Protest Challenging AbilityOne Commission’s Decision to Implement Competitive Processes in Acquisitions Is Not Ripe; Melwood Horticultural Training Center, Inc. v. United States, COFC No. 20-758C

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Protest challenging the AbilityOne Commission’s decision to use competitive procedures in a procurement as part of a pilot program in the AbilityOne program is dismissed for lack of jurisdiction. The AbilityOne Commission decided to implement a pilot program to use competitive procedures for a base support contract at Ft. Meade. The protester alleged that the decision to use competitive procedures violated the Javits-Wagner-O’Day Act, the federal law that created the AbilityOne program. The court found that the protest was not ripe because it did not challenge a final agency action. The protest challenged the AbilityOne program’s announcement of the pilot program. But that announcement was not a final agency action that consummated the pilot program. Moreover, the court found, the protester had not established that it would suffer hardship absent court action as required by the ripeness doctrine. Although the court lacked jurisdiction to hear the protest, it noted that the protester had raised legitimate concerns about the pilot program.

The AbilityOne program was established by the Javits-Wagner-O’Day Act to provide jobs to individuals with vision impairment and severe disabilities. As part of the Act, Congress created a committee, the AbilityOne Commission, to identify programs and services furnished by qualifying non-profit agencies that are suitable for government procurement. Once the committee identifies a good or service suitable for procurement from a qualified non-profit, that good or service is placed a procurement list, and federal agencies must obtain that good or service through a qualified non-profit. Because the policy of the AbilityOne Program is to increase opportunities for the blind and people with disabilities, procurements under the program are designated as “other than competitive,” meaning that full and open competition is not required.

Section 898 of the National Defense Authorization Act FY 2017 directed the Secretary of Defense to establish a panel on AbilityOne oversight. The purpose of the panel was to explore opportunities for competition in the AbilityOne Program. IN 2018, the DoD AbilityOne panel made its first report to Congress. In the report, the panel proposed requiring best value tradeoffs in AbilityOne acquisitions that consider price.

In accordance with this recommendation, the Army requested that the AbilityOne conduct a pilot program using competitive processes for a base operations support contract at Fort Meade. The AbilityOne commission issued a memorandum formalizing the decision to use competitive processes for the base support contract in May 2020.

Melwood Horticultural Training Center was the AbilityOne non-profit agency that had been performing the base operations support contract at Ft. Meade. When the AbilityOne Commission announced the decision to use competitive processes for the base support contract, Melwood filed a pre-award bid protest with the Court of Federal Claims, challenging the decision. While the protest was pending, the AbilityOne Commission authorized the posting of an opportunity notice for the base operations support contract.

Melwood’s complaint challenged the AbilityOne Commission’s decision on three grounds. First, the company claimed the Commission had improperly cancelled Melwood’s current contract with Ft. Meade. Second, Melwood argued that the source selection plan for Fort Meade violated various federal statutes and regulations by obviating the AbilityOne Commission’s responsibility to establish a fair market price between nonprofit agencies. Third, Melwood contended that the decision to use competitive procedures in the AbilityOne program was arbitrary and capricious and thus violated the Administrative Procedures Act. The government moved to dismiss Melwood’s complaint. Both parties moved for judgment on the administrative record.

The court found that it lacked jurisdiction to consider Melwood first claim, i.e., that the AbilityOne Commission improperly cancelled its contract. Melwood had filed a bid protest complaint. But improper cancellation of a contract broaches a question of contract administration that must be brought under the Contract Disputes Act. Melwood could not bring this challenge as a bid protest.

The government requested dismissal of Melwood’s second count—alleging that the decision violated federal law—because the claim was not ripe. To establish that an action is ripe, the plaintiff must show that (1) the issue is fit for judicial review, and (2) that the withholding of the court’s consideration will result in a hardship on the parties.

The court found that Melwood’s complaint did not satisfy either of the ripeness prongs. When a party challenges a government decision, the fitness element becomes a question of whether the challenged decision constitutes the final agency action. The agency action must be the consummation of the agency’s decision-making process. Additionally, the action must be one in which rights and obligations have been determined and legal consequences will flow.

Melwood alleged that final agency action occurred when the AbilityOne program announced that it would use the base operations support contract for the competition pilot. But the court reasoned that final agency action occurred when the Commission took a final vote to authorize the use of competitive processes. Up until that point, the government could have changed its mind and decided not to use competitive processes. Ripeness is evaluated at the time the complaint is filed. Melwood’s complaint did not challenge the final agency action.

The court further noted that even if Melwood could satisfy the fitness prong, it had not offered an argument as to how it would suffer a hardship in the absence of court intervention. The court construed Melwood’s silence on this prong as a concession that it would suffer no hardship.

The court also found that it lacked jurisdiction to hear Melwood’s third count, alleging violation of the Administrative Procedures Act. The Court of Federal Claims lacks jurisdiction to hear APA claims. Accordingly, the court transferred the APA claim to the District Court of Maryland.

In closing, the court noted that although it could rule on the matter due to lack of jurisdiction, it believed that Melwood’s suit had raised a serious question as to whether DoD’ pilot program violated the Javits-Wagner-O’Day Act and its implementing regulations. The NDAA that created the DoD panel only authorized the panel to make recommendations. It was not clear that Congress intended DoD and the AbilityOne Commission to implement a program that actually used competitive procedures. Moreover, the Javits-Wagner-O’Day Act clearly statsd a preference for acquisitions that do not contain a price component. It was unclear whether the NDAA authorized the AbilityOne program to drastically modify its procurement procedures. Finally, the court questioned the “back-of-the-napkin math relied upon [by the government] to determine that a resolicitaiton at Fort Meade could accomplish legally dubious price slashing goals.” Indeed, the court noted that the Army’s own independent estimate indicated that using competitive procedures at Fort Meade could result in a price increase.

Melwood is represented by Meghan A. Douris and Alix K. Town of Oles Morrison Rinker & Baker LLP. The government is represented by Steven C. Hough, Douglas K. Mickle, Robert E. Kirschman, Jr., and Jeffrey Bossert Clark of the Department of Justice as well as Robert B. Neill and Mark T. Robinson of the Army along with Timi N. Kenealy of the AbilityOne Commission.

COFC - Melwood Horticultural Training Center