American Relocation Connections, L.L.C. v. United States

In the United States Court of Federal Claims

No. 18-963C

Filed: September 24, 2018

Redacted Version Issued for Publication: October 22, 20181

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AMERICAN RELOCATION *

CONNECTIONS, L.L.C., *

Pre-Award Bid Protest; Cross-

*

Protestor, Motions for Judgment on the

*

Administrative Record; Acquisition

*

v. Planning; Market Research; 13

*

C.F.R. § 125.2; Federal Supply

UNITED STATES, *

Schedule; NAICS Codes.

*

Defendant. *

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

Bret S. Wacker, Clark Hill PLC, Detroit, MI. Of counsel was Emily Baldwin, Clark

Hill PLC, Detroit, MI, and W. Barron A. Avery and William B. O’Reilly, Baker Hostetler,

Washington, D.C.

Margaret J. Jantzen, Trial Attorney, Commercial Litigation Branch, Civil Division,

United States Department of Justice, Washington, D.C., for defendant. With her were

Steven J. Gillingham, Assistant Director, Commercial Litigation Branch, Robert E.

Kirschman, Jr., Director, Commercial Litigation Branch, and Joseph H. Hunt, Assistant

Attorney General. Of counsel was Kimberly L. Cohen, Attorney, Office of Assistant Chief

Counsel, U.S. Customs and Border Protection, Indianapolis, IN.

OPINION

HORN, J.

In the above-captioned bid protest, American Relocation Connections, L.L.C.

(ARC) asserts that the United States Customs and Border Protection (CBP) violated

federal procurement law, including the Federal Acquisition Regulation (FAR) and

regulations promulgated by the Small Business Administration (SBA), when it issued an

1 This opinion was issued under seal on September 24, 2018. The parties were asked to

propose redactions prior to public release of the opinion. Protestor responded that

protestor “proposes no redactions to the Court’s September 24, 2018 Opinion,” and

defendant proposed to redact information defendant identified as “government cost

estimates” and “offeror information.” This opinion is issued with all of the redactions that

the parties proposed in response to the court’s request. Words which are redacted are

reflected with the notation: “[redacted].”

unrestricted solicitation requesting employee relocation services under the Federal

Supply Schedule (FSS) program, allegedly without engaging in any acquisition planning

or conducting any market research.

FINDINGS OF FACT

According to ARC’s complaint, “ARC is a nationally recognized small business that

is an industry leader in government and commercial sectors for the provision of employee

relocation and related services.” On April 1, 2014, CBP awarded ARC Order No.

HSBP1014A00027 under Contract No. GS-33F-0054V (the ARC Contract), which was

set aside for small businesses. The ARC Contract had a base period of performance

beginning on April 1, 2014 and ending on September 30, 2014. The ARC Contract

contained three one-year option periods of performance, all of which were exercised by

the CBP. Subsequently, CBP and ARC executed three bilateral modifications extending

ARC’s period of performance under the ARC Contract to July 31, 2018. Under the ARC

Contract, ARC was to provide professional relocation services “in order to facilitate the

real estate transactions and household goods moving services” of the approximately

1,000 CBP employees who CBP relocates on an annual basis. The parties have

stipulated that the ARC Contract “requested services listed under GSA [General Services

Administration] Federal Supply Schedule[2] 48, SINS [Special Item Numbers] 653-1, 653-

4, 653-5 and 653-7,” as defined below. ARC asserts that it “has received consistently high

accolades for its performance under the Existing Contract.”

On March 30, 2017, Joe Ohene, a Contract Specialist with CBP, sent an email

message to Thomas Ischkum, a Branch Chief at the GSA, indicating that CBP planned

“to use GSA Schedule 48 Transportation, Delivery, and Relocation Solutions for the

recompete. It was used successfully for the last acquisition.” On May 8, 2018, the CBP

posted a Request for Information for employee relocation services. In response to

questions received by CBP regarding CBP’s May 8, 2018 Request for Information, CBP

indicated that, for its upcoming acquisition of employee relocation services, the North

American Industry Classification System (NAICS) Code “to be utilized is 484210,” which

has a small business size standard of $27,500,000.00.

The CBP subsequently created an Acquisition Plan, which was dated June 19,

2017, addressing the requirements and potential risks associated with CBP’s upcoming

acquisition of employee relocation services. The CBP’s June 19, 2017 Acquisition Plan

indicates that it was prepared by Iris Reeves, Lead Staff Accountant and Contracting

2 “The Federal Supply Schedule program is also known as the GSA Schedules Program

or the Multiple Award Schedule Program.” FAR § 8.402(a) (2018). The FSS is “directed

and managed by GSA and provides Federal agencies (see [FAR §] 8.004 [(2018)]) with

a simplified process for obtaining commercial supplies and services at prices associated

with volume buying.” FAR § 8.402(a). “A GSA Schedule is a list of product and service

items and of indefinite-delivery indefinite-quantity contracts for a particular class of

products or services against which agencies may issue task and delivery orders.” JOHN

CIBINIC, JR. ET AL., FORMATION OF GOVERNMENT CONTRACTS 1144 (4th ed. 2011).

2

Officer Representative at the CBP, Francine Harris, Contracting Officer and Branch Chief

at the CBP, Herman Shivers, Lead Small Business Specialist at the CBP, Phillip

Landfried, Chief Information Officer at the CBP, and CBP Contract Specialist Joe Ohene.

The CBP’s June 19, 2017 Acquisition Plan provided the following description of CBP’s

requirements:

The Employee Relocation Program was established to provide enhanced

benefits to relocating employees and thus facilitate the retention of well-

qualified employees. The program provides relocation assistance to help

employees plan and complete moves to their new duty stations as quickly

and smoothly as possible.

CBP requires an experienced and dedicated professional relocation

services provider in order to facilitate the real estate transactions and

household goods moving services for transferring employees. Counseling

is provided throughout the process for selling, renting of old homes and

acquisition of new homes. The Contractor arranges for the household goods

to be packed, shipped and unpacked. In some cases, vehicles and/or

temporary support goods are shipped. Services may be provided to sell or

rent out the old home and to procure a new one.

This requirement fulfills the following critical gaps; CBP does not have the

in-house ability to support any of the functions that will be obtained through

this contract. Forcing personnel to make their own moving arrangements

would place undue burdens on them and their families creating discontent

and putting CBP at risk of losing quality employees. The contract to be

awarded provides relocation assistance to help employees plan and

complete their moves to new duty stations: afford eligible transferring

employees with access to relocation services: balance the effects that

availability of relocation services has on employee mobility and morale by

providing qualified home sale and move management services: provides

guidance and options for employees to take measures to assist in

expediting the home sale process.

As stated, CBP does not have the human resources and personnel to

conduct the operational activities associated with relocation services such

as moving and shipping employees’ household goods. A Government in-

[sic] house effort is therefore not a feasible acquisition alternative. Further,

using other agencies [sic] relocation contracts through a vehicle such as an

Interagency Agreement is also not a feasible acquisition alternative as CBP

employees may have relocation needs or requirements that may differ

significantly from other agencies’ employees relocating requirements.

With respect to the acquisition history, a relocation services contract was

awarded in 2014. This is the current contract, which expires in FY17. Prior

to this contract, another relocation contract was awarded in April 2008 and

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expired in May 2014. CBP received satisfactory services under both

contracts. As a result of these prior acquisitions and the satisfactory

services received the [sic] resultant contracts, there is no need to pursue

other acquisition alternatives.

The CBP’s June 19, 2017 Acquisition Plan also states that:

CBP experienced some degree of performance constraint on the move

management aspect of the current contract, specifically pertaining to goods

of some CBP employees being damaged during transit resulting in unpaid

claims to the said employees. Language is being included on the new

contract to mitigate issues pertaining to the move management service.

The CBP’s June 19, 2017 Acquisition Plan states that “the acquisition will be

competed via GSA Relocation Services schedule holders,” specifically “GSA Schedule

48- Transportation, Delivery and Relocation Solutions,” and that small business vendors

“will be utilized for this acquisition.” According to the June 19, 2017 Acquisition Plan,

“[b]ased on a review of GSA Schedule 48, 5 proposals submissions from small business

companies are anticipated in response to the Request for Quotation.” The CBP’s June

19, 2017 Acquisition Plan identified five Special Item Numbers (SINs) that the CBP

anticipated obtaining under a future acquisition: SIN 653-1, “Relocation Service

Package;” SIN 653-3, “Relocation Software, Technology Tools, and Services;” SIN 653-

4, “Additional Services;” SIN 653-5, “Agency Customization Service;” and SIN 653-7,

“Move Management Services.”3 According to defendant, “[e]ach GSA schedule is

comprised of SINs. This is a categorization method that groups together similar products,

services, and solution to aid in the acquisition process.” (citing FAR § 8.401 (2018)). In

the parties’ joint statement of stipulated facts, the parties state:

SIN 653-1 is for “Relocation Service Package,” which includes home sale

services to ensure the employee’s home will be sold, including assistance

in marketing the home, negotiating with potential outside buyers, helping

the employee become familiar with their new duty location, providing

renter/buyer assistance, spousal and mortgage counseling and reports.

SIN 653-4 is for “Additional Services,” which includes extra services

available such as Cost of Living Analysis, Closing Assistance, Expense

Management, Rental Management, Entitlement Counseling, Group Move

Assistance and International Move Assistance, Property Management and

Training.

SIN 653-5 is for “Agency Customization Services,” which includes handling

property that is not eligible for the home sale services including special

3 Although the CBP’s June 19, 2017 Acquisition Plan indicated that CBP anticipated that

it would be requesting services under SIN 653-3, the 2017 RFQ did not request services

under SIN 653-3.

4

property that is difficult to sell. Also included are special home sale and

marketing assistance, and international services involving acclimating the

family to the new area.

SIN 653-7 is for “Move Management Services,” which includes a total

package of move management services including transferee entitlement

and pre-move counseling; carrier selection; preparation of bills of lading;

shipment booking; service performance and prepayment audits; claims

preparation assistance; and on-site quality control.

(internal references omitted).

The June 19, 2017 Acquisition Plan states that a “small business set-aside[4] is

contemplated given the sizable number of small business vendors found under GSA

Schedule 48 that show the capability to provide employee relocation services.” The June

19, 2017 Acquisition Plan indicates that the CBP anticipates awarding a firm-fixed price

contract with a base period of performance of one year and with four one-year option

periods of performance. If all option periods were to be exercised, the Acquisition Plan

indicates the “Total Value” of the resulting contract would be [redacted].

On August 21, 2017, the CBP issued Request for Quotation (RFQ) No.

HSBP1017Q0046 (the 2017 RFQ) for employee relocation services under GSA’s

“Relocation Services Schedule 48 SSIN 653.” The 2017 RFQ indicated that the

underlying procurement was set aside for small businesses. On August 22, 2017, the

CBP issued Amendment No. A0001 to the 2017 RFQ, which indicated that SIN 653-1,

Relocation Service Package, SIN 653-4, Additional Services, SIN 653-5, Agency

Customization Services, and SIN 653-7, Move Management Services, were the SINS

applicable to the 2017 RFQ. The 2017 RFQ stated:

For Move Management service, apart from showing data that it has the

technical capability to provide this service, the offeror shall also include a

carrier evaluation plan as part of its submission. The carrier evaluation plan

must show how the offeror evaluates the carrier’s performance in terms of

meeting required delivery dates, professionalism of personnel, ability to

provide timely reports and information.

Attachment 2 to the 2017 RFQ, which was titled “Price Sheet,” provided two hypothetical

scenarios and tables containing line items with estimated quantities. For each line item in

the CBP’s Price Sheet, offerors were to provide a unit price. Offerors were to address the

hypothetical scenarios and complete the tables “for the purpose of the price competition

comparison with other vendors.”

4 “A ‘set-aside for small business’ is the reserving of an acquisition exclusively for

participation by small business concerns.” FAR § 19.501(a) (2018).

5

On August 23, 2017, Terri Shaffer, a GSA Program Analyst, sent an email

message to CBP contracting personnel stating:

I understand that your agency issued an RFQ for relocation services. It

looks like the solicitation refers to an earlier version of the 653-7 SOW

[Statement of Work] that included commercial pricing as an option for move

management services. The recent change to the Schedule which is

reflected in the attached process maps offers move management services

through the Schedule in combination with the household goods moving

services being managed under the terms, conditions, and pricing of the

Centralized Household Goods Traffic Management Program (CHAMP).

Would you have an opportunity to discuss today? I can further explain the

purpose of the change.

On August 24, 2017, the CBP issued a modification to the 2017 RFQ postponing

the submission deadline for offers under the 2017 RFQ and stating that “OFFERORS

SHOULD CONTINUE TO MONITOR GSA EBUY FOR FURTHER UDDATES [sic].”

(capitalization in original). On September 5, 2017, the CBP issued an additional

modification cancelling the 2017 RFQ.

On November 9, 2017, Ms. Shaffer, the GSA Program Analyst, sent an email

message to CBP Contract Specialist Joe Ohene stating that “[w]e’ve been working closely

with Iris [Reeves] on the requirements for your BPA and are nearing the final stretch. She

has been very thorough reviewing all of the requirements compared to your previous

SOW as well as the policies for employees.” On November 16, 2017, Mr. Ohene sent an

email message to Ms. Reeves, requesting that Ms. Reeves send the names of

“Relocation Vendors that showed good capability and can be used as part our [sic] Market

Research.” Ms. Reeves responded that same day and stated that “[t]he list of vendors

that we identified when preparing for the DHS Relocation Service Contract were:

American Relocation Connection[,] Brookfield[,] Caprelo[,] Interstate Service Group[,]

Relocation NW[, and] Sirva.” On Tuesday, November 28, 2017, Ms. Reeves sent an email

message to Mr. Ohene stating “[s]till on track to getting you the SOW by COB [close of

business] Thursday [November 30, 2017]. Is there anything else that I should be working

on? If so, could you provide me with a list of expected deliverables so I can plan

accordingly.” Mr. Ohene responded:

Thanks for the information. I look forward to the SOW. We will have to tweak

some of the initial documents used in FY17 due to the change in the

acquisition strategy.

 Market Research

 Acquisition Plan

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I will work on the above two and send them to you. In addition, we will have

to work on the Evaluation Factors that will be used to make the award. Terri

provided a Sample Evaluation Factors that we can tweak for our acquisition.

We may also need to tweak the attached Independent Government Cost

Estimate. According to Terri, we will be paying fees to the Contractor who

will be coordinating the HHG [Household Goods] shipping with a CHAMP

carrier so our IGCE [Independent Government Cost Estimate] needs to

reflect the estimated fee and not the actual HHG amount as it is currently

listed in the attached. We can use an average of fees off the GSA

Relocation Schedule for our IGCE.

The attached independent government cost estimate (the 2017 Independent Government

Cost Estimate) referenced in Mr. Ohene’s email message, which appears to have been

created in connection with the CBP’s issuance of the 2017 RFQ, projected expenditures

of [redacted] in Fiscal Year 2018, [redacted] in Fiscal Year 2019, [redacted] in Fiscal Year

2020, [redacted] in Fiscal Year 2021, and [redacted] in Fiscal Year 2022, which amounts

to a total of [redacted].5

On December 5, 2017, Ms. Shaffer of the GSA sent an email message to Mr.

Ohene and Ms. Reeves of CBP providing Mr. Ohene and Ms. Reeves with an

email introduction to Kim Spangler, our CO [contracting officer] who

oversees the relocation contracts. Her team manages these contracts. Iris

inquired earlier today about the companies that are currently identified as

small business.

Kim put together information that includes small business as it relates to

these contracts and can provide this to you directly. It’s a great resource so

wanted [sic] to be sure you had all of the information.

Subsequently on December 5, 2017, Ms. Spangler sent an email message to Mr. Ohene

and Ms. Reeves which stated:

To support your research please find attached a pricing sheet for the

Schedule 48 employee relocation contracts. This sheet includes the NAICS

for each SIN and contractor business size classification by SIN as of today.

As you can see, Schedule 48 employee relocation contracts may include

multiple NAICS with different business classifications. The Schedule COs

made NAICS determinations for these contracts based on the

preponderance of work to be performed under the contract at time of award.

5 The 2017 Independent Government Cost Estimate projected a total award value that

differed from the amount projected by CBP’s June 19, 2017 Acquisition Plan, as well as

CBP’s 2018 Independent Government Cost Estimate, as discussed below.

7

FAR 8.405-5(b) states that “Ordering activities should rely on the small

business representations made by schedule contractors at the contract

level.” However, in situations where a MAS contract includes multiple

NAICS, the ordering CO’s are responsible for assigning the order level

NAICS which best corresponds to the work being performed. The order

level CO should be re-certifying businesses at the order level per SBA at 71

Federal Register 220 (November 15, 2006), Page 66439. Due to the fact

that a contractor’s business size may be different at the MAS level from the

Ordering Level, with regards to schedule SB set-asides competitors have

an avenue for business size protest through the ordering CO.

I’m hoping the attachment will provide the documentation needed for your

market research and resulting decision for acquisition strategy.

The parties have stipulated that the attachment to Ms. Spangler’s December 5, 2017

email message was “an excel spreadsheet identifying the contractors under Schedule 48

for SIN 653-1, -4, -5, and -7 and the contractors that were then identified as small

businesses (‘S’) for each SIN.” The parties also have stipulated that the December 5,

2017 spreadsheet “lists one NAICS Code for each SIN,” and that the December 5, 2017

spreadsheet listed:

SIN 653-1: NAICS Code 531210, with two businesses listed as small

business certified: Choice Relocation Management and Sibcy Cline

Relocation Services

SIN 653-4: NAICS Code 531390, with two businesses listed as small

business certified: Choice Relocation Management and Sibcy Cline

Relocation Services

SIN 653-5: NAICS Code 531210, with two businesses listed as small

business certified: Choice Relocation Management and Sibcy Cline

Relocation Services

SIN 653-7: NAICS Code 484210, with nine business listed as small

business certified: American Relocation Connections, Choice Relocation

Management, Sibcy Cline Relocation Services, TRF Global Mobility, Life

International Companies, Move Management Center, Relocation

Worldwide, and Weleski Transfer[.]

Although the parties have correctly stipulated that, under NAICS Code 484210, the

December 5, 2017 spreadsheet listed nine small business, the parties’ joint statement of

stipulated facts omitted Reliance Relocation Services from the list of small business under

NAICS Code 484210.

Also on December 5, 2017, Ms. Spangler sent another email message to Mr.

Ohene and Ms. Reeves that stated “I meant to share that Sibcy [Cline Relocation

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Services] provided notification that it will not renew its option and will expire 3/17/18. Relo

Direct[6] has also provided notification that it is recertifying as [sic] large business.”

Consequently, with Sibcy Cline Relocation Services, one of the two contractors identified

as a certified small business under NAICS Codes 531210 and 531390, indicating to the

GSA that it would not be renewing its option, Choice Relocation Management was the

only remaining certified small business under NAICS Codes 531210 and 531390.

On December 6, 2017, Mr. Ohene responded:

Thanks for the pricing sheet and the additional information regarding Sibcy

[Cline Relocation Services] and Relo Direct. We plan on opening up the

acquisition to both large and small business probably - [redacted] vendors

based on market research information. As we move further in the

acquisition, I will let you know if anything else is needed.

Two days later, on December 8, 2017, Ms. Reeves sent an email message to Mr. Ohene

regarding her preparation of an independent government cost estimate, stating “I believe

that the estimates on our volumes for the next 4 years should still be the same. This was

based off of statistical information. From a contracting viewpoint can you share with me

why this information would change if we are sticking with the same services that we

previously had.” That same day, Mr. Ohene replied:

Yes- very good question! I will try to a give succinct explanation.

Vendors will be submitting pricing in addition to technical proposals. Their

respective pricing is typically compared to the IGCE in determining fair and

reasonable pricing and more importantly may be a variable in determining

the winning vendor. I am working on the Price Sheet that will be sent to the

vendors. The Price Sheet (base period) will look similar to the table below.

As it [sic] now, the vendors won’t be submitting pricing for Shipment of

Household Goods as you have on the ICCE [sic] as CHAMP will be handling

this. Instead, the vendors will be charging a fixed fee for Move Management

(see highlighted red). In addition, line items like Shipment of POV and also

Direct billing as you have on the IGCE won’t be on the Price Sheet to be

sent to the vendors.

So in essence, there will a big discrepancy between the IGCE and Offeror’s

submitted pricing as the itemized items on the former won’t be on the latter.

On December 13, 2017, Ms. Spangler sent an email message to Mr. Ohene and

Ms. Reeves, attached to which was a spreadsheet that “was updated to correct NAICS

6 The parties have stipulated that the “System of Award Management database shows

that, Reliance Relocation Services, Inc, dba Relo Direct, was certified as other than small

under NAICS code 531210, with certification validity dates from July 31, 2017 to July 31,

2018.”

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codes & add comments on expiration dates.” The parties have stipulated that the

December 13, 2017 spreadsheet

listed the following NAICS Codes for each SIN:

SIN 653-1: NAICS Codes 531210 and 531190, with two businesses listed

as small business certified: Choice Relocation Management and Sibcy

Cline Relocation Services

SIN 653-4: NAICS Codes 531390, 531210 and 541511, with two

businesses listed as small business certified: Choice Relocation

Management and Sibcy Cline Relocation Services

SIN 653-5: NAICS Codes 531210 and 531190, with two businesses listed

as small business certified: Choice Relocation Management and Sibcy

Cline Relocation Services

SIN 653-7: NAICS Code 484210, with nine business listed as small

business certified: American Relocation Connections, Choice Relocation

Management, Reliance Relocation Services, Sibcy Cline Relocation

Services, TRF Global Mobility, Life International Companies, Move

Management Center, Relocation Management Worldwide, and Weleski

Transfer.

As discussed above, Sibcy Cline Relocation Services had indicated to the GSA that it “will

not renew its option” that was set to “expire” in March 2018, which results in Choice

Relocation Management being the only small business identified in the December 13,

2017 spreadsheet under NAICS Codes 531210, 531190, 531390, and 541511.

According to ARC, however, the December 5, 2017 spreadsheet and the

December 13, 2017 spreadsheet provided a “skewed” and incomplete view of the NAICS

Codes available under each SIN identified in the spreadsheets. According to ARC’s

motion for judgment on the administrative record:

The NAICS Codes under each of the SINs for the [2018] RFQ[7] are as

follows:

a. SIN 653-1: 484210 (Used Household and Office Goods Moving);

531210 (Offices of Real Estate Agents and Brokers); 531390 (Other

Activities Related to Real Estate); and 541511 (Custom Computer

Programming Services);

b. SIN 653-4: 484210 (Used Household and Office Goods Moving);

531210 (Offices of Real Estate Agents and Brokers); 531390 (Other

7 As discussed below, on January 19, 2018, CBP issued RFQ No. 70B05C18Q00000021.

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Activities Related to Real Estate); and 541511 (Custom Computer

Programming Services);

c. SIN 653-5: 484210 (Used Household and Office Goods Moving);

531210 (Offices of Real Estate Agents and Brokers); 531390 (Other

Activities Related to Real Estate); and 541511 (Custom Computer

Programming Services); and

d. SIN 653-7: 484210 (Used Household and Office Goods Moving).[8]

ARC contends that CBP should have, but failed to include NAICS Code 484210 as a

NAICS Code under SIN 653-1, 653-4, and 653-5, although NAICS Code 484210 was

included as a NAICS Code under SIN 653-7, and that CBP failed to include NAICS Code

541511 as a NAICS Code under SIN 653-1 and SIN 653-5, although NAICS Code 541511

was included as a NAICS Code under SIN 653-4. The administrative record does not

appear to address why the agency chose the NAICS Codes it did or did not include as

being NAICS Codes under the SINs listed in the December 5, 2017 spreadsheet or in the

December 13, 2017 spreadsheet.

According to a July 17, 2018 declaration signed by Mr. Ohene,9 an undated

document titled “RELOCATION SERVICES MARKET RESEARCH REPORT” (the First

8 The NAICS Codes identified by ARC in its motion for judgment on the administrative

record as being applicable to SINS 653-1, 653-4, 653-5, and 653-7 are consistent with

the NAICS Codes listed on GSA’s website. See NAICS schedule/SIN crosswalk, GEN.

SERVS. ADMIN., https://www.gsaelibrary.gsa.gov/docs/Schedule-SIN-NAICS-

crosswalk.xlsx (last visited Sept. 24, 2018).

9 Although review under the Administrative Procedure Act (APA) is to be applied to an

agency’s decision based on the record the agency presents to the court, the court may

supplement the administrative record when omission of the supplemental material

precludes effective judicial review. See AugustaWestland N. Am., Inc. v. United States,

880 F.3d 1326, 1331-32 (Fed. Cir. 2018); see also Axiom Res. Mgmt., Inc. v. United

States, 564 F.3d 1374, 1380 (Fed. Cir. 2009). In the above-captioned protest, the parties

dispute when the undated First Market Research Report, the Second Market Research

Report, dated December 18, 2017, and the undated 2018 Independent Government Cost

Estimate were created. The declaration signed by Mr. Ohene is necessary for effective

judicial review because, in his declaration, Mr. Ohene discusses his recollection of the

dates when each of the documents was created. Mr. Ohene offers an explanation of the

differences between the undated First Market Research Report and the Second Market

Research Report, dated December 18, 2017, and indicates that he did not rely on the

Second Market Research Report, dated December 18, 2017, “in making my decision to

solicit the effort on an unrestricted basis.” The court, therefore, supplements the

administrative record with the July 17, 2018 declaration signed by Mr. Ohene because it

contains information necessary for the court’s review regarding the extent and nature of

the acquisition planning and market research undertaken by the CBP prior to issuing the

2018 RFQ. See AugustaWestland N. Am., Inc. v. United States, 880 F.3d at 1331-32.

11

Market Research Report) was created “in December 2017” as “the result of a

collaborative effort between Iris Reeves and me using a standard DHS template form,”

which Mr. Ohene states “includes certain pre-checked boxes.” (capitalization in original).

Mr. Ohene states in his July 17, 2018 declaration that “I reviewed this market research

report in December 2017 and made some changes to the document.” The First Market

Research Report indicates that “market research is required in accordance with: FAR

7.102, Acquisition Planning Policy” and “FAR 10.001, Market Research Policy.” According

to the First Market Research Report, Mr. Ohene and Ms. Reeves were the “Participants

in Market Research,” although Ms. Reeves is the only individual who signed the Market

Research Report. The First Market Research Report states that the CBP “is seeking a

contractor support [sic] to provide relocation assistance to help employees plan and

complete moves to their new duty stations as quickly and smoothly as possible. The

contractor shall provide relocation services, facilitate real estate transactions and

household goods moving services for relocating employees.” Under a section titled

“Market Research Techniques and Sources,” boxes were marked indicating that the

“Sources Used in Market Research” include “DHS Advance Acquisition Plan reviewed,”

“Acquisition history reviewed,” “Reviewed requirements with Small Business Specialist,”

“Reviewed existing DHS-wide and Multi-Component Contract Vehicles with DHS

Strategic Sourcing Program Office and/or on DHS Enterprise-wide Contract Vehicle

Portal,” “Services: Mandatory Federal Supply Schedules,” the “Past Performance

Information Retrieval System,” and the “Excluded Parties List System.”

In a section of the First Market Research Report titled “Identify Product/Services

and Sources Able to Meet the Requirement,” the First Market Research Report states:

GSA schedule 48-Transportation, Delivery, and Relocation Solutions

vehicle is able to meet this requirement based on market research.

Schedule 48 was created to assist federal agencies with respect to

relocation services. The schedule contains the following applicable

SINs/NAICS for the CBP Relocation Services acquisition:

SIN 653-1, Relocation Services Package (Homesale Assistance) NAICS

531210 & 531390

SIN 653-4, Additional Services NAICS 531210 & 531390

SIN 653-5, Agency Customization Service NAICS 531210 & 531390

SIN 653-7, Move Management Services NAICS 484210

The CBP Relocation acquisition encompasses the above SINs/NAICS.

Given the multiple NAICS associated with the above reference [sic] SINs,

the applicable NAICS at the order level for the preponderance of work ($

value) to be performed under the resultant contract is NAICS 531210 (Office

of Real Estates and Brokers). NAICS 531210 is being utilized given the

higher estimated value of work to be performed under the NAICS relative to

the other NAICS being utilized for this acquisition as supported by

Independent Government Cost Estimate.

12

(capitalization in original). In a section titled “Other Considerations,” the First Market

Research Report provides:

A consideration gathered during market research is whether to continue the

small business set aside strategy utilized for the predecessor contract. The

solicitation requires services on all 4 relevant SINs applicable to the

acquisition.; [sic] SIN 653-1- Relocation Services Package (Homesale

Assistance SIN 653-4, Additional Services SIN 653-5, Agency

Customization Service SIN 653-7, Move Management Services.

Experience during contract performance has shown that the requirement is

best opened to all GSA vendors due to the experience with the current

contractor (ARC) needing to excessively invoice and the requirement of a

guaranteed home buyout. If a small businesses [sic] need to invoice so

frequently, there is no way they could sustain buying homes, if required.

Further, based on information obtained through the GSA Contracting Officer

in charge of Relocation Program, there was a not reasonable expectation

that CBP would receive three small business proposals needed for

maximum competition. Specifically, a number of small business [sic] were

exiting the GSA Relocation program. The requirement is such the contractor

would have to provide services across 4 SINs relevant to the acquisition,

and the market research done did not show sufficient small businesses

required to obtain at [sic] 2 to 3 proposals[.10]

(capitalization in original). Additionally, in a section of the undated First Market Research

Report titled “Provide Market Research Conclusions and Recommendations,” the

undated First Market Research Report states:

The Federal Supply Schedule provides CBP with a flexibility of meeting the

relocation acquisition needs quickly, efficiently, and cost effectively.

Other benefits include competitive market-based pricing that leverages the

buying power of CBP, with the ability to negotiate further discounts at the

order level; the ability of the agency to tailor orders to get what it needs by

customizing terms and conditions at the order level; alternatives such as

blanket purchase agreements and contractor team arrangements and

allows CBP to achieve best value at the lowest overall cost alternative to

meet the relocation services requirement.

10 When a proposed order under the FSS exceeds the simplified acquisition threshold

and requires a statement of work, an agency is required to provide the RFQ “to as many

schedule contractors as practicable, consistent with market research appropriate to the

circumstances, to reasonably ensure that quotes will be received from at least three

contractors that can fulfill the requirements.” See FAR § 8.405-2(c)(3)(iii) (2018).

13

The Federal Supply Schedule, specifically Schedule 48- Transportation,

Delivery, and Relocation Solutions is the preferred contract vehicle for the

Relocation Services requirement based on market research information,

which show [sic] sources available from the referenced vehicle to meet the

requirements. In conclusion, a recommendation is made that GSA

Schedule 48 Relocation Services be used for the CBP relocation services

requirements as supported by the narrative and analysis provided in this

document.

(capitalization in original). The First Market Research Report also notes that “IBIS World,

a renowned magazine that publishes the largest collection of reports, analysis, statistics

and future trends in various industries, provides a positive assessment of the relocation

services commercial market place.”

Additionally, a second document dated December 18, 2017, which also is titled

“RELOCATION SERVICES MARKET RESEARCH REPORT” (capitalization in original)

(the Second Market Research Report), appears in the administrative record and is

substantially similar to the undated First Market Research Report discussed above, with

exception of the differences noted below. The Second Market Research Report indicates

that “[m]arket research is required in accordance with: FAR 7.102, Acquisition Planning

Policy,” as opposed to being required by both “FAR 7.102” and “FAR 10.001,” as the

undated First Market Research Report indicates. Unlike the undated First Market

Research Report, which indicates that the CBP’s market research techniques included

reviewing the CBP’s requirements with a small business specialist and reviewing an

existing “DHS Advance Acquisition Plan,” the Second Market Research Report does not

mention that the CBP reviewed its requirements with a small business specialist or

reviewed a “DHS Advance Acquisition Plan.” The Second Market Research Report also

omitted a sentence providing that “[t]he estimated cost of the new relocation contract was

developed based on FY16-17 historical spend on the current relocation contract,” which

was included in the First Market Research Report. In the signature block on the Second

Market Research Report, the date “12/18/2017” appears next to Ms. Reeves’ electronic

signature.

In the July 17, 2018 declaration signed by Mr. Ohene, Mr. Ohene that:

At some point in time after the decision was made to issue the solicitation

as unrestricted (i.e., not set aside for small businesses), I revised that

document [the undated First Market Research Report] to correct certain

information upon further review given that the market research is dynamic

in nature. For instance, some of the pre-checked boxes on Tab 13 should

have been unchecked but were not due to inadvertent error. I also removed

a sentence on pricing because the information was not developed. I placed

a prior date on the revised document to reflect when I believed the market

research activity had occurred as reflected by email correspondence with

the GSA Contracting Officer (CO) in December 2017. This revised market

research report was not relied upon [sic] me in making my decision to solicit

14

the effort on an unrestricted basis, but rather, was corrected to reflect errors

discovered in the Tab 13 document [the undated First Market Research

Report].

In general, the market research report is used to document the market

research process. For purposes of determining whether to set aside this

acquisition, I relied on email correspondence between the Schedule 48

GSA CO Branch Chief [Ms. Spangler] and me in December 2017, and

verification of this information by a review of the public database known as

System of Award Management (SAM). The information obtained in GSA’s

emails/spreadsheets was then referenced in the [undated First] market

research [Report] document.

(internal references omitted).

According to the July 17, 2018 declaration signed by Mr. Ohene, “[a]fter having

several discussions with Ms. Reeves on the values for the Independent Government Cost

Estimate (IGCE), the IGCE was sent to me on January 19, 2018, a few hours before

issuance of the solicitation.” To support the statement, in his declaration, Mr. Ohene

references an email message sent from Ms. Reeves to Mr. Ohene on January 19, 2018,

which has a subject line of “CBP Historical Transactions Spend and Projected Contract

Value” and which states, in its entirety, “[a]s requested. [sic] Estimate is based on FY17

numbers at an annually 2% increase. Please let me know if you require anything further.”

The document the government identifies in the administrative record and cross-motion

for judgment on the administrative record as the independent government cost estimate

used to support the 2018 RFQ (the 2018 Independent Government Cost Estimate), which

was attached to Ms. Reeves’ January 19, 2018 email message, is an undated document

that does not contain a cover sheet identifying the document as the independent

government cost estimate, nor a narrative explaining what the document contains.

Rather, the 2018 Independent Government Cost Estimate contains five charts providing

what appear to be the CBP’s estimates of costs for a base period of performance and

four one-year option periods of performance. For each period of performance, the 2018

Independent Government Cost Estimate identifies a “Service Type” for SINS 653-1, 653-

4, 653-5, and 653-7, “Projected Transaction Count,” and a projected cost on a “[redacted]

Home Value.” (capitalization in original). The 2018 Independent Government Cost

Estimate indicates that the CBP anticipates the value of the base period of performance

to be [redacted], the first option period of performance to be [redacted], the second option

period of performance to be [redacted], the third option period of performance to be

[redacted], and the fourth option period of performance to be [redacted], thereby

amounting to a total of [redacted] if all option periods were to be exercised.

On January 19, 2018, the CBP issued RFQ No. 70B05C18Q00000021 (the 2018

RFQ), which is the RFQ at issue in the above-captioned bid protest. The parties have

stipulated that the 2018 RFQ was “publically released . . . to certain Schedule 48 holders,

including ARC, for a single-award Blanket Purchase Agreement. The RFQ indicated that

the underlying procurement was unrestricted, i.e., the procurement was not set aside for

15

small businesses.” The 2018 RFQ includes FAR Clause 52.212-2 (2018), titled

“Evaluation – Commercial Items,” which states that the CBP intends to award a single

blanket purchase agreement “to the responsible Offeror whose quote conforming to the

solicitation will be most advantageous to the Government, price and other factors

considered.” The parties have stipulated that, “[w]hen released, the [2018] RFQ did not

reference any NAICS Code under which the underlying procurement was being issued,”

and that a “separate acquisition plan [different from the June 19, 2017 Acquisition Plan]

was not drafted for the 2018 RFQ.”

The parties also have stipulated that the 2018 RFQ “requested services listed

under the same SINs as the 2017 RFQ, i.e., GSA Federal Supply Schedule 48, SINS

653-1, 653-4, 653-5 and 653-7,” and, that “[t]he predecessor BPA procurement requested

services listed under GSA Federal Supply Schedule 48, SINS 653-1, 653-4, 653-5 and

653-7.” The 2018 RFQ indicates that Move Management Services are to be provided

through GSA’s CHAMP, and that offerors must demonstrate an ability to manage “the

household goods moving services.” In a section of the 2018 RFQ regarding invoicing, the

2018 RFQ states:

Contractor shall bill CBP bi-monthly for all SINs and services described

within the Statement of Work and referenced in the BPA. To promote cost

efficiency for both CBP and the Contractor, the Contractor shall submit a

maximum of two (2) invoices per employee per month. Invoices shall be

itemized with SIN’s clearly identified for each itemized line. CHAMP line

items should be identified as CHAMP and separately itemized from SIN

653-7.

In the Price Sheet attached to the 2018 RFQ, the CBP requests that offerors provide

“proposed BASE PERIOD fees/rates” for SINs 653-1, 653-4, 653-5, and 653-7.

(capitalization for original). For SIN 653-7, the CBP only requests that offerors provide a

“Service Fee.” When discussing the difference in offeror pricing under the 2017 RFQ and

offeror pricing under the 2018 RFQ, defendant states that, under the 2018 RFQ, “the unite

[sic] costs for shipment of household goods would no longer be part of the contractor’s

overall contract price. Rather, a pre-approved CHAMP service provider must perform

these services.” ARC states that the 2018 RFQ “simply changed the pricing the contractor

could charge for move management services, i.e., such charges were limited to the

CHAMP tariffs,” and that “CHAMP is not an organization or entity; it’s nothing more than

a pricing scheme, which has the effect of, inter alia, increasing the Industrial Funding Fee

collected by the GSA for the performance of the services.” (emphasis in original).

According to the parties’ joint statement of stipulated facts, on February 1, 2018,

ARC contacted the DHS Office of Small & Disadvantaged Business Utilization “to discuss

the ongoing contract, for which ARC is the contractor, and to discuss follow-on work.” The

parties indicate in their joint statement of stipulated facts that, “[d]uring this discussion,

ARC requested information as to why the RFQ was not set aside for small businesses,

as it had been with the predecessor BPA procurement.” The parties also stipulated that

the CBP did not consult with the DHS Office of Small & Disadvantaged Business

16

Utilization “prior to withdrawing the procurement from a small business set-aside” and did

not “provide a written statement to the SBA [Small Business Administration] at least 30

days prior to the issuance of the solicitation that explained why small business prime

contract participation was unlikely.”

On February 2, 2018, Anthony Bell, a Small Business Advisor with the DHS Office

of Small & Disadvantaged Business Utilization sent an email message to contracting

personnel at the CBP. In his February 2, 2018 email message, Mr. Bell stated:

Yesterday morning I had a call with ARC to discuss their contract with CBP

regarding invoices and follow on work. I asked Arc [sic] to continue the

dialogue with CBP to resolve the invoice issue. The focus of my office is the

planned unrestricted acquisition strategy for the follow‐on work. ARC is

questioning why after 10 years of this work being a set aside, is the follow‐

on work going out as unrestricted? ARC stated that they are a small

business in SINs 653‐1, 653‐4, 653‐5 and 653‐7 on GSA Schedule 48. ARC

mentioned there are three other small businesses on Schedule 48 with all

four SINs. Please see the below information provided by ARC.

I have verified this information to be correct. If these are the SINs required

for this work, there [sic] four small businesses on GSA Schedule 48 that

meet the criteria. However, we realize there’s more to a set aside than just

having all the required SINs. Responsibility has to be taken into account

and my office can’t speak on whether these small businesses have been

deemed responsible. Market research should determine that. With this said,

and the rule of two being met, predicated on these four firms being deemed

responsible, what factor(s) determined an unrestricted acquisition strategy?

Rick – Kevin Boshears acknowledges the trillion set asides you have done

and views you as a friend to the small business community. So, we know

you know small business. This email is just to ensure we have done our due

diligence as it relates to the acquisition strategy here. I’m not clear on what

GSA was saying about not doing a set aside, but I am clear that GSA does

have the most small business friendly procedures and the DHS [Department

of Homeland Security] OSDBU [Office of Small & Disadvantaged Business

Utilization] takes their advice with a heaping of skepticism.

The “information provided by ARC” consisted of four screenshots of eligible small

businesses under SINs 653-1, 653-4, 653-5, and 653-7. Mr. Bell noted that the

“companies that are on all 4 SINs [in the screenshots from ARC] are: 1. American

Relocation Connections 2. Reliance Relocation Services 3. Sibcy Cline Relocation

Services 4. TRC Global Mobility.”

Mr. Ohene responded to Mr. Bell’s email message approximately forty-five minutes

later, stating:

17

Thanks for the email. Attached is a spreadsheet of the Schedule 48

employee relocation contracts NAICS for each SIN and contractor business

size classification by SIN as of December 5, 2017. I received this

spreadsheet from the GSA Contracting Officer in charge of the Relocation

contracts. As you can see, there are some discrepancies between the

attached spreadsheet and the schedule screenshots provided in your email.

I am also aware GSA tends to delay in updating its schedule information so

the Agency’s website schedule/SIN/business size classification information

may not necessary [sic] be the most current. You stated that information

provided by ARC has been verified to be correct. So I assume that

information has been verified with the SBA office?

(emphasis in original). That same day, on February 2, 2018, Mr. Bell replied to Mr.

Ohene’s email message and stated:

Agree, there is some discrepancy which GSA needs to clarified [sic]. Rick

will discuss this matter with Francine next week.

No, I have not verified this information with SBA. SBA will only verify small

business status when an official size protest is submitted. I reviewed ARC’s

information in SAM [System for Award Management] for NAICS code

484210 (please see the below screen shot). Is this the NAICS code

assigned to this requirement? Please understand, I’m not advocating for

ARC, as mentioned earlier, we are here just to ensure the SB [small

business] community gets a fair opportunity. At the end of the day, if the

data does not support a set aside, my office will be the first to tell small

businesses to stand down. I’m standing by to offer any additional assistance

needed.

Also on February 2, 2018, Mr. Ohene sent an email message to Ms. Spangler, the

GSA Contracting Officer, which stated:

We have an issue with our acquisition strategy with regard to the recompete

for the CBP Relocation Services requirements and would appreciate your

assistance. Based on market research, we decided to pursue an

unrestricted acquisition strategy for the CBP relocation requirements. You

sent me the attached spreadsheet comprising the Schedule 48 employee

relocation contracts NAICS for each SIN and contractor business size

classification by SIN as of December 5, 2017. On the attached spreadsheet,

American Relocation Connections (ARC), our current contractor, is large for

all the SINS with exception of Move Management Service 653-7. ARC,

however, has indicated they are still small business in SINs 653-1, 653-4,

653-5 on GSA Schedule 48, and sent the below screenshots to our Small

Business Office to ‘confirm’ their small business status. Essentially, ARC is

complaining that we are not doing a set- aside [sic]. We, however, based

on market research and in addition to our experience with the contractor

18

believe that the unrestricted acquisition strategy is appropriate for our

recompete.

Given the situation, I feel that our unrestricted acquisition strategy may have

to be put on hold until ARC’s small business status is adjudicated. Would

you be available next week to discuss ARC’s small business status or send

me something in writing to confirm the information on the attached EEAC

spreadsheet is the most current with respect to the Schedule 48 contractors’

business size classification?

That same day, Ms. Spangler responded:

I can certainly discuss with you next week.

I’m sure you are aware that SB [small business] set asides are not required

under FAR Part 8 for FSS [Federal Supply Schedule] BPA/orders. So the

concern I’m guessing is coming from your OSDBU review of the acquisition

strategy decision not to set-aside relative to goals and advocacy.

Referencing the email sent to you on 12/5/17, due to the ERRC [Employee

Relocation Resource Center] contracts having 4 SINs which have multiple

NAICS, the ordering agency must determine and identify the applicable

NAICS at the order level for the preponderance of work ($ value) to be

performed. This is instruction from the Small Business Administration found

at 71 Federal Register 220 (November 15, 2006), Page 66439. This same

information was provided at GSA’s Supplier meeting on 12/13/17 (see bullet

3 on attached meeting notes). I think ARC was in attendance.

The SBA determines business size according to NAICS, not the GSA

contract. See page 5 of ARC’s SAM_Reps & Certs (attached).

Which NAICS did you issue your solicitation under?

If your solicitation was issued and appropriately falls under a NAICS other

than 653-7 and you decide to change strategy for SB set aside, you will

have issues with all other contractors. Why? Because according to SAM

there are no small businesses eligible to compete (Sibcy & Choice are both

expiring this quarter).

(emphasis in original).

On February 5, 2018, the CBP issued Amendment No. 1 to the 2018 RFQ.

Amendment No. 1 stated that the NAICS Code for the 2018 RFQ “is 531210-Offices of

19

Real Estate Agents and Brokers,” which has a size standard of $7,500,000.00.11

Amendment No. 1 also made administrative and typographical revisions, responded to

questions from potential offerors, and extended the quotation submission due date from

February 8, 2018 to February 13, 2018.

The next day, on February 6, 2018, Mr. Ohene sent an email message to Mr. Bell

of the DHS Office of Small & Disadvantaged Business Utilization that stated:

The GSA Relocation Point of Contract [sic] has provided additional

clarification and information that addresses ARC’s ‘small business’ issue.

As indicated in the spreadsheet I sent last week, the GSA Employee

Relocation Service Center contracts has 4 SINs with multiple NAICS as

follows:

 SIN 653-1 NAICS 531210 & 531390

 SIN 653-4 NAICS 531210 & 531390

 SIN 653-5 NAICS 531210 & 531390

 SIN 653-7 NAICS 484210

The CBP Relocation acquisition encompasses the above SINs/NAICS.

Given the multiple NAICS, the Ordering Agency must determine and identify

the applicable NAICS at the order level for the preponderance of work ($

value) to be performed. The CBP Relocation solicitation was issued under

NAICS 531210 (Office of Real Estates and Brokers) , [sic] and

appropriately falls under that code given its higher estimated value relative

to the as supported by our IGCE. Please note ARC is large business under

NAICS 531210 as shown in your SAM screenshot.

Second, contemplating a set aside for the reference NAICS is a moot point

as I was informed by the GSA POC [point of contact] that some of the small

business vendors provided in your email are leaving the Relocation program

this quarter. Sibcy Cline and Choice Relocaton [sic] are both expiring this

11 As discussed below, according to the December 13, 2017 spreadsheet and Sibcy Cline

Relocation Services’ statement that it would not be renewing its contract that was set to

expire in March 2018, at the time the 2018 RFQ was issued on January 19, 2018, there

was only one certified small business under NAICS Code 531210, the NAICS Code

applicable to the 2018 RFQ. According to the December 13, 2017 spreadsheet, Sibcy

Cline Relocation Services’ statement that it would not be renewing its contract, and

Reliance Relocation Services’ statement that it was certifying as an other than small

business, under the NAICS Code applicable to the 2017 RFQ, NAICS Code 484210,

which has a size standard of $27,500,000.00, there were seven certified small

businesses. In the December 13, 2017 spreadsheet, Reliance Relocation Services was

listed as a small business under NAICS Code 484210, but as an other than small

business under NAICS Code 531210.

20

quarter. Further, Reliance Relocation Services has recertified as large

business. TRC Global Mobility is also large. So even [sic] ARC were to be

small business for the sake of argument under NAICS 531210 , [sic] there

won’t be enough small businesses [sic] vendors to meet the competition

threshold[.]

Third, I inquired why ARC’s GSA schedule information lists the Contractor

to be small business under SIN 653-1, 653-4, 653-5 as shown in the

screenshot you sent last week Friday. According to the GSA Relocation

POC, this is unfortunately a system issue in that it is picking up on the

“Schedule” awarded NAICS not the SIN NAICS (fed by SAM). So one has

to further research by clicking on the Contractor to reach the Contractor

Information page. This page identifies the “Schedule” level NAICS of that

particular contract. For ARC, you will see that the contract was awarded

with the 484210 NAICS (SIN 653-7). That is why the NAICS must be

identified and verified at the ordering level to determine the contractor’s size

in relation to the order. As stated, The NAICS at the ordering level for our

Relocation acquisition is 531210 for which ARC is designated as large

business in SAMS [sic].

(emphasis in original). Mr. Bell responded on February 6, 2018, stating “[t]hanks for the

additional information/research. Unless Kevin and Darlene have any objections, I have

no objections to this requirement going unrestricted.”

On February 7, 2018, Richard Travis, a CBP Contracting Officer, completed a

Small Business Review Form, at the request of Ms. Reeves, for the employee relocation

services that were to be acquired under the 2018 RFQ. In a section titled “Procurement

Information/History,” the Small Business Review Form indicates that the CBP previously

had used NAICS Code 48210, which has a small business size standard of

$27,500,000.00. The Small Business Form, however, states that NAICS Code 531210,

which has a small business size standard of $7,500,000.00, is being utilized in the 2018

RFQ “given the higher estimated value of work to be performed under the NAICS relative

to the other NAICS being utilized for this acquisition.” The Small Business Review Form

also states that “there was a not reasonable expectation that CBP would receive two to

three small business proposals needed for maximum competition.” On February 9, 2018,

a DHS Small Business Specialist marked a box indicating his “[c]oncurrence” with the

CBP’s decision, and, on February 12, 2018, a SBA Procurement Center Representative

marked a box indicating his “[c]oncurrence” with the CBP’s decision.

On February 12, 2018, ARC filed a bid protest at the United States Government

Accountability Office (GAO), in which ARC alleged that the CBP violated the FAR, the

SBA’s regulations, and the DHS’ small business procurement policies. The contracting

officer’s statement of facts was submitted to the GAO on February 13, 2018 and stated

that ARC submitted a proposal in response to the 2018 RFQ. On February 21, 2018, the

CBP requested summary dismissal of ARC’s February 12, 2018 bid protest to the GAO,

alleging that ARC was not an interested party. The CBP noted that the NAICS Code for

21

the 2018 RFQ was NAICS Code 531210 and argued that “ARC has certified in the SAM

that it is not a small business under NAICS code 531210. Thus, if ARC succeeded in this

protest and the BPA solicitation were [sic] set aside for small business concerns, ARC

would be ineligible to compete.” On February 26, 2018, ARC filed an opposition to the

CBP’s request for summary dismissal, in which ARC argued that it was an interested

party because ARC is not required to certify its small-business size in an unrestricted

procurement and stated that the CBP’s argument in “the Agency’s Request for Summary

Dismissal alerted ARC to an administrative error in its SAM registration, which it has

promptly researched and corrected. ARC has updated its certifications to reflect that it is

a small business under NAICS Code 531210.” On February 27, 2018, ARC filed a

supplemental response to the CBP’s request for summary dismissal at the GAO, in which

ARC noted that it was “not protesting whether the Agency has selected the proper NAICS

Code for the instant RFQ, which was issued an [sic] unrestricted solicitation.” ARC,

however, reasserted that it was an interested party because “(1) it was an actual bidder

under the unrestricted RFQ and would be a prospective bidder under a newly issued set-

aside RFQ using NAICS Code 531210; and (2) it would be in line for award in either

situation as both a responsible and responsive bidder.”

On March 13, 2018, the government filed its Agency Report with the GAO. In its

March 13, 2018 Agency Report, the government asserted that the GAO should deny

ARC’s bid protest because the “‘Rule of Two’ is inapplicable to this type of acquisition and

even if it applied, the Agency properly conducted market research and determined that

two or more small businesses could not compete under the applicable North American

Industry Classification System (NAICS) code assigned to the procurement.” On May 18,

2018, the GAO dismissed ARC’s bid protest. See Am. Relocation Connections, LLC, B-

416035, 2018 WL 2316177, at *1 (Comp. Gen. May 18, 2018). The GAO stated that ARC

argued in its bid protest at the GAO that CBP “was required to set aside the solicitation,

which anticipates the establishment of a blanket purchase agreement (BPA) under the

General Services Administration’s (GSA) Federal Supply Schedule (FSS), for small

businesses,” and that CBP’s “market research and decision not to set aside the RFQ were

unreasonable.” Id. The GAO then determined that ARC was an interested party “[b]ased

on the protestor’s updated representation” in SAM. Id. at *3. The GAO also concluded

that CBP was not required to set-aside the 2018 RFQ because “the contracting officer

here has discretionary authority to set-aside an order against the FSS, but is not required

to do so.” Id. at *7. According to the GAO, “agencies are not required to follow the Small

Business Rule of Two[12] when issuing orders or establishing BPAs under the FSS.” Id.

at *4. When addressing ARC’s arguments concerning the CBP’s market research, the

GAO stated:

12 The GAO stated that the “Small Business Rule of Two” “requires agencies to set aside

for small business participation a procurement valued over the simplified acquisition

threshold if there is a reasonable expectation of receiving fair market offers from at least

two small business concerns.” Am. Relocation Connections, LLC, 2018 WL 2316177, at

*3 (citing 13 C.F.R. § 125.2(e)(6)(i) (2018); and FAR § 19.502-2 (2018)).

22

Next, ARC raises a number of challenges to CBP’s market research and its

conclusion that the agency was not likely to receive proposals from two or

more small businesses at fair market prices. However, as discussed above,

agencies have the discretion to set aside procurements under the FSS. FAR

§ 8.405-5(a)(2). Thus, even if our Office were to agree with ARC that CBP’s

market research was not reasonable, there would be no basis for our Office

to recommend any corrective action because the agency would not be

required to set aside the procurement. See AeroSage, LLC, B-414640, B-

414640.3, July 27, 2017, 2017 CPD ¶ 233 at 5 (agencies have the discretion

to seek a waiver of the nonmanufacturer rule, FAR § 19.102(f)(5); based on

this discretion, an agency’s refusal to seek a waiver of the nonmanufacturer

rule does not provide a basis to sustain a protest). We therefore find that

ARC’s argument fails to state adequate legal grounds of protest, and

therefore dismiss it on that basis. See 4 C.F.R. § 21.5(f).

Am. Relocation Connections, LLC, 2018 WL 2316177, at *7 (footnote omitted).

On July 3, 2018, ARC filed its complaint in this court in the above-captioned pre-

award bid protest. In its complaint in this court, ARC states that it is “challenging the terms

of the [2018] RFQ, and seeking an order declaring that the Agency [the CBP]

impermissibly failed to set-aside the Procurement for small businesses, and that the

Agency’s actions in releasing the [2018] RFQ as an unrestricted acquisition were arbitrary

and capricious and contrary to applicable procurement law and regulation.” ARC argues

that CBP “failed to undertake any advance acquisition planning or conduct any advance

market research for the Procurement prior to selecting the contract vehicle or prior to

making the decision to release the RFQ as an unrestricted acquisition,” and that CBP’s

decision to release the 2018 RFQ as an unrestricted procurement was based on “virtually

no information at all.” ARC also contends that:

The procurement record clearly shows that any acquisition planning or

market research that the Agency may have conducted with respect to the

Procurement was undertaken after the release of the RFQ; after reducing

the small business size standard; and after the Agency selected GSA FSS

48 as the procurement vehicle, each of which is a violation of procurement

law.

According to ARC, the CBP’s alleged failure to undertake advance acquisition planning

and market research violates the regulations of the SBA, as well as the “FAR, as

supplemented by the DHS HSAR [DHS Acquisition Regulations] and implemented by the

DHS HSAM [DHS Acquisition Manual].”

Regarding the GAO’s May 18, 2018 decision, ARC argues that:

The GAO failed to address whether the Agency’s contracting officer’s

exercise of its discretion in selecting FSS Schedule 48 and then

subsequently deciding to severely reduce the applicable size standard was

23

arbitrary or capricious, or in violation of procurement law when the

acquisition record was entirely deficient of any information, let alone reliable

or accurate information, upon which the decision was based.

ARC further asserts that the GAO’s decision incorrectly concluded that “the Agency’s

discretion cannot be challenged regardless of how unreasonably such discretion is

exercised.” In its requests for relief, ARC requested a temporary restraining order, a

preliminary injunction, and a permanent injunction enjoining award or performance of a

contract under the 2018 RFQ. Alternatively, ARC argues that “ARC is entitled to bid

preparation and other costs, attorney fees under the Equal Access to Justice Act or such

other and further relief as this Court deems just and proper.”

On the same day protestor filed its protest, July 3, 2018, the court held an initial

status conference with the parties in the above-captioned bid protest. During a

subsequent status conference on July 9, 2018, defendant indicated that the CBP would

voluntarily stay an award under the 2018 RFQ until the end of September 2018, and ARC

indicated that it was no longer seeking a temporary restraining order. Thereafter, on July

10, 2018, defendant submitted to the court the administrative record in the above-

captioned bid protest. On July 13, 2018, ARC filed a motion to strike documents from the

administrative record, or, in the alternative, a motion to compel or a motion for discovery,

as well as a motion to supplement the administrative record. In its July 13, 2018 motion,

ARC argued that the court should strike from the administrative record the undated First

Market Research Report, the Second Market Research Report dated December 18,

2017, and the undated 2018 Independent Government Cost Estimate “because they lack

proper evidentiary support” and “cannot be authenticated as being part of the

Government’s decision-making process.”

On July 16, 2018, the court held a hearing to discuss with the parties ARC’s July

13, 2018 motion. Subsequently, on July 16, 2018, the court issued an Order directing

defendant to submit any documents which potentially could be used to authenticate the

undated First Market Research Report, the Second Market Research Report dated

December 18, 2017, and the undated 2018 Independent Government Cost Estimate. On

July 17, 2018, defendant submitted the declaration signed by Mr. Ohene, discussed

above, in which Mr. Ohene described his recollection of when, according to him, the

undated First Market Research Report, the Second Market Research Report dated

December 18, 2017, and the undated 2018 Independent Government Cost Estimate were

created, as well as the differences between the undated First Market Research Report

and the Second Market Research Report dated December 18, 2017. Also on July 17,

2018, ARC submitted an unopposed motion to withdraw its motion to supplement the

administrative record. On July 18, 2018, the court issued an Order denying ARC’s motion

to strike and granting ARC’s unopposed motion to withdraw its motion to supplement the

administrative record. On July 20, 2018, ARC and defendant submitted a joint statement

of stipulated facts.

Subsequently, on July 25, 2018, ARC filed a motion for judgment on the

administrative record. In its motion for judgment on the administrative record, ARC

24

asserts that CBP failed to perform acquisition planning and market research in

accordance with FAR Part 7 (2018) and FAR Part 10 (2018). ARC also argues that the

CBP violated the SBA’s regulation at 13 C.F.R. § 125.2 (2018), which ARC argues

requires that a federal agency conduct market research concerning the extent of small

business participation in an acquisition. ARC asserts that CBP selected the “GSA FSS

Schedule 48 as the acquisition vehicle for the RFQ without undertaking any acquisition

planning or market research,” and that CBP’s “decision not to set aside the [2018] RFQ

for small business lacked a rational basis as the decision was not based on (1) any

acquisition plan, or (2) any advance market research.” According to ARC’s motion for

judgment on the administrative record:

Such research must precede decisions whether to utilize the GSA Federal

Supply Schedules (“FSS”), which NAICS code (and thus what size

standard) is applicable to the procurement, or whether or not to set-aside

an acquisition for small businesses. See e.g., FAR 8.404(c) [(2018)]

(“Orders placed under a Federal Supply Schedule contract are not exempt

from the development of acquisition plans (see subpart 7.1)”). Nor does

FAR Part 8 [(2018)] exempt FSS orders from the advance acquisition

planning requirements or market research requirements of the SBA

regulations.

ARC also contends that the administrative record “clearly indicates” that the undated First

Market Research Report, the Second Market Research Report dated December 18,

2017, the undated 2018 Independent Government Cost Estimate, the December 5, 2017

and December 13, 2017 spreadsheets that were sent from Ms. Spangler to CBP

contracting personnel, and the February 7, 2018 DHS Small Business Review Form “were

prepared after the RFQ was issued and likely after ARC registered its complaint with the

Agency regarding the RFQ being unrestricted.”

On August 8, 2018, defendant filed a response to protestor’s motion for judgment

on the administrative record and a cross-motion for judgment on the administrative

record. In its August 8, 2018 cross-motion, defendant argues that CBP’s decision to use

the FSS was reasonable because the CBP’s June 19, 2017 Acquisition Plan “identified

the reasons why using the FSS as an acquisition tool here was a reasonable exercise of

agency discretion.” Defendant asserts that “small business set-aside preferences do not

apply to FSS contracts,” and that CBP’s “prior, discretionary set-asides do not expand

CBP’s obligations under the current FSS solicitation.” Defendant also asserts that CBP’s

acquisition of employee relocation services did not qualify to be set-aside because, when

CBP issued the 2018 RFQ in January 2018, the only small business that qualified under

NAICS Code 531210, the NAICS Code that CBP chose to use for the procurement, was

Choice Relocation Management.

On August 13, 2018, ARC filed a response to defendant’s cross-motion for

judgment on the administrative record and a reply in support of its motion for judgment

on the administrative record. In its August 13, 2018 filing, ARC argues that the “crux” of

its complaint and motion for judgment on the administrative record is “that the Agency

25

made critical decisions about this procurement either without having performed the

requisite advance acquisition planning or market research, or prior to doing so.” ARC

again asserts that the CBP failed to perform acquisition planning or market research prior

to selecting the FSS as its “acquisition vehicle,” selecting the NAICS Code for the 2018

RFQ, and “removing the services from the small business program.” ARC also argues

that defendant has not addressed its failure to comply with the SBA’s regulations, which

ARC indicates requires the CBP to conduct market research to determine the type and

extent of possible small business participation in an acquisition.

On August 17, 2018, defendant filed a reply, in which defendant asserted that the

Acquisition Plan created in connection with the 2017 RFQ also supported the 2018 RFQ,

and that ARC “fails to acknowledge that the 2017 and 2018 RFQs were not separate

acquisitions. The 2017 RFQ was cancelled which resulted in issuance of the 2018 RFQ

for procurement of the relocation services identified in the plan.” Defendant also contends

that, “once CBP decided to use the FSS to purchase relocation services, it had no further

obligation to consider small business preferences – including the requirements of the

Small Business Act cited by ARC (13 C.F.R. § 125 et., [sic] seq.).” (emphasis in original).

According to defendant, the SBA regulation at 13 C.F.R. § 125.2(c) is inapplicable to the

CBP’s procurement.

On August 21, 2018, the court issued an Order directing the parties each to submit

a supplemental filing addressing whether and why the SBA regulation at 13 C.F.R.

§ 125.2(c) applies to CBP’s procurement in the above-captioned protest, whether the

CBP complied with 13 C.F.R. § 125.2, and whether failing to comply with 13 C.F.R. §

125.2 would be prejudicial to ARC. On August 29, 2018, ARC and defendant both

submitted their supplemental filings. In ARC’s August 29, 2018 filing, ARC asserts that

13 C.F.R. § 125.2(c) does apply to the procurement at issue in the above-captioned bid

protest, that CBP did not comply with 13 C.F.R. § 125.2 when issuing the 2018 RFQ, and

that CBP’s failure to comply with 13 C.F.R. § 125.2 was prejudicial to ARC. Defendant,

however, asserts in its August 29, 2018 filing that 13 C.F.R. § 125.2(c) does not apply to

the procurement at issue in the above-captioned bid protest and that “ARC was not

prejudiced by any alleged failure to engage with SBA.” On September 5, 2018, the court

heard oral argument in the above-captioned protest.

DISCUSSION

Rule 52.1(c)(1) (2018) of the Rules of the United States Court of Federal Claims

(RCFC) governs motions for judgment on the Administrative Record. The court’s inquiry

is directed to “‘whether, given all the disputed and undisputed facts, a party has met its

burden of proof based on the evidence in the record.’” Mgmt. & Training Corp. v. United

States, 115 Fed. Cl. 26, 40 (2014) (quoting A & D Fire Prot., Inc. v. United States, 72 Fed.

Cl. 126, 131 (2006) (citing Bannum, Inc. v. United States, 404 F.3d 1346, 1356-57 (Fed.

Cir. 2005))); see also Centerra Grp., LLC v. United States, 138 Fed. Cl. 407, 412 (2018)

(citing Bannum, Inc. v. United States, 404 F.3d at 1356-57); Informatics Applications Grp.,

Inc. v. United States, 132 Fed. Cl. 519, 524 (2017) (citation omitted); Strategic Bus. Sols.,

Inc. v. United States, 129 Fed. Cl. 621, 627 (2016), aff’d, 711 F. App’x 651 (Fed. Cir.

26

2018); Rotech Healthcare Inc. v. United States, 118 Fed. Cl. 408, 413 (2014); Eco Tour

Adventures, Inc. v. United States, 114 Fed. Cl. 6, 21 (2013); DMS All-Star Joint Venture

v. United States, 90 Fed. Cl. 653, 661 (2010). Pursuant to RCFC 52.1, in a bid protest,

the court reviews the agency’s procurement decision to determine whether it is supported

by the administrative record. See CW Gov’t Travel, Inc. v. United States, 110 Fed. Cl.

462, 481 (2013); see also CR/ZWS LLC v. United States, 138 Fed. Cl. 212, 223 (2018)

(citing Bannum, Inc. v. United States, 404 F.3d at 1353-54).

The Administrative Dispute Resolution Act of 1996 (ADRA), Pub. L. No. 104-320,

§§ 12(a), 12(b), 110 Stat. 3870, 3874 (1996) (codified at 28 U.S.C. § 1491(b)(1)–(4)

(2012)), amended the Tucker Act to establish a statutory basis for bid protests in the

United States Court of Federal Claims. See Impresa Construzioni Geom. Domenico

Garufi v. United States, 238 F.3d 1324, 1330-32 (Fed. Cir. 2001); see also Sys.

Application & Techs., Inc. v. United States, 691 F.3d 1374, 1380 (Fed. Cir. 2012)

(explaining that the Tucker Act expressly waives sovereign immunity for claims against

the United States in bid protests). The statute provides that protests of agency

procurement decisions are to be reviewed under APA standards, making applicable the

standards outlined in Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), and

the line of cases following that decision. See, e.g., Per Aarsleff A/S v. United States, 829

F.3d 1303, 1309 (Fed. Cir. 2016) (“Protests of agency procurement decisions are

reviewed under the standards set forth in the Administrative Procedure Act (‘APA’), see

28 U.S.C. § 1491(b)(4) (citing 5 U.S.C. § 706), ‘by which an agency's decision is to be set

aside only if it is arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law[.]’” (quoting NVT Techs., Inc. v. United States, 370 F.3d 1153, 1159

(Fed. Cir. 2004)) (citing PAI Corp. v. United States, 614 F.3d 1347, 1351 (Fed. Cir.

2010))); Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at

1332; Res. Conservation Grp., LLC v. United States, 597 F.3d 1238, 1242 (Fed. Cir.

2010) (“Following passage of the APA in 1946, the District of Columbia Circuit in Scanwell

Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), held that challenges to awards of

government contracts were reviewable in federal district courts pursuant to the judicial

review provisions of the APA.”); Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324,

1329 (Fed. Cir. 2004) (citing Scanwell Labs., Inc. v. Shaffer, 424 F.2d at 864, 868, for its

“reasoning that suits challenging the award process are in the public interest and

disappointed bidders are the parties with an incentive to enforce the law”); Banknote

Corp. of Am., Inc. v. United States, 365 F.3d 1345, 1351 (Fed. Cir. 2004) (“Under the

APA standard as applied in the Scanwell line of cases, and now in ADRA cases, ‘a bid

award may be set aside if either (1) the procurement official’s decision lacked a rational

basis; or (2) the procurement procedure involved a violation of regulation or procedure.’”

(quoting Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at

1332)); Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir.

2003).

When discussing the appropriate standard of review for bid protest cases, the

United States Court of Appeals for the Federal Circuit addressed subsections (2)(A) and

(2)(D) of 5 U.S.C. § 706, see Impresa Construzioni Geom. Domenico Garufi v. United

States, 238 F.3d at 1332 n.5, but focused its attention primarily on subsection (2)(A). See

27

Croman Corp. v. United States, 724 F.3d 1357, 1363 (Fed. Cir.) (“‘[T]he proper standard

to be applied [to the merits of] bid protest cases is provided by 5 U.S.C. § 706(2)(A)

[(2006)]: a reviewing court shall set aside the agency action if it is “arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance with law.”’” (alterations in original)

(quoting Banknote Corp. of Am. v. United States, 365 F.3d at 1350-51 (citing Advanced

Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057-58 (Fed. Cir.), reh’g denied

(Fed. Cir. 2000)), reh’g and reh’g en banc denied (Fed. Cir. 2013). The statute says that

agency procurement actions should be set aside when they are “arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law,” or “without observance of

procedure required by law.” 5 U.S.C. § 706(2)(A), (D) (2012);13 see also Tinton Falls

13 The language of 5 U.S.C. § 706 provides in full:

To the extent necessary to decision and when presented, the reviewing

court shall decide all relevant questions of law, interpret constitutional and

statutory provisions, and determine the meaning or applicability of the terms

of an agency action. The reviewing court shall—

(1) compel agency action unlawfully withheld or unreasonably delayed;

and

(2) hold unlawful and set aside agency action, findings, and conclusions

found to be—

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law;

(B) contrary to constitutional right, power, privilege, or immunity;

(C) in excess of statutory jurisdiction, authority, or limitations, or short

of statutory right;

(D) without observance of procedure required by law;

(E) unsupported by substantial evidence in a case subject to sections

556 and 557 of this title or otherwise reviewed on the record of

an agency hearing provided by statute; or

(F) unwarranted by the facts to the extent that the facts are subject

to trial de novo by the reviewing court.

In making the foregoing determinations, the court shall review the whole

record or those parts of it cited by a party, and due account shall be taken

of the rule of prejudicial error.

5 U.S.C. § 706.

28

Lodging Realty, LLC v. United States, 800 F.3d 1353, 1358 (Fed. Cir. 2015); Orion Tech.,

Inc. v. United States, 704 F.3d 1344, 1347 (Fed. Cir. 2013); COMINT Sys. Corp. v. United

States, 700 F.3d 1377, 1381 (Fed. Cir. 2012) (“We evaluate agency actions according to

the standards set forth in the Administrative Procedure Act; namely, for whether they are

‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’”

(quoting 5 U.S.C. § 706(2)(A); and Bannum, Inc. v. United States, 404 F.3d at 1351));

Savantage Fin. Servs. Inc., v. United States, 595 F.3d 1282, 1285-86 (Fed. Cir. 2010);

Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1358 (Fed. Cir. 2009); Axiom Res.

Mgmt., Inc. v. United States, 564 F.3d at 1381 (noting arbitrary and capricious standard

set forth in 5 U.S.C. § 706(2)(A), and reaffirming the analysis of Impresa Construzioni

Geom. Domenico Garufi v. United States, 238 F.3d at 1332); Blue & Gold Fleet, L.P. v.

United States, 492 F.3d 1308, 1312 (Fed. Cir. 2007) (“‘[T]he inquiry is whether the

[government]’s procurement decision was “arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law.”’” (quoting Bannum, Inc. v. United States, 404

F.3d at 1351 (quoting 5 U.S.C. § 706(2)(A) (2000))); NVT Techs., Inc. v. United States,

370 F.3d at 1159 (“Bid protest actions are subject to the standard of review established

under section 706 of title 5 of the Administrative Procedure Act (‘APA’), 28 U.S.C. §

1491(b)(4) (2000), by which an agency’s decision is to be set aside only if it is ‘arbitrary,

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

706(2)(A) (2000).” (internal citations omitted)); Info. Tech. & Applications Corp. v. United

States, 316 F.3d at 1319 (“Consequently, our inquiry is whether the Air Force’s

procurement decision was ‘arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law.’ 5 U.S.C. § 706(2)(A) (2000).”); Synergy Sols., Inc. v. United

States, 133 Fed. Cl. 716, 734 (2017) (citing Banknote Corp. of Am. v. United States, 365

F.3d at 1350); Eco Tour Adventures, Inc. v. United States, 114 Fed. Cl. at 22; Contracting,

Consulting, Eng’g LLC v. United States, 104 Fed. Cl. 334, 340 (2012). “In a bid protest

case, the agency’s award must be upheld unless it is ‘arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.’” Turner Constr. Co. v. United States,

645 F.3d 1377, 1383 (Fed. Cir.) (quoting PAI Corp. v. United States, 614 F.3d at 1351),

reh’g en banc denied (Fed. Cir. 2011); see also Tinton Falls Lodging Realty, LLC v. United

States, 800 F.3d at 1358 (“In applying this [arbitrary and capricious] standard to bid

protests, our task is to determine whether the procurement official’s decision lacked a

rational basis or the procurement procedure involved a violation of a regulation or

procedure.” (citing Savantage Fin. Servs., Inc. v. United States, 595 F.3d at 1285–86));

Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d 901, 907 (Fed. Cir.), reh’g

en banc denied (Fed. Cir. 2013); Nat’l Gov’t Servs., Inc. v. United States, 137 Fed. Cl.

715, 735 (2018) (quoting Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed.

Cir. 2009)); McVey Co., Inc. v. United States, 111 Fed. Cl. 387, 402 (2013) (“The first step

is to demonstrate error, that is, to show that the agency acted in an arbitrary and

capricious manner, without a rational basis or contrary to law.”); PlanetSpace, Inc. v.

United States, 92 Fed. Cl. 520, 531-32 (“Stated another way, a plaintiff must show that

the agency’s decision either lacked a rational basis or was contrary to law.” (citing Weeks

Marine, Inc. v. United States, 575 F.3d at 1358)), subsequent determination, 96 Fed. Cl.

119 (2010).

The United States Supreme Court has identified sample grounds which can

29

constitute arbitrary or capricious agency action:

[W]e will not vacate an agency’s decision unless it “has relied on factors

which Congress has not intended it to consider, entirely failed to consider

an important aspect of the problem, offered an explanation for its decision

that runs counter to the evidence before the agency, or is so implausible

that it could not be ascribed to a difference in view or the product of agency

expertise.”

Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 658 (2007) (quoting

Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)); see

also Tinton Falls Lodging Realty, LLC v. United States, 800 F.3d at 1358; F.C.C. v. Fox

Television Stations, Inc., 556 U.S. 502, 552 (2009); Ala. Aircraft Indus., Inc.-Birmingham

v. United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009), reh’g and reh’g en banc denied

(Fed. Cir. 2010); In re Sang Su Lee, 277 F.3d 1338, 1342 (Fed. Cir. 2002) (“[T]he agency

tribunal must present a full and reasoned explanation of its decision. . . . The reviewing

court is thus enabled to perform meaningful review . . . .”); Textron, Inc. v. United States,

74 Fed. Cl. 277, 285-86 (2006), appeal dismissed sub nom. Textron, Inc. v. Ocean

Technical Servs., Inc., 223 F. App’x 974 (Fed. Cir. 2007). The United States Supreme

Court also has cautioned, however, that “courts are not free to impose upon agencies

specific procedural requirements that have no basis in the APA.” Pension Benefit Guar.

Corp. v. LTV Corp., 496 U.S. 633, 654 (1990).

Under an arbitrary or capricious standard, the reviewing court should not substitute

its judgment for that of the agency, but should review the basis for the agency decision to

determine if it was legally permissible, reasonable, and supported by the facts. See Motor

Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. at 43 (“The scope of

review under the ‘arbitrary and capricious’ standard is narrow and a court is not to

substitute its judgment for that of the agency.”); see also Turner Constr. Co., Inc. v. United

States, 645 F.3d at 1383; R & W Flammann GmbH v. United States, 339 F.3d 1320, 1322

(Fed. Cir. 2003) (citing Ray v. Lehman, 55 F.3d 606, 608 (Fed. Cir.), cert. denied, 516

U.S. 916 (1995)); Synergy Sols., Inc. v. United States, 133 Fed. Cl. at 735 (citing Impresa

Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332-33). “‘“If the

court finds a reasonable basis for the agency’s action, the court should stay its hand even

though it might, as an original proposition, have reached a different conclusion as to the

proper administration and application of the procurement regulations.”’” Weeks Marine,

Inc. v. United States, 575 F.3d at 1371 (quoting Honeywell, Inc. v. United States, 870

F.2d 644, 648 (Fed. Cir. 1989) (quoting M. Steinthal & Co. v. Seamans, 455 F.2d 1289,

1301 (D.C. Cir. 1971))); Limco Airepair, Inc. v. United States, 130 Fed. Cl. 544, 550 (2017)

(citation omitted); Jordan Pond Co., LLC v. United States, 115 Fed. Cl. 623, 631 (2014);

Davis Boat Works, Inc. v. United States, 111 Fed. Cl. 342, 349 (2013); Norsat Int’l

[America], Inc. v. United States, 111 Fed. Cl. 483, 493 (2013); HP Enter. Servs., LLC v.

United States, 104 Fed. Cl. 230, 238 (2012); Vanguard Recovery Assistance v. United

States, 101 Fed. Cl. 765, 780 (2011).

Stated otherwise by the United States Supreme Court:

30

Section 706(2)(A) requires a finding that the actual choice made was not

“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance

with law.” To make this finding the court must consider whether the decision

was based on a consideration of the relevant factors and whether there has

been a clear error of judgment. Although this inquiry into the facts is to be

searching and careful, the ultimate standard of review is a narrow one. The

court is not empowered to substitute its judgment for that of the agency.

Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971) (internal citations

omitted), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977); see

also U.S. Postal Serv. v. Gregory, 534 U.S. 1, 6-7 (2001); Bowman Transp., Inc. v.

Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285 (1974), reh’g denied, 420 U.S. 956

(1975); Co-Steel Raritan, Inc. v. Int’l Trade Comm’n, 357 F.3d 1294, 1309 (Fed. Cir. 2004)

(In discussing the “arbitrary, capricious, and abuse of discretion, or otherwise not in

accordance with the law” standard, the Federal Circuit stated: “the ultimate standard of

review is a narrow one. The court is not empowered to substitute its judgment for that of

the agency.”); In re Sang Su Lee, 277 F.3d at 1342; Advanced Data Concepts, Inc. v.

United States, 216 F.3d at 1058 (“The arbitrary and capricious standard applicable here

is highly deferential. This standard requires a reviewing court to sustain an agency action

evincing rational reasoning and consideration of relevant factors.” (citing Bowman

Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. at 285)); Lockheed Missiles &

Space Co. v. Bentsen, 4 F.3d 955, 959 (Fed. Cir. 1993); By Light Prof’l IT Servs., Inc. v.

United States, 131 Fed. Cl. 358, 366 (2017); BCPeabody Constr. Servs., Inc. v. United

States, 112 Fed. Cl. 502, 508 (2013) (“The court ‘is not empowered to substitute its

judgment for that of the agency,’ and it must uphold an agency’s decision against a

challenge if the ‘contracting agency provided a coherent and reasonable explanation of

its exercise of discretion.’” (internal citations omitted) (quoting Keeton Corrs., Inc. v.

United States, 59 Fed. Cl. 753, 755, recons. denied, 60 Fed. Cl. 251 (2004); and Axiom

Res. Mgmt., Inc. v. United States, 564 F.3d at 1381)), appeal withdrawn, 559 F. App’x

1033 (Fed. Cir. 2014); Supreme Foodservice GmbH v. United States, 109 Fed. Cl. 369,

382 (2013); Alamo Travel Grp., LP v. United States, 108 Fed. Cl. 224, 231 (2012);

ManTech Telecomms. & Info. Sys. Corp. v. United States, 49 Fed. Cl. 57, 63 (2001), aff’d,

30 F. App’x 995 (Fed. Cir. 2002); Ellsworth Assocs., Inc. v. United States, 45 Fed. Cl.

388, 392 (1999) (“Courts must give great deference to agency procurement decisions

and will not lightly overturn them.” (citing Fla. Power & Light Co. v. Lorion, 470 U.S. 729,

743-44 (1985))), appeal dismissed, 6 F. App’x 867 (Fed. Cir. 2001), and superseded by

regulation as recognized in MVS USA, Inc. v. United States, 111 Fed. Cl. 639 (2013).

According to the United States Court of Appeals for the Federal Circuit:

Effective contracting demands broad discretion. Burroughs Corp. v. United

States, 223 Ct. Cl. 53, 617 F.2d 590, 598 (1980); Sperry Flight Sys. Div. v.

United States, 548 F.2d 915, 921, 212 Ct. Cl. 329 (1977); see NKF Eng’g,

Inc. v. United States, 805 F.2d 372, 377 (Fed. Cir. 1986); Tidewater

Management Servs., Inc. v. United States, 573 F.2d 65, 73, 216 Ct. Cl. 69

31

(1978); RADVA Corp. v. United States, 17 Cl. Ct. 812, 819 (1989), aff’d, 914

F.2d 271 (Fed. Cir. 1990). Accordingly, agencies “are entrusted with a good

deal of discretion in determining which bid is the most advantageous to the

Government.” Tidewater Management Servs., 573 F.2d at 73, 216 Ct. Cl.

69.

Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d at 958-59; see also Res-Care, Inc. v.

United States, 735 F.3d 1384, 1390 (Fed. Cir.) (“DOL [Department of Labor], as a federal

procurement entity, has ‘broad discretion to determine what particular method of

procurement will be in the best interests of the United States in a particular situation.’”

(quoting Tyler Constr. Grp. v. United States, 570 F.3d 1329, 1334 (Fed. Cir. 2009))), reh’g

en banc denied (Fed. Cir. 2014); Grumman Data Sys. Corp. v. Dalton, 88 F.3d 990, 995

(Fed. Cir. 1996); Geo-Med, LLC v. United States, 126 Fed. Cl. 440, 449 (2016); Cybertech

Grp., Inc. v. United States, 48 Fed. Cl. 638, 646 (2001) (“The court recognizes that the

agency possesses wide discretion in the application of procurement regulations.”);

Furthermore, according to the United States Court of Appeals for the Federal Circuit:

Contracting officers “are entitled to exercise discretion upon a broad range

of issues confronting them in the procurement process.” Impresa

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

1332 (Fed. Cir. 2001) (internal quotation marks omitted). Accordingly,

procurement decisions are subject to a “highly deferential rational basis

review.” CHE Consulting, Inc. v. United States, 552 F.3d 1351, 1354 (Fed.

Cir. 2008) (internal quotation marks omitted).

PAI Corp. v. United States, 614 F.3d at 1351; see also AgustaWestland N. Am., Inc. v.

United States, 880 F.3d at 1332 (“Where, as here, a bid protester challenges the

procurement official's decision as lacking a rational basis, we must determine whether

‘the contracting agency provided a coherent and reasonable explanation of its exercise

of discretion,’ recognizing that ‘contracting officers are entitled to exercise discretion upon

a broad range of issues confronting them in the procurement process.’” (quoting Impresa

Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332-33 (internal

quotation marks and citation omitted))); Weeks Marine, Inc. v. United States, 575 F.3d at

1368-69 (“We have stated that procurement decisions ‘invoke [ ] “highly deferential”

rational basis review.’ Under that standard, we sustain an agency action ‘evincing rational

reasoning and consideration of relevant factors.’” (alteration in original) (quoting CHE

Consulting, Inc. v. United States, 552 F.3d at 1354 (quoting Advanced Data Concepts,

Inc. v. United States, 216 F.3d at 1058))).

On a motion for judgment on the administrative record, a disappointed bidder has

the burden of demonstrating the arbitrary and capricious nature of the agency decision

by a preponderance of the evidence. See Tinton Fall Lodging Realty, LLC v. United Sates,

800 F.3d at 1364; see also Grumman Data Sys. Corp. v. Dalton, 88 F.3d at 995-96;

Enhanced Veterans Sols., Inc. v. United States, 131 Fed. Cl. 565, 578 (2017); Davis Boat

Works, Inc. v. United States, 111 Fed. Cl. at 349; Contracting, Consulting, Eng’g LLC v.

United States, 104 Fed. Cl. at 340. The Federal Circuit has indicated that “[t]his court will

32

not overturn a contracting officer’s determination unless it is arbitrary, capricious, or

otherwise contrary to law. To demonstrate that such a determination is arbitrary or

capricious, a protester must identify ‘hard facts’; a mere inference or suspicion . . . is not

enough.” PAI Corp. v. United States, 614 F.3d at 1352 (citing John C. Grimberg Co. v.

United States, 185 F.3d 1297, 1300 (Fed. Cir. 1999)); see also Turner Constr. Co., Inc.

v. United States, 645 F.3d at 1387; Sierra Nevada Corp. v. United States, 107 Fed. Cl.

735, 759 (2012); Filtration Dev. Co., LLC v. United States, 60 Fed. Cl. 371, 380 (2004).

A bid protest proceeds in two steps. First . . . the trial court determines

whether the government acted without rational basis or contrary to law when

evaluating the bids and awarding the contract. Second . . . if the trial court

finds that the government’s conduct fails the APA review under 5 U.S.C.

§ 706(2)(A), then it proceeds to determine, as a factual matter, if the bid

protester was prejudiced by that conduct.

Bannum, Inc. v. United States, 404 F.3d at 1351; T Square Logistics Servs. Corp. v.

United States, Fed. Cl. 550, 555 (2017); FirstLine Transp. Sec., Inc. v. United States, 119

Fed. Cl. 116, 126 (2014), appeal dismissed (Fed. Cir. 2015); Eco Tour Adventures, Inc.

v. United States, 114 Fed. Cl. at 22; Archura LLC v. United States, 112 Fed. Cl. 487, 496

(2013). To prevail in a bid protest case, the protestor not only must show that the

government’s actions were arbitrary, capricious, or otherwise not in accordance with the

law, but the protestor also must show that it was prejudiced by the government’s actions.

See 5 U.S.C. § 706 (“[D]ue account shall be taken of the rule of prejudicial error.”); see

also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d at 907 (“In a bid

protest case, the inquiry is whether the agency’s action was arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law and, if so, whether the error

is prejudicial.”); IT Enter. Sols. JV, LLC v. United States, 132 Fed. Cl. 158, 173 (2017)

(citing Bannum v. United States, 404 F.3d at 1357-58); Linc Gov’t Servs., LLC v. United

States, 96 Fed. Cl. 672, 694-96 (2010). In describing the prejudice requirement, the

Federal Circuit also has held that:

To prevail in a bid protest, a protester must show a significant, prejudicial

error in the procurement process. See Statistica, Inc. v. Christopher, 102

F.3d 1577, 1581 (Fed. Cir. 1996); Data Gen. Corp. v. Johnson, 78 F.3d

1556, 1562 (Fed. Cir. 1996). “To establish prejudice, a protester is not

required to show that but for the alleged error, the protester would have

been awarded the contract.” Data General, 78 F.3d at 1562 (citation

omitted). Rather, the protester must show “that there was a substantial

chance it would have received the contract award but for that error.”

Statistica, 102 F.3d at 1582; see CACI, Inc.-Fed. v. United States, 719 F.2d

1567, 1574-75 (Fed. Cir. 1983) (to establish competitive prejudice, protester

must demonstrate that but for the alleged error, “‘there was a substantial

chance that [it] would receive an award--that it was within the zone of active

consideration.’”) (citation omitted).

Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed. Cir.), reh’g denied

33

(Fed. Cir. 1999); see also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720 F.3d

at 912; Allied Tech. Grp., Inc. v. United States, 649 F.3d 1320, 1326 (Fed. Cir.), reh’g en

banc denied (Fed. Cir. 2011); Info. Tech. & Applications Corp. v. United States, 316 F.3d

at 1319; Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at

1332-33; OMV Med., Inc. v. United States, 219 F.3d 1337, 1342 (Fed. Cir. 2000);

Advanced Data Concepts, Inc. v. United States, 216 F.3d at 1057; Stratos Mobile

Networks USA, LLC v. United States, 213 F.3d 1375, 1380 (Fed. Cir. 2000).

In Data General Corp. v. Johnson, the United States Court of Appeals for the

Federal Circuit wrote:

We think that the appropriate standard is that, to establish prejudice, a

protester must show that, had it not been for the alleged error in the

procurement process, there was a reasonable likelihood that the protester

would have been awarded the contract . . . . The standard reflects a

reasonable balance between the importance of (1) averting unwarranted

interruptions of and interferences with the procurement process and (2)

ensuring that protesters who have been adversely affected by allegedly

significant error in the procurement process have a forum available to vent

their grievances. This is a refinement and clarification of the “substantial

chance” language of CACI, Inc.-Fed. [v. United States], 719 F.2d at 1574.

Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1562 (Fed. Cir.), reh’g denied, en banc

suggestion declined (Fed. Cir. 1996); see also Glenn Def. Marine (ASIA), PTE Ltd. v.

United States, 720 F.3d at 912; Bannum, Inc. v. United States, 404 F.3d at 1353, 1358

(“The trial court was required to determine whether these errors in the procurement

process significantly prejudiced Bannum . . . . To establish ‘significant prejudice’ Bannum

must show that there was a ‘substantial chance’ it would have received the contract award

but for the [government’s] errors” in the bid process. (citing Info. Tech. & Applications

Corp. v. United States, 316 F.3d at 1319; Alfa Laval Separation, Inc. v. United States,

175 F.3d at 1367; Statistica, Inc. v. Christopher, 102 F.3d at 1581; and Data Gen. Corp.

v. Johnson, 78 F.3d at 1562); see also Todd Constr., L.P. v. United States, 656 F.3d

1306, 1315 (Fed. Cir. 2011); Advanced Data Concepts, Inc. v. United States, 216 F.3d at

1057 (using a “reasonable likelihood” rule); Stratos Mobile Networks USA, LLC v. United

States, 213 F.3d at 1380 (using a “substantial chance” test); Am. Corr. Healthcare, Inc.

v. United States, 137 Fed. Cl. 395, 410 (2018) (using a “substantial chance” test); Vintage

Autoworks, Inc. v. United States, 132 Fed. Cl. 143, 149 (2017) (using a “substantial

chance” test); Active Network, LLC v. United States, 130 Fed. Cl. 421, 427 (2017) (using

a “substantial chance” test); Archura LLC v. United States, 112 Fed. Cl. at 496 (using a

“substantial chance” test); Info. Scis. Corp. v. United States, 73 Fed. Cl. 70, 96 (2006)

(using a “substantial chance” test), recons. in part, 75 Fed. Cl. 406 (2007).

In the above-captioned bid protest, ARC asserts that CBP failed to perform “any”

acquisition planning or market research prior to deciding to obtain employee relocation

services from the FSS, inappropriately “changing the small business size standard

34

applicable to the Procurement,” and issuing 2018 RFQ as an unrestricted procurement.

ARC asserts in its motion for judgment on the administrative record in this court that:

Under FAR § 7.102 [(2018)], the Agency was required “to perform

acquisition planning and conduct market research for all acquisitions in

order to promote and provide for:”

1. “Full and open competition or, when full and open competition is not

required” by FAR Part 6;

2. “Selection of appropriate contract type”; and

3. “Appropriate consideration of the use of pre-existing contracts,

including interagency and intra-agency contracts, to fulfill the

requirement, before awarding new contracts.”

FAR Part 7 does not exempt any agency or any procurement from the

requirement to undertake acquisition planning.

ARC contends that FAR § 7.105(b)(i)(3) (2018) requires that a “properly prepared”

acquisition plan must include consideration of whether small business concerns may be

utilized, and that FAR § 7.103(u) (2018) requires that federal agencies implement

procedures to ensure that acquisition planners structure contract requirements to facilitate

competition among small business concerns to the maximum extent possible. According

to ARC’s motion for judgment on the administrative record in this court:

The Secretary of DHS has implemented FAR Part 7 through the

promulgation of the DHS supplements to the FAR (“HSAR”), as well as the

DHS Acquisition Manual (“HSAM”).

 HSAM § 3007.102(b)(2) states that “[n]o solicitations may be issued,

or funds transferred within or outside the Department until an

acquisition plan (AP) has been completed and approved.”[14]

 HSAM § 3007.104 states that “acquisition planning should begin as

soon as the agency need is identified.”

14 When the CBP issued the 2018 RFQ on January 19, 2018, the version of the HSAM

that was in effect had been issued on December 29, 2017. In the December 29, 2017

version of the HSAM, HSAM § 3007.102(b) is reserved, and the section the protestor

quotes in its motion for judgment on the administrative record does not appear to be

included in the HSAM. The DHS subsequently issued revised versions of the HSAM on

March 30, 2018, April 30, 2018, and June 29, 2018. In all three of the revised versions of

the HSAM, HSAM § 3007.102(b) is reserved, and the section protestor quotes does not

appear to be included in the revised versions of the HSAM.

35

 HSAM § 3019.501(c) requires that each DHS proposed acquisition

exceeding the simplified acquisition threshold be reviewed by the

CBP small business specialist prior to synopsizing the requirement

and the results documented in the file.

(first alteration in original). ARC also argues that FAR Part 10 requires agencies to

conduct market research, “particularly with respect to whether a particular acquisition can

be performed by small businesses,” prior to soliciting offers for acquisitions with an

estimated value in excess of the simplified acquisition threshold.

ARC, citing to 13 C.F.R. § 125.2(c), further asserts that the SBA’s regulations

require that each agency must conduct market research to determine the type and extent

of small business participation in an acquisition and, when an acquisition involves goods

or services currently being performed by a small business, an agency must provide a

written statement to the SBA thirty days prior to the issuance of a solicitation indicating

why the proposed procurement would render small business participation unlikely.

Additionally, ARC asserts that FAR § 19.502-2(b) requires that a federal agency set aside

an acquisition when the agency has a reasonable expectation that at least two

responsible small business concerns will submit offerors and an award can be made at a

fair market price. ARC alleges that the CBP selected the FSS in an effort to “avoid the

requirements of FAR Part 19, which states that ‘[s]mall business set-asides have priority

over acquisitions using full and open competition.’” (quoting FAR § 19.203(e) (2018)).

ARC states that FAR § 8.405-5 (2018) “exempts FSS orders from the preference

programs of FAR Part 19,” but ARC contends that FAR § 8.405-5

does not exempt FSS orders from the advance acquisition planning

requirements of FAR Part 7 or the advance market research requirements

of FAR Part 10, including such requirements as implemented by FAR Part

19. Such research must precede decisions whether to utilize the GSA

Federal Supply Schedules (“FSS”), which NAICS code (and thus what size

standard) is applicable to the procurement, or whether or not to set-aside

an acquisition for small businesses. See e.g., FAR 8.404(c) (“Orders placed

under a Federal Supply Schedule contract are not exempt from the

development of acquisition plans (see subpart 7.1)”). Nor does FAR Part 8

exempt FSS orders from the advance acquisition planning requirements or

market research requirements of the SBA regulations.

ARC also argues that the CBP’s actions lacked a rational basis and violated “the

applicable regulations and procedures provided above” because the CBP,

 Did not undertake any acquisition planning or market research prior

to: (1) selecting FSS 48 as the contract type for the Procurement; (2)

changing the small business size standard applicable to the

Procurement; or (3) releasing the RFQ as an unrestricted

procurement.

36

 Did not consult with OSBDU [sic] or the Agency’s small business

specialist prior to: (1) selecting FSS 48 as the contract type for the

Procurement; (2) changing the small business size standard

applicable to the Procurement; or (3) releasing the RFQ as an

unrestricted procurement.

ARC argues that the undated First Market Research Report, the Second Market

Research Report dated December 18, 2017, the undated 2018 Independent Government

Cost Estimate, the December 5, 2017 and December 13, 2017 spreadsheets that Ms.

Spangler sent to CBP contracting personnel, and the February 7, 2018 DHS Small

Business Review Form “were prepared after the RFQ was issued and likely after ARC

registered its complaint with the Agency regarding the RFQ being unrestricted.” ARC

asserts that “many of the facts and opinions expressed in both” the undated First Market

Research Report and the Second Market Research Report dated December 18, 2017

“directly reflect responses to issues raised by ARC in its communications with the Agency

on or about February 1, 2018 or during the GAO protest, both of which were after the

[2018] RFQ was issued.” (emphasis in original). ARC also contends that “Mr. Ohene’s

declaration is an admission that Tab 13 [the undated First Market Research Report] was

flawed and that Tab 42 [the Second Market Research Report dated December 18, 2017]

was not relied upon.”

According to ARC, the December 5, 2017 spreadsheet and December 13, 2017

spreadsheet “are misleading documents and are not trustworthy” because “these

spreadsheets do not include an overview of every available NAICS Code under each

SIN.” ARC contends in its motion for judgment on the administrative record that:

The NAICS Codes under each of the SINs for the RFQ are as follows:

a. SIN 653-1: 484210 (Used Household and Office Goods Moving);

531210 (Offices of Real Estate Agents and Brokers); 531390 (Other

Activities Related to Real Estate); and 541511 (Custom Computer

Programming Services);

b. SIN 653-4: 484210 (Used Household and Office Goods Moving);

531210 (Offices of Real Estate Agents and Brokers); 531390 (Other

Activities Related to Real Estate); and 541511 (Custom Computer

Programming Services);

c. SIN 653-5: 484210 (Used Household and Office Goods Moving);

531210 (Offices of Real Estate Agents and Brokers); 531390 (Other

Activities Related to Real Estate); and 541511 (Custom Computer

Programming Services); and

d. SIN 653-7: 484210 (Used Household and Office Goods Moving).

37

ARC also notes that the December 5, 2017 spreadsheet sent from the GSA to the CBP

“lists only one NAICS Code for each SIN” and that the December 13, 2017 spreadsheet

sent from the GSA to the CBP lists only the following NAICS Codes for each SIN:

a. SIN 653-1: NAICS Codes 531210 and 531190, with two businesses

listed as small business certified.

b. SIN 653-4: NAICS Codes 531390, 531210 and 541511, with two

businesses listed as small business certified.

c. SIN 653-5: NAICS Codes 531210 and 531190, with two businesses

listed as small business certified.

d. SIN 653-7: NAICS Code 484210, with nine business [sic] listed as

small business certified.

ARC argues that “reliance on these documents [the December 5, 2017 spreadsheet and

December 13, 2017 spreadsheet] cannot be considered reasonable as they failed to

reveal all relevant information regarding Schedule 48 and the relevant SINS.”

Regarding the 2018 Independent Government Cost Estimate, ARC asserts that

the document is “totally unverifiable” and does not constitute market research because

the 2018 Independent Government Cost Estimate is undated and unsigned and Mr.

Ohene only received the 2018 Independent Government Cost Estimate a few hours

before issuing the solicitation.15 Regarding the February 7, 2018 DHS Small Business

Review Form, ARC argues that the CBP could not have relied on the February 7, 2018

DHS Small Business Review Form as “the basis for the Agency’s decision not to set aside

the Procurement for small businesses because the document was not created until after

the issuance of the RFQ” on January 19, 2018.

15 The court is not persuaded by ARC’s argument that the 2018 Independent Government

Cost Estimate was prepared after the 2018 RFQ was issued. In an email message dated

December 8, 2017, Mr. Ohene informed Ms. Reeves that Ms. Reeves would need to

update the 2017 Independent Government Cost Estimate that was prepared in

connection with the 2017 RFQ to incorporate the updated pricing the CBP was planning

on using in connection with the 2018 RFQ. According to the July 17, 2018 declaration

signed by Mr. Ohene, “[a]fter having several discussions with Ms. Reeves on the values

for the Independent Government Cost Estimate (IGCE), the IGCE was sent to me on

January 19, 2018.” The administrative record includes a January 19, 2018 email message

from Ms. Reeves to Mr. Ohene, attached to which was the 2018 Independent Government

Cost Estimate. The administrative record, therefore, indicates that CBP had been working

on the 2018 Independent Government Cost Estimate as early as December 8, 2017, and

that the 2018 Independent Government Cost Estimate was finalized prior to the issuance

of the 2018 RFQ.

38

Defendant, however, argues that CBP has broad discretion when deciding whether

to use the FSS to acquire employee relocation services. According to defendant, the

CBP’s June 19, 2017 Acquisition Plan identified benefits associated with using the FSS

and “explained that the agency was not changing its acquisition strategy from the current

relocation services contract because ‘CBP received satisfactory services under both

[prior] contracts [awarded in 2008 and 2014 respectively for relocation services].’”

(alterations in original). Defendant contends that CBP was not required to draft an

additional acquisition plan because “the acquisition vehicle did not change.” Defendant

also asserts that:

In light of the preference for obtaining goods and services from FSS

contractors, and the fact that CBP had successfully employed this approach

on the current and previous contracts for procuring the same services, the

agency’s decision to continue this acquisition strategy was reasonable and

in the best interests of the United States.

Defendant also argues that CBP was not required to “undertake market research

to determine whether a small business set-aside was appropriate before purchasing

goods or services through the FSS,” and that CBP’s decision to set aside prior

procurements of employee relocation services does “not expand CBP’s obligations under

the current FSS solicitation.” Defendant asserts that, “[e]ven if CBP chose to evaluate the

procurement as a small business set-aside – as it had done in the past – no such set-

aside could be made here because there was not at least two small businesses that could

have submitted offers when CBP issued its RFQ in January 2018.” According to

defendant, the December 13, 2017 spreadsheet

reflected the NAICS code for SIN 653-7 (NAICS 484210) that was used in

the cancelled 2017 RFQ (and was in use during under the current contract),

but for which the statement of work and pricing had changed significantly.

The NAICS code for the 2018 RFQ was subsequently changed to 531210

to reflect “the higher estimated value of work to be performed under the

NAICS relative to the other NAICS being utilized for this acquisition as

supported by the Independent Government Cost Estimate.” The GSA

spreadsheet identified only Choice Relocation Management, LLC and Sibcy

Cline Relocation Services, Inc. as “small” under NAICS code 531210. And

in her December 5 email, Ms. Spangler informed Mr. Ohene that “Sibcy

provided notification that it will not renew its option and will expire 3/17/18”

and that “ReloDirect [aka ‘Reliance Relocation Services’] has also provided

notification that it is recertifying as large business.” A review of the System

for Award Management records showed that Reliance Relocation Services,

Inc., dba Relo Direct and ARC were both identified as “other than small”

under NAICS code 531210 at the time. The only small business that

qualified under NAICS code 531210 was Choice Relocation.

(alteration in original; internal references omitted).

39

Regarding the SBA regulation cited by ARC, 13 C.F.R. § 125.2, defendant

contends that the SBA regulation does not apply to the CBP’s acquisition of employee

relocation services under the FSS. Defendant relies on K-Lak Corp. v. United States, 98

Fed. Cl. 1, 6 (2011), as support for its position that the CBP did not have any obligation

to comply with the requirements of 13 C.F.R. § 125.2 once the CBP decided to utilize the

FSS to acquire employee relocation services.

The FAR defines acquisition planning as “the process by which the efforts of all

personnel responsible for an acquisition are coordinated and integrated through a

comprehensive plan for fulfilling the agency need in a timely manner and at a reasonable

cost. It includes developing the overall strategy for managing the acquisition.” FAR §

2.101 (2018). FAR Part 7 sets forth the policies and procedures a federal agency must

follow when developing an acquisition plan. See FAR § 7.000(a) (2018). Acquisition

planning should begin as soon as an agency identifies a need. FAR 7.104(a) (2018); see

also HSAM § 3007.104(a) (2018) (“In accordance with FAR 7.104(a), acquisition planning

should begin as soon as the agency need is identified.”). FAR § 7.102 (2018) requires

that an agency perform acquisition planning and conduct market research pursuant to

FAR Part 10, as discussed below, for all acquisitions in order “to ensure that the

Government meets its needs in the most effective, economical, and timely manner.” FAR

§ 7.102; see also Magnum Opus Techs., Inc. v. United States, 94 Fed. Cl. 512, 545 (2010)

(“FAR part 7 requires agencies to develop acquisition plans to ensure that the

Government meets its needs in the most effective, economical, and timely manner.”

(citing FAR §§ 7.102-.103)). Provided there is no statutory or regulatory requirement to

the contrary, an agency generally has broad discretion when determining whether a

procurement strategy will meet the agency’s needs in an effective, economical, and timely

manner. See Tyler Constr. Grp. v. United States, 570 F.3d 1329, 1334 (Fed. Cir. 2009)

(“The Corps, like other federal procurement entities, has broad discretion to determine

what particular method of procurement will be in the best interests of the United States in

a particular situation.” (citing E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir.

1996); and Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d at 958)).

The FAR defines market research as “collecting and analyzing information about

capabilities within the market to satisfy agency needs.” FAR § 2.101. FAR Part 10

“prescribes the policies and procedures for conducting market research to arrive at the

most suitable approach to acquiring, distributing, and supporting supplies and services.”

FAR § 10.000 (2018). A federal agency must “[c]onduct market research appropriate to

the circumstances” prior to soliciting offers for an acquisition with an estimated value

exceeding the simplified acquisition threshold and must use the results of the agency’s

market research to determine “if sources capable of satisfying the agency’s requirements

exist.” FAR § 10.001(a) (2018); see also Magnum Opus Techs., Inc. v. United States, 94

Fed. Cl. at 545 (“FAR part 10 requires agencies to conduct market research to determine

the most suitable approach for acquiring goods and services.” (citing FAR §§ 10.001-

.002)). “The extent of market research will vary, depending on such factors as urgency,

estimated dollar value, complexity, and past experience,” but market research “should

include” consideration of the “[s]ize and status of potential sources (see [FAR] Part 19

[(2018)]).” FAR § 10.002(b) (2018).

40

FAR Part 19, titled “Small Business Programs,” at FAR § 19.201(a) (2018)

indicates that it is the policy of the federal government to “provide maximum practicable

opportunities in its acquisitions” to small businesses. See FAR § 19.201(a). FAR

§ 19.501(c) requires that a contracting officer conduct market research, and, if the

contracting officer decides not to set aside the acquisition for small businesses, the

contracting officer must document why a small business set-aside is inappropriate. FAR

§ 19.501(c); see also Proxtronics Dosimetry, LLC v. United States, 128 Fed. Cl. 656, 680

(2016) (discussing the requirements of FAR Part 19 and stating that “[c]ontracting officers

are required to ‘review acquisitions to determine if they can be set aside for small

business,’ and must ‘perform market research’ before concluding that an acquisition

should not be set aside for a small business” (quoting FAR § 19.501(c))), appeal

dismissed (Fed. Cir. 2017). A contracting officer generally must set aside an acquisition

for small businesses when there is a reasonable expectation that “[o]ffers will be obtained

from at least two responsible small business concerns offering the products of different

small business concerns” and “[a]ward will be made at fair market prices.” See FAR §

19.502-2(b); see also Adams & Assocs., Inc. v. United States, 741 F.3d 102, 106 (Fed.

Cir.) (stating that, under FAR Part 19, “[t]he Rule of Two requires the ‘contracting officer

shall set aside any acquisition over $150,000 for small business participation when there

is a reasonable expectation that: (1) Offers will be obtained from at least two responsible

small business concerns . . . ; and (2) Award will be made at fair market prices.’” (omission

in original) (quoting FAR § 19.502-2(b))), reh’g en banc denied (Fed. Cir. 2014).

FAR § 8.404(a) (2018), however, states that FAR “Parts 13 (except 13.303-

2(c)(3)), 14, 15, and 19 (except for the requirement at 19.202-1(e)(1)(iii)[16]) do not apply

to BPAs or orders placed against Federal Supply Schedules contracts.” FAR § 8.404(a);

see also FAR § 38.101(e) (2018) (stating that FAR Part 19 does not apply to orders or

blanket purchase agreements awarded under the FSS). Moreover, if an agency is unable

to satisfy its requirements for a procurement from the list of mandatory sources in FAR

§ 8.002 (2018) and FAR § 8.003 (2018), “agencies are encouraged to consider satisfying

requirements from or through the non-mandatory sources listed in paragraph (a) of this

section,” which includes blanket purchase agreements under the FSS, before considering

“[c]ommercial sources (including educational and non-profit institutions) in the open

market.” FAR § 8.004 (2018). Although FAR Part 19 does not apply to acquisitions

utilizing the FSS in accordance with FAR Part 8, acquisitions utilizing the FSS are “not

exempt from the development of acquisition plans” under FAR Part 7. See FAR

§ 8.404(c)(1). Contracting Officers also “may, at their discretion,” set aside a blanket

purchase agreement placed under the FSS for small businesses. See FAR § 8.405-5.

In the above-captioned bid protest, the administrative record indicates that CBP

identified its need for employee relocation services as early as March 2017. In an email

message dated March 29, 2017, which was sent by Mr. Ischkum, a GSA Branch Chief,

16FAR § 19.202-1(e)(1)(iii) (2018) states that a contracting officer shall provide a copy of

a proposed acquisition package to an SBA procurement center representative when the

proposed acquisition is a consolidated or bundled requirement.

41

to Mr. Ohene and displayed a subject line of “F2017036219 Relocation Services,” Mr.

Ischkum states, “I saw her [Ms. Reeves’] APFS [Acquisition Planning Forecast System

Number] # F2017036219 for relocation services. This is something you may easily be

able to accomplish on the GSA Schedules program.” In a March 30, 2017 email message

from Mr. Ohene to Mr. Ischkum, Mr. Ohene stated that “[w]e plan to use GSA Schedule

48 Transportation, Delivery, and Relocation Solutions for the recompete. It was used

successfully for the last acquisition.” In response to questions received by CBP regarding

the CBP’s May 8, 2018 Request for Information, CBP indicated that NAICS Code 484210,

titled “Used Household and Office Goods Moving,” which has a small business size

standard of $27,500,000.00, was to be the applicable NAICS Code for the acquisition of

employee relocation services.

According to the CBP’s Acquisition Plan dated June 19, 2017, the acquisition of

employee relocation services “will be competed via GSA Relocation Services schedule

holders.” The CBP’s Acquisition Plan stated that “[m]arket research conducted for this

requirement showed that relocation services can be procured via GSA Schedule 48-

Transportation, Delivery, and Relocation Solutions, which was created to assist federal

agencies offering relocation benefits for employees and their families,” and that SINs 653-

1, 653-4, 653-5, and 653-7, which are listed on Schedule 48 of the FSS, satisfied the

CBP’s requirements. The CBP’s June 19, 2017 Acquisition Plan also provided that:

CBP can leverage the purchase of relocation services via the GSA

schedule. The use of FAR Subpart 8.4 (Federal Supply Schedule)

procedures significantly reduces acquisition lead time allowing CBP to more

efficiently complete the procurement process for the relocation acquisition.

In addition, small business set-asides are allowable under the schedule.

While the award will not be an IDIQ award as it is not permitted for GSA

Multiple Award Schedule (MAS) vehicles, a Blanket Purchase Agreement

will be awarded that will significantly reduce time by allowing orders to be

placed under it as needs arise.

Additionally, the CBP noted that it had received satisfactory results under the previous

employee relocation contract and the current ARC contract, which was issued under

Schedule 48 of the FSS.17

17 As noted above, APA review is to be applied to an agency’s decision based on the

record the agency presents to the court, although the court may supplement the

administrative record when omission of the supplemental material precludes effective

judicial review. See AugustaWestland N. Am., Inc. v. United States, 880 F.3d at 1331-32;

see also Axiom Res. Mgmt., Inc. v. United States, 564 F.3d at 1380. ARC attached to its

motion for judgment on the administrative record a July 25, 2018 declaration signed by

Mr. William Mulholland, who states that he is the “Managing Member” of ARC. In the July

25, 2018 declaration, Mr. Mulholland focuses on an invoicing dispute experienced

between ARC and CBP. ARC asserts that the declaration signed by Mr. Mulholland

“directly challenges the facts asserted in these so-called Market Research Reports,

demonstrating that such reports were flawed and likely created after ARC contacted the

42

On August 21, 2017, the CBP issued the 2017 RFQ, which was set-aside for small

businesses and sought employee relocation services under GSA’s “Relocation Services

Schedule 48 SSIN 653.” On August 22, 2017, CBP issued an amendment to the 2017

RFQ, which added SINs 653-1, 653-4, 653-5, and 653-7 to the 2017 RFQ. On August 23,

2017, Terri Shaffer, a GSA Program Analyst, sent an email message to CBP contracting

personnel stating that the 2017 RFQ “included commercial pricing as an option for move

management services” under SIN 653-7, and that the “recent change to the Schedule

which is reflected in the attached process maps offers move management services

through the Schedule in combination with the household goods moving services being

managed under the terms, conditions, and pricing of the Centralized Household Goods

Traffic Management Program (CHAMP).” On September 5, 2017, CBP issued a

modification cancelling the 2017 RFQ.

Subsequently, according to a November 9, 2018 email from Ms. Shaffer of the

GSA, Ms. Schaffer began “working closely with Iris [Reeves of CBP] on the requirements

for your [the CBP’s] BPA,” and, as of November 9, 2017, Ms. Shaffer and Ms. Reeves

were “nearing the final stretch” of completing a statement of work for the 2018 RFQ, which

was ultimately issued on January 19, 2018. As with the 2017 RFQ, the 2018 RFQ seeks

to use Schedule 48 of the FSS to acquire employee relocation services and identifies

SINs 653-1, 653-4, 653-5, and 653-7 as the applicable SINs. Prior to the issuance of the

2018 RFQ, on December 5, 2017, Ms. Spangler, a GSA Contracting Officer, sent an email

message to Mr. Ohene and Ms. Reeves that stated:

To support your research please find attached a pricing sheet for the

Schedule 48 employee relocation contracts. This sheet includes the NAICS

for each SIN and contractor business size classification by SIN as of today.

As you can see, Schedule 48 employee relocation contracts may include

multiple NAICS with different business classifications. The Schedule COs

made NAICS determinations for these contracts based on the

preponderance of work to be performed under the contract at time of award.

FAR 8.405-5(b) states that “Ordering activities should rely on the small

business representations made by schedule contractors at the contract

Government after release of the 2018 RFQ.” Defendant argues that the court “should

strike the declaration of William Mulholland” because “the declaration contains no

information that is relevant to any of the issues being protested.” The defendant is correct

that, upon review, there appears to be no information necessary for the court’s judicial

review in the above-captioned bid protest included in Mr. Mulholland’s declaration. The

court, therefore, declines to supplement the administrative record with the declaration

signed by Mr. Mulholland. Mr. Mulholland’s offered additional information regarding an

invoicing dispute between ARC and CBP does not alter the court’s conclusion that CBP

adequately engaged in acquisition planning and conducted market research prior to

issuing the 2018 RFQ.

43

level.” However, in situations where a MAS contract includes multiple

NAICS, the ordering CO’s are responsible for assigning the order level

NAICS which best corresponds to the work being performed. The order

level CO should be re-certifying businesses at the order level per SBA at 71

Federal Register 220 (November 15, 2006), Page 66439. Due to the fact

that a contractor’s business size may be different at the MAS level from the

Ordering Level, with regards to schedule SB set-asides competitors have

an avenue for business size protest through the ordering CO.

I’m hoping the attachment will provide the documentation needed for your

market research and resulting decision for acquisition strategy.

Ms. Spangler also informed Ms. Reeves and Mr. Ohene that Sibcy Cline Relocation

Services informed GSA that Sibcy Cline Relocation Services “will not renew its option and

will expire 3/17/18,” which was reflected in the December 5, 2017 spreadsheet. On

December 13, 2017, Ms. Spangler sent to Ms. Reeves and Mr. Ohene an updated

spreadsheet that “was updated to correct NAICS codes & add comments on expiration

dates.” As the parties have stipulated, Ms. Spangler’s December 13, 2017 spreadsheet

listed the following NAICS Codes for each SIN:

SIN 653-1: NAICS Codes 531210 and 531190, with two businesses listed

as small business certified: Choice Relocation Management and Sibcy

Cline Relocation Services

SIN 653-4: NAICS Codes 531390, 531210 and 541511, with two

businesses listed as small business certified: Choice Relocation

Management and Sibcy Cline Relocation Services

SIN 653-5: NAICS Codes 531210 and 531190, with two businesses listed

as small business certified: Choice Relocation Management and Sibcy

Cline Relocation Services

SIN 653-7: NAICS Code 484210, with nine business listed as small

business certified: American Relocation Connections, Choice Relocation

Management, Reliance Relocation Services, Sibcy Cline Relocation

Services, TRF Global Mobility, Life International Companies, Move

Management Center, Relocation Management Worldwide, and Weleski

Transfer.

Based on the December 13, 2017 spreadsheet and Sibcy Cline Relocation Services’

statement that it “will not renew its option and will expire 3/17/18,” the only certified small

business under NAICS Codes 531210, 531190, and 541511 was Choice Relocation

Management, although, according to the December 13, 2017 spreadsheet, there were

44

seven certified small businesses under NAICS Code 484210.18 The December 5, 2017

spreadsheet and December 13, 2017 spreadsheet also provided a “Rate Comparison”

among all of the vendors listed under each SIN.

According to the undated First Market Research Report, CBP then determined that

the applicable NAICS Code for the 2018 RFQ was NAICS Code 531210, titled “Offices of

Real Estate Agents and Brokers,” rather than NAICS Code 484210, titled “Used

Household and Office Goods Moving,” which the CBP utilized for the 2017 RFQ. The

undated First Market Research Report stated:

GSA schedule 48-Transportation, Delivery, and Relocation Solutions

vehicle is able to meet this requirement based on market research.

Schedule 48 was created to assist federal agencies with respect to

relocation services. The schedule contains the following applicable

SINs/NAICS for the CBP Relocation Services acquisition:

SIN 653-1, Relocation Services Package (Homesale Assistance) NAICS

531210 & 531390

SIN 653-4, Additional Services NAICS 531210 & 531390

SIN 653-5, Agency Customization Service NAICS 531210 & 531390

SIN 653-7, Move Management Services NAICS 484210

The CBP Relocation acquisition encompasses the above SINs/NAICS.

Given the multiple NAICS associated with the above reference [sic] SINs,

the applicable NAICS at the order level for the preponderance of work ($

value) to be performed under the resultant contract is NAICS 531210 (Office

of Real Estates and Brokers). NAICS 531210 is being utilized given the

higher estimated value of work to be performed under the NAICS relative to

the other NAICS being utilized for this acquisition as supported by

Independent Government Cost Estimate.

Thereafter, on January 19, 2018, CBP issued the 2018 RFQ as an unrestricted

procurement, and, on February 5, 2018, CBP issued an amendment to the 2018 RFQ,

which indicates that NAICS Code 531210 is the applicable NAICS Code for the 2018

RFQ.

Contrary to ARC’s position, the administrative record indicates that CBP did

undertake acquisition planning and market research prior to selecting the FSS as the

method for obtaining employee relocation services for the 2017 RFQ, as well as additional

acquisition planning and market research prior to issuing the 2018 RFQ. As discussed

above, the email messages exchanged between Mr. Ohene and Mr. Ischkum indicate

18Reliance Relocation Services, which is listed as a small business under NAICS Code

484210 in the December 5, 2017 and December 13, 2017 spreadsheets, had informed

the GSA, which had informed CBP, that Reliance Relocation Services was going to be

recertifying as a “large business.”

45

that the CBP identified its upcoming need for employee relocation services as early as

March 2017. The CBP’s June 19, 2017 Acquisition Plan indicates that CBP had

previously, successfully used the FSS to acquire employee relocation services, noted that

Schedule 48, which is titled “Transportation, Delivery and Relocation Solutions,” was

“created to assist federal agencies offering relocation benefits for employees and their

families,” stated that the SINs listed on Schedule 48 of the FSS covered the CBP’s

requirements, stated that “[m]arket research conducted for this acquisition can be

procured via GSA Schedule 48,” and reasoned that using the FSS permitted the CBP to

complete its procurement process in an efficient manner, all of which suggested to the

agency that the FSS was an effective method for acquiring employee relocation services.

Although the CBP’s June 19, 2017 Acquisition Plan was created in connection with the

2017 RFQ, which requested employee relocation services under SINs 653-1, 653-4, 653-

5, and 653-7, the reasoning in the June 19, 2017 Acquisition Plan directly supports the

use of Schedule 48 of the FSS for the 2018 RFQ, which also requested employee

relocation services under SINs 653-1, 653-4, 653-5, and 653-7, albeit with revised pricing

and a revised statement of work for SIN 653-7. See FAR § 10.002(b)(1) (“The contracting

officer may use market research conducted within 18 months before the award of any

task or delivery order if the information is still current, accurate, and relevant.”). As

indicated in Ms. Reeves’ December 8, 2017 email message to Mr. Ohene, the CBP

anticipated that its “estimates on our volumes [for employee relocation services] for the

next 4 years should still be the same” for the 2018 RFQ and that CBP’s 2018 RFQ is

requesting “the same services that we previously had,” although, as noted in Mr. Ohene’s

December 8, 2017 response, vendors would not be submitting pricing for the shipment of

Household Goods because “CHAMP will be handling this.” ARC also states that “there is

no fundamental change to the services being acquired” under the 2018 RFQ, but that the

CBP “simply changed the pricing the contractor could charge for move management

services, i.e., such charges were limited to the CHAMP tariffs.”

The June 19, 2017 Acquisition Plan was developed less than seven months before

CBP issued the 2018 RFQ on January 19, 2018, and ARC has not identified any

information in the administrative record indicating that Schedule 48 of the FSS, which is

titled “Transportation, Delivery and Relocation Solutions,” had become an ineffective

vehicle for the CBP’s procurement of employee relocation services during that time

period. Under the existing regulations, the CBP had broad discretion when selecting

which method of contracting to utilize for the acquisition, and the administrative record

indicates that the CBP engaged in acquisition planning prior to selecting Schedule 48 of

the FSS to acquire employee relocation services, as the CBP had done in the past when

acquiring employee relocation services, and that CBP had a rational basis for selecting

the FSS vehicle. See Tyler Constr. Grp. v. United States, 570 F.3d at 1334 (stating that

an agency “has broad discretion to determine what particular method of procurement will

be in the best interests of the United States in a particular situation” (citing E.W. Bliss Co.

v. United States, 77 F.3d at 449; and Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d

at 958)); see also Che Consulting, Inc. v. United States, 125 Fed. Cl. 234, 245 (2016)

(indicating that an agency had broad discretion in selecting the method of contracting to

use and stating that the agency “had the right to award the contract under the FSS

program”); K-Lak Corp. v. United States, 98 Fed. Cl. at 6 (“[A] procuring agency is free to

46

decide whether to use the FSS without regard to whether the requirement has been or

could be met through a set-aside or preference program.”). Indeed, the protestor, ARC,

indicated at the September 5, 2018 oral argument that ARC was not asserting that it was

improper for the CBP to utilize the FSS to procure employee relocation services, but only

that the CBP’s decision to utilize the FSS lacked a rational basis because ARC failed to

perform acquisition planning and market research prior to selecting the FSS as the

method for obtaining employee relocation services, which is not supported by the

administrative record.

Regarding ARC’s allegation that the CBP did not perform any market research

prior to “changing the small business size standard applicable to the Procurement” or

“releasing the RFQ as an unrestricted procurement,” the administrative record indicates

that Ms. Spangler of the GSA sent CBP contracting personnel a detailed spreadsheet on

December 5, 2017 and an updated, detailed spreadsheet on December 13, 2017

identifying vendors under SINs 651-1, 653-4, 653-5, and 653-7 and indicating whether

each vendor identified in the spreadsheets was certified as a small business or an other

than small business for certain NAICS Codes applicable to the four SINs.

The FAR requires that CBP “[c]onduct market research appropriate to the

circumstances” to determine “if sources capable of satisfying the agency’s requirements

exist,” and, the agency, including Mr. Ohene and Ms. Reeves of the CBP, had discretion

when determining the extent and the nature of the market research to conduct prior to

issuing the 2018 RFQ. See Sigmatech, Inc. v. United States, 136 Fed. Cl. 346, 352 (2018)

(“FAR Part 10 provides that an agency has substantial discretion in determining how

much and what type of market research is ‘appropriate to the circumstances’ for the

purpose of ‘[d]etermining if sources capable of satisfying the agency’s requirements

exist.’” (alteration in original) (quoting FAR § 10.001(a)) (citation omitted)); see also

Advanced Am. Constr., Inc. v. United States, 111 Fed. Cl. 205, 226 (2013) (“[T]he agency

enjoys substantial discretion in determining how much and what type of market research

is ‘appropriate to the circumstances’ for the purpose of ‘[d]etermin[ing] if sources capable

of satisfying the agency’s requirements exist.’” (second and third alterations in original)

(quoting FAR § 10.001(a))); Assessment & Training Sols. Consulting Corp. v. United

States, 92 Fed. Cl. 722, 731 (2010) (“The court agrees with defendant that the Contracting

Officer had discretion under the relevant regulations to conduct market research

‘appropriate to the circumstances.’” (quoting FAR § 10.001(a))). The work and review

evidenced by the December 5, 2017 spreadsheet and December 13, 2017 spreadsheet

acquired from Ms. Spangler of the GSA satisfied CBP’s obligation to undertake market

research appropriate to the circumstances in order to determine whether there were

sources capable of satisfying the CBP’s requirements under Schedule 48 of the FSS and

the agency’s actions in this regard were not arbitrary and capricious. Both spreadsheets

indicate that there were multiple vendors potentially available under Schedule 48 capable

of providing to the CBP the services listed under SINs 651-1, 653-4, 653-5, and 653-7.

According to FAR § 10.002(b)(2), market research may include “[c]ontacting

knowledgeable individuals in Government and industry regarding market capabilities to

meet requirements,” which, is what CBP did when it obtained the December 5, 2017

spreadsheet and December 13, 2017 from Ms. Spangler, GSA’s “CO who oversees the

47

relocation contracts” and “manages these [relocation] contracts.” See FAR

§ 10.002(b)(2)(i). The undated First Market Research Report indicates that CBP also

conducted market research by reviewing “IBIS World, a renowned magazine that

publishes the largest collection of reports, analysis, statistics and future trends in various

industries,” which the undated First Market Research Report indicates “provides a

positive assessment of the relocation services commercial market place.” See FAR

§ 10.002(b)(2)(vii) (stating that market research may include “[r]eviewing catalogs and

other generally available product literature published by manufacturers, distributors, and

dealers or available on-line”). FAR Part 10 states that market research “should include”

consideration of the “[s]ize and status of potential sources (see part 19),” while also noting

that the “extent of market research will vary depending on such factors as urgency,

estimated dollar value, complexity, and past experience.” See FAR § 10.002(b)(1)(vii).

Although FAR § 19.501(c) states that the “contracting officer shall perform market

research and document why a small business set-aside is inappropriate when an

acquisition is not set aside for small business,” FAR Part 19 does not apply to blanket

purchase agreements placed under the FSS. See FAR § 8.404(a) (stating that FAR Part

19 does not apply to blanket purchase agreements placed under the FSS); see also K-

Lak Corp. v. United States, 98 Fed. Cl. at 2 n.3; Navarro Research & Eng’g, Inc. v. United

States, 94 Fed. Cl. 224, 233 (2010) (“FAR Part 8.4 expressly exempts FSS contracts from

the requirements of Parts 13, 14, 15, and 19.” (citing FAR § 8.404(a))).

The court is not persuaded by ARC’s argument that “[c]learly Mr. Ohene, or others

at the Agency, had made a decision to remove the acquisition from the small business

program before they had made contact with [Ms.] Spangler. In fact, it appears a decision

may have been made in November of 2017.” In an attempt to support its position, ARC

cites to a November 28, 2017 email message in a series of email messages between Mr.

Ohene and Ms. Reeves and to a December 6, 2017 email message from Mr. Ohene to

Ms. Spangler. In the November 2017 email messages between Ms. Reeves and Mr.

Ohene, on November 16, 2017, Mr. Ohene asked Ms. Reeves to send him “some names

of Relocation Vendors that showed good capability and can be used as part our Market

Research.” Ms. Reeves responded on November 22, 2017 by sending Mr. Ohene the list

of five “vendors that we identified when preparing for the DHS Relocation Service

Contract.” Subsequently, on November 28, 2017, Ms. Reeves sent another email

message to Mr. Ohene, which stated “[s]till on track to getting you the SOW by COB

Thursday [November 30, 2017]. Is there anything else that I should be working on? If so,

could you provide me with a list of expected deliverables so I can plan accordingly.” That

same day, on November 28, 2017, Mr. Ohene sent an email message to Ms. Reeves

stating:

Thanks for the information. I look forward to the SOW. We will have to tweak

some of the initial documents used in FY17 due to the change in the

acquisition strategy.

 Market Research

 Acquisition Plan

48

I will work on the above two and send them to you. In addition, we will have

to work on the Evaluation Factors that will be used to make the award. Terri

provided a Sample Evaluation Factors that we can tweak for our acquisition.

We may also need to tweak the attached Independent Government Cost

Estimate. According to Terri, we will be paying fees to the Contractor who

will be coordinating the HHG shipping with a CHAMP carrier so our IGCE

needs to reflect the estimated fee and not the actual HHG amount as it is

currently listed in the attached. We can use an average of fees off the GSA

Relocation Schedule for our IGCE.

Mr. Ohene’s November 28, 2017 email message, including Mr. Ohene’s vague reference

to a “change in the acquisition strategy,” does not specifically indicate that, as of

November 28, 2017, CBP “had made a decision to remove the acquisition from the small

business program,” as ARC asserts, but only that Mr. Ohene anticipated that CBP would

have to perform additional research related to CBP’s upcoming acquisition of employee

relocation services because of the change in pricing.

In the December 6, 2017 email message, cited by protestor in an attempt by ARC

to demonstrate that CBP had made a decision to release the procurement as an

unrestricted procurement prior conducting market research, Mr. Ohene is responding to

Ms. Spangler’s December 5, 2017 email messages, in which Ms. Spangler sent to CBP

contracting personnel the December 5, 2017 spreadsheet and provided additional

information about the notifications received from Sibcy Cline Relocation Services and

Reliance Relocation Services. In the December 6, 2017 email message, Mr. Ohene

states:

Thanks for the pricing sheet and the additional information regarding Sibcy

and Relo Direct. We plan on opening up the acquisition to both large and

small business probably - [redacted] vendors based on market research

information. As we move further in the acquisition, I will let you know if

anything else is needed.

As of December 6, 2017, CBP had conducted market research that indicated that

Schedule 48 of the FSS was an efficient tool for CBP’s upcoming acquisition of employee

relocation services, which was documented in the June 19, 2017 Acquisition Plan, and

CBP was in possession of the December 5, 2017 spreadsheet indicating whether vendors

were certified as a small business or as an other than small business under NAICS Codes

associated with SINs 653-1, 653-4, 653-5, and 653-7. Mr. Ohene only states in his

December 6, 2017 email message to Ms. Spangler that CBP “probably” will issue the

2018 RFQ to “both large and small business,” which Mr. Ohene states is based on “market

research information.” The CBP then received the December 13, 2017 spreadsheet from

Ms. Spangler, and the undated First Market Research Report, which Mr. Ohene indicates

in his July 17, 2018 declaration was created on or about December 18, 2017, states that,

“based on information obtained through the GSA Contracting Officer in charge of

Relocation Program, there was a not reasonable expectation that CBP would receive

three small business proposals needed for maximum competition,” as the only business

49

identified in the December 5, 2017 and the December 13, 2017 spreadsheet as being a

certified small business under NAICS Code 531210 was Choice Relocation Management.

ARC also argues that the CBP violated the SBA regulation at 13 C.F.R.

§ 125.2(c)(2), which states that “[e]ach agency, as part of its acquisition planning, must

conduct market research to determine the type and extent of foreseeable small business

participation in the acquisition,” and also that, during the market research phase, a

procuring agency “must consult with the applicable PCR [SBA Procurement Center

Representative] (or if a PCR is not assigned to the procuring activity, the SBA Office of

Government Contracting Area Office serving the area in which the buying activity is

located) and the activity’s Small Business Specialist.” ARC further asserts that the CBP

violated 13 C.F.R. § 125.2(c)(3)(iv), which states that, when a requirement includes goods

or services currently being performed by a small business, an agency must provide to the

SBA a written statement at least thirty days prior to issuing a solicitation when a proposed

acquisition strategy “[i]ncludes in its description goods or services the magnitude of the

quantity or estimated dollar value of which would render small business prime contract

participation unlikely.” Defendant, however, asserts that CBP did not have to comply with

13 C.F.R. § 125.2(c) because CBP had selected the FSS as the acquisition vehicle for its

procurement. Defendant argues that “[w]e do not dispute that orders issued against a

multiple award schedule – including the solicitation at issue here – are contemplated

within certain provisions set forth at 13 C.F.R. § 125.2. But none of those provisions affect

this procurement.” According to defendant, “the only provision of the regulation that

speaks directly to this procurement is found at [13 C.F.R.] § 125.2(e)(6)(i), which gives

the contracting officer ‘the authority to set-aside orders against Multiple Award Contracts

that were competed on a full and open basis.’” (footnote omitted) (quoting 13 C.F.R.

§ 125.2(e)(6)). Defendant cites to K-Lak Corp. v. United States, 98 Fed. Cl. at 6, and

asserts in a parenthetical that, “because the agency chose to use the FSS after the

incumbent’s contract expired, it was not required to comply with Rule of Two or any of the

other regulations applicable to small businesses.” According to defendant, 13 C.F.R. §

125.2(c) is “inapplicable” to the CBP’s procurement and “irrelevant” to ARC’s protest, as

13 C.F.R. § 125.2(c) “only applies to acquisitions at the Multiple Award Contract level”

and not “to Part 8.4 task orders.”

In K-Lak Corp. v. United States, the United States Court of Federal Claims

reviewed a protestor’s challenge to an agency’s decision to “procure credit reports using

the Federal Supply Schedule (‘FSS’) rather than continue its procurement pursuant to the

requirement it had set aside for small businesses in 2007.” See K-Lak Corp. v. United

States, 98 Fed. Cl. at 1. The court in K-Lak Corp. stated that the protestor had “not cited

and the court has not found any statutory or regulatory support for the plaintiff’s underlying

contention that, where the required goods or services are available from the FSS, the

FAR or SBA rules mandate that an agency continue to procure

This text is long and has been trimmed here. Open the source document for the complete record.