OPINION AND ORDER
Todd Construction sued in this court alleging that the negative performance evalúa-
I. Factual Background
In 2003, Todd Construction received two task orders from the United States Army Corps of Engineers (“Corps”) for roof repair of buildings at the Seymour Johnson Air Force Base in North Carolina. Todd,
On May 25, 2007, Todd filed a three-page complaint in this Court seeking judicial review of the decision of the contracting officer rejecting Todd’s challenge to the unsatisfactory performance appraisals. Compl. (docket entry 1). Todd asserted in its complaint that (1) it had received two task orders; (2) the Corps had issued proposed unsatisfactory evaluations and Todd had timely commented
On August 24, 2007, the Government moved to dismiss Todd’s complaint, alleging that this Court lacked subject matter jurisdiction or, in the alternative, that the complaint failed to state a claim pursuant to Rule 12(b)(6). With respect to the motion to dismiss for failure to state a claim, defendant noted that “Todd Construction’s complaint fails because it does not present any claims or allege any facts in support of its claims,” and that the “omission of any factual allegations ... is fatal to its pleading under the standard set forth by the Supreme Court in Bell Atlantic v. Twombly,”
On December 9, 2008, after multiple rounds of briefing, this Court determined that it possessed jurisdiction over plaintiffs complaint as properly presenting a claim within the scope of the CDA, and thus denied defendant’s motion to dismiss the complaint pursuant to RCFC 12(b)(1). Todd,
The parties filed supplemental briefs stating their initial positions on these questions on March 6, 2009. Defendant’s Additional Briefing on Relief and Standard of Review (“Def.’s Br.”) (docket entry 26); Plaintiffs Supplemental Brief in Response to Court’s December 9, 2008 Opinion and Order (“Pl.’s Br.”) (docket entry 25). Simultaneous responses were filed on April 17, 2009. Defendant’s Response to Plaintiff’s Supplemental Brief (“Def.’s Resp.”) (docket entry 28); Plaintiffs Reply to Defendant’s March 6, 2009, Supplemental Brief (“Pl.’s Resp.”) (docket entry 27).
The question decided by the prior decision in this ease was whether the allegations of the complaint generally fell within the Court’s jurisdiction pursuant to the CDA, and the Court concluded that they did. The matter presently before the Court is whether the relief the plaintiff seeks is within this Court’s power to provide, and what standard of review the Court should apply in evaluating plaintiffs claims.
The parties agree that the Court possesses the authority to enter a declaratory judgment, and further that the second sentence of 28 U.S.C. § 1491(a)(2), which grants the court authority to remand “any case within its jurisdiction” to the agency with “such direction as it may deem proper and just” applies in the present circumstances. Def.’s Br. at 8; Pl.’s Br. at 7. Because plaintiff contends that it relies solely on the declaratory and remand powers, this Court has no occasion to consider and does not decide whether any other remedy could be available. The parties also agree that the court should apply an “arbitrary and capricious” standard of review, despite the statutory instruction to review CDA claims de novo. 41 U.S.C. § 609. The parties differ in the reasoning they apply to reach this conclusion.
The Court again finds it helpful to review the relevant history as background against which to decide the present motion.
II. Historical Background
For more than 100 years following the passage of the Tucker Act, contract disputes
It was not until World War I that the War Department established the first formal board of contract appeals. Joel P. Shedd, Jr., Disputes and Appeals: The Armed Services Board of Contract Appeals, 29 Law & Contemp. Probs. 39, 45 (1964). At about the same time, the Government began to use a “disputes” clause in its contracts setting forth a procedure for resolving disagreements, but a contractor displeased by the agency’s resolution of its claim could nonetheless proceed to court. November 1977 Hearing at 109-10 (statement of Commissioner Louis Spector). Over time, these disputes clauses evolved to include language to the effect that the agency board’s determination was final on “all disputes concerning questions of fact arising under this contract.” Shedd, 29 Law & Contemp. Probs. at 49.
In United States v. Wunderlich,
Some courts interpreted the Wunderlich Act to permit trials de novo on factual issues in the court, while others asserted that the court was limited to reviewing the administrative record. The Supreme Court addressed this issue in United States v. Carlo Bianchi & Co.,
It is contended that the Court of Claims has no power to remand a case such as this to the department concerned, cf. United States v. Jones,336 U.S. 641 , 670-671,69 S.Ct. 787 ,93 L.Ed. 938 , and thus if the administrative record is defective or inadequate, or reveals the commission of some prejudicial error, the court can only hold an evidentiary hearing and proceed to judgment. There are, we believe, two answers to this contention. First, there would undoubtedly be situations in which the court would be warranted, on the basis of the administrative record, in granting judgment for the contractor without the need for further administrative action. Second, in situations where the court believed that the existing record did not warrant such a course, but that the departmental determination could not be sustained under the standards laid down by Congress, we see no reason why the court could not stay its own proceedings pending some further action before the agency involved. Cf. Pennsylvania R. Co. v. United States,363 U.S. 202 ,80 S.Ct. 1131 ,4 L.Ed.2d 1165 . Such a stay would certainly be justified where the department had failed to make adequate provision for a record that could be subjected to judicial scrutiny, for it was clearly part of the legislative purpose to achieve uniformity in this respect. And in any case in which the department failed to remedy the particular substantive or procedural defect or inadequacy, the sanction of judgment for the contractor would always be available to the court.
Carlo Bianchi,
This was an awkward process, and the Chief Judge of the Court of Claims expressed the need for a more direct and expeditious method of remand. Hearing on S. 1704 to Amend Title 28, United States Code, 1491, to Authorize the Court of Claims to Implement Its Judgments for Compensation, Subcommittee on Improvements in Judicial Machinery, Committee on the Judiciary, 90th Cong., 2d Sess., March 12, 1968 at 11 (statement of the Honorable Wilson Cowen, Chief Judge, United States Court of Claims) (“Now, I think it would be very helpful, and I think this legislation would clarify our right to remand, if we could expressly remand the case with specific directions to the Board which we feel we do not have the right to do now.... I think it would be helpful to [the boai’ds] if we said ‘We want you to find specifically what the facts are about this particular claim or cause of action.’ ”).
In 1972, Congress amended the Tucker Act to provide the court authority to “remand appropriate matters to any administrative or executive body or official with such directions as it may deem proper and just,” in “any case within its jurisdiction.” Pub.L. No. 92-415, 86 Stat. 652 (codified at 28 U.S.C. § 1491). This was a non-eontrover-sial codification of the existing practice of “staying” a case pending further agency action, which in the context of government contracts was usually a finding of additional facts by an agency board of contract appeals. Hearing Before Subcommittee No. 2 of the Committee on the Judiciary on H.R. 12979 and H.R. 12392, 92d Cong., 2d Sess. at 125 (March 1, 1972) (statement of Irving Jaffe, Deputy Assistant Attorney General); Hoopa Valley Tribe v. United States,
Shortly thereafter, the Court of Claims utilized this new power to remand a case to the Armed Services Board of Contract Appeals to determine whether the plaintiff had shown good cause for failing to file an appeal within the 30-day time limit: “In remanding
The enactment of the CDA in 1978 allowed government contractors, for the first time, to bring their complaints regarding disputes “under” the contract directly to the court, rather than first addressing them to an agency board of contract appeal.
III.Standard of Review
In considering a motion to dismiss under RCFC 12(b)(6), a court accepts all well-pleaded facts as true and draws all reasonable inferences in plaintiffs favor. See Scheuer v. Rhodes,
IV. This Court is Not Authorized to Award Equitable or Injunctive Relief Generally
The parties correctly agree that, as a general matter, this Court lacks authority to provide injunctive and equitable relief. See Brown v. United States,
V. This Court Possesses Authority to Enter a Declaratory Judgment
The Court previously observed that “it appears that because ‘[j]urisdietion is power to declare the law,’ Ex Parte McCar-
In the supplemental briefing, the parties agreed that the Court may declare the rights of the parties. PL’s Br. at 6-7; Def.’s Br. at 9 (“Assuming [Plaintiff] seeks purely declaratory relief ... this Court possesses authority to issue that relief.”). The Federal Circuit has observed that in deciding whether declaratory relief is warranted, the Court should keep in mind the “appropriateness of declaratory relief, including whether the claim involves a live dispute between the parties, whether a declaration will resolve that dispute, and whether the legal remedies available to the parties would be adequate to protect the parties’ interests.” Alliant Techsystems, Inc. v. United States,
Unlike a traditional matter of contract interpretation, a pure declaration on these facts would serve little purpose. For example, in CW Government Travel, Inc. v. United States,
In this case, we have a “live dispute” — a disagreement over, inter alia, whether the performance evaluation is fair and accurate. It is not clear, however, that a declaration of rights will resolve that dispute. If the Court possesses only the power to say “no, the performance evaluation is not fair and accurate,” but no authority to order any other action, the plaintiff would be essentially no better off than it is today. Even if the Court could say “the performance evaluation should be set aside,” but had no power to require any entity to take any action on that conclusion, the declaratory relief would be meaningless. Thus, although the Court possesses jurisdiction to declare the rights of the parties, declaratory relief alone would be insufficient to provide the plaintiff with any of the relief it seeks. Defendant is correct that a mere declaration “will not necessarily resolve the dispute” because it would neither cause the performance evaluation rating to be changed nor cause the evaluation to be removed from CCASS. Def.’s Resp. at 9.
VI. This Court Possesses Jurisdiction to Remand with “Proper and Just” Directions
As noted above, the parties agree the Court is statutorily authorized to remand this ease to the agency (in this ease, the United States Army Corps of Engineers) with “proper and just” directions. Plaintiff would shoehorn into the Court’s ability to remand with “proper and just” directions authority for the Court to make essentially any order requiring the agency to take any action, including setting aside the performance evaluation or removing it from CCASS. Pl.’s Br. at 7. Defendant counters that although the Court may remand, it may “say nothing more than that [Plaintiff] is entitled to a fair and
The Court’s review of the history and case law reveals that the truth lies somewhere in between these two extremes. The Court may, and does, remand to agencies with directions more specific than merely restating the terms of the right at issue. The Court does not, however, view the “proper and just” language as conferring unlimited authority.
The court has utilized the remand power in a variety of ways. It has, for example, remanded for a new hearing and new decision, Rothman,
The common theme running through these eases is that the remand does not mandate a particular factual determination, but directs the agency’s attention to matters the court believes require further action to create an adequate record for the agency’s decision. See RCFC 52.2. Further, “[a]ny remand must be consistent with the statutory scheme under which the agency has taken action.” Richey v. United States,
The Court thus agrees with defendant that the power to remand with “proper and just” instructions “does not trump the [general] prohibition on injunctive relief.” Def.’s Resp. at 8. The Court cannot agree with plaintiffs assertion that the Court may simply disregard the limitations on its injunctive authority by construing an injunction as a “proper and just” direction. The Court disagrees, however, with defendant’s contention that the “directions” accompanying the remand power are limited to merely restating the terms of the requirement at issue. The Government argues that a remand “would serve a useful purpose, as Todd Construction would receive a new determination as to whether the evaluation was fair and accurate and the agency would be provided another opportunity to provide Todd with a fair and accurate evaluation if the reviewing official’s determination that the original evaluation was fair and inaccurate
VII. Although an Agency’s Compliance With Required Procedures in Preparing a Performance Evaluation Is Subject to De Novo Review, the Assignment of a Particular Rating Warrants Deferential Review
The defendant argues, in part, that a deferential standard of review should apply to CDA claims regarding past performance evaluations because the statutory scheme allows appeal one level above the contracting officer, and that decision should be reviewed with the deference due to a board of contract appeals.
The Court reads the pertinent regulatory provisions as creating two distinct sets of requirements. One is strictly procedural: there are a number of acts that are not within the discretion of the contracting officer. She must prepare an evaluation, using a particular form, at a particular time. Where an unsatisfactory evaluation is contemplated, she must confer with the contractor, send a notice of intent to issue an unsatisfactory interim rating, allow written comments by the contractor, include them in the report, et cetera,
But the second issue is a different matter. The regulations contemplate that the contracting officer and the reviewing officer will produce a performance evaluation that is “accurate” and “fair.”
The choice of a particular rating to assign is necessarily subjective and is within the sole purview of the Government. Thus, the production of an accurate and fair performance evaluation rating requires the exercise of the contracting officer’s judgment, and “when the parties to a contract vest one party with the discretion to make a critical factual determination under the contract, this court narrowly reviews that determination to ascertain whether that discretion was arbitrarily or capriciously exercised.” Reservation Ranch v. United States,
In the bid protest context, the assignment of a past performance rating is reviewed “only to ensure that it was reasonable and consistent with the stated evaluation criteria and applicable statutes and regulations, since determining the relative merits of the offerors’ past performance is primarily a matter within the contracting agency’s discretion.” Clean Venture Inc., 2000 CPD ¶ 47 (March 6, 2000); Weidlinger Assocs., Inc., 2007 CPD 191 (May 7, 2007) (“Regarding the relative merits of offerors’ past performance information, this matter is generally within the broad discretion of the contracting agency, and our Office will not substitute our judgment for that of the agency. A protester’s mere disagreement with the agency’s
Despite the discretionary nature of the assignment of a performance evaluation rating, the exercise of that discretion must be reasonable. Thus, the court will review the. “accuracy” and “fairness” of a performance evaluation rating to determine whether “the discretion employed in making the decision is abused, for example, if the decision was arbitrary or capricious.” Burnside-Ott,
VIII. Plaintiff’s Complaint Fails to State A Claim Upon Which The Court Can Grant Relief
The plaintiffs complaint requests the following relief:
(a) A judicial determination that the Corps’ final decision is unlawful and should be set aside;
(b) An order directing the Corps to remove the final performance evaluations fromCCASS; and
(c) For such other relief as this Court deems proper, including interest, costs and attorneys’ fees....
Complaint, Prayer for Relief.
For the reasons set forth above, even if plaintiff would eventually prevail in its contentions on the merits, the Court does not possess authority to provide the relief requested in paragraphs (a) and (b). Given the remedial powers relied upon by plaintiff, the Court may issue a declaration of rights and may remand to the contracting officer with “proper and just” instructions, but those instructions cannot include a direction that the agency reach a particular conclusion on the merits of the performance evaluation. Thus, this Court does not possess the ability, under the remand clause of § 1491(a)(2), to order that the Corps set aside its final evaluation or remove it from CCASS.
Under its remand authority, this Court can review the procedural propriety of the manner in which the performance evaluation was determined and, if it finds inadequacies, remand to the agency with a description of the procedural deficiencies found by the Court and direction as to how to remedy them. The Court can also review whether the agency abused its discretion in determining that the assigned performance rating was
To the extent that plaintiffs complaint requests either a declaration that the Corps’ final decision is unlawful, or that an extremely broad reading of “such other relief as this Court deems proper” can be construed to include a request for remand to the agency, the complaint in this ease does not “plausibly suggest an entitlement to relief.” Ashcroft v. Iqbal, — U.S. -,
a. The Corps’ actions were arbitrary, capricious, an abuse of discretion, and not in accordance with law;
b. The Corps exceeded its statutory and regulatory authority;
c. The Corps failed to properly observe procedures required by law; and
d. The Corps’ actions were unsupported by substantial evidence and/or unwarranted by the facts.
Id. ¶ 9. The Supreme Court has rejected the notion that a “wholly conelusory statement of claim would survive a motion to dismiss whenever the pleadings left open the possibility that a plaintiff might later establish some set of undisclosed facts to support recovery.” Bell Atlantic Corp. v. Twombly,
CONCLUSION
Ordinarily, for the reasons enumerated above, the Court would grant defendant’s motion to dismiss plaintiffs complaint for failure to state a claim upon which relief can be granted. Such a dismissal would operate as an adjudication on the merits. See RCFC 41(b). In this case, however, the Court is concerned that such an outcome at this stage would cause plaintiff, whose complaint was filed in May of 2007, to be unfairly victimized by scrutiny of its complaint in light of the Supreme Court’s recent explanation of the pertinent standards in Twombly and Ashcroft. In addition, this Court’s decision will, one hopes, clarify the sources and extent of the Court’s authority to review performance evaluations, the scope of and standards applicable to such review, and the remedies available in this Court under its remand power when a contractor successfully challenges a performance evaluation.
In light of these factors, the Court will defer a final ruling on defendant’s 12(b)(6) motion in order to give the plaintiff, if it is so inclined, an opportunity to file a motion for leave to file an amended complaint. Any such motion shall be filed no later than August 12, 2009. In the meantime, the Court ORDERS that all other proceedings in
IT IS SO ORDERED.
Notes
.A distinction then existed in the law between matters arising "under” the contract (that is, included within the contract’s disputes clause) and matters that constituted a "breach”' — defined as "a claim which is recognized under contract law as a basis for monetary relief against the Government, but no clause exists in the contract whereby the contract price could be increased or decreased to permit payment of such relief.” November 1977 Hearing at 84; id. at 110-111 ("Under the Bianchi ruling, judicial review is limited to the agency's record. The agency’s decision is final unless fraudulent or capricious or arbitrary or grossly erroneous or not supported by substantial evidence. The court in a contract case where the 'disputes’ clause is present cannot take any evidence or provide a trial. This stricture on the judicial remedy applies only to contract disputes 'arising under the contract.’ But so many clauses have meanwhile been fashioned and inserted in Government contracts to replace what would otherwise be breach of contract situations, that very few circumstances are construed as not 'arising under the contract.’ The procurement agencies continue to develop new clauses, including a proposed 'all-disputes’ clause which would embrace all breaches of contract. This would make the procurement agency the final judge of its own breach."). In United States v. Utah Construction & Mining Co.,
. After the passage of the CDA, the Wunderlich Act itself only applies to contracts of non-executive agencies or to contracts entered into prior to the effective date of the CDA. Parker v. United States,
. November 1977 Hearing at 103 (statement of Mr. Jaffe) ("Or if we don’t have a board of contract appeals decision and only have a contracting officer's determination, we haven't had any adjudication. We haven’t had any consideration necessarily of anybody who is above the two people who you might expect would be fighting more frequently, the contracting officer and the project foreman. Sometimes they get along fine and sometimes they don't. They can't be relied upon to resolve disputes. They can be relied upon to come to agreement, sometimes, but not to resolve disputes. That has to be done somewhere else along the line, and I think the
. There is no allegation of a pending procurement in which plaintiff’s position may be adversely affected by the performance evaluation at issue here, and thus the case is unlike Public Warehousing, where the court enjoined the agency to comply with Federal Acquisition Regulation Subpart 42.15 (Contractor Performance Information). Public Warehousing Co. v. Defense Supply Center Philadelphia,
. The review of a decision of the board of contract appeals would be conducted by the Federal Circuit. See n. 2, supra.
. Plaintiff's position is simply incorrect. The APA standard of review applies to bid protests because a statute mandates that review, 28 U.S.C. § 1491(b)(4), while a statute mandates de novo review for CDA claims such as the one presented here. 41 U.S.C. § 609(a)(3).
. The Federal Acquisition Regulation, as applicable here, mandates, among other things, that the "contracting activity shall evaluate contractor performance” using Form SF 1420 for contracts of more than $550,000 or, if the contract was terminated for default, more than $10,000. FAR § 36.201(a)(1); see also Army Corps of Engineers Regulation 415-1-17 (March 26, 1993) ("ER 415-1-17”) (extending requirement for performance reports to contracts of $100,000 or more, or, if any element of performance is unsatisfactory or outstanding, $25,000).
The report "shall be prepared at the time of final acceptance of the work, at the time of contract termination, or at other times, as appropriate, in accordance with agency procedures.” FAR § 36.201(a)(2). The Corps mandates that the final report “shall be prepared within 60 days of substantial completion of the work or at the time of contract termination” and that "[a]n interim performance evaluation report shall be prepared for incomplete contracts when a contractor’s performance is generally unsatisfactory” for three months or more. The Corps regulations specify a number of steps to be taken, beginning with "notifying a contractor at the
"When unsatisfactory performance is noted, the contractor will be called into a conference to discuss problem areas and their resolution,” and that meeting must be memorialized in a “Memorandum of Record.” Id. If no improvement is observed, a notification of the intent to issue an unsatisfactory interim performance evaluation will be sent, and “[i]t is mandatory that the contractor be given the opportunity to meet with the CO prior to issuance of the unsatisfactory rating." Id. The contractor will be given at least 14 days to respond to the notification, and if it responds "all written comments will be included in the report.” Id. Final performance evaluations “are processed in the same manner.” Id.
If performance is unsatisfactory, the "contractor shall be advised in writing that a report of unsatisfactoiy performance is being prepared and the basis for the report. If the contractor submits any written comments, the evaluating official shall include them in the report, resolve any alleged factual discrepancies and make appropriate changes in the report.” FAR § 36.201(a)(3); ER 415-1-17 (“If the evaluating official concludes that a contractor’s overall performance was unsatisfactory, the contractor shall be advised in writing that a report of unsatisfactory performance is being prepared and the basis for the report. The contractor must be afforded the opportunity to submit written comments, which should be addressed and included in the report.”). The "head of the contracting activity shall establish procedures which ensure that fully qualified personnel prepare and review performance reports.” FAR § 36.201(a)(4).
. "Each performance report shall be reviewed to ensure that it is accurate and fair.” FAR § 36.201(b); ER 415-1-17 ("Each performance evaluation shall be reviewed for accuracy and fairness by an individual having knowledge of the contractor’s performance at a supervisory level above that of the evaluating official.”); see generally United States Government Accountability Office, Better Performance Information Needed To Support Agency Award Contract Decisions (April 2009).