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Sigmatech Inc. v. United States Department of Defense

United States District Court, N.D. Alabama, Northeastern Division

February 4, 2019

SIGMATECH, INC., Plaintiff,
v.
UNITED S TATES DEP ARTMENT OF DEFENSE, et al., Defendants.

          MEMORANDUM OPINION

          LILESC. BURKE UNITED STATES DISTRICT JUDGE

         On January 15, 2019, plaintiff Sigmatech, Inc., filed a Verified Petition for Review of Agency Action (“Petition”)(doc. 1) against defendants the United States Department of Defense; Patrick Shanahan, Acting Secretary of Defense; the United States Army; and Mark Esper, Secretary of the Army (collectively, the “Agency”). Sigmatech seeks review of the Agency's actions allegedly designed to prevent (1) Sigmatech from competing for the award of government contracts; and/or (2) award of government contracts to Sigmatech. According to Sigmatech, the Agency's actions constitute a de facto debarment.

         Background

          In its petition, Sigmatech explained that it holds a Blanket Purchase Agreement (“BPA”) with the Agency that allows it to compete for various “task orders” among other BPA holders. While the BPA itself is not a contract, the task orders issued under the BPA have the force of contract because they obligate both parties. Sigmatech asserted that it has provided excellent services to the Agency since being awarded the BPA, and that its success in performing various task orders led the Agency to increase Sigmatech's work.

         However, Sigmatech claims that its relationship with the Agency began to deteriorate in 2015. Since that time, it says, the Agency has taken actions to prevent Sigmatech from competing for and/or obtaining new task orders. According to Sigmatech, the Agency began to classify task orders for "small businesses," despite the increased size of the task orders, in order to prevent Sigmatech, which is not classified as a small business, from being eligible to compete.[1] For example, Sigmatech asserts that it was the incumbent contractor on "Task Order 15" when the Agency issued a re-compete solicitation for further work on the project. According to Sigmatech, the Agency issued that re-compete as a small business set aside, thus preventing Sigmatech from competing for it.

         Sigmatech also points to its work on "Task Order 22," which is set to expire on April 26, 2019. According to Sigmatech, the Agency initially tried to set aside the re-compete on that work for small businesses but was unable to find enough small businesses to compete for the job. Then, Sigmatech says, the Agency attempted to prevent it from competing for the work by using a different contracting vehicle in order to circumvent the BPA procurement process but was again unable to find enough contractors to compete for the work. Finally, Sigmatech says, the Agency delayed the project until it was able to bring new small businesses onto the BPA to bid for the work. Sigmatech claims that it will lose this additional work because it will not have the opportunity to compete for it. Sigmatech asserts that other similarly-situated contractors have been treated differently by the Agency.

         The focal point of Sigmatech's petition, however, appears to be "Task Order 18," on which it is the incumbent contractor. Sigmatech alleges that the Agency used the same tactics that it used in relation to the re-compete process on Task Order 22 in order to prevent it from competing for the follow-on work to Task Order 18. Specifically, Sigmatech alleges that the Agency improperly attempted to set aside the work for small businesses and attempted to use a different contracting vehicle. When those tactics failed, Sigmatech says, the Agency unlawfully awarded the procurement to a single small business. Sigmatech claims that after it protested this action, the Agency reissued the re-compete for "full and open" competition, thus allowing Sigmatech to compete for the work. However, the Agency ultimately awarded the follow on to Task Order 18 to DigiFlight, Inc. According to Sigmatech, the Agency's decision to award the contract to DigiFlight turned on DigiFlight's proposal to use a subcontractor that owned proprietary financial-management software. However, Sigmatech says, it recently learned that DigiFlight did not renew the license for the financial-management software and did not actually plan to use it. Therefore, Sigmatech argues that the Agency's decision to award the contract to DigiFlight was based on a "sham discriminator, '' i.e., its use of the financial-management software. According to Sigmatech, the decision was arbitrary, capricious, and otherwise contrary to law.

         Procedural History

         Sigmatech challenged the Agency's award of Task Order 18 to DigiFlight by first filing a protest with the U.S. Government Accountability Office ("GAO"), which was ultimately unsuccessful. (Doc. 8-1). Then, on September 18, 2018, Sigmatech filed a bid-protest complaint in the United States Court of Federal Claims ("CFC"), in which it challenged the Agency's decision to award Task Order 18 to DigiFlight as being irrational, arbitrary and capricious, an abuse of discretion, and otherwise not in accordance with the law. (Doc. 8-2). The CFC made extensive factual findings regarding the particulars of the Agency's decision and ultimately held that Sigmatech was not entitled to relief. Sigmatech v. United States, Fed. CI. (November 30, 2018), 2018 WL 6920166. Sigmatech appealed the CFC's decision to the United States Court of Appeals for the Federal Circuit but moved to dismiss the appeal shortly after filing the instant petition in this Court.

         The Present Petition

          Sigmatech filed the present petition on January 15, 2019. On January 16, 2019, Sigmatech filed an "Application to Stay Administrative Action Pending Judicial Review" in which it asked this Court to stay the expiration of Task Order 18 along with "any other actions constituting a de facto debarment of Sigmatech." (Doc. 4, p. 1). On January 18, 2019, DigFlight filed a motion to intervene, which this Court granted. On January 23, 2019, DigiFlight filed a motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6), Fed. R. Civ. P., based on its assertion that this Court lacked subject-matter jurisdiction over Sigmatech's claim and that the present action was precluded by principles of res judicata and collateral estoppel. This Court conducted a hearing over two days in which it heard arguments from the parties regarding the jurisdictional issue. For the reasons set forth below, this Court finds that it lacks subject-matter jurisdiction over Sigmatech's petition.

         Discussion

          When "a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before addressing any attack on the merits." Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (citing Hitt v. City of Pasadena, 561 F.2d 606, 608 (5th Cir.1977));[2] Harris v. Bd. of Trustees Univ. of Ala., 846 F.Supp.2d 1223, 1230 (N.D.Ala.2012). A motion under Federal Rule of Civil Procedure 12(b)(1) allows a party to assert a defense of lack of subject-matter jurisdiction. A Rule 12(b)(1) motion to dismiss should be granted "only if it appears certain that the plaintiff cannot prove any set of facts in support of his claim that would entitle plaintiff to relief." Harris, 846 F.Supp.2d at 1232 (quoting Ramming, 281 F.3d at 161). The burden of proof on a motion to dismiss for lack of subject-matter jurisdiction is on the party asserting jurisdiction (i.e., Plaintiff). Id. "A federal district court is under a mandatory duty to dismiss a suit over which it has no jurisdiction." Southeast Bank, N.A. v. Gold Coast Graphics Grp. Partners, 149 F.R.D. 681, 683 (S.D. Fla 1993) (citing Stanley v. Central Intelligence Agency, 639 F.2d 1146, 1157 (5th Cir. 1991J; Marshall v. Gibson's Prods., Inc. of Piano, 584 F.2d 668, 671-72 (5th Cir. 1978)).

         In its motion to dismiss, DigiFlight argues, among other things, that this Court lacks subject-matter jurisdiction to decide Sigmatech's petition. According to DigiFlight, the Court of Federal Claims ("CFC") has exclusive jurisdiction over the present matter and is the only forum in which Sigmatech can bring such a claim. DigiFlight argues that the Administrative Disputes Resolution Act ("ADRA"), Pub. L. No. 104-320, 110 Stat. 3870 (1996), vests jurisdiction of this case solely in the CFC. In Vero ...


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