Disabled Veterans Security, LLC v. United States ( 2021 )

In the United States Court of Federal Claims
No. 19-711C
(Filed: September 9, 2021)*
*Opinion originally filed under seal on August 30, 2021
)
LAND SHARK SHREDDING, LLC, )
) Bid Protest; SDVOSB Set Aside;
Plaintiff, ) Solicitation Cancellation; Standing;
) Asset Sales; Actual Bidder; Successor-
v. ) in-Interest
)
THE UNITED STATES, )
)
Defendant. )
)
Joseph A. Whitcomb, Denver, CO, for plaintiff.
Daniel B. Volk, Civil Division, United States Department of Justice, Washington, D.C.,
with whom were Brian M. Boynton, Acting Assistant Attorney General, Martin F.
Hockey, Jr., Acting Director, and L. Misha Preheim, Assistant Director, for defendant.
Natica Chapman Neely, Washington, D.C., of counsel.
OPINION
FIRESTONE, Senior Judge.
In this bid protest, plaintiff Land Shark Shredding, LLC, a service-disabled
veteran-owned small business (SDVOSB), challenges the Department of Veterans
Affairs’ (VA) cancellation of a solicitation for document shredding services that was set
aside for SDVOSBs. After completion of briefing on the government’s motion to dismiss
and the parties’ cross motions for judgment on the administrative record, this case was
stayed pending Land Shark’s appeals to the United States Court of Appeals for the
Federal Circuit of other bid protest actions involving issues related to this case.
Following the Federal Circuit’s January 11, 2021 decisions on those appeals, the court
ordered supplemental briefing and held oral argument on June 3, 2021.
At oral argument, the parties informed the court that Land Shark had recently sold
its name, its assets, and its government contracting and commercial business interests to
two companies, and had changed its name to Disabled Veterans Security, LLC. The
parties informed the court that these transactions would require, at minimum, amending
the case caption. The government also raised questions of whether any entity had
standing to bring this case. The court ordered supplemental briefing on these issues.
Now pending before the court are two new motions. Land Shark moves to
substitute Disabled Veterans Security, LLC as the real party at interest in this case or,
alternatively, amend the case caption to reflect Land Shark’s new name. Mot. to
Substitute at 1, ECF No. 43. The government has filed a second motion to dismiss,
agreeing that the case caption should be amended but arguing that the case should be
dismissed because Disabled Veterans is not an interested party and therefore lacks
standing. 2d Mot. to Dismiss at 4-5, ECF No. 48.
For the reasons that follow, Land Shark’s request that the case caption be amended
to reflect its current name, Disabled Veterans Security, LLC is GRANTED. However,
because Disabled Veterans is not a successor-in-interest to Land Shark for purposes of
the shredding solicitation at issue and therefore lacks interested party status, the
government’s second motion to dismiss is GRANTED. The government’s first motion
to dismiss, ECF No. 14, the parties’ cross motions for judgment on the administrative
2
record, ECF Nos. 12, 14, and Land Shark’s supplemental motion for judgment on the
administrative record, ECF No. 25, are DISMISSED AS MOOT.
I. BACKGROUND
A. The Solicitation and Quotations
On March 15, 2019, the VA issued Solicitation No. 36C24119Q0163, requesting
quotations for commercial document shredding services for the VA’s Boston Medical
Center and associated facilities under a firm, fixed-price contract to be performed for a
one-year base period with four one-year options. AR207, AR210, ECF No. 11. For this
procurement, the VA was required by 38 U.S.C. § 8127(d) to provide preferences to
veteran-owned small businesses. Under what is known as the “Rule of Two,” the VA
must restrict competition for a contract to SDVOSBs or veteran-owned small businesses
(VOSBs) “if the contracting officer has a reasonable expectation that two or more
[SDVOSBs or VOSBs] will submit offers and that the award can be made at a fair and
reasonable price that offers best value to the United States.” Id. If the Rule of Two is
satisfied, the contracting officer must issue the solicitation as an SDVOSB or VOSB set-
aside. Land Shark Shredding, LLC v. United States, 842 F. App’x 594, 597 (Fed. Cir.
2021).
The shredding services procurement in this case was originally set aside under the
Rule of Two for VOSBs and was later changed to an SDVOSB set-aside by amendment.
AR210, AR272, AR295. The evaluation criteria for submitted quotations included price,
past performance, and technical considerations. AR211-12. Quotations were to be
evaluated in accordance with Federal Acquisition Regulation (FAR) Part 13, see AR211,
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which provides the contracting officer “broad discretion in fashioning suitable evaluation
procedures” on the basis established in the solicitation, 48 C.F.R. § 13.106-2(b).
Quotations were due by March 28, 2019 at 12:00 p.m. eastern standard time. AR215.
The VA received three quotations from SDVOSBs in response to the solicitation,
but only Land Shark’s quotation was timely. See AR470. Land Shark’s proposed prices
were close to double the VA’s independent government cost estimate (IGCE) 1 for the
shredding services, and far exceeded the (untimely) price proposals from the other
SDVOSBs. See AR274 (revised IGCE), AR340-46 (Land Shark’s price proposal),
AR407-21 (untimely proposal from Document Security Solutions), AR441-46 (untimely
proposal from Minuteman Technology Services).
The solicitation also contained technical requirements regarding subcontracting.
For offerors outside of the Boston, MA area intending to self-perform without
subcontractors, the solicitation required the offeror to include an explanation as to how it
would accomplish the shredding work in Massachusetts. AR212. Land Shark, based in
Bowling Green, Kentucky, AR384, stated that it intended “to self-perform all contract
work,” AR376. Land Shark’s quotation included 58 pages of general information
regarding how it would perform, AR347-405, but did not include a separate explanation
as to how it would accomplish the shredding work in Massachusetts, see AR472.
1 “Generally, independent government estimates represent the agency’s best estimate of the most
reasonable current price of the products or services being procured.” Parcel 49C Ltd. P’ship v.
United States, 130 Fed. Cl. 109, 128 (2016) (internal alterations and quotation omitted). FAR
13.106-3(a)(2)(vi) permits an agency to use the IGCE in evaluating price reasonableness.
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Land Shark’s bid also contained conflicting information as to whether Land Shark
would—despite its intent to self-perform—use subcontractors. AR376 (“LSS reserves
the right (when necessary) to utilize the services of a qualified Teaming
Partner/Subcontractor.”), AR377 (“However, we still must properly compensate our
subcontractor. Therefore, to remain compliant with 13 CFR 125.6 we have to double
what a subcontractor charges us – which results in a higher price . . . .”). For offerors
planning to subcontract some or all of the work, the solicitation required the offeror to
“please provide the name and address([e]s) of all subcontractor(s), a description of the
planned subcontracting effort, and the subcontractor’s experience to meet the
requirements of the PWS [(performance work statement)].” AR212 (emphasis omitted).
Land Shark did not include this information in its quotation. See AR472.
B. The Contracting Officer’s Cancellation Decision
In an April 24, 2019 memorandum, the contracting officer cancelled the
solicitation, citing pricing and technical deficiencies in Land Shark’s quotation, the only
timely bid. AR470. First, the contracting officer concluded that the pricing proposal
submitted by Land Shark was not “fair and reasonable.” AR471. The contracting officer
noted that the pricing submitted by Land Shark was nearly double the agency’s available
funding and the IGCE and far exceeded the other untimely SDVOSB quotes received in
response to the solicitation. Id.As for the technical portions of Land Shark’s bid, the contracting officer
determined that Land Shark had shown that “it has the experience to meet the
requirement.” AR472. However, the contracting officer determined that Land Shark’s
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quotation contained “inconsistent information” regarding whether Land Shark would
self-perform or use subcontractors. Id. The contracting officer found that, if it intended
to self-perform, Land Shark “did not indicate how it would accomplish document
shredding in Massachusetts as required by the solicitation.” Id. The contracting officer
further found that, if it intended to use subcontractors, “Land Shark did not provide the
name and address(es) of the subcontractor(s), a description of the planned subcontracting
effort, and the subcontractor’s experience to meet the requirements of the PWS as
required by the solicitation.” Id. The contracting officer therefore concluded that Land
Shark’s technical quote was unacceptable. Id. For these reasons, the contracting officer
cancelled the solicitation. AR473.
C. The Parties’ Initial Briefing in This Court
On May 14, 2019, Land Shark filed a complaint in this court, challenging the
cancellation of the solicitation on the grounds that the contracting officer’s determination
regarding Land Shark’s pricing lacked a rational basis and violated the Rule of Two. See
Compl. ¶¶ 27-50, ECF No. 1. On June 19, 2019, Land Shark filed a motion for judgment
on the administrative record, challenging only the pricing aspect of the contracting
officer’s cancellation decision and arguing that, under the Rule of Two, the contracting
officer was required to award Land Shark the shredding contract. See Pl.’s Mot. at 3-5,
ECF No. 12.
On July 12, 2019, the government filed its first motion to dismiss combined with a
cross motion for judgment on the administrative record and response to Land Shark’s
motion. Def.’s Cross-Mot. at 1, 3, ECF No. 14. The government argued, inter alia, that
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Land Shark had failed to challenge the contracting officer’s determination that Land
Shark’s quotation was technically deficient, which disqualified Land Shark’s quotation
from consideration and served as a basis to dismiss Land Shark’s claim for lack of
standing. Id. at 4-7.
As part of the briefing that followed, Land Shark requested that it be permitted to
amend its complaint to challenge the contracting officer’s findings regarding technical
unacceptability. See Order at 1, ECF No. 19. The court allowed Land Shark to do so and
ordered that the parties submit supplemental briefing. Id.; see Am. Compl. at 13, ECF
No. 24 (adding a count challenging the technical acceptability determination).
The parties’ supplemental briefing was completed on September 24, 2019. In its
briefs, Land Shark generally argued that because its quotation was made at a fair and
reasonable price, the government was required by the Rule of Two to award Land Shark
the shredding contract. See, e.g., Pl.’s Mot. at 8-14. Although conceding that its
quotation did not include specific subcontractor information, Land Shark contended that
its proposal met all of the solicitation’s technical requirements. See, e.g., Pl.’s Supp.
Reply at 1-4, ECF No. 27. For its part, the government argued that because Land Shark’s
proposal did not meet the technical requirements of the solicitation, Land Shark did not
have the requisite direct economic interest to bring this case and for this reason lacked
standing. See, e.g., Def.’s Cross-Mot. at 4-7. The government further argued that the
VA’s cancellation of the solicitation was rational based on the noted pricing and technical
defects in Land Shark’s quotation. See, e.g., id. at 8-14.
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D. Related Federal Circuit Decisions and Supplemental Briefs
Following briefing in this case, Land Shark filed notices of appeal in two other bid
protests before this court involving the application of the Rule of Two. 2 See Order, ECF
No. 31. On December 18, 2019, this court stayed this case pending the Federal Circuit’s
decisions in Land Shark’s appeals. Id.On January 11, 2021, the Federal Circuit issued decisions rejecting Land Shark’s
two appeals. Land Shark Shredding, LLC v. United States, 842 F. App’x 589, 590 (Fed.
Cir. 2021); Land Shark Shredding, LLC v. United States, 842 F. App’x 594, 595 (Fed.
Cir. 2021). The parties then submitted a second round of supplemental briefing regarding
the effect of these decisions on Land Shark’s claims. See generally Pl.’s 2d Supp. Br.,
ECF No. 36; Def.’s 2d Supp. Br., ECF No. 37.
E. Additional Briefing Regarding the Sale of Land Shark’s Name, Assets
and Business Interests
The court held oral argument on June 3, 2021. At the oral argument, the parties
informed the court that Land Shark had recently sold its name, assets, and business
interests, and that these transactions raised questions regarding whether the case caption
should be amended to reflect Land Shark’s new name, Disabled Veterans Security, LLC;
whether a new party should be substituted as the real party in interest; and whether any
2 Land Shark has also filed three other bid protests before this court that are still pending, making
similar allegations regarding the Rule of Two. These cases are currently stayed pending the
resolution of this and other cases. See Order Staying Case, Land Shark Shredding, LLC v.
United States, Nos. 19-1719C, 19-1741C, ECF No. 10; Order, Land Shark Shredding, LLC v.
United States, No. 19-1852, ECF No. 10.
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entity had standing to bring this case. See Tr. 6:17-7:12, 13:11-16:25, ECF No. 47.
Accordingly, the court ordered another round of supplemental briefs. Order, ECF No. 42.
On June 14, 2021, Land Shark moved to substitute Disabled Veterans Security,
LLC as the plaintiff or, in the alternative, to amend the case caption to reflect its new
name. Mot. to Substitute at 1. Land Shark attaches to its supporting briefs documents
regarding its name change and the sale of its assets. Id., Exs. 1-9; Pl.’s Resp. & Reply,
Ex. 1, ECF No. 50. The following facts are taken from Land Shark’s and the
government’s briefs on this issue and are undisputed.
Land Shark explains that on December 15, 2020, Dunlap Government Services,
LLC, a certified SDVOSB, acquired from Land Shark all assets necessary to perform
Land Shark’s government contracting business. Mot. to Substitute at 2; see also id., Ex.
1 at 1 (Asset Purchase Agreement); id., Ex. 1 at 34 (Second Amendment to Asset
Purchase Agreement noting that Land Shark intended to sell “all assets . . . necessary to
perform” its federal contracting business). These assets included equipment, such as
shredding trucks, id., Ex. 1 at 34-35 (Second Amendment to Asset Purchase Agreement
listing assets), as well as Land Shark’s ongoing government contracts, id. at 3, Ex. 1 at 1
(Section 1.01), Ex. 2 at 1, 11-20 (Novation Agreement listing contracts). The sale
excluded contested government contracts including the one at issue in this case, id. at 3,
Ex. 1 at 1 (Section 1.02), 20 (Schedule 1.02), but gave Dunlap the option to purchase any
awarded contested government contracts from Land Shark, id., Ex. 1 at 9-10 (Section
8.07). Under the agreement, Land Shark is barred from seeking new shredding contracts
with the federal government for five years. Id. at 3, Ex. 1 at 8-9 (Section 8.04).
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Then, through another asset purchase agreement dated December 31, 2020, Land
Shark sold its commercial shredding business, including its name and “all of its
remaining assets,” to Underground Vaults and Storage, Inc. Pl.’s Resp. & Reply at 2 n.2,
Ex. 1 at 6; see also 2d Mot. to Dismiss at 1-4. According to a press release about this
sale, Land Shark’s Vice President of Operations and five other Land Shark employees
now work for Underground Vaults. 2d Mot. to Dismiss at 1 (quoting a January 4, 2021
press release by Underground Vaults).
Following these sales, on January 22, 2021 Land Shark changed its name to
Disabled Veterans Security, LLC. Mot. to Substitute at 3, Ex. 8 (Articles of Amendment
changing Land Shark’s name). According to Land Shark, Disabled Veterans is in the
process of verifying its SDVOSB status. Pl.’s Resp. & Reply at 3. Like Land Shark,
Disabled Veterans is a single-member limited liability corporation owned by Donald
Gerard, Jr. Id. at 7; Mot. to Substitute at 1.
Because of these various transactions, Land Shark moves to substitute Disabled
Veterans as the real party in interest or to amend the case caption to reflect its name
change. Mot. to Substitute at 1. It argues that substitution or amendment is appropriate
because the name change “resulted in no actual change to its organizational structure,” id.
at 5, and, therefore, nothing prevents Disabled Veterans “from continuing the present
case” or from competing for the shredding solicitation at issue, id. at 1.
On June 25, 2021, the government filed a second motion to dismiss and response
to Land Shark’s motion to substitute. The government agrees with Land Shark that the
case caption should be amended to reflect Land Shark’s new name. 2d Mot. to Dismiss
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at 4. However, the government argues that Land Shark—now operating as Disabled
Veterans—lacks standing to bring this case because, due to the sale of its assets and
businesses to Underground Vaults and Dunlap, “no entity remains in a position where it
could fill the shoes of the former Land Shark Shredding, LLC with respect to the
quotation it submitted in March 2019.” Id. at 7. The government also points out that
“Disabled Veterans Security, LLC has not been verified as an SDVOSB,” and would
therefore be ineligible to compete. Id. at 8.
In response, Land Shark argues that Disabled Veterans may step into the shoes of
Land Shark because Disabled Veterans has the same corporate structure and leadership.
Pl.’s Resp. & Reply at 7. Land Shark further argues that Disabled Veterans can satisfy
the terms of Land Shark’s prior quotation because its organizational structure remains the
same, because it can “purchase necessary equipment,” and because it “intends to
subcontract” the shredding work. Id.Briefing was completed on August 10, 2021. The court has determined that oral
argument is not necessary.
II. LEGAL STANDARDS
Standing in this case is framed by 28 U.S.C. § 1491(b)(1), which provides this
court jurisdiction over bid protests. Asset Prot. & Sec. Servs., LP v. United States, 5
F.4th 1361, 1364 (Fed. Cir. 2021). Under § 1491(b)(1), bid protests may only be brought
by “interested parties” that are prejudiced by the procuring agency’s action. CliniComp
Int’l, Inc. v. United States, 904 F.3d 1353, 1358 (Fed. Cir. 2018).
11
To demonstrate that it is an “interested party,” a plaintiff must show that it “(1) is
an actual or prospective bidder and (2) possess[es] the requisite direct economic interest”
in the procurement. Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1359 (Fed. Cir.
2009) (internal quotation omitted). As to the first requirement, where a plaintiff is not an
“actual bidder” on the solicitation, a plaintiff may nonetheless possess standing as a
“complete successor-in-interest” that can “stand in the shoes” of the actual bidder.
Universal Prot. Serv., LP v. United States, 126 Fed. Cl. 173, 187 (2016); L-3 Commc’ns
Integrated Sys., LP v. United States, 84 Fed. Cl. 768, 779 (2008) (citing Ala. Aircraft
Indus., Inc. v. United States, 83 Fed. Cl. 666, 682 (2008), rev’d on other grounds, 586
F.3d 1372 (Fed. Cir. 2009)); Centerline Logistics Corp. v. United States, 148 Fed. Cl.
332, 336 (2020). As to the second requirement, to prove a “direct economic interest” in
bid protest cases challenging the cancellation of a procurement, a plaintiff must establish
that it had a “substantial chance” of receiving the contract but for the alleged errors in the
procurement process. Veterans Electric, LLC v. United States, 138 Fed. Cl. 781, 790
(2018).
Whether a plaintiff has standing is a jurisdictional issue, and the plaintiff bears the
burden of proving standing to sue. Universal Prot., 126 Fed. Cl. at 184-85. When
assessing standing, “a court must accept as true all undisputed facts asserted in the
plaintiff’s complaint and draw all reasonable inferences in favor of the plaintiff.” Trusted
Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed. Cir. 2011). However, where
jurisdictional facts are in dispute, a plaintiff must establish those facts by a preponderance
of the evidence. Sci. Applications Int’l Corp. v. United States, 102 Fed. Cl. 644, 651
12
(2011). Although most standing cases consider whether a plaintiff has standing when
filing suit, an “actual controversy” must exist through “all stages” of the litigation.
Acetris Health, LLC v. United States, 949 F.3d 719, 726 (Fed. Cir. 2020) (quoting
Already, LLC v. Nike, Inc., 568 U.S. 85, 90-91 (2013)). The court therefore may consider
post-filing evidence in assessing jurisdiction. See id.III. DISCUSSION
As an initial matter, both parties agree that the case caption should be amended to
reflect Land Shark’s legally changed name, Disabled Veterans Security, LLC. Mot. to
Substitute at 1, Ex. 8; 2d Mot. to Dismiss at 4-5. The court agrees that amending the case
caption, rather than substituting Disabled Veterans as a party, is appropriate. Land Shark
retained its interest in this case when the contested solicitation was excluded from the
asset sale to Dunlap, and then changed its name to Disabled Veterans. Mot. to Substitute
at 3, Ex. 1 at 1 (Section 1.02), Ex. 8. Even though Dunlap may purchase any contract
awarded out of the contested solicitation, id., Ex. 1 at 9 (Section 8.07), neither party
argues that Dunlap (or Underground Vaults) can currently claim an interest in this case,
see 2d Mot. to Dismiss at 5. The court therefore agrees with the parties that Land Shark,
now operating under the name Disabled Veterans Security, LLC, continues to be the real
party in interest. See id.; Pl.’s Resp. & Reply at 1. Accordingly, Land Shark’s motion to
amend the case caption to reflect this new name, the alternative relief requested in its
motion to substitute, is granted.
The court now turns to the question of whether Disabled Veterans has standing as
an interested party to bring this case. In its motion to dismiss, the government argues that
13
Disabled Veterans does not satisfy either prong of the “interested party” test because
Disabled Veterans (1) was not an actual bidder on the March 2019 shredding solicitation
and cannot establish that it is a complete successor-in-interest to Land Shark, and (2) also
cannot establish that it stands a substantial chance of contract award. 2d Mot. to Dismiss
at 6-9. Land Shark admits that Disabled Veterans is not an actual bidder on the
solicitation or a complete successor-in-interest to Land Shark, but argues that it can
nevertheless step into the shoes of Land Shark, for purposes of this litigation, because it
has the same corporate structure, would honor the price listed on Land Shark’s quotation,
has the same technical capabilities as Land Shark, may purchase any necessary
equipment to perform the contract, and can subcontract the work. Pl.’s Resp. & Reply at
5-9.
After careful consideration of these arguments, the court agrees with the
government that Land Shark, now operating as Disabled Veterans, lacks standing as an
interested party to continue this lawsuit. 3 It is undisputed that Disabled Veterans was not
an “actual or prospective bidder” on the solicitation at issue in this case, as required to
3 The United States Supreme Court has stated that “[t]he doctrine of standing generally assesses
whether [the requisite interest in a dispute] exists at the outset [of the litigation], while the
doctrine of mootness considers whether it exists throughout the proceedings.” Uzuegbunam v.
Preczewski, 141 S. Ct. 792, 796 (2021). Because the court is evaluating whether Disabled
Veterans has demonstrated interested party status under § 1491(b)(1), the court analyzes
jurisdiction for purposes of this opinion under the standing doctrine. However, the court’s
holding could also be framed under the mootness doctrine. Because Land Shark, operating as
Disabled Veterans, no longer possesses the requisite interested party status to bring this case, the
court cannot provide Land Shark with effectual relief, and the case is moot. See Uzuegbunam,
141 S. Ct. at 796; see also Acetris, 949 F.3d at 726-27 (determining that a portion of the case was
“moot” because the plaintiff did “not now have standing” to challenge the solicitation at issue).
Under either doctrine, this case must be dismissed for lack of jurisdiction.
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demonstrate standing as an interested party under § 1491(b)(1). Asset Prot., 5 F.4th at
1365. Nevertheless, Land Shark may establish Disabled Veterans’ standing by
demonstrating that Disabled Veterans can “stand in the shoes” of Land Shark as Land
Shark’s “complete successor-in-interest.” Universal Prot., 126 Fed. Cl. at 187 (“[E]ven
if a bidder did not submit a proposal, if it is the complete successor-in-interest to the
actual offeror, the bidder may stand in the shoes and have standing to bring a protest.”);
Centerline, 148 Fed. Cl. at 336 (“[T]he inquiry is whether the follow-on entity is the
complete successor-in-interest to the actual offeror.” (internal quotation omitted)); L-3
Commc’ns, 84 Fed. Cl. at 779 (citing Ala. Aircraft, 83 Fed. Cl. at 682). In evaluating
“successor-in-interest” status, this court looks to such factors as whether the actual bidder
and the entity asserting standing are the same legal entity or business unit, Ala. Aircraft,
83 Fed. Cl. at 682; Centerline, 148 Fed. Cl. at 336 (evaluating “indicia such as merger,
corporate reorganization, the sale of an entire business or the sale of an entire portion of a
business”); L-3 Commc’ns, 84 Fed. Cl. at 778-79 (finding standing where the new entity
“embraces the identical business unit which submitted” the original bid), and whether the
change in corporate structure or sale at issue affected the “operational” or “financial”
resources that the entity asserting standing could devote to the subject contract, Ala.
Aircraft, 83 Fed. Cl. at 682-84; Universal Prot., 126 Fed. Cl. at 193 (dismissing for lack
of standing where the plaintiff “lack[ed] all of the resources” referenced by the actual
bidder’s proposal). 4
4Land Shark attempts to distinguish these cases on the ground that they involved post-award bid
protests, while this case involves a pre-award cancellation. Pl.’s Resp. & Reply at 2 n.1. The
15
In this case Land Shark has failed to provide sufficient evidence that Disabled
Veterans could “stand in the shoes” of Land Shark as a complete successor-in-interest
with regard to Land Shark’s submitted quotation. Universal Prot., 126 Fed. Cl. at 187.
Based on the undisputed facts described above, Land Shark, now operating as Disabled
Veterans, no longer owns the assets or employs the personnel that it did when it
submitted its quotation in March 2019. Because of this, Land Shark itself “concedes that
[Disabled Veterans] is not a complete successor-in-interest to Land Shark.” Pl.’s Resp. &
Reply at 5-6. Under this court’s precedent, therefore, Disabled Veterans “has no right to
proceed” with this case. Centerline, 148 Fed. Cl. at 336.
In addition to this concession, Land Shark has failed to demonstrate that Disabled
Veterans has the operational resources that would allow it to perform the shredding
solicitation at issue in accordance with Land Shark’s quotation. Land Shark admits that it
has sold all of its assets to Dunlap and Underground Vaults and provides no evidence or
argument that Disabled Veterans has since acquired its own assets. Pl.’s Resp. & Reply
at 2 n.2. Therefore, the quotation submitted by Land Shark for the March 2019 shredding
solicitation cannot now apply to Disabled Veterans. For example, the “Capabilities
Statement” and “Technical Proposal” in Land Shark’s March 2019 quotation describe
Land Shark’s available trucks, bins, and shredding equipment. AR350, AR355.
However, Land Shark sold its trucks, bins, and shredding equipment to Dunlap and
court sees no basis for this distinction. In both pre- and post-award bid protests, a plaintiff must
establish standing by demonstrating that it is an “actual or prospective bidder.” See e.g.,
Veterans Electric, 138 Fed. Cl. at 790 (pre-award cancellation).
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Underground Vaults. Pl.’s Resp. & Reply, Ex. 1 at 6 (selling “4 mobile shred trucks,”
“Tubs and consoles,” a “Plant-based shredder/baler/conveyor system,” and “all inventory,
supplies, office furniture, computers, software, and other tangible assets” to Underground
Vaults); Mot. to Substitute, Ex. 1 at 34 (Second Amendment to Asset Purchase
Agreement with Dunlap, listing sold vehicles and bins). Land Shark’s quotation,
therefore, does not describe the assets and capabilities of Disabled Veterans, but the
resources of a company that no longer exists. See Universal Prot., 126 Fed. Cl. at 193
(dismissing for lack of standing where the plaintiff “appears to lack all of the resources”
relied on in the original proposal); Centerline, 148 Fed. Cl. at 336 (dismissing for lack of
standing where there was no representation that the plaintiff “inherited sufficient assets of
[the actual bidder] to perform”).
Likewise, the employees described in Land Shark’s “Capabilities Statement” and
“Technical Proposal” do not appear to work for Disabled Veterans. According to a press
release regarding Land Shark’s sale of its commercial business, one of the key employees
listed in Land Shark’s “Capabilities Statement” under its “Expertise Summary,” as well
as five of its other employees, now work for Underground Vaults. 2d Mot. to Dismiss at
1; AR350 (Capabilities Statement); AR354-55 (describing the qualifications of Land
Shark’s service personnel); see also Universal Prot., 126 Fed. Cl. at 191 (holding that the
plaintiff had not established successor-in-interest status where “key personnel” listed in
the proposal to the solicitation were no longer employed by the plaintiff). In fact, it is
unclear to the court whether Disabled Veterans has any employees or management at all
to devote to the shredding contract, apart from its owner, Mr. Gerard, Jr. In addition,
17
while stating that Disabled Veterans is in the process of becoming SDVOSB verified,
Pl.’s Resp. & Reply at 3, Land Shark has failed to show that Disabled Veterans has
achieved SDVOSB status such that it could compete for the contract at issue. 5 In short,
there is no quotation in the record that could serve as the basis for an award to Disabled
Veterans.
Land Shark argues that Disabled Veterans may nonetheless “stand in the shoes” of
Land Shark because Disabled Veterans has the same corporate structure as Land Shark,
could purchase the necessary equipment, and could subcontract the shredding work. Pl.’s
Resp. & Reply at 5-9. Yet, more is needed to demonstrate complete successor-in-interest
status. That Disabled Veterans may eventually be able to obtain the resources to perform
the shredding contact at issue does not demonstrate that Disabled Veterans has the same
financial and operational resources as Land Shark, such that it could provide the assets
and services promised in Land Shark’s previously submitted quotation. See Universal
Prot., 126 Fed. Cl. at 187 (dismissing for lack of standing where the plaintiff could not
offer “an identical proposal” to that submitted by the actual bidder). As discussed above,
based on the undisputed facts surrounding Land Shark’s asset sales, Disabled Veterans is
not able to “stand in the shoes” of Land Shark for the purposes of the challenged
solicitation.
5For these reasons, the court also agrees with the government, 2d Mot. to Dismiss at 8, that Land
Shark has not established that Disabled Veterans has a “substantial chance” of being awarded the
shredding contract, the second requirement for demonstrating interested party status under §
1491(b)(1). Veterans Electric, 138 Fed. Cl. at 790.
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Moreover, Land Shark’s contention that Disabled Veterans could subcontract the
solicited shredding work, Pl.’s Resp. & Reply at 7, contradicts Land Shark’s statement in
its quotation that the “intent of Land Shark Shredding (LSS) is to self-perform all
contract work.” AR376. These contradictory statements additionally confirm that any
award to Disabled Veterans could not be grounded in Land Shark’s prior quotation.
Based on the undisputed facts described above, Disabled Veterans cannot
demonstrate that it is a complete successor-in-interest to Land Shark. Disabled Veterans
therefore has not established standing as an interested party. Accordingly, the case must
be dismissed for lack of jurisdiction.
IV. CONCLUSION
For the foregoing reasons, Land Shark’s motion to amend the case caption, ECF
No. 43, to reflect its current name, Disabled Veterans Security, LLC, is GRANTED.
However, because Disabled Veterans lacks interested party status, the government’s
second motion to dismiss, ECF No. 48, is GRANTED. The government’s first motion to
dismiss, ECF No. 14, the parties’ cross motions for judgment on the administrative
record, ECF Nos. 12, 14, and Land Shark’s supplemental motion for judgment on the
administrative record, ECF No. 25, are DISMISSED AS MOOT. No costs. After
amending the case caption, the Clerk is directed to enter judgment accordingly. The
caption of the judgment shall reflect Disabled Veterans Security, LLC as the plaintiff.
IT IS SO ORDERED.
s/Nancy B. Firestone
NANCY B. FIRESTONE
Senior Judge
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