Mission Critical Solutions v. United States

91 Fed. Cl. 386, 2010 WL 785564
CourtUnited States Court of Federal Claims
DecidedMarch 2, 2010
DocketNo. 09-864 C
StatusPublished
Cited by11 cases

This text of 91 Fed. Cl. 386 (Mission Critical Solutions 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
Mission Critical Solutions v. United States, 91 Fed. Cl. 386, 2010 WL 785564 (uscfc 2010).

Opinion

OPINION

HEWITT, Chief Judge.

Before the court are Plaintiff Mission Critical Solutions’ Motion for Judgment on the Administrative Record and Memorandum in Support of Mission Critical Solutions’ Motion for Judgment on the Administrative Record (plaintiff’s Motion or Pl.’s Mot.), Defendant’s Response and Cross-Motion for Judgment Upon the Administrative Record (defendant’s Response or Def.’s Resp.), Plaintiff’s Reply to Defendant’s Cross-Motion for Judgment on the Administrative Record (Pl.’s Reply), and Defendant’s Reply to Plaintiff’s Response to Cross-Motion for Judgment Upon the Administrative Record (Def.’s Reply). This case presents what is primarily a legal, rather than a factual, question: whether statutory language provides for the prioritization of the Historically Underutilized Business Zone (HUBZone) Program over the 8(a) Business Development Program (and over the Service-Disabled Veteran-Owned (SDVO) Business Concern Program, although not at issue in this case)2 or provides [390]*390for parity between the programs. Factual background from the Administrative Record (AR) and the parties’ filings is provided as context for the legal dispute in this case. For the following reasons, the court SUSTAINS the protest.

I. Background

A. Facts and Circumstances Surrounding the Award at Issue3

Plaintiff Mission Critical Solutions (MCS), an entity which is both an 8(a) program participant and a qualified Historically Underutilized Business Zone (HUBZone) small business, is the incumbent contractor providing Information Technology (IT) support services for the Office of the Judge Advocate General, United States Department of the Army (Army)-the requirement at issue in this case. Pl.’s Mot. 1, 2; AR 83. Prior to January 2008, a large business, IBM, had provided the IT support services. AR 83. In December 2007 the Army requested an acceptance letter from the Small Business Administration (SBA) approving the nomination of MCS as the service provider. AR 85. The Army had determined that the requirement for IT support services was appropriate for set-aside under the SBA’s 8(a) program and, with the SBA’s concurrence, intended to issue a sole-source contract to MCS. AR SO-SO. The SBA accepted the requirement into the 8(a) program and authorized the Army to negotiate directly with MCS. AR 87. The Army awarded the one-year contract, Contract No. W91WAW-08-C-0035, for just under $3.5 million to MCS on January 31, 2008. Compl. ¶ 8; AR 83.

The Army decided that the follow-on contract for the IT support services would dielude a base year and two option years, increasing the anticipated value of the contract to approximately $10.5 million. See AR 10, 83. Because the contract value was in excess of the $3.5 million ceiling for sole-source awards provided in Federal Acquisition Regulation (FAR) § 19.805-l(a)(2), the Army determined that the contract could no longer be awarded to MCS, the incumbent 8(a) program contractor, on a sole-source basis. AR 83. FAR § 19.805-1 states:

(a) Except [“[wjhere an acquisition exceeds the competitive threshold” and “(1) [tjhere is not a reasonable expectation that at least two eligible and responsible 8(a) firms will submit offers at a fair market price; or (2) SBA accepts the requirement on behalf of a concern owned by an Indian tribe or an Alaska Native Corporation”], an acquisition offered to the SBA under the 8(a) Program shall be awarded on the basis of competition limited to eligible 8(a) firms if—
(1) There is a reasonable expectation that at least two eligible and responsible 8(a) firms will submit offers and that award can be made at a fair market price; and
(2) The anticipated total value of the contract, including options, will exceed $5.5 million for acquisitions assigned manufacturing North American Industry Classification System (NAICS) codes and $3.5 million for all other acquisitions.

48 C.F.R. § 19.805-1 (2009). On December 17, 2008, the Army requested that the SBA issue an acceptance letter approving the nomination of Copper River Information Technology, LLC (Copper River), an Alaska Native Corporation, as the IT support services provider. AR 136-37. The Army had [391]*391determined that the requirement was appropriate for set-aside under the SBA’s 8(a) program and, with the SBA’s concurrence, intended to issue a sole-source contract to Copper River. Id. The SBA accepted the requirement on behalf of Copper River on December 23, 2008, AR 139, and the Army awarded the sole-source contract to Copper River on January 13, 2009, AR 141, 210.

MCS filed a protest with the Government Accountability Office (GAO) on January 28, 2009. AR 1-3. MCS argued that the Army should not have awarded the contract to Copper River on a sole-source basis, thereby depriving MCS of an opportunity to compete for the contract. Id. As both an 8(a) program participant and a qualified HUBZone small business, MCS argued that the Army should have competed the requirement among HUBZone small businesses under the HUBZone statute. AR 1-3, 26-28. At GAO’s request, the SBA responded to the issue raised in the protest. AR 209. The Army filed two motions to dismiss the protest, both of which GAO denied. See AR 4, 35, 51, 69. GAO sustained MCS’s protest on May 4, 2009, AR 252-59, and denied the SBA’s request for reconsideration on July 6, 2009, AR 304-11.

On July 10, 2009, the Office of Management and Budget issued a memorandum directing executive branch agencies to disregard GAO’s rulings in Mission Critical Solutions, Comp. Gen. B-401057, 2009 CPD ¶ 93, 2009 WL 1231855 (May 4, 2009), and International Program Group, Inc., Comp. Gen. B-400278, B-400308, 2008 CPD ¶ 172, 2008 WL 4351134 (Sept. 19, 2008), pending legal review by the executive branch. AR 312-13. On August 21, 2009, the Office of Legal Counsel of the United States Department of Justice (OLC) issued a memorandum opinion (OLC Opinion) addressing the issues raised in the MCS protest. AR 314-27. The OLC Opinion disagreed with GAO’s analysis, concluded that the SBA’s interpretation is a permissible construction of the relevant statutes, and stated that the OLC Opinion is-and GAO’s decisions are not-binding on the executive branch. AR 315, 327. On September 28, 2009, the Army informed GAO that, as a result of the OLC Opinion, the SBA had decided not to release the IT support services requirement from the 8(a) program4 and the Army would not be implementing GAO’s recommendations. AR 349-50.

On October 9, 2009, MCS requested a recommendation from GAO that the Army pay MCS the costs of pursuing its protest before GAO. AR 328-29. The Army notified GAO that it did not intend to reimburse MCS for its costs because it believed the OLC Opinion prevented it from doing so. AR 330-32. On November 19, 2009, GAO dismissed MCS’s request as “academic” in light of the Army’s statement. AR 353. MCS filed a second protest of the same contract award on November 25, 2009, AR 354-59, which the GAO [392]*392also dismissed as “academic” on December 7, 2009, AR 412-13.

MCS filed its notice of intent to protest in this court on December 11, 2009, and filed its Complaint on December 15, 2009. Along with its Complaint, MCS filed a Motion for Preliminary Injunction, Docket Number (Dkt.

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Cite This Page — Counsel Stack

Bluebook (online)
91 Fed. Cl. 386, 2010 WL 785564, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mission-critical-solutions-v-united-states-uscfc-2010.