The government’s motion to dismiss a consolidated protest as mooted by corrective action is granted, where the corrective action granted the remedy sought the plaintiffs and where the plaintiffs’ additional complaints were matters of contract administration, which do not fall within the court’s jurisdiction. The court also found that the plaintiffs did not incur bid proposal or preparation costs, because their protests challenged the award of extensions to existing tasks orders, and that their attorneys’ fees were not recoverable, because plaintiffs are not the prevailing party when a case is dismissed.
The government moved to dismiss an amended complaint from the plaintiffs challenging the Department of Education’s award of award-term extensions for task orders for student loan debt collection services.
In their initial and amended complaints, the plaintiffs argued that Education had declined to extend their task orders based on an unreasonable reliance on the results of audits seeking potential violations of consumer protection laws. Prior to these audits, each of the plaintiffs had been highly rated for performance. However, the audits concluded that the plaintiffs had high error rates in relation to compliance with the Fair Debt Collection Practices Act, and related statutes. As a result, the department declined to extend their task orders.
In response, the agency proposed to take corrective action by excluding the results of the focused audits from the decision-making process. The court denied the government’s motion to dismiss the case as moot, pending the resolution of the corrective action. After the corrective action, the agency offered the option to continue performance. Enterprise and Pioneer accepted award-term extensions, and Coast and NRI chose to continue performance under their set-aside contracts.
The government again moved to dismiss, arguing that the corrective action was completed, and the amended complaints are now moot. The government also argued that the plaintiffs’ claims for costs should be dismissed.
In response, the plaintiffs asserted claims similar to those in the original amended complaint. They demanded ATE awards in accordance with the original 2009 task orders; asserted that the focused review and resulting decision not to issue 2015 ATEs were arbitrary and capricious; and (3) requested bid preparation and proposal costs and attorneys’ fees.
Specifically, Pioneer sought an ATE award commensurate with the 2015 ATEs. According to Pioneer, as a result of corrective action, it has only received 160,000 account transfers, compared to the 600,000 it would have received had it been a 2015 ATE recipient.
Coast and NRI claimed they should not have to choose between an ATE and their separate, small business contracts. They argued that the agency improperly modified the small business contract to preclude an organization from holding more than one prime contract for debt collection services. According to the plaintiffs, the original contract would have allowed them to hold both their small business contract and an ATE concurrently. NRI also questioned the timing of the contract limitation language, noting it was added after the protests were filed with the court.
COFC concluded that it lacked jurisdiction to hear the plaintiff’s primary allegations, finding they were mooted by the government’s corrective action. The alleged defect in the 2015 ATE awards was the government’s use of the focused review results to issue task orders. Education’s voluntary corrective action reevaluated each plaintiff and did not consider the focus review results in making determinations. As a result, each plaintiff was offered the opportunity to continue services under an ATE. Because the defective was eradicated and cannot recur, the claims are moot.
While Pioneer claims that the corrective action does not provide a full remedy, noting that it had received less work than it expected, COFC held it lacked jurisdiction to consider this complaint, as it falls under the category of contract administration. Similarly, the court held that Coast and NRI’s arguments regarding their requirement to choose between work under a new ATE or existing small business contracts do not devalue Education’s corrective action.
While each challenged the revised language in their small business contract, the agency noted both had assented to the modification. And again, the court noted that the agency’s method for distributing accounts is not within its jurisdiction.
Finally, the court denied the plaintiffs’ requests for bid preparation and proposal costs and attorneys’ fees. First, the court found no evidence showing that bid preparation or proposal costs were required, as the ATE awards extended an existing task order award. Second, because the case is dismissed due to voluntary corrective action, the plaintiffs were not the prevailing party and attorneys’ fees are not recoverable.
The plaintiffs are represented by Megan C. Connor, with whom were Pamela J. Mazza, Patrick T. Rothwell, and Julia Di Vito of PilieroMazza PLLC, Coast Professional Inc.; Edward T. DeLisle of Cohen Seglias Pallas Greenhall & Furman, for National Recoveries Inc.; Daniel R. Forman, with whom were Peter J. Eyre, James G. Peyster, and Robert J. Sneckenberg of Crowell & Moring LLP, for Enterprise Recovery Systems, Inc.; Jonathan D. Shaffer, with whom were Mary Pat Buckenmeyer and Sean K. Griffin of Smith Pachter McWorther PLC, for Pioneer Credit Recovery Inc.
The government is represented by Michael D. Snyder, with whom were Chad A. Readler, Acting Assistant Attorney General, Robert E. Kirschman, Jr., Director, Patricia M. McCarthy, Assistant Director, Jana Moses, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, as well as Jose Otero and Sarah Falk, General Attorneys, Office of General Counsel, U.S. Department of Education.
The defendant-intervenors are represented by Jason A. Levine, with whom was David R. Johnson of Vinson & Elkins LLP, for Financial Management Systems, Corp.; Benjamin G. Chew, with whom was Rory E. Adams of Manatt, Phelps & Phillips, for Account Control Technology Inc.; Edward H. Meyers, with whom was Rebecca R. Anzidei of Stein, Mitchell, Cipollone, Beato & Missner LLP, for Continental Service Group, Inc.; David T. Ralston, Jr., with whom was Frank S. Murray of Foley & Lardner LLP, for Windham Professionals Inc., and Stephen E. Ruscus of Morgan Lewis & Bockius LLP, for GC Services Limited Partnership.
Jeffrey M. Chiow, with whom were Neil H. O’Donnell and Lucas T. Hanback of Rogers Joseph O’Donnell, P.C. for The CBE Group, Inc., Amicus Curiae. Paul M. Honigberg, with whom were Albert B. Krachman, Kendra P. Norwood, and Harrison H. Kang of Blank Rome LLP, for West Asset Management Inc., Amicus Curiae.
