CMS CONTRACT MANAGEMENT SERVICES, THE HOUSING AUTHORITY OF THE CITY OF BREMERTON, NATIONAL HOUSING COMPLIANCE, ASSISTED HOUSING SERVICES CORP., NORTH TAMPA HOUSING DEVELOPMENT CORP., CALIFORNIA AFFORDABLE HOUSING INITIATIVES, INC., SOUTHWEST HOUSING COMPLIANCE CORPORATION, AND NAVIGATE AFFORDABLE HOUSING PARTNERS (formerly known as Jefferson County Assisted Housing Corporation), Plaintiffs-Appellants,
MASSACHUSETTS HOUSING FINANCE AGENCY, Plaintiff-Appellee,
UNITED STATES, Defendant-Appellee
Appeal from the United States Court of Federal Claims in consolidated Nos. 12-CV-0852, 12-CV-0853, 12-CV-0862, 12-CV-0864, and 12-CV-0869, Judge Thomas C. Wheeler.
ROBERT K. TOMPKINS, Patton Boggs LLP, of Washington, DC, argued for all plaintiffs-appellants. With him on the brief were MICHAEL J. SCHAENGOLD and ELIZABETH M. GILL. Of counsel on the brief were COLM P. NELSON, Foster Pepper PLLC, of Seattle, Washington, for CMS Contract Management Services and The Housing Authority of The City of Bremerton; and MICHAEL GOLDEN, Pepper Hamilton LLP, of Washington, DC, for National Housing Compliance; NEIL H. O'DONNELL, Rogers, Joseph, O'Donnell, of San Francisco, California, for Assisted Housing Services Corp., North Tampa Housing Development Corp. and California Affordable Housing Initiatives, Inc.; and RICHARD JAMES VACURA, Morrison & Foerster, LLP, of McLean, Virginia, for Southwest Housing Compliance Corp. Of counsel was WILLIAM GREGORY GUEDEL, Foster Pepper PPLC, of Seattle, Washington, for CMS Contract Management Services.
GABRIEL E. KENNON, Cohen Mohr LLP, of Washington, DC, for plaintiff-appellee Massachusetts Housing Finance Agency. Of counsel was ANDREW J. MOHR.
KIRK T. MANHARDT, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were STUART F. DELERY, Acting Assistant Attorney General, and JEANNE E. DAVIDSON, Director. Of counsel on the brief were DOUGLAS K. MICKLE, Senior Trial Counsel, and JOSEPH A. PIXLEY, Trial Attorney, DORIS S. FINNERMAN, Assistant General Counsel for Assisted Housing and Civil Rights, Office of General Counsel, and KATHIE SOROKA, Special Assistant to the General Counsel, Office of General Counsel, United States Department of Housing and Urban Development, of Washington, DC.
KEVIN P. MULLEN, Jenner & Block, LLP, of Washington, DC, for amicus curiae.
Before RADER, Chief Judge, LOURIE, and MOORE, Circuit Judges.
Rader, Chief Judge.
The Court of Federal Claims denied CMS Management Services et al.'s (Appellants) request to set aside as unlawful the Department of Housing and Urban Development's (HUD) solicitation and award of contract administration services related to Section 8 of the Housing Act. Because the Performance-Based Annual Contribution Contracts (PBACCs) are procurement contracts, not cooperative agreements, this court reverses.
The Federal Grant and Cooperative Agreement Act (FGCAA) sets forth the type of legal instrument an executive agency must use when awarding a federal grant or contract. 31 U.S.C. § 6301. In pertinent part, " [a]n executive agency shall use a procurement contract as the legal instrument... 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." 31 U.S.C. § 6303. When using a procurement contract, an agency must adhere to federal procurement laws, including the Competition in Contracting Act (CICA), 41 U.S.C. § 3301, as well as the Federal Acquisition Regulation (FAR).
In contrast, an " agency shall use a cooperative agreement as the legal instrument... when... the principal purpose of the relationship is to transfer a thing of value to the [recipient] to carry out a public purpose of support or stimulation authorized by a law of the United States instead of acquiring... property or services." 31 U.S.C. § 6305. The FGCAA notes that " substantial involvement is expected between the executive agency and the [recipient] when carrying out the activity contemplated in the [cooperative] agreement." 31 U.S.C. § 6305(2). When using a cooperative agreement, agencies escape the requirements of federal procurement law.
Section 8 of the Housing Act of 1937 authorized HUD to provide rental assistance benefits to low-income families and individuals. These benefits included payments to owners of privately-owned dwellings (project owners) to subsidize the cost of rent. Traditionally, HUD entered into ...