶ 24. Plaintiff thus argues that the in-sourcing of the contract services lacks a rational basis, is arbitrary and capricious, and violates 10 U.S.C. § 129a and 10 U.S.C. § 2463 (West Supp.2012), which concern force management and the use of civilian personnel in the performance of Department of Defense (“DoD”) functions.
10 U.S.C. § 129a(e) provides that if the DoD seeks to transfer performance of services from contractors to civilian employees, it must comply with 10 U.S.C. § 2463. Section 2463, in turn, provides in relevant part:
[I]n determining whether a function should be converted to performance by Department of Defense civilian employees, the Secretary of Defense shall—
(A)develop methodology for determining costs based on the guidance outlined in the Directive-Type Memorandum 09-007 entitled ‘Estimating and Comparing the Full Costs of Civilian and Military Manpower and Contractor Support’ or any successor guidance for the determination of costs when costs are the sole basis for the determination;
(B) take into consideration any supplemental guidance issued by the Secretary of a military department for determinations affecting functions of that military department; and
(C) ensure that the difference in the cost of performing the function by a contractor compared to the cost of performing the function by Department of Defense civilian employees would be equal to or exceed the lesser of—
(i) 10 percent of the personnel-related costs for performance of that function; or
(ii) $10,000,000.
10 U.S.C. § 2463(e) (West Supp.2012).
In response, defendant argues that this court lacks subject matter jurisdiction under 28 U.S.C. § 1491(b)(1) (2006) because there is no pending or proposed procurement. In addition, it contends that plaintiff lacks standing because plaintiff is neither an “interested party,” nor does it have prudential standing to protest the agency’s in-sourcing decision because the injury that plaintiff alleges is not within the zone of interests protected by the statutes upon which it relies. Even if the court does possess jurisdiction, defendant argues that a preliminary injunction should be denied because of potential danger to the national security interests involved, exacerbated by the lengthy delay between the time that plaintiff first became aware of the proposed in-sourcing and when it brought this suit.
We note аt the outset that there exists a split among the judges of this court regarding whether the decision to in-source contract services is renewable. In Santa Barbara Applied Research, Inc. v. United States,
I. The сourt possesses subject matter jurisdiction because the in-sourcing decision is in connection with a proposed procurement
Plaintiff relies on the final clause of § 1491(b)(1), which allows an interested party to bring suit for “any alleged violation of statute or regulation in connection with a procurement or proposed procurement.” In Distributed Solutions, Inc. v. United States,
The substance of the Air Force’s decision here was to stop procuring services from plaintiff and instead to use government employees. Because that decision necessarily included the process for “determining the need for ... services” that plaintiff currently provides, the in-sourcing decision-making process was “in connection with a procurement or proposed procurement” within the rather generous definition adopted by the Federal Circuit. The statutorily-required cost comparison under 10 U.S.C. § 2463 was the beginning of the contracting process here. Other courts which confronted this issue have come to the same result. See
Santa Barbara,
II. Plaintiff is an “interested party” and is not otherwise barred by prudential standing concerns
Under 28 U.S.C. § 1491(b)(1), plaintiff must be an “interested party” to proceed with its bid protest in this court. Again turning to Distributed Solutions, a plaintiff is an “interested party” for purposes of 28 U.S.C. § 1491(b)(1) if it establishes that: “(1) it was an actual or prospective bidder or offeror, and (2) it had a direct economic interest in the procurement or proposed procurement.”
Santa Barbara is instructive. There the court held that “[w]here ... [plaintiff] has a track record of winning contracts for the work that the Air Force is now in-sourcing, the economic impact to [plaintiff] cannot be
Defendant contends that, even if standing concerns are satisfied in terms of a typical bid protest, nevertheless it is absent here because of the attenuated connection plaintiff has to the statutes it wishes the court to enforce. It invokes Judge Allegra’s rationale in Hallmark-Phoenix, where he dismissed a similar protest due to a perceived lack of “prudential standing.” Prudential standing is a judicially self-imposed standard used to circumscribe the exercise of federal jurisdiction. See Elk Grove Unified Sch. Dist. v. Newdow,
In Hallmark-Phoenix, Judge Allegra declined to exercise jurisdiction because, in his view, 10 U.S.C. § 129a and 10 U.S.C. § 2463 are intended to protect the government’s internal budgetary interests, and are not intended to protect contractors adversely affected by in-sourcing decisions.
Judge Firestone came to the opposite conclusion in Santa Barbara,
Subsequent to oral argument, the Supreme Court in Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak, — U.S. -,
III. The balance of hardships weighs against issuing a preliminary injunction
A preliminary injunction is an extraordinary remedy. See FMC Corp. v. United States,
(1) that it will suffer irreparable injury if the procurement is not enjoined; (2) a reasonable likelihood of success on the merits of its claim; (3) that the harm suffered by it, if the procurement action is*210 not enjoined, will outweigh the harm to the government and third parties; and (4) that granting injunctive relief serves the public interest.
MORI Assocs., Inc. v. United States,
In addition to these factors, unique to the Court of Federаl Claims, we have a statutory directive to “give due regard to the interests of national defense and national security and the need for expeditious resolution of the action” when determining whether to grant a preliminary injunction in a bid protest. 28 U.S.C. § 1491(b)(3) (2006). In doing so, we are to give deference “to the professional judgment of military authorities concerning the relative importance of a particular military interest.” Winter v. Natural Res. Def. Council, Inc.,
A. Plaintiffs potential injury
Plaintiff submitted several declarations to demonstrate the harm that it would suffer in the absence of a preliminary injunction. The thrust of the injury is economic. Plaintiff asserts that it was formed solely to work on this contract and, if the contract ends, its only source of income will cease. Additionally, Gail Schubert, President and CEO of Bering Straits Native Corporation (parent company of one of the companies that comprises ESS) stated that the Alaska Teamster-Employer Pension Plan would assess a penalty against ESS for early withdrawal from the pension plan in the amount of $7,170,513.67. Plaintiff has also submitted three declarations by Steven P. Brunin, its Program Manager. In his second declaration, Mr. Brunin states that the in-sourcing decision is causing plaintiff to lose employees to the Air Force and that plaintiff is not in a position to hire replacements.
We credit plaintiffs assertion of immediate financial harm. If this is plaintiffs only contract, then it plainly would be injured, assuming the Air Force’s only option is to exercise the next option term.
We decline to give anything like conclusive weight to this factor, however, for twо reasons. First, the injury to plaintiff is being triggered by the failure of the Air Force to exercise the next option year of the contract. In other words, the injury could be happening not because of an alleged procurement error, but if the Air Force simply decided not to obtain the services that plaintiff has been providing. Plaintiff should have been aware that the government was under no obligation to exercise additional options. See 48 C.F.R. § 2.101 (2011). If an option was not exercised, plaintiff would no longer earn profits under the contract and potentially be subject to penalties related to the pension plan.
Second, plaintiff has known about the results of the Air Force’s cost comparison process and the anticipated shift to in-sourcing since February 2011. Nevertheless it chose to wait until 28 days before the end of the last option extension to file its complaint. Equity aids the vigilant, not those who slumber on their rights. See LaForge & Budd Const. Co., Inc. v. United States,
B. Likelihood of success on the merits
Although the likelihood of success need not be shown to a mathematical certainty, plaintiff must nevertheless demonstrate that it has a reasonable likelihood of success. The gravamen of plaintiffs complaint is that, although a cost comparison was done, it was done improperly because it assumed the use of civilian employees, whereas the Air Force is now contemplating, at least temporarily, using some military personnel.
We are not persuaded that plaintiffs argument is a likely winner. First, the major
C. Harm to the government
The defendant hаs filed five declarations from Air Force officers addressing the likely harm that an injunction against in-sourcing would cause to Air Force operations and military readiness. Two of the declar-ants, Lt. Col. Steven J. Minkin, Chief of Budget Operations, [¶] Pacific Air Force, and Lt. Col. Patricia Csánk, Commander of. the 673rd LRS, 673rd Air Base Wing, JBER, made statements directly addressing the impact an injunction would have on national defense and national security. Lt. Col. Csánk stated that an injunction would have a “harmful and immediate impact on JBER’s combat and deployment readiness for both exercises and real world requirements.” Csánk Decl. ¶ 4. Lt. Col. Csánk further states that, due to the employees ESS has lost, if an injunction mandated ESS continue providing the services, it would “unduly jeopardize the 673rd Air Base Wing and the 3rd Wing’s combat and mobility aircraft operational missions and overall readiness posture _” Csánk Decl. ¶ 7.
In response, plaintiff offers Mr. Brunin’s declaration that employees from other contracts performed by ESS’s parent company could be relocated to perform on the JBER contract. We note that this is in direct tension with his statement elsewhere that “ESS will not be in а position to hire replacement personnel for these vacant positions during the remainder of the Contract term.” Brunin 2d Decl. ¶ 9. Moreover, “starting June 4, and increasing in severity from June 14 through June 18, ESS’s ability to perform the Contract will be materially impaired by these Air Force actions.” Brunin 2d Decl. ¶ 11.
Even if plaintiff could perform sufficiently notwithstanding the lack of employees, however, the Air Force stated that it does not have the money to pay plaintiff past June 29, 2012 without affecting military readiness. The lack of budgeted funds to pay plaintiff past June 29, 2012, is further supрorted by the declaration from Lt. Col. Steven J. Min-kin, Chief of Budget Operations, [¶] Pacific Air Force, Joint Base Pearl Harbor-Hickam, who is responsible for budgeting across the pacific theater. He states that if the transition was stopped, because there exists no more funding for the contract, the Air Force would have to “cancel planned facility renovation projects across the Pacific theater, rescind projects that have already been advertised, and incur the subsequent termination fees associated with pulling solicitations from the open market.” Minkin Deck ¶ 8. Lt. Col. Minkin recites that during an injunction, “the United States military would face financial constraints and uncertainty that would harm military readiness and national security.” Minkin Deck ¶ 9.
In response to the defendant’s claim that the Air Force would have to reallocate funds from other projects, Mr. Brunin claims that the Air Force’s Warehouse Shutdown Plan, a part of the transition process, calls for increasing inventory by 200%. Mr. Brunin estimates the cost of these supplies at $2.9 million, and claims that if the injunction is
The effect on military readiness is further exacerbated by the summer military exercises that are planned for JBER. The Air Force notes that it is currently involved in a “multinational RED FLAG” exercise. The 673rd Logistics Readiness Squadron, stationed at JBER, “plays a significant role in these exercises in supplying and sustaining aircraft parts for numerous [United States] and mul-ti-national air forces’ weapons systems as well as providing various types of ground and aviation supplies_” Csánk Decl. ¶ 5. Lt. Col. Csánk notes that this exercise significantly increases the demand for base supply services. Lt. Col. Csánk doubts plaintiffs ability to handle this increase in demand due to its loss of employees, as confirmed by Mr. Brunin. In fаct, Lt. Col. Csánk states that degradation of services has already been noticed and required the government to supplement plaintiffs employees during the most recent Operation Readiness Exercise and real-world contingency deployment operations.
Defendant points out that the harm the Air Force would suffer would be worse now than if an injunction had been issued long before the Air Force began the process of converting the services. Plaintiff has known of the Air Force’s intention to in-source the contract since February 2, 2011, after the cost comparison had been completed. On February 3, 2012, the Air Force informed plaintiff that it was unlikely to exercise the remaining options and predicted that the contract would expire on June 29, 2012. In February 2012, the Air Force even requested that plaintiff prepare a comprehensive transition plan. Despite these warnings, plaintiff did not chose to file a bid protest until June 1, 2012, less than a month before their contract expired and the Air Force in-sourcing initiative would take full effect. Undue delay is relevant in determining the extent to which it has magnified the harm to defendant. See Software Testing Solutions, Inc. v. United States,
D. The public interest
The public interest is obviously served by requiring the Air Force to follow the law with respect to performing the requisite cost analysis. Plaintiff recognizes that a cost-comparison was done, and defendant asserts that it was done in such a way that obviates plaintiffs concerns about the use of military personnel. Under the circumstances, and in light of the government’s unrebutted assertions that an injunction would jeopardize national security and national defеnse, this factor does not favor entry of an injunction.
In sum, none of the factors militate in favor of an injunction. While plaintiff clearly has an interest in maintaining its contract, it was slow to enforce its rights. Nor does it appear likely that plaintiff will succeed on its narrow substantive claim. The disorder that would result from an injunction is well established by the government, in part because of the undue delay. And finally, there is no overriding public interest in ignoring the impact on the Air Force’s concern for national security and military readiness. Accordingly, injunctive relief is inappropriate.
CONCLUSION
For the reasons stated above, we deny defendant’s motion to dismiss. We also deny plaintiffs motion for a preliminary injunction. The parties shall submit a joint status report by July 13, 2012, detailing how they would like to proceed.
Notes
.The following facts are drawn from the complaint, plaintiff’s motion for preliminary injunction, defendant’s motion to dismiss, and declarations filed in support of the parties’ respective motions. Unless otherwise stated, the facts are not in dispute. The parties agreed that it would be unnecessary for the government to produce thе administrative record until after the present motions are resolved.
. DTM-COMPARE is a cost-comparison software tool provided by the Air Force Manpower Agency-
. The Ike Skelton National Defense Authorization Act for Fiscal Year 2011, Pub.L. 111-383, 124 Stat. 4127, 4184 (Jan. 7, 2011), amended 10 U.S.C. § 2463 by specifically requiring the Directive-Type Memorandum 09-007 analysis.
. We note also that Congress, in adopting 28 U.S.C. § 1491(b)(5), allowed government employees to intervene in a bid protest under the reverse scenario, i.e., when the government decides to "out-source” services provided by government emplоyees to contractors by conducting a "public-private competition” under Office of Management and Budget Circular A-76. Circular A-76 provides that the government, as a general matter, is to procure services from outside contractors if less costly than government employees. See Am. Fed'n of Gov't Emps., AFL-CIO v. United States,
