Government’s motion to dismiss a bid protest challenging a sole source award is granted. The government argued that the protester’s claims were not ripe because the agency’s decision to award a sole source contract was not a final decision. The court, however, found that the sole source decision was final. Nevertheless, the court determined that the protester lacked standing to protest. Even if the government’s sole source decision violated the law, the protester could not satisfy the solicitation’s requirements and thus was ineligible for award.
The Department of Housing and Urban Development (HUD) awarded three loan servicing contracts for reverse mortgages to companies that participated in SBA’s 8(a) Business Development Program. HUD, however, was unhappy with these companies’ performance and thus cancelled the solicitations. HUD combined the loan servicing services it had previously received under three contracts into one new solicitation. With this new solicitation, HUD added a requirement that the prime contractor be an FHA Approved Mortgage Loan Servicer.
HUD conducted market research and identified companies that were FHA approved servicers that specialized in reverse mortgages. The agency, however, was unable to identify any 8(a) small business that were FHA approved. HUD issued a request for information to the companies it had identified, but only one vendor, Celink, responded with an expression of interest. HUD then issued a Notice of Intent to Award a Sole Source Contract to Celink. The notice invited other interested parties to submit capability statements.
Ideogenics, LLC filed a protest with COFC, objecting to the Notice of Intent to award a sole source contract. Ideogenics argues that HUD had violated the FAR and SBA regulations by failing to request approval from SBA before removing the procurement from the 8(a) program. The company further alleged that even if the procurement had been properly removed from the 8(a) program, HUD was still required to award the contract to a HUBZone, veteran-owned, or small business set aside. The government moved to dismiss Ideogenics’s protest, arguing that its claims were not ripe, and that the company lacked standing.
The government argued that Ideogenics’s claims were not ripe because HUD had not yet made a final decision on the contract. The government claimed that the notice of intent to award a sole source contract was simply market research, and that it was still in the process of reviewing capability statements to decide whether a competitive procurement would better serve the agency’s needs.
The court rejected this argument, noting that its protest jurisdiction extends to any alleged violation of a statute or regulation in connection with a procurement. Ideogenics had alleged violations of the FAR and SBA regulations in connection with the procurement. Those claims clearly fell within the court’s jurisdiction.
Additionally, the court was not persuaded by the government’s attempt to characterize the notice of intent as mere market research. The government had already conducted market research, identified eligible companies, and then issued the notice setting forth the type of contract that will be awarded, the services that will be procured, the terms, option periods, and the awardee. If this were not sufficient for ripeness purposes, the court reasoned, then it is unclear what would be. The fact that the government had invited capability statements and could conceivably cancel the solicitation and procure the requirements in a different manner, was unavailing. The same could be said of any pre-award bid protest. To accept the government’s argument that pre-award bid protest is not ripe until the government makes a final award would eviscerate the court’s jurisdiction over pre-award bid protests.
Although the court found that Ideogenics’s claim was ripe, it did not believe the company had standing to assert it. In Count I of its complaint, Ideogenics claimed the government had erred in removing the procurement from the 8(a) program. But Ideogenics was itself no longer a participant in the 8(a) program. Even if the government had erred in removing the procurement from the program, Ideogenics would not be eligible for award.
Additionally, in Count II of its complaint, Ideogenics alleged that the government should have set the procurement aside for HUBZone or service disabled veteran owned small businesses. Ideogenics held a HUBZone certification. But the solicitation also required that the award be made to an FHA approved loan servicer. Ideogenics was not an FHA approved vendor and thus was ineligible for award. Ideogenics tried to argue that if the government opened the procurement up to competition, then the FHA approval requirement may not be included in a new solicitation. The court reasoned, however, that if it were to accept that argument, it would have to find that the agency’s decision to award a sole source contract was not final. And if that decision was not final, then Ideogenics’s protest would not have been ripe.
Ideogenics is represented by Jerry A. Miles of Deale Services, LLC. The intervenor, Celink, is represented by Aron C. Beezley of Bradley Arant Boult Cummings, LLP. The government is represented by Douglas K. Mickle of the U.S. Department of Justice, Jonathan E. English of the U.S. Department of Housing and Urban Development , and Beverly E. Hazlewood of the U.S. Small Business Administration.
