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DHS Defends Selection of Kansas Site for NBAF, Says Construction Will Begin November 2010

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By Alex Philippidis

The US Department of Homeland Security has filed court papers that offer more details about its timetable for building the National Bio- and Agro-Defense Facility in Kansas as well as answers to arguments by a Texas consortium that is seeking to wrest the $523 million project from the Sunflower State.

DHS said it is on track with plans to award a construction contract in September to build the biolab on the Manhattan campus of Kansas State University, immediately adjacent to the Biosecurity Research Institute, a $54 million research/education facility that, like the one planned by NBAF, has BSL-3 and BSL-3 ag-research space and BSL-3 Enhanced space.

DHS and the US Department of Agriculture have contended they need the NBAF because the existing Plum Island Animal Disease Center in New York, which was built in the 1950s, is too small and increasingly too outdated to carry out the volume and quantity of testing needed to protect the nation’s $1 trillion agricultural industry from the potentially catastrophic results of a bioterror attack on livestock.

"The design process is proceeding on a critical path for the project leading to site preparation in July 2010. Following site preparation and contingent on availability of appropriations, DHS plans to begin actual construction in November 2010," DHS stated in a court filing earlier this month.

The DHS filing came in response to a filing by the Texas Bio- & Agro-Defense Consortium that requested US Court of Federal Claims Judge Mary Ellen Coster Williams to order the homeland security agency to produce all documents related to its securing of Kansas land for the NBAF project, and hold a hearing over what it termed "retractions" made by DHS lawyers of earlier legal arguments.

DHS denied these retractions in its filing, dated June 19.

The attorney representing TBAC, Michael Guiffre of the Washington, DC, law firm Patton Boggs, told BioRegion News Thursday via e-mail that he expected to file a response to the DHS brief with the court. A Department of Justice representative did not respond to e-mailed questions from BRN; DHS has said it will not comment on the case while it is pending.

TBAC — a consortium of Texas political, academic, and business leaders — filed suit against DHS on April 23, arguing that the agency's Dec. 5 decision to build NBAF in Kansas was "arbitrary, capricious, and an abuse of discretion and otherwise contrary to law" [BRN, May 8].

The 48-page lawsuit, Texas Bio- & Agro-Defense Consortium v. the United States, asserted that Kansas had unfair influence with the DHS official overseeing the NBAF review, that DHS favored the state because it promised more in incentive packages than Texas did, and that DHS failed to consider the risk that the Kansas site may experience a severe tornado.

In addition, the Texas consortium is seeking a preliminary injunction barring further federal action on developing NBAF in Manhattan, Kan., including DHS' pursuit of bidders for a construction contract to build the project, Solicitation No. HSFLBP-09-R-00001, "until such time as DHS has lawfully and properly conducted a site selection for the NBAF."

Kansas, through its own group of government and industry leaders called the Heartland BioAgro Consortium, has intervened in the case on DHS' side.

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Since the decision to site NBAF in Kansas, DHS issued a formal solicitation for construction bids with a May 14 deadline, and a stipulation that the construction contract set to be awarded "approximately" Sept. 7. But the agency also cautioned: "The government does not guarantee award within this period, nor shall the government be liable for any costs should award occur before or after this period."

DHS' bid solicitation includes a total estimated construction cost for the NBAF project of $523 million — down 7 percent from the $563 million projected last December in the agency's final environmental impact statement on the NBAF project, but still 16 percent above the project's initial cost estimate of $450 million.

Jurisdiction, Procurement Issues

DHS has sought to have the case thrown out of the federal court of claims on grounds that it lacks jurisdiction to hear a bid protest from Texas.

A linchpin of DHS' jurisdictional case is its argument that the NBAF selection process did not constitute a procurement by a federal agency — which would give the federal court of claims jurisdiction — because the agency will receive the site where NBAF would be built as a gift from Kansas, and not use funds appropriated by Congress to acquire that land.

The Texas consortium disagreed, citing the pending construction contract as well as a US Court of Appeals for the Federal Circuit ruling that defined procurement broadly enough to include pre-procurement planning.

DHS fleshed out its procurement arguments in its latest court filing, in which it cited Section 403 of Title 41 of the US Code, which begins the definition of acquisition as "the process of acquiring, with appropriated funds."

In its latest 26-page filing, DHS asked Williams to reconsider her decision to postpone ruling on the court's jurisdiction until all land transfer documents are finalized, executed, and filed. Williams has contended that the court should know what, if any, written communications exist reflecting the terms and conditions of the land gift, implied or otherwise, according to a summary of the transcript of a June 8 court proceeding included by TBAC in a filing earlier this month.

According to DHS, Williams should allow the agency to submit only a memorandum of understanding with the Kansas Board of Regents in advance of a formal land conveyance agreement, rather than all documents related to Kansas' planned transfer of land for NBAF. The agency contended that the judge's decision would delay the court case.

"DHS is in the process of discussing the MOU with the Kansas Board of Regents representatives, hiring a title company to assist with preparation of all real estate transaction documents (i.e., title search, obtaining title insurance if necessary or warranted, and a sample warranty deed for review by the Department of Justice), and obtaining from the Department of Justice a preliminary title opinion" similar to those it issues before all real estate transactions where the federal government receives property, the agency said in its filing.

"DHS anticipates that it will be able to finalize a MOU with the Kansas Board of Regents fairly quickly," the agency added. "Due to the schedule unknowns in conducting the title search, obtaining a title opinion from the Department of Justice, and ultimately receiving title to the property, we urge the Court not to delay resolution of this case until all the transaction documents are completed."

The agency also rejected a Texas consortium request that Williams examine "all documents reflecting communications between DHS and HBAC relating to the transfer of title and other property interest … to determine whether HBA was allowed to revise its proposal post-selection," contending that they were irrelevant to TBAC's challenge of the Kansas selection.

"The court should not indulge this fishing expedition," DHS argued.

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DHS has sought to delay Texas' protest of its site selection process, which ended with the agency choosing Kansas over the Lone Star State and three other finalist states —Mississippi, Georgia, and North Carolina. DHS also rejected a sixth option, retaining Plum Island, after projecting that it would be the costliest option at $752.5 million to modernize.

While DHS has insisted that it acted lawfully in its site selection process, the Texas consortium holds otherwise. In a June 8 filing, TBAC accused DHS of backtracking on what it called earlier promises that it would not object to any Texas request for judicial relief if the court sustains its protest over DHS' selection of Kansas over the Lone Star State.

The Texas consortium said it held off filing a preliminary injunction seeking to stop all action on the NBAF project, on the basis of what it said was a DHS promise to incur the cost of evaluating bids and selecting a winning contractor even if Texas prevailed in its bid protest — as well as to not cite national security or the cost of evaluating bids as arguments against Texas if it should win the protest. TBAC said it expected the stipulation to appear as part of an agreement to extend the schedule of arguments in the case, only to see the stipulation omitted when the agency filed a proposed schedule extension with the court.

TBAC based its arguments on portions of transcripts and on e-mail exchanges between lawyers for both sides.

In its response filing, DHS said it never agreed to the stipulation, which it noted the court did not demand, and expected the agreement to cover just the schedule extension. It asserted the proposed extension would not stop Texas, if it won its bid protest, from obtaining relief against the homeland security agency.

"We remain bound by the representations that we made in court and have taken no steps to withdraw any of our representations," DHS said in its filing.

DHS has said it based its decision to develop NBAF in Kansas on four criteria — proximity to research capabilities; proximity to workforce; acquisition/construction/operations, requirements; and community acceptance — as well as threat and risk assessment studies and site-cost analyses.

In its lawsuit, Texas has asserted that DHS unfairly based its decision solely on which state would offer the most in economic incentives. Kansas offered the most such money, with a $205 million package from the state and city of Manhattan, compared with $44 million from Texas initially. Texas raised its package to $100 million after the deadline, which it said should have been extended because its legislature was not in session during the period set by DHS.

The incentives reduced what would have been a costlier option for constructing NBAF, since DHS originally projected the Kansas construction cost at $563 million, compared with $501.7 million in Texas.

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