Infiniti Info. Solutions LLC v. United States
| Decision Date | 17 September 2010 |
| Docket Number | No. 09-750C,09-750C |
| Parties | INFINITI INFORMATION SOLUTIONS, LLC, Plaintiff, v. UNITED STATES,Defendant. |
| Court | Court of Federal Claims |
Janine S. Benton, Benton, Potter & Murdock, P.C., Falls Church, VA, for plaintiff. With her on the briefs was Kathy C. Potter, Benton, Potter & Murdock, P.C., Falls Church, VA.
Russell A. Shultis, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for defendant. With him on the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Commercial Litigation Branch, and Kenneth M. Dintzer, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C. Of counsel were Gregory S. Walters and Gabriel G. Lopez, United States Department of Housing and Urban Development, Denver, CO.
Post-judgment matters are at issue. Earlier this year, judgment was entered in favor of plaintiff, Infiniti Information Systems ("Infiniti"), in this post-award bid protest of a contract to provide internet-related support services for the Department of Housing and Urban Development ("HUD"). The contract had been awarded to Ideogenics, LLC ("Ideogenics"), pursuant to Section 8(a) of the Small Business Act, 15 U.S.C. § 637(a). In resolving Infiniti's challenge to the award to Ideogenics, the court found "HUD's evaluation and recommendation of Ideogenics to be contrary to law and arbitrary and capricious on two separate grounds." Infiniti Info. Solutions, LLC v. United States, 92 Fed. Cl. 347, 359 (2010) (""Infiniti I"). First, the award contravened a regulation adopted by the Small Business Administration ("SBA"), barring a "non-competitive" award where potential awardees had received a statement of work and been evaluated based upon their responses. Second, HUD had made the award to a non-ServiceDisabled-Veteran-Owned ("SDVO") entity although it had indicated that the award would bemade to an SDVO entity. Id. at 357-59. Infiniti consequently was granted a declaratory judgment setting aside the award. Id. at 359-60. That judgment has become final.1
Having been awarded its costs of suit, see Infiniti I, 92 Fed. Cl. at 360, Infiniti has filed a Bill of Costs and concomitantly has moved for an award of attorneys' fees and expenses pursuant to the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412(d). Overall, Infiniti seeks $47,668.13 in attorneys' fees and expenses and $263.50 in costs. Pl.'s Mot. at 4; Pl.'s Supp. Mot. at 2.2 The government resists such an award, arguing that it prevailed in part, but primarily maintaining that its position in the underlying litigation was substantially justified and secondarily questioning the reasonableness of Infiniti's attorneys' fee request.
HUD has used a contractor to provide internal and external website support services for its Office of Public and Indian Housing ("PIH"). See Infiniti I, 92 Fed. Cl. at 350. Infiniti, an SDVO and African-American-owned company, performed these services from 2005 to September 19, 2009, under two sequential sole-source contracts issued pursuant to Section 8(a) of the Small Business Act. Id. The contested contract to Ideogenics was a replacement for Infiniti's earlier awards.
Section 8(a) authorizes the Small Business Administration to enter into procurement contracts with other federal agencies and to subcontract performance of those contracts to disadvantaged small businesses. See Pub. L. No. 85-536, 72 Stat. 384, 389-90 (1958) (codified as amended as 15 U.S.C. § 637(a)). SBA's implementing regulations permit SBA to delegate the choice of subcontractor to the procuring agency ("procuring activity"). 13 C.F.R. § 124.501(a). A delegated procuring activity must in turn "report all 8(a) contract awards, modifications, and options to SBA." Id.
A procuring activity must comply with the requirements of the Small Business Act and implementing regulations in carrying out its delegated authority. Among other things, in a noncompetitive procurement, it must not release a "statement of work for the requirement... to any of the Participants" being considered for a contract, although the procuring activity "[m]ayconduct informal assessments of several Participants' capabilities to perform a specific requirement." 13 C.F.R. § 124.503(e)(2). Further, the SBA cannot accept a procurement if limiting circumstances exist, described in 13 C.F.R. § 124.504, including where "[t]he procuring activity... expressed a clear intent to reserve the procurement as a small business or small disadvantaged business ("SDB") set-aside prior to offering the requirement to SBA for an award as an 8(a) contract," 13 C.F.R. § 124.504(a), and where "[t]he procuring activity competed a requirement among Participants prior to offering the requirement to SBA and receiving SBA's formal acceptance of the requirement." 13 C.F.R. § 124.504(b).
By an agreement effective January 30, 2007, SBA delegated to HUD its authority to enter into prime contracts under Section 8(a) of the Small Business Act. Infiniti I, 92 Fed. Cl. at 351. In the agreement between SBA and HUD, SBA "delegate[d] only the contract execution function," while remaining "the prime contractor on all 8(a) contracts." Id. (quoting AR 9D000356 (Partnership Agreement, 1¶ IV.A.1)).4 In return, HUD bound itself to "adhere to all the provisions of contractual assistance identified in 13 C.F.R. parts 124.501 through 124.520, as well as the applicable provisions of [Federal Acquisition Regulations ("FAR")] 48 part 19." Id. (quoting AR 9D-000358 (Partnership Agreement, 1¶ IV.B.2)). The Agreement remained in effect until September 30, 2009. Id. (citing AR 9D-000360 (ART. V)).
In May 2009, HUD issued a notice advising of a planned "PIH Internet/ HUD Web/ PHA Plan Support [Contract]." Infiniti I, 92 Fed. Cl. at 351 (AR 3-000021 (May Forecast (May 18, 2009))). This notice projected that the award would be a "Competitive 8(a) Set-Aside (Service Disabled/Veteran Owned)." Id. (quoting AR 3-000022 (May Forecast)). Several weeks later, HUD issued a revised notice for the same projected award, which differed from the prior notice only in listing the acquisition strategy as an "8(a) Direct (Service Disabled/Veteran Owned)." Id. (quoting AR 3-000023 to 000024 (June Forecast (June 8, 2009))).5
On June 11, 2009, Susan Adams, Contract Oversight Specialist for HUD and PIH, e-mailed eleven vendors to schedule interviews with a panel comprised of herself and two other HUD employees, Reginald Strayhorn and Kevin Jones. Infiniti I, 92 Fed. Cl. at 351-52. The e-mails sent to the eleven vendors were virtually identical, and each began: "This e-mailconfirms that [vendor company's name] will present its capabilities as they relate to the attached draft SOW." Id. at 352 (quoting AR 6B-000104 (E-mail from Ms. Adams to Ideogenics (June 11, 2009))). A draft "SOW," or statement of work, was attached to each e-mail. Id. at 352.
Several interviewees, as well as other firms who had expressed an interest in the procurement, posed queries to Ms. Adams regarding the acquisition strategy and process. Infiniti I, 92 Fed. Cl. at 352; see, e.g., AR Supp. 16-000562 (E-mail from Ideogenics to Ms. Adams (May 27, 2009)) ("I understand that this is going to be an 8(a) direct award, correct?"); AR Supp. 17-000657 (E-mail from Jackie Robinson & Associates to Ms. Adams (June 22, 2009)) ("inquiring what the process was"); AR 7B-000124 (E-mail from Shiva Information Technology Services to Ms. Adams (June 22, 2009)) ( ). In response to questions regarding whether SDVO was a requirement, Ms. Adams stated that SDVO was "just a preference." Infiniti I, 92 Fed. Cl. at 352 (quoting AR Supp. 16-000530 (E-mail from Ms. Adams to Imagine One Technology (Apr. 2, 2009))); but see AR Supp. 17-000626 (E-mail from Ms. Adams to Mr. Strayhorn (June 16, 2009)) ( that an additional vendor was unlikely to be added for review because it was not a SDVO). Although Ms. Adams responded to inquiries about the acquisition strategy, she did not provide her answers to non-inquiring participants. Infiniti I, 92 Fed. Cl. at 359.
After interviewing potential vendors, including Infiniti, Ideogenics was recommended for the contract award. Infiniti I, 92 Fed. Cl. at 354. Ideogenics was not an SDVO entity. Id. at 353. HUD then sought SBA's authorization to negotiate a contract with Ideogenics, which SBA granted, and Ideogenics was awarded the contract. Id. at 354.
Infiniti filed a protest with the Government Accountability Office ("GAO") on August 27, 2009, claiming that HUD had awarded an "illegal sole source contract without affording Infiniti the protections and procedures set forth in the FAR supporting such anti-competitive awards." Infiniti I, 92 Fed. Cl. at 354 (quoting AR 12A-000414 to 000415 (GAO Protest)). Alternatively, Infiniti argued that "to the extent that the Comptroller General finds that the award to Ideogenics was done on a competitive basis, the award decision must be overturned because it was made on the basis of unstated evaluation criteria and not on the basis of a fair and reasonable evaluation." Id. (quoting AR 12A-000415 (GAO Protest)). HUD responded by moving for dismissal based upon lack of jurisdiction and Infiniti's failure to state legally sufficient grounds for the protest. Id. The administrative record of the procurement was never filed with GAO. Hr'g Tr. 20:5-14 (Sept. 3, 2010).6
On September 24, 2009, GAO dismissed the protest, concluding that "no solicitation was issued" because "there was neither a finalized statement of work [released to all the participants] nor a list of...
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