United States Court of Appeals
      for the Federal Circuit
                ______________________

           PALLADIAN PARTNERS, INC.,
                Plaintiff-Appellee

                           v.

                  UNITED STATES,
                 Defendant-Appellant
                ______________________

                      2014-5125
                ______________________

    Appeal from the United States Court of Federal
Claims in No. 14-cv-00317C, Judge Marian Blank Horn.
                 ______________________

                Decided: April 22, 2015
                ______________________

   DANIEL E. CHUDD, Jenner & Block LLP, Washington,
DC, argued for plaintiff-appellee. Also represented by
DAMIEN C. SPECHT, CHARLES L. CAPITO, III.

    DOMENIQUE GRACE KIRCHNER, Commercial Litigation
Branch, Civil Division, United States Department of
Justice, Washington, DC, argued for defendant-appellant.
Also represented by STUART F. DELERY, ROBERT E.
KIRSCHMAN, JR., DEBORAH A. BYNUM.
                ______________________
2                           PALLADIAN PARTNERS, INC.   v. US



    Before LOURIE, MOORE, and O’MALLEY, Circuit Judges.
O’MALLEY, Circuit Judge.
    This case involves a pre-award bid protest. On Feb-
ruary 28, 2014, the National Institute on Drug Abuse
(“NIDA”), an institute within the National Institutes of
Health (“NIH”), issued Request for Proposal (“RFP”) No.
N01DA-14-4423 for the “NIH Pain Consortium Centers of
Excellence in Pain Education Coordination Center” (“the
solicitation”). NIDA initially issued the solicitation as a
small business set-aside under North American Industry
Classification System (“NAICS”) code 541712, “Research
and Development in the Physical, Engineering, and Life
Sciences (except Biotechnology),” which limits offerors to
small businesses with 500 employees or fewer. A prospec-
tive offeror appealed the NAICS code designation to the
United States Small Business Administration (“SBA”)
Office of Hearings and Appeals (“OHA”), and OHA or-
dered NIDA’s contracting officer to amend the solicitation
to change the NAICS code designation to 541611, “Admin-
istrative Management and General Management Consult-
ing Services.”
    Palladian Partners, Inc. (“Palladian”) filed suit in the
Court of Federal Claims seeking declaratory and injunc-
tive relief to enjoin NIDA from accepting and evaluating
proposals under the new code, which rendered Palladian
ineligible to compete. The Court of Federal Claims grant-
ed Palladian’s motion for judgment on the administrative
record, finding that the contracting officer’s NAICS code
amendment was arbitrary and capricious. Specifically,
the court found that NAICS code 541611 did not best
describe the statement of work for the solicitation. Based
on this conclusion, the court remanded for NIDA to make
a “proper NAICS code selection, given the current state-
ment of work, or to determine how otherwise to proceed.”
Palladian Partners, Inc. v. United States, 

, 459 (2014).
PALLADIAN PARTNERS, INC.   v. US                         3



    The United States appeals from the Court of Federal
Claims’ final judgment which sustained Palladian’s pre-
award protest and entered a permanent injunction
against the receipt and review of proposals for the solici-
tation under NAICS code 541611. Among other things,
the government argues that the court should have dis-
missed Palladian’s suit for failure to exhaust administra-
tive remedies with OHA.          Because we agree that
Palladian failed to exhaust its administrative remedies,
and because this failure warrants dismissal of Palladian’s
protest, we reverse.
                      BACKGROUND
    The Small Business Act, 15 U.S.C. §§ 631, et seq.,
(“the Act”) was designed to set aside certain contracts for
the benefit of small business concerns. Congress created
the Small Business Administration (“SBA”) to carry out
the policies of the Act, and gave SBA authority to “specify
detailed definitions or standards by which a business
concern may be determined to be a small business con-
cern.”    15 U.S.C. § 632(a)(2)(A); see also 15 U.S.C.
§ 637(b)(6) (SBA is empowered “to determine within any
industry the concerns, firms, persons, corporations, part-
nerships, cooperatives, or other business enterprises
which are to be designated ‘small-business concerns’ for
the purpose of effectuating the provisions of this chap-
ter”). SBA was authorized to engage in rulemaking and
its regulations “have the force and effect of law.” Otis
Steel Prods. Corp. v. United States, 

, 940 (Ct.
Cl. 1963) (“Since the Administrator was specifically
authorized to define a small business concern, these
regulations have the force and effect of law.”).
   SBA uses the North American Industry Classification
System (“NAICS”) to determine which entities qualify as
small business concerns. The Office of Management and
Budget assigns NAICS codes to various industry sectors,
and SBA determines which firms qualify as small busi-
4                            PALLADIAN PARTNERS, INC.   v. US



nesses “to assure that a fair proportion of government
contracts for goods and services are performed by such
entities in each industry category.” Advanced Sys. Tech.,
Inc. v. United States, 

, 476 (2006) (citing 15
U.S.C. §§ 637(b)(6), 644(a)). To do so, SBA specifies the
maximum number of employees or maximum annual
receipts which a company may have in order to qualify as
a small business within a particular NAICS code. See 13
C.F.R. § 121.201 (providing size standards for specific
industries by either annual revenue or number of employ-
ees).
    SBA’s regulations instruct that the procuring agency’s
contracting officer “designates the proper NAICS code and
corresponding size standard in a solicitation, selecting the
single NAICS code which best describes the principal
purpose of the product or service being acquired.” 13
C.F.R. § 121.402(b). The NAICS code assigned to a solici-
tation limits the small businesses that may submit bids to
those that qualify under the size standard associated with
that particular NAICS code. By regulation, the contract-
ing officer’s choice of NAICS code and corresponding size
standard “is final unless timely appealed” to the SBA’s
OHA. 13 C.F.R. § 121.402(d).
     The regulations provide that the “OHA appeal is an
administrative remedy that must be exhausted before
judicial review of a NAICS code designation may be
sought in a court.” 13 C.F.R. § 121.1102. OHA’s decision
in a NAICS code appeal is “final” and “may not be recon-
sidered.” 13 C.F.R. § 134.316(d) & (f). If OHA grants the
appeal and changes the NAICS code, “and the contracting
officer receives OHA’s decision by the date offers are due,
the contracting officer must amend the solicitation to
reflect the new NAICS code.” 13 C.F.R. § 134.318(b).
With this framework in mind, we turn to the solicitation
at issue.
PALLADIAN PARTNERS, INC.   v. US                          5



                   A. The Solicitation
    The National Institutes of Health (“NIH”) operates
twelve Centers of Excellence in Pain Education
(“CoEPEs”) to “develop pain management training and
educational resources for medical, dental, nursing, and
pharmacy students to advance the assessment, diagnosis,
and safe treatment of pain.” 

. On February 28, 2014, NIDA published the
solicitation at issue as a total small business set aside.
The purpose of the solicitation was to fund a “Coordina-
tion Center,” operated by the contractor, “to facilitate the
activities of the CoEPEs.” 

    The solicitation identified seven tasks the contractor
was required to perform. Specifically, it provided that the
contractor would: (1) prepare and submit monthly pro-
gress reports; (2) “maintain, host and manage an interac-
tive online communication portal” for NIH, the contractor,
and the CoEPEs to use; (3) “coordinate the process by
which CoEPEs submit their materials to be used in the
development of cases,” “facilitate NIH Pain Consortium
evaluation of proposed cases and other materials to be
produced,” “use the materials submitted by the CoEPEs to
create” interactive pain treatment scenarios with graphics
and embedded videos, “proofread, edit, and program” the
scenarios, “advise and suggest ways to improve the cases,
when applicable,” and “program, format and code” por-
tions of the NIH website; (4) “facilitate the evaluation of
the impact of these training materials” and the “dissemi-
nation of the results of these evaluations;” (5) “organize
teleconferences,” “summarize these meetings in writing,”
and post such summaries on the website; (6) post videos
through a special YouTube channel; and (7) obtain addi-
tional content for case studies. 

    NIDA’s contracting officer, Kenneth E. Goodling,
selected NAICS code 541712, “Research and Development
in the Physical, Engineering, and Life Sciences (except
6                           PALLADIAN PARTNERS, INC.   v. US



Biotechnology),” for the solicitation. To qualify under this
code, a business must have fewer than 500 employees.
Palladian alleges that it qualified as a small business
under this code and size standard.
                 B. Initial OHA Appeal
    SBA’s regulations provide that “[a]ny interested party
adversely affected by a NAICS code designation may
appeal the designation to OHA.”                13 C.F.R.
§ 121.1103(a)(1). “An appeal from a contracting officer’s
NAICS code or size standard designation must be served
and filed within 10 calendar days after the issuance of the
solicitation or amendment affecting the NAICS code or
size standard.” 13 C.F.R. § 121.1103(b)(1).
    On March 10, 2014, a prospective offeror—
Information Ventures, Inc.—filed a timely OHA Appeal.
Upon receipt of the appeal, OHA issued a notice and order
instructing the contracting officer to amend the solicita-
tion to notify potentially interested parties of the appeal.
The order indicated that any response to the appeal must
be filed with OHA and received no later than March 25,
2014. Pursuant to that order, and consistent with SBA
regulations, NIH amended the solicitation to notify all
potential offerors—including Palladian—of the OHA
appeal. Palladian did not respond to or seek to partici-
pate in the appeal.
     In its appeal, Information Ventures argued that the
contracting officer erred in selecting NAICS code 541712,
because the tasks identified in the solicitation were
unrelated to research and development. According to
Information Ventures, “with the exception of Task 3—
which contains some work properly viewed as information
technology, such as developing a website—all of the tasks
fit squarely within NAICS code 541611,” “Administrative
Management and General Management Consulting
Services.” NAICS Appeal of: Info. Ventures, Inc., SBA No.
PALLADIAN PARTNERS, INC.   v. US                          7



NAICS-5544, 

, at *3 (Apr. 2, 2014) (IV
OHA Appeal).
     On March 20, 2014, NIH contracting officer Goodling
filed a response, defending his selection of NAICS code
541712. Specifically, he argued that:
   The primary purpose of the solicited contract and
   the majority of the anticipated cost of the contract
   will be in the implementation of Task 3 of the
   Statement of Work. The Contractor will use ma-
   terials researched and submitted by the CoEPEs
   to develop the online case-scenarios. Further, the
   Contractor will perform additional research, pro-
   gram, format and code as needed to develop the
   website on the NIH Pain Consortium page for re-
   search support in disseminating health based in-
   formation.

. Goodling explained that
the contractor would be responsible for the “R&D [Re-
search & Development] creation of the two predominant
products in the contract:” the case-based scenarios and
the website to host them. 

2, 2014, OHA granted the appeal, concluding
that the contracting officer “clearly erred in assigning
NAICS code 541712” because the solicitation “does not
call for research and development.” IV OHA Appeal, 

, at *5. OHA found that the contractor would
have “little, if any, substantive role in any research” and
would instead be coordinating among entities that were
engaging in research. 

with Information
Ventures that NAICS code 541611 was the most appro-
priate for the solicitation. In reaching this conclusion,
OHA noted that it has affirmed use of NAICS code 541611
“in situations where a contractor will ‘assis[t] with the
administration and management’ of an important pro-
gram.” 

(citations omitted). OHA found that the
“instant contractor will perform precisely such work,
8                            PALLADIAN PARTNERS, INC.   v. US



acting as the ‘Coordination Center,’ assisting with admin-
istrative matters, and managing communications and
interactions between NIH and the CoEPEs.” 

decision issued before the close of the
solicitation, it informed the contracting officer that he
“MUST amend the RFP to change the NAICS code desig-
nation from 541712 to 541611.” 

by
stating that “[t]his is the final decision of the Small Busi-
ness Administration.” 

OHA’s decision,
the contracting officer amended the solicitation to change
the NAICS code to 541611, “Administrative Management
and General Management Consulting Services,” which
has a size standard of $14 million average annual re-
ceipts. NIDA issued another amendment to the solicita-
tion, this time extending the due date for offers to April
22, 2014.
         C. Palladian’s Subsequent OHA Appeal
     On April 14, 2014, Palladian appealed the contracting
officer’s new NAICS code designation to OHA. OHA
provided notice of the appeal and the contracting officer
issued an amendment to the solicitation to notify all
potential offerors of Palladian’s appeal. Palladian argued
that NAICS code 541611 was inappropriate because it is
used for “general consulting services in support of an
agency.” NAICS Appeal of Palladian Partners, Inc., SBA
No. NAICS-5553, 

, at *4 (May 7, 2014)
(“Palladian OHA Dismissal”). According to Palladian,
NAICS code 519130, “Internet Publishing and Broadcast-
ing and Web Search Portals,” which has a size standard of
500 employees, best describes the work to be performed
because the RFP’s tasks “all relate to the creation of the
Coordination Center website or to basic contract admin-
istration.” 

that it would be eligible
to bid if that code and its accompanying size standard
were used, but not if the revenue-based NAICS code
541611 applied, which restricted the solicitation to com-
PALLADIAN PARTNERS, INC.   v. US                          9



panies with less than $14 million in average annual
receipts. Notably, Palladian did not defend or seek rein-
statement of the original code chosen by the contracting
officer—NAICS code 541712.
    On May 7, 2014, OHA dismissed Palladian’s appeal
under the doctrine of issue preclusion. Specifically, OHA
found that Palladian is “barred from relitigating issues
already decided in NAICS Appeal of Information Ven-
tures,” and that the issue presented there was the same:
which NAICS code is appropriate for RFP No. N01DA-14-
4423. 

OHA emphasized that, in Information
Ventures, the contracting officer notified Palladian and
other prospective offerors that a NAICS appeal was
pending at OHA, that the record would close on March 25,
2014, and that SBA’s regulations permit interested par-
ties to intervene “at any time until the close of record.”

(quoting 13 C.F.R. § 134.210(b)).
    OHA explained that, if Palladian “wished to litigate
the issue of what NAICS code should apply to this RFP,”
it “could, and should, have intervened in Information
Ventures.” 

Palladian’s suggestion that
its decision in Information Ventures should have ad-
dressed every possible NAICS code, noting that it would
not be “practicable to specifically comment in the text of a
decision on every NAICS code theoretically applicable to a
procurement.” 

explained that the
regulations “specifically preclude reconsideration of a
NAICS code decision.” 

C.F.R. § 134.316(f)).
         D. Court of Federal Claims Proceedings
     On April 21, 2014, while its OHA appeal was pending,
Palladian filed a pre-award bid protest in the Court of
Federal Claims. Palladian argued that the contracting
officer’s decision to amend the solicitation was “arbitrary,
capricious, an abuse of discretion, and lack[ed] a rational
basis.” 

. In its complaint,
Palladian sought declaratory and injunctive relief, includ-
10                          PALLADIAN PARTNERS, INC.   v. US



ing a finding that NIDA’s use of NAICS code 541611 was
improper, an injunction preventing NIDA from accepting
and evaluating proposals under the that code, and a
declaration that the appropriate NAICS code is 519130,
“Internet Publishing and Broadcasting and Web Search
Portals.” 

    The parties filed expedited motions for judgment on
the administrative record. In relevant part, the govern-
ment argued that Palladian’s suit should be dismissed for
failure to exhaust its administrative remedies because it
did not participate in Information Ventures’ OHA NAICS
proceeding. The Court of Federal Claims conducted a
hearing on the parties’ cross-motions and ordered sup-
plemental briefing. During those proceedings, Palladian
conceded that it had notice of Information Ventures’ OHA
appeal.
    On May 15, 2014, the court issued an oral decision
finding that the NIDA contracting officer’s decision to
change the solicitation’s NAICS code from 541712 to
541611 was arbitrary and capricious. The court also
preliminarily enjoined NIDA from proceeding with the
solicitation under NAICS code 541611. Accordingly, the
contracting officer issued an amendment to the solicita-
tion indicating that no offers would be accepted or consid-
ered.
    The court subsequently issued the written decision at
issue in this appeal, granting Palladian’s motion for
judgment on the administrative record. At the outset, the
court noted that this court “has yet to clarify how [the
Court of Federal Claims’] bid protest jurisdiction interacts
with the Small Business Administration’s NAICS code
review responsibilities.” 

.
The parties agreed that the issue “hasn’t been decided at
the Circuit.” 

found, however, that it had
jurisdiction pursuant to the Tucker Act, 28 U.S.C.
PALLADIAN PARTNERS, INC.   v. US                          11



§ 1491(b)(1), to review the contracting officer’s decision to
amend the solicitation.
    The government argued that, even if the Court of
Federal Claims had the jurisdiction to do so, the court
should not reach the merits of Palladian’s appeal because
Palladian failed to exhaust its administrative remedies at
the SBA when it declined to participate in Information
Ventures’ OHA appeal. According to the government,
Palladian had notice of that proceeding and was required
to participate in it pursuant to 13 C.F.R. § 121.1102,
which states that the “OHA appeal is an administrative
remedy that must be exhausted before judicial review of a
NAICS code designation may be sought in a court.”

. The Court of Federal
Claims rejected the government’s approach, finding that
it would require potential small business bidders to
participate in an OHA NAICS proceeding to preserve
their right to judicial review, even if they had not yet
decided to bid, and even if the current NAICS code did not
negatively affect their ability to bid.
     Turning to the merits, the Court of Federal Claims
concluded that the contracting officer “blindly accept[ed]
the NAICS code chosen” by OHA and failed to exercise his
discretion to determine the proper code for the solicita-
tion. 

In doing so, the court noted that the code
selected must be the one that “best describes the principal
nature of the product or service being acquired.” 

C.F.R. § 121.402(b)).
     After reviewing the record, the court stated that “it
appears that Task 3, encompassing the construction of a
website portal, and the creation and posting online of
interactive case-based scenarios, will account for the
‘greatest percentage of the contract price.’” 

(citing Federal Acquisition Regulation (“FAR”) 19.102(d)).
“Therefore, Task 3 should be most determinative of which
NAICS code to apply to the solicitation.” 

12                          PALLADIAN PARTNERS, INC.   v. US



conclusion, the court found that “NAICS code 541611 does
not best describe the ‘principal nature’ of the services
being acquired.” 

The court further indicated
that the “creation of a website and the publishing of
content online align better with NAICS code 519130’s
classification of companies ‘publishing and/or broadcast-
ing content on the Internet exclusively.’” 

But
because “the role of the court is not to determine which
NAICS code best describes the statement of work in the
solicitation, or to select a NAICS code for insertion into
the solicitation,” the court declined Palladian’s invitation
to declare that the solicitation be re-designated under
NAICS code 519130. 

Instead, the court:
(1) found that selection of NAICS code 541611 was arbi-
trary and capricious; (2) remanded to NIDA to make a
proper code selection or otherwise determine how to
proceed; and (3) entered a permanent injunction against
receipt and review of proposals for the solicitation under
NAICS code 541611. 1
   The government timely appealed to this court.         We
have jurisdiction under 28 U.S.C. § 1295(a)(3).




     1  The Court of Federal Claims reached no conclu-
sion regarding the extent to which the originally-
designated code—NAICS code 541712—aligned with the
tasks outlined in the solicitation. The parties on appeal
concede that NAICS code 541712 is not an appropriate
choice for this solicitation, however. There is, thus, no
contention that it was arbitrary or capricious for the
contracting officer to choose a code other than that origi-
nally designated; the only question is whether it was
arbitrary or capricious for the contracting officer to
change the designation to NAICS code 541611, rather
than to some third NAICS code, such as NAICS code
519130.
PALLADIAN PARTNERS, INC.   v. US                         13



                       DISCUSSION
     We review the Court of Federal Claims’ legal deter-
minations de novo and its factual findings for clear error.
CMS Contract Mgmt. Servs. v. Mass. Hous. Fin. Agency,

, 1385 (Fed. Cir. 2014). In a bid protest
case, an agency’s action “must be set aside if it is arbi-
trary, capricious, an abuse of discretion, or otherwise not
in accordance with law.” Savantage Fin. Servs. v. United
States, 

, 1285 (Fed. Cir. 2010). The court’s
task is to determine whether “(1) the procurement offi-
cial’s decision lacked a rational basis; or (2) the procure-
ment procedure involved a violation of regulation or
procedure.” 

(citation omitted).
    As a threshold matter, the government states that we
have not yet decided whether the Court of Federal Claims
has the authority to reverse or vacate an OHA NAICS
code decision. For the reasons explained below, we con-
clude that the court had jurisdiction over both OHA’s code
decision and the contracting officer’s amendment to the
solicitation implementing that decision.
     Next, the government argues that the Court of Feder-
al Claims erred when it enjoined the agency from proceed-
ing with the solicitation under the NAICS code OHA
determined should be assigned to it in Information Ven-
tures. Specifically, the government argues that the court:
(1) erred by not dismissing Palladian’s protest for failure
to exhaust administrative remedies; (2) improperly con-
cluded that the contracting officer abused his discretion
by amending the solicitation in light of OHA’s NAICS
code determination; and (3) improperly engaged in a de
novo review of OHA’s NAICS code determination. We
agree with the government on its first point, and find that
Palladian failed to exhaust its administrative remedies.
Because this failure requires dismissal of Palladian’s
protest, we need not reach the government’s additional
arguments on appeal.
14                           PALLADIAN PARTNERS, INC.   v. US



                       A. Jurisdiction
     “We review decisions of the Court of Federal Claims
on the scope of its jurisdiction without deference.” SRA
Int’l, Inc. v. United States, 

, 1412 (Fed. Cir.
2014). The Tucker Act, as amended by the Administra-
tive Disputes Resolution Act (“ADRA”), confers jurisdic-
tion to the Court of Federal Claims:
     to render judgment on an action by an interested
     party objecting to a solicitation by a Federal agen-
     cy for bids or proposals for a proposed contract or
     to a proposed award or the award of a contract or
     any alleged violation of statute or regulation in
     connection with a procurement or a proposed pro-
     curement.
28 U.S.C. § 1491(b)(1). We have acknowledged that this
statute “provides a broad grant of jurisdiction because
‘[p]rocurement includes all stages of the process of acquir-
ing property or services, beginning with the process for
determining a need for property or services and ending
with contract completion and closeout.’” Sys. Application
& Techs., Inc. v. United States, 

, 1381 (Fed.
Cir. 2012) (quoting Res. Conservation Grp., LLC v. United
States, 

, 1244 (Fed. Cir. 2010)).
     In this case, pursuant to OHA’s decision in Infor-
mation Ventures, the contracting officer amended the
solicitation to change the NAICS code from 541712 to
541611. Palladian argued that both the agency’s amend-
ment and OHA’s order directing that amendment “are
actions ‘in connection with a proposed procurement’ that
lacked a rational basis and were contrary to applicable
regulatory requirements.” 

(citation omitted).
    The Court of Federal Claims found that it had juris-
diction to review whether the contracting officer’s decision
to amend the NAICS code was “arbitrary, capricious, an
PALLADIAN PARTNERS, INC.   v. US                         15



abuse of discretion, or otherwise not in accordance with
law.” 

noted that there was some precedent
suggesting that it also has jurisdiction to review SBA
OHA’s final decision, as long as that decision is in connec-
tion with a proposed procurement. 

n.8 (citing
Cavalier Clothes, Inc. v. United States, 

,
1112 (Fed. Cir. 1987) (“[N]othing either in the language or
the legislative history of [the Small Business Act at 15
U.S.C.] § 634 suggests that Congress intended to grant
the SBA any greater immunity from injunctive relief than
that possessed by other governmental agencies.”). But
because the court found that it had jurisdiction under the
Tucker Act to review the contracting officer’s decision to
amend the solicitation, it declined to address whether it
also had jurisdiction to review OHA’s decision. 

Palladian argues that, when the contract-
ing officer “blindly adopts” OHA’s NAICS code determina-
tion, both OHA’s decision and the contracting officer’s
adoption of it are within the Court of Federal Claim’s
jurisdiction. Appellee Br. 17. Palladian submits that,
“although the court was correct in asserting jurisdiction
over the Contracting Officer’s amendment of the solicita-
tion, and properly enjoined the Agency from accepting
proposals under NAICS code 541611, the court also would
have been well-within its jurisdiction to directly review
OHA’s determination.” 

concedes
that Palladian’s objections to the NAICS code are within
the Court of Federal Claims’ jurisdiction. 2 See Palladian



   2    At oral argument, counsel for the government
stated that “we have not taken the position that there is a
lack of jurisdiction. And I believe we have said in our
briefs that certainly the jurisdictional statute is broad
enough here. Jurisdiction is determined by whether you
are challenging the term of a solicitation. They are chal-
lenging the term of a solicitation.” Oral Argument at
16                           PALLADIAN PARTNERS, INC.   v. US

(noting that the government
conceded that both the contracting officer’s designation
and the OHA decision are “in connection with” a proposed
procurement).
     “Every federal appellate court has a special obligation
to ‘satisfy itself not only of its own jurisdiction, but also
that of the lower courts in a cause under review,’ even
though the parties are prepared to concede it.” Steel Co.
v. Citizens for a Better Env’t, 

, 95 (1998) (cita-
tion omitted). This court has not previously addressed
the scope of the Court of Federal Claims’ jurisdiction over
OHA’s NAICS code determinations. We have, however,
recognized that the Tucker Act “expressly waives sover-
eign immunity for claims against the United States in bid
protests” and that “this waiver covers a broad range of
potential disputes arising during the course of the pro-
curement process.” Sys. Application & 

. As noted, the statute authorizes the Court of Fed-
eral Claims to review an action “in connection with a
procurement or a proposed procurement.” 28 U.S.C.
§ 1491(b)(1). In construing this language, we have found
that the “operative phrase ‘in connection with’ is very
sweeping in scope.” RAMCOR Servs. Group, Inc. v. Unit-
ed States, 

, 1289 (Fed. Cir. 1999) (“As long
as a statute has a connection to a procurement proposal,
an alleged violation suffices to supply jurisdiction.”).
    For its part, the Court of Federal Claims has held that
“the SBA OHA’s decision is . . . ‘in connection with’ a
proposed procurement.” InGenesis, Inc. v. United States,


1:34-1:55, available at http://www.cafc.uscourts.gov/oral-
argument-recordings/14-5125/all. Likewise, counsel for
Palladian indicated that “both parties agreed that the
term ‘in connection with a procurement’ would include
both the contracting officer’s action and the OHA action.”

PALLADIAN PARTNERS, INC.   v. US                         17

, 48 (2012); see also RLB Contracting, Inc.
v. United States, 

, 756 (2014) (“Decisions
of SBA’s OHA are reviewable under [the Tucker Act’s]
grant of authority . . . .”). We agree. Because OHA’s
NAICS code determination and the contracting officer’s
amendment to the solicitation are actions “in connection
with a proposed procurement,” we conclude that they are
within the scope of jurisdiction granted under the Tucker
Act. Accordingly, we find that the Court of Federal
Claims had jurisdiction over OHA’s NAICS code decision
and the contracting officer’s decision amending the solici-
tation pursuant to OHA’s directive.
       B. Exhaustion of Administrative Remedies
    The government argues that Palladian failed to
properly exhaust its administrative remedies before filing
its pre-award bid protest with the Court of Federal
Claims and that this failure requires dismissal. “The
doctrine of exhaustion of administrative remedies is well
established in the jurisprudence of administrative law.”
McKart v. United States, 

, 193 (1969). It
provides that “no one is entitled to judicial relief for a
supposed or threatened injury until the prescribed admin-
istrative remedy has been exhausted.” Sandvik Steel Co.
v. United States, 

, 599 (Fed. Cir. 1998) (quot-
ing 

). Exhaustion stems from the
notion that “‘[s]imple fairness to those who are engaged in
the tasks of administration, and to litigants, requires as a
general rule that courts should not topple over adminis-
trative decisions unless the administrative body not only
has erred but has erred against objection made at the time
appropriate under its practice.’” Mittal Steel Point Lisas
Ltd. v. United States, 

, 1383-84 (Fed. Cir.
2008) (quoting United States v. L.A. Tucker Truck Lines,
Inc., 

, 37 (1952)).
   “Exhaustion of administrative remedies serves two
main purposes.” Woodford v. Ngo, 

, 89 (2006).
18                         PALLADIAN PARTNERS, INC.   v. US



First, it protects “administrative agency authority.” 

point, the Supreme Court has explained that the
exhaustion doctrine “recognizes the notion, grounded in
deference to Congress’ delegation of authority to coordi-
nate branches of Government, that agencies, not the
courts, ought to have primary responsibility for the pro-
grams that Congress has charged them to administer.”
McCarthy v. Madigan, 

, 145 (1992). Exhaus-
tion gives an agency “an opportunity to correct its own
mistakes . . . before it is haled into federal court.” 

promotes judicial efficiency.

. “Claims generally can be
resolved much more quickly and economically in proceed-
ings before an agency than in litigation in federal court.
In some cases, claims are settled at the administrative
level, and in others, the proceedings before the agency
convince the losing party not to pursue the matter in
federal court.” 

. Even if litiga-
tion ensues, however, exhaustion of the administrative
procedure may narrow the issues and “produce a useful
record for subsequent judicial consideration.” 

be required by statute, regulation, or
judicially-created common law. See Weinberger v. Salfi,

, 766 (1975) (distinguishing between a statu-
tory exhaustion requirement and “judicially developed
doctrine of exhaustion”); see also Sims v. Apfel, 

, 108 (2000) (“[I]t is common for an agency’s regula-
tions to require issue exhaustion in administrative ap-
peals.”). The “fact that the administrative remedy was
provided by a regulation rather than by a statute does not
make the exhaustion doctrine inapplicable or inappropri-
ate.” 

. Where a regulation
requires exhaustion, a party’s failure to exhaust adminis-
trative remedies precludes judicial review of its claim.
See 

(noting that, when a regulation
provides for exhaustion, “courts reviewing agency action
regularly ensure against the bypassing of that require-
PALLADIAN PARTNERS, INC.   v. US                          19



ment by refusing to consider unexhausted issues”); see
also 

(finding that the “de-
tailed scope determination procedures that Commerce has
provided constitute precisely the kind of administrative
remedy that must be exhausted before a party may liti-
gate the validity of the administrative action”).
         1. SBA Regulations Require Exhaustion
    SBA’s regulations provide that “[t]he OHA appeal is
an administrative remedy that must be exhausted before
judicial review of a NAICS code designation may be
sought in a court.” 13 C.F.R. § 121.1102 (emphasis add-
ed). Consistent with this mandatory language, the Court
of Federal Claims has recognized that a challenge to an
agency’s assignment of a particular NAICS code “is an
administrative remedy which must be exhausted before
judicial review of a code designation is permitted.” Rotech
Healthcare, Inc. v. United States, 

, 407
(2006). Accordingly, if no party had appealed the con-
tracting officer’s NAICS code selection to OHA, it would
not have been reviewable in court.
    Here, Information Ventures timely appealed the con-
tracting officer’s NAICS code determination for the solici-
tation and OHA issued a final decision. It is undisputed
that interested persons, including Palladian, received
notice of the pending NAICS code appeal, and had an
opportunity to intervene and participate in that proceed-
ing. See 13 C.F.R. § 134.210(b) (“Any interested person
may move to intervene at any time . . . .”). Palladian did
not do so.
    By regulation, when OHA issued its NAICS code de-
termination for the solicitation, it became a final decision.
13 C.F.R. § 134.316(d) (“The decision is the final decision
of the SBA and becomes effective upon issuance.”). The
code selected governs later proceedings concerning the
same solicitation and is not subject to reconsideration.
See 13 C.F.R. § 134.316(f) (“The decision in a NAICS code
20                          PALLADIAN PARTNERS, INC.   v. US



appeal may not be reconsidered.”); see also Integrated
Lab. Sys., Inc., SBA No. NAICS-4733, 

,
at *3 n.4 (Oct. 6, 2005) (noting that OHA precedent “holds
that a decision which determines the correct code for a
solicitation controls in the case of later-filed appeals
concerning the same solicitation”). According to OHA,
“[t]o hold otherwise would permit constant re-litigation of
a solicitation’s NAICS code, as successive potential offe-
rors expressed their unhappiness with the codes deter-
mined by this Office’s decisions.” Advanced Sys., 69 Fed.
Cl. at 480-81.
     Consistent with these regulations, in Palladian’s sub-
sequent appeal of the same issue, OHA refused to depart
from or reconsider its NAICS code decision in Information
Ventures. OHA explained that, if Palladian “wished to
litigate the issue of what NAICS code should apply to this
RFP,” then it should have intervened in the pending
appeal. Palladian OHA Dismissal, 

, at
*6. In Palladian’s bid protest, however, the Court of
Federal Claims rejected the government’s argument that
Palladian was required to participate in the pending OHA
appeal. Specifically, the court found it would be burden-
some to require potential small business offerors to inter-
vene in every SBA NAICS code challenge to the
solicitation to preserve the possibility of judicial review.
The court noted that, in many instances, intervention
would require litigants to file “useless motions in order to
preserve their rights.” 

. 3



     3  The futility exception to the exhaustion require-
ment applies “in situations in which enforcing the exhaus-
tion requirement would mean that parties ‘would be
required to go through obviously useless motions in order
to preserve their rights.’” Corus Staal BV v. United
States, 

, 1379 (Fed. Cir. 2007) (quoting
Bendure v. United States, 

, 431 (Ct. Cl.
PALLADIAN PARTNERS, INC.   v. US                        21



The court was also concerned that small businesses would
“be forced to expend significant time and money to involve
themselves in potentially costly litigation, in some cases,
even before having made the decision of whether or not to
submit a proposal.” 

the government maintains that Palladian
was “required to either address the merits in the pending
OHA NAICS proceeding or accept OHA’s ruling on the
appropriate code as dispositive.” Appellant Br. 21. Ac-
cording to the government, the court “undermined the
administrative scheme established by SBA and erroneous-
ly excused Palladian from exhausting administrative
remedies and thereby deprived OHA of a principal pur-
pose of administrative exhaustion, i.e., ‘an opportunity to
correct its own [potential] errors.’” 

(quoting
Weinberger v. Salfi, 

, 765 (1975)). The gov-
ernment argues that it “reasonably interprets OHA
regulations as requiring that an interested party partici-
pate in the solicitation’s OHA NAICS code appeal, or be
barred from suit.” Appellant Reply Br. 4.
    In response, Palladian concedes that a “party adverse-
ly affected by a NAICS code determination must first file
at OHA within 10 days of that determination.” Appellee


1977)). We apply the exception narrowly, however. “The
mere fact that an adverse decision may have been likely
does not excuse a party from a statutory or regulatory
requirement that it exhaust administrative remedies.”

government notes, Palladian does not attempt
to defend the Court of Federal Claims’ suggestion that
exhaustion was not required because it would be “useless”
or “futile.” Palladian’s suggestion of a different alterna-
tive to the original code designation than NAICS code
541611 could have been made to OHA in the context of
that appeal, and might well have been deemed persua-
sive.
22                          PALLADIAN PARTNERS, INC.   v. US



Br. 35. But when a contractor is “adversely affected by a
NAICS code determination resulting from an OHA ap-
peal,” Palladian submits that the proper venue is the
Court of Federal Claims. 

Otherwise, as the
court observed, the new code “could become completely
unreviewable.” 

.
     According to Palladian, as long as any interested par-
ty filed an OHA NAICS appeal and OHA rendered a final
decision identifying the most appropriate NAICS code, the
administrative exhaustion requirement is satisfied. In
particular, Palladian argues that the regulation is written
in passive voice—“The OHA appeal is an administrative
remedy that must be exhausted before judicial review of a
NAICS code designation may be sought in a court”—and
nothing contained therein provides that “the ability to
seek judicial review vests only in those parties that par-
ticipated in the OHA appeal.” Appellee Br. at 20-21
(quoting 13 C.F.R. § 121.1102). As explained below, on
the record here, we disagree.
    First, Palladian’s argument that the regulations do
not specify which parties must exhaust the administrative
remedies lacks merit; the regulations do identify the
parties that can either initiate or participate in an OHA
NAICS code appeal. The regulations provide that “[a]ny
person adversely affected by a NAICS code designation”
may file an appeal with OHA. 13 C.F.R. § 134.302(b).
When a NAICS code appeal is filed, the contracting officer
must advise the public of the existence of the appeal and
“the procedures and deadline for interested parties to file
and serve arguments concerning the appeal.” 13 C.F.R.
§ 121.1103(c)(1)(ii). And, once the appeal is filed, “[a]ny
interested person may move to intervene at any time until
the close of record by filing and serving a motion to inter-
vene containing a statement of the moving party’s inter-
est in the case and the necessity for intervention to
PALLADIAN PARTNERS, INC.   v. US                         23



protect such interest.” 13 C.F.R. § 134.210(b). 4 An “inter-
ested person” is defined as “any individual, business
entity, or governmental agency that has a direct stake in
the outcome of the appeal.” 

“[a]ny person served with an appeal
petition, any intervenor, or any person with a general
interest in an issue raised by the appeal may file and
serve a response supporting or opposing the appeal.” 13
C.F.R. § 134.309(a). Accordingly, any interested party
can present evidence and arguments for OHA to consider.
The regulations make clear that OHA’s decision is the
final decision on the NAICS code applicable to a particu-
lar solicitation and is not subject to reconsideration by
OHA. See 13 C.F.R. § 134.316(d); see also 13 C.F.R.
§ 134.316(f).
    We agree with the government that SBA’s regula-
tions, taken together, identify the parties who must
participate in a pending OHA proceeding if they want to
challenge OHA’s NAICS code designation in court. And,
by regulation, any interested party who participated in
the pending OHA appeal for the solicitation can seek
judicial review of OHA’s NAICS code determination. See
13 C.F.R. § 121.1102.
    The facts of this case underline the importance of as-
suring that any appeal taken to OHA be all encompass-
ing. As noted, Palladian is not urging a return to the



   4    Although the Court of Federal Claims found that
requiring intervention would be burdensome on small
businesses, there is no indication that the regulations
contemplate an onerous procedure. Indeed, at oral argu-
ment, the government explained that a party can preserve
its right to judicial review by filing a letter with OHA
stating whether or not it supports the contracting officer’s
original decision. Oral Argument at 5:58-7:20.
24                           PALLADIAN PARTNERS, INC.   v. US



contracting officer’s original code determination; it seeks
use of an altogether different code. Palladian, thus, does
not contend that it failed to participate because it felt the
contracting officer would represent its interests. If Palla-
dian were correct that any code change following an OHA
appeal could give rise to a court challenge by third par-
ties, it would seem that, after a remand like that author-
ized by the Court of Federal Claims here, some other
third party could file a protest relying on yet another code
designation. The process could be endless.
    Consistent with SBA regulations, in a recent decision,
the Court of Federal Claims held that judicial review was
not available where a protester “failed to comply with the
specific procedures for challenging a NAICS code or size
standard designation.” Lawrence Battelle, Inc. v. United
States, 

, 588 (2014). Specifically, the
court found that, because the protestor “failed to appeal
the NAICS code or size standard to SBA within the time
allotted, it may not seek review of the NAICS code or size
determination in this proceeding.” 

that
decision, the court recognized that it “does not have
authority to ignore the process set forth in the regulations
for challenging NAICS code designations.” 

n.11. We agree. Where, as here, Congress has specifically
delegated rulemaking authority to an agency, courts
“lack[] authority to undermine the regime established . . .
unless [the] regulation is ‘arbitrary, capricious, or mani-
festly contrary to the statute.’” See Sebelius v. Auburn
Reg. Med. Ctr., 

, 826 (2013) (quoting Chev-
ron U.S.A. Inc., v. Natural Res. Def. Council, Inc., 

, 844 (1984)).
     Given these circumstances, we conclude that SBA’s
regulations require an interested party to participate in a
pending OHA NAICS code appeal, or be precluded from
filing suit. As such, Palladian’s failure to participate in
the pending OHA appeal was a failure to exhaust its
administrative remedies.
PALLADIAN PARTNERS, INC.   v. US                         25



              2. Exhaustion is Not Excused
     Palladian contends that, even if exhaustion by it is
required under the regulations, the Court of Federal
Claims had the authority to decline to require it in these
circumstances. According to Palladian, OHA had the
opportunity and obligation during Information Ventures
to consider all potentially applicable NAICS codes before
selecting the one that best describes the services required.
Palladian cites the Supreme Court’s decision in McKart
for the proposition that, when “the administrative process
is at an end,” and the government is seeking dismissal of
a case for failure to exhaust administrative remedies at
the agency, “the proper inquiry for the court is whether
‘judicial review may be hindered by the failure of the
litigants to allow the agency to make a factual record, or
to exercise or apply its expertise.’” Appellee Br. 22 (quot-
ing 

). The government responds
that “McKart does not support waiver of the requirement
that Palladian exhaust the administrative remedy in Part
134.” Appellant Reply Br. 10. For the reasons explained
below, we agree with the government.
    In McKart, the Court explained that “it is normally
desirable to let the agency develop the necessary factual
background upon which decisions should be 

. Because “agency decisions are frequently of a
discretionary nature or frequently require expertise, the
agency should be given the first chance to exercise that
discretion or to apply that expertise.” 

a
criminal case where the defendant was indicted for will-
fully and knowingly failing to report for and submit to
induction into the Armed Forces. 

His defense
was that he should have been exempt as the “sole surviv-
ing son” whose father had been killed in action while
serving in the Armed Forces. 

court held
that he could not raise that defense because he failed to
exhaust the Selective Service System’s administrative
remedies. The court of appeals affirmed, and the Su-
26                           PALLADIAN PARTNERS, INC.   v. US



preme Court reversed. Specifically, the Court held that
the “petitioner’s failure to appeal his classification and
failure to report for his pre-induction physical do not bar a
challenge to the validity of his classification as a defense
to his criminal prosecution for refusal to submit to induc-
tion.” 

    The Court declined to apply the exhaustion doctrine
to the circumstances presented in McKart. First, the
Court explained that “use of the exhaustion doctrine in
criminal cases can be exceedingly harsh. The defendant
is often stripped of his only defense; he must go to jail
without having any judicial review of an assertedly inva-
lid order.” 

Second, the applicable “statute as
it stood when petitioner was reclassified said nothing
which would require registrants to raise all their claims
before the appeal boards.” 

the “Notice of
Classification form . . . inform[ed] the registrant of his
right to appeal, but d[id] not inform him that failure to
appeal may bar a subsequent challenge to the validity of
his classification.” 

n.11.
    In McKart, the Court explained that exhaustion is ap-
propriate “where the function of the agency and the
particular decision sought to be reviewed involve exercise
of discretionary powers granted the agency by Congress,
or require application of special expertise.” 

Because the question of whether the defendant was
entitled to an exemption as a “sole surviving son” was one
of statutory interpretation, no agency expertise or discre-
tion was required. 

Accordingly, the Court
concluded that there was “no overwhelming need . . . to
have the agency finally resolve this question in the first
instance, at least not where the administrative process is
at an end and the registrant is faced with criminal prose-
cution.” 

   While it is true that there are circumstances under
which some types of exhaustion could be waived, the
PALLADIAN PARTNERS, INC.   v. US                           27



circumstances before us do not fall into that category.
McKart is distinguishable from this case on multiple
grounds. Not only was McKart a criminal case, but,
unlike SBA’s regulations which require exhaustion, there
was no statute or regulation requiring McKart to exhaust
his administrative remedies before asserting wrongful
classification. See 

(noting that
common law exhaustion “is, like most judicial doctrines,
subject to numerous exceptions”). And, the issue in
McKart was “solely one of statutory interpretation” re-
quiring no agency expertise. 

In contrast, a
NAICS code decision requires that SBA-OHA exercise its
expertise. See Baird Corp. v. United States, 

,
666 (1983) (SBA’s determination “is entitled to considera-
ble weight since it ‘incorporates quasi-technical . . . intri-
cacies inherent in a comprehensive regulatory scheme.’”).
These many factual differences render Palladian’s reli-
ance on McKart unpersuasive.
    Indeed, the Supreme Court emphasized the im-
portance of certain of these factual distinctions in McGee
v. United States, 

(1971). There, the defend-
ant was convicted of failing to submit to induction and his
defense was that he was classified incorrectly by the local
Selective Service board. 

Although McGee
contended that he was exempt from the draft as a minis-
terial student, he never requested classification as a
ministerial student and refused to respond to question-
naires about his educational plans. 

The Court
explained that, “[u]nlike the dispute about statutory
interpretation involved in McKart, McGee’s claims to
exempt status—as a ministerial student or a conscien-
tious objector—depended on the application of expertise
by administrative bodies in resolving underlying issues of
fact.” 

Because McGee’s defenses were fact-
based, his failure to file an administrative appeal de-
prived the appeal board of the opportunity to apply its
expertise in factfinding. 

The Court con-
28                          PALLADIAN PARTNERS, INC.   v. US



cluded that McGee’s “failure to exhaust administrative
remedies bars the defense of erroneous classification,” and
it refused to excuse exhaustion, despite the criminal
context in which the issue arose. 

    As noted, NAICS code selection is a fact-specific de-
termination that requires agency expertise. Accordingly,
McGee’s emphasis on presenting fact-based issues to the
agency supports the government’s position that interested
parties must exhaust their administrative remedies with
SBA-OHA prior to seeking judicial review.
    Finally, Palladian argues that a purported failure to
exhaust administrative remedies should not result in
dismissal where it is clear that the agency considered the
issues raised in the plaintiff’s suit. In support of this
proposition, Palladian relies on two decisions from our
sister circuits involving common law exhaustion: Natural
Resources Defense Council, Inc. v. U.S. Environmental
Protection Agency, 

, 1151 (D.C. Cir. 1987)
(en banc) (“NRDC”), and American Forest & Paper Associ-
ation v. United States Environmental Protection Agency,

, 295-96 (5th Cir. 1998). Both cases involved
review of a final agency rule where the plaintiff failed to
participate during the notice and comment period, and
neither case is particularly helpful for Palladian.
    In NRDC, the D.C. Circuit indicated that it generally
requires participation in rulemaking proceedings during
the comment period “as a prerequisite to a petition for
direct review of the resulting regulations.” 

. It explained, however, that courts have
waived exhaustion where the agency “‘has had an oppor-
tunity to consider the identical issues [presented to the
court] . . . but which were raised by other parties,’” or if
the agency’s decision indicates that it “had ‘the opportuni-
ty to consider’ ‘the very argument pressed’ by the peti-
tioner on judicial review.” 

(internal citations
omitted). Because there was evidence that the agency
PALLADIAN PARTNERS, INC.   v. US                         29



“actually did consider the issue raised by the NRDC in its
petition for review,” the court excused the exhaustion
requirement. 

American Forest & Paper Association, the
Fifth Circuit indicated that it had “never held that failure
to raise an objection during the public notice and com-
ment period estops a petitioner from raising it on 

. The court further noted that the con-
cerns underlying the exhaustion doctrine were not impli-
cated because the public comments from other interested
parties were “sufficiently specific” such that “the agency
cannot reasonably claim that it has been denied the
opportunity to consider the issue.” 

    Palladian’s reliance on these cases is misplaced. Nei-
ther case involved a statutory or regulatory exhaustion
requirement, both cases were discussing rules that affect-
ed all matters and all parties appearing before the respec-
tive agencies, and both cases involved issues of statutory
interpretation rather than fact-specific inquiries. See

(the NRDC argued that the EPA
“in fact considered the statutory issue raised in the peti-
tion”); Am. Forest & Paper 

(“Dur-
ing the public comment period, EPA was presented with
detailed objections concerning the scope of endangered
species protection under Louisiana’s proposed program.”).
There is, moreover, no evidence that Palladian’s now-
urged code designation was discussed during Information
Ventures’ OHA appeal.
    Applying the exhaustion doctrine here “serves the
twin purposes of protecting administrative agency author-
ity and promoting judicial efficiency.” 

. As outlined above, SBA-OHA “is vested with
exclusive jurisdiction to review the [contracting officer’s]
determination of the appropriate NAICS code designa-
tion.” Ceres Envt’l Servs. v. United States, 

,
33 (2002) (citing 13 C.F.R. § 121.1102). Although Palladi-
30                          PALLADIAN PARTNERS, INC.   v. US



an contends that the issue it presented in court was the
same as that presented in the Information Ventures’ OHA
appeal, Palladian raised additional evidence and argu-
ments in its protest that the contracting officer did not
present to OHA. Specifically, Palladian argued in its bid
protest that NAICS code 519130, “Internet Publishing
and Broadcasting and Web Search Portals”—and not the
code suggested by the contracting officer—best described
the principal purpose of the solicitation. Palladian’s
failure to present this argument in the pending OHA
appeal deprived the agency of “an opportunity to correct
its own errors, to afford the parties and the courts the
benefit of its experience and expertise, and to compile a
record which is adequate for judicial review.” 

.
     Palladian had notice of Information Ventures’ appeal
and knew, or should have known, that the appeal could
result in a final decision changing the code and rendering
Palladian ineligible to compete. Palladian’s mere belief
that it was not required to participate in the OHA pro-
ceeding does not excuse its obligation to do so. As noted
previously, we agree with OHA that, to hold otherwise
“would potentially create endless cycles of NAICS code
litigation, whereby any concern disappointed by an OHA
decision could file a new NAICS code appeal, and thereby
re-litigate the matter.” Palladian OHA Dismissal, 

, at *6.
     We have considered Palladian’s remaining arguments
with respect to exhaustion and conclude that they are
without merit. Palladian’s failure to participate in the
pending OHA appeal was a failure to exhaust its adminis-
trative remedies and we decline Palladian’s invitation to
read an exception into or otherwise excuse the SBA’s
regulatory exhaustion requirement. Because Palladian
failed to exhaust its administrative remedies, dismissal is
required. See Deseado Int’l, Ltd. v. United States, 

, 1380 (Fed. Cir. 2010) (affirming dismissal of a
PALLADIAN PARTNERS, INC.   v. US                        31



litigant’s suit for failure to participate in a pending ad-
ministrative proceeding which could affect its interests).
                       CONCLUSION
    We conclude that the Court of Federal Claims had ju-
risdiction pursuant to 28 U.S.C. § 1491(b)(1) over both
OHA’s NAICS code decision and the contracting officer’s
amendment to the solicitation reflecting that decision.
But because Palladian was required by regulation to
participate in the pending OHA proceeding challenging
the applicable NAICS code for the solicitation and failed
to do so, we reverse the Court of Federal Claims’ decision
and permanent injunction, and remand with instructions
to dismiss Palladian’s protest for failure to exhaust its
administrative remedies.
                      REVERSED