Pre-award protest challenging agency’s acquisition planning and market research is denied where the agency’s planning and research was (1) appropriate to determine whether the government’s requirements could be satisfied under the Federal Supply Schedule, and (2) sufficient to determine the type and extent of small business participation.
American Relocation Connections LLC had a contract with U.S. Customs and Border Patrol to provide moving and relocation services to CBP employees. That contract was a small business set aside that requested services under Federal Supply Schedule 48 (Transportation, Delivery and Relocation Services). When ARC’s contract ended in 2018, CBP issued a request for quotations, again seeking relocation services under Schedule 48. This time, however, the procurement was unrestricted, i.e., not set aside for small businesses.
ARC filed and lost a pre-award protest challenging the terms of the RFQ with the Government Accountability Office. ARC then filed a complaint with the Court of Federal Claims, contending that CBP had failed to conduct meaningful acquisition planning or market research before deciding to use the Federal Supply Schedule as a contract vehicle and before electing to issue the RFQ as an unrestricted acquisition. ARC argued that to the extent CBP performed planning or research, it was undertaken in a post hoc fashion to validate the already-issued RFQ. Following the filing of ARC’s complaint, both ARC and the government moved for judgment on the administrative record.
FAR 7.102 requires agencies to conduct acquisition planning and market research to ensure an efficient procurement. ARC argued that CBP had violated this rule by failing to perform planning and research before selecting the Federal Supply Schedule as a contracting vehicle. The court disagreed, explaining that internal CBP emails discussing the upcoming need for relocation services as well as a June 2017 Acquisition Plan, which specifically discussed using the Federal Supply Schedule, indicated reasonable planning.
With regard to market research, the court found that CBP’s review of spreadsheets acquired from the General Services Administration satisfied the requirement to undertake market research in order to determine whether there were small businesses capable of satisfying CBP’s requirements under the Federal Supply Schedule. The court reasoned that under FAR 10.002, market research may include contacting knowledgeable individuals in the government regarding market capabilities. That is exactly what CBP did when it obtained spreadsheets from the person at GSA who managed relocation contracts.
Nevertheless, ARC argued that CBP had violated 13 C.F.R § 125.2, a Small Business Administration regulation. That regulation requires, among other things, that in conducting market research, an agency must (1) consult with small business procurement center representatives to determine the extent of foreseeable small business participation; and (2) provide a written statement to the SBA when the agency wants to conduct an unrestricted competition for a contract that was previously performed by a small business. ARC contended the CBP had not undertaken these steps before deciding to conduct an unrestricted procurement.
The court noted that previous COFC precedent indicated that small business regulation do not apply to Federal Supply Schedule procurements. The court reviewed the history of 13 C.F.R. § 125.2 and similarly found that it did not appear that SBA intended the regulation to apply to orders against the Federal Supply Schedule. At most, it appeared that SBA merely required agencies to consider the procedures outlined in the regulation, and if they did not use them, to document their rationale.
What’s more, the court found that interpreting 13 C.F.R. § 125.2 to apply to Federal Supply Schedule orders would conflict with the FAR. The SBA regulation was very similar to FAR 19.501(c), which requires contacting officers to conduct market research concerning small business. But FAR 8.404(a), which governs Federal Supply Schedule acquisitions, explicitly states that the requirements of FAR Part 19 do not apply to Schedule orders.
Regardless of whether CBP conducted its market research in accordance with the SBA regulation, the court found that the agency had conducted sufficient market research to determine the type and extent of small business participation. As noted, CBP had obtained GSA spreadsheets that indicated there were not enough small business under the applicable NAICS Codes to conduct a meaningful competition. CBP was entitled to rely on this government-provided market information.
Even if the SBA regulation applied, the court was not inclined to find a violation. The regulation only required an agency to provide a written statement to SBA when “the magnitude of the quantity or estimated dollar amount value of the proposed procurement would render small business prime contract participation unlikely.” Here, CBP did not issue an unrestricted procurement because of the magnitude of quantity or estimated dollar value; rather, it decided on an unrestricted procurement because under the applicable NAICS Code, there was only one certified business that could compete for the contract. Thus, the SBA regulation’s “written statement” requirement was not even applicable.
The fact that was only one certified small business that could compete also excused the agency’s failure to consult with SBA representatives before deciding on an unrestricted procurement. Given that there was only one certified small business eligible for the contract, ARC had no reasonable expectation of a small business set aside, and without this reasonable expectation, ARC could not establish that it had been prejudiced by CBP’s failure to consult with SBA personnel.
Ultimately, the court denied ARC’s motion for judgment on the administrative record and granted the government’s.
American Relocation Connections LLC is represented by Bret S. Wacker and Emily Baldwin of Clark Hill PLC as well as W. Barron A. Avery and William B. O’Reilly of Baker Hostetler. The government is represented by Margaret J. Jantzen, Steven J. Gillinham, Robert E. Kirschman Jr, and Joseph H. Hunt of the Department of Justice, as well as Kimberly L. Cohen from U.S. Customs and Border Protection.
