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Orbital ATK, Inc. v. Walker

United States District Court, E.D. Virginia, Alexandria Division

July 12, 2017

DR. STEVEN H. WALKER, in his official Capacity as Acting Director of the Defense Advanced Research Project Agency, the DEFENSE ADVANCED RESEARCH PROJECTS AGENCY, Defendants.


          Leonie M. Brinkema United States District Judge

         Plaintiffs, Orbital ATK and its subsidiary, Space Logistics LLC, have brought suit against the Defense Advanced Research Projects Agency and its acting director, Dr. Steven H. Walker (collectively "defendants" or "DARPA"), seeking to enjoin DARPA's program for Robotic Servicing of Geosynchronous Satellites ("RSGS Program" or "Program") under the theory that the Program violates multiple provisions of the 2010 National Space Policy ("NSP"), a presidential policy directive, and therefore violates the Administrative Procedure Act ("APA"), 5 U.S.C. § 701. Compl., [Dkt. No. 1] ¶ 1. Defendants have filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction and for Failure to State a Claim Upon Which Relief May be Granted [Dkt. No. 12], in which defendants contend that the Court lacks subject matter jurisdiction because the complaint runs "afoul of the Supreme Court's 'prohibition on programmatic challenges' that seek 'wholesale improvement of [an agency's programs] by court decree, '" and because "DARPA's determination to conduct the RSGS Program is soundly 'committed to agency discretion by law' within the meaning of 5 U.S.C. § 701(a)(1), " Def. Mem., [Dkt. No. 13] at 2-3 (citations omitted) (alteration in original). In addition, defendants contend that even if the Court had subject matter jurisdiction, plaintiffs' claims must be dismissed under Rule 12(b)(6) because they erroneously contend that the NSP has the force of law. Id. at 3. For the reasons that follow, defendants' motion will be granted.

         I. BACKGROUND

         Plaintiffs contend that "DARPA unlawfully intends to waste hundreds of millions of U.S. taxpayer dollars to develop robotic satellite servicing technology for which DARPA has admitted there is no present U.S. Government need and that NASA and the U.S. Private Sector-specifically Plaintiffs-are already developing, " and then "give away this technology to a foreign-owned company for that company's sole commercial use." Compl. ¶ 1. DARPA describes its RSGS Program as aimed at implementing robotic servicing of the many government and commercially owned satellites in Geosynchronous Earth Orbit ("GEO"), approximately 22, 000 miles above the Earth. Def. Mem. at l.[1] GEO's orbital period makes it a desirable location for satellites; however, the radiation levels in GEO preclude human space walks and can damage electronics. Id. at 4. There is currently no U.S. entity, private or public, that is able to service GEO-based satellites. Id. at 1. As a result, when satellites in GEO "experience[] failures, malfunctions, schedule delays, coverage gaps, unforeseen maneuvers, and other anomalous events" they cannot be inspected to determine the source of the problem, nor can they be repaired, relocated, or upgraded with new capabilities and installations, therefore becoming prematurely obsolete. Id. at 4-5.

         In 2011, DARPA announced the Phoenix Program to explore potential in-space satellite serving capabilities. Compl. ¶ 18. The initial goal of the Phoenix Program was to utilize DARPA's existing robotic arm technology as well as new technologiesctto demonstrate the ability to harvest and re-use valuable components from retired, nonworking GEO satellites." Id. In 2012, DARPA contracted with ATK (plaintiff Orbital ATK's predecessor entity), to modify an existing government owned satellite bus for use in the Phoenix Program demonstration. Id. ¶ 19. "A satellite bus is the infrastructure of a spacecraft, including the propulsion power, operating power, internal communication system and the physical structure, providing locations for the payload (typically space experiments or instruments)." Compl. ¶ 17 n.2. By 2013, DARPA's vision for RSGS technology had changed "from a demonstration mission to a long-term operation with additional capabilities, " such as robotic servicing, and DARPA indicated that it no longer needed a repurposed bus, as this vehicle would not be able to support its new objective. Id. ¶ 20.

         In May 2015, DARPA circulated a proposal for a consortium of companies to partner with DARPA to pursue real-world servicing capabilities in GEO. Id. ¶ 24. In response to DARPA's proposal, Orbital ATK argued that "satellite life extension[2] was the only existing commercial need sufficient to justify the investment required to support a business case." Id. ¶¶ 24, 26. When Orbital ATK asked DARPA what long-term commitments it had from U.S. government entities to use DARPA's robotic arm technology for servicing GEO satellites, DARPA responded, "there are no existing commitments. We expect them to develop as the RSGS [P]rogram is approved, moves forward toward flight, and becomes a part of various space architectures being developed." Id. ¶¶ 26-27.

         Meanwhile, ATK's parent company had merged with Orbital Sciences Corporation, a manufacturer of commercial GEO satellites and other spacecraft, to create plaintiff Orbital ATK. Id. ¶¶ 21-22. ATK had been investing in satellite servicing technology for commercial satellites since 2008, and under the new ownership structure Orbital ATK is developing a Mission Extension Vehicle ("MEV"), which will provide a "satellite life extension service"[3] for GEO satellites. Id. ¶ 17. Meanwhile, NASA, which had contracted with ATK since 2004 for the design and development of robotic tools for in-space satellite servicing, has continued to "examine the possibility of on-orbit satellite servicing." Id. ¶¶ 16, 23. In 2015, NASA "conceived of what became the Restore-L program, a project to deploy a robotic spacecraft capable of refueling and servicing an operational satellite;" however, NASA was not focused on GEO, the target of DARPA's RSGS technology, but instead on Low Earth Orbit. Id. ¶ 23.[4] Although plaintiffs identify a "substantial redundancy" between the NASA and DARPA programs, they allege that "[i]n DARPA's case, Orbital ATK's concerns are more acute because of DARPA's stated plan to transfer ownership and commercial use of the technology to a single competitor." Id. ¶¶ 29, 31.

         In May 2016, DARPA issued a request for proposals ("RFP") in conjunction with the RSGS Program. Id. ¶ 37. The RFP announced DARPA's intent to partner with a private industry partner to develop and launch a Robotic Servicing Vehicle ("RSV")-an unmanned spacecraft, consisting of both a robotic servicing payload and satellite bus, capable of autonomously servicing, repairing, and repositioning satellites in GEO. Def. Mem. at 1. According to DARPA, the RSGS Program is designed to "(1) inspect satellites experiencing anomalies; (2) assist with satellite orbital adjustments; (3) correct satellite mechanical problems; and (4) install upgrade payloads onto operating satellites to provide them with new capabilities." Id. at 7. As explained in the RFP, the RSGS Program will have five phases: In the first phase, which is ongoing, DARPA and the U.S. Naval Research Laboratory ("NRL") are working together to develop the "robotic servicing payload"-i.e., the device with a robotic arm capable of repairing the satellites. Id. at 6.[5] Meanwhile a private partner is building a satellite bus capable of carrying the payload. Id. As part of phase one, the NRL has entered into contracts with commercial vendors for components of the robotic servicing payload, including with plaintiff Orbital ATK, which has been contracted to design the circuit boards. Def. Mem. at 6. In the second phase, the private partner will integrate the payload onto the partner-owned bus with support from DARPA. Id. at 6. In the third phase, projected for late 2020 or early 2021, DARPA will launch the RSV into GEO. Id. The fourth phase has DARPA working with its industry partner to demonstrate the capabilities of the RSV in a series of exercises specified by DARPA. Id. In the fifth and final phase, DARPA will transfer ownership of the robotic servicing payload to the private partner, which will continue to own and operate the RSV while offering fee-for-service operations to both U.S. government and commercial GEO satellite operators. Id.

          On June 22, 2016, shortly after the RFP was released, Orbital ATK's CEO wrote a letter to DARPA expressing his concern that the RSGS Program violated multiple provisions of the NSP and arguing that it would both unfairly advantage DARPA's private partner and harm investment in Orbital ATK's MEV system. Id. ¶ 45-46. DARPA claimed that a response to the letter would be inappropriate and declined to meet with Orbital ATK. Id. ¶ 49. Orbital ATK ultimately attended an informational meeting regarding the RSGS solicitation, allegedly "[i]n an effort to gain additional information from DARPA, specifically to better understand DARPA's purported governmental need for the capabilities described in the RSGS [P]rogram." Id. ¶ 51. In response to written questions about the RSGS Program, DARPA explained that the RSV was not intended to be used for life extension, but instead for robotic servicing; however, DARPA indicated that if the private partner wanted to develop life extension capabilities this "would be complementary to the advanced robotic capabilities DARPA proposes to enable." Id. ¶ 52.

         Under the four-step selection process established by the Program Solicitation, interested parties were to first submit executive summaries of their proposals for the Program. Def. Mem. at 8. At the second stage, DARPA would invite those parties who met initial eligibility criteria to submit full proposals. Id. During the third stage, DARPA would invite parties whose full proposals were most promising to participate in an "oral presentations and negotiations." Id. at 8. Lastly, DARPA would conduct final evaluations and make an award. Id. at 8-9.

         According to plaintiffs, "[a]fter DARPA closed every other avenue of communication, Orbital ATK had no choice but to reiterate its objections in a counter-proposal to the RSGS satellite bus RFP, " which it submitted on July 5, 2016. Id. ¶ 54-55. Orbital ATK proposed three alternative approaches that it claimed would save the government money and "achieve DARPA's stated objectives." Id. ¶ 55. The first approach was for "ground based testing of DARPA's [] robotic arm, followed by transfer of the technology to all interested U.S. companies for fair and equal commercial development." Id. ¶ 56. The second approach was for DARPA to "fund development, production, and testing of the RSGS technology as a 'hosted payload' on a commercial satellite [bus], but not transfer ownership to, or subsidize the launch costs of, a single private operator." Id. ¶ 57. The third approach was for DARPA to "conduct the RSGS Program for government-only missions but not transfer ownership of the satellite [presumably, plaintiffs meant to write "RSV" or "payload"] to a commercial operator." Id. ¶ 58. As plaintiffs admit, "[n]one of these approaches were contemplated by, let alone did they comply with, DARPA's RFP. Orbital ATK's purpose was not to submit a compliant bid to secure the contract, because it believed that no such contract should be issued." Id. ¶ 59.

         On July 14, 2016, DARPA asked Orbital ATK to submit a more detailed proposal. Id. ¶ 60. Orbital submitted "an updated counter-proposal" on September 9, 2016, providing more details regarding Orbital ATK's second approach-"that DARPA change the [P]rogram to one involving a hosted payload without compensation for the launch or transfer of ownership of the payload." Id. ¶ 61. On December 14, 2016, DARPA sent Orbital ATK a letter indicating that its submissions were no longer being considered. Id. ¶ 63. Following its final evaluations, DARPA selected as its industry partner Space Systems/Loral LLC, a wholly owned subsidiary of MacDonald Dettwiler and Associates, a Canadian Corporation. Id. ¶ 64. This relationship is based on an "Other Transaction" agreement ("OT agreement"), a special instrument authorized by Congress for DARPA to flexibly enter into procurement arrangements, for specified purposes, outside the constraints of the Federal Acquisition Regulation and other sources of normally applicable federal procurement law. Id. at 5 & n.3 (citing 10 U.S.C. §§ 2371, 2371(b)).

         Plaintiffs allege that the RSGS Program violates five separate provisions of the NSP issued in 2010 by then-President Barack Obama. Compl. ¶ 2. The NSP is a Presidential Policy Directive that sets forth the United States' policy goals in the realm of outer space. Id. The document, which is formatted as a memorandum from the President to cabinet secretaries and other senior officials in the executive branch, begins by stating principles of cooperation with the international community to which the United States will adhere, proceeds to outline the goals for the United States' space programs, and closes by offering both intersector and sector guidelines for departments and agencies. Def. Ex. 14, [Dkt. No. 21-1]. Plaintiffs focus on five particular provisions in the "Commercial Space Guidelines" section of the NSP, each of which corresponds to an APA count in the complaint. Compl. ¶¶ 69, 77, 86, 93, 102. That section directs that "[t]o promote a robust domestic commercial space industry ... [federal] departments and agencies shall..."

• Purchase and use commercial space capabilities and services to the maximum practical extent when such capabilities and services are available in the marketplace and meet United States Government requirements. [Count I]
• Modify commercial space capabilities and services to meet government requirements when existing commercial capabilities and services do not fully meet these requirements and the potential modification represents a more cost-effective and timely acquisition approach for the government. [Count II]
• Develop governmental space systems only when it is in the national interest and there is no suitable, cost-effective U.S. commercial or, as appropriate, foreign commercial service system that is or will be available. [Count III]
• Refrain from conducting United States Government space activities that preclude, discourage, or compete with U.S. commercial space activities, unless required by national security or public safety. [Count IV]
• Ensure that United States Government space technology and infrastructure are made available for commercial use on a reimbursable, noninterference, and equitable basis to ...

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