RCD Cleaning Service, Inc. v. United States
2011 U.S. Claims LEXIS 552
| Fed. Cl. | 2011Background
- RCD filed a post-award bid protest on January 6, 2011 challenging SBA's decertification of RCD from the HUBZone program after the Army canceled an award and FMH was ultimately awarded the custodial services contract in Hawaii.
- FMH intervened; the contract at issue covered custodial services for numerous buildings on Oahu, Hawaii, with FMH the incumbent contractor.
- The administrative record was filed January 20, 2011 and corrected January 28, 2011; the court held oral argument on March 4, 2011.
- SBA decertified RCD from HUBZone on November 16, 2010; the Army terminated RCD’s contract on November 17, 2010 and awarded to FMH on December 2, 2010.
- RCD appealed SBA’s decertification; SBA's decision and RCD’s appeal were reviewed under a deferential standard in a bid protest context.
- The court denied the government’s 12(b)(1) dismissal and granted the defendants’ and intervenor-defendants’ cross-motions for judgment on the administrative record, denying RCD's motion for judgment on the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has bid-protest jurisdiction over SBA HUBZone decertification. | RCD asserts bid-protest jurisdiction lies since the challenge is procurement-related. | Defendant contends the matter could be CDA-related and not properly a bid protest. | Jurisdiction lies; the HUBZone decertification challenge fits bid-protest jurisdiction. |
| Whether RCD has standing to protest. | RCD had a substantial chance of performing the contract absent decertification. | No issue; standing disputed only if no direct economic interest. | RCD has standing; substantial chance of award/contract performance conferred standing. |
| Standard of review for judgment on the administrative record under RCFC 52.1. | Court should reexamine SBA’s decision's rational basis. | Apply deferential standard; review for rational basis and relevant evidence in the AR. | Deferential, rational-basis review; the record supports SBA’s decertification conclusion. |
| Whether SBA’s decertification decision was rational given the principal-office documentation requirements. | SBA’s requests were overbroad or improperly tailored, and RCD cooperated reasonably. | SBA’s requests and framework were proper; insufficient documentation undermined principal-office determination. | SBA’s decision to decertify was not irrational; SBA’s principal-office analysis and evidence were reasonable under the circumstances. |
Key Cases Cited
- ITAC v. United States, 316 F.3d 1312 (Fed. Cir. 2003) (standing requires a substantial chance of obtaining the contract)
- Rex Srv. Corp. v. United States, 448 F.3d 1305 (Fed. Cir. 2006) (standing requires direct economic interest)
- Banknote Corp. of Am. v. United States, 365 F.3d 1345 (Fed. Cir. 2004) (arbitrary and capricious review of procurement decisions)
- Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054 (Fed. Cir. 2000) (highly deferential standard in bid protests)
- Ala. Aircraft Indus., Inc.-Birmingham v. United States, 586 F.3d 1372 (Fed. Cir. 2009) (clear and prejudicial errors or irrational paths undermine decisions)
- RAMCOR Servs. Group, Inc. v. United States, 185 F.3d 1286 (Fed. Cir. 1999) (broad bid-protest jurisdiction covers procurement actions)
- Diversified Maint. Sys., Inc. v. United States, 93 F.3d 794 (Fed. Cl. 2010) (HUBZone protests fit bid-protest jurisdiction)
- Aeolus Sys., LLC v. United States, 79 Fed.Cl. 1 (Fed. Cl. 2007) (HUBZone decertification challenges fit bid-protest framework)
- Davis/HRGM Joint Venture v. United States, 50 Fed.Cl. 539 (Fed. Cl. 2001) (termination-for-convenience issue not proper bid protest focus)
- Diversified Maint. Sys., Inc. v. United States, 93 F.3d 794 (Fed. Cl. 2010) (underpinning authority for bid protest jurisdiction over HUBZone challenges)