Ranger American of Puerto Rico, Inc. v. United States

In the United States Court of Federal Claims

No. 21-935C

Filed: May 14, 2021

Redacted Version Issued for Publication: May 21, 20211

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RANGER AMERICAN OF PUERTO *

RICO, INC., *

*

Protestor, *

*

v. *

UNITED STATES, *

*

Defendant, *

*

v. *

AGMA SECURITY SERVICE, INC., *

Defendant-Intervenor. *

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

Jonathan D. Shaffer, Smith Pachter McWhorter PLC, Tysons Corner, VA for

protestor. With him was Todd M. Garland, Smith Pachter McWhorter PLC, Tysons

Corner, VA.

Bryan M. Byrd, Department of Justice, Washington, DC, Trial Attorney,

Commercial Litigation Branch, Civil Division, Department of Justice, Washington, DC, for

defendant. With him were Kara M. Westercamp, Trial Attorney, Elizabeth M. Hosford,

Assistant Director, Commercial Litigation Branch, and Brian Boynton, Acting Assistant

Attorney General, Civil Division. Of counsel was Matthew Lane, Office of Chief Counsel,

Procurement and Fiscal Legal Division, Federal Emergency Management Agency.

Alan M. Grayson, Windermere, FL for intervenor.

1 This Opinion was issued under seal on May 14, 2021. The parties were asked to

propose redactions prior to public release of the Opinion. This Opinion is issued with the

redactions that the parties proposed in response to the court’s request and other

conforming redactions. Words which are redacted are reflected with the notation:

“[redacted].”

OPINION

HORN, J.

In the above-captioned, pre-award bid protest, protestor Ranger American of

Puerto Rico, Inc. (Ranger American of Puerto Rico) challenged the decision of the

Federal Emergency Management Agency (FEMA) to set aside Solicitation No.

70FBR221R00000007 (the Solicitation) as a small business set-aside. The Solicitation

explained “[t]his requirement is for contracted Protective Service Officers (PSO) and

Patrolled Services to safeguard federal employees, visitors and property at both

temporary and fixed facilities during disaster and emergency declarations for DR-4339

(all counties and municipalities within the Commonwealth of Puerto Rico).” (capitalization

in original). This Opinion memorialized the oral decision issued by the court given the

urgency represented by FEMA. The decision denied protestor’s motion for judgment on

the Administrative Record, as well as protestor’s request for injunctive relief, and granted

defendant’s and intervenor’s motions for judgment on the Administrative Record.

FINDINGS OF FACT

The above captioned bid protest is the latest in a series of four protests involving

FEMA, AGMA Security Service, Inc. (AGMA), and Ranger American of Puerto Rico,

regarding contracted Protective Service Officers and Patrolled Services in Puerto Rico,

first at the United States Government Accountability Office (GAO), and now the third in

the series of protests, steps and missteps by the agency at the United States Court of

Federal Claims regarding a FEMA contract for armed security services in Puerto Rico.

The facts and procedural history are set out in the court’s December 29, 2020 Opinion in

Case No. 20-926C, and the court’s March 5, 2021 Opinion in Case No. 21-740C, which

are incorporated into this Opinion. Key relevant facts in the continuing saga of FEMA’s

attempts to award a contract over the course of three calendar years are restated below.

On November 19, 2019, FEMA issued Request for Proposal No.

70FBR220R00000002 (RFP) for “contracted Protective Service Officers (PSO) and

Patrolled Services to safeguard federal employees, visitors and property at both

temporary and fixed facilities during disaster and emergency declarations for DR-4339

(all counties and municipalities within the Commonwealth of Puerto Rico).” Ranger

American of Puerto Rico was the incumbent contractor for the predecessor contract which

provided the same armed security services for FEMA in Puerto Rico.

FEMA conducted market research for the 2019 RFP, including whether the 2019

RFP should be set aside for small business offerors or should be unrestricted. FEMA’s

Small Business Review Form noted that “[t]he Contractor shall be able to provide 600+

guards to cover locations in all municipalities of the U.S. Territory of Puerto Rico. The

contractor must perform duties/tasks necessary to provide Protective Security Officers

(PSOs) for physical security services throughout the entire island of Puerto Rico.” The

Small Business Review Form also indicated that the estimated dollar value of the base

period was $[redacted], and the total estimated value including the five option periods

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was $[redacted]. The Small Business Review Form checked the box to issue the 2019

RFP as an unrestricted RFP and indicated “[n]o reasonable expectation that offers will be

obtained from at least two 8(a), HubZone small, Service Disabled Veteran Owned Small,

Economically Disadvantaged Women-Owned Small Business, Women-Owned Small

Business, or general Small Business concerns offering the products of different small

business concerns.” Additionally, the Market Research Report supported the decision to

issue the 2019 RFP as an unrestricted RFP, explaining that “[t]here are various providers

in the island of Puerto Rico, but only few have experience with the Federal Government

with the required capabilities to respond to large staffing. Small business [sic] cannot

handle staffing requirement,” and “[b]ased on our research only two companies have the

capabilities to respond to our request since the requirement is for 600+ Armed Guards

making it only achievable by medium/large businesses.”

The 2019 RFP indicated that “[t]he Government intends to award a Labor Hour

type contracts [sic] resulting from this solicitation to the responsible offerors whose offers,

conforming to the solicitation, are most advantageous to the Government, price and other

factors considered. Award will be made to the responsive, responsible contractor who

provides the best-valued solution to the Government.” The period of performance was a

one year base period, and then a one-year option period and sought a maximum of

590,400 annual labor hours of armed security guard services. The 2019 RFP explained:

The acquisition and source selection are being conducted in accordance

with the procedures of Federal Acquisition Regulation (FAR) Parts 12 and

15. The acquisition will be conducted using Best Value as the evaluation

methodology. Proposals will be evaluated and rated but not ranked using

the non-price factors listed below. A rating of “Unacceptable” in any of the

below technical factors will render the entire proposal technically

unacceptable and, therefore, not eligible for award.

1. Work Plan

2. Project Management Plan

3. Quality Control Plan

4. Past Performance

5. Price[.]

Additionally, the 2019 RFP included a “Local Area Documentation Requirement”

which required any offeror to represent “that it does reside or primarily do [sic] business

in the set-aside area.” Protestor (AGMA and intervenor Ranger American of Puerto Rico

were among nine offerors which submitted timely proposals to FEMA in response to the

2019 RFP, and per the requirements of the 2019 RFP, AGMA and Ranger American of

Puerto Rico both indicated “the offeror represents that it does reside or primarily do [sic]

business in the set-aside area.” AGMA and Ranger American of Puerto Rico both

submitted supporting documentation to that effect with their proposals.

After the Source Selection Evaluation Board (SSEB) completed the evaluation of

the proposals, on March 3, 2020, the contracting officer issued an initial Award Decision

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Memorandum, which summarized the background of the procurement and the

evaluations of the SSEB, and included a technical evaluation, price evaluation, a best

value analysis and finally an award decision to AGMA. The initial Award Decision

Memorandum included four charts for a summary of the technical ratings: a rating chart,

an empirical values rating chart, a ratings chart breakdown, and the overall rating range.

The four charts provided:

Summary of Technical Ratings

Table 1

RATING CHART

Offeror: Factor 1 Factor 2 Factor 3 Factor 4 Overall Factor

Rating

Offeror 1: Unsatisfactory Unsatisfactory Unsatisfactory Neutral Unsatisfactory

[redacted]

Offeror 2: Agma Good Satisfactory Satisfactory Neutral Satisfactory

Security Service

Inc.

#3 Offeror 3: Unsatisfactory Unsatisfactory Unsatisfactory Neutral Unsatisfactory

[redacted]

Offeror 4: Unsatisfactory Unsatisfactory Marginal Neutral Unsatisfactory

[redacted]

Offeror 5: Unsatisfactory Unsatisfactory Unsatisfactory Satisfactory Unsatisfactory

[redacted]

Offeror 6: Good Good Good Good Good

Ranger American

Offeror 8: Marginal Satisfactory Satisfactory Satisfactory Satisfactory

[redacted]

Offeror 9: Marginal Marginal Marginal Satisfactory Marginal

[redacted] [2]

2 The SSEB explained that: “During the initial screening, Offeror 7 [redacted] was deemed

ineligible for award. Offeror does not reside or primarily doing [sic] business in the disaster

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Table 2

EMPIRICAL VALUES RATING CHART

Total Converted Empirical

Offeror: Factor 1 Factor 2 Factor 3 Factor 4 Empirical Value to Overall

Value Rating

#1 1 1 1 0 3 Unsatisfactory

#2 [AGMA] 4 3 3 0 10 Satisfactory

#3 1 1 1 0 3 Unsatisfactory

#4 1 1 1 0 3 Unsatisfactory

#5 1 1 1 2 5 Unsatisfactory

#6 [Ranger] 4 4 4 4 16 Good

#8[redacted] 1 3 3 2 9 Satisfactory

#9[redacted] 1 1 1 2 5 Marginal

Table 3

RATING CHART BREAKDOWN

Factors 1 - Numerical Numerical

3 Rating Factor 4 Rating

Superior 5

Good 4 Superior 3

Satisfactory 3 Satisfactory 2

Marginal 1 Unsatisfactory 1

Unsatisfactory 1 Neutral 0

Table 4

OVERALL RATING

RANGE

Rating

Overall Rating

Range

Superior 18

Good 14 to 17

Satisfactory 10 to 13

Marginal 6 to 10

Unsatisfactory 3 to 5

(all capitalization and emphasis for all charts in original; brackets added). Although the

2019 RFP makes no mention of an “empirical values ratings” system, the contracting

officer included the empirical values ratings chart in the initial Award Decision

Memorandum and changed the rating chart, as shown in Table 1, into the empirical values

area in accordance with FAR 52.226-3 Disaster or Emergency Area Representation and

therefore were [sic] not evaluated.”

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ratings, the rating chart breakdown, and the overall rating range, as indicated in Tables

2, 3, and 4.

The initial Award Decision Memorandum concluded:

AGMAs overall rating is Satisfactory on both technical and past

performance. Although Ranger received a rating of Good. Contracting

Officer determined that there was no rational that substantiates paying a

higher price to Ranger when the same services could be provided from

AGMA. . . . AGMA’s proposal offers the best overall value to the Government

and price is determined to be fair and reasonable.

On March 13, 2020, FEMA made the award to AGMA, and notified Ranger

American of Puerto Rico of the same. Ten days later on March 23, 2020, Ranger

American of Puerto Rico filed a protest at the GAO. In response to Ranger American of

Puerto Rico’s protest, on April 13, 2020, FEMA notified GAO that the agency intended to

take corrective action, and on April 15, 2020, GAO issued a decision which stated, in part:

“We dismiss the protest based on the corrective action taken by the agency.”

On June 15, 2020, the contracting officer issued a Revised Award Decision

Memorandum, albeit without seeking revised proposals. In the Revised Award Decision

Memorandum, the contracting officer indicated that

The Solicitation stated that technical factors would be more important than

price. Offeror 6 (Ranger) had a 50% higher technical score than AGMA and

only a 20% higher price. Ranger had a higher rating with regard to the

Project Management Plan, Quality Control Plan, and Past Performance.

While Offeror 2’s (AGMA) proposal was perfectly adequate, Offeror 6’s

(Ranger) was significantly better.

For the award decision, the contracting officer concluded:

Based on the integrated assessment of all proposals in accordance with the

specified evaluation factors, it is hereby recommended that the award be

made to Ranger under contract No. 70FBR220C00000019. Ranger’s

proposal is significantly stronger and offers the best-valued solution to the

Government, and the price is determined to be fair and reasonable.

The same day the contracting officer issued the Revised Award Decision

Memorandum, June 15, 2020, the contracting officer made the award to Ranger American

of Puerto Rico. On June 23, 2020, FEMA terminated for convenience AGMA’s previously

awarded contract, after the contracting officer awarded the contract to Ranger American

of Puerto Rico.

On July 29, 2020, AGMA filed a bid protest complaint in this court, as well as a

motion for injunctive relief. AGMA argued that “FEMA improperly accepted Ranger’s

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certification as a local firm, and FEMA should have rejected Ranger’s proposal on this

basis” as a violation of the Stafford Act, 42 U.S.C. § 5150, et seq. Protestor AGMA also

argued “FEMA improperly reevaluated the Ranger and AGMA proposals, and decided to

terminate the AGMA Contract and make award to Ranger.” Therefore, AGMA contended

FEMA’s award to Ranger American of Puerto Rico “was arbitrary, capricious, an abuse

of discretion, contrary to law and without the procedures required by law.”

On December 29, 2020, the court issued a decision in Case No. 20-926C. See

generally AGMA Sec. Serv., Inc. v. United States, 152 Fed. Cl. 125 (2020). The court

determined that “Ranger American of Puerto Rico’s representations were sufficient to

meet the requirements of the Stafford Act and FEMA acted reasonably to rely on those

representations.” Id. at 154. Regarding FEMA’s evaluations after the corrective action,

however, the court determined

at no point, after the corrective action was undertaken did the contracting

officer explain why the corrective action and the revised evaluations were

occurring, why revisions of proposals were not required by agency, why

particular evaluation revisions were undertaken by the agency, or what was

wrong with the previous evaluation. Taken as a whole, the actions taken by

the contracting officer after the corrective action are considered by the court

to be arbitrary and capricious.

Id. at 170. Therefore, the court granted AGMA’s motion for injunctive relief on December

29, 2020. See id. 175. Given the history of the protests at the GAO and the Court of

Federal Claims and defendant’s represented importance of the need to keep Protective

Services Officers and Patrolled Services in Puerto Rico, the discussions and questions

at the hearings and oral argument prior to the court’s decision in Case No. 20-926C,

FEMA could well have anticipated that a bridge contract might be necessary given the

numerous protests. Despite this, as explained in a January 19, 2021 declaration of

Contracting Officer Carolyn Knight,

because the time between December 31, 2020 and January 8, 2021 was

insufficient for a full and open competition for a new solicitation, and there

was no contract vehicle currently in place, the Agency determined that a

short-term bridge contract would be required to prevent a lapse in services

and the catastrophic damage that such a lapse would cause. The decision

to move forward in this manner was made late in the day on December 31,

2020, and required consultation with the contract team. The next day,

January 1, 2021 was a Federal holiday. The contract team began work on

plans for a sole source contract on Monday, January 4, 2021, pursuant to

41 U.S.C. § 3304(a)(2), which permits a sole source award when there is

an unusual and compelling urgency and the Government would be seriously

injured unless the Agency is permitted to limit the number of sources from

which it solicits proposals.

(capitalization in original).

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After the court’s December 29, 2020 Opinion, FEMA decided to issue a sole source

bridge contract to Ranger American of Puerto Rico. Contracting Officer Carolyn Knight

indicated in her declaration that “[o]n January 5, 2021, I sought a proposal from Ranger

[the entity performing the requirement at the time] to provide services for the bridge

contract. Ranger responded with a proposal on January 6. I determined that Ranger’s

prices were acceptable and the Bridge Contract was executed with Ranger on January

7,” 2021. The sole source bridge contract was for a term of 150 days3 at a cost of

$2,367,751.50. Like the previously enjoined procurement, the sole source bridge contract

continued to solicit for a requirement of “600+ armed guards,” unlike the procurement that

FEMA intended to solicit to replace the sole source bridge contract which was being

planned by FEMA to have a requirement of fewer than 200 armed guards.

On January 11, 2021, Tyuana L. Bailey, the Procuring Activity Advocate for

Competition, signed a “Justification and Approval for Other Than Full and Open

Competition” (Sole Source Justification) for the sole source bridge contract award to

Ranger. The Sole Source Justification for the sole source bridge contract began:

Pursuant to the requirements of 41 U.S.C [sic] [§] 1901 as implemented by

the Federal Acquisition Regulation (FAR) Subpart 13.501(a) and in

accordance with the requirements of FAR 13.501(a)(ii), the justification for

the use of the statutory authority follows:

1. Agency and Contracting Activity. The Department of Homeland

Security, Federal Emergency Management Agency (FEMA), Office of the

Chief Procurement Officer (OCPO), proposes to enter a contract on a basis

other than full and open competition.

2. Nature and/or Description of the Action being Approved. A short

paragraph or two describing the effort to be placed on contract, or the

modification action. This section should include all of the following

information:

(a) The FEMA requires the provision of a short-term bridge contract for

continued Armed Security Guard Services in support of the FEMA’s

Recovery mission, Disaster (DR)-4339-Puerto Rico (PR). The contractor

shall perform duties/tasks necessary to provide Protective Service Officers

(PSO)s for physical security services throughout the entire island of Puerto

Rico including municipalities of Vieques and Culebra.

...

3 On January 21, 2021, a bilateral modification of the sole source bridge contract was

executed which reduced the term of the bridge contract from 150 days to 60 days, with

three, 30 day option periods so that if all the options were to be exercised, the length of

the sole source bridge contract ultimately would be 150 days.

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3. Description of Supplies/Services. Describe the supplies or services to

be acquired. Include the purpose the supplies or services are intended to

fulfill or the function the supplies or services provide.

The requirement is to provide continued Armed Security Guard Services

through the provision of Protective Service Officers (PSOs). The contractor

shall perform duties/tasks necessary to provide PSOs for physical security

services throughout the entire island of Puerto Rico including municipalities

of Vieques and Culebra. Patrol vehicles shall be provided, when required

by FEMA, based on location characteristics, vulnerabilities and risks. The

period of performance will be 150 calendar days.

4. Identification of Statutory Authority Permitting Other Than Full and

Open Competition.

The statutory authority permitting other than full and open competition is 41

U.S.C. [§] 1901 implemented by the FAR Subpart 13.501(a), Special

documentation requirements, Sole source acquisitions. The limitation on

the period of performance of 150-day at HSAR [Homeland Security

Acquisition Regulation] 3006.302-270 applies.

(capitalization and emphasis in original) (brackets added). The Sole Source Justification

continued:

6. Demonstration that the proposed contractor’s unique qualifications

or the nature of the acquisition requires use of the authority cited. This

paragraph is one of the most important parts of the J&A [Justification &

Approval] and should clearly identify why the proposed action must be

accomplished through other than full and open competition. Provide a well-

reasoned, detailed discussion of the issue that will make it clear to someone

who is unfamiliar with your organization or your requirement why full and

open competition cannot be used for this procurement. The following

information must be included:

The proposed contractor, Ranger, is currently performing the services

required effectively and satisfactorily under contract 70FBR220C00000019.

Given the short timeline at issue, a transition to another contractor would

introduce unnecessary risks and uncertainties that would be detrimental to

the interests of the government.

(a) Rationale for using the authority cited in section 4 of the J&A;

Due to the Court of Federal Claims (COFC) ruling in response to the protest

submitted by the contractor AGMA against the award of the existing FEMA

contract with the contractor Ranger, the use of other than full and open

competition is required to award a short-term Firm Fixed Price, Labor Hour

(FFP, LH) bridge contract in order to provide continued Armed Security

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Guard Services in support of the FEMA’s Recovery mission, Disaster (DR)-

4339-Puerto Rico (PR). The ruling enjoins FEMA from continuing the

performance of the contract currently in place to provide these services as

of January 8, 2021. The ruling states that AGMA “has been deprived the

opportunity to compete fairly for a contract.” In order to correct this harm, a

new contract under a full and open competition procedure will be awarded.

However, continued services are required to maintain the safety, security

and health of the current federal employees, visitors and property at all

existing temporary and fixed facilities currently being occupied in response

to DR-4339-PR. Based on the COFC ruling, a nine-day acquisition timeline

to solicit and award a new contract under full and open competition

procedures is unattainable.

(b) Details covering what events lead to the situation requiring use of other

than full and open competition procedures including whether any portion of

the work can be segregated to allow for competition;

On December 30, 2020, the FEMA received notification of the COFC ruling

in response to the protest submitted by AGMA against the award of contract

70FBR220C00000019 to Ranger in response to solicitation

70FBR220R00000002. The ruling required the FEMA end the current

contract awarded to Ranger by January 8, 2021. Therefore, due to

extraordinary limitation in acquisition lead time, there is not any portion of

the work that can be segregated to allow for competition. However, this

short-term contract is being sought to allow adequate acquisition lead time

to solicit an award under full and open competition procedures with

limitations to local area set aside under the Stafford Act.

(c) Summarize alternatives considered and why they will not work; and

Due to the acquisition lead time limitation, the only other alternative

considered was to award a short-term sole source contract to AGMA.

However, it was considered in the best interest of the FEMA to award a

short-term contract to the existing contractor, Ranger, since the contractor

was already in place effectively and satisfactorily performing. Moreover, the

lack of adequate time to both award to AGMA and transition from Ranger

poses substantial risk to continuity of operations; therefore, increasing risk

to safety, security and health of the current federal employees, visitors and

property at all existing temporary and fixed facilities currently being

occupied in response to DR-4339-PR. The risk is viewed as detrimental to

the interests of the government. Because the current Ranger contract must

be terminated and the previous AGMA contract was terminated, there is no

existing vehicle by which the FEMA can obtain these services and no legal

method by which the Agency could reinstate either contract.

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(d) Impact to the mission that would result if the J&A is not approved and,

consequently, the product or service not provided.

See Section b above.

(capitalization and emphasis in original).

The Sole Source Justification also stated:

7. Description of Efforts Made to Ensure that Offers are Solicited from

as Many Potential Sources as is Practicable.

Offerors will be solicited from as many potential sources as possible under

the new solicitation that will be posted to the Contract Opportunities of

beta.SAM.gov as required by FAR 5.201 a synopsis. In the case of this

unusual and compelling urgency requirement, posting will be made within

30 days after contract award, in accordance with 6.305 procedures at

paragraphs (b), (d), (e), and (f).

8. Determination by the Contracting Officer that the Anticipated Cost

to the Government will be Fair and Reasonable.

The contracting officer will determine that the anticipated price(s) will be fair

and reasonable based on a comparison of the contractor labor costs

proposed to the costs paid for services under current competed contract

and previous historical awards for similar contracts and labor categories.

9. Description of Market Research. Market research is required by FAR

Part 10, and the results of the market research should be summarized here.

Include the following information:

Market research was not conducted as the Government determined that the

time period from the previous market research current and relevant within

18 months. The market research is available under solicitation

70FBR220R00000002.

10. Any Other Facts Supporting the Use of Other Than Full and Open

Competition. This section presents an opportunity to strengthen the

justification by presenting supplemental or supporting information. Do not

summarize or duplicate information already stated in previous sections.

This section should include information such as:

NONE[.]

(capitalization and emphasis in original).

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As explained in Contracting Officer Carolyn Knight’s January 19, 2021 declaration:

Because the market research from the previous solicitation[4] remained

accurate and had been conducted within 18 months, in accordance with

FAR 10.002(b)(1), we did not conduct new market research. According to

the market research, a number of contractors could theoretically provide

armed guard services, including Ranger, AGMA, and other offerors from the

previous solicitation. I had also been informed that AGMA’s attorney had

indicated that his client was “ready, willing and able to perform the

requirement at issue.” The contract team discussed internally whether it was

practicable to ask any or all of those offerors for proposals. In making our

decision that it was not practicable to ask other offerors for proposals, we

considered that, in this case, a contractor’s subjective belief that it is ready

to perform is not indicative of whether that contractor could have security

guards in place on the ground at sites quickly enough to prevent a lapse

during a very short transition period. The contractor must compile a list of

proposed security guards that are available and willing to work for that

contractor on the contract. Then, the contractor must submit that list to

FEMA. FEMA’s Office of the Chief Security Officer (OSCO) then must

complete an approval process for each of these proposed guards that

includes a full background check. That process takes, on average, two

weeks, but can be longer for some proposed guards who are required to

answer additional questions or present additional documentation.

(capitalization in original). The declaration of Ms. Knight stated further:

Even if the approval process could be expedited for AGMA employees that

had previously been approved, we determined that this still would not be

sufficient. OCSO [Office of Chief Security Officer] had previously vetted 137

AGMA employees, who remained active until July 2020. The work is

currently being performed by at least 190 Ranger employees. Even if that

reduced number of AGMA employees could have been sufficient, the

following would have been required to ensure that the 137 employees would

be in place by midnight on January 7: (1) ascertainment and confirmation

within 24 hours (January 4-5) that all 137 of those employees identified six

months ago are still available; and (2) completion of the OSCO approval

process within 48 hours (January 5-7), rather than the standard two weeks

in order to have those employees in place by midnight on January 7.

Although it is technically possible that these requirements could have been

fulfilled, it created an unacceptable risk that there would be a lapse of

services during the transition.

Although AGMA (or any other number of offerors) may have been capable

of performing the contract, the truncated transition time created an

4Contracting Officer Carolyn Knight is referring to the 2019 RFP, issued on November

19, 2019.

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unacceptable level of risk that there could not be a smooth transition and

that the Agency would be left without services for a period of time after

January 8. Even if a contractor like AGMA could move quickly, the two-week

OCSO approval process would be extremely problematic. For example, if

AGMA had given the Agency a list of employees on January 5, it likely would

have taken OCSO until at least January 18 (or possibly longer) to vet and

approve the available employees. And the only representation we had from

AGMA’s attorney was that his client was “ready, willing, and able” to

perform, but he did not include any other information or documents that

actually indicated a certainty that his client could perform, such as providing

a list of available employees or showing any affirmative steps that his client

had taken to expedite the transition process. Thus, we determined that it

was not practicable to seek proposals from anyone other than the

incumbent.

(capitalization in original). Ms. Knight concluded:

Even with a longer transition period from the Court’s enjoining of Ranger’s

continued performance of the Ranger Contract to award of the bridge

contract, rather than the six business (nine calendar) days permitted, FEMA

likely would have still awarded the bridge contract to the incumbent, Ranger,

regardless of whether it had received a lower-priced proposal from another

contractor, like AGMA. The incumbent was performing the services required

effectively and satisfactorily and any transition creates risk of catastrophic

consequences for the entire Puerto Rico recovery effort. FEMA must

balance this risk with the need for full and open competition in the

procurement process. Because this is a short-term bridge contract that is

only intended to allow for a full and open competition for a longer-term

award, the Government in this situation is best served by avoiding the

unnecessary risk of an additional transition and providing a full and open

competition for all contractors to compete for the longer-term contract as

soon as possible.

After the award of the sole source bridge contract to Ranger American of Puerto

Rico, on January 13, 2021, AGMA filed another protest, this time a post-award bid protest

on the sole source award to Ranger American of Puerto Rico in the United States Court

of Federal Claims alleging FEMA had made an improper sole source award to Ranger

American of Puerto Rico for the bridge contract. In In its motion for judgment on the

Administrative Record, protestor AGMA argued that in making the sole source award to

Ranger American of Puerto Rico, FEMA had not complied with 41 U.S.C. § 3304. AGMA

urged that it had consistently represented to FEMA that it stood ready and able to perform

and had been qualified and chosen by FEMA to perform the initial award, albeit that award

was terminated for convenience after the corrective action following the GAO protest.

Ranger American of Puerto Rico and defendant filed cross-motions for judgment on the

Administrative Record and argued that if the court granted an injunction, the FEMA

facilities in Puerto Rico would be without armed security services,” which were essential

13

to Puerto Rico and its safety. Defendant also argued that FEMA’s decision to award a

short-term bridge contract to Ranger American of Puerto Rico was reasonable.

On March 5, 2021, the court issued a decision on the sole source bridge contract.

See generally AGMA Sec. Serv., Inc. v. United States, No. 21-740C, 2021 WL 1011210

(Fed. Cl. Mar. 4, 2021). The court first noted that

[r]ather than taking any responsibility for the agency's improper actions, the

premise of the defendant's cross-motion for judgment on the Administrative

Record is that the urgency for the sole source bridge contract award was

caused by the timing of the December 29, 2020 decision. Once the court

concluded, however, that the agency had acted unreasonably and

improperly, the issue became, given the lengthy history of the procurement

at the GAO and at the court, should the agency not have been planning for

all eventualities, including a possible sole source procurement, especially

given the discussions with the parties and concerns raised by the court at

the various hearings, including oral argument, suggesting serious concerns

regarding the previous procurement protested by AGMA.

...

The court believes the limited amount of time between the date of the

decision and the injunctive effective date cannot be the only reason for the

sole source to be released in the way it was issued. The court notes if the

agency was that concerned, FEMA could have requested the Department

of Justice file a motion to stay the injunction to allow FEMA to issue a

negotiated bridge contract. Moreover, the agency could have and should

have prepared for a possible negative result in Case No. 20-926C, given

the discussions at the various hearings with the parties and the court after

the protest was filed and been in a better position to move forward

appropriately.

AGMA Sec. Serv., Inc. v. United States, No. 21-740C, 2021 WL 1011210, at *19-20.

Regarding the agency’s justification, the court explained:

Specifically, the Sole Source Justification & Approval's rationale for the sole

source comes almost entirely from paragraph 6 above, and focuses on the

urgency of a quick award, rather than the merits of why the sole source

decision was proper. As noted above, AGMA argues that in order to rely on

urgency, pursuant to 41 U.S.C. § 3304(a), “the executive agency's need for

the property or services is of such an unusual and compelling urgency that

the Federal Government would be seriously injured unless the executive

agency is permitted to limit the number of sources from which it solicits bids

or proposals.” Id. FEMA, however, provided no explanation why it would be

“seriously injured” to have received a proposal from AGMA and AGMA had

independently contacted the agency and represented that it was ready to

perform. The Sole Source Justification & Approval only states:

14

Due to the acquisition lead time limitation, the only other

alternative considered was to award a short-term sole source

contract to AGMA. However, it was considered in the best

interest of the FEMA to award a short-term contract to the

existing contractor, Ranger, since the contractor was already

in place effectively and satisfactorily performing. Moreover,

the lack of adequate time to both award to AGMA and

transition from Ranger poses substantial risk to continuity of

operations; therefore, increasing risk to safety, security and

health of the current federal employees, visitors and property

at all existing temporary and fixed facilities currently being

occupied in response to DR-4339-PR.

(emphasis added). There is no explanation for the FEMA to rely on the “best

interest of the FEMA” to justify the sole source award, and notably, neither

defendant nor intervenor attempt to defend or even explain the “best

interest” standard in addition to the safety concerns expressed. The fact that

Ranger American of Puerto Rico was “already in place effectively and

satisfactorily performing” cannot alone justify not even considering a

proposal from AGMA. Although the post sole source decision declaration of

the contracting officer Ms. Knight is more descriptive, even the declaration,

prepared after the above captioned bid protest was filed, does not offer a

sufficient explanation for why AMGA was not given an opportunity to submit

a proposal as offered by AGMA, a previous awardee for the same services.

AGMA Sec. Serv., Inc. v. United States, 2021 WL 1011210, at *20. The court also noted

that “Protestor has consistently contended that ‘AGMA is ready, willing and able to

perform this requirement, under either the AGMA contract award or under a new award,

for substantially less than the posted award price to Ranger.’” Id. at *8.

The court concluded that

[a]fter careful review of the Administrative Record, including the Sole

Source Justification & Approval and even considering the contracting

officer’s post-award declaration, the court concludes that there is not

enough evidence to demonstrate that the agency did enough to justify the

sole source bridge contract award. Therefore, FEMA acted arbitrarily and

capriciously when it awarded the sole source bridge contract to Ranger

American of Puerto Rico. The agency did not follow the requirements of 41

U.S.C. § 3304 when it issued the Sole Source Justification & Approval. In

sum, FEMA’s sole source award lacked a rational basis.

AGMA Sec. Serv., Inc. v. United States, 2021 WL 1011210, at *26.

15

The court also considered if AGMA had a substantial chance to receive the award,

absent the agency’s error. The court concluded “[a]lbeit unusual for a sole source award,

the prior solicitation process and previous bid protest in this court demonstrates AGMA

had a substantial chance of AGMA receiving the award, absent the agency’s error.” Id. at

*28. The court reasoned:

The services required in the sole source contract were the same as at issue

in the prior solicitation, which the court has determined AGMA had a

substantial chance of receiving an award, absent the agency’s errors.

Therefore, given that the court determination that AGMA had a substantial

chance of receiving an award previously, the court likewise concludes that

AGMA could have competed or should have been given a chance to

compete for the requirement if FEMA had made the bid process competitive

for the requirement at issue in the above captioned protest. See Myers

Investigative & Sec. Servs. v. United States, 275 F.3d at 1370.

AGMA Sec. Serv., Inc. v. United States, 2021 WL 1011210, at *30. Therefore, the court

granted AGMA’s motion for injunctive relief regarding the sole source award. In the court’s

decision, however, the court noted:

After consultation with the parties, and based on representations made by

the government to the court at the oral argument, including that a 30 day

transition period is required after award of the subsequent competitive

procurement, and in order not to cause a disruption of security services in

Puerto Rico, the injunction shall be effective on Monday, April 5, 2021.

Id. at *33 (emphasis in original).

After the court’s December 29, 2020 Opinion, FEMA decided to issue Solicitation

No. 70FBR221R00000007 (the Solicitation) “as a means to transition the services to a

long-term contract vehicle.” On February 14, 2021, FEMA issued solicitation No.

70FBR221R00000007 for the contracted Protective Services Officers and Patrolled

Services for Puerto Rico, with proposals due by February 18, 2021, 10:00 a.m. The

Solicitation was the third, different procurement vehicle FEMA had used to contract for

the services since 2019. This time, the Solicitation sought a maximum of 202,940 labor

hours of guard services per year, far less than the maximum included in the 2019 RFP,

due to the closure of multiple facilities and this time the Solicitation was issued as a set-

aside for businesses that qualified as small under North American Industrial Classification

System (NAICS) code 561612.

In determining that the Solicitation could be a small business set-aside, FEMA

relied on a Small Business Review Form, Form 700-22, dated January 26, 2021 and the

Market Research Report, Form 700-22, dated January 20, 2021. On the Form 700-22,

FEMA checked the box indicating this was a new requirement described the Solicitation

as “for Armed Security Guard Services (Protective Services Officer PSO) and Patrolled

Services to safeguard federal employees, visitors and property at both temporary and

fixed facilities during disaster and emergency declarations for DR-4339 (all counties and

16

municipalities within the Commonwealth of Puerto Rico).” Form 700-22 also indicated that

the estimated dollar value of the base period was $[redacted] , and the total estimated

value including the four option periods was $[redacted]. The Market Research Report

stated:

Since the current requirement is similar to the previous contract awarded in

2020, the Program Office used the following information from the previous

Market Research: There are 47 companies registered in SAM that are

scheduled as Security Services companies. Eleven were researched,

including the current contract vendors. Four were not in business. One was

not interested because of lack of resources to provide the requirement. One

did not respond to our request for information. Only three companies

responded to our request including the current two contractors.

Based on the responses to the prior solicitation, there were three

responsible small businesses that responded that could have performed the

work. Two received technical ratings of acceptable and one received a

technical rating of marginal. All offered fair market prices. The previous

requirement was for 600+ armed guards. Due to the closure of multiple

facilities, the current requirement is significantly smaller, requiring fewer

than 200 armed guards. Because there were three small businesses that

could have performed the requirement with over 600 armed guards at fair

market prices, we have a reasonable expectation that for this significantly

smaller requirement offers will be obtained from at least two responsible

small business concerns and that award will be made at fair market prices.

The checklist in the Market Research Report reflected that FEMA had reviewed “[o]ther

recent market research,” specifically the “2020 MR [market research] for Guard services

in DR4339PR;” or the previous 2019 RFP, Request for Proposal No.

70FBR220R00000002, as well as “[i]nterviewed knowledgeable individuals in industry;”

and “[i]nterviewed knowledgeable individuals in Government,” including “Experienced

Security Managers and FEMA HQ SMEs [small and medium-sized enterprises].”

(capitalization in original).

On February 17, 2021, the day before proposals were due for solicitation No.

70FBR221R00000007, this time, Ranger American of Puerto Rico timely filed a pre-

award protest in this court. Ranger American of Puerto Rico’s complaint sought injunctive

relief asking the court to force FEMA “to comply with statutory requirements for full and

open competition,” “enjoin FEMA from making award and then direct FEMA to remove

the restrictions limiting the competition for the protested procurement to only small

businesses and for FEMA to then request proposals based on the amended solicitation.”

Ranger American of Puerto Rico’s complaint included two counts, first, alleging that

“FEMA’s decision to conduct the procurement as a small business set-aside was contrary

to law and was unreasonable,” and alleged

17

FEMA at that time was required to have determined that a "fair proportion"

of the relevant industry category for the services at issue here was placed

with small business concerns. No changes in the industry or competition

have affected this result. Agency action is disparate and arbitrary when an

agency treats the same situation differently. FEMA's decision to reverse

course and set-aside the current solicitation is the result of disparate

treatment contrary to CICA and the FAR.

(capitalization in original). The second count of Ranger American of Puerto Rico’s

complaint alleged “FEMA’s decision to conduct this procurement as a small business set-

aside was arbitrary, capricious, and an abuse of discretion, and violated the applicable

FAR provisions.”

After the court held an initial hearing on February 18, 2021, the defendant filed a

motion to voluntarily remand on February 22, 2021, proposing to conduct “additional

market research to determine whether the requirement should be set aside for small

businesses.”5 The court held another hearing the following day, February 23, 2021, and

permitted FEMA to immediately begin the additional market research that it planned to

conduct during the proposed remand proceedings. On February 24, 2021, the defendant

filed a status report which reflected that six offerors had responded to the additional

market research and “[t]he responses indicate that all six companies are small businesses

and have the capabilities to perform the services required in the Solicitation.” The court

held another hearing on February 25, 2021,6 and instructed the parties to file

simultaneous cross-motions for judgment on the Administrative Record on February 26,

2021, and simultaneous reply briefs on March 1, 2021.

Ranger American of Puerto Rico filed a motion for judgment on the Administrative

Record, as well as a motion for preliminary and permanent injunction, in which it argued

that “[c]ontrary to statute and regulation, FEMA has restricted competition by designating

the procurement as a 100 percent small business set-aside.” Protestor further contended

that “FEMA has improperly set aside the procurement without conducting the required fair

proportion analysis.” Additionally, protestor argued that “FEMA has violated the ‘Rule of

Two.’ See FAR 19.502-2(b). No reasonable basis exists for FEMA to have expected it

would receive offers from at least two responsible small business concerns capable of

successfully meeting the agency's needs at a fair market price.”

Defendant responded that “Ranger’s ‘fair proportion’ challenge lacks merit,” and

also argued that the “contracting officer properly set aside the 2021 Solicitation based on

her reasonable determination that the Rule of Two had been satisfied.” Similarly, AGMA

contended that “[t]here is no ‘required fair proportion analysis.’” Regarding the Rule of

5 Given the reported urgency to have continued services in place in Puerto Rico, as

identified by the government in all three bid protests before the undersigned, the court set

a very aggressive schedule to resolve the above captioned protest.

6 At the February 25, 2021 hearing, the defendant indicated that another offeror,

[redacted], had responded to the additional market research.

18

Two, AGMA argued “[t]he Contracting Officer did not abuse her discretion here when she

held 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.’”

(emphasis removed).7

On March 2, 2021, the court held oral argument on the cross-motions for judgment

on the Administrative Record. After reviewing the parties’ submissions and considering

the parties’ arguments at the oral argument, in response to the agency’s request that a

decision be made as soon as possible, the court issued an oral decision to the parties,

and an explanation of its decision. The court’s oral decision denied protestor’s motion for

7 Included in AGMA’s motion for judgment on the Administrative Record was a motion to

dismiss protestor’s complaint for failing “to satisfy the pleading requirements.” Protestor

Ranger American of Puerto Rico responded that AGMA’s motion raised the issue in a

“conclusory manner” and is “devoid of analysis.” At the oral argument, defendant’s

counsel explained that the government “did not file a motion to dismiss because we do

believe there is sufficient facts in the complaint to establish and state a claim -- to state a

claim in the case.” The court notes that the bid protest complaint alleged, in part:

Ranger has been performing guard service contracts in Puerto Rico for over

30 years. Ranger is familiar with the capabilities of guard service firms in

Puerto Rico. The RFP includes complex requirements for management

plans, which requires recruitment and vetting of a significant number of

qualified personnel. The period from posting of the RFP to the proposal due

date (less than three business days) increases the likelihood that no

responsible small businesses will submit proposals (other than AGMA,

which had advance notice through its prior Court protest actions). Even if

small businesses meet the proposal deadline, there is an increased

likelihood the small businesses will be unable to meet FEMA's needs at a

fair market price. FEMA erred in determining it has a reasonable

expectation that it will receive offers from small business concerns capable

of fully performing the scope of work with technically acceptable proposals

and at fair market prices. Small business concerns attempting to comply

with the RFP requirements will lack adequate funding to pay their

employees and meet all equipment and uniform contractual requirements.

Small business concerns will also lack a formal corporate structure sufficient

to maintain the complexity required by the contract. Given Ranger's industry

knowledge, FEMA had strong evidence that small business contractors lack

capability and responsibility to meet the RFP requirements at a fair market

price, especially given the short notice and proposal period. As a result,

FEMA must not have conducted any reasonable market research in light of

the actual RFP requirements and timing. Any reasonable market research

would have concluded that there is a substantial likelihood that FEMA will

not receive two offers from capable entities at fair market prices.

The court agrees with protestor Ranger American of Puerto Rico and defendant that the

complaint filed by Ranger American of Puerto Rico was sufficient to state a claim.

19

judgment on the Administrative Record and request for injunctive relief and granted

defendant and intervenor’s motions for motion for judgment on the Administrative Record.

This Opinion incorporated and memorialized the oral decision.

DISCUSSION

Rule 52.1(c)(1) (2020) 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); see also Superior Optical Labs, Inc. v. United States, 150 Fed. Cl.

681, 691 (2020) (citing Bannum, Inc. v. United States, 404 F.3d 1346, 1356-57 (Fed. Cir.

2005)); AAR Manufacturing, Inc. v. United States, 149 Fed. Cl. 514, 522 (2020); Glocoms,

Inc. v. United States, 149 Fed. Cl. 725, 731 (2020); 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. 2018); 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)),

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.

20

v. United States, 369 F.3d 1324, 1329 (Fed. Cir.) (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”), reh’g denied (Fed. Cir. 2004). In Banknote Corp. of Am., Inc. v. United States,

365 F.3d 1345 (Fed. Cir. 2004), the Federal Circuit explained that “[u]nder 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.’” Id. at

1351 (quoting Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d

at 1332)); see also Palantir USG, Inc. v. United States, 904 F.3d 980, 990 (Fed. Cir.

2018); AgustaWestland North Am., Inc. v. United States, 880 F.3d 1326, 1332 (Fed. Cir.

2018); Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319.

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

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) (2018);8 see also Veterans

8 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;

21

Contracting Grp., Inc. v. United States, 920 F.3d 801, 806 (Fed. Cir. 2019) (“In a bid

protest, we follow Administrative Procedure Act § 706 and set aside agency action ‘if it is

arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’”

(quoting Palladian Partners, Inc. v. United States, 783 F.3d 1243, 1252 (Fed. Cir. 2015));

Tinton Falls 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

(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.

22

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); 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

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 F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502, 552 (2009); Tinton Falls

Lodging Realty, LLC v. United States, 800 F.3d at 1358; 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 Dell Fed. Sys., L.P. v. United

States, 906 F.3d 982, 990 (Fed. Cir. 2018); 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

23

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:

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); ); Sys. Studies & Simulation, Inc.

v. United States, 146 Fed. Cl. 186, 199 (2019); 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 dismissed, 559 F. App’x 1033 (Fed. Cir. 2014);

Supreme Foodservice GmbH v. United States, 109 Fed. Cl. at 382; Alamo Travel Grp.,

24

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).

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

(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

25

Consulting, Inc. v. United States, 552 F.3d at 1354 (quoting Advanced Data Concepts,

Inc. v. United States, 216 F.3d at 1058))).

“Contracting officers ‘are entitled to exercise discretion upon a broad range of

issues confronting them in the procurement process,’” PAI Corp. v. United States, 614

F.3d at 1351 (quoting Impresa Construzioni Geom. Domenico Garufi v. United States,

238 F.3d at 1332), and “[a]ccordingly, procurement decisions are subject to a ‘highly

deferential rational basis review.’” Id. (quoting CHE Consulting, Inc. v. United States, 552

F.3d at 1354 (Fed. Cir. 2008) (internal quotation marks omitted). As recently explained by

a Judge of the United States Court of Federal Claims, “‘[i]dentical review standards apply

under the APA in the context of a sole-source award.’” Utech Prod. v. United States, 148

Fed. Cl. 542, 549 (2020) (quoting Emery Worldwide Airlines, Inc. v. United States, 264

F.3d 1071, 1086 (Fed. Cir. 2001)).

When the contracting officer’s discretion grows, so does the burden on the

protestor. As noted in D & S Consultants, Inc. v. United States:

The protestor’s burden becomes more difficult the greater the degree of

discretion vested in the contracting officer. DynCorp Int’l v. United States,

76 Fed. Cl. 528, 537 (2007). Negotiated procurements afford the contracting

officer a “breadth of discretion;” “best-value” awards afford the contracting

officer additional discretion. Id. Therefore, in a negotiated, best-value

procurement, the “protestor’s burden is especially heavy.” Id.

D & S Consultants, Inc. v. United States, 101 Fed. Cl. 23, 33 (2011), aff’d, 484 F. App’x

558 (Fed. Cir. 2012); see also Galen Med. Assocs., Inc. v. United States, 369 F.3d at

1330 (noting that contracting officers have great discretion in negotiated procurements

but even greater discretion in best-value determinations than in procurements based on

cost alone); PHT Supply Corp. v. United States, 71 Fed. Cl. 1, 11 (2006) (“It is critical to

note that ‘a protestor’s burden is particularly great in negotiated procurements because

the contracting officer is entrusted with a relatively high degree of discretion, and greater

still, where, as here, the procurement is a “best-value” procurement.’” (citations omitted)).

“It is well-established that contracting officers have a great deal of discretion in making

contract award decisions, particularly when, as here, the contract is to be awarded to the

bidder or bidders that will provide the agency with the best value.” Banknote Corp. of Am.

Inc. v. United States, 365 F.3d at 1355 (citing TRW, Inc. v. Unisys Corp., 98 F.3d at 1327-

28; E.W. Bliss Co. v. United States, 77 F.3d at 449; Lockheed Missiles & Space Co. v.

Bentsen, 4 F.3d at 958–59); see also Am. Tel. & Tel. Co. v. United States, 307 F.3d at

1379; Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d at 958; Brooks Range Contract

Servs., Inc. v. United States, 101 Fed. Cl. 699, 707 (2011) (“[A] plaintiff’s burden ‘is

elevated where the solicitation contemplates award on a “best value” basis.’” (internal

citations omitted)); Matt Martin Real Estate Mgmt. LLC v. United States, 96 Fed. Cl. 106,

113 (2010); Serco v. United States, 81 Fed. Cl. 463, 496 (2008) (“To be sure, as noted at

the outset, plaintiffs have a significant burden of showing error in that regard because a

court must accord considerable deference to an agency’s best-value decision in trading

off price with other factors.”).

26

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 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, 134 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. at

496. 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).

As explained by the United States Court of Federal Claims in Digitalis Education

Solutions, Inc. v. United States:

Only an “interested party” has standing to challenge a contract award. Rex

Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006). An

interested party is an actual or prospective bidder whose direct economic

interest would be affected by the award of the contract. Id. Thus, a party

must show that it is 1) an actual or prospective bidder and 2) that it has a

direct economic interest. “[I]n order to be eligible to protest, one who has

27

not actually submitted an offer must be expecting to submit an offer prior to

the closing date of the solicitation.” MCI Telecomms. Corp. v. United States,

878 F.2d 362, 365 (Fed. Cir. 1989). To prove a direct economic interest, a

party must show that it had a “substantial chance” of winning the contract.

Rex Serv., 448 F.3d at 1308.

Digitalis Educ. Solutions, Inc. v. United States, 664 F.3d 1380, 1384 (Fed. Cir. 2012); see

also Am. Fed’n of Gov’t Emps. v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001),

cert. denied, 534 U.S. 113 (2002); Centech Grp., Inc. v. United States, 78 Fed. Cl. 496,

503-504 (2007).

In the context of a pre-award bid protest which challenges the terms of the

solicitation, the United States Court of Appeals for the Federal Circuit has determined that

to show the requisite “direct economic interest,” and, therefore, to be an “interested party”

under the Tucker Act, the protestor has to have suffered a “‘non-trivial competitive injury

which can be redressed by judicial relief.’” See Orion Tech., Inc. v. United States, 704

F.3d 1344, 1348 (Fed. Cir. 2013) (quoting Weeks Marine, Inc. v. United States, 575 F.3d

at 1362–63); see also CGI Fed. Inc. v. United States, 779 F.3d 1346, 1348 (Fed. Cir.

2018); COMINT Sys. Corp. v. United States, 700 F.3d at 1383 n.7 (“[I]n Weeks Marine

this court specifically held that the ‘non-trivial competitive injury’ standard was applicable

to ‘a pre-award protest.’” (quoting Weeks Marine, Inc. v. United States, 575 F.3d at 1362))

(emphasis in original); MVS USA, Inc. v. United States, 111 Fed. Cl. 639, 647 (2013).

This is a lower standard than the “substantial chance” standard used in post-award bid

protests, but still requires a “showing of some prejudice.” Orion Tech., Inc. v. United

States, 704 F.3d at 1348-49 (quoting Weeks Marine, Inc. v. United States, 575 F.3d at

1362) (emphasis in original).

As indicated above, Ranger American of Puerto Rico argues that “FEMA failed to

conduct a reasonable fair proportion determination,” and contends that “[b]efore setting

aside a procurement exclusively for small business concerns under the Rule of Two, FAR

19.502-1(a) requires an agency to first assess whether the agency has ‘assur[ed] that a

fair proportion of Government contracts in each industry category is placed with small

business concerns.” (brackets in original). Defendant responds that “Ranger’s ‘fair

proportion’ challenge lacks merit.” AGMA goes farther and states that “[t]here is no

‘required fair proportion analysis.’”

Section 644 of Title 15, titled “Awards or contracts,” states, in part:

(a) Small business procurements

(1) In general

For purposes of this chapter, small business concerns shall receive any

award or contract if such award or contract is, in the determination of the

Administrator and the contracting agency, in the interest of--

(A) maintaining or mobilizing the full productive capacity of the United

States;

(B) war or national defense programs; or

28

(C) assuring that a fair proportion of the total purchases and contracts for

goods and services of the Government in each industry category (as

defined under paragraph (2)) are awarded to small business concerns.

15 U.S.C. § 644(a) (2018) (emphasis added); see also Mgmt. & Training Corp. v. United

States, 115 Fed. Cl. 26, 42 (2014); Dynamic Educ. Sys., Inc. v. United States, 109 Fed.

Cl. 306, 324–25 (2013). FAR 19.502-1, “Requirements for setting aside acquisitions,”

states

(a) The contracting officer shall set aside an individual acquisition or class

of acquisitions for competition among small businesses when—

(1) It is determined to be in the interest of maintaining or mobilizing the

Nation’s full productive capacity, war or national defense programs; or

(2) Assuring that a fair proportion of Government contracts in each industry

is placed with small business concerns; and the circumstances described

in 19.502–2 or 19.502–3(a) exist.

(b) The requirement in paragraph (a) of this section does not apply to

purchases at or below the micro-purchase threshold, or purchases from

required sources under part 8 (e.g., Committee for Purchase From People

Who are Blind or Severely Disabled).

48 C.F.R. § 19.502-1 (2020) (capitalization in original). Protestor asserts, according to

FAR 19.502-1(a), FEMA was required to have determined that a "fair

proportion" of the relevant industry category for the services at issue here

was placed with small business concerns. The 2019 procurement that

resulted in award to Ranger was unrestricted. No change in the industry or

competition has been produced to show any change. FEMA's current

solicitation is the result of disparate treatment contrary to CICA [Competition

in Contract Act of 1984], the FAR, and APA.

(capitalization in original). Protestor argues “FEMA never conducted the fair proportion

analysis as required by FAR 19.502-1(a). FEMA's actions were arbitrary and capricious

because the agency entirely failed to consider an important aspect of the problem.”

Specifically, Ranger American of Puerto Rico contends that “FEMA entirely failed to

consider whether a fair proportion of contracts was already set-aside for small businesses

such that the CICA exception to full and open competition did not apply.”

Ranger American of Puerto Rico, citing Adams & Associates, Inc. v. United States,

741 F.3d 102, acknowledges that “[t]he Federal Circuit has clarified that an agency need

only meet minimum requirements to satisfy FAR 19.502-1,”9 but still tries to argue that

FEMA did not meet those minimum requirements. The United States Court of Appeals for

the Federal Circuit in Adams & Associates considered two related bid protests for small

business set-asides. The United States Department of Labor had awarded contracts to

9In its reply brief, protestor further admits that the “United Stated Court of Appeals for the

Federal Circuit has set a relatively low bar for agency fair proportion determinations.”

29

Adams & Associates for the operation of the Gadsden Job Corps Center and for the

operation of the Shriver Job Corps Centers. See Adams & Assocs., Inc. v. United States,

741 F.3d 102, 104 (Fed. Cir.), reh’g en banc denied (Fed. Cir. 2014). After the end of both

contracts, the Department of Labor issued a solicitation notices for the Gadsden contract

and the Shriver contract as total small business set-asides, which Adams & Associates

challenged in pre-award bid protests as Adams & Associates was not eligible as a small

business. Adams & Associates argued that the Department of Labor did not correctly

apply the fair proportion regulation, and also argued that the Department did not properly

conduct a Rule of Two analysis.10 Id. at 109.

For its fair proportion argument, Adams & Associates contended that FAR 19.502-

1 requires “‘a [contracting officer] shall set aside an individual acquisition when, and only

when, (1) “it is determined . . . to be in the interest of assuring a fair proportion of

Government contracts in each industry category is placed with small business concerns;”

and (2) “the circumstances described in 19.502–2 [i.e., the Rule of Two] . . . exist.”’”

Adams & Assocs., Inc. v. United States, 741 F.3d at 109-110 (emphasis and alterations

in original). The Federal Circuit, however, explained:

Adams’s interpretation of the Federal Acquisition Regulation also finds no

support in the Small Business Act, from which the “fair proportion” language

originated:

To effectuate the purposes of this chapter, small-business

concerns within the meaning of this chapter shall receive any

award or contract or any part thereof . . . as to which it is

determined by the Administration and the contracting

procurement or disposal agency . . . to be in the interest of

assuring that a fair proportion of the total purchases and

contracts for property and services for the Government in

each industry category are placed with small business

concerns. . . . These determinations may be made for

individual awards or contracts or for classes of awards or

contracts.

15 U.S.C. § 644(a) (emphasis added). The “fair proportion” determination is

to be made “by the Administration and the contracting procurement or

disposal agency” and “may be made for individual awards or contracts or

for classes of awards or contracts.” Id. (emphases added). The plain

language of the statute repudiates Adams's suggestion that the “fair

proportion” determination is part of a two-part process executed by a

contracting officer. There is no indication in the Small Business Act that the

“fair proportion” determination must be made on a contract-specific basis.

10The protestor in Adams & Associates also challenged the decision to use a small

business set-aside as violating the Workforce Investment Act, which is not at issue in the

above captioned protest. See Adams & Assocs. v. United States, 741 F.3d at 107-108.

30

Here, the DOL conducted market research to assess the interest among

small businesses in bidding on the contracts, applied the appropriate NAICS

size standard, and received the endorsement of the Office of Small and

Disadvantaged Business Utilization as part of its “fair proportion”

determination. The Court of Federal Claims correctly concluded that the

DOL had satisfied the “fair proportion” determination.

Adams & Assocs., Inc. v. United States, 741 F.3d at 110 (emphasis in original). The

Federal Circuit concluded:

Notably, Adams has not articulated a means by which an individual

contracting officer would make a “fair proportion” determination in the

context of a specific procurement. While Adams is correct that the DOL

must make a “fair proportion” determination prior to designating a contract

as a small business set-aside, the method it proposes for doing so is without

support. The DOL properly employed a method that comports with the Small

Business Act; therefore, its decision was not arbitrary, capricious, an abuse

of discretion, or otherwise not in accordance with law, and must be

sustained. 5 U.S.C. § 706(2)(A).

Adams & Assocs., Inc. v. United States, 741 F.3d at 110.

Most significantly for the protest currently under review, the Federal Circuit

determined that “[t]here is no indication in the Small Business Act that the ‘fair proportion’

determination must be made on a contract-specific basis.” Id. Although decided a year

before the Federal Circuit’s decision in Adams & Associates, a Judge of the United States

Court of Federal Claims came to a similar conclusion in Dynamic Educational Systems,

Inc. v. United States, 109 Fed. Cl. 306, albeit focusing on 15 U.S.C. § 644. In Dynamic,

similar to the facts in Adams & Associates, an incumbent contractor at a Jobs Corps

Center, this one at the Montgomery, Alabama Job Corps Center, filed a pre-award protest

challenging the Department of Labor's decision to proceed with the subsequent

requirement as a small business set-aside. See Dynamic Educ. Sys., Inc. v. United

States, 109 Fed. Cl. at 309–10. The Dynamic protestor argued that

before a procurement may be set aside for small businesses, the procuring

agency, in this case DOL acting through Ms. Andry, had to make a

preliminary determination pursuant to 15 U.S.C. § 644(a) (2006) (“Section

644”), that a “fair proportion” of work in that industry category should be set

aside for small businesses. Plaintiff contends that the set-aside is fatally

flawed because that determination was not made.

Dynamic Educ. Sys., Inc. v. United States, 109 Fed. Cl. at, 319. The Judge in Dynamic

provided a thorough analysis of 15 U.S.C. § 644 to conclude that the Department of

Labor’s set-aside was not fatally flawed. The Judge explained:

Section 644 itself sets up a larger scheme of promoting small-business

contracting that seems incompatible with a prior, rigid, contract-by-contract

31

determination by contracting officers of whether a “fair proportion” has been

achieved. Subsection (g) of Section 644, for example, calls for the President

to set government-wide goals, in percentage terms for small business

participation in contracting:

[t]he President shall annually establish Government-wide

goals for procurement contracts awarded to small business

concerns. . . . Notwithstanding the Government-wide goal,

each agency shall have an annual goal that presents, for that

agency, the maximum practicable opportunity for small

business concerns.

15 U.S.C. § 644(g). The agency-wide goal will be set by the “head of each

Federal agency, after consultation with the Administration.” Id. §

644(g)(2)(A). The purpose of these goals is to “make consistent efforts to

annually expand participation by small business concerns from each

industry category in procurement contracts of the agency.” Id. §

644(g)(2)(D). An enforcement mechanism of sorts exists in subsection (h),

which calls for annual reports to Congress and the President as to the

agencies' level of success in meeting goals for small business contracting.

Id. § 644(h).

Also integral to the operation of Section 644 is the appointment within each

agency of a Director of the Office of Small and Disadvantaged Business

Utilization. The OSDBU monitors performance in meeting goals and

encourages “unbundling” contracts to make them more accessible to small

businesses. In addition, one of the roles of the Director of OSDBU is to

make recommendations to contracting officers as to whether

a particular contract requirement should be awarded pursuant

to subsection (a) of this section, or section 637(a) of this title

or section 2323 of Title 10. Such recommendations shall be

made with due regard to the requirements of subsection (m)

of this section, and the failure of the contracting officer to

accept any such recommendations shall be documented and

included within the appropriate contract file.

Id. § 644(k)(10).

The “fair proportion” determination is also inextricably linked to the process

by which the Office of Management and Budget creates NAICS industry

codes and the Small Business Administration then assigns size standards

for each NAICS code. When the contracting officer selects “the appropriate

NAICS code and related small business size standard and [includes it] in

solicitations,” 48 C.F.R. § 19.303(a), the effect is to incorporate a judgment

made by the Small Business Administration as to what the appropriate

32

small-business size standard is for a particular industry category. This

standard can be adjusted, with the result that more or less companies are

able to compete as small businesses.

Congress was obviously aware of this interplay between the fair proportion

determination and the use of set-asides based on size standards. When

Section 644 was amended in 1986 by the National Defense Authorization

Act for Fiscal Year 1987, Pub. L. No. 99–661, § 921, 100 Stat. 3816, 3926–

30 (1986), to add the requirement that the fair proportion determination be

made on an industry category basis, the Report of the House Armed

Services Committee noted the following:

The Small Business Act requires that a fair proportion of the

total purchases and contracts for property and services

needed by the Federal Government be placed with small

business concerns. One procedure for accomplishing this

objective is the small business set-aside program.

...

The recommended provision allows the SBA flexibility to

evaluate the existing size standards and craft size standards

consistent with the objectives of the Act. The committee has

been advised that, in some industries such as the military boot

manufacturing industry, only manufacturers exist, all of whom

are classified as small businesses. An inappropriate reduction

in size could result in two or three companies being classified

as small, leaving the one or two companies not deemed small

at a significant disadvantage in bidding those contracts. In

circumstances such as those, the size standard should be

reduced to a sufficient degree that all potential offerors with

similar capabilities are treated similarly.

H.R. Rep. No. 99–718, at 256, 259, H.R. Rep. No. 99–718, at 256, 259

(1986). This strongly suggests that, even if Section 644 was initially adopted

on the assumption that some other device would emerge to implement the

“fair proportion” determination, Congress understood that set-asides were

being used to accomplish that end. By then, of course, the Rule of Two was

already in place. See 49 Fed. Reg. 40135–01 (Oct. 12, 1984).

Dynamic Educ. Sys., Inc. v. United States, 109 Fed. Cl. at 324–25. Similar to Federal

Circuit’s conclusion in Adams & Associates, the Judge in Dynamic determined that the

agency had not acted improperly, as follows:

In sum, we agree with defendant that the fair proportion determination was

satisfied when the Contracting Officer applied the appropriate NAICS size

33

standard, received the endorsement of the OSDBU, and then invoked the

Rule of Two. The mechanisms contemplated by Section 644—goal setting

by the executive branch and input from the OSDBU—and the industry

specific application of size standards by OMB and the SBA, all were

implemented. We conclude that nothing more was required to satisfy the

“fair proportion” requirement.

Although not necessary to the outcome, we also note that plaintiff was never

able to articulate a clear means by which a single contracting officer could

make a fair proportion determination in the context of a particular

procurement. Of necessity, this would seem to call for a much broader

vantage point, perhaps even outside the agency. Moreover, plaintiff was

unable to offer any reasonable likelihood that a remand for a “fair proportion”

determination would lead to a different outcome. Arguing that a new

determination “might” come out differently would not satisfy the requirement

of a non-trivial competitive injury. Nor could plaintiff offer any meaningful

guidelines for the court to apply in determining whether the agency's

discretion had been abused.

Dynamic Educ. Sys., Inc. v. United States, 109 Fed. Cl. at 325 (footnote omitted).

Like the protestors in Adams & Associates and Dynamic, Ranger American of

Puerto Rico does not clearly articulate how the FEMA contracting officer could make a

fair proportion determination in the context of the one procurement at issue. Most

significantly, however, as noted above, the Federal Circuit in Adams & Associates

determined that there “is no indication in the Small Business Act that the ‘fair proportion’

determination must be made on a contract-specific basis.” Adams & Assocs., Inc. v.

United States, 741 F.3d at 110.

As noted above, Ranger American of Puerto Rico contends that “FEMA's actions

also reflect disparate treatment,” arguing that “[t]o make its prior awards to Ranger, FEMA

must have found that a set-aside was not proper since the agency already awarded a fair

proportion of relevant contracts to small businesses.” Relatedly, Ranger American of

Puerto Rico argues that “FEMA's decision is also disparate, arbitrary, and contrary to

CICA and the FAR because the agency is reversing course from previous procurements

for the same services in the same location that were open to all offerors, including large

businesses, including the recent award by FEMA in June 2020 to Ranger.”

Protestor’s arguments, however, are speculative about the agency’s needs in both

2019 and in 2021, and presumes that FEMA needs have not changed since 2019. The

Administrative Record, moreover, demonstrates the nature for the requirement has

changed according to the agency between 2019 and 2021 as the Market Research

Report for the Solicitation explained that “[t]he previous requirement was for 600+ armed

guards. Due to the closure of multiple facilities, the current requirement is significantly

smaller, requiring fewer than 200 armed guards.” Additionally, defendant states in its reply

brief that “[r]egardless of a previous proportion, or the current proportion, of small

34

business contracts with the agency, more small business participation is encouraged.”

Indeed, the Rule of Two, discussed below, is one such example of a statutory provision

to encourage small businesses. See Mgmt. & Training Corp. v. United States, 115 Fed.

Cl. 26, 43 (2014) (referencing the “overall statutory goal of promoting small businesses,

which is advanced by applying the ‘Rule of Two’”). Additionally, a number of the provisions

in the FAR addresses the importance of the small business set-aide. For example, FAR

§ 19.201(a) states that, “[i]t is the policy of the Government to provide maximum

practicable opportunities in its acquisitions to small business” and FAR § 19.203(e)

provides that, “[s]mall business set-asides have priority over acquisitions using full and

open competition.” Moreover, FAR § 19.501(a) states that, “[t]he purpose of small

business set-asides is to award certain acquisitions exclusively to small business

concerns. A ‘set-aside for small business’ is the limiting of an acquisition exclusively for

participation by small business concerns. A small business set-aside may be open to any

of the small business concerns identified at [FAR §] 19.000(a)(3).” FAR § 19.501(a).

Regarding protestor’s argument that the FEMA’s decision for the Solicitation was

contrary to CICA, as noted by an Judge of the United States Court of Federal Claims,

“CICA expressly allows the government to favor small businesses to further the policies

of the Small Business Act, 15 U.S.C. §§ 638, 644. 10 U.S.C. § 2304(b)(2).” InGenesis,

Inc. v. United States, 104 Fed. Cl. 43, 52 (2012). Moreover, even an agency has already

set-aside a fair proportion of the agency’s contracts, the FAR at section 19.502-5 makes

clear that that alone is not a valid reason to determine a specific small business set-aside

is improper. See FAR. § 19.502-5 (2020). FAR § 19.502-5, titled: “Insufficient reasons for

not setting aside an acquisition,” states in full:

None of the following is, in itself, sufficient cause for not setting aside an

acquisition:

(a) A large percentage of previous contracts for the required item(s) has

been placed with small business concerns.

(b) The item is on an established planning list under the Industrial

Readiness Planning Program. However, a total small business set-aside

shall not be made when the list contains a large business Planned

Emergency Producer of the item(s) who has conveyed a desire to supply

some or all of the required items.

(c) The item is on a Qualified Products List. However, a total small business

set-aside shall not be made if the list contains the products of large business

unless none of the large businesses desires to participate in the acquisition.

(d) A period of less than 30 days is available for receipt of offers.

(e) The acquisition is classified.

35

(f) Small business concerns are already receiving a fair proportion of the

agency's contracts for supplies and services.

(g) A class small business set-aside of the item or service has been made

by another contracting activity.

(h) A “brand name or equal” product description will be used in the

solicitation.

FAR. § 19.502-5 (2020).

Despite the foregoing, Ranger American of Puerto Rico nevertheless tries to

question the specific documentation by FEMA in making the set-aside determination in

the current bid protest. Aside from citing to 15 U.S.C. § 644(a) and FAR 19.502-1, which,

as discussed in Adams & Associates and Dynamic, does not provide a basis to

successfully challenge a single procurement for an agency’s fair proportion obligations,

protestor does not cite to any statute or regulation to argue that FEMA failed to make a

proper fair proportion determination. Instead in its submissions, Ranger American of

Puerto Rico merely repeats that “there is no evidence that FEMA considered the fair

proportion requirement set forth in FAR 19.502-1(a)(2) at all.” (emphasis in original).

Despite repeatedly arguing that there no evidence that the agency considered the

fair proportion requirement, Ranger American of Puerto Rico also argues that FEMA

reliance on the January 26, 2021 Small Business Review Form, Form 700-22, to make a

proper fair proportion determination was improper. The court notes that in Adams &

Associates, the Federal Circuit determined that “the DOL conducted market research to

assess the interest among small businesses in bidding on the contracts, applied the

appropriate NAICS size standard, and received the endorsement of the Office of Small

and Disadvantaged Business Utilization as part of its ‘fair proportion’ determination. The

Court of Federal Claims correctly concluded that the DOL had satisfied the ‘fair proportion’

determination.” Adams & Assocs., Inc. v. United States, 741 F.3d at 110 (citing Adams &

Assocs., Inc. v. United States, 109 Fed. Cl. at 355).

Protestor Ranger American of Puerto Rico argues, “[h]ere, FEMA apparently relies

on Form 700-22 to support its fair proportion determination. The Form is erroneous and

misleading regarding whether the requirement is ‘new,’ is not signed or endorsed by the

relevant office, and otherwise reflects disparate treatment.” (internal reference omitted).

Ranger American of Puerto Rico provides zero citations to caselaw or regulations that

demonstrate the absence of a signature or endorsement on Form 700-22 means that

FEMA has not complied with the requirement to set aside a fair proportion of the contracts.

Additionally, protestor Ranger American of Puerto Rico points out that “[t]he Form

is signed by the Small Business Specialist, but he neglected to mark whether he

concurred or disagreed with FEMA’s decision to issue the RFP as a total set-aside for

small business concerns.” Defendant agrees that small business specialist did not

specifically indicate his concurrence, but explains that “[i]f the SBS [small business

specialist] had not concurred in the set-aside, the form required him to have attached a

36

justification for that non-concurrence.” The court notes that the small business specialist

did digitally sign Form 700-22. The Form 700-22 shows:

Defendant also argues “the contracting officer would have been required to respond to

the SBS’s non-concurrence,” if the small business specialist had determined that the

procurement was not properly a small business set-aside.

Protestor further contends that “[t]here is a space for the OSDBU [Office of Small

and Disadvantaged Business Utilization] Director to sign (Box 22), but that is blank. Box

23 indicates that review by the OSBDU is required.” The Form 700-22 at Boxes 22 and

23 appear as the following in the Administrative Record:

37

Although Box 22 in Form 700-22 is unsigned, the court notes that for Box 23, an “x” has

been marked for the small business set-aside for each of three identified officials:

Contracting Officer Carolyn Knight, the small business specialist, and the OSDBU

Director. Form 700-22 explains that an “x” “indicates review and signature unless noted

otherwise.” Moreover, the court does not see any “requirement” in the Administrative

Record that the signature is necessary or the failure to be signed means that the agency

somehow demonstrates that FEMA has failed to meet its obligation to make a fair

proportion determination. Nor is there a regulation that mandates a signature on Form

700-22 or its equivalents in order to meet the fair proportion requirement.11 Defendant

argues

11 The court notes that 15 U.S.C. § 644(k), titled: “Office of Small and Disadvantaged

Business Utilization; Director,” “established in each Federal agency having procurement

powers an office to be known as the ‘Office of Small and Disadvantaged Business

Utilization,’” and established that “[t]he management of each such office shall be vested

in an officer or employee of such agency. . . .” 15 U.S.C. § 644(k) (capitalization in

original). Subsection k, however, does not provide how the office should function or how

involvement, including concurrence of Office of Small and Disadvantaged Business

Utilization personnel, should be conducted.

38

the record does not contain any indication that this acquisition has been

designated by the OSDBU Director as requiring this form to be signed by

the Director. To the contrary, and consistent with the policy favoring small

business contracting, the form shows that there are more signatures

required when an acquisition is not set aside for small businesses than

when an acquisition is set aside for small businesses.

(emphasis in original).

As noted above, protestor Ranger American of Puerto Rico further argues, “[e]ven

if it [Form 700-22] had been signed or endorsed, that would have been unreasonable and

not valid since the Form erroneously states the requirement is ‘new.’" The requirement

for services in Puerto Rico is similar to the requirements in the post-award bid protests of

Case No. 20-926C, and Case No. 21-740C, described above. The 2019 RFP sought

“contracted Protective Service Officers (PSO) and Patrolled Services to safeguard federal

employees, visitors and property at both temporary and fixed facilities during disaster and

emergency declarations for DR-4339 (all counties and municipalities within the

Commonwealth of Puerto Rico).” The sole source bridge contract provided for “PSOs to

provide physical security at all sites and facilities related to disaster declaration DR-4339-

PR (for Hurricane Maria) encompassing all municipalities of the U.S. Territory of Puerto

Rico.” The Solicitation at issue in the protest currently under review sought contracted

Protective Service Officers (PSO) and Patrolled Services to safeguard federal employees,

visitors and property at both temporary and fixed facilities during disaster and emergency

declarations for DR-4339 (all counties and municipalities within the Commonwealth of

Puerto Rico).” (capitalization in original). Despite the similarities in the description of the

type of work, the number of contract personnel is significantly different. The Small

Business Review Form for the 2019 RFP noted that “[t]he Contractor shall be able to

provide 600+ guards to cover locations in all municipalities of the U.S. Territory of Puerto

Rico. The contractor must perform duties/tasks necessary to provide Protective Security

Officers (PSOs) for physical security services throughout the entire island of Puerto Rico.”

Regarding the sole source bridge contract, the contracting officer, Carolyn Knight, also

indicated in her declaration for the sole source bridge contract that like the previous

procurement for the 2019 RFP, the sole source bridge contract continued to solicit for a

requirement of “600+ armed guards.”

For the competitive procurement that FEMA intends to solicit to replace the sole

source bridge contract, i.e., the Solicitation currently under review, however, only is

intended to have a requirement of fewer than 200 armed guards. Indeed, the Market

Research Report for the current Solicitation states “[t]he previous requirement was for

600+ armed guards. Due to the closure of multiple facilities, the current requirement is

significantly smaller, requiring fewer than 200 armed guards.” Additionally, during the

course of the three bid protests before the undersigned, the defendant represented to the

court that fewer guards were needed because of the length of time that has passed since

Hurricane Maria made landfall in Puerto Rico. Therefore, although the same type of work

is contemplated by the requirement for the most recent Solicitation, the scope of the

39

Solicitation in terms of personnel numbers is numerically quite different than the previous

ones. Defendant observes, “[i]t is unclear why Ranger believes that the requirement in

the 2021 Solicitation is not ‘new’ when the record confirms that the requirement, though

similar to that sought in previous solicitations, is different from previous requirements.

Indeed, it is significantly smaller than previous requirements, and, therefore, can be

considered a new requirement.”12 Defendant continues:

it is also unclear why Ranger believes that an erroneous indication of “new”

on the form would invalidate the form. Ranger appears to assert that

identifying the requirement as “new” on the form misled the SBS into

concurring in the set-aside decision. But there is no evidence that the SBS

was misled or confused. To the contrary, the same SBS signed the Form

700-22 for the unrestricted 2019 Solicitation and therefore should have

been at least generally familiar with the procurement history at issue.

(internal citation omitted). Although protestor Ranger American of Puerto Rico, as an

incumbent contractor, questions the change in the most recent procurement to a set-

aside contract, the agency’s size requirement has changed. As a result none of the

perceived shortcomings identified by protestor regarding Form 700-22 and its impact on

the procurement demonstrate FEMA did not meet its obligations to make a fair proportion

determination for the small business set-asides or did not describe a new set-aside

procurement as represented.

In addition to arguing that FEMA did not make a proper fair proportion

determination, Ranger American of Puerto Rico argues that “FEMA arbitrarily and

unreasonably implemented the ‘Rule of Two.’” Specifically, Ranger American of Puerto

Rico contends that the agency “entirely failed to consider whether potential small

business concerns are responsible or likely to offer fair market prices.” Protestor also

argues that “FEMA’s [market research] report failed to consider required responsibility

factors,” and contends “FEMA's market research report and agency documents in the AR

[Administrative Record] focus exclusively on whether there are small businesses in the

relevant NAICS code, meaning the documents lack the required analysis of whether small

business concerns are responsible or are capable of successfully performing at fair

market prices for a five-year FEMA contract.” (brackets added).

Regarding the small business set-aside determination, the FAR provides: “The

purpose of small business set-asides is to award certain acquisitions exclusively to small

business concerns.” FAR § 19.501(a) (2020); see also Proxtronics Dosimetry, LLC v.

United States, 128 Fed. Cl. 656, 680 (2016). FAR § 19.502-2(b) indicates that:

The contracting officer shall set aside any acquisition over the simplified

acquisition threshold for small business participation when there is a

reasonable expectation that—

12Defendant also suggests that “[t]he agency intends to award a new contract based on

the 2021 Solicitation—'new’ in this context means ‘new contract’ not ‘new need for these

services.’”

40

(1) Offers will be obtained from at least two responsible small business

concerns; and

(2) Award will be made at fair market prices. Total small business set-asides

shall not be made unless such a reasonable expectation exists (see

19.502–3 for partial set-asides). Although past acquisition history and

market research of an item or similar items are always important, these are

not the only factors to be considered in determining whether a reasonable

expectation exists. In making research and development small business

set-asides, there must also be a reasonable expectation of obtaining from

small businesses the best scientific and technological sources consistent

with the demands of the proposed acquisition for the best mix of cost,

performances, and schedules.

FAR § 19.502-2(b).

As generally explained by the United States Supreme Court in Kingdomware

Technologies, Inc. v. United States:

In an effort to encourage small businesses, Congress has mandated that

federal agencies restrict competition for some federal contracts. The Small

Business Act thus requires many federal agencies, including the

Department of Veterans Affairs, to set aside contracts to be awarded to

small businesses. The Act requires each agency to set “an annual goal that

presents, for that agency, the maximum practicable opportunity” for

contracting with small businesses, including those “small business

concerns owned and controlled by service-disabled veterans.” 15 U.S.C. §

644(g)(1)(B). And federal regulations set forth procedures for most

agencies to “set aside” contracts for small businesses. See, e.g., 48 CFR §

19.502–2(b) (2015).

Kingdomware Techs., Inc. v. United States, 136 S. Ct. 1969, 1973 (2016).13 A Judge of

the United States Court of Federal Claims has explained 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.” Proxtronics Dosimetry, LLC v. United States, 128 Fed. Cl.

at 680 (citing FAR § 19.501(c)); see also FAR § 19.501(c) (2020). As further explained

by another Judge of the United States Court of Federal Claims, “the decision to set aside

a solicitation ‘is a matter of business judgment within the contracting officer's discretion

and, as such, must be upheld unless the Court finds the decision to be arbitrary,

13 Ranger American of Puerto Rico states, without any support, in a footnote that “[t]he

U.S. Supreme Court's decision in Kingdomware Technologies, Inc. v. United States, 136

S. Ct. 1969 (2016) is not relevant because the Court did not address the requirements of

15 U.S.C. § 644 or FAR 19.502-1 or -2. Rather, the Court addressed specific and different

statutory language in 38 U.S.C. § 8127(d) (addressing certain preferences for veteran-

owned business).”

41

capricious, an abuse of discretion or otherwise not in accordance with the law.’” Mgmt. &

Training Corp. v. United States, 115 Fed. Cl. at 44 (quoting Benchmade Knife Co. v.

United States, 79 Fed. Cl. 731, 738 (2007)); see also Adams & Assocs. v. United States,

741 F.3d at 111; Res-Care Inc. v. United States, 735 F.3d 1384, 1390 (Fed. Cir. 2013)

(quoting Weeks Marine, Inc. v. United States, 575 F.3d at 1368–69 (“A contracting

officer's decision to set aside a contract for small businesses invokes ‘highly deferential

rational basis review.’”)), reh’g en banc denied (Fed. Cir. 2014). Likewise, as noted by

another Judge of this court, “[w]e begin with the reminder that, whether to set aside a

solicitation for small businesses ‘“is a matter of business judgment within the contracting

officer's discretion.”’” Adams & Assocs. v. United States, 109 Fed. Cl. 340, 356 (2013)

(quoting Gear Wizzard, Inc. v. United States, 99 Fed. Cl. 266, 282 (2011) (quoting

Benchmade Knife Co. v. United States, 79 Fed. Cl. 731, 738 (2007))), aff’d, 741 F.3d 102

(Fed. Cir.), reh’g en banc denied (Fed. Cir. 2014). “The ‘law does not require any

particular method.’” Dynamic Educ. Sys., Inc. v. United States, 109 Fed. Cl. at 326

(quoting Gear Wizzard, Inc. v. United States, 99 Fed. Cl. at 282). The determination for

the Rule of Two is based on the information available to the contracting officer at the time

the decision is made, in the protest currently under review, after the agency market

research review, as “the FAR provides for set asides based on the contracting officer's

‘reasonable expectation,’ implicitly accepting the possibility that that expectation may

ultimately prove incorrect.” Mgmt. & Training Corp. v. United States, 118 Fed. Cl. 155,

169 (2013).

Although discussed above regarding protestor’s fair proportion argument, the court

also looks to the Federal Circuit’s Adams & Associates v. United States decision

regarding the requirements for a small business set-aside determination. As explained

above, in Adams & Associates, the protestor had challenged the United States

Department of Labor’s decision to set aside two contracts, the Gadsden contract and the

Shriver contract, as small business set-asides. See Adams & Assocs. v. United States,

741 F.3d at 105. The Federal Circuit explained regarding the requirements for a small

business set-aside determination:

Adams’s reading of the Rule of Two ignores that “a reasonable expectation”

that at least two responsible small businesses will submit bids at fair market

prices is all that is required. Here, through the RFI process, the DOL

performed market research about the level of interest from small businesses

in bidding on the Shriver and Gadsden contracts. It then determined from

the responses that there was a reasonable expectation that at least two

responsible small businesses would make offers for the operation of each

of the Centers. To Adams, “the issue here is that the market research . . .

must generate the information necessary to address the expressly required

responsibility and price reasonableness legal elements of the Rule of Two.”

According to Adams, the required information is identified in another part of

the Federal Acquisition Regulation pertaining to determining whether a

prospective contractor is “responsible” before awarding a contract to that

contractor. These factors include capability, capacity, and past

performance. 48 C.F.R. § 9.104-1. Adams contends that only by collecting

42

information related to these factors can the DOL meet the requirements of

the Rule of Two.

Adams conflates a set-aside determination with a responsibility

determination made pursuant to § 9.104-1; the former determines whether

there is a reasonable expectation that at least two responsible small

businesses will make an offer at fair market prices, while the latter

determines whether an individual contractor is responsible in the context of

awarding a contract. As the lower court noted, a set-aside determination

requires only that the contracting officer have a reasonable expectation that

likely small business offerors will survive a future responsibility

determination. The DOL was not required to impose the requirements of the

contractor-selection process onto the small business set-aside

determination, and it properly applied the Rule of Two. Because its decision

was not arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law, it will not be disturbed. 5 U.S.C. § 706(2)(A).

Adams & Assocs. v. United States, 741 F.3d at 111 (internal citations omitted).

In the above captioned protest, FEMA relied on a Small Business Review Form,

Form 700-22, and the Market Research Report to make a Rule of Two determination. In

the Market Research Report, the report stated:

Since the current requirement is similar to the previous contract awarded in

2020, the Program Office used the following information from the previous

Market Research: There are 47 companies registered in SAM that are

scheduled as Security Services companies. Eleven were researched,

including the current contract vendors. Four were not in business. One was

not interested because of lack of resources to provide the requirement. One

did not respond to our request for information. Only three companies

responded to our request including the current two contractors.

Based on the responses to the prior solicitation, there were three

responsible small businesses that responded that could have performed the

work. Two received technical ratings of acceptable and one received a

technical rating of marginal. All offered fair market prices. The previous

requirement was for 600+ armed guards. Due to the closure of multiple

facilities, the current requirement is significantly smaller, requiring fewer

than 200 armed guards. Because there were three small businesses that

could have performed the requirement with over 600 armed guards at fair

market prices, we have a reasonable expectation that for this significantly

smaller requirement offers will be obtained from at least two responsible

small business concerns and that award will be made at fair market prices.

The checklist in the Market Research Report reflected that FEMA had reviewed “[o]ther

recent market research,” specifically the “2020 MR [market research] for Guard services

in DR4339PR,” the previous 2019 RFP, Request for Proposal No. 70FBR220R00000002,

43

as well as interviewed people in the industry and in the government, including

“Experienced Security Managers and FEMA HQ SMEs [small and medium-sized

enterprises].” (capitalization in original). The Market Research Report referenced the

previous procurement and, as referenced above, the original Award Decision

Memorandum for the 2019 RFP which made the award to AGAMA, was included in the

Administrative Record in the above captioned protest. As the 2019 RFP’s original Award

Decision Memorandum was included in the Administrative Record in the above captioned

protest, the court considers it as part of the information available to the agency in making

the Rule of Two determination. Moreover, FAR 19.502–2(b), quoted above, contemplates

that an agency can take into consideration previous procurements. The FAR at section

19.502–2(b)(2) states, in part, “[a]lthough past acquisition history and market research of

an item or similar items are always important, these are not the only factors to be

considered in determining whether a reasonable expectation exists.” Id.; see also MCS

Mgmt., Inc. v. United States, 48 Fed. Cl. 506, 512, 514 (2001). The Judge who decided

Adams & Associates v. United States at the United States Court of Federal Claims, which

was affirmed by the Federal Circuit, indicated:

Additionally, it is not required or practical at this stage of the procurement

process for the contracting officer to conduct a full responsibility evaluation.

Fermont Div., Dynamics Corp., B–195431, 1980 WL 18035, 59 Comp. Gen.

533, 538–40 (1980). Rather, the contracting officer need only reasonably

expect that likely offerors will “be capable of surviving a future responsibility

determination.” Greenleaf Const. Co., Inc. v. United States, 67 Fed. Cl. 350,

358 (2005).

Adams & Assocs., Inc. v. United States, 109 Fed. Cl. at 356; see also Adams & Assocs.

v. United States, 741 F.3d at 111 (“As the lower court noted, a set-aside determination

requires only that the contracting officer have a reasonable expectation that likely small

business offerors will survive a future responsibility determination.”).

The original Award Decision Memorandum for the 2019 RFP, which was the first

in the series of awards for the Protective Service Officers and Patrolled Services for

Puerto Rico, in making the award to AGAMA, included the table of the summary of

technical ratings for each of the first four factors: 1. Work Plan, 2. Project Management

Plan, 3. Quality Control Plan, and 4. Past Performance.

44

Summary of Technical Ratings

Table 1

RATING CHART

Offeror: Factor 1 Factor 2 Factor 3 Factor 4 Overall Factor

Rating

Offeror 1: Unsatisfactory Unsatisfactory Unsatisfactory Neutral Unsatisfactory

[redacted]

Offeror 2: Agma Good Satisfactory Satisfactory Neutral Satisfactory

Security Service

Inc.

#3 Offeror 3: Unsatisfactory Unsatisfactory Unsatisfactory Neutral Unsatisfactory

[redacted]

Offeror 4: Unsatisfactory Unsatisfactory Marginal Neutral Unsatisfactory

[redacted]

Offeror 5: Unsatisfactory Unsatisfactory Unsatisfactory Satisfactory Unsatisfactory

[redacted]

Offeror 6: Good Good Good Good Good

Ranger American

Offeror 8: Marginal Satisfactory Satisfactory Satisfactory Satisfactory

[redacted]

Offeror 9: Marginal Marginal Marginal Satisfactory Marginal

[redacted] [14]

14 The SSEB explained that: “During the initial screening, Offeror 7 [redacted] was

deemed ineligible for award. Offeror does not reside or primarily doing [sic] business in

the disaster area in accordance with FAR 52.226-3 Disaster or Emergency Area

Representation and therefore were [sic] not evaluated.”

45

Table 2

EMPIRICAL VALUES RATING CHART

Total Converted Empirical

Offeror: Factor 1 Factor 2 Factor 3 Factor 4 Empirical Value to Overall

Value Rating

#1 1 1 1 0 3 Unsatisfactory

#2 [AGMA] 4 3 3 0 10 Satisfactory

#3 1 1 1 0 3 Unsatisfactory

#4 1 1 1 0 3 Unsatisfactory

#5 1 1 1 2 5 Unsatisfactory

#6 [Ranger] 4 4 4 4 16 Good

#8[redacted] 1 3 3 2 9 Satisfactory

#9[redacted] 1 1 1 2 5 Marginal

Table 3

RATING CHART BREAKDOWN

Factors 1 - Numerical Numerical

3 Rating Factor 4 Rating

Superior 5

Good 4 Superior 3

Satisfactory 3 Satisfactory 2

Marginal 1 Unsatisfactory 1

Unsatisfactory 1 Neutral 0

Table 4

OVERALL RATING

RANGE

Rating

Overall Rating

Range

Superior 18

Good 14 to 17

Satisfactory 10 to 13

Marginal 6 to 10

Unsatisfactory 3 to 5

(all capitalization and emphasis for all charts in original; brackets added).15

15Although the 2019 RFP makes no mention of an “empirical values ratings” system, the

contracting officer included the empirical values ratings chart in the original Award

Decision Memorandum and changed the rating chart, as shown in Table 1, into the

empirical values ratings, the rating chart breakdown, and the overall rating range, as

indicated in Tables 2, 3, and 4.

46

As noted above, and as referenced in the Market Research Report, for the 2019

RFP, the original Award Decision Memorandum determined that there were four offerors

who “were deemed technically acceptable,” three of which were small businesses,

AGMA, the original awardee, [redacted], and [redacted], and the fourth being Ranger

American of Puerto Rico. AGMA and [redacted] were determined to be “Satisfactory,”

[redacted] was determined to be “Marginal,” and Ranger American of Puerto Rico was

determined to be “Good.” Additionally, the original Award Decision Memorandum included

a comprehensive analysis of each strengths, weaknesses, and deficiencies, if any, of

each of the eight evaluated offerors, as well as an analysis of each of the offeror’s

proposals. Below are the evaluations for AGMA, Ranger American of Puerto Rico,

[redacted], and [redacted], the only four offerors to propose technical proposal which was

evaluated to be marginal or better.

Offeror 2: AGMA Security Service Inc [sic] Rating: Satisfactory

Offeror 2’s proposal demonstrated a probability of success to support

FEMA’s requirement. The offeror had previous experience with FEMA but

had no CPARS records. Offeror 2 provided in detail how they would execute

the requirement, with a good workplan including a proper transition, good

management considering most challenges, and a reasonable Quality

Control (QC) Plan.

Factor 1 - Workplan: Good

Strengths include:

o Demonstrated the ability to make a seamless transition and accounted for

the required services. (Section 1: Workplan, page 1, paragraph 2, 6; page

2 paragraph 1, 2; page 3, paragraph 3)

o Proper execution including a detailed description of a proper chain of

command and a well-planned timeline (Section 1: Workplan, page 1

paragraphs 3-5, page 2 paragraph 4-6 [sic]

o Offeror demonstrates to have the capability to fulfill the staffing demand

in this requirement (footnote page 2).

Weakness include:

o None

Deficiencies include:

o None

Factor 2 – Project Management Plan: Satisfactory

Strengths include:

o Demonstrated the ability to effectively manage the contract (Section 2:

Project Management Plan in its entirety page 3-4).

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o Offeror has a proper plan in place to fulfill staffing island-wide (Section 2:

Project Management Plan page 3 paragraphs 5-6).

o Proper assigned supervision (Section 2: Project Management Plan page

4 paragraph 1-5).

o Detailed description of distribution of resources (Section 1: Workplan,

page 1 last paragraph, continued page 2 first paragraph and page 2

footnote).

Weakness include:

o None

Deficiencies include:

o None

Factor 3 – Quality Control Plan: Satisfactory

Strengths include:

o Offeror has staff designated for Quality Control (Section 3: Quality Control

Plan, page 5, paragraph 3).

o Good plan for physical inspections and reporting tools (Section 3, page 5,

paragraph 2, 5, 6; page 6 all paragraphs; page 7, paragraphs 1-4).

o Good corrective actions plan Section 3, Paragraph 5-6; page 8, paragraph

1-4).

Weakness include:

o None

Deficiencies include:

o None

Factor 4 – Past Performance: Neutral

Strengths include:

o None

Weakness include:

o None

Deficiencies include:

o None

...

Offeror 6: Ranger American of Puerto Rico Inc [sic] Rating: Good

Offeror 6 is the vendor for the current contract. They relied on their efficacy

to execute the new contract to the “successful” execution of the current

48

contract. The offeror demonstrates the capability to comply with the

requirement as established. The offeror demonstrates that they have vast

staffing capabilities to meet requirements and beyond. A detailed Project

Management Plan was provided. A rigorous training schedule was

presented with a good command/field operations structure to complement.

Offeror diligently provided the “Use of Force” policy and a sample of

physical inspections spreadsheet they use to ensure PSO compliance.

Factor 1 - Workplan: Good

Strengths include:

o Offeror references effective modus operandum in current contract

(Section: Introduction, page 1, paragraph 6).

o Offeror states a continuation of services would not require a transition

(Section 1: Workplan, page 2, paragraph 2).

o Vast staffing capabilities (Section 1, page 2, paragraph 3).

Weakness include:

o None

Deficiencies include:

o None

Factor 2 – Project Management Plan: Good

Strengths include:

o Offeror presents in detail the contract management responsibilities, risk

avoidance, and insurance of performance making the contract transition a

seamless continuity of operations (Section 1: Workplan, page 2, paragraph

3).

o Good command and field operations structure (Section 2: Project

Management Plan, sub-section Site Leaders, page 5 graph, paragraphs 1-

3).

o Contingency plan set in place (Section 2, page 3, paragraph 4).

Weakness include:

o None

Deficiencies include:

o None

Factor 3 – Quality Control Plan: Good

Strengths include:

o The offeror demonstrates a rigorous Quality Control system in place

(Section 3: Quality Control Plan, page 5, paragraph 1-2).

49

o Quality Control for this offeror includes monitoring processes, field

inspections, supporting software, cost control software, reporting capacity,

disciplinary strategies, and internal investigations (Section 3, sub-section

Technology, page 8, paragraph 1).

o Monitoring documentation developed ensuring compliance (proposal

attachment).

o Robust training schedule potentially maximizing quality of work (Section

3, page 6, paragraph 3; and attachment “Training [sic] Manuals protocol).

Weakness include:

o None

Deficiencies include:

o None

Factor 4 – Past Performance: Good

Strengths include:

o In CPARS, offeror has two evaluations where they are described as “very

good” and exceptional in all categories on both.

Weakness include:

o None

Deficiencies include:

o None

Offeror 8: [redacted] Rating: Satisfactory

Offeror 8’s proposal stated they have the experience and capability to fulfill

the requirements set forth in the SOW [statement of work]. In contradiction,

the offeror also stated they currently do not possess the required staffing

and they would conduct a recruitment event (within 90 days after execution)

to fulfill the requirement. The proposal lacks a detailed transition process

and fulfilling regional staffing. Good quality controls are in place but no

disciplinary/corrective actions for PSO compliance are presented.

Factor 1 - Workplan: Marginal

Strengths include:

o Offeror states experienced capabilities to address the requirement

(Section 1: Workplan, sub-section 4 Resources, page 2 paragraph 3).

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Weakness include:

o Offeror states they currently do not have the staffing capability to address

the requirement needing to recruit new employees to comply with the

staffing requirement (Section 1: Workplan, sub-section VI, page 2,

paragraph 1).

Deficiencies include:

o None

Factor 2 – Project Management Plan: Satisfactory

Strengths include:

o Offeror’s under the Project Management section (pages 4-6) in the

proposal demonstrates a thorough understanding of the requirements as

outlined in the SOW.

o Offeror divided the island into 5 geographical areas with proper

supervisory staffing (Section 2, Sub-section Executive Summary, page 4,

paragraph 3).

Weakness include:

o No detailed transition plan incorporated in the proposal (Section 2, sub-

section 7, page 3, paragraph 1-2).

Deficiencies include:

o None

Factor 3 – Quality Control Plan: Satisfactory

Strengths include:

o The offeror details the specific methods and processes involved in the QC

processes with diligent standards (Section 3: Quality Control, page 7,

paragraph 3).

o Good PSO performance matrix and field inspections (Section 3, sub-

section Quality Evaluation Criteria, page 8 in its entirety).

Weakness include:

o No disciplinary action plan presented anywhere in Section 3, pages 7-8.

Deficiencies include:

o None

Factor 4 – Past Performance: Satisfactory

Strengths include:

o An offeror’s customer provided the past performance questionnaire with

satisfactory results.

51

Weakness include:

o None

Deficiencies include:

o None

Offeror 9: [redacted] Rating: Marginal

Offeror 9’s proposal demonstrates proper understanding to fulfill the

requirements set forth in the SOW. The offeror mentions a contingency

plan, and other required documentation and tasks to fulfill the requirement,

but they failed to present the actual plans. Offeror states they would

subcontract to achieve staffing levels which has shown to be a risk in Armed

Guards contract. Good quality controls are in place but no

disciplinary/corrective actions for PSO compliance are presented.

Factor 1 - Workplan: Marginal

Strengths include:

o Offeror demonstrates proper understanding of the requirement (Section

Workplan in its entirety).

Weakness include:

o Offeror states subcontracting to fulfill requirement (Section 1: Workplan,

page 2, paragraph [sic]

Deficiencies include:

o None

Factor 2 – Project Management Plan: Marginal

Strengths include:

o Offeror on “Section 2: Project Management Plan” the offeror establishes

a clear plan to execute the requirement with proper chain of command

(Section 2, page 6 paragraph 1, and page 7 in its entirety).

Weakness include:

o The offeror outlined some of the required management tasks in the

Workplan; however, management tasks for proper execution of contract

were not detailed anywhere in the proposal.

Deficiencies include:

o None

52

Factor 3 – Quality Control Plan: Marginal

Strengths include:

o Offeror states the development of a Quality Control Plan with some detail

(Section 3: Quality Control Plan page 8, paragraph 1).

Weakness include:

o The Quality Control Plan lacks management of corrective actions; the

offeror did not include the “Use of Force” policy and has no mention of

disciplinary actions. Contingency plan is not included and talks about

additional fees to cover the requirement if an abnormal situation arises

(Section 34, sub-section Contingencies, page 8, paragraph 1).

Deficiencies include:

o None

Factor 4 – Past Performance: Satisfactory

Strengths include:

o A previous customer of Offeror #9 completed and returned to the CO

[contracting officer] the Additional Quality Control Questionnaire with

“Outstanding” results.

Weakness include:

o None

Deficiencies include:

o None

(emphasis in original). After the evaluations of the first four factors, the original Award

Decision Memorandum for the 2019 RFP explained “[t]he price proposals for the

remaining Offerors 2 [AGMA], 6 [Ranger American of Puerto Rico], 8 [redacted] and 9

[redacted] were evaluated separately from the Technical evaluation,” and determined that

“[t]hose Offerors that were deemed technically acceptable were notified via email that the

performance period changed to one base period and a one-year option period, and a

price revision request was issued to Offerors 2, 6, 8 and 9.” The original Award Decision

Memorandum included a chart of the revised prices of each of the four responsible

offerors:

53

OFFEROR NAMES Qty Revised Revised TOTAL

Labor Hour Vehicles (3)

Hrs. Rates Daily Rate

OFFEROR 2: AGMA Security Service 295,288 $23.98 $90.00 per $14,359,040.54

Inc. [redacted] vehicle

OFFEROR 6: Ranger American of PR, Inc. 295,288 $29.07 $70.00 $17,321,257.11

[redacted]

OFFEROR 8: [redacted] 295,288 $25.64 $58.34 $15,270,243.24

OFFEROR 9: [redacted] 295,288 $28.25 N/C $16,683,772.00

The chart reflects that for the 2019 RFP, the lowest price was offered by AGMA, and the

highest price was offered by Ranger American of Puerto Rico, with [redacted] and

[redacted]in between. In the best value trade-off, the original Award Decision

Memorandum determined although Ranger American of Puerto Rico offered a superior

technical evaluation, that “there was no rational that substantiates paying a higher price

to Ranger when the same services could be provided from AGMA.” The original Award

Decision Memorandum for the 2019 RFP concluded: “Based on the integrated

assessment of all proposals in accordance with the specified evaluation factors, it is

hereby recommended that the award be made to AGMA under contract No.

70FBR220C00000006. AGMA’s proposal offers the best overall value to the Government

and price is determined to be fair and reasonable.”

Based on the information gleaned by the agency after issuing the original Award

Decision Memorandum for the 2019 RFP,16 it was reasonable in the protest currently

16 As noted above, for the 2019 RFP, after the original Award Decision Memorandum and

award to AGMA, Ranger American of Puerto Rico filed a protest at the GAO, and FEMA

took corrective action, terminated AGMA’s contract, issued a Revised Award Decision

Memorandum, and made the award to Ranger American of Puerto Rico. The court refers

to the original Award Decision Memorandum in the above analysis, because as the court

previously determined in its December 29, 2020 Opinion:

AGMA’s evaluation remained largely unchanged from the prior evaluation.

FEMA again evaluated AGMA as “Good” for Factor 1, “Satisfactory” for

Factor 2, “Satisfactory,” for Factor 3, “Neutral” for Factor 4, with no “known

past performance issues.” The Revised Award Decision Memorandum

noted that AGMA met “the minimum solicitation technical requirements,”

“AGMA received an overall rating of Satisfactory,” and the “(AGMA)

proposal was perfectly adequate.” The Revised Award Decision

Memorandum again concluded that AGMA offered a lower evaluated price

than Ranger American of Puerto Rico. If Ranger American of Puerto Rico’s

claims about the failures of AGMA’s proposal were the cause of the

corrective action it was not articulated by the contracting officer, nor is there

a reflection in the analysis after the corrective action. There is not even an

54

under review for the agency to conclude in the Market Research Report, that “[b]ased on

the responses to the prior solicitation, there were three responsible small businesses that

responded that could have performed the work. Two received technical ratings of

acceptable and one received a technical rating of marginal.”

As noted above, the Federal Circuit in Adams & Associates stated, “‘a reasonable

expectation’ that at least two responsible small businesses will submit bids at fair market

prices is all that is required.” Adams & Assocs. v. United States, 741 F.3d at 111. FEMA’s

Market Research Report for the solicitation under review was informed by the agency’s

experience with the 2019 RFP and the award process, provides sufficient evidence that

the contracting officer had a “reasonable expectation” that “fair market prices” could be

met with offers from “at least two responsible small business.” See id.; see also Res-Care

Inc. v. United States, 735 F.3d at 1390 (quoting Weeks Marine, Inc. v. United States, 575

F.3d at 1368–69) (“A contracting officer's decision to set aside a contract for small

businesses invokes ‘highly deferential rational basis review.’”).

Despite protestor Ranger American of Puerto Rico’s contention that the agency

“entirely failed to consider whether potential small business concerns are responsible or

likely to offer fair market prices,” FEMA’s history with the 2019 RFP evaluations

demonstrates that FEMA did have a reasonable expectation as to whether two or more

small business could meet the criteria of responsibility and a fair price. The agency had

previously made the first in a series of awards for the 2019 RFP to AGMA, which

demonstrates that it believed AGMA to be responsible and could offer a fair price. FEMA

also determined that two other small businesses, [redacted] and [redacted], offered

technically acceptable proposals, and both [redacted] and [redacted] offered proposals

explanation for why corrective action was warranted in the above captioned

protest in the Revised Award Decision Memorandum.

It is equally unexplained in the record before the court why the contracting

officer reached a different conclusion in the Revised Award Decision

Memorandum than the initial Award Decision Memorandum. Although the

contracting officer referenced each technical factor, past performance, and

price, and concluded that “Ranger’s proposal is significantly stronger and

offers the best-valued solution to the Government, and the price is

determined to be fair and reasonable,” the contracting officer made no effort

to distinguish the new award decision from the original decision by the

contracting officer awarding the contract to AGMA, or even compare the two

decisions. In fact, the contracting officer did not even mention the initial

award decision in her analysis. Additionally, there is no explanation for why

FEMA did not give offerors a chance to submit revised proposals after the

corrective action.

The Revised Award Decision Memorandum also retained mostly

unchanged numerical ratings from the initial Award Decision Memorandum.

AGMA Sec. Serv., Inc. v. United States, 152 Fed. Cl. at 164–65.

55

for a lower price than Ranger American of Puerto Rico, reflecting a belief that the

[redacted] and [redacted] were responsible offerors. Given the prior evaluations, it was

reasonable for the agency to conclude to believe there would be two or more responsible

offerors with fair market price offers. Ranger American of Puerto Rico also misstates the

obligation of FEMA when making a Rule of Two determination, FEMA was not obligated

“to consider whether potential small business concerns are responsible,” rather “a set-

aside determination requires only that the contracting officer have a reasonable

expectation that likely small business offerors will survive a future responsibility

determination.” Adams & Assocs. v. United States, 741 F.3d at 111. FEMA, by virtue of

the previous evaluations, had a reasonable expectation that two or more offerors would

be small businesses that could likely survive a responsibility determination. See id.

Finally, Ranger American of Puerto Rico contends “[t]he agency's decision is also

inadequately documented. The record lacks any explanation why FEMA issued numerous

prior procurements for the same services in the same location on a full and open basis

but then reversed course for the current RFP by restricting competition to small business

concerns.” Defendant correctly notes that “FAR 6.203 provides that ‘[n]o separate

justification or determination and findings is required . . . to set aside a contract action for

small business concerns.’” Defendant also acknowledges, “the documentation for the set-

aside decision may have been improved.’”17 The court notes that the while FEMA could

have been more through and careful throughout the many phases of the procurements to

procure Protective Service Officers and Patrolled Services for Puerto Rico and could have

provided more information in the Market Research Report for the Solicitation, as noted

above, the Market Research Report did explain that

[b]ased on the responses to the prior solicitation, there were three

responsible small businesses that responded that could have performed the

work. Two received technical ratings of acceptable and one received a

technical rating of marginal. All offered fair market prices. The previous

requirement was for 600+ armed guards. Due to the closure of multiple

facilities, the current requirement is significantly smaller, requiring fewer

than 200 armed guards. Because there were three small businesses that

17 As noted above, and given the time constraints as a result of the history of the

procurements at the agency and the agency’s lack of adequate planning earlier, the court

did not grant defendant’s request for remand and ins

This text is long and has been trimmed here. Open the source document for the complete record.