Court Opinion

ID: 4655257
Source: CourtListenerOpinion
Date Created: 2021-01-28 14:01:45.434502+00
Date Added: 2024-06-11T08:00:09.564047
License: Public Domain

In the United States Court of Federal Claims
                                          BID PROTEST

                                                 )
    BTAS, INC.,                                  )
                                                 )
                        Plaintiff,               )     No. 20-1176C
                                                 )     (Filed Under Seal: January 21, 2021 |
          v.                                     )     Reissued: January 27, 2021) *
                                                 )
    THE UNITED STATES OF AMERICA,                )
                                                 )
                        Defendant.               )
                                                 )

Samuel S. Finnerty, PilieroMazza PLLC, Washington, DC, for Plaintiff. Patrick R. Rothwell,
Timothy F. Valley, Meghan F. Leemon, and Anna R. Wright, PilieroMazza PLLC, Washington,
DC, Of Counsel.

Sonia W. Murphy, U.S. Department of Justice, Civil Division, Commercial Litigation Branch,
Washington, DC, with whom were Douglas K. Mickle, Assistant Director, Robert E. Kirschman,
Jr., Director, Jeffrey Bossert Clark, Acting Assistant Attorney General, for Defendant.

                                     OPINION AND ORDER

KAPLAN, Judge.

        The General Services Administration (“GSA”) awarded plaintiff, BTAS, Inc. (“BTAS”),
a small business set-aside contract. After one of BTAS’s competitors filed a size protest with the
Small Business Administration (“SBA”), the SBA’s regional office and then its Office of
Hearings and Appeals (“OHA”) concluded that BTAS was ineligible to be treated as a small
business because BTAS’s average annual receipts over the preceding three years exceeded $38.5
million, the limit set forth in the applicable size standard.

        In this bid protest, BTAS contends that OHA’s ruling was inconsistent with law. It argues
that as a result of an amendment to the Small Business Act contained in the Small Business
Runway Extension Act of 2018, Pub. L. No. 115-324, 132 Stat. 4444 (“Runway Extension Act”),
the SBA was obligated to use a period of no less than five years to calculate BTAS’s average

*
  This opinion was originally issued under seal and the parties were given the opportunity to
request redactions. In a joint response, the parties notified the Court that they had no proposed
redactions and the opinion could be released in full.
annual receipts. It is undisputed that if a five-year rather than three-year period had been used,
BTAS’s average annual receipts would not have exceeded the $38.5 million ceiling.

        The government opposes BTAS’s claim on several grounds. First, it contends that BTAS
waived its argument that the Runway Extension Act required the SBA to use the longer
averaging period because BTAS did not raise it before the time for submitting offers had expired.
In any event, according to the government, the provision of the Small Business Act that was
amended by the Runway Extension Act, namely section 3(a)(2)(C)(ii), 15 U.S.C.
§ 632(a)(2)(C)(ii), does not apply to the SBA’s size standards but rather to alternative standards
that other agencies are statutorily permitted to issue subject to SBA approval. Further, according
to the government, even if section 3(a)(2)(C)(ii) were applicable here, the five-year averaging
period did not apply to offers submitted before January 6, 2020—the effective date of the final
rule the SBA ultimately issued, which adopted a five-year averaging period.

         For the reasons set forth below, the Court finds that the government’s waiver argument
lacks merit. It agrees, however, that section 3(a)(2)(C)(ii) does not impose limitations on the
SBA’s prescription of size standards; instead it applies to agencies and departments other than
the SBA that lack independent statutory authority to promulgate size standards. Moreover, even
if section 3(a)(2)(C)(ii) did apply to the SBA, the three-year averaging period required under
existing regulations remained in effect until the SBA—after providing notice and an opportunity
for public comment—amended its regulations to codify the five-year averaging period.
Therefore, the government’s motion for judgment on the administrative record is GRANTED,
ECF No. 22, and BTAS’s cross-motion is DENIED, ECF No. 21.

                                         BACKGROUND

I.     Statutory and Regulatory Overview

        Under section 3(a)(1) of the Small Business Act, “a small-business concern” is defined as
an enterprise “which is independently owned and operated and which is not dominant in its field
of operation.” 15 U.S.C. § 632(a)(1). Section 3(a)(2) of the Act, 15 U.S.C. § 632(a)(2), governs
the establishment of the criteria that determine which business concerns fall within this
definition.

        First, subparagraph (A) of § 632(a)(2) states in pertinent part that “the [SBA]
Administrator may specify detailed definitions or standards by which a business concern may be
determined to be a small business concern for the purpose of this chapter or any other Act.”
Subparagraph (B) further specifies that the standards that the SBA promulgates “may utilize
number of employees, dollar volume of business, net worth, net income, a combination thereof,
or other appropriate factors.” 15 U.S.C. § 632(a)(2)(B). 1

1
  In specifying that the SBA may consider number of employees, dollar volume, etc., to
determine whether a business is “small,” section 3(a)(2)(B) references “[t]he standards described
in paragraph (1).” 15 U.S.C. § 632(a)(2)(B). Although not especially material to the issues before
the Court, the reference to “paragraph (1)” appears to be an error. Paragraph (1) provides a
general definition of a “small-business concern.” It is actually subsection (a)(2)(A) and not

                                                  2
        Pursuant to its statutory authority under subparagraphs (A) and (B) of section 3(a)(2), the
SBA has issued regulatory “size standards” that “define whether a business entity is small and,
thus, eligible for Government programs and preferences reserved for ‘small business’ concerns.”
13 C.F.R. § 121.101(a). These “[s]ize standards have been established for types of economic
activity, or industry, generally under the North American Industry Classification System
(NAICS).” Id. The SBA’s size standards are generally based on either the number of employees
of the business or its annual receipts. 13 C.F.R. § 121.201; see also Palladian Partners, Inc. v.
United States, 783 F.3d 1243, 1247 (Fed. Cir. 2015).

        As the SBA’s regulations state, “[f]ederal agencies or departments promulgating
regulations relating to small businesses usually use SBA size criteria,” but may employ their own
standards in “limited circumstances” where “the SBA size standard is not suitable for their
programs.” 13 C.F.R. § 121.903(a). This option is subject to subparagraph (C) of section 3(a)(2),
which provides that federal agencies or departments that wish to employ their own size standards
must comply with certain statutory conditions. 15 U.S.C. § 632(a)(2)(C). Among other things,
they must secure the approval of the SBA Administrator through the regulatory procedures the
SBA has established, 15 U.S.C. § 632(a)(2)(C)(iii), see also 13 C.F.R. § 121.903(a)(5), and they
must provide notice of their proposed standards for public comment, 15 U.S.C. § 632(a)(2)(C)(i).

        In addition, subclause (II) of section 3(a)(2)(C)(ii) provides in pertinent part that
“[u]nless specifically authorized by statute, no Federal department or agency may prescribe a
size standard for categorizing a business concern as a small business concern, unless such
proposed size standard” “provides for determining . . . the size of a business concern providing
services on the basis of the annual average gross receipts of the business concern over a period of
not less than 5 years.” 15 U.S.C. § 632(a)(2)(C)(ii)(II). Significantly for the purposes of the
issues in this case, before the Runway Extension Act was signed into law in December of 2018,
the averaging period set forth in section 3(a)(2)(C)(ii)(II) of the Small Business Act was three
years. The Runway Extension Act directed that the number “5” be substituted for the number
“3.” Beyond that change, however, section 3(a)(2), including the remainder of subparagraph (C),
were unchanged.

II.    The Procurement

        GSA administers “One Acquisition Solution for Integrated Services—Small Business”
(“OASIS SB”), a multiple award, indefinite delivery/indefinite quantity contract program that
federal agencies and other entities can use to secure a variety of professional, scientific, and
technical services. Admin. R. (“AR”) Tab 30 at 3938, ECF No. 18; AR Tab 3 at 62, ECF No. 15.
GSA originally awarded contracts under the Solicitation—No. GS00Q-13-DR-0002—in 2014.
AR Tab 1 at 3, ECF No. 15. On April 29, 2019, GSA re-opened the Solicitation and added
approximately 160 additional contractors to the Pool 3 contract vehicle, which includes small
businesses that meet the size standard of $38.5 million under NAICS code 541330 (engineering
services). AR Tab 3 at 61–62, 268.30.

subsection (a)(1) that gives the SBA the authority to promulgate “detailed definitions or
standards” for determining whether a business concern is a small-business concern.

                                                 3
        On May 7, 2019, GSA held a presentation for potential offerors. See AR Tab 13 at 1163,
ECF No. 15. The presentation included a slide addressing the impact on the procurement of the
then only recently-enacted Runway Extension Act. Id. at 1269. GSA advised attendees that until
the SBA issued further direction, agencies would continue to use the three-year standard to
determine size status. Id.; see also AR Tab 7 at 643, ECF No. 15 (June 6, 2019 GSA response to
question regarding the applicability of the Runway Extension Act stating that “[t]he SBA has
released their response on this matter, which states that until the SBA issues further direction,
agencies will continue to use the previous standard of 3 years when determining size status”).
And GSA notified potential offerors that it “lack[ed] the authority to deviate from the SBA’s
current regulations, which specify a 3 year size standard, absent coordination and concurrence
from the SBA.” AR Tab 7 at 643 (Q&A 27); see also id. (Q&A 28); id. at 644 (Q&A 33); id. at
648 (Q&A 64); id. at 665–66 (Q&A 200).

       In the meantime, on June 24, 2019, the SBA issued a notice in the Federal Register
proposing that the three-year averaging period be changed to a five-year period. SBA Notice of
Proposed Rulemaking, 84 Fed. Reg. 29399 (June 24, 2019). In the notice, the SBA asserted that
the change was discretionary and not statutorily required. The SBA observed that it had long
been the agency’s position that the conditions set forth in section 3(a)(2)(C) of the Small
Business Act (including the minimum averaging period) do not apply to the SBA’s regulations,
which are issued pursuant to section 3(a)(2)(A) and (B). According to the SBA, it was proposing
to adopt the new five-year minimum averaging period “to promote consistency” with the size
standards other agencies issued under section 3(a)(2)(C). Id.

        On June 25, 2019, GSA issued Amendment 7 to the Solicitation. AR Tab 10 at 1102,
ECF No. 15. Among other things, the Amendment stated that “[c]onsistent with the terms of the
Solicitation regarding size status, GSA will not make determinations regarding the status of a
concern as a small business.” Id. at 1104. It further stated that “[s]hould matters concerning size
status representations arise, they will be referred to the SBA in accordance with FAR Subpart
19.3.” Id.

        Plaintiff BTAS, a woman-owned small business that provides information technology
services to federal agencies, submitted its offer the next day, on June 26, 2019. AR Tab 14b at
1339, 1357, ECF No. 16. Its offer included the required self-certification that it was a small
business concern and that it met the $38.5 million small business size standard specified in the
Solicitation. Id. at 1357. 2 On May 29, 2020, GSA issued a list of awardees for the OASIS SB
Pool 3 Contract. AR Tab 22 at 3064, ECF No. 18; AR Tab 24 at 3210, ECF No. 18. BTAS was
named as an awardee on the list. AR Tab 22 at 3065.

III.    The Size Protest Before the SBA

2
  Pursuant to the SBA’s regulations, an offeror’s size status is determined “as of the date the
[offeror] submits a written self-certification that it is small . . . as part of its initial offer.” 13
C.F.R. § 121.404(h); see also FAR 19.301-1(a) (discussing self-certification). After self-
certification, the qualifying business is “considered to be a small business throughout the life of
that contract.” 13 C.F.R. § 121.404(g).

                                                   4
         On June 1, 2020, an unsuccessful offeror for the OASIS SB Pool 3 procurement filed a
size protest with the SBA, challenging BTAS’s designation as a small business and therefore its
eligibility for an award under the terms of the Solicitation. AR Tab 27 at 3221, ECF No. 18; see
AR Tab 28 at 3492–93, ECF No. 18; see also 13 C.F.R. § 121.1001(a)(1). 3 The protester alleged
that BTAS was ineligible for an award because its average revenue over the three years
preceding the Solicitation was greater than $38.5 million. AR Tab 27 at 3225.

        On June 18, 2020, Area Office IV issued Size Determination No. 04-2020-027. AR Tab
30 at 3938–40. The Area Office found that—in accordance with the rule that the SBA issued in
final form on December 5, 2019—the new five-year averaging period would not apply to
proposals submitted before January 6, 2020. AR Tab 31 at 3940, ECF No. 18; see 84 Fed. Reg.
66561 (December 5, 2019). Because the SBA found that BTAS did not meet the $38.5 million
limit as calculated on the basis of its last three years of annual receipts, GSA removed BTAS
from its list of awardees for the Pool 3 contract. AR Tab 30 at 3938–40.

        BTAS appealed the Area Office’s decision to OHA. Size Appeal of BTAS, Inc., SBA
No. SIZ-6063, 2020 WL 5093292 (Aug. 11, 2020) (“Size Appeal”). On appeal, BTAS contended
that the Area Office’s decision was contrary to law to the extent that it was based upon the
SBA’s position that subsection (a)(2)(C)(ii)(II) of the Small Business Act does not apply to the
SBA. It also argued that the effect of the amendment to that provision contained in the Runway
Extension Act was to immediately nullify the then-existing regulation which provided for a
three-year averaging period.

         Expressly declining to address whether section 3(a)(2)(C) of the Small Business Act
applies to the SBA, OHA denied BTAS’s appeal. Relying on prior OHA precedent, 4 it rejected
BTAS’s argument that the three-year averaging period was immediately superseded and replaced
with a five-year period upon the enactment of the Runway Extension Act. Size Appeal at 12.
OHA reasoned that “the Runway Extension Act amended only a single sentence of the Small
Business Act, and the provision amended pertains specifically to the promulgation of size
standards, not to the methodology used to calculate the size of a particular business.” Id. at 11. In
addition, it agreed that the amendment “did not alter the requirements for notice-and-comment
rulemaking and approval by the SBA Administrator.” Id. at 12. Because new size standards “can
only be implemented by adhering to these requirements,” OHA concluded, there was no merit to
BTAS’s argument that the Runway Extension Act “overrule[d]” the SBA’s existing regulations.
Id. Therefore, OHA held, the applicable size standard at the time of BTAS’s self-certification
was based on the three-year averaging period and BTAS’s appeal was rejected. Id. at 13.

3
  An unsuccessful offeror in a procurement set-aside for small businesses may lodge a size status
protest. 13 C.F.R. § 121.1001(a)(1); FAR 19.301-1(b). Size protests are adjudicated by the
appropriate SBA Area Office. 13 C.F.R. § 121.1002; FAR 19.301-1(c); FAR 19.302(f)(1), (h).
The Area Office’s decision is subject to review by OHA, whose decision constitutes “the final
decision of the SBA.” 13 C.F.R. § 134.316(d).
4
  Size Appeal of Cypher Analytics, Inc. d/b/a Crown Point Systems, SBA No. SIZ-6022 (Aug.
27, 2019), Size Appeal of Advanced Technology Systems Co., SBA No. SIZ-6034 (Oct. 25,
2019), and Size Appeal of Diversified Protection Corp., SBA No. SIZ-6042 (Dec. 20, 2019).

                                                 5
IV.    This Action

       BTAS filed its bid protest here on September 10, 2020. ECF No. 1. It contends that the
SBA’s decision that a three-year averaging period must be used to determine whether BTAS’s
annual receipts were less than $38.5 million is contrary to law. The government filed the
administrative record on October 5, 2020, ECF No. 13, and on October 19, 2020, BTAS filed a
motion for judgment on the administrative record, ECF No. 21. The government filed its cross-
motion and response in opposition to Plaintiff’s motion on November 2, 2020. ECF No. 22. Oral
argument on the parties’ cross-motions was held via video conference on December 17, 2020. In
addition, at the Court’s request, the parties filed simultaneous supplemental briefs after oral
argument addressing the impact of the court of appeals’ decision in Boeing Co. v. United States,
968 F.3d 1371 (Fed. Cir. 2020) on the government’s waiver argument.

                                          DISCUSSION

I.     Subject Matter Jurisdiction

         The Court of Federal Claims has jurisdiction over bid protests in accordance with the
Tucker Act, 28 U.S.C. § 1491, as amended by the Administrative Dispute Resolution Act of
1996, 28 U.S.C. § 1491(b). That statute grants the Court the authority to “render judgment on an
action by an interested party objecting to . . . a proposed award or the award of a contract or any
alleged violation of statute or regulation in connection with a procurement or a proposed
procurement.” 28 U.S.C. § 1491(b)(1); see also Sys. Application & Techs., Inc. v. United States,
691 F.3d 1374, 1380–81 (Fed. Cir. 2012) (observing that § 1491(b)(1) “grants jurisdiction over
objections to a solicitation, objections to a proposed award, objections to an award, and
objections related to a statutory or regulatory violation so long as these objections are in
connection with a procurement or proposed procurement”). OHA determinations that an offeror
does not meet required size standards “are actions ‘in connection with a proposed procurement,’”
and thus “within the scope of jurisdiction granted under the Tucker Act.” Palladian Partners, 783
F.3d at 1254 (quoting 28 U.S.C. § 1491); see also Dorado Servs., Inc. v. United States, 128 Fed.
Cl. 375, 383 (2016) (explaining that SBA determinations regarding a business concern’s
eligibility for set-aside contracts are made “in connection with a procurement”).

        As required by the statute, a plaintiff must be an “interested party”—i.e., an actual or
prospective offeror—to have standing to invoke the Court’s bid protest jurisdiction. CGI Fed.
Inc. v. United States, 779 F.3d 1346, 1348 (Fed. Cir. 2015) (quoting 28 U.S.C. § 1491(b)(1));
Myers Investigative & Sec. Servs., Inc. v. United States, 275 F.3d 1366, 1369–70 (Fed. Cir.
2002). An interested party has standing if it has incurred “a non-trivial competitive injury” as a
result of alleged errors in the procurement. CGI Fed. Inc., 779 F.3d at 1351 (quoting Weeks
Marine Inc. v. United States, 575 F.3d 1352, 1361–62 (Fed. Cir. 2009)); see also Myers
Investigative & Sec. Servs., Inc., 275 F.3d at 1370 (holding that “prejudice (or injury) is a
necessary element of standing”).

                                                 6
        BTAS is an interested party and thus has standing to bring this protest. It submitted an
offer and was selected as an awardee for an OASIS Small Business Pool 3 contract, AR Tab 22
at 3065, and was therefore “an actual . . . bidder” with “a direct economic interest in the
procurement,” Distributed Sols., Inc. v. United States, 539 F.3d 1340, 1344 (Fed. Cir. 2008)
(citing Rex. Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006)). But for what it
alleges was the SBA’s erroneous determination, BTAS’s contract award would not have been set
aside. See Sys. Application & Techs., Inc., 691 F.3d at 1382 (finding standing where the awardee
suffered a “non-trivial competitive injury,” when the procuring agency deprived that awardee of
the contract). Thus, BTAS has standing to bring this protest.

II.    Standard for Granting Judgment on the Administrative Record

         Pursuant to Rule 52.1 of the Rules of the Court of Federal Claims (“RCFC”), the Court
reviews an agency’s procurement decision based on the administrative record. Bannum, Inc. v.
United States, 404 F.3d 1346, 1353–54 (Fed. Cir. 2005); see also 28 U.S.C. § 1491(b)(4) (stating
that “[i]n any action under this subsection, the courts shall review the agency’s decision pursuant
to the standards set forth in section 706 of title 5”). The court makes “factual findings under
RCFC [52.1] from the record evidence as if it were conducting a trial on the record.” Bannum,
Inc., 404 F.3d at 1357. Thus, “resolution of a motion respecting the administrative record is akin
to an expedited trial on the paper record, and the Court must make fact findings where
necessary.” Baird v. United States, 77 Fed. Cl. 114, 116 (2007), aff’d, 285 Fed. App’x 746 (Fed.
Cir. 2008) (citing A&D Fire Prot., Inc. v. United States, 72 Fed. Cl. 126, 131 (2006)). The
Court’s inquiry is thus “whether, given all the disputed and undisputed facts, a party has met its
burden of proof based on the evidence in the record.” A&D Fire Prot., Inc., 72 Fed. Cl. at 131
(citing Bannum, 404 F.3d at 1356).

III.   Standard of Review in Bid Protest Cases

        The Court reviews challenges to procurement decisions under the same standards used to
evaluate agency actions under the Administrative Procedure Act, 5 U.S.C. § 706 (“APA”). See
28 U.S.C. § 1491(b)(4) (stating that “[i]n any action under this subsection, the courts shall
review the agency’s decision pursuant to the standards set forth in section 706 of title 5”).
Therefore, in order to successfully challenge an agency’s procurement decision, a protestor must
show that the agency’s decision was “arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law.” 5 U.S.C. § 706(2)(A); see Bannum, Inc., 404 F.3d at 1351. This
“highly deferential” standard “requires a reviewing court to sustain an agency action evincing
rational reasoning and consideration of relevant factors.” Advanced Data Concepts, Inc. v.
United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000) (citing Bowman Transp., Inc. v. Ark.-Best
Freight Sys., Inc., 419 U.S. 281, 285 (1974)).

IV.    Waiver

        As noted, BTAS contends that the SBA committed legal error when it used a three-year
rather than five-year period to determine BTAS’s average annual receipts. The government
argues, however, that under the reasoning of Blue & Gold Fleet, L.P. v. United States 492 F.3d
1308, 1313 (Fed. Cir. 2007), BTAS waived its right to judicial review of this legal issue by

                                                 7
failing to file a protest with either GAO or this court before the Solicitation closed. See Def.’s
Mot. for J. on the Admin. R. and Opp’n to Pl.’s Cross-Mot. for J. on the Admin. R. at 19–20,
ECF No. 22; Def.’s Reply in Supp. of its Cross-Mot. for J. on the Admin. R. at 3–6, ECF No. 24.
        The government’s waiver argument lacks merit. Blue & Gold established a general rule
that to challenge the terms of a solicitation before this court, the protestor must raise its
objections before the solicitation closes. 492 F.3d at 1313; see also COMINT Sys. Corp. v.
United States, 700 F.3d 1377, 1382 (Fed. Cir. 2012). But in this case BTAS is not challenging
the terms of the Solicitation; it is appealing the size determination the SBA made after the award
decision in the context of a size protest filed by one of BTAS’s competitors.

        Indeed, the Solicitation expressly disclaims any role by GSA in size determination
matters. As noted above, Amendment 7 states that “GSA will not make determinations regarding
the status of a concern as a small business” and that “[s]hould matters concerning size status
representations arise, they will be referred to the SBA in accordance with FAR Subpart 19.3.”
AR Tab 10 at 1104. And while Amendment 4 advised prospective offerors of the SBA’s position
that agencies would continue to use a three-year period until the SBA issued further direction, by
so advising them GSA did not make the three-year period a term of the Solicitation; it merely
communicated to them the SBA’s views and intentions, as well as its own lack of authority on
the matter.

        Furthermore, the Court notes that because the appropriate averaging period is not
addressed in the Solicitation, and because it is the SBA in the first instance that has the exclusive
authority to make size determinations, it is difficult to see what relief the Court could have given
BTAS had it filed a protest before the Solicitation closed, as the government claims it was
required to do. Ordinarily, if the terms of a solicitation are defective, then the Court can preclude
an agency from proceeding with the procurement unless it corrects the defect. The point of the
Blue and Gold rule is that by correcting the defect before the solicitation period ends, the agency
can avoid spending time and resources evaluating proposals and making award decisions that
may have to be reversed because of defects in the Solicitation. See 492 F.3d at 1313
(“[r]ecognition of a waiver rule, which requires that a party object to solicitation terms during the
bidding process, furthers this statutory mandate” for the “‘expeditious resolution’” of bid
protests) (quoting 28 U.S.C. §1491(b)(3)). But here it would not have been efficient to have had
BTAS file an earlier protest because the party whose actions BTAS would have been protesting
would be GSA, which lacks the authority to make size determinations. No matter what GSA
stated in its Solicitation, an unsuccessful offeror would have the right to file a size protest with
the SBA after the award decision was made, leading us to the same place we are now. For that
reason, among others, the issue BTAS presses here would not have been ripe for review had
BTAS filed a pre-award protest as the government states it was required to do.

         Finally, the Court is cognizant of the fact that GAO considered two protests in this
procurement that were filed before the Solicitation closed and in which the protesters argued that
the Runway Extension Act required the use of a five-year averaging period to determine their
size status. TechAnax, LLC; Rigil Corp., 2019 CPD P 294, B-408685.22 (Comp. Gen. Aug. 16,
2019). GSA argued that GAO should dismiss the protests because GSA “issued the RFP based
on guidance provided by SBA, and because that guidance concerns matters within the exclusive
jurisdiction of SBA that [GAO] does not review as part of [its] bid protest function.” Id. at 3.

                                                 8
GAO rejected GSA’s argument, reasoning that “[a]lthough [it] w[ould] not review SBA’s
issuance or amendment of size standards, the protesters argue primarily that the effective date of
the Runway Extension Act applies to this solicitation.” Id. at 4. “Therefore,” GAO stated, it
would consider “whether the Runway Extension Act imposed requirements that obligated GSA
to include terms in the solicitation implementing the change to the number of years to be
considered in calculating a firm’s average revenue.” Id.

        Respectfully, the Court is not persuaded by the distinction GAO drew between “review
[of] SBA’s issuance or amendment of size standards” (which it acknowledges is outside of its
purview) and review of whether “the effective date of the Runway Extension Act applies to this
solicitation.” Id. at 4. In fact, the Court is not sure what it means for a statutory effective date to
“appl[y]” to a solicitation. Id. Moreover, because GAO ruled against the protesters, it was not
required to fashion corrective action for GSA to take as GAO would have if it had sustained the
protest. Requiring GSA to state in the Solicitation that the Runway Extension Act mandated the
use of a five-year averaging period would have been an empty promise, given that size
determinations are made by the SBA and not GSA.

        In short, the government’s waiver argument is unpersuasive. The Court turns, therefore,
to the merits of BTAS’s arguments.

V.      Merits

                 The SBA is not Subject to the Restrictions Contained at Section 3(a)(2)(C) of
                 the Small Business Act as Amended by the Runway Extension Act

         The first issue before the Court on the merits is whether section 3(a)(2)(C) of the Small
Business Act—which was amended by the Runway Extension Act—applies to the SBA’s
promulgation of standards for categorizing businesses as “small.” 15 U.S.C.
§ 632(a)(2)(C)(ii)(II). While OHA found it unnecessary to address the issue, in the Court’s view
this is a threshold question that should be addressed because answering it will determine whether
the Runway Extension Act has any bearing on this matter in the first instance.

        As described above, section 3(a)(2)(C) of the Small Business Act states in pertinent part
that “[u]nless specifically authorized by statute, no Federal department or agency may prescribe
a size standard for categorizing a business concern as a small business concern” unless the
proposed size standard meets certain requirements, including (as amended by the Runway
Extension Act) that the standard “provides for determining . . . the size of the business concern
providing services on the basis of annual average gross receipts of the business concern over a
period of not less than 5 years.” 15 U.S.C. § 632(a)(2)(C)(ii)(II).

       The SBA’s longstanding position is that section 3(a)(2)(C) does not apply to the size
standards the SBA promulgates, but rather to alternative size standards that other federal
agencies and departments propose to use, and which the SBA must approve. In the Court’s view,
the SBA’s interpretation is correct.

                                                   9
         “[T]he ‘starting point in every case involving construction of a statute is the language
itself.’” Gilead Scis., Inc. v. Lee, 778 F.3d 1341, 1347 (Fed. Cir. 2015) (quoting United States v.
Hohri, 482 U.S. 64, 69 (1987)). “The first step ‘is to determine whether the language at issue has
a plain and unambiguous meaning with regard to the particular dispute in the case.’”
Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336, 1346 (Fed. Cir. 2018)
(quoting Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450 (2002)). In making that determination,
the Court must read the words of a statute “in their context and with a view to their place in the
overall statutory scheme.” Applications in Internet Time, LLC, 897 F.3d at 1346 (quoting King
v. Burwell, 576 U.S. 473, 486 (2015)). “This is because statutory ‘[a]mbiguity is a creature not
[just] of definitional possibilities but [also] of statutory context.’” Id. (quoting Brown v. Gardner,
513 U.S. 115, 118 (1994)).

         According to the government, section 3(a)(2)(C)(ii)(II) of the Small Business Act does
not apply because the SBA is “specifically authorized by statute” to prescribe size standards that
are not subject to the limitations set forth in section 3(a)(2)(C), including the limitation imposed
by section 3(a)(2)(C)(ii)(II) as amended by the Runway Extension Act. The Court agrees with
this interpretation of the statute because section 3(a)(2)(A) provides the SBA with specific
authority to “specify detailed definitions or standards” for categorizing a business concern as
small. In addition, section 3(a)(2)(B) gives the SBA specific authority to employ a broad range
of relevant factors when crafting its standards, including “number of employees, dollar volume
of business, net worth, net income, a combination thereof, or other appropriate factors.” The
SBA, in short, is not bound by the limitations imposed by subparagraph (C) because its authority
to regulate is governed by subparagraphs (A) and (B). See also 15 U.S.C. § 634(b)(6) (giving the
SBA Administrator the authority to “make such rules and regulations as he deems necessary to
carry out the authority vested in him”).

        The Court is not persuaded by BTAS’s contention that the broad grant of regulatory
authority and discretion given to the SBA under subparagraphs (A) and (B) of section 3(a)(2) do
not supply “specific[] authoriz[ation]” to deviate from the limitations imposed by
section 3(a)(2)(C) because neither subparagraph (A) nor (B) expressly authorizes the SBA to
employ a three-year averaging period. 15 U.S.C. § 632(a)(2)(C). As noted, in interpreting
particular statutory language, the Court must read the language in context. In addition, the Court
is required to avoid interpreting one part of a statute in a way that makes another provision
inconsistent, meaningless, or superfluous. TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001). Under
section 3(a)(2)(C), federal agencies, unless specifically authorized to do so, may not prescribe
size standards unless they are “approved by the Administrator.” 15 U.S.C. § 632(a)(2)(C)(iii).
BTAS’s argument that section 3(a)(2)(C) applies to size standards issued by the SBA itself
renders the separate approval requirement superfluous.

        Indeed, a textual analysis reveals that section 3(a)(2) assigns the SBA two distinct sets of
responsibilities with respect to the prescription of size standards. Subparagraphs (A) and (B) give
the SBA the authority to establish standards and subparagraph (C) assigns the SBA the job of
approving the standards other agencies propose to establish. See also 15 U.S.C. § 632(a)(3)
(referring to the Administrator’s authority to “establish[] or approv[e] any size standard pursuant
to [section 3(a)(2)]”) (emphasis supplied).

                                                 10
        BTAS’s contention that its interpretation of the statutory language is supported by the
legislative history is equally unpersuasive. Thus, it cites the initial draft of section 3(a)(2)(C)
which was reported out by the Senate Committee on Small Business in 1994. That draft stated
that “[u]nless specifically authorized by statute, the Secretary of a department or the head of a
Federal agency, other than the Administrator of the Small Business Administration, may not
prescribe for the use of such department or agency a size standard for categorizing a business
concern as a small business concern, unless such proposed size standard . . . provides for
determining . . . the size of a concern providing services on [the] basis of the annual average
gross receipts of the concern over a period of not less than three years[.]” S. 2060, 103d Cong.
§ 507 (as reported by S. Comm. on Small Bus., Aug. 11, 1994) (emphasis supplied). BTAS
points out that the language “other than the Administrator of the Small Business
Administration[,]” was removed before the 1994 act was finalized. Compare id., with Small
Business Administration Reauthorization and Amendments Act of 1994, Pub. L. No. 103-403,
108 Stat. 4175. According to BTAS, this shows that in the end “Congress did not intend to
except SBA from also complying with, among other things, the 3 (now 5-year) period of
measurement outlined in [s]ection 3(a)(2)(C).” Pl.’s Reply in Supp. of its Mot. for J. on the
Admin. R. and Opp’n to Def.’s Cross-Mot. for J. on the Admin. R. at 15, ECF No. 23.

        The Court does not find this piece of legislative history especially illuminating. As the
Supreme Court has “repeatedly held, the authoritative statement is the statutory text, not the
legislative history or any other extrinsic material.” Exxon Mobil Corp. v. Allapattah Servs., Inc.,
545 U.S. 546, 568 (2005). That is because “legislative history is itself often murky, ambiguous,
and contradictory.” Id. “Judicial investigation of legislative history has a tendency to become, to
borrow Judge Leventhal’s memorable phrase, an exercise in ‘looking over a crowd and picking
out your friends.’” Id.

       The kind of history upon which BTAS relies is especially unreliable as an indicator of
Congressional intent. A change in the wording of a statutory provision after it is first reported out
of committee does not really reveal much of anything about the intent of the entire Congress
when it passed the final bill. Further, the implication BTAS draws from the change is not the
only one that might be drawn. It is entirely possible that sometime between the committee report
and the bill’s final passage it was decided by the drafters that the committee language explicitly
excepting the SBA from section 3(a)(2)(C) was redundant and therefore unnecessary.

       Moreover, the inference BTAS would have the Court draw based on this history is
undermined by language in the Senate Report on the final bill. It states that the purpose of the
1994 amendment was to “clarif[y] that a Federal Department or agency, other than the [SBA],
may issue a size standard set in terms of number of employees, average annual gross receipts, or
otherwise, only under certain conditions.” S. Rep. No. 103-332, at 13 (1994) (emphasis added).
“Those conditions,” the Senate Report explained, “are that the standard is set by rulemaking,
including a proposal and an opportunity for public comment, and that the SBA Administrator has
approved the standard.” Id.

       For similar reasons, the Court rejects BTAS’s reliance on language in the 2018 report of
the House Committee on Small Business concerning the Runway Extension Act, stating that
“H.R. 6330 lengthens the time in which the Small Business Administration (SBA) measures size

                                                 11
through revenue, from the average of the past 3 years to the average of the past 5 years.” H.R.
Rep. No. 115-939, at 2 (2018). It may well be that House Committee members who drafted the
report believed that by amending section 3(a)(2)(C) they would be mandating that the SBA adopt
at least a five-year average when prescribing its own standards (as opposed to merely mandating
that it not approve size standards proposed by other federal agencies that do not adopt that longer
averaging period). But if that were their intent, the language of the bill Congress ultimately
passed did not reflect it. And the floor statements BTAS cites to the same effect “rank among the
least illuminating forms of legislative history.” N.L.R.B. v. SW Gen., Inc., 137 S. Ct. 929, 943
(2017).

        Finally, even if the Court were to find the statutory language ambiguous, it would be
required to defer to the SBA’s interpretation of section 3(a)(2)(C) because it is based on a
“permissible” and reasonable interpretation of the statute. Chevron, U.S.A., Inc. v. Nat. Res. Def.
Council, Inc., 467 U.S. 837, 843 (1984). An agency’s interpretation of a statute it is charged with
administering need only be a reasonable one, and it is controlling “unless [it is] arbitrary,
capricious, or manifestly contrary to the statute.” Id. at 844; see Entergy Corp. v. Riverkeeper,
Inc., 556 U.S. 208, 218 (2009) (explaining that Chevron deference does not require that the
agency’s interpretation be “the only possible interpretation, nor even the interpretation deemed
most reasonable by the courts”).

       In this case, the SBA has long interpreted section 3(a)(2)(C) as inapplicable to the SBA’s
own standards. Indeed, it has reiterated this understanding of the statute in the Federal Register
dozens of times. SBA Notice of Proposed Rulemaking, 84 Fed. Reg. 29399-01 (June 24, 2019)
(“Since 2002, SBA has repeated this interpretation of section 3(a)(2)(C) in the Federal Register
52 times.”). Because the SBA’s interpretation of section 3(a)(2)(C) is at the very least a
reasonable one, the agency is entitled to Chevron deference.

       In short, section 3(a)(2)(C)(ii)(II) of the Small Business Act does not apply to size
standards that the SBA itself promulgates. Therefore, the SBA’s decision finding that it was
proper to apply a three-year period to determine BTAS’s average annual receipts was correct,
and BTAS’s protest must fail.

       B.      In Any Event, the Five-Year Averaging Requirement Contained in the
               Runway Extension Act Did Not Go into Effect Until the Change Was
               Published in Final Form After a Period of Notice and Comment

        BTAS argues that the Runway Extension Act was effective upon enactment and that it
immediately superseded the SBA’s existing regulation at 13 C.F.R. § 121.104(c)(1), which then
directed the use of a three-year averaging period to calculate a business concern’s annual
receipts. Pl.’s Mot. for J. on the Admin. R. at 7, ECF No. 21. For the reasons set forth above, the
Court is of the view that section 3(a)(2)(C)(ii)(II) of the Small Business Act as amended by the
Runway Extension Act is inapplicable to the SBA. But even if the Court were to find the
provision applicable, there is no merit to BTAS’s argument that the Runway Extension Act
amendment would have the effect of immediately superseding existing regulations.

                                                12
         As BTAS observes, the “general rule” is that “when a statute has no effective date . . . it
takes effect on the date of its enactment.” Johnson v. United States, 529 U.S. 694, 702 (2000)
(quoting Gozlon-Peretz v. United States, 498 U.S. 395, 404 (1991)). Therefore, BTAS is correct
that the Runway Extension Act became effective December 17, 2018. But acknowledging that
the amendment to the Small Business Act became effective on December 17, 2018 begs the
critical question of what effect the amendment had on the existing size standard regulations,
which used a three-year averaging period for annual receipts.

        The answer to this question cannot be, as BTAS argues, that the Runway Extension Act
immediately nullified the existing three-year averaging period and replaced it with a five-year
averaging period. Congress could not have intended that the new requirement imposed by the
amendment would immediately supersede the existing regulations because, for one thing, the
Runway Extension Act’s substitution of the number “5” for the number “3” was not self-
executing. As amended, section 3(a)(2)(C)(ii)(II) does not require that average annual receipts be
calculated on the basis of a specific time period (i.e., five years). Rather, assuming its
applicability to the SBA, its effect was to cabin the SBA’s discretion so that whatever averaging
period it chose would be at least five years long. To effect this new requirement, therefore, the
agency would necessarily have to promulgate new regulations.

        Moreover, the very section of the Small Business Act that the Runway Extension Act
amended (section 3(a)(2)(C)) prohibits agencies from prescribing new size standards unless they
are promulgated in final form after notice and an opportunity for public comment. 15 U.S.C.
§ 632(a)(2)(C)(i). The Runway Extension Act had no effect on this requirement. And
section 3(a)(6) of the Small Business Act similarly requires the SBA to use notice and comment
rulemaking “to revise, modify or establish size standards.” 15 U.S.C. § 632(a)(6).

        Further, had Congress intended the change in the averaging period to be implemented
immediately, it could have so indicated in the Runway Extension Act. But the Act did not direct
the SBA to promulgate interim regulations that would be immediately effective. To the contrary,
as noted, it amended a section of the statute that explicitly requires that notice and comment
rulemaking procedures be followed. And, although Congress has done so in other instances
under the Small Business Act, it did not set a deadline for the SBA to take administrative action
in the Runway Extension Act. See 15 U.S.C. § 632(a)(4)(A) (“Not later than 30 days after
January 6, 2006, the Administrator shall review the application of size standards established
pursuant to paragraph (2).”); National Defense Authorization Act for Fiscal Year 2017, Pub. L.
No. 114-328, 130 Stat. 2000 (“Not later than 180 days after the date of enactment of this Act, the
Administrator of the Small Business Administration . . . shall issue guidance pertaining to the
amendments made by this title to the Small Business Act and . . . shall provide notice and
opportunity for comment on such guidance for a period of not less than 60 days.”). 5

5
  See also Puerto Rico Oversight, Management, and Economic Stability Act, Pub. L. 114-187,
130 Stat. 549 (“The Administrator of the Small Business Administration shall issue regulations
to implement the amendment [to 15 U.S.C. § 632] not later than 90 days after the date of the
enactment of this Act.”); National Defense Authorization Act for Fiscal Year 2014, Pub. L. 113-
66, 127 Stat. 672 (“No later than 18 months after the date of the enactment of this Act, the
Administrator of the Small Business Administration shall promulgate any regulations necessary,

                                                 13
        Finally, for the reasons set forth above, the SBA is entitled to Chevron deference with
respect to this issue of statutory construction as well. Therefore, even assuming that the Runway
Extension Act were viewed as ambiguous as to this point, the SBA’s determination that new
regulations were required to effect the statutory change in the averaging period was reasonable
and must be sustained.

        In short, the Court concludes that the Runway Extension Act’s no less than five-year
averaging period was intended to be implemented through the promulgation of new regulations.
Until new regulations were prescribed, the existing regulations controlled. Assuming, therefore,
that the SBA’s regulatory authority is limited by the provision of the Small Business Act that the
Runway Extension Act amended, BTAS’s protest must still be rejected.

                                        CONCLUSION

        Based on the foregoing, BTAS’s motion for judgment on the administrative record, ECF
No. 21, is DENIED. The government’s cross-motion for judgment on the administrative record
and response in opposition to Plaintiff’s motion, ECF No. 22, is GRANTED. The Clerk is
directed to enter judgment accordingly. Each side will bear its own costs.

       IT IS SO ORDERED.

                                                     s/ Elaine D. Kaplan
                                                     ELAINE D. KAPLAN
                                                     Judge

and the Federal Acquisition Regulation shall be revised, to implement this section and the
amendments made by this section.”); National Defense Authorization Act for Fiscal Year 2013,
Pub. L. 112-239, 126 Stat. 1632 (“Not later than 180 days after the date of enactment of this part,
the Administrator of the Small Business Administration shall issue guidance with respect to the
changes made to the Small Business Act by the amendments in this subtitle, with opportunities
for notice and comment.”); National Defense Authorization Act for Fiscal Year 2006, Pub. L.
109-163, 119 Stat. 3136 (“Not later than 45 days after the date of enactment of this Act, the
Administrator of the Small Business Administration shall promulgate final rules to carry out this
section and the amendments made by this section.”).

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