Case: 18-2399    Document: 53     Page: 1   Filed: 02/10/2020




   United States Court of Appeals
       for the Federal Circuit
                  ______________________

                ACETRIS HEALTH, LLC,
                   Plaintiff-Appellee

                             v.

                    UNITED STATES,
                   Defendant-Appellant
                  ______________________

                        2018-2399
                  ______________________

    Appeal from the United States Court of Federal Claims
 in No. 1:18-cv-00433-MMS, Chief Judge Margaret M.
 Sweeney.
                 ______________________

                Decided: February 10, 2020
                 ______________________

     STEPHEN E. RUSCUS, Morgan, Lewis & Bockius LLP,
 Washington, DC, argued for plaintiff-appellee. Also repre-
 sented by JAMES D. NELSON, DAVID B. SALMONS, DONNA
 LEE YESNER.

     DANIEL B. VOLK, Commercial Litigation Branch, Civil
 Division, United States Department of Justice, Washing-
 ton, DC, argued for defendant-appellant. Also represented
 by JOSEPH H. HUNT, ROBERT EDWARD KIRSCHMAN, JR.,
 PATRICIA M. MCCARTHY; JENNIFER CLAYPOOL, Procure-
 ment Law Group, United States Department of Veterans
 Affairs, Hines, IL.
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 2                      ACETRIS HEALTH, LLC v. UNITED STATES




     KYLE R. JEFCOAT, Latham & Watkins LLP, Washing-
 ton, DC, for amicus curiae The Association for Accessible
 Medicines. Also represented by GENEVIEVE PATRICIA
 HOFFMAN; JEFFREY FRANCER, The Association for Accessi-
 ble Medicines, Washington, DC.
                 ______________________

      Before DYK, PLAGER, and STOLL, Circuit Judges.
 DYK, Circuit Judge.
     This case concerns restrictions on the procurement of
 foreign-origin pharmaceutical products by the Department
 of Veterans Affairs (“VA”). The Trade Agreements Act of
 1979 (“TAA”) bars the VA from purchasing “products of”
 certain foreign countries, such as India. The Federal Ac-
 quisition Regulation (“FAR”) directs agencies to purchase
 “U.S.-made end products” before end products from certain
 foreign countries.
      The VA interpreted the statute and regulation to define
 the country of origin of a pharmaceutical product to be the
 country in which the product’s active ingredient is manu-
 factured, here India. Acetris Health, LLC (“Acetris”) chal-
 lenged the VA’s interpretation of the TAA and the FAR in
 a bid protest action at the United States Court of Federal
 Claims (“Claims Court”). The Claims Court granted Ace-
 tris declaratory and injunctive relief, holding that the VA
 misinterpreted the TAA and the FAR and enjoined the VA,
 in future procurements, from utilizing an erroneous inter-
 pretation. Acetris Health, LLC v. United States, 138 Fed.
 Cl. 579, 606–07 (2018). The government appeals.
     We hold that this suit is justiciable and agree with the
 Claims Court on the result, but find the Claims Court’s
 remedy to be imprecise in certain respects. Accordingly,
 we affirm-in-part, vacate-in-part, and remand for the entry
 of a declaratory judgment and injunction consistent with
 this opinion.
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 ACETRIS HEALTH, LLC v. UNITED STATES                         3



                        BACKGROUND
                               I
     Two statutes restrict the government’s ability to pro-
 cure foreign-origin products. The first of these statutes to
 be enacted, the Buy American Act of 1933 (“BAA”), pro-
 vides in relevant part that:
     [O]nly manufactured articles, materials, and sup-
     plies that have been manufactured in the United
     States substantially all from articles, materials, or
     supplies mined, produced, or manufactured in the
     United States, shall be acquired for public use un-
     less the head of the department . . . determines . . .
     their cost to be unreasonable.
 41 U.S.C. § 8302(a)(1) (emphasis added). A 1954 Executive
 Order, now implemented in the FAR, specifies that the un-
 reasonable cost exception to the BAA applies where the
 lowest domestic offer by a large business is over 6% higher
 than the lowest foreign offer, and the lowest domestic offer
 by a small business is over 12% higher than the lowest for-
 eign offer. 48 C.F.R. (“FAR”) § 25.105. Congress has also
 exempted commercial-off-the-shelf (“COTS”) products from
 the “substantially all” requirement, 41 U.S.C. § 1907, so a
 COTS product “manufactured” in the United States is
 BAA-compliant even if it is manufactured from predomi-
 nantly foreign components, FAR § 25.101(a)(2). Acetris
 contends that this exception applies to its products, and the
 government does not contend otherwise.
     The second of these statutes is the TAA. The TAA was
 designed to encourage foreign countries to enter reciprocal
 government-procurement trade agreements. Those agree-
 ments prohibit foreign countries from discriminating
 against American-made products and prohibit the United
 States from discriminating against foreign-origin products.
 Under the statute, countries that have entered into such
 agreements, and that do not discriminate against
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 4                        ACETRIS HEALTH, LLC v. UNITED STATES




 American-made products, are allowed to compete for U.S.
 government procurements on non-discriminatory terms.
 At the same time, products from countries that have not
 entered into such trade agreements are barred from gov-
 ernment procurements. Countries that have entered into
 such agreements are described as parties to the World
 Trade Organization (“WTO”) Agreement.            Section
 2512(a)(1) of the TAA provides that:
     [T]he President, in order to encourage additional
     countries to become parties to the [WTO] Agree-
     ment and to provide appropriate reciprocal compet-
     itive government procurement opportunities to
     United States products and suppliers of such prod-
     ucts—
          (A) shall, with respect to procurement cov-
          ered by the Agreement, prohibit the pro-
          curement . . . of products—
          (i) which are products of a foreign country
          or instrumentality which is not designated
          pursuant to section 2511(b) of this title [i.e.,
          have not entered into reciprocal trade
          agreements], and
          (ii) which would otherwise be eligible prod-
          ucts [i.e., products covered by the Agree-
          ment or another reciprocal trade
          agreement] 1. . . .
 19 U.S.C. § 2512(a)(1) (emphasis added). The TAA defines
 “a product of a country” as follows:
     An article is a product of a country or instrumen-
     tality only if (i) it is wholly the growth, product, or
     manufacture of that country or instrumentality, or


     1    See 19 U.S.C. § 2518(4) (defining “eligible prod-
 uct”).
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 ACETRIS HEALTH, LLC v. UNITED STATES                         5



     (ii) in the case of an article which consists in whole
     or in part of materials from another country or in-
     strumentality, it has been substantially trans-
     formed into a new and different article of commerce
     with a name, character, or use distinct from that of
     the article or articles from which it was so trans-
     formed.
 19 U.S.C. § 2518(4)(B) (emphasis added). Accordingly, for
 procurements “covered by the [WTO] Agreement,” the TAA
 generally prohibits government procurement of “products
 of a foreign country” unless the country is a party to the
 “Agreement” referenced in section 2512(a)(1). India, nota-
 bly, is not a party to the Agreement. Thus, the TAA bars
 procurement of “products of” India. 2
      As the government states, “[r]ulings from U.S. Cus-
 toms and Border Protection (CBP) had long held that the
 source of a pharmaceutical product’s active ingredient gen-
 erally dictates its country of origin.” Appellant’s Br. 6. The
 VA has adopted the CBP’s interpretation. The central mer-
 its question is whether this interpretation is correct, i.e.,
 whether the products involved here are “products of a for-
 eign country,” i.e., India, under the meaning of the TAA.
    Also pertinent here are the provisions of the FAR. The
 FAR’s Trade Agreements Clause (“TA Clause”), which har-
 monizes and implements the BAA and TAA in contracts



     2   The President can “designate[]” (i.e., waive the re-
 quirements of the TAA for) a country that is not a party to
 the Agreement in certain circumstances, such as if the
 country is a “least developed country,” or not a “major in-
 dustrial country” and “will provide appropriate reciprocal
 competitive government procurement opportunities to
 United States products and suppliers of such products.”
 See 19 U.S.C. § 2511(b). India has not been “designated”
 by the President under section 2511(b).
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 6                       ACETRIS HEALTH, LLC v. UNITED STATES




 covered by the WTO Agreement, states in relevant part
 that the “Contractor shall deliver under this contract only
 U.S.-made or designated country end products.” FAR
 § 52.225-5.
     The FAR defines a “U.S.-made end product” as follows:
     U.S.–made end product means an article that is
     mined, produced, or manufactured in the United
     States or that is substantially transformed in the
     United States into a new and different article of
     commerce with a name, character, or use distinct
     from that of the article or articles from which it was
     transformed.
 FAR § 25.003.
                               II
      Plaintiff-Appellee Acetris is a generic pharmaceutical
 distributor that specializes in providing pharmaceuticals
 to the federal government. Acetris obtains many of its
 pharmaceutical products from Aurolife Pharma LLC (“Au-
 rolife”), which makes them in a facility located in Dayton,
 New Jersey using an active pharmaceutical ingredient
 (“API”) made in India. In 2017, Acetris had contracts to
 supply the VA with at least 13 pharmaceutical products,
 including Entecavir Tablets (used to treat hepatitis B).
     On March 1, 2017, the VA sent a letter to Acetris re-
 questing it to recertify its compliance with the TAA for each
 of 13 contracts Acetris then held with the VA. Acetris re-
 sponded that its products were “TAA compliant.” J.A. 558.
 On March 30, 2017, the VA sent an email to Acetris stating
 that Acetris’ response was “insufficient” and “demanded”
 that Acetris provide a compliance letter “that followed the
 definition of substantial transformation under the TAA, as
 set forth in FAR 52.225-5,” which directs agencies to ac-
 quire “U.S.-made end products.” J.A. 558. In Acetris’ re-
 sponse to this email, it stated that its products were “‘U.S.-
 made end products’ as defined in FAR 52.225-5, because
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 ACETRIS HEALTH, LLC v. UNITED STATES                      7



 each is ‘an article that is mined, produced, or manufactured
 in the United States or that is substantially transformed in
 the United States.’” J.A. 559.
     In response, on April 17, 2017, the VA “requested” that
 Acetris obtain a country-of-origin determination from the
 CBP for each of ten Acetris products. J.A. 558. The VA
 reiterated this request in a subsequent letter dated June 6,
 2017, stating that it had “probable cause” to believe that
 ten of Acetris’ products, including Acetris’ Entecavir Tab-
 lets, were made using API made in India, and so were al-
 legedly not TAA-compliant. J.A. 559.
      Acetris sought such rulings from the CBP and, on Jan-
 uary 30, 2018, the CBP issued its country-of-origin deter-
 minations, holding that the Acetris products were products
 of India because their APIs were made in India and no sub-
 stantial transformation had occurred in the United States.
 See, e.g., Notice of Issuance of Final Determinations Con-
 cerning Certain Pharmaceutical Products, 83 Fed. Reg.
 5130–33 (Feb. 5, 2018). Acetris challenged the CBP’s de-
 terminations in the Court of International Trade (“CIT”),
 contending that its products’ country-of-origin is the
 United States. Acetris’ CIT cases are stayed pending reso-
 lution of this appeal.
     On March 8, 2018, the VA sent a letter to Acetris noting
 the CBP’s determination and requesting that Acetris find
 another source for each of the Acetris products that CBP
 had determined to be products of India. The VA stated that
 it was “the VA’s intention to no longer purchase the current
 Acetis [sic] products” after March 26, 2018. J.A. 2269. On
 April 5, 2018, to avoid termination for default, Acetris
 agreed to a no-cost cancellation of its Entecavir contract.
 The record does not indicate the disposition of Acetris’
 other contracts.
     On March 14, 2018, the VA issued a new solicitation
 seeking proposals for Entecavir tablets. Acetris again
 sought an award of the Entecavir contract. Before the
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 8                      ACETRIS HEALTH, LLC v. UNITED STATES




 submission deadline, Acetris sent the VA five questions
 concerning the solicitation. The VA’s response indicated
 that it would continue to rely on the CBP’s determination,
 stating: “[t]he substantial [transformation] determination
 is determined by [CBP]” and “[CBP’s] determination is fi-
 nal and cannot be overturned. The API was manufactured
 in India and India is deemed Non-[TAA] compliant.” J.A.
 894. (fifth alteration added).
     On March 23, 2018, Acetris filed suit in the Claims
 Court challenging the VA’s interpretation of the TAA and
 the FAR to exclude Acetris’ products. Acetris’ core conten-
 tion was that its products, though manufactured using for-
 eign-made API, are not “products of” India (under the TAA)
 and are “U.S.-made end products” (under the FAR) because
 they are manufactured into tablets in the United States.
 The complaint recounted the VA’s position—reflected in its
 March 30, 2017, April 17, 2017, June 6, 2017, February 22,
 2018, and March 8, 2018 letters—that ten of Acetris’ prod-
 ucts were not TAA and FAR-compliant. The complaint fur-
 ther alleged that the VA “appl[ied] the VA’s improper
 interpretation of the clause contrary to the FAR and in-
 dicat[ed] the VA’s intent impermissibly to treat Acetris’
 products as non-compliant” with the TAA and the FAR.
 J.A. 110–11. Thus, Acetris contended that the VA acted
 unlawfully in excluding Acetris’ products from considera-
 tion for VA contracts, and Acetris requested broad declara-
 tory and injunctive relief.       The complaint focused
 particularly on the VA’s actions in connection with Acetris’
 Entecavir solicitation.
      After filing the Claims Court suit, on March 28, 2018,
 Acetris submitted an offer in response to the Entecavir so-
 licitation. Two other entities also submitted offers: Golden
 State Medical Supply, Inc. (“Golden State”) and AvKare,
 Inc. Of the three bidders, Golden State offered the lowest
 per-bottle price and Acetris offered the highest. The VA
 awarded the contract to Golden State, consistent with the
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 ACETRIS HEALTH, LLC v. UNITED STATES                          9



 VA’s policy to award contracts to the lowest-price techni-
 cally acceptable bid.
     The government moved to dismiss the Claims Court
 suit on several grounds, two of which are relevant here.
 First, the government contended that Acetris lacked an in-
 jury sufficient to confer standing because Acetris, as the
 highest-price bidder, would not have won the Entecavir
 contract even if Acetris’ position as to the interpretation of
 the FAR were meritorious. Second, the government con-
 tended that Acetris’ earlier-filed CIT suits divested the
 Claims Court of jurisdiction due to 28 U.S.C. § 1500, which
 provides that the Claims Court of “shall not have jurisdic-
 tion of any claim for or in respect to which the plaintiff . . .
 has pending in any other court.” The Claims Court denied
 the government’s motions.
     The Claims Court then ruled on the parties’ cross-mo-
 tions for judgment on the administrative record, rejecting
 the government’s interpretation of the TAA and FAR on
 the merits and agreeing with Acetris’ interpretation. The
 Claims Court found that Acetris’ products were “manufac-
 ture[d] . . . in a facility located in Dayton, New Jersey.”
 Acetris, 138 Fed. Cl. at 586. The Claims Court then held
 that the government’s interpretation of the TAA and the
 FAR was incorrect and erroneously excluded Acetris’ prod-
 ucts. Id. at 600–01. The Claims Court granted Acetris both
 declaratory and injunctive relief. Id. at 606–07.
     The government appeals. We have jurisdiction to re-
 view the Claims Court’s judgment under 28 U.S.C.
 § 1295(a)(3).
                          DISCUSSION
     We review the Claims Court decisions regarding justi-
 ciability and its interpretation of the TAA and the FAR de
 novo. See Trusted Integration, Inc. v. United States, 659
 F.3d 1159, 1163 (Fed. Cir. 2011); Bannum, Inc. v. United
 States, 404 F.3d 1346, 1351 (Fed. Cir. 2005).
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 10                     ACETRIS HEALTH, LLC v. UNITED STATES




                               I
      We first address the government’s contention that the
 case is moot because, after the filing of the complaint, Ace-
 tris bid on the Entecavir solicitation. Acetris was not the
 lowest bidder for the Entecavir solicitation, so it could not
 have secured the award even if its interpretation of the
 TAA and FAR were correct. The Claims Court denied the
 government’s motion to dismiss the case as moot, reason-
 ing that standing was to be assessed solely on the allega-
 tions in the complaint, so later events were not properly
 considered in determining standing. Acetris, 138 Fed. Cl.
 at 595–96. That is not correct. The Supreme Court has
 “repeatedly held that an ‘actual controversy’ must exist not
 only ‘at the time the complaint is filed,’ but through ‘all
 stages’ of the litigation.” Already, LLC v. Nike, Inc., 568
 U.S. 85, 90–91 (2013). Because a lack of “controversy” is a
 jurisdictional defect, Lujan v. Defs. of Wildlife, 504 U.S.
 555, 559 (1992), the Claims Court should have considered
 the post-filing evidence. See Int’l Elec. Tech. Corp. v.
 Hughes Aircraft Co., 476 F.3d 1329, 1330 (Fed. Cir. 2007)
 (“[A] court in the first instance must determine whether or
 not it has subject matter jurisdiction even sua sponte.”).
     This evidence demonstrates that the case is moot inso-
 far as Acetris challenges the Entecavir procurement. The
 VA’s Entecavir solicitation explicitly stated that the low-
 est-price technically acceptable offer would be awarded the
 contract. Yet Acetris submitted the highest-price offer of
 the three offers. Acetris therefore would not have been
 awarded the Entecavir contract even if it were correct on
 the merits of its challenge to the VA’s interpretation of the
 TAA and the FAR. Because Acetris cannot show prejudice
 resulting from the VA’s purportedly flawed interpretation
 of the TAA and the FAR as applied to the Entecavir solici-
 tation, Acetris has no injury-in-fact with respect to that
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 ACETRIS HEALTH, LLC v. UNITED STATES                        11



 solicitation. 3 See Myers Investigative & Sec. Servs., Inc. v.
 United States, 275 F.3d 1366, 1370 (Fed. Cir. 2002)
 (“[P]rejudice (or injury) is a necessary element of stand-
 ing.”). Thus, Acetris does not now have standing to chal-
 lenge the Entecavir solicitation.
                               A
     Nonetheless, we conclude that this case is not moot be-
 cause Acetris’ challenge is not limited to the Entecavir pro-
 curement. We first address constitutional standing. The
 government contests justiciability under Article III, argu-
 ing that Acetris’ challenge as applied to future procure-
 ments is “entirely hypothetical, . . . rather than an injury
 that actually occurred.” Appellant’s Br. 34–35 (citing
 Lujan, 504 U.S. at 560). But, as the Supreme Court has
 explained, an Article III injury-in-fact may be, as it is here,
 “the inability to compete on an equal footing in the bidding
 process,” rather than “the loss of a contract.” Ne. Fla.
 Chapter of Associated Gen. Contractors of Am. v. City of
 Jacksonville, Fla., 508 U.S. 656, 666 (1993). Indeed, the
 Court has found Article III standing where, as here, a pro-
 spective bidder alleges that it would be unlawfully disad-
 vantaged in competing for a government contract that the
 bidder is “very likely” to bid on in the “relatively near fu-
 ture.” Adarand Constructors, Inc. v. Pena, 515 U.S. 200,
 211–12 (1995). These future procurements are virtually
 certain to occur, and, absent the alleged error by the VA,
 Acetris is “very likely” to bid on those procurements.




     3    The parties disputed—both in the Claims Court
 and in this appeal—whether the “substantial chance” test
 or the “non-trivial competitive injury” test is appropriate
 here. With respect to Acetris’ challenge to the Entecavir
 solicitation as well as the other solicitation discussed be-
 low, the result is the same regardless of the test used.
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 12                      ACETRIS HEALTH, LLC v. UNITED STATES




                                B
     Acetris also has statutory standing. The statute con-
 ferring bid protest jurisdiction provides in relevant part
 that:
      [T]he Unite[d] States Court of Federal Claims . . .
      shall have jurisdiction to render judgment on an
      action by an interested party objecting to a solicita-
      tion by a Federal agency for bids or proposals for a
      proposed contract or to a proposed award or the
      award of a contract or any alleged violation of stat-
      ute or regulation in connection with a procurement
      or a proposed procurement. [T]he United States
      Court of Federal Claims . . . shall have jurisdiction
      to entertain such an action without regard to
      whether suit is instituted before or after the con-
      tract is awarded.
 28 U.S.C. § 1491(b)(1) (emphasis added).
     As relevant here, two phrases define the boundaries of
 section 1491(b)(1) jurisdiction: (1) that the challenge be “in
 connection with a procurement or a proposed procure-
 ment”; and (2) that the challenger be an “interested party.”
     Acetris broadly challenges the VA’s purportedly flawed
 interpretation of “U.S.-made end products” in connection
 with both existing and proposed procurements. Acetris has
 standing because the government has taken a definitive
 position as to the interpretation of the TAA and the FAR
 that would exclude Acetris from future procurements for
 other products on which it is a likely bidder. The CBP has
 consistently held drug products manufactured in the
 United States with API from a foreign country to be prod-
 ucts of that foreign country. The government agreed at oral
 argument that, “as long as the CBP decision was in place,”
 there was no “reason to believe that the VA would take a
 different position about the country of origin . . . in any fu-
 ture contract.” Oral Argument at 18:30. Thus, there is
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 ACETRIS HEALTH, LLC v. UNITED STATES                       13



 every indication that the VA will evaluate future bids using
 the interpretation of the TAA now challenged by Acetris.
 The CBP has held already at least ten of Acetris’ products
 to be “products of” India, see 83 Fed. Reg. 5118, 5118–39
 (Feb. 5, 2018), and, as noted in letters referenced in and
 attached to the complaint, the VA has indicated on the ba-
 sis of these determinations that Acetris’ products are not
 TAA- and FAR-compliant. It is equally clear that the gov-
 ernment will likely prohibit these products in the near fu-
 ture. And, in view of Acetris’ history of performance, there
 is every indication that Acetris would seek to supply and
 could supply these products if it were awarded contracts for
 them. See CliniComp Int’l, Inc. v. United States, 904 F.3d
 1353, 1357 (Fed. Cir. 2018). Thus, Acetris has established
 both a substantial chance of securing those contracts and a
 “non-trivial competitive injury” as to its other products suf-
 ficient to make it an “interested party.” See Weeks Marine,
 Inc. v. United States, 575 F.3d 1352, 1363 (Fed. Cir. 2009);
 Distributed Sols., Inc. v. United States, 539 F.3d 1340,
 1344–45 (Fed. Cir. 2008) (holding that protester “deprived
 of the opportunity to compete” was an “interested party”).
     Acetris’ challenge also fits easily within the procure-
 ment language of the statute. We have held that the word
 “procurement” in section 1491(b)(1) “includes all stages of
 the process of acquiring property.” See Res. Conservation
 Grp., LLC v. United States, 597 F.3d 1238, 1244 (Fed. Cir.
 2010) (emphasis omitted). The reference to “proposed pro-
 curements” likewise broadly encompasses all contemplated
 future procurements by the agency. This is not a situation
 where, as in Geiler/Schrudde & Zimmerman v. United
 States, 743 F. App’x 974 (Fed. Cir. 2018), the bid protester
 could not identify any future procurements on which the
 protester intended to bid. The future procurements are
 likely to occur. And “[t]he operative phrase ‘in connection
 with’ is very sweeping in scope.” RAMCOR Servs. Grp.,
 Inc. v. United States, 185 F.3d 1286, 1289 (Fed. Cir. 1999).
 “As long as a statute has a connection to a procurement
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 14                      ACETRIS HEALTH, LLC v. UNITED STATES




 proposal, an alleged violation suffices to supply jurisdic-
 tion.” Id. (emphasis added).
     Here, since the VA’s actions under the TAA and the
 FAR “so clearly affect the award and performance” of other
 VA procurements on which Acetris intends to bid in the rel-
 atively near future, the TAA and FAR have “a connection”
 with “a procurement or proposed procurement.” See id.
     Acetris’ challenge to the VA’s ruling is not moot be-
 cause Acetris continues to have both constitutional and
 statutory standing.
                               C
      The government contends that Acetris’ previously filed
 pending suits in the CIT, in which Acetris challenged
 CBP’s country-of-origin determinations for Acetris’ prod-
 ucts, divest the Claims Court of jurisdiction under 28
 U.S.C. § 1500. Section 1500 provides that the Claims
 Court “shall not have jurisdiction of any claim for or in re-
 spect to which the plaintiff . . . has pending in any other
 court.” In United States v. Tohono O’Odham Nation, 563
 U.S. 307, 317 (2011), the Supreme Court interpreted sec-
 tion 1500 to preclude Claims Court jurisdiction where an
 earlier-filed suit is “based on substantially the same oper-
 ative facts” as the Claims Court suit, “regardless of the re-
 lief sought in each suit.”
     We have explained that “[u]nder Tohono, the question
 is whether the second Claims Court . . . suit would have
 been barred by res judicata if it had been brought in district
 court” under “res judicata principles as of 1868, when the
 predecessor to § 1500 was first enacted.” Res. Invs., Inc. v.
 United States, 785 F.3d 660, 666 (Fed. Cir. 2015) (footnote
 omitted). At that time, the two tests for res judicata were
 the “act or contract test” and the “evidence test.” Trusted
 Integration, 659 F.3d at 1169.
    Under the “act or contract test,” “[t]he true distinction
 between demands or rights of action which are single and
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 ACETRIS HEALTH, LLC v. UNITED STATES                       15



 entire, and those which are several and distinct, is, that the
 former immediately arise out of one and the same act or
 contract, and the latter out of different acts or contracts.”
 Tohono, 563 U.S. at 316 (quoting J.C. Wells, Res Adjudi-
 cata and Stare Decisis § 241, p. 208 (1878)). Under the “ev-
 idence test,” two suits involve the same claim if “the same
 evidence support[s] and establish[es] both the present and
 the former cause of action.” Id. (quoting 2 H. Black, Law of
 Judgments § 726, p. 866 (1891)). If the suits are the “same”
 under either of these tests, the Claims Court suit will be
 barred by section 1500. Res. Invs., 785 F.3d at 666.
     Acetris’ second CIT claim is that, contrary to the CBP’s
 ruling, the Acetris product is “manufactured in the [United
 States]” under the FAR because the processing steps in the
 United States are sufficiently “complex, time consuming,
 and expensive.” CIT Complaint ¶¶ 86–94. The CBP had
 no colorable authority to opine on the FAR (i.e., the second
 CIT claim), which is a matter solely of procurement law.
 The CBP’s statutory authority to provide country-of-origin
 determinations comes from 19 U.S.C. § 2515(b)(1), which
 only authorizes “determinations . . . under section
 2518(4)(B) of this title.” Section 2518(4)(B) provides the
 TAA’s statutory country-of-origin test, which is different
 from the FAR’s test. The CIT thus lacks colorable jurisdic-
 tion to review the merits of a CBP decision on Acetris’ FAR
 compliance (which the CBP did not have authority to make
 in the first instance). Accordingly, any decision by the CIT
 on this claim would not have res judicata effect, and any
 factual allegations in the CIT complaint pertaining only to
 this claim do not have preclusive effect under section
 1500. 4



     4
          Tohono held that, under section 1500, a claim filed
 at a first court can divest the Claims Court of a second,
 later-filed claim even where the first court would have
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 16                      ACETRIS HEALTH, LLC v. UNITED STATES




     We next turn to the first CIT claim, which involves the
 TAA, at issue in both the CIT and the Claims Court cases.
 Neither the “act or contract” test nor the “evidence” test
 supports a section-1500 bar. As to the “act or contract” test,
 the CIT cases challenge the CBP’s act of issuing a TAA de-
 termination. In contrast, the Claims Court case challenges
 the actions of a different government agency—the VA—in
 adopting an interpretation of the TAA (and the FAR) that
 excludes products manufactured in the United States with
 foreign-made API (including, but not limited to, Acetris’
 products) from government procurements. Thus, the CIT
 and Claims Court suits do not “immediately arise out of one
 and the same act.” See Tohono, 563 U.S. at 316 (citation
 omitted).




 lacked subject-matter jurisdiction over the second claim.
 Tohono, 563 U.S. at 315–17. This represents a departure
 from the usual rule that res judicata cannot preclude a
 later-filed claim over which the first court lacked jurisdic-
 tion. See Res. Invs., 785 F.3d at 666. But in Tohono the
 earlier-filed claims were properly filed in the district court;
 Tohono did not consider situations where, as here, the first
 court lacks jurisdiction over the earlier-filed claim. And we
 do not read Tohono to override the principle that a court
 cannot rule on the merits of—and thus res judicata effect
 cannot arise from—a claim over which the court has no col-
 orable jurisdiction. Restatement (Second) of Judgments
 § 12 (1982) (no preclusion where “[t]he subject matter of
 the action was so plainly beyond the court’s jurisdiction
 that its entertaining the action was a manifest abuse of au-
 thority”); see also United States v. U. S. Fid. & Guar. Co.,
 309 U.S. 506, 512 (1940) (holding that res judicata did not
 apply where district court had no statutory authority to ad-
 judicate a claim against the United States); Christopher
 Vill., L.P. v. United States, 360 F.3d 1319, 1326–33 (Fed.
 Cir. 2004).
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 ACETRIS HEALTH, LLC v. UNITED STATES                      17



     As to the “evidence” test, Acetris’ first CIT claim has
 some factual overlap with the Claims Court claim. But
 many of the VA actions challenged in Acetris’ Claims Court
 complaint occurred after the CIT complaints were filed and
 are not challenged in the CIT claims. And, to the extent
 that there is overlap between those claims, it largely in-
 volves the “res gestae,” not the “operative facts,” of the
 claims. See Trusted Integration, 659 F.3d at 1170; see, e.g.,
 Complaint, Acetris Health LLC v. United States, No. 18-47
 (Ct. Int’l Trade Mar. 7, 2018), ECF No. 4 [hereinafter “CIT
 Complaint”], ¶¶ 79–85.
     The CIT and Claims Court claims are not the “same”
 under the evidence test. With respect to the first CIT
 claim, Acetris contends that its products are TAA-
 compliant because they are “products of the United States”
 having been “substantially transformed” in the United
 States under 19 U.S.C. 2518(4)(B). In contrast, at the
 Claims Court, Acetris contends that its products are TAA-
 compliant because they are not “products of India” since
 they are neither “wholly the . . . manufacture” of India nor
 “substantially transformed” in India. These claims are not
 based on the same evidence. The “products of the United
 States” question in the CIT turns on whether a substantial
 transformation occurred in the United States. The “prod-
 uct of India” question in the Claims Court turns on whether
 the product was “wholly the . . . manufacture” of or “sub-
 stantially transformed” in India. Thus, an adverse decision
 on the factual assertion that forms the basis for Acetris’
 CIT claim—that the processing steps in New Jersey cause
 a “substantial transformation” of the product from its con-
 stituent API sufficient to result in a “product of the United
 States” under the TAA—cannot preclude Acetris’ Claims
 Court claim asserting that the product is not a “product of
 India” because the product is neither “wholly the . . . man-
 ufacture” of India nor “substantially transformed” in India.
     Because the evidence at issue in the CIT cases does not
 “support and establish” the Claims Court claims, the
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 18                      ACETRIS HEALTH, LLC v. UNITED STATES




 evidence test does not bar jurisdiction here. See Tohono,
 563 U.S. at 316 (emphasis added); see also Trusted Integra-
 tion, 659 F.3d at 1170 (noting that “under the evidence test
 . . . the overlapping evidence need[s] to be both relevant to
 and legally operative to prove the prior claim before res ju-
 dicata [acts] as a bar to the subsequent claim” (emphasis
 in original)).
      Section 1500 does not preclude jurisdiction here.
                               II
                               A
      Turning to the merits, the government contends that
 the CBP’s country-of-origin determinations are “binding”
 on the VA and so left no discretion to the VA to conduct an
 “independent [country-of-origin] analysis.” Appellant’s Br.
 48. We reject that argument. As the Claims Court noted,
 “the procuring agency”—here, the VA—is “responsible for
 determining whether an offered product qualifies as a U.S.-
 made end product.” Acetris, 138 Fed. Cl. at 602–03. In-
 deed, as the government admitted at oral argument, there
 is “not a requirement” for the VA to defer to the CBP’s de-
 termination.
                               B
      We conclude that the VA’s interpretation of the TAA
 and the FAR was erroneous, as the Claims Court held. The
 TAA provides in relevant part that “the President . . . shall,
 with respect to procurement covered by the [WTO Agree-
 ment], prohibit the procurement . . . of products . . . which
 are products of a foreign country or instrumentality which
 is not designated pursuant to section 2511(b) of this title.”
 19 U.S.C. § 2512(a)(1). The question here is whether Ace-
 tris’ products, which are made into tablets in the United
 States using API made in India, are “products of” India for
 which procurement is prohibited by the TAA. The TAA’s
 rule-of-origin test provides that:
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 ACETRIS HEALTH, LLC v. UNITED STATES                           19



     An article is a product of a country or instrumen-
     tality only if (i) it is wholly the growth, product, or
     manufacture of that country or instrumentality, or
     (ii) in the case of an article which consists in whole
     or in part of materials from another country or in-
     strumentality, it has been substantially trans-
     formed into a new and different article of commerce
     with a name, character, or use distinct from that of
     the article or articles from which it was so trans-
     formed.
 19 U.S.C. § 2518(4)(B) (emphasis added).
      The government argues that Acetris’ tablets are prod-
 ucts of India because the tablets’ API was made in India.
 But the government cannot identify any Supreme Court or
 Circuit authority holding that a pharmaceutical product’s
 country-of-origin is determined by the country in which its
 API was manufactured. To the contrary, it is clear from
 the TAA that the “product” is the final product that is pro-
 cured—here, the pill itself—rather than the ingredients of
 the pill. Acetris’ tablets do not meet prong (i) of the TAA’s
 country-of-origin test for India because the tablets are not
 “wholly the . . . manufacture” of India. Acetris’ tablets sim-
 ilarly do not meet prong (ii) because the tablets’ compo-
 nents are not “substantially transformed” into tablets in
 India. Because an article is a product of a country “only if”
 prongs (i) or (ii) are met, Acetris’ tablets are therefore not
 a “product of” India. Indeed, the government concedes that
 under the construction of “product” that we have adopted
 (i.e., that “the pill is the product”), “the pill is not the prod-
 uct of India.” Oral Argument at 11:50–12:50.
     Accordingly, since the TAA only excludes products from
 government procurement if they are “products of” a foreign
 country like India, the TAA does not bar the VA from pro-
 curing Acetris’ products.
    The FAR also does not bar Acetris’ products. The
 FAR’s Trade Agreements (“TA”) Clause provides in
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 20                     ACETRIS HEALTH, LLC v. UNITED STATES




 relevant part that “[t]he Contractor shall deliver under this
 contract only U.S.-made . . . end products.” FAR § 52.225­5.
 The FAR does not adopt the TAA’s country-of-origin test
 for determining what are “products of a foreign country or
 instrumentality.” 19 U.S.C. § 2518(4)(B). Instead, the
 FAR defines “U.S.-made end product” as “an article that is
 mined, produced, or manufactured in the United States or
 that is substantially transformed in the United States.”
 FAR § 25.003.
     The regulatory history of the term “U.S.-made end
 product” makes clear that the source of the components
 (here, the API) is irrelevant in determining where a prod-
 uct is “manufactured.” When the term was introduced to
 the FAR, the government explained it as follows: “[t]he pro-
 posed rule defines U.S. made end products as products that
 are manufactured or substantially transformed in the
 United States, regardless of the source of the components.”
 Federal Acquisition Regulation; Foreign Acquisition (Part
 25 Rewrite), 63 Fed. Reg. 51642 (Sept. 28, 1998) (emphasis
 added). A product need not be wholly manufactured or sub-
 stantially transformed in the United States to be a “U.S.-
 made end product.” Instead, such products may be—as
 Acetris’ products are—“manufactured” in the United
 States from foreign-made components. The solicitation
 here similarly provides that “the place of manufacture is
 the location ‘where ingredients are measured, weighed,
 mixed and compounded.’” J.A. 100. The government does
 not dispute that Acetris’ products are measured, weighed,
 mixed and compounded in—and so, under the VA’s own
 definition, “manufactured” in—a facility in Dayton, New
 Jersey. See Acetris, 138 Fed. Cl. at 586; Oral Argument at
 4:10 (government stating that the “pill form [of an Acetris
 product] is made in New Jersey”). Therefore, on the plain
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 ACETRIS HEALTH, LLC v. UNITED STATES                     21



 meaning of the FAR, Acetris’ products are “U .S.-made end
 products.” 5
      The government cites the Supreme Court’s decision in
 Anheuser–Busch Brewing Ass’n v. United States, 207 U.S.
 556 (1908), for the proposition that the terms “‘manufac-
 ture’ and ‘substantial transformation’ share a common
 meaning” (i.e., that there cannot be a “manufacture” with-
 out a “substantial transformation”). Appellant’s Reply Br.
 14–16. To the government, Acetris’ products are not “man-
 ufactured” in the United States because they are not sub-
 stantially transformed in the United States.           Even
 assuming (without deciding) that Acetris’ products are not
 substantially transformed in the United States, 6 the gov-
 ernment’s argument fails. Under Anheuser–Busch, the
 “first sense” of the term “manufacture” is when “a new ar-
 ticle is produced of which the imported material constitutes
 an ingredient or part.” Anheuser–Busch, 207 U.S. at 562.
 That definition is clearly satisfied here; the India-made




     5    The Claims Court concluded and Acetris argues ex-
 tensively on appeal that the term “U.S.-made end prod-
 ucts” necessarily includes “domestic end products” (i.e.,
 BAA-compliant products). This is not the relevant inquiry.
 Products that, like Acetris’ products, are “manufactured in
 the United States” and so are “U.S.-made end products”
 whether or not they meet the other requirements of “do-
 mestic end products” (i.e., that they are COTS items or
 their components are at least 50% (by cost) American-
 made). See FAR § 25.003; J.A. 881 (VA solicitation stating
 that “the Government will evaluate offers of U.S.-made or
 designated country end products without regard to the re-
 strictions of the Buy American statute”).
     6    Acetris’ products may very well be substantially
 transformed in the United States, but we need not decide
 this question here.
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 22                     ACETRIS HEALTH, LLC v. UNITED STATES




 API “constitutes an ingredient or part” of the tablets pro-
 duced in New Jersey.
      To be sure, Anheuser–Busch construed the word “man-
 ufacture” to also require that “a new and different article
 must emerge, ‘having a distinctive name, character, or
 use,’” 207 U.S. at 560 (quoting Hartranft v. Wiegmann, 121
 U.S. 609, 615 (1887)), a construction that has since been
 referred to as the “substantial transformation” test. But,
 under the FAR, a “U.S.-made end product” may either be
 (i) “manufactured in the United States”; or (ii) “substan-
 tially transformed in the United States.” FAR § 25.003.
 The language of the FAR reflects an intent not to require
 “substantial transformation” for analysis under the FAR;
 “manufacture” does not require substantial transfor-
 mation.
     If the government is dissatisfied with how the FAR de-
 fines “U.S.-made end product,” it must change the defini-
 tion, not argue for an untenable construction of the existing
 definition.
                              III
     Having concluded that Acetris is correct on the merits,
 we turn to the issue of remedy. The Claims Court granted
 Acetris the following relief:
      [T]he court DECLARES that:
         The term “U.S.-made end product,” as used
         in the Trade Agreements clause, includes
         “domestic end products,” as that term is de-
         fined in the FAR.
         The VA’s failure to construe the term “U.S.-
         made end product,” as used in the Trade
         Agreements clause, to include “domestic
         end products,” as that term is defined in
         the FAR, was arbitrary, capricious, and
         contrary to law.
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 ACETRIS HEALTH, LLC v. UNITED STATES                     23



         It was arbitrary and capricious for the VA
         to require manufacturers to certify that the
         offered products were “[Trade Agreements
         Act] compliant.”
         The VA’s failure to independently assess
         whether plaintiff’s Entecavir Tablets qual-
         ified as U.S.-made end products under the
         Trade Agreements clause was arbitrary,
         capricious, and contrary to law.
     In addition, the court ENJOINS the VA, in future
     procurements, from
         construing the term “U.S.-made end prod-
         uct” in the Trade Agreements clause as ex-
         cluding products manufactured in the
         United States (in other words, domestic
         end products), and
         relying on CBP rather than independently
         ascertaining whether an offered product is
         manufactured in the United States (in
         other words, a domestic end product) pur-
         suant to the definition of the term “U.S.-
         made end product.”
 J.A. 89 (second brackets in original).
      We find that the Claims Court judgment is both impre-
 cise and confusing. On remand, the Claims Court should
 declare that: (1) under the TAA, a pharmaceutical product
 using API made in India does not, because of that fact,
 thereby become the “product of” India; and (2) under the
 FAR, the term “U.S.-made end product” may include prod-
 ucts manufactured in the United States using API made in
 another country. The Claims Court should also enjoin the
 VA from excluding Acetris’ products manufactured in Au-
 rolife’s Dayton, New Jersey facility from future procure-
 ments.
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 24                      ACETRIS HEALTH, LLC v. UNITED STATES




                         CONCLUSION
     We conclude that this case is justiciable, and that the
 VA erred in interpreting the TAA and the FAR to exclude
 pharmaceutical products that, like Acetris’ products, are
 manufactured in the United States using API made in a
 foreign country. Such products are not, under the TAA, the
 “product of” the country in which their API was made, and
 are “U.S.-made end products” under the FAR. We remand
 the case for the Claims Court to enter judgment consistent
 with this opinion.
      AFFIRMED-IN-PART, VACATED-IN-PART, AND
                    REMANDED
                            COSTS
       No costs.
