Land Shark Shredding, LLC v. United States
| Decision Date | 09 October 2019 |
| Docket Number | No. 19-508C,19-508C |
| Parties | LAND SHARK SHREDDING, LLC, Protestor, v. UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Pre-Award Bid Protest; Motion to Dismiss; Failure to State a Claim; Lack of Subject Matter Jurisdiction; Service-Disabled Veteran-Owned Small Business Rule of Two Doctrine.
Joseph A. Whitcomb, Whitcomb, Selinsky, McAuliffe, PC, Denver, CO, for protestor.
Sonia M. Orfield, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for defendant. With her was Steven J. Gillingham, Assistant Director, Commercial Litigation Branch, Robert E. Kirschman, Jr., Director, Commercial Litigation Branch, and Joseph H. Hunt, Assistant Attorney General, Civil Division. Of counsel was Natica C. Neely, Staff Attorney, United States Department of Veterans Affairs, Office of General Counsel, District Contracting National Practice Group, Washington, D.C.
Protestor Land Shark Shredding, LLC (Land Shark Shredding) challenges the cancellation of Solicitation No. 36C24119Q0003 for document shredding and destruction services issued by the Department of Veterans Affairs (VA) for the White River Junction VA Medical Center, located at White River Junction, Vermont, and for seven surrounding White River Junction clinics located in Vermont and New Hampshire, also known as White River Junction Community Based Outpatient Clinics (CBOCs). Because, according to protestor, Land Shark Shredding is a service-disabled veteran-owned small business (SDVOSB) contractor, and the lowest-priced of two available SDVOSB contractors thatbid on Solicitation No. 36C24119Q0003, according to protestor, the VA was required to make a contract award to protestor under the "Rule of Two" doctrine contained at 38 U.S.C. § 8127(d) (2018). Protestor argues that the VA's decision to cancel Solicitation No. 36C24119Q0003 because the VA had found that neither protestor's nor the second, offering SDVOSB contractor's prices were "fair and reasonable" it was a "flagrant disregard for federal procurement law and Congressional intent," and, thus, "lacked a rational basis."
In 2013, the VA awarded Task Order VA241-14-F-0113 in the amount of $64,800.00 for document shredding services at the White River Junction VA Medical Center and Task Order VA241-14-F-1928 in the amount of $65,260.20 for document shredding services at the White River Junction CBOCs. The two task orders were awarded under the General Services Administration (GSA) Federal Supply Schedule (FSS) and both were awarded to Shred This Inc., SecurShred (SecurShred), "a small business." Performance under the two task orders was scheduled to end on March 31, 2019. The VA subsequently issued a modification to Task Order VA241-14-F-0113 for the White River Junction VA Medical Center, which increased the award amount from $64,800.00 to approximately $106,950.00. The total for both task orders, including the modifications to Task Order VA241-14-F-0113, was approximately $172,210.20.
Subsequently, the VA submitted a requirement for document shredding services at the White River Junction VA Medical Center and the White River Junction CBOCs, with performance set to start on April 1, 2019, following the March 31, 2019 end date of SecurShred's performance under Task Order VA241-14-F-0113 and Task Order VA241-14-F-1928. Unlike the two previous task orders, which were issued under the GSA FSS, the VA decided to compete the requirement for document services at the White River Junction VA Medical Center and the White River CBOCs as a SDVOSB set-aside procurement.
On July 19, 2018, the VA issued an internal memorandum with the subject line "Independent Government Cost Estimate for VA-241—14-F-0113," which summarized the independent government cost estimate (IGCE) for SecurShred's VA-241-14-F-0113 Task Order for the White River Junction VA Medical Center. The July 19, 2018 IGCE memorandum stated:
(emphasis in original).
The July 19, 2018 IGCE memorandum also stated that "this estimate draws heavily on researched past price history with minor adjustments for changes in specifications, quantities, location and task frequency."
According to defendant's motion to dismiss and cross-motion for judgment on the administrative record, the VA used the July 19, 2018 IGCE memorandum as a price comparison tool when evaluating protestor's proposal for Solicitation No. 36C241119Q0003, the solicitation at issue in the above-captioned protest. Also, according to the contracting officer's internal memorandum, dated January 11, 2019, the contracting officer used the July 19, 2018 IGCE memorandum as a justification for her decision to cancel the solicitation because protestor's price exceeded the July 19, 2018 IGCE memorandum.
On October 29, 2018, the VA issued a document titled "REQUEST, TURN-IN, AND RECEIPT FOR PROPERTY OR SERVICES," addressed to the "REQUESTING OFFICE" of the "OFFICE" of "FACILITIES MANAGEMENT SERVICE" for federal funding for "1 YR" for the "REMOVAL OF SECURE SHRED CONTAINERS FROM WHITE RIVER JUNCTION, VT MEDICAL CENTER AND COMMUNITY BASED OUTPATIENT CLINICS (CBOC'S)," and listed the "TOTAL COST" as "$35000.00." (all capitalization and emphasis in original). It is unclear from the October 29, 2018 document, however, whether the funding request was approved. The only reference contained on the October 29, 2018 document regarding an approval of funding is the following notation:
(all capitalization and emphasis in original). In addition, there is no explanation contained in the October 29, 2018 document which explains to which contract the funding would be allocated or why the government requested only $35,000.00 in funding. The October 29, 2018 document notes that the "VENDOR" was "TBD [to be determined]." (capitalization in original). Defendant in the above-captioned case cites to the October 29, 2018 document as evidence that the government allocated $35,000.00 in funding for the first-year base period of the five-year contract being solicited under Solicitation No. 36C241119Q0003, the solicitation at issue in the above-captioned bid protest.
According to a document dated December 17, 2018, which presented a "summary" of the VA's "acquisition planning" (the December 17, 2018 Acquisition Planning Summary), the VA had previously conducted market research for the procurement of a "firm fixed price" contract for "Shredding White River Junction." The December 17, 2018 Acquisition Planning Summary does not state whether the market research addressed document shredding services for the White River Junction VA Medical Center or for the White River Junction CBOCs, or for both. According to the December 17, 2018 document, the VA determined that there were "10 SDVOSB and VOSB [veteran-owned small business] businesses" in the market that offered shredding services, and that "[t]hree of the ten Vet Biz vendors are listed on GSA Ebuy (Land Shark Shredding LLC, RW Lone Star Security, LLC and TrussCrane, Inc)." According to the December 17, 2018 Acquisition Planning Summary, the VA issued a request for quotes on August 7, 2018 to the three SDVOSBs listed on GSA Ebuy, and protestor was the only contractor that responded. The VA subsequently cancelled the August 7, 2018 request for quotes3 "because Land Shark Shredding's price in the amount of $[redacted] was $[redacted] or [redacted] percent higher than the IGCE amount of $[redacted]."4
The December 17, 2018 Acquisition Planning Summary also stated that on September 26, 2018, a "sources sought notice was posted on FBO [FedBizOpps]" and that "[c]apability statements were provided from the following vendors:"
The "Sources Sought Notice" was attached to the December 17, 2018 Acquisition Planning Summary, and noted that it was The Sources Sought Notice also stated that the place of performance for the document shredding services would be the White River Junction VA Medical Center and White River Junction CBOCs.
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