NEIE, Inc. v. United States, 13-164 C

• Decision Date: 06 December 2013
• Docket Number: No. 13-164 C,13-164 C
• Parties: NEIE, Inc., Plaintiff, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

NEIE, Inc., Plaintiff, v. THE UNITED STATES, Defendant.

No. 13-164 C

United States Court of Federal Claims

Filed under seal: November 26, 2013^*

Reissued for publication: December 6, 2013

Central Contractor Registration, 48

C.F.R. § 52.204-7(a) (2013) (changing the

name of the CCR to the "System for

Award Management");

Pre-Award Bid Protest Jurisdiction (28

U.S.C. § 1491(b)(1));

Service-Disabled Veteran-Owned Small

Business Set-Aside

(15 U.S.C. § 644(g)(1)(A)(ii));

Standing;

Federal Acquisition Regulations,

1.102(b)(3) ("The Federal Acquisition

System will . . . [c]onduct business

with integrity, fairness, and

openness.");

1.102-2(c)(3) (fair and impartial treatment

of contractors);

1.602-2(b) ("impartial, fair, and equitable

treatment" of contractors by

contracting officers);

3.101-1 (standards of conduct for

government personnel);

15.305 (evaluation of proposals);

16.504 (indefinite quantity contract);

19.1405 (SDVOSB set-aside procedures);

52.219-1 (voluntary certifications);

13 C.F.R. § 125.15(e)(1) (SDVOSB status

determined at the time of an initial offer);

48 C.F.R. § 4.1201 (2012 and 2013)

(representations and certifications);

48 C.F.R. § 52.204-13(b) (contractors

responsibility for the accuracy of

information in the Central Contractor

Registration).

William E. Hughes, III, Whyte Hirschboeck Dudek S.C., Milwaukee, Wisconsin, Counsel for Plaintiff.

Jessica R. Toplin, United States Department of Justice, Civil Division, Washington, D.C., Counsel for the Government.

MEMORANDUM OPINION AND ORDER

BRADEN, Judge.

This bid protest concerns allegations made by a service-disabled veteran-owned small business that the United States Environmental Protection Agency acted arbitrarily and capriciously and in bad faith when the agency determined the bidder to be non-responsible, proposed the bidder for debarment, and then declined to award the contract to any bidder.

To facilitate review of this Memorandum Opinion and Order, the court includes the following outline:

RELEVANT FACTS.

A. The Solicitation.

B. The Evaluation Of Service-Disabled Veteran-Owned Small Business Proposals, Initial Contract Award, And Subsequent Protests.

C. The Selection Process Resumed.

D. The Contracting Officer Issued A Determination Of Non-Responsibility.

E. The Contracting Officer Initiated A Proposed Debarment.

F. The Effect Of The Proposed Debarment On Plaintiff's Effort To Obtain A Certificate Of Competency.

G. The Agency's Decision To Terminate Plaintiff's Proposed Debarment But Not To Award The Service-Disabled Veteran-Owned Small Business Contract.

II. PROCEDURAL HISTORY.

III. DISCUSSION.

A. Jurisdiction.

B. Standing.

C. Applicable Standards Of Review.

D. Whether The Contracting Officer's Determination Of Non-Responsibility Was Unlawful.

1. The Plaintiff's Argument.

2. The Government's Response.

3. The Court's Resolution.

IV. CONCLUSION.

* * *

I. RELEVANT FACTS.¹

A. The Solicitation.

On April 15, 2009, the United States Environmental Protection Agency ("EPA") issued Solicitation No. PR-R2-08-10085 (the "Solicitation") for proposals to provide emergency and rapid response services ("ERRS"), including "fast responsive environmental cleanup services for hazardous substances/wastes/contaminants/materials and petroleum products/oil for the EPA Region 2 in the states of New York and New Jersey." AR Tab 1 at 150 (Performance Work Statement). The Solicitation stated that the EPA intended to award three "Fixed-Rate, Indefinite Delivery/Indefinite Quantity" contracts.² AR Tab 1 at 121. In addition, the Solicitation stated that the award would be made on a competitive basis, pursuant to a small business set-aside. AR Tab 1 at 121. The Solicitation also identified only the "Program Manager" and "Response Managers" as key personnel. AR Tab 1 at 144-45. The third contract, however, was to be "awarded based on competition restricted to service-disabled veteran-owned small businesses" (the "SDVOSB Contract" or the "SDVOSB set-aside").³ AR Tab 1 at 121. The Solicitationexpressly "reserve[d] the [EPA's] right to award only one contract[]" (AR Tab 1 at 141), and to "reject any or all proposals if such action is in the Government's interest." AR Tab 1 at 119.

B. The Evaluation Of Service-Disabled Veteran-Owned Small BusinessProposals, Initial Contract Award, And Subsequent Protests.

On May 19, 2009, NEIE, Inc. ("NEIE" or "Plaintiff") submitted a timely proposal in response to the Solicitation for the SDVOSB Contract. AR Tab 3 at 271; AR Tab 4. NEIE represented that it was "a full service hazardous waste management company operating in the Northeast and Mid-Atlantic Regions" of the United States, providing "premier ERRS service" within EPA Region 2. AR Tab 3 at 276. At that time, James Coleson, a service-disabled veteran, owned 100% of NEIE. Am. Compl. ¶ 5. NEIE identified James Coleson as a "Responsible Corporate Officer" and that his son, Chris Coleson, worked in Resource Management. AR Tab 3 at 280.

In response to the Solicitation, the EPA received nine proposals; four of which were also candidates for the SDVOSB Contract. AR Tab 13 at 1254. On September 29, 2009, NEIE was advised that its proposal was in the competitive range for the SDVOSB Contract. AR Tab 43 at 1555.

On April 30, 2010, the EPA awarded two contracts: one to Environmental Restoration, LLC; the other to Kemron Environmental Services, Inc. AR Tab 13 at 1277-78 (Source Selection Document); AR Tab 17 at 1305. The EPA initially awarded the SDVOSB Contract to EarthCare Solutions, Inc. ("EarthCare"). AR Tab 17; see also AR Tab 13 at 1296-98 (Source Selection Document).

On May 6, 2010, NEIE filed a protest with the Contracting Officer ("CO") and the United States Small Business Administration ("SBA") challenging Earthcare's claimed status as a small business. AR Tab 20. On the same date, NEIE also filed a protest with the CO and the SBA challenging Earthcare's claimed status as a SDVOSB. AR Tab 21. On May 25, 2010, the SBA determined that EarthCare met the SDVOSB eligibility standards as of the date of the Solicitation. AR Tab 24 at 1447-48 (May 25, 2010 eligibility letter). On October 29, 2010, however, the SBA's Office of Government Contracting, Area II, issued Size Determination Nos. 2-2010-77 & 79, finding EarthCare to be "other than a small business" and ineligible for award of the April 30, 2010 SDVOSB Contract. AR Tab 27 at 1470. On January 12, 2011, the SBA Office of Hearings and Appeals affirmed this determination. AR Tab 34 at 1513 (Size Appeal of EarthCare Solutions, Inc., SBA No. SIZ-5183 (2011)).

During the period of January 2011 to March 2011, NEIE contacted the CO to ascertain the status of the April 30, 2010 SDVOSB Contract. AR Tab 35 at 1516 (1/19/11) (requesting update on the "next step by EPA"); AR Tab 37 at 1518 (1/26/11) (requesting information, because NEIE was "contemplating closing [their] . . . satellite office"); AR Tab 38 at 1519 (Jan. 28, 2011) (voicing concern that EPA may not award the contract). EPA responded that it was still in the process of making a decision and would provide an update when information became available. AR Tab 37 at 1518 (1/26/11) (stating that EPA "should have an update . . . by the end of this week"); AR Tab 40 (2/8/11) ("[T]here is no update on the . . . contract at this time.").

On March 2, 2011, NEIE filed an agency level protest with the EPA to ascertain the status of the SDVOSB Contract. AR Tab 42 (expressing NEIE's concerns about reports that the EPA planned to "cancel the SDVO solicitation [and] re-issue the procurement"). On March 11, 2011, NEIE also filed a protest with the United States Government Accountability Office ("GAO"). AR Tab 43. On March 22, 2011, the GAO dismissed NEIE's protest as "speculative and premature." AR Tab 46A at 1685.3; see also AR Tab 47 at 1686, 1688. In April 2011, NEIE continued to inquire about the status of the SDVOSB Contract. AR Tab 48-54 (4/4-4/7/13 emails from Chris Coleson to the CO). On April 6, 2011, the CO responded that "there is no update . . . at this time." AR Tab 52; see also AR Tab 55 at 1701 (4/12/11 email from EPA Contract Specialist to Chris Coleson) ("[T]here is no update . . . at this time."). Another round of emails from NEIE to the EPA yielded no more information. AR Tab 57 (4/20/11 email from Chris Coleson to the CO and EPA Contract Specialist); AR Tab 58 (4/22/11 email from Chris Coleson to the CO explaining that, without a resolution, NEIE would soon need to layoff employees); AR Tab 59 at 1715 (4/22/11 email from the CO to Chris Coleson) ("[T]here is no update . . . at this time."). On April 12, 2011, NEIE asked United States Congressman Bobby Scott to inquire about the status of the SDVOSB Solicitation. AR Tab 56 at 1707-10. On May 16, 2011, EPA responded to Congressman Scott that EPA "expect[ed] to have a decision on [the SDVOSB Contract] within the next two months." AR Tab 60 at 1717.

On June 10, 2011, James Coleson died and ownership of NEIE was transferred to his son, Chris Coleson. AR Tab 123 at 2004; AR Tab 149.A at 2192.14. Thereafter, Chris Coleson asked the EPA again about the status of the SDVOSB Contract. AR Tabs 61, 62, 64 (6/23/11, 6/27/11, 7/6/11 emails from Chris Coleson to the CO and EPA Contract Specialist). Again, the EPA advised NEIE that "there is no change in the status of the subject procurement at this time." AR Tab 63 (7/29/11 email from the CO to Chris Coleson).

C. The Selection Process Resumed.

On July 22, 2011, the CO notified the three competitive range offerors for the SDVOSB Contract, i.e., NEIE, Guardian Environmental Services ("Guardian"), and LATA-Kemron Environmental Response Services ("LATA-Kemron"), that the EPA was "proceeding with an award" of the SDVOSB Contract. AR Tab 68 at 1727 (email to NEIE); see also AR Tabs 66-67 (emails to LATA-Kemron and Guardian). On July 27, 2011, the CO contacted each offeror to confirm their interest in extending the final proposal revision acceptance periods for 90 days from August 10, 2011. AR Tabs 73-75, 77-79; see also AR Tabs 82-84 (clarifying that, because...