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No. 07-220C (Judge Braden) IN THE UNITED STATES COURT OF FEDERAL CLAIMS SHIRLINGTON LIMOUSINE & TRANSPORTATION, INC., Plaintiff, v. THE UNITED STATES, Defendant. DEFENDANT'S MOTION TO DISMISS OR, IN THE ALTERNATIVE, FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD AND OPPOSITION TO PLAINTIFF'S MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD PETER D. KEISLER Assistant Attorney General JEANNE E. DAVIDSON Director BRIAN M. SIMKIN Assistant Director OF COUNSEL: ROSE J. ANDERSON Attorney Advisor General Law Division United States Department of Homeland Security Washington, DC 20528 KENNETH D. WOODROW Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street Washington, D.C. 20530 tel: (202) 353-0513 fax: (202) 514-7976 Attorneys for Defendant
May 15, 2007
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TABLE OF CONTENTS PAGE STATEMENT OF THE CASE ....................................................................................................... 1 I. II. Nature Of The Case ................................................................................................ 1 Counter Statement Of Facts .................................................................................... 2
ISSUES PRESENTED .................................................................................................................. 13 SUMMARY OF THE ARGUMENT ........................................................................................... 13 ARGUMENT ................................................................................................................................ 14 I. Standard Of Review .............................................................................................. 14 A. B. Standard Of Review For Motion To Dismiss ........................................... 14 Standard Of Review For Motion For Judgment Upon The Administrative Record ..................................................................................................... 14 The Standard For Granting Injunctive Relief ............................................ 16
C. II.
Shirlington Does Not Possess Standing To Challenge The Terms Of The Solicitation ............................................................................................................ 17 A. Shirlington Is Not An Actual Offeror Under The Solicitation .................. 19 1. The Burden Rests Upon The Contractor To Timely Deliver Its Proposal To The Proper Location ................................................. 19 Shirlington's Cannot Justify Its Failure To Timely Deliver Its Proposal ......................................................................................... 20 a. The Delivery Location Was Clearly Set Forth In The Solicitation ........................................................................ 22 Shirlington Cannot Meet Any Of The Timeliness Exceptions Set Forth In FAR 15.208 ................................ 22
2.
b.
B.
Shirlington Is Not A Prospective Offeror Under The Solicitation ................................................................................................ 26
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TABLE OF CONTENTS -continuedIII.
PAGE
The Agency's Decision To Set Aside The Solicitation For Small Business Was Lawful and Reasonable ......................................................................................... 27 A. The Agency Met The Statutory Requirements For Determining Whether The Solicitation Qualified As A HUBZone Set-Aside ............................. 28 1. The Scope And Complexity Of The Agency-Wide Transportation Procurement Precludes Adequate Competition From HUBZone Companies ..................................................................................... 29 The Agency Thoroughly Researched Prospective HUBZone Offerors And Concluded That It Would Not Receive Proposals From At Least Two Responsible Qualified HUBZone Companies ..................................................................................... 30 DHS's Decision To Require Contractors To Maintain Secure Vehicle Storage Facilities Was Clearly Set Forth In The Solicitation .................................................................................... 32
2.
3.
B.
DHS Properly Exercised Its Discretion In Determining That It Would Not Receive Awards From At Least Two Responsible HUBZone Contractors ................................................................................................ 33
IV. V.
Shirlington Cannot Demonstrate That The Agency Acted In Bad Faith .............. 34 Shirlington Is Not Entitled To Injunctive Relief ................................................... 36 A. Shirlington Has Not Demonstrated That It Has Succeeded Upon The Merits Of Its Claims .......................................................................... 36 Shirlington Has Not Demonstrated That It Was Irreparably Injured By The Government's Actions .................................................................. 36 Permanently Enjoining The Procurement Would Not Serve The Public Interest ....................................................................................................... 37 The Balance Of Harms Favors The Government ...................................... 38
B.
C.
D.
CONCLUSION ............................................................................................................................. 38
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TABLE OF AUTHORITIES CASES PAGE(s)
A-Transport Northwest Co. v. United States, 27 Fed. Cl. 206 (1992) .................................................................................................... 35 Am-Pro Protective Agency, Inc. v. United States, 281 F.3d 1234 (Fed. Cir. 2002) ....................................................................................... 34 American Federation of Government Employees, AFL-CIO v. United States, 258 F.3d 1294 (Fed. Cir. 2001) ....................................................................................... 17 Argencord Mach. & Equip., Inc. v. United States, 68 Fed. Cl. 167 (2005) .................................................................................................... 16 Asco-Falcon II Shipping Co., v. United States, 32 Fed. Cl. 595 (1994) .................................................................................................... 35 Awad v. United States, 61 Fed. Cl. 281 (2004) .............................................................................................. 13, 14 Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345 (Fed. Cir. 2004) ....................................................................................... 22 Bean Stuyvesant, L.L.C. v. United States, 48 Fed. Cl. 303 (2000) .................................................................................................... 16 Beta Analytics Int'l., Inc. v. United States, 44 Fed. Cl. 131 (1999) .................................................................................................... 15 CACI, Inc. v. United States, 719 F.2d 1567 (Fed. Cir. 1983) ................................................................................. 14, 16 CCL Serv. Corp. v. United States, 48 Fed. Cl. 113 (2000) .................................................................................................... 16 Cal. Marine Cleaning, Inc. v. United States, 42 Fed. Cl. 281 (1998) .............................................................................................. 24, 25 Camp v. Pitts, 411 U.S. 138 (1973) ........................................................................................................ 15 Cent. Ark. Maint., Inc. v. United States, 68 F.3d 1338 (Fed. Cir. 1995) ......................................................................................... 14
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TABLE OF AUTHORITIES -continuedCASES PAGE(s)
Cincom Sys., Inc. v. United States, 37 Fed. Cl. 663 (1997) .............................................................................................. 15, 16 City of Tacoma Dept. of Pub. Utils. v. United States, 31 F.3d 1130 (Fed. Cir.1994) .......................................................................................... 22 Community Heating & Plumbing Co., Inc. v. Kelso, 987 F.2d 1575 (Fed. Cir. 1993) ...................................................................................... 24 Conscoop-Consorzia Fra Cooperative Di Prod. E Lavoro v. United States, 62 Fed. Cl. 219 (2004) .............................................................................................. 18, 19 Contract Management, Inc. v. Rumsfeld, 291 F.Supp.2d 1166 (D. Hawaii 2003), aff'd, 434 F.3d 1145 (9th. Cir. 2006) ............... 28 Cubic Def. Sys. v. United States, 45 Fed. Cl. 450 (2003) .................................................................................................... 15 FMC Corp. v. United States, 3 F.3d 424 (Fed. Cir. 1993) ............................................................................................. 16 Fed. Data Corp. v. United States, 911 F.2d 699 (Fed. Cir. 1990) ......................................................................................... 26 Graphicdata, LLC v. United States, 37 Fed. Cl. 771 (1997) .................................................................................................... 17 Hayes International Corp. v McLucas, 509 F.2d 247 (5th Cir. 1975) .......................................................................................... 37 Hospital Klean of Texas, Inc. v. United States, 65 Fed. Cl. 618 (2005) .............................................................................................. 19, 37 Indium Corp. of Am. v. Semi-Alloys, Inc., 781 F.2d 879 (Fed. Cir. 1985) ......................................................................................... 14 Information Technology & Applications Corp. v. United States, 316 F.3d 1312 (Fed. Cir. 2003) ................................................................................. 34, 35 J&H Reinforcing and Structural Erectors, Inc. v. United States, 50 Fed. Cl. 570 (2001) .................................................................................................... 19
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TABLE OF AUTHORITIES -continuedCASES PAGE(s)
Keco Indus., Inc. v. United States, 203 Ct. C 492 F.2d 1200 (1974) ..................................................................................... 16 Kinnett Dairies, Inc. v Farrow, 580 F.2d 1260 (5th Cir. 1978) ........................................................................................ 37 L.P. Consulting Group, Inc. v. United States, 66 Fed. Cl. 238 (2005) .................................................................................................... 34 MCI Telecomm. Corp. v. United States, 878 F.2d 362 (Fed. Cir. 1989) ................................................................................... 25, 26 McMahon v. United States, 342 U.S. 25 (1951) .......................................................................................................... 18 McRae Industries, Inc. v. United States, 53 Fed. Cl. 177 (2002) .................................................................................................... 26 Myers Investigative and Security Svcs., Inc. v. United States, 275 F.3d 1366 (Fed. Cir. 2002) ....................................................................................... 17 Overstreet Elec. Co., Inc. v. United States, 47 Fed. Cl. 728 (2000) .................................................................................................... 15 Petchem, Inc. v. United States, 99 F. Supp. 2d 50 (D.D.C. 2000) .................................................................................... 33 Spezzaferro v. Fed. Aviation Admin., 807 F.2d 169 (Fed. Cir. 1986) ......................................................................................... 34 Steel Co. v. Citizens for a Better Env't, 523 U.S. 83 (1998) .......................................................................................................... 17 Tech Systems, Inc. v. United States, 50 Fed. Cl. 216 (2001) .............................................................................................. 14, 15 Wackenhut Int'l, Inc. v. United States, 40 Fed. Cl. 93 (1998) ..................................................................................................... 14 Winstar Communications, Inc. v. United States, 41 Fed. Cl. 748 (1998) .................................................................................................... 15 -v-
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TABLE OF AUTHORITIES -continued-
STATUTES AND REGULATIONS
PAGE(s)
5 U.S.C. § 706 ............................................................................................................................ 14 15 U.S.C. § 657a .................................................................................................................. 26, 27 28 U.S.C. § 1491(b)(4) ......................................................................................................... 14, 26 28 U.S.C. § 1491 (b)(1) ............................................................................................................. 17 28 U.S.C. § 1491 ................................................................................................................... passim 31 U.S.C. § 3551(2) .................................................................................................................... 17 13 C.F.R. § 126.607 .............................................................................................................. 28, 31 48 C.F.R. § 15.208 ............................................................................................................... passim 48 C.F.R. § 19.1301(b) ............................................................................................ 27, 31, 33, 36
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IN THE UNITED STATES COURT OF FEDERAL CLAIMS BID PROTEST SHIRLINGTON LIMOUSINE & TRANSPORTATION, INC., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) ) ) )
No. 07-220C (Judge Braden)
DEFENDANT'S MOTION TO DISMISS OR, IN THE ALTERNATIVE, FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD AND OPPOSITION TO PLAINTIFF'S MOTION FOR JUDGMENT UPON THE ADMINISTRATIVE RECORD Pursuant to Rules 12(b)(1) of the Rules of the United States Court of Federal Claims ("RCFC"), defendant, the United States, respectfully requests that the Court dismiss plaintiff's bid protest complaint for lack of jurisdiction. In the alternative, pursuant to RCFC 52.1, the United States respectfully requests the Court to grant judgment upon the administrative record in the United States' favor. In addition, pursuant to RCFC 65(a), defendant respectfully requests the Court to deny the motion for declaratory and injunctive relief of plaintiff, Shirlington Limousine & Transportation, Inc. ("Shirlington"). In support of our motion and opposition we rely upon the administrative record, this brief, and the accompanying statement of facts. STATEMENT OF THE CASE I. NATURE OF THE CASE In this pre-award protest, Shirlington seeks to permanently enjoin the Department of Homeland Security ("DHS" or "Agency") from proceeding with the award of a contract under
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Solicitation Number HSHQDC-07-R-00009 (the "solicitation") to provide Agency-wide shuttle bus and sedan transportation services for DHS employees. Shirlington's complaint includes three counts. In Count 1 of its complaint, Shirlington alleges that the agency erred by failing to set aside the procurement for competition among companies that are qualified as Historically Underutilized Business Zone Small Business Concerns ("HUBZone SBCs" or "HUBZone firms"). Compl. at ¶¶ 12-35. Count 2 of the complaint alleges that DHS erred by failing to accept Shirlington's proposal that Shirlington delivered to the wrong location. Compl. at ¶¶36-56. Count 3 alleges that DHS breached an "implied duty of good faith and fair dealing" by pushing Shirlington out of the existing contract and the new procurement, allegedly in response to political pressure from Members of Congress. Compl. at ¶¶57-75. II. COUNTER-STATEMENT OF FACTS 1. The Department of Homeland Security ("DHS" or "Agency") currently is
comprised of a Headquarters office and more than 16 separate components, ranging from the Federal Emergency Management Association to the United States Coast Guard. These components are housed in multiple separate buildings located throughout the District of Columbia metropolitan area. AR249 (Tab 10); AR127-131 (Tab 6) (setting forth current DHS shuttle bus routes).1 2. Agency employees currently use shuttle buses and executive sedans to travel
between the Agency's dozens of offices located in the District of Columbia metropolitan area. Each of DHS's various components acquire commercial executive sedan and shuttle services
1
"AR___" refers to the administrative record of this case. 2
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from different providers at varying degrees of quality and cost. AR249 (Tab 11). 3. On October 25, 2005, DHS awarded Shirlington a contract to provide
transportation services to the DHS Headquarters. The contract was for a period of one year with four one-year options. Subsequently, Shirlington and DHS mutually agreed to modify the option periods under the contract. Shirlington currently is performing a nine-month option period, called Option 1A, which ends on July 26, 2007. 4. Shirlington is currently one of seven contractors providing transportation services
to DHS and its components in the District of Columbia metropolitan area. These services include sedans and shuttles for DHS's Headquarters, sedans, vans, and shuttle buses for Immigration and Customs Enforcement, sedans and shuttles for Customs and Border Protection, and sedans for the Transportation Security Administration and the United States Customs and Immigration Service. AR194 (Tab 8). 5. In May 2006, DHS initiated a comprehensive analysis of its transportation
requirements. AR249 (Tab 11). 6. Recognizing the inefficiencies of the current provider structure, the Agency's
Chief Administrative Officer, Don Bathurst, and the Director of the Office of Procurement Operations, Soraya Correa, concluded that the agency could achieve cost savings and greater efficiency by consolidating the agency's transportation services using a strategic sourcing process. AR249. The Office of Management and Budget currently requires all Federal agencies to implement strategic sourcing initiatives to improve Federal procurement practices. AR1 (Tab 1). DHS currently employs strategic sourcing processes to acquire several commercial commodities and services, ranging from handguns to express mail services. Id. 3
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7.
As a part of the strategic sourcing process, DHS formed a Commodity Council
consisting of representatives from each organizational component within the Agency. The Council is responsible for consolidating and refining the Agency's requirements and developing an acquisition strategy to meet those requirements. AR249. The Council relies upon historical data (i.e., existing contracts and results of previous competitive actions), market surveys, and responses to requests for information. 8. The agency designated Victoria Short as the contracting officer and Frank Rumph
as the contract specialist to handle the consolidated transportation procurement. AR250. 9. On June 23, 2006, the contracting officer issued a Request for Information
("RFI") identifying the Agency's preliminary requirements for transportation services. AR21 (Tab 3). 10. The purpose of the RFI was to gauge the level of interest in a DHS-wide
transportation services contract. AR21; AR250. 11. The RFI specified that the contractors would be responsible for providing all
sedans and shuttle buses and that the shuttle buses must be "handicapped/wheelchair accessible." AR250; AR21 (Tab 3). It further specified, at a minimum, that all "contractor principals and operations personnel are required to obtain a Suitability Determination." AR21. 12. On October 10, 2006, the Agency amended the RFI to inform potential offerors
that "all interested parties have a Defense Industrial Security Clearance Office ("DISCO") cleared Contractor Owned facility at time of award" and that "all Contractor principals and operations personnel are required to obtain a Secret Clearance." AR27 (Tab 5). 13. Of the 11 companies that responded to the Request For Information ("RFI"), only 4
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four claimed to be HUBZone companies. AR251. 14. Based upon the information provided by each of the RFI respondents, and upon
research conducted through the Consolidated Contractor Registration ("CCR") and Small Business Administration ("SBA") databases, the Agency concluded that only one of the HUBZone firms, Shirlington, had performed a contract that was similar to the proposed solicitation. AR251. 15. The Agency further determined that another of the HUBZone respondents had
previously submitted a marginal proposal that could not be considered for award for a previous DHS transportation contract. Id. The third HUBZone firm indicated that its experience was limited to providing shuttle bus service as a subcontractor to commercial organization, while the fourth respondent was not a HUBZone certified firm based upon the CCR and SBA databases. 16. Only one of the RFI respondents, a small business firm, could meet the DISCO-
cleared facility requirement. AR247 (Tab 10). 17. In August and September of 2006, the Commodity Council held multiple
meetings to review the results of the RFI and decide upon a strategy for the acquisition. The Council and the contracting officer concluded that: (1) the DHS executive sedan service would be consolidated with a single dispatcher to provide on-call transportation and courier services for authorized DHS executives; (2) the contractor would provide and house the dispatching service; (4) DHS would award two separate contracts for shuttle bus services; (4) the contractors would provide all of the vehicles, including shuttle buses and executive sedans; (5) contractors would be responsible for providing secure storage of the vehicles. AR250 (Tab 11). 18. One of the principal rationales for consolidating the executive sedan services is to 5
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ensure the safety and security of DHS employees traveling between facilities in the Washington metropolitan area. Based upon the security requirements established by the Office of the Chief Security Officer, the Agency determined that contractors must at a minimum provide a secure facility for storing vehicles and dispatching calls and ensure that contractor employees obtain appropriate security clearances. AR250 (Tab 11). 19. The proposed procurement is larger in both scope and complexity than any of the
Agency's existing transportation contracts. For example, Shirlington currently provides a portion of the Agency's sedan services to the DHS headquarter's component, but the Agency owns the sedans and houses the dispatching service on Agency property. The contract does not require contractor employees to have security clearances because the sedans are stored at Agency facilities. AR251 (Tab 11). 20. In September 2006, the Agency conducted a thorough review of the procurement
process and evaluated how the proposed changes to the scope and complexity of the Agencywide procurement would affect small businesses, including HUBZone companies. AR246, 251. 21. The Agency's evaluation included detailed discussions between the Director of
the Office of Procurement Operations and the Director of the Small and Disadvantaged Business Utilization. The discussions specifically related to the small business considerations for the proposed Agency-wide transportation contract. AR251. 22. The Director of the Small and Disadvantaged Business Utilization Office
specifically tasked his personnel to perform additional research into the matter. Based upon this analysis, the Agency concluded that it would not receive adequate proposals if the procurement was conducted the procurement under a HUBZone sole-source or competitive set-aside. AR247. 6
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The Agency further concluded that the significant increase in the size and scope of the proposed Agency-wide contract would be too difficult and too expensive for HUBZone businesses. AR247, 252. The Agency concluded, however, that small businesses were interested in the procurement and could fulfill the requirements. Id. 23. On October 6, 2006 the Director of the Office of Procurement Operations
convened a meeting of the senior executives involved with the procurement and they each concurred with the acquisition strategy to set-aside the procurement for small businesses and concurred in the decision-making process. AR247, 252. 24. On November 20, 2006, the Agency posted a Request for Proposals ("RFP" or
"solicitation") on the FedBizOps website for the DHS-wide Transportation services requirement. 25. The November 20, 2006 solicitation, in the section entitled "Instructions To
Offerors," instructed offerors that proposals were to be received by 2:00 p.m. Eastern Standard Time ("EST"), December 12, 2006, and should be submitted to the following address: Frank Rumph, Contract Specialist OPO Headquarters Procurement Division 7th and D Streets, SW Washington, DC 20024 AR66 (Tab 6). 26. The November 20, 2006 solicitation also contained Standard Form 1449, which
designated a delivery address in Box 15 of the form as follows: Department of Homeland Security Office of Procurement Ops. (DO) 245 Murray Lane Building 410 Washington, DC 20528
7
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AR29 (Tab 6). 27. The RFP gave prospective offerors an opportunity to submit questions regarding
the RFP via e-mail by November 28, 2006. The RFP also stated that the prospective offerors could submit additional questions, if any, after the pre-proposal conference. The additional questions were due December 5, 2006. AR66 (Tab 6). 28. On November 28, 2006, DHS issued Amendment 0001 providing information for
the pre-proposal conference and incorporating the applicable Department of Labor wage determination for the solicitation. AR169 (Tab 7). 29. On December 1, 2006, DHS held a pre-proposal conference. The purpose of the
conference was to provide potential offerors with the background of the requirement and the strategic source initiative, address information that potential offerors would need to know regarding the preparation of their proposals, and provide an overview of the necessary security requirements. Twelve vendors attended, including two representatives from Shirlington. 30. On December 4, 2006, DHS issued Amendment 0002 to the solicitation in order
to provide the slides from the pre-proposal conference held on December 1, 2006. AR181 (Tab 8). Amendment 0002 also provided answers to questions submitted by prospective offerors and informed offerors that a subsequent amendment would be issued to address additional questions. AR2; AR181 (Tab 8). 31. Additional questions after the pre-proposal conference were due December 5,
2006, 10:00 a.m. EST. Shirlington did not submit any questions within the deadline. AR3. 32. On December 7, 2006, after the deadline for submitting questions relating to the
pre-proposal conference, Shirlington submitted the following e-mail request to the Contracting 8
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Specialist: "Per our conversation, please fax a copy of the attendees at the pre-proposal conference last Friday, Dec. 1, 2006, to 202-248-0722." AR3. 33. On December 8, 2006, DHS issued Amendment 003 to the solicitation. Among
other things, the amendment included the Agency's answers to questions raised by prospective offerors. One question noted the two different delivery addresses listed in the RFP and sought clarification. The Agency responded as follows: Change the delivery address at page 38 to read: Department of Homeland Security Office of Procurement Operations, 245 Murray Lane, Building 410, Washington DC 20528. ATTN Frank Rumph. AR225 (Tab 9). Amendment 0003 also extended the deadline for submitting proposals to December 19, 2006, at 10:00 a.m. EST. AR224. 34. The 245 Murray Lane, Building 410, Washington DC 20528 address is located on
the Anacostia Naval Station. AR559 (Tab 31). 35. DHS normally uses the 245 Murray Lane location as the delivery address for its
procurements. AR560-61 (Tab 32); AR628-29 (Rumph deposition). DHS uses the Anacostia Naval Station location in order to x-ray and screen incoming packages for security purposes. AR630 (Rumph deposition). Once the incoming proposals are screened, they are delivered by courier to the Office of Procurement Operations at 7th and D Streets, SW. AR630-31 (Rumph deposition). 36. Only three of the more than 15,000 procurement actions conducted by DHS in the
past three years involved delivery to the GSA bid room at 7th and D Streets, SW. AR560 (Tab 32). 9
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37.
On December 11, 2006, DHS received correspondence from Shirlington's counsel
informing DHS that Shirlington had filed a pre-award protest before the General Accountability Office ("GAO") regarding the Agency-wide transportation services solicitation. 38. Counsel for Shirlington also contacted the Director of the Office of Procurement
Operations, Soraya Correa, by letter, dated December 8, 2006, informing her that he had filed a protest the previous day and urging her to take immediate corrective action. 39. On December 14, 2006, the Agency received the bid protest filed before the GAO
alleging restrictive specifications and a failure to set aside the procurement for HUBZone small businesses. 40. On December 19, 2006, the deadline for proposals set forth in the solicitation,
Ms. Lucretia Pearce, Shirlington's Chief Operating Officer, hand-delivered Shirlington's proposal to the General Services Administration ("GSA") bid room, located at 7th and D Streets, SW. Compl. at ¶ 41 (admitting that Shirlington delivered proposal to bid room at 7th and D Streets, SW) 41. The GSA bid room, located at 7th and D Streets, SW, is clearly marked as secure
room for depositing bids for GSA procurements. It is located immediately inside the door of the building bearing the sign "General Services Administration National Capital Region." AR565 (color picture). A sign outside the room identifies the room as the "HPSD-12 Contractor Processing Center" and the door to the room contains a GSA notice to all bidders/offerors. AR566 (color picture); AR568 (color picture). 42. Shirlington did not deliver a proposal to the location at 245 Murray Lane,
Building 410, the delivery address set forth in the solicitation. Compl. at ¶ 41. 10
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43.
The Agency has received multiple proposals in response to the solicitation, all of
which were timely delivered to the correct delivery address set forth in the solicitation. 44. On January 8, 2007, the Agency filed its GAO report responding to Shirlington's
protest. The Agency's report included a legal memorandum that challenged Shirlington's standing upon the grounds that Shirlington had not submitted a proposal in response to the solicitation. AR255 (Tab 12). 45. On January 10, 2007, Shirlington's counsel sent a letter stating that Shirlington
had delivered its proposal to the "bid room" located at 7th and D Streets, SW. Counsel demanded that DHS retrieve his client's proposal. AR532 (Tab 23). 46. On January 10, 2007, the contracting officer stopped by the General Services
Administration ("GSA") Bid Room located at 7th and D Streets, SW. Based upon a conversation with Mr. Campbell, a GSA employee, the contracting officer learned that Shirlington's proposal had been submitted there, instead of the location set forth in the solicitation. The contracting officer departed the Bid Room leaving the proposal at that location. To date, the Agency has not retrieved the proposal and at this point is unaware of its location. AR506 (Tab 21). 47. On January 11, 2007, Agency counsel renewed her motion to dismiss the GAO
proceeding for lack of jurisdiction and submitted documentary evidence demonstrating that Shirlington had submitted its proposal to a location other than that specified in the solicitation. AR506 (Tab 21). 48. (Tab 24). 49. On January 19, 2007, after an ex parte conversation with the GAO, Shirlington's 11 On February 8, 2007, the GAO denied the Agency's motion to dismiss. AR534
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counsel filed a second protest challenging the Agency's rejection of its proposal as late. AR536 (Tab 25). 50. On March 13, 2007, the GAO denied Shirlington's first protest. It held that the
terms of the solicitation were not unduly restrictive and that the Agency's decision to not set aside the solicitation for HUBZone business was reasonable and fully supported in the administrative record. The GAO specifically held that the determination to set aside a procurement requires a business judgment regarding whether the agency will receive offers from at least two qualified, responsible HUBZone companies. It further held that the use of any particular method to assess the availability of HUBZone small business is not required and that measures such as prior procurement history, market surveys, and advice from the agency's small business specialist may all constitute adequate grounds for a contracting officer's decision not to set aside a procurement. AR434, 439 (Tab 16). 51. On March 30, 2007, the GAO denied the second protest. AR598 (Tab 39). It held
that it is an offeror's responsibility to deliver its proposal to the proper place by the proper time and that late delivery generally requires the Agency to reject the proposal. AR600. The GAO further held that Shirlington delivered its proposal to the wrong address and that there was no basis to conclude that improper Government action caused the late submission of Shirlington's proposal. Id. The GAO held that there was no support for Shirlington's assertion that the Agency failed to provide sufficiently clear delivery instructions, when the Agency had amended the solicitation to explicitly clarify the delivery instructions. Finally, the GAO held that Shirlington could not rely upon the exception for late proposals that are under the Government's control, because the exception applies only to proposals that are delivered to the address set forth 12
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in the solicitation. AR602. 52. On April 4, 2007, Plaintiff's counsel filed its Complaint for Preliminary
Injunction, Permanent Injunction and Declaratory Judgment in this case. ISSUES PRESENTED 1. Whether this Court lacks subject matter jurisdiction to entertain Shirlington's
claims because Shirlington is not an interested party to the procurement. 2. Whether Shirlington's claims are barred because Shirlington cannot show it has
been prejudiced by agency action. 3. Whether the Agency's decision to set-aside the solicitation for small businesses
was arbitrary, an abuse of discretion, or otherwise contrary to law. SUMMARY OF ARGUMENT As shown below, Shirlington has failed to meet its burden of establishing subject matter jurisdiction in this case. Because Shirlington failed to deliver its proposal to the location specified in the solicitation, its proposal is late and the Agency is obligated to reject it. 48 C.F.R. § 15.208; Compl. at ¶ 41 (admitting that Shirlington delivered proposal to bid room at 7th and D Streets, N.W.). Because the Agency cannot consider Shirlington's proposal, Shirlington is not an actual or prospective offeror and has no direct economic interest in the award of the contract. Therefore, Shirlington is not an "interested party" and has no standing to challenge the terms of the solicitation. Accordingly, the Court should dismiss Shirlington's complaint. In the alternative, if the Court finds that Shirlington possesses standing, the Court should conclude that Shirlington has failed to demonstrate that the Agency acted unlawfully or unreasonably in deciding to set aside the Agency-wide transportation procurement for small 13
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businesses, rather than to restrict competition to HUBZone companies. ARGUMENT I. Standard Of Review A. Standard Of Review For Motion To Dismiss
Pursuant to RCFC 12(b)(1) and 12(b)(6), the Court is required to grant Defendant's motion to dismiss if it finds that it does not have jurisdiction over Plaintiff's claim or that Plaintiff has failed to state a claim upon which relief can be granted. Awad v. United States, 61 Fed. Cl. 281, 283 (2004). When a defendant challenges this Court's jurisdiction, "the plaintiff bears the burden of proving that subject-matter jurisdiction is proper." Id. (citing Schickler, TMD U.S.A., Inc. v. United States, 54 Fed. Cl. 264, 268 (2002)). If the factual basis for jurisdiction is challenged, the allegations in the complaint are not controlling and only uncontroverted factual allegations are accepted as true for purposes of the motion. Awad, 61 Fed. Cl. at 283. In deciding a motion to dismiss for lack of subject matter jurisdiction pursuant to rule 12(b)(1), the Court may consider evidentiary matters outside the pleadings. Indium Corp. of Am. v. Semi-Alloys, Inc., 781 F.2d 879, 884 (Fed. Cir. 1985); Adams v. United States, 20 Cl. Ct. 132, 133 n.1 (1990). Here, Shirlington's complaint fails to offer a proper basis upon which this Court can assert jurisdiction to entertain Shirlington's claims. Accordingly, this Court should dismiss the complaint for lack of subject matter jurisdiction. B. Standard Of Review For Motion For Judgment Upon The Administrative Record
This Court reviews allegations of error in the contract procurement process under the
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deferential standard set forth in 5 U.S.C. § 706. 28 U.S.C. § 1491(b)(4); Tech Systems, Inc. v. United States, 50 Fed. Cl. 216, 221 (2001). An agency's contracting decision may be set aside only if the agency's actions are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." 5 U.S.C. § 706. To prevail, a protestor must show that, had it not been for the alleged error in the procurement process, there was a reasonable likelihood that the protestor would have been awarded the contract. Wackenhut Int'l, Inc. v. United States, 40 Fed. Cl. 93, 94-95 (1998). Only agency action that is so egregious that it prevented the fair and honest consideration of the protestor's offer or similarly tainted the procurement process may be enjoined. Cent. Ark. Maint., Inc. v. United States, 68 F.3d 1338, 1341-42 (Fed. Cir. 1995); accord CACI, Inc. v. United States, 719 F.2d 1567, 1573 (Fed. Cir. 1983). In determining whether the agency's action was arbitrary or capricious, the Court considers whether: (1) there was subjective bad faith upon the part of procuring officials thus depriving the protestor of fair and honest consideration of its proposal; (2) there was a reasonable basis for the procuring officials' decision; (3) the procuring officials abused their discretion; or (4) the procuring officials violated pertinent statutes or regulations. Beta Analytics Int'l., Inc. v. United States, 44 Fed. Cl. 131, 136 (1999); Cincom Sys., Inc. v. United States, 37 Fed. Cl. 663, 671 (1997). In applying these factors, the proper focus is the agency's articulated rationale for the decision and the administrative record underlying it. Camp v. Pitts, 411 U.S. 138, 142-43 (1973); see also Tech Systems, 50 Fed. Cl. at 222 (the Court "cannot substitute its own judgment for that of the agency"); Winstar Communications, Inc. v. United States, 41 Fed. Cl. 748, 757 (1998) (the court's role is limited to ensuring that the agency has examined the relevant data and articulated a satisfactory explanation for its action including a rational 15
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connection between the facts found and the choice made). Although the agency is required to proffer an explanation for its action, the explanation need not be extensive. Camp, 411 U.S. at 142-43. A protestor must prove the arbitrary and capricious nature of the Government's actions or the violation of an applicable procurement regulation by a preponderance of the evidence. Tech Systems, 50 Fed. Cl. at 222-24. However, because injunctive relief is extraordinary in nature, a plaintiff must demonstrate the right to such relief by clear and convincing evidence. Cubic Def. Sys. v. United States, 45 Fed. Cl. 450, 474 (2003); Overstreet Elec. Co., Inc. v. United States, 47 Fed. Cl. 728, 732 (2000) (citing Bean Dredging Corp. v. United States, 22 Cl. Ct. 519, 522 (1991)); Cincom, 37 Fed. Cl. at 671 (citing 126 Northpoint Plaza LP v. United States, 34 Fed. Cl. 105, 107, appeal dismissed, 73 F.3d 379 (Fed. Cir. 1995)) (plaintiff must prove its case by clear and convincing evidence). A bid protestor cannot meet its burden merely by demonstrating that the record might have supported a different decision. Keco Indus., Inc. v. United States, 203 Ct. Cl. 566, 579, 492 F.2d 1200, 1206-07 (1974). Because contracting officials may exercise wide discretion in their evaluation of procurement regulations, a bid protestor may prevail only when it is clear that the agency's determinations were irrational and unreasonable. Cincom Systems, 37 Fed. Cl. at 672. C. The Standard For Granting Injunctive Relief
Shirlington here requests permanent injunctive relief. Injunctive relief is appropriate "only in extremely limited circumstances." CCL Serv. Corp. v. United States, 48 Fed. Cl. 113, 120 (2000) (quoting CACI, Inc. , 719 F.2d at 1581). In order to obtain a permanent injunction, a plaintiff must carry the burden of establishing entitlement to this extraordinary relief based upon 16
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the following factors: (1) actual success on the merits; (2) that plaintiff will suffer irreparable injury if injunctive relief is not granted; (3) that, if the injunction is not granted, the harm to plaintiff will outweigh the harm to the Government and third parties; and (4) that granting the injunction serves the public interest. Bean Stuyvesant, L.L.C. v. United States, 48 Fed. Cl. 303, 320-21 (2000). The decision whether to grant an injunction is within the sound discretion of the trial court. FMC Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993). II. Shirlington Does Not Possess Standing To Challenge The Terms Of The Solicitation The threshold issue before the Court is whether Shirlington possesses standing to bring this protest, when it failed to timely deliver its proposal to the correct location as set forth in the solicitation. See Argencord Mach. & Equip., Inc. v. United States, 68 Fed. Cl. 167, 176 (2005) (holding that protestor that failed to timely submit a proposal lacks standing to challenge terms of the solicitation). For this Court to possess jurisdiction over Shirlington's pre-award protest, Shirlington must have standing. Myers Investigative and Security Svcs., Inc. v. United States, 275 F.3d 1366, 1369 (Fed. Cir. 2002) (citing Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 102-04 (1998)). As the party invoking jurisdiction, Shirlington bears the burden of establishing the elements of standing. Id. (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)). The Tucker Act, 28 U.S.C. § 1491, grants this Court jurisdiction to entertain pre-award bid protest actions. Graphicdata, LLC v. United States, 37 Fed. Cl. 771, 778 (1997). As amended by the Administrative Dispute Resolution Act of 1996, the Tucker Act provides that this Court: shall have jurisdiction to render judgment on an action by an 17
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interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation or regulation without regard to whether suit is instituted before or after the contract is awarded. 28 U.S.C. § 1491 (b)(1) (emphasis added). The Federal Circuit has held that the term "interested party," which is not defined in the Tucker Act, is to be construed in accordance with the Competition in Contracting Act ("CICA"), 31 U.S.C. § 3551(2) (Supp. IV 1998), and that "standing under § 1491(b)(1) is limited to actual or prospective bidders or offerors whose direct economic interest would be affected by the award of the contract or by failure to award the contract." American Federation of Government Employees, AFL-CIO v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001). Waivers of sovereign immunity, such as those established by the Tucker Act, are to be narrowly construed in favor of the sovereign. McMahon v. United States, 342 U.S. 25, 27 (1951). Shirlington has failed to meet its burden of establishing standing. In its Memorandum on Jurisdiction, filed on April 6, 2007, Shirlington does no more than represent that the Court possesses jurisdiction of pre-award protests based on the Tucker Act, while conveniently ignoring the question of standing. Shirlington's memorandum in support of its motion for judgment upon the administrative record is even less forthcoming the discussion of jurisdiction is restricted to a single paragraph. Pl. Br. at 12. Because Shirlington is not an actual or prospective offeror under the solicitation, it lacks the requisite direct economic interest necessary to establish standing as an "interested party." Shirlington has failed to meet its burden of establishing jurisdiction in this case.
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A.
Shirlington Is Not An Actual Offeror Under The Solicitation
Shirlington is not an actual offeror under the solicitation. The uncontested facts in the administrative record and in Shirlington's complaint establish that Shirlington did not timely deliver its proposal to the location set forth in the solicitation, as required by FAR 15.208.2 Moreover, Shirlington cannot, as a matter of law, demonstrate that it falls within any of the timeliness exceptions set forth in that section. See generally FAR 15.208 (setting forth limited exceptions only for proposals "received at the Government installation designated for receipt of offers"); also Conscoop-Consorzia Fra Cooperative Di Prod. E Lavoro v. United States, 62 Fed. Cl. 219 (2004), aff'd, 159 Fed. Appx. 184 (Fed. Cir. 2005)) (holding that agency was required to reject untimely offers and could not consider an untimely offer unless one or more limited exceptions applied).3 Shirlington has not attempted, even now, to deliver its proposal to the address set forth in the solicitation. 1. The Burden Rests Upon The Contractor To Timely Deliver Its Proposal To The Proper Location
The Federal Acquisition Regulation clearly places the burden upon the offeror to transmit its proposal so as to reach the Government office designated in the solicitation by the time specified in the solicitation. FAR 15.208(a) provides that "[o]fferors are responsible for submitting proposals, and any modifications or revisions, so as to reach the Government office
FAR 15.208(a) establishes that "[o]fferors are responsible for submitting proposals, and any modifications or revisions, so as to reach the Government office designated in the solicitation by the time specified in the solicitation." 48 C.F.R. § 15.208(a). Indeed, if the Agency agreed to consider Shirlington's proposal, it would be subject to protest by any of the other bidders who timely delivered their proposals to the correct address. See Hospital Klean of Texas, Inc. v. United States, 65 Fed. Cl. 618 (2005) (holding that agency improperly accepted untimely proposal). 19
3
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designated in the solicitation by the time specified in the solicitation." 48 C.F.R. § 15.208(a). Here, Shirlington did not seek to clarify the delivery location and never questioned the delivery instructions set forth in the solicitation prior to the deadline. If Shirlington believed that the proposal was ambiguous, it would have a duty to inquire. Conscoop-Consorzia, 62 Fed. Cl. at 233 (2004), aff'd, 159 Fed. Appx. 184 (Fed. Cir. 2005)) (holding that "if an ambiguity is obvious and a bidder fails to inquire with regard to the provision, his interpretation will fail."). On the day its proposal was due (December 19, 2006), Shirlington did not seek assistance from the agency regarding delivery. See J&H Reinforcing and Structural Erectors, Inc. v. United States, 50 Fed. Cl. 570 (2001) (dismissing contractor's protest for lack of jurisdiction when contractor failed to timely inquire regarding alleged patent ambiguity in solicitation). In fact, Shirlington did not become aware that its proposal was not timely filed until early January, when agency counsel informed Shirlington's counsel that the Agency had not received a proposal from his client. AR255 (Tab 12). Despite Shirlington's counsel's imperious demands to agency counsel that the Agency retrieve Shirlington's proposal from the GSA bid room, AR530 (Tab 23), there is no legal obligation for the Agency to hunt down and retrieve a proposal submitted to the wrong location. 2. Shirlington's Cannot Justify Its Failure To Timely Deliver Its Proposal
Shirlington's arguments, attempting to justify its failure to timely deliver its proposal, have evolved throughout its protest before the General Accountability Office and before this Court. Despite this evolution, Shirlington's arguments are wholly unavailing. Initially, Shirlington argued that it delivered its proposal to the wrong location because the solicitation was
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inartfully drafted. AR539-544 (Tab 26). Next, Shirlington's president, Chris Baker, argued that the delivery address set forth in the solicitation was subject to multiple "interpretations" as either a mailing address or a physical address. AR613 (Tab 40). Then, Shirlington's Chief Operating Officer, Lucretia Pearce, argued that Shirlington's past practice of delivering contract administration documents to the 7th and D Street location justified its decision to deliver the proposal to that location (despite having written the correct delivery location on the front if its proposal). AR609 (Tab 40). Subsequently, in her April 2007 statement, Ms. Pearce claimed that she was "misled" by statements of Shirley Turner, the contracting officer for DHS's existing contract with Shirlington.4 See Memorandum Of Points And Authorities In Support Of Plaintiff's Motion For Leave To Supplement The Administrative Record With Additional Discovery, Att. A (statement of Lucretia Pearce at ¶ 5). In that submission, Shirlington argued, for the first time, that Frank Rumph had provided more explicit delivery directions to other offerors prior to the date that proposals were due. Id. at 3. Despite these myriad arguments, and despite being permitted to take the deposition of Frank Rumph, Shirlington has failed to identify any affirmative Government misconduct that caused Shirlington to deliver its proposal to the wrong location. Instead, Mr. Rumph's deposition simply affirmed his earlier statement in the administrative record and further clarified the fact that, to his knowledge, DHS has always used the Anacostia Naval Station as the delivery address for contract proposals. AR559 (Tab 31).
4
Ms. Turner has nothing to do with the procurement at issue in this case. 21
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a.
The Delivery Location Was Clearly Set Forth In The Solicitation
Shirlington relies upon the statement of Lucretia Pearce, attached to its April 18, 2007 motion for additional discovery, to imply that the delivery instructions in the solicitation were ambiguous. See Mot., Att. A (statement of Lucretia Pearce at ¶ 3). Shirlington's allegations are without merit. The requirements for delivery of the proposal are unambiguously set forth in the solicitation itself. AR443 (Tab 17). Box 15 of the solicitation sets forth the delivery address as: Department of Homeland Security Office of Procurement Ops. (DO) 245 Murray Lane Building 410 Washington, DC 20528 Shirlington was unquestionably aware of the correct delivery address, because the cover sheet of its proposal contained the correct address. AR512 (Tab 21). Because the solicitation is unambiguous and is not capable or more than one interpretation, the Court cannot rely upon extrinsic evidence to clarify the solicitation's terms. See Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1353 (Fed. Cir.2004). Therefore, Shirlington is not entitled to rely upon testimonial evidence regarding the interpretation of the solicitation. See City of Tacoma Dept. of Pub. Utils. v. United States, 31 F.3d 1130, 1134 (Fed. Cir.1994) ("Outside evidence may not be brought in to create an ambiguity where the language is clear."). b. Shirlington Cannot Meet Any Of The Timeliness Exceptions Set Forth In FAR 15.208
Shirlington cannot, as a matter of law, demonstrate that it meets any of the timeliness exceptions set forth in FAR 52.215-1(c)(3). FAR 15.208 provides for the following limited 22
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timeliness exceptions: (b)(1) Any proposal, modification, or revision, received at the Government office designated in the solicitation after the exact time specified for receipt of offers is "late" and will not be considered unless it is received before award is made, the Contracting Officer determines that accepting the late offer would not unduly delay the acquisition; and-(I) If it was transmitted through an electronic commerce method authorized by the solicitation, it was received at the initial point of entry to the Government infrastructure not later than 5:00 p.m. one working day prior to the date specified for receipt of proposals; or (ii) There is acceptable evidence to establish that it was received at the Government installation designated for receipt of offers and was under the Government's control prior to the time set for receipt of offers; or (iii) It is the only proposal received. 48 C.F.R. § 15.208(b)(1)(I) - (iii) (emphasis added). Each of these three limited exceptions apply only to proposals "received at the Government office designated in the solicitation." Id. Shirlington admits that it did not deliver its proposal to the office designated in the solicitation. Compl. at ¶ 41 (alleging that Shirlington delivered proposal to bid room at 7th and D Streets, N.W.); see also Compl. at Ex. 4 (statement of Lucretia Pearce acknowledging that she delivered proposal to GSA bid room at 7th and D Streets, N.W.). Nothing prevented Shirlington from calling the Agency, at any time before the deadline for receipt of proposals, to obtain more explicit instructions to reach the delivery address. Moreover, since the December 19, 2006 deadline for receipt of bids, Shirlington has made no attempt to deliver its proposal the correct location at 245 Murray Lane. Therefore, Shirlington does not, and cannot, demonstrate that it meets any of the regulatory exceptions for untimely
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proposals. Moreover, the discovery obtained by Shirlington has no bearing upon whether any of the timeliness exceptions apply to it. FAR 15.208(c) provides that the only "acceptable evidence to establish the time of receipt at the Government installation includes . . . oral testimony or statements of Government personnel." 48 C.F.R. § 15.208(c). Here, Shirlington sought discovery to "explain whether the Agency had contact with other potential or actual offers [sic] at any time prior to the date that proposals were due." Motion to Supplement Administrative Record, at 3. This information has nothing to do with when the Government may have received Shirlington's proposal (indeed, the administrative record establishes that the Agency has never received Shirlington's proposal at the designated location). Consequently, it has no bearing upon whether Shirlington could qualify for one of the regulatory exceptions.5 Moreover, Mr. Rumph testified that proposals (indeed, all deliveries) are received by security personnel at Anacostia Naval Station and are forwarded to DHS at its 7th and D location by courier. Shirlington relies upon California Marine Cleaning, Inc. v. United States, 42 Fed. Cl. 281 (1998), to support its argument that its mis-delivered proposal should be accepted as "received at the Government installation designated for receipt of offers and was under the Government's control prior to the time set for receipt of offers." FAR 15.208. Shirlington's reliance upon California Marine is misplaced. Contrary to Shirlington's representations, California Marine
At most, information regarding the submission of other proposals demonstrates only that the delivery instructions in the solicitation were sufficiently clear to the other prospective bidders who successfully delivered their proposals to the correct location in a timely manner. See Community Heating & Plumbing Co., Inc. v. Kelso, 987 F.2d 1575, 1579 (Fed. Cir. 1993) (evidence of other offerors' interpretations considered in determining reasonableness of contractor's interpretation). 24
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held that a proposal that was timely delivered to the proper location, but not discovered by the agency until later, must be considered for award. 42 Fed. Cl. at 297. The facts in California Marine bear no meaningful similarity to the facts of this case. In California Marine, it was undisputed that the protestor delivered its bid to the location designated in the solicitation; the only issue was whether the protestor had timely delivered the bid. Id. Here, Shirlington cannot legitimately claim that it delivered its proposal to the "Government installation designated for receipt of offers." Shirlington admits that it delivered its proposal to the GSA bid room at 7th and D Streets, N.W., not to 245 Murray Lane location specified in the solicitation. Compl. at ¶ 41 (alleging that Shirlington delivered proposal to bid room at 7th and D Streets, N.W.); see also Compl. at Ex. 4 (statement of Lucretia Pearce acknowledging that she delivered proposal to GSA bid room at 7th and D Streets, N.W.). Shirlington distorts dicta in California Marine to support its argument that FAR 15.208 does not require that the contractor submit its bid to the designated Government installation prior to the bid deadline. Pl. Br. at 31. Shirlington misleadingly attempts to distinguish between the "designated office" for the receipt of bids and the "government installation" as those terms are applied by the GAO, implying that the "designated office" here is the 7th and D location and the "government installation" is the 245 Murray Lane location at the Anacostia Naval Station. Id. at 32. This distinction is irrelevant to this case. As the Court in California Marine explained, "government installation" refers to the entire Government facility in which the "designated office" is located and the distinction applies only to situations in which a proposal is timely delivered to the Government facility but not received at the designated office until later. 42 Fed. Cl. at 298, n. 33. Here, the 7th and D St., SW location cannot be construed as being within (or 25
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even near) the "government facility" at the Anacostia Naval Station.6 Following Shirlington's argument to its logical conclusion, any Government office would be obligated to accept proposals, regardless of whether the office was designated as the delivery location in the solicitation. B. Shirlington Is Not A Prospective Offeror Under The Solicitation
The test for determining whether a protestor possesses standing as a prospective offeror is set forth in MCI Telecomm. Corp. v. United States, 878 F.2d 362 (Fed. Cir. 1989). In MCI, the plaintiff alleged that the Government had waived mandatory contract requirements and should be required to resolicit the contract. The court held that "in order to be eligible to protest, one who has not actually submitted an offer must be expecting to submit an offer prior to the closing date of the solicitation . . . the opportunity to qualify either as an actual or prospective bidder ends when the proposal period ends." 878 F.2d at 365 (emphasis added); see also Fed. Data Corp. v. United States, 911 F.2d 699, 704 (Fed. Cir. 1990). Shirlington cannot meet this standard. Because Shirlington failed to submit its proposal before the deadline for receipt of bids, it cannot qualify as a prospective offeror. Therefore, Shirlington is not a "prospective bidder" and does not have standing to challenge the terms of the solicitation. Moreover, Shirlington cannot rely upon its economic interest in the subject matter of the procurement to establish standing. The facts of this protest are similar to those in McRae Industries, Inc. v. United States, 53 Fed. Cl. 177 (2002). McRae Industries, like Shirlington here, was not an actual offeror. Accordingly, the Court in McRae held that, because the protestor was
Such a distinction might presumably apply to the designated office at Building 410, 245 Murray Lane, which is located on the Government facility of the Anacostia Naval Station. 26
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not an actual offeror and did not have the requisite "direct economic interest" in the solicitation, it could not establish its standing under 28 U.S.C. § 1491(b)(1). The Court held that possessing an economic interest in the subject matter of the procurement is not enough; instead, a protester must be "an `actual or prospective bidder' and have the requisite `direct economic interest.'" Id. at 180 (citing Fed. Data Corp. v. United States, 911 F.2d 699, 703 (Fed. Cir. 1990)). Because Shirlington is neither an actual offeror, nor a prospective offeror, it lacks the requisite standing to challenge the terms of the solicitation, and thus Count I of the Complaint should be dismissed. III. The Agency's Decision To Set Aside The Solicitation For Small Business Was Lawful and Reasonable In 1997, Congress passed the Historically Underutilized Business Zone ("HUBZone") Act. 15 U.S.C. § 657a (1994 & Supp. V 1999). The Act established the HUBZone program, the purpose of which "is to a provide Federal contracting assistance for qualified small business concerns located in historically underutilized business zones, in an effort to increase employment opportunities, investment, and economic development in those areas." 48 C.F.R. ("FAR") § 19.1301(b) (2000). The Small Business Administration (the "SBA") is responsible for certifying qualified firms as HUBZone small business concerns ("HUBZone businesses"). FAR § 19.1303(a). Once a firm is HUBZone certified and its name appears on the SBA's List of Qualified HUBZone Small Business Concerns, the firm is eligible for HUBZone program preferences. FAR § 19.1303(b). The HUBZone program provides three mechanisms to assist HUBZone businesses obtain Federal contracts: (1) HUBZone set-asides; (2) HUBZone sole source awards; and (3) HUBZone
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price evaluation preferences. FAR §§ 19.1305-07. The HUBZone set-aside is at issue here. A. The Agency Met The Statutory Requirements For Determining Whether The Solicitation Qualified As A HUBZone Set-Aside
The statutory and regulatory requirements for setting aside a solicitation for HUBZone business are straightforward. By statute, a contract opportunity shall be set aside for HUBZone businesses when the contracting officer makes two specific discretionary determinations: first, the contracting officer must have a "reasonable expectation that not less than 2 qualified HUBZone small business concerns will submit offers;" and second, the contracting