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2008 Procurement Review: Protests



Contents

Successful GAO Protests Court of Federal Claims

Court of Appeals for the Federal Circuit

SBA Office of Hearings and Appeals

Introduction

Timeliness/Standing

Jurisdiction

Meaningful Discussions

Prejudice/Eligibility for Award

Equal Access to Justice

Faulty Evaluations

Late Proposals

Bundling

Small/SDVOSB Business

Small/SDVOSB Business

Responsiveness

Past Performance

Late Bids

Solicitation Terms

OCI

OCI

Corrective Action

Post Employment Restrictions

Bid/Proposal/Protest Costs

Sole Source

FSS Solicitations

Miscellaneous

Protest and Bid/Proposal Costs

Discovery/Procedure

Successful GAO Protests

Introduction

The GAO published 19 decisions sustaining protests on the merits (five of which were belated, redacted versions of protests actually decided in 2007).  It also belatedly published one decision in 2010 (Velos, below), which was originally issued in November 2008. The GAO issued five other decisions approving (or partially approving) various costs as a result of earlier, successful protests.

Of course, the big news was the GAO's announcement that Boeing had won its protest of the air refueling tanker contract solicitation. The redacted version of the GAO's decision in the Boeing air refueling tanker protest was published in record time.

Lack of Meaningful Discussions

AT&T didn't win all its protest grounds, but the agency's failure to conduct meaningful discussions with AT&T and its unexplained final evaluation of the awardee's management proposal were sufficient for the GAO to recommend that the agency re-open discussions and re-evaluate proposals. 

The GAO sustained separate protests by two offerors against a lease awarded by the GSA because it failed to alert the protesters to significant weaknesses in their proposals and gave the awardee credit for a part of its proposal that did not comply with the solicitation's requirements. See Trammel Crow and New Jersey & H Street. See also MTV JV.

The GAO sustained a protest by Burchick Construction Co. because the VA failed to conduct meaningful discussions regarding weaknesses in several parts of Burchick's technical proposal, including its past performance, small business participation, and quality control plan.

Velos won its initial protest because, during discussions, the agency misled it into believing its proposed terms for a software license were acceptable, when the agency subsequently found them unacceptable.

Flawed Evaluations 

Fedcar won its protest against the GSA's award of a contract to construct and lease a dedicated campus facility. The GSA admitted it made a mistake in calculating the awardee's price but claimed it would have made no difference in the cost/technical tradeoff evaluation. The GAO gave this argument short shrift:

While the agency argues that the outcome of the SSA's cost/technical tradeoff would be the same regardless of the re-calculated price, our Office affords little weight to an agency's post-protest arguments that are based on judgments the agency asserts it would have made because such judgments made in the heat of litigation and based on facts that were not previously considered that are materially different from those on which the agency relied in making the original decision may not represent the fair and considered judgment of the agency. Global, A 1st Flagship Co., B-297235.2, Dec. 27, 2005 , 2006 CPD para. 14 at 8. Under the circumstances, we give little weight to the agency's assertion that the outcome would have been the same, given that Fedcar now has a significantly greater price advantage than found by the agency when it made its source selection decision. Where a source selection authority bases his or her source selection decision on figures that do not reasonably represent the differences in costs to be incurred under competing proposals, the source selection is not reasonably based. See Gemmo Impianti SpA, B-290427, Aug. 9, 2002 , 2002 CPD para. 146 at 5-6.  

Fedcar also obtained meaningful relief because the agency made a counteroffer in the contract it sent the awardee for signature post-award, which meant no enforceable agreement was in place at the time of the protest. Thus, the GAO did not have to worry about disturbing an ongoing contract in fashioning a remedy.

In Systems Research and Applications Corp., the GAO sustained a protest against 8(a) awards for construction services because the agency evaluated the experience of the awardees' parents/affiliates in violation of a clear solicitation statement to the contrary. 

The GAO  decided that the Defense Information Systems Agency's evaluation of Apptis, Inc.'s proposal was flawed because the agency improperly evaluated past performance under technical approach risk and failed to alert the protester to deficiencies in its proposal during discussions. On the other hand, Apptis'  allegation that an evaluator had a conflict of interest was untimely because the protester knew of this grounds for protest before submitting its offer but did not complain until after award.

The GAO found a host of problems with the agency's evaluation in the Contingency Management Group protest, including (i) overlooking stated assumptions by the awardee that differed from those specified in the solicitation and (ii) accepting a technical approach proposed by the awardee while evaluating a similar approach proposed by the protester as a weakness.

The GAO published the redacted version of a June 2007 winning protest by IBM against an award by the EPA to CGI. The GAO found the agency's cost/price evaluation was flawed in several respects, but the redactions are so heavy in crucial places that it is difficult to ascertain what is going on. See, e.g., the discussion in the decision under "Other CGI costs."

The GAO sustained MCT JV's protest in part because the agency neglected to evaluate the performance risk associated with the awardee's failure to follow solicitation instructions not to propose unrealistically low costs.

In ASRC Research & Technology Solutions, the GAO sustained a protest against a NASA evaluation that was flawed in its analysis of (i) the costs of hiring incumbent personnel and (ii) the differences in size between the protested contract and the awardee's past performance references.

Small Business/Set-Asides/SDVOSB Status

The GAO sustained Singleton Enterprises' protest because the procuring agency had overstepped its authority in determining the company was nonresponsive due to lack of SDVOSB status, a matter that is within the exclusive jurisdiction of the SBA.

In Delex, the GAO held that FAR 19.502-2(b) concerning set-asides for small businesses applies to competitions for task and delivery orders under multiple-award contracts and that a solicitation for a delivery order under one such NAVAIR contract should have been set aside for small businesses rather than being issued on an unrestricted basis.

Responsiveness      

The GAO sustained a protest by Native American Industrial Distributors because the awardee failed to provide required letters of commitment for key personnel.          

Late Bids/Quotations/Offers

Data Integrators involved the agency's improper acceptance of a late quotation.

Organizational Conflicts of Interest

The GAO sustained a protest by AT&T Government Solutions because the Navy rejected its proposal due to a perceived organizational conflict of interest ("OCI") without evaluating the mitigation plan included with the proposal and without giving AT&T the opportunity to correct the perceived deficiencies in its proposal, when the company's products that allegedly created the OCI were not even available for purchase by the agency.  Similarly,  Nortel Government Solutions won its protest against a DEA award because the agency failed to adequately address the awardee's potential organizational conflict of interest.              

Inadequate Corrective Action 

In Superlative Technologies, after the Department of Justice canceled a solicitation because source selection sensitive information may have been improperly provided to an offeror, the agency turned around and awarded a sole source contract to a team that included that same offeror, which had submitted essentially the same proposal as it had in the canceled procurement. The GAO indicated the agency may have chosen this course of action just to avoid further scrutiny of the original problem.         

Protest Costs

In Eagle Home Medical Corp., World Communications Center and Sysorex, the GAO recommended  be awarded protest costs because the agency delayed until after filing the agency report to take corrective action on a clearly meritorious protest.

Burns and Roe offers a brief refresher course in the standards and tests the GAO uses in deciding whether to award protest costs:

As a general rule, we consider a successful protester entitled to be reimbursed costs incurred with respect to all issues pursued, not merely those upon which it prevails. AAR Aircraft Servs.--Costs , B-291670.6, May 12, 2003 , 2003 CPD para. 100 at 9. In our view, limiting recovery of protest costs in all cases to only those issues on which the protester prevailed would be inconsistent with the broad, remedial congressional purpose behind the cost reimbursement provisions of the Competition in Contracting Act of 1984, 31 U.S.C. sect. 3554 (c)(1)(a) (2006). AAR Aircraft Servs.--Costs , supra; TRESP Assocs., Inc.--Costs, B-258322.8, Nov. 3, 1998 , 98-2 CPD para. 108 at 2. Nevertheless, failing to limit the recovery of protest costs in all instances of partial or limited success by a protester may also result in an unjust award determination. Accordingly, in appropriate cases, we have limited our recommendation for the award of protest costs where a part of those costs is allocable to an unsuccessful protest issue that is so clearly severable from the successful issues as to essentially constitute a separate protest. See, e.g., BAE Tech. Servs., Inc.--Costs, B-296699.3, Aug. 11, 2006, 2006 CPD para. 122 at 3; Interface Floorings Sys., Inc.--Claim for Attorneys’ Fees, B-225439.5, July 29, 1987, 87-2 CPD para. 106 at 2-3. In determining whether protest issues are so clearly severable as to essentially constitute separate protests, we consider, among other things, the extent to which the issues are interrelated or intertwined--i.e., the successful and unsuccessful arguments share a common core set of facts, are based on related legal theories, or are otherwise not readily severable. See Sodexho Mgmt., Inc.--Costs, B-289605.3, Aug. 6, 2003 , 2003 CPD para.136 at 29.

FSS Solicitations

In Seaborn Health Care, the GAO sustained a protest against a solicitation for FSS contractors that required non-FSS supervisory services.

 

Court of Federal Claims 

Timeliness/Standing/Jurisdiction 

Under 28 U.S.C. § 1491(b)(1), the Court of Federal Claims has the authority to “render judgment to an action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award of a contract or any alleged violation of statue or regulation in connection with a procurement .” Ezenia! tried to convince the court that it was not protesting the Army's earlier decision to standardize the software for reasons of interoperability (by specifying Adobe Connect software), but, rather, was challenging an invalid sole source award. The CoFC concluded the standardization decision was, in reality, what Ezenia! was protesting and that the court lacked jurisdiction because such a protest was not of a procurement or of a solicitation.

In International Management Services (IMS), shortly after a firm won a small business set aside, three of its competitors (including IMS) protested that it was not small. They won, so the agency rescinded the contract and awarded it to IMS. The two competitors who had originally protested the first award with IMS then protested its small business status, and they won, so it lost its contract, and one of the remaining two protesting offerors ascended the throne. There were further fights between the competitors over their status. Then, at the Court of Federal Claims, IMS claimed that both the remaining companies were other than small and that the solicitation should never have been set aside in the first place. IMS lost on standing and justiciability issues, but one gets the distinct impression that all these businesses were, fairly equally, not small.

Biltmore Forest Broadcasting lost a suit in district court challenging the FCC's award of a broadcast license. It tried again in the guise of a bid protest at the Court of Federal Claims. The court, however, recognized the issue already had been litigated.

OSG Product Tankers (OSG)  originally protested the agency's finding that it was non-responsible, despite its low bid. Subsequently, OSG moved to amend its complaint to allege that the winning bidder was non-responsible. The court denied that motion and then denied OSG's motion to make an interlocutory appeal of the court's earlier ruling.  The court reasoned that OSG did not have standing to challenge the responsibility of the winning bidder because OSG had been found non-responsible and, therefore, lacked a substantial chance of award (even though, if OSG had won its basic protest, it would have been awarded the contract as the low, responsible bidder).

The court's most recent decision in the Information Sciences protest ostensibly involves only a motion to amend the complaint, but it includes an interesting discussion of post-award actions by an agency of which a protester may complain under the Competition in Contracting Act.

Dionyx cautions against using the concepts of responsiveness and noncompliance as barriers to a protester's standing in a negotiated procurement and counsels that the only correct standard for analyzing standing in such situations is the Federal Circuit's decision in  Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006).

In Access Systems, the Court of Federal Claims held that the award of a bridge contract to the incumbent during the pendancy of a GAO protest does not constitute the override of an automatic stay of the protested procurement.

In L-3 Communications Integrated Systems, the Court of Federal Claims denied the Government's motion to dismiss a post-award bid protest seeking bid and proposal costs. L-3 Communications is the successor-in-interest by operation of law to the entire business of the original offeror on the procurement (Raytheon Systems Corporation). Therefore, the court rejected the Government's contentions (i) that  L-3 Communications lacked standing because it was not the original offeror and (ii) that the suit was barred by the Anti-Assignment Act (31 U.S.C. 3727). Concerning the latter contention, the court wrote in part as follows: "By virtue of this acquisition [of Raytheon], only L-3 possesses the right to pursue this claim, and the evil the [Anti-Assignment] Act was designed to prevent--subjecting the Government to multiple lawsuits for the same claim--is not present here." The court also held that the Administrative Dispute Resolution Act of 1966 did not deprive the court of jurisdiction under 28 U.S.C. 1491(a)(1) over L-3's theory of recovery based on an alleged breach of an implied-in-fact contract.

Prejudice/Eligibility for Award

Infrastructure Defense Technologies lost its pre-award bid protest against a sole source solicitation and a related bridge contract in part because it neither submitted a proposal nor filed a protest prior to the date proposals were due.

In Allied Materials, the court found there was no showing the protester would have had a substantial chance for award if the alleged defect in the solicitation were cured.

Late Proposals

Career Training Concepts ("CTC") lost its post-award protest at the Court of Federal Claims. Its primary argument was that an email to all offerors from the Contracting Officer extending the date for receipt of proposals was ineffective because it was not a formal solicitation amendment. The court found that the email, especially when coupled with the Government's change of the due date for proposals on the GSA's e-Buy website, sufficed. The case also involved the protester's complaints about "discussions" that allegedly occurred. The court viewed the protester's somewhat unusual arguments in this regard as follows: "CTC apparently believes that it was given an opportunity to materially revise its proposal, while [the awardee] was only given the opportunity to clarify its proposal, and that any additional opportunity the agency afforded CTC may be employed to undo a competition it did not win. The record does not support CTC’s view of the exchanges."

Flawed Evaluations

The court sustained a post-award protest by Serco and seven other plaintiff/offerors under the GSA's Alliant Solicitation No. TQ2006MCB0001 because, in selecting multiple awardees, the agency used a flawed  past performance evaluation and seemed not to have conducted a required price/technical trade-off analysis. The court enjoined performance under all contracts awarded in response to the solicitation.

The court spanked the GSA a second time after its inadequate response to an earlier protest decision.  In the original protest, the court set aside the GSA's award of a Federal Business Opportunities ("FBO") contract to Symplicity Corp. The GSA subsequently re-evaluated and then re-awarded the contract to the same company. Information Sciences protested the second award. The court set aside that award, too, and directed the GSA to issue a revised solicitation.  

In The CNA Corp. pre-award protest, the court overturned a decision by a Health and Human Services contracting officer to exclude an offeror from a competition on the basis of an agency ethics opinion regarding a perceived post employment conflict of interest under 18 U.S.C. 207(a)(1).

In Klinge Corporation, the court declared the award invalid, directed the agency to terminate the awardee's contract, and awarded costs to Klinge because the agency should have recognized that the awardee violated the Trade Agreements Act by proposing an item essentially made in China, rather than being a U.S.-made or qualifying country end product as required by the certification at DFARS 252.225-7020.

In Tin Mills Properties, the court held that, although a standard GSAR solicitation provision permitted offerors to submit offers that deviated from the solicitation, it did not prevent the agency from summarily rejecting those offers it did not find to be advantageous. In other words, proceed at your own considerable risk in submitting an offer that materially differs from the solicitation's requirements.

In the Watts-Healy Tibbitts case, the court found that (even though it was widespread and even accepted there) bid rigging in Japan should not have been ignored by the Contracting Officer in making a responsibility determination without some decision at a higher level in the Navy to accept this situation for foreign policy reasons. Subsequently, the court amended its original order to specify precisely what the Navy must do, as follows:

The Navy shall make a new responsibility determination by a new contracting officer within 30 days from the date of this Order. The new contracting officer must obtain written advice from NAVFAC by someone at the flag officer or presidential appointee level as to the pertinent policy considerations and standards of business integrity in order to find awardees responsible in international contracts. This reconsideration should involve a reasoned analysis of the conduct of TOA and the statutory and regulatory factors relevant to the purposes of a responsibility determination. The reasons for finding TOA either a responsible contractor or not must be clearly articulated and consistent with the law and Navy policy.

Subsequently, the court dissolved the preliminary injunction it had issued previously because the Government had complied with the court's order to conduct a new responsibility determination, which was neither arbitrary nor capricious, even though the court might not agree with its conclusions.

L-3 Communications EoTech won its protest (and an injunction) because the Government relaxed and waived mandatory solicitation requirements for only one offeror, failed to seek readily available clarifications from the protester, and irrationally established a competitive range of (and then conducted further discussions only with) one offeror.

In a consolidated protest by Femme Comp., among several others, the Court of Federal Claims found the Army's Source Selection Authority improperly converted what should have been a best value trade-off among the evaluation factors listed in the solicitation into simple technically acceptable, low price award decisions.

Alabama Aircraft won its protest against the Air Force's contract award to Boeing for maintenance and modifications to the KC-135 Stratotanker fleet because of the agency's faulty price realism analysis of Boeing's proposal. The court issued an injunction setting aside the award and requiring the agency to resolicit. Specifically, the agency failed to take into account the rapidly aging fleet in analyzing Boeing's price realism.

Wackenhut Services won its protest, and the court ordered NASA to set aside a contract award, appoint new members to the Source Evaluation Board (SEB), and also to appoint a new Source Selection Authority (SSA) to re-evaluate proposals and correct errors in the original evaluations after the court found a multitude of errors in the evaluation, including possible undue influence by the SSA on the SEB, a complete lack of a documented tradeoff analysis in the final decision by the SSA, and other unexplained adjustments by the SEB and SSA related to various of the evaluation factors. The court's disgust with the problems in the original evaluation is palpable. One interesting aspect of the case is that Wackenhut originally protested at the GAO, lost there, and then filed this suit seven days later.

Past Performance

In DCMS-ISA, the Court of Federal Claims upheld the Government's decision to cancel an SDVOSB set-aside because none of the offerors possessed sufficient past performance experience. The court rejected the offerors' contention that the matter should have been referred to the SBA for a responsibility determination.

In its post-award protest at the Court of Federal Claims, Lumetra claimed, inter alia, that the Government had failed to provide it with the opportunity to respond to a negative in-progress performance evaluation. The court conceded that the Government neglected to comply with a FAR 42.1503(b) requirement that the contractor be permitted to submit comments, additional information, or rebuttals concerning the evaluation, but held that the Government's failure was not prejudicial because Lumetra had other means to address the alleged past performance issues. 

Flawed Solicitation Terms

The Watts-Healy Tibbitts decision shows how difficult it is to win a protest. The "one thing" that was "clear" to the court was that neither DFARS 252.236-7010 nor the statute on which it is based "clearly define[s] whether a joint venture between an American company and foreign corporation is an American company for the purposes of the twenty percent differential to be applied to foreign corporations." The court also found the agency's responses to bidders' questions on the subject completely unenlightening. Nevertheless, the court did not find the agency's subsequent interpretation of the requirements in this particular solicitation unreasonable. On reconsideration, the court acquiesced grudgingly and granted the protester's request for a preliminary injunction "with reluctance" only because it had "no choice."

Organizational Conflicts of Interest

In Axiom Resource Management, Inc. v. United States, after the court found organizational conflicts of interest in Lockheed Martin Federal Health Insurance's TRICARE contract, and the Government refused to accede to any type of ongoing court monitoring of a contractual plan to mitigate such conflicts, the court enjoined the Government from exercising the contract options. The dialogue concerning the issue among the judge, government counsel, and Lockheed's counsel, which is included in the body of the opinion, is extremely interesting. Subsequently, the court   denied the Government's motion to stay the court's order not to exercise the contract option.

Post Employment Restrictions

In The CNA Corp., the court overturned the agency's decision to exclude an individual from participating in the protester's bid due to an alleged post-employment restriction under 18 U.S.C. 207(a)(1).

Sole Source  

In Savantage Financial Services, the court found the Department of Homeland Security's awards of sole source contracts to two company's based upon a brand name justification was improper. 

In EOD Technology, the  court upheld the agency's override of the automatic stay of a protest of a sole source award.  

ID/IQ Task Orders

Omega World Travel lost its protest against a task order under an ID/IQ contract in part because of the limits on the scope of such protests imposed by the Federal Acquisition Streamlining Act and in part because the Government's allegedly improper disclosure of the protester's personnel information occurred after the task order was awarded and, therefore, was not a violation of the Procurement Integrity Act. 

Miscellaneous

The Chapman Law Firm Co. and several other firms had contracts to perform managing and marketing services in Michigan and Ohio for HUD. The agency did not renew Chapman's contract at its option exercise date. Subsequently, the agency requested input from the remaining contractors as to whether they would like to expand their service territories and at what price. Chapman claimed that the agency violated the Competition in Contracting Act by not soliciting it for these services and that the subsequent modifications to the incumbents' contracts were cardinal changes. The court, however, held that limiting the pool of solicited firms to current incumbents was reasonable and that, because each of their contracts explicitly contemplated it might be modified to increase their areas of service, the modifications were not cardinal changes.  

Sealift, Inc. lost its protest because  even though the agency relaxed, waived, or modified quite a few of the solicitation's requirements after award, none of these actions rose to the level of a fundamental change in the scope of the contract. Had the GAO decided this dispute, it likely would have referred to the Government's actions as normal matters of contract administration.

In E-Management Consultants, the Court of Federal Claims voided an agency's override of the automatic stay issued during pendancy of a GAO protest because the agency failed to consider the impact of the stay on the procurement system and made an inadequate cost-benefit analysis, which did not establish that serious consequences would befall the agency in the absence of the override.  The court invalidated another override in Nortel Government Solutions.  

In Labatt Food Service, the court overturned an award where the agency had accepted emailed proposal revisions in violation of solicitation's instructions).

Protest Costs/EAJA and Bid and Proposal Costs

The court has discretion to award bid and proposal costs to successful protesters. In The CNA Corp., the Government moved to strike the protester's entire application for such costs, for several reasons, none of which made much sense to the court. For example, the Government contended that the court's original decision on the protest, which merely stated that the protester was entitled to the costs, without stating an amount, was a "final" decision and, thus, no specific costs could be claimed. The court noted the standard procedure is for the protester to submit its quantum claim after the court's initial decision on then  protest. The Government also argued unsuccessfully that the court had no authority to award both protest costs and an injunction in favor of the protester.  

Adding insult to injury in the latest round of the International Air Response case, the court (i) denied the Government's motion for reconsideration of the original  EAJA fee award to the company and (ii) indicated that the contractor was entitled to additional EAJA fees for responding to the motion for reconsideration.

Discovery/Procedure

In Alabama Aircraft Industries Inc. - Birmingham, the Court of Federal Claims decided a slew of procedural issues in the continuation of this protest that began at the GAO, including several requests by the protester to supplement the administrative record and several requests to obtain discovery from the Government, e.g., requests for documents for which the Government is asserting attorney-client or work product protection. The court's analysis of the discovery requests demonstrates that obtaining discovery in a bid protest is often like pulling teeth.

The saga of the Information Sciences Corp. (ISC) protests continues. After the Court of Federal Claims twice invalidated a GSA award because of faulty evaluation procedures, the agency (stubbornly) awarded a sole-source contract to its contractor-of-choice. Rather than protest a third time, Information Sciences filed suit on the basis that the latest "award [i] violated FAR requirements to conduct business with integrity, fairness, and openness, and [ii] breached an implied-in-fact contract with ISC." ISC's Complaint did not request that the sole-source award be set aside. Instead it sought monetary damages for "employee time, labor, material, and expert time involved in pursuing the two prior solicitations." The court dismissed the Complaint because neither of the prayers for relief was a proper request for bid and proposal costs cognizable under the Administrative Dispute Resolution Act, but noted that the contractor could refile for such costs.

         

        

Court of Appeals for the Federal Circuit

Jurisdiction

In Distributed Solutions, Inc., and STR. L.L.C., the Court of Appeals for the Federal Circuit reversed the prior decision by the Court of Federal Claims and held that the lower court had jurisdiction over a protest against the Government's decision to abandon a proposed competition in favor of permitting a current prime to procure items by soliciting various subcontractors.  The issue was the meaning of the phrase "in connection with a procurement or proposed procurement" in the Tucker Act, as amended by the Administrative Dispute Resolution Act. The court broadly construed the phrases as follows:

Therefore, the phrase, "in connection with a procurement or proposed procurement," by definition involves a connection with any stage of the federal contracting acquisition process, including "the process for determining a need for property or services." To establish jurisdiction pursuant to this definition, the contractors must demonstrate that the government at least initiated a procurement, or initiated "the process for determining a need" for acquisition. . . .

The court decided that a Request for Information (RFI) met this requirement in the circumstances of the case.

Equal Access to Justice

The Equal Access to Justice Act provides in part that an application for attorneys fees must be filed within 30 days of the date a judgment becomes final and unappealable. Impresa Construzioni Geom. Domenico Garufi won a bid protest at the Court of Federal Claims and filed a request for bid and proposal costs. The Court of Federal Claims denied it, and Impresa appealed to the Federal Circuit, but then filed a motion requesting that the Federal Circuit dismiss its appeal and enter a final judgment in favor of the Government. The Federal Circuit complied. About 114 days later, Impresa  filed an application for attorneys fees under the Equal Access to Justice Act with the Court of Federal Claims. The court held that the application was untimely because more than 30 days had passed since the Federal Circuit's order had become final. Now, the Federal Circuit overturns that decision, establishing a firm rule that the 30-day period begins to run only after the 90-day period for requesting certiorari expires, regardless whether there is any possibility the Supreme Court would grant cert. Judge Rader's one-paragraph dissent is an instant classic: "Impresa cannot now revive a corpse it buried with its own motion."

Bundling

In CHE Consulting, the Court of Appeals for the Federal Circuit  by affirmed the Court of Federal Claims' decision that a procuring agency acted rationally in bundling hardware and software requirements into a  a single-provider solicitation. The protester had objected to the lower court's allowing the agency to supplement the record. The CAFC, however, reached its decision  without relying on the supplements. The CAFC relied on the GAO's 1993 decision in National Customer Engineering (B-251135) to support its conclusions.

SBA Office of Hearings and Appeals

Timeliness requirements for appealing SBA size determinations apply to the Government as well as private firms. In the Size Appeal of U. S. Department of Housing and Urban Development,  the OHA dismissed the Contracting Officer's appeal because it was untimely.

In J. W. Mills Management, the OHA clarified that the "seven factors test" originally announced in Size Appeal of D.P. Associates, Inc., SBA No. SIZ-2719 (1987),  for analyzing the "ostensible subcontractor rule" is no longer sufficient:

The Area Office used the "seven factors test" to evaluate the relationship between Appellant and BCI. The "seven factors test" is an earlier way of encapsulating what has become the ostensible subcontractor rule codified in 13 C.F.R. § 121.103(h)(4). These seven factors are now twenty years old; they are neither exclusive nor exhaustive, nor do they address "all aspects" of the prime contractor/subcontractor relationship the Area Office is required to evaluate by 13 C.F.R. § 121.103(h)(4). Instead, area offices must, at a minimum, consider the aspects listed in 13 C.F.R. § 121.103(h)(4) and should analyze factors outside of the seven factors if relevant. See Size Appeal of FDR, Inc., SBA No. SIZ-4781 (2006); Size Appeal of Taylor Consultants, Inc., SBA No. SIZ-4775 (2006). In their analyses, area offices may choose to concentrate on one factor if it is dominant or persuasive. See Size Appeal of Ahuska Int’l Security Corp., SBA No. SIZ-4752 (2005) (Ahuska). Therefore, while it is acceptable to consider the seven factors, the area office must evaluate "all aspects" of the prime contractor/subcontractor relationship to determine if the ostensible subcontractor rule applies.

In Computer Cite, the OHA clarified its standard of review for reviewing the NAICS code established by the Contracting Officer for a procurement:

SBA’s regulations do not require the contracting officer to designate the perfect NAICS code. Rather, 13 C.F.R. § 121.402(b) states the procuring agency contracting officer designates the NAICS code that best describes the principal purpose of the product being acquired in light of the industry description in the NAICS Manual,3 the description in the solicitation, and the relative weight of each element in the solicitation. To overcome a contracting officer’s designation of a NAICS code, Appellant must establish the contracting officer’s NAICS code designation is based on a clear error of fact or law. 13 C.F.R. § 134.314.

In another Computer Cite decision, the SBA dismissed a NAICS appeal based on a pre-solicitation notice as premature.

In White Hawk/Todd, the OHA held that area offices may not review mentor-protégé eligibility issues in 8(a) procurements. In DCS Night Vision JV, the OHA had occasion to clarify White Hawk in a situation where a firm contended that it assumed the SBA had extended its mentor-protégé agreement past its expiration date because the firm had not heard anything to the contrary from the SBA: 

The general rule is that firms submitting an offer on a particular procurement as a joint venture are affiliates with regard to that contract and their size will be aggregated for that procurement. 13 C.F.R. § 121.103(h)(2). However, two firms approved by SBA to be a mentor and protégé may form a joint venture for any Federal Government procurement. 13 C.F.R. § 121.103(h)(3)(iii) and their joint venture is exempt from the normal rules of affiliation. 13 C.F.R. § 121.103(b)(6), (h)(3)(iii) and see also 13 C.F.R. § 124.520. The exemption continues as long as the protégé concern qualifies as small for the size standard applicable to the contract. 13 C.F.R. § 121.103(h)(3)(iii). The assistance which a mentor extends to its protégé under an approved joint venture agreement cannot be relied upon to make a finding of affiliation. 13 C.F.R. §§ 121.103(b)(6) & 124.520(d)(4).

The exception created by 13 C.F.R. § 121.103(h)(3)(iii) presupposes the existence of a mentor-protégé agreement approved by the SBA. Under 13 C.F.R. § 121.404(a), the mentor-protégé agreement must be approved at the time the offeror submits its offer, including price. Size Appeal of Medical and Occupational Services Alliance, SBA No. SIZ-4989 (2008) (MOSA).

Appellant’s approved Mentor-Protégé Agreement expired on November 15, 2007 (Fact 10). It is undisputed, that for whatever reason, SBA had not renewed Appellant’s Mentor-Protégé Agreement as of November 26, 2007, the date Appellant submitted its initial offer, including price (Facts 2 and 11). Accordingly, Appellant was not eligible for the exception to affiliation detailed in 13 C.F.R. § 121.103(h)(3)(iii).

In The Management Consulting Group, the OHA criticized (but could do nothing about) several SBA practices for determining whether individuals are economically disadvantaged: "Although SBA's current practice of determining income is the law, the practice results in unintended inequities because the SBA fails to (1) consider inflation, (2) distinguish between initial 8(a) eligibility income thresholds and continuing eligibility income thresholds to account for business growth (as is done with net worth determinations, 13 C.F.R. 124.104(c)(2)), (3) consider deductible expenses, such as medical expenses, and instead considers adjusted gross income, without exception, (4) evaluate geographical cost of living differences in assessing the value of income, and (5) treat each business similarly irrespective of its business organizational form."

In Novalar Pharmaceuticals, the OHA found affiliation among a large group of companies using its single-largest minority shareholder rule and its multiple-largest minority shareholder rule.

The "ostensible subcontractor" rule provides that when a subcontractor is actually performing the primary and vital requirements of the contract, or the prime contractor is unusually reliant upon the subcontractor, the two firms are found to be engaged in joint venture, and thus affiliated. 13 C.F.R. § 121.103(h)(4). All aspects of the relationship between the two concerns are considered, including the terms of the proposal (such as contract management, technical responsibilities, and percentage of subcontracted work, agreements between the concerns (such as teaming agreements, bonding or financial assistance) and whether the subcontractor is the incumbent and is now ineligible. See, e.g., Public Communications Services, Inc., in which the SBA found that the small amount of subcontract work to be performed by a large business did not run afoul of the rule. In TCE Inc., the SBA OHA found that the Area Office had erred in several respects in finding a violation of the ostensible subcontractor rule, so the decision is an instructive example of how the OHA will analyze the issue.

Genome-Communications lacked standing to challenge the NAICS code on an unrestricted procurement, the OHA reasoning in part as follows: "This Office has consistently held that a small business lacks standing to appeal the NAICS code classification of an unrestricted solicitation unless the firm can demonstrate that it has been adversely affected. NAICS Appeal of Integrated Laboratory Systems, Inc., SBA No. NAICS-4733, at 2 (2005). The size standard here does not affect Appellant's eligibility to participate in the contract process, nor does it appear to affect award."


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