              In the United States Court of Federal Claims
                                         No. 12-694 C
                                     (Filed June 5, 2013)1
 * * * * * * * * * * * * * * * *                  *
 ADVANCED AMERICAN                                *
 CONSTRUCTION, INC.,                              *   Pre-Award Bid Protest;
                                                  *   Post-Award Bid Protest;
                   Plaintiff,                     *   Standing; Blue & Gold Fleet;
                                                  *   Documented Market Research;
              v.                                  *   8(a) Business Development
                                                  *   Program; FAR 10.001;
 THE UNITED STATES,                               *   FAR 10.002; FAR 19.805-1;
                                                  *   Special Standards of
                   Defendant.                     *   Responsibility.
                                                  *
 * * * * * * * * * * * * * * * * *

       Joseph A. Yazbeck, Jr., with whom was D. Brent Carpenter, Portland, OR,
for plaintiff.

       David A. Levitt, United States Department of Justice, with whom were
Stuart F. Delery, Principal Deputy Assistant Attorney General, Jeanne E.
Davidson, Director, Claudia Burke, Assistant Director, Washington, DC, for
defendant. Tyler Moore and Thomas J. Warren, United States Army Corps of
Engineers, of counsel.
                       _______________________________

                              OPINION AND ORDER
                         ________________________________



       1
        / This opinion was issued under seal on May 10, 2013. Pursuant to ¶ 4 of the ordering
language, the parties were invited to identify source selection, proprietary, or other confidential
material subject to deletion on the basis that the material was either protected or privileged.
On May 24, 2013, the parties filed a notice indicating that they had no proposed redactions to the
opinion. Thus, with the exception of this footnote and the publication date, the public and sealed
versions of this opinion are identical.
Bush, Judge.

       Advanced American Construction, Inc. (AAC) filed its pre- and post-award
bid protest complaint in this court on October 15, 2012. In its complaint, AAC
challenges the decision of the United States Army Corps of Engineers (the Corps
or agency) to set aside a contract under Solicitation No. W912EF-12-B-0022
(the IFB) for competition among 8(a) small business concerns. AAC also
challenges the award of that contract to TSS-Garco Joint Venture (TSS-Garco).
The subject contract is for the construction of a new barge moorage facility on the
north side of the Snake River at Lower Granite Dam near Pomeroy, Washington.
Defendant has agreed to stay performance of the contract until the court resolves
this protest on the merits.2

       This bid protest is now before the court on defendant’s motion to dismiss the
complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the United States
Court of Federal Claims (RCFC), and on the parties’ cross-motions for judgment
on the administrative record pursuant to RCFC 52.1. Because plaintiff has
standing in this case and did not waive its pre-award challenges to the IFB, the
court hereby denies defendant’s motion to dismiss the complaint. For the reasons
discussed below, however, the motion for judgment on the administrative record
filed by defendant is granted, and the cross-motion filed by plaintiff is denied.

                                      BACKGROUND

I.     Factual Background

      On July 30, 2012, the Walla Walla District of the Corps issued the IFB. See
AR Tab 13. Because most of AAC’s challenges to the procurement are based on
the agency’s decision to offer the contract to the Small Business Administration
(SBA) as an 8(a) set-aside, the court’s recitation of the facts in this case are
focused primarily on events that occurred before the IFB was issued by the Corps.

       2
        / See AR at 3110 (continuing the suspension of performance that had been triggered by
AAC’s earlier protests to GAO). The IFB states that all in-water work under the contract was to
be completed between December 15, 2012, and February 28, 2013. Id. at 168. In continuing the
suspension of performance, the contracting officer explained that the time lost during the earlier
GAO bid protest “create[d] a high risk of not completing this project within the in-water work
window required by the contract.” Id. at 3110.

                                                2
       A.      The 8(a) Business Development Program

       In 1978, Congress amended the Small Business Act to establish the 8(a)
business development program. Pub. L. No. 95-507, sec. 202, 92 Stat. 1757, 1761
(1978) (codified as amended at 15 U.S.C. § 637 (2006)). Under that program, a
procuring agency may offer a contract to the SBA as a prime contractor, which
then subcontracts the requirements of that contract to small business concerns
owned and controlled by socially and economically disadvantaged individuals,
otherwise known as 8(a) firms.3 See 15 U.S.C. § 637(a)(1)(A)-(B). Generally,
set-aside contracts with a value below the competitive acquisition threshold –
currently, $4 million for construction contracts – are awarded on a sole-source
basis, while contracts with a value above that threshold are competed among 8(a)
firms. See id. § 637(a)(1)(D)(i); 13 C.F.R. § 124.506 (2013); 48 C.F.R. § 19.805-1
(2012).

       Under the Small Business Act, the president is required to establish goals for
the percentage of procurement contracts awarded to various types of small business
concerns in each year. 15 U.S.C. § 644(g)(1) (2006). For the 8(a) program, the
Act provides that the government-wide goal must be at least five percent of the
total value of all prime contract and subcontract awards in each fiscal year. Id.
Individual agencies are also required to establish their own contracting goals,
which are to represent “the maximum practicable opportunity for small business
concerns, small business concerns owned and controlled by service-disabled
veterans [SDVOSBs], qualified HUBZone small business concerns, small business
concerns owned and controlled by socially and economically disadvantaged
individuals, and small business concerns owned and controlled by women.” Id.

      The SBA and the Department of Defense, of which the Corps is a part, have
entered into a partnership agreement, under which the Corps is authorized to award

       3
         / The Small Business Act defines socially disadvantaged individuals as “those who have
been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member
of a group without regard to their individual qualities,” 15 U.S.C. § 637(a)(5), while
economically disadvantaged individuals are those socially disadvantaged individuals
“whose ability to compete in the free enterprise system has been impaired due to diminished
capital and credit opportunities as compared to others in the same business area who are not
socially disadvantaged,” id. § 637(a)(6)(a).

                                                3
contracts to the 8(a) firms directly. See AR at 1081-91. Section 19.803 of the
Federal Acquisition Regulation (FAR) describes the process for selecting
acquisitions for the 8(a) program:

             Through their cooperative efforts, the SBA and an
             agency match the agency’s requirements with the
             capabilities of 8(a) concerns to establish a basis for the
             agency to contract with the SBA under the program.
             Selection is initiated in one of three ways —

                    (a)   The SBA advises an agency contracting
                          activity through a search letter of an 8(a)
                          firm’s capabilities and asks the agency to
                          identify acquisitions to support the firm’s
                          business plans.
             ....
                    (b)   The SBA identifies a specific requirement
                          for a particular 8(a) firm or firms and asks
                          the agency contracting activity to offer the
                          acquisition to the 8(a) Program for the
                          firm(s).
             ....
                    (c)   Agencies may also review other proposed
                          acquisitions for the purpose of identifying
                          requirements which may be offered to the
                          SBA. Where agencies independently, or
                          through the self-marketing efforts of an 8(a)
                          firm, identify a requirement for the 8(a)
                          Program, they may offer on behalf of a
                          specific 8(a) firm, for the 8(a) Program in
                          general, or for 8(a) competition.

48 C.F.R. § 19.803 (2012). Following a preliminary evaluation of its decision to
offer an acquisition to the SBA for inclusion in the 8(a) program, see 48 C.F.R.
§ 19.804-1 (2012), the agency then formally offers the acquisition to the SBA, and
it is required to include certain information about the project in its letter to the
SBA, see 48 C.F.R. § 19.804-2 (2012). Finally, the SBA must accept – or decline


                                          4
– the acquisition for inclusion in the 8(a) program within a specified period of
time. See 48 C.F.R. § 19.804-3 (2012).

      B.     The Challenged Procurement

             1.    The Set-Aside Decision

        Based on the record, it appears that the decision to set aside the subject
contract for competition among 8(a) firms began to take shape in April 2012.
Initially, Scott Beckstrand, the small business programs manager for the
Walla Walla District of the Corps, planned to set aside the project for SDVOSBs.
AR at 860. Following a veterans’ business conference in April 2012, however,
Mr. Beckstrand determined that there would not be sufficient competition among
SDVOSBs to ensure price reasonableness. Id. For that reason, Mr. Beckstrand
elected to pursue an 8(a) small business set-aside. Id.

      On or about May 14, 2012, the contracting officer for this procurement
e-mailed the statement of work for the proposed project to Mr. Beckstrand, who
was then attending a conference with representatives from the SBA. AR at 940.
During outreach meetings and in his office, Mr. Beckstrand met with no fewer than
eighteen 8(a) firms and other small businesses to discuss their ability to perform
complex marine construction projects. Id. at 860-61.

       On May 29, 2012, Mr. Beckstrand e-mailed the Seattle and Boise offices of
the SBA to discuss the feasibility of setting aside the proposed procurement for
competition among 8(a) firms located in Washington and Idaho. See AR Tabs 2-3.
In that e-mail message, Mr. Beckstrand explained that the project would involve
the construction of a new barge mooring facility on the Upper Snake River, with a
total value of approximately $8 million. Id. at 6, 8. Mr. Beckstrand also noted that
“[p]reliminary market research indicates competent and qualified contractors in
this area.” Id.

      On the same day, Diana Drake of the SBA’s office in Seattle responded to
Mr. Beckstrand’s message, requesting the North American Industry Classification
System (NAICS) code for the project. AR at 5. Mr. Beckstrand responded that the
assigned code for the construction project was 237990, id., which corresponds to
“Other Heavy and Civil Engineering Construction,” and includes, inter alia,


                                          5
“[c]onstruction projects involving water resources (e.g., dredging and land
drainage), [and] development of marine facilities.” Def.’s Mot. at 6 n.4.
Ms. Drake replied that there were at least ten 8(a) firms based in Washington that
would be able to bond the required amount for the project. AR at 5. On June 6,
2012, Irene Gonzalez of the SBA’s office in Boise informed Mr. Beckstrand that
there were three 8(a) firms in Idaho that would be able to meet the bonding
requirement for the project, based on its NAICS code. Id. at 7.

       For any procurement that has a total value exceeding $150,000, the agency’s
acquisition strategy must be approved by the Tactical Acquisition Strategy Board
(TASB). See Def.’s Mot. at 7-8. On June 18, 2012, the contracting officer signed
off on the decision to set the project aside for competition restricted to 8(a) firms.
AR at 9-11. The signed document was then forwarded to the members of the
TASB for review. Id. One member of the TASB suggested that the requirements
be procured through an open and unrestricted competition in order to ensure
competitive bids. Id. at 14-15. However, Ruthann Haider, the chief of contracting
for the agency, dismissed that concern, noting that the Corps had identified seven
8(a) firms that were qualified, in addition to the ten 8(a) firms the SBA’s Seattle
office predicted would bid on the contract.4 Id. at 14. In response to Ms. Haider’s
e-mail, a second member of the TASB surmised that an 8(a) set-aside could
increase the agency’s costs by twenty percent or more, id., and recommended that
the agency’s requirements be procured through an unrestricted competition instead
of an 8(a) set-aside, id. at 13. Mr. Beckstrand then sent an e-mail to the TASB
members on June 21, 2012, which listed the names of the thirteen 8(a) firms
identified by the SBA. Id. at 857-59.

       It appears that Mr. Beckstrand’s e-mail failed to completely allay the
TASB’s concerns. Thus, in a subsequent e-mail sent on July 9, 2012, Mr.
Beckstrand asked Kevin Michael, the procurement center representative for Area
VI at the SBA, whether he would be willing to agree to an unrestricted competition
for the barge mooring project. AR at 118-19. Mr. Michael responded as follows:


       4
         / It is not clear whether any of the seven qualified 8(a) firms identified by the Corps
through its market research were included within the group of ten 8(a) firms identified by the
SBA’s Seattle office. See AR at 14 (“We did Market Research and found at least 7 8(a)s
qualified to do this work – in addition the SBA 8(a) coordinator has 10 8(a)s that have said they
will bid this IFB.”).

                                                6
              You are joking right? $8M contract with sufficient 8(a)
              contractors, first I have heard about this, I get it sent to
              me 11:11 a.m. today and you guys want a decision today.
              I am supposed to sign off on the project as unrestricted
              because the PM is “nervous”. This would be begging for
              a protest. Even assuming I might consider this, [t]he 8(a)
              people need to sign off on this action. Diana Drake is out
              of the office, and I am waiting to hear from Ms.
              Gonzalez.

Id. 118.

        It is not clear from the record whether there was any further communication
between Mr. Beckstrand and Mr. Michael regarding an unrestricted competition for
the barge moorage project. The next day, however, the Corps sent letters to both
the Seattle and Boise offices of the SBA, offering the project as a set-aside for
competition restricted to 8(a) firms. See AR Tabs 7-8. The Corps attached an
information sheet for the construction project to each of the offer letters, which
described the scope, nature, value, and duration of the work to be performed. See
id. at 125-27. The offer letter listed the names of the thirteen 8(a) firms that had
been identified by the Seattle and Boise offices of the SBA, and emphasized that a
“[f]loating plant, drill rig, and diving are required for performance of the work.”
Id. at 125.

       In a letter dated July 18, 2012, the Seattle office of the SBA accepted the
barge mooring project into the 8(a) business development program.5 AR Tab 11.
The acceptance letter authorized the Corps to issue a solicitation for the project,
and it specified that the competition was to be limited to 8(a) firms located within
Washington and Idaho. Id. at 135. The letter also stated that the SBA’s “analysis
indicates that acceptance of this requirement meets the criteria for competition in
the 8(a) [Business Development] Program.” Id. Finally, the letter indicated that
the “SBA will confirm the eligibility of the apparent successful offeror to receive
the contract award and will notify your office, in writing, of its determination.” Id.
at 136.


       5
        / The Seattle office accepted the offer from the Corps because the construction project
was to be completed in Washington. See 13 C.F.R. § 124.502(b)(2) (2012).

                                               7
            2.     The IFB

      The Corps published a synopsis of the procurement on the Federal Business
Opportunities online publication (FedBizOpps) on July 18, 2012. See AR Tab 12.
The synopsis on FedBizOpps described the construction project as follows:

            This project involves construction of a new moorage
            facility and mooring dolphin at Lower Granite Dam in
            Whitman County, Washington.

            The new moorage facility will be a reinforced concrete
            wharf approximately 300 feet in length and 40 feet in
            width. The wharf will be fabricated using a combination
            of cast-in-place and precast concrete. The wharf
            structure will consist of precast cap beams and precast
            slabs set on top of 4.5-foot diameter reinforced concrete
            drilled shafts, approximately 40-feet in length. A cast-in-
            place topping slab and in-fill will tie the drilled shafts,
            cap beams, and precast slabs together. At least one
            floating plant and drill rig will be required for installation
            of the drilled shafts.

            The mooring dolphin will consist of a 15-foot diameter
            concrete shaft, approximately 40 feet in length, drilled
            and anchored approximately 20 feet into bedrock. The
            mooring dolphin will have a permanent steel casing,
            mooring cleats, fender system, and a cast-in-place top
            slab.

            Other work includes excavation, trenching for utilities,
            asphalt repair, installation of fender systems, mooring
            cleats, mooring bits, potable water lines, compressed air
            lines, electrical receptacles, area lighting, traffic bollards,
            and fabrication of a movable access stairway.

AR at 138. The synopsis also stated that the contract would be awarded as a
competitive 8(a) set-aside with an NAICS code of 237990. Id. at 137. Finally, the


                                           8
synopsis noted that the Corps intended to issue the IFB on or about July 30, 2012,
and that bids would be due on August 29, 2012. Id. at 139. On July 19, 2012, the
synopsis was amended to state that only 8(a) firms located within the geographic
areas of Washington or Idaho, or 8(a) firms with a bona fide place of business in
that area and assigned the appropriate NAICS code, would be eligible for award.6
Id. at 142.

        On July 30, 2012, the Corps issued the IFB, which contemplated the award
of a firm fixed-price (FFP) contract. See AR Tab 13. The IFB specified that only
8(a) firms located in Washington and Idaho were eligible for award, and instructed
offerors to submit their bids no later than 2:00 p.m. on August 30, 2012. Id. at 145.
The IFB further stated that sealed bids would be publicly opened at that time. Id.
In an amendment to the IFB, the opening date for bids, and the deadline for the
submission of bids, were extended to 3:00 p.m. on August 30, 2012.7 Id. at 835.

       Finally, the IFB states that

               [t]his contract is issued as a direct award between the
               contracting office and the 8(a) Contractor pursuant to
               the Partnership Agreement between the [SBA] and the
               Department of Defense. Accordingly, the SBA, even if
               not identified in Section A of this contract, is the prime
               contractor and retains responsibility for 8(a) certification,
               for 8(a) eligibility determinations and related issues, and
               for providing counseling and assistance to the 8(a)
               Contractor under the 8(a) Program.

AR at 174.




       6
         / The original synopsis also stated that the procurement would be set aside for eligible
8(a) firms in Washington and Idaho. AR at 138.
       7
         / There were four amendments to the IFB, see AR Tabs 16-19, but, with the exception
of the extension of the deadline for bids, none of those amendments is relevant in this case.

                                                 9
             3.    Contract Award to TSS-Garco

       A total of six firms submitted bids in response to the IFB. See AR Tab 14.
Five of the offerors were certified 8(a) firms, and one – plaintiff AAC – was not.
TSS-Garco, a joint venture formed in 2012 for the sole purpose of submitting a bid
on the barge moorage project, submitted the lowest bid of $6,969,000. Id. at 686.
Plaintiff submitted the second-lowest bid, in the total amount of $7,345,000. Id.
The government estimate for the project was $9,122,599, id. at 890-92, and the
highest bid received was $9,470,000, id. at 686.

       On September 14, 2012, the Corps conducted a pre-award survey for the
contract and determined that TSS-Garco was a responsible bidder and eligible for
award. See AR Tab 27; see also id. at 1156 (confirming that TSS-Garco was an
approved joint venture within the 8(a) program). On September 19, 2012, the
Corps notified TSS-Garco that it was the successful bidder on the procurement.
See id. Tab 30. The contract was executed the same day, see id. at 1162, and
plaintiff was notified of the contract award in a letter dated September 19, 2012,
see id. at 1707.

II.   Procedural History

      A.     Agency-Level Protests

       On August 7, 2012, after the IFB had been issued but before the deadline for
the submission of bids, plaintiff filed an agency-level protest with the Corps. See
AR at 961-91. Plaintiff filed supplemental protests on August 20, 2012, see id. at
993-96, and on August 24, 2012, see id. at 998-1012. In its agency-level protests,
plaintiff argued that the IFB required that the 8(a) firm selected for contract award,
rather than its subcontractors or joint venturer, be “regularly engaged” in the
specialized work of marine construction, and that no 8(a) firm could meet that
requirement. Plaintiff also asserted that, under FAR 19.805-1, the Corps was
required to have a reasonable expectation, before offering the project to the SBA,
that at least two eligible and responsible 8(a) firms would submit bids on the
project. Finally, plaintiff argued that the agency failed to conduct the necessary
market research required by FAR 10.001. On September 19, 2012, the same day
that the Corps awarded the contract to TSS-Garco, the Northwest Division Office
of the Corps denied the protests. See AR Tab 33.


                                         10
      B.     GAO Protests

       Following the award of the contract to TSS-Garco, plaintiff filed a protest
with the Government Accountability Office (GAO) on September 21, 2012, see
AR Tab 34, and it filed a supplemental protest with GAO on September 24, 2012,
see AR Tab 35. In its protests before GAO, plaintiff raised the same arguments it
presented to the agency, which are essentially the same arguments now before this
court. GAO summarily dismissed the protest as untimely on October 11, 2012.
See AR Tab 42.

      C.     Proceedings in this Court

       Plaintiff filed its bid protest complaint in this court on October 15, 2012.
With its complaint, plaintiff also filed a motion for a preliminary injunction, as
well as a memorandum in support of that motion. TSS-Garco has not moved to
intervene in this protest. Because defendant has agreed to stay performance of the
subject contract until the court resolves this protest on the merits, the court denied
AAC’s motion for a preliminary injunction as moot.

      In accordance with the scheduling order in this case, defendant filed the
administrative record (AR) on November 6, 2012. Defendant then filed a motion
to dismiss the complaint and a motion for judgment on the administrative record on
December 4, 2012. Plaintiff responded to the government’s motions and filed its
own cross-motion for judgment on the administrative record on January 3, 2013.
Defendant filed its response and reply on January 25, 2013, and plaintiff filed its
own reply on February 7, 2013. The court heard oral argument from the parties on
February 19, 2013.

                                   DISCUSSION

I.    Bid Protest Jurisdiction

       This court “shall have jurisdiction to render judgment on an action by an
interested party objecting to a solicitation by a Federal agency for bids or proposals
for a proposed contract or to a proposed award or the award of a contract or any
alleged violation of statute or regulation in connection with a procurement or a
proposed procurement.” 28 U.S.C. § 1491(b)(1) (2006). The jurisdictional grant is


                                          11
“without regard to whether suit is instituted before or after the contract is
awarded.” Id. As a threshold jurisdictional matter, however, the plaintiff in a bid
protest must show that it has standing to bring the suit. Info. Tech. & Applications
Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir. 2003) (ITAC); Myers
Investigative & Sec. Servs., Inc. v. United States, 275 F.3d 1366, 1369 (Fed. Cir.
2002).

       In order to establish this court’s jurisdiction in a bid protest action, the
plaintiff must first demonstrate that it has been prejudiced by the alleged errors of
procurement officials. ITAC, 316 F.3d at 1319 (citing Am. Fed’n of Gov’t
Employees v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001) (AFGE)). In the
absence of such prejudice, this court is without subject matter jurisdiction over the
protest, regardless of whether the government’s conduct was arbitrary, capricious,
or contrary to law. The plaintiff in a bid protest suit must establish that it is an
interested party with a direct economic interest in the procurement. Id. Bid protest
standing is limited to those plaintiffs who are “‘actual or prospective bidders or
offerors whose direct economic interest would be affected by the award of the
contract or by the failure to award the contract.’” Weeks Marine, Inc. v. United
States, 575 F.3d 1352, 1359 (Fed. Cir. 2009) (quoting AFGE, 258 F.3d at 1302).
In the context of a pre-award bid protest, a plaintiff must establish that it has
suffered or will suffer a “non-trivial competitive injury which can be addressed by
judicial relief.” Id. at 1362. In a post-award bid protest, a plaintiff must prove that
it would have a substantial chance of being awarded the contract if the alleged
procurement errors were corrected. Rex Serv. Corp. v. United States, 448 F.3d
1305, 1307-08 (Fed. Cir. 2006).

II.   Standards of Review

      A.     Motion to Dismiss under RCFC 12(b)(1)

       In rendering a decision on a motion to dismiss for lack of subject matter
jurisdiction pursuant to RCFC 12(b)(1), this court must presume all undisputed
factual allegations to be true and must construe all reasonable inferences in favor
of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), abrogated on other
grounds by Harlow v. Fitzgerald, 457 U.S. 800, 814-15 (1982); Reynolds v. Army
& Air Force Exch. Serv., 846 F.2d 746, 747 (Fed. Cir. 1988). The relevant issue in
a motion to dismiss under RCFC 12(b)(1) “‘is not whether a plaintiff will


                                          12
ultimately prevail but whether the claimant is entitled to offer evidence to support
the claims.’” Patton v. United States, 64 Fed. Cl. 768, 773 (2005) (quoting
Scheuer, 416 U.S. at 236). The plaintiff bears the burden of establishing subject
matter jurisdiction, Alder Terrace, Inc. v. United States, 161 F.3d 1372, 1377 (Fed.
Cir. 1998) (citing McNutt v. Gen. Motors Acceptance Corp. of Ind., 298 U.S. 178,
189 (1936)), and must do so by a preponderance of the evidence, Reynolds, 846
F.2d at 748 (citations omitted). The court may look at evidence outside of the
pleadings in order to determine its jurisdiction over a case. Martinez v. United
States, 48 Fed. Cl. 851, 857 (2001) (citing RHI Holdings, Inc. v. United States, 142
F.3d 1459, 1461-62 (Fed. Cir. 1998); Rocovich v. United States, 933 F.2d 991, 993
(Fed. Cir. 1991)), aff’d in relevant part, 281 F.3d 1376 (Fed. Cir. 2002). “Indeed,
the court may, and often must, find facts on its own.” Id. If jurisdiction is found to
be lacking, this court must dismiss the action. RCFC 12(h)(3).

      B.     Motion to Dismiss under RCFC 12(b)(6)

       It is well-settled that a complaint should be dismissed under RCFC 12(b)(6)
“when the facts asserted by the claimant do not entitle him to a legal remedy.”
Lindsay v. United States, 295 F.3d 1252, 1257 (Fed. Cir. 2002). When considering
a motion to dismiss under this rule, “the allegations of the complaint should be
construed favorably to the pleader.” Scheuer, 416 U.S. at 236. “[W]hen the
allegations in a complaint, however true, could not raise a claim of entitlement to
relief,” dismissal is warranted under RCFC 12(b)(6). Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 558 (2007). To survive a motion to dismiss for failure to
state a claim, a complaint must contain “more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Id. at 555.
While a complaint is not required to contain detailed factual allegations, it must
provide “enough facts to state a claim for relief that is plausible on its face.” Id. at
570. In order to meet the requirement of facial plausibility, the plaintiff must plead
“factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009).

      C.     Motion for Judgment on the Administrative Record

      RCFC 52.1(c) provides for judgment on the administrative record. To
review a motion, or cross-motions, under RCFC 52.1(c), the court asks whether,


                                          13
given all the disputed and undisputed facts, a party has met its burden of proof
based on the evidence in the record. Bannum, Inc. v. United States, 404 F.3d 1346,
1356-57 (Fed. Cir. 2005). The court must make factual findings where necessary.
Id. The resolution of RCFC 52.1(c) cross-motions is akin to an expedited trial on
the paper record. Id.

      D.     Bid Protest Review

        As the United States Court of Appeals for the Federal Circuit has stated,
“the proper standard to be applied in bid protest cases is provided by 5 U.S.C.
§ 706(2)(A) [(2006)]: a reviewing court shall set aside the agency action if it is
‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law.’” Banknote Corp. of Am. v. United States, 365 F.3d 1345, 1350-51 (Fed. Cir.
2004) (citing Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057-
58 (Fed. Cir. 2000)). Under this standard, a procurement decision may be set aside
if it lacked a rational basis or if the agency’s decision-making involved a clear and
prejudicial violation of statute, regulation or procedure. Emery Worldwide
Airlines, Inc. v. United States, 264 F.3d 1071, 1085-86 (Fed. Cir. 2001) (citing
Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324,
1332-33 (Fed. Cir. 2001) (Impresa)).

       The higher the degree of discretion allotted the contracting officer, the more
difficult it is for a protestor to prove that the procurement decision was arbitrary or
capricious. Burroughs Corp. v. United States, 617 F.2d 590, 597 (Ct. Cl. 1980)
(citing Keco Indus., Inc. v. United States, 492 F.2d 1200, 1203-04 (Ct. Cl. 1974)).
In addition, the court may not substitute its judgment for the agency’s expertise in
procuring services to meet the needs of the government. See, e.g., Ala. Aircraft
Indus., Inc.-Birmingham v. United States, 586 F.3d 1372, 1376 (Fed. Cir. 2009)
(reversing this court when it “substitut[ed] . . . the court’s judgment for the
agency’s with regard to how the contract work should be designed” (citing Motor
Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983))).
Instead, the court must “determine whether the agency’s . . . analysis [of proposals]
was consistent with the evaluation criteria set forth in the [solicitation].” Id. at
1375-76 (citation omitted). The court will “sustain an agency action evincing
rational reasoning and consideration of relevant factors.” Advanced Data
Concepts, 216 F.3d at 1058 (citation omitted).



                                          14
       “‘If the court finds a reasonable basis for the agency’s action, the court
should stay its hand even though it might, as an original proposition, have reached
a different conclusion as to the proper administration and application of the
procurement regulations.’” Honeywell, Inc. v. United States, 870 F.2d 644, 648
(Fed. Cir. 1989) (quoting M. Steinthal & Co. v. Seamans, 455 F.2d 1289, 1301
(D.C. Cir. 1971)). If, on the other hand, “the trial court determines [that] the
government acted without rational basis or contrary to law when evaluating the
bids and awarding the contract[,] . . . it proceeds to determine, as a factual matter, if
the bid protester was prejudiced by that conduct.” Bannum, 404 F.3d at 1351.
Plaintiff again bears the burden of proof, and must “show that there was a
‘substantial chance’ [plaintiff] would have received the contract award but for the
[government’s] errors in the [procurement] process.” Id. at 1358 (citations
omitted). If a protestor can show that there was a substantial chance that it would
have won the contract award but for the procurement errors of the agency,
prejudice has been established. Id. at 1353 (citations omitted). “Prejudice is a
question of fact.” Id. (citing Advanced Data Concepts, 216 F.3d at 1057).

III.   Analysis of the Parties’ Motions

       Defendant has filed a motion to dismiss the complaint in this case under
RCFC 12(b)(1) on the basis that plaintiff does not have standing to challenge the
agency’s set-aside decision or the ultimate award of the contract to TSS-Garco.
Defendant also moves to dismiss the complaint under RCFC 12(b)(6), asserting
that plaintiff waived its challenges to the agency’s set-aside decision by waiting
until after the contract was awarded to TSS-Garco before protesting the IFB.
Plaintiff has moved for judgment on the administrative record under RCFC 52.1(c)
based on the government’s alleged violation of various FAR provisions in setting
aside the contract for competition among 8(a) firms and in awarding the contract to
an 8(a) firm that did not, according to plaintiff, satisfy responsibility criteria set
forth in the IFB. In addition to its motion to dismiss the complaint, defendant has
filed a cross-motion for judgment on the administrative record on the same issues
raised by plaintiff.

       Most of the challenges raised by plaintiff are pre-award in nature, in that
they focus on the early decision to set aside the project for competition restricted to
8(a) firms alone. In addition to those pre-award challenges, however, plaintiff
further asserts that the contract awardee, TSS-Garco, was not a responsible bidder.


                                           15
In contrast to the challenges to the agency’s decision to offer the procurement to
the SBA, the objections to TSS-Garco’s responsibility are post-award in nature.

      A.     Motion to Dismiss under RCFC 12(b)(1)

       In its motion to dismiss under RCFC 12(b)(1), defendant argues that plaintiff
cannot establish competitive prejudice, and therefore does not have standing in this
case, for three different reasons. First, defendant asserts that even if the Corps had
not offered the contract to the SBA for inclusion in the 8(a) program, it would have
been required to set the contract aside for small businesses under FAR 19.502-2.
Second, defendant argues that a large business, such as AAC, does not have
standing to challenge an agency’s decision to compete a contract among 8(a) firms
under FAR 19.805-1 because the alternative to a restricted competition would be
the award of the contract to an 8(a) firm on a sole-source basis, not an open and
unrestricted competition. Finally, defendant contends that plaintiff does not have
standing to challenge the agency’s conclusion that TSS-Garco was a responsible
bidder because plaintiff would not have a substantial chance of award even if the
court were to set aside the agency’s responsibility determination.

      First, defendant points to FAR 19.502-2, which states in relevant part that

             [t]he contracting officer shall set aside any acquisition
             over $150,000 for small business participation when
             there is a reasonable expectation that –

                   (1)    offers will be obtained from at least two
                          responsible small business concerns offering
                          the products of different small business
                          concerns . . . ; and
                   (2)    award will be made at fair market prices.

48 C.F.R. § 19.502-2(b) (2012). Defendant argues that because the government
had a reasonable expectation that two or more small businesses would submit bids
on the contract if the agency were to remove the procurement from the 8(a)
program, it had no discretion to allow large businesses, such as plaintiff, to




                                          16
compete for the contract in an unrestricted competition.8 Defendant notes that the
SBA identified thirteen qualified 8(a) firms in connection with this procurement,
and that the agency determined through its own independent research that at least
seven such firms were capable of performing the work contemplated under the
contract. Further, defendant notes that two small businesses submitted bids on the
McNary Juvenile Fish Bypass Outfall Pipe Relocation Project (McNary Project),
see AR at 1-4, 942, 974-87, which plaintiff has described as a “project[] [that]
involved similar work to that required by the IFB – that is, the ‘specialized work’
of marine construction,” id. at 2406.9 Because its market research has identified at
least two responsible small business concerns, defendant argues that the removal of
the protested procurement from the 8(a) program would result in a competition
among small businesses – a competition for which plaintiff would be ineligible.

       Defendant further argues that plaintiff does not have standing to challenge
the agency’s decision to award the contract based on a competition restricted to
8(a) firms under FAR 19.805-1, which provides that:

               (a)    Except as provided in paragraph (b) of this
                      subsection, an acquisition offered to the SBA
                      under the 8(a) Program shall be awarded on the
                      basis of competition limited to eligible 8(a) firms
                      if –
                      (1) There is a reasonable expectation that at
                             least two eligible and responsible 8(a) firms
                             will submit offers and that award can be
                             made at a fair market price; and
                      (2) The anticipated total value of the contract,
                             including options, will exceed $6.5 million


       8
        / There is a distinction between 8(a) small business concerns and small businesses.
While all 8(a) firms are small businesses, not all small businesses are certified 8(a) firms.
       9
         / Defendant also notes that two 8(a) firms attended site visits for the Lower Monumental
Juvenile Fish Bypass Outfall Pipe Relocation Project (Lower Monumental Project), which AAC
identified as another complex marine construction project similar to the barge mooring project,
while one 8(a) firm attended a site visit for the McNary Project. See Def.’s Reply at 11
(citing AR at 942, 977, 986). In addition, three non-8(a) small businesses attended site visits for
one or both of those projects. See id. (citing AR at 942, 977, 982-84).

                                                17
                          for acquisitions assigned manufacturing
                          [NAICS] codes and $4 million for all other
                          acquisitions.

48 C.F.R. § 19.805-1(a). Defendant explains that FAR 19.805-1 does not dictate
when a contract may be offered to the SBA for inclusion in the 8(a) program, but
instead addresses what happens after a contract has been offered and accepted into
that program. When the government does not have a reasonable expectation that
two or more eligible and responsible 8(a) firms will submit bids on the contract, it
is still permitted to award the contract to an 8(a) firm on a sole-source basis.
Because plaintiff is not an 8(a) firm, defendant argues, plaintiff lacks standing to
challenge the agency’s action here – whether that action was to compete the
procurement among eligible and responsible 8(a) firms or to sole-source the
contract to an eligible and responsible 8(a) firm.

       Finally, defendant argues that plaintiff does not have standing to challenge
the government’s responsibility determination for TSS-Garco because plaintiff is
ineligible for award. Because this aspect of AAC’s protest is post-award in nature,
plaintiff must demonstrate that it would have a substantial chance of being awarded
the contract in the absence of the alleged procurement errors. See Rex Service,
448 F.3d at 1307-08. Defendant contends that even if the court were to hold that
TSS-Garco does not meet the responsibility standards set forth in the IFB, plaintiff
would still not have a substantial chance of contract award because it is ineligible
for award of a contract set aside for 8(a) firms.

       Defendant is correct that no single procurement error alleged by plaintiff has
resulted in competitive harm to plaintiff, but that is not the appropriate inquiry in
determining whether a protestor has standing for jurisdictional purposes. Rather,
“a plaintiff must show that it would have had a substantial chance of being
awarded the contract but for the combined impact of all agency decisions alleged
to be unlawful.” Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. 672, 696
(2010) (emphasis added and citations omitted). To the extent that AAC’s inability
to compete for the contract is the result of the alleged procurement errors, that
inability is a non-trivial competitive injury. See Weeks Marine, 575 F.3d at 1362;
Distributed Solutions, Inc. v. United States, 539 F.3d 1340, 1345 (Fed. Cir. 2008)
(holding that the protestors possessed a direct economic interest in the procurement
because they were deprived of the opportunity to compete for its requirements).


                                         18
       Further, if AAC were to succeed on all of the grounds set forth in its
complaint, including plaintiff’s contention that no 8(a) firms or other small
businesses were capable of meeting the IFB’s responsibility requirements, then
plaintiff would be free to compete for the contract in an open and unrestricted
competition. See Assessment & Training Solutions Consulting Corp. v. United
States, 92 Fed. Cl. 722, 728 (2010) (ATSCC) (holding that a non-8(a) small
business had standing to challenge the government’s decision to set aside a
contract for competition among 8(a) firms alone because it would be able to
compete for the contract in any subsequent open or small-business competition).10
Here, if the agency were required to hold an unrestricted competition for this
procurement, plaintiff would in fact have a substantial chance of being awarded the
contract. See Rex Service, 448 F.3d at 1307-08. AAC has significant experience in
marine construction and has been awarded contracts for such work in the past. See
AR at 970-71 (noting that AAC was awarded and has performed at least two
specialized marine construction projects for the Corps in the past). The court
concludes that plaintiff has standing in this case.

       B.      Motion to Dismiss under RCFC 12(b)(6)

       Defendant also argues that any challenges to the set-aside decision must be
dismissed under RCFC 12(b)(6) because plaintiff failed to protest the IFB in this
court until after the contract was awarded to TSS-Garco.11 According to defendant,
pursuant to Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1315
(Fed. Cir. 2007), plaintiff has waived any such arguments. In response, plaintiff
argues that it did not waive any of its claims because it filed a timely agency-level
protest and diligently pursued those claims thereafter. The court agrees with
plaintiff.



       10
         / Defendant notes that this court held that the protestor in ATSCC could not establish
competitive harm in its assertion that the government violated FAR 19.805-1, see ATSCC,
92 Fed. Cl. at 732, but that determination was contained in the court’s analysis of prejudice on
the merits, not in its preliminary analysis of jurisdictional standing. See Linc, 96 Fed. Cl. at 694-
97 (discussing the two distinct analyses of prejudice required in bid protest cases).
       11
          / Defendant does not expressly state that its waiver arguments are included in its
motion to dismiss under RCFC 12(b)(6), but the court notes that such arguments are not
jurisdictional in nature. See Linc, 96 Fed. Cl. at 697-98.

                                                 19
       In Blue & Gold Fleet, the Federal Circuit held that “a party who has the
opportunity to object to the terms of a government solicitation containing a patent
error and fails to do so prior to the close of the bidding process waives its ability to
raise the same objection afterwards in a § 1491(b) action in the Court of Federal
Claims.” Id. In that case, the court explained the reason for the waiver rule:

             In the absence of a waiver rule, a contractor with
             knowledge of a solicitation defect could choose to
             stay silent when submitting its first proposal. If its
             first proposal loses to another bidder, the contractor
             could then come forward with the defect to restart the
             bidding process, perhaps with increased knowledge
             of its competitors.

Id. at 1314. Thus, the rule in Blue & Gold Fleet “prevents contractors from taking
advantage of the government and other bidders, and avoids costly after-the-fact
litigation.” Id.

       The Federal Circuit did not hold, however, that a protestor must always file
suit in this court before the closing date for the receipt of bids to avoid waiving its
claims. In fact, this court has rejected precisely that interpretation of the waiver
rule, explaining that the rule set forth in Blue & Gold Fleet “does not require a
protester raising a solicitation impropriety to file suit before the closing date for the
receipt of proposals, provided that timely challenges have first been made at the
agency or before the GAO.” DGR Assocs., Inc. v. United States, 94 Fed. Cl. 189,
194 (2010). The court went on to specifically state that

             [t]he correct interpretation of Blue & Gold Fleet is that,
             if a party has challenged a solicitation impropriety
             before the close of the bidding process, the party is not
             precluded from later filing its protest at the Court of
             Federal Claims. A party must do something before the
             closing date to preserve its rights, and must thereafter
             pursue its position in a timely manner.




                                           20
Id. at 203. Thus, as a general rule, a party may preserve its rights by filing a
protest with the agency or GAO, instead of this court, before the closing date for
bidding.

       In Blue & Gold Fleet, the protestor challenged an alleged infirmity in the
procurement before GAO, but it waited to do so until the procuring agency had
already selected a bidder for contract award, even though the protestor was aware
of the basis of its protest prior to bid closing. That is not the situation in this case.
Here, plaintiff filed a protest with the agency on August 7, 2012, and it filed
supplemental protests on August 20, 2012, and on August 24, 2012. See AR at
961-1012. The initial protest was filed just one week after the issuance of the IFB,
and more than three weeks before bids were due. The supplemental protests were
also filed before the closing date for the receipt of bids. On August 28, 2012, the
agency informed plaintiff that it intended to proceed with the opening of bids on
August 30, 2012, but that it would not award the contract until after it had resolved
AAC’s protest.12 See AR at 3097-98, 3103-05; see also id. at 937 (stating that
while “the District will not award this contract until adjudication of the agency
protest, it is proceeding with bid opening”).

        The agency denied AAC’s protest on September 19, 2012, see AR Tab 33,
and awarded the contract to TSS-Garco on the same day, see id. Tab 30. Plaintiff
then filed a protest with GAO just two days later, on September 21, 2012, see id.
Tab 34, and then filed a supplemental protest on September 24, 2012, see id. Tab
35. Plaintiff diligently prosecuted its protest before GAO until the protest was
ultimately dismissed as untimely on October 11, 2012. See id. Tab 42. Finally, on
October 15, 2012, only four days after the dismissal of its protest by GAO, plaintiff
filed its bid protest complaint in this court, along with a motion for a preliminary
injunction.




       12
         / There is some dispute as to the precise nature of the communications between the
parties. Defendant asserts that it informed plaintiff that it was required to resolve the protest
before contract award due to the regulatory stay requirement set forth in 48 C.F.R. § 33.103(f)
(2012). See AR at 3103-04. Plaintiff, in contrast, claims that the agency implied that it was
delaying the award of the contract because the agency was still considering whether to take
corrective action in response to AAC’s protest. See id. at 3098. These factual disputes do not,
however, materially impact the issue addressed here.

                                                21
        In this case, there is no question that plaintiff “did something” before the
closing date for the receipt of bids by filing a timely agency-level protest. Further,
it is equally clear that plaintiff diligently pursued its position in a timely manner
thereafter. In the months since its first protest to the agency, plaintiff has been
continuously contesting the agency’s set-aside decision in one forum or another.
Plaintiff did not submit a bid to the government, “remain silent,” and then protest
the IFB for the first time when its offer was not accepted. Plaintiff has not waived
any of its pre-award challenges under Blue & Gold Fleet.

       Defendant argues that plaintiff did not pursue its claims in a timely manner
following its initial protest to the agency because its appeal to GAO was untimely.
That argument fails for a number of reasons. First, there is no requirement that a
protestor pursue its claims before GAO prior to filing a bid protest in this court.
See 31 U.S.C. § 3556 (2006) (stating that GAO’s authority to review bid protests
under the Competition in Contracting Act does not in any way “affect the right of
any interested party to file a protest with the contracting agency or to file an action
in the United States Claims Court”); 4 C.F.R. § 21.11(b) (2012) (requiring GAO to
dismiss any protest in that forum when the matter is the subject of litigation in this
court). Thus, despite defendant’s assertion to the contrary, there is simply no
requirement that a protestor “fully exhaust administrative remedies to avoid
waiving its solicitation-based claim in this Court after the closing date for the
receipt of bids.” Def.’s Mot. at 16. The fact that GAO dismissed AAC’s protest as
untimely is irrelevant to this court’s analysis of AAC’s claims in this suit, and this
court will not review GAO’s decision in that regard. See Advance Constr. Servs.,
Inc. v. United States, 51 Fed. Cl. 362, 365 (2002) (noting the “well-settled
principle that ‘it is the agency’s decision, not the decision of GAO, that is the
subject of judicial review’ when a bid protestor protests an award previously
reviewed by GAO”) (citations omitted).

       Further, GAO dismissed AAC’s protest as untimely under a regulation that
does not apply to this court. See AR at 3113 (citing 4 C.F.R. § 21.2(a)(3) (2012)).
In contrast to GAO, this court is not bound by any regulatory time limits for the
filing of bid protests. See DGR, 94 Fed. Cl. at 201 (“Unlike agency-level or GAO
protests, there are no regulatory time limits for filing at the Court.”). Defendant
cites the Federal Circuit’s decision in Comint Systems Corp. v. United States,
700 F.3d 1377 (Fed. Cir. 2012), for the proposition that a protestor may not bring
suit in this court if the protest would not be permitted under GAO regulations. See


                                          22
Def.’s Notice of Supplemental Authority at 2 (citing Comint, 700 F.3d at 1383
(“It would be incongruous to bar later GAO protests but to permit a later court
challenge.”)). However, in Comint, as in Blue & Gold Fleet, the protestor did not
take any protest action – in any forum – until after the closing date for bids.
Indeed, the protestor in Comint did not file an agency-level protest until after the
contracts were awarded.

       Comint, moreover, did not establish a more rigorous approach to the waiver
rule set forth in Blue & Gold Fleet. To the contrary, the court held that when an
alleged error in the procurement is not apparent until after the closing date for
bidding, the protestor does not waive its arguments as long as it raises them before
the contract is awarded:

               To be sure, where bringing the challenge prior to the
               award is not practicable, it may be brought thereafter.
               But, assuming that there is adequate time in which to do
               so, a disappointed bidder must bring a challenge to a
               solicitation containing a patent error or ambiguity prior to
               the award of the contract.

Comint, 700 F.3d at 1382. The Federal Circuit’s decision in Comint does not
require a protestor to file suit in this court before the closing date for the receipt of
bids, nor does it adopt GAO’s timeliness regulations for this court.13


       13
          / Defendant cites this court’s decision in Esterhill Boat Service Corp. v. United States,
91 Fed. Cl. 483 (2010), for the proposition that a pre-award, agency-level protest does not
preserve a protestor’s rights under Blue & Gold Fleet when the agency subsequently takes action
that is adverse to the protestor’s interests, such as accepting bids in accordance with the
challenged solicitation, and the protestor does not immediately pursue its claims before GAO or
this court. Plaintiff argues that Esterhill is distinguishable because the initial “protest” in that
case was not a formal agency-level protest in accordance with FAR 33.103, but was instead an
informal letter to the contracting officer. Defendant disputes that characterization of the initial
protest. To the extent that the initial protest in Esterhill was an informal one, that case is
distinguishable from this case. See Contract Servs., Inc. v. United States, 104 Fed. Cl. 261, 277
(2012) (noting that “even if [the protestor] had discussed the issue with [the contract specialist],
an informal question to the Solicitation’s contract specialist does not qualify as the type of
objection or challenge contemplated by Blue & Gold Fleet”). However, to the extent that the
initial protest in Esterhill was a formal one, that decision would then appear to be in some
                                                                                            continue...

                                                 23
       In sum, plaintiff did not waive any of its claims in this case. AAC filed a
timely protest with the agency before the closing date for bids, and it has
continuously pursued its claims since that time, first at GAO and now before this
court. Defendant’s motion to dismiss the complaint on that basis must be denied.

       C.      Cross-Motions for Judgment on the Administrative Record

       Plaintiff argues in its cross-motion that the government violated a number of
regulatory provisions when it set aside the subject procurement for competition
limited to 8(a) firms. First, plaintiff argues that the agency erred in its
determination that TSS-Garco was a responsible bidder because the IFB contained
special standards of responsibility that plaintiff contends no 8(a) firm could
possibly meet. Next, plaintiff asserts that the government violated FAR 19.805-1
because it offered the subject procurement to the SBA without first determining
that there were at least two 8(a) firms capable of meeting those responsibility
standards. Plaintiff further argues that the government violated FAR 10.001
because it did not perform the market research necessary to support its decision to
offer the procurement to the SBA for inclusion in the 8(a) program. Finally,
plaintiff contends that the government failed to document its market research, as
required under FAR 10.002. In its own motion for judgment on the administrative
record, the government argues that none of its actions violated any provision of the
FAR. For the reasons set forth below, the court agrees with the government.

               1.     The IFB Does Not Contain Definitive Responsibility
                      Criteria that Must Be Satisfied Before Award

      AAC argues that the government was required to determine whether the
lowest bidder met the definitive responsibility criteria set forth in the IFB before
awarding the contract to that bidder. Plaintiff argues that the government never
determined whether TSS-Garco actually met those criteria, and that no 8(a) firm
possessed the requisite experience to meet them. Plaintiff, however, misinterprets
the IFB, which does not contain any special standards of responsibility.


       13
          / ...continue
tension with this court’s decision in DGR. Neither of those decisions is binding on this court,
but the court finds the analysis set forth in DGR to be more persuasive in the circumstances of
this case and will therefore follow it here.

                                               24
       The term “responsibility” is used to describe the ability of an offeror to
successfully meet its obligations under a contract. The contracting officer must
make a responsibility determination prior to award. See 48 C.F.R. § 9.103(b)
(2012) (“No purchase or award shall be made unless the contracting officer makes
an affirmative determination of responsibility.”); see also John Cibinic, Jr. et al.,
Formation of Government Contracts at 411 (4th ed. 2011); Steven W. Feldman,
Government Contract Guidebook at 134 (4th ed. 2008) (“[W]hile the
responsiveness of a bid is determined at the time bids are opened, the responsibility
of a prospective contractor is determined by the time of award of the contract.”).
There are two different kinds of contractor responsibility. First, there are general
standards of responsibility, which are expressly set forth in the FAR and are
applicable to all contractors. See 48 C.F.R. § 9.104-1 (2012). Second, in some
procurements, there may also be “special standards of responsibility”:

             When it is necessary for a particular acquisition or class
             of acquisitions, the contracting officer shall develop, with
             the assistance of appropriate specialists, special standards
             of responsibility. Special standards may be particularly
             desirable when experience has demonstrated that unusual
             expertise or specialized facilities are needed for adequate
             contract performance.

48 C.F.R. § 9.104-2(a) (2012). Importantly, “[t]he special standards shall be set
forth in the solicitation (and so identified) and shall apply to all offerors.” Id.

      The GAO has explained the difference between the two types of
responsibility:

             In most cases, responsibility is determined on the basis of
             what the FAR refers to as general standards of
             responsibility, such as adequacy of financial resources,
             ability to meet delivery schedules, and a satisfactory
             record of past performance and of business integrity and
             ethics. In some cases, however, an agency will include in
             a solicitation a special standard of responsibility, which is
             often referred to as a definitive criterion of responsibility.
             Definitive responsibility criteria are specific and


                                          25
            objective standards established by an agency as a
            precondition to award which are designed to measure a
            prospective contractor’s ability to perform the contract.

Vador Ventures, Inc., B-296394, 2005 CPD ¶ 155, 2005 WL 1876113, at *2
(Comp. Gen. Aug. 5, 2005) (citations omitted).

      The IFB in the instant procurement set forth the requirements to be
considered by the agency in determining whether a prospective contractor was a
responsible bidder:

            CONTRACTOR RESPONSIBILITY,
            PREAWARD SURVEY

            In order to determine a contractor’s responsibility for
            purposes of contract award the contractor is required to
            provide a statement regarding previous experience and
            past performance in performing comparable work,
            information related to the business organization, financial
            resources, and/or plant to be used in performing the
            work. (See the Attention to Bidders form included in this
            solicitation.) In accordance with FAR 9.104-1, to be
            determined responsible, a prospective contractor must –
                   (a) Have adequate financial resources to
                          perform the contract, or the ability to obtain
                          them;
                   (b) Be able to comply with the required or
                          proposed delivery or performance schedule,
                          taking into consideration all existing
                          commercial and governmental business
                          commitments;
                   (c) Have a satisfactory performance record.
                          (A prospective contractor shall not be
                          determined responsible or non-responsible
                          solely on the basis of a lack of relevant
                          performance history except as provided in
                          FAR 9.104-2);


                                        26
                    (d)    Have a satisfactory record of integrity and
                           business ethics;
                    (e)    Have the necessary organization,
                           experience, accounting and operational
                           controls, and technical skills, or the ability
                           to obtain them;
                    (f)    Have the necessary production, construction,
                           and technical equipment and facilities, or the
                           ability to obtain them;
                    (g)    Be otherwise qualified and eligible to
                           receive an award under applicable laws and
                           regulations.

AR at 150. As noted in the IFB, these are the same general responsibility
standards, virtually word for word, set forth in FAR 9.104-1.

       The contractor responsibility section of the disputed IFB does not include
any other responsibility standards, aside from those described above. However,
plaintiff argues that provisions located in other sections of the IFB do contain
definitive responsibility criteria that must be satisfied by the successful bidder prior
to award. Specifically, part 1.6 in section 31 63 26.00 10 of the IFB provides the
following with respect to contractor qualifications for drilled shaft experience:

             1.6    CONTRACTOR QUALIFICATIONS
                    AND EXPERIENCE

             Drilled shafts shall be constructed only by a Contractor
             who has been regularly engaged in the performance of
             this type of specialized work. The Contractor shall have
             successfully completed large-diameter drilled shaft
             foundation projects, with an emphasis on those projects
             completed in-water, or demonstrate that the company has
             the key personnel from a former company in which these
             personnel successfully met the same requirements.

AR at 567.



                                          27
       Similarly, part 1.6 in section 31 63 26.00 20 of the IFB sets forth nearly
identical language for the required contractor experience in casing installation for
the mooring dolphin:

             1.6    CONTRACTOR QUALIFICATIONS
                    AND EXPERIENCE

             The Mooring Dolphin shall be constructed only by a
             Contractor who has been regularly engaged in the
             performance of this type of specialized work. The
             Contractor shall have successfully completed large-
             diameter casing foundation projects, with an emphasis on
             those project[s] completed in-water, or demonstrate that
             the company has the key personnel from a former
             company in which these personnel successfully filled the
             same role and successfully met the same requirements.

AR at 610.

        Plaintiff argues that both of the sections noted above contain definitive
responsibility criteria, and that the government was required to determine, before
contract award, that TSS-Garco satisfied those requirements. The court further
notes that AAC’s interpretation of those sections provides the foundation for each
of its challenges to the government’s set-aside decision. Plaintiff argues that the
Corps was required to determine, before offering the contract to the SBA, that at
least two 8(a) firms met the experience requirements discussed above. Plaintiff
also asserts that the agency was required to perform market research regarding the
ability of 8(a) firms to meet those requirements, and that the agency was required
to document the results of its research on that issue. Finally, plaintiff argues that
the 8(a) firm may not rely on subcontractors, joint venturers, or post-award hires to
meet those experience requirements. Rather, according to plaintiff, the 8(a) firm
must meet those requirements itself. Plaintiff is incorrect on all counts.

       First, as noted above, the IFB clearly sets forth the responsibility standards
that apply in this case, and those standards do not include the experience
requirements described above. Rather, the responsibility standards in the IFB



                                          28
closely track the general standards of responsibility set forth in the FAR. Compare
AR at 150 with 48 C.F.R. § 9.104-1.

        Second, the experience requirements referenced by plaintiff are contained in
a section of the IFB addressing the post-award submittal process for the contractor.
The IFB explains that the contractor must obtain government approval for the
drilled shaft and casing installation experience described above in accordance with
the submittal procedures of the IFB. See AR at 563, 607. Those procedures, in
turn, require the contractor to prepare a schedule of its submittals within fifteen
calendar days of receiving a notice to proceed with the project. Id. at 241; see also
id. at 168 (requiring the contractor to commence work within ten days of receiving
a notice to proceed).

       Thus, the experience requirements described above cannot be viewed as
responsibility requirements – either general or special – because they are not
required to be satisfied by the contractor until after the contract is awarded. See
48 C.F.R. § 9.103(b) (2012) (“No purchase or award shall be made unless the
contracting officer makes an affirmative determination of responsibility.”);
Centech Grp. v. United States, 554 F.3d 1029, 1034 n.2 (Fed. Cir. 2009)
(“Responsibility refers to an offeror’s apparent ability and capacity to perform all
contract requirements and is determined, not at proposal opening, but at any time
prior to award of the contract based on any information received by the agency up
to that time.”); Advanced Tech. Sys., B-296493.6, 2006 CPD ¶ 151, 2006 WL
2975357, at *3 (Comp. Gen. Oct. 6, 2006) (“The concept of responsibility
expressly applies to ‘prospective contractors’ – not ‘current’ or ‘existing’
contractors – a limitation that is repeated throughout the applicable statutes and
regulations, and that indicates that the requirement for a responsibility
determination applies before award of a contract.”) (citations omitted); Matter of
Charter Environmental, Inc., B-297219, 2005 CPD ¶ 213, 2005 WL 3288200,
at *2 (Comp. Gen. Dec. 5, 2005) (noting that definitive responsibility criteria
“must be met as a precondition to award”).

      Plaintiff also argues that responsibility standards are not required to be
located in any particular section of the IFB, and that “the substance of the
provision, not its label or location in the IFB, determines whether it is a definitive
responsibility criterion.” Pl.’s Reply at 11. However, FAR 9.104-2 states that
special standards of responsibility “shall be set forth in the solicitation (and so


                                          29
identified), and shall apply to all offerors.” 48 C.F.R. § 9.104-2(a) (emphasis
added); see also News Printing Co. v. United States, 46 Fed. Cl. 740, 746 (2000)
(“Two characteristics thus mark . . . definitive responsibility criteria. They must be
specific and objective, and the bidders have to be warned of them.”). Because the
experience requirements were not contained in the responsibility section of the IFB
and were not otherwise specified as responsibility standards, the court may not
treat them as responsibility standards.

       An additional contention set forth by plaintiff is based largely on this court’s
earlier decision in Chas. H. Tompkins Co. v. United States, 43 Fed. Cl. 716 (1999).
AAC contends that a procuring agency may actually establish definitive
responsibility criteria even if it had no intention of doing so. That argument is
inapposite for two reasons. First, the government’s intent is not at issue in this
case; rather, the court concludes, based on the language and structure of the IFB,
that the contractor experience sections cited by plaintiff are not responsibility
standards. Moreover, in Chas. H. Tompkins, there was no dispute over whether the
provisions at issue were responsibility standards; rather, the disagreement between
the parties turned on whether those responsibility standards were general or
special. See id. at 717 (quoting language from the solicitation indicating that
“[t]his information will be used by the Government to assist in its determination of
responsibility in accordance with Subpart 9.1 of the FAR”), 720 (noting that the
plaintiff in that case “view[ed] the disputed provision . . . as setting forth definitive
responsibility criteria or special standards as described in FAR 9.104-2, while the
government characterize[d] the same provision as setting forth general
responsibility standards as described in FAR 9.104-1”). Here, the court holds that
the experience requirements cited by plaintiff are not responsibility standards,
either general or special, at all.

       Finally, plaintiff argues that the successful bidder must meet the experience
requirements for drilled shafts and casing installation itself, and may not rely upon
subcontractors or new hires for that purpose. First, because those requirements are
not responsibility standards, but matters of post-award contract administration,
plaintiff cannot challenge any contractor’s alleged inability to meet those
requirements in this bid protest. See Diversified Maint. Sys., Inc. v. United States,
103 Fed. Cl. 431, 436-37 (2012) (noting that disputes between a current contractor
and the government that are based on matters of post-award contract administration
may not be resolved in the context of a bid protest). Further, AAC’s arguments in


                                           30
this regard are based on an unreasonable reading of the IFB, under which the term
“Contractor” is read to refer only to the prime contractor, while “contractor” may
be read to refer to either the prime contractor or one of its subcontractors. The
interpretation urged by plaintiff is problematic in a number of respects. For
example, the SBA is technically the prime contractor on this contract, while the
8(a) firm is the SBA’s subcontractor. See AR at 174. In addition, the IFB uses the
term “8(a) Contractor” – rather than simply “Contractor” – to refer to the 8(a) firm.
See id. at 174-75. Further, the first sentence of the two sections referenced by
plaintiff as containing definitive responsibility criteria do not refer to “the
Contractor,” as plaintiff suggests, but to “a Contractor.” See id. at 567, 610.
Subsequent references to “the Contractor” in those sections of the IFB are most
naturally read to refer to the party referenced in the first sentence (i.e., “a
Contractor”), which could, in turn, refer to either the 8(a) firm or a subcontractor.
Finally, the general responsibility standards set forth in the “Contractor
Responsibility, Preaward Survey” section of the IFB – which are the only
responsibility requirements in the entire IFB – contemplate the use of
subcontractors or new hires to perform the technical aspects of the contract. For
example, the 8(a) firm must

             (e)    Have the necessary organization, experience,
                    accounting and operational controls, and technical
                    skills, or the ability to obtain them; [and]
             (f)    Have the necessary production, construction, and
                    technical equipment and facilities, or the ability to
                    obtain them.

AR at 150 (emphasis added). AAC’s interpretation of the IFB is contradicted by
its plain terms.

       In sum, the court concludes that the contractor experience requirements for
drilled shafts and casing installation are not standards of responsibility that must be
satisfied prior to contract award. The only responsibility standards in the IFB are
the general standards set forth in the section entitled “Contractor Responsibility,
Preaward Survey.” See AR at 150. The agency determined that TSS-Garco met
those standards, see id. at 1153-55, and plaintiff has not challenged that finding in
this case. For that reason, the government is entitled to judgment with respect to
AAC’s post-award challenge to TSS-Garco’s responsibility.


                                          31
            2.    The Government Did Not Violate FAR 19.805-1

      Plaintiff argues that the government violated FAR 19.805-1(a), which states:

            (a)   Except as provided in paragraph (b) of this
                  subsection, an acquisition offered to the SBA
                  under the 8(a) Program shall be awarded on the
                  basis of competition limited to eligible 8(a) firms
                  if –
                  (1) There is a reasonable expectation that at
                         least two eligible and responsible 8(a) firms
                         will submit offers and that award can be
                         made at a fair market price; and
                  (2) The anticipated total value of the contract,
                         including options, will exceed $6.5 million
                         for acquisitions assigned manufacturing
                         [NAICS] codes and $4 million for all other
                         acquisitions.

48 C.F.R. § 19.805-1(a).

       When the agency does not have a reasonable expectation that two or more
eligible and responsible 8(a) firms will submit offers on the procurement, the
agency may award the contract to an 8(a) firm on a sole-source basis:

            (b)   Where an acquisition exceeds the competitive
                  threshold, the SBA may accept the requirement for
                  a sole source 8(a) award if –
                  (1) There is not a reasonable expectation that at
                         least two eligible and responsible 8(a) firms
                         will submit offers at a fair market price; or
                  (2) SBA accepts the requirement on behalf of a
                         concern owned by an Indian tribe or an
                         Alaskan Native Corporation.

48 C.F.R. § 19.805-1(b).


                                       32
       Plaintiff argues that this section requires the procuring agency to determine
that two or more 8(a) firms are eligible and responsible and will submit offers on a
procurement before that procurement is offered to the SBA for inclusion in the 8(a)
business development program. That argument is flawed for at least two reasons.

       First, plaintiff misreads the clear language of FAR 19.805-1, which does not
require a procuring agency to evaluate the responsibility of 8(a) firms before an
acquisition is offered to the SBA. Rather, that section addresses when a
procurement that has already been offered to the SBA must be awarded on the
basis of competition among 8(a) firms and when it may be awarded on a sole-
source basis. See ATSCC, 92 Fed. Cl. at 732 (noting that FAR 19.805-1 “does not
provide for two separate offers but rather directs how an acquisition is to be
awarded once it is ‘offered to the SBA under the 8(a) Program’”); see also
13 C.F.R. § 124.506(a)(2) (2013) (stating, in an SBA regulation that largely tracks
the language of FAR 19.805-1, that “[a] procurement offered and accepted for the
8(a) BD program” must be competed among 8(a) firms when the requirements are
met) (emphasis added). AAC’s interpretation of FAR 19.805-1 is based on cases
that interpreted different regulations. See, e.g., RhinoCorps Ltd. v. United States,
87 Fed. Cl. 261, 279-80 (2009) (discussing the “rule of two” established by FAR
19.502-2); JT Constr. Co., B-254257, 93-2 CPD ¶ 302, 1993 WL 505803, at *3-*4
(Comp. Gen. Dec. 6, 1993) (discussing the set-aside requirement established by
DFARS § 219.502-2-70(a)).

       Here, since the challenged procurement was above the competitive
acquisition threshold of $4 million, FAR 19.805-1 required the Corps to compete
the challenged procurement among 8(a) firms as long as it possessed a reasonable
expectation that at least two eligible and responsible 8(a) firms would submit
offers, and that an award to one of those firms could be made at a fair market price.
In the absence of such an expectation, the alternative to an 8(a) competition was a
sole-source award to an 8(a) firm, not a full and open competition as plaintiff
suggests. See ATSCC, 92 Fed. Cl. at 732 (“Because the contracting agency had
already determined that it would offer the requirement to the SBA for the 8(a)
program, the agency’s alternative to a competitive 8(a) award would be a sole-
source 8(a) award.”).

     Finally, even if the court were to accept, arguendo, the interpretation now
advanced by plaintiff, the SBA – the entity responsible for determining whether an


                                         33
8(a) firm is eligible for contract award – informed the Corps that no fewer than
thirteen 8(a) firms were qualified to perform the contract. In addition, the Corps
identified seven qualified 8(a) firms through its own independent research.
Because the agency identified two or more eligible and responsible 8(a) firms, the
agency did not violate FAR 19.805-1, even under the incorrect interpretation of
that section advanced by plaintiff here.

            3.     The Government Did Not Violate FAR 10.001

      Plaintiff argues that the government violated section 10.001 of the FAR,
48 C.F.R. § 10.001 (2012), which requires each procuring agency to “[c]onduct
market research appropriate to the circumstances . . . before developing new
requirements documents for an acquisition by that agency,” id. § 10.001(a)(2).
That section further provides that the results of the agency’s market research
should be used to “[d]etermine if sources capable of satisfying the agency’s
requirements exist.” Id. § 10.001(a)(3)(i). However, “[w]hen conducting market
research, agencies should not request potential sources to submit more than the
minimum information necessary.” Id. § 10.001(b).

       The court first notes that the Small Business Act “affords the SBA and
contracting agencies broad discretion in selecting procurements for entry to the
8(a) program.” MCB Lighting & Elec., B-406703, 2012 CPD ¶ 206, 2012 WL
2878575, at *2 (Comp. Gen. July 13, 2012); see also Data Transformation Corp. v.
United States, 13 Cl. Ct. 165, 173 (1987) (“Judicial intrusion into the procurement
process is generally infrequent, limited and circumspect. The discretion inherent in
the section 8(a) contractor selection process requires even greater judicial
restraint.”) (citations omitted).

       In a similar vein, the agency enjoys substantial discretion in determining
how much and what type of market research is “appropriate to the circumstances”
for the purpose of “[d]etermin[ing] if sources capable of satisfying the agency’s
requirements exist.” 48 C.F.R. § 10.001(a). For example, in ATSCC, the agency
issued a ‘sources sought notice’ to determine whether there were any 8(a) firms
qualified to perform a contract for medical training services. Based on the
responses to that notice, the agency determined that only one such firm was
qualified and offered the contract to the SBA for award on a sole-source basis.
The SBA subsequently provided the agency with the name of a second 8(a) firm


                                        34
and therefore, the agency elected to proceed with a competition restricted to 8(a)
small businesses. The incumbent contractor, a non-8(a) small business, argued that
neither the information requested in the ‘sources sought notice,’ nor the
information received in response to that notice, was sufficient to determine whether
there were two or more 8(a) firms capable of performing the contract. This court
rejected that challenge to the adequacy of the agency’s market research:

             Given this regulatory guidance and the discretion
             afforded agencies and contracting officers in making
             such procurement-related determinations, the court
             cannot conclude that the market research conducted by
             the Contracting Officer was inadequate nor that the
             Contracting Officer’s 8(a) set-aside decision was
             unreasonable.

ATSCC, 92 Fed. Cl. at 731.

       Here, Mr. Beckstrand attended a number of small business conferences; he
discussed the possibility of setting aside the project for 8(a) participation with SBA
representatives; he met with eighteen 8(a) firms and other small businesses to
discuss their marine construction capabilities; he identified seven 8(a) firms that
would be able to complete a marine construction project; he obtained the names of
thirteen qualified 8(a) firms from SBA representatives in Seattle and Boise; and he
performed further research on those firms. Plaintiff argues that the facts in ATSCC
are distinguishable from the facts in this case because the agency there issued a
‘sources sought notice.’ Nothing in this court’s decision, however, suggests that
such a notice is a sine qua non of market research. Although the protestor in that
case argued that the ‘sources sought notice’ and the responses to that notice were
both inadequate for the agency’s purposes, this court did not engage in an intrusive
scrutiny of either the notice or the responses. The court cannot conclude here that
the agency’s market research was either unreasonable or inadequate.

             4.    The Government Did Not Violate FAR 10.002

      Finally, plaintiff argues that the government violated section 10.002(e) of
the FAR, which provides that “[a]gencies should document the results of market
research in a manner appropriate to the size and complexity of the acquisition.”


                                         35
48 C.F.R. § 10.002(e). Plaintiff asserts that the Corps did not adequately document
its research into whether two or more 8(a) firms were capable of performing the
contract. That argument fails for at least three reasons.

      First, as discussed above, the asserted “requirement” that the government
determine whether there are at least two responsible 8(a) firms before offering a
contract to the SBA for inclusion in the 8(a) program is based on a misreading of
applicable regulations. The court will not require the agency to demonstrate
adequate documentation of market research to support a nonexistent requirement.

       In addition, the language of section 10.002(e) is precatory in nature and does
not establish any mandatory documentation requirement. That section states that
agencies “should” document the results of their market research; it does not state
that those agencies “shall” do so. Plaintiff acknowledges that its proffered reading
of FAR 10.002 is unsupported by any legal authority, but it attempts to draw an
analogy between that section and other purportedly similar regulations. However,
each of the regulations cited by plaintiff imposes a clear duty on the agency. See,
e.g., 48 C.F.R. § 15.308 (2012) (stating that a source selection authority’s
“decision shall be based on a comparative assessment of proposals against all
source selection criteria in the solicitation . . . [and] shall be documented, and the
documentation shall include the rationale for any business judgments or tradeoffs
made or relied on by the SSA”) (emphases added).

       Finally, the administrative record demonstrates that the agency documented
its market research. See AR at 5-8 (correspondence between Mr. Beckstrand and
the SBA regarding the capabilities of 8(a) firms in Washington and Idaho), 857-59
(e-mail to TASB members listing the 8(a) firms identified by the SBA), 860-62
(e-mail from Mr. Beckstrand to agency counsel describing the steps leading to his
decision to set aside the procurement for 8(a) participation), 864-89 (spreadsheet
compiling the identity, capabilities, and other information on 8(a) firms). Thus, the
court concludes that the government did not violate FAR 10.002 in this case.

                                 CONCLUSION

      The court concludes that plaintiff has standing in this case and did not waive
any of its arguments under Blue & Gold Fleet. For that reason, defendant’s motion
to dismiss the complaint is denied. However, the court further holds that the Corps


                                         36
did not violate any of the regulatory provisions cited by plaintiff, nor did it err in
concluding that TSS-Garco was a responsible bidder. For those reasons,
defendant’s motion for judgment on the administrative record is granted, and
AAC’s cross-motion for judgment on the administrative record is denied.
Accordingly, it is hereby ORDERED that

      (1)    Defendant’s Motion to Dismiss or, in the Alternative, for Judgment
             upon the Administrative Record, filed December 4, 2012, is DENIED
             in part, as it relates to the motion to dismiss, and GRANTED in part,
             as it relates to the motion for judgment on the administrative record;

      (2)    Plaintiff’s Cross-Motion for Judgment on the Administrative Record,
             filed January 3, 2013, is DENIED;

      (3)    The Clerk’s Office is directed to ENTER final judgment in favor of
             defendant, dismissing the complaint with prejudice;

      (4)    On or before May 24, 2013, counsel for the parties shall CONFER
             and FILE with the Clerk’s Office a redacted copy of this opinion,
             with any material deemed proprietary marked out and enclosed in
             brackets, so that a copy of the opinion can then be prepared and made
             available in the public record of this matter; and

      (5)    Each party shall bear its own costs.



                                                /s/Lynn J. Bush
                                                LYNN J. BUSH
                                                Judge




                                           37
