THOMAS C. WHEELER, Judge.
In this bid protest, Plaintiff National Telecommuting Institute ("NTI") challenges the award of a U.S. Department of Agriculture ("USDA") help desk services contract to Peckham Vocational Industries ("Peckham"). The Government conducted this procurement under the AbilityOne Program established by the Javits-Wagner-O'Day ("JWOD") Act, 41 U.S.C. §§ 8501-8506, to provide jobs for individuals with severe disabilities. The AbilityOne Commission is an independent federal agency created to administer the AbilityOne Program.
This particular procurement has a long history, beginning in April 2013. There have been multiple administrative appeals before SourceAmerica and the AbilityOne Commission, and a reevaluation of proposals in accordance with the Commission's instructions. For the reasons explained below, the Court finds that NTI's protest is barred under the doctrine of laches.
Putting NTI's laches problem aside, the protest also fails on the merits. The Court finds that SourceAmerica rationally evaluated the proposals, and determined that Peckham's proposal was far superior to NTI's. SourceAmerica adhered to the reevaluation instructions mandated by the Commission. NTI's complaints about the procedures followed during the reevaluation are not supported by the administrative record. Accordingly, NTI's protest is DENIED.
NTI is a not-for-profit organization providing telecommuting job opportunities for severely disabled individuals who are unable to work outside the home. Compl. ¶ 13. Joining the Government in defending against NTI's protest are SourceAmerica, the designated central nonprofit agency, and Peckham, the selected awardee for the contract at issue. SourceAmerica and Peckham are Defendant-Intervenors.
Through the JWOD Act, Congress created the Committee for Purchase from People Who are Blind or Severely Disabled ("Committee" or "Commission") to administer the AbilityOne Program ("AbilityOne" or "Program"). 41 U.S.C. §§ 8502-03. The Committee consists of fifteen presidential appointees representing various federal agencies as well as the blind and severely disabled communities.
Once the Committee determines that a good or service is suitable for procurement from a qualified nonprofit agency, the Committee places that item on a published Procurement List and any federal agency wishing to obtain that item must do so through a qualified nonprofit agency. The Act lists specific requirements and conditions nonprofit agencies must satisfy to participate, and requires the Committee to maintain and publish in the Federal Register the list of products and services deemed suitable for procurement through the Program. The Act does not define the suitability standard, but states that the Committee "may prescribe regulations regarding specifications for products and services on the procurement list . . . and other matters as necessary to carry out this chapter." 41 U.S.C. § 8503(c). As discussed below, the Committee promulgated regulations establishing four mandatory criteria to determine a commodity's or service's suitability for the Procurement List. 41 C.F.R. § 51-2.4(a)(1)-(4) "Determination of suitability."
The Program's statutory and regulatory framework creates a multi-step process by which potential AbilityOne goods and services are identified and assessed. The statute and regulations also create a three-tiered framework for evaluating the ultimate suitability of a given addition to the Procurement List. Along with the Committee, SourceAmerica, in its role as the central nonprofit agency coordinating employment opportunities for the severely disabled, assesses federal contracting activities for compatibility with the AbilityOne Program, obtains procurement information from federal contracting entities, evaluates submissions from interested nonprofit agencies, and makes recommendations to the Committee. Once the Committee receives SourceAmerica's recommendation, the Committee's executive staff conducts its own review of the submissions and makes an independent recommendation to the Committee's presidentially-appointed members. The Committee members then consider the "particular facts and circumstances in each case" before deciding whether the good or service should be added to the Procurement List. 41 C.F.R. § 51-2.5.
After the USDA Forest Service posted a Request for Information ("RFI") for IT helpdesk services support ("HelpDesk Services") on October 30, 2012, SourceAmerica approached the Forest Service to discuss whether the HelpDesk Services project might be sourced through the AbilityOne Program. Gov't Mem. at 6. The USDA then contacted Ryan Blackman, SourceAmerica's Senior Deputy Director for Strategy Development, in early February, 2013, to discuss transitioning the helpdesk call center to an AbilityOne opportunity. SourceAmerica ("SA") Mem. at 8. Once the USDA Secretary and Chief Information Officer confirmed that the HelpDesk Services could be sourced through the AbilityOne Program, SourceAmerica created Sources Sought Notice ("SSN") 2000 for distribution among qualified nonprofit agencies.
On April 8, 2013, SourceAmerica published SSN 2000 and its evaluation team began reviewing bid proposals in early May. Mr. Blackman hired two independent contractors to offer technical advice to ensure accurate assessment of the technical elements of the proposals. Although Mr. Blackman continued to facilitate the relationship between the independent contractors and SourceAmerica's evaluation team, Mr. Blackman was not a member of the evaluation team. The SSN 2000 team completed its evaluation matrices on May 6, 2013, with every evaluator recommending Peckham for the HelpDesk Services opportunity. SA Mem. at 12. Although NTI received no first rankings, it did rank second or third with a majority of the evaluators. Following SourceAmerica's Executive Director's recommendations, on May 23, 2013, Peckham and NTI presented their proposals to the USDA and answered key questions submitted to SourceAmerica by the USDA.
Following a debriefing with SourceAmerica's Executive Director, NTI filed two appeals with SourceAmerica, both of which were denied.
After granting NTI's appeal on December 20, 2013, Ms. Ballard remanded SSN 2000 to SourceAmerica "for appropriate action." Administrative Record ("AR") 2885. To ensure a fair and unbiased second evaluation, Ms. Ballard "instructed SourceAmerica to re-do their NPA recommendation," giving the agency the following guidelines: "(1) SourceAmerica should create another Sources Sought Notice using the original Statement of Work and identical posting questions; (2) SourceAmerica should establish an evaluation team of SourceAmerica staff members who were not involved in the first posting; (3) [t]he SourceAmerica Executive Director making the recommendation should not have been involved with the first posting; and (4) [create a] `firewall' between the first posting and the second posting [] so no one on the new team has access to any of the details of responses to first posting or any evaluation details."
SourceAmerica posted SSN 2333 on Friday, January 3, 2014.
NTI immediately initiated the appeal process, filing ultimately unsuccessful first and second-level internal appeals with SourceAmerica on February 6 and March 4, 2014.
Counsel for NTI filed this judicial post-award challenge on March 20, 2015, protesting the USDA HelpDesk Services award to Peckham and requesting declaratory and injunctive relief. On March 25, 2015, Peckham filed a motion to intervene, which the Court granted the next day. During a hearing on March 26, 2015, Counsel for NTI successfully applied for a Temporary Restraining Order ("TRO") to enjoin the Government from allowing Peckham's performance for fourteen days. On April 2, 2015, after briefing and oral argument, the Court granted Peckham's motion to dissolve the TRO. On April 10, 2015, the Court granted SourceAmerica's motion to intervene in this case.
On July 8, 2015, NTI filed a motion for judgment on the administrative record and a permanent injunction. On July 29, 2015, the Government and Intervenors each filed an opposition to Plaintiff's motion and a cross-motion for judgment on the administrative record. The parties have fully briefed their respective motions, and on September 15, 2015, the Court heard closing arguments. After carefully considering the parties' positions, the Court concludes that NTI's claims are time-barred and that, in the alternative, the Government is entitled to judgment on the administrative record.
Pursuant to the Tucker Act, as amended by the Administrative Dispute Resolution Act of 1996, this Court has "jurisdiction to render judgment on an action by an interested party objecting to a solicitation by a Federal agency 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 procurement." 28 U.S.C. § 1491(b)(1). Determining whether a bid protester has standing to pursue a claim in this Court "is a threshold jurisdictional issue" that must be met in any protest.
Neither the Government nor the Intervenors dispute that NTI has standing to pursue this action. Indeed, the Court agrees that NTI is an interested party within the meaning of the relevant statute and therefore has standing. NTI is an actual offeror and submitted a technically acceptable proposal. NTI submitted timely proposals for both SSN 2000 and SSN 2333, and was one of only three offerors evaluated by SourceAmerica and the Commission during the second evaluation process. Pl. Mem. at 13. Only NTI and Peckham proceeded beyond the initial qualifying assessment such that both were "within the zone of competition" for the HelpDesk Services opportunity.
In its cross-motion for judgment on the administrative record, Peckham asserts the equitable defense of laches. Peckham Mem. at 25-27. The doctrine of laches "bars a claim when a plaintiff's `neglect or delay in bringing suit to remedy an alleged wrong, which taken together with lapse of time and other circumstances, causes prejudice to the adverse party.'"
A laches defense requires that a defendant show "(1) unreasonable and unexcused delay by the claimant, and (2) prejudice to the other party, either economic prejudice or defense prejudice."
SourceAmerica notified Peckham and NTI of the outcome of SSN 2333 via email on January 23, 2014, and debriefed NTI on January 29, 2014. AR 2642-45. NTI filed first and second-level appeals with SourceAmerica on February 6 and March 4, 2014.
This Court has explained that a plaintiff cannot sit on his rights in bringing a bid protest while the Government moves forward with a contract.
NTI offers two primary justifications to explain its delay, both of which are unpersuasive. First, NTI explains that it waited until March 2015 to bring its protest before this Court because it chose to attempt to work directly with the USDA.
The Court does not quarrel with NTI's claims that it was attempting to seek relief through informal channels and by less expensive means. However, in choosing to rely on such alternative efforts, rather than timely filing a bid protest, NTI "simply chose to put all [its] eggs in one basket—ultimately to [its] detriment."
As this Court has explained, the "[m]ere passage of time does not constitute laches."
In the present case, NTI's decision to sit on its right to bring this claim for six months directly and substantially prejudiced both Peckham and the Government. Peckham has "incur[red] millions of dollars in costs that remain unreimbursed pending this bid protest." Peckham Mem. at 26;
For these reasons, the Court finds that application of the laches doctrine is appropriate in this case. NTI could have brought this action as much as six months before it did so and its justifications for the delay are inadequate. As a result of NTI's delay, both Peckham and the Government have suffered economic prejudice, much of which could have been avoided had NTI brought a timely bid protest.
In a bid protest, this Court reviews an agency's decision pursuant to the standards set forth in the Administrative Procedure Act ("APA"). 5 U.S.C. §§ 701-706 (2000);
The APA standard allows this Court to set aside an agency's procurement decision if it lacked a rational basis or if the agency's decision-making involved a violation of regulation or procedure.
In its motion for judgment on the administrative record and permanent injunction, NTI protests the second evaluation process of proposals for the USDA HelpDesk Services opportunity on three grounds. First, NTI contends that SourceAmerica failed to follow each of four guidelines from Ms. Ballard in conducting the second evaluation, resulting in an arbitrary and capricious evaluation process that prejudiced NTI. Second, NTI argues that the Commission erred in determining Peckham was a suitable, qualified nonprofit agency. Pl. Reply at 25. Finally, NTI contends that it was unreasonable for SourceAmerica and the Commission not to consider AbilityOne's policy goal of maximizing employment opportunities. Pl. Mem. at 22. The Court will address each of NTI's arguments below.
For the reasons explained, NTI has failed to meet its burden on any of its protest grounds and, in fact, the administrative record instead supports judgment in the Government's and Intervenors' favor. Specifically, SourceAmerica and the AbilityOne Committee's decision to award this contract to Peckham was reasonable, coherent, and rational based on the record evidence. Moreover, the reevaluation process adhered to the specific procedures articulated by Ms. Ballard as well as the four-factor regulatory framework.
After sustaining NTI's first appeal based on its claim that SourceAmerica "evaluat[ed] NTI on criteria that was not included in the Source Selection Notice #2000," Ms. Ballard returned the IT project selection decision to SourceAmerica "for appropriate action." SA 1756. A July 21, 2014 Commission staff synopsis summarizes Ms. Ballard's instructions to SourceAmerica regarding SSN 2333, the second evaluation for the USDA HelpDesk Services opportunity. The synopsis is a post-hoc description of the instructions for the second evaluation and the parties disagree as to the weight this summary should be given. Tr. at 74-75 ("There's been some debate between NTI and the intervenors . . . because AR 94 is an after-the-fact memorialization of the instructions. The intervenors are absolutely correct on that.... But NTI is also right that it represents the instructions. These are the instructions of SourceAmerica."). The Court deems it unnecessary to decide whether the guidelines are directions or an after-the-fact summary because, either way, SourceAmerica conducted the second evaluation process in accordance with each of the four Commission guidelines.
Based on these guidelines, NTI argues that the evaluation process was arbitrary and capricious because SourceAmerica failed to: (1) issue an identical posting; (2) establish an evaluation team of members who were not involved in the first posting; (3) select an evaluation official who was not involved in the first posting; and (4) create a firewall between the first and second postings so new team members could not access evaluation or response details from the first posting. AR 94.
The first Commission guideline instructed SourceAmerica to "create another Sources Sought Notice using the original Statement of Work and identical posting questions," because Ms. Ballard determined SourceAmerica evaluated the SSN 2000 proposals using criteria not explicitly listed in the notice.
As the evaluation of proposals for SSN 2000 proceeded, the USDA posed additional questions and its user requirements changed, which in turn led to changes in the Commission's suitability analysis. Gov't Mem. at 28. For example, on June 11, 2013, both NTI and Peckham received an email with three questions that then became part of SSN 2000. Tr. at 75. In drafting SSN 2333, the staff at SourceAmerica deliberately added these three questions (as Response Requirements 7, 8, and 10) to the notice to ensure that it accurately reflected the substantive evaluation criteria considered during the first evaluation. SA Reply at 14. NTI claims that these changes make the second evaluation substantially different from the first.
NTI's contention that SourceAmerica made impermissible changes to SSN 2333 is simply without merit. The information sought by Response Requirements 7, 8, and 10 was requested from NTI and Peckham during the first evaluation process. NTI provided this information during that process by answering the USDA's and SourceAmerica's additional questions. Had SourceAmerica issued an identical posting, it would have been disregarding Ms. Ballard's first guideline for conducting the second evaluation process.
NTI places form over substance by arguing SourceAmerica should have drafted SSN 2333 in a way that effectively did not reflect the actual contract opportunity SSN 2000 had become by the time the first evaluation period ended.
Lastly, SourceAmerica "expanded upon the criterion regarding [nonprofit agency] management" in part because NTI itself requested such guidance following SSN 2000. SA 738-39. To clarify this criterion, SourceAmerica explained what it was looking for in terms of nonprofit agency management in greater detail in SSN 2333.
The record demonstrates that SourceAmerica complied with the second Commission guideline to "establish an evaluation team of SourceAmerica staff members who were not involved in the first posting." AR 94;
NTI contends that SSN 2333 evaluators Ted Prindle and Chris Seventko were involved in the first posting based on two emails. Yet, any involvement by Mr. Seventko or Mr. Prindle in SSN 2000, however limited, came well after SourceAmerica completed the evaluation process and awarded the contract to Peckham. As to Mr. Prindle, NTI cites a single email referring to him as a potentially interested party to a conference call discussing the USDA award. Pl. Mem. at 19; SA 2715. NTI fails to acknowledge, however, that this email and the conference call to which it refers took place post-award, and therefore would not have involved information about the actual evaluation.
Finally, NTI argues that Mr. Blackman's role as the executive director for SSN 2333 tainted the evaluation process. However, as NTI itself concedes, Mr. Blackman had "legitimate business reasons" for his early involvement with the USDA HelpDesk Services opportunity.
Ms. Ballard's third guideline required that "[t]he SourceAmerica Executive Director making the recommendation should not have been involved with the first posting." AR 94. Again, in this context, "posting" refers "to the solicitation and its evaluation." SA Reply at 17. Accordingly, Ms. Ballard's "phrase `not involved with the first posting' refers to the first proposals and their evaluation, not to conduct of business that preceded or followed that evaluation."
As executive director of the SSN 2333 posting, Mr. Blackman "was responsible for reviewing the evaluators' findings, recommending an NPA to the Commission, and notifying the NPAs of his recommendation." Gov't Mem. at 32;
NTI correctly asserts that SourceAmerica did not create "[a] `firewall' between the first posting and the second posting . . . so no one on the new team ha[d] access to any details of responses to [the] first posting or any evaluation details," according to Ms. Ballard's final guideline. Pl. Reply at 17; AR 94 (listing final guideline). What NTI's argument fails to acknowledge, however, is that SourceAmerica did not have to set up or create a new IT infrastructure to meet this requirement.
To the extent that any messages relating to the first posting reached SSN 2333 evaluators, NTI fails to show how any such message caused an irrational second evaluation process. SA Mem. at 36-37. Finally, NTI's additional arguments concerning similarities between SSN 2000 and SSN 2333 evaluators' descriptions of the opportunity or project history are unpersuasive. The language appeared verbatim in both publicly distributed notices. SA Reply at 18.
As noted above, the AbilityOne Committee's regulations set out four criteria that a commodity or service must satisfy to be considered "suitable" for addition to the Procurement List. Much of the suitability assessment involves the qualifications of the nonprofit agency providing the services. As the regulations state, "[f]irst, the service must have the potential to generate employment for the severely disabled. 41 C.F.R. § 51-2.4(a). Second, the selected NPA must `qualify' for the program. Id. Third, the selected NPA must be capable of providing the service. Id. Fourth, the addition of the service to the Procurement List should not have severe adverse impact on the incumbent. Id." Gov't Reply at 1-2. When assessed against these four suitability criteria, the Committee's decision to add the USDA HelpDesk Services to the Procurement List with Peckham as the service provider was rational and in accordance with applicable law.
The USDA's HelpDesk opportunity, as provided by Peckham, had the potential to generate employment for the severely disabled.
Peckham qualifies to participate in the AbilityOne Program as an agency that is "operated in the interest of severely disabled individuals who are not blind," 41 U.S.C. § 8501(6), and "employs . . . 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 C.F.R. § 51-2.4(a)(3).
Despite Peckham's clear qualifications, NTI contends that SourceAmerica ignored the statutory purpose of the AbilityOne Program when it "failed to follow its B-1 policies and procedures." Pl. Mem. at 22. According to NTI, SourceAmerica's B-1 policies and procedures require it to consider which nonprofit agency will "maximize employment" for the target population. NTI claims that had SourceAmerica followed this "authentic mandate," it would have determined that NTI was more qualified for this opportunity than Peckham because NTI employees are homebound and therefore are the "most severely disabled." Pl. Reply at 23. The Court does not find support for this argument in the JWOD Act.
In passing the JWOD Act, Congress directed "the CNAs [to] assist the Commission with the identification, evaluation, and distribution" of "employment and training opportunities for persons who are blind or have other severe disabilities." 41 U.S.C. § 8503(c); 41 C.F.R. §§ 51-3.2, 51-1.1. Pursuant to the Commission's directives and its "overarching goal to increase" such training and employment opportunities, SourceAmerica published AbilityOne Program Bulletin No. B-1. 41 C.F.R. § 51-1.1; AR 330-38. As Bulletin B-1 states, SourceAmerica
AR 330. NTI's argument essentially rewrites this policy statement to create a maximization mandate, rather than an overarching policy goal, which it then claims SourceAmerica disregarded during the evaluation process.
The Court is not persuaded by NTI's "maximization of employment" argument. NTI asks this Court to decide whether employing individuals with visible, physical disabilities should render a nonprofit agency more qualified under the regulations than an agency employing individuals with less visible physical or mental disabilities. The Court will not engage in such analysis. Nor does it find any evidence in the record or statutory framework to suggest that the AbilityOne Program was meant to weigh the severity of a person's disability after that individual qualifies under the statutory definition of "severely disabled individual." SourceAmerica, the Committee's staff, and the Committee itself determined that Peckham qualified for this opportunity. The evaluators were persuaded that Peckham satisfied the 75 percent direct-labor ratio and approved its "plans for employing severely disabled persons with a range of physical and mental disabilities." SA Reply at 12.
The regulations also require that the selected nonprofit agency be capable of performing the contract. As outlined above, potential nonprofit agency providers are assessed via AbilityOne's three-tiered evaluation process. Once the Committee decides that a good or service is capable of being provided by the severely disabled and therefore suitable for procurement through the Program, SourceAmerica, as the designated central nonprofit agency, publishes a Sources Sought Notice. This notice accomplishes what a request for proposals ("RFP") normally would in ordinary government procurement.
At every stage of the evaluation process, individuals and organizations experienced with the AbilityOne procurement process assessed both NTI's and Peckham's responses to SSN 2000 and SSN 2333. NTI's strengths did not go unnoticed, but over the course of two years, "the recommendation[s] of every individual who and organization that assessed the competing proposals" favored Peckham in terms of ability to provide the requested service.
The fourth and final regulatory condition requires the Commission to assess the impact that adding the good or service to the Procurement List will have on the current contractor. 41 C.F.R. § 51-2.4(a). The incumbent contractor for the HelpDesk Services is IBM, currently twenty-fourth on the Fortune 500 with reported annual revenues of $104 billion. Gov't Mem. at 28; AR 232. The Commission rationally determined that adding the $60 million HelpDesk Services contract to the Procurement List would "not have [a] severe adverse impact on the incumbent." 41 C.F.R. § 51-2.4(a); AR 232. IBM has not opposed adding the HelpDesk Services opportunity to the Procurement List and nowhere in NTI's motions before this Court does it dispute this finding.
NTI could have filed this protest at least six months before it finally chose to do so. Instead, it opted to weigh the cost of litigation while pursuing its own means of resolution. By virtue of NTI's delay, the Government and Intervenors have incurred costs that could have been avoided. The doctrine of laches precludes relief to one who slumbers on his rights to the disadvantage of the other parties. Accordingly, NTI's claims in this case are barred by the doctrine of laches.
In the context of a procurement protest, the APA's standard permits this Court to set aside an agency's procurement decision only where it lacked a rational basis or if the agency's decision-making involved a violation of regulation or procedure. When evaluating a challenge on the first ground, a court "must determine `whether the contracting agency provided a coherent and reasonable explanation of its exercise of discretion."
When bringing a challenge "on the second ground, the disappointed bidder must show a clear and prejudicial violation of applicable statutes or regulations.'"
Based upon the foregoing, the Court DISMISSES NTI's claims as untimely, and alternatively GRANTS the Government's and Intervenors' Cross-Motions for Judgment on the Administrative Record.
IT IS SO ORDERED.
The reason for redaction "is to safeguard the competitive process, not to withhold information that a party frowns on making public."
