Melwood Horticultural Training Ctr., Inc. v. United States
| Decision Date | 04 May 2021 |
| Docket Number | No. 20-1884C,20-1884C |
| Parties | MELWOOD HORTICULTURAL TRAINING CENTER, INC., Plaintiff, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Meghan A. Douris and Alix K. Town, Oles Morrison Rinker & Baker, LLP, Seattle, WA, for Plaintiff.
Tanya B. Koenig, Trial Attorney, and Steven C. Hough, Trial Attorney, with whom were Douglas K. Mickle, Assistant Director, Martin F. Hockey, Acting Director, Brian M. Boynton, Acting Assistant Attorney General, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., Robert B. Neill, United States Army, and Timi N. Kenealy, United States AbilityOne Commission, Of Counsel, for Defendant.
This pre-award bid protest is the sequel to Melwood Horticultural Training Ctr., Inc. v. United States, 151 Fed. Cl. 297 (2020) ("Melwood I"). Like the original, Plaintiff Melwood Horticultural Training Center, Inc. ("Melwood") challenges the second iteration of a pilot procurement program to recompete a base operations support services contract ("BOSS Contract") at Fort Meade, Maryland. Melwood also brings a claim related to the United States' public release of declarations in Melwood I which allegedly included source selection information.
The Court previously dismissed Melwood's bid protest claims in Melwood I, finding that because Melwood had not challenged a final agency action, that case was not yet ripe. Now,however, Melwood challenges the AbilityOne Commission's decision to re-compete the BOSS Contract using new "Interim Policies" that create what AbilityOne calls a test pilot (the "Pilot Program").
Like many challenges to agency action, this bid protest is illustrated by a familiar metaphor, presenting the question of whether the horse not only pulls the cart but also determines its destination. Because the Court determines that it is Congress who fixes the objective rather than the agency, the novel AbilityOne Commission Pilot Program impermissibly introduces competitive pricing into a procurement intended by Congress to support employment opportunities for the blind and severely disabled. As explained below, the Court finds that these Interim Policies (and thus the Pilot Program) contravene 41 U.S.C. § 8504 and 41 C.F.R. § 51-2.7. Therefore, the Court concludes the procurement is contrary to law, and Melwood is entitled to injunctive relief that enjoins AbilityOne from awarding a contract under Opportunity Notice No. 3923. Further, the Court finds that the United States did not violate the Procurement Integrity Act in Melwood I filings.
The parties have submitted a Joint Stipulation of Facts, from which the Court draws relevant facts, with limited revisions. (Joint Stipulation of Facts, ECF No. 13).
Melwood Horticultural Training Center, Inc. is a not-for-profit organization exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, which provides jobs and opportunities for people of differing abilities in the Washington, DC area. (See Compl. at ¶ 2, ECF No. 1). Melwood is the authorized non-profit agency ("NPA") for the services in question. (Administrative Record ("AR") at 1-2, ECF No. 10; Case No. 20-758 ECF No. 22).2 Melwood is the current contractor through the U.S. AbilityOne Program on the Fort Meade Base Operations Support Services contract, Contract No. W91QV118C0008 ("Fort Meade BOSS"). (Id. ¶ 4).
The United States Army's Installation Management Command is responsible for delivering base operations support services, including traditional municipal services such as electrical supply, trash removal, facilities maintenance, and repair services at over seventy Army installations worldwide. These services allow Army installations to operate efficiently and effectively in support of national defense objectives.
The legislation at issue in this controversy is the Javits-Wagner-O'Day Act (the "JWOD Act") that established the Committee for Purchase From People Who Are Blind or Severely Disabled, which operates as the "U.S. AbilityOne Commission" ("AbilityOne" or the"Commission"). See 41 U.S.C. § 8502(a). The AbilityOne Program is a Federal procurement program with the purpose of providing jobs in the manufacture and delivery of products and services to the Federal Government for people who are blind or have severe disabilities.
While any government effort has detractors, the accomplishments of the AbilityOne Commission cannot be overstated. AbilityOne currently employs over 45,000 blind or severely disabled individuals including approximately 3,000 veterans and wounded warriors.3 These employees work at over 1,000 locations throughout all 50 states and Guam. It is the largest source of employment opportunities for the blind and severely disabled in the United States and provides as much as $4 billion in sales and services to the Federal Government.
Procurements involving AbilityOne are readily distinguishable from normal government processes. As it acknowledges, "AbilityOne procurements are considered 'other than competitive' procurements . . .."4 To achieve its goals, AbilityOne is required to maintain a "Procurement List" of products and services "determined by [AbilityOne] to be suitable for the Federal Government to procure" that are produced or provided by a qualified nonprofit agency for the blind or by a qualified nonprofit agency for other severely disabled. 41 U.S.C. § 8501(a)(1). Congress directed the AbilityOne Commission to "designate a central nonprofit agency or agencies to facilitate the distribution, by direct allocation, subcontract, or any other means, of orders of the Federal Government for products and services on the procurement list among qualified nonprofit agencies for the blind or qualified nonprofit agencies for other severely disabled." 41 U.S.C. § 8503(c). As relevant here, AbilityOne designated SourceAmerica as a central nonprofit agency ("CNA") which represents the interests of severely disabled people who provide services on the Procurement List. 41 C.F.R. § 51-3.1. AbilityOne determines the Fair Market Price ("FMP") for those products and services, which are provided by nonprofit agencies that employ the blind and severely disabled. 41 U.S.C. § 8503(c).
The JWOD Act requires that "[a]n entity of the Federal Government intending to procure a product or service on the procurement list . . . shall procure the product or service from a qualified nonprofit agency for the blind or a qualified nonprofit agency for other severely disabled in accordance with regulations of [AbilityOne] and at the price [AbilityOne] establishes if the product or service is available within the period required by the entity." 41 U.S.C. 8504(a); see also Federal Acquisition Regulation ("FAR") § 8.704(a) (). The JWOD Act defines "qualified nonprofit agency for other severely disabled" as an agency that "in the production of products and in the provision of services (whether or not the products or services are procured under this chapter) during the fiscal year employs blind orother 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." 41 U.S.C. § 8501(6)(c).
Under the Competition in Contracting Act ("CICA"), executive agencies may conduct procurements using procedures that are "other than competitive" only when specifically authorized by statute. 10 U.S.C. § 2304(a) and (c)(5) (DoD procurements); 41 U.S.C. § 3304(a)(5), (e)(4)(D); FAR §§ 6.302-5, 8.002, 8.7. Otherwise, agencies must use "competitive procedures" which entail "full and open competition[.]" 10 U.S.C. § 2302(2); 41 U.S.C. § 152.
Typically, when Federal agencies identify suitable products or services to be placed on the Procurement List, they provide AbilityOne or the designated CNA (here SourceAmerica) with information, such as "the latest solicitation and amendments, bid abstracts, procurement history, estimated annual usage quantities, and anticipated date of next solicitation issuance and opening may be needed . . . statement of work and applicable wage determination" to enable AbilityOne to determine whether a product or service is suitable to be furnished by an NPA. 41 C.F.R. § 51-5.1(b). The CNAs provide such documentation to interested NPAs.
NPAs initially submit a technical proposal to the CNA, without pricing, in response to published opportunity notices and accordance with allocation processes established by the CNAs and in accordance with Commission Policy 51.301.5 The NPAs' proposals indicate how each will meet the contract technical requirements, while also satisfying the JWOD Act employment requirements. See 41 C.F.R. §§ 51-4.3 and 51-6; Commission Policy 51.301.
SourceAmerica typically evaluates the technical proposals, which may include review by the government customer, to identify an NPA to perform the contract. After an NPA has been identified as the recommended nonprofit agency, the pricing process historically includes negotiations between the government customer, the selected NPA, and SourceAmerica. This cooperative approach is highlighted on AbilityOne's website. See supra note 3, FAQ #15. SourceAmerica recommends that suitable services be added to the Procurement List, and recommends an authorized NPA to perform those services, together with the recommended fair market price, to the Commission for approval. Pursuant to the JWOD Act, AbilityOne has the sole authority to establish the Fair Market Price "of products and services contained on the procurement list that are offered for sale to the Federal Government." 41 U.S.C. § 8503(b).
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