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The GovCon Bulletin™

Jul, 2021

GovCon Legal Round Up™ - July 2, 2021


Harmonia Holdings Group, LLC v. U.S. (June 8, 2021)
A government contractor (Harmonia Holdings Group, LLC) appealed a decision by the Court of Federal Claims dismissing in part and denying in part its post-award protest.  The agency (U.S. Census Bureau) issued an RFP as a women-owned small business set-aside but awarded the contract to another bidder.  Harmonia then filed a protest with the Court of Federal Claims challenging the agency's technical evaluation and best-value determination.  Harmonia also alleged that the agency violated FAR 19.301-1(b), as numbered at time of the solicitation but which was subsequently designated FAR 19.301-1(f) in March 2020, by failing to refer the awarded contractor to the SBA for a size determination.  The Court of Federal Claims considered and rejected Harmonia's arguments regarding the Census Bureau's evaluation and best-value determination, but dismissed outright Harmonia's claim based on the agency's failure to seek a size determination from the SBA.  The Court of Federal Claims ruled that Harmonia failed to exhaust its administrative remedies on that claim.   In the court's view, that claim was a size protest that should have first been presented to the agency's contracting officer.  On appeal, the U.S. Court of Appeals for the Federal Circuit upheld the lower court's ruling on the proposal evaluation claims.  With regard to the size determination claim, the U.S. Court of Appeals for the Federal Circuit first concluded that since Harmonia was not actually challenging the awardee's size, but rather was contesting the agency's failure to follow FAR, the claim was a bid protest claim and not a size protest claim and should not have been dismissed on failure to exhaust grounds.  However, rather than remand that claim back to the lower court, the U.S. Court of Appeals went on to consider it and ruled that Harmonia, in any event, had failed to allege facts sufficient to support its claim that the contracting officer abused his discretion in failing to refer the awardee to the SBA for a size determination.  (Read decision here.)


M.R. Pittman Group, LLC v. U.S. (June 24, 2021)
In this decision, the U.S. Court of Federal Claims dismissed a protest lawsuit by a government contractor (M.R. Pittman Group, LLC) on the basis that the contractor, M.R. Pittman, waived its grounds for protest by not objecting to the terms of the solicitation before the conclusion of the bidding process.  The agency (U.S. Army Corps of Engineers) issued a solicitation for repair services at a pump station, and the webpage with the link to the solicitation stated that the solicitation was for a small business set-aside procurement under NAICS code 811310. The solicitation itself, however, omitted the NAICS code in violation of FAR 19.501(e).  The solicitation did incorporate by reference FAR 52.219-6, “Notice of Total Small Business SetAside.”  The agency ultimately informed M.R. Pittman, which does not qualify as a small business under NAICS code 811310, that it was ineligible for the award.  As we reported in a prior GovCon Legal Round Up™ (here),  M.R. Pitrman filed its protest with GAO claiming that the solicitation should not have been treated as a small business set-aside.  GAO dismissed the protest on the grounds that the solicitation was patently ambiguous on the issue of small business set-aside and that the contractor failed to timely challenge the ambiguity before bid closing.  Contractor then filed suit at the Court of Federal Claims arguing that the NAICS code omission precluded the solicitation from being treated as a small business set-aside and that it was unaware of the solicitation defect prior to bid closing.  The Court of Federal Claims ruled that pre-solicitation information and solicitation’s incorporation of FAR clause 52.219-6 could have been discovered by reasonable and customary care and that the contractor, thus, had the opportunity to object to the solicitation’s error before close of bidding.  (Read decision here.)


In re Inmarsat Government, Inc. (Released June 16, 2021)
An incumbent contractor (Inmarsat Government, Inc.) protested the terms of a request for proposal (RFP) issued by the Defense Information Systems Agency (DISA) for commercial broadband satellite services for the Department of Navy under a follow-on contract.  When DISA published a draft solicitation in a pre-solicitation announcement, it inadvertently included Inmarsat's detailed pricing information.  When Inmarsat alerted DISA of the release of its pricing information, DISA did nothing more than remove the draft solicitation from the federal business opportunities website.  After DISA published the solicitation, a competitor of Inmarsat informed DISA that its employees had accessed the draft solicitation and Inmarsat's pricing information, but that the pricing information was removed from the competitor's servers and the employees were walled off from the competitor's proposal writing team.  Inmarset subsequently protested the solicitation.  GAO ruled that the disclosure of Inmarsat's pricing resulted in competitive harm and recommended that DISA either cancel the solicitation or revise it so that the harm from the disclosure can be mitigated.  GAO also recommended that Inmarsat's protests costs, including reasonable attorneys' fees, be reimbursed.  (Read decision here.)

In re Yang Enterprises, Inc. (Released June 4, 2021)
A women-owned small disadvantaged business (Yang Enterprises, Inc.) protested the award of a small business set-aside contract by a defense agency (Air Force) to a small business mentor-protégé joint-venture that comprised a large business that was the incumbent contractor.  Yang protested the award on several grounds, all of which were rejected except for its argument that Air Force improperly evaluated the joint venture's past performance.  Yang argued that the agency unreasonably overlooked the lack of past performance by the joint venture and the small business protégé and, instead, credited the joint venture with the past performance of the large business venturer.  Air Force contended that in reviewing the joint venture's past performance, it relied on the version of  the SBA regulation 13 C.F.R. § 125.8(e) that became effective in November 2020 - after the solicitation was issued.  That version of the regulation provides that an agency cannot require a protégé firm to individually meet the same evaluation or responsibility criteria required of other offerors and that past performance can be demonstrated "in the aggregate" by the joint venture partners.  In its decision, GAO ruled that the version of the SBA regulation that Air Force relied on was irrelevant and that Air Force unreasonably credited the large business joint venture partner with past performance in areas of the procurement that it was not proposed to perform.  GAO recommended that Air Force reevaluate the joint venture's past peformence, make a new selection decision, and reimburse Yang its protest costs, including reasonable attorneys' fees.  (Read decision here.)


In re CVE Protest of: Land Shark Shredding, LLC Protestor re: Griffin Resources LLC (June 3, 2021)
In this decision, the SBA’s Office of Hearings and Appeals (OHA) sustained the protest of a contractor (Land Shark Shredding, LLC) that protested the service-disabled veteran-owned small business (SDVOSB) status of another contractor (Griffin Resources LLC) that was awarded an SDVOSB set-aside contract by the U.S. Veterans Administration.  The protestor, Land Shark, alleged that Griffin Resources had no experience with providing the procured services - sensitive document collection and destruction - and was unusually reliant upon its non-SDVOSB subcontractor to perform the contract.  OHA agreed, concluding that because it appears that the subcontractor will perform all or nearly all of the contract, the awarded contractor was not an eligible SDVOSB for the contract.  (Read decision here.)

In re Size Appeal of: Leumas Residential, LLC (June 10, 2021)
In this decision, the SBA’s Office of Hearings and Appeals (OHA) granted the contractor’s (Leumas Residential, LLC) appeal and overturned a decision by the SBA’s Area Office that Leumas, an 8(a) small business, was other than small for purposes of an 8(a) set-aside contract.  As we discussed in an earlier GovCon Legal Round Up™ (here), previously OHA granted Leumas’ appeal of a similar finding by the Area Office that the contractor was not a small business, and remanded the size determination back to the Area Office for a complete assessment of whether Leumas was in violation of the ostensible contractor rule.  After the remand, the Area Office concluded that Leumas was unduly reliant on its subcontractor and, thus, in an ostensible contractor relationship, and also that Leumas was generally affiliated with the subcontractor based on the totality of the circumstances.  Leumas appealed again and, on appeal, OHA first concluded that the primary and vital requirements of the procurement were narrower than the Area Office had determined.  OHA then concluded that only one of the Dover Staffing factors were present and, thus, Leumas was not unduly reliant upon its subcontractor.  OHA also concluded that the Area Office’s findings of fact with regard to general affiliation were flawed, based on speculation, and in some cases outright error.  Consequently, OHA ruled that Leumas was a small business for purposes of the 8(a) set-aside procurement.  (Read decision here.) 


In re Najmaa Alshimal Company (June 2, 2021)
In this decision, the Armed Services Board of Contract Appeals (ASBCA) granted the agency’s (Air Force) motion to dismiss a company’s (Najmaa Alshimal Company) claims under the Contract Disputes Act (CDA) for payment it alleged was due after the company submitted a quotation for a contract.  Air Force denied that it had ever contracted with the company, arguing that it had instead made the award to another offeror and that the company’s documents reflecting a signed contract were, in fact, doctored.  In dismissing the claim, ASBCA ultimately agreed with Air Force that the company’s attempted CDA claim failed to specify the amount of its claim in a sum certain.  (Read decision here.)

Mark A. Amadeo