Court Opinion

ID: 2677002
Source: CourtListenerOpinion
Date Created: 2014-06-04 12:00:39.96835+00
Date Added: 2024-06-11T13:11:13.485081
License: Public Domain

In the United States Court of Federal Claims
                                    No. 11-73C
                               (Filed June 3, 2014)
                             NOT FOR PUBLICATION

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B&B MEDICAL SERVICES, INC.,        *
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             Plaintiff,            *
                                   *
         v.                        *
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THE UNITED STATES,                 *
                                   *
             Defendant,            *
                                   *
         and                       *
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EAGLE HOME MEDICAL CORP.,          *
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             Defendant-Intervenor. *
                                   *
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                                      ORDER

WOLSKI, Judge.

       Pending before the Court is defendant’s motion to dismiss the complaint as
moot under Rule 12(b)(1) of the Rules of the Court of Federal Claims (RCFC).
Defendant argues that the complaint is moot because on January 8, 2014, the
Department of Veterans Affairs (VA) canceled the solicitation at issue in this case,
VA244-10-RP-0221 (the solicitation), and expects to reissue it on terms allowing
plaintiff to compete for an award. Def.’s Mot. to Dismiss (Def.’s Mot.) at 6–9.
Plaintiff B&B Medical Services, Inc. (B&B) argues that the case is not moot because
the government continues to misapply the non-manufacturer rule (NMR) and
because the new solicitation, under which B&B would be eligible to compete for an
award, has not yet been reissued. Pl.’s Resp. to Def.’s Mot. to Dismiss (Pl.’s Opp’n)
at 1–5.

      The solicitation was initially issued under solicitation number VA244-09-RP-
0252 as a small business set-aside under North American Industry Classification
System (NAICS) code 532291 --- a services code restricted to offerors with annual
receipts of $7 million or less. Admin. R. at 252. Plaintiff, which would not have
met that size standard, objected to this classification code and the contracting
officer changed the code to supply NAICS code 339112 --- a standard requiring 500
employees or fewer, which B&B met. Defendant-intervenor Eagle Home Medical
Corporation (Eagle Home) filed a size appeal with the Small Business
Administration’s (SBA) Office of Hearings and Appeals (OHA), and OHA
determined that the original NAICS code of 532291 was appropriate for the
procurement. See Eagle Home Med. Corp., SBA No. NAICS-5099, 2009 WL
5646459 (Dec. 11, 2009). Apparently relying on our court’s decision in Rotech v.
United States, 71 Fed. Cl. 393 (2006), the VA resisted complying with the OHA
ruling until Eagle Home’s subsequent protest concerning the matter was sustained
by the United States Government Accountability Office. See Admin. R. at 260, 265;
Eagle Home Med. Corp., B-402387, 2010 CPD ¶ 82 (Comp. Gen. Mar. 29, 2010).

        After the solicitation was reissued as number VA244-10-RP-0221, B&B filed
a bid protest in our court. The first count challenged as arbitrary the VA’s decision
to employ services code 532291, arguing that the solicitation’s incorporation of an
NMR provision from the Federal Acquisition Regulation (FAR), 48 C.F.R. § 52.212-
1, required instead the 500-employee size standard. Compl. ¶¶ 18–29. Two other
counts alleged that the VA and SBA arbitrarily selected the services code 532291
despite the relative predominance of supply items over service items. Id. ¶¶ 30–54.
A fourth count challenged the solicitation’s restriction to Historically Underutilized
Business Zone (HUBZone) establishments --- as, although B&B was such a concern,
see id. ¶ 2, under its interpretation of the NMR a HUBZone manufacturer would be
needed as the source of all supply items. Id. at 55–63.

       Two events subsequent to the filing of the complaint have made this case
moot. First, based on more current industry data, the SBA has increased the size
standard for small businesses under NAICS code 532291 to $30 million in annual
receipts. Small Business Size Standards: Real Estate and Rental Leasing, 77 Fed.
Reg. 58,747, 58,754 (Small Bus. Admin. Sept. 24, 2012). Plaintiff concedes that it
qualifies as a small business under this standard. See Pl.’s Opp’n at 3. Second,
market research conducted by the VA revealed that a HUBZone restriction was no
longer appropriate, and the VA canceled the solicitation so that it may be reissued
without such a limitation. See Def.’s Mot. at 4–6 & Ex. A.

       Plaintiff does not dispute that the HUBZone restriction will be lifted from the
procurement, see Pl.’s Opp’n at 1–6, nor does there seem to be any legitimate basis
for doubting this. Without question, that portion of the case is moot. But B&B
argues that its claim that the NMR takes precedence in determining the size
standard applicable to this type of procurement is not moot, and that it remains

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injured until a new solicitation issues under which it may compete for an award.
Id. at 3–5.

       The Court, however, cannot find this matter distinguishable from the
companion case which was dismissed as moot due to the upward revision of the
NAICS code 532291 size standard. See B&B Med. Servs., Inc. v. United States, 114
Fed. Cl. 658, 660–61 (2014). To the extent that plaintiff maintains that the
selection of NAICS code 532291 was improper, this impropriety no longer excludes
B&B from competition and no other injury has been alleged. See Compl. ¶¶ 29, 45,
54, 66. The OHA determination requires the VA to use NAICS code 532291 for this
procurement, see 48 C.F.R. § 19.303(c)(5), and the cancellation will enable the
current size standard (under which B&B may compete) to be used. Just as in the
other case brought by plaintiff, the necessary competitive injury to support our
jurisdiction did not rest on the government’s interpretation of the NMR alone, but
required interaction with a size standard under which plaintiff failed to qualify as
small. See B&B, 114 Fed. Cl. at 661. This element is now absent, with the increase
in the NAICS code 532291 size standard.

        Speculation that the requirements of the successor solicitation may change,
either by the choice of the VA or due to protests of other potential offerors --- or that
other procurements might exclude B&B unless its view of the NMR is vindicated ---
does not change things. We are now presented with an “abstract disagreement” and
not a “specific live grievance.” Lewis v. Cont’l Bank Corp., 494 U.S. 472, 479 (1990)
(citations omitted) (internal quotation marks omitted). Plaintiff’s controversy with
the government concerning its eligibility as an offeror is moot, and our subject-
matter jurisdiction is accordingly lost. B&B, 114 Fed. Cl. at 661. Dismissal under
RCFC 12(b)(1) is thus in order. See CBY Design Builders v. United States, 105 Fed.
Cl. 303, 328–29 (2012); Technical Innovation, Inc. v. United States, 93 Fed. Cl. 276,
278 (2010).

     For the reasons stated above, defendant’s motion to dismiss this case for
mootness is GRANTED. The Clerk shall close the case.

IT IS SO ORDERED.

                                         s/ Victor J. Wolski
                                         VICTOR J. WOLSKI
                                         Judge

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