E&L Construction Group, LLC v. United States, 21-1765

The VA issued an IFB (SDVOSB set-aside) for work at Fort Sill; E&L Construction was the low bidder and received award notice.
Randy Kinder Excavating (intervenor) protested E&L’s SDVOSB status to the contracting officer, who referred the protest to SBA OHA; intervenor alleged the operating agreement limited veteran ownership.
On August 17, 2021, SBA OHA held E&L not unconditionally owned by a service-disabled veteran under the Wexford standard and directed removal from the VA VIP database; removal occurred August 20, 2021.
E&L filed a bid protest in the Court of Federal Claims challenging OHA’s application of the Wexford definition to the current 2018 regulatory definition of “unconditional ownership.”
The court found OHA’s explanation for continuing to apply Wexford after the 2018 regulatory revision inadequate and could not evaluate the legal position on the current record.
The court denied the parties’ motions for judgment on the administrative record and remanded to SBA OHA for a reasoned explanation; case stayed and parties directed to report on remand progress.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether OHA may apply the pre-2018 Wexford standard after 2018 regulatory revisions	Wexford was effectively overruled by the 2018 standardized regulation; OHA misapplied outdated precedent	OHA may continue to apply Wexford’s interpretation because the 2018 rule only added exceptions and left Wexford intact	Court: OHA did not adequately explain why Wexford governs post-2018; remand for reasoned explanation
Proper meaning of “unconditional ownership” under current regulation	The 2018 regulation (mirroring VA pre-2018 language) governs and permits a less draconian reading than Wexford	SBA contends the Wexford interpretation remains applicable and supports finding conditional ownership here	Court: Could not resolve on record; requested OHA to reconcile Wexford with 2018 regulation on remand
Adequacy of OHA’s reasoning in its August 17, 2021 decision	OHA failed to justify applying pre-2018 OHA precedent to the new rule; reasoning is insufficient	OHA relied on prior OHA decisions and rulemaking preambles to support its view	Court: OHA’s explanation was insufficiently reasoned; remand ordered for fuller explanation

Weeks Marine, Inc. v. United States, 575 F.3d 1352 (Fed. Cir. 2009) ("interested party" standing requirements in bid protests)
Bannum, Inc. v. United States, 404 F.3d 1346 (Fed. Cir. 2005) (two-step APA review in bid protests)
Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054 (Fed. Cir. 2000) (deferential review of contracting officer decisions)
Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312 (Fed. Cir. 2003) (prejudice/substantial chance standard)
Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365 (Fed. Cir. 1999) (prejudice requirement in procurement protests)
Veterans Contracting Group, Inc. v. United States, 135 Fed. Cl. 316 (Fed. Cl. 2017) (OHA’s pre-2018 interpretation of unconditional ownership)
Miles Construction, LLC v. United States, 108 Fed. Cl. 792 (Fed. Cl. 2013) (court interpretation of VA pre-2018 regulation)
AmBuild Company, LLC v. United States, 119 Fed. Cl. 10 (Fed. Cl. 2014) (court interpretation of VA pre-2018 regulation)
Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281 (U.S. 1974) (scope of arbitrary-and-capricious review)
Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (U.S. 1971) (review requires consideration of relevant factors)
Veterans Contracting Grp., Inc. v. United States, [citation="743 F. App'x 439"] (Fed. Cir. 2018) (dismissal noting 2018 rules affected Wexford’s viability)