MEMORANDUM OPINION AND ORDER DENYING DEFENDANT’S MOTION TO DISMISS
In this post-award bid protest, L-3 Communications Integrated Systems, L.P. (“L-3”) challenges the Air Force’s award of two contracts to Lockheed Martin Aeronautics Company (“Lockheed Martin”) to modernize the C-5 Galaxy aircraft (“C-5 AMP”) and seeks its bid preparation and proposal costs. This protest was filed in the wake of the former Principal Deputy Secretary of the Air Force’s conviction for violating conflict of interest laws. Specifically, the former Principal Deputy Secretary, Darleen Druyun, admitted that she allowed her personal interest to influence her procurement decisions with respect to the Boeing Company — she, her daughter, and son-in-law negotiated for employment with Boeing while she was a top Air Force procurement official.
Plaintiff has raised several grounds of protest, claiming that through Druyun’s unauthorized assumption of the Source Selection Authority (“SSA”) duties and her change of evaluation ratings to justify the selection of Lockheed Martin’s higher cost proposal, the Air Force improperly compromised the integrity of the procurement process, breached its implied contract to treat proposals fairly, honestly, and in good faith, and violated a panoply of procurement statutes and regulations. L-3 further claims that Druyun was biased in favor of Lockheed Martin and acted in bad faith in the C-5 AMP procurement. Finally, L-B asserts that the Air Force acted arbitrarily and capriciously in malting award to Lockheed Martin.
This matter comes before the Court on Defendant’s motion to dismiss Plaintiffs claim for breach of the implied contract of fair dealing. Defendant argues that the Federal Circuit’s decision in Resource Conservation Group, LLC v. United States,
This Court does not read Resource Conservation to preclude a plaintiff either from claiming a breach of the implied contract of fair dealing in a bid protest or from relying on § 1491(a) as a predicate for jurisdiction in a bid protest involving a procurement. As such, the Court denies Defendant’s motion to dismiss.
Discussion
In its third motion to dismiss, Defendant moves to dismiss paragraph 42 of Plaintiffs complaint for lack of jurisdiction under Rule 12(b)(6) of the Rules of the Court of Federal Claims (“RCFC”) and to dismiss the statement in Plaintiffs amended complaint in which Plaintiff avers that this Court has jurisdiction over this action pursuant to 28 U.S.C. § 1491(a).
Before ADRA’s enactment, the Court’s jurisdiction over a bid protest was predicated on the implied-in-fact contract between the Government and prospective bidders to fairly and honestly consider the bids in making a selection under § 1491(a). Keco Indus., Inc. v. United States,
Defendant argues that the Federal Circuit’s opinion in Resource Conservation resolved the dispute by holding that a claim for breach of the implied-in-fact contract of fair and honest consideration is no longer viable in procurement actions. However, Resource Conservation did not squarely address that issue and should not be read to limit § 1491(a)(1) jurisdiction particularly where the decision construed that statute to confer jurisdiction, not curtail it. After ruling that nonprocurement eases do not fall under the Court’s § 1491(b) jurisdiction because that statute only pertains to procurement decisions, the Federal Circuit in Resource Conservation concluded that the implied-in-fact contract jurisdiction under 28 U.S.C. § 1491(a)(1) that existed prior to 1996, survived ADRA’s enactment “as to claims where the new statute does not provide a remedy.”
In so ruling the Federal Circuit tackled an issue it had twice declined to reach before— whether that implied-in-fact contract jurisdiction under § 1491(a) survived the new ADRA statute, § 1491(b). See Emery Worldwide Airlines v. U.S.,
Contrary to Defendant’s arguments, the Federal Circuit in Resource Conservation did not repeal this Court’s § 1491(a) jurisdiction ■with respect to a subcategory of contracts, i.e., procurement contracts. Rather, the court in Resource Conservation focused on whether § 1491(b) applied to a lease and concluded this provision did not apply. The Federal Circuit in Resource Conservation found that the plaintiffs claim was beyond the jurisdiction conferred by § 1491(b) because the plaintiff was challenging a solicitation that did not involve the procurement of goods and services by the Government. Without addressing the entire universe of what type of § 1491(a) actions survived the enactment of § 1491(b)(1), the Federal Cir
As the Court in FAS Support Servs., LLC v. United States, No. 10-289C (Fed.Cl. July 28, 2010) recently recognized, Congress, in changing § 1491(b) to unify bid protest jurisdiction in the Court of Federal Claims (“COFC”), left this Court’s broad contract jurisdiction in § 1491(a)(1) alone. Section 1491(a) continues to state, exactly as it did before the 1996 amendments, that the COFC has “jurisdiction to render judgment upon any claim against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.” The statute does not delete implied-in-fact or express procurement contracts from its reach. Section 1491(a)(1) continues to allow any plaintiff, including a disappointed bidder, to invoke this Court’s general contract jurisdiction to recover money damages, including bid preparation and proposal costs. The revision of § 1491(b) did not terminate the implied contract of fair dealing. Nor did a cause of action for breach of the implied contact of fair dealing under § 1491(a) cease to exist simply because a breach occurred in the context of a procurement decision and could also be denominated a “bid protest.” On the contrary, as the Federal Circuit in Resource Conservation recognized, Congress intended ADRA “to give the Court of Federal Claims exclusive jurisdiction over the full range of procurement protest cases previously subject to re-vieiv in the federal district courts and the Court of Federal Claims.” H.R.Rep. No. 104-841, at 10 (1996) (emphasis added). At the time of ADRA’s enactment, the “full range of procurement protest cases” subject to r’eview in federal courts included cases based on the breach of the implied contract of fair dealing.
Indeed, the Court of Federal Claims recently reaffirmed that § 1491(a) still confers jurisdiction on this Court in a bid protest challenging a suspension or debarment process that “has a direct impact on the award process for a specific federal government contraet(s).” FAS Support Servs., LLC v. United States,
The parties recognize that Resource Conservation Group, LLC v. United States,597 F.3d 1238 , 1245 (Fed.Cir.2010) holds that implied-in-fact contract jurisdiction under 28 U.S.C. § 1491(a)(1) remains for application to protests where 28 U.S.C. § 1491(b)(1) does not provide a remedy. By “implied-in-fact contract jurisdiction,” the Federal Circuit has reference to “ ‘an implied contract to have the involved bids fairly and honestly considered.’ ”597 F.3d at 1242 (quoting United States v. John C. Grimberg Co.,702 F.2d 1362 , 1367 (Fed. Cir.1983)).
For recovery under the implied contract for bids to be fairly and honestly considered, a plaintiff has to establish arbitrary and capricious action, or an abuse of discretion by the government. Keco Indus., Inc. v. United States,492 F.2d 1200 ,203 Ct.Cl. 566 (1974). One factor to consider in this regard is a proven violation of pertinent statutes or regulations. Keco,203 Ct.Cl. at 574 ,492 F.2d at 1203-04 .
Id. at 694.
This Court recognizes that some courts and commentators have read the dicta in
Nonetheless, this Court does not read the dicta in Resource Conservation as an effort by the Federal Circuit to repeal the § 1491(a) jurisdiction with regard to procurement contracts. Such an implicit repeal of § 1491(a)’s procurement jurisdiction would run counter to the longstanding principle of statutory construction which recognizes a strong presumption against an implied repeal of a jurisdictional statute. See Colo. River Water Conservation Dist. v. United States,
In sum, Resource Conservation does not hold that ADRA eliminated § 1491(a) jurisdiction in a breach of implied contract action involving a procurement. Nor did ADRA affect a protestor’s ability to argue a breach of the implied contract of fair dealing in a bid protest where jurisdiction is predicated on § 1491(b).
Defendant’s motion to dismiss is DENIED.
Notes
. Defendant invokes Rule 12(b)(6) in its motion, not Rule 12(b)(1). Given the substance of Defendant’s argument and Plaintiff's response, the Court interprets Defendant’s motion as raising both a partial lack of subject matter jurisdiction and a failure to state a claim for which relief may be granted.
. Compare L-3 Commc'ns Integrated Sys., L.P. v. United States, 79 Fed.Cl. 453, 461 (2007) ("Although ADRA obviated the need to base the fU.S. Court of Federal Claims’] protest jurisdiction on a breach of this implied-in-fact contract to consider bids fairly, the statute in no way eliminated a protestor's ability to challenge arbitrary and capricious conduct, such as bias or an unfair evaluation, which would also constitute a breach of the implied contract of fair dealing.”), with Block v. United States,
. The Court in FAS also put to rest the notion that § 1491(a) jurisdiction could not have sur
Thus the 5 U.S.C. § 706(2)(A) arbilraiy, capricious, and abuse of discretion review standard specified for procurement protests under 28 U.S.C. § 1491(b)(4) is essentially the same as that established for the implied contract requiring fair and honest bid consideration. The major difference between a protest brought under 28 U.S.C. § 1491(b)(1) and one brought pursuant to an implied contract under 28 U.S.C. § 1491(a)(1) is the equitable relief which is available for the section 1491(b)(1) protest, but not for breach of the implied contract. Only monetary relief is available for breach of the implied contract, comprising the costs incurred in preparing the proposal and bid.
No. 10-289C, at 11-12 (Fed.Cl. July 28, 2010).