January 01, 2017 Public Contract Law Journal

All's Well that Ends Well: Scanwell Jurisdiction in the Twenty-First Century

by Jordan Hess

Jordan Hess ( jahess@law.gwu.edu) is a J.D. Candidate at The George Washington University Law School and the Managing Editor of the Public Contract Law Journal. He gratefully thanks Professors Joshua Schwartz, Collin Swan, Thomas Papson, and Toma´s Bogardus, along with his fellow editors, especially Krista Nunez, for their thoughtful help in developing and polishing this Note.  

I.  Introduction

A.  An Unpleasant Situation

Imagine that you are the president of a family-owned resort in sunny Lake Pleasant, Arizona, and you hear that the government is seeking a concessionaire to build another resort on federal property nearby.1 You review the re- quest for proposals (RFP) and discover, to your dismay, that the Bureau of Reclamation (BOR) will not consider bids from any commercial property owner already adjacent to Lake Pleasant.2 So, your company does not bid.3 After the BOR awards the concession, you learn several frustrating facts: the new concessionaire was the only company that bid, the terms of the contract are materially different than the RFP,4 and the terms are considerably more business-friendly.5 Channeling your inner Billy the Kid, you valiantly file a bid protest6 against the government in the nearby federal district court.7

The awardee intervenes and files a motion to dismiss. She argues that district courts lack jurisdiction over bid protests under the Tucker Act, as amended by the Administrative Dispute Resolution Act of 1996 (ADRA), which requires that such challenges be brought in the Court of Federal Claims (CoFC).8 If true, your best case scenario is to pay an expensive D.C. lawyer to litigate your case 2,300 miles away. If you sue in the CoFC, however, the court will likely dismiss your claim because it lacks jurisdiction over concession contracts (or so your attorney says).9

Alternatively, place yourself in the awardee’s position. You would prefer that the district court lacks jurisdiction, but, if you must defend your con- tract, you would rather do so in a local forum. Most importantly, you want to keep the concession contract you already won.

Should the suit proceed in district court?

B.  The Lead-Up to the Administrative Dispute Resolution Act

This Note argues that under the Administrative Procedure Act (APA), district courts have jurisdiction over bid protests outside the scope of the Tucker Act’s exclusive jurisdiction.10 Congress frequently seems dissatisfied with the forums available for bidders to challenge government procurement awards; hence over the last ninety years,11 four forums have adjudicated bid protests.12 After the most recent jurisdictional alterations — in 199613 and 200114 — the dominant view is that the Government Accountability Office (GAO) and the CoFC are the only remaining forums.15

Prior to 1996, the GAO,16 CoFC,17 and U.S. District Courts18 all possessed a species of bid protest jurisdiction. The system was an awkward jurisdictional and remedial hodgepodge: protestors could receive an expedient, inexpensive (and non-binding) administrative recommendation at the GAO; a pre-award binding order that the government rebid the contract or repay bid preparation costs from the CoFC; but post-award challenges for injunctive relief had to be brought in district courts.19 To correct this problem, Congress amended the Tucker Act by passing the ADRA in 1996.20 The ADRA altered the CoFC’s jurisdiction, codified identical bid protest jurisdiction in U.S. District Courts, and included a sunset provision that would repeal district court bid protest jurisdiction “over the actions described” in the statute absent congressional action in 2001.21

Congress let the sunset provision take effect and the district courts’ juris- diction “over the actions described” in the Tucker Act22 expired,23 although much debate followed regarding the provision’s actual effect.24 Currently, two circuit courts25 — alongside district courts nationwide26 — hold that the sunset provision repealed the entire bid protest jurisdiction of federal district courts. Other courts, however, hold that district courts retain some bid protest jurisdiction.27

Fifteen years later, there is still no dispositive answer.28 This Note posits that APA jurisdiction ensures that disappointed bidders that could pursue a judicial bid protest pre-ADRA may do so now, even when their claim is beyond the scope of 28 U.S.C. § 1491(b)(1). Part II of this Note examines three sources of judicial jurisdiction over bid protests: Heyer Products Co. v. United States,29 Scanwell Laboratories Inc. v. Shaffer,30 and 28 U.S.C. § 1491(b)(1), and concludes by analyzing the ADRA’s sunset provision. Part III discusses bid protests outside the scope of § 1491(b)(1) that illustrate the district court’s current bid protest jurisdiction. Part IV briefly summarizes the argument and offers concluding remarks.

Premium Content For:
  • Public Contract Law Section
Join - Now