Prc Inc. v. Sheila E. Widnall, Secretary of the Air Force

Citations: 64 F.3d 644; 40 Cont. Cas. Fed. 76,824; 1995 U.S. App. LEXIS 22537; 1995 WL 491011Docket: 94-1481

Court: Court of Appeals for the Federal Circuit; August 17, 1995; Federal Appellate Court

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PRC Inc. appeals the General Services Administration Board of Contract Appeals' dismissal of its Motion for Costs related to a protest against the Air Force's contract award to Electronic Data Systems Corporation (EDS). The Board had previously sustained PRC's protest on April 30, 1992, due to prohibited practices by the Air Force that prejudiced PRC. Following this, PRC filed its Motion for Costs on June 1, 1992, seeking reimbursement for costs incurred during the protest and proposal preparation.

On August 28, 1992, EDS appealed the Board's decision, and PRC intervened. However, the Air Force cancelled the LAN SEII procurement on September 14, 1992, leading PRC to argue that EDS's appeal was moot. The court agreed the appeal was moot but denied PRC's motion to dismiss, vacating the Board's decision sustaining PRC's protest and remanding the case for dismissal of PRC's complaint. PRC subsequently filed a petition seeking clarification on the vacatur's impact on its rights to recover costs under 40 U.S.C. Sec. 759, which was denied by the court. The appellate court has now reversed the Board's dismissal and instructed reinstatement of PRC's Motion for Costs.

On remand, the Board dismissed PRC's protest complaint as per the vacatur order and subsequently dismissed PRC's Motion for Costs, citing lack of jurisdiction. The Board reasoned that the vacatur order effectively nullified its previous determination that the Air Force committed procurement violations, which eliminated the necessary basis under 40 U.S.C. Sec. 759(f)(5)(B) for PRC to recover costs under 40 U.S.C. Sec. 759(f)(5)(C). The dismissal of the Motion for Costs also referenced the court's unqualified vacatur order despite PRC's objections. Jurisdictional questions are reviewed de novo, as is the interpretation of cost-shifting statutes.

PRC contends that Supreme Court precedent requires that the vacatur order not impede its right to claim protest and proposal costs. The Air Force counters that, under 40 U.S.C. Sec. 759(f)(5)(B, C), PRC cannot recover costs without an initial Board finding of a violation, which was nullified by the unconditional vacatur. The Air Force argues that no existing Board determination supports PRC's cost claim.

Referencing Crowell v. Mader, the court indicated that vacatur should not prejudice unresolved issues, such as cost recovery rights. The court’s December 2 order vacated the Board's protest decision but did not address PRC's pending Motion for Costs. The court concluded that the vacatur order did not deprive the Board of jurisdiction to consider PRC's claim for protest and proposal costs.

The vacatur order does not prejudice PRC's ability to pursue protest and proposal costs. A prerequisite for such costs is a determination by the Board that an agency action violated a statute or regulation, which the Board made in this case. The vacatur order should not negate the Board's original protest decision as it pertains to PRC's cost claim, establishing a valid basis for PRC's claim. Consequently, the Board's dismissal of PRC's claim for lack of jurisdiction is reversed, and the case is remanded for the Board to reinstate the Motion for Costs. PRC seeks $321,410.45 in protest costs and $201,895.45 in proposal preparation costs. The Board assigned a new docket number for PRC's Motion for Costs. A prior order erroneously referenced EDS instead of PRC, which was later corrected. Per Title 40 U.S.C. Sec. 759(f)(5), if the Board finds a violation, it may award costs to an interested party for protest-related expenses.