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FAR 6.102: Use of competitive procedures

Comptroller General - Key Excerpts

With respect to the second reverse auction, the VA argues that it properly limited competition to FSS vendors. In its response, FitNet argues only that any preference for using the FSS program “is both injudicious and unfair.” Protester’s Response, at 1. We disagree. The procedures established for the FSS program satisfy the requirement for full and open competition. 41 U.S.C. sect. 259(b)(3) (2000); FAR sect. 6.102(d)(3); Tarheel Specialties, Inc., B-298197, B-298197.2, July 17, 2006, 2006 CPD para. 140 at 3. Thus, limiting the pool of competition to vendors holding FSS contracts is legally permissible, even if an individual protester may be unable to compete because it does not hold an FSS contract. See Information Ventures, Inc., B‑299422, B‑299422.2, May 1, 2007, 2007 CPD para. 88 at 3 (decision to use FSS program was not evidence of bias against a protester that lacked an FSS contract).  (FitNet Purchasing Alliance, B-310031, September 21, 2007) (pdf)

Comptroller General - Listing of Decisions

For the Government For the Protester
FitNet Purchasing Alliance, B-310031, September 21, 2007 (pdf)  

U. S. Court of Federal Claims - Key Excerpts

In 1958, Congress enacted the Fish and Wildlife Coordination Act (the “1958 Act”), which again amended the 1934 [Fish and Wildlife Coordination Act] Act “to provide for more effective integration of a fish and wildlife conservation program with Federal water-resource developments.” Pub. L. No. 85-624, § 3, 72 Stat. 563 (codified as amended, at 16 U.S.C. §§ 661−64). This Act also retained the text of the 1946 amendment, instructing the Service “to provide assistance to, and cooperate with, Federal, State, and public or private agencies and organizations” to protect migratory birds and wildlife habitat. Id. § 2, 72 Stat. at 563.

(sections deleted)

II. RELEVANT FACTS.

A. Cooperative Farming Agreements In The McNary And Umatilla Refuges.

The cooperative farming agreements in this case concern federal land within the McNary and Umatilla Refuges, located along the Columbia River in southeastern Washington State and the northeastern area of Oregon. Court Exhibits 1–3. The Service operates these Refuges as migration and wintering areas for Canada geese, other waterfowl, and birds. These agreements allow a farmer-cooperator to use or sell 75 percent of the crop yield on a per-acre basis; the remaining 25 percent is considered as refuge shares, i.e., crops used to feed migratory birds and other wildlife. The cooperative farming agreements require the farmer-cooperators to be responsible for all production costs, except the maintenance of underground irrigation systems and pumps.

(sections deleted)

b. Whether The Service’s Priority Selection System Violates The Competition In Contracting Act.

The CICA provides:

Except as provided in sections 3303, 3304(a), and 3305 of this title and except in the case of procurement procedures otherwise expressly authorized by statute, an executive agency in conducting a procurement for property or services shall—

(1) obtain full and open competition through the use of competitive procedures in accordance with the requirements of this division and the Federal Acquisition Regulation; and

(2) use the competitive procedure or combination of competitive procedures that is best suited under the circumstances of the procurement.

41 U.S.C. § 3301(a) (emphasis added). “Procurement” is defined by Congress to include “all stages of the process of acquiring property or services.” 41 U.S.C. § 111 (emphasis added). In this case, the Service is acquiring the services of the farmer-cooperators to feed migratory birds and wildlife in the refuges. As such, the Service is acquiring “property or services” for purposes of the CICA.

The Service, however, did not conduct “full and open competition through the use of competitive procedures.” AR 93 (noting that the Service did not solicit bids for the 2013 program and that the Service simply “continue[s] to utilize existing cooperators [indefinitely] . . . unless there is a problem with their performance”); AR 190 (citing 5 RM § 17.11(A)(1)(C)). Nor did the Service “use the competitive procedure or combination [thereof] best suited under the circumstances.” Therefore, the court has determined that the Service’s Cooperative Farming Selection Process’s priority system violated the CICA.

The Government counters that the CICA does not apply to the Service’s award of cooperative farming agreements, because the CICA only applies to procurements made with appropriated funds. Gov’t Reply 7. As an initial matter, this argument was raised, for the first time, in the Government’s March 24, 2014 Reply. It is “well established that arguments not raised in the opening brief are waived.” SmithKline Beecham, 439 F.3d at 1319; Eden Isle Marina, Inc. v. United States, 89 Fed. Cl. 480, 512 n.37 (2009) (“Raising the issue for the first time in a reply brief does not suffice [to avoid waiver]; reply briefs reply to arguments made in the response brief—they do not provide the moving party with a new opportunity to present yet another issue for the court’s consideration.” (quoting Novosteel SA v. U.S. Bethlehem Steel Corp., 284 F.3d 1261, 1274 (Fed. Cir. 2002)).

Assuming, arguendo, that the Government’s appropriated funds argument was not waived, the court nonetheless has determined it is without merit, because it is premised on a misreading of the relevant statutes and unsupported by the Administrative Record. As a matter of law, again in section 111, “procurement” is defined, for purposes of Subtitle I of Title 41, as including “all stages of the process of acquiring property or services.” 41 U.S.C. § 111 (emphasis added). In contrast, section 131 defines “acquisition,” solely for purposes of Subchapter II (Division B Definitions) of Subtitle I of Title 41, as “the process of acquiring, with appropriated amounts, . . . property or services.” 41 U.S.C. § 131 (emphasis added). Based on this statutory framework, the Government argues that the CICA does not apply to the cooperative farming agreements, because in the CICA, the term “procurement” “only pertains to acquisitions made with appropriated funds.” Gov’t Reply 7–8. Here, the Government imports the definition of “acquisition” as used in Title 41, Subtitle I, Subchapter II, into the meaning of “procurement,” that delineates the scope of the CICA’s “full and open” competition requirement. See 41 U.S.C. § 111 (defining “procurement” for purposes of Title 41, Subtitle I); see also 41 U.S.C. § 3301 (requiring “full and open competition” when an executive agency is “conducting a procurement for property or services”). The text of section 131 makes it abundantly clear that the definition of “acquisition” applies only to Title 41, Subtitle I, Subchapter II, and not to any other section in Subtitle I of Chapter 41, including provisions of the CICA. See 41 U.S.C. § 131 (“In division B, the term ‘acquisition’— (1) means the process of acquiring, with appropriated amounts, . . . property or services[.]”); see also 360Training.com, 104 Fed. Cl. at 586 (“The definition of acquisition in [section] 131 explicitly provides that it only applies to Division B and therefore it does not apply to [section] 111 in Division A.”). Further, the Government posits that “acquisition” and “acquiring” are interchangeable, even though the former is defined in section 131 with a technical meaning, while the latter is a generally understood and statutorily-undefined term. As such, the Government disregards a congressional choice to use these terms in different ways. See Mohamad v. Palestinian Authority, __ U.S. __, 132 S. Ct. 1702, 1708 (2012) (explaining that courts “generally seek to respect Congress’ decision to use different terms to describe different categories of people or things”); see also Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132 (2000) (“In determining whether Congress has specifically addressed the question at issue, a reviewing court should not confine itself to examining a particular statutory provision in isolation. The meaning—or ambiguity—of certain words or phrases may only become evident when placed in context.”); Davis v. Mich. Dep’t of Treasury, 489 U.S. 803, 809 (1989) (“It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.”). As explained above, the term “procurement” is broader than the term “acquisition,” and, quite clearly, “had Congress intended for the ‘with appropriated funds’ clause to apply to ‘procurement,’ it would ha[ve] included those words in . . . § 111.” 360Training.com, 104 Fed. Cl. at 586–87.

And, as a matter of fact, the Service personnel who supervised the Cooperative Farming Process in 2013 and 2014 were paid salaries with appropriated funds. See 17 RM § 17.9 (1986) (reprinted at AR 175) (noting that “Congress . . . tells you how much you will have available to run your operation. You cannot supplement these funds, no matter how great the need or how noble the cause[.]”).

For these reasons, the court has determined, as a matter of law and fact, that the cooperative farming agreements at issue in this case are procurements and subject to the requirements of the CICA.

c. Whether Any Of The Statutes Cited By The Government Exempt The Service From Complying With The Competition In Contracting Act.

The Government cites three statutes that it argues exempt the Service’s cooperative farming agreements from the CICA.

i. The 1958 Fish And Wildlife Coordination Act.

The Government cites the 1958 Act (codified, as amended, at 16 U.S.C. §§ 661–64), as authority for the Service to use a noncompetitive selection process in awarding cooperative farming agreements. Gov’t Mot. 17, 25. Section 664 therein provides that refuge areas “shall be administered by [Interior] directly or in accordance with cooperative agreements entered into pursuant to the provisions of section 661 of this title . . . for the conservation, maintenance, and management of wildlife[.]” 16 U.S.C. § 664 (emphasis added). In turn, section 661 authorizes Interior “to provide assistance to, and cooperate with, Federal, State, and public or private agencies and organizations in [supporting] all species of wildlife[.]” 16 U.S.C. § 661. According to the Government, these statutory provisions together “authorize[] the agency to use ‘cooperative agreements,’ rather than procurement contracts, to promote wildlife conservation.” Gov’t Mot. 17.

As an initial matter, it is impossible for a 1958 statute to preempt the CICA, which was not enacted until 1984. In addition, the “cooperative agreements” authorized by the 1958 Act have nothing to do with the cooperative farming agreements at issue here. The purpose of the 1958 Act was to “provide for more effective integration of a fish and wildlife conservation program with Federal water-resource developments.” Pub. L. No. 85-624, 72 Stat. 563, 563. As such, sections 661 and 664 concern agreements between the Service and other “Federal, State, and public or private agencies and organizations” to coordinate conservation between these various organizations. See 16 U.S.C. § 661; see also id. § 663 (requiring wildlife conservation plans to be approved jointly by the administrating federal agency, the Secretary of the Interior, and the head of the state wildlife resources agency); id. § 664 (allowing lands of value to migratory birds to “be made available without cost directly to the State agency having control over wildlife resources” if this would be “in the public interest”). For example, in order to mitigate wildlife habitat loss due to completion of the McNary Lock and Dam Project, in 1956 the United States Department of the Army made land surrounding the resulting reservoir, known as Lake Wallula, available to Interior for conservation and management of wildlife resources. AR 44; see also 62 Stat. 240–41 (1948); McNary National Wildlife Management Area, Washington: Designation of Area and Notice of Applicability of Regulations, 21 FED. REG. 2991 (May 4, 1956). Today, the Service manages this refuge under a cooperative agreement with the Army Corps and it is exemplary of the type of “cooperative agreement” identified by 16 U.S.C. § 664. AR 44.

Therefore, the cooperative farming agreements in this case are not used to coordinate wildlife protection between the Service and another agency or organization. Instead, they are used to induce private farmers to provide the Service with the means to fulfill their statutory mandate to feed migratory birds and wildlife. As such, the farmer-cooperators function as contractors for the Service. Thus, neither section 661 nor 664 exempt the Service from the competitive requirements of the CICA.

ii. The 1966 National Wildlife Refuge System Administration Act.

The second statute cited by the Government is the 1966 National Wildlife Refuge System Administration Act (codified at 16 U.S.C. § 668dd(h)). The Government contends that this statute implicitly exempted the Service’s award of cooperative farming agreements, without competition. Gov’t Mot. 27. Again, a 1966 statute cannot preempt a 1984 statute. In addition, there is no evidence in the Administrative Record or in legislative history that Congress was concerned with, or even knew that, cooperative farming agreements were being awarded without competition, when the 1966 Act was enacted. See 1966 U.S.C.C.A.N. 3342, 3349 (“Subsection (g) [(the original subsection for 668dd(h))] is a technical provision which continues the regulations now applicable to the various areas of the system until modified or rescinded by the Secretary.”). As such, section 668dd(h) did not exempt the Service from the competitive requirements of the CICA.

iii. The 1998 National Wildlife Refuge System And Community Partnership Enhancement Act.

The third statute cited by the Government as exempting the Service from the CICA is the National Wildlife Refuge System and Community Partnership Enhancement Act (the “1998 Act”), as amended in 2004 by the National Wildlife Refuge Volunteer Act (codified at 16 U.S.C. § 742f). Gov’t Mot. 27–28. Section 742f(d) allows the Secretary of the Interior, “[n]otwithstanding [the FGCAA],” to “enter into a cooperative agreement with a partner organization . . . or other person to implement one or more projects or programs . . . in accordance with the purposes of this subsection.” 16 U.S.C. § 742f(d)(2)(A). Subsection (B) of § 742f(d)(2) further states that a cooperative agreement can be used for “habitat maintenance, restoration, and improvement,” which encompasses the purpose of cooperative farming agreements. Gov’t Mot. 28.

The Government’s contention that section 742f(d)’s reference to cooperative agreements includes the type of cooperative farming agreements at issue in this case does not comport with the 1998 Act nor with its legislative history. The stated purpose of the 1998 Act was “to promote volunteer programs and community partnerships for . . . national wildlife refuges.” 112 Stat. 1574; see also id. § 2(b) (“The purposes of this Act are—(1) to encourage the use of volunteers . . . (2) to facilitate partnerships between the [Refuge] System and non-Federal entities . . . and (3) to encourage donations and other contributions by persons and organizations to the [Refuge] System.”). Cooperative farming agreements are not “voluntary programs or community partnerships,” but contractual arrangements whereby farmer-cooperators use public land to grow crops, if they reserve part of the yield to feed migratory birds and wildlife.

Moreover, in discussing the proposed 2004 amendments to the Fish and Wildlife Act of 1956, the House Report describes how the volunteer programs should work. H. R. Rep. 108-385, at 1165–66 (2003) (emphasis added).

[T]he 1998 amendments added a new provision to enhance community partnership with the Refuges. . . . In light of this expanded authority, the Committee hopes that the Fish and Wildlife Service will examine the usefulness of additional volunteer coordinator positions . . . . [The 2004 amendments] . . . expand[] the authority for the Secretary of the Interior to hire volunteer coordinators beyond just the pilot programs originally authorized.

H. R. Rep. 108-385, at 1165–66 (2003); see also S. Rep. 108-315, at 3 (2004) (observing that the United States House of Representatives adopted an amendment, offered by Rep. Gilchrest, “to expand the authority of the Secretary to hire full-time volunteer coordinators at more Refuges”). Again, the cooperative farming agreements at issue here, unlike the projects and programs listed in section 742f(d), are not agreements between the Service and volunteers who perform a service without any benefit.

Finally, when Congress amended the 1998 Act in 2004, it could have exempted the Service from the CICA, but did not do so. Compare P.L. 105-242, 112 Stat. 1574, § 5 (Oct. 5, 1998) (“The Secretary of the Interior may enter into a cooperative agreement (within the meaning of chapter 63 of title 31, United States Code)[.]”), with P.L. 108-327, 118 Stat. 1271, § 4 (Oct. 16, 2004) (“Notwithstanding chapter 63 of title 31, United States Code, the Secretary of the Interior may negotiate and enter into a cooperative agreement[.]”); see also AK Steel Corp. v. United States, 226 F.3d 1361, 1374 (Fed. Cir. 2000) (“Congress is presumed to know the administrative or judicial interpretation given a statute when it adopts a new law incorporating the prior law.”); cf. Department of the Interior, Environment, and Related Agencies Appropriations Act, 2010, P.L. 111-88, 123 Stat. 2904, 2923 (Oct. 30, 2009) (“[N]otwithstanding requirements of the Competition in Contracting Act, the Secretary, for purposes of hazardous fuels reduction activities, may obtain maximum practicable competition” among selected entities.).

For these reasons, the court has determined that none of the aforementioned statutes exempt the Service from the competitive requirements of the CICA.

d. The Service’s Priority Selection System Violates The Federal Grant And Cooperative Agreement Act.

Like the CICA, the FGCAA delineates requirements for federal procurement law and uses the terms “property or services.” Compare 41 U.S.C. § 3301(a) (requiring an agency to use “full and open competition” when procuring “property or services”), with 31 U.S.C. § 6303 (requiring that “[a]n executive agency shall use a procurement contract . . . when . . . the principal purpose of the instrument is to acquire (by purchase, lease, or barter) property or services for the direct benefit or use of the United States Government”) (emphasis added). In contrast, “[a]n executive agency shall use a cooperative agreement . . . when . . . the principal purpose of the relationship is to transfer a thing of value to the State, local government, or other recipient to carry out a public purpose of support or stimulation[.]” 31 U.S.C. § 6305.

In this case, whether the Service violated the FGCAA turns on whether the Service’s cooperative farming agreements procure property or services for the “direct benefit or use” of the Government. The court’s decision that they do is informed by CMS Contract Management Services, wherein the United States Court of Appeals for the Federal Circuit explained that, in determining whether an agency’s decision to use a procurement contract or a cooperative agreement complies with the FGCAA, “‘[t]he fact that the product or service produced by the intermediary may benefit another party is irrelevant.’ In the case of an intermediary relationship, ‘the proper instrument is a procurement contract.’” 745 F.3d at 1386 (quoting S. Rep. No. 97-180, at 5 (1981)).

As discussed in the jurisdiction section of this Memorandum Opinion and Final Order, the court determined that the intended beneficiaries of the cooperative farming agreement are the migratory birds and wildlife on the McNary and Umatilla Refuges, because Congress charges the Service with this responsibility. AR 46–47 (McNary Refuge); AR 67 (Umatilla Refuge). In fact, the Service effectively leases refuge land to farmer-cooperators in exchange for their service in growing crops to feed migratory birds and wildlife in the refuges. The name of the contractual instrument is irrelevant. What is relevant is that the FGCAA requires the Service to use a procurement contract whenever it acquires property or services “by purchase, lease or barter.” 31 U.S.C. § 6303. See CMS Contract Mgmt. Servs., 745 F.3d at 1379, 1385–86 (holding that agreements to acquire services to support agency staff and benefit a third party are procurement contracts); see also 360Training.com, 104 Fed. Cl. at 585 (“Whatever the agreements are called, the [c]ourt finds that [the agency] . . . . was conducting a ‘procurement.’”). The Service did not do so in this case. Therefore, the court has determined that the Service violated the FGCAA.

(sections deleted)

For these reasons, it is ordered that,

the United States of America, the United States Department of the Interior, the Fish and Wildlife Service, and their officers, agents, employees, and representatives are enjoined from entering into any cooperative farming agreements or other contractual vehicles concerning the McNary and Umatilla National Wildlife Refuges for the 2015 farming season or thereafter, unless and until the selection process and award comply with the CICA, FGCAA, and the APA.

The opinion next lists 6 cooperators who received cooperative farming agreements and their various information.

V. CONCLUSION.

For these reasons, the Government’s March 7, 2014 Motion To Dismiss is denied. Plaintiff’s February 17, 2014 Motion For Judgment On The Administrative Record is granted in-part and denied in-part. The Government’s March 7, 2014 Cross-Motion For Judgment On The Administrative Record is denied.

In addition, at the conclusion of the 2014 farming season, the Service will terminate the cooperative farming agreements identified above.  (Jay Hymas d/b/a Dosmen Farms v. U. S., No. 13-291C, July 25, 2014.)  (pdf)

U. S. Court of Federal Claims - Listing of Decisions
For the Government For the Protester
  Jay Hymas d/b/a Dosmen Farms v. U. S., No. 13-291C, July 25, 2014.  (pdf)
   
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