Adams and Associates, Inc. v. United States
2014 U.S. App. LEXIS 1510
| Fed. Cir. | 2014Background
- Adams & Associates is incumbent operator of the Gadsden and Shriver Job Corps Centers and is barred from bidding due to the centers’ small-business set-aside status.
- DOL used RFIs to assess market interest and, after NAICS sizing, designated the contracts as small-business set-asides.
- Gadsden contract was set aside for small businesses in May 2012; Shriver contract followed in October 2012.
- Adams filed two pre-award bid protests in the Court of Federal Claims; the court denied Adams’s motion and granted the United States’ cross-motion.
- DOL regulations applying Small Business Act and Competition in Contracting Act were promulgated to implement the Workforce Investment Act procurement framework; the DOL’s rulemaking authority is challenged but upheld here.
- The court affirms the decisions denying Adams relief and sustaining the DOL’s small-business set-aside determinations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether WIA requires open competition or permits SB set-asides | Adams: competitive basis means open competition among all eligible entities | United States: competitive basis allows SB set-aside within WIA framework | DOL may use SB set-aside procedures under WIA |
| Whether DOL had authority to promulgate regulations applying CICA/FAR to WIA procurements | Adams: DOL lacked delegated authority; Chevron deference denied | United States: DOL properly promulgated regulations under WIA with Chevron deference | DOL regulations were authorized and properly applied |
| Whether the DOL correctly performed the fair proportion determination before the Rule of Two | Adams: must perform fair proportion as a contract-specific step | United States: fair proportion is an overarching determination; need not be per-contract | DOL satisfied the fair proportion determination |
| Whether the Rule of Two was correctly applied in Gadsden and Shriver | Adams: market research must address responsibility and price reasonableness per contract | United States: market research supports a reasonable expectation of two small business offers at FMV | Rule of Two properly applied; decision not arbitrary |
Key Cases Cited
- Dysart v. United States, 369 F.3d 1303 (Fed. Cir. 2004) (standard of review for agency action in bid protests)
- Haselrig v. United States, 333 F.3d 1354 (Fed. Cir. 2003) (statutory interpretation and de novo review)
- Bannum, Inc. v. United States, 404 F.3d 1346 (Fed. Cir. 2005) (arbitrary or capricious review of procurement decisions)
- Res-Care, Inc. v. United States, 735 F.3d 1384 (Fed. Cir. 2013) (supports limited open competition and SB set-aside reasoning for Job Corps)
- Schism v. United States, 316 F.3d 1259 (Fed. Cir. 2002) (Chevron analysis framework and regulatory authority)
- Res-Care, Inc. v. United States, 735 F.3d 1384 (Fed. Cir. 2013) (concludes selective competition under SB set-aside satisfies ‘competitive basis’)