Protest challenging the admission of a contract to SBA’s 8(a) Business Development Program is denied. The SBA determined the contract involved new work, so an adverse impact determination was not required. The protester argued SBA had failed to explain how the contract constituted new work. The court found SBA had reasonably relied on the agency’s documentation. Those documents showed the new contract increased the price of predecessor contract by more than 25% and added different capabilities thus qualifying as new work.
Background
Quanterion Solutions had a contract with the Defense Threat Reduction Agency (DTRA). Before Quanterion’s contract ended, DTRA decided it wanted to submit the successor contract to the SBA’s 8(a) Business Development Program. DTRA identified Kapili Services, LLC as a sole-source awardee for the new contract. DTRA asked the SBA to accept Kapili and the contract into the 8(a) Program.
The SBA ultimately accepted Kapili into the 8(a) Program. SBA determined the successor contract involved new work so an adverse impact analysis under 13 C.F.R. § 124.504 was not required. Quanterion filed suit in the Court of Federal Claims, challenging the SBA’s “new work” determination.
Legal Analysis
- New Work Exception — A procurement will not be accepted into the 8(a) program unless SBA has determined the award would not adversely impact small businesses. But if the procurement is a new, previously un-procured requirement, SBA does not need to make an adverse impact determination. A modification of an existing requirement is new if it (1) increases the price of the requirement by 25%, or (2) requires different capabilities or work.
- Kapili Contract Was a New Requirement — Quanterion alleged SBA had not sufficiently explained why the Kapili contract was a new. While the SBA’s decision lacked an explanation, the court found that the SBA had reasonably relied on DTRA’s submissions in making the determination.Those submissions established that the new contract required a 25% price increase and that it involved different capabilities than Quanterion’s contract.
- Quanterion Not Prejudiced by Size Determination — Quanterion asserted the SBA’s decision was deficient because while Kapili had been small when DTRA submitted the contract to SBA, it was no longer a small business. The court found that even if the SBA had made an error, Quanterion had not been prejudiced. The contract itself still qualified as new work for the 8(a) Program. If Kaplili couldn’t perform it, it would not be removed from the program. Quanterion was not an 8(a) contractor and would still not have a chance of receiving award.
Quanterion is represented by Bret S. Wacker and Christopher White of Clark HIll PLC as well as Evan A. Rossi or Rossi & Rossi. The intervenor, Kapili, is represented by Damien C. Specht, James A. Tucker, and Alissandra D. Young of Morrison & Foerster LLP. The government is represented by Andrew Hunter, Brian M. Boynton, Martin F. Hockey, Jr., and L. Misha Preheim of the Department of Justice as well as Judith L. Richardson of the Defense Threat Reduction Agency.
