Court Opinion

ID: 5118761
Source: CourtListenerOpinion
Date Created: 2021-10-15 17:01:55.839104+00
Date Added: 2024-06-11T08:22:09.428735
License: Public Domain

In the United States Court of Federal Claims
                                         No. 21-1647C
                                   Filed: September 30, 2021
                                  Reissued: October 15, 2021 †

    ACCELGOV, LLC,

                    Plaintiff,

    v.

    THE UNITED STATES,

                    Defendant,

    and

    UNITED SUPPORT SERVICES, INC.,

                   Intervenor-Defendant.

W. Brad English, Jon D. Levin, Emily J. Chancey, Joshua B. Duvall, and Nicholas P. Greer,
Maynard, Cooper & Gale, P.C., Huntsville, Alabama, for Plaintiff.

Catherine M. Parnell, Trial Attorney, Douglas K. Mickle, Assistant Director, Martin F. Hockey,
Jr., Acting Director, Commercial Litigation Branch, Brian M. Boynton, Acting Assistant
Attorney General, Civil Division, U.S. Department of Justice, Washington, D.C., with John
McHugh, Office of General Counsel for the U.S. Marine Corps, of counsel, and William Gery,
Small Business Administration, Of Counsel, for Defendant.

Richard B Oliver, J. Matthew Carter, Meghan D. Doherty, and Dinesh C. Dharmadasa,
Pillsbury Winthrop Shaw Pittman LLP, Los Angeles, California, for Intervenor-Defendant.

†
  This Opinion was filed under seal. On October 14, 2021 the parties filed a joint notice
proposing redactions of protected information. (ECF No. 62). This public version reflects those
redactions.
                         MEMORANDUM OPINION AND ORDER

TAPP, Judge.

        AccelGov, LLC (“AccelGov”) brings this pre-award protest to challenge the United
States Marine Corps’ (“USMC”) award of a sole-source bridge contract to United Support
Services, Inc. The case presents three core issues. The first is whether the Marine Corps
“expressed publicly a clear intent to award” a small business set-aside contract. The second is
whether the bridge contract is a “new requirement” requiring the Small Business Administration
(“SBA”) to perform an adverse impact analysis. The third issue is whether the Marine Corps’
selection process itself was arbitrary and capricious.

        The Court finds that the clear disclaimer in the sources sought notice controls, and that
notice does not demonstrate a clearly expressed public intent to conduct a procurement. The
Court also finds that the bridge contract was not a new requirement, therefore, the SBA was
required to perform an adverse impact analysis. It failed to do so. Accordingly, the Court
remands this matter to the SBA to perform an adverse impact analysis as required by 13 C.F.R. §
124.504. Finally, the Court finds that the Marine Corps is entitled to discretion in the
procurement process, and its selection of United Support Services was not irrational, arbitrary, or
capricious.

        Accordingly, the Court DENIES AccelGov’s Motion for Judgment on the Administrative
Record with respect to Counts I and III. The Court GRANTS the United States’ and United
Support Services’ cross-motions for judgment on the Administrative Record with respect to
Counts I and III. The Court REMANDS Count II for further consideration by the SBA
consistent with this opinion.

                                       I.   Background

         AccelGov’s challenge avers that the Marine Corps’ decision to utilize the Small Business
Act’s Section 8(a) Business Development Program to award the bridge contract was irrational,
arbitrary, capricious, and contrary to law. AccelGov raises three primary arguments: (1) the
Marine Corps could not have lawfully utilized the 8(a) Program because the Marine Corps
expressed a prior intent to award the bridge contract as a small business set-aside; (2) the bridge
contract requirements were not “new” and therefore, even if an 8(a) Program award was lawful,
the SBA was first required to perform an adverse impact analysis, but it did not do so; and (3) in
evaluating whether United Support Services was “suitable” and “eligible” for an 8(a) Program
award, the Marine Corps acted arbitrarily and capriciously. Before diving into the merits of
AccelGov’s arguments, it is necessary to explain why the bridge contract was necessary in the
first place.

       To explain how AccelGov fits into this narrative, it is important to know that AccelGov is
a mentor-protégé joint venture between AgovX, LLC and 22nd Century Technologies (“22nd
Century”). (Am. Compl. ¶ 5, ECF No. 28). In March 2016, the Marine Corps awarded task order
N0017811D6410-MU61 (the “Incumbent Contract”) to 22nd Century. (Administrative Record

                                                 2
(“AR”) at 3, ECF No. 24). 1 The Incumbent Contract was an information technology (“IT”)
support services contract for the Marine Corps’ Facilities Services Branch primarily performed at
a Marine Corps installation in Kansas City, Missouri. (AR 2). That installation supports several
IT systems, including the Marine Corps’ Food Management Information System, CLWATER,
USMCmax, and GEOFidelis. (AR 8). These systems support services such as menu preparations
for Marine Corps installations across the United States, notifications to individuals who may be
affected by contaminated water at Camp Lejune in North Carolina, facility maintenance
operations at installations worldwide, and public utilities monitoring operations. (Decl. of R.
Thompson at 5–6, ECF No. 33-2). The Marine Corps designated the Incumbent Contract as a set-
aside for small businesses. (Am. Compl. at ¶ 8). The Incumbent Contract contained a period of
performance from March 2016 through January 19, 2021 and was valued at approximately $39
million. (AR 3). Under FAR § 52.217-8, the Marine Corps exercised its option to extend that
period to July 19, 2021.

        In October 2020, needing to prepare for the Incumbent Contract’s expiration, the Marine
Corps issued Solicitation No. M95494-21R-3000 (the “RFP”) to procure follow-on IT services.
(AR 3, 12, 13, 480). The RFP was designated as a 100% small business set-aside contract with a
performance period of five years (inclusive of options) and a total value of approximately $37
million. (AR 12, 13, 23, 477). 22nd Century asserts that as of October 2020, it could no longer
certify as a small business and thus was ineligible to bid as a prime contractor. (Am. Compl. ¶
10). Instead, FreeAlliance.com, LLC (“FreeAlliance”) responded to the RFP and proposed 22nd
Century as a subcontractor. (AR 478; Compl. Ex. A at A10, ECF No. 1-2).

        The Marine Corps reviewed eighteen offers in two phases. (AR 114, 478). In Phase I, the
Marine Corps evaluated proposals’ adherence to the RFP’s submission instructions; non-
compliant proposals were eliminated. (AR 114). In Phase II, the Marine Corps evaluated offers
based on a ranked five-factor best value tradeoff. (AR 114–15). FreeAlliance was eliminated in
Phase I for submitting a proposal that exceeded the RFP’s page limits. (AR 490–91). The Marine
Corps awarded the follow-on contract to Arrowpoint Corporation (“Arrowpoint”) in June 2021. 2
(AR 477). In early July, the Marine Corps debriefed the unsuccessful offerors. (AR 1204). After
that debriefing, on July 9, the Contracting Officer notified the Marine Corps Systems Command
that the award to Arrowpoint was likely to face protests. (AR 1203–04). Several days later,
Marine Corps Systems Command informed the Contracting Officer that it had already exercised
its extension options under FAR § 52.217-8 and no further extensions were available. (AR
1203). This was concerning to the Marine Corps, as the Incumbent Contract was scheduled to
expire on July 19.

          On or about July 15, United Support Services, FreeAlliance, and one other unsuccessful

1
  The Administrative Record in this case spans several docket entries, but the Court will simply
refer to the Record by its consecutive pagination in the bottom righthand corner. The bulk of the
record can be found at ECF No. 24. (AR 1–877). Some documents can be found in ECF No. 43-
1. (AR 878–1201). Finally, some documents were produced pursuant to the Court’s Order
Granting AccelGov’s Motion to Complete. (ECF No. 46–1 containing AR 1202–1211).
2
    All dates hereinafter refer to the year 2021 unless otherwise noted.

                                                   3
offeror filed protests of the RFP with the Government Accountability Office (“GAO”), thereby
triggering a statutory 90-day stay of performance and a stop work order from the Marine Corps.
(AR 692, 787, 563, 674). The next day, the Contracting Officer notified several companies—
including 22nd Century—of the protest, the stop work order, and most importantly, that the
Marine Corp would be issuing a Request for Information regarding the services procured through
the RFP. (AR 562–63). The following day, July 17, United Support Services notified the
Contracting Officer that it was eligible for an 8(a) sole-source award and capable of responding
to a sole-source RFP within 24 hours. (AR 1209).

       On July 19, the Contracting Officer distributed Sources Sought Notice No. M95494-
MR21-20 (the “RFI”) to six companies, including 22nd Century, Arrowpoint, and United
Support Services (but not FreeAlliance or AccelGov). (AR 572, 562, 564, 566, 568, 571). The
RFI explicitly stated that it was intended for informational purposes only, not a commitment to
make a contract award:

          This Sources Sought is for informational purposes only. This is not a Request
          for Proposal. It does not constitute a solicitation and shall not be construed as
          a commitment by the Government. Responses in any form are not offers and
          the Government is under no obligation to award a contract as a result of this
          announcement. No funds are available to pay for preparation of responses to
          this announcement. Any information submitted by respondents to this notice
          is strictly voluntary.

(AR 572 (capitalization altered)). The RFI also stated that “[t]he Government anticipates
awarding a . . . Bridge Contract to support” the Marine Corps installation in Kansas City,
Missouri. (AR 572). The RFI anticipated a one-month base period with three one-month option
periods. (Id.).

        Six companies responded: (1) 22nd Century; (2) AccelGov; (3) Arrowpoint;
(4) FreeAlliance; (5) LinTech Global, Inc.; and (6) United Support Services. (AR 640, 646, 650,
657, 662, 668). In a memorandum to the file, dated July 22, the Contracting Officer noted that
based on his review of the six responses, “more than one source is available to meet the
requirements of the bridge contract and therefore the USMC cannot meet the exception for full
and open competition at FAR 6.302-1, only one responsible source.” (AR 674–75).

       On July 21, after business hours, 22nd Century and FreeAlliance each filed complaints
challenging the anticipated sole-source award (though one had not been publicly announced).
(Case Nos. 21-1598 & 21-1599). On July 23, the SBA sent the Contracting Officer an “SBA 8(a)
Search letter” regarding the contemplated four-month bridge contract. (AR 676–77, 1205).
Notably, in that letter, three times the SBA identified the contemplated four-month bridge
contract as a “follow-on” to the Incumbent Contract. (AR 677).

       On July 27, the Contracting Officer notified the six firms who responded to the RFI that
the Marine Corps had determined “not to proceed with making an award based upon the
requirements as stated within the [RFI].” (AR 679–91). That same day, the Contracting Officer
requested authorization to issue a bridge contract award to United Support Services consisting of
a six-month base period, a three-month option period, and a thirty-day option period. (AR 692).

                                                 4
The Marine Corps valued the bridge contract at approximately $3.5 million. (AR 692). The
Contracting Officer sought agency approval to issue the bridge contract award as a sole-source
award through the 8(a) Program. (AR 698–700). That request explained that four 8(a)-eligible
companies expressed interest by submitting offers in response to the October 2020 RFP and only
one—United Support Services—submitted a proposal that was evaluated as part of Phase II. (AR
699). Additionally, the Contracting Officer submitted a memorandum to the file dated July 27
documenting his decision to make a sole-source award under the 8(a) Program. (AR 770). The
Contracting Officer further informed United Support Services’ SBA representative that the
Marine Corps would offer United Support Services a sole-source award of the bridge contract
pending approval of the Contracting Officer’s request for authorization. (AR 695–96). On July
30, via email, the Marine Corps sent United Support Services a letter titled “Request for
Proposals Under Contract M95494-21-C-0025” which enclosed a draft contract for the IT
support services bridge contract. (AR 878).

        AccelGov filed this protest on August 2 and simultaneously moved for a preliminary
injunction to prevent a sole-source award. (Compl, ECF No. 1; Mot. for PI, ECF No. 3). That
same day, the Contracting Officer drafted a second memorandum to the file—styled as an
addendum—further explaining the Marine Corps’ selection of United Support Services for an
8(a) sole-source award. (AR 874). The Contracting Officer stated that the award qualified for the
8(a) Program because the contract was valued at less than $4.5 million. (AR 874 (citing 13 CFR
§ 124.506(a)). The Contracting Officer explained that in reviewing known 8(a) companies in the
market, the Marine Corps “focused” on three factors, including whether companies: (1) had “the
technical capabilities to execute the requirement immediately;” (2) an accounting system
“approved for a cost reimbursable contract” paired with “fair and reasonable” pricing; and (3)
whether “[t]he 8(a) company is a responsible Offeror in accordance with [48 C.F.R. § 19.800 et
seq.].” (AR 874). In identifying the known 8(a) companies that performed the type of work
sought, the Contracting Officer noted AccelGov did not submit a proposal in response to the RFP
and FreeAlliance’s proposal was deemed “unacceptable” in Phase I and thus was not evaluated
in Phase II. (AR 874–75). The Contracting Officer then considered each company relative to the
three factors identified—technical capability, cost/price, and responsibility. (AR 875–76).

        In considering AccelGov, the Contracting Officer “relied on the four (4) page RFI
response[,]” which he deemed technically acceptable. (AR 875). However, the Contracting
Officer caveated that AccelGov’s response “did not contain a wealth of information on which the
[Marine Corps] could determine that [AccelGov] would be able” to execute the requirement
“with no worse than moderate performance risk.” (Id.). The Contracting Officer added that while
it lacked familiarity with AccelGov’s teaming arrangement involving 22nd Century, its
unfamiliarity “did not have an overall impact on the [Marine Corps’] technical assessment.” (AR
875). 3 With respect to the cost/price factor, the Contracting Officer stated that AccelGov “did not

3
  AccelGov takes issue with the credibility of this assertion. (Pl.’s MJAR at 11–12, ECF No. 47).
The Court is sympathetic—AccelGov identified by name the 22nd Century employees who
would perform the required work. (AR 648). Additionally, 22nd Century had been performing
the required work for five years at the facility in question which, lest the Marine Corps forget,

                                                 5
address whether it [had] an approved accounting system, which is a requirement for a cost
reimbursement contract.” (AR 875).

        In considering FreeAlliance’s technical capabilities, the Contracting Officer stated that
the Marine Corps “would have to evaluate the technical proposal volume submitted in response
to [the RFP,]” but did not have the time or personnel to conduct that evaluation under the
circumstances. (AR 875–76). Similarly, the Contracting Officer stated that while FreeAlliance
utilized an accounting system approved by the Defense Contract Audit Agency, the Marine
Corps did not have the time and resources to evaluate FreeAlliance’s price reasonableness. (AR
876).

        The Contracting Officer evaluated United Support Services’ RFP response finding it
acceptable in Phase I and “acceptable” or better for all four Phase II non-price factors. (AR 876).
The Marine Corps also looked to United Support Services’ RFI response, finding the company
capable of beginning performance within five days. (AR 876). The Contracting Officer further
found that                                                                         . (AR 876).
Finally, with respect to responsibility, the Contacting Officer noted that the SBA had endorsed
United Support Services for an 8(a) Program award of the bridge contract. (AR 876).

        The United States filed the Administrative Record on Friday, August 6. On August 8,
armed with the agency’s record, AccelGov renewed its motion for preliminary injunctive relief
and also sought a temporary restraining order (“TRO”). (Mot. for TRO, ECF No. 29). The
Marine Corps awarded the bridge contract to United Support Services on August 9. (AR 1117).
The Court denied AccelGov’s motions, citing credible national security concerns that weighed
against an injunction. AccelGov, LLC v. United States, No. 21-1647C, __ Fed. Cl. ___, 2021 WL
3578694 (Aug. 13, 2021). The Court’s decision explicitly did not address the merits of
AccelGov’s claims. Id. The parties have filed cross-motions for judgment on the administrative
record and the Court has heard oral argument. This matter is now fully briefed and ripe for a
decision on the merits.

                                        II.    Analysis

        Where, as here, the parties have filed cross-motions for judgment on the administrative
record, RCFC 52.1 provides a procedure for parties to seek the equivalent of an expedited trial
on a “paper record, allowing fact-finding by the trial court.” Bannum, Inc. v. United States, 404
F.3d 1346, 1356 (Fed. Cir. 2005). Unlike summary judgment standards, genuine issues of
material fact do not preclude a judgment on the administrative record. Id. at 1355–56. Questions
of fact are resolved by reference to the administrative record. Id. at 1356.

       As previewed above, AccelGov challenges the Marine Corps’ decision to make an 8(a)
sole-source award. (Pl.’s MJAR at 12, 14, ECF No. 47). AccelGov seeks an order declaring the
sole-source award unlawful and ordering that the Marine Corps be permanently enjoined from

AccelGov, FreeAlliance, and 22nd Century all noted in their responses to the RFI. (AR 642, 646,
658). This statement is disturbing as it appears aimed at disadvantaging 22nd Century and its
business associates.

                                                 6
allowing performance under the award. (Id. at 31). When presented with a challenge to a
procurement award, “[t]he task of the reviewing court is to apply the appropriate [Administrative
Procedure Act] standard of review, 5 U.S.C. § 706, to the agency decision based on the record
the agency presents to the reviewing court.” Fla. Power & Light Co. v. Lorion, 470 U.S. 729,
743–44 (1985); 28 U.S.C. § 1491(b)(4) (citing 5 U.S.C. § 706 (the “APA”)).

         Under the APA standard, “[i]n a bid protest case, the inquiry is whether the agency’s
action was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law
and, if so, whether the error is prejudicial.” Glenn Def. Marine (ASIA), PTE Ltd. v. United States,
720 F.3d 901, 907 (Fed. Cir. 2013). Thus, judicial review of agency action under the APA
proceeds on two tracks: (1) the Court might find that the agency’s decision lacked either a
rational basis or support from the administrative record or was arbitrary and capricious; and/or
(2) the Court could find the agency’s procurement procedure involved a regulatory or statutory
violation. Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1358 (Fed. Cir. 2009). To obtain
relief, even if the protestor shows that the procuring agency violated the law, it must also show
that the agency’s violation was prejudicial to the protestor. Glenn Def. Marine, 720 F.3d at 907;
see also Veterans4You LLC v. United States, 985 F.3d 850, 857 (Fed. Cir. 2021). In reviewing
sole-source awards, the same APA standard of review applies. Emery Worldwide Airlines, Inc. v.
United States, 264 F.3d 1071, 1086 (Fed. Cir. 2001) (“Identical review standards apply under the
APA in the context of a sole-source award.”).

         AccelGov first argues that the award was contrary to 13 C.F.R. § 124.504(a) because the
Marine Corps previously expressed clear public intent to award the requirements as small
business set-aside. (Am. Compl. ¶¶ 29–34 (Count I); Pl.’s MJAR at 14–19). Second, AccelGov
contends that the SBA failed to perform an adverse impact analysis required by 13 C.F.R. §
124.504(c). (Am. Compl. ¶¶ 35–41 (Count II); Pl.’s MJAR at 19–22). Third, AccelGov alleges
that the Marine Corps failed to evaluate offerors’ capabilities consistent with the Competition in
Contracting Act (“CICA”) as it applies to defense agencies. (Am. Compl. ¶¶ 41–52 (Count III);
Pl.’s MJAR at 22–25 (citing 10 U.S.C. § 2304(a)(1)(A)). The Court will address each argument
in turn.

       A. The Marine Corps did not publicly express clear intent to award the bridge contract
          requirements as a small business set-aside.

        AccelGov argues that the Marine Corps’ requirements here are ineligible for the 8(a)
Program because the Marine Corps publicly demonstrated prior intent to award those
requirements as a small business set-aside. (Am. Compl. Count I; Pl.’s MJAR at 14). AccelGov
points to 13 C.F.R. § 124.504, entitled in part, “What circumstances limit SBA’s ability to accept
a procurement for award as an 8(a) contract[?]” That regulation states that the “SBA will not
accept a procurement for award as an 8(a) contract” if the “procuring activity issued a
solicitation for or otherwise expressed publicly a clear intent to award the contract as a small
business set-aside[.]” § 124.504(a). AccelGov argues that the RFI combined with the Marine
Corps’ internal communications and deliberations demonstrate that clear public intent, making
an 8(a) award unavailable. (Pl.’s MJAR at 15). AccelGov further argues that the Marine Corps

                                                 7
used a NAICS Code 4 in the RFI to limit its scope to a single responsible offeror. (Id.). AccelGov
urges the Court to compare the RFI to the 8(a) Notice of Award and find that the instruments
contain the exact same requirements. (Id. at 17).

        In response, the United States points out that the Marine Corps knows how to express
clear intent to award a procurement as a small business set-aside, as demonstrated by the
language of the RFP. (USA xMJAR at 15, ECF No. 51). The United States argues that not only
did the RFI explicitly state the Marine Corps did not intend to award a contract, but also that the
FAR prohibits the use of RFI responses to form a contract. (Id. (citing 48 C.F.R. § 15.201(e)
(“RFIs may be used when the Government does not presently intend to award a contract, . . ..
Responses to these notices are not offers and cannot be accepted by the Government to form a
binding contract.”))).

        The Court agrees with the United States. The FAR identifies several purposes of RFIs.
First, contracting activities may use them to “obtain price, delivery, other market information, or
capabilities for planning purposes.” § 15.201(e). Second, RFIs promote “early exchanges of
information about future acquisitions.” § 15.201(c). The benefits of this exchange are
multifaceted; an RFI may:

          [I]dentify and resolve concerns regarding the acquisition strategy, including
          proposed contract type, terms and conditions, and acquisition planning
          schedules; the feasibility of the requirement, including performance
          requirements, statements of work, and data requirements; the suitability of
          the proposal instructions and evaluation criteria, including the approach for
          assessing past performance information; the availability of reference
          documents; and any other industry concerns or questions.

48 C.F.R. § 15.201(c).

       In this case, the record reflects that the Marine Corps used the RFI for those information-
gathering purposes. The Marine Corps issued the RFI with clear instructions:

          This Sources Sought is for informational purposes only. This is not a Request
          for Proposal. It does not constitute a solicitation and shall not be construed as
          a commitment by the Government. Responses in any form are not offers and
          the Government is under no obligation to award a contract as a result of this
          announcement. No funds are available to pay for preparation of responses to
          this announcement. Any information submitted by respondents to this notice
          is strictly voluntary.

4
 The North American Industry Classification System (“NAICS”) was developed by the Office
of Management and Budget and is the standard used by federal statistical agencies in classifying
business establishments to collect, analyze, and publish statistical data related to the United
States’ economy. North American Industry Classification System, U.S. CENSUS BUREAU,
https://www.census.gov/naics/ (last accessed October 15, 2021).

                                                 8
(AR 572 (capitalization altered)). This plain language clearly communicated that the Marine
Corps was only seeking to gather information, and responding parties should not try to read
between the lines in other parts of the notice.

        It is true that the RFI indicated that the Marine Corps was only seeking information from
businesses with a standard size of $16.5 million under NAICS code 541330 – Engineering
Services. (AR 572). The response instructions directed parties to indicate whether their business
fit within that code. (AR 573). But these limitations are still part of the information-gathering
function of the RFI. In this context, agencies are not limited to what types of information they
can seek using an RFI—the agency can instruct parties to respond with whatever information the
agency desires.

        In SKC, LLC v. United States, 136 Fed. Cl. 605 (2018), the court emphasized that a
disclaimer such as the one the Marine Corps included in the RFI, when publicly available to the
parties, controls as to the government’s expression of intent. In that case, the protestor argued
that the agency distributed detailed documents at an industry day event signaling the agency
intended to make a contract award for the requirements described. Id. at 612. The court rejected
the protestor’s argument, stating the disclaimers in the distributed documents—that the event
was for informational purposes only—“conveyed the very lack of explicit intent to be bound by
the specifics of the communication[.]” Id. at 613.

        The same is true of the RFI in this case. The disclaimer is the clearest expression of the
Marine Corps’ intent not to be bound to award a contract under the requirements described
therein. AccelGov states that the Marine Corps began drafting a Justification and Approval
document to support a sole-sourced small business set-aside award. (Pl.’s MJAR at 15).
AccelGov believes that this document demonstrates that the Marine Corps was in fact seeking to
issue an award based on the RFI requirements. (Id.). Whatever the Marine Corps’ internal
documents may show, those are not “publicly expressed” intentions of the government. By
definition, they do not raise the interference of a publicly expressed intent contrary to what is
encapsulated in the RFI.

         Finally, the Court recognizes that it is no coincidence that the RFI refers to requirements
that, in all ways meaningful, are identical to the Marine Corps’ eventual sole-source award to
United Support Services. (Compare AR 578–90 (RFI Performance Work Statement) with AR
714–18 (8(a) Performance Work Statement)). But that similarity in scope of work does not
negate the very clear intent expressed in the RFI’s disclaimer. The proper focus of the Court’s
inquiry is whether, when the sole-source award was issued, the Marine Corps expressed a prior
clear intent to make a small business set-aside award. The RFI simply does not demonstrate that
clear intent on its face.

        In summary, the RFI does not demonstrate a publicly expressed clear intent to award the
IT services bridge contract as a small business set-aside. Therefore, an 8(a) sole-source award
was not precluded by 13 C.F.R. § 124.504(a).

                                                  9
       B. The SBA failed to perform an adverse impact analysis required by 13 C.F.R.
          §124.504 and thus the Marine Corps’ award decision lacks support in the
          Administrative Record.

         AccelGov argues that the Marine Corps’ 8(a) sole-source award was not a “new
requirement,” but rather a follow-on to the Incumbent Contract and the RFP. (Am. Compl. Count
II; Pl.’s MJAR at 20). Consequently, AccelGov argues, the SBA was required to perform an
adverse impact analysis but failed to do so. (Id.). Therefore, AccelGov’s argument goes, the
SBA’s acceptance of the Marine Corps’ requirements violated 13 C.F.R. § 124.504(c), and
consequently, the Marine Corps’ procurement decision lacks support in the Administrative
Record. (Id.). The Court agrees that the requirements were not new, and the SBA failed to
perform an adverse impact analysis required by 13 C.F.R. § 124.504. Consequently, because the
Marine Corps relied on the SBA’s endorsement to issue an 8(a) award, that award decision lacks
support in the Administrative Record.

               i. The 8(a) Bridge Contract is not a “new requirement” thus, the SBA’s failure
                  to perform an adverse impact analysis as required by 13 C.F.R § 124.504.

         To protect small business concerns outside of the 8(a) Program, the SBA is required to
make a “written determination” as to whether “acceptance of the procurement for [an] 8(a) award
would have an adverse impact on an individual small business, a group of small businesses
located in a specific geographical location, or other small business programs.” 13 C.F.R.
§ 124.504(c). But the SBA need not perform an adverse impact determination where a “new
requirement” is offered to the 8(a) Program. § 124.504(c)(1)(ii)(D). “New requirement” is a term
of art, and the regulations provide some guidance as to what requirements the SBA typically
considers “new”:

          A new requirement is one which has not been previously procured by the
          relevant procuring activity.

              (A) Where a requirement is new, no small business could have
              previously performed the requirement and, thus, SBA’s acceptance of
              the requirement for the 8(a) BD program will not adversely impact any
              small business.

              (B) Procurements for construction services (e.g., the building of a
              specific structure) are generally deemed to be new requirements.
              However, recurring indefinite delivery or indefinite quantity task or
              delivery order construction services are not considered new (e.g., a
              recurring procurement requiring all construction work at base X).

              (C) The expansion or modification of an existing requirement may be
              considered a new requirement where the magnitude of change is
              significant enough to cause a price adjustment of at least 25 percent
              (adjusted for inflation) or to require significant additional or different
              types of capabilities or work.

                                               10
Section 124.504(c)(1)(ii)(A)–(C). The third guideline encapsulates two considerations: (1) a
twenty-five percent variance in value; and (2) “[w]hether the scope has changed significantly,
requiring meaningful different types of work or different capabilities.” 85 Fed. Reg. 66155. 5

         The United States does not contend that the SBA performed an adverse impact analysis.
Nor has it tendered those documents, should they exist, for inclusion in the record. Instead, the
United States urges the Court to focus on only the first part of the third guideline and find that
this procurement represents a “new requirement” because the value of the awarded contract
varies from the value of the Incumbent Contract and RFP by more than twenty-five percent.
(USA xMJAR at 22). This argument is not compelling. In 2020, the SBA amended the regulation
to ensure a twenty-five percent price variance would not be dispositive. See 85 Fed. Reg. 66188
(“Removing the word ‘will’ and adding in its place the word ‘may’ in paragraph (c)(1)(ii)(C)”).
In fact, the SBA determined that the considerations “should be a guide, and not necessarily
dispositive of whether a requirement qualifies as ‘new.’” 85 Fed. 66155 (further explaining that
applying the twenty-five percent rule rigidly could permit gamesmanship and circumvention).
Finally, the 2020 revisions included the addition of 13 C.F.R. § 124.504(c)(4), stating:

          SBA does not typically consider the value of a bridge contract when
          determining whether an offered procurement is a new requirement. A bridge
          contract is meant to be a temporary stop-gap measure intended to ensure the
          continuation of service while an agency finalizes a long-term procurement
          approach.

See 85 Fed. Reg. 66188 (“Adding a paragraph (c)(4)” to 13 C.F.R. § 124.504).

        AccelGov’s argument is more compelling—the scope of work has not “changed
significantly, requiring different types of work or different capabilities.” 85 Fed. Reg. 66155
(explaining 13 C.F.R. § 124.504(c)(1)(ii)(C)). The RFP and the 8(a) bridge contract contain the
same scope of work, albeit the 8(a) award is adjusted for the shorter duration. (Compare AR 36–
85 (RFP Performance Work Statement) with AR 701–49 (Bridge Contract Performance Work
Statement)). Table 1 in each Performance Work Statement contains “Tasks,” “Subtasks,” and
“Task Output” columns. (AR 49, 714). Every task and nearly every subtask in these columns is
identical across both Performance Work Statements. The bridge contract Performance Work
Statements omits certain subtasks and outputs such as budgeting and researching emerging
technologies, which are endemic to a long-term contract, but in all meaningful ways the
performance work statements are identical. These similarities strongly support AccelGov’s
contention that, despite the variance in duration and scale, the bridge contract does not require
“meaningful different types of work or different capabilities” than were required by the RFP.
(Pl.’s Reply at 6, ECF No. 54). When confronted with these similarities during oral argument,
the United States urged the Court to consider the “implied tasks” that fell under the deleted
subtasks, suggesting there were more meaningful changes than meet the eye. (Tr. of Oral Arg. at

5
  The Federal Register also discusses a third consideration, contained in the definition of
“[f]ollow-on requirement or contract.” That third factor is “whether the end user of the
requirement has changed.” 13 C.F.R. § 124.3. The third factor is not implicated here.

                                                11
15–16, ECF No. 58). However, the United States was unable to provide any support for that
assertion in the Administrative Record. (Id. at 16–17).

        The performance work statements were so similar that the Contracting Officer was able
to use the RFP responses, in combination with the market research obtained using the RFI, to
evaluate companies for the bridge contract. (AR 874–76). In fact, the award to United Support
Services was based almost entirely on the company’s response to the RFP. (AR 874–76). The
Court agrees with AccelGov that the Marine Corps “cannot use the prior acquisition to evaluate
[United Support Services] for the Bridge Contract doing the same work, and then claim that the
requirement is new. That is not fair, not reasonable and not true.” (Pl.’s MJAR at 21). Even the
SBA recognized that the bridge contract did not fulfill “new” requirements, as it identified the
bridge contract as a “follow-on” when corresponding with the Marine Corps. (AR 677, 1205). 6

        As AccelGov pointed out during oral argument, the record reflects no analysis or
considered judgment from either the Marine Corps or the SBA regarding whether the
requirements were “new.” (Tr. of Oral Arg. at 22–24). At one point during the procurement
process, the SBA’s description of the bridge contract shifts. The SBA initially discussed the
contract as a “follow-on,” but later described the requirements as “new.” (Compare AR 676–77
with AR 782–83). The record does not reveal any considered judgment in that shift, and the
Court finds that the initial, contemporaneously-made descriptor is the most credible indication of
the SBA’s thinking. The lack of any legal analysis from the SBA on this issue is striking
considering that the regulations at issue are SBA regulations and thus the SBA would likely be
entitled to deference had it undertaken minimum interpretive efforts. Auer v. Robbins, 519 U.S.
452 (1997). Likewise, the Marine Corps never attempted its own analysis or reconciled the
inconsistency in the SBA’s characterization of the bridge contract.

       In summary, the bridge contract awarded using an 8(a) sole-source award was not for
“new requirements.” The requirements were the same as those in the Incumbent Contract and the
RFP, though slightly modified to account for a shorter performance period. Therefore, under 13
C.F.R. § 124.504(c), the SBA was required to perform an adverse impact analysis. It failed to do
so. Consequently, the SBA’s endorsement of United Support Services for an 8(a) award was
erroneous.

               ii. The Marine Corps’ 8(a) award lacks support in the Administrative Record.

       As explained above, the SBA endorsed United Support Services for an 8(a) award in
contravention of 13 C.F.R. § 124.504. The Marine Corps relied on the SBA’s endorsement in

6
  As an aside, during oral argument, United Support Services raised a new argument—that SBA
was not required to perform an adverse impact report if the contract was a “follow-on.” (Tr. of
Oral Arg. at 45). United Support Services cited 13 C.F.R. § 124.504(c), which states that an
adverse impact report is not required if the requirement is a “follow-on or renewal 8(a)
acquisition[].” (emphasis added). However, the Incumbent Contract and award under the RFP
were total small business set-asides. (AR 4). Section 124.504(c) contemplates multiple 8(a)
acquisitions, not an 8(a) award as a follow-on to another type of acquisition. Subsection (c)
simply does not control here.

                                                12
determining that United Support Services was eligible for an 8(a) award of the bridge contract.
(AR 771 (describing the rationale for the procurement approach)). Given that the SBA
erroneously endorsed United Support Services, it follows that the Marine Corps’ award decision
lacked support in the Administrative Record. Though AccelGov urges the Court to set the award
aside on this basis, AccelGov conceded that a remand would be an appropriate remedy. (Tr. of
Oral Arg. at 43:11–22). Therefore, the Court remands this matter to the SBA to perform an
adverse impact analysis as required by 13 C.F.R. § 124.504.

        At oral argument, counsel for the United States was not joined by counsel from either the
SBA or the Marine Corps. (Tr. of Oral Arg. at 24–25). The United States was unable to provide
any estimated timeline for the SBA’s completion of an adverse impact analysis, or what such an
analysis would involve. (Id. at 25–27). Counsel for AccelGov represented having some
experience with the SBA’s timeline for an adverse impact analysis and suggested that one could
be completed within a few weeks. (Id. at 36–37). The Court credits that representation as the
only information in the record of an appropriate timeline for remand.

       C. Neither the SBA’s suitability analysis nor the Marine Corps’ evaluation of RFP
          responses was arbitrary and capricious.

        AccelGov argues that the SBA’s analysis of United Support Services’ suitability for the
8(a) award was arbitrary and capricious. (Am. Compl. Count III; Pl.’s MJAR at 22). AccelGov
also argues that the Marine Corps’ selective use of information from the RFP and RFI responses
was likewise arbitrary and capricious. (Id.). Though AccelGov’s brief somewhat blends these
arguments, the Court views them as distinct challenges under the Court’s highly limited APA
jurisdiction.

               i. The SBA properly conducted a suitability analysis for United Support
                  Services.

        The 8(a) Program is an exception to CICA’s general rule that procurements must be
subject to full and open competition. 41 U.S.C. § 3301 (general rule); 10 U.S.C. § 2304(c)(5)
(other than competitive procedures available when a statute specifically so authorizes); 15 U.S.C.
§ 637(a) (8(a) Program); 48 C.F.R. § 6.302-5(b)(4) (explaining that 8(a) awards are exempt from
full and open competition). Selection for the 8(a) Program is a cooperative effort—“the SBA and
an agency match the agency’s requirements with the capabilities of 8(a) participants to establish
a basis for the agency to contract with the SBA under the program.” 48 C.F.R. § 19.803. There
are three ways an acquisition is selected for the 8(a) Program: (1) the SBA contacts the
contracting activity and advises that agency of the participant’s capabilities and seeks agency
requirements that meet those capabilities; (2) the SBA identifies a specific requirement for an
8(a) participant and sends a letter to the agency’s small business procurement office requesting
that the contracting officer offer the procurement to the 8(a) program; or (3) agencies
“independently, or through the self marketing efforts of an 8(a) participant, identify a
requirement for the 8(a) program” and then offer that requirement to the SBA either “on behalf
of a specific 8(a) participant, for the 8(a) program in general, or for 8(a) competition.”
§ 19.803(a)–(c).

                                               13
        In this case, the requirements for the bridge contract were identified by the SBA, which
then requested that the Marine Corp reserve the procurement for the 8(a) Program and,
specifically, for an award to United Support Services. (AR 676, 699). Therefore, this
procurement falls within § 19.803(b). Consequently, the SBA was required to provide the Marine
Corps with certain information listed in § 19.803(a) and (b). Within subsection (b), because this
was a sole-source request, the SBA was required to provide the Marine Corp with:

          (A) The reasons why the participant is considered suitable for this particular
          acquisition; e.g., previous contracts for the same or similar supply or service;
          and

          (B) A statement that the participant is eligible in terms of its small business
          size status relative to the assigned NAICS code, business support levels, and
          business activity targets[.]

48 C.F.R. § 19.803(b)(4)(i)(A)–(B). 48 C.F.R. § 19.804-1 details the criteria on which the
Marine Corps was required to evaluate the suitability of a participant:

          In determining the extent to which a requirement should be offered in support
          of the 8(a) program, the agency should evaluate—

          (a) Current and future plans to acquire the specific items or work that 8(a)
          participants are seeking to provide, . . .

               ...

          (b) The impact of any delay in delivery;

          (c) Whether the items or work have previously been acquired using small
          business set-asides, and the date the items or work were acquired;

          (d) Problems encountered in previous acquisitions of the items or work from
          the 8(a) participants or other contractors; and

          (e) Any other pertinent information about known 8(a) participants, the items,
          or the work.

48 C.F.R. § 19.804-1. There is no requirement that the SBA or Marine Corps compare AccelGov
and United Support Services. All that is required is that the SBA determined United Support
Services to be “suitable” and “eligible,” and that the Marine Corps evaluated United Support
Services on the criteria found in § 19.804-1.

       Here, the record demonstrates that those agencies complied with the requirements. First,
the SBA sent the Marine Corps a Search Letter and Firm’s Capability Statement on behalf of
United Support Services for the bridge contract. (AR 676–78). The Marine Corps Contracting
Officer then drafted a memorandum to the file stating that the Marine Corps had “conducted a
thorough review and evaluation of [United Support Services’] capabilities under [the RFP]
during which the Government found their technical proposal acceptable and their proposed price

                                                14
fair and reasonable.” (AR 770–72). The Marine Corps’ Contracting Officer concluded that
United Support Services was capable of performing at a reasonable price and therefore issued the
8(a) sole-source award. (AR 771). The Marine Corps and the SBA did not act irrationally,
arbitrarily or capriciously, or contrary to law in this regard. 22nd Century’s capabilities,
including its apparent advantages it brought to the AccelGov joint venture, are irrelevant here.

              ii. The Marine Corps’ use of RFP and RFI responses in making the 8(a) award
                  was not arbitrary and capricious.

        As discussed above, AccelGov appears to take issue with the Marine Corps
amalgamating information the parties submitted in response to the RFP and RFI to conduct
evaluations on what the United States now argues is a “new” procurement. (Pl.’s MJAR at 23).
Indeed, the 8(a) determination letter addendum draws on both the RFP and RFI responses. (AR
874–77). For example, the Marine Corps cited its acceptance of both the price and non-price
factors in United Support Services’ proposal in response to the RFP, and United Support
Services’ ability to begin performance within five days—a response to the RFI. (AR 876). For
AccelGov, the Marine Corps was only able to evaluate the RFI response, because AccelGov did
not submit a proposal in response to the RFP. (AR 875). From that response, the Marine Corps
concluded that it lacked enough information about AccelGov to determine whether it would be
technically acceptable for an award. (AR 875). The Marine Corps also claimed that the teaming
arrangement involving 22nd Century was unclear. (AR 875). However, 22nd Century—the
incumbent contractor—submitted an RFI response and, through a teaming arrangement with
FreeAlliance, submitted an RFP response. (AR 640, 478). Likewise, FreeAlliance submitted an
RFI response. (AR 686).

        In its 8(a) determination memorandum, the Marine Corps discussed the accounting
systems of each 8(a) company that responded to the RFI even though it did not request that
information in the RFI. (AR 875). United Support Services noted in its RFI response that it
utilized a DCAA approved accounting system. (AR 671). United Support Services also provided
that information in response to the RFP. (AR 876). AccelGov made no representations regarding
its accounting system in its RFI response. (AR 646–49). The Marine Corps Contracting Officer
noted that AccelGov had failed to “address whether it has an approved accounting system, which
is a requirement for a cost reimbursement contract.” (AR 875). That, combined with the
“uncertainty regarding the teaming arrangement with 22nd Century Technologies” apparently
prevented the Marine Corps from determining whether AccelGov could perform a cost
reimbursement contract. (See id.).

        The Marine Corps’ treatment of AccelGov’s interest in the bridge contract is somewhat
perplexing. The RFI responses from AccelGov, 22nd Century, and FreeAlliance were identical.
AccelGov provided that 22nd Century would perform as a mentor in the joint venture. (AR 646).
AccelGov also explained that the joint venture, if selected, would utilize 22nd Century
personnel—the incumbent personnel—which it identified by name. (AR 646–49). From the
record, it is not clear what, exactly, the Marine Corps was “uncertain[]” about. In sum, it is
curious why the Marine Corps believed it did not have sufficient information to evaluate

                                              15
AccelGov—a joint venture that included a highly rated 7 incumbent contractor—yet was able to
locate plenty of information to support an award to United Support Services, a relative
newcomer. AccelGov’s incredulity is understandable.

        Nevertheless, “[e]ffective contracting demands broad discretion.” Lockheed Missiles &
Space Co. v. Bentsen, 4 F.3d 955, 958 (Fed. Cir. 1993). “The arbitrary and capricious standard
applicable [in bid protest cases] is highly deferential.” Advanced Data Concepts, Inc. v. United
States, 216 F.3d 1054, 1058 (Fed. Cir. 2000). Procuring agencies “are entrusted with a good deal
of discretion in determining which bid is the most advantageous to the Government.” Tidewater
Mgmt. Servs., Inc. v. United States, 573 F.2d 65, 73 (Ct. Cl. 1978). This discretion extends to
contracting officers; the Court must afford contracting officers substantial leeway to make
decisions on “a broad range of issues confronting them in the procurement process.” Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001)
(internal quotations omitted).

        In giving due regard to the deference owed to agency decision-making in the
procurement process, the Court may not set aside an administrative decision “simply because the
court is unhappy with the result reached.” Vermont Yankee Nuclear Power Corp. v. Nat. Res.
Def. Council, Inc., 435 U.S. 519, 558 (1978). “Under the ‘arbitrary and capricious’ standard[,]
the scope of review is a narrow one. A reviewing court must consider whether the decision was
based on a consideration of the relevant factors and whether there has been a clear error of
judgment” and may not substitute its own judgment for that of the agency. Bowman
Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285 (1974) (internal
quotations omitted). But the agency must articulate a “rational connection between the facts
found and the choice made.” Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168
(1962).

        Here, the record demonstrates that the Marine Corps’ award to United Support Services
was not an arbitrary, capricious, or irrational decision. Despite AccelGov’s urging, the Court
cannot review the procurement decision anew, it can only review whether the Marine Corps
articulated a rational reason for selecting United Support Services for the bridge contract. The
Marine Corps has done so here. The Marine Corps Contracting Officer stated that the sole-source
contract was awarded based on the Marine Corps’ review of three factors, whether: (1)
companies had “the technical capabilities to execute the requirement immediately;” (2)
companies utilize an accounting system “approved for a cost reimbursable contract” paired with
“fair and reasonable” pricing; and (3) “[t]he 8(a) company is a responsible Offeror in accordance
with [48 C.F.R. § 19.800 et seq.].” (AR 874). The Marine Corps determined that United Support
Services was able to perform within five days of an award. (AR 876). It determined that United
Support Services had demonstrated that it was acceptable on both price and nonprice factors
under the RFP, which the Court has already explained was substantially similar in scope to the
bridge contract award. (AR 876). And the Marine Corps determined that United Support

7
 Nearly all of 22nd Century’s latest CPARS (“Contractor Performance Assessment Reporting
System”) ratings were “              ” save for cost control which was “     ” (Am.
Compl. Ex. A at A13).

                                               16
Services was a qualifying small business, eligible for an 8(a) award. (AR 770–72). These
determinations were not irrational, arbitrary, or capricious based on the Administrative Record.

        That 22nd Century or AccelGov might have been more capable or a better selection is
irrelevant to the Court’s judicial review here; those decisions are soundly within the purview of
the agency’s purview. The Marine Corps clearly reviewed the RFI responses, the RFP responses,
and the SBA’s proffer of United Support Services. The Marine Corps is entitled to discretion in
weighing the information it possessed from those documents, so long as it can demonstrate that it
reviewed and considered them and reached a decision rationally connected to the information
gleaned. The Marine Corps has done so. Consequently, the Court cannot find that the Marine
Corps acted irrationally, arbitrarily, or capriciously in awarding the bridge contract to United
Support Services.

       D. Injunctive Relief

        A party seeking an injunction must demonstrate (1) success on the merits; (2) irreparable
harm absent an injunction; (3) the balance of hardships favors an injunction; and (4) that an
injunction is in the public interest. PGBA, LLC v. United States, 389 F.3d 1219, 1229 (Fed. Cir.
2004). Though no single factor is dispositive, “proving success on the merits is a necessary
element for a permanent injunction[.]” Dell Fed. Sys., L.P. v. United States, 906 F.3d 982, 999
(Fed. Cir. 2018). The trial court’s decision to grant or deny an injunction is reviewed for abuse of
discretion. Asociacion Colombiana de Exportadores de Flores v. United States, 916 F.2d 1571,
1578 (Fed. Cir. 1990). AccelGov has not demonstrated success on the merits with respect to
Counts I and III of its Amended Complaint. Therefore, AccelGov is not entitled to injunctive
relief on those grounds. The Court reserves judgment with respect to Count II. After remand,
AccelGov may reraise arguments with respect to Count II if that claim is not moot.

                                      III.    Conclusion

        As explained above, the Court finds that the clear language of the RFI does not express
publicly a clear intent to conduct a procurement. The Court also finds that the bridge contract
was not a “new requirement,” therefore the SBA was required to perform an adverse impact
analysis. The Court remands Count II to the SBA to perform that analysis. Finally, the Court
finds that the Marine Corps is entitled to discretion in the procurement process, and its selection
of United Support Services was not irrational, arbitrary, or capricious.

       Accordingly, the Court ORDERS the following:

           (1) AccelGov, LLC’s Motion for Judgment on the Administrative Record, ECF No.
               47, is DENIED with respect to Counts I and III.

           (2) United Support Services, Inc.’s Cross-Motion for Judgment on the Administrative
               Record, ECF No. 49, is GRANTED with respect to Counts I and III.

           (3) The United States’ Cross-Motion for Judgment on the Administrative Record,
               ECF No. 51, is GRANTED with respect to Counts I and III.

                                                 17
  (4) Under RCFC 54(b), there being no just reason for delay, the Clerk is DIRECTED
      to enter judgment for the United States and United Support Services, Inc. on
      Counts I and III of AccelGov’s Complaint.

  (5) The Court DEFERS judgment on Count II.

  (6) Under RCFC 52.2, Count II is REMANDED to the Small Business
      Administrative for a period not to exceed thirty days.

  (7) On remand, the Small Business Administration is ORDERED to conduct an
      adverse impact report consistent with 13 C.F.R. § 124.504.

  (8) On or before November 1, 2021, the United States is ORDERED to file a status
      report detailing the results of a remand. If the adverse impact report is not
      complete within 30 days, the United States is ORDERED to file a notice showing
      cause why the Court should not enter judgment and grant relief in favor of
      AccelGov.

  (9) After being notified of the results of the remand, the Court will schedule a status
      conference to discuss further proceedings in this matter.

  (10)        On or before October 14, 2021, the United States is ORDERED to file a
      Notice that contains a statement indicating whether the parties seek redactions to
      the public version of this Opinion. That Notice must represent whether the United
      States has discussed the matter with all counsel and the extent of agreement as to
      the redacted content. The proposed redactions must be reflected in a PDF attached
      as an exhibit to that Notice.

IT IS SO ORDERED.

                                                            s/  David A. Tapp
                                                            DAVID A. TAPP, Judge

                                       18