National Telecommuting Institute, Inc. v. United States

In the United States Court of Federal Claims

No. 15-293C

(Filed Under Seal: October 14, 2015)

(Reissued for Publication: October 28, 2015)

******************************************

NATIONAL TELECOMMUTING *

INSTITUTE, INC., *

*

Plaintiff, *

v. *

*

THE UNITED STATES, * Post-award Bid Protest; AbilityOne

* Program; Javits-Wagner-O’Day Act;

Defendant, * Delay in Filing Protest; Laches;

* Reasonableness of Evaluation and

PECKHAM VOCATIONAL INDUSTRIES, INC., * Selection of Awardee; Judgment on

* the Administrative Record.

and *

*

SOURCEAMERICA, *

*

Defendant-Intervenors. *

*

******************************************

Ronald K. Henry, with whom were David Hibey and Robert J. Wagman, Jr., Kaye Scholer

LLP, Washington, D.C., for Plaintiff.

Christopher L. Harlow, with whom were Benjamin C. Mizer, Principal Deputy Assistant

Attorney General, Robert E. Kirschman, Jr., Director, Franklin E. White, Jr., Assistant

Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice,

Washington, D.C., Timi Nickerson Kenealy, General Counsel, Committee for Purchase

from People Who are Blind or Severely Disabled, and Antonio T. Robinson, Office of

General Counsel, U.S. Department of Agriculture, Of Counsel, for Defendant.

Meghan A. Douris, Oles Morrison Rinker & Baker LLP, Seattle, Washington, for

Defendant-Intervenor Peckham Vocational Industries, Inc.

Sarah L. Wilson, with whom were J. Chase Johnson, Jeffery T. Bozman, and Z. Lily Rudy,

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

OPINION AND ORDER1

WHEELER, Judge.

In this bid protest, Plaintiff National Telecommuting Institute (“NTI”) challenges

the award of a U.S. Department of Agriculture (“USDA”) help desk services contract to

Peckham Vocational Industries (“Peckham”). The Government conducted this

procurement under the AbilityOne Program established by the Javits-Wagner-O’Day

(“JWOD”) Act, 41 U.S.C. §§ 8501-8506, to provide jobs for individuals with severe

disabilities. The AbilityOne Commission is an independent federal agency created to

administer the AbilityOne Program. See 41 U.S.C. § 8502. The Commission is responsible

for determining which products and services should be furnished to the Government by

people who are blind or severely disabled. A central nonprofit agency known as

SourceAmerica functions as a technical evaluation panel and makes recommendations to

the Commission on the qualifications and abilities of prospective nonprofit agencies to

perform the work.

This particular procurement has a long history, beginning in April 2013. There have

been multiple administrative appeals before SourceAmerica and the AbilityOne

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The Court issued this decision under seal on October 14, 2015 and invited the parties to submit proposed

redactions of any competitive-sensitive, proprietary, confidential, or other protected information on or

before October 21, 2015. By that date, Defendant-Intervenor SourceAmerica, on behalf of itself,

Defendant-Intervenor Peckham, and the Government, requested only minimal redactions of identifying

non-party bidder information and source selection evaluation criteria, while Plaintiff National

Telecommuting Institute asked for extensive redactions of source selection evaluation commentary, along

with the Court’s own factual findings and legal conclusions. In an effort to resolve redaction issues, the

Court requested NTI to submit a memorandum explaining the basis for its redactions by October 26, 2015.

NTI filed its memorandum on October 26, 2015, and SourceAmerica, on behalf of itself, Defendant-

Intervenor Peckham, and the Government, responded on October 27, 2015.

The reason for redaction “is to safeguard the competitive process, not to withhold information that a party

frowns on making public.” Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. 672, 723 (2010). When

considering redactions, the better approach is to honor the “presumption of public access to judicial

records.” Baystate Techs., Inc. v. Bowers, 283 F. App’x 808, 810 (Fed. Cir. 2008) (citing Siedle v. Putnam

Invs., Inc., 147 F.3d 7, 9 (1st Cir. 1998); Poliquin v. Garden Way, Inc., 989 F.2d 527, 533 (1st Cir. 1993));

see also Madison Servs., Inc. v. United States, 92 Fed. Cl. 120, 131-33 (2010); Akal Sec., Inc. v. United

States, 87 Fed. Cl. 311, 314 n.1 (2009). After considering NTI’s explanations in support of its proposed

redactions, the Court agrees it is appropriate to redact certain source selection evlauation commentary.

These redactions are indicated in the decision by brackets and three asterisks, [***]. However, NTI also

proposes to redact this Court’s own factual and legal analysis where it reflects poorly on NTI. Omitting

such information would not serve to safeguard the competitive process, but rather would serve to shield

NTI from unfavorable commentary. The Court finds that it is neither necessary nor appropriate to redact

its decisional reasoning containing no protected information.

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Commission, and a reevaluation of proposals in accordance with the Commission’s

instructions. For the reasons explained below, the Court finds that NTI’s protest is barred

under the doctrine of laches. A.C. Aukerman Co. v. R.L. Chaides Constr, Co., 960 F.2d

1020, 1028-29 (Fed. Cir. 1992) (en banc); Clinton Reilly v. United States, 104 Fed. Cl. 69,

78-80 (2012). NTI waited six months after the official notice of award, and nearly ten

months after it had exhausted its agency appeals, before filing its bid protest. The awardee,

Peckham, and the Government suffered significant prejudice from NTI’s delay in bringing

the protest.

Putting NTI’s laches problem aside, the protest also fails on the merits. The Court

finds that SourceAmerica rationally evaluated the proposals, and determined that

Peckham’s proposal was far superior to NTI’s. SourceAmerica adhered to the reevaluation

instructions mandated by the Commission. NTI’s complaints about the procedures

followed during the reevaluation are not supported by the administrative record.

Accordingly, NTI’s protest is DENIED.

Background

NTI is a not-for-profit organization providing telecommuting job opportunities for

severely disabled individuals who are unable to work outside the home. Compl. ¶ 13.

Joining the Government in defending against NTI’s protest are SourceAmerica, the

designated central nonprofit agency, and Peckham, the selected awardee for the contract at

issue. SourceAmerica and Peckham are Defendant-Intervenors.

A. Statutory and Regulatory Framework

Through the JWOD Act, Congress created the Committee for Purchase from People

Who are Blind or Severely Disabled (“Committee” or “Commission”) to administer the

AbilityOne Program (“AbilityOne” or “Program”). 41 U.S.C. §§ 8502-03. The Committee

consists of fifteen presidential appointees representing various federal agencies as well as

the blind and severely disabled communities. Id. at § 8502; 41 C.F.R. § 51-1.3. The

Committee’s mandate is to identify programs and services furnished by qualifying

nonprofit agencies that are suitable for government procurement. Congress also directed

the Committee to designate central nonprofit agencies to assist in maintaining the

Procurement List and to evaluate the suitability of qualifying nonprofit agencies. 41 U.S.C.

§ 8503(c). Under this mandate, the Committee selected National Industries for the Blind

and SourceAmerica, previously named National Industries for the Severely Handicapped,

as its designated central nonprofit agencies.

Once the Committee determines that a good or service is suitable for procurement

from a qualified nonprofit agency, the Committee places that item on a published

Procurement List and any federal agency wishing to obtain that item must do so through a

qualified nonprofit agency. The Act lists specific requirements and conditions nonprofit

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agencies must satisfy to participate, and requires the Committee to maintain and publish in

the Federal Register the list of products and services deemed suitable for procurement

through the Program. The Act does not define the suitability standard, but states that the

Committee “may prescribe regulations regarding specifications for products and services

on the procurement list . . . and other matters as necessary to carry out this chapter.” 41

U.S.C. § 8503(c). As discussed below, the Committee promulgated regulations

establishing four mandatory criteria to determine a commodity’s or service’s suitability for

the Procurement List. 41 C.F.R. § 51-2.4(a)(1)-(4) “Determination of suitability.”

The Program’s statutory and regulatory framework creates a multi-step process by

which potential AbilityOne goods and services are identified and assessed. The statute and

regulations also create a three-tiered framework for evaluating the ultimate suitability of a

given addition to the Procurement List. Along with the Committee, SourceAmerica, in its

role as the central nonprofit agency coordinating employment opportunities for the severely

disabled, assesses federal contracting activities for compatibility with the AbilityOne

Program, obtains procurement information from federal contracting entities, evaluates

submissions from interested nonprofit agencies, and makes recommendations to the

Committee. Once the Committee receives SourceAmerica’s recommendation, the

Committee’s executive staff conducts its own review of the submissions and makes an

independent recommendation to the Committee’s presidentially-appointed members. The

Committee members then consider the “particular facts and circumstances in each case”

before deciding whether the good or service should be added to the Procurement List. 41

C.F.R. § 51-2.5.

B. Procurement Process

After the USDA Forest Service posted a Request for Information (“RFI”) for IT

helpdesk services support (“HelpDesk Services”) on October 30, 2012, SourceAmerica

approached the Forest Service to discuss whether the HelpDesk Services project might be

sourced through the AbilityOne Program. Gov’t Mem. at 6. The USDA then contacted

Ryan Blackman, SourceAmerica’s Senior Deputy Director for Strategy Development, in

early February, 2013, to discuss transitioning the helpdesk call center to an AbilityOne

opportunity. SourceAmerica (“SA”) Mem. at 8. Once the USDA Secretary and Chief

Information Officer confirmed that the HelpDesk Services could be sourced through the

AbilityOne Program, SourceAmerica created Sources Sought Notice (“SSN”) 2000 for

distribution among qualified nonprofit agencies.

On April 8, 2013, SourceAmerica published SSN 2000 and its evaluation team

began reviewing bid proposals in early May. Mr. Blackman hired two independent

contractors to offer technical advice to ensure accurate assessment of the technical

elements of the proposals. Although Mr. Blackman continued to facilitate the relationship

between the independent contractors and SourceAmerica’s evaluation team, Mr. Blackman

was not a member of the evaluation team. The SSN 2000 team completed its evaluation

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matrices on May 6, 2013, with every evaluator recommending Peckham for the HelpDesk

Services opportunity. SA Mem. at 12. Although NTI received no first rankings, it did rank

second or third with a majority of the evaluators. Following SourceAmerica’s Executive

Director’s recommendations, on May 23, 2013, Peckham and NTI presented their

proposals to the USDA and answered key questions submitted to SourceAmerica by the

USDA. Id. After submitting additional questions and independently analyzing the

proposals, the USDA’s sixteen-member team agreed with SourceAmerica, recommending

that Peckham perform the HelpDesk Services. Id. at 13.

Following a debriefing with SourceAmerica’s Executive Director, NTI filed two

appeals with SourceAmerica, both of which were denied. Id. at 14-15. NTI appealed these

denials to the Commission and, through its Executive Director Tina Ballard, the

Commission ultimately sustained NTI’s appeal on the ground that SourceAmerica “failed

to follow its established policies and procedures by evaluating NTI on criteria that was

[sic] not included in the Source Selection Notice #2000, dated April 29, 2013.”2 Pl. Mem.

at 8 (quoting SA 1756).3

After granting NTI’s appeal on December 20, 2013, Ms. Ballard remanded SSN

2000 to SourceAmerica “for appropriate action.” Administrative Record (“AR”) 2885. To

ensure a fair and unbiased second evaluation, Ms. Ballard “instructed SourceAmerica to

re-do their NPA recommendation,” giving the agency the following guidelines: “(1)

SourceAmerica should create another Sources Sought Notice using the original Statement

of Work and identical posting questions; (2) SourceAmerica should establish an evaluation

team of SourceAmerica staff members who were not involved in the first posting; (3) [t]he

SourceAmerica Executive Director making the recommendation should not have been

involved with the first posting; and (4) [create a] ‘firewall’ between the first posting and

the second posting [] so no one on the new team has access to any of the details of responses

to first posting or any evaluation details.” Id. 94.

SourceAmerica posted SSN 2333 on Friday, January 3, 2014. Id. 1500-03. The

second solicitation stated that the “project was under a tight timeframe.” Id. 1500. On

Friday, January 17, 2014, SourceAmerica received proposals from three bidders.4 Id.

2202-2410. After receiving these proposals, the new evaluation team “immediately began

its evaluations and was exclusively devoted to this task.” SA 1887. The evaluations and

ultimate recommendation from the SSN 2333 team that Peckham was the most qualified

nonprofit agency for the HelpDesk Services opportunity matched those “of every

2

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

3

Due to the fact that SourceAmerica was responsible for evaluating proposals and making

recommendations to the Commission, the Court required SourceAmerica to produce documents relating to

the evaluations. The Court considered these SourceAmerica documents part of the record on review.

4

The third bidder, [***], was not competitive but wanted to be considered as a subcontractor/mentee.

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individual who and organization that assessed the competing proposals of Peckham and

NTI over the course of two years.” SA Mem. at 2. SourceAmerica notified the bidders of

the outcome of the SSN 2333 evaluation on January 23, 2014, and debriefed NTI six days

later on January 29, 2014. AR 2646-45.

NTI immediately initiated the appeal process, filing ultimately unsuccessful first

and second-level internal appeals with SourceAmerica on February 6 and March 4, 2014.

Id. 256, 265. NTI then appealed to the AbilityOne Commission on April 4, 2014. Id. 131-

43. The Commission, acting again through Ms. Ballard, denied NTI’s appeal on May 29,

2014, at which time NTI’s agency appeals were exhausted. Id. 152. Following a notice

and comment period, the Commission published the USDA HelpDesk Services in the

Federal Register on August 15, 2014, placing the contract with Peckham “on the

Procurement List to be awarded on September 15, 2014.” Peckham Mem. at 11. Shortly

after the August 15 final publication, Peckham began contract performance, which

“include[d] a transition period during which the previous service provider [IBM] remained

in place. On March, 20, 2015, NTI initiated this bid protest, just days before Peckham was

scheduled to assume full responsibility for contract performance.” Gov’t Mem. at 9.

C. Procedural History

Counsel for NTI filed this judicial post-award challenge on March 20, 2015,

protesting the USDA HelpDesk Services award to Peckham and requesting declaratory and

injunctive relief. On March 25, 2015, Peckham filed a motion to intervene, which the

Court granted the next day. During a hearing on March 26, 2015, Counsel for NTI

successfully applied for a Temporary Restraining Order (“TRO”) to enjoin the Government

from allowing Peckham’s performance for fourteen days. On April 2, 2015, after briefing

and oral argument, the Court granted Peckham’s motion to dissolve the TRO. On April

10, 2015, the Court granted SourceAmerica’s motion to intervene in this case.

On July 8, 2015, NTI filed a motion for judgment on the administrative record and

a permanent injunction. On July 29, 2015, the Government and Intervenors each filed an

opposition to Plaintiff’s motion and a cross-motion for judgment on the administrative

record. The parties have fully briefed their respective motions, and on September 15, 2015,

the Court heard closing arguments. After carefully considering the parties’ positions, the

Court concludes that NTI’s claims are time-barred and that, in the alternative, the

Government is entitled to judgment on the administrative record.

Discussion

A. Standing

Pursuant to the Tucker Act, as amended by the Administrative Dispute Resolution

Act of 1996, this Court has “jurisdiction to render judgment on an action by an interested

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party objecting to a solicitation by a Federal agency for bids or proposals for a proposed

contract or to a proposed award or the award of a contract or any alleged violation of statute

or regulation in connection with a procurement or a proposed procurement.” 28 U.S.C.

§ 1491(b)(1). Determining whether a bid protester has standing to pursue a claim in this

Court “is a threshold jurisdictional issue” that must be met in any protest. Myers

Investigative & Sec. Servs. v. United States, 275 F.3d 1366, 1369 (Fed. Cir. 2002) (citing

Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102-04 (1998)). To establish standing

under the Tucker Act, an aggrieved protester must demonstrate that it is an “interested

party” by showing that it is “an actual or prospective bidder or offeror whose direct

economic interest would be affected by the award of the contract or by failure to award the

contract.” Am. Fed’n of Gov’t Emps. v. United States, 258 F.3d 1294, 1302 (Fed. Cir.

2001) (quoting 31 U.S.C. § 3551(2) (Supp. IV 1998)).

Neither the Government nor the Intervenors dispute that NTI has standing to pursue

this action. Indeed, the Court agrees that NTI is an interested party within the meaning of

the relevant statute and therefore has standing. NTI is an actual offeror and submitted a

technically acceptable proposal. NTI submitted timely proposals for both SSN 2000 and

SSN 2333, and was one of only three offerors evaluated by SourceAmerica and the

Commission during the second evaluation process. Pl. Mem. at 13. Only NTI and

Peckham proceeded beyond the initial qualifying assessment such that both were “within

the zone of competition” for the HelpDesk Services opportunity. Holloway & Co., PLLC

v. United States, 87 Fed. Cl. 381, 391 (2009).

B. Laches

In its cross-motion for judgment on the administrative record, Peckham asserts the

equitable defense of laches. Peckham Mem. at 25-27. The doctrine of laches “bars a claim

when a plaintiff’s ‘neglect or delay in bringing suit to remedy an alleged wrong, which

taken together with lapse of time and other circumstances, causes prejudice to the adverse

party.’” Land Grantors in Henderson, Union, & Webster Counties v. United States, 86

Fed. Cl. 35, 47 (2009) (quoting A.C. Aukerman Co., 960 F.2d at 1028-29). As this Court

has explained, the doctrine of laches “is premised on the maxim vigilantibus non

dormientibus aequitas subvenit–equity aids the vigilant not those who slumber on their

rights.” Mississippi Dep’t of Rehab. Servs. v. United States, 61 Fed. Cl. 20, 30 (2004)

(citing Cornetta v. United States, 851 F.2d 1372, 1375 (Fed. Cir.1988)). Laches may be

invoked as an affirmative defense in the context of a bid protest before this Court. See

Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1314-14 (Fed. Cir. 2007); see

also Software Testing Solutions, Inc. v. U.S., 58 Fed. Cl. 533, 536 (2003).

A laches defense requires that a defendant show “(1) unreasonable and unexcused

delay by the claimant, and (2) prejudice to the other party, either economic prejudice or

defense prejudice.” JANA, Inc. v. United States, 936 F.2d 1265, 1269 (Fed. Cir. 1991);

see also Hermes Consol., Inc. v. Unites States, 58 Fed. Cl. 3, 20 (2003). Ultimately, the

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defendant bears the burden of establishing that “the plaintiff delayed in filing suit for an

unreasonable and inexcusable length of time from the time the plaintiff knew or reasonably

should have known of its claim against the defendant” and that this “delay operated to the

prejudice or injury of the defendant.” A.C. Auckerman Co., 960 F.2d at 1032.

1. Delay

SourceAmerica notified Peckham and NTI of the outcome of SSN 2333 via email

on January 23, 2014, and debriefed NTI on January 29, 2014. AR 2642-45. NTI filed first

and second-level appeals with SourceAmerica on February 6 and March 4, 2014. Id. 256,

265. After losing both internal appeals, NTI appealed to the AbilityOne Commission on

April 4, 2014. Id. 131-43. Following a review of NTI’s allegations and meetings with

both NTI and SourceAmerica, the Commission, acting through Ms. Ballard, denied the

protest on May 29, 2014. Id. 152. After a period of public notice and comment, the

Commission added Peckham to the Procurement List on September 15, 2014. NTI filed

the present action on March 20, 2015, more than six months after the Commission finalized

the award to Peckham, more than eight months after NTI exhausted its administrative

appeals, and more than a year after SourceAmerica announced the outcome of SSN 2333.

This Court has explained that a plaintiff cannot sit on his rights in bringing a bid

protest while the Government moves forward with a contract. See, e.g., Benchmark Knife

Co. v. United States, 79 Fed. Cl. 731, 737 (2007) (citing Blue & Gold Fleet, 492 F.3d at

1314). To this end, this Court has found a “strong argument in favor of applying laches”

when a plaintiff chose to wait two months to file suit because he was weighing the cost of

litigation. Software Testing Solutions, Inc. v. United States, 58 Fed .Cl. 533, 536 (2003).

In this case, NTI waited more than three times as long to bring this bid protest.

NTI offers two primary justifications to explain its delay, both of which are

unpersuasive. First, NTI explains that it waited until March 2015 to bring its protest before

this Court because it chose to attempt to work directly with the USDA. See, e.g., Sept. 15,

2015 Closing Arg. (“Tr.”) at 33-34; accord Dkt. No. 1-2 (MJ Willard Declaration ¶ 27)

(“Since the SSN was placed on the Procurement List on September 15, 2015, [sic] I have

been seeking relief directly from the USDA.”). Second, NTI explains that, due to its

modest size and nonprofit status, it wanted to seek less expensive means of relief before

litigating this matter. See, e.g., Tr. at 33 (“NTI is a small nonprofit. The idea of rushing

into court prematurely and expensively is a very difficult undertaking for them so they

attempted everything they could think of prior to going into court.”), id. at 34 (“So, you

had two components to it. One is it’s expensive to be here. . . .”).

The Court does not quarrel with NTI’s claims that it was attempting to seek relief

through informal channels and by less expensive means. However, in choosing to rely on

such alternative efforts, rather than timely filing a bid protest, NTI “simply chose to put all

[its] eggs in one basket—ultimately to [its] detriment.” Reilly, 104 Fed. Cl. at 80; see also

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Tr. at 34 (“The reason we had to file in March . . . was because we suddenly got word that

those discussions had been a waste of time and Peckham was preparing to launch a startup

of services.”). While NTI was attempting to avoid the cost of litigation, the USDA and

Peckham were proceeding with the call-center contract at a significant cost to both parties.

2. Prejudice

As this Court has explained, the “[m]ere passage of time does not constitute laches.”

Mississippi Dep’t, 61 Fed. Cl. at 30. To prevail, the defendant must also show how the

plaintiff’s delay in bringing a claim caused the defendant to suffer prejudice. In the case

of a bid protest, “[a] plaintiff may choose to sit on his rights while a government contract

proceeds, but he will be barred from protesting if the Government is prejudiced as a

consequence.” Reilly, 104 Fed. Cl. at 80; see also 30A C.J.S. Equity § 138 (“Laches is not

based merely upon time, but also upon changes in conditions or relationships involved with

the claim, and the consequent inequity of permitting the claim to be enforced.”).

In the present case, NTI’s decision to sit on its right to bring this claim for six months

directly and substantially prejudiced both Peckham and the Government. Peckham has

“incur[red] millions of dollars in costs that remain unreimbursed pending this bid protest.”

Peckham Mem. at 26; see also Tr. at 156 (“Peckham has had to outlay resources for its

facilities, outlay resources for the training program, for the software.”). Also, the

Government has incurred and will continue to incur substantial costs pending resolution of

this matter. NTI’s delay has forced the USDA to extend its contract with incumbent IBM.

See Peckham Reply at 14 (explaining that the USDA is holding the launch of its contract

with Peckham “due to the TRO that was issued in this case, and its impacts after only one

week.”). Finally, pending a result in this case, task orders that should have gone into effect

in July remain on hold. Id. at 15; see also Tr. at 156 (explaining that two of the four USDA

IT task orders remain unimplemented pending resolution of this matter).

For these reasons, the Court finds that application of the laches doctrine is

appropriate in this case. NTI could have brought this action as much as six months before

it did so and its justifications for the delay are inadequate. As a result of NTI’s delay, both

Peckham and the Government have suffered economic prejudice, much of which could

have been avoided had NTI brought a timely bid protest.

C. Judgment on the Administrative Record

1. Standard or Review

In a bid protest, this Court reviews an agency’s decision pursuant to the standards

set forth in the Administrative Procedure Act (“APA”). 5 U.S.C. §§ 701-706 (2000); see

also Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332

(Fed. Cir. 2001) (stating that the APA standard of review shall apply in all procurement

protests in the Court of Federal Claims). Under the APA, a reviewing court shall set aside

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an agency action if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law.” 5 U.S.C. § 706(2)(A); see, e.g., Banknote Corp. of Am., Inc. v.

United States, 365 F.3d 1345, 1350-51 (Fed. Cir. 2004).

The APA standard allows this Court to set aside an agency’s procurement decision

if it lacked a rational basis or if the agency’s decision-making involved a violation of

regulation or procedure. Impresa, 238 F.3d at 1333. When evaluating a challenge on the

first ground, a court “must determine ‘whether the contracting agency provided a coherent

and reasonable explanation of its exercise of discretion. When a challenge is brought on

the second ground, the disappointed bidder must show a clear and prejudicial violation of

applicable statutes or regulations.’” Axiom Res. Mgmt., Inc. v. United States, 564 F.3d

1374, 1381 (Fed. Cir. 2009) (quoting Impresa, 238 F.3d at 1332–33 (Fed. Cir. 2001)). If

the Court determines that an agency acted without a rational basis or contrary to law, it

must then determine whether “the bid protestor was prejudiced by that conduct.” Bannum,

Inc. v. United States, 404 F.3d 1346, 1351 (Fed. Cir. 2005). The plaintiff must show

prejudice by demonstrating “that there was a substantial chance it would have received the

contract award but for [the agency’s procurement] error.” Alfa Laval Separation, Inc. v.

United States, 175 F.3d 1365, 1367 (Fed. Cir. 1999) (internal citation omitted); see also

Bannum, Inc. 404 F.3d at 1353.

In its motion for judgment on the administrative record and permanent injunction,

NTI protests the second evaluation process of proposals for the USDA HelpDesk Services

opportunity on three grounds. First, NTI contends that SourceAmerica failed to follow

each of four guidelines from Ms. Ballard in conducting the second evaluation, resulting in

an arbitrary and capricious evaluation process that prejudiced NTI. Second, NTI argues

that the Commission erred in determining Peckham was a suitable, qualified nonprofit

agency. Pl. Reply at 25. Finally, NTI contends that it was unreasonable for SourceAmerica

and the Commission not to consider AbilityOne’s policy goal of maximizing employment

opportunities. Pl. Mem. at 22. The Court will address each of NTI’s arguments below.

For the reasons explained, NTI has failed to meet its burden on any of its protest

grounds and, in fact, the administrative record instead supports judgment in the

Government’s and Intervenors’ favor. Specifically, SourceAmerica and the AbilityOne

Committee’s decision to award this contract to Peckham was reasonable, coherent, and

rational based on the record evidence. Moreover, the reevaluation process adhered to the

specific procedures articulated by Ms. Ballard as well as the four-factor regulatory

framework.

2. SourceAmerica Followed the Guidelines for the Second Evaluation and

Conducted a Fair and Lawful Reevaluation

After sustaining NTI’s first appeal based on its claim that SourceAmerica

“evaluat[ed] NTI on criteria that was not included in the Source Selection Notice #2000,”

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Ms. Ballard returned the IT project selection decision to SourceAmerica “for appropriate

action.” SA 1756. A July 21, 2014 Commission staff synopsis summarizes Ms. Ballard’s

instructions to SourceAmerica regarding SSN 2333, the second evaluation for the USDA

HelpDesk Services opportunity. The synopsis is a post-hoc description of the instructions

for the second evaluation and the parties disagree as to the weight this summary should be

given. Tr. at 74-75 (“There’s been some debate between NTI and the intervenors . . .

because AR 94 is an after-the-fact memorialization of the instructions. The intervenors are

absolutely correct on that. . . . But NTI is also right that it represents the instructions.

These are the instructions of SourceAmerica.”). The Court deems it unnecessary to decide

whether the guidelines are directions or an after-the-fact summary because, either way,

SourceAmerica conducted the second evaluation process in accordance with each of the

four Commission guidelines.

Based on these guidelines, NTI argues that the evaluation process was arbitrary and

capricious because SourceAmerica failed to: (1) issue an identical posting; (2) establish

an evaluation team of members who were not involved in the first posting; (3) select an

evaluation official who was not involved in the first posting; and (4) create a firewall

between the first and second postings so new team members could not access evaluation

or response details from the first posting. AR 94.

a. SourceAmerica Issued a Substantively Identical Posting

The first Commission guideline instructed SourceAmerica to “create another

Sources Sought Notice using the original Statement of Work and identical posting

questions,” because Ms. Ballard determined SourceAmerica evaluated the SSN 2000

proposals using criteria not explicitly listed in the notice. Id. 94. To address this concern,

SourceAmerica prepared SSN 2333 so that all of the substantive factors considered during

the first evaluation process were explicitly listed in the text of SSN 2333.

As the evaluation of proposals for SSN 2000 proceeded, the USDA posed additional

questions and its user requirements changed, which in turn led to changes in the

Commission’s suitability analysis. Gov’t Mem. at 28. For example, on June 11, 2013,

both NTI and Peckham received an email with three questions that then became part of

SSN 2000. Tr. at 75. In drafting SSN 2333, the staff at SourceAmerica deliberately added

these three questions (as Response Requirements 7, 8, and 10) to the notice to ensure that

it accurately reflected the substantive evaluation criteria considered during the first

evaluation. SA Reply at 14. NTI claims that these changes make the second evaluation

substantially different from the first.

NTI’s contention that SourceAmerica made impermissible changes to SSN 2333 is

simply without merit. The information sought by Response Requirements 7, 8, and 10 was

requested from NTI and Peckham during the first evaluation process. NTI provided this

information during that process by answering the USDA’s and SourceAmerica’s additional

11

questions. Had SourceAmerica issued an identical posting, it would have been

disregarding Ms. Ballard’s first guideline for conducting the second evaluation process.

See id. at 14 (“No rational participant in a procurement would expect SourceAmerica to

simply re-title SSN 2000 as SSN 2333 and repeat the evaluation process. Doing so would

have clearly violated the purpose and intent of Ms. Ballard’s December 20, 2013 remand

letter.”). Instead, in drafting the second posting, SourceAmerica took steps to clarify and

make explicit all evaluation criteria that it considered during the first evaluation.

NTI places form over substance by arguing SourceAmerica should have drafted

SSN 2333 in a way that effectively did not reflect the actual contract opportunity SSN 2000

had become by the time the first evaluation period ended. Id. (“Re-posting verbatim

Sources Sought Notices would have been irrational and unreasonable.”). Instead,

SourceAmerica incorporated the June 13, 2013 questions relating to subcontracting and

financial stability directly into the SSN 2333 posting. AR 1503; see also Tr. at 121

(“[T]hey made it express, that there could be absolutely no question, no room for

misunderstanding, that the subcontracting requirements . . . included in the questions

responded to by both NTI and Peckham in the SSN 2000 process, were also part of the

2333 process, and they incorporated question about the financial stability issue.”).5

Lastly, SourceAmerica “expanded upon the criterion regarding [nonprofit agency]

management” in part because NTI itself requested such guidance following SSN 2000. SA

738-39. To clarify this criterion, SourceAmerica explained what it was looking for in terms

of nonprofit agency management in greater detail in SSN 2333.6 Despite this additional

guidance on how to effectively address this criterion, a criterion included in both SSN 2000

and SSN 2333, NTI again failed to provide a satisfactory response in its second proposal.

SA Mem. at 19; see, e.g., AR 1738 (comments of evaluator Michael McDermott) (“[***]”).

b. SourceAmerica Established a New Evaluation Team

The record demonstrates that SourceAmerica complied with the second

Commission guideline to “establish an evaluation team of SourceAmerica staff members

who were not involved in the first posting.” AR 94; see SA Mem. at n.15 (demonstrating

5

SourceAmerica further clarified the subcontracting criterion in SSN 2333’s initial “key notice”

information. AR 1500 (explaining “[i]f other aspects of the proposals received are equal, SourceAmerica

will give preference to the CRP with the highest degree of organic technical capability, resulting in the least

amount of subcontracting risk, subcontract labor, and/or subcontract dollars.”).

6

Compare SSN 2000 Response Requirement #2 at SA 4 “(Capacity) Describe your organization’s overall

ability to commit organizational resources, and have available the technical and management bandwidth to

support a November 2013 start date for this project, including pricing activities, production of customer

deliverables, etc.”) with SSN 2333 Response Requirement #4 at AR 1526 (“Describe your CRP’s executive

and senior management infrastructure that supports and integrates successful execution of this opportunity.

Include, at minimum, a description of the following specifics: 1) Management hierarchy/structure; 2)

Management communication infrastructure; 3) Management principles and tools to be utilized for June

start-up and throughout contract performance.”).

12

no overlap between the first and second evaluation team members). Here, “posting” refers

“to the solicitation and its evaluation.” SA Reply at 17. Despite the evidence of

SourceAmerica’s compliance, NTI argues that SourceAmerica failed to adhere to the

second requirement because: (1) two SourceAmerica employees participated in both

evaluations; and (2) Ryan Blackman, the deciding official assigned to SSN 2333, “was

involved in the earliest stages of the development of SSN 2000, through the evaluation

phase, and into the post-award stage.” Pl. Mem. at 17.

NTI contends that SSN 2333 evaluators Ted Prindle and Chris Seventko were

involved in the first posting based on two emails. Yet, any involvement by Mr. Seventko

or Mr. Prindle in SSN 2000, however limited, came well after SourceAmerica completed

the evaluation process and awarded the contract to Peckham. As to Mr. Prindle, NTI cites

a single email referring to him as a potentially interested party to a conference call

discussing the USDA award. Pl. Mem. at 19; SA 2715. NTI fails to acknowledge,

however, that this email and the conference call to which it refers took place post-award,

and therefore would not have involved information about the actual evaluation. See Tr. at

82-83 (explaining conference call took place after SSN 2000 evaluations were closed).

Similarly, NTI argues that Mr. Seventko was involved in the first posting based on a post-

award email. See Pl. Mem. at 17. Much like its argument respecting Mr. Prindle, however,

NTI’s argument also fails with regard to Mr. Seventko because any contact he had in

relation to SSN 2000 occurred post-award, and consequently post-evaluation.

Finally, NTI argues that Mr. Blackman’s role as the executive director for SSN 2333

tainted the evaluation process. However, as NTI itself concedes, Mr. Blackman had

“legitimate business reasons” for his early involvement with the USDA HelpDesk Services

opportunity. See Pl.’s Reply at 15-16. In his role as senior deputy director, Mr. Blackman

helped to transition the USDA opportunity to an AbilityOne program. Gov’t Mem. at 33.

He also helped the technical expert consultants navigate SourceAmerica’s internal

structure and processes. Specifically, Mr. Blackham coordinated with the consultants to

ensure that they understood SourceAmerica’s staffing structure and general evaluation

procedures. See, e.g., SA 3386. He did not, however, take part in evaluating SSN 2000

proposals, nor did he have access to the evaluations materials and substantive proposals

maintained within the secure Front Office Application (“FOA”) system. Consequently, the

fact that Mr. Blackman served as executive director for the second posting did not “taint”

the SSN 2333 evaluation process because he was never involved in evaluating SSN 2000

proposals, and in fact, Mr. Blackman never had access to those proposals or any of the

materials used to evaluate them.

c. SourceAmerica Designated a New Evaluation Official

Ms. Ballard’s third guideline required that “[t]he SourceAmerica Executive Director

making the recommendation should not have been involved with the first posting.” AR

94. Again, in this context, “posting” refers “to the solicitation and its evaluation.” SA

13

Reply at 17. Accordingly, Ms. Ballard’s “phrase ‘not involved with the first posting’ refers

to the first proposals and their evaluation, not to conduct of business that preceded or

followed that evaluation.” Id. To comply with Ms. Ballard’s directive, SourceAmerica

selected Mr. Blackman to serve as executive director for the SSN 2333 posting. Mr.

Blackman was experienced in the Procurement List addition process and well-regarded

within SourceAmerica and by the AbilityOne Commission.

As executive director of the SSN 2333 posting, Mr. Blackman “was responsible for

reviewing the evaluators’ findings, recommending an NPA to the Commission, and

notifying the NPAs of his recommendation.” Gov’t Mem. at 32; see also AR 2639-45. His

tenure as executive director was the only point at which Mr. Blackman had access to the

substantive information in the parties’ proposals and SourceAmerica’s evaluative

information. Contrary to NTI’s contentions, there is simply no support for the argument

that Mr. Blackman was involved in SSN 2000’s evaluative process or was exposed to

information that would have biased his actions as executive director of SSN 2333. The

record and briefing instead suggests that Mr. Blackman wears many hats at

SourceAmerica, only one of which involved exposure to evaluative findings related to the

USDA HelpDesk Services opportunity.

d. SourceAmerica’s Second Evaluation Was Not Contaminated

NTI correctly asserts that SourceAmerica did not create “[a] ‘firewall’ between the

first posting and the second posting . . . so no one on the new team ha[d] access to any

details of responses to [the] first posting or any evaluation details,” according to Ms.

Ballard’s final guideline. Pl. Reply at 17; AR 94 (listing final guideline). What NTI’s

argument fails to acknowledge, however, is that SourceAmerica did not have to set up or

create a new IT infrastructure to meet this requirement. See SA Reply 17-18. Its existing

FOA document control system effectively satisfied Ms. Ballard’s fourth guideline.7

To the extent that any messages relating to the first posting reached SSN 2333

evaluators, NTI fails to show how any such message caused an irrational second evaluation

process. SA Mem. at 36-37. Finally, NTI’s additional arguments concerning similarities

between SSN 2000 and SSN 2333 evaluators’ descriptions of the opportunity or project

history are unpersuasive. The language appeared verbatim in both publicly distributed

notices. SA Reply at 18.

7

See SA Mem. at 7 (“One tool used to protect source selection information is SourceAmerica’s Front Office

Application (“FOA”) system. FOA serves as the official repository of source selection documents, and

access is closely protected. During an evaluation, only members of an evaluation team have access to NPA

proposals; other employees of SourceAmerica do not have access to the system.”).

14

3. The Award Decision in Favor of Peckham Was Reasonable

As noted above, the AbilityOne Committee’s regulations set out four criteria that a

commodity or service must satisfy to be considered “suitable” for addition to the

Procurement List. Much of the suitability assessment involves the qualifications of the

nonprofit agency providing the services. As the regulations state, “[f]irst, the service must

have the potential to generate employment for the severely disabled. 41 C.F.R. § 51-2.4(a).

Second, the selected NPA must ‘qualify’ for the program. Id. Third, the selected NPA

must be capable of providing the service. Id. Fourth, the addition of the service to the

Procurement List should not have severe adverse impact on the incumbent. Id.” Gov’t

Reply at 1-2. When assessed against these four suitability criteria, the Committee’s

decision to add the USDA HelpDesk Services to the Procurement List with Peckham as

the service provider was rational and in accordance with applicable law.

The USDA’s HelpDesk opportunity, as provided by Peckham, had the potential to

generate employment for the severely disabled. See, e.g., AR 302 (“The Commission

noted that call centers are routinely staffed by severely disabled individuals and [] the

Federal Government regularly utilizes such individuals on these contracts.”). Through its

hiring, training, and staffing framework, Peckham demonstrated a commitment to

employing severely disabled individuals and veterans. Id. 2423, 2424, 2449, 2479, 2503.

Peckham qualifies to participate in the AbilityOne Program as an agency that is

“operated in the interest of severely disabled individuals who are not blind,” 41 U.S.C.

§ 8501(6), and “employs . . . severely disabled individuals for at least 75 percent of the

hours of direct labor required for the production or provision of the products or services.”

41 C.F.R. § 51-2.4(a)(3).8 To participate in the Program, nonprofit agencies must certify

compliance with the direct labor ratio by completing annual certifications and submitting

to onsite visits and audits. 41 C.F.R. §§ 51-2.4(a)(3), 51-4.3. Indeed, the Commission

explained that “Peckham has been in the AbilityOne Program for 25 years, and in that time

its agency-wide direct labor ratio has never dropped lower than 75% and is usually above

80%.” AR 233 (emphasis in original).

Despite Peckham’s clear qualifications, NTI contends that SourceAmerica ignored

the statutory purpose of the AbilityOne Program when it “failed to follow its B-1 policies

and procedures.” Pl. Mem. at 22. According to NTI, SourceAmerica’s B-1 policies and

procedures require it to consider which nonprofit agency will “maximize employment” for

the target population. NTI claims that had SourceAmerica followed this “authentic

mandate,” it would have determined that NTI was more qualified for this opportunity than

8

According to the statute, “[t]he term “severely disabled individual” means an individual or class of

individuals under a physical or mental disability, other than blindness, which (according to criteria

established by the Committee after consultation with appropriate entities of the Federal Government and

taking into account the views of non-Federal Government entities representing the disabled) constitutes a

substantial handicap to employment and is of a nature that prevents the individual from currently engaging

in normal competitive employment.” 41 U.S.C. §8501(8).

15

Peckham because NTI employees are homebound and therefore are the “most severely

disabled.” Pl. Reply at 23. The Court does not find support for this argument in the JWOD

Act.

In passing the JWOD Act, Congress directed “the CNAs [to] assist the Commission

with the identification, evaluation, and distribution” of “employment and training

opportunities for persons who are blind or have other severe disabilities.” 41 U.S.C.

§ 8503(c); 41 C.F.R. §§ 51-3.2, 51-1.1. Pursuant to the Commission’s directives and its

“overarching goal to increase” such training and employment opportunities,

SourceAmerica published AbilityOne Program Bulletin No. B-1. 41 C.F.R. § 51-1.1; AR

330-38. As Bulletin B-1 states, SourceAmerica

will adhere to a set of best practices consistent with its mission,

vision, values, and goals, and to [its] role as defined by

regulation, to maximize the employment options for people

with significant disabilities, by aggressively preserving

existing and proactively developing new job opportunities for

people with significant disabilities. A clear and transparent

Project Development Distribution process is essential to the

achievement of this goal.

AR 330. NTI’s argument essentially rewrites this policy statement to create a

maximization mandate, rather than an overarching policy goal, which it then claims

SourceAmerica disregarded during the evaluation process.

The Court is not persuaded by NTI’s “maximization of employment” argument.

NTI asks this Court to decide whether employing individuals with visible, physical

disabilities should render a nonprofit agency more qualified under the regulations than an

agency employing individuals with less visible physical or mental disabilities. The Court

will not engage in such analysis. Nor does it find any evidence in the record or statutory

framework to suggest that the AbilityOne Program was meant to weigh the severity of a

person’s disability after that individual qualifies under the statutory definition of “severely

disabled individual.” SourceAmerica, the Committee’s staff, and the Committee itself

determined that Peckham qualified for this opportunity. The evaluators were persuaded

that Peckham satisfied the 75 percent direct-labor ratio and approved its “plans for

employing severely disabled persons with a range of physical and mental disabilities.” SA

Reply at 12.

The regulations also require that the selected nonprofit agency be capable of

performing the contract. As outlined above, potential nonprofit agency providers are

assessed via AbilityOne’s three-tiered evaluation process. Once the Committee decides

that a good or service is capable of being provided by the severely disabled and therefore

suitable for procurement through the Program, SourceAmerica, as the designated central

16

nonprofit agency, publishes a Sources Sought Notice. This notice accomplishes what a

request for proposals (“RFP”) normally would in ordinary government procurement.9 The

proposals are then evaluated independently at three separate levels before a winner is

selected.

At every stage of the evaluation process, individuals and organizations experienced

with the AbilityOne procurement process assessed both NTI’s and Peckham’s responses to

SSN 2000 and SSN 2333. NTI’s strengths did not go unnoticed, but over the course of two

years, “the recommendation[s] of every individual who and organization that assessed the

competing proposals” favored Peckham in terms of ability to provide the requested

service.10 SA Mem. at 2. As the contracting agency, the USDA also reviewed Peckham’s

technical capabilities and provided its own assessment to the Commission.11 Based on its

assessment, the USDA concluded “that Peckham has the technical capability and capacity

to perform the IT Service Desk Support Service requirement.” AR 228. Following these

initial evaluations and assessments, the Commission’s executive staff reviewed Peckham’s

proposal, along with SourceAmerica and the USDA’s recommendations, and ultimately

concluded “that Peckham had adequately demonstrated its technical capabilities.” Id. 127-

29, 312-15. Finally, after receiving and reviewing summaries of all of the

recommendations and proposal materials, the presidentially-appointed Committee

members “unanimously determined that the HelpDesk Services should be added to the

Procurement List and provided by Peckham.” Id. 127-29, 312-15, 352.

The fourth and final regulatory condition requires the Commission to assess the

impact that adding the good or service to the Procurement List will have on the current

contractor. 41 C.F.R. § 51-2.4(a). The incumbent contractor for the HelpDesk Services is

IBM, currently twenty-fourth on the Fortune 500 with reported annual revenues of $104

billion. Gov’t Mem. at 28; AR 232. The Commission rationally determined that adding

the $60 million HelpDesk Services contract to the Procurement List would “not have [a]

severe adverse impact on the incumbent.” 41 C.F.R. § 51-2.4(a); AR 232. IBM has not

9

In an AbilityOne procurement, the government-issued RFP “comes relatively late in the process. It is a

single source RFP in accordance with FAR § 6.302-5, issued after a single NPA has been recommended to

proceed.” SA Mem. at 6.

10

Compare SSN 2333 NTI evaluations: Evaluator A, AR 1735 (“[***]”), and Evaluator B, id. 1735

(“[***]”), and Evaluator C, id. 1736-37 (“[***]”), and Evaluator D, id. (“[***]”), with SSN 2333 Peckham

evaluations: Evaluator A, id. 1734 (“[***]”), and Evaluator B, id. (“[***]”), and Evaluator C, id. 1736

(“[***]”), and Evaluator D, id. 1737-38 (“[***]”).

11

See AR 228-29 (“Specifically, the USDA determined that Peckham: [1] Exhibited clear understanding

of contract requirements and magnitude; [2] Designated technical expertise and experience in IT Service

Desk Support; [3] Proposed technical approach and addressed the full scope of USDA’s requirement and

how they will specifically satisfy the requirements; [4] Address subcontracting opportunities to perform

scope of work; [5] Provided Past Performance history including several requirements similar in size and

scope; [and 6] Provided a high confidence level and a plan for recruiting, hiring, and retaining personnel.”).

17

opposed adding the HelpDesk Services opportunity to the Procurement List and nowhere

in NTI’s motions before this Court does it dispute this finding.

Conclusion

NTI could have filed this protest at least six months before it finally chose to do so.

Instead, it opted to weigh the cost of litigation while pursuing its own means of resolution.

By virtue of NTI’s delay, the Government and Intervenors have incurred costs that could

have been avoided. The doctrine of laches precludes relief to one who slumbers on his

rights to the disadvantage of the other parties. Accordingly, NTI’s claims in this case are

barred by the doctrine of laches.

In the context of a procurement protest, the APA’s standard permits this Court to

set aside an agency’s procurement decision only where it lacked a rational basis or if the

agency’s decision-making involved a violation of regulation or procedure. When

evaluating a challenge on the first ground, a court “must determine ‘whether the contracting

agency provided a coherent and reasonable explanation of its exercise of discretion.”

Axiom Res., 564 F.3d at 1381 (quoting Impresa, 238 F.3d at 1332-33). As the record

demonstrates, SourceAmerica and the AbilityOne Commission carefully considered each

proposal before selecting Peckham for this opportunity. By way of the nonprofit agencies’

responses to SSN 2333, SourceAmerica and the Commission evaluated the proposals

according to each of the four regulatory requirements within 41 C.F.R. § 51-2.4(a)(1)-(4).

The evaluations, recommendations, and decisions contained in the administrative record

are coherent and provide very reasonable explanations for awarding the opportunity to

Peckham. Accordingly, the agencies’ decision to add the HelpDesk Services, as performed

by Peckham, to the Procurement List was reasonable with a rational basis in fact and law.

When bringing a challenge “on the second ground, the disappointed bidder must

show a clear and prejudicial violation of applicable statutes or regulations.’” Axiom Res.,

564 F.3d at 1381 (quoting Impresa, 238 F.3d at 1332-33). Despite NTI’s insistence to the

contrary, the second evaluation team adhered to Ms. Ballard’s four guidelines throughout

the posting process for SSN 2333. The agencies made their decision in accordance with

both these procedural directives and the applicable statutory regulations. As such, Plaintiff

NTI has failed to meet its burden of demonstrating that this agency action was “arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C.

§ 706(2)(A).

Based upon the foregoing, the Court DISMISSES NTI’s claims as untimely, and

alternatively GRANTS the Government’s and Intervenors’ Cross-Motions for Judgment

on the Administrative Record.

18

IT IS SO ORDERED.

s/Thomas C. Wheeler

THOMAS C. WHEELER

Judge

19