Melwood Horticultural Training Ctr., Inc. v. United States
| Decision Date | 23 November 2020 |
| Docket Number | No. 20-758C,20-758C |
| Parties | MELWOOD HORTICULTURAL TRAINING CENTER, INC., Plaintiff, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Keywords: Motion to Dismiss; RCFC 12(b)(1); Ripeness; Pre-Award Bid Protest; AbilityOne; Section 898, National Defense Authorization Act of Fiscal Year 2017, Pub. L. No. 114-328, 130 Stat 2000; Javits-Wagner O'Day Act, 41 U.S.C. §§ 8501-06; 41 C.F.R. 51
Meghan A. Douris and Alix K. Town, Oles Morrison Rinker & Baker, LLP, Seattle, WA, for the Plaintiff.
Steven C. Hough, Trial Attorney, with whom were Douglas K. Mickle, Assistant Director, Robert E. Kirschman, Jr., Director, Commercial Litigation Branch, Jeffrey Bossert Clark, Acting Assistant Attorney General, Civil Division, United States Department of Justice, Washington, D.C., Robert B. Neill, Mark T. Robinson, United States Army, and Timi N. Kenealy, United States AbilityOne Commission, Of Counsel, for the Defendant.
This is an unconventional pre-award, pre-solicitation bid protest involving the second iteration of a Pilot Program purportedly authorized by a panel established under Section 898 of the 2017 National Defense Authorization Act. Plaintiff, Melwood Horticultural Training Center ("Melwood"), challenges not only the United States' intent to recompete a contract for base operations support services provided to the U.S. Army, but also the selection of Fort Meade, Maryland for the Pilot Program. The United States argues that this case is not yet ripe.
Melwood brought these challenges on June 23, 2020, before the United States solicited bids for a new contract award. (Compl., ECF No. 1). That same day, Melwood filed a Motion forTemporary Restraining Order, seeking an order enjoining the United States, acting through the AbilityOne Commission ("AbilityOne" or "the Commission"), from issuing a request for proposals. The Court denied that Motion on June 26, 2020. (Order Denying TRO, ECF No. 11).
On July 15, 2020, the United States issued an opportunity notice for a Base Operations and Maintenance services contract at Fort Meade. (Administrative Record ("AR") at 2, 1543, ECF No. 22). The United States filed the administrative record for its decision on July 24, 2020. Soon thereafter, the Court denied Melwood's Motion to Supplement the Administrative Record. (Order Denying Mot. to Suppl., ECF No. 33; Pl.'s Mot. to Suppl. AR, ECF No. 26).2
On August 26, 2020, Melwood moved for judgment on the administrative record. (Pl.'s MJAR, ECF No. 34). When the United States filed its Response and Cross-Motion for Judgment on the Administrative Record (Def.'s Mot., ECF No. 42), the United States moved to dismiss Melwood's claims under RCFC 12(b)(1) and 12(b)(6). The parties each filed timely reply briefs. This matter now stands submitted.
For the reasons set forth below, the Court GRANTS the United States' Motion to Dismiss, DENIES AS MOOT Melwood's Motion for Judgment on the Administrative Record, and DENIES AS MOOT the United States' Cross-Motion for Judgment on the Administrative Record.
In 1971, Congress passed the Javits-Wagner O'Day Act ("JWOD"), which updated the Wagner-O'Day Act of 1938. Pub. L. No. 92-28, § 1, 85 Stat. 77 (1971) ().3 JWOD established the "Committee for Purchase From People Who Are Blind or Severely Disabled." 41 U.S.C. § 8502. That Committee, colloquially known as the AbilityOne Commission, exists to carry out the Federal Government's policy of "increas[ing] employment and training opportunities for persons who are blind or have other severe disabilities through the purchase of commodities and services from qualified nonprofit agencies employing persons who are blind or have other severe disabilities." 41 C.F.R. § 51-1.1.
In order to implement these policy goals, procurements under the JWOD function differently than traditional government procurements. For example, AbilityOne maintains a Procurement List, which it publishes to the Federal Register, containing products and services produced or provided by qualified nonprofit agencies ("NPA") and available for purchase by theFederal Government. 41 U.S.C. §§ 8503-8504. Qualified NPAs must employ "blind or other severely disabled individuals for at least 75 percent of the hours of direct labor required for the production or provision of the products or services." § 8501. The Federal Government purchases products and services from the Procurement List at Fair Market Prices that are determined by the Commission. § 8503(b). The Commission may, "from time to time . . . revise its price determinations . . . in accordance with changing market conditions." § 8503(b).
AbilityOne also must designate central nonprofit agencies ("CNA") to help "facilitate the distribution" of government contracts among the qualified nonprofit agencies. § 8503(c). SourceAmerica is the CNA applicable to this action. (Compl. at 3). The process for "determin[ing] the fair market price of products and services contained on the procurement list" involves the "contracting activity," the qualified nonprofit agency, and the CNA (in this case, SourceAmerica). 41 C.F.R. § 51-2.7(a). The "contracting activity" is "any element of an entity of the Government that has responsibility for identifying and/or procuring Government requirements for commodities or services." 41 C.F.R. § 51-1.3. The "initial price is based on Committee procedures, which permit negotiations between the contracting activity and the nonprofit agency which will produce or provide the commodity or service to the Government, assisted by the appropriate central nonprofit agency." 41 C.F.R. § 51-2.7(a). "Recommendations for initial fair market prices, or changes thereto, shall be submitted jointly by the contracting activities and nonprofit agencies concerned to the appropriate central nonprofit agency." 41 C.F.R. § 51-2.7(c). SourceAmerica will then submit the recommended price to AbilityOne. 41 C.F.R. § 51-2.7. Because the policy of the AbilityOne program is to "increase employment and training opportunities for persons who are blind or have other severe disabilities," procurements under the program are designated as "other than competitive." See 41 U.S.C § 3304(a)(5). The effect of being designated "other than competitive" is that for procurements in the AbilityOne program, "[f]ull and open competition need not be provided[.]" FAR 6.302-5(a)(2), (b)(2).
On December 23, 2016, Congress passed the National Defense Authorization Act For Fiscal Year 2017 ("NDAA"). NDAA For Fiscal Year 2017, Pub. L. No. 114-328, 130 Stat 2000 (2016). Section 898 of the NDAA stated that "[t]he Secretary of Defense shall establish a panel to be known as the 'Panel on Department of Defense and AbilityOne Contracting Oversight, Accountability, and Integrity'" (the "898 Panel"). The 898 Panel was tasked to:
NDAA § 898(c)(4), (6). The 898 Panel was also directed to "consult[] with central nonprofit agencies and qualified nonprofit agencies" and "suggest milestone dates for implementation of the recommendations made under subsection (c)[.]" NDAA § 898(f)(1). These recommendations would also be compiled in an annual report to Congress required by § 898(i). See also Pride Indus., Inc. v. Comm. for Purchase From People Who Are Blind or Severely Disabled, 420 F. Supp. 3d 1035, 1039 (E.D. Cal. 2019) ().
The authority to implement these recommendations is somewhat ambiguous. Under subsection (e), the 898 Panel has the "authority [to] request documentation or other information needed from the AbilityOne Commission, central nonprofit agencies, and qualified nonprofit agencies." NDAA § 898(e). If AbilityOne fails to substantially implement the recommendations, the Secretary of Defense, upon receiving notification, "may suspend compliance with the requirement to procure a product or service [from the Procurement List] until the date on which the Secretary notifies Congress, in writing, that the AbilityOne Commission is substantially implementing the [898 Panel's] recommendations[.]" NDAA § 898(g)(1)(A).
On July 18, 2018, the 898 Panel submitted its First Annual Report to Congress. (AR15-84). In its First Annual Report, the 898 Panel stated that "CNA and NPA perception that a designated NPA remains the provider of a product or service in perpetuity can erode performance, escalate prices, and impact customer satisfaction, and the AbilityOne Program Reputation and employment." (AR44). Therefore, the 898 Panel recommended "changes to how work is assigned or re-assigned, and also changes to Title 41 CFR 51." (AR44).4 The proposed changes included "adding policy which would establish mandatory source selection procedures" that "would require CNAs to use a specific list of measurable qualifications when choosing an NPA for the project assignment, such as price, technical capability for the work, past performance, and the percentage of disabled hours." (AR44) (emphasis added). For procurements, the 898 Panel proposed "[r]equir[ing] [a] best value trade-off analysis process that considers price . . .." (AR45).
In spring of 2019, the Army advised Pride Industries, Inc.—an AbilityOne NPA contractor—that it would extend Pride's Facilities Support Operations contract at Fort Bliss until January 2020,...
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