SRS Technologies v. DOD

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
SRS TECHNOLOGIES, INCORPORATED,
Plaintiff-Appellant,
v.
U.S. DEPARTMENT OF DEFENSE,
William Perry, Secretary,
Department of Defense; SMALL
BUSINESS ADMINISTRATION; THE
DEFENSE EVALUATION SUPPORT No. 96-1484
AGENCY; HIGH TECHNOLOGY
SOLUTIONS, INCORPORATED,
Defendants-Appellees,
and
THE MINORITY BUSINESS SUMMIT
VOLUNTEER COMMITTEE,
Defendants.
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Claude M. Hilton, District Judge.
(CA-95-1792-A)
Argued: April 10, 1997
Decided: May 6, 1997
Before WILKINSON, Chief Judge, and HAMILTON and
MOTZ, Circuit Judges.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
COUNSEL
ARGUED: Alan Mark Grayson, McLean, Virginia, for Appellant.
Gregory Bryan Friel, UNITED STATES DEPARTMENT OF JUS-
TICE, Washington, D.C., for Appellees. ON BRIEF: James S. Del-
Sordo, McLean, Virginia, for Appellant. Deval L. Patrick, Assistant
Attorney General, Dennis J. Dimsey, UNITED STATES DEPART-
MENT OF JUSTICE, Washington, D.C., for Federal Appellees;
Nancy O. Dix, Mary A. Lehman, GRAY, CARY, WARE & FREI-
DENRICH, San Diego, California; Karla L. Palmer, Michael R. Char-
ness, MCDERMOTT, WILL & EMERY, Washington, D.C., for
Appellee High Technology Solutions.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
SRS Technologies brought suit challenging the government's
award of a technical support services contract to High Technology
Solutions pursuant to the Small Business Administration's (SBA) 8(a)
Program. SRS claims that the 8(a) Program is unconstitutional
because it uses racial presumptions to determine"social disadvan-
tage." SRS further alleges that SBA violated its own procurement reg-
ulations. The district court found that SRS lacked standing to raise
these claims, and SRS appealed. We affirm the judgment.
I.
SRS Technologies provides technical support services to TRW,
Inc. pursuant to a nationwide subcontracting agreement. TRW, in
turn, services military facilities under an omnibus contract with the
Defense Evaluation and Support Agency, a component of the Depart-
ment of Defense. One of the sites where SRS formerly provided ser-
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vices to TRW is the Pacific Missile Range Facility (PMRF) in Kauai,
Hawaii.
In 1995, the government announced that it would no longer use the
TRW contract for work at the PMRF. As a result, SRS ceased per-
forming services for TRW at the PMRF on December 31, 1995. The
government awarded the PMRF work to High Technology Solutions
(HTS) through a program established under section 8(a) of the Small
Business Act, 15 U.S.C. § 637(a).
Under the 8(a) Program, the Small Business Administration (SBA)
enters into contracts with other government agencies to provide goods
or services. SBA then subcontracts the work to small businesses that
are owned and controlled by "socially and economically disadvan-
taged" individuals. SBA's regulations establish a rebuttable presump-
tion that members of a certain racial or ethnic groups are socially
disadvantaged for the purposes of the 8(a) Program. 13 C.F.R.
§ 124.105(b)(1). HTS's owner is of Philippine descent, and SRS's
owner is a native of India. Both derive from ethnic groups that are
presumed disadvantaged.
Regardless of the presumption of social disadvantage, SBA
requires each 8(a) Program participant to make an individualized
showing of economic disadvantage. SBA's regulations provide that
"an individual whose personal net worth exceeds $250,000 will not
be considered economically disadvantaged for purposes of 8(a) pro-
gram entry." 13 C.F.R. § 124.106(a)(2)(i). SRS cannot participate in
the 8(a) Program because SRS's owner is a multi-millionaire.
On December 28, 1995, SRS filed a complaint alleging that the
government awarded the PMRF contract to HTS on the basis of race
in violation of the Constitution's guarantee of equal protection. SRS
further alleged non-constitutional claims related to the award of the
PMRF contract to HTS. The district court dismissed the suit, finding
that SRS lacked standing to raise any of its claims. SRS appeals.
II.
In order to show standing to raise its constitutional claim, SRS
must demonstrate a "causal connection between the injury and the
3
conduct complained of." Lujan v. Defenders of Wildlife, 504 U.S.
555, 560 (1992). SRS challenges the racial presumptions of social dis-
advantage in SBA regulations implementing section 8(a) of the Small
Business Act. However, SRS was not prohibited from participating in
the 8(a) Program for race-based reasons. Rather, SRS was ineligible
to participate in the 8(a) Program because its owner is a multi-
millionaire whose net worth exceeded SBA's guidelines for economic
disadvantage by several orders of magnitude. SBA's requirement of
economic disadvantage for entry into the 8(a) Program is a race-
neutral criterion. It was by virtue of this race-neutral criterion that
plaintiff failed to qualify for a contract award, and its standing to
challenge the race-conscious criteria is therefore lacking.
III.
SRS also raises non-constitutional claims regarding the govern-
ment's award of the PMRF contract to HTS. First, SRS complains
that HTS was not qualified to participate in the 8(a) Program because
it had not fulfilled SBA's two-year experience requirement, as gener-
ally required by 13 C.F.R. § 124.107. However, even if HTS were not
qualified, this would not affect SRS. Regardless of HTS's qualifica-
tions, SRS would still have been unable to participate in the 8(a) Pro-
gram because its owner is not economically disadvantaged.
Furthermore, even assuming that the government would open the
PMRF contract to all bidders if HTS were disqualified, SRS would
still lack standing. SRS's contract with TRW prohibits SRS from
entering into other contracts which involve tasks that are directly
related to work that SRS has performed under the TRW subcontract
unless TRW grants a waiver. If the contract were open to competitive
bidding, it is not certain that such a waiver would be forthcoming, as
TRW might well desire to bid on the contract itself. Since SRS's abil-
ity to compete for the PMRF contract in this situation would depend
on the "independent action of some third party not before the court,"
SRS cannot establish standing. Lujan, 504 U.S. at 560 (citation omit-
ted).
SRS further alleges that the government violated 13 C.F.R.
§ 124.309 by failing to perform an adverse impact study before
assigning the PMRF contract under the 8(a) Program. That regulation,
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however, is designed to protect small businesses who have contracts
with the government. SRS did not have a contractual relationship with
the government at the time the PMRF work was contracted to HTS.
Rather, SRS was performing a contract for TRW. As such, SRS was
not a party protected by section 124.309 and has no standing to raise
a claim under that regulation. See GBA Associates v. General Services
Administration, 32 F.3d 898, 900 (4th Cir. 1994) (party must be
within a statute's zone of interest to establish standing).
IV.
For the foregoing reasons we affirm the judgment of the district
court.
AFFIRMED
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