# In the United States Court of Federal Claims

No. 15-293C

(Filed Under Seal: October 14, 2015)

(Reissued for Publication: October 28, 2015)

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Post-award Bid Protest; AbilityOne Program; Javits-Wagner-O’Day Act; Delay in Filing Protest; Laches;
Reasonableness of Evaluation an d Selection of Awardee; Judgment o n the Administra tive Record. N ATIONAL TELECOMMUTING * INSTITUTE, INC., *
* Plaintiff, *
v. *
* THE UNITED STATES, *

* Defendant,

PECKHAM VOCATIONAL INDUSTRIES, INC.,

and

SOURCEAMERICA,

Defendant-Intervenors. *

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Ronald K. Henry , with whom were David Hibey and Robert J. Wagman, Jr. , Kaye Scholer LLP, Washington, D. C., for Plaintiff.

Christopher L. Harlow , with whom were Benjamin C. Mizer , Principal Deputy Assistant Attorney General, Robert E. Kirschman, Jr. , Director, Franklin E. White, Jr. , Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, D.C., Timi Nickers on Kenealy , General Counsel, Committee for Purchase from People Who are Blind or Severely Disabled, and Antonio T. Robinson , Office of General Counsel, U.S. Department of Agriculture, Of Counsel, for Defendant.

Meghan A. Douris , Oles Morrison Rinker & Baker LLP, Seattle, Washington, for
Defendant-Intervenor Peckham Vocational Industries, Inc.2 Sarah L. Wilson , with whom were J. Chase Johnson, Jeffery T. Bozman , and Z. Lily Rudy

, Covington & Burling LLP, Wa shington, D.C., for Defendant -Intervenor SourceAmerica.

OPINION AND ORDER 1

WHEELER, Judge.

In this bid protest, Plaintiff Nationa l Telecommuting Institute (“NTI”) challenges the award of a U.S. Department of Agricultur e (“USDA”) help desk services contract to Peckham Vocational Industries (“Peckha m”). The Government conducted this procurement under the AbilityOne Program es tablished by the Ja vits-Wagner-O’Day (“JWOD”) Act, 41 U.S.C. §§ 8501-8506, to provide jobs for individuals with severe disabilities. The AbilityOne Commission is an independent federal agency created to administer the AbilityOne Program. See 41 U.S. C. § 8502. The Commi ssion is responsible for determining which products and services should be furnished to the Government by people who are blind or severely disabl ed. A central nonprofit agency known as
SourceAmerica functions as a technical eval uation panel and makes recommendations to the Commission on the qualifications and abilitie s of prospective nonp rofit agencies to perform the work.

This particular procurement has a long hist ory, beginning in April 2013. There have been multiple administrative appeals before SourceAmerica and the AbilityOne

1 The Court issued this decision under seal on Octobe r 14, 2015 and invited the parties to submit proposed redactions of any competitive-sensitive, proprietary, c onfidential, or other protected information on or before October 21, 2015. By that date, Defenda nt-Intervenor SourceAmerica, on behalf of itself, Defendant-Intervenor Peckham, and the Government, requested only minimal redactions of identifying non-party bidder information and source selection evaluation criteria, while Plaintiff National Telecommuting Institute asked for extensive redacti ons of source selection evaluation commentary, along with the Court’s own factual findings and legal conclusions. In an effort to resolve redaction issues, the Court requested NTI to submit a memorandum explaining th e basis for its redactions by October 26, 2015. NTI filed its memorandum on October 26, 2015, and SourceAmerica, on behalf of itself, DefendantIntervenor Peckham, and the Govern ment, responded on October 27, 2015.

The reason for redaction “is to safeguard the comp etitive process, not to withhold information that a party frowns on making public.” Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. 672, 723 (2010). When considering redactions, the better approach is to honor the “presumption of public access to judicial records.” Baystate Techs., Inc. v. Bowers, 283 F. App’ x 808, 810 (Fed. Cir. 2008) (citing Siedle v. Putnam Invs., Inc., 147 F.3d 7, 9 (1st Cir. 1998); Poliquin v. Garden Way, Inc., 989 F.2d 527, 533 (1st Cir. 1993)); see also Madison Servs., Inc. v. United States, 92 Fed. Cl. 120, 131-33 (2010); Akal Sec., Inc. v. United States, 87 Fed. Cl. 311, 314 n.1 (2009). After consid ering NTI’s explanations in support of its proposed redactions, the Court agrees it is appropriate to reda ct certain source selection evlauation commentary. These redactions are indicated in the decision by brackets and three asterisks, [***]. However, NTI also proposes to redact this Court’s own factual and legal analysis where it reflects poorly on NTI. Omitting such information would not serve to safeguard the co mpetitive process, but rather would serve to shield NTI from unfavorable commentary. The Court finds that it is neither necessary nor appropriate to redact its decisional reasoning containing no protected information.3 Commission, and a reevaluation of proposal s in accordance w ith the Commission’s
instructions. For the reasons explained below, the Court finds that NTI’s protest is barred
under the doctrine of laches. A.C. Aukerm an Co. v. R.L. Chaide s Constr, Co., 960 F.2d 1020, 1028-29 (Fed. Cir. 1992) (en banc); Clin ton Reilly v. United St ates, 104 Fed. Cl. 69, 78-80 (2012). NTI waited six months after the official notice of aw ard, and nearly ten months after it had exhausted its agency appeals, before filing its bid protest. The awardee, Peckham, and the Government suffered significant prejudice from NTI’s delay in bringing the protest.

Putting NTI’s laches problem as ide, the protest also fails on the merits. The Court finds that SourceAmerica rationally evalua ted the proposals, and determined that Peckham’s proposal was far superior to NTI’s. SourceAmerica adhered to the reevaluation instructions mandated by the Commission. NTI’s complaints ab out the procedures followed during the reevaluation are not s upported by the administrative record. Accordingly, NTI’s protest is DENIED.

Background

NTI is a not-for-profit organization provid ing telecommuting jo b opportunities for severely disabled individuals who are unable to work outside the home. Compl. ¶ 13. Joining the Government in defending agai nst NTI’s protest are SourceAmerica, the designated central nonprofit agency , and Peckham, the selected awardee for the contract at
issue. SourceAmerica and Peck ham are Defendant-Intervenors.

A. Statutory and Regulatory Framework

Through the JWOD Act, Congress created the Committee for Pu rchase from People Who are Blind or Severely Disabled (“Comm ittee” or “Commission”) to administer the AbilityOne Program (“AbilityOne” or “Program”). 41 U.S.C. §§ 8502-03. The Committee consists of fifteen presidential appointees re presenting various federal agencies as well as the blind and severely disabled communities. Id. at § 8502; 41 C.F.R. § 51-1.3. The
Committee’s mandate is to id entify programs and services furnished by qualifying nonprofit agencies that are su itable for government procurement. Congress also directed the Committee to designate central nonprofit agencies to assist in maintaining the
Procurement List and to evaluate the suitability of qualifying no nprofit agencies. 41 U.S.C. § 8503(c). Under this mandate, the Committee selected National Industries for the Blind and SourceAmerica, pr eviously named National Industrie s for the Severely Handicapped, as its designated centr al nonprofit agencies.

Once the Committee determines that a good or service is suitable for procurement from a qualified nonprofit ag ency, the Committee places that item on a published Procurement List and any federal agency wishin g to obtain that item must do so through a qualified nonprofit agency. Th e Act lists specific requireme nts and conditions nonprofit4 agencies must satisfy to partic ipate, and requires the Committ ee to maintain and publish in the Federal Register the list of products a nd services deemed suitable for procurement through the Program. The Act does not define the suitability standard, but states that the Committee “may prescribe regulations regardin g specifications for products and services on the procurement list . . . and other matters as necessary to carry out this chapter.” 41 U.S.C. § 8503(c). As discussed below, the Committee promulgated regulations establishing four mandatory criteria to determ ine a commodity’s or se rvice’s suitability for
the Procurement List. 41 C. F.R. § 51-2.4(a)(1)-(4) “Deter mination of suitability.”

The Program’s statutory a nd regulatory framework creates a multi-step process by which potential AbilityOne goods and services are identified and assessed. The statute and regulations also create a three-tiered framework for evaluating the u ltimate suitability of a given addition to the Procurement List. Along with the Committee, S ourceAmerica, in its role as the central nonprofit agency coordina ting employment opportun ities for the severely disabled, assesses federal contracting ac tivities for compatibility with the AbilityOne Program, obtains procuremen t information from federal c ontracting entities, evaluates submissions from interested nonprofit agen cies, and makes recommendations to the
Committee. Once the Committee receives SourceAmerica’s recommendation, the
Committee’s executive staff conducts its own re view of the submissions and makes an independent recommendation to the Committee’s presidentially-appointed members. The Committee members then consider the “particul ar facts and circumstances in each case” before deciding whether the go od or service should be added to the Procurement List. 41 C.F.R. § 51-2.5.

B. Procurement Process

After the USDA Forest Service posted a Re quest for Informati on (“RFI”) for IT helpdesk services support (“HelpDesk Serv ices”) on October 30, 2012, SourceAmerica approached the Forest Service to discuss whether the HelpDesk Services project might be sourced through the Ab ilityOne Program. Gov’t Mem. at 6. The USDA then contacted Ryan Blackman, SourceAmerica’s Senior Deput y Director for Strategy Development, in early February, 2013, to discuss transitioni ng the helpdesk call center to an AbilityOne opportunity. SourceAmerica (“SA”) Mem. at 8. Once the USDA Secretary and Chief Information Officer confirmed that the HelpDe sk Services could be sourced through the AbilityOne Program, SourceAmerica created So urces Sought Notice (“SSN”) 2000 for distribution among qualified nonprofit agencies.

On April 8, 2013, SourceAmerica pub lished SSN 2000 and its evaluation team began reviewing bid proposals in early Ma y. Mr. Blackman hired two independent
contractors to offer technical advice to en sure accurate assessment of the technical elements of the proposals. Although Mr. Blac kman continued to fac ilitate the relationship between the independent contractors and Sour ceAmerica’s evaluation team, Mr. Blackman
was not a member of the evaluation team. The SSN 2000 team completed its evaluation5 matrices on May 6, 2013, with every evalua tor recommending Peckham for the HelpDesk Services opportunity. SA Mem. at 12. Althou gh NTI received no first rankings, it did rank second or third with a major ity of the evaluators. Follow ing SourceAmerica’s Executive Director’s recommendations, on May 23, 2 013, Peckham and NTI presented their proposals to the USDA and answered key questions submitted to SourceAmerica by the USDA. Id. After submitting additional que stions and independe ntly analyzing the proposals, the USDA’s sixteen-member team agreed with SourceAmerica, recommending that Peckham perform the Help Desk Services. Id. at 13.

Following a debriefing with SourceAmerica’s Executiv e Director, NTI filed two appeals with SourceAmerica, both of which were denied. Id. at 14-15. NTI appealed these denials to the Commission and, through its Executive Director Tina Ballard, the Commission ultimately sustained NTI’s appeal on the ground that So urceAmerica “failed to follow its established policies and proced ures by evaluating NTI on criteria that was [sic] not included in the Source Selecti on Notice #2000, dated April 29, 2013.” 2 Pl. Mem. at 8 (quoting SA 1756). 3

After granting NTI’s appeal on Decemb er 20, 2013, Ms. Ballard remanded SSN 2000 to SourceAmerica “for appropriate action. ” Administrative Record (“AR”) 2885. To
ensure a fair and unbiased second evaluatio n, Ms. Ballard “instructed SourceAmerica to re-do their NPA recommendation,” giving the agency the following guidelines: “(1)
SourceAmerica should create a nother Sources Sought Notice us ing the original Statement of Work and identical posting questions; (2) SourceAmerica s hould establish an evaluation
team of SourceAmerica staff members who were not involved in the first posting; (3) [t]he SourceAmerica Executive Director making th e recommendation should not have been involved with the first posting; and (4) [cr eate a] ‘firewall’ between the first posting and the second posting [] so no one on the new team has access to any of the details of responses to first posting or any eval uation details.” Id. 94.

SourceAmerica posted SSN 2333 on Friday, Ja nuary 3, 2014. Id . 1500-03. The
second solicitation stated that the “project was under a tight timeframe.” Id. 1500. On Friday, January 17, 2014, SourceAmerica received proposals from three bidders. 4 Id. 2202-2410. After receiving these proposals, the new evalua tion team “immediately began
its evaluations and was exclusiv ely devoted to this task.” SA 1887. The evaluations and
ultimate recommendation from the SSN 2333 team that Peckham was the most qualified nonprofit agency for the HelpDesk Services oppor tunity matched those “of every

2 SSN 2000 “involved 6 versions issued between April 8, 2013 and April 29, 2013.” Peckham Mem. at 3.

3 Due to the fact that Sour ceAmerica was responsible for evaluating proposals and making recommendations to the Commission, the Court require d SourceAmerica to produce documents relating to
the evaluations. The Court considered these SourceA merica documents part of the record on review.

4 The third bidder, [***], was not competitive but wa nted to be considered as a subcontractor/mentee.6 individual who and organization that assesse d the competing proposals of Peckham and NTI over the course of two year s.” SA Mem. at 2. SourceAmerica notified the bidders of
the outcome of the SSN 2333 evaluation on January 23, 2014 , and debriefed NTI six days later on January 29, 20 14. AR 2646-45.

NTI immediately initiated the appeal pro cess, filing ultimately unsuccessful first and second-level internal appeals with Source America on February 6 and March 4, 2014. Id. 256, 265. NTI then app ealed to the AbilityOne Commission on April 4, 2014. Id. 131- 43. The Commission, acting again through Ms . Ballard, denied NTI’s appeal on May 29, 2014, at which time NTI’s agency appeals were exhausted. Id. 152. Following a notice and comment period, the Commission publishe d the USDA HelpDesk Services in the Federal Register on August 15, 2014, plac ing the contract with Peckham “on the Procurement List to be awarded on September 15, 2014.” Peckham Me m. at 11. Shortly after the August 15 final publication, Peckham began contract performance, which “include[d] a transition period during which the previous serv ice provider [IBM] remained in place. On March, 20, 2015, NTI initiated this bid protest, just days before Peckham was scheduled to assume full resp onsibility for contract performance.” Gov’t Mem. at 9.

C. Procedural History

Counsel for NTI filed this judicial pos t-award challenge on March 20, 2015, protesting the USDA HelpDesk Services awar d to Peckham and reque sting declaratory and injunctive relief. On March 25 , 2015, Peckham filed a moti on to intervene, which the Court granted the next day. During a he aring on March 26, 20 15, Counsel for NTI successfully applied for a Temporary Restrainin g Order (“TRO”) to en join the Government from allowing Peckham’s performance for fourteen days. On April 2, 2015, after briefing and oral argument, the Court granted Peckha m’s motion to dissolve the TRO. On April 10, 2015, the Court granted SourceAmeri ca’s motion to intervene in this case.

On July 8, 2015, NT I filed a motion for judgment on the administrative record and a permanent injunction. On Ju ly 29, 2015, the Government a nd Intervenors each filed an opposition to Plaintiff’s motion and a cro ss-motion for judgment on the administrative record. The parties have fully briefed their respective motio ns, and on September 15, 2015, the Court heard closing arguments. After care fully considering the parties’ positions, the
Court concludes that NTI’s claims are time -barred and that, in the alternative, the Government is entitled to judgme nt on the administrative record.

Discussion

A. Standing

Pursuant to the Tucker Act, as amende d by the Administrative Dispute Resolution Act of 1996, this Court has “jurisdiction to render judgment on an action by an interested7 party objecting to a solicitation by a Federal ag ency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged viola tion of statute or regulation in connection with a procuremen t or a proposed procurement.” 28 U.S.C. § 1491(b)(1). Determining whether a bid proteste r has standing to pursue a claim in this Court “is a threshold jurisdictional issue” th at must be met in any protest. Myers Investigative & Sec. Servs. v. United Stat es, 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)). To establish standing under the Tucker Act, an aggrieved protester must demonstrate that it is an “interested party” by showing that it is “an actual or prospective bi dder or offeror whose direct
economic interest would be affect ed by the award of the contract or by failure to award the
contract.” Am. Fed’n of Go v’t Emps. v. United States, 25 8 F.3d 1294, 1302 (Fed. Cir. 2001) (quoting 31 U.S.C. § 3551(2) (Supp. IV 1998)).

Neither the Government nor the Intervenors dispute that NTI has standing to pursue this action. Indeed, the Court agrees that NTI is an interested party within the meaning of the relevant statute and therefore has standing. NTI is an actual offeror and submitted a technically acceptable proposal. NTI submitte d timely proposals for both SSN 2000 and SSN 2333, and was one of on ly three offerors evaluate d by SourceAmerica and the Commission during the second evaluation proce ss. Pl. Mem. at 13. Only NTI and Peckham proceeded beyond the initial qualifying assessment su ch that both were “within the zone of competition” for the HelpDesk Services opportunity. Holloway & Co., PLLC v. United States, 87 Fed. Cl. 381, 391 (2009).

B. Laches

In its cross-motion for judg ment on the administrative record, Peckham asserts the equitable defense of laches. Peckham Mem. at 25-27. The doctrine of laches “bars a claim when a plaintiff’s ‘neglect or delay in bringing suit to re medy an alleged wrong, which taken together with lapse of time and other circumstances, ca uses prejudice to the adverse party.’” Land Grantors in Henderson, Uni on, & Webster Counties v. United States, 86 Fed. Cl. 35, 47 (2009) (quotin g A.C. Aukerman Co., 960 F.2d at 1028-29). As this Court has explained, the doctrine of laches “is premised on the maxim vigilantibus non dormientibus aequitas subvenit– equity aids the vigilant not those who slumber on their rights.” Mississippi Dep’t of Rehab. Servs. v. United States, 61 Fed. Cl. 20, 30 (2004) (citing Cornetta v. United States

, 851 F.2d 1372, 1 375 (Fed. Cir.1988)). Laches may be
invoked as an affirmativ e defense in the context of a bid protest before this Court. See Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1314-1 4 (Fed. Cir. 2007); see also Software Testing Solutions, Inc. v. U.S., 58 Fed. Cl. 53 3, 536 (2003).

A laches defense requires that a defend ant show “(1) unreasonable and unexcused delay by the claimant, and (2) pr ejudice to the other party, either economic prejudice or defense prejudice.” JANA, Inc. v. United St ates, 936 F.2d 1265, 1 269 (Fed. Cir. 1991); see also Hermes Consol., Inc. v. Unites States, 58 Fed. Cl. 3, 20 (2003). Ultimately, the8 defendant bears the burden of es tablishing that “the plaintiff delayed in filing suit for an unreasonable and inexcusable length of time fro m the time the plain tiff knew or reasonably should have known of its claim against the de fendant” and that this “delay operated to the prejudice or injury of th e defendant.” A.C. Auckerman Co., 960 F.2d at 1032.

1. Delay

SourceAmerica notified Peckham and NTI of the outcome of SSN 2333 via email on January 23, 2014, and debriefe d NTI on January 29, 2014. AR 2642-45. NTI filed first and second-level appeals with SourceAmerica on February 6 and March 4, 2014. Id. 256, 265. After losing both inte rnal appeals, NTI appealed to the AbilityOn e Commission on April 4, 2014. Id. 131-43. Following a revi ew of NTI’s allegations and meetings with both NTI and SourceAmerica, the Commission, acting through Ms. Ballard, denied the protest on May 29, 2014. Id . 152. After a period of pu blic notice and comment, the
Commission added Peckham to the Procurement List on September 15, 2014. NTI filed the present action on March 20 , 2015, more than six months after the Commission finalized the award to Peckham, more than eight months after NTI exhausted its administrative appeals, and more than a year after Source America announced the outcome of SSN 2333.

This Court has explained that a plaintiff cannot sit on his right s in bringing a bid protest while the Government moves forward w ith a contract. See, e.g., Benchmark Knife Co. v. United States, 79 Fed. Cl . 731, 737 (2007) (citing Blue & Gold Fleet, 492 F.3d at 1314). To this end, this Court has found a “strong argument in favor of applying laches” when a plaintiff chose to wait two months to f ile suit because he was weighing the cost of litigation. Software Testing Solutions, Inc. v. United States, 58 Fed .Cl. 533, 536 (2003). In this case, NTI waited more than three tim es as long to bring this bid protest.

NTI offers two primary justifications to explain its delay, both of which are unpersuasive. First, NTI explains that it wa ited until March 2015 to bring its protest before
this Court because it chose to a ttempt to work direc tly with the USDA. See, e.g., Sept. 15, 2015 Closing Arg. (“Tr.”) at 33-34; accord Dkt. No. 1-2 (MJ Willard Declaration ¶ 27) (“Since the SSN was placed on the Procurement List on September 15, 2015, [sic] I have been seeking relief directly from the USDA.”). Second, NTI explains that, due to its modest size and nonprofit status, it wanted to seek less expensive means of relief before litigating this matter. See, e.g ., Tr. at 33 (“NTI is a small non profit. The idea of rushing into court prematurely and expe nsively is a very difficult u ndertaking for them so they attempted everything they could think of prio r to going into court.”), id. at 34 (“So, you had two components to it. One is it’s expensive to be here. . . .”).

The Court does not quarrel with NTI’s claims that it was attempting to seek relief through informal channels and by less expensive means. Ho wever, in choosing to rely on such alternative efforts, rather than timely filing a bid protest, NTI “simply chose to put all [its] eggs in one basket—ultimately to [its] detr iment.” Reilly, 104 Fed. Cl. at 80; see also9 Tr. at 34 (“The reason we had to file in March . . . was beca use we suddenly got word that
those discussions had been a waste of time an d Peckham was preparing to launch a startup of services.”). While NTI was attempting to avoid the cost of litigation, the USDA and Peckham were proceeding with the call-center cont ract at a significant co st to both parties.

2. Prejudice

As this Court has explained, the “[m]ere pa ssage of time does not constitute laches.” Mississippi Dep’t, 61 Fed. Cl. at 30. To prevail, the defe ndant must also show how the plaintiff’s delay in br inging a claim caused the defendant to suffer prejudice. In the case of a bid protest, “[a] plaintiff may choose to sit on his rights while a government contract proceeds, but he will be barred from protesti ng if the Government is prejudiced as a consequence.” Reilly, 104 Fed. Cl. at 80; see also 30A C.J. S. Equity § 138 (“Laches is not based merely upon time, but also upon changes in conditions or relationships involved with the claim, and the consequent inequity of permitting the claim to be enforced.”).

In the present case, NTI’s decision to sit on its right to bring this claim for six months directly and substantially prejudiced both Peckham and the Government. Peckham has “incur[red] millions of dollars in costs that re main unreimburse d pending this bid protest.” Peckham Mem. at 26; see also Tr. at 156 (“ Peckham has had to outlay resources for its facilities, outlay resources for the training program, for the soft ware.”). Also, the
Government has incurred and will continue to incur substantial costs pending resolution of this matter. NTI’s delay has forced the USDA to extend its contract with incumbent IBM. See Peckham Reply at 14 (explaining that the USDA is holding the la unch of its contract
with Peckham “due to the TRO that was issued in this case , and its impacts after only one week.”). Finally, pending a result in this case, task orders that should have gone into effect in July remain on hold. Id. at 15; see also T r. at 156 (explaining that two of the four USDA IT task orders remain unimplemented pending resolution of this matter).

For these reasons, the Court finds that application of the laches doctrine is appropriate in this case. NTI could have brou ght this action as much as six months before it did so and its justifications for the delay ar e inadequate. As a result of NTI’s delay, both
Peckham and the Government have suffered economic prejudice, much of which could
have been avoided had NTI brou ght a timely bid protest.

C. Judgment on the Ad ministrative Record

1. Standard or Review

In a bid protest, this Court reviews an ag ency’s decision pursuant to the standards
set forth in the Administrative Procedure Act (“APA”). 5 U.S.C. §§ 701-706 (2000); see also Impresa Construzioni Ge om. Domenico Garufi v. Unite d States, 238 F.3d 1324, 1332 (Fed. Cir. 2001) (stating that the APA standard of review shall apply in all procurement protests in the Court of Federal Claims). Un der the APA, a reviewing court shall set aside10 an agency action if it is “arbitr ary, capricious, an abuse of di scretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A); see, e.g., Ban knote Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1350-51 (Fed. Cir. 2004).

The APA standard allows this Court to se t aside an agency’s procurement decision
if it lacked a rational basis or if the agency’s decision- making involved a violation of regulation or procedure. Impresa, 238 F.3d at 1333. When evaluating a challenge on the first ground, a court “must determine ‘whether the contracting agency provided a coherent and reasonable explanation of its exercise of discretion. When a challenge is brought on the second ground, the disappoi nted bidder must show a clear and prejudicial violation of applicable statutes or regulations.’” Axio m Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 1381 (Fed. Cir. 2 009) (quoting Impresa, 238 F.3d at 1332–33 (Fed . Cir. 2001)). If
the Court determines that an agency acted without a rational basis or contrary to law, it must then determine whether “the bid protes tor was prejudiced by that conduct.” Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir. 2005). The plaintiff must show prejudice by demonstrating “that there was a s ubstantial chance it would have received the contract award but for [the agency’s procuremen t] error.” Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed. Cir. 1999) (interna l citation omitted); see also Bannum, Inc. 404 F.3d at 1353.

In its motion for judgment on the administ rative record and permanent injunction, NTI protests the second evaluation process of proposals for the USDA HelpDesk Services opportunity on three grounds. First, NTI c ontends that SourceAm erica failed to follow each of four guidelines from Ms. Ballard in co nducting the second ev aluation, resulting in an arbitrary and capricious evaluation proce ss that prejudiced NTI. Second, NTI argues that the Commission erred in determining P eckham was a suitable, qualified nonprofit agency. Pl. Reply at 25. Finally, NTI conten ds that it was unreasonable for SourceAmerica and the Commission not to consider AbilityOn e’s policy goal of ma ximizing employment opportunities. Pl. Mem. at 22. The Court wi ll address each of NTI’s arguments below.

For the reasons explained, NTI has failed to meet its burden on any of its protest grounds and, in fact, the administrative re cord instead supports judgment in the Government’s and Intervenors’ favor. Sp ecifically, SourceAmerica and the AbilityOne
Committee’s decision to award this contractto Peckham was reasonable, coherent, and
rational based on the record evidence. More over, the reevaluation process adhered to the specific procedures articulat ed by Ms. Ballard as well as the four-factor regulatory
framework.

2. SourceAmerica Followed the Guidelines for the Second Evaluation and
Conducted a Fair and Lawful Reevaluation

After sustaining NTI’s firs t appeal based on its cl aim that SourceAmerica “evaluat[ed] NTI on criteria that was not incl uded in the Source Se lection Notice #2000,”11 Ms. Ballard returned the IT pr oject selection decision to So urceAmerica “for appropriate action.” SA 1756. A July 21, 2014 Commission staff synop sis summarizes Ms. Ballard’s instructions to SourceAmerica regarding SS N 2333, the second evaluation for the USDA HelpDesk Services opportunity. The synopsis is a post-hoc description of the instructions for the second evaluation and the parties disagree as to the weight this summary should be given. Tr. at 74-75 (“There’s been some debate between NTI and the intervenors . . .
because AR 94 is an after-the-fa ct memorialization of the inst ructions. The intervenors are absolutely correct on that. . . . But NTI is also right that it represents the instructions.
These are the instructions of SourceAmerica.” ). The Court deems it unnecessary to decide whether the guidelines are directions or an after-the-fact summary because, either way,
SourceAmerica conducted the second evaluation process in accordance with each of the four Commission guidelines.

Based on these guidelines, NTI argues that the evaluation process was arbitrary and capricious because SourceAmerica failed to: (1 ) issue an identical posting; (2) establish
an evaluation team of members who were not i nvolved in the first pos ting; (3) select an
evaluation official who was not involved in the first posting; and (4) create a firewall between the first and second po stings so new team member s could not access evaluation or response details from th e first posting. AR 94.

a. SourceAmerica Issued a Subs tantively Identical Posting

The first Commission guideline instructed SourceAmerica to “create another Sources Sought Notice using the original Statement of Work and identical posting questions,” because Ms. Ballard determin ed SourceAmerica evaluated the SSN 2000 proposals using criteria not explicitly listed in th e notice. Id. 94. To address this concern, SourceAmerica prepared SSN 2333 so that all of the substantive factors considered during the first evaluation process were explicitly listed in the text of SSN 2333.

As the evaluation of proposals for SSN 2000 proceeded, the USDA posed additional questions and its user require ments changed, which in turn led to changes in the Commission’s suitability analysis. Gov’t Mem. at 28. For example, on June 11, 2013,
both NTI and Peckham received an email with three questions that then became part of SSN 2000. Tr. at 75. In drafting SSN 2333, the staff at SourceAmerica deliberately added these three questions (as Res ponse Requirements 7, 8, and 10) to the notice to ensure that it accurately reflected the subs tantive evaluation criteria c onsidered during the first evaluation. SA Reply at 14. NTI claims that these change s make the second evaluation substantially different from the first.

NTI’s contention that SourceAmerica made impermissible changes to SSN 2333 is simply without merit. The information sought by Response Requirement s 7, 8, and 10 was requested from NTI and Peckham during the firs t evaluation process. NTI provided this information during that pro cess by answering the USDA’s a nd SourceAmeri ca’s additional12 questions. Had SourceAmerica issued an identical posting, it would have been disregarding Ms. Ballard’s first guideline for c onducting the second evaluation process. See id. at 14 (“No rational participant in a procurement would expect SourceAmerica to simply re-title SSN 2000 as SSN 2333 and repe at the evaluation process. Doing so would have clearly violated the purpose and intent of Ms. Ballard’s December 20, 2013 remand letter.”). Instead, in drafting th e second posting, SourceAmeri ca took steps to clarify and make explicit all evaluation criteria that it considered during the first evaluation.

NTI places form over substance by arguin g SourceAmerica should have drafted SSN 2333 in a way that effec tively did not reflect the actual contract opportunity SSN 2000 had become by the time the first evaluation period ended. Id. (“Re-posting verbatim Sources Sought Notices would have been irrational and unreasonable.”). Instead, SourceAmerica incorporated the June 13, 2013 questions relating to subcontracting and financial stability directly in to the SSN 2333 posting. AR 1503; see also Tr. at 121 (“[T]hey made it express, that there could be absolutely no que stion, no room for misunderstanding, that the subcontracting re quirements . . . included in the questions responded to by both NTI and Peckham in the SSN 2000 proce ss, were also part of the 2333 process, and they inco rporated question about the financial stability issue.”). 5

Lastly, SourceAmerica “expanded upon th e criterion regarding [nonprofit agency] management” in part because NTI itself request ed such guidance fo llowing SSN 2000. SA 738-39. To clarify this crite rion, SourceAmerica explained what it was looking for in terms of nonprofit agency management in greater detail in SSN 2333. 6 Despite this additional guidance on how to effectively address this criterion, a criterion included in both SSN 2000 and SSN 2333, NTI again failed to provide a sa tisfactory response in its second proposal. SA Mem. at 19; see, e.g., AR 1738 (comment s of evaluator Michael McDermott) (“[***]”).

b. SourceAmerica Established a New Evaluation Team

The record demonstrates that Sour ceAmerica complied with the second Commission guideline to “estab lish an evaluation team of SourceAmerica staff members
who were not involved in the fi rst posting.” AR 94; see SA Mem. at n.15 (demonstrating

5 SourceAmerica further clarified the subcontrac ting criterion in SSN 2333’s initial “key notice” information. AR 1500 (explaining “[i]f other aspects of the proposals received are equal, SourceAmerica will give preference to the CRP with the highest degree of organic technical capability, resulting in the least amount of subcontracting risk, subcontract labor, and/or subcontract dollars.”).

6 Compare SSN 2000 Response Requirement #2 at SA 4 “(Capacity) Describe your organization’s overall ability to commit organizational resour ces, and have available the techni cal and management bandwidth to support a November 2013 start date for this project, including pricing activities, production of customer deliverables, etc.”) with SSN 2333 Response Require ment #4 at AR 1526 (“Describe your CRP’s executive and senior management infrastructure that supports and integrates successful execution of this opportunity. Include, at minimum, a description of the following specifics: 1) Management hierarchy/structure; 2) Management communication infrastructure; 3) Manageme nt principles and tools to be utilized for June start-up and throughout contract performance.”).13 no overlap between the first and second evaluation team members). Here, “posting” refers
“to the solicitation and its evaluation.” SA Reply at 17. Despite the evidence of SourceAmerica’s compliance, NT I argues that SourceAmerica failed to adhere to the second requirement because: (1) two SourceAmeric a employees participated in both evaluations; and (2) Ryan Blackman, the deci ding official assigned to SSN 2333, “was involved in the earliest stag es of the development of SSN 2000, through the evaluation phase, and into the post-award stage.” Pl. Mem. at 17.

NTI contends that SSN 2333 evaluators Ted Prindle and Chris Seventko were involved in the first posting based on two em ails. Yet, any invo lvement by Mr. Seventko or Mr. Prindle in SSN 2000, however limited, came well after SourceAmerica completed the evaluation process and awarded the contract to Peckham. As to Mr. Prindle, NTI cites a single email referring to him as a potentia lly interested party to a conference call discussing the USDA award. Pl. Mem. at 19; SA 2715. NTI fa ils to acknowledge, however, that this email and the conference ca ll to which it refers took place post-award,
and therefore would not have involved informa tion about the actual evaluation. See Tr. at 82-83 (explaining conference call took place af ter SSN 2000 evaluations were closed). Similarly, NTI argues that Mr. Seventko was invo lved in the first pos ting based on a postaward email. See Pl. Mem. at 17. Much lik e its argument respecting Mr. Prindle, however, NTI’s argument also fails with regard to Mr. Seventko because any contact he had in
relation to SSN 2000 occu rred post-award, and conseq uently post-evaluation.

Finally, NTI argues that Mr. Blackman’s role as the executive di rector for SSN 2333 tainted the evaluation process. However, as NTI itself concedes, Mr. Blackman had “legitimate business reasons” for his early involvement with the USDA HelpDesk Services opportunity. See Pl.’s Reply at 15-16. In his role as seni or deputy director, Mr. Blackman helped to transition the USDA opportunity to an AbilityOne prog ram. Gov’t Mem. at 33. He also helped the technical expert consultants navigate SourceAmerica’s internal structure and processes. Sp ecifically, Mr. Blackham coordinated with the consultants to ensure that they understood SourceAmerica’s staffing structure and general evaluation procedures. See, e.g., SA 3386. He did not, however, take part in evaluating SSN 2000 proposals, nor did he have access to the eval uations materials and substantive proposals
maintained within the secure Front Office Application (“ FOA”) system. Consequently, the
fact that Mr. Blackman served as executive director for the second posting did not “taint” the SSN 2333 evaluation proce ss because he was never invo lved in evaluating SSN 2000 proposals, and in fact, Mr. Blackman never ha d access to those proposals or any of the
materials used to evaluate them.

c. SourceAmerica Designated a New Evaluation Official

Ms. Ballard’s third guideline required that “[t]he SourceAmerica Executive Director making the recommendation should not have been involved with the first posting.” AR 94. Again, in this context, “posting” refers “to the solicitation and its evaluation.” SA14 Reply at 17. Accordingly, Ms. Ballard’s “phras e ‘not involved with the first posting’ refers to the first proposals and their evaluation, not to conduct of business that preceded or followed that evaluation.” Id. To comply with Ms. Ballard’s directive, SourceAmerica
selected Mr. Blackman to serv e as executive director for the SSN 2333 posting. Mr. Blackman was experienced in the Procuremen t List addition process and well-regarded
within SourceAmerica and by the AbilityOne Commission.

As executive director of the SSN 2333 pos ting, Mr. Blackman “was responsible for reviewing the evaluators’ findings, reco mmending an NPA to the Commission, and notifying the NPAs of his recommendation.” Go v’t Mem. at 32; see also AR 2639-45. His
tenure as executive director wa s the only point at which M r. Blackman had access to the
substantive information in the parties’ proposals and SourceAmerica’s evaluative information. Contrary to NT I’s contentions, there is simply no support for the argument
that Mr. Blackman was involv ed in SSN 2000’s evaluative process or was exposed to
information that would have biased his actio ns as executive director of SSN 2333. The record and briefing instead suggests that Mr. Blackman wears many hats at SourceAmerica, only one of which involved expo sure to evaluative fi ndings related to the USDA HelpDesk Serv ices opportunity.

d. SourceAmerica’s Second Evalua tion Was Not Contaminated

NTI correctly asserts that SourceAmerica did not create “[a] ‘firewall’ between the first posting and the second posting . . . so no one on the new team ha[d] access to any details of responses to [the] first posting or any evaluation details,” according to Ms. Ballard’s final guideline. Pl. Reply at 17; AR 94 (listing fi nal guideline). What NTI’s argument fails to acknowledge, however, is that SourceAmerica did not have to set up or
create a new IT infrastructure to meet this re quirement. See SA Reply 17-18. Its existing FOA document control system effectively satisfied Ms. Ballard’s fourth guideline. 7

To the extent that any messages relati ng to the first posting reached SSN 2333 evaluators, NTI fails to show how any such message caused an irrational second evaluation process. SA Mem. at 36-37. Finally, NTI’s additional arguments c oncerning similarities
between SSN 2000 and SSN 2333 evaluators’ desc riptions of the opportunity or project history are unpersuasive. The language appear ed verbatim in both publicly distributed notices. SA Reply at 18.

7 See SA Mem. at 7 (“One tool used to protect source selection information is SourceAmerica’s Front Office Application (“FOA”) system. FOA serves as the offi cial repository of source selection documents, and access is closely protected. During an evaluation, onl y members of an evaluation team have access to NPA proposals; other employees of SourceAmerica do not have access to the system.”).15 3. The Award Decision in Favor of Peckham Was Reasonable

As noted above, the AbilityOne Committee’s regulations set out four criteria that a commodity or service must satisfy to be considered “suitable” for addition to the
Procurement List. Much of th e suitability assessment involves the qualifications of the nonprofit agency providing the services. As the regulations state, “[f]irst, the service must have the potential to generate employment for the severely disa bled. 41 C.F.R. § 51-2.4(a). Second, the selected NPA must ‘qualify’ for the program. Id. Third, the selected NPA must be capable of providing the service. Id. Fourth, the addition of the service to the
Procurement List should not have severe adverse impact on the incumbent. Id .” Gov’t Reply at 1-2. When assessed against thes e four suitability criteria, the Committee’s decision to add the USDA HelpDesk Services to the Procurement Li st with Peckham as the service provider was rational and in accordance with applicable law.

The USDA’s HelpDesk opportunity, as pr ovided by Peckham, had the potential to generate employment for the severely disabl ed. See, e.g., AR 302 (“The Commission noted that call centers are routinely staffed by severely disabled individuals and [] the Federal Government regularly utilizes such i ndividuals on these contra cts.”). Through its hiring, training, and staffing framework, Peckham demonstrated a commitment to employing severely disabled individuals and vete rans. Id. 2423, 2424, 2449, 2479, 2503.

Peckham qualifies to participate in the Ab ilityOne Program as an agency that is “operated in the interest of severely disabl ed individuals who are not blind,” 41 U.S.C. § 8501(6), and “employs . . . severely disabled individuals for at least 75 percent of the hours of direct labor required for the production or provision of the products or services.” 41 C.F.R. § 51-2.4(a)(3). 8 To participate in the Progra m, nonprofit agencies must certify compliance with the direct labor ratio by co mpleting annual certifications and submitting
to onsite visits and audits. 41 C.F.R. §§ 51-2.4(a)(3), 51-4.3. Indeed, the Commission explained that “Peckham has been in the AbilityOne Program for 25 years, and in that time its agency-wide direct labor ratio has never dropped lower than 75% and is usually above 80%.” AR 233 (emphasis in original).

Despite Peckham’s clear qualifications, NT I contends that SourceAmerica ignored the statutory purpose of the Ab ilityOne Program when it “faile d to follow its B-1 policies and procedures.” Pl. Mem. at 22. Accord ing to NTI, SourceAmerica’s B-1 policies and procedures require it to consider which no nprofit agency will “max imize employment” for the target population. NTI claims that had SourceAmerica foll owed this “authentic mandate,” it would have determined that NTI was more qualified for this opportunity than

8 According to the statute, “[t]he term “severely di sabled individual” means an individual or class of individuals under a physical or mental disability, other than blindness, which (according to criteria established by the Committee after consultation with a ppropriate entities of the Federal Government and taking into account the views of non-Federal Govern ment entities representing the disabled) constitutes a substantial handicap to employment a nd is of a nature that prevents th e individual from currently engaging in normal competitive employment.” 41 U.S.C. §8501(8).16 Peckham because NTI employees are homebound and therefore are the “most severely disabled.” Pl. Reply at 23. The Court does not find support for this argumen t in the JWOD

Act.

In passing the JWOD Act, C ongress directed “the CNAs [to] assist the Commission with the identification, evaluation, and di stribution” of “employment and training opportunities for persons who ar e blind or have other severe disabilities.” 41 U.S.C. § 8503(c); 41 C.F.R. §§ 51-3.2 , 51-1.1. Pursuant to the Co mmission’s directives and its “overarching goal to increase” such training and employme nt opportunities, SourceAmerica published AbilityOne Program Bulletin No. B-1. 41 C. F.R. § 51-1.1; AR 330-38. As Bulletin B-1 states, SourceAmerica

will adhere to a set of best prac tices consistent with its mission, vision, values, and goals, and to [its] role as defined by regulation, to maximize the employment options for people with significant disabilities, by aggressively preserving existing and proactively devel oping new job opportunities for people with significant disab ilities. A clear and transparent Project Development Distribution process is essential to the achievement of this goal.

AR 330. NTI’s argument essentially rewr ites this policy statement to create a maximization mandate, rather than an ove rarching policy goal, which it then claims SourceAmerica disregarded during the evaluation process.

The Court is not persuaded by NTI’s “max imization of employment” argument.
NTI asks this Court to decide whether em ploying individuals with visible, physical disabilities should render a nonprof it agency more qualified under the regulations than an agency employing individuals w ith less visible physical or mental disabilities. The Court will not engage in such analysis. Nor does it find any evidence in the record or statutory framework to suggest that th e AbilityOne Program was meant to weigh the severity of a person’s disability after that individual qualif ies under the statutory definition of “severely
disabled individual.” Sour ceAmerica, the Committee’s st aff, and the Committee itself determined that Peckham qualified for this op portunity. The evalua tors were persuaded
that Peckham satisfied the 75 percent direct-labor ratio and approved its “plans for employing severely disa bled persons with a range of phys ical and mental disabilities.” SA Reply at 12.

The regulations also require that the se lected nonprofit agency be capable of performing the contract. As outlined abov e, potential nonprofit agency providers are assessed via AbilityOne’s three-tiered evalua tion process. Once the Committee decides that a good or service is capab le of being provided by the se verely disabled and therefore suitable for procurement through the Program, SourceAmerica, as the designated central17 nonprofit agency, pub lishes a Sources Sought Notice. This notice accomplishes what a request for proposals (“RFP” ) normally would in ordinary government procurement. 9 The proposals are then evaluated independently at three separate levels before a winner is
selected.

At every stage of the evaluation process, individuals and organizations experienced with the AbilityOne procurement process asse ssed both NTI’s and Peck ham’s responses to SSN 2000 and SSN 2333. NTI’s strengths did no t go unnoticed, but ove r the course of two years, “the recommendation[s] of every individual who and or ganization that assessed the competing proposals” favored Peckham in te rms of ability to pr ovide the requested
service. 10 SA Mem. at 2. As the contracting agency, the USDA also reviewed Peckham’s technical capabilities and provided its own assessment to the Commission. 11 Based on its assessment, the USDA concluded “that Peckha m has the technical capability and capacity to perform the IT Service Desk Support Service requirement.” AR 228. Following these initial evaluations and assessments, the Commi ssion’s executive staff reviewed Peckham’s proposal, along with SourceAmerica and the USDA’s recommendations, and ultimately concluded “that Peckham had adequately dem onstrated its technical capabilities.” Id. 127- 29, 312-15. Finally, after receiving and reviewing summaries of all of the recommendations and proposal materials, the presidentially-appointed Committee members “unanimously determined that the He lpDesk Services shou ld be added to the Procurement List and provided by Pe ckham.” Id. 127-29, 312-15, 352.

The fourth and final regulatory conditio n requires the Commission to assess the impact that adding the good or service to the Procurement Li st will have on the current contractor. 41 C.F.R. § 51-2.4( a). The incumbent contractor for the HelpDesk Services is IBM, currently twenty-fourth on the Fortune 500 with reporte d annual revenues of $104 billion. Gov’t Mem. at 28; AR 232. Th e Commission rationally determined that adding the $60 million HelpDesk Services contract to the Procurement List would “not have [a] severe adverse impact on the incumbent.” 41 C.F.R. § 51-2. 4(a); AR 232. IBM has not

9 In an AbilityOne procurement, the government-issued R FP “comes relatively late in the process. It is a single source RFP in accordance with FAR § 6.302-5, issued after a single NPA has been recommended to proceed.” SA Mem. at 6.

10 Compare SSN 2333 NTI evaluations: Evaluator A, AR 1735 (“[***]”), and Evaluator B, id. 1735 (“[***]”), and Evaluator C, id. 1736-37 (“[***]”), an d Evaluator D, id. (“[***]”), with SSN 2333 Peckham evaluations: Evaluator A, id. 1734 (“[***]”), and Eval uator B, id. (“[***]”), and Evaluator C, id. 1736 (“[***]”), and Evaluator D, id. 1737-38 (“[***]”).

11 See AR 228-29 (“Specifically, the USDA determined that Peckham: [1] Exhibited clear understanding of contract requirements and magnitude; [2] Designate d technical expertise and experience in IT Service Desk Support; [3] Proposed technical approach and addressed the full scope of USDA’s requirement and how they will specifically satisfy the requirements; [4] Address subcontracting opportunities to perform scope of work; [5] Provided Past Performance history including several requirements similar in size and scope; [and 6] Provided a high confidence level and a pl an for recruiting, hiring, and retaining personnel.”).18 opposed adding the HelpDesk Services opportunity to the Procurement List and nowhere
in NTI’s motions before this C ourt does it dispute this finding.

Conclusion

NTI could have filed this prot est at least six months before it finally chose to do so. Instead, it opted to weigh the co st of litigation while pursuing its own means of resolution. By virtue of NTI’s delay, the Government an d Intervenors have incurred costs that could
have been avoided. The doct rine of laches precludes relie f to one who slumbers on his rights to the disadvantage of the other parties. Accordingly, NTI’s claims in this case are barred by the doctrine of laches.

In the context of a procurement protest, the APA’s standard permits this Court to set aside an agency’s procurement decision onl y where it lacked a rational basis or if the agency’s decision-making involved a viola tion of regulation or procedure. When evaluating a challenge on the first ground, a c ourt “must determine ‘whether the contracting agency provided a coherent and reasonable e xplanation of its exercise of discretion.” Axiom Res., 564 F.3d at 1381 (quoting Impresa, 238 F.3d at 1332-33). As the record demonstrates, SourceAmerica and the AbilityOn e Commission carefully considered each proposal before selecting Peckha m for this opportunity . By way of the nonprofit agencies’ responses to SSN 2333, SourceAmerica and the Commission evaluated the proposals according to each of the four re gulatory requirements within 41 C.F.R. § 51-2.4(a)(1)-(4). The evaluations, recommendations , and decisions contained in the administrative record are coherent and provide very reasonable explanations for awarding the op portunity to Peckham. Accordingly, the ag encies’ decision to add the Help Desk Services, as performed by Peckham, to the Procurement List was reasonabl e with a rational basis in fact and law.

When bringing a challenge “on the second ground, the disappointed bidder must show a clear and prejudicial violation of appli cable statutes or regulations.’” Axiom Res., 564 F.3d at 1381 (quoting Impresa, 238 F.3d at 1332-33). Despite NTI’s insistence to the contrary, the second evaluation team adhered to Ms. Ballard’s four guidelines throughout the posting process for SSN 2333. The agencies made their decision in accordance with both these procedural directives and the applicab le statutory regulations. As such, Plaintiff
NTI has failed to meet its burden of demonstra ting that this agency action was “arbitrary, capricious, an abuse of discretion, or otherwis e not in accordance with law.” 5 U.S.C. § 706(2)(A).

Based upon the foregoing, the Court DI SMISSES NTI’s claims as untimely, and alternatively GRANTS the Government’s and Intervenors’ Cross-Motions for Judgment
on the Administra tive Record.19 IT IS SO ORDERED.

s/Thomas C. Wheeler

THOMAS C. WHEELER Judge