Straughan Environmental, Inc. v. United States
15-1217
| Fed. Cl. | Nov 6, 2017Background
- NASA issued a total small-business set-aside RFP for environmental and health services at KSC/Cape Canaveral (KEMCON); proposals due January 2015. IMSS (a JV of small HSG and large InoMedic) certified small status based on an SBA‑approved mentor‑protégé agreement.
- IMSS was the only offeror placed in the competitive range; Straughan was excluded and protested to GAO (denied). NASA awarded the contract to IMSS in September 2015; first option later exercised.
- The CO requested a formal SBA size determination focused on whether the mentor‑protégé agreement was in effect when IMSS submitted its offer (Jan 5/6, 2015). SBA initially found IMSS other‑than‑small (Jan 2016) because the December 19, 2013 mentor‑protégé approval had not been timely extended before its one‑year expiration.
- After appeals/remand and additional SBA area‑office factual material, SBA issued a June 13, 2016 remand size determination finding IMSS small (concluding the agreement effectively was in place as of the offer date). Straughan timely appealed that determination to OHA, which dismissed for lack of standing.
- Straughan then sued in the Court of Federal Claims, challenging SBA’s June 13, 2016 determination and NASA’s competitive‑range decision. The court found SBA’s size determination unlawful but denied injunctive relief to set aside the contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge SBA size determination | Straughan: CO’s request for a formal SBA size determination makes later SBA decision reviewable; Straughan timely appealed and is an adversely affected party because IMSS was sole competitive‑range offeror. | Govt: Straughan failed to file a 5‑day FAR size protest and OHA already dismissed for lack of standing, so CFC lacks jurisdiction. | CFC: Straughan has standing — CO’s requested size determination makes review timely; OHA’s standing dismissal was wrong because IMSS was the lone competitive‑range offeror. |
| Ripeness / whether CFC should hear merits vs. remand to OHA | Straughan: OHA’s dismissal was erroneous; CFC can review SBA’s June 13 decision as connected to the procurement. | Govt: OHA has exclusive review jurisdiction; CFC should not decide merits after OHA dismissed. | CFC: CFC may review the SBA decision here; remand would be futile given SBA’s published positions. |
| Whether SBA lawfully concluded IMSS had an approved mentor‑protégé agreement as of offer date | Straughan: Agreement expired Dec. 19, 2014 for failure to request/obtain 60‑day written extension; letters dated after Jan 6, 2015 cannot cure lack of approval on the offer date; OHA precedent requires pre‑offer evidence. | SBA/IMSS: Annual 8(a) reviews and subsequent BOS letters show SBA effectively extended/approved the mentor‑protégé relationship, making IMSS eligible. | CFC: SBA’s June 13, 2016 determination was contrary to the mentor‑protégé agreement language, applicable SBA regulation (as then written), and OHA precedent; IMSS did not have an approved agreement on the offer date. |
| Remedy — injunctive relief / setting aside award | Straughan: Having prevailed on the merits, it seeks injunction setting aside award and/or reprocurement. | Govt/IMSS: Injunction would cause serious service disruption, workforce harms, large reprocurement costs; plaintiff’s harm is speculative lost profits. | CFC: Denied injunctive relief — balance of hardships and public interest favor leaving the award intact given service disruption, time elapsed, and option exercised. |
Key Cases Cited
- Palladian Partners, Inc. v. United States, 783 F.3d 1243 (Fed. Cir.) (SBA decisions may be "in connection with" a procurement and fall within CFC bid‑protest jurisdiction)
- Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir.) (standard for reviewing procurement decisions under APA § 706)
- Centech Grp., Inc. v. United States, 554 F.3d 1029 (Fed. Cir.) (four‑factor injunction test in bid protest context)
- PGBA, LLC v. United States, 389 F.3d 1219 (Fed. Cir.) (injunction standard and balance of harms)
- Corus Staal BV v. United States, 502 F.3d 1370 (Fed. Cir.) (administrative appeal may be excused where futile)
- Bowman Transp., Inc. v. Arkansas‑Best Freight Sys., Inc., 419 U.S. 281 (U.S.) (court may not substitute its judgment for agency when decision is reasonable)
- Weeks Marine, Inc. v. United States, 575 F.3d 1352 (Fed. Cir.) (CICA standing requirements for bid protests)
- Digitalis Educ. Sols., Inc. v. United States, 664 F.3d 1380 (Fed. Cir.) (prejudice requirement: must show substantial chance of winning but for error)