LB & B Associates Inc. v. United States

68 Fed. Cl. 765, 2005 U.S. Claims LEXIS 368, 2005 WL 3446264
CourtUnited States Court of Federal Claims
DecidedDecember 8, 2005
DocketNo. 05-1066L
StatusPublished
Cited by16 cases

This text of 68 Fed. Cl. 765 (LB & B Associates 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
LB & B Associates Inc. v. United States, 68 Fed. Cl. 765, 2005 U.S. Claims LEXIS 368, 2005 WL 3446264 (uscfc 2005).

Opinion

OPINION

FIRESTONE, Judge.

The present post-award bid protest was filed under 28 U.S.C. § 1491(b)(1) (2000). At issue is a Request for Proposal (“RFP”) for a small business set-aside task order (“task order”) to provide maintenance of flight' simulation equipment to the United States Air Force (“Air Force”). The RFP was issued pursuant to a multi-award Indefinite Delivery/Indefinite Quantity (“ID/IQ”) contract previously awarded by the Air Force in 2001. The underlying ID/IQ contract, known as Training Systems Acquisition II (“TSA II contract”), authorized the Air Force to issue task orders for Air Force simulation training products and services. The plaintiff, LB & B Associates Inc. (“LB & B”), was among the five small businesses and six large businesses that were selected under the 15-year TSA II contract. At the time it submitted its offer on the TSA II contract, LB & B certified that it was a small business under North American Industrial Classification System (“NAICS”) code 336413, which is 1,000 employees. It is not disputed that LB & B is no longer a small business under the applicable NAICS code. Nonetheless, in submitting its proposal for the subject small business set-aside RFP, LB & B relied upon the size certification it had made in response to the TSA II contract in 2001. The Air Force determined that LB & B’s proposal for the subject task order represented “best value.” However, prior to making an award, the Air Force filed a protest with the Small Business Administration’s (“SBA”) Area 2 Office of Government Contracting (“Area Office”) to determine whether LB & B still qualified as a small business for purposes of the task order. The Area Office ruled in favor of LB & B and determined that LB & B could rely on its earlier certification. The Air Force appealed the Area Office decision to the SBA Office of Hearings and Appeals (“OHA”), which held on September 28, 2005 that the Air Force could request LB & B to re-certify and therefore LB & B’s size could be determined as of the offer date specified in the task order RFP. As a consequence, LB & B was no longer eligible to receive the task order.

LB & B alleges that the OHA decision is inconsistent with SBA regulations and binding precedent and is thus arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law. The defendant, the United States (“government”), and the intervenor, Sytronics, Inc. (“Sytronics”), have moved to dismiss LB & B’s protest for lack of jurisdiction pursuant to Rule 12(b)(1) of the United States Court of Federal Claims (“RCFC”). In the alternative, the government and Sytronics argue that the SBA decision is rational and legally supported and must be upheld.

For the reasons that follow, the court holds that it has jurisdiction. On the merits, LB & B’s protest is DENIED.

BACKGROUND

I. Background Facts

On January 29, 2001, the Air Force issued an RFP for a multi-award ID/IQ contract to be awarded to a mix of large and small businesses to provide flight simulation training products and services. This multi-award ID/IQ contract was identified as the TSA II contract. Compl., Ex. 1. As described in the executive summary accompanying the TSA II RFP, once the basic ID/IQ contracts had been awarded, “individual task orders/delivery orders” would be competed among the awardees, unless small business set-asides [767]*767applied. The executive summary also provided: “The basic structure of the overall contract will allow individual task/delivery orders to buy items or services [through a variety of contract types].” The TSA II contract contemplated a 15-year concurrent ordering and performance period. The TSA II contract was also partially set-aside for small businesses, with an applicable NAICS code 336413. Compl. Ex. 2.

On April 21, 2001, LB & B submitted an initial offer, including its certification of small business status, in response to the TSA II RFP. The Air Force made awards under TSA II to six large businesses and five small businesses, including LB & B.

LB & B was awarded two task orders under the TSA II ID/IQ contract that were set-aside for small businesses. LB & B was not asked to re-certify its size status in the RFPs for either of the two task orders.

On April 7, 2005, the Air Force issued the subject RFP for the RC-135 task order under the TSA II contract. As noted, the task order was for the maintenance of flight simulation equipment that the Air Force uses to train pilots. The task order was for services at Offut Air Base, Nebraska. The subject task order was set-aside for a small business under NAICS code 336413. In the proposal preparation instructions to the RC-135 task order RFP, the Air Force also required that offerors “[r]e-eertify as to small business size under NAICS CODE 336413.” RFP Section L, 6.1(e). The proposal preparation instructions described the task order as follows: “The resulting contract will be Fixed Price, IDIQ____Period of performance is October 2005 through September 2015. The contract will consist of the basic year with nine (9) one year options.” RFP Section L, 1.2.

Three approved suppliers, LB & B, KAR-TA, and Sytronics, submitted proposals in response to the task order RFP. KARTA and Sytronics were able to certify that, as of the time of the task order RFP, they were small businesses. LB & B referred to its 2001 size certification and did not re-certify its size at the time of its May 13, 2005 offer.

11. Proceedings Before the SBA Area Office and Office of Hearings and Appeals

After receipt of the offers, the Air Force filed a protest with the SBA Area Office because the Air Force had credible information that LB & B was no longer small. The Air Force asked the Area Office to determine whether LB & B qualified as a small business for purposes of the task order. On June 28, 2005, the Area Office issued a size determination, stating that LB & B was a small business because it was small when it submitted its offer for the ID/IQ contract in April 2001. In support of its decision, the Area Office relied on the SBA’s long-standing policy, now codified in 13 C.F.R. § 121.404(g) (2005), that a concern that qualifies as a small business at the time it receives a contract is considered a small business for the life of the contract. The Air Force appealed that determination to the SBA OHA on July 13, 2005. The OHA vacated the Area Office’s decision and dismissed the Air Force’s appeal as premature pursuant to 13 C.F.R. § 121.1004(e) (2000), because the Air Force had not yet selected the apparently successful offeror. On July 28, 2005, the Air Force announced that LB & B was the apparent successful offeror subject to the challenge of its small business status. The Air Force refiled its appeal with the Area Office on July 29, 2005. On August 18, 2005, the Area Office once again issued a size determination, which was based on LB & B’s certification of its size in 2001. The Area Office rejected the Air Force’s contention that the task order should be treated as a new contract and that a new certification was therefore required. The Air Force appealed the Area Office’s size determination the following day to the OHA.

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68 Fed. Cl. 765, 2005 U.S. Claims LEXIS 368, 2005 WL 3446264, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lb-b-associates-inc-v-united-states-uscfc-2005.