Ingenesis, Inc. v. United States

104 Fed. Cl. 43, 2012 WL 991943
CourtUnited States Court of Federal Claims
DecidedMarch 23, 2012
DocketNo. 11-754C
StatusPublished
Cited by10 cases

This text of 104 Fed. Cl. 43 (Ingenesis, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ingenesis, Inc. v. United States, 104 Fed. Cl. 43, 2012 WL 991943 (uscfc 2012).

Opinion

OPINION

BRUGGINK, Judge.

This is a pre-award protest of a solicitation for physician services by the United States Army.2 Because of the small business size limitations placed on this contract, plaintiff, InGenesis, Inc., is precluded from qualifying for the award. Currently before the court are the parties’ cross-motions for judgment on the administrative record and plaintiffs motion for leave to file the declaration of its corporate president. The motions are fully briefed, and we heard oral argument on March 7, 2012. As we announced at the conclusion of oral argument, and for the reasons explained below, we deny plaintiffs motion to file the declaration and its motion for judgment on the administrative record, and we grant defendant’s cross-motion for judgment on the administrative record.

[45]*45BACKGROUND3

I. The solicitation

On September 15, 2011, the U.S. Army Medical Command, Center for Health Contracting, issued solicitation W81K04-11-R-0018, seeking offers for multiple indefinite delivery/indefinite quantity (“IDIQ”) contracts for physician services. The solicitation anticipated a maximum of five contracts being awarded and contemplated a five-year performance period. The minimum guaranteed contract amount for each contract was $1,000 with an estimated maximum for all the contracts of nearly $400 million over five years. The solicitation indicated that the procurement had been set aside for small businesses.4

The performance work statement noted that the contract was to support military treatment facilities (e.g., military hospitals) within the U.S. Army Medical Command as well as other Department of Defense agencies. The contractor was to provide “personal and or non-personal Physician Services, which will contribute to a stable workforce tasked with providing quality health care services to a diverse beneficiary population.” AR 208. The solicitation indicated that the contractor would provide medical doctors or doctors of osteopathy from a wide-range of specialties, including specialties from a non-exhaustive list provided in the solicitation.5 It is plain from the performance work statement that the successful bidder would be furnishing physicians who would use existing Army medical facilities.

Because of the small business set aside, the Small Business Administration regulations contained in 13 C.F.R. part 121, sub-part A apply. Under these regulations, the contracting officer is to choose the North American Industry Classification System (“NAICS”) code that best describes the principal purpose of the product or services being acquired. 13 C.F.R. § 121.402 (2011). NA-ICS codes are promulgated by the Office of Management and Budget and are used to classify an economic activity or industry for many purposes. Using the already-established NAICS codes, the Small Business Administration then imposes its own limitations on size and revenue. 13 C.F.R. § 121.201. Thus, when the contracting officer designates a NAICS code for a small business set aside solicitation, the effect is both to target the type of institutions solicited and simultaneously to impose size and revenue limitations on those bidders.

The contracting officer selected NAICS code 621111 for the solicitation. The revenue limit associated with that code caps awards to firms with no more than $10 million in annual receipts. NAICS code 621111 provides that:

This U.S. industry comprises establishments of health practitioners having the degree of M.D. (Doctor of Medicine) or D.O. (Doctor of Osteopathy) primarily engaged in the independent practice of general or specialized medicine (except psychiatry or psychoanalysis) or surgery. These practitioners operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or HMO medical centers.

NAICS 621111, 2007 WL 6902774 (NAICS).

Prior to issuing the solicitation, the contracting officer completed a “Findings” report to explain his NAICS code selection. The contracting officer used this report to analyze applicable NAICS codes for three sets of IDIQs, including nursing, physicians, and ancillary services. In that report, he considered four NAICS codes: (1) 561320, Temporary Help Services; (2) 621399, Office of All Other Miscellaneous Health Practition[46]*46ers; (3) 621111, Offices of Physicians (except mental health specialists); and (4) 622110, General Medical and Surgical Hospitals. After noting that code 621111 contemplates practitioners who practice in general or specialized medicine and operate in either their own offices or facilities, such as hospitals, the contracting officer noted, “This NAICS code is considered appropriate for the Physician crafts contemplated here.” AR 548.

The contracting officer also considered code 622110, the code which plaintiff asserts should have been used. NAICS code 622110 provides:

This industry comprises establishments known and licensed as general medical and surgical hospitals primarily engaged in providing diagnostic and medical treatment (both surgical and nonsurgical) to inpatients with any of a wide variety of medical conditions. These establishments maintain inpatient beds and provide patients with food services that meet their nutritional requirements. These hospitals have an organized staff of physicians and other medical staff to provide patient care services. These establishments usually provide other services, such as outpatient services, anatomical pathology services, diagnostic X-ray services, clinical laboratory services, operating room services for a variety of procedures, and pharmacy services.

NAICS 622110, 2007 WL 6902817 (NAICS).

The contracting officer noted that code 622110 contemplates, inter alia, “establishments known and licensed as general medical and surgical hospitals .... establishments [that] maintain inpatient beds ... provide food service ... provide X-ray services, [and] clinical laboratory services.” AR 548. He noted that this code, although not selected for physicians, was appropriate for “Ancillary crafts,” for which the Army was also seeking bids at that time.6

In order to give himself some assurance that there were a sufficient number of small businesses capable of and interested in bidding on the various medical services being sought, the contracting officer conducted a widely-advertised “Industry Day.” Potential bidders were invited and briefed on what the Army was planning. Attendees were notified of the codes being contemplated and the respective revenue limitations: Physician services-621111 ($10,000,000); Nursing services-621399 ($7,000,000); and Ancillary services-622110 ($34,500,000).

The physician services code, 621111, is the same code currently being used under existing contracts for services which the parties agree amounts to the same work presently being solicited. Plaintiff is one of the incumbent contractors for that work, and, at the time the contract was previously awarded, it was small enough not to be barred by the revenue limitation.

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Cite This Page — Counsel Stack

Bluebook (online)
104 Fed. Cl. 43, 2012 WL 991943, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ingenesis-inc-v-united-states-uscfc-2012.