RhinoCorps Ltd. v. United States

87 Fed. Cl. 673, 2009 WL 1362843
United States Court of Federal Claims·Decided May 15, 2009·No. No. 08-410C·Published·Cited by 3 cases

Opinion

MEMORANDUM OPINION AND ORDER GRANTING PRELIMINARY INJUNCTIVE RELIEF

CHRISTINE O.C. MILLER', Judge.

Before the court after argument is plaintiffs renewed motion for a preliminary injunction in this pre-award bid protest.1 The United States Air Force (“the Air Force”) decided not to solicit a small business set-aside follow-on contract after the expiration of plaintiffs contract. Plaintiff challenges this decision as unreasonable and in violation of applicable procurement law. This is another iteration in an old pre-award bid protest filed in June 2008; transferred to the undersigned on September 19, 2008; and subject to aging and deferred ruling due to [675] new developments in controlling precedent governing jurisdiction and augmentation of the administrative record as recently as March 30, 2009.

BACKGROUND

The following facts are the same, unless otherwise noted, as those recited in the earlier opinion in RhinoCorps Co. v. United States, 85 Fed.Cl. 712, 713-14 (2009) (order granting, in part, motion to dismiss), withdrawn and reissued (May 15, 2009), slip op. at 2-4. RhinoCorps Ltd. Co. (“plaintiff’) is a small business incorporated in New Mexico. Plaintiff filed suit against the United States for problems stemming from acquisition of services that the Air Force had procured from plaintiff under an expired contract (the “ARSS contract”).2 See Complaint for Declaratory Judgment and Injunctive Relief filed June 3, 2008, ¶¶ 2-3.

On May 29, 2003, what is now called the 709th Armament System Squadron (the “ARSS”), an agency of the Air Force, awarded the ARSS contract for programmatic services supporting weapon systems development to plaintiff through a competitive small business set-aside. Compl. ¶ 4. The contract incorporated by reference 48 C.F.R. (FAR) § 52.219-6 (2006), setting aside acquisitions for qualifying small businesses. Also incorporated by reference was FAR 52.219-8, which implements a policy to allow qualifying small businesses the maximum opportunity to participate in performing federal contracts. FAR 19.502-2(b) applied, as well, and mandates that a contract with the value and performance characteristics of the ARSS contract would be awarded to a small business upon an agency determination that at least two responsible small businesses would be reasonably expected to submit offers. This regulation is the centerpiece of this litigation. Plaintiff, with the highest rated technical proposal and the lowest proposed price, secured award. Plaintiff agreed to a two-year contract term, with three one-year option pei'iods. The ARSS contract expired on May 29, 2008. Compl. ¶ 4.

On January 24, 2008, the ARSS contracting officer announced through a commercial procurement tracking service, INPUT Federal Technology Opportunities, that plaintiffs ARSS contract would not be re competed, but would be “fulfilled through an ongoing, current contract out of another Contracting Office.” Id. ¶ 16 (quoted source not cited in original). On February 22, 2008, following plaintiffs submission of a Freedom of Information Act (“FOIA”) request probing the Air Force’s decision not to recompete the requirements covered by the ARSS contract, representatives for plaintiff and the Air Force met regarding a possible follow-on to the ARSS contract. Plaintiff alleges that the Air Force stated that “it was not unhappy with [plaintiffs] performance,” but “it was not required to maintain the work that is the subject of the ARSS Contract as a small business set-aside.” Id. ¶ 19. Following another FOIA request, the parties met again on March 19, 2008. Plaintiff alleges that the Air Force had a legal obligation to continue this procurement through the small business set-aside program. The Air Force disagreed, explaining that the ARSS requirements had changed. According to plaintiff, this was the first notice by the Air Force that change-of-circumstanees prompted the decision not to solicit a follow-on contract. Id. ¶ 21.

By letter to Secretary of the Air Force dated March 19, 2008, Rep. Heather Wilson questioned why the ARSS contract had been moved to a large business and whether the ARSS contract could be extended to allow for an issuance of a request for proposals for a follow-on contract. Id. ¶ 25. The Air Force responded by letter dated April 17, 2008, stating that reorganizations within the Air Force, among other developments, rendered plaintiffs programmatic services no longer necessary and that support would be provided by government personnel through on-going non-small-business contractors. Id. ¶¶ 26(b), (c). Plaintiff objected to the Air Force’s decision not to solicit a follow-on [676] contract to the expired ARSS contract. Id. ¶ 23.

In its April 17, 2008 response, the Air Force attributed its need for a “highly skilled, technical expertise across a bi’oad spectrum only on an as-needed basis” as another justification to redistribute the ARSS contract requirements. Id. ¶ 26(d). To allow small business contractors to compete, the ARSS would conduct market research by means of a “Sources Sought Synopsis” to determine whether a follow-on contract was needed. Id. ¶ 26(e). Plaintiff was encouraged to respond to the Sources Sought Synopsis, id. ¶¶ 26(e), (f), and plaintiff alleged that it “intend[edj to submit a response,” id. ¶ 28. The Sources Sought Synopsis was posted on May 6, 2008, id. ¶ 28; responses were due on June 4, 2008, id.; and plaintiff commenced this action on June 3, 2008.

Plaintiff marshaled an array of charges to indict the Air Force’s decision not to solicit small businesses for a follow-on contract to the ARSS contract as contrary to law. Compl. ¶37. Plaintiffs primary contention was that diverting the duties of the ARSS contract violates FAR 19.502-2(b), which requires contracting officers to set aside acquisitions over $100,000.00 for small business participants upon a determination that a reasonable expectation exists that at least two responsible small business concerns will submit offers. Id. ¶ 37(i). Plaintiff asserted that the transfer of duties was “pretextual” and that the Air Force lacked legitimate motivation for determining not to issue a new solicitation identical to the expired ARSS contract. Id. ¶¶ 39(a), (b). Plaintiff leveled the charge that the Air Force did not announce that the ARSS requirements had changed until after plaintiff confronted the Air Force with the “legal authority concerning its obligation to maintain the small business set-aside program represented by the ARSS Contract.” Id. ¶ 39(a). On June 3, 2008, plaintiff filed suit in the United States Court of Federal Claims for declaratory and injunctive relief, with jurisdiction predicated on 28 U.S.C. § 1491(b) (2006), “reversing” the Air Force’s decision not to solicit a follow-on contract and not to extend plaintiffs contract until the decision required by law had been made. Id. ¶¶ 1,42.

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RhinoCorps Ltd. v. United States, 87 Fed. Cl. 673, 2009 WL 1362843 (uscfc 2009).

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