Santa Barbara Applied Research, Inc. v. United States
2011 U.S. Claims LEXIS 732
| Fed. Cl. | 2011Background
- SBAR challenged an Air Force in-sourcing decision under 28 U.S.C. § 1491(b)(1) and related DoD guidance; the contract at issue is MWLS (IDIQ) with nine locations; DoD in-sourced non-fuels MWLS functions starting 2010–2012; Air Force re-evaluated the cost analysis due to errors and conducted multiple revised comparisons; DoD guidance (DTM 09-007) and Ike Skelton NDAA guided the in-sourcing process; SBAR sought injunctive and declaratory relief asserting misapplication of cost-analysis and guidance; the government moved to dismiss for lack of standing and failure to state a claim; the court denied the motion to dismiss and SBAR’s judgment on the administrative record, but granted the government’s cross-motion for judgment on the administrative record; the decision ultimately upheld the in-sourcing as not arbitrary or capricious.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge in-sourcing | SBAR is an interested party with likely future work | SBAR lacks standing under AFGE/Weeks, insufficient competitive injury | SBAR has standing under §1491(b)(1) |
| Claim states a viable challenge | SBAR alleges misapplication of DTM 09-007 | Discretionary in-sourcing limited by Lincoln; no standard of review | SBAR states a claim for relief |
| Standard of review under RCFC 52.1 | APA standard applies to arbitrary/capricious review | DoD decisions insulated by discretionary-judgment doctrine | APA standard applies; review is for rational basis or regulatory violation |
| Re-evaluation scope not arbitrary | Re-evaluation should focus on four bases not yet in-sourced | Re-evaluation was proper to assess overall cost savings | Including all nine locations in revised analysis not arbitrary or capricious |
| Cost accounting methodology | Full federal costs should be used | DTM 09-007 requires full costs to DoD; not required to include full federal costs | Use of DoD full costs per DTM 09-007 not arbitrary; QAEs treatment appropriate |
Key Cases Cited
- AFGE v. United States, 258 F.3d 1294 (Fed.Cir.2001) (interested party standing under §1491(b)(1))
- Weeks Marine, Inc. v. United States, 575 F.3d 1352 (Fed.Cir.2009) (competitive injury requirement in pre-award context)
- Distributed Solutions, Inc. v. United States, 539 F.3d 1340 (Fed.Cir.2008) (in-sourcing/competition context analogous to procurement challenges)
- LABAT-Anderson, Inc. v. United States, 65 Fed.Cl. 570 (2005) (standing to challenge cost-analysis decisions in A-76 context)
- Lincoln v. Vigil, 508 U.S. 182 (U.S. 1993) (agency discretion review; separation from Lincoln doctrine in in-sourcing)
- Banknote Corp. of Am. v. United States, 365 F.3d 1345 (Fed.Cir.2004) (APA standard of review for procurement decisions)
- Galen Medical Associates, Inc. v. United States, 369 F.3d 1337 (Fed.Cir.2004) (prudential standing in procurement protests)
- Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374 (Fed.Cir.2009) (interpretation of standing and review standards)