Looking Back One Year After the Federal Circuit’s “Jurisdictional Triumvirate”

Subject matter jurisdiction had a banner year in 2023 at the US Court of Appeals for the Federal Circuit (Federal Circuit). In three cases, the Federal Circuit shifted the jurisdictional landscape at the US Court of Federal Claims (Court of Federal Claims)—or, more accurately, reframed which questions touched on the Court of Federal Claims’ subject matter jurisdiction. These decisions did not substantively change procurement law. Instead, they created procedural shifts. But procedure can sometimes yield substantive advantages if utilized properly.

This article digests the three recent cases out of the Federal Circuit and canvasses lower courts’ adjustments to the implications of the Federal Circuit’s latest decisions. This article further suggests ways contractors filing at the Court of Federal Claims can utilize procedural rules to advance their claims.

The Federal Circuit’s Jurisdictional Triumvirate

CACI, Inc.-Federal v. United States addressed the “interested party” requirement of 28 U.S.C. § 1491(b). Section 1491(b)(1) states the Court of Federal Claims “shall have jurisdiction” over “an action by an interested party objecting to” a procurement by a federal agency. For decades, the Federal Circuit maintained that whether a protester was an “interested party” impacted the Court of Federal Claims’ subject matter jurisdiction over the bid protest. If a protester was not an “interested party,” the Court of Federal Claims lacked subject matter jurisdiction over the protest. In CACI, though, the Federal Circuit upended its longstanding precedent “treating the interested party issue as jurisdictional.” Rather, relying on the Supreme Court’s decision in Lexmark Int’l, Inc. v. Static Control Components, Inc., the Federal Circuit decided the “interested party” requirement under Section 1491(b)(1) involved statutory standing, not subject matter jurisdiction.

M.R. Pittman Group, LLC v. United States concerned the waiver rule first announced in Blue & Gold Fleet, L.P. v. United States. In Blue & Gold, the Federal Circuit held that “a party who has the opportunity to object to the terms of a government solicitation containing a patent error and fails to do so prior to the close of the bidding process waives its ability to raise the same objection afterwards in a § 1491(b) action in the Court of Federal Claims.” Courts often treated Blue & Gold’s waiver rule as jurisdictional—the Court of Federal Claims lacked subject matter jurisdiction over a post-award bid protest challenging the solicitation’s terms that could have been raised prior to the close of bidding.

But this interpretation of Blue & Gold changed after the Federal Circuit’s decision in M.R. Pittman. There, the protester filed a post-award bid protest challenging the US Army Corps of Engineers’ award of a contract to repair pumps in Louisiana. The Court of Federal Claims dismissed the protest for lack of subject matter jurisdiction under Rule 12(h)(3) because the protester “waived its protest grounds under the Blue & Gold waiver rule.” On appeal, the protester argued the Blue & Gold waiver rule does not implicate the Court of Federal Claims’ subject matter jurisdiction. The Federal Circuit agreed, holding that the Blue & Gold waiver rule “is more akin to a nonjurisdictional claims-processing rule.” The Federal Circuit did not eliminate the waiver rule, nor did it disturb the substantive analysis for assessing whether a party waived its right to protest a solicitation term. It simply held that whether Blue & Gold waiver applied did not affect the Court of Federal Claims’ subject matter jurisdiction over the bid protest.

ECC International Constructors, LLC v. Secretary of the Armywas an appeal from the Armed Services Board of Contract Appeals (ASBCA). It concerned the Contract Disputes Act’s (CDA) requirement that a government contractor’s monetary claim to the contracting officer state a sum certain. The plaintiff held a contract with the US Army Corps of Engineers to design and build a military compound in Afghanistan. After significant project delays, the contractor submitted a claim to the contracting officer under the CDA. The contracting officer did not issue a final decision, so the contractor appealed to the ASBCA claiming a “deemed denial.” After six years of discovery and back-and-forth settlement negotiations, the government suddenly moved to dismiss the appeal for lack of jurisdiction because the contractor’s claim did not include a sum certain. The ASBCA agreed and dismissed the appeal, and the contractor appealed to the Federal Circuit.

On appeal, the Federal Circuit sua sponte considered “whether the requirement . . . that claims submitted under the [CDA] state a ‘sum certain’—i.e., specify the precise dollar amount sought in relief—is jurisdictional.” The court emphasized that subject matter jurisdiction defenses are “unique in our adversarial system.” Defendants can raise such defenses “at any time,” and the tribunal must consider them. The court explained that this case in particular “reflects the draconian consequences of a jurisdictional rule: a late-filed motion challenging jurisdiction can thwart both the claimant’s ability to recover and any opportunity to timely refile.” The court concluded “the requirement to state a sum certain in submitting a claim under the CDA is a non-jurisdictional requirement.”

The Federal Circuit was careful, however, to clarify that the sum-certain requirement is still mandatory for a contractor to prevail on a CDA claim. In other words, “[a] claim that does not state a sum certain has not sufficiently pleaded the elements of a claim under the CDA and may be . . . dismissed on appeal to the boards or Court of Federal Claims for failure to state a claim.” But failing to state a sum certain did not deprive the Court of Federal Claims or the boards of subject matter jurisdiction. The Federal Circuit acknowledged the limited practical impact its decision would have: “In the vast majority of cases,” the Federal Circuit admitted, “the distinction between whether the sum-certain requirement is jurisdictional or nonjurisdictional will be of little, if any, consequence.”

Jurisdictional Adjustments

The Federal Circuit’s jurisdictional decisions have certain practical impacts for government contractors and, by extension, government procurement lawyers. For example, as some practitioners have noted, ECC Int’l means the government cannot delay moving to dismiss a CDA monetary claim appeal for failing to state a sum certain. Pre-ECC Int’l, when the sum-certain rule was jurisdictional, the government could raise the argument whenever it wanted, and the Court of Federal Claims or boards were obligated to consider it, often before the court or board even considered the merits. Post-ECC Int’l, though, the government’s sum-certain argument is no longer jurisdictional and is therefore subject to forfeiture if the government sits on its hands.

Still, in the year since the Federal Circuit issued its “jurisdictional triumvirate,” the decisions have seemingly not created any paradigm shifts at the Court of Federal Claims. As the Federal Circuit previewed in ECC Int’l, “[i]n the vast majority of cases,” the “jurisdictional or nonjurisdictional [distinction] will be of little, if any, consequence.” If the government determines the plaintiff in a bid protest is not an “interested party,” it may—and likely will—move to dismiss the complaint on that basis. Similarly, if the government assesses a strong likelihood that a post-award bid protest, in fact, challenges a term in the solicitation, the government will likely move to dismiss on the ground the protester waived its right to challenge the solicitation. And if a plaintiff’s CDA claim lacks a sum certain, the government will almost certainly move to dismiss at the outset.

What (if anything) has changed, then? The most notable alteration in practice at the Court of Federal Claims is that these defenses must be raised under Rule 12(b)(6), rather than under Rule 12(b)(1). Rule 12(b)(1) states the defendant may move to dismiss the complaint for lack of subject matter jurisdiction. Rule 12(b)(6), in contrast, states a defendant may move to dismiss the complaint for failure to state a claim upon which relief can be granted. In light of CACI, M.R. Pittman, and ECC Int’l, several judges on the Court of Federal Claims have adapted in real time, recognizing that while the substantive challenges did not necessarily change, there has been a change in the procedural mechanism through which those challenges are made.

For example, in Bitscopic, Inc. v. United States, the government and intervenor moved to dismiss the plaintiff’s bid protest complaint “for lack of standing under Rule 12(b)(1) on the basis that [protester] was not an ‘interested party.’” But the court noted that after CACI, the “interested party” requirement goes to statutory standing, not jurisdiction, and “motions to dismiss based on “statutory standing” defects are properly brought under Rule 12(b)(6) rather than Rule 12(b)(1) in recognition that such defects are not jurisdictional.” After supplemental briefing on the issue, the court therefore exercised its discretion to “convert the Government’s and [intervenor’s] motion to dismiss for lack of standing under Rule 12(b)(1) to motions to dismiss under Rule 12(b)(6).” Another judge acted similarly, exercising her discretion to “consider[] the standing issue as a failure to state a claim instead of a lack of subject matter jurisdiction.”

Opportunities for Procedural Advantages?

Thus far, the Federal Circuit’s jurisdictional changes, while still unfolding, have not reshaped procurement law or altered the Court of Federal Claims’ substantive analyses. They have, however, resulted in some relatively modest procedural tap dances. And, as with any dance, it means you have a chance to do it well or to do it poorly. The Court of Federal Claims’ procedural rules can sometimes afford contractors substantive advantages. Here are some suggestions on ways the contractor community can take advantage.

First, the Court of Federal Claims generally has a shorter leash when deciding a motion to dismiss under Rule 12(b)(6) than under Rule 12(b)(1).

With a jurisdictional 12(b)(1) motion to dismiss, the Court of Federal Claims has free reign to consider whatever it needs to assure itself of its own subject matter jurisdiction. A court may “inquire into jurisdictional facts,” from whatever source is necessary. This is because subject matter jurisdiction touches on a court’s inherent power to adjudicate a particular dispute. Subject matter jurisdiction is so important at the Court of Federal Claims—which, in a certain sense, is a creature of subject matter jurisdiction, in contrast to a federal district court, whose existence is defined as much by geography—that the court may order jurisdictional discovery. Jurisdictional discovery is especially costly for plaintiffs, who must suffer the rigors of (albeit targeted) discovery without an assurance the court will consider the merits of the plaintiff’s case.

Under a 12(b)(6) motion to dismiss, in contrast, the Court of Federal Claims is generally limited to considering only the pleadings, exhibits to the pleadings, documents incorporated into the pleadings by reference, or facts over which a court may take judicial notice. Courts typically refuse to consider extra-pleading materials under a Rule 12(b)(6) motion to dismiss.

The Court of Federal Claims’ decision in Quanterion Solutions, Inc. v. United States is enlightening. In a post-award bid protest, the plaintiff argued the agency’s evaluation was inconsistent with the terms of the solicitation. The government moved for judgment on the administrative record. But the government also moved to dismiss under Rule 12(b)(6), arguing under Blue & Gold that the protester waived its right to challenge the solicitation’s terms. The dispute, according to the court, “largely turn[ed] on the correct interpretation of the RFP and, secondarily, if the relevant RFP provisions are ambiguous, whether the RFP contains a patent or latent ambiguity.” A patent ambiguity is “an obvious omission, inconsistency, or discrepancy of significance” that the protester should have raised prior to the close of bidding. A latent defect, in contrast, is “hidden or concealed” and therefore need not be raised prior to the close of bidding. Patent ambiguities are subject to Blue & Gold waiver, while latent ambiguities are not. The Court of Federal Claims concluded that “the proper interpretation of the RFP terms . . . requires a close examination of extrapleading materials in the [administrative record].” The court therefore decided “the optimal procedural approach is for the court to resolve the parties’ motions for judgment on the administrative record, which will address the patent ambiguity issue as an integral part of the analysis.”

Quanterion Solutions is an example of how the Federal Circuit’s jurisdiction-related decisions might impact litigation in the Court of Federal Claims. Some defenses, such as Blue & Gold waiver or lack of a “sum certain,” may require factual development. For example, is an ambiguous solicitation provision patent or latent? The answer may depend on the offerors’ pre-solicitation questions, the context of the solicitation itself, or perhaps pre-solicitation conduct or representations from the agency. As another example, whether a claim states a “sum certain” may require analysis of the various aspects of the claim and whether the claim’s components should be separated into different claims—and therefore include different sums certain.

Consider also the “interested party” statutory standing inquiry, particularly in view of the Federal Circuit’s significant decision in Percipient.ai, Inc. v. United States, issued June 7, 2024. There, the Federal Circuit held that when a protester asserts a violation of 10 U.S.C. § 3453—which requires that agencies prefer commercial products “to the maximum extent practicable”—the protester is an “interested party” if “it is an offeror of a commercial product or commercial service that had a substantial chance of being acquired to meet the needs of the agency had the violation not occurred.” The Federal Circuit, in effect, removed the “actual or prospective offeror” requirement to demonstrate statutory standing in certain circumstances. But how can the Court of Federal Claims determine that an offeror of a commercial product had a “substantial chance of being acquired to meet the needs of the agency”? That analysis will likely require extra-pleading materials, particularly the details of the commercial product, the agency’s needs, and other pertinent background facts.

Removing certain issues from the jurisdictional specter, such as statutory standing (CACI), waiver (M.R. Pittman), or lack of a sum certain (ECC Int’l), can only benefit plaintiffs opposing a motion to dismiss. Indeed, the Federal Circuit has held that the “strictures of Rule 12(b)(6), wherein dismissal of the claim is based solely on the complainant’s pleadings, are not readily applicable” to certain defenses. Plaintiffs facing a motion to dismiss should take advantage of the procedural shackles Rule 12(b)(6) imposes on the government and the court. Furthermore, plaintiffs should consider limiting the materials attached or incorporated by reference into the complaint. Obviously, the complaint cannot be too barebones, which could create a “Twiqbal” issue. And truly critical information may provide necessary support to the allegations in the complaint. But a plaintiff should consider omitting unnecessary information that, while submitted with the good intention of aiding the court’s assessment of the complaint, ironically gives the court more facts to consider if the defendant moves to dismiss.

Second, and relatedly, the Rules of the Court of Federal Claims contain a provision that can abruptly transform a simple 12(b)(6) motion to dismiss to a full-fledged motion for summary judgment under Rule 56. Rule 12(d) states:

If, on a motion under RCFC 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under RCFC 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.

Rule 12(d) offers plaintiffs a potentially potent procedural weapon that is not available in the 12(b)(1) context. Consider a situation where the government attaches materials to its 12(b)(6) motion to dismiss that are absent from the complaint, nor incorporated therein by reference. A plaintiff can urge the court to convert the motion into one for summary judgment. The court will then be in an uncomfortable position. A motion for summary judgment is a decision on the merits and typically demands a complete record and undisputed facts, where both parties submit their best evidence and the court dutifully reviews the evidence before it and resolves all doubt in the nonmovant’s favor. But there is something inherently “icky”—that’s a legal term of art—about resolving a motion for summary judgment early in a case, when the parties have not conducted discovery and there are potentially important facts lurking out of the court’s reach. Accordingly, judges at the Court of Federal Claims may be hesitant to grant summary judgment so early in the litigation cycle.

Consider Chenega Healthcare Services, LLC v. United States, a post-award bid protest involving the Department of Energy. The plaintiff moved for a preliminary injunction, while the government moved to dismiss the plaintiff’s complaint, alleging both Blue & Gold waiver and inadequate pleading. But both parties relied on materials that were outside the pleadings, such as documents the plaintiff submitted in support of its motion for a preliminary injunction. The court noted that due to the extra-pleading evidence, it must convert the defendant’s motion to dismiss into a motion for summary judgment. The court further observed that “[i]n this case, as in most bid protests, . . . an administrative record will provide the basis for further proceedings.” The court therefore concluded “[i]t would not be efficient to convert” the defendant’s motion to dismiss under Rule 12(b)(6) to a motion for summary judgment. The court did not grapple with the defendant’s arguments for dismissal; instead, it reserved judgment until it received and reviewed a fulsome record.

In this vein, protesters usually include with their complaint a motion for a preliminary injunction, accompanied by a declaration attesting to the underlying facts and irreparable harm. Such a declaration is a matter outside the pleading. To the extent the court considers the declaration on a motion to dismiss—or any rebuttal declarations submitted by the government and/or an intervenor—the court must instead rule on a motion for summary judgment. And motions for summary judgment are particularly difficult to justify in the bid protest context, where the agency has a more-or-less ready-made record at its fingertips and can furnish a complete record within weeks.

When the issues of Blue & Gold waiver, “interested party” status, and the sum certain requirement were jurisdictional questions, the court was free to consider extra-pleading evidence. But now, under the “strictures of Rule 12(b)(6),” the court may not consider extra-pleading materials—unless the court converts the motion to dismiss to a motion for summary judgment. And courts are often unwilling to grant summary judgment prior to any discovery and corresponding factual development. Plaintiffs opposing motions to dismiss should make it as difficult as possible for the court to grant the motion. Rule 12(d) is another tool plaintiffs can and should use to give the court pause.

Conclusion

It has only been about a year since the Federal Circuit decided its “jurisdictional triumvirate” of CACI, M.R. Pittman, and ECC Int’l. While the repercussions are not fully known yet, early results reflect primarily procedural impacts. But procedure can be a contractor’s best friend when litigating against the government. With this new Federal Circuit case law, contractors at the Court of Federal Claims have additional means to use the Court’s rules to their advantage to stave off a motion to dismiss and to proceed to the merits of their case.