Resource Management Concepts, Inc. v. U.S. Small Business Administration
Civil Action No. 2020-3416
| D.D.C. | Mar 31, 2022Background:
- SBA regulatory framework: the Small Business Act and SBA regulations govern when a concern is "small" for set-aside contracts; timing rules in 13 C.F.R. § 121.404 determine when size is measured for MACs and task orders.
- 2013 rule: size generally determined at time of the initial offer for the MAC; if small at MAC award, no recertification required for task orders unless contracting officer asks.
- 2020 Regulations: amended timing for unrestricted MACs that required price at initial offer—size must be recertified at the time of each task-order proposal (i.e., businesses must recertify at order stage).
- Plaintiff (Resource Management Concepts) holds a Seaport‑NxG IDIQ MAC awarded Jan 2019 (no price required at MAC stage); it was small when awarded, invested ~$1–1.5M to compete for small‑business task orders, but outgrew small status by Jan 1, 2021.
- Plaintiff sued (Nov. 24, 2020) challenging the 2020 Regulations as retroactive and unlawful; during summary‑judgment briefing the SBA issued a 2021 "correcting amendment" reinstating a provision stating that for IDIQ MACs where price was not required at the MAC offer, size is determined at the date of initial offer (i.e., MAC award).
- Procedural posture: parties cross‑moved for summary judgment; the court denied both motions without prejudice because the case’s mootness depends on the correct reading of the 2021 correction and whether recertification is required for Seaport‑NxG task orders.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2021 "correction" moots the case by restoring MAC‑stage size determination for Seaport‑NxG (an IDIQ MAC that did not require price at award) | The 2021 correction restores the pre‑2020 rule for IDIQ MACs without price, so Resource Management remains small for task orders and the dispute is moot | The correction only addresses IDIQ MACs that did not require price; the 2020 Regulations control size at the task‑order stage for unrestricted MACs, so the case remains live | Court rejected SBA's reading of the correction as inconsistent with regulatory text; case may be moot depending on whether recertification is required, so summary judgment denied without prejudice |
| Whether summary judgment is appropriate now given the jurisdictional (mootness) question and regulatory ambiguity | Plaintiff says mootness eliminates the controversy, supporting dismissal/resolution | SBA says substantive rules still apply and case is not moot, supporting judgment for defendants | Because mootness (jurisdictional) is unresolved and parties haven’t fully briefed the fallback rule if the 2020 regs don’t apply, court denied both summary‑judgment motions and ordered further proceedings |
Key Cases Cited
- Huashan Zhang v. U.S. Citizenship & Immigration Servs., 978 F.3d 1314 (D.C. Cir. 2020) (courts must follow plain meaning of regulatory text)
- Callahan v. U.S. Dep't of Health & Hum. Servs., 939 F.3d 1251 (11th Cir. 2019) (scope‑of‑subparts canon: indented subparts relate only to that subpart)
- Kingdomware Techs., Inc. v. United States, 579 U.S. 162 (2016) (task orders can be treated as separate/new contracts)
- Spencer v. Kemna, 523 U.S. 1 (1998) (injury‑in‑fact must persist throughout litigation for Article III jurisdiction)
- Preiser v. Newkirk, 422 U.S. 395 (1975) (federal courts cannot issue advisory opinions)