Case: 22-1784 Document: 45 Page: 1 Filed: 03/06/2024
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`
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`AVUE TECHNOLOGIES CORPORATION,
`Appellant
`
`v.
`
`SECRETARY OF HEALTH AND HUMAN
`SERVICES, ADMINISTRATOR OF THE GENERAL
`SERVICES ADMINISTRATION,
`Appellees
`______________________
`
`2022-1784
`______________________
`
`Appeal from the Civilian Board of Contract Appeals in
`Nos. 6360, 6627, Administrative Judge Kyle E. Chadwick,
`Administrative Judge Kathleen J. O’Rourke, Administra-
`tive Judge Patricia J. Sheridan.
`______________________
`
`Decided: March 6, 2024
`______________________
`
`MICHAEL BHARGAVA, Nichols Liu LLP, Washington,
`DC, argued for appellant. Also represented by ANDY LIU,
`ROBERT NICHOLS, MADISON PLUMMER.
`
` DANIEL B. VOLK, Commercial Litigation Branch, Civil
`Division, United States Department of Justice, Washing-
`ton, DC, argued for appellees. Also represented by BRIAN
`M. BOYNTON, PATRICIA M. MCCARTHY, CORINNE ANNE
`NIOSI.
`
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`AVUE TECHNOLOGIES CORPORATION v. HHS
`
`
` ______________________
`
`Before STOLL, CUNNINGHAM, and STARK, Circuit Judges.
`STARK, Circuit Judge.
`Avue Technologies Corporation (“Avue”) appeals a de-
`cision by the Civilian Board of Contract Appeals (“Board”),
`which dismissed for lack of jurisdiction Avue’s appeal of a
`claim under the Contract Disputes Act (“CDA”). Avue non-
`frivolously alleged that it is party to a procurement con-
`tract with the Food and Drug Administration (“FDA”) via
`incorporation of Avue’s end-user licensing agreement
`(“EULA”) into an FDA task order, which is governed by a
`Federal Supply Schedule (“FSS”) contract between a third-
`party and the General Services Administration (“GSA”).
`Such an allegation is adequate to establish the Board’s ju-
`risdiction over Avue’s CDA claim. Whether Avue actually
`is a “contractor” for purposes of pressing the CDA claim is
`a matter (among others) on which Avue will have to prevail
`on the merits. We vacate the Board’s dismissal and re-
`mand with instructions that the Board provide Avue with
`an opportunity to prove its claim.
`I
`Avue develops software that it sells to private and gov-
`ernment entities, allowing them to automate administra-
`tive tasks while complying with statutory, regulatory, and
`policy requirements. Avue does not sell licenses to its soft-
`ware directly to federal agencies. Instead, it sells annual
`subscriptions – to what it calls Avue Digital Services
`(“ADS”) – through third party Carahsoft Technology Cor-
`poration (“Carahsoft”), an authorized reseller which is it-
`self party to an FSS contract with GSA. Avue attempts to
`govern its relationship with end users of its software via an
`
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`AVUE TECHNOLOGIES CORPORATION v. HHS
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`EULA, which Avue calls a master subscription agreement
`(“MSA”).1
`In 2012, Carahsoft and GSA amended the FSS contract
`to which they were both parties to include reference to
`Avue’s ADS. The form effectuating this modification pro-
`vided, among other things, that the “GSA approved EULA
`rider
`[is] hereby
`incorporated
`into this contract.”
`J.A. 2836. An attachment to the modification form in-
`cluded an unsigned, undated template version of Avue’s
`MSA, containing the words “[CLIENT NAME]” on the title
`page. The attached version of the MSA states, just above
`the empty signature blocks, “in the event this agreement is
`incorporated into a governmental contract award, execu-
`tion by the parties is not necessary.” J.A. 3001 (capitaliza-
`tion altered). The MSA further states that, “[f]or federal
`government Subscribers, the Subscribed Services are com-
`mercial items under [48 C.F.R. §] 2.101 and this standard
`commercial license to the Subscribed Services shall be in-
`corporated into and attached to the applicable contract.”
`J.A. 2993.
`In September 2015, the FDA placed a task order under
`the FSS contract for a subscription to Avue’s ADS (“Task
`Order”). The Task Order was for one base year and four
`option years. Sometime in mid-September 2016, Avue
`learned through “an anonymous text message” that the
`FDA “did not intend to renew its Avue subscription,” which
`
`1 The parties use the terms “MSA” and “EULA” in-
`terchangeably. See, e.g., Opening Br. at 8 n.1; Oral Arg.
`1:58-2:05,
`https://oralargu-
`available
`at
`ments.cafc.uscourts.gov/default.aspx?fl=22-1784_1005202
`3.mp3 (Avue counsel stating EULA and MSA are inter-
`changeable terms). We do so here as well. Both terms refer
`to the “GSA approved EULA rider [that was] []incorporated
`into [the amended FSS] contract” in 2012. J.A. 2836.
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`AVUE TECHNOLOGIES CORPORATION v. HHS
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`was due to expire on September 29, 2016. J.A. 5789; see
`also J.A. 5288. Avue also “immediately conducted an anal-
`ysis of the account activity and use of FDA account hold-
`ers.” Id. On September 18, 2016, Avue accused the FDA
`of taking “acts in violation of Avue’s end user terms and
`conditions, intellectual property rights, and the Trade Se-
`crets Act.” Id. On September 29, 2016, when the FDA
`chose not to exercise its option, the Task Order terminated.
`Over the ensuing months, Avue sent a “Cease and De-
`sist Letter” and a claim letter to the FDA’s contracting of-
`ficer. J.A. 6040-41 (cease and desist letter); J.A. 6069-86
`(claim letter). Then, in a series of communications back to
`Avue in 2017 and 2018, the contracting officer denied
`Avue’s allegations, pointing out that the FDA’s contract
`was with Carahsoft, not Avue. J.A. 6067-68 (FDA’s re-
`sponse to cease and desist letter in October 2017);
`J.A. 6099 (FDA’s response to claim letter in August 2018).
`The contracting officer also noted that “[i]f Avue wishes to
`pursue its ‘claim,’ it can do so by having Carahsoft assert a
`pass-through claim against the FDA on Avue’s behalf.”
`J.A. 6099.
`On January 22, 2019, Avue filed an appeal at the Board
`of the contracting officer’s denial of its claim.2 Carahsoft
`
`2 The government argues that Avue’s Board appeal
`was untimely under 41 U.S.C. § 7104. Section 7104 re-
`quires a party to file an appeal with the Board “within 90
`days from the date of receipt of a contracting officer’s deci-
`sion under [41 U.S.C. §] 7103.” The government concedes
`it did not raise this issue with the Board. In any event, the
`FDA’s August 17, 2018 letter did not start the clock gov-
`erning Avue’s appeal since it failed to adequately “inform
`the contractor of the contractor’s rights,” 41 U.S.C.
`§ 7103(e); see also Pathman Constr. Co. v. United States,
`817 F.2d 1573, 1578 (Fed. Cir. 1987), and the letter did not
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`AVUE TECHNOLOGIES CORPORATION v. HHS
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`did not sponsor Avue’s claim. Avue asserted to the Board
`that it was appealing from a “deemed denial” of its claim.
`The United States Department of Health and Human Ser-
`vices (HHS), of which the FDA is a part, moved to dismiss
`Avue’s appeal for lack of subject matter jurisdiction, argu-
`ing that Avue is not a “contractor” within the meaning of
`the CDA. The Board denied the HHS motion. After Avue
`filed a “protective” claim with GSA, the Board consolidated
`the appeal of the GSA claim with the ongoing appeal of the
`HHS claim.
`Following discovery, the agencies and Avue cross-
`moved for summary judgment. Before ruling on the par-
`ties’ motions, the Board sua sponte ordered supplemental
`briefing addressing whether a software license is a procure-
`ment contract subject to the CDA. After receiving the sup-
`plemental briefs, the Board dismissed Avue’s appeal for
`lack of jurisdiction. The Board’s opinion stated that it was
`not deciding whether Avue’s “MSA establishes privity of
`contract between Avue and the Government.” J.A. 4-5. Ra-
`ther, the Board was dismissing because it agreed with the
`government’s view that “even if the Board were to find that
`the . . . MSA establishes an independent contract between
`the Government and Avue as Avue alleges, [the Board]
`lack[ed] jurisdiction to decide the case because the MSA is
`not a procurement contract within the meaning of the
`CDA.” J.A. 4 (internal quotation marks omitted). In the
`Board’s view, “the MSA standing alone lack[ed] core
`
`
`indicate that it was the contracting officer’s final decision,
`see J.A. 6099 (contracting officer stating “FDA will continue
`to research the allegations presented in Avue’s ‘claim’”)
`(emphasis added); see also 48 C.F.R. § 33.211 (requiring
`contracting officer’s written decision to include “para-
`graphs substantially as follows: ‘This is the final decision
`of the Contracting Officer . . . .’”).
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`AVUE TECHNOLOGIES CORPORATION v. HHS
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`aspects of a CDA procurement contract.” J.A. 5. The Board
`did not evaluate whether the FSS contract or the Task Or-
`der, which incorporated the MSA, constituted a procure-
`ment contract.
`Avue timely appealed the Board’s dismissal. We have
`jurisdiction under 28 U.S.C. § 1295(a)(10). We review the
`Board’s decision on questions of law de novo. See 41 U.S.C.
`§ 7107(b). In particular, whether a tribunal “has jurisdic-
`tion over a claim presents a question of law we review de
`novo.” Lee’s Ford Dock, Inc. v. Sec’y of the Army, 865 F.3d
`1361, 1369 (Fed. Cir. 2017).
`
`II
`The Board’s jurisdiction over an appeal of a CDA claim
`is derived from 41 U.S.C. § 7105(e)(1)(B), which confers “ju-
`risdiction to decide any appeal from a decision of a contract-
`ing officer . . . relative to a contract made by that agency.”
`Under 41 U.S.C. § 7103(a)(1) & (2), the contracting officer’s
`decision that gives rise to a Board appeal must be with re-
`spect to a claim by a “contractor.” The term “contractor” is
`expressly defined in 41 U.S.C. § 7101(7) as “a party to a
`Federal Government contract other than the Federal Gov-
`ernment.” Accordingly, “the CDA does not permit appeals
`by anyone who is not a party to a Government contract.”
`Winter v. FloorPro, Inc., 570 F.3d 1367, 1371 (Fed. Cir.
`2009) (internal quotation marks omitted); see also id. at
`1370 (“[T]he provisions of the CDA apply only to ‘contrac-
`tors,’ i.e., ‘part[ies] to a Government contract other than
`the Government.’”) (quoting 41 U.S.C. § 601(4)).
`In some circumstances, however, we have held that cer-
`tain third parties that are in privity with the federal gov-
`ernment may “become a ‘contractor’ within the meaning of
`the CDA” and, hence, press a claim under the CDA. Lum-
`bermens Mut. Cas. Co. v. United States, 654 F.3d 1305,
`1321 (Fed. Cir. 2011); see also Admiralty Constr. By Nat’l
`Am. Ins. Co. v. Dalton, 156 F.3d 1217, 1222 (Fed. Cir. 1998)
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`AVUE TECHNOLOGIES CORPORATION v. HHS
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`(“Because National is neither a contractor nor an entity in
`privity with the Navy, National alone is not eligible to ap-
`peal to the Board under the CDA.”); Erickson Air Crane Co.
`of Washington, Inc. v. United States, 731 F.2d 810, 813
`(Fed. Circ. 1984) (“The government consents to be sued
`only by those with whom it has privity of contract . . . .”).
`“[A] plaintiff need only allege” – that is, it need not
`prove – “the existence of a contract” to which it is a party
`“to establish the Board’s jurisdiction under the CDA ‘rela-
`tive to’ an express or implied contract with an executive
`agency.” Engage Learning, Inc. v. Salazar, 660 F.3d 1346,
`1353 (Fed. Cir. 2011) (emphasis added). Notwithstanding
`our clear holding in Engage Learning, the government ar-
`gues that if a “motion denies or controverts the pleader’s
`allegations of jurisdiction . . . , the movant is deemed to be
`challenging the factual basis for the court’s subject matter
`jurisdiction,” and at that point “[a]llegations alone will not
`suffice.” Gov. Br. at 29 (citing Cedars-Sinai Med. Ctr. v.
`Watkins, 11 F.3d 1573, 1583 (Fed. Cir. 1993)). According
`to the government, then, establishing the Board’s jurisdic-
`tion requires that “Avue must convince this [c]ourt that
`there is a genuine issue of material fact for trial as to that
`issue,” i.e., that the record contains sufficient evidence
`from which a reasonable factfinder could find that Avue is
`party to a contract with the federal government. Gov. Br.
`at 31.
`The government’s position is contrary to our precedent.
`In Engage Learning, we held that “the determination of
`whether or not a contract in fact exists is not jurisdictional;
`it is a decision on the merits.” 660 F.3d. at 1355 (emphasis
`added). It follows, then, that to establish the Board’s juris-
`diction over a CDA claim, a party need only allege, non-
`frivolously, that it has a contract (express or implied) with
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`AVUE TECHNOLOGIES CORPORATION v. HHS
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`the federal government.3 The obligation to actually prove
`the existence of such a contract does not arise until the case
`proceeds to the merits, at which point the claimant can only
`prevail on its claim if it proves (among other things) that it
`has rights under a “procurement contract.”4
`None of the cases on which the government relies for
`its contention that a claimant, in order to establish the
`Board’s jurisdiction, must produce sufficient evidence of a
`contract to at least create a genuine dispute of fact, see
`Govt. Br. at 29, actually involves a CDA claim or the Board.
`See McNutt v. Gen. Motors Acceptance Corp. of Ind., 298
`U.S. 178, 189 (1936) (discussing diversity jurisdiction in
`district court); Cedars-Sinai, 11 F.3d at 1583 (applying
`Federal Rule of Civil Procedure 12(b)(1) in district court ac-
`tion); Reynolds v. Army & Air Force Exch. Serv., 846 F.2d
`746, 747 (Fed. Cir. 1988) (same). In contrast, Engage
`Learning is directly on point, as it involved a CDA claim
`before the Board – and, again, Engage Learning expressly
`
`
`3 That is, the party must allege, in substance, that
`there was “a mutual intent to contract including an offer,
`an acceptance, and consideration” and that “the Govern-
`ment representative who entered or ratified the agreement
`had actual authority to bind the United States.” Trauma
`Serv. Grp. v. United States, 104 F.3d 1321, 1325 (Fed. Cir.
`1997).
`4 The government correctly notes that “the same
`question may resolve both the merits and a jurisdictional
`issue.” Gov. Br. at 30 (citing Brownback v. King, 141 S. Ct.
`740, 749 (2021)). Such potential overlap, however, does not
`make it any less important to distinguish between jurisdic-
`tion, which need only be alleged (to survive a motion to dis-
`miss), and the merits, which must be proven.
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`AVUE TECHNOLOGIES CORPORATION v. HHS
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`held that nonfrivolous allegations are adequate to estab-
`lish jurisdiction and avoid dismissal.
`Avue has made the requisite non-frivolous allegations
`to establish the Board’s jurisdiction. Indeed, this was the
`conclusion the Board itself reached early in the case when
`it denied the initial motions to dismiss. See J.A. 198
`(Board: “Avue is not pursuing its claim as a subcontractor.
`Avue alleges that it is a contractor. More than this, Avue
`points to a specific writing (the EULA, allegedly ‘incorpo-
`rated’ in the FSS contract) that it considers a government
`contract.”). At that stage, the Board correctly explained
`that Avue’s “allegations of the existence of a contract suf-
`fice to take the claim out of the realm of subcontractor
`claims and into the world of claims within our CDA juris-
`diction.” J.A. 198 (citing Engage Learning, 660 F.3d at
`1353 and Gould, Inc. v. United States, 67 F.3d 925, 929
`(Fed. Cir. 1995)).
`After the parties filed their motions for summary judg-
`ment and supplemental briefs, however, the Board found it
`lacked jurisdiction, for a new reason. At that point, the
`Board held that the MSA, standing alone, is not a “procure-
`ment contract” within the meaning of the CDA. J.A. 4.
`Central to the Board’s rationale was that “the Government
`did not acquire anything directly from Avue under a pro-
`curement contract with Avue.” J.A. 6.
`Whether or not the MSA, all by itself, is a “procurement
`contract” is not a question we need to decide. The pertinent
`question, instead, is whether Carahsoft’s FSS contract
`with GSA or the Task Order placed by the FDA, each of
`which incorporates the MSA, constitutes a “procurement
`contract” giving rise to rights enforceable by Avue. See
`Opening Br. at 28 (“The Board’s fundamental error was to
`improperly disaggregate the Carahsoft Schedule Contract
`from its incorporated parts . . . .”). While Avue, confus-
`ingly, urged the Board to treat the MSA as a standalone
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`contract, see J.A. 170-71 (“MSA [i]s a [f]reestanding [c]on-
`tract [b]etween Avue and FDA.”); see also J.A. 4 (“[E]ven if
`the Board were to find that the . . . MSA establishes an in-
`dependent contract between the Government and Avue, as
`Avue alleges . . . .”) (emphasis added), Avue also suffi-
`ciently, and alternatively, made the more comprehensive
`allegation that its rights arise from the combination of the
`MSA with the FSS contract or with the Task Order, see
`J.A. 737 (“[T]here is no question that the MSA is incorpo-
`rated by reference into FDA’s FSS order, and so, whether
`or not it is a CDA contract standing alone, CDA jurisdiction
`attaches to a claim based on its breach.”). The government
`agrees that Avue made this broader allegation to the
`Board, see Oral Arg. at 14:44-15:09 (government acknowl-
`edging that “[b]oth arguments will probably show up in
`[Avue’s] briefs including from below”) and that “the MSA
`was not a stand-alone contract,” Gov. Br. at 51.
`Importantly, the government further concedes that if,
`as we are requiring on remand, the MSA is to be considered
`part of a larger contract (i.e., in conjunction with the FSS
`contract or the Task Order), that larger contract is a pro-
`curement contract. See Gov. Br. at 52 (“Unquestionably,
`Carahsoft’s contracts with GSA and the FDA were procure-
`ment contracts.”); Oral Arg. at 24:19-34 (government coun-
`sel stating “[i]t is not a question of whether there is or isn’t
`a procurement contract. There was. It was with Carah-
`soft.”).
`Under these circumstances, in which the Board found
`it lacked jurisdiction without considering a basis for juris-
`diction that all parties to this appeal agree was fairly pre-
`sented to the Board, we will not affirm the Board’s
`dismissal of Avue’s claim. Instead, we conclude that Avue’s
`allegation that it is a party to a procurement contract (i.e.,
`the FSS contract or the Task Order) with the federal gov-
`ernment that incorporates its MSA is nonfrivolous and,
`therefore, sufficient to establish the Board’s jurisdiction
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`AVUE TECHNOLOGIES CORPORATION v. HHS
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`under the Engage Learning standard, which we reaffirm is
`applicable here.
`On remand, the Board must proceed to consider the
`merits, treating as a merits issue the matter of whether
`Avue is a party to – or otherwise has enforceable rights
`pursuant to, for example by being in privity with Carahsoft
`– the conceded procurement contract (i.e., the MSA plus
`the FSS or the Task Order). We decline the parties’ invita-
`tion, see e.g., Opening Br. at 50; Oral Arg. at 17:53-18:32,
`to resolve merits issues (including privity) ourselves in the
`first instance. Instead, we will benefit from the Board’s
`considerable “expertise on questions of government con-
`tracts” and its considered views on these issues. R.B.
`Wright Constr. Co. Through Rembrant v. United States,
`919 F.2d 1569, 1571 (Fed. Cir. 1990).
`III
`We have considered the government’s remaining argu-
`ments and find they are unpersuasive and do not warrant
`further discussion. Thus, for the reasons stated above, we
`vacate the Board’s dismissal for lack of jurisdiction and re-
`mand for further proceedings on the merits consistent with
`this opinion.
`VACATED AND REMANDED
`COSTS
`
`No costs
`
`