In the United States Court of Federal Claims

No. 18-1568C

(E-Filed: March 21, 2019)1

LAND SHARK SHREDDING, LLC,

Plaintiff,

v.

THE UNITED STATES,

Defendant,

)

)

)

)

)

)

)

)

)

)

)

Post-Award Bid Protest; Alleged 

Proposal Evaluation Errors; Price 

Reasonableness of a Proposal 

Submitted by a Federal Supply 

Schedule Contractor; Preference for a 

Service-Disabled Veteran-Owned 

Small Business; Preliminary Injunction 

Request.

Joseph A. Whitcomb, Denver, CO, for plaintiff.

Sean L. King, Trial Attorney, with whom were Joseph H. Hunt, Assistant Attorney 

General, Robert E. Kirschman, Jr., Director, Douglas K. Mickle, Assistant Director, 

Commercial Litigation Branch, Civil Division, United States Department of Justice, 

Washington, DC, for defendant. Natica Chapman Neely, United States Department of 

Veterans Affairs, of counsel.

OPINION AND ORDER

CAMPBELL-SMITH, Judge.

This post-award bid protest is before the court on plaintiff’s renewed application 

for a temporary restraining order (TRO) and motion for a preliminary injunction. See

ECF No. 20. The court has reviewed the complaint, ECF No. 1; the administrative 

record, ECF No. 11; plaintiff’s memorandum in support of its motion, ECF No. 20-1; the 

exhibits to plaintiff’s memorandum, ECF Nos. 20-2 through 20-5; defendant’s opposition 

 1 This opinion was issued under seal on March 1, 2019. Pursuant to ¶ 2 of the 

ordering language, the parties were invited to identify source selection, proprietary or 

confidential material subject to deletion on the basis that the material was 

protected/privileged. The proposed redactions were acceptable to the court. All 

redactions are indicated by brackets ([ ]).
2

brief, ECF No. 21; and, plaintiff’s reply brief, ECF No. 22. Oral argument was deemed 

unnecessary. For the reasons set forth below, plaintiff’s renewed TRO and preliminary 

injunction motion is DENIED.

I. Background

A. Solicitation

The procuring agency here is the United States Department of Veterans Affairs

(VA). The competition that underlies this protest is for on-site document shredding and 

pill-bottle destruction at the Bruce W. Carter VA Medical Center in Miami, Florida, and 

other VA facilities in Florida. ECF No. 11 at 285-347. The solicitation for this firm,

fixed-price Federal Supply Schedule (FSS) contract, id. at 309, 327, issued on August 30, 

2018, id. at 285, with a closing date for receipt of proposals of September 21, 2018, id. at 

469. The contract would include one base year and four option years. Id. at 289-93. 

This competition is described in the solicitation as “a Service Disabled Veteran

Owned Small Businesses (SDVOSB) set-aside with Small Business Set-aside -using a 

tiered or cascading order of precedence.” Id. at 345. The tiers of cascading preferred 

business types are clearly delineated, beginning with SDVOSBs, then veteran-owned 

small businesses, then all other small businesses, then all other businesses. Id. Further, 

offerors were informed that “[i]f an award or a sufficient number of awards cannot be 

made at the first tier, evaluation of offers will proceed at the next lower tier until an 

award or a sufficient number of awards can be made.” Id.

The solicitation contained at least three other provisions of relevance to this 

protest. First, the solicitation included a performance work statement. Id. at 294-309. 

Second, the solicitation cited a limitation on subcontracting regulation applicable to 

SDVOSB set-asides. Id. at 323 (citing 13 C.F.R. § 125.6 (2018)). Finally, the 

solicitation informed offerors that the agency would choose the “best value” proposal 

among “acceptable” proposals. Id. at 345.

B. Offerors and Proposal Prices

Three offerors responded to the solicitation. ECF No. 11 at 618. The offerors 

were plaintiff, Land Shark Shredding, LLC (Land Shark or LSS), SafeGuard Document 

Destruction Inc. (SafeGuard), and [ ]. Id. at 278-79, 618. According to the 

administrative record, Land Shark was the only first-tier offeror (SDVOSB), SafeGuard 

was a third-tier offeror (small business), and [ ] was a fourth-tier offeror (large business). 

Id. at 618.

For price evaluation purposes, Land Shark’s proposal was determined to be the 

most expensive, at $2,819,101.20. Id. [ ]’s proposal was significantly less expensive 

than Land Shark’s, at $[ ]. Id. SafeGuard’s proposal was slightly less expensive than 
3

[ ]’s proposal, and much less expensive than Land Shark’s, at $474,034.80. Id. 

SafeGuard’s proposal was also closest in price to the independent government cost 

estimate (IGCE) for the contract, which was $490,000. Id. at 56, 617. According to the 

VA’s records, the IGCE was calculated using FSS published prices for document 

shredding services. Id. at 56. The court observes that Land Shark’s price was more than

five times as high as the prices proposed by the other offerors.

C. Award Decision and Land Shark’s Protest

SafeGuard’s proposal was selected for award on September 26, 2018. ECF No. 11 

at 617. On September 27, 2018, Land Shark was informed that its proposal had not been 

selected for award. ECF No. 1 at 5. The contract was awarded to SafeGuard on 

September 28, 2018. ECF No. 11 at 625. 

The decision not to award the contract to Land Shark was premised on the VA’s 

determination that Land Shark’s evaluated price of $2,819,101.20 was “not reasonable.” 

Id. at 620. In contrast, SafeGuard’s price was found to be “fair and reasonable.” Id. 

Although both entities were considered to be qualified to perform the required services, 

SafeGuard’s proposal was determined to be the “most advantageous to the Government.” 

Id. 

On Friday, September 28, 2018, Land Shark asked the VA’s contracting specialist 

to explain how a SDVOSB could lose the contract to a small business that was not a 

SDVOSB. Id. at 675. The contracting specialist explained that if the SDVOSB’s price 

was “found [to be] not reasonable,” the VA could go to a lower-tier offeror for award. Id.

at 674. On Saturday, September 29, 2018, Land Shark’s CEO requested a “full 

debrief[ing]” from the VA regarding the contract award. Id. at 678. 

On Monday, October 1, 2018, the VA’s contracting specialist and Land Shark’s 

CEO discussed the award during a telephone conversation. Id. at 744. Land Shark’s 

CEO apparently presented his concerns about the propriety of the award, and indicated 

that Land Shark would protest the award. Id. On October 9, 2018, Land Shark filed its 

protest in this court.

II. Legal Standards

A. Bid Protest Standard of Review

As the United States Court of Appeals for the Federal Circuit has stated, “the 

proper standard to be applied in bid protest cases is provided by 5 U.S.C. § 706(2)(A) 

[(2012)]: a reviewing court shall set aside the agency action if it is ‘arbitrary, capricious, 

an abuse of discretion, or otherwise not in accordance with law.’” Banknote Corp. of 

Am. v. United States, 365 F.3d 1345, 1350-51 (Fed. Cir. 2004) (citing Advanced Data 

Concepts, Inc. v. United States, 216 F.3d 1054, 1057-58 (Fed. Cir. 2000)). Under this 
4

standard, a procurement decision may be set aside if it lacked a rational basis or if the 

agency’s decision-making involved a clear and prejudicial violation of statute, regulation 

or procedure. Emery Worldwide Airlines, Inc. v. United States, 264 F.3d 1071, 1085-86 

(Fed. Cir. 2001) (citing Impresa Construzioni Geom. Domenico Garufi v. United States, 

238 F.3d 1324, 1332-33 (Fed. Cir. 2001)). “The arbitrary and capricious standard 

applicable [in bid protests] is highly deferential.” Advanced Data Concepts, 216 F.3d at 

1058. 

De minimis errors in the procurement process do not justify relief. Grumman Data 

Sys. Corp. v. Dalton, 88 F.3d 990, 1000 (Fed. Cir. 1996) (citing Andersen Consulting v. 

United States, 959 F.2d 929, 932-33, 935 (Fed. Cir. 1992)). The bid protest plaintiff 

bears the burden of proving that a significant error marred the procurement in question. 

Id. (citing CACI Field Servs., Inc. v. United States, 854 F.2d 464, 466 (Fed. Cir. 1988)). 

Examples of arbitrary and capricious agency action include “when the agency ‘entirely 

failed to consider an important aspect of the problem, offered an explanation for its 

decision that runs counter to the evidence before the agency, or [the decision] is so 

implausible that it could not be ascribed to a difference in view or the product of agency 

expertise.’” Ala. Aircraft Indus., Inc.-Birmingham v. United States, 586 F.3d 1372, 1375 

(Fed. Cir. 2009) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 

463 U.S. 29, 43 (1983)) (alteration in original). The court will, however, “uphold a 

decision of less than ideal clarity if the agency’s path may reasonably be discerned.” 

Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286 (1974) 

(citation omitted).

“‘If the court finds a reasonable basis for the agency’s action, the court should stay 

its hand even though it might, as an original proposition, have reached a different 

conclusion as to the proper administration and application of the procurement 

regulations.’” Honeywell, Inc. v. United States, 870 F.2d 644, 648 (Fed. Cir. 1989) 

(quoting M. Steinthal & Co. v. Seamans, 455 F.2d 1289, 1301 (D.C. Cir. 1971)). 

B. Injunctive Relief

As the Federal Circuit has held:

In deciding whether a permanent injunction should issue, a 

court considers: (1) whether, as it must, the plaintiff has 

succeeded on the merits of the case; (2) whether the plaintiff 

will suffer irreparable harm if the court withholds injunctive 

relief; (3) whether the balance of hardships to the respective 

parties favors the grant of injunctive relief; and (4) whether it 

is in the public interest to grant injunctive relief.

PGBA, LLC v. United States, 389 F.3d 1219, 1228-29 (Fed. Cir. 2004) (citing Amoco 

Prod. Co. v. Vill. of Gambell, Alaska, 480 U.S. 531, 546 n.12 (1987)). The standard for a 
5

preliminary injunction is the same, except that likelihood of success on the merits --

instead of actual success on the merits -- must be shown by the plaintiff. Id. at 1229. 

Further, the standard for the issuance of a temporary restraining order is the same as that 

for a preliminary injunction. See, e.g., Munilla Constr. Mgmt., LLC v. United States, 130 

Fed. Cl. 131, 135 (2016).

III. Analysis

There were three issues presented by plaintiff’s complaint for the court’s 

consideration. Plaintiff argued, first, that its proposal should not have been subjected to a 

test for price reasonableness, because Land Shark’s prices as an FSS contractor are 

presumptively fair and reasonable. ECF No. 1 at 7-8. Plaintiff argued, second, that Land 

Shark’s SDVOSB status was not given proper priority by the VA. Id. at 9-11. Third, 

plaintiff argued that SafeGuard cannot comply with the limitation on subcontracting 

provision in the solicitation, rendering the VA’s award to SafeGuard arbitrary, capricious, 

and contrary to law. Id. at 11-12. 

In plaintiff’s renewed TRO and preliminary injunction motion, a somewhat 

different challenge to the award to SafeGuard is presented in three separately identified 

sub-sections of the brief.

2

 First, plaintiff challenges the agency’s evaluation of proposals. 

ECF No. 20-1 at 11-13. Second, the agency’s determination that Land Shark’s price was 

unreasonable is alleged by plaintiff to be arbitrary, capricious and contrary to law. Id. at 

13-16. Third, plaintiff contends that the award to a “non-SDVOSB” was improper. Id. at 

16-19. The court addresses each of these contentions in turn,

3 and briefly considers the 

question of whether Land Shark has shown its entitlement to preliminary injunctive relief 

at the end of this opinion.

 2 The court has also considered the arguments contained in plaintiff’s reply brief. 

The court agrees with plaintiff that Land Shark has standing to bring this bid protest, see

ECF No. 22 at 3-7, but rejects plaintiff’s contention that Land Shark has shown 

likelihood of success on the merits of its challenge to the award to SafeGuard, or that 

plaintiff is entitled to preliminary injunctive relief.

3 The court restricts its analysis of the merits of this protest to plaintiff’s contentions 

set forth in the “merits” section of its brief, identified in the brief’s outline as section 

IV(A)(1)(a)-(c). ECF No. 20-1 at 11-19. This section of the brief presents plaintiff’s 

most substantive arguments supported by citations to caselaw. To the extent that other 

sections of plaintiff’s brief contain additional criticism of the agency’s award decision, 

those allegations of error are cursory and unpersuasive. Cf. id. at 7 (alleging that the VA 

violated 13 C.F.R. § 125.6 (2018) (Limitations on Subcontracting), but providing no 

explanation for this assertion). 
6

A. Alleged Proposal Evaluation Errors

The court has attempted to discern the evaluation error, or errors, that plaintiff 

seeks to bring to the court’s attention in this sub-section of plaintiff’s motion. See ECF 

No. 20-1 at 11-13. There is ample reference to unequal treatment of offerors, but no 

explanation of the unequal treatment the court should focus on here. There is ample 

reference to the principle that offerors must be evaluated according to the criteria set forth 

in a solicitation, but no discussion of how the VA violated this rule. 

Instead, plaintiff offers only a summary of vague and unsubstantiated allegations 

of procurement errors, which are set forth in one sentence, without supporting citations to 

the administrative record. This sentence reads:

Thus, the VA violated the terms of the Solicitation by eliminating LSS

from competition based upon an erroneous determination that LSS’s price 

was unreasonable and imbalanced, by awarding the Contract to an offeror 

that is not a SDVOSB, and by ignoring a likely violation of the limitation of 

subcontracting regulation.

ECF No. 20-1 at 12. This sentence offers a preview of two upcoming sub-sections of 

plaintiff’s motion before the court and alludes to an unexplained violation of regulatory 

limitations on subcontracting. Plaintiff’s general and vague allegations of evaluation 

error, in this sub-section of its brief, fail to persuade the court that the agency’s award 

decision was flawed. Plaintiff’s renewed request for a TRO and preliminary injunction 

cannot be sustained on this ground.

B. Price Reasonableness Evaluation by the VA

This sub-section of plaintiff’s brief is not a model of clarity. As many as five

different topics appear to be addressed, although the thread of plaintiff’s arguments on 

each of these topics is difficult to discern. The court summarizes each of plaintiff’s 

contentions as to the flaws in the VA’s price evaluation of proposals, and also

summarizes the government’s counter-arguments addressing each of these topics. The 

court addresses each of plaintiff’s topics, in turn.

1. The Per Pound Shredding Price Used in the IGCE Is Allegedly Not 

an Appropriate Unit of Measure for Evaluating Offerors’ Prices

According to plaintiff, most FSS contractors “don’t even list per-pound prices” in 

their price lists for document shredding services. ECF No. 20-1 at 13 (citing ECF No. 

20-2 at 6-34). Thus, in plaintiff’s view, an IGCE that merely multiplies an estimate of 

700,000 pounds of paper per year, by a price per pound of $.14, “has no rational basis.” 

Id. 
7

Defendant argues that the IGCE is rational, because it was based on published FSS 

per pound shredding prices, and because two of the three offerors submitted prices in line 

with the IGCE. ECF No. 21 at 18-20. The court must agree with the government that 

plaintiff has not shown that the methodology used to create the IGCE lacked a rational 

basis. Indeed, the per pound price used in the IGCE is supported by some of the price 

lists attached as exhibits to plaintiff’s motion, which offer per pound shredding prices at 

or near the price used in the IGCE. See ECF No. 20-2 at 9, 14, 24, 27-30. The court 

cannot agree with plaintiff that the per pound price used in the IGCE was irrational.

2. The IGCE’s Pounds Per Year Estimate Allegedly Underestimates 

the Work Required under the Contract

Plaintiff contends that a better estimate of shredding services under the contract 

would be closer to 1,548,300 pounds per year, not 700,000 pounds per year. ECF No. 

20-1 at 14. Plaintiff’s figure is derived from the weight capacity for various shredding 

containers at VA facilities. Id. at 13-14. Defendant does not respond specifically to this 

contention, other than to note that the IGCE was in line with two of the three offerors’ 

prices. ECF No. 21 at 19. 

The court is not persuaded by plaintiff’s “container capacity” calculation that the 

IGCE was irrational. The solicitation and the agency’s answers to bidder questions 

discussed the number of shredding containers, and the frequency of service visits to these 

containers, but did not indicate that container capacity and service frequency would 

directly correspond with the amount, measured in pounds, of shredding required. ECF 

No. 11 at 285-347, 465-67, 470-71. Further, the predecessor contract to this one 

projected that 500,000 pounds of shredding would occur each year of the contract, and 

modifications to that contract noted that sometimes less shredding was required. See id.

at 15-18, 42-54. Land Shark was informed that the current contract would involve the 

same level of effort as the predecessor contract. Id. at 467. The record before the court 

does not support plaintiff’s contention that the 700,000 pounds per year estimate in the 

IGCE was irrational.

3. Alleged Flaw in the Evaluation of Contract Line Item Number 

(CLIN) 002

Plaintiff contends that there is a flaw in the price evaluation of CLIN 002, which 

required destruction of “special documents/Pill Bottles.” ECF No. 20-1 at 14 (citing ECF 

No. 11 at 289-91). As a threshold matter, plaintiff contends that the solicitation was 

ambiguous regarding this CLIN: “It isn’t clear what the VA wanted bidders to price 

here.” Id.; see ECF No. 22 at 10 (stating that “there was obviously some confusion” as to 

CLIN 002). Plaintiff also complains that the awardee’s price was viewed as reasonable, 

even though SafeGuard priced this CLIN at $0.00. ECF No. 20-1 at 14.
8

As defendant points out, if plaintiff believed there was a patent error in the 

solicitation regarding CLIN 002, such a challenge should have been brought pre-award, 

because such a challenge is untimely in a post-award bid protest. ECF No. 21 at 20. 

Moreover, as defendant also points out, Land Shark received instruction as to the pricing 

of CLIN 002, which stated that a price of $0.00 was acceptable for this CLIN. See ECF 

No. 11 at 465. SafeGuard was not treated differently than Land Shark when it priced 

CLIN 002 at $0.00. Plaintiff has not shown that the VA’s price evaluation of the CLINs 

in the offerors’ proposals was irrational.

4. The Comparison of a SDVOSB’s price to a Non-SDVOSB’s Price Is 

Allegedly Improper

Plaintiff suggests, with minimal explanation, that the VA could not determine the 

reasonableness of Land Shark’s price through a comparison with non-SDVOSB prices. 

The court reproduces the entirety of this argument, as follows:

The VA also based its evaluation of LSS’s bid on a comparison of 

LSS’s prices to the other non-SDVOSB offerors. This is not a fair and 

reasonable comparison, and it totally negates the value of set-asides. It also 

ignores the U.S. Supreme Court’s holdings in the Kingdomware case, which 

is discussed in detail below. Comparison of SDVOSB bids to non-veteran 

and other than small business concerns also violates Congress’ express 

policy regarding SDVOSB assistance programs. “The purpose of the 

Service-Disabled Veteran-Owned Small Business Program is to provide 

Federal contracting assistance to service-disabled veteran-owned small 

business concerns.” FAR § 19.1401(b).

ECF No. 20-1 at 15 (citing generally to Kingdomware Techs., Inc. v. United States, 136 

S. Ct. 1969 (2016)).

Defendant notes, first, that the comparison of quotes with other quotes received 

was a methodology established by the solicitation, which expressly noted that several 

tiers of businesses, including SDVOSBs, would be considered to be eligible offerors. 

ECF No. 21 at 18 (citing ECF No. 11 at 345). Thus, defendant argues, plaintiff should 

have raised its objection to the comparison of the offerors’ quotes in a pre-award protest, 

not in a post-award protest. Id. at 18-19 (citations omitted). The court is not certain that 

plaintiff’s challenge is untimely as raised, but need not resolve that question. More 

important, in the court’s view, are the merits of plaintiff’s argument, which the 

government also addresses.

The court agrees with the government that plaintiff has not cited any authority 

which supports its position. Kingdomware does not address price comparisons, in 

general, or the specific question of how the VA should determine that a SDVOSB’s 

prices are fair and reasonable. The Federal Acquisition Regulation (FAR) provision cited 
9

by plaintiff is a policy statement that does not regulate procedures for the price evaluation 

of proposals in procurements such as this one. In sum, plaintiff objects to the price 

comparison conducted by the VA here because it does not do enough, in plaintiff’s view, 

to secure government contracts for SDVOSBs. That is a policy argument, unmoored

from statute or regulation. Without more, that policy argument is an insufficient ground

for this court to invalidate a procurement decision of a federal agency. See, e.g., Artuz v. 

Bennett, 531 U.S. 4, 10 (2000) (“Whatever merits these and other policy arguments may 

have, it is not the province of this Court to rewrite the statute to accommodate them.”);

Precise Sys., Inc. v. United States, 120 Fed. Cl. 586, 602 n.18 (2015) (stating that this 

“court has no authority to compel [a] reconciliation” of conflicting procurement 

regulations); Colonial Press Int’l, Inc. v. United States, 113 Fed. Cl. 497, 524 (2013) 

(stating that even “a positive policy argument” cannot provide a reason to contravene a 

long-standing statutory interpretation), aff’d, 788 F.3d 1350 (Fed. Cir. 2015); McKing 

Consulting Corp. v. United States, 78 Fed. Cl. 715, 722 n.12 (2007) (“Regardless of the 

merits of the[] policy argument, th[is] Court is not empowered to make [procurement] 

law.”).

5. The VA’s Price Evaluation of Land Shark’s Proposal Is Allegedly 

Improper under FAR 8.404(d), 48 C.F.R. § 8.404(d) (2017), and 

FAR 8.405-2(d), 48 C.F.R. § 8.405-2(d) (2017)

This section of plaintiff’s brief is difficult to summarize, so the court quotes 

plaintiff’s argument in full:

The VA has argued that FAR 8.405-2(d) requires the contracting officer to 

make an independent evaluation of LSS’s price reasonableness. The Plaintiff 

disagrees with that argument because in this case LSS was asked to bid prices 

per bin, not hourly labor rates. In practical terms, what 8.405-2(d) is saying 

is that hourly labor rates for a given employee may be fair and reasonable as 

listed on the FSS (e.g. Engineer I, $60.00/hour), but the Government must 

still evaluate the labor categories that will perform specific tasks and the 

labor mix for the entire project in order to determine whether the total bid 

price is reasonable. See Advanced Tech. Sys., Inc., B-296493.6, at page 9, 

(Oct. 6, 2006). LSS’s per-bin prices on [the FSS price-list] are reasonable 

per 48 C.F.R. § 8.404(d) and the VA’s analysis of reasonable pricing should 

have stopped at that point. There is no legal or regulatory basis for further 

evaluation of LSS’s price reasonableness.

ECF No. 20-1 at 15-16. Thus, plaintiff relies on both FAR 8.404(d) and FAR 8.405-2(d) 

to argue that the VA was not permitted to conduct a price reasonableness analysis of 

Land Shark’s proposal.

Defendant has a number of counter-arguments which are persuasive on this topic. 

First, as the government notes, simply because FAR 8.404(d) states that agencies are not 
10

required, generally, to inquire into the reasonableness of FSS prices, that regulation does 

not forbid them from doing so. ECF No. 21 at 13. Second, defendant suggests that in 

this type of FSS procurement, which contains a statement of work, a price evaluation was 

required by FAR 8.405-2(d), as referenced in FAR 8.404(d). ECF No. 21 at 13-14. The 

court agrees with both of these arguments. The government then proceeds to parse a 

number of related regulatory provisions to show that the VA was permitted to assess the 

reasonableness of Land Shark’s overall price, in order to ensure that the best value 

proposal was obtained. Id. at 14-15. The government concludes that “Land Shark’s 

unsupported allegations rest entirely on a disingenuous reading of § 8.404 which ignores 

the express requirement to independently evaluate the reasonableness of quoted FSS 

prices when a statement of work is required, and to select FSS quotes which provide the 

best value to the Government.” Id. at 16. 

The court agrees with defendant that, under the FAR and the terms of the 

solicitation, the VA was permitted to conduct an independent assessment of the 

reasonableness of Land Shark’s overall price. The court also finds that the VA’s 

determination that Land Shark’s price was not reasonable is adequately supported by the 

record before the court. The agency’s price evaluation therefore survives this court’s 

review under both the arbitrary and capricious standard and the violation of procurement 

regulations standard.

C. Cascading Tiers of Preference

The final protest ground addressed in plaintiff’s motion is a multi-pronged attack 

on the agency’s use of a cascading tier of set-asides. Fundamental to plaintiff’s argument 

is the assertion that Land Shark’s prices were and are reasonable. See ECF No. 20-1 at 

16 (stating that “the VA should have concluded that [Land Shark’s General Service 

Administration (GSA)] Schedule prices were reasonable without further analysis per 48 

C.F.R. § 8.404(d) and then awarded the contract to LSS as a fully qualified first-tier 

SDVOSB with a reasonable price”); id. at 17 (“The fact of this matter is that LSS’s bid 

price was fair and reasonable per 48 C.F.R. § 8.404(d).”); id. at 19 (“The VA acted 

arbitrarily and capriciously and violated regulations and case law when it determined that 

LSS’s bid price was not reasonable and imbalanced, and when it awarded the contract to 

[SafeGuard] . . . .”). But as the court has found, there was no error in the agency’s 

determination that Land Shark’s price was unreasonable. Thus, Land Shark’s overall 

argument that the award to SafeGuard was improper, under various authorities, suffers 

from an inaccurate factual premise and must be rejected.

The individual components of Land Shark’s argument regarding the priorities due 

the sole SDVOSB offeror in this procurement are also unsound. The principal authorities 

relied upon by plaintiff are as follows: (1) the Supreme Court’s decision in 

Kingdomware; (2) this court’s decision in Greenleaf Construction Co. v. United States, 

67 Fed. Cl. 350 (2005) (Greenleaf); (3) Veterans Affairs Acquisition Regulation (VAAR) 
11

852.219-10, 48 C.F.R. § 852.219-10 (2017); and (4) FAR 19.1405(c), 48 C.F.R. 

§ 19.1405(c) (2017).

4 None of these authorities is persuasive.

1. Kingdomware

Plaintiff argues that “[t]he VA’s application of its tiered and cascading order of 

precedence award process violated . . . the Supreme Court’s ruling in the Kingdomware

case.” ECF No. 20-1 at 17. Plaintiff quotes a passage of the Supreme Court’s decision to

support plaintiff’s assertion that once the VA “satisfied the rule of two . . . , it was 

required to award the contract to LSS.” Id. at 18 (quoting Kingdomware, 136 S. Ct. at 

1976-77). Plaintiff’s reliance on Kingdomware is unavailing.

The Rule of Two discussed in Kingdomware is found at 38 U.S.C. § 8127(d) 

(2012). According to the Supreme Court,

The Act’s “Rule of Two,” at issue here, provides that the Department [of 

Veterans Affairs] “shall award” contracts by restricting competition for the 

contract to service-disabled or other veteran-owned small businesses. To 

restrict competition under the Act, the contracting officer must reasonably 

expect that at least two of these businesses will submit offers and that “the 

award can be made at a fair and reasonable price that offers best value to the 

United States.”

Kingdomware, 136 S. Ct. at 1973-74 (citing 38 U.S.C. § 8127(d)). The Kingdomware

decision shows that the Rule of Two applies to FSS contracts. Id. at 1979. Although the 

Supreme Court required a Rule of Two analysis for FSS acquisitions, it is important to 

note that the Court did not specify the manner in which the Rule of Two search for

veteran-owned contractors would be accomplished. Id. at 1977 n.4.

Although plaintiff argues that the VA “satisfied” the Rule of Two, ECF No. 20-1

at 18, that statement is only partly correct. The VA in this procurement conducted a Rule 

of Two analysis, as required by Kingdomware, but the VA did not find that this 

procurement could be entirely set aside for veteran-owned businesses. See ECF No. 11 at

345, 620. As defendant notes, the solicitation clearly indicated that, in addition to 

veteran-owned small businesses and SDVOSBs, small businesses and large businesses 

were welcome to apply. ECF No. 21 at 18. The court sees no violation of Kingdomware

 4 Plaintiff also cites generally to an article in a government contracts journal. ECF 

No. 20-1 at 16-17. As the court noted when it denied plaintiff’s initial TRO and 

preliminary injunction motion, a general citation to an entire article, with no explanation 

as to the significance of specific passages in the article to the analysis required in this 

case, is unhelpful to the court. ECF No. 18 at 2 & n.1 (order).
12

in the agency’s Rule of Two analysis, its use of a cascading system of preferences placing 

SDVOSBs in the first tier, or in the selection of SafeGuard as contract awardee.

2. Greenleaf

Plaintiff relies on Greenleaf because that decision criticized a tiered-preference 

system used in another procurement. ECF No. 20-1 at 16-17, 19. The Greenleaf decision 

is not particularly helpful here, however, because the preference system at issue in that 

case was not the one set forth in § 8127(d). See Greenleaf, 67 Fed. Cl. at 360 (citing the 

small business Rule of Two set forth in FAR 19.502-2(b), 48 C.F.R. § 19.502-2(b) 

(2017)). Thus, Greenleaf is not “a case directly on point,” as plaintiff contends. ECF No. 

20-1 at 16.

To the extent that Greenleaf articulates the general principle that a cascading set of 

tiered preferences cannot contravene procurement regulations, the court would agree. 

See 67 Fed. Cl. at 356 (“While the justifications for cascading may be legitimate, they 

cannot lead to a procedure that violates acquisition regulations.”). Plaintiff argues that 

the cascading set of tiered preferences used by the VA in this procurement violated this 

statement of the principle in Greenleaf: “[A]warding the contract to a non-SDVOSB 

bidder by application of the tiered and cascading order of precedence award process 

would violate acquisition regulations, which take precedence over the tiered and 

cascading order of preference per the Greenleaf case.” ECF No. 20-1 at 19 (citing 

Greenleaf, 67 Fed. Cl. at 356). Unfortunately for plaintiff, the VA’s cascading tier of 

preferences has not been shown to violate any procurement regulations. 

3. VAAR 852.219-10

Plaintiff notes, first, that the “full text” of VAAR 852.219-10 was included in the 

solicitation. ECF No. 20-1 at 17 (citing ECF No. 11 at 323-24). Plaintiff also notes that 

the title of VAAR 852.219-10 is “Notice of Total Service-Disabled Veteran-Owned 

Small Business Set-Aside.” Id. However, as defendant notes, this solicitation was not a 

total set-aside for SDVOSBs, because the agency’s Rule of Two analysis was 

inconclusive as to the appropriateness of proceeding with this FSS acquisition as a total 

SDVOSB set-aside.5

 ECF No. 21 at 17-18. Defendant argues, further, that plaintiff’s 

 5 In plaintiff’s reply brief, a new argument is raised regarding the SDVOSB setaside nature of this procurement. ECF No. 22 at 14. Plaintiff was specifically warned 

not to raise new arguments in its reply brief, as it had done before in an earlier round of 

briefing. See ECF No. 18 at 2. Plaintiff’s new argument, based on notations on the 

solicitation’s “Form 1449,” is deemed to be waived. See, e.g., Arakaki v. United States, 

62 Fed. Cl. 244, 246 n.9 (2004) (“The court will not consider arguments that were 

presented for the first time in a reply brief or after briefing was complete.” (citing 

Novosteel SA v. United States, 284 F.3d 1261, 1274 (Fed. Cir. 2002); Cubic Def. Sys., 

Inc. v. United States, 45 Fed. Cl. 450, 467 (1999))). Even if this argument were not 
13

opportunity to challenge the cascading tier of preferences, because it was not a total 

SDVOSB set-aside, was pre-award, not post-award. Id. at 18.

The court agrees with defendant’s analysis of the solicitation, with defendant’s 

contention that the cascading preferences aspect of the procurement did not offend 

VAAR 852.219-10, and with defendant’s assertion that plaintiff’s challenge to the 

solicitation’s cascading tiers of preferences is untimely. It appears that VAAR 

852.219-10 is routinely inserted into solicitations where SDVOSBs will be given highest 

preference, through a system of cascading tiers of preferences, and where the 

procurement will not be a total set-aside for SDVOSBs. See 48 C.F.R. §§ 819.7004, 

819.7009 (2017). Moreover, if there was, indeed, a patent discrepancy between VAAR 

852.219-10 and the cascading tiers of preferences set forth in the solicitation, plaintiff 

should have protested that patent error before award, not in a post-award protest. See, 

e.g., Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007)

(“We also hold that a party who has the opportunity to object to the terms of a 

government solicitation containing a patent error and fails to do so prior to the close of 

the bidding process waives its ability to raise the same objection subsequently in a bid 

protest action in the Court of Federal Claims.”). For all of the above reasons, plaintiff’s 

challenge to the award to SafeGuard must be rejected, because no violation of VAAR 

852.219-10 has been shown.

4. FAR 19.1405

It is unclear whether FAR 19.1405 applies to this procurement. This regulation is 

not mentioned in the solicitation, and by its language, appears to refer to total SDVOSB 

set-aside procurements conducted by federal agencies, not cascading tiers of preferences 

procurements conducted by the VA, in particular. Defendant argues that FAR 19.1405 is 

not applicable here, but that even if it were, the VA is nonetheless permitted to not award 

to a SDVOSB under this regulation when the price offered is not fair and reasonable. 

ECF No. 21 at 17 n.1 (citing FAR 19.1405(c)).

The equivalent VAAR provision is found at VAAR 819.7005, 48 C.F.R. 

§ 819.7005 (2017), which would appear to replace FAR 19.1405 for VA procurements. 

See VAAR 801.104(b), 48 C.F.R. § 801.104(b) (2017) (“The FAR applies to VA 

acquisitions except as provided in the VAAR.”). The VAAR regulation states that “[i]f 

the contracting officer receives only one acceptable offer at a fair and reasonable price

from an eligible SDVOSB concern in response to a SDVOSB set-aside, the contracting 

officer should make an award to that concern.” 48 C.F.R. § 819.7005(c) (emphasis 

 

waived, it is unpersuasive, because the solicitation form cited by plaintiff is not marked 

as a 100% SDVOSB set-aside. See ECF No. 11 at 285. 
14

added). Thus, under VAAR 819.7005(c), when the VA conducts a SDVOSB set-aside 

procurement, a SDVOSB does not receive a contract award simply because it is the only 

SDVOSB participating in the procurement, it must also submit an offer that has a fair and 

reasonable price. 48 C.F.R. § 819.7005(c). The court must conclude, then, that even if 

this were a total SDVOSB set-aside, which it is clearly not, Land Shark would not 

receive the award under VAAR 819.7005 because its price was not reasonable. The court 

sees no violation of applicable procurement regulations which govern SDVOSB setasides in the VA’s award to SafeGuard. 

D. Preliminary Injunctive Relief Not Warranted

Plaintiff has not shown likelihood of success on the merits of its protest. This

failure weighs heavily against the issuance of a preliminary injunction. See, e.g., FMC 

Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993) (“Absent a showing that a 

movant is likely to succeed on the merits, we question whether the movant can ever be 

entitled to a preliminary injunction unless some extraordinary injury or strong public 

interest is also shown.”). Indeed, the Federal Circuit has held that an inability to show 

likelihood of success on the merits is dispositive. See Nat’l Steel Car, Ltd. v. Canadian 

Pac. Ry., Ltd., 357 F.3d 1319, 1325 (Fed. Cir. 2004) (stating that “a movant is not 

entitled to a preliminary injunction if he fails to demonstrate a likelihood of success on 

the merits”) (citation and footnote omitted). The court briefly discusses the other 

injunctive relief factors.

Although the court agrees with plaintiff that the SDVOSB program is an important 

tool that serves the public interest, ECF No. 22 at 17-18, the court cannot agree that an 

injunction is required here to uphold the public interest targeted by that program. 

Procurement efficiency and reasonable prices for contract services are also in the public 

interest. Under the facts of this case, the greater public interest would be served by not 

enjoining a contract award to the lowest-priced offeror, when the highest-priced offeror, 

offering the same services for more than five times the price, has not shown that the 

award was improper. See Wind Tower Trade Coal. v. United States, 741 F.3d 89, 101 

(Fed. Cir. 2014) (agreeing with the lower court that “no strong public interest [in the 

issuance of a preliminary injunction] was demonstrated” when the movant had failed to 

show likelihood of success on the merits). 

The court also finds that irreparable harm to plaintiff is not established because the 

protestor has not shown likelihood of success on the merits. See Akal Sec., Inc. v. United 

States, 87 Fed. Cl. 311, 319 (2009) (stating that the “strength or weakness of [the 

protestor’s] merits arguments largely determines the court’s view of irreparable injury”).

 Finally, there would be more harm to the VA and SafeGuard flowing from an 

injunction of contract performance than there would be to plaintiff in the absence an 

injunction, where plaintiff has not shown likelihood of success on the merits. Contract 

performance began even before this protest was filed, and SafeGuard is already five 
15

months into performance of shredding services. ECF No. 1 at 5; ECF No. 11 at 625-27; 

ECF No. 21 at 22. If Land Shark were to prevail in its protest, an orderly transition to a 

new contract award would mitigate any harm that Land Shark would experience in the 

absence of an injunction.

When all four of the injunctive relief factors are considered, plaintiff’s renewed 

request for a TRO and a preliminary injunction must be DENIED.

IV. Conclusion

Accordingly, 

(1) Plaintiff’s renewed temporary restraining order and preliminary injunction

motion, ECF No. 20, is DENIED;

(2) On or before March 22, 2019, the parties shall CONFER and FILE a 

proposed redacted version of this opinion, with any competition-sensitive 

or otherwise protectable information blacked out; and,

(3) On or before March 22, 2019, the parties shall CONFER and FILE a 

joint status report proposing the next steps toward a resolution of this 

litigation.

IT IS SO ORDERED.

s/Patricia E. Campbell-Smith 

PATRICIA E. CAMPBELL-SMITH

Judge