Relevant Cases

In an important victory for service-disabled veteran-owned (SDVO) firms, PilieroMazza helped to reverse an adverse SBA determination regarding the eligibility of an SDVO joint venture for a set-aside contract.  On appeal to the SBA’s Office of Hearings and Appeals (OHA), our attorneys challenged the SBA’s finding that an SDVO joint venture was ineligible for an SDVO contract because the joint venture was set up as an LLC.  The appeal argued that the SBA wrongly applied the SDVO regulations because the SBA ruled on the eligibility of the joint venture without discussing the specific SBA regulation that pertains to joint venture eligibility for contracting purposes.  The appeal also argued that two prior OHA decisions were wrongly decided because those cases found that a joint venture formed as a separate legal entity is treated differently under the regulations than a joint venture that is not formed as a separate legal entity.  In sustaining our appeal, OHA overturned its existing case law on this issue and ruled that the SBA’s regulations permit an SDVO joint venture to be formed as a separate legal entity.  As a result, SDVO firms and their joint venture partners may form joint ventures for SDVO contracts as separate legal entities such as an LLC, corporation, or partnership.

PilieroMazza successfully appealed a decision of the SBA’s Area Office finding a competitor of PilieroMazza’s client to be a small business.  In its decision, the SBA’s Office of Hearings and Appeals agreed with PilieroMazza’s contention that the competitor’s ongoing bankruptcy did not exempt it from affiliation with other businesses controlled by the bankruptcy trustee.   The Office of Hearings and Appeals further agreed with PilieroMazza that the competitor and three other companies were affiliated by virtue of common management.  As a result of the successful appeal, OHA vacated the SBA’s decision finding the competitor to be an eligible small business.

PilieroMazza successfully appealed an adverse SBA size determination to the SBA’s Office of Hearings and Appeals (“OHA”), enabling the appellant to resume self-certifying as small for government contracts. 

The appeal arose out of an SBA Area Office decision, analyzing the appellant’s size for purposes of its 8(a) application.  The Area Office found that the appellant was small as of the date of its application, but not small as of the date the Area Office issued the size determination.  In reversing the Area Office’s decision, OHA agreed with PilieroMazza the applicable regulation did not permit the Area Office to evaluate the appellant’s size as of the date of the size determination.  For 8(a) purposes, size is to be evaluated on two precise dates: the initial application date, and the date of certification as an 8(a) participant.  Because the appellant had not yet been certified as an 8(a) participant, the only relevant date, for size purposes, was the date of the appellant’s application, for which the appellant had already been found to be a small business.  OHA held that by also evaluating the appellant on the date of the size determination, the Area Office committed a clear error of law.

PilieroMazza assisted an intervenor in defending a contract award that was protested by Advanced Sciences & Technologies LLC (AS&T) to the Federal Aviation Administration’s (FAA) Office of Dispute Resolution for Acquisition (ODRA).  In the protest, AS&T challenged the contract award, which was made after a reevaluation mandated by the ODRA.  The re-evaluation was a result of a previous protest in which PilieroMazza obtained a favorable sustain decision from the ODRA on behalf of the eventual awardee (Protest of Columbus Technologies & Services, Inc., 10-ODRA-00514). 

AS&T, which was initially selected by the FAA but subsequently lost the award due to PilieroMazza’s successful protest against it, claimed that the FAA improperly awarded the contract upon re-evaluation.  Ruling against AS&T, the ODRA found that AS&T’s protest should be dismissed in part, and denied in part.  This conclusion was based on the ODRA’s determination that the FAA’s evaluation had a rational basis and was supported by substantial evidence; (2) that the FAA’s cost/technical tradeoff analysis and award decision was not improper; and (3) AS&T’s supplemental protest challenging portions of the FAA’s original evaluation was untimely.  As a result of the ODRA’s ruling, our client will be able to continue to perform work as the awardee on this very valuable FAA project.

PilieroMazza successfully defended a size protest that was filed against the awardee of a NASA contract.  The size protest made allegations of ostensible subcontractor, identity of interest, and totality of the circumstances affiliation.  Our attorneys worked with the SBA to demonstrate that there was no merit in any of the protest allegations.  The SBA agreed and denied the size protest, finding that our client was an eligible small business for the procurement.  As a result, our client can proceed with the contract award.

PilieroMazza obtained a favorable sustain decision from the FAA’s Office of Dispute Resolution for Acquisition (ODRA) in bid protest we filed on behalf of the protester.  Our protest principally challenged the FAA’s evaluation of past performance and corporate experience, as well as how discussions were conducted.  Regarding past performance and corporate experience, the issue was whether the FAA properly gave the awardee credit for the experience of another firm that was not a predecessor to the awardee or a team member for the project.  As for discussions, the issue was whether the FAA reasonably opened technical discussions with the awardee when there was a clear winner at the conclusion of the evaluation and there were no significant weaknesses or deficiencies in the awardee’s proposal. 

In sustaining both grounds of protest, the ODRA distinguished existing precedent regarding the evaluation of predecessor company experience.  The ODRA also clarified when discussions with offerors result in an improper “second bite at the apple.”  As a result of the ODRA’s ruling, the protester will now receive another opportunity to win the contract through the FAA’s reevaluation, which must be performed in accordance with the ODRA’s decision. 

The U.S. Government Accountability Office (GAO) sustained a bid protest PilieroMazza brought on behalf of J2A² Joint Venture, LLC (J2A²).  The protest, which challenged the Department of Veterans Affairs’ award of a construction contract to another offeror, was upheld because GAO found that the agency’s evaluation had been unreasonable and improper.

The protest centered on the terms of the Request for Proposals (RFP), which included a “corporate experience” factor calling for the general contractor to possess at least five years of experience.  Despite this black-and-white requirement, the agency made award to a contractor with less than two years of experience.  PilieroMazza argued that the agency had violated the RFP’s evaluation scheme by making award to an insufficiently experienced offeror. 

The GAO agreed with the protest, writing in its decision that because the awardee had been in business for less than two years, it “does not have 5 years of experience as a general contractor.”  Accordingly, “the contracting officer could not reasonably conclude” that the awardee satisfied the RFP’s experience requirements.

PilieroMazza obtained a favorable size protest decision on behalf of an intervenor after it's appeal against Condor Reliability Services (Condor).  The intervenor challenged Condor’s size status primarily based on a familial identity of interest between Condor’s owner and the owner of another company, Alpa Technology and Services (Alpa).  The Small Business Administration (SBA) Area Office agreed that Condor and Alpa were affiliated and thus Condor was found to be ineligible for the procurement. 

Condor appealed the Area Office’s decision to the SBA’s Office of Hearings and Appeals (OHA) and argued that the Area Office relied on irrelevant facts in making its determination. Namely, Condor asserted that the respective owners of Condor and Alpa own only a minority interest in the other’s company, which means that neither has the ability to control the other’s company.  Condor also argued that a familial relationship cannot form the basis of affiliation on its own.  Finally, Condor claimed that the SBA was prevented from finding affiliation between Condor and Alpa because the SBA did not previously question the relationship when it approved Alpa’s 8(a) application. 

OHA’s ruling agreed with PilieroMazza’s responsive pleading and confirmed existing precedent regarding affiliation between family members.  This precedent holds that when there is a familial identity of interest, a clear fracture must be shown to rebut the presumption of affiliation.  In this case, OHA rejected Condor’s argument that affiliation between Condor and Alpa did not exist since the respective owners only held a minority interest in the other’s company.  OHA made clear that when family members are involved, the issue is not whether each family member has the ability to control the other’s company but whether there is a clear fracture between the two; even a minority ownership interest in the other’s company is a sign that sufficient fracture is lacking.  OHA also found that a familial relationship alone can form the basis of affiliation when there is no mentor/protégé relationship between the two family members’ companies.  And lastly, OHA rejected Condor’s assertion that the SBA was estopped from enforcing its size regulations because of the SBA’s previous handling of Alpa’s 8(a) application.  According to OHA, for such an argument to be successful, Condor must demonstrate that the SBA committed affirmative misconduct and there was no such allegation, let alone determination, in this case.

Washington Metropolitan Transit Commission Order No. 12,282 (2010) 

PilieroMazza represented a respondent in its successful defense against a complaint filed by Executive Technology Solutions, LLC (ETS) before the Washington Metropolitan Area Transit Commission (WMATC).  ETS' complaint alleged that the respondent had engaged in the advertising, promotion, offering for sale, and/or sale of for-hire transportation services in violation of of the Washington Metropolitan Area Transit Regulation Compact (the Compact), which regulates private sector motor carriers transporting passengers for hire within the Washington Metropolitan Area Transit District (the District), including Washington, D.C. and parts of Maryland and Virginia.  A knowing or willful violation of the Compact can result in the operator losing its Certificate of Authority to operate within the District.

In agreeing with PilieroMazza’s arguments, WMATC held that while there was some evidence that the Compact may have been violated, it was not done so willfully or with "intentional or careless disregard or plain indifference."  As such, WMATC assessed the respondent a small fine, but allowed it to continue operating within the District.  This victory allowed the respondent to continue performing its government contracts without interruption.

PilieroMazza represented a contractor in a successful bid protest against its exclusion from award of a U.S. Army Corps of Engineers contract valued in excess of $1 billion.  After filing a protest with the GAO challenging the agency’s improper discussions and failure to evaluate consistent with the stated evaluation criteria, the GAO recommended that the agency take corrective action.  The agency concurred and as corrective action issued a contract award to our client.  This means that our client now has the ability to pursue work on this very valuable and important project.

PilieroMazza represented an intervenor in its successful size protest against Smart Data Solutions, LLC (Smart Data).  After the Small Business Administration (SBA) Area Office determined Smart Data to be other than small for an Air Force Air Combat Command procurement based on the ostensible subcontractor rule, Smart Data appealed to the SBA’s Office of Hearings and Appeals (OHA).  On appeal, Smart Data sought to overturn the Area Office’s decision by asserting, among other arguments, that Smart Data’s ostensible subcontractors were not the incumbents and that Smart Data would provide the key personnel and perform the project’s primary and vital requirements.  PilieroMazza intervened in the appeal on behalf of the intervenor, reviewed the Area Office record, and filed a response to the appeal noting several reasons why the Area Office’s decision did not contain clear errors of fact or law. 

In agreeing with PilieroMazza’s arguments, OHA held that Smart Data was affiliated with its ostensible subcontractors because those firms were the incumbents and would perform the primary and vital requirements.  Based on Smart Data’s proposal, OHA found unusual reliance because the primary and vital weather forecasting and maintenance requirements would be performed by the subcontractors, not Smart Data, and all of the key personnel are employed by the subcontractors.  OHA also noted that Smart Data’s lack of experience with the primary and vital requirements, and the proposal’s repeated references to “we” and “our” when discussing the Smart Data “team’s” capabilities and experience, indicated that Smart Data “knew it did not have the requisite experience to gain award of the contract . . . unless it took credit for the experience of or combined with [the ostensible subcontractors.]”

Another reason OHA upheld the Area Office’s decision was because Smart Data’s teaming agreements with the ostensible subcontractors indicated that Smart Data did not have sufficient bargaining power.  This was because the teaming agreements permitted the subcontractors to walk away from the arrangement if the procurement’s NAICS code changed.  Furthermore, OHA found that Smart Data’s proposal was indicative of a joint venture, and thus affiliation, due to Smart Data’s repeated and overbroad references to “we” and “our,” the establishment of an “Executive Committee,” and because the proposal failed to specifically describe the work each party would perform.     

PilieroMazza assisted an intervenor in defending a contract awarded to the company that was protested multiple times by NEQ, LLC (NEQ) to the Government Accountability Office (GAO) and then to the U.S. Court of Federal Claims (COFC).  The contract in question was awarded to the intervenor by the Environmental Protection Agency (EPA) for the performance of emergency and rapid response services in EPA’s Region 5 (consisting of Illinois, Indiana, Ohio, Michigan, Wisconsin, and Minnesota). 

In protesting the award to the intervenor, NEQ made a number of arguments, all of which the COFC rejected.  First, NEQ argued that the EPA improperly used unstated evaluation criteria when evaluating the offerors’ proposals by placing emphasis on the intervenor's proximity to major population centers in Region 5 while failing to give similar credit to NEQ for having its main bases of operation in rural areas.  Second, NEQ alleged that EPA erroneously gave the intervenor credit for certain limited-purpose specialty subcontractors because those specialty subcontractors did not provide letters of intent in the intervenor's proposal.  Lastly, NEQ asserted a multitude of other arguments that purported to show the impropriety of the EPA’s award to the intervenor. 

In its ruling, the COFC rejected all of the arguments put forth by NEQ.  Specifically, the COFC found that the EPA reasonably took the intervenor's proximity to major population centers into account when giving the intervenor higher technical ratings than those given to NEQ.  The COFC based its decision upon the fact that, while the solicitation did not specifically indicate that proximity would be an evaluation factor, it did state that offerors had to respond to major population centers within four hours of an emergency being reported, but that they only had to respond in six hours to rural areas.  The COFC also stated that the EPA could rely upon the intervenor's specialty subcontractors despite the fact that no letters of intent were provided because the other language in that proposal made it clear that the intervenor had an ongoing working relationship with such named specialty subcontractors.  The rest of NEQ’s arguments were summarily rejected by the COFC.

PilieroMazza assisted an intervenor in defending a contract award that was protested by FPM Remediations, Inc. (FPM) to the U.S. Government Accountability Office (GAO).  The RFP in this case was a small business set-aside and contemplated multiple IDIQ contracts with award of at least one contract to a SDVOSB firm, one contract to an 8(a) firm, and one contract to a HUBZone firm, plus up to three contracts to small businesses.  Offerors that competed unsuccessfully for a SDVOSB, 8(a), or HUBZone award were then considered for one of the small business contracts. 

FPM, which was initially selected by the Army Corps of Engineers (Corps) as the HUBZone awardee but subsequently lost the award due to a successful HUBZone protest against it, claimed that the Corps improperly failed to consider FPM for one of the small business awards.  Ruling against FPM, the GAO found that FPM did not establish a valid basis for challenging the Corps’ actions since FPM’s inaccurate representation that it was an eligible HUBZone firm resulted in its selection for the HUBZone award, which in turn made FPM unavailable when the remaining small business awards were made.  Therefore, GAO held that FPM, not the Corps, was responsible for FPM not being considered for a small business award and the protest was dismissed.           

PilieroMazza represented a protester in its successful and well-publicized bid protest to the U.S. Government Accountability Office (GAO).  This protest was the first of its kind under the GAO's new authority to hear protests of task orders valued in excess of $10 million.  Ruling in our client's favor, the GAO established significant precedent for the application of small business set-aside requirements to task orders

The protest alleged that the agency (1) failed to comply with the set-aside provisions of Federal Acquisition Regulation (FAR) § 19.502-2(b), when issuing, on an unrestricted basis, the solicitation for a delivery order under multiple-award contracts; and (2) erred in concluding that it had no reasonable expectation of receiving offers from two small businesses is sustained where the record shows that the agency's set-aside determination is not adequately supported by the record.  In sustaining the protest, GAO specifically determined that the set-aside provisions of the FAR apply to competitions for task and delivery orders issued under multiple-award contracts.

PilieroMazza represented a disappointed bidder in its challenge of an SBA size ruling.  In this case the Office of Hearing Appeals (OHA) determined that two parties to a nonbinding Letter of Intent (LOI) were affiliated at the time one of the companies submitted a proposal on a small business set-aside contract even though the proposal was submitted before the acquisition was finalized but after the LOI was executed.  The deal was consummated prior to award of the contract, and a size protest filed.

OHA held that the LOI constituted an “agreement in principle” between the parties and, thus, must be given present effect.  Because an agreement in principle was found as of the date the proposal was submitted, the two entities were deemed to be affiliated and the small business was deemed ineligible for the small business set-aside.  Upon appeal, the U.S. Court of Federal Claims upheld the OHA ruling.

This ruling is a departure from practitioner understanding of the present effect rule.  Small businesses need to keep this ruling in mind when considering mergers and acquisitions that will affect their size status.

PilieroMazza represented an appellant in its successful appeal of an Small Business Administration (SBA) Area Office's determination that its proposal violated the ostensible subcontractor rule.  The ostensible subcontractor rule provides that when a subcontractor is actually performing the primary and vital requirements of the contract, or the prime contractor is unusually reliant upon the subcontractor, the two firms must be found to be affiliated.  In making its determination, the Area Office relied primarily on the the fact that the subcontractor had greater experience in the field.

In overturning the Area Office's finding of affiliation, the Office of Hearings and Appeals (OHA) stated that the Area Office "comes perilously close to making a responsibility determination, in making its own judgments as to Appellant's capacity to perform the contract."  OHA specifically states that these judgments should be left to the contracting officer and are outside the purview of the size appeal process.  Notably, OHA recognized that "[t]o place too much emphasis on the challenged firm's prior experience in making an ostensible subcontractor determination runs the risk of closing the door on new small firms entirely."

PilieroMazza represented an appellant in its successful appeal of an adverse U.S. Small Business Administration (SBA) size determinations.  This appeal confirmed important parameters regarding the application of the SBA's 8(a) joint venture regulations to joint ventures for non-8(a) contracts.

The appellant was a joint venture seeking to compete for a small business set-aside, not an 8(a) procurement. The Area Office reviewed the joint venture agreement under the regulations targeted to joint ventures performing 8(a) contracts. Because it found that a protégé firm brought little to a joint venture arrangement, it determined that the firm did not meet the joint venture requirements and thus, was not entitled to the joint venture exception from affiliation.  On appeal, the Office of Hearings and Appeals (OHA) reversed the Area Office’s size determination and found that the appellant, an SBA-approved joint venture between an 8(a) protégé firm and mentor was a small business for the procurement.       

OHA has consistently held that 8(a) regulations do not apply to procurements that are outside the 8(a) program.  Further, because OHA had recently determined that it will not review mentor-protégé issues (See White Hawk/Todd, A Joint Venture , supra ), it stated that it had no authority to review the present case.

PilieroMazza successfully represented a protestor in challenging the General Services Administration’s (“GSA”) award of its $50 billion “Alliant” government-wide acquisition contract for the provision of a large percentage of the federal government’s information technology products and services for up to the next 10 years.   In overturning the award, the Court of Federal Claims agreed with the protesters’ arguments that the GSA’s decision was arbitrary and capricious.  Specifically, the court found that GSA’s decision was improper due to its (1) reliance on past performance surveys that were ill designed to solicit the actual information needed to perform a proper evaluation; (2) placing of undue significance on technical calculations that suffered from false precision; and (3) failing to conduct a proper price reasonableness analysis prior to making its award determinations.

First, the court, in agreeing with the protesters’ arguments, found that the offerors, especially the protesters, were treated unequally with regard to how their past performance was evaluated.  These uneven evaluations were due to the fact that the GSA asked questions of the offerors past performance references that were extremely generic.  Instead of asking references to give specific adjectival ratings (i.e., “excellent,” “very good,” etc.), the GSA’s questionnaires simply asked questions similar to “how was the contractors performance.”  The record before the court showed that some responses used the term “excellent,” some said “very well,” and still others said “phenomenal success.”  The problem the court found, however, was that those evaluating the questionnaires did not have any way of quantifying  what each response meant because the responses were so subjective.  One individuals could have said “excellent” and meant the same exact thing as the other individual that said “very well.”  Because it was impossible for the evaluators to objectively review these subjective responses, the court found that the GSA’s reliance upon those questionnaires was arbitrary and capricious. 

Next, the court agreed with the protesters’ arguments that the way GSA calculated the offerors’ numeric technical scores suffered from an unacceptable level of false precision.  Specifically, each of the GSA’s evaluators assigned an adjectival rating to each offeror for the various factors/subfactors.  Those adjectival ratings were then converted into a single digit numerical scores of 1 through 5.  By a process of averaging and re-averaging these single digit numerical scores, GSA created scores that, instead of being single digits, had precision down to the thousandths place (i.e., 4.225).  Because, as the court found, the rules of statistical accuracy state that mathematical calculations cannot create true precision, the court classified these averages as being falsely precise.  As such, it was arbitrary and capricious for the GSA to rely upon differences in the tenth, hundredth, or thousandths decimal place when ranking the offerors where the initial scores were merely single digits.  In effect, anything more precise than a single digit, without taking into account the significance, from a statistical perspective, of any additional digits to the right of the decimal point.

Lastly, and again finding merit in the protesters’ arguments, the court found that GSA failed to properly consider offerors’ prices when making its award determination.  The record before the court showed that some of the awardees had pricing that was more than 2 standard deviations both above and below the mean overall price among all offerors yet the GSA found all such pricing to be “reasonable.”  The court found a finding of reasonableness despite such wide deviations in price was arbitrary and capricious.

For all these reasons, the court overturned the awards made under the GWAC and ordered the GSA to perform a new evaluation.  As a result, the protester represented by PilieroMazza received one of the GSA “Alliant” contracts.