Knowledge Connections, Inc. v. United States

79 Fed. Cl. 750, 2007 U.S. Claims LEXIS 398, 2007 WL 4545276
United States Court of Federal Claims·Decided December 12, 2007·No. No. 06-786C·Published·Cited by 23 cases

Opinion

OPINION AND ORDER1

LETTOW, Judge.

Knowledge Connections, Inc. (“KCI”) filed suit in this court challenging a procurement structured by the General Services Administration (“GSA”) as a Veterans Technology Services Government-Wide Acquisition Contract (‘VETS GWAC”) under an “executive agent” designation from the Office of Management and Budget (“OMB”). KCI initially focused on three alleged errors by GSA, two of which were rejected by this court in a decision issued on March 28, 2007. See Knowledge Connections, Inc. v. United States, 76 Fed.Cl. 6, 7-8 (2007). At that time, the record was insufficient to address definitively KCI’s third allegation, that GSA employed criteria for evaluating past experience based on a large number of work-scope elements coupled with three tiers of monetary values of previous contracts, in effect arbitrarily excluding from consideration KCI and others who did not have a broad range of prior work. Id. at 19-21. Arguably, GSA’s criteria were inconsistent with the legal framework for the solicitation. As a result, the court remanded to GSA for reconsideration of the claims of “KCI and others who [had] demonstrated satisfactory past performances in some work-scope elements at some tiers.” Id. at 21. GSA issued its remand determination on July 25, 2007, explaining and adhering to its structure and framework for the procurement and failing to accord KCI any relief, and KCI thereafter renewed its objections to GSA’s criteria. The parties have submitted cross-motions for judgment on the administrative record pursuant to RCFC 52.1(b), and a hearing was held on November 7, 2007.

BACKGROUND2

A. Statutory and Executive Predicates

1. The 1999 and 2003 Acts and Executive Order 13360.

In 1999, Section 15(g)(1) of the Small Business Act, 15 U.S.C. § 644(g)(1), was amended [752]*752by Congress to require the President to establish a “[g]overnment-wide goal for participation by small business concerns owned and controlled by service-disabled veterans ... at not less than 3 percent of the total value of all prime contract and subcontract awards for each fiscal year.” See Veterans Entrepreneurship and Small Business Development Act of 1999 (the “1999 Act”), Pub.L. No. 106-50, § 502(a)(2), 113 Stat. 233, 247 (codified at 15 U.S.C. § 644(g)(1)).3 This goal for contractual awards to service-disabled, veteran-owned small businesses (“SDVOSBs”) is implemented through non-mandatory agency programs.4 The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (“Councils”) responded to public comments on proposed amendments to the Federal Acquisition Regulation (“FAR”) pursuant to the 1999 Act and specifically rejected a request that the FAR refer to the three percent goal. See Federal Acquisition Regulation; Veterans Entrepreneurship and Small Business Development Act of 1999, 66 Fed.Reg. 53, 492 (Oct. 22, 2001) (“[Sjpecifying the 3 percent service-disabled veteran-owned small business goals in the FAR is inappropriate in that only the goal negotiated with SBA [“Small Business Administration”] is relevant to [each] agen[753]*753cy.”).5

The Small Business Act was farther amended in 2003, when Section 36 was added by Congress to give federal agency contracting officers the discretion to use sole-source contracts and contracts awarded on the basis of restricted competition to SDVOSBs. See Veterans Benefits Act of 2003 (“2003 Act”), Pub.L. No. 108-183, § 308, 117 Stat. 2651, 2662 (codified at 15 U.S.C. § 657f).6 Thereafter, the Councils issued a final rule amending the FAR to include regulations for the sole-source and set-aside provisions of the 2003 Act, but in doing so rejected a public comment that requested altering the language from “may set[-]aside” to “shall set-aside.” See Federal Acquisition Regulation; Procurement Program for Service-Disabled Veteran-Owned Small Business Concerns, 70 Fed.Reg. 14,950, 14,953 (Mar. 23, 2005); 48 C.F.R. § 19.1405(a). In rejecting the proposed change, the Councils explained that by using the words “may award,” “[t]he statute established a discretionary, not mandatory, set-aside authority for SDVOSBs,” 70 Fed. Reg. at 14,953; see 15 U.S.C. §§ 657f(a) (“contracting officer may award a sole-source contract”), 657f(b) (“contracting officer may award contracts on the basis of competition restricted to small businesses owned and controlled by service-disabled veterans”); 48 C.F.R. §§ 19.1405(a) (“may set-aside acquisitions”), 19.1406(a) (“may award contracts”).

President Bush issued Executive Order 13360 on October 20, 2004, requiring agencies to “more effectively implement section[s] 15(g) of the Small Business Act (15 U.S.C. § 644(g)[(l)]) ... and section 36 of that Act (15 U.S.C. § 657f).” 69 Fed.Reg. 62,549 (Oct. 26, 2004). Agency heads were directed by the Executive Order to “develop a strategy to implement [the statutory provisions],” and the Administrator of GSA was specifically directed to, consistent with legal and financial constraints, “establish a Government-[W]ide Acquisition Contract reserved for participation by service-disabled veteran businesses” and “assist service-disabled veteran businesses to be included in Federal Supply Schedules.” Id. at 62,549-50.7

In February 2005, GSA sent OMB the Veterans Technology Service [VETS] business case, a proposal to establish the VETS GWAC. See GSA Determination Pursuant to Remand Order, July 25, 2007 (“Remand De[754]*754termination”) at 10;8 AR 16-50 (GSA, VETS (Veterans Technology Services) Business Case For a Service-Disabled Veteran-Owned Small Business (SDVOSB) Government-Wide Acquisition Contract (GWAC) (Feb. 3, 2005)) (“Business Case”). GSA described the VETS GWAC as “a streamlined acquisition vehicle” through which GSA would “offer a pre-qualified group of SDVOSB information technology [“IT”] firms the opportunity to compete for government IT services orders from [government agencies].” AR 18 (Business Case). GSA stated that “[evaluation criteria [would], at a minimum, focus on technical expertise, successful past performance and price.” AR 21 (Business Case).

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Knowledge Connections, Inc. v. United States, 79 Fed. Cl. 750, 2007 U.S. Claims LEXIS 398, 2007 WL 4545276 (uscfc 2007).

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