Free Notice (Other) - District Court of Federal Claims - federal

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REDACTED VERSION

IN THE UNITED STATES COURT OF FEDERAL CLAIMS
_____________________________________________ No. 07-831 C (Judge Sweeney) _____________________________________________

INTERNATIONAL MANAGEMENT SERVICES, INC.,
Plaintiff, v.

THE UNITED STATES,
Defendant, and

AEGIS, MISSION ESSENTIAL PERSONNEL LLC,
Defendant-Intervenor. _____________________________________________ PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION TO DISMISS _____________________________________________ Richard D. Lieberman McCarthy, Sweeney & Harkaway, PC 2175 K Street NW, Suite 600 Washington, DC 20037 202-775-5560 Fax: 202-775-5574 Counsel to Plaintiff, International Management Services, Inc.

December 12, 2007

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TABLE OF CONTENTS Page TABLE OF AUTHORITIES .....................................................................................................iii-iv STATEMENT OF THE ISSUES.....................................................................................................2 STATEMENT OF FACTS ..............................................................................................................3 ARGUMENT...................................................................................................................................3 I. STANDARD OF REVIEW ....................................................................................................3 II. ALL OFFERORS IN THE COMPETITIVE RANGE OF THIS PROCUREMENT WERE OTHER THAN SMALL, INCLUDING AEGIS AND TORRES, WHO PROPOSED USING OSTENSIBLE SUBCONTRACTOR(S) .............................................3 A. The Ostensible Subcontractor Rule................................................................................3 B. The SBA View of This Procurement .............................................................................6 C. Aegis's Proposal and Its Negotiations with the Army Demonstrate Its Undue Reliance on Its Large Subcontractors............................................................6 1. Aegis's proposal repeatedly refers to Aegis and its subcontractors as a "team," particularly when discussing management and the most critical aspects of the contract.................................7 2. Aegis has assigned the most complex and critical part of the solicitation to its subcontractors.........................................................................8 3. Aegis is inexperienced in the primary and vital requirements of the solicitation..............................................................................................10 4. The majority of key personnel needed to perform the primary and vital requirements of the contract are provided by Aegis's subcontractors, rather than Aegis itself............................................................11 5. The subcontractors account for more than 50% of the direct costs of the contract .........................................................................................11 6. Aegis is using ostensible subcontractors..........................................................12 D. Torres's Proposal Demonstrates Its Unusual Reliance on Its Large Subcontractors...........................................................................................................12

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1. Torres's proposal repeatedly refers to Torres and its subcontractors as a "team," particularly when discussing the contract's management ....................................................................................13 2. Torres's proposal fails to identify which discrete functions are to be performed by its subcontractors..............................................................13 3. Torres is inexperienced in the primary and vital requirements of the solicitation..............................................................................................14 4. The majority of key personnel needed to perform the primary and vital requirements of the contract are provided by Torres's subcontractors, rather than Torres itself...........................................................15 5. Torres's proposal utilizes an incumbent subcontractor where Torres will hire a number of the incumbent subcontractor's employees ........................................................................................................16 6. The subcontractors account for more than 50% of the direct costs of the contract .........................................................................................16 7. Torres is using ostensible subcontractors ........................................................17 E. Conclusion ­ Small Business Set Asides Are Being Undermined ...........................17 III. IMS IS AN INTERESTED PARTY AND HAS STANDING.............................................19 IV. THIS ACTION IS JUSTICIABLE .......................................................................................24 V. IMS DOES NOT CHALLENGE THE 2006 SMALL BUSINESS SET ASIDE OF THE ARMY....................................................................................................................25 CONCLUSION..............................................................................................................................26 CERTIFICATE OF FILING..........................................................................................................27

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TABLE OF AUTHORITIES Page(s) CASES Brown & Son Elec. Co. v. United States, 325 F.2d 446 (Ct. Cl. 1963).........................................25 Compliance Corp. v. United States, 22 Cl. Ct. 193 (Fed. Cir. 1990) ............................................20 First Hartford Corp. Pension Plan & Trust v. United States, 194 F.3d 1279 (Fed. Cir. 1999)..........................................................................................25 Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001)....................................................................................21, 22 John Reiner & Co. v. United States, 325 F.2d 438 (Ct. Cl. 1963).................................................25 Massie v. United States, 226 F.3d 1318 (Fed. Cir. 2000)..............................................................25 NKF Eng'g v. United States, 805 F.2d 372 (Fed. Cir. 1986) ........................................................20 Northrup Grumman Corp. v. United States, 50 Fed. Cl. 443 (2001).............................................22 Phoenix Air Group, Inc. v. United States, 46 Fed. Cl. 90 (2000)..................................................23 Rex Serv. Corp. v. United States, 448 F.3d 1305 (Fed. Cir. 2006) ...............................................20 Statistica, Inc. v. Christopher, 102 F.3d 1577 (Fed. Cir. 1996).....................................................20 United Int'l Investigative Servs., Inc. v. United States, 41 Fed. Cl. 312 (1998) ...........................20 United States v. Amdahl Corp, 786 F.2d 387 (Fed. Cir. 1986) .....................................................25 Wetsel-Oviatt Lumber Co. v. United States, 43 Fed. Cl. 748 (1999)......................................20, 21

ADMINISTRATIVE DECISIONS ALATEC, Inc., B-298730, 2006 WL 3691186 December 4, 2006 ...............................................21 B&M Constr., Inc., SBA No. SIZ-4805 (2006)...........................................................................5, 6 Bus. Control Sys., Inc., SBA No. SIZ-3959 (1994).........................................................................4 CardioMetrix, Inc., SBA No. SIZ-4051 (1995) ...............................................................................5

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Page(s) Data Based Decisions, Inc., B-232663.2, 89-1 CPD ¶ 87 January 26, 1989 ................................................................................................................25 ePerience, Inc., SBA No. SIZ-4668 (2004) .....................................................................................5 Gen. Maint. Eng'g, Inc., SBA No. SIZ-4405 (2000).......................................................................5 Info-Tech Enter., SBA No. SIZ-4346 (1999) ..............................................................................4, 5 Leonardo Techs., Inc., SBA No. SIZ-4597 (2003)..........................................................................5 SecTek, Inc., SBA No. SIZ-4558 (2003).........................................................................................4 Spectrum Security Services, Inc., B-297320.3, 2005 CPD ¶ 227 December 29, 2005 ............................................................................................................21 Stellar Industries, Inc., B-218287, 85-1 CPD ¶ 616 May 30, 1985 .....................................................................................................................25 The Analysis Group, L.L.C., SBA No. SIZ-4814 (2006)................................................................4 Tiger Enterprises, Inc., B-293439, 2004 CPD ¶ 19 January 20, 2004 ................................................................................................................21

STATUTES AND REGULATIONS 13 C.F.R. § 121.103(h)(4)............................................................................................................3, 4 13 C.F.R. § 121.1003 .....................................................................................................................19 13 C.F.R. § 121.1004(b) ................................................................................................................19 28 U.S.C. § 1491(b)(1) ...................................................................................................... 19-20, 24 28 U.S.C. § 1491(b)(2) ..................................................................................................................25

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS BID PROTEST REDACTED VERSION ________________________________________________ ) INTERNATIONAL MANAGEMENT SERVICES, INC. ) ) Plaintiff, ) ) v. ) ) THE UNITED STATES ) ) Defendant, ) ) and ) ) AEGIS MISSION ESSENTIAL PERSONNEL, LLC ) ) Defendant-Intervenor ) ________________________________________________)

CFC No. 07-831C Judge Sweeney

OPPOSITION TO MOTION TO DISMISS

Pursuant to the Court's Order dated December 3, 2007, Plaintiff respectfully submits its opposition to Defendant's Motion to Dismiss for Lack of Standing and Non-Justiciability ("Mo. To Dism."). This action is not a protest of a size determination or a solicitation; rather, it is a prayer that the Court maintain the integrity of the government procurement process by ensuring that businesses that are other than small not be awarded a contract set aside for small business under the Small Business Act. Plaintiff International Management Services, Inc. ("IMS") has standing because none of the offerors within the competitive range are small businesses, as explained herein. Accordingly, IMS meets this circuit's test for standing because it would be a prospective bidder on a corrected (full and open) procurement, its direct economic interest would

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be affected by the award of the contract; and but for error by the Army and the Small Business Administration ("SBA"), there is a substantial chance that it would receive award. This matter is justiciable as the Court can grant the relief requested by suspending or terminating Aegis Mission Essential Personnel LLC's ("Aegis") contract for convenience of the government. Finally, IMS's action herein is not a challenge to the solicitation; rather, it is a request for this Court to ensure the integrity and fairness of the procurement process. STATEMENT OF THE ISSUES As explained herein, the Mo. To Dism. has inaccurately characterized this action, and seeks dismissal for reasons that are not present here. This Opposition will show that (1) IMS has standing to protest the Army's award because it meets all of the tests established by the relevant statutes conferring standing; (2) this complaint must apply to the present procurement because it complains of a significant defect affecting the integrity of the procurement process, and this Court has statutory authority to grant the appropriate relief; (3) IMS is not protesting the original solicitation, but rather the failure of the procurement process itself; and (4) all offerors in the competitive range of this procurement are other than small businesses. The purpose of IMS's bid protest is to ensure that the statutory requirements in the Small Business Act, as implemented in the Federal Acquisition Regulation ("FAR"), are complied with. IMS has standing to bring this protest because there were and are no small businesses in the competitive range of this procurement, which was set aside exclusively for small business. The Army and the SBA both ignored their duties to raise obvious size issues, of which they were fully aware, and made award to Aegis, which is other than a small business, in direct contravention of these duties. The only other offeror remaining, Torres Advanced Solutions ("Torres") is also other than a small business as explained herein.

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STATEMENT OF FACTS Plaintiff adopts by reference the facts as set forth in its Complaint, and on pages 2-5 of the Defendant's Mo. To Dism. ARGUMENT I. STANDARD OF REVIEW Plaintiff adopts by reference the standard of review set forth in the Mo. To Dism. at 5-6.

II.

ALL OFFERORS IN THE COMPETITIVE RANGE OF THIS PROCUREMENT WERE OTHER THAN SMALL, INCLUDING AEGIS AND TORRES, WHO PROPOSED USING OSTENSIBLE SUBCONTRACTOR(S) Primarily because of the "ostensible subcontractor" rule of the SBA, all four offerors

within the competitive range for this procurement are other than a small business. Thomas Computer Solutions, LLC ("TCS") was adjudicated as other than small by the SBA1 on January 8, 2007. Compl. at ¶ 14. IMS was adjudicated not small primarily because of an ostensible subcontractor on March 7, 2007. Compl. at ¶ 19. As explained herein, neither of the other two offerors, Aegis or Torres, is a small business.2 A. The Ostensible Subcontractor Rule

SBA regulations define an ostensible subcontractor as "a subcontractor that performs primary and vital requirements of a contract . . . or a subcontractor upon which the prime contractor is unusually reliant."3 In determining whether such a relationship exists the regulations demand that: [a]ll aspects of the relationship between the prime and subcontractor [be] considered, including, but not limited to, This was based on TCS's average annual receipts, not on the ostensible subcontractor rule. However, IMS believes that TCS also proposed one or more ostensible subcontractors. 2 The SBA determined that Aegis was "small," however the SBA never considered Aegis's ostensible subcontractor(s). Compl. at ¶ 30. 3 13 C.F.R. § 121.103(h)(4) (emphasis added). 3
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the terms of the proposal (such as contract management, technical responsibilities, and the percentage of subcontracted work), agreements between the prime and subcontractor (such as bonding assistance or the teaming agreement), and whether the subcontractor is the incumbent contractor and is ineligible to submit a proposal because it exceeds the applicable size standard for that solicitation.4 If a subcontractor is, in fact, an ostensible subcontractor, then the subcontractor and the prime contractor are treated as joint venturers, and therefore affiliates, for size determination purposes.5 This rule "prevent[s] other than small firms from forming relationships with small firms to evade SBA's size requirements."6 The SBA's Office of Hearing and Appeals ("OHA") has expressed additional indicia of a prime contractor's "unusual reliance" on a subcontractor, including: · · where a proposal repeatedly identifies the prime and subcontractor as a "team;"7 where a proposal fails to identify which discrete functions are to be performed by the subcontractor;8

Id. Id. 6 Size Appeal of The Analysis Group, L.L.C., SBA No. SIZ-4814 (2006). 7 See Size Appeal of SecTek, Inc., SBA No. SIZ-4558 (2003) ("One factor this Office has consistently held to support a finding of unusual reliance is that the proposal constantly identifies the two concerns as to a team. . . . as though it were a single, separate entity apart from its parent corporations. . . . Under these circumstances, this language is an exceptionally strong indicator of unusual reliance . . . ."). 8 See Size Appeal of Info-Tech Enter., SBA No. SIZ-4346 (1999) ("Appellant's own proposal . . . enumerates many discrete tasks which the team . . . will perform. Yet Appellant has made no effort to identify which tasks each firm will perform, even though this information must be available. Accordingly, I must take its failure to make such an identification as a strong indicium of undue reliance."); Size Appeal of Bus. Control Sys., Inc., SBA No. SIZ-3959 (1994) ("[T]he Cost and Technical Proposal here fails to identify discrete functions to be performed by [the subcontractor] . . . and is, an integrated "team" approach to the tasks to be performed. Thus, when the totality of circumstances are considered, the record demonstrates that [the contractor] is unduly reliant and dependent upon [the subcontractor] . . . .).
5

4

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·

where the prime contractor assigns the most complex and costly tasks to its subcontractors;9

·

where a significant number of key personnel needed to perform primary and vital requirements of the contract are provided by the subcontractor, rather than the prime contractor;10

·

where the subcontractor is the incumbent and where the prime contractor will hire a substantial number of the incumbent's employees;11

· ·

where the subcontractor participates in the contract's management;12 where the prime contractor lacks and the subcontractor possesses the qualifications relevant to the contract requirements;13

·

where the prime contractor is inexperienced in the primary and vital requirements of the solicitation.14

See Size Appeal of Leonardo Techs., Inc., SBA No. SIZ-4597 (2003) ("Among the methodologies SBA has used [in determining whether a contractor is engaged in a joint venture] is the so-called `seven factors test.' These factors [include which] party [is] performing the more complex and costly contract functions."). 10 See Size Appeal of B&M Constr., Inc., SBA No. SIZ-4805 (2006) ("OHA has often affirmed size determinations where an area office determined that key personnel were subcontractor employees or that key tasks were to be performed by subcontractor employees."). 11 Size Appeal of Gen. Maint. Eng'g, Inc., SBA No. SIZ-4405 (2000). 12 See Size Appeal of ePerience, Inc., SBA No. SIZ-4668 (2004) ("[The subcontractor] will thus not merely be managing its own subcontract, but playing a role in the management of the overall contract. This participation in management is a strong indicia of unusual reliance upon the ostensible subcontractor."). 13 See Size Appeal of Info-Tech Enter., SBA No. SIZ-4346 (1999) ("Notwithstanding Appellant's assertion that all the incumbent employees will be under the control of Appellant . . . Appellant is nonetheless relying on the qualifications of its incumbent subcontractor to perform the primary and vital requirements of the solicitation."). 14 See Size Appeal of CardioMetrix, Inc., SBA No. SIZ-4051 (1995) ("Appellant's own submission fails to show that it is experienced in laboratory testing, and in transporting the laboratory samples involved. Thus, since the primary and vital requirements of the solicitation are for laboratory testing, and to a lesser extent, delivery . . . Appellant will, of necessity, be "unusually reliant" upon the services of its large subcontractor.") 5

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An examination of the proposals of both Aegis (which received award) and Torres' (the only other contractor remaining in the competition) demonstrates that both bear many, if not all, of the above indicia of unusual reliance. This unusual reliance on their respective subcontractors violates the ostensible contractor rule, necessitates a finding of affiliation, and results in both Aegis and Torres exceeding the size standard for this solicitation. B. The SBA View of This Procurement

In its size determination of IMS, the SBA expressed its skepticism that offerors could submit proposals to INSCOM as small businesses because of the inherent need for subcontracting required by a procurement of this size and complexity, and because of the ostensible subcontracting rule. SBA stated as follows: This contract proposes a minimum of $10 million and a maximum of over $703 million. It is clear that but for the subcontractors, this firm would not even be considered for this contract. (SBA also notes that with a size standard of $6.5 million, it is not surprising that a small business would be forced to rely heavily on its larger subcontractors.) See Size Appeal of B&M Construction, Inc., No. 4805 (2006), holding that "[u]nder the ostensible subcontractor rule, a concern is unusually reliant on its subcontractors when the dominant basis of a concern's ability to submit an offer and qualify for a contract is the qualifications and experience of its two principal subcontractors.15 This comment should have served as a red flag to both the Army and SBA that all offerors could have a serious ostensible subcontractor problem. C. Aegis's Proposal and Its Negotiations with the Army Demonstrate Its Undue Reliance on Its Large Subcontractors

The Administrative Record conclusively demonstrates Aegis's unusual reliance on its four large business subcontractors, CACI International, Inc. ("CACI"), MPRI, an L-3

15

Administrative Record ("AR") Tab 271 at 16399 (Size Determination). 6

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Communications Company ("MPRI"), Science Applications International Corporation ("SAIC") and General Dynamics Information Technology ("GDIT").16 1. Aegis's proposal repeatedly refers to Aegis and its subcontractors as a "team," particularly when discussing management and the most critical aspects of the contract

Aegis has repeatedly referred to "Team Aegis" throughout this procurement, beginning with its initial proposal,17 continuing through its negotiations with the Army,18 and concluding with its Final Proposal Revision ("FPR").19 The first pages of both Aegis's initial proposal and FPR, under the heading "Overall Approach to Managing the Contract," state that "Team Aegis' total management solution is founded on our experience as incumbent contractors...."20 A content analysis of the words in the management section of the Aegis FPR illustrates that the term "Team Aegis" was used 85 times in the 34 textual pages of the FPR (excluding attachments), an average of 2.5 times per page.21 The Army identified linguist fill rates (i.e., maintaining the necessary number of linguists in Afghanistan to support the Army) as an important issue during its discussions with Aegis22 presumably because it has been a significant problem for the Army Intelligence and Security Command ("INSCOM") in the past.23 Aegis agreed with the problem identified by INSCOM,

16

The Army acknowledges that CACI, MPRI, and GDIT are large. AR Tab 96.A at 3628. SAIC is a company with $8.3 billion a year in revenues. Complaint at ¶ 35. 17 AR Tabs 24-28. 18 AR Tab 114 ("Items for Discussion"). 19 AR Tabs 91, 91.1 and 92. 20 AR Tab 25 at 1005; AR Tab 91.1 at 2893. 21 AR Tab 91.1 at 2893-2926. Note, that when discussing Aegis alone, the FPR uses the phrase "Aegis MEP." See, e.g., AR Tab 91.1 at 2914, 2921. 22 AR Tab 114. 23 The current incumbent providing linguists in Iraq (L-3 Communications) was issued a Cure Notice on its current INSCOM contract specifically regarding this issue. The Army stated that "the L-3 Titan shortfall was due to the inability to rapidly recruit a large number of linguists for a hostile fire zone." AR Tab 100 at 3685. 7

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stating that fill rates were "the solicitation's most critical element."24 Yet, when articulating how it would address said fill rates, Aegis used the term "Team Aegis" 48 times in only 4 ¼ pages-- an average of more than 11 times per page.25 Aegis's repeated use of "Team Aegis" throughout its proposal and its discussion responses demonstrates that it will rely heavily on the skills and resources of its four large business subcontractors to both manage the contract and meet its "most critical element." Without the "team," Aegis could not represent that it could perform the Contract. Aegis's undue reliance on its subcontractors makes them ostensible subcontractors. 2. Aegis has assigned the most complex and critical part of the solicitation to its subcontractors

The Aegis FPR identifies "Team Aegis Roles and Responsibilities" as reproduced below:26 Figure 1-2 Team Aegis Roles and Responsibilities

Team Member Aegis MEP

Roles and Responsibilities Prime contractor/overall program management and execution Linguist fill rate and management support

Skills/Experience Incumbent subcontractor on the WLS project. Aegis MEP currently has over 85 CAT II/III linguists deployed in support of INSCOM in Iraq and Afghanistan Incumbent subcontractor on the WLS project. ATS offers experience in providing highly qualified linguists in support of missions that require deployment to Areas of Operations worldwide, including Afghanistan CACI brings 17 years of experience managing 136 prime contracts totaling $1.3 B for the US Army. With over 100 linguists currently providing language translation services to the DoD, Intelligence Community

ATS

CACI

PMO processes and staffing, web-based management tools, and CAT II/III fill rate

24 25

AR Tab 114 at 3811. AR Tab 114 at 3811-3815. 26 AR Tab 91.1 at 2895. 8

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Calnet

Linguist fill rate and management support

GDIT

Logistics, linguist fill rate

MPRI

CAT I fill rate and management support CAT II/III fill rate

SAIC

SR-SSSI

CAT I recruiting and logistics

(IC), and civilian agencies, CACI also brings depth in achieving the fill rates of all OEF-A TOs. Incumbent subcontractor on the WLS project. Calnet has experience in providing linguist services in Arabic, Dari, Farsi, Hindi, Kurdish, Malay, Nurastani, Pashto, Turkoman, Uguyr and Urdu in support of US Armed Forces Missions in combat zones throughout Iraq and Afghanistan GDIT brings experience in staff augmentation support, including base operations, infrastructure, strategic planning, and management support throughout the USCENTCOM Area of Responsibility (AOR). MPRI brings experience in staffing and managing large scale deployments in Afghanistan SAIC provides Team Aegis with added depth of experience in working side-by-side with American troops in Afghanistan and Iraq in the GWOT and quickly responding to the need for support SR-SSSI has extensive experience conducting background screening and field investigations on Afghan employees in cooperation and coordination with the established Afghanistan National Ministries and directorates.

As shown above, Aegis reserves for itself the nebulous task of "overall program management and execution," while assigning the admittedly most critical task of maintaining CAT I, II, and III linguist fill rates to its subcontractors SAIC, MPRI, GDIT, CACI, Calnet, ATS and SR-SSSI, four of which are not small businesses. This is an explicit acknowledgement that Aegis's subcontractors and not Aegis will perform the Contract's most challenging and vital requirements, and are ostensible subcontractors.

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3.

Aegis is inexperienced in the primary and vital requirements of the solicitation

Aegis's inexperience is laid bare in its recitation of its own relevant past performance. Aegis listed: 1) a $4.5 million time and materials subcontract for Arab linguists in Baghdad (a task order under an L-3 Titan contract); 2) a fixed-price subcontract in support of a DIA Iraq Survey Group with an estimated value of $1.6 million; and 3) a subcontract for INSCOM Force Protection support with an estimated value of $995,000 (again under a L-3 Titan contract).27 Of the three contracts, only the first two concern linguist support and in none of these contracts did Aegis act as the prime contractor, coordinating and managing multiple subcontracts.28 Aegis's proposal then provided the following relevant contracts of its "significant" large business subcontractors: CACI: 1) CACI-Genesis II, for technical and managerial support to INSCOM at an estimated value of $198 million; and 2) CACI-USAREUR G2 Intelligence Support at an award price of $86.5 million.29 MPRI-an L-3 Communications Company: 1) Afghanistan Advisory Support and Mentoring Services to the Office of Security Transition Command-Afghanistan at an estimated value of $150 million; and 2) Iraq Ministry of Defense-Ministry of Interior at an award price of $31.0 million.30 Aegis's proposal then provided the following relevant contracts of its "additional" large business subcontractors: Science Applications International Corporation ("SAIC"): 1) Linguist Support for the National Media Exploitation Center at an estimated value of $18.9 million; and 2) Global Geospatial Intelligence, Translation, Geonames and Boundary Support (providing linguists) at an estimated value of $3.4 million.31

27 28

AR Tab 92 at 3019-23. AR Tab 92 at 3019-23. 29 AR Tab 92 at 3024-29. 30 AR Tab 92 at 3037-39. 31 AR Tab 92 at 3040-42. 10

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General Dynamics Information Technology ("GDIT"): a single contract for Engineering an Installation Support Services for Afghanistan with an estimated value of $15.5 million.32 Judging by the manner in which Aegis's subcontractors' prior awards dwarf those of Aegis, it is clear that the relevant experience, expertise and capabilities rest with Aegis's subcontractors, not with Aegis. The subcontractors are clearly ostensible subcontractors. 4. The majority of key personnel needed to perform the primary and vital requirements of the contract are provided by Aegis's subcontractors, rather than Aegis itself.

The Aegis FPR identifies most of the key personnel it intends to use on the Contract. Although the FPR states that there are 20 key personnel, the volume lists only 19.33 Of these 19 personnel, only 5 are Aegis employees. The remaining 14 are made up of 8 CACI (a large business) employees, 3 current or former US Army personnel, 1 employee from SOSI (a large business),34 and 1 employee from Cubic (another large business).35 Therefore, Aegis employees account for only 5 out of 20, or 25 percent of the key personnel, while 10 out of 20, or 50 percent, are from large business subcontractors (CACI, SOSI and Cubic). Once again, this is a clear indicator that Aegis's subcontractors are performing the key and vital aspects of the contract, and are therefore ostensible subcontractors. 5. The subcontractors account for more than 50% of the direct costs of the contract

The Army's final cost estimate shows that the direct cost of the subcontractors exceeds the direct cost of Aegis management and linguist staff as illustrated below: 36
32 33

AR Tab 92 at 3043-44. AR Tab 91.1 at 2915-17. 34 SOS Interpreting, LTD (SOSI) is a large business under the RFP's NAICS code. Torres, which also proposed SOSI as a subcontractor, admitted that SOSI is a large business. AR Tab 19 at 534. 35 AR Tab 91.1 at 2916-17. 36 AR Tab 216 at 10528,10533. 11

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Aegis Direct Labor $138.4 mil Aegis Fringes & Overhead $ 18.2 mil Total-Aegis Direct $156.6 mil --------------------------------------------------------------------------------------Aegis Direct $156.6 mil (49.1%) Subcontractors $161.7 mil (50.9%) Total, Direct $318.3 mil (100%) Subcontractors account for 50.9 percent of direct costs, while Aegis direct labor plus fringes and overhead accounts for 49.1 percent of the direct costs.37 The significant direct cost contribution of the subcontractors is another indication that without its subcontractors, Aegis would be unable to perform this contract. 6. Aegis Is Using Ostensible Subcontractors

Because of Aegis's "Team Aegis" approach, its reliance on large subcontractors for the most vital aspects of the contract, its reliance on its subcontractors' experience and credentials, its reliance on its subcontractors for the vast majority of key personnel, and the relative direct costs incurred, it must be concluded that Aegis is using one or more ostensible subcontractors.

D. Torres's Proposal Demonstrates Its Unusual Reliance on Its Large Subcontractors The Administrative Record conclusively demonstrates Torres's unusual reliance on its large business subcontractors L-3 Titan (a division of L-3 Communications) and SOS Interpreting, LTD ("SOSI").38

37

These figures exclude Subcontractor handling, Other Direct Costs ("ODCs"), ODC handling, General & Administrative ("G&A") costs and fee (profit). 38 The Army acknowledges that L-3 Titan is a large business. The Army Final Cost Evaluation Report on Torres notes that L-3 Titan was purchased by L-3 Communications, and its divisions have 1,700 employees and revenues in FY 2005 of $453 million, well in excess of the size standard. AR Tab 96.T at 3642. SOSI is a large business under the RFP's NAICS code. Torres, which also proposed SOSI as a subcontractor, admitted that SOSI is a large business. AR Tab 19 at 534. 12

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1.

Torres's proposal repeatedly refers to Torres and its subcontractors as a "team," particularly when discussing the contract's management.

Torres has repeatedly referred to the "Torres Team" throughout this procurement, beginning with its initial proposal,39 and continuing through to its Final Proposal Revision.40 The first sentence of both its initial proposal and FPR, states that "the Torres Team is the only offeror with the demonstrated experience of recruiting, deploying and sustaining the number of cleared and un-cleared Linguists required by [the contract]."41 A content analysis of the words in the management section of the Torres FPR show that the term "Torres Team" was used 76 times in the 31 pages of the FPR--an average of 2.45 times per page.42 Torres's repeated use of the "Torres Team" throughout its proposal demonstrates that it will heavily rely on the skills and resources of its large business subcontractors to both manage and meet the requirements of the contract. Indeed, the notion of a team consisting of Torres and its subcontractors permeates the entire FPR. Without the team members, and in particular, the large business members, Torres could not represent that it could perform the Contract. Clearly, the subcontractors to Torres will perform vital aspects of the contract, and are ostensible subcontractors. 2. Torres's proposal fails to identify which discrete functions are to be performed by its subcontractors

The Torres FPR fails to identify which of the three contractors will perform the key aspects of the work. For example, in discussing the critical linguist fill rates, namely Torres's ability to perform model task order 1, the FPR speaks only of the "Torres Team" and never

39 40

AR Tab 15. AR Tab 88.2. 41 AR Tab 15 at 393; Tab 88.2 at 2288. 42 AR Tab 88.2 at 2288-318. 13

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identifies which contractor will perform the varying aspects of the work.43 The next section of the FPR discusses Recruitment, Staffing and Retention, and again speaks only of the "Torres Team" without identifying which of the three contractors will perform which actions.44 Again in the section discussing Torres's transition plan, Torres fails to specify which contractors will perform which tasks.45 Where the FPR does assign responsibility to a contractor for a discrete task, namely managing linguist payroll/accounting and tracking government furnished equipment, the FPR names its large subcontractor L-3 Titan, not Torres.46 As noted previously (see footnote 8, supra), where a proposal fails to indicate which contractors will perform each of the various tasks, this is a strong indicator of undue reliance, and the fact that the subcontractor is an ostensible subcontractor. 3. Torres is inexperienced in the primary and vital requirements of the solicitation

Torres's FPR section on past performance demonstrates how small a contribution Torres's past performance makes to the contract. In its FPR, Torres identifies the four relevant past contracts on which it has performed: 1) a subcontract to L-3 for INSCOM Linguist Support at an award price of $4.2 million and an estimated final value of $19.5 million; 2) a contract for Linguist Management Services for the U.S Department of State at an award price of $2.9 million and an estimated final value of $4.4 million; 3) a contract for Linguist and SME [subject matter experts] Management Services at a final price of $22.5 million; and 4) a contract for Linguist and

43 44

AR Tab 88.2 at 2290-91. AR Tab 88.2 at 2292-98. 45 AR Tab 88.2 at 2298-304. 46 AR Tab 88.2 at 2202, 2303; AR Tab 17 at 512 ("The Torres Team will use L-3 Communications Worldwide Linguist Support Environment (WLSE) database to track linguists. WLSE is proprietary [sic] product of L-3 Communications.") 14

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Islamic Cultural/Religious Advisor Services at an award price of $49,298 and an estimated final value of $1.1 million.47 In contrast, Torres offered the following relevant contracts of its large business subcontractors: SOSI: 1) a subcontract to L-3 Titan for Linguist Support with an initial award of $10,290 and an estimated final value of $183.7 million; 2) a Linguist Support Contract at an initial award of $2.7 million and an estimated final value of $6.3 million; 3) a contract for Interpreter Services supporting CENTAF at an award and final price of $2.1 million; and 4) a Linguist Support contract with an award and final price of $83.7 million.48 L-3 Titan and MPRI-an L-3 Company: 1) an INSCOM Linguist Support contract with an award price of $400 million and an estimated final price of $753.5 million; 2) an NSA linguist contract at an award and final price of $36.6 million; and 3) an Advisory Support contract awarded at $74.4 million and a final estimated value of $150 million.49 These contracts demonstrate that the expertise and capabilities, based on prior past performance, are held by Torres's subcontractors, and not by Torres. Like Aegis above, Torres's subcontractor's awards dwarf those of Torres, and indicate that without these subcontractors, Torres could not perform and would not be awarded the contract.

4.

The majority of key personnel needed to perform the primary and vital requirements of the contract are provided by Torres's subcontractors, rather than Torres itself.

The Torres FPR identifies 23 key personnel it intends to use on the Contract.50 Seventeen or 74% of these key personnel are from either Titan/L-3 or SOSI (there are 16 from Titan/L-3 and one from SOSI).51 Only five of the key personnel are Torres employees.52 As noted
47 48

AR Tab 89 at 2319-26. AR Tab 89 at 2327-34. 49 AR Tab 89 at 2335-2340. 50 AR Tab 88.2 at 2313-14. 51 AR Tab 88.2 at 2313-14. 15

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previously (see footnotes 9-13, supra), where the primary expertise lies in the subcontractors for the key and important work of the contract, the prime contractor is unusually reliant, and the subcontractors are ostensible subcontractors. 5. Torres's proposal utilizes an incumbent subcontractor where Torres will hire a number of the incumbent subcontractor's employees

During Torres's negotiations, Torres admitted that "[t]he majority of current managers and supervisors that will be retained on the program will become Torres AES employees."53 Note that 16 of the 23 "Team Torres" key personnel are currently the incumbent contractor's (L-3 Titan) employees.54 As stated previously, (see footnotes 11 & 12, supra), where the primary expertise lies in the subcontractors for the key personnel and important work of the contract, the prime contractor is unusually reliant, and the subcontractors are ostensible subcontractors. 6. The subcontractors account for more than 50% of the direct costs of the contract

The Army's final cost estimate shows that the direct cost of the subcontractors exceeds the direct cost of Torres management and linguist staff as illustrated below:55

Torres Direct Labor $132.7 mil Torres Fringes & Overhead $ 47.5 mil Total-Torres Direct $180.2 mil --------------------------------------------------------------------------------------Torres Direct $180.2 mil (40.5%) Subcontractors $265.1 mil (59.5%) Total, Direct $445.3 mil (100%)

52 53

AR Tab 88.2 at 2313-14. AR Tab 113 at 3810. 54 AR Tab 88.2 at 2313-14. 55 AR Tab 96.T at 3645. 16

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Subcontractors account for 59.5 percent of direct costs, while Torres's direct labor plus fringes and overhead accounts for 40.5 percent of the direct costs.56 The significant direct cost contribution of the subcontractors is another indication that without its subcontractors, Torres would be unable to perform this contract. 7. Torres Is Using Ostensible Subcontractors

Because of Torres's "Team Torres" approach, its reliance on large subcontractors for the most vital aspects of the contract, its reliance on its subcontractors' experience and credentials, its reliance on its subcontractors for the vast majority of key personnel, its reliance on hiring key personnel from its incumbent subcontractor, the relative direct costs incurred, and Torres's failure to identify which discrete functions its subcontractors would perform, it must be concluded that Torres is using one or more ostensible subcontractors. E. Conclusion - Small Business Set Asides Are Being Undermined

The AR demonstrates beyond doubt that Aegis, the awardee, and Torres, the only other alleged "small business" within the competitive range, are actually other than small businesses because of their ostensible subcontractors. These facts were well known to the Army which evaluated both of these proposals. Furthermore, IMS submitted size status protests of both Torres and Aegis to the Contracting Officer and to the SBA, alleging that both companies have ostensible subcontractors for this procurement.57 However, even though the SBA dismissed the protests on October 26, 2007 for lack of standing,58 both the SBA and the Contracting Officer were aware of the ostensible subcontractor issues for Torres and Aegis. Despite this knowledge,

56

These figures exclude Subcontractor handling, Other Direct Costs ("ODCs"), FCCM [facilities capital cost of money], ODC handling, General & Administrative ("G&A") costs and fee (profit). 57 Complaint ¶ ¶ 24, 25. 58 Compl. ¶ 29. 17

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neither the SBA nor the Contracting Officer took any action to investigate the existence of ostensible subcontractors, which they are obliged to do. IMS further believes that this procurement may be a purposeful undermining of a small business set-aside. Consider these facts: · On February 6 & 7, 2007, Torres and Aegis filed size protests alleging that IMS was not small due (in part) to IMS's undue reliance upon WorldWide Language Resources, Inc. ("WWLR") pursuant to the ostensible subcontractor rule. Comp. at ¶¶ 16-17. It is clear from this size protest that both Torres and Aegis are well aware of the ostensible subcontractor rule. On March 2, 2007, SBA found IMS to be other than small due to IMS's affiliation with WWLR and to the ostensible subcontractor rule. Compl. at ¶ 19. On September 21, 2007, the Army awarded the contract to Aegis. Compl. at ¶ 23. On October 3, 2007 and again on October 9, 2007, Torres protested the award to Aegis at the GAO. Compl. at ¶¶ 26-27. These protests were docketed as B-299315.4 & B-299315.5. AR Tab 273 at 16473. On October 18, 2007, Torres filed a size protest of Aegis, alleging receipts in excess of the applicable size standard and affiliation with other entities, but not alleging that Aegis had any ostensible subcontractors. Compl. at ¶ 28. On November 2, 2007, the SBA held that Aegis was a small business, pursuant to the solicitation's size standard. The ostensible contractor issue was not examined by the SBA. Compl. at ¶ 30 On November 8, 2007, Torres advised the GAO that "the parties have reached a settlement whereby Torres Advanced Enterprise Solutions has agreed to withdraw the above reference protests [B-299315.4 & B-299315.5] with prejudice. We hereby withdraw the protests and request that you close the file on this matter." AR Tab 273 at 16473 (emphasis added). On November 9, 2007, the GAO dismissed both Torres protests (B-299315.4 & B299315.5). AR Tab 273 at 16474.

· · ·

·

·

. ·

·

When it protested IMS's size, both Torres and Aegis asserted that IMS was relying on an ostensible subcontractor. After IMS was eliminated from competition (in part because of the ostensible subcontractor rule) and only two offerors (Aegis and Torres) remained, the Army

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awarded the contract to Aegis. Within ten days of that award, Torres submitted two protests to the GAO, alleging problems with the INSCOM process. Shortly thereafter, Torres submitted a size protest to the Contracting Officer59 but, this protest never asserted that Aegis was using an ostensible subcontractor. This may have been because Torres suffered from the same infirmity in its own offer (an ostensible subcontractor) and did not want the Army Contracting Officer to raise that issue in his own size protest.60 Two weeks later (November 2, 2007), the SBA ruled that Aegis was small, although it never considered Aegis's ostensible subcontractors. Within a week of that ruling, Torres reached a settlement and withdrew both GAO protests. This sequence of events suggests that there may be a post-award business arrangement between Torres and Aegis (two large businesses, both with ties to the large business incumbent L-3 Communications/Titan) that thwarts the purposes of the small business set-aside system by permitting a large business to keep an award set aside for small business. Although IMS makes no allegations, these contractors appear to be seeking to shield this improper award from further GAO, SBA or Court review. Protester does not know the substance of the "settlement" reported to the GAO by Torres, but it should be examined by this Court. III. IMS IS AN INTERESTED PARTY AND HAS STANDING Defendant challenges IMS's standing, asserting it is not an "interested party" pursuant to the Administrative Dispute Resolution Act ("ADRA") and the Tucker Act. This matter must be addressed by examining the requisites for a bid protester's standing. Pursuant to 28 U.S.C. § 1491(b)(1), this Court possesses: [j]urisdiction 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 The contracting officer is required to forward the protest to the SBA. 13 C.F.R. § 121.1003. A contracting officer may protest an offeror or awardee's size status at any time before or after award. 13 C.F.R. § 121.1004(b).
60 59

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proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or proposed procurement...without regard to whether suit is instituted before or after the contract is awarded. The Court of Appeals for the Federal Circuit has held that to come within the §1491(b)(1) protest jurisdiction, a protester is required to establish that it is an actual or prospective bidder, and possess the requisite direct economic interest.61 A protester must also establish competitive prejudice, which is accomplished by demonstrating that "but for the alleged error, there was a substantial chance that [it] would receive an award."62 Plaintiff meets all of the standing requirements. Defendant does not understand the nature of this bid protest. IMS is not challenging the SBA's size determinations of Aegis on an isolated basis. The SBA size rules are inapplicable to the Court's consideration of this protest. Rather, IMS challenges any award to either Aegis or Torres because neither is a small business when evaluated in conjunction with their ostensible subcontractors. IMS also challenges the fact that the SBA and the Army failed their duties and obligations to challenge and review Aegis's size status in the context of the ostensible subcontractor rule. This failure results in an undermining of the integrity of the procurement process which must be corrected by this Court, since it results in award of a set-aside to a business other than small.63 The GAO has repeatedly echoed this

Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006). Statistica, Inc. v. Christopher, 102 F. 3d 1577, 1581 (Fed. Cir. 1996) (emphasis in original). 63 This Circuit has frequently upheld the need for the Court to ensure the integrity of the procurement process. See, e.g., NKF Eng'g v. United States, 805 F.2d 372, 377 (Fed. Cir. 1986) (holding that agency may disqualify a firm because of appearance of impropriety which implicates the integrity of the bidding system); United Int'l Investigative Servs., Inc. v. United States, 41 Fed. Cl. 312, 323 (1998) ("the public has a strong interest in preserving the integrity of the procurement process"); and Compliance Corp. v. United States, 22 Cl. Ct. 193, 204 (1990) (holding that agency may disqualify those who engage in industrial espionage to protect the integrity of the contracting process); see also Wetsel-Oviatt Lumber Co. v. United States, 43 Fed. Cl. 748, 753 (1999) (noting that "where the federal procurement process is tainted by arbitrary
62

61

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sentiment and supported the need to uphold the integrity of the Small Business Act by not permitting large businesses to perform small business set-asides.64 A compelling reason for this Court to find that IMS has standing is a case cited by Defendant, Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001) ("Garufi"). In that case, at both the GAO and the Court of Federal Claims, Garufi protested its loss of a contract, challenging the Navy's evaluation, its elimination from the competitive range, and the Navy's award to another contractor, JVC. The GAO denied Garufi's protest, and subsequently, the Court of Federal Claims denied it as well. In its decision, the Court of Federal Claims determined that the elimination of Garufi from the competitive range was within the contracting officer's discretion, and then held that Garufi lacked standing to challenge the award to JVC because Garufi was not an interested party since it "would not have been in a position to receive the award if JVC had been disqualified."65 The Federal Circuit reversed on the standing issue, holding that Garufi had a substantial chance of receiving award, an economic interest to challenge the award, and standing to bring its bid protest.66 In its Mo. To Dism., Defendant properly cites Garufi, 238 F. 3d at 1334, for the proposition that "protestors who did not submit proposals, withdrew from the procurement, or finished lower than second after evaluation do not have standing to protest the procurement." Mo. To Dism. at 7. However, Defendant overlooks the rest of the cited paragraph, which is directly applicable to IMS's action. It states:

and capricious government action, the public interest is served by restoring integrity to the procurement process."). 64 See ALATEC Inc., B-298730, Dec. 4, 2006, 2006 WL 3691186 at *21; Spectrum Sec. Servs., Inc., B-297320.3, Dec. 29, 2005, 2005 CPD ¶ 227 at *943; Tiger Enter., Inc., B-293439, Jan. 20., 2004, 2004 CPD ¶ 19 at *3023. 65 Garufi, 238 F.3d at 1330. Notwithstanding its holding on Garufi's standing, the Court of Federal Claims reached the merits. Id. 66 238 F. 3d at 1334. 21

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In this case, as the government has conceded at oral argument, if appellant's bid protest were allowed because of an arbitrary and capricious responsibility determination by the contracting officer, the government would be obligated to rebid the contract, and appellant could compete for the contract once again. Under these circumstances, the appellant has a substantial chance of receiving the award and an economic interest and has standing to challenge the award. Garufi, 238 F.3d 1324, 1334 (emphasis added). IMS submits that the circumstances here are identical to those discussed in Garufi. If this Court sustains IMS's bid protest, and holds that no offeror was small, then the government would be obligated to rebid the contract (using full and open competition), and IMS could compete for the contract once again. In such a circumstance, IMS would have a substantial chance of receiving the award as well as an economic interest which confers standing on IMS to challenge the award to Aegis and Torres. Other cases are to the same effect regarding standing. In Northrop Grumman Corp. v. United States,67 Northrop Grumman and Lockheed Corp. brought a bid protest alleging that two delivery orders issued to Raytheon for a radar system by the Government were unlawful because they improperly relaxed and changed contract requirements to an extent that the contract should be subject to new competitive bidding. Lockheed had never submitted a proposal on the original contract work, even though it had an opportunity to do so.68 The Court held that Lockheed had standing where it demanded competition for the new work because it would "determine standing based on whether the protesting contractor could compete for the new contract work and whether it has an economic interest in such work, unhindered by the restrictions applicable when a bidder protests a solicitation that has already taken place.69 The Court held that Lockheed had standing if it could show it would participate as a bidder for, and have an economic interest in the new
67

68

50 Fed. Cl. 443 (2001). Id. at 456.

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uncompeted work. 70 IMS's interest is exactly the same, as is its standing. If the Army holds a new full and open competition for the linguists herein, never before held for large business offerors, IMS will submit an offer, has an economic interest, and a good chance of winning. To the same effect, finding standing where there would be a new procurement if relief were granted by the Court, is Phoenix Air Group, Inc. v. United States.71 Phoenix alleged a violation of statute (an unlawful sole-source award). Even though there had been no competition, the Court noted that: Phoenix's connection to the 'procurement' [and the basis for its standing before the Court of Federal Claims] is its readiness and ability to bid for work which [Phoenix] argues should be competitively procured by the Air Force. Phoenix's economic interest is the revenue which it might gain if it were to perform the work under a different contract. 72 IMS is in the same position as Phoenix, namely, the Compl. alleges that the present award to Aegis is unlawful, and that in a new, lawful full and open competition for the linguists, IMS is ready and able to bid as a large business. It therefore has standing. As submitted in its Complaint, IMS meets all the requirements for standing. If the Court agrees that none of the offerors in the competitive range are small, then it must direct a termination of award to Aegis, and demand a new (full and open competition) procurement if the Army still has a requirement for these services. In such a new procurement, IMS, as a non-small business would be a prospective bidder, since it still intends to bid, and would therefore possess a direct economic interest. In such a new procurement, IMS would also have a substantial chance of winning award, since IMS was awarded this contract in preference to both Aegis and Torres. (IMS was awarded the contract on January 31, 2007 before Aegis received the award on
69 70

Id. Id. 71 46 Fed. Cl. 90 (2000). 72 Id. at 102 (emphasis added). 23

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September 21, 1007. Compl. at ¶¶ 15, 23. Torres has never received a contract award under this procurement). Notwithstanding the failure of both the SBA and the Army to perform their obligatory functions of review of small business size status and consideration of ostensible subcontractors, Defendant asks this Court to forgo any review of the integrity of the process and the size of the awardee. Plaintiff was an essential part of this procurement process, received an award and was deemed other than small--something which the Army and SBA could and should have done for all competitive offerors, but failed to do. This undermining of the integrity of the procurement process cannot be permitted by the Court, which should find that IMS has standing because of the unlawful defects in the procurement process such that a new competition must be held. IV. THIS ACTION IS JUSTICIABLE Defendant asserts that IMS's protest "cannot as a matter of law, affect the award of the contract at issue in this case" and therefore is nonjusticiable.73 The Motion then goes on to assert that under Office of Hearings and Appeals (SBA) rules and precedents, this Court may not order a remedy that affects the award of the Aegis contract. Defendant misreads the significant authority of this Court and the basis of the Compl. As noted previously, this action is not an appeal of a size determination. More important, this Court is not bound by the rules of the SBA. The Tucker Act provides jurisdiction to hear bid protests "in connection with a procurement or proposed procurement."74 In order to provide relief in a bid protest case, the Court "may award any relief that [it] considers proper, including declaratory

73 74

Mo. To. Dism. at 9. 28 U.S.C. § 1491(b)(1). 24

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and injunctive relief except that any monetary relief shall be limited to bid preparation and proposal costs."75 This Court can order the Army to terminate the Aegis contract for convenience, based on the fact that the current award to Aegis undermines the integrity of the procurement system. In U.S. v. Amdahl, the Court indicated that a contract may be terminated for convenience where the procurement procedures that were followed were wrong.76 Indeed, although its authority rests on a different statute, the Government Accountability Office has recommended termination for convenience where it was an appropriate remedy.77 Accordingly, because this action is not a mere appeal of a size determination but an allegation of unlawful conduct, the court can grant relief and this action is justiciable. V. IMS DOES NOT CHALLENGE THE 2006 SMALL BUSINESS SET ASIDE OF THE ARMY Defendant asserts that by submitting a bid as a small business, IMS has waived its right to challenge a small business set aside. This misconstrues IMS's action here. IMS does not challenge the Army's 2006 decision to set aside this procurement for small business, and it is not now protesting that solicitation. At the time of the original solicitation, IMS saw no defects in it, and made no protest or challenge. However, since the offers were submitted and three size protests have been
75

28 U.S.C. § 1491(b)(2). The Federal Circuit has repeatedly acknowledged that § 1491(b)(2) grants this Court authority to order equitable relief in bid protest cases, which is precisely what IMS seeks. See, e.g., Massie v. United States, 226 F.3d 1318, 1321 (Fed. Cir. 2000); accord First Hartford Corp. Pension Plan & Trust v. United States, 194 F.3d 1279, 1294 (Fed. Cir. 1999). 76 786 F.2d 387, 395 (Fed. Cir. 1986) (citing John Reiner & Co. v. United States, 325 F.2d 438 (Ct. Cl. 1963) and Brown & Son Elec. Co. v. United States, 325 F. 2d 446 (Ct. Cl. 1963). 77 See, e.g., Data Based Decisions, Inc., B-232663.2, Jan. 26, 1989, 89-1 CPD ¶ 87 (recommending termination for convenience after issuing a new solicitation); and Stellar Industries, Inc., B-218287, May 30, 1985, 85-1 CPD ¶ 616 (recommending examination of size of one offeror, and if small, termination for convenience). 25

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adjudicated by the SBA, it has only now become apparent that there is no small business within the competitive range. It is now evident that the Army has awarded a 100 percent small business set aside to a business that is not small. Under the Small Business Act and the FAR, this must be corrected by the Court so that award is either made to a small business, or full and open competition is held. Absent such a correction, the integrity of the entire process of small business set-asides stands in serious question. CONCLUSION Defendant's Mo. To Dism. misconstrues the nature of this action. Plaintiff has standing to bring this timely action, and the Court may grant relief. Under the Tucker Act and the developed case law, IMS meets all the tests of an interested party. IMS urges the court to deny the Mo. To. Dism.

Respectfully submitted, DATE: December 12, 2007 __/s/ Richard D. Lieberman________ Richard D. Lieberman McCarthy, Sweeney & Harkaway, PC 2175 K St., NW, Suite 600 Washington, DC 20037 202-775-5560 fax 202-775-5574 [email protected] Counsel to Plaintiff, International Management Services, Inc.

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CERTIFICATE OF FILING I hereby certify that on December 12, 2007 a copy of plaintiff's "Opposition to Motion to Dismiss" was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the court's electronic filing system. Parties may access this filing through the court's system.

/s/ Richard D. Lieberman

27