North Wind Site Services, LLC v. United States

• Court: United States Court of Federal Claims
• Decided: April 26, 2019
• Docket: 19-148
• Status: Published

Opinion

In the United States Court of Federal Claims No. 19-148C (Filed: April 26, 2019) *Opinion originally filed under seal on April 22, 2019

) NORTH WIND SITE SERVICES, LLC, ) ) Bid Protest; Post-award; Judgment Plaintiff, ) on the Administrative Record; ) Motion to Complete the v. ) Administrative Record; Motion to ) Dismiss for Lack of Subject Matter THE UNITED STATES, ) Jurisdiction; RCFC 12(b)(1); SBA; ) Defendant, ) 8(a) Contract. ) and, ) ) KŪPONO GOVERNMENT SERVICES, ) LLC, ) ) Defendant-Intervenor. ) ) )

Matthew T. Schoonover, Lawrence, KS, for plaintiff. Steven J. Koprince, Ian P. Patterson, and Nicole D. Pottroff, Lawrence, KS, of counsel.

Richard Schroeder, Civil Division, United States Department of Justice, Washington, D.C., with whom were Joseph H. Hunt, Assistant Attorney General, Robert E. Kirshman, Jr., Director, and Patricia M. McCarthy, Assistant Director, for defendant.

Damien C. Specht, McLean, VA., for defendant-intervenor. James A. Tucker and R. Locke Bell, McLean, VA., of counsel. OPINION

FIRESTONE, Senior Judge

This post-award bid protest has been brought by North Wind Site Services, LLC,

(“North Wind”) against the United States Department of Energy (“DOE”) in connection with an 8(a) small business set-aside contract to supply critical training, information

technology, site and facility management, and custodial services at the DOE’s

Government-Owned Contractor-Operated National Training Center and at DOE

Headquarters. After the award to Kūpono Government Services, LLC (“Kūpono”) on

March 7, 2018, the Small Business Association (“SBA”) determined that Kūpono did not

qualify as a small business for purposes of the procurement. Kūpono’s disqualification is

not at issue in this bid protest. At issue is whether DOE violated SBA regulation, 13

C.F.R. § 121.1009(g)(2),1 by not terminating Kūpono’s contract after the Office of

Hearings and Appeals (“OHA”) affirmed the SBA Area Office’s size determination

finding that Kūpono was ineligible for the contract.2 North Wind is also challenging the

task orders issued by DOE while awaiting the OHA determination. Amend. Compl. (ECF

No. 16) at ¶¶ 64-67, 71-75. North Wind claims that the contracting officer should have

terminated the contract and that North Wind should have been selected as the offeror with

the second highest rating to perform the remainder of the contract. Id. at ¶ 88.3

1 13 C.F.R. § 121.1009(g)(2) provides “[r]esults of an SBA Size determination. . . . (2) A contracting officer shall not award a contract to a protested concern that the Area Office has determined is not an eligible small business for the procurement in question. (i) If a contracting officer receives such a determination after contract award, and no OHA appeal has been field, the contracting officer shall terminate the award. (ii) If a timely OHA appeal is filed after contract award, the contracting officer must consider whether performance can be suspended until an appellate decision is rendered. (iii) If OHA affirms the size determination finding the protested concern ineligible, the contracting officer shall either terminate the contract or not exercise the next option.” 2 Kupono intervened without objection on January 30, 2019. (ECF No. 10). 3 North Wind conceded during oral argument that DOE does not have to award the contract to North Wind but can also elect to re-procure the services. Oral Arg. 13:03:29-13:03:58.

2 Pending before the court are the parties’ cross-motions for judgment on the

administrative record, (ECF Nos. 31, 34, 35), Kūpono’s motion to complete the

administrative record with a signed copy of Kūpono’s contract. Kūpono’s Reply, Ex. A

(ECF No. 38), and the government’s and Kūpono’s motion to dismiss North Wind’s

claims regarding issuance of the task order for lack of subject matter jurisdiction under

Rule 12(b)(1) of the Rules of the United States Court of Federal Claims (“RCFC”) (ECF

Nos. 34, 35). Both the government and Kūpono argue that North Wind’s objection to

issuance of the task order is barred under 41 U.S.C. § 4106,4 which bars this court’s

review of task orders, except in limited circumstances which the government and Kūpono

argue are not relevant to this case.

For the reasons that follow, the court finds that DOE was not arbitrary and

capricious and acted in accordance with the law when it did not terminate Kūpono’s

underlying contract after the OHA decision, and therefore, the government’s and

Kūpono’s motions for judgment on the administrative record are GRANTED. The court

also finds that it does not have jurisdiction over North Wind’s challenge to the task orders

issued to Kūpono, and thus, the government’s and Kūpono’s motions to dismiss are also

GRANTED. In addition, Kūpono’s motion to complete the administrative record is

GRANTED.

4 41 U.S.C. § 4106(f)(1) provides that “[a] protest is not authorized in connection with the issuance or proposed issuance of a task or delivery order except for (A) a protest on the ground that the order increases the scope, period, or maximum value of the contract under which the order is issued; or (B) a protest of an order valued in excess of $10,000,000.” 3 I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY A. The Solicitation And Contract Award On June 23, 2017, DOE issued the request for proposals No. DE-SOL-0010843

(“RFP”) at issue in this action. Administrative Record (“AR”) 63 (cover letter for RFP).

The RFP sought proposals to support DOE’s National Training Center (“NTC”) in

connection with DOE “with a full range of services” including “developing, providing

and supporting safety and security classroom and on-line training at the NTC” and “at

DOE Headquarters in Washington, D.C., and maintaining the facilities and grounds.”

See AR 63.

DOE explained that the acquisition was “a total set aside for SBA 8(a) program

participants under North American Industry Classification System (‘NAICS’) code

611430, Professional and Management Development Training with a size standard of

$11.0 million.” AR 63.

DOE contemplated that it would issue an “Indefinite Delivery Indefinite Quantity

(IDIQ) contract . . . against which” it would later issue “Firm Fixed Price and Time and

Materials Task Orders.” See AR 63. The contract would “be awarded as a five year

IDIQ” (contract or underlying contract or master IDIQ). AR 68

(Solicitation/Contract/Order for Commercial Items) (block 20, schedule of

supplies/services). The resulting IDIQ was to “consist of a sixty month ordering period.”

AR 63.5

5 The acquisition plan also stated “[t]he objective of this acquisition is to issue a new contract award . . . as a five year IDIQ; the completion date of the award will be December 13, 2022.” 4 The RFP stated that “for pricing purposes” the performance period divided the 60

month period into 12-month “base periods” for all CLINS, except for CLIN 4000, which

had a 10-month “base period.” AR 275. In response to questions from offerors, the DOE

referred to the entire period of performance as “February 1, 2018-January 31, 2023[.]”

AR 296-97 (headings).

The RFP included various clauses from the Federal Acquisition Regulation

(“FAR”), including FAR 52.217-8, “Option to Extend Services,”6 and FAR 52.217-9,

“Option to Extend the Term of the Contract.” 7 These options expressly permitted DOE to

extend the contract’s duration from 60 months to as many as 66 months. AR 88 (sec.

C3.ax); AR 3420-21 (Kūpono’s contract with the same provisions).8

Specifically, the RFP and Kūpono’s contract, consistent with FAR 52.217-8 state:

The government may require continued performance of any services within the limits and at the rates specified in the contract. These rates may be adjusted only as a result of revisions to prevailing labor rates provided by the Secretary of

6 48 C.F.R. § 52.217-8, “Option to Extend Services” provides “[t]he Government may require continued performance of any services within the limits and at the rates specified in the contract. These rates may be adjusted only as a result of revisions to prevailing labor rates provided by the Secretary of Labor. The option provision may be exercised more than once, but the total extension of performance hereunder shall not exceed 6 months. The Contracting Officer may exercise the option by written notice to the Contractor within ___ [insert the period of time within which the Contracting Officer may exercise the option].” 7 48 C.F.R. § 52.217-9, “Option to Extend the Term of the Contract” provides that “(a) [t]he Government may extend the term of this contract by written notice to the Contractor within __[insert the period of time within which the Contracting Officer may exercise the option]; provided that the Government gives the Contractor a preliminary written notice of its intent to extend at least __ [60 days unless a different number of days is inserted] before the contract expires. The preliminary notice does not commit the Government to an extension. (b) If the government exercises this option, the extended contract shall be considered to include this option clause. (c) The total duration of this contract, including the exercise of any options under this clause, shall not exceed ___ (months)(years).” 8 The solicitation was amended several times. See AR 264, AR 345, AR 381; see also AR 1639 (Source Selection Memorandum, sec. II.B). The amendments are not relevant to this protest. 5 Labor. The option provision may be exercised more than once, but the total extension of performance hereunder shall not exceed 6 months. The Contracting Officer may exercise the option by written notice to the Contractor within thirty (30) days of the contract expiration.

AR 88 (RFP); AR 3420 (contract).

The RFP and Kūpono’s contract, consistent with FAR 52.217-9, also state:

(a) The government may extend the term of this contract by written notice to the Contractor within thirty days provided that the Government gives the Contractor a preliminary written notice of its intent to extend at least thirty days before the contract expires. The preliminary notice does not commit the Government to an extension. (b) If the government exercises this option, the extended contract shall be considered to include this option clause. (c) The total duration of this contract, including the exercise of any options under this clause, shall not exceed sixty-six months. AR 88 (RFP); AR 3421 (contract).

DOE received proposals from five firms, including North Wind, Kūpono, and

Chenega Healthcare Services, LLC (“Chenega”), a sister company of Chenega Support

Services (“CSS”), the incumbent contractor. See AR 1645; AR 3585. On March 7, 2018,

DOE awarded the master IDIQ to Kūpono. See AR 1685. DOE’s notice of the award

stated that the contract’s period of performance would be “a sixty month ordering period

from which task orders” would “be issued” and funding would be “at the task order

level.” Id. That same day, DOE notified the unsuccessful offerors that it had awarded the

contract to Kūpono. AR 1692, 1697, 1706, 1715 (notices of unsuccessful proposal, dated

and indicating transmission to unsuccessful offerors on March 7, 2018). The awarded

contract stated that “[t]he Contractor shall commence performance of this contract in

accordance with the contract terms and conditions on March 15, 2018 and continue

6 through March 14, 2023.” AR 3428; see AR 3401 (“The period of performance consists

of a sixty month ordering period commencing March 15, 2018.”).

B. Procurement- Related Challenges to Kūpono’s Award On March 9, 2018, Chenega filed a SBA size protest with the contracting officer,

asserting that Kūpono had exceeded the solicitation’s size standard. AR 1769. On March

19, 2018, Chenega withdrew that protest. AR 2349. On March 16, 2018, Chenega

protested the Kūpono award to the U.S. Government Accountability Office (“GAO”).

AR 2866. The GAO denied Chenega’s protest on June 4, 2018. AR 3175-76. Chenega

then brought a post-award bid protest in front of this court, and on January 11, 2019 this

court issued a public opinion denying Chenega’s motion for judgment on the

administrative record. See Chenega Healthcare Servs., LLC v. United States, 141 Fed. Cl.

254, 256 (2019).

On March 14, 2018, North Wind filed a separate size protest with the SBA,

alleging among other things that Kūpono was not an eligible small business based on

Kūpono’s affiliation with a large business. AR 2416. On March 19, 2018, North Wind

also filed a protest with GAO, alleging that DOE’s contract award to Kūpono “was the

result of several evaluation flaws[.]” AR 2655. On April 12, 2018, SBA suspended its

consideration of North Wind’s size protest pending a decision on North Wind’s GAO

protest. AR 2711. The SBA requested that the contracting officer notify it when the

GAO process was completed. Id.

On June 18, 2018, North Wind withdrew its GAO protest following outcome-

predictive alternative dispute resolution conducted the previous week, and GAO closed

7 its file on North Wind’s protest the following day. AR 3398; AR 3399. As of June 19,

2018, Chenega’s and North Wind’s GAO protests were no longer pending. See AR 2728.

Chenega did not have a pending size protest but North Wind did. On July 20, 2018, the

SBA’s area office issued a decision on North Wind’s size protest finding that Kūpono’s

annual receipts fell within the size standard for this procurement but that Kūpono was not

small for purposes of this procurement based Kūpono’s affiliation with a large business

joint venture under the SBA’s subcontractor rule. See AR 2727-28, AR 2732-33, AR

2736-37. Kūpono filed an appeal with OHA on August 6, 2018. AR 2856.

On August 6, 2018, the contracting officer issued a memorandum. AR 3585. The

contracting officer wrote “[o]n the afternoon of July 20th, SBA issued its determination

that Kūpono is not a small business for the NAICS code assigned to the NTC

requirement” and that “Kūpono has appealed the determination to [OHA] on August 6,

2018.” AR 3586. The contracting officer considered what to do next. Under the SBA’s

regulations, 13 C.F.R. § 121.1009(g)(2), “(i) [i]f a contracting officer receives [an SBA

Area Office Determination] after contract award, and no OHA appeal has been field, the

contracting officer shall terminate the award.” However, “(ii) [i]f a timely OHA appeal is

filed after contract award, the contracting officer must consider whether performance can

be suspended until an appellate decision is rendered.” Subsection (iii) in that same section

provides, “If OHA affirms the size determination finding the protested concern ineligible,

the contracting officer shall either terminate the contract or not exercise the next option.”

The contracting officer “determined that it was in the best interest of the

Government to proceed with the transition to Kūpono and issue task orders to start

8 performance.” The contracting officer documented his rationale in the August 6, 2018

memorandum. AR 3585-88. On August 6, 2018 the contracting officer decided to allow

Kūpono “to go forward with performance under” the underlying IDIQ contract, but did so

on a limited basis. See AR 3588.

Specifically, the contracting officer stated that DOE will go forward with

performance with Kūpono, but in “consideration of the possibility of the OHA upholding

the size standard decision, DOE will only issue Task Orders with a 2 year period of

performance.” AR 3588. The contracting officer wrote “[a] two year period of

performance will allow DOE enough time to issue a new 8(a) competitive acquisition if

the OHA upholds the SBA decision that Kūpono is not an eligible business for this

award.” AR 3588.

From September 17 through September 19, 2018, while Kūpono’s appeal to OHA

was pending, the contracting officer issued four more task orders for a term of two years

each authorizing Kūpono to perform work under the master IDIQ contract. AR 3626-27;

AR 3663-64; AR 3665-66; AR 3685-86. The task orders’ period of performance ended in

September 2020. AR 3627, 3664, 3666, 3686. On October 23, 2018, OHA denied

Kūpono’s appeal and affirmed the area office’s ineligibility determination. AR 2850,

2864.

On November 16, 2018, DOE issued a contract modification making certain

revisions to the master IDIQ which had the effect of extending underlying contract until

September 2023, but did not change the length of performance for any of the previously

issued task orders. See AR 3720-23; see also AR 3711-14 (memorandum dated Nov. 1,

9 2018) (“The new ordering period is reflective of the start date of the transition period

(August 8, 2018) and ends sixty months from the start date.”).

North Wind filed the protest in this court on January 29, 2019. (ECF No. 1). North

Wind filed its amended complaint on February 1, 2019 (ECF No. 16). Briefing was

completed on April 4, 2019, and the court held oral argument on April 5, 2019.

II. STANDARD OF REVIEW A. Motion For Judgment On The Administrative Record

This court exercises jurisdiction over a post-award bid protest under 28 U.S.C.

§ 1491(b). In a bid protest, the court applies the standards set forth in 5 U.S.C. § 706, and

may set aside an award only if the agency’s action was “‘arbitrary, capricious, an abuse

of discretion, or otherwise not in accordance with law.’” Palladian Partners, Inc. v.

United States, 783 F.3d 1243, 1252 (Fed. Cir. 2015) (quoting Savantage Fin. Servs. v.

United States, 595 F.3d 1282, 1285 (Fed. Cir. 2010)). An agency’s decision is arbitrary

and capricious where the agency “‘entirely failed to consider an important aspect of the

problem, offered an explanation for its decision that runs counter to the evidence before

the agency, or [the decision] is so implausible that it could not be ascribed to a difference

in view or the product of agency expertise.’” Ala. Aircraft Indus., Inc. v. United States,

586 F.3d 1372, 1375 (Fed. Cir. 2009) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm

Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

“This standard is ‘highly deferential.’” Sims v. United States, 125 Fed. Cl. 119,

129-30 (2016), aff’d, 655 F. App’x 826 (Fed. Cir. 2016) (quoting Advanced Data

Concepts, Inc. v. United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000)). “The court’s task

10 is to determine whether ‘(1) the procurement official’s decision lacked a rational basis; or

(2) the procurement procedure involved a violation of regulation or procedure.’”

Palladian Partners, Inc., 783 F.3d at 1252 (quoting Savantage Fin. Servs., 595 F.3d at

1285-86). “When such decisions have a rational basis and are supported by the record,

they will be upheld.” NCL Logistics Co. v. United States, 109 Fed. Cl. 596, 610 (2013)

(quoting Bender Shipbuilding & Repair Co. v. United States, 297 F.3d 1358, 1362 (Fed.

Cir. 2002)). Moreover, the court must “uphold a decision of less than ideal clarity if the

agency’s path may reasonably be discerned.” Bowman Transp., Inc. v. Ark.-Best Freight

Sys., Inc., 419 U.S. 281, 286 (1974) (citation omitted). Furthermore, “‘[i]f the court finds

a reasonable basis for the agency’s action, the court should stay its hand even though it

might, as an original proposition, have reached a different conclusion as to the proper

administration and application of the procurement regulations.’” Honeywell, Inc. v.

United States, 870 F.2d 644, 648 (Fed. Cir. 1989) (quoting M. Steinthal & Co. v.

Seamans, 455 F.2d 1289, 1301 (D.C. Cir. 1971)).

B. Motion To Dismiss Due To Subject Matter Jurisdiction

The standards upon which motions to dismiss for lack of subject matter

jurisdiction can be granted are well-settled. McKuhn v. United States, No. 18-107C, 2018

WL 2126909, at *2 (Fed. Cl. May 9, 2018). The plaintiff must establish the court’s

subject matter jurisdiction by a preponderance of the evidence. Fid. & Guar. Ins.

Underwriters, Inc. v. United States, 805 F.3d 1082, 1087 (Fed. Cir. 2015) (citing Brandt

v. United States, 710 F.3d 1369, 1373 (Fed. Cir. 2013)). “In deciding a motion to dismiss

for lack of subject matter jurisdiction, the court accepts as true all uncontroverted factual

11 allegations in the complaint, and construes them in the light most favorable to the

plaintiff.” Estes Exp. Lines v. United States, 739 F.3d 689, 692 (Fed. Cir. 2014).

C. Motion To Complete The Administrative Record Where a party seeks to add to the record materials that were generated or

considered by the agency during the procurement and decisionmaking process, such a

request is viewed as a request to complete the administrative record. This court’s rules

include a non-exhaustive list of “core documents” relevant to a bid protest. Joint Venture

of Comint Sys. Corp. v. United States, 100 Fed. Cl. 159, 166 (2011); see RCFC Appendix

C ¶ 21-24.9 Among these core documents are correspondence between the agency and the

protester, awardee, or other interested parties relating to the procurement, records of any

discussions, meetings, or telephone conferences between the agency and the protester,

awardee, or other interested parties relating to the procurement, and documents relating to

any stay, suspension, or termination of award or performance pending resolution of the

bid protest. RCFC Appendix C ¶ 22. Documents such as these “presumptively qualify for

inclusion in the Administrative Record.” Dyncorp Int’l LLC v. United States, 113 Fed. Cl.

298, 303 (2013). By contrast, supplementation of the record with non-core documents is

only appropriate when necessary for judicial review—such as where the record raises

serious questions concerning the rationality of the agency action. See Impresa

9 RCFC Appendix C ¶ 21 states “The United States will be required to identify and provide . . . the administrative record in a protest case . . . .” RCFC Appendix C ¶ 22 states “[e]arly production of relevant core documents may expedite final resolution of the case” and provides a list of the “core documents relevant to a protest case[.]” RCFC Appendix C ¶ 24 states “[a]ny additional documents within the administrative record must be produced at such time as may be agreed to by the parties or ordered by the court.” 12 Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1341 (Fed. Cir.

2001).

III. DISCUSSION North Wind brings this protest on two principle grounds. First, North Wind argues

that DOE violated SBA’s rules by failing to terminate the contract awarded to Kūpono

after OHA affirmed the SBA Area Office’s determination that Kūpono was not an

eligible small business for the procurement at issue. Specifically, North Wind argues the

contracting officer violated 13 C.F.R. § 121.1009(g)(2)(iii) which states “[i]f OHA

affirms the size determination finding the protested concern ineligible, the contracting

officer shall either terminate the contract or not exercise the next option.” Second, North

Wind argues that each task order issued under the IDIQ contract should be viewed as a

separate contract and that the contracting officer violated the same regulation by

awarding “a contract” to a party that is not an eligible small business. See 13 C.F.R.

§ 121.1009(g)(2) (“[a] contracting officer shall not award a contract to a protested

concern that the Area Office has determined is not an eligible small business for the

procurement in question.”).

Before proceeding with the merits of North Wind’s protest, the court grants

Kūpono’s motion to complete the administrative record to include a copy of the signed

cover page of the contract awarded to Kūpono and signed by both the contracting officer

and Kūpono on March 7, 2018. Kūpono’s Reply at 5-6. The court finds the contract

signed by Kūpono and the Contracting Officer on March 7, 2019 to be the type of

correspondence between the agency and awardee categorized as a “core document” under

13 RCFC Appendix C ¶ 22 and thus, qualifies for inclusion in the administrative record.

Therefore, the court GRANTS Kūpono’s motion to complete the administrative record.

A. DOE Acted In Accordance With The Law When It Elected Not To Terminate Kūpono’s Contract North Wind argues that DOE was required to terminate Kūpono’s contract after

OHA affirmed that Kūpono is not a small business for the purpose of this procurement

under 13 C.F.R. § 121.1009(g)(2)(iii). The government and Kūpono argue that by

limiting Kūpono’s performance to only two years and agreeing not to issue any further

task orders or to exercise the contract’s options but to instead issue a new procurement,

DOE has complied with the SBA’s rules, as well as the corresponding FAR provision.10

Regarding DOE’s compliance with the SBA’s rules the court finds that because

this IDIQ contract has “options” under Sections C3.ax and C3.ay, and DOE has agreed

not to issue an option to extend services under the contract or the contract term, see AR

3588, DOE has complied with the SBA’s requirements.

The FAR defines an “option” to be “a unilateral right in a contract by which, for a

specified time, the Government may elect to purchase additional supplies or services

called for by the contract, or may elect to extend the term of the contract.” 48 C.F.R.

§ 2.101. The Federal Circuit has made it plain that in construing a contract, “the plain

and unambiguous meaning of a written agreement controls.’” Hercules Inc. v. United

10 Under FAR 19.302(h), after OHA finds a protested concern ineligible for award after the contract has been awarded, “the contracting officer shall not exercise any options or award further task or delivery orders.” 14 States, 292 F.3d 1378, 1380-81 (Fed. Cir. 2002) (quoting Craft Mach. Works, Inc. v.

United States, 925 F.2d 1110, 1113 (Fed. Cir. 1991)).

Here, as quoted above, Kūpono’s contract stated:

The government may require continued performance of any services within the limits and at the rates specified in the contract. These rates may be adjusted only as a result of revisions to prevailing labor rates provided by the Secretary of Labor. The option provision may be exercised more than once, but the total extension of performance hereunder shall not exceed 6 months. The Contracting Officer may exercise the option by written notice to the Contractor within thirty (30) days of the contract expiration.

AR 3420. The contract further stated:

(a) The government may extend the term of this contract by written notice to the Contractor within thirty days provided that the Government gives the Contractor a preliminary written notice of its intent to extend at least thirty days before the contract expires. The preliminary notice does not commit the Government to an extension. (b) If the government exercises this option, the extended contract shall be considered to include this option clause. (c) The total duration of this contract, including the exercise of any options under this clause, shall not exceed sixty-six months.” AR 3421.

In view of the plain language defining an “option” under the FAR, North Wind’s

argument that the aforementioned provisions in the contract are not “options” and

therefore cannot excuse DOE’s failure to terminate Kūpono’s IDIQ contract must be

rejected. North Wind’s contention that the above-quoted language is not evidence of an

“option” because the language allows for only a “short-term continuity of services

extension” is unpersuasive. See North Wind’s Sur-Reply at 3 n.5. North Wind conceded

that it had no legal authority for its position. Oral Arg. 12:20:25-12:20:48. Without some

sound reason to reject the plain terms of the contract, the court finds that the subject

15 contract contains option provisions and that DOE’s agreement not to exercise those

options but instead to reprocure after Kūpono’s task orders end in September 2020

comports with the relevant SBA rule.

Specifically, under section 121.1009(g)(2)(iii) where OHA affirms the ineligibility

of a contractor for a procurement after award, the “the contracting officer shall either

terminate the contract or not exercise the next option.” The plain meaning of the

regulation grants the contracting officer discretion to terminate the contract or not

exercise an option. Here, the record supports the contracting officer’s rational decision to

“only issue Task Orders with a 2 year period of performance” to allow “enough time to

issue a new 8(a) competitive acquisition.” See AR 3588. Therefore, the court finds that

DOE acted in accordance with the law.11

In oral argument, North Wind agreed that its primary complaint is related to

DOE’s aforementioned failure to terminate Kūpono’s contract. Oral Arg. 12:04:16-

12:04:40. Nonetheless, the court will review North Wind’s other objections to DOE’s

actions regarding DOE’s compliance with the SBA’s rules for purposes of completeness.

11 Furthermore, the record shows that DOE acted in compliance with the requirements in FAR 19.302(h). FAR 19.302(h) provides “[i]f the contracting officer has made a written determination in accordance with (g)(1) or (2) of this section, the contract has been awarded, the SBA rulings is received after award, and OHA finds the protested concern to be ineligible for award, the contracting officer shall terminate the contract unless termination is not in the best interests of the Government, in keeping with the circumstances described in the written determination. However the contracting officer shall not exercise any options or award further task or delivery orders.” Here, OHA found Kūpono to be ineligible for award, and the DOE’s August 6, 2019 memorandum demonstrates why it was not in the best interests of the DOE to terminate the contract. The contracting officer further complied with the FAR regulation because DOE will not exercise any options or award further task orders under this contract.

16 First, in its amended complaint, North Wind claimed that DOE violated 13 C.F.R.

§ 121.1009(a)12 by lifting the stay on Kūpono’s contract without a written determination

while a size protest was pending before the SBA. Amend. Compl. at ¶¶ 57-63. This

argument fails because 13 C.F.R. § 121.1009(a) only regulates the award of a contract

while the SBA size protest is pending, and here, the contract had been already awarded

before any size protest was raised. Thus, the provision is inapplicable.

Second, North Wind alleged that DOE violated 13 C.F.R. § 121.1009(g)(2)(ii), by

failing to consider whether performance could be suspended pending OHA’s review.

Section 121.1009(g)(2)(ii) states “[i]f a timely OHA appeal is filed after contract award,

the contracting officer must consider whether performance can be suspended until an

appellate decision is rendered.” 13 C.F.R. § 121.1009(g)(2)(ii). Here, the record reflects

that on August 6, 2018, after learning that Kūpono had filed a timely appeal to OHA, the

contracting officer fulfilled this responsibility by considering whether it was in the best

interest of the DOE to suspend performance further. The contracting officer

memorialized his decision “to go forward with performance under” the underlying IDIQ

contract but went forward with performance on a very limited basis. See AR 3588. North

12 13 C.F.R. § 121.1009(a) provides: “[t]ime frame for making size determination. (1) After a receipt of a protest or request for a formal size determination, the SBA Area Office will issue a formal size determination within 15 business days, if possible. (2) The contracting officer may award a contract after receipt of a protest if the contracting officer determines in writing that an award must be made to protect the public interest. Notwithstanding such a determination, the provisions of paragraph (g) of this section apply to the procurement in question. (3) If SBA does not issue its determination within 15 business days (or request an extension that is granted), the contracting officer may award the contract if he or she determines in writing that there is an immediate need to award the contract and that waiting until SBA makes its determination will be disadvantageous to the Government. Notwithstanding such a determination, the provisions of paragraph (g) of this section apply to the procurement in question.” 17 Wind has not offered the court a basis for finding this decision by the contracting officer,

which is supported by the record, was irrational.

Third, North Wind’s amended complaint also claims DOE violated 13 C.F.R.

§ 124.504(d)(1)13 and 48 C.F.R. § 6.101(b)14 by allegedly removing work from the 8(a)

program by failing to terminate Kūpono’s contract. Id. at ¶¶ 81-86. The court agrees with

Kūpono that neither 13 C.F.R. § 124.504(d)(1) nor 48 C.F.R. § 6.101(b) require agencies

to automatically terminate awards to 8(a) firms that ultimately lose a size appeal. Kūpono

Cross-Mot. for J. on the Admin. R. (“Kūpono’s MJAR”) at 34. As demonstrated above,

under the SBA rules that govern this case, the contracting officer had the discretion to not

terminate the contract and instead, not exercise the next option. Moreover, North Wind’s

argument is based on the unsupported contention that Kūpono is no longer a member of

the 8(a) program. Id. at 9. Kūpono is still in the 8(a) program. The SBA found that it was

ineligible for the subject contract because of an affiliation it entered into for purposes of

this procurement only. AR 2736-37 (SBA stating that “Kūpono is not considered small

for the $11 million size standard” and this “determination is applicable only to this

procurement”); AR 2864 (OHA affirming the SBA). In view of the foregoing, none of

13 13 C.F.R. § 124.504(d)(1) provides that “where a procurement is awarded as an 8(a) contract, its follow-on or renewable acquisition must remain in the 8(a) BD program unless SBA agrees to release it for non-8(a) competition.” 14 48 C.F.R. § 6.101(b) provides that “[c]ontracting officers shall provide for full and open competition through use of the competitive procedure(s) contained in this subpart that are best suited to the circumstances of the contract action and consistent with the need to fulfill the Government’s requirements efficiently.” 18 North Wind’s arguments regarding DOE’s compliance with any applicable SBA or FAR

regulations have merit.

B. The Court Does Not Have Jurisdiction Over North Wind’s Challenge To The Issued Task Orders The court now addresses the government’s and Kūpono’s motions to dismiss

North Wind’s challenge to the task orders DOE issued under the subject IDIQ contract as

outside this court’s jurisdiction under RCFC 12(b)(1). Both the government and Kūpono

rely on the Federal Acquisition Streamlining Act (“FASA”) of 1994 to support their

motions. Specifically, Section 4106(f)(1)(A) in FASA provides that “[a] protest is not

authorized in connection with the issuance or proposed issuance of a task or delivery

order except for . . . a protest on the ground that the order increases the scope, period, or

maximum value of the contract under which the order is issued[.]” “Even if the protester

points to an alleged violation of statute or regulation . . . the court still has no jurisdiction

to hear the case if the protest is in connection with the issuance of a task order.” SRA

Int’l, Inc. v. United States, 766 F.3d 1409, 1413 (Fed. Cir. 2014). For the reasons that

follow, the court finds that it does not have jurisdiction over North Wind’s challenge to

the task orders.

First, contrary to North Wind’s contentions, there is nothing in the record to

suggest that the subject task orders increased the scope of the contract. In order for there

to be a change in scope, there must be a material change so significant that it amounts to

a “cardinal change[.]” See AT & T Comm’ns, Inc. v. Wiltel, Inc., 1 F.3d 1201, 1205 (Fed.

Cir. 1992); see BayFirst Solutions, LLC v. United States, 104 Fed. Cl. 493, 503 (2012)

19 (stating that for task orders, “[t]he standard to be applies . . . is provided by AT & T

Communications”). The Federal Circuit stated:

[A] cardinal change . . . occurs when the government effects an alteration in the work so drastic that it effectively requires the contractor to perform duties materially different from those originally bargained for. By definition, then a cardinal change is so profound that it is not redressable under the contract, and thus renders the government in breach. See AT & T Comm’ns, Inc., 1 F.3d at 1205 (quoting Allied Materials & Equip. Co. v.

United States, 569 F.2d 562, 563-64 (Ct. Cl. 1978)).

Therefore, the question is whether the task orders substantially affect the type of

service the contractor “performs under the contract as a whole.” See id. at 1206, n.3.

North Wind argues that the “change of this award from a small business, 8(a) set-aside to

a sole source large business award” is a cardinal change in scope. Pl.’s Reply at 14. The

court agrees with the government and Kūpono that the subject provision relates to a

change in the scope of “services” and North Wind has failed to identify a change to the

scope of the services. Kūpono’s status as a firm that is other than small for this contract

does not impact the work, duties, or services performed under the contract. Because

North Wind has not shown that the actual work, duties, or services in the contract

changed, let alone fundamentally changed, in any of the task orders, the court concludes

that the task orders did not increase the scope of the contract.

The court also concludes that the task orders have not increased the period of the

contract. North Wind contends that the “task orders increased the period of Kūpono’s

base contract award.” Pl. Mot. for J. on the Admin. R. (“Pl.’s MJAR”) at 14. Because

the contract will not be extended beyond its original completion date but will end

20 September 30, 2020, North Wind’s argument fails. See Def. Mot. for J. on the Admin. R.

(“Def.’s MJAR”) at 12-13 (citing AR 3665-66). The subject task orders fit within the

time frame of the original contract and do not increase its term.15

Finally, to the extent North Wind argues that the task orders increased the value of

the contract, that argument fails. See Pl.’s MJAR at 11. The value of the underlying IDIQ

contract is $108,000,000. AR 3400-01. The combined value of the issued task orders is

$42,378,613. Because $42,378,613 does not exceed $108,000,000, there is no basis for

asserting that the task orders have increased the maximum value of the contract. See

Kūpono’s MJAR at 16.

In sum, because North Wind has not shown that the task orders increase the scope,

period, or value of the contract, the government’s and Kūpono’s motions to dismiss

North Wind’s claims related to task orders must be granted.

CONCLUSION For the reasons stated above, the court GRANTS the government’s and Kūpono’s

motion to dismiss North Wind’s claims challenging the issuance of task orders, and North

Wind’s complaint is DISMISSED IN PART accordingly for lack of jurisdiction. The

court also GRANTS the government’s and Kūpono’s motions for judgment on the

15 To the extent that North Wind seeks to establish jurisdiction over the task order by arguing the task order caused a contract modification which extended the contract, that argument is without merit. See Amend. Compl. ¶ 73 (“On information and belief, Modification No. 1 extended the base period of Kūpono’s Contract to correspond with the two-year orders issued in September 2018.”). The contract was modified on November 16, 2018 to extend the underlying IDIQ until September 2023 because the start date of the transition period was delayed. AR 3711-14. The awarded work under the IDIQ through the task orders will, as discussed above, end in September 2020. 21 administrative record for the remaining counts. Accordingly, the court DENIES North

Wind’s motions for judgment on the administrative record and request for injunctive

relief. Finally, the court GRANTS Kūpono’s motion to complete the administrative

record with Exhibit A attached to Kūpono’s Reply brief. No costs.

IT IS SO ORDERED.

s/Nancy B. Firestone NANCY B. FIRESTONE Senior Judge