# Legacy Corporation of Illinois v. United States

> United States Court of Federal Claims · December 4, 2024

URL: https://www.frixlaw.com/law-library/cases/10754474

## Case

- **Court:** United States Court of Federal Claims
- **Decided:** December 4, 2024
- **Precedential status:** Published
- **Opinion:** Opinion
- **Judges:** David A. Tapp
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10754474

## How later opinions describe it (automated extraction)

- finding the committee’s use of a vote to make its final recommendation permissible
- holding COs decide what constitutes sufficient evidence to make their responsibility determinations

## Opinion text

In the United States Court of Federal Claims
No. 24-698
Filed: November 19, 2024 †
Published: December 4, 2024

LEGACY CORPORATION OF
ILLINOIS,

Plaintiff,

v.

THE UNITED STATES,

Defendant,

and

DUBUQUE BARGE AND FLEETING
SERVICE COMPANY, d/b/a NEWT
MARINE SERVICE,

Intervenor-Defendant.

Theodore Watson, with Wojciech Z. Kornacki, Watson & Associates LLC, Aurora, CO, for
Plaintiff.

Margaret J. Jantzen, Senior Trial Counsel, and Nelson Kuan, Trial Attorney, with Brian M.
Boynton, Principal Deputy Assistant Attorney General, Patricia M. McCarthy, Director,
Reginald T. Blades, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, Washington, D.C., for Defendant.

Erin R. Davis, with Peter Deegan, and Brandon E. Dobyns, Taft Stettinius & Hollister, Dayton,
OH, for Intervenor-Defendant.

†
This Order was originally filed under seal on November 19, 2024, (ECF No. 53). The Court
provided parties the opportunity to review this Opinion for any proprietary, confidential, or other
protected information and submit proposed redactions. The proposed redactions were filed on
December 3, 2024, (ECF No. 55), and are accepted by the Court. Thus, the sealed and public
versions of this Opinion differ only to the extent of those redactions, the publication date, and
this footnote.
solicitation 2 summarized the work as including “surveying, clearing, excavating/mechanical
dredging and placing; transferring and shaping of placed material into topographic diversity
sites; seeding and [s]ite [r]estoration” with an estimated price range of $5 to $10 million. (AR 40,
129). The solicitation stated that the work was to be completed in 569 days and would be
awarded to a responsible bidder who conformed with the solicitation and was most advantageous
to the United States considering only price and price-related factors. (AR 45, 52). In response to
the solicitation, Legacy Corporation, Newt Marine Service, and Bloomsdale Excavating Co.,
submitted proposals. (AR 494–95). In relevant part, the offerors proposed the following prices:

Bidder Price
Bloomsdale Excavating Co.
Newt Marine Service $5,344,356.00
Legacy Corporation $5,143,500.00

(AR 495).

Subsequently, USACE performed a responsibility review of Legacy. (AR 495, 505–08).
A responsibility determination is a term of art, it means simply that the agency determines
whether a proposed contractor has the ability to complete a contract. See FAR 9.104-1 (listing
standards for a prospective contractor to qualify as “responsible”); FAR 19.602-1(a), (b) (upon
determining and documenting that an apparent successful small business offeror lacks certain
elements of responsibility, the contracting officer shall refer the matter to the SBA). Here, the
CO reviewed Legacy’s Contractor Performance Assessment Reports (“CPARS”) on previous
contracts and drafted a non-responsibility memo highlighting two past
performance schedule ratings and three past performance schedule ratings. (AR 506).
Additionally, the CO noted that the United States sought to terminate Legacy for default after
issuing both a cure and show cause notice on an ongoing dredging contract. 3 (AR 505). The CO
determined that Legacy was not responsible within the definition of FAR 9.104 and thus
ineligible for the award. (AR 508). The CO subsequently submitted a COC application to the
SBA. (AR 619–1180).

The SBA notified Legacy of the CO’s referral and Legacy responded to the non-
responsibility determination. (AR 1197, 1228–376). Legacy specifically objected to the inclusion
of information regarding the ongoing dredging contract and interim CPARS from 2016–2017.
(AR 1248–56). The SBA’s industrial specialist (“IS”) reviewed USACE’s referral package and
Legacy’s application materials. (AR 1618–625). The IS found that Legacy “had issues with
quality control, scheduling and management, causing delays and unnecessary additional

2
Solicitation No. W912EK24B0013.
3
Contract no. W912EK21D0008. (AR 509–10, 629–31 (The United States sought termination
because it believed that Legacy failed to adhere to the schedule of performance and suffered
multiple equipment breakdowns that delayed completion)).

3
oversight of past projects.” (AR 1625). Despite this finding, the IS recommended issuing a COC
as “[Legacy’s] apparent sincere efforts to take corrective action in-house” led the IS to believe
Legacy maintained “the capacity to perform acceptably . . . and will not be detrimental to the
Government or significantly increase the risk for unsuccessful performance.” (AR 1625).

A three-member COC Review Committee (“the Committee”) considered Legacy’s COC
application, the CO’s non-responsibility determination, and the IS’s Report and
Recommendation. (AR 1626–27). The Committee recommended, by simple majority vote, that
Legacy be denied a COC for “not sufficiently overcoming the CO’s objections.” (AR 1627). The
Committee forwarded its recommendation to the Area Director who, after reviewing the
package, finally denied Legacy a COC for “fail[ing] to overcome the reasons cited for referral.”
(AR 1632). In plain terms, the SBA determined that Legacy was not capable of fulfilling the
proposed contract for rehabilitation of the Steamboat Island project.

As a consequence, USACE awarded the contract to Newt Marine as the second-lowest
bidder and next in-line for award. (AR 1642–43). This litigation ensued. The parties now move
for judgment on the administrative record.

II. Analysis

When deciding a bid protest, the Court “appl[ies] the appropriate [Administrative
Procedure Act (“APA”)] 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). Under the APA, the Court determines 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). In other words, the Court must determine whether “(1) the
procurement official’s decision lacked a rational basis; or (2) the procurement procedure
involved a violation of regulation or procedure.” Weeks Marine, Inc. v. United States, 575 F.3d
1352, 1358 (Fed. Cir. 2009).

To determine whether the agency’s decision was arbitrary or capricious, the Court
determines whether the action was “legally permissible, reasonable, and supported by the facts.”
UnitedHealth Mil. & Veterans Servs., LLC v. United States, 132 Fed. Cl. 529, 551 (2017). The
Court may not substitute its own judgment for that of the agency. Id. Rather, “[p]rocurement
officials have substantial discretion to determine which proposal represents the best value for the
government” particularly in the “minutiae of the procurement process[.]” E.W. Bliss Co. v.
United States, 77 F.3d 445, 449 (Fed. Cir. 1996). This standard is “highly deferential.” CHE
Consulting, Inc. v. United States, 552 F.3d 1351, 1354 (Fed. Cir. 2008). But if the agency’s
decision fails under this standard, the Court determines if the “bid protester was prejudiced by
that conduct.” Bannum, Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir. 2005). To establish
prejudice, the plaintiff must show “that there was a ‘substantial chance’ it would have received
the contract award but for the [agency’s] errors.” Id. at 1353.

When parties move for judgment on the administrative record, RCFC 52.1 provides a
procedure to seek the equivalent of an expedited trial on a “paper record, allowing fact-finding
by the trial court.” Id. at 1356. Genuine issues of material fact do not preclude judgment on the

4
administrative record, so the Court can resolve questions of fact by referencing the
administrative record. Id. at 1355–56. Because the Court is bound to the administrative record, it
“will not put words in an agency’s mouth or invent supporting rationales the agency has not itself
articulated.” ENGlobal Gov’t Servs., Inc. v. United States, 159 Fed. Cl. 744, 764 (2022) (quoting
IAP Worldwide Servs. v. United States, 159 Fed. Cl. 265, 286 (2022)). It follows that the Court is
suspect of “any rationale that departs from the rationale provided at the time the procuring
agency made its decision.” Sys. Stud. & Simulation, Inc. v. United States, 152 Fed. Cl. 20, 32
(2020) (quoting Raytheon Co. v. United States, 121 Fed. Cl. 135, 158 (2015), aff’d 809 F.3d 590
(Fed. Cir. 2015)).

“Because responsibility decisions are largely a matter of judgment, contracting officers
are generally given wide discretion to make this decision.” Sims v. United States, 655 Fed. Appx.
826, 829 (2016) (quoting John C. Grimberg Co., Inc. v. United States, 185 F.3d 1297, 1303 (Fed.
Cir. 1999)); see also Supreme Foodservice GmbH v. United States, 112 Fed. Cl. 402, 415 (2013)
(citing News Printing Co. v. United States, 46 Fed. Cl. 740, 746 (2000)) (“‘A contracting agency
has broad discretion in making responsibility determinations since it must bear the brunt of
difficulties experienced in obtaining the required performance.’”) (quotation and citation
omitted). “When such decisions have a rational basis and are supported by the record, they will
be upheld.” Supreme Foodservice GmbH, 112 Fed. Cl. at 415 (citing Bender Shipbuilding &
Repair Co., Inc. v. United States, 297 F.3d 1358, 1362 (2002)). An agency’s responsibility
determination is entitled to a “presumption of regularity,” and a plaintiff “necessarily bears a
heavy burden” in seeking to rebut that presumption. Impresa Construzioni Geom. Domenico
Garufi v. United States, 238 F.3d 1324, 1338 (Fed. Cir. 2001).

It is settled that “this court has jurisdiction to review the SBA’s denial of the plaintiff’s
application for a COC pursuant to the court’s jurisdiction over bid protests.” CSE Constr. Co.,
Inc. v. United States, 58 Fed. Cl. 230, 247 (2003); see Cavalier Clothes, Inc. v. United States,
810 F.2d 1108, 111 (Fed. Cir. 1987) (“The mere fact that [15 U.S.C. § 637(b)(7)(A)] commits
the ‘final disposition’ of the competency certification to the SBA does not immunize from
judicial review the refusal to grant a COC.”); Stapp Towing Inc. v. United States, 34 Fed. Cl.
300, 306 (1995) (“Unquestionably, the Court of Federal Claims has jurisdiction to review the
COC determination.”). The Court applies the same “arbitrary and capricious” standard utilized in
agency procurement actions when reviewing the SBA's competency determinations, CSE Constr.
Co., 58 Fed. Cl. at 248, although “certain deference must be accorded the unique expertise that
[the] SBA [ ] unquestionably possesses in the area of business responsibility determinations[.]”
United Enter. & Assocs. v. United States, 70 Fed. Cl. 1, 30–31 (2006) (quoting Stapp Towing, 34
Fed. Cl. at 306). “[T]his court will overturn an SBA competency determination only if it appears
by a preponderance of the evidence ‘that the SBA's COC decision of nonresponsibility had no
rational basis or that, in making the decision, the SBA violated an applicable procurement statute
or regulation in a manner prejudicial to the protesting bidder.’” CSE Constr. Co., 58 Fed. Cl. at
248 (quoting Stapp Towing, 34 Fed. Cl. at 306).

Legacy challenges both USACE’s referral decision and SBA’s evaluations and denial of
a COC as arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the
law. (See generally Pl.’s MJAR). First, Legacy argues the CO’s determination of non-
responsibility was accomplished in bad faith. (Id. at 12–28). Specifically, Legacy argues USACE
improperly introduced information, on which the SBA relied, regarding a termination for default

5
the cure notice citing difficulty with equipment failures and the type of dredge material,
specifically asserting the delays were caused by unforeseeable incidents, and setting out the
corrective actions Legacy took to mitigate delays. (AR 514–18).

Noting that “72.6%” of the overall contract consisted of similar dredging work, the CO
was concerned with Legacy’s ability to comply with the scheduling, stating:

I have serious concerns about the contractor maintaining schedule because
the contractor has failed to correct performance delays after numerous
requests and a Show Cause Letter. Furthermore, as detailed below, Legacy
has had similar issues maintaining schedule on other contracts. Legacy has
failed on multiple occasion on similar work to adhere to the schedule. Based
on this information, I question the contractors ability to comply with the
performance schedule for Steamboat Island HREP- Phase II.

(AR 506) (emphasis added). The CO concluded that Legacy’s past schedule performance was
unsatisfactory and demonstrated the contractor was not responsible within the meaning of FAR
9.104. (AR 507).

1. The CO’s determination was neither arbitrary nor capricious.

Legacy insists the CO wrongfully considered information regarding the United States’
potential default termination and performance schedule concerns under the ongoing contract.
(Pl.’s MJAR at 13). Legacy asserts that this evidence violated the FAR because ultimately: (1)
the termination for default was never issued; and (2) the performance schedule concerns were
“promptly corrected” resulting in no CPARS report being issued for either concern. (Id. at 13–
14). Legacy contends that the evidence was prejudicial in that it served as the sole basis for the
CO's referral to the SBA, which subsequently relied upon it in its determination to deny Legacy a
COC. (Id. at 14).

As an initial matter, the standards by which a prospective contractor’s responsibility is
judged are outlined in FAR 9.104-1. C&G Excavating, Inc. v. United States, 32 Fed. Cl. 231, 239
(1994) (citing Reel–O–Matic Sys., Inc. v. United States, 16 Cl. Ct. 93, 99 (1989)). “[T]he
responsibility criteria set out in FAR 9.104-1 are to be utilized by both procuring agencies and
the SBA.” J.E. McAmis, Inc. v. United States, 164 Fed. Cl. 650, 662 (2023) (citing CSE Constr.
Co., 58 Fed. Cl. at 250). To be determined responsible, a contractor must “[b]e able to comply
with the required or proposed delivery or performance schedule, taking into consideration all
existing commercial and governmental business commitments.” Sims, 655 Fed. Appx. at 829
(quoting 48 FAR 9.104-1(b)). On the other hand, FAR 42.1503 outlines procedures agencies
must utilize when developing evaluations of a contractor’s performance on government
contracts. See Alamo Travel Grp., LP v. United States, 108 Fed. Cl. 224, 234 (2012)); see also
Maint. Eng’rs v. United States, 50 Fed. Cl. 399, 423 n.8 (2001). These are two very distinct
regulations that Legacy seems to conflate throughout its argument, thus the Court will turn to
each of Legacy’s claims in turn.

7
First, Legacy argues consideration of ongoing contract information violates the “spirit
and intent of FAR 42.1503(d)” because this provision entitles Legacy to appeal the CO’s
decision above the CO’s legal and not to the SBA.” (Pl.’s Reply at 4). That provision provides:

Agency evaluations of contractor performance . . . shall be provided to the
contractor as soon as practicable after completion of the evaluation. The
contractor will receive a CPARS-system generated notification when an
evaluation is ready for comment. Contractors shall be afforded up to 14
calendar days from the date of notification of availability of the past
performance evaluation to submit comments, rebutting statements, or
additional information. Agencies shall provide for review at a level above the
contracting officer to consider disagreements between the parties regarding
the evaluation. The ultimate conclusion on the performance evaluation is a
decision of the contracting agency.

FAR 42.1503(d).

When interpreting regulations, the Court applies the same interpretive rules used when
analyzing the language of a statute. Boeing Co. v. Sec’y of Air Force, 983 F.3d 1321, 1327 (Fed.
Cir. 2020) (citing Mass. Mut. Life Ins. Co. v. United States, 782 F.3d 1354, 1365 (Fed. Cir.
2015)). Therefore, the Court must analyze the plain and ordinary meaning of section 42.1503(d).
Jimenez v. Quarterman, 555 U.S. 113, 118 (2009) (“As with any question of statutory
interpretation, our analysis begins with the plain language of the statute.”). Importantly, the
Court must assess “a [regulatory] scheme in its entirety” and “give full effect to all words
contained within [a] statute or regulation, thereby rendering superfluous as little of the statutory
or regulatory language as possible.” Hanser v. McDonough, 56 F.4th 967, 970 (Fed. Cir. 2022)
(internal quotations omitted). “If the regulatory language is clear and unambiguous, the inquiry
ends with the plain meaning.” Goodman v. Shulkin, 870 F.3d 1383, 1386 (Fed. Cir. 2017). The
issue with Legacy’s assertions is that it ignores two sentences immediately preceding which
state: “Agency evaluations of contractor performance, including both negative and positive
evaluations, prepared under this subpart shall be provided to the contractor as soon as practicable
after completion of the evaluation. The contractor will receive a CPARS-system generated
notification when an evaluation is ready for comment.” FAR 42.1503(d) (emphasis added).

In context, a contractor is entitled to provide comments to higher authority rebutting a
performance evaluation after a performance evaluation has been completed. That is not the
scenario here. The CO considered information from an ongoing contract for which no CPARS
had been formalized. (AR 623–24). This information was garnered from sources independent of
a CPARS evaluation as evidenced from the cure and show cause letters. (AR 509–13). In making
responsibility determinations, a CO is authorized to consider information independent of CPARS
evaluations to include: “records and experience data, including verifiable knowledge of
personnel within the contracting office, audit offices, contract administration offices, and other
contracting offices.” FAR 9.105-1(c). Further, the FAR requires CO’s to “promptly share
relevant information” regarding “circumstances casting doubt on a contractor’s ability to perform
contracts successfully.” FAR 9.105-1(d).

8
Ultimately, because the Agency did not complete a formal CPARS evaluation for the
ongoing contract, Legacy’s rights to offer comments or rebuttals were not triggered.
Nevertheless, use of this information was not only proper but mandated because evidence of a
cure and show cause letter on a similar contract casts on Legacy’s ability to perform.
Therefore, FAR 42.1503 has no bearing on this case.

Second, Legacy asserts it was deprived of its right to challenge a CPARS rating pursuant
to FAR 42.1503(f). (Pl.’s MJAR at 16). Legacy seemingly alleges the CO’s consideration of the
ongoing contract violated FAR 42.1503(f) by “injecting derogatory CPARS” into the COC
process, preventing Legacy from offering rebuttals to those CPARS, and failing to consider
Legacy’s responses to the COC application. (Id. at 17). Despite Legacy’s acknowledgment that a
CPARS had not yet been entered at the time of the CO’s responsibility review, (id. at 4 (“There
was also no CPARS initiated for [the ongoing contract]”), Legacy insists it has a statutory right
to challenge the CO’s consideration of this issue through “narrati[on] to the SBA.” (Id. at 16).
Pursuant to FAR 42.1503(f), Legacy suggests that a CO is “required to address and consider [a]
contractor’s responses.” (Pl.’s MJAR at 13 (citing Bender Shipbuilding, 297 F.3d at 1362)).

FAR 42.1503(f) provides, in relevant part:

Agencies shall prepare and submit all past performance evaluations
electronically in CPARS . . . . These evaluations, including any contractor-
submitted information . . . become available for source selection officials not
later than 14 days after the date on which the contractor is notified of the
evaluation's availability for comment. The Government shall update CPARS
with any contractor comments provided after 14 days, as well as any
subsequent agency review of comments received.

The plain language of this regulation establishes the method for submitting evaluations, the
information to be included, and when they will become available. Id. These provisions concern
formalized CPARS entries which, as Legacy concedes, had not yet been created for Legacy’s
performance under the ongoing construction contract. Thus, this regulation is not relevant to
Legacy’s claims in this scenario.

Legacy also contends that the CO was required to consider Legacy’s responses in his
responsibility determination. (Pl.’s MJAR at 13 (citing Bender Shipbuilding, 297 F.3d at 1362)).
It is unclear how Legacy’s argument is supported by the cases cited by Bender Shipbuilding.
Bender Shipbuilding highlighted a quote from Impresa, stating that “[c]ontracting officers are
‘generally given wide discretion’ in making responsibility determinations and in determining the
amount of information that is required to make a responsibility determination.” 297 F.3d at 1362
(quoting Impresa, 238 F.3d at 1334–35 (quoting John C. Grimberg Co., 185 F.3d at 1303)). The
Impresa Court further held that “[i]n the absence of information clearly indicating” a contractor
is responsible, the CO “shall make a determination of responsibility or nonresponsibility,” but is
not required to explain the basis for his determination. Impresa, 238 F.3d at 1334–35 (citing 48
C.F.R. § 9.103(b)).

Additionally, the plaintiff in Grimberg argued that USDA acted contrary to law by not
requesting additional information from Grimberg and did not provide Grimberg with an

9
opportunity to respond to concerns regarding its proposed project manager before finding them
non-responsible. John C. Grimberg Co., 185 F.3d at 1303. The Federal Circuit rejected that
argument, finding that FAR 9.1015-1(a) requires a CO to obtain “enough information to make a
responsibility determination” and decisions to “seek additional or clarifying responsibility
information” are discretionary. Id. (citation omitted). A CO, “as the arbiter of what, and how
much, information he needs” may offer a contractor the “opportunity to explain or defend against
adverse evidence” but may also make a responsibility determination based on the record without
doing so. Id.; See also Bailey Tool & Mfg. Co. v. United States, 117 Fed. Cl. 457, 465 (2014)
(holding COs decide what constitutes sufficient evidence to make their responsibility
determinations).

The CO in this case noted that out of fourteen contracts, Legacy received two
and three past performance schedule ratings for work similar to the
current solicitation. (AR 505). These are not inconsequential. The CO reviewed
detailed CPARS reports explaining the bases for each of Legacy’s evaluations. (AR 526–618).
Additionally, the CO considered Legacy’s schedule performance under an ongoing contract,
noting the United States issued a cure notice and a show cause letter. (AR 509–13). While the
CO did not solicit a response from Legacy regarding the schedule concerns in the ongoing
contract, he did review and consider Legacy’s response to the cure notice in which Legacy
provided detailed explanations for each of the United States’ concerns on this contract. (AR 514–
18).

Based on these findings, the CO retained discretion to determine that this amount of
information “was sufficient to make the ultimate decision of nonresponsibility.” See John C.
Grimberg Co., 185 F.3d at 1303. The Court will not substitute its own judgment for that of the
agency in this regard. Colonial Press Int’l, Inc. v. United States, 788 F.3d 1350, 1359 (2015).
The CO was well within his discretion to determine that this information was sufficient to make
a non-responsibility determination and Legacy was not entitled to offer additional responses.

Third, Legacy contends that the CO’s consideration of a performance period between
July 28, 2016 and February 8, 2017 contravened FAR 42.1503(g) “because it was in excess of 6
years.” (Pl.’s MJAR at 25). The unequivocal language of the FAR provides otherwise. “Agencies
shall use the past performance information in CPARS that is within three years (six for
construction and architect-engineer contracts) of the completion of performance of the evaluated
contract or order.” FAR 42.1503(g). Relying on the plain language of the statute, “the rule
requires procuring agencies to use past performance information in the [CPARS] if it relates to a
contract where performance was completed within the last [six] years.” BLR Grp. of Am., Inc. v.
United States, 94 Fed. Cl. 354, 363 (2010), appeal dismissed, 460 Fed. Appx. 918 (Fed. Cir.
2011) (analyzing language identical to FAR 42.1503(g)) (emphasis added). Accordingly, an
agency may consider past performance for up to six years after the completion of contract
performance as a whole, rather than for only six years after each incident of performance under
the contract. The contract in question began on July 28, 2016, and concluded on June 24, 2020.
(AR 1619). Under FAR 42.1503(g), the CO was permitted to consider any reports generated
throughout the contract’s performance and up until June 25, 2026. Because the six-year
limitations period had not yet expired, the CO permissibly considered Legacy’s interim reports
occurring between July 2016 and February 2017.

10
Turning to FAR 49.4, Legacy argues that the CO “is bound to follow its own [termination
for default] rules, and the failure to follow them cannot be explained award by post-hoc
rationalizations.” (Pl.’s Reply at 8). FAR 49.4 establishes the procedures, rights, and obligations
of parties once an agency has officially entered a termination for default. See generally FAR
49.4. Since a termination for default was never issued in this case, this regulation has no bearing
and the Court declines to assess it further.

When a CO rejects a bidder as non-
responsible due to a small business concern,
“the contracting officer shall refer the matter to
the [SBA]” who decides whether to issue a
COC. FAR 9.104-3(d)(1); see also Legacy
Corp. of Illinois v. United States, 172 Fed. Cl.
314, 316–17 (2024). The SBA is not bound to
solely consider the information “that formed
the basis of the contracting officer’s
decision[,]” but may consider “all aspects of
responsibility that it considers germane.”
Stapp Towing, 34 Fed. Cl. at 307.
Furthermore, upon referral to the SBA, the
agency “is required to submit ‘[a]ny
justification and documentation used to arrive PHOTO OF RESTORATION PROJECT
at its responsibility determination.’” CSE
Constr. Co., 58 Fed. Cl. at 254 (citing 13 C.F.R. § 125.5(c)(1)(vii)).

Since the CO determined that Legacy was non-responsible, he was required to provide
the SBA with all evidence that supported his decision. C.F.R. § 125.5(c)(1)(vii). The Court has
determined that the CO properly considered Legacy’s performance from its ongoing contract and
the interim reports reaching beyond six years, thus the SBA owed the same level
of consideration. Therefore, Legacy’s argument that the SBA improperly considered the
previously discussed factors is necessarily precluded. 7

2. The CO did not act in bad faith.

Legacy alleges that the CO’s and SBA’s treatment of Legacy and the awardee was
unequal. (Pl.’s MJAR at 26). Legacy insists that it was treated differently because USACE
“focused on [Legacy’s] past performance from over 6 years” but assessed the awardee on “price
and price-related factors.” (Id.). Legacy also claims unequal treatment due to consideration of the
potential termination for default. 8 (Id. at 30). Legacy seems to argue that the CO “gave credit”

7
Photo of Restoration Project. Zlatan Hrvacevic, Steamboat Island Restoration Project,
DredgingToday.com (Oct. 29, 2024), https://www.dredgingtoday.com/2024/10/29/steamboat-
island-restoration-project/.
8
Because the Court has dismissed this underlying argument, it will not address it further.

11
rating history.” (AR 1637). The key distinction between the CO’s findings is that a review of
Legacy’s performance exhibits both “deficiencies and a pattern of noncompliance” while the
Awardee’s deficiencies seem to reflect only “minor, isolated incidents of noncompliance.”
Ettefaq-Meliat-Hai-Afghan Consulting, Inc. v. United States, 106 Fed. Cl. 429, 438 (2012).

Legacy’s assertion that the CO did not credit its improvements on previous contract
evaluations is factually inconsistent with the record. The CO noted several instances in which
Legacy successfully raised its ratings, but also highlighted that these deficiencies “reduce[d] the
amount of task orders the Government [could] complete, therefore limiting the dredging work.”
(AR 624–25). Even if the CO were to place more emphasis on Legacy’s improvements as
Legacy seems to insist, previous failures and similar ongoing issues justified the CO’s decision
to find Legacy non-responsible based on his “business judgment.” MG Altus Apache Co. v.
United States, 111 Fed. Cl. 425, 451 (2013). Therefore, the CO’s decision was reasonable.

ii. Multiple Versions of the CO’s Determination of Non-
Responsibility

When referring a contractor to the SBA due to a finding of non-responsibility, 13 C.F.R.
§ 125.5(c)(1)(v) mandates that the CO include a “written determination of nonresponsibility” to
their referral for the SBA’s review. The plain language of the statute is clear. See CSE Constr.
Co., 58 Fed. Cl. at 254 (finding no ambiguity in the language of 13 C.F.R. § 125.5(c)(1)(2001)).

The record contains two versions of the CO’s written determination of non-responsibility.
(Compare AR 623, with AR 1200). The CO provided the SBA with a memorandum dated
January 30, 2024 (“final version”), (AR 623–26), as part of the COC referral packet pursuant to
13 C.F.R. § 125.5(c)(1). When the SBA notified Legacy of the CO’s referral, it included a
second memorandum by the CO dated January 29, 2024 (“draft version”), (AR 1200–03).
Notably, the AR does not demonstrate how the SBA obtained this draft version, nor is there
evidence of when the CO provided the SBA with the draft version. (See generally AR).

The United States attached two declarations to its Cross-Motion. 9 (Def.’s xMJAR, ECF
No. 33). During Oral Argument, the United States stated these declarations were attached to
explain “procedural irregularity . . . in compiling the administrative record[,]” which resulted in
the AR containing two versions of the CO’s non-responsibility determination. (OA Tr. 10:15–25,
ECF No. 52). Despite attachment of these declarations at the briefing stage, the declarations are
not a part of the administrative record.

The focal point for judicial review is the agency’s administrative record, thus “the
standard for discovery in the bid protest is narrower,” than in non-bid protest cases. Proxtronics
Dosimetry, LLC v. United States, 128 Fed. Cl. 656, 681 (2016); see also Murakami v. United
States, 46 Fed. Cl. 731, 735 (2000) (“[E]xceptions to the general rule against extra-record
evidence is based upon necessity, rather than convenience, and should be triggered only where

9
The declarations consisted of written statements from the CO (Ryan Larrison) managing this
solicitation and the attorney from the SBA’s Office of General Counsel (Lane Siems) who
compiled the administrative record.

13
the omission of extra-record evidence precludes effective judicial review.”), aff’d, 398 F.3d 1342
(Fed. Cir. 2005). The purpose of limiting review to the record before the procuring agency is to
prevent courts from using new evidence to “convert the ‘arbitrary and capricious’ standard into
effectively de novo review.” Murakami, 46 Fed. Cl. at 735. The ability to submit additional
information into an administrative record is therefore limited. Axiom Res. Mgmt., Inc. v. United
States, 564 F.3d 1374, 1379 (Fed. Cir. 2009).

There are two vehicles for submitting additional information to an administrative record:
a motion to complete and a motion to supplement. A motion to complete the record seeks to add
documents that were considered by the agency and relevant to the challenged decision. See BHB
Ltd. P’ship v. United States, 147 Fed. Cl. 226, 229 (2020). However, the government’s
designation of the administrative record is presumptively complete. Poplar Point RBBR, LLC v.
United States, 145 Fed. Cl. 489, 494 (2019) (citing Bar MK Ranches v. Yuetter, 994 F.2d 735,
740 (10th Cir. 1993)). To rebut this presumption, this Court has required “clear evidence of
material that was generated or considered by the agency but excluded from the record[.]” BHB
Ltd. P’ship, 147 Fed. Cl. at 229 (citing Poplar Point, 145 Fed. Cl. at 494); see also Linc Gov’t
Servs., LLC v. United States, 95 Fed. Cl. 155, 158 (2010).

Conversely, the Court must grant a request to supplement the administrative record or
conduct discovery in a bid protest only “if necessary for effective judicial review or if the
existing record cannot be trusted.” Diversified Maint. Sys. v. United States, 93 Fed. Cl. 794, 802
(2010) (internal quotations omitted); cf. Axiom Res. Mgmt., 564 F.3d at 1381. Only in extremely
limited circumstances is supplementation of the administrative record appropriate, such as where
the agency failed to consider relevant factors or where there is some evidence of bad faith or
improper behavior by agency officials. Cubic Applications, Inc. v. United States, 37 Fed. Cl. 339,
342 (1997)); see also Axiom, 564 F.3d at 1379 (citing IMS, P.C. v. Alvarez, 129 F.3d 618, 624
(D.C. Cir. 1997)). This Court is limited to supplementing the record in instances in which it can
“explain why the evidence omitted from the record frustrated judicial review as to the ultimate
question of whether [the agency action] was arbitrary and capricious.” AgustaWestland N. Am.,
Inc. v. United States, 880 F.3d 1326, 1332 (Fed. Cir. 2018) (citing Axiom, 564 F.3d at 1379–80).

Regarding these declarations, the United States has neither filed a motion to complete the
record nor requested the Court supplement the record. (See generally Def.’s xMJAR; see also
Def.’s Reply). By virtue of the substance of the documents, they were not considered before the
agency and thus are not relevant to this procurement. Additionally, when questioned, the United
States rejected the notion that the Court was incapable of properly adjudicating this case absent
the declarations. (OA Tr. 8:21–9:3 (responding to the Courts direct inquiry “is the United States
conceding that the administrative record is insufficient for the Court to conduct a meaningful
review?”)). Because the Court agrees that these documents do not aid in judicial review,
inclusion of the declarations would be inappropriate. Therefore, the Clerk is ORDERED to
STRIKE Exhibits 1 and 2 which are attached to the United States’ Cross Motion and Response,
(ECF No. 33).

Nonetheless, Legacy seemingly continues to find a comparison of the two documents
relevant as some evidence of inconsistency between the CO’s and SBA’s decision, stating:

14
requirements.”)). Notably, the CO’s draft version specifically highlights Legacy’s responses to
both the cure and show cause notice in which Legacy offered various justifications to explain its
equipment failures:

A cure notice was issued to Legacy on 24 August 2023 for unacceptable
delays in completing the task order performance . . . [a] response to the cure
notice was received by the Government . . . [t]he response detailed numerous
equipment failures that impeded the performance of the task order and refuted
the Government’s claim it was negligent and the contractor’s fault. The
response also detailed corrective actions taken to include implementing a 24
hour/day and 7 day/week schedule for the dredge crew and ensuring a full
and operational maintenance staff . . . [a] response to the show cause notice
was received . . . detail[ing] the continued issues experienced with equipment
failures and difficulty in dealing with the type of dredged material.

(AR 1202). While the final version did not provide the same depth of analysis regarding
Legacy’s equipment failures, the similarities contravene Legacy’s assertion. The draft version
acknowledges Legacy’s transparency regarding its equipment issues and the CO utilized that
transparency to form his responsibility determination.

Even if this Court were to determine that the CO ignored contextual information
regarding Legacy’s equipment failures, this would not indicate prejudice. The SBA was
ultimately the final decision maker and “Legacy had the chance” to address its concerns
regarding these issues within its COC application. (AR 1248–56); see also Legacy Corp. of
Illinois, 172 Fed. Cl. at 317 (citing 13 C.F.R. § 125.5 (providing SBA independent authority and
discretion to evaluate all elements of responsibility)). While the existence of both a draft and
final version may inspire the Agency to reexamine its internal submission processes and cause
the SBA to read their emails more closely, there is no evidence that these errors prejudiced
Legacy. 10

Lastly, the final version does refer to unfavorable information contained in past CPARS
that is not also found within the draft version. 11 (Compare AR 507, with AR 1200–1203). While
Legacy may not have been aware that the final version included this specific information,

10
If a practice exists in which agencies forward draft versions of documents to the SBA for its
review and potential comments, without disclosure to a bidder challenging a responsibility
determination, that practice would be, to put it mildly, problematic. In this instance, however, the
draft and final versions of the CO’s determination are sufficiently alike to determine that Legacy
suffered no prejudice. In addition, the administrative record contained both versions, thus
permitting effective judicial review.
11
The final version highlights Legacy received ratings on contract no.
W912ES21D0002 and was “assessed for liquidated damages” and issued a “Letter of Concern”
under contract no. W912EK21D0003. These references do not appear in the CO’s draft version
of the non-responsibility determination.

16
Legacy should have been aware that these reports existed as they would have been provided
during performance on its previous contracts. The SBA’s authority extends to all areas of
responsibility; thus, it would be unreasonable for Legacy to believe that this prior performance
information would be overlooked. 13 C.F.R. § 125.5(f)(1). To the extent that Legacy alleges due
process violations, the record establishes Legacy’s awareness of USACE’s complaints and
referral to the SBA, and that Legacy was provided with an opportunity to respond to the SBA
with its position regarding those complaints; Legacy was not entitled to anything more in the
way of due process. Mitchell v. W. T. Grant Co., 416 U.S. 600, 610 (1974) (“[d]ue process of
law guarantees ‘no particular form of procedure; it protects substantial rights.’”); see also Cook
v. United States, 210 Ct. Cl. 368, 373 (1976). Therefore, Legacy’s claims are unsupported by the
record.

B. The SBA’s decision to not issue a COC was neither arbitrary nor capricious.

Legacy asserts several claims regarding the SBA’s alleged failure to adequately consider
sufficient information to reach its COC determination. (Pl.’s Reply at 6). Legacy concedes that
the SBA’s Area Review Committee Chairperson and COC Program Manager “thoroughly
analyz[ed]” all relevant evidence but argues that the final Committee neglected to do so because
“the [Committee] only produced a two-page document showing that the Committee voted not to
issue a [COC].” (Id.). Legacy insists that this necessarily demonstrates a lack of “meaningful
review and contemporaneous documentation.” (Id. at 6). Legacy argues the SBA failed to
meaningfully investigate because it did not consider any of Legacy’s corrective actions. (Id. at
10–11; see also Pl.’s MJAR at 29, 35).

The Court will generally not take issue with the SBA’s process unless the plaintiff
evinces that the SBA “deviated from its standard operating procedure[s] or . . . deprived plaintiff
of the right to submit pertinent information and explain its case for a COC.” See PNM Constr.,
Inc. v. United States, 13 Cl. Ct. 745, 750 (1987) (finding the committee’s use of a vote to make
its final recommendation permissible). Here, Legacy has demonstrated neither.

The Committee reviewed and summarized the factors considered in its recommendation,
including (1) the basis for the CO’s referral, (2) Legacy’s responses to the COC application, and
(3) the IS’s report. (AR 1626–27). The Committee was comprised of three members, who by
majority vote ultimately recommended to deny Legacy a COC, holding:

By a simple majority, the Committee recommended not to issue a COC based
on the firm not sufficiently overcoming the CO’s objections.

Based upon the applicant’s explanations and its corrective plan and actions,
the Committee concluded that the applicant failed to overcome the reasons
cited in the Determination of Non-Responsibility. As a result, it
recommended that SBA decline to issue a Certificate of Competency.

(AR 1627).

As Legacy concedes, the IS’s report was thorough and well-reasoned; Legacy’s response
to the CO’s non-responsibility determination was also in-depth, and the SBA had access to
concerns raised by the CO. (Pl.’s Reply at 6; see also (AR 623–26, 1248–56, 1618–25). These

17
factors together demonstrate a well-rounded source of information for the SBA to make its
determination. See United Enter., 70 Fed. Cl. at 31 (citing Advanced Data Concepts, Inc v.
United States, 216 F.3d 1054, 1058 (Fed. Cir. 2000) (holding the court will sustain agency
decisions evincing rational reasoning and consideration of relevant factors)).

Upon receiving the referral for non-responsibility from the CO, SBA notified Legacy and
sought a response to the CO’s findings and ultimate determination of non-responsibility. (AR
1197–1222). Legacy’s detailed response provided its perspective as to why it believed a non-
responsibility determination was improper and included what it believed to be supporting
evidence. (AR 1235– 1376). The SBA assigned the case to the IS who compiled all of the
information into a report and ultimately recommended Legacy receive COC. (AR 1618–25).
After reviewing all information within the IS’s report, the Committee cast a vote rejecting the
IS’s recommendation. (AR 1626). The Court finds the SBA’s ruling to be “eminently rational
and reasonable” considering the amount of information reviewed within the IS’s investigation.
PNM Constr., 13 Cl. Ct. at 750. The record does not suggest the COC Committee failed to
meaningfully reach its final recommendation.

While Legacy may be dissatisfied by the lack of depth in the final summary, the Court
cannot imply consideration to mean a detailed explanation. Stapp Towing, 34 Fed. Cl. at 308
(characterizing the SBA’s final memorandum and meeting summary as not the “ideal
manifestation of cogency” for judicial review). “It is well-established that ‘an agency official
exercising discretion need not address every piece of evidence presented in its decision.’” Ocean
Ships, Inc. v United States, 115 Fed. Cl. 577, 593 (2014) (quoting Preferred Sys. Sol., Inc. v.
United States, 110 Fed. Cl. 48, 59 (2013)); see also Rebosky v. United States, 60 Fed. Cl. 305,
312 (2004). The Committee’s failure to discuss all evidence does not mean it was not considered
nor does it demonstrate an incomplete explanation. Preferred Sys., 110 Fed. Cl. at 59. Thus, the
fact that the Committee’s summary consisted of only two pages does not by itself establish that a
decision was reached without thoughtful consideration of all factors.

Legacy argues that the Committee did not account for Legacy’s corrective actions to
mitigate schedule and equipment failures on other contracts. (Pl.’s Reply at 10–11). The SBA
must conduct an adequate investigation “into elements of responsibility which it purports to
evaluate[;]” thus, a failure to consider Legacy’s corrective actions may violate the SBA’s
obligations. CSE Constr. Co., 58 Fed. Cl. at 257–58. However, as the United States properly
analyzed, evidence of Legacy’s corrective actions would not require the SBA to make a finding
of responsibility. See Stapp Towing, 34 Fed. Cl. at 309–10 (upholding the SBA’s finding of non-
responsibility despite evidence of plaintiff’s corrective actions). With this understanding, the
Court now reviews the Committee’s findings.

In its meeting summary, the COC Committee made several acknowledgements of
Legacy’s corrective actions:

The applicant explained that while they did face schedule issues on a prior
contract that was mentioned in the Interim CPARS Report, the issues were
due to unforeseen equipment failures that were remedied as quickly as
possible. In addition, the applicant shifted operations to 24/7 hours for that

18
contract effort to recover from the schedule slippage. The applicant also
stated . . . there have been no issues since.

(AR 1626) (emphasis added). “The applicant also emphasized that despite the Unacceptable
ratings on the Interim reports, the final Schedule rating for this contract was Acceptable and the
rating official stated that they ‘would recommend this firm for similar projects in the future.’”
(AR 1627).

Additionally, the Committee highlights the IS’s report which also addressed Legacy’s
corrective actions:

The IS Report stated “I sense that Legacy Corp is taking remedial actions to
shore up their management and quality issues and in fact have successfully
completed similar actions for the federal government. Schedule slippage was
discussed at length and it is my opinion they are taking action to address this
internally.

(AR 1627) (emphasis added). Even if briefly discussed, the record clearly shows the COC
Review Committee did in fact consider the corrective actions that Legacy insists were ignored.
Ultimately, the SBA decides whether a contractor has overcome the CO’s objections in a
responsibility determination; here, they found Legacy had not. Therefore, Legacy’s final
argument fails.

III. Conclusion

For the reasons stated above, Legacy’s Motion for Judgment on the Administrative
Record, (Pl.’s MJAR, ECF No. 29), is DENIED. The United States’ and Newt Marine Service’s
Cross-Motions for Judgment on the Administrative Record, (Def.’s xMJAR, ECF No. 33; Int.-
Def.’s xMJAR, ECF No. 32), are GRANTED.

The Court GRANTS the United States’ Motion to Amend/Correct the Administrative
Record, (ECF No. 37).

The Clerk is ORDERED to STRIKE Exhibits 1 and 2 which are attached to the United
States’ Cross Motion and Response, (ECF No. 33).

Further, the Court DENIES the United States Motion for Extension of Time to File
Motion for Judgment on the Administrative Record as MOOT, (ECF No. 31).

The Clerk is DIRECTED to enter judgment accordingly. The parties shall meet and
confer and file a Joint Status Report proposing redactions to this memorandum opinion within
fourteen (14) days of its entry to allow the Court to file a public version of the opinion.

IT IS SO ORDERED.

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10754474. Public record. Not legal advice.