Goodwill Industries of South Florida, Inc. v. United States

In the United States Court of Federal Claims
No. 21-2323C
Filed: August 31, 2022
Reissued for Publication: September 18, 20221
* * * * * * * * * * * * * * * * ** *
GOODWILL INDUSTRIES OF SOUTH *
FLORIDA, INC., *
Protestor, *
v. *
*
UNITED STATES, *
Defendant. *
*
* * * * * * * * * * * * * * * * ** *
Alan M. Grayson, Windermere, FL, for protestor.
Ann C. Moto, Trial Attorney, Department of Justice, Commercial Litigation Branch,
Civil Division, Washington, DC, for defendant. With her were Steven J. Gillingham,
Assistant Director, Commercial Litigation Branch, Patricia M. McCarthy, Director,
Commercial Litigation Branch, and Brian M. Boynton, Principal Deputy Assistant
Attorney General. Allison Colsey Eck, Defense Logistics Agency, Troop Support, of
counsel.
OPINION
HORN, J.
In the bid protest filed in this court, protestor Goodwill Industries of South Florida,
Inc., sought to
enjoin the award or continued performance of any federal contract or
contracts, or the modification of any federal contract or contracts, awarded
to or performed by entities other than Goodwill [Industries of South Florida],
for the production (in whole or in part) of military equipment items known as
Women’s Army Improved Hot Weather Combat Uniform trousers
(“Women’s IHWCU Trousers” or the “Goodwill items”).
1 This Opinion was issued under seal on August 31, 2022. The parties were asked to
propose redactions prior to public release of the Opinion. This Opinion is issued without
redactions since the parties proposed no redactions in response to the court’s request.
(alteration added).2
The Javits-Wagner-O’Day (JWOD) Act, titled “Committee for Purchase From
People Who Are Blind or Severely Disabled,” 41 U.S.C. §§ 8501–06 (2018), and its
implementing regulations create a government procurement set aside for qualified
nonprofits. It is uncontested that protestor, Goodwill Industries of South Florida, is a
JWOD Act qualified nonprofit. Goodwill Industries of South Florida contends that it is a
“mandatory source of supply for” the Women’s IHWCU Trousers and that the
government’s “procurement of the Goodwill items from any source other than Goodwill
[Industries of South Florida] is a violation of procurement statutes and regulations.”
(alteration added). Therefore, according to protestor, “[b]ecause Goodwill [Industries of
South Florida] is the mandatory source of supply for the Goodwill items, if DLA [Defense
Logistics Agency] can issue solicitations for the Goodwill items at all, DLA should require
awardees under the Solicitations to acquire the Goodwill items from Goodwill [Industries
of South Florida].” (alterations added). Goodwill Industries of South Florida’s bid protest
complaint challenges solicitation No. SPE1C1-21-R-0029, which was divided into two
parts, an awarded small business set aside contract, and a future award to a HUBZone
contractor. According to the defendant, the United States, through the procuring agency,
the “DLA is a ‘defense agency’ under the authority, direction, and control of the
Department of Defense.” See 10 U.S.C. §§ 191–92 (2018); Department of Defense
Directive (DoDD) 5105.22 (June 29, 2017). This Opinion memorializes the oral decision
previously issued by the court in response to represented, urgent impending procurement
deadlines. The decision granted protestor Goodwill Industries of South Florida’s motion
for judgment on the Administrative Record, including injunctive relief, which was effective
immediately at the time of the oral decision.
FINDINGS OF FACT
When enacted, the JWOD Act was titled “Committee for Purchase from People Who
Are Blind or Severely Disabled.” 41 U.S.C. §§ 8501–06. Subsequently, the “Committee
for Purchase From People Who Are Blind or Severely Disabled,” was renamed in a
November 27, 2006 notice filed in the Federal Register:
The Committee for Purchase From People Who Are Blind or Severely
Disabled (the Committee) has deliberated and voted to change the name of
the JWOD Program to the AbilityOne Program. The name of the program is
being changed to AbilityOne to give a stronger, more unified identity to the
2 The court uses the term “Women’s IHWCU Trousers” to refer to the Improved Hot
Weather Combat Uniform Trousers designed specifically for women, the items at issue in
this protest. These items are sometimes referred to by the parties as “IHWCU-F”
Trousers, “Hot Weather Trousers,” or the “Goodwill items.”
2
program and to show a connection between the program name and the
abilities of those who are blind or have other severe disabilities.
AbilityOne Program, 71 Fed. Reg. 68492-01 (Nov. 27, 2006).3
The JWOD Act directs AbilityOne to create and maintain a Procurement List. The
JWOD Act provides:
(a) Procurement List.–
(1) Maintenance of list.—The Committee shall maintain and publish in
the Federal Register a procurement list. The list shall include the
following products and services determined by the Committee to be
suitable for the Federal Government to procure pursuant to this
chapter:
(A) Products produced by a qualified nonprofit agency for the blind
or by a qualified nonprofit agency for other severely disabled.
(B) The services those agencies provide.
(2) Changes to list.—The Committee may, by rule made in accordance
with the requirements of section 553(b) to (e) of title 5, add to and
remove from the procurement list products so produced and services
so provided.
41 U.S.C. § 8503(a) (2018). The JWOD Act also provides:
(c) Central nonprofit agency or agencies.—The Committee shall designate
a central nonprofit agency or agencies to facilitate the distribution, by direct
allocation, subcontract, or any other means, of orders of the Federal
Government[4] for products and services on the procurement list among
3The court uses the newer AbilityOne title, but leaves unchanged any quotations as they
exist in relevant documents, including briefs and attachments filed with the court, which
sometimes refer to AbilityOne as the “Commission.”
4 The JWOD Act states:
The terms “entity of the Federal Government” and “Federal Government”
include an entity of the legislative or judicial branch, a military department
or executive agency (as defined in sections 102 and 105 of title 5,
respectively), the United States Postal Service, and a nonappropriated fund
instrumentality under the jurisdiction of the Armed Forces.
41 U.S.C. § 8501(a) (2018).
3
qualified nonprofit agencies for the blind or qualified nonprofit agencies for
other severely disabled.
(d) Regulations.—The Committee—
(1) may prescribe regulations regarding specifications for products and
services on the procurement list, the time of their delivery, and other
matters as necessary to carry out this chapter; and
(2) shall prescribe regulations providing that when the Federal
Government purchases products produced and offered for sale by
qualified nonprofit agencies for the blind or qualified nonprofit
agencies for other severely disabled, priority shall be given to
products produced and offered for sale by qualified nonprofit
agencies for the blind.
41 U.S.C. § 8503(c)–(d). With regard to specific procurement requirements, the JWOD
Act provides:
(a) In general.—An entity of the Federal Government intending to procure
a product or service on the procurement list referred to in section 8503
of this title shall procure the product or service from a qualified nonprofit
agency for the blind or a qualified nonprofit agency for other severely
disabled in accordance with regulations of the Committee and at the
price the Committee establishes if the product or service is available
within the period required by the entity.
(b) Exception.—This section does not apply to the procurement of a product
that is available from an industry established under Chapter 307 of title
18 and that is required under section 4124 of title 18 to be procured from
that industry.
41 U.S.C. § 8504(a)–(b) (2018).
In SEKRI, Inc. v. United States, 34 F.4th 1063 (Fed. Cir. 2022), the United States
Court of Appeals for the Federal Circuit offered a helpful and concise summary of the
JWOD Act’s legislative history and purpose:
The Javits-Wagner-O’Day Act (“JWOD Act”) was originally enacted in 1938
to prioritize purchasing of products from suppliers that employed blind
individuals. U.S. Statutes at Large, 75 Cong. Ch. 697, 52 Stat. 1196 (June
25, 1938) (JWOD Act). The JWOD Act established the “Committee on
Purchases of Blind-made Products” and charged it with various duties,
including determining fair market prices of “brooms and mops and other
suitable commodities manufactured by the blind and offered for sale to the
[f]ederal [g]overnment by any non-profit-making agency for the blind.” Id.§ 2. The Act stated, “All brooms and mops and other suitable commodities
hereafter procured in accordance with applicable [f]ederal specifications by
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or for any [f]ederal department or agency shall be procured from such non-
profit-making agencies for the blind in all cases where such articles are
available within the period specified at the price determined by the
committee . . . .” Id. § 3.
The legislative history of the 1938 JWOD Act shows that Congress intended
to create a procurement system in which the government would be required
to purchase certain products from suppliers that employ blind individuals.
Under the new system, the government would “distribute . . . orders among
. . . agencies for the blind. In other words, instead of the present cutthroat
competition[,] the blind people who are engaged in this type of work will be
able to obtain it at a fair price.” 83 Cong. Rec. 9111 (1938). The bill would
take the buying of mops, brooms, and other suitable commodities “out of
competitive bidding.” Id. (emphasis added); see also S. Rep. 75-1330, at 2
(1938). Congress expanded the JWOD Act in 1971 to similarly protect
suppliers that employ “other severely handicapped” individuals. Pub. L. No.
92-28, 85 Stat. 77, 80 (1971); see also S. Rep. No. 92-41, at 1 (1971)
(stating Congress's principal objectives). Congress again amended the law
in 2011 by, among other things, renaming the Committee to be called the
“Committee for Purchase From People Who Are Blind or Severely
Disabled.” Pub. L. No. 111-350, 124 Stat. 3677, 3826 (2011).
The JWOD Act today, 41 U.S.C. §§ 8501–06, establishes a procurement
system, overseen by the Committee, in which the government procures
certain commodities and services from nonprofit agencies that employ the
blind or otherwise severely disabled. The Committee has the
responsibilities of, among other things, (i) maintaining and publishing a
“procurement list” identifying products and services made or rendered by
qualified nonprofit agencies for the blind or severely disabled, (ii)
designating one or more “central nonprofit agencies” to facilitate the
distribution of orders for the products and services on the procurement list,
and (iii) prescribing regulations implementing the law. See 41 U.S.C.
§ 8503.
SEKRI, Inc. v. United States, 34 F.4th at 1065–66 (emphasis and alterations in original).
The Federal Circuit further explained:
The Committee has promulgated regulations that define the complex
“AbilityOne Program,” which is the Committee’s name for the JWOD Act
procurement system. 41 C.F.R. pt. 51. These regulations reiterate the
mandatory nature of the AbilityOne Program. See 41 C.F.R. § 51–1.2(a)
(stating that the JWOD Act “mandates that commodities or services on the
[p]rocurement [l]ist required by [g]overnment entities be procured” from a
qualified nonprofit agency).
5
The Committee’s regulations describe the role of the “central nonprofit
agencies” in the AbilityOne Program. The regulations designate
SourceAmerica (formerly known as NISH) as the central nonprofit agency
that works, in a number of respects, with nonprofit agencies that employ
people with severe disabilities other than blindness. Id. §§ 51–3.1 to –3.2.
SourceAmerica is responsible for representing those nonprofit agencies
when dealing with the Committee; evaluating the qualifications and
capabilities of nonprofit agencies; recommending commodities and services
for inclusion on the procurement list; distributing orders from government
contracting activities; and recommending price changes. Id. § 51–3.2. The
regulations also impose requirements on participating nonprofit agencies
to, for example, initially qualify for participation in the AbilityOne Program
and thereafter maintain their qualification. See id. pt. 51–4.
SEKRI, Inc. v. United States, 34 F.4th at 1066–67 (all alterations in original; footnote
omitted); see also PDS Consultants, Inc. v. United States, 907 F.3d 1345, 1348 (Fed. Cir.
2018) (“The JWOD Act was enacted in 1938 to provide employment opportunities for the
blind, and was amended in 1971 to provide such opportunities for ‘other severely disabled
individuals.’”), cert. denied sub. nom. Winston-Salem Indus. for the Blind v. PDS
Consultants, Inc., 140 S. Ct. 909 (2020).
The implementing regulations for the JWOD Act are contained in Titles 41 and 48
of the Code of Federal Regulations. Regarding the policy of the JWOD Act, the
implementing regulations state:
(a) It is the policy of the Government to increase employment and training
opportunities for persons who are blind or have other severe disabilities
through the purchase of commodities and services from qualified
nonprofit agencies employing persons who are blind or have other
severe disabilities. The Committee for Purchase from People who are
Blind or Severely Disabled (hereinafter the Committee) was established
by the Javits-Wagner-O’Day Act, Public Law 92-28, 85 Stat. 77 (1971),
as amended, 41 U.S.C. 46-48c (hereinafter the JWOD Act). The
Committee is responsible for implementation of a comprehensive
program designed to enforce this policy.
(b) It is the policy of the Committee to encourage all Federal entities and
employees to provide the necessary support to ensure that the JWOD
Act is implemented in an effective manner. This support includes
purchase of products and services published on the Committee’s
Procurement List through appropriate channels from nonprofit agencies
employing persons who are blind or have other severe disabilities
designated by the Committee; recommendations to the Committee of
new commodities and services suitable for addition to the Procurement
List; and cooperation with the Committee and the central nonprofit
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agencies in the provision of such data as the Committee may decide is
necessary to determine suitability for addition to the Procurement List.
41 C.F.R. § 51-1.1 (2020).
To further the policy of the JWOD Act, the implementing regulations establish
“Mandatory source priorities.” 41 C.F.R. § 51-1.2(a) (2020). The regulation at 41 C.F.R.
§ 51-1.2(a) provides:
(a) The JWOD Act mandates that commodities or services on the
Procurement List required by Government entities be procured, as
prescribed in this regulation, from a nonprofit agency employing persons
who are blind or have other severe disabilities, at a price established by
the Committee, if that commodity or service is available within the
normal period required by that Government entity. Except as provided
in paragraph (b) of this section, the JWOD Act has priority, under the
provisions of 41 U.S.C. § 48,[5] over any other supplier of the
Government’s requirements for commodities and services on the
Committee’s Procurement List.
41 C.F.R. § 51-1.2(a) (alteration added). The JWOD Act implementing regulations define
the Procurement List as “a list of commodities (including military resale commodities) and
services which the Committee has determined to be suitable to be furnished to the
Government by nonprofit agencies for the blind or nonprofit agencies employing persons
with severe disabilities pursuant to the JWOD Act and these regulations.” 41 C.F.R. § 51-
1.3 (2020).
The implementing regulation at 41 C.F.R. § 51-2.2 explains that:
[t]he Committee is responsible for carrying out the following functions in
support of its mission of providing employment and training opportunities
for persons who are blind or have other severe disabilities and, whenever
possible, preparing those individuals to engage in competitive employment:
(a) Establish rules, regulations, and policies to assure effective
implementation of the JWOD Act.
(b) Determine which commodities and services procured by the Federal
Government are suitable to be furnished by qualified nonprofit agencies
employing persons who are blind or have other severe disabilities and add
those items to the Committee’s Procurement List. Publish notices of
addition to the Procurement List in the Federal Register. Disseminate
information on Procurement List items to Federal agencies. Delete items no
5 The mandatory source requirement was formerly codified at 41 U.S.C. § 48 and was
recodified at 41 U.S.C. § 8504.
7
longer suitable to be furnished by nonprofit agencies. Authorize and
deauthorize central nonprofit agencies and nonprofit agencies to accept
orders from contracting activities for the furnishing of specific commodities
and services on the Procurement List.
(c) Determine fair market prices for items added to the Procurement List
and revise those prices in accordance with changing market conditions to
assure that the prices established are reflective of the market.
(d) Monitor nonprofit agency compliance with Committee regulations and
procedures.
(e) Inform Federal agencies about the AbilityOne Program and the statutory
mandate that items on the Procurement List be purchased from qualified
nonprofit agencies, and encourage and assist entities of the Federal
Government to identify additional commodities and services that can be
purchased from qualified nonprofit agencies. To the extent possible,
monitor Federal agencies’ compliance with JWOD requirements.
(f) Designate, set appropriate ceilings on fees paid to these central nonprofit
agencies by nonprofit agencies selling items under the AbilityOne Program,
and provide guidance to central nonprofit agencies engaged in facilitating
the distribution of Government orders and helping State and private
nonprofit agencies participate in the AbilityOne Program.
(g) Conduct a continuing study and evaluation of its activities under the
JWOD Act for the purpose of assuring effective and efficient administration
of the JWOD Act. The Committee may study, independently, or in
cooperation with other public or nonprofit private agencies, problem s
relating to:
(1) The employment of the blind or individuals with other
severe disabilities.
(2) The development and adaptation of production methods
which would enable a greater utilization of these individuals.
(h) Provide technical assistance to the central nonprofit agencies and the
nonprofit agencies to contribute to the successful implementation of the
JWOD Act.
(i) Assure that nonprofit agencies employing persons who are blind will have
priority over nonprofit agencies employing persons with severe disabilities
in furnishing commodities.
41 C.F.R. § 51-2.2 (2020). The JWOD Act implementing regulations also state there is a
“statutory mandate that items on the Procurement List be purchased from qualified
nonprofit agencies.” 41 C.F.R. § 51-2.2; see also 41 U.S.C. § 8504(a).
Before adding or deleting an item from the Procurement List, the JWOD Act
implementing regulations state:
At least 30 days prior to the Committee’s consideration of the addition or
deletion of a commodity or service to or from the Procurement List, the
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Committee publishes a notice in the Federal Register announcing the
proposed addition or deletion and providing interested persons an
opportunity to submit written data or comments on the proposal.
41 C.F.R. § 51-2.3 (2020). In addition, before adding or deleting items, there must be a
“Determination of Suitability,” which requires:
(a) For a commodity or service to be suitable for addition to the Procurement
List, each of the following criteria must be satisfied:
(1) Employment Potential. The proposed addition must demonstrate a
potential to generate employment for persons who are blind or have
other severe disabilities.
(2) Nonprofit agency qualifications. The nonprofit agency (or agencies)
proposing to furnish the item must qualify as a nonprofit agency
serving persons who are blind or have other severe disabilities, as
set forth in part 51-4 of this chapter.
(3) Capability. The nonprofit agency (or agencies) desiring to furnish a
commodity or service under the JWOD Program must satisfy the
Committee as to the extent of the labor operations to be performed
and that it will have the capability to meet Government quality
standards and delivery schedules by the time it assumes
responsibility for supplying the Government.
(4) Level of impact on the current contractor for the commodity or
service.
(i) In deciding whether or not a proposed addition to the
Procurement List is likely to have a severe adverse impact on
the current contractor for the specific commodity or service,
the Committee gives particular attention to:
(A) The possible impact on the contractor’s total sales,
including the sales of affiliated companies and parent
corporations. In addition, the Committee considers the
effects of previous Committee actions.
(B) Whether that contractor has been a continuous supplier
to the Government of the specific commodity or service
proposed for addition and is, more dependent on the
income from such sales to the Government.
(ii) If there is not a current contract for the commodity or service
being proposed for addition to the Procurement List, the
Committee may consider the most recent contractor to furnish
the item to the Government as the current contractor for the
purpose of determining the level of impact.
41 C.F.R. § 51-2.4(a) (2020) (emphasis in original). When determining whether an item
should be added to the Procurement List,
9
[t]he Committee considers the particular facts and circumstances in each
case in determining if a commodity or service is suitable for addition to the
Procurement List. When the Committee determines that a proposed
addition is likely to have a severe adverse impact on a current contractor, it
takes this fact into consideration in deciding not to add the commodity or
service to the Procurement List, or to add only a portion of the Government
requirement for the item. If the Committee decides to add a commodity or
service in whole or in part to the Procurement List, that decision is
announced in the Federal Register with a notice that includes information
on the effective date of the addition.
41 C.F.R. § 51-2.5 (2020).
The JWOD Act implementing regulation at 41 C.F.R. § 51-2.8 explains:
(a) The Committee maintains a Procurement List which includes the
commodities and services which shall be procured by Government
departments and agencies under the JWOD Act from the nonprofit
agency(ies) designated by the Committee. Copies of the Procurement List,
together with information on procurement requirements and procedures are
available to contracting activities upon request.
(b) For commodities, including military resale commodities, the Procurement
List identifies the name and national stock number or item designation for
each commodity, and where appropriate, any limitation on the portion of the
commodity which must be procured under the JWOD Act.
41 C.F.R. § 51-2.8(a)–(b) (2020).
Notably, the JWOD Act implementing regulations impose specific duties on federal
contracting activities to promote the goals of the JWOD Act. For example, 41 C.F.R.
§ 51-5.1 provides:
(a) Contracting activities are encouraged to assist the Committee and the
central nonprofit agencies in identifying suitable commodities and services
to be furnished by nonprofit agencies employing persons who are blind or
have other severe disabilities so that the Committee can attain its objective
of increasing employment and training opportunities for individuals who are
blind or have other severe disabilities. For items which appear to be suitable
to be furnished by nonprofit agencies, the contracting activity should refer
the candidate commodities and services to the Committee or a central
nonprofit agency. If a contracting activity decides to procure one or more
commodities which are similar to a commodity or commodities on the
Procurement List, the contracting activity should refer the commodities it
intends to procure to the Committee or a central nonprofit agency.
10
(b) Contracting activities shall provide the Committee and designated central
nonprofit agencies with information needed to enable the Committee to
determine whether a commodity or service is suitable to be furnished by a
nonprofit agency. For commodities, information such as the latest
solicitation and amendments, bid abstracts, procurement history, estimated
annual usage quantities, and anticipated date or next solicitation issuance
and opening may be needed. For services, similar information including the
statement of work and applicable wage determination may be required. In
order to assist in evaluating the suitability of an office of Management and
Budget Circular A-76 conversion, contracting activities should provide a
copy of the draft statement of work and applicable wage determination to
the central nonprofit agency upon its request.
41 C.F.R. § 51-5.1 (2020).
For federal entities that seek to procure items on the Procurement List, the
regulation at 41 C.F.R. § 51-5.2 establishes JWOD qualified nonprofit organizations as
the mandatory sources of supply for Procurement List items. The regulation at 41 C.F.R.
§ 51-5.2, titled “Mandatory source requirement,” provides:
(a) Nonprofit agencies designated by the Committee are mandatory sources
of supply for all entities of the Government for commodities and services
included on the Procurement List, as provided in § 51-1.2 of this chapter.
(b) Purchases of commodities on the Procurement List by entities of the
Government shall be made from sources authorized by the Committee.
These sources may include nonprofit agencies, central nonprofit agencies,
Government central supply agencies such as the Defense Logistics Agency
and the General Services Administration, and certain commercial
distributors. Identification of the authorized sources for a particular
commodity may be obtained from the central nonprofit agencies at the
addresses noted in § 51-6.2 of this chapter.
(c) Contracting activities shall require other persons providing commodities
which are on the Procurement List to entities of the Government by contract
to order these commodities from the sources authorized by the Committee.
41 C.F.R. § 51-5.2(a)–(c) (2020). With regard to the scope of the mandatory source
requirement, the JWOD Act implementing regulation at 41 C.F.R. § 51-5.3(a) states:
(a) When a commodity is included on the Procurement List, the mandatory
source requirement covers the National Stock Number or item designation
listed and commodities that are essentially the same as the listed item. In
some instances, only a portion of the Government requirement for a
National Stock Number or item designation is specified by the Procurement
List. Where geographic areas, quantities, percentages or specific supply
locations for a commodity are listed, the mandatory provisions of the JWOD
11
Act apply only to the portion or portions of the commodity indicated by the
Procurement List.
41 C.F.R. § 51-5.3(a) (2020).
In specific circumstances, it may be appropriate for AbilityOne or a central nonprofit
agency to grant a purchase exception to the mandatory source requirement enumerated
by the JWOD Act and its implementing regulations. The implementing regulation at 41
C.F.R. § 51-5.4 explains:
(a) A central nonprofit agency will normally grant a purchase exception for a
contracting activity to procure from commercial sources commodities or
services on the Procurement List when both of the following conditions are
met:
(1) The central nonprofit agency or its nonprofit agency(ies) cannot furnish
a commodity or service within the period specified, and
(2) The commodity or service is available from commercial sources in the
quantities needed and significantly sooner than it will be available from
the nonprofit agency(ies).
(b) The central nonprofit agency may grant a purchase exception when the
quantity involved is not sufficient to be furnished economically by the
nonprofit agency(ies).
(c) The Committee may also grant a purchase exception for the reasons set
forth in paragraphs (a) and (b) of this section.
(d) The central nonprofit agency shall obtain the approval of the Committee
before granting a purchase exception when the value of the procurement
exceeds the simplified acquisition threshold set forth in the Federal
Acquisition Streamlining Act of 1994 or any subsequent amendments
thereto.
(e) When the central nonprofit agency grants a purchase exception under the
above conditions, it shall do so promptly and shall specify the quantities and
delivery period covered by the exception.
(f) When a purchase exception is granted under paragraph (a) of this section:
(1) Contracting activities shall initiate purchase actions within 15 days
following the date of the purchase exception. The deadline may be
extended by the central nonprofit agency with, in cases of
procurements exceeding the simplified acquisition threshold, the
concurrence of the Committee.
(2) Contracting activities shall furnish a copy to the solicitation to the
appropriate central nonprofit agency at the time it is issued, and a
copy of the annotated bid abstract upon awarding of the commercial
contract.
(g) Any decision by a central nonprofit agency regarding a purchase exception
may be appealed to the Committee by the contracting activity.
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41 C.F.R. § 51-5.4 (2020).
If the appropriate central nonprofit agency or AbilityOne determines that a
particular order for Procurement List items may exceed the capability of one or more
nonprofits, the JWOD Act implementing regulations authorize either the central nonprofit
or AbilityOne to issue a purchase exception to the mandatory source requirement. The
regulation at 41 C.F.R. § 51-6.7 provides:
(a) Nonprofit agencies are expected to furnish commodities on the
Procurement List within the time frames specified by the Government. The
nonprofit agency must have the necessary production facilities to meet
normal fluctuations in demand.
(b) Nonprofit agencies shall take those actions necessary to ensure that they
can ship commodities within the time frames specified by the Government.
In instances where the nonprofit agency determines that it cannot ship the
commodity in the quantities specified by the required shipping date, it shall
notify the central nonprofit agency and the contracting activity. The central
nonprofit agency shall request a revision of the shipping schedule which the
contracting activity should grant, if feasible, or the central nonprofit agency
shall issue a purchase exception authorizing procurement from commercial
sources as provided in § 51-5.4 of this chapter.
41 C.F.R. § 51-6.7 (2020).
To delete items from the Procurement List, the JWOD Act implementing regulation
at 41 C.F.R. § 51-6.8 states:
(a) When a central nonprofit agency decides to request that the Committee
delete a commodity or service from the Procurement List, it shall notify the
Committee staff immediately. Before reaching a decision to request a
deletion of an item from the Procurement List, the central nonprofit agency
shall determine that none of its nonprofit agencies is capable and desirous
of furnishing the commodity or service involved.
(b) Except in cases where the Government is no longer procuring the item in
question, the Committee shall, prior to deleting an item from the
Procurement List, determine that none of the nonprofit agencies of the other
central nonprofit agency is desirous and capable of furnishing the
commodity or service involved.
(c) Nonprofit agencies will normally be required to complete production of any
orders for commodities on hand regardless of the decision to delete the
item. Nonprofit agencies shall obtain concurrence of the contracting activity
and the Committee prior to returning a purchase order to the contracting
activity.
(d) For services, a nonprofit agency shall notify the contracting activity of its
intent to discontinue performance of the service 90 days in advance of the
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termination date to enable the contracting activity to assure continuity of the
service after the nonprofit agency’s discontinuance.
(e) The Committee may delete an item from the Procurement List without a
request from a central nonprofit agency if the Committee determines that
none of the nonprofit agencies participating in the AbilityOne Program are
capable and desirous of furnishing the commodity or service to the
Government, or if the Committee decides that the commodity or service is
no longer suitable for procurement from nonprofit agencies employing
people who are blind or have other severe disabilities. In considering such
an action, the Committee will consult with the appropriate central nonprofit
agency, the nonprofit agency or agencies involved, and the contracting
activity.
41 C.F.R. § 51-6.8 (2020).
With regard to replacement and similar commodities, the JWOD Act implementing
regulations indicate:
(a) When a commodity on the Procurement List is replaced by another
commodity which has not been recently procured, and a nonprofit
agency can furnish the replacement commodity in accordance with the
Government’s quality standards and delivery schedules, the
replacement commodity is automatically considered to be on the
Procurement List and shall be procured from the nonprofit agency
designated by the Committee at the fair market price the Committee has
set for the replacement commodity. The commodity being replaced shall
continue to be included on the Procurement List until there is no longer
a Government requirement for that commodity.
(b) If contracting activities desire to procure additional sizes, colors, or
other variations of a commodity after the commodity is added to the
Procurement List, and these similar commodities have not recently been
procured, these commodities are also automatically considered to be on
the Procurement List.
(c) In accordance with § 51-5.3 of this chapter, contracting activities are not
permitted to purchase commercial items that are essentially the same
as commodities on the Procurement List.
41 C.F.R. § 51-6.13 (2020).
In addition, the Federal Acquisition Regulations (FAR), at Title 48 of the Code of
Federal Regulations, contains regulations which further implement the JWOD Act. See
generally 48 C.F.R. subpart 8.7. With regard to the role of AbilityOne, 48 C.F.R. § 8.703,
states:
14
The Committee maintains a Procurement List of all supplies and services
required to be purchased from AbilityOne participating nonprofit agencies.
The Procurement List may be accessed at: http://www.abilityone.gov.
Questions concerning whether a supply item or service is on the
Procurement List may be submitted at Internet email address
info@abilityone.gov or referred to the Committee offices at the following
address and telephone number: Committee for Purchase From People Who
Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 10800,
Arlington, VA 22202-3259, 703-603-7740.
Many items on the Procurement List are identified in the General Services
Administration (GSA) Supply Catalog and GSA’s Customer Service Center
Catalogs with a black square and the words “NIB/NISH Mandatory Source,”
and in similar catalogs issued by the Defense Logistics Agency (DLA) and
the Department of Veterans Affairs (VA). GSA, DLA, and VA are central
supply agencies from which other Federal agencies are required to
purchase certain supply items on the Procurement List.
48 C.F.R. § 8.703 (2021). With a reference to Title 41 of the Code of Federal Regulations,
Title 48 of the FAR also lays out purchase priorities for entities of the federal government
that wish to purchase items from the Procurement List, stating:
(a) 41 U.S.C. chapter 85 requires the Government to purchase supplies or
services on the Procurement List, at prices established by the Committee,
from AbilityOne participating nonprofit agencies if they are available within
the period required. When identical supplies or services are on the
Procurement List and the Schedule of Products issued by Federal Prison
Industries, Inc., ordering offices shall purchase supplies and services in the
following priorities:
(1) Supplies:
(iii) Federal Prison Industries, Inc. (41 U.S.C. 8504).
(iv) AbilityOne participating nonprofit agencies.
(v) Commercial sources.
(2) Services:
(vi) AbilityOne participating nonprofit agencies.
(vii) Federal Prison Industries, Inc., or commercial sources.
(b) No other provision of the FAR shall be construed as permitting an exception
to the mandatory purchase of items on the Procurement List.
(c) The Procurement List identifies those supplies for which the ordering office
must obtain a formal waiver (8.604) from Federal Prison Industries, Inc.,
before making any purchases from AbilityOne participating nonprofit
agencies.
48 C.F.R. § 8.704 (2021).
15
The FAR also provides procedures for when the federal government’s needs may
exceed nonprofit production capability. The regulation at 48 C.F.R. § 8.706 states:
(a) Ordering offices may acquire supplies or services on the Procurement
List from commercial sources only if the acquisition is specifically authorized
in a purchase exception granted by the designated central nonprofit agency.
(b) The central nonprofit agency shall promptly grant purchase exceptions
when-
(1) The AbilityOne participating nonprofit agencies cannot provide
the supplies or services within the time required, and commercial
sources can provide them significantly sooner in the quantities
required; or
(2) The quantity required cannot be produced or provided
economically by the AbilityOne participating nonprofit agencies.
(c) The central nonprofit agency granting the exception shall specify the
quantity and delivery or performance period covered by the exception.
(d) When a purchase exception is granted, the contracting officer shall-
(1) Initiate purchase action within 15 days following the date of the
exception or any extension granted by the central nonprofit agency;
and
(2) Provide a copy of the solicitation to the central nonprofit agency
when it is issued.
(e) The Committee may also grant a purchase exception, under any
circumstances it considers appropriate.
48 C.F.R. § 8.706 (2021) (emphasis in original). With regard to replacement commodities,
similar to the JWOD Act implementing regulation at 41 C.F.R. § 51-6.13(a), the JWOD
Act implementing regulation at 48 C.F.R. § 8.715 provides that
[w]hen a commodity on the Procurement List is replaced by another
commodity which has not been previously acquired, and a qualified
AbilityOne participating nonprofit agency can furnish the replacement
commodity in accordance with the Government’s quality standards and
delivery schedules and at fair market price, the replacement commodity is
automatically on the Procurement List and shall be acquired from the
AbilityOne participating nonprofit agency designated by the Committee. The
commodity being replaced shall continue to be included on the Procurement
List until there is no longer a requirement for that commodity.
48 C.F.R. § 8.715 (2021).
On December 1, 2006, AbilityOne published, what it labeled a “Clarification of
Scope of Procurement List Additions; 2007 Procurement List,” in the Federal Register.
See Clarification of Scope Procurement List Additions; 2007 Commodities Procurement
List, 71 Fed. Reg. 69,535 (Dec. 1, 2006) (2006 Clarification). In the announcement, which
16
was not promulgated as a regulation in the Federal Register, AbilityOne addressed
proposed procedures for adding products to the Procurement List and announced a three-
tiered system: “A List”, “B List”, and “C List.” See id. The 2006 Clarification states with
regard to “A List” items:
The first category (the A List) contains commodity type products that are
commonly used in office and light industrial settings. These products, when
furnished by the JWOD Program, are widely available through multiple
Government and commercial distribution channels, and are delivered to
customers in timeframes consistent with industry best practices. For most
office supplies, this means on a next-day or two-day basis. For oversize
office products (e.g., chair mats), or janitorial/sanitary products, delivery
times may be three to five days after receipt of order. “A list” products must
be purchased by Federal employees whenever there are available within
required timeframes and quantities.
Id. at 69,536 (capitalization in original). With regard to “B-List” items, the 2006 Clarification
provides:
The second category (the B List) contains products that are not used in
volume in most offices, but have broad applicability across multiple Federal
agencies, and the demand for these items is aggregated by the General
Services Administration (GSA). As such, GSA is the JWOD Program’s
responsible contracting activities for these items on behalf of the rest of the
Federal Government, just as GSA fulfills this role for A List items. However,
given the B List items’ less-than-universal demand, particularly in terms of
office use, the B List items are not required to be available through all
commercial distribution channels. The B List items are available through the
Federal Supply System, as managed by GSA, and will be carried by
authorized commercial distributors who carry comparable commercial
product families. The JWOD purchasing preference extends to those items
and applies to all entities of the Government when such items meet
customers’ needs and are available in the timeframe and quantities
necessary.
Id. (capitalization in original). With regard to “C List” items, the 2006 Clarification states:
The third category (the C List) contains specialized or niche products (i.e.,
adapted to a specific function or demand) that are most often designed and
manufactured to meet the needs of a single Federal agency, or a group of
customers with a unique requirement. These products, when furnished
under the JWOD Program, are sponsored by and have procurement
preference for the specific Federal agency or agencies that defined the
17
requirement. The JWOD procurement preference does not apply to Federal
Agencies that are not identified on the Procurement List documentation for
such items. Generally, C List items are only made available to Federal
customers through the distribution channels authorized by the requiring
office. If Federal agencies whose requirements are not specified on the
Procurement List would like to purchase C list items, they must refer their
request to the sponsoring contracting activity. Alternatively, Federal
agencies may ask the Committee to change the Procurement List in order
to add their agency as an additional contracting Activity.
Id. (capitalization in original).
On August 27, 2010, AbilityOne published a Federal Register Notice, titled
“Procurement List Additions,” effective September 27, 2010, which added to the
Procurement List a series of national stock numbers for the Multi-Camouflage Trouser,
stated in this litigation by both parties to have the same national stock numbers as the
Women’s IHWCU Trousers.6 See Procurement List Additions, 75 Fed. Reg. 52,724,
52,725 (Aug. 27, 2010). The August 27, 2010 notice stated in part:
NPAs [Nonprofit Agencies]: ReadyOne Industries, Inc., El Paso, TX
Goodwill Industries of South Florida, Inc., Miami, FL
Contracting Activity: Department of the Army Research, Development, &
Engineering Command, Natick, MA.
Coverage: C-List for 50% of the requirement of the U.S. Army, as
aggregated by the Department of the Army Research, Development, &
Engineering Command, Natick, MA.
6 The court notes that both parties strenuously asserted and both parties agreed during
the course of the litigation in the above captioned protest that the unisex IHWCU Trousers
were added to the Procurement List as a variation of the Multi-Camouflage Trouser. See
Procurement List Additions, 75 Fed. Reg. 52,724, 52,725 (Aug. 27, 2010); see also 41
C.F.R. § 51-6.13. The court accepts the protestor’s and defendant’s definition of the
Women’s IHWCU Trouser as a replacement item for the unisex IHWCU Trouser and,
therefore, as an item that is “automatically considered to be on the Procurement List” as
of September 27, 2010. See 41 C.F.R. § 51-6.13. The court observes that the trousers’
sizing and designation changed from unisex to female through the January 11, 2021
Notice of Addition published in the Federal Register discussed below. The Administrative
Record does not offer details on the differences between the unisex and the female
trousers, and neither party alleged that the differences between the unisex and the female
trousers was relevant to the above captioned bid protest.
18
See Procurement List Additions, 75 Fed. Reg. 52,724, 52,725 (Aug. 27, 2010) (emphasis
in original; alteration added).
On November 28, 2017, AbilityOne issued a Notice of Addition in which AbilityOne,
citing 41 C.F.R. § 51-6.13(b),7 added the unisex IHWCU Trouser to the Procurement List
under Procurement List Number 20105144. The November 28, 2017 Notice indicated:
Distribution: C-List
Contracting Activity: Army Contracting Command – Aberdeen Proving
Ground, Natick Contracting Division
Mandatory for: 50% of the requirement of the U.S. Army
Designated Mandatory Source(s) of Supply: Goodwill Industries of South
Florida, Inc., Miami, FL, a nonprofit agency associated with SourceAmerica,
is authorized to accept orders for the products listed above.
(emphasis in original).
On November 17, 2021, Evan Eisenberg, the contracting officer for the
procurement challenged in the above captioned protest, issued a Memorandum for
Record which provided the following background:
The U.S. Army Natick Soldier Systems (Natick) developed the Improved
Hot Weather Combat Uniform (IHWCU) to meet the needs of warfighters
deployed to hot weather desert and/or tropical locations. Natick serves as
the research and development center for the Army. The IHWCU is intended
to serve as an alternative to the Army Combat Uniform (ACU) for those
environments. The IHWCU consists of a coat and trousers. The initial
development and fielding of the IHWCU relied on a unisex sizing tariff that
was intended to meet the needs of both male and female warfighters.
The Memorandum for Record continued,
[a]fter developing and transmitting the SRP [supply request package] for the
IHWCU, Natick then developed a more specific sizing tariff and design for
female soldiers – the IHWCU-F. Due to congressional inquiries regarding
the availability of female specific uniforms and equipment, there was
increased pressure on the Army to field the uniforms as quickly as possible.
(alteration added).
7 41 C.F.R. § 51-6.13(b) provides, in full, that “[i]f contracting activities desire to procure
additional sizes, colors, or other variations of a commodity after the commodity is added
to the Procurement List, and these similar commodities have not recently been procured,
these commodities are also automatically considered to be on the Procurement List.”
19
On January 11, 2021, AbilityOne issued a Notice of Addition which added the
Women’s IHWCU Trousers to the Procurement List. The January 11, 2021 Notice of
Addition stated in its entirety:
PROCUREMENT LIST
NOTICE OF ADDITION
TO: Army Contracting Command – Aberdeen Proving Ground, Natick Contracting
Division
SourceAmerica
In accordance with 41 CFR 51-6.13(b), the U.S. AbilityOne Commission
(Commission) has determined that the following products are additional
sizes, colors, or other variations of products already on the Procurement
List (PL) and that these products have not recently been procured.
Accordingly, the products are automatically considered to be on the PL at
the Fair Market Prices (FMP) indicated
Product Name: Trouser, Improved Hot Weather Combat Uniform
(IHWCU), Permethrin, Women’s, Army
Product NSN Size
8415-01-687-6651 25-X Short
8415-01-687-6669 25-Short
8415-01-687-3100 25-Regular
8415-01-687-6659 28-A Short
8415-01-687-6201 28-Short
8415-01-687-6555 28-Regular
8415-01-687-6180 28-Long
8415-01-687-1971 31-X Short
8415-01-687-1339 31-Short
8415-01-687-1353 31-Regular
8415-01-687-6673 31-Long
8415-01-687-2126 31-X Long
8415-01-687-6147 35-Short
8415-01-687-2060 35-Regular
8415-01-687-1345 35-Long
8415-01-687-4018 35-X Long
The following information is applicable to all products listed above
20
Product Description: The Improved Hot Weather Combat Uniform
(IHWCU) trouser has one (1) button/buttonhole closure with seven (7) belt
loops along with a covered fly with three (3) buttons and buttonhole closure,
two (2) side hanging pockets, two (2) front side pleated cargo pockets with
three (3) buttons/two (2) buttonholes closure flaps. The trousers include a
double needle seat patch and knee reinforcement patches and a mesh
fabric attached on the inside of the trousers at the bottom of the legs as
inner cuffs. Both the bottom of the trousers legs and the inner cuffs have
drawstrings. The trouser is treated with permethrin, wind resistant, and
wrinkle free. UOI [Unit of Issue] is PR.
Unit of issue: PR
FMP Category: Post Treated Garment - Rapid Fielding
FMP Change Mechanism: Negotiated
FOB Origin FMP: $62.34
FOB Destination FMP: $62.50
In accordance with 41 CFR 51-2.7, change to the FMP [Fair Market Price]
outside of the approved methodology above and provisions in the U.S.
AbilityOne Pricing Policy 51.610, Pricing AbilityOne Products, must be
approved by the Commission before a contract is awarded or an existing
contract is modified.
Distribution: C-List
Contracting Activity: Army Contracting Command - Aberdeen Proving
Ground, Natick Contracting Division
Mandatory for: 50% of the requirement of the Department of Defense
Designated Source of Supply: Goodwill Industries of South Florida, Inc.,
Miami, FL, a nonprofit agency associated with SourceAmerica, is
authorized to accept orders for the products listed above.
This addition to the Procurement List is effective the date of this notice. In
accordance with 41 CFR 51-5.3, this change does not affect contracts for
the product awarded prior to the effective date of the Procurement List
addition or options exercised under those contracts. Please direct questions
regarding this Notice to Operations@abilityone.gov.
21
(capitalization and emphasis in original; alteration added). 8
Solicitation No. SPE1C1-21-R-0029, the one at issue in this protest, for the
procurement of Women’s Improved Hot-Weather Combat Uniform (IHWCU) Trousers
was issued by the DLA for troop sustainment on April 26, 2021. As indicated above,
protestor argues that according to the Procurement List maintained by the AbilityOne,
Goodwill Industries of South Florida is the mandatory source of supply for the Women’s
IHWCU Trousers and that procurement from any source but Goodwill Industries of South
Florida violates procurement statutes and regulations. Protestor’s complaint indicates that
“Goodwill [Industries of South Florida] has received, has performed, and is performing
one or more military contracts for the Goodwill items.” Goodwill Industries of South
Florida’s bid protest complaint alleges that protestor had “received Contract No.
W911QY-21-C-0042, to supply the Women’s IHWCU Trousers,” which “are in production
at Goodwill [Industries of South Florida].” (alteration added).
Defendant acknowledges that
[a]fter the Commission allocated a portion of the Army’s requirement for
combat pants to the Procurement List, Army-Natick issued a series of
product development contracts to Goodwill. See AR Tab 46, at 1053
(Goodwill’s project development plan noting that it has produced IHWCU-F
trousers “under complete M&D contracts,” that is—manufacture and
development contracts).
Additionally, defendant acknowledges that Goodwill Industries of South Florida was
producing the Women’s IHWCU Trousers during what defendant characterizes as the
development phase, and that once the design was finalized, AbilityOne issued the
January 11, 2021 Notice of Addition, which added the Women’s IHWCU Trousers to the
Procurement List. Defendant also states that “[a]fter the Commission allocated a portion
of the Army’s requirement for combat pants to the Procurement List, Army-Natick issued
a series of product development contracts to Goodwill,” and notes that “Army -Natick’s
most recent contract with Goodwill [Industries of South Florida] called for 68,991 pants to
be delivered in monthly installments in quantities ranging from 2,000 to 6,370.” (alteration
8 Protestor’s complaint alleges that it received a Notice of Change, dated April 8, 2021,
which was similar to the January 11, 2021 Notice of Addition. The April 8, 2021 Notice of
Change to the Procurement List that was issued by AbilityOne for the “Army Contracting
Command - Aberdeen Proving Ground, Natick Contracting Division,” similarly dated April
8, 2021, changed a single Product NSN: 8415-01-687-6555, and noted: “Product Name:
Trouser, Improved Hot Weather Combat Uniform (IHWCU), Permethrin, Women’s, Army,
28-Regular.” (capitalization and emphasis in original). AbilityOne then issued a revised
Notice of Addition on November 9, 2021, in which AbilityOne changed “the Mandatory for
[sic] statement from Department of Defense to U.S. Army.” (capitalization in original ;
alteration added).
22
added). The defendant indicates that when Army-Natick subsequently proposed to add a
portion of its requirement for the Women’s IHWCU Trousers to the Procurement List, its
estimated annual quantity was contemplated to be 86,688 trousers.
Defendant identifies that the procuring agency, “DLA is a ‘defense agency’ under
the authority, direction, and control of the Department of Defense.” See 10 U.S.C. §§
191–92; see also DoDD 5105.22 (June 29, 2017). Defendant also indicates, with respect
to the DLA:
The agency’s primary mission is to “manage[s] [sic] the global supply
chain—from raw materials to end user to disposition—for the Army, Marine
Corps, Navy, Air Force, Space Force, Coast Guard, 11 combatant
commands, other federal agencies, and partner and allied nations.” DLA
Troop Support requirements are unique given that it is responsible for
“manag[ing] the supply chains for food, textiles, construction material,
industrial hardware and medical supplies and equipment, including
pharmaceuticals.” Within DLA Troop Support, the clothing and textiles
supply chain “outfit[s] every soldier, sailor, airman and Marine around the
world, from their first day of service in boot camp, to camouflage uniforms
worn on the battlefield and service dress uniforms.”
(capitalization in original; first and third alterations in original; citations omitted).
The regulation at 48 C.F.R. § 8.703 provides that “GSA, DLA, and VA are central
supply agencies from which other Federal agencies are required to purchase certain
supply items on the Procurement List.” 48 C.F.R. § 8.703. In addition, citing to Department
of Defense Instruction (DoDI) 4140.63 ¶¶ 2.4, 2.6 (June 7, 2019), defendant explains that
“[a]lthough DLA manages various supply chains for the services, the military services’
research and engineering arms are typically responsible for developing the products —
e.g., Army weapons, Air Force helicopter motors, Navy coats—to meet their particular
needs.” Because Army-Natick is the research and development center for the Army, as
stated in the Army Statement of Work for the Army Combat Pants in the earlier related
protest, Goodwill Industries of South Florida, Inc. v. United States, 156 Fed. Cl. 661(2021) (Goodwill I), submitted as part of the Administrative Record in the current protest,
“[w]hen testing a uniform design, Army-Natick often develops a specification and field
tests the design with specific units or at specific installations.” According to the November
17, 2021 Memorandum for Record by the contracting officer, Evan Eisenberg, also stated,
“[p]roduction requirements during research and development are typically narrow,” and
“Natick generally procures items during the research and development phase of new
items when requirements are much smaller.” Additionally, the November 17, 2021
Memorandum for Record stated that the efforts undertaken at Army-Natick “‘do not
typically involve the same or similar scope and magnitude of effort that DLA Troop
Support requires for sustainment of the item.’” According to DoDI 4140.63, ¶ 2.3 (Apr. 12,
2019), after Army-Natick completes research and development on a particular item of
“DoD clothing and textiles material,” Army-Natick may transfer the requirement to the DLA
23
for the procurement, management, and supply of products made in accordance with that
item, which is generally referred to as “sustainment.” At the “sustainment” level, the DLA
develops acquisition strategies and awards contracts to support Department of Defense
requirements. See DoDI 4140.01, at 22 (Mar. 6, 2019). The DLA administers the contracts
and awards follow-on contracts to ensure the item’s availability until it receives notice that
the product is being replaced or discontinued. See id. With respect to the Women’s
IHWCU Trousers, defendant states that “[h]aving completed the technical design of the
combat pants and female improved hot weather trousers, Army-Natick transferred these
products to DLA Troop Support for procurement at sustainment levels.”
Relevant to the protest at issue, on April 26, 2021, the DLA issued solicitation No.
SPE1C1-21-R-0029 to procure the Women’s IHWCU Trousers using competitive
procedures. The government indicates in its motion for judgment on the Administrative
Record that
DLA Troop Support intends to award two IDIQ contracts—one restricted to
small businesses, the other restricted to HUBZone businesses—to procure
the female improved hot weather trousers, and to select contractors based
on best value. Because DLA Troop Support estimates a combined average
requirement of 192,000 trousers per year, awarding two contracts will
“ensure that multiple sources are available to provide for the continuous
availability of reliable sources of supplies.” On December 1, 2021, DLA
Troop Support awarded the small business contract, but the agency has not
yet awarded the HUBZone contract.
(internal citations omitted).
Prior to filing the instant protest, on May 24, 2021, Goodwill Industries of South
Florida filed a pre-award bid protest complaint in this court, challenging the solicitation
issued by DLA Troop Support for Army Combat Pants and for Women’s IHWCU Trousers,
which is also the subject of the above captioned current bid protest. See Goodwill I, 156
Fed. Cl. at 663. In Goodwill I, Goodwill Industries of South Florida sought an injunction
prohibiting federal procurement, including by the DLA, of the Women’s IHWCU Trousers,
as well as the Army Combat Pants, referred to by the protestor as the “Goodwill items,”
from any entity other than Goodwill Industries of South Florida. Id. at 671.9 In Goodwill I,
Goodwill Industries of South Florida argued that
[b]ecause Goodwill [Industries of South Florida] is the mandatory source of
supply for the Goodwill items, if DLA can issue solicitations for the Goodwill
items at all, DLA should require awardees under the Solicitations to acquire
9 In addition to the Women’s IHWCU Trousers, there was a second item from the
Procurement List at issue in Goodwill I, the Army Combat Pants. See generally Goodwill
I, 156 Fed. Cl. 661. The Army Combat Pants are not at issue in this protest.
24
the Goodwill items from Goodwill [Industries of South Florida]. DLA has not
done so. This violates 41 C.F.R. § 51-5.2.
Id. at 671 (alterations added). Therefore, in Goodwill I, Goodwill Industries of South
Florida asked this court to enjoin “federal acquisition of the Goodwill items, and any
replacement item or variation of the Goodwill items, and any item that is ‘essentially the
same’ or ‘similar,’ from any source other than Goodwill [Industries of South Florida].” Id.(alteration added). This court dismissed Goodwill I, without prejudice, as unripe. See id.at 680–81. At the time that protestor Goodwill Industries of South Florida filed the protest
in Goodwill I, defendant had not yet issued a final solicitation or award for the items at
issue in the protest. See id. at 677. Accordingly, this court found that
for the DLA procurement of the Army Hot-Weather Trousers, no award has
been made, and no final solicitation has been issued [for either the Army
Combat Pants or the Women’s IHWCU trousers]. Although protestor argues
that the award of a contract to anyone other than Goodwill [Industries of
South Florida] will be a violation of numerous statutes and regulations
related to the Procurement List, the anticipation of a future procurement
violation is not sufficient to make a claim ripe in a bid protest before the
court.
Id. at 675 (alteration added).
Thereafter, Evan Eisenberg, the contracting officer for solicitation No. SPE1C1-21-
R-0029, the solicitation now at issue before this court, issued his November 17, 2021
Memorandum for Record which states in part:
The U.S. Army Natick Soldier Systems (Natick) developed the Improved
Hot Weather Combat Uniform (IHWCU) to meet the needs of warfighters
deployed to hot weather desert and/or tropical locations. Natick serves as
the research and development center for the Army. The IHWCU is intended
to serve as an alternative to the Army Combat Uniform (ACU) for those
environments. The IHWCU consists of a coat and trousers. The initial
development and fielding of the IHWCU relied on a unisex sizing tariff that
was intended to meet the needs of both male and female warfighters.
Natick sent a supply request package (SRP) for the unisex IHWCU to DLA
Troop Support in 2019. Based on the Army’s fielding needs, DLA Troop
Support competitively solicited and issued contracts for the IHWCU
beginning on December 15, 2020.
After developing and transmitting the SRP for the IHWCU, Natick then
developed a more specific sizing tariff and design for female soldiers – the
IHWCU-F [Women’s IHWCU Trousers]. Due to congressional inquiries
regarding the availability of female specific uniforms and equipment, there
25
was increased pressure on the Army to field the uniforms as quickly as
possible. The SRP was approved November 2020, and the Army wanted to
begin to be able to issue the IHWCU-F according to its fielding plan in July
2021. The production lead time for the item is 180 days for initial deliveries
and 150 days for subsequent deliveries. DLA had to develop an acquisition
strategy to try supply the IHWCU-F as close to the Army’s desired
timeframes as possible while taking into consideration the practical realities
of soliciting and awarding contracts having long production lead times.
As part of its initial acquisition planning, DLA Troop Support conducted
market research to test the domestic industrial market as to interest and
production capabilities. Although requirements for sustaining uniform items
after development are routinely transferred to DLA Troop Support via the
SRP process, DLA Troop Support does not normally consider performance
on Natick contracts as part of its market research analysis. This is because
Natick generally procures items during the research and development
phase of new items when requirements are much smaller, and the efforts
do not typically involve the same or similar scope and magnitude of effort
that DLA Troop Support requires for sustainment of the item.
Based on its market research, DLA determined that the solicitation would
contain two lots resulting in two long term contracts for these items. Both
lots contain the IHWCU-F coats and trousers. One lot is set aside for small
businesses and the other lot is set aside for HUBZone small businesses.
Because the acquisition timeline would not permit DLA Troop Support to
have sufficient quantities of the IHWCU-F coats and trousers available to
issue to female personnel starting in July 2021, on December 9, 2020, DLA
Troop Support modified a previously-issued solicitation for IHWCU (unisex)
coats and trousers to add a portion of its requirements for ICHCU-F coats
and trousers. Two contracts were awarded pursuant to that solicitation,
each with a monthly maximum of 30,000: SPE1C1-D-1449, awarded on
March 9, 2021 (IWHCU coats and IHWCU-F coats); and SPE1C1-21-D-
1456, awarded on April 7, 2021 (IWHCU trousers and IHWCU-F trousers).
Adding the IHWCU-F to the previously-issued IHWCU solicitation and
awards was intended to provide additional support for female personnel
until the long-term contracts for the IHWCU-F could be put in place. As a
short-term stopgap measure, DLA also requested the Army to place an
order under Natick’s existing contracts for a quantity of 69,000 IHWCU-F
coats and 69,480 IHWCU-F trousers. DLA Troop Support supported the
request through a Military Interdepartmental Purchase Request (MIPR)
which is a method to transfer funds from one military organization to
another. DLA Troop Support was aware that the Army’s contracts were with
Ability One for the IHWCU-F coats and trousers. Seeking the additional
quantities under Natick’s contracts was intended to assist DLA Troop
26
Support with building up the initial inventory needed while contracts were
being awarded and production ramped up under the long-term contracts.
(capitalization in original; alteration added). The November 17, 2021 Memorandum for
Record continues:
The contracting team discussed the Court’s decision with agency counsel
and reviewed counsel’s memorandum outlining the legal requirements
related to items on the PL [Procurement List]. Based on a counsel’s
comments, and a review of the rules governing acquisitions from Ability One
nonprofit agencies/workshops, especially the Commission’s Clarification of
Scope of Procurement List Additions; 2007 Commodities Procurement List
71 Fed. Reg. 69,535, 69,536 (Dec. 1. 2006)), DLA Troop Support does not
consider the current identification of the IHWCU-F Trouser or Coat on the
C list, with Natick as the designated contracting activity, to indicate that DLA
must acquire the item directly from an Ability One nonprofit
agency/workshop.
In reaching this decision, DLA Troop Support considered the fact that the
Procurement Notice of Addition that added the IHWCU-F to the PL identifies
the item as being a C list item, which from the 2006 Clarification means that
it is a specialized item designed to meet the needs of a single Agency or
group of customers. Further the 2006 Clarification indicated that the
products on the C list are only mandatory for the agency which sponsored
them. In this case, Natick has been designated as the Agency that
sponsored the addition of the IHWCU-F Coat and Trouser to the PL. DLA
Troop Support was not consulted by Natick, an Ability One nonprofit agency
or even the Ability One Commission regarding the addition of the IHWCU-
F coat or trouser to the PL, and thus had no opportunity to weigh in
regarding the scope of future acquisitions that DLA Troop Support may be
required to fulfill. Here the current solicitation has a monthly maximum
quantity of 13,333 trousers and 13,333 coats for each lot. These quantities
are more than double what Goodwill is producing on Natick’s contract for
the trousers and what Ready One or IOB Greensboro is producing on
Natick’s contracts for the coat. The identification of the contracting activity
on the PL is meaningful, since just because the Ability One Commission
determined that one or more workshops can satisfy the needs of Natick, it
does not mean that the Ability One Commission has determined that those
workshops can satisfy the much larger needs of a different contracting
activity such as DLA Troop Support.
While it might be possible to acquire a smaller percentage of the total
quantity needed from an Ability One nonprofit workshop, DLA does not
consider it to be in the government’s best interest to apportion a percentage
27
to Ability One for the IHWCU-F coats and trousers. When determining the
monthly maximums and estimated monthly orders under a contract, DLA
Troop Support is taking into consideration reasonable economic production
runs needed to keep a production line running. DLA Troop Support also
must comply with the requirements of the Competition in Contracting Act
(CICA), 10 U.S.C. §2304 which requires that procurements for property
must be obtained through full and open competition unless an exception
applies. Since the IHWCU-F trouser and coats are not mandatory for DLA
Troop Support to acquire from an Ability One nonprofit agency/workshop,
there is no basis for DLA Troop Support to order even a small percentage
from Ability One unless DLA Troop Support seeks to place a portion on the
PL.
In developing an acquisition strategy, and even in considering whether to
seek to request that an item, or percent of an item, be placed on the PL as
mandatory for DLA Troop Support to acquire, DLA Troop Support considers
the domestic industrial base as a whole. Due to the domestic sourcing
restrictions of the Berry Amendment (10 U.S.C. 2533a), all uniform items,
such as the IHWCU-F Trouser are required to be 100% domestically
manufactured, including all the components. There is an extremely limited
domestic industrial base that manufactures clothing components from fiber
to finished product, and part of DLA Troop Support’s acquisition strategy is
to ensure that there is sufficient demand and domestic capability to ensure
the health and strength of that domestic base. After reviewing its
requirements and taking into account the capabilities of commercial
domestic manufacturers, DLA Troop Support does not consider it beneficial
to seek to request the Ability One Commission to place a portion or
percentage of the IHWCU-F trouser or coat on the PL as mandatory for DLA
Troop Support because shifting even a small quantity of production away
from the commercial acquisitions to Ability One would result in lower
monthly production runs which could discourage competition, drive up
prices and/or result in companies having to reduce their workforce due to
the lower production quantities.
Therefore, based on the above, DLA Troop Support has determined that it
is in the government’s best interests to continue with its competitive
acquisition for the IHWCU-F coats and trousers and not to seek to place
these items on the PL as mandatory for DLA Troop Support as the
contracting activity, either in whole or part at this time.
(capitalization and emphasis in original).
28
After solicitation No. SPE1C1-21-R-0029 was issued on April 26, 2021,10 protestor
filed the above captioned post-award bid protest, which similar to Goodwill I, alleges three
claims. First, protestor, again, “objects to any solicitation by a Federal agency for bids or
proposals for a proposed contract or to a proposed award or the award of a contract for
federal procurement of the Goodwill items (or similar items, etc.) from anyone other than
Goodwill [Industries of South Florida].” (emphasis in original; alteration added). In count
two, protestor “seeks injunctive relief prohibiting DLA from procurement of the Goodwill
items (or ‘similar’ items, etc.) from anyone other than Goodwill [Industries of South
Florida].” (emphasis in original; alteration added). Finally, in count three, protestor alleges
that “[b]ecause Goodwill [Industries of South Florida] is the mandatory source of supply
for the Goodwill items, if DLA can issue solicitations for the Goodwill items at all, DLA
should require awardees under the Solicitations to acquire the Goodwill items from
Goodwill [Industries of South Florida].” (alteration added).
After an initial hearing in the protest currently under review, the parties filed cross-
motions for judgment on the Administrative Record. In protestor’s motion for judgment on
the Administrative Record, Goodwill Industries of South Florida argues that if an item is
on the Procurement List, it creates a mandatory source of supply for the government,
including the DLA. Furthermore, according to protestor: “Goodwill maintains that as the
mandatory source of supply, it should not have had to submit a proposal to DLA in order
to be awarded this requirement.” Goodwill Industries of South Florida also contends that
“the presence of the Hot-Weather [the Women’s IHWCU] Trousers on the Procurement
List mandates that every federal agency, including DLA, purchase these items from
Goodwill [Industries of South Florida].” (alterations added). In the defendant’s cross-
motion for judgment on the Administrative Record, defendant, however, argues that “the
JWOD Act does not require all entities of the federal government to procure items on the
procurement list through the AbilityOne program,” or to procure 100% of their
requirements through AbilityOne. Defendant states:
Goodwill [Industries of South Florida]’s protest rises and falls on its
suggestion that the addition of any product on the Procurement List is
without limitation such that all portions of the government must procure
100% of their requirements for that product through the AbilityOne program.
But no procurement statute or regulation imposes that categorical mandate.
On the contrary, at least three [AbilityOne] Commission regulations
authorize the Commission to place scope limitations by adding portions of
a product requirement to the Procurement List.
10 As indicated above, solicitation No. SPE1C1-21-R-0029 specified the award of two
IDIQ contracts, one restricted to small businesses and one restricted to HUBZone
businesses. When the above captioned protest was filed, the DLA had awarded one but
not both of the contracts. Accordingly, the parties in their documents sometimes refer to
the above captioned protest as pre-award and at other times post-award.
29
(alteration added). Specifically, the government contends that the procurement list applies
only to “Army-Natick’s purchases of 50% of Army’s requirements” of Women’s IHWCU
Trousers and “[t]he Commission’s 2006 clarification further demonstrates that DLA Troop
Support is not required to purchase the Female Improved Hot Weather Trousers through
the AbilityOne Program.”
In response, protestor argues that the Women’s IHWCU Trousers are “on the
JWOD ‘Procurement List,’” and that “[u]nder the JWOD Act (and relevant regulations),
the item must be made by a workshop until a rational finding is made that no workshop
can make it.” Protestor alleges that since “[t]here has been no such finding,” and that the
“DLA’s award of a contract for production of the item to a commercial contractor, instead
of a workshop, is a violation of the JWOD Act (and relevant regulations).” After the parties
briefed the cross-motions for judgment on the Administrative Record, the court held oral
argument. In response to the stated immediate urgency of the protest as represented by
the parties, the court subsequently issued its decision orally to the parties. The court’s
oral decision granted protestor’s motion for judgment on the Administrative Record
including injunctive relief, effective immediately at the time of the oral decision. As noted
above, this Opinion incorporates and memorializes the court’s oral decision.
DISCUSSION
As noted above, protestor and defendant have filed cross-motions for judgment on
the Administrative Record. Rule 52.1 (2021) of the Rules of the United States Court of
Federal Claims (RCFC) governs motions for judgment on the Administrative Record. The
court’s inquiry is directed to “‘whether, given all the disputed and undisputed facts, a party
has met its burden of proof based on the evidence in the record.’” Mgmt. & Training Corp.
v. United States, 115 Fed. Cl. 26, 40 (2014) (quoting A & D Fire Prot., Inc. v. United
States, 72 Fed. Cl. 126, 131 (2006)); see also PGLS, LLC v. United States, 152 Fed. Cl.
59, 67 (2020); Superior Optical Labs, Inc. v. United States, 150 Fed. Cl. 681, 691 (2020)
(citing Bannum, Inc. v. United States, 404 F.3d 1346, 1356–57 (Fed. Cir. 2005)); see also
AAR Manufacturing, Inc. v. United States, 149 Fed. Cl. 514, 522 (2020); Glocoms, Inc. v.
United States, 149 Fed. Cl. 725, 731 (2020); Centerra Grp., LLC v. United States, 138
Fed. Cl. 407, 412 (2018) (citing Bannum, Inc. v. United States, 404 F.3d at 1356–57);
Informatics Applications Grp., Inc. v. United States, 132 Fed. Cl. 519, 524 (2017);
Strategic Bus. Sols., Inc. v. United States, 129 Fed. Cl. 621, 627 (2016), aff’d, 711 F.
App’x 651 (Fed. Cir. 2018); Rotech Healthcare Inc. v. United States, 118 Fed. Cl. 408,
413 (2014); Eco Tour Adventures, Inc. v. United States, 114 Fed. Cl. 6, 21 (2013); DMS
All-Star Joint Venture v. United States, 90 Fed. Cl. 653, 661 (2010). Pursuant to RCFC
52.1, in a bid protest, the court reviews the agency’s procurement decision to determine
whether it is supported by the Administrative Record. See CW Gov’t Travel, Inc. v. United
States, 110 Fed. Cl. 462, 481 (2013); see also CR/ZWS LLC v. United States, 138 Fed.
30Cl. 212, 223 (2018) (citing Bannum, Inc. v. United States, 404 F.3d at 1353–54).
The Administrative Dispute Resolution Act of 1996 (ADRA), Pub. L. No. 104-320,
§§ 12(a), 12(b), 110 Stat. 3870, 3874 (1996) (codified at 28 U.S.C. § 1491(b)(1)–(4)),
amended the Tucker Act to establish a statutory basis for bid protests in the United States
Court of Federal Claims. See SEKRI, Inc. v. United States, 34 F.4th at 1071 (citing
Distributed Sols., Inc. v. United States, 539 F.3d 1340, 1344 (Fed. Cir. 2008); Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1330–32 (Fed.
Cir. 2001); see also Sys. Application & Techs., Inc. v. United States, 691 F.3d 1374, 1380
(Fed. Cir. 2012) (explaining that the Tucker Act expressly waives sovereign immunity for
claims against the United States in bid protests). The statute provides that protests of
agency procurement decisions are to be reviewed under APA standards, making
applicable the standards outlined in Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C.
Cir. 1970), and the line of cases following that decision. See, e.g., Per Aarsleff A/S v.
United States, 829 F.3d 1303, 1309 (Fed. Cir. 2016) (“Protests of agency procurement
decisions are reviewed under the standards set forth in the Administrative Procedure Act
(‘APA’), see 28 U.S.C. § 1491(b)(4) (citing 5 U.S.C. § 706), ‘by which an agency’s decision
is to be set aside only if it is arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law[.]’” (quoting NVT Techs., Inc. v. United States, 370 F.3d 1153,
1159 (Fed. Cir. 2004)) (citing PAI Corp. v. United States, 614 F.3d 1347, 1351 (Fed. Cir.
2010))); Dell Fed. Sys., L.P. v. United States, 906 F.3d 982, 990 (Fed. Cir. 2018); Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332; Res.
Conservation Grp., LLC v. United States, 597 F.3d 1238, 1242 (Fed. Cir. 2010)
(“Following passage of the APA in 1946, the District of Columbia Circuit in Scanwell Labs.,
Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), held that challenges to awards of
government contracts were reviewable in federal district courts pursuant to the judicial
review provisions of the APA.”); Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324,
1329 (Fed. Cir.) (citing Scanwell Labs., Inc. v. Shaffer, 424 F.2d at 864, 868, for its
“reasoning that suits challenging the award process are in the public interest and
disappointed bidders are the parties with an incentive to enforce the law”), reh’g denied
(Fed. Cir. 2004). In Banknote Corp. of Am., Inc. v. United States, 365 F.3d 1345 (Fed.
Cir. 2004), the Federal Circuit explained that “[u]nder the APA standard as applied in the
Scanwell line of cases, and now in ADRA cases, ‘a bid award may be set aside if either
(1) the procurement official’s decision lacked a rational basis; or (2) the procurement
procedure involved a violation of regulation or procedure.’” Id. at 1351 (quoting Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d at 1332)); see also
Harmonia Holdings Grp., LLC v. United States, 999 F.3d 1397, 1403 (Fed. Cir. 2021);
Palantir USG, Inc. v. United States, 904 F.3d 980, 990 (Fed. Cir. 2018); AgustaWestland
North Am., Inc. v. United States, 880 F.3d 1326, 1332 (Fed. Cir. 2018); Info. Tech. &
Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir.), reh’g and reh’g en
banc denied (Fed. Cir. 2003).
When discussing the appropriate standard of review for bid protest cases, the
United States Court of Appeals for the Federal Circuit addressed subsections (2)(A) and
(2)(D) of 5 U.S.C. § 706, see Impresa Construzioni Geom. Domenico Garufi v. United
31
States, 238 F.3d at 1332 n.5, but focused its attention primarily on subsection (2)(A). See
Croman Corp. v. United States, 724 F.3d 1357, 1363 (Fed. Cir.) (“‘[T]he proper standard
to be applied [to the merits of] 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.”’” (alterations in original)
(quoting Banknote Corp. of Am. v. United States, 365 F.3d at 1350-51 (citing Advanced
Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057-58 (Fed. Cir.), reh’g denied
(Fed. Cir. 2000)))), reh’g and reh’g en banc denied (Fed. Cir. 2013). The statute says that
agency procurement actions should be set aside when they are “arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law,” or “without observance of
procedure required by law.” 5 U.S.C. § 706(2)(A), (D) (2018);11 see also Mitchco Int’l, Inc.
v. United States, 26 F.4th 1373, 1384 (Fed. Cir. 2022) (applying the “‘arbitrary and
capricious’” standard of Administrative Procedure Act, 5 U.S.C. § 706(2)(A), to review of
a bid protest) (citing Impresa Construzioni Geom. Domenico Garufi v. United States, 238
F.3d at 1332); Veterans Contracting Grp., Inc. v. United States, 920 F.3d 801, 806 (Fed.
Cir. 2019) (“In a bid protest, we follow Administrative Procedure Act § 706 and set aside
agency action ‘if it is arbitrary, capricious, an abuse of discretion, or otherwise not in
11 The language of 5 U.S.C. § 706 provides in full:
To the extent necessary to decision and when presented, the reviewing
court shall decide all relevant questions of law, interpret constitutional and
statutory provisions, and determine the meaning or applicability of the terms
of an agency action. The reviewing court shall—
(1) compel agency action unlawfully withheld or unreasonably delayed;
and
(2) hold unlawful and set aside agency action, findings, and conclusions
found to be—
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or
short of statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to
sections 556 and 557 of this title or otherwise reviewed on the
record of an agency hearing provided by statute; or
(F) unwarranted by the facts to the extent that the facts are subject
to trial de novo by the reviewing court.
In making the foregoing determinations, the court shall review the whole
record or those parts of it cited by a party, and due account shall be taken
of the rule of prejudicial error.
5 U.S.C. § 706.
32
accordance with law.’” (quoting Palladian Partners, Inc. v. United States, 783 F.3d 1243,
1252 (Fed. Cir. 2015)); Tinton Falls Lodging Realty, LLC v. United States, 800 F.3d 1353,
1358 (Fed. Cir. 2015); Orion Tech., Inc. v. United States, 704 F.3d 1344, 1347 (Fed. Cir.
2013); COMINT Sys. Corp. v. United States, 700 F.3d 1377, 1381 (Fed. Cir. 2012) (“We
evaluate agency actions according to the standards set forth in the Administrative
Procedure Act; namely, for whether they are ‘arbitrary, capricious, an abuse of discretion,
or otherwise not in accordance with law.’” (quoting 5 U.S.C. § 706(2)(A); and Bannum,
Inc. v. United States, 404 F.3d at 1351)); Savantage Fin. Servs. Inc., v. United States,
595 F.3d 1282, 1285–86 (Fed. Cir. 2010); Weeks Marine, Inc. v. United States, 575 F.3d
1352, 1358 (Fed. Cir. 2009); Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374,
1381 (Fed. Cir. 2009) (noting arbitrary and capricious standard set forth in 5 U.S.C. §
706(2)(A), and reaffirming the analysis of Impresa Construzioni Geom. Domenico Garufi
v. United States, 238 F.3d at 1332); Blue & Gold Fleet, L.P. v. United States, 492 F.3d
1308, 1312 (Fed. Cir. 2007) (“‘[T]he inquiry is whether the [government]’s procurement
decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law.”’” (quoting Bannum, Inc. v. United States, 404 F.3d at 1351 (quoting 5 U.S.C.
§ 706(2)(A) (2000)))); NVT Techs., Inc. v. United States, 370 F.3d at 1159 (“Bid protest
actions are subject to the standard of review established under section 706 of title 5 of
the Administrative Procedure Act (‘APA’), 28 U.S.C. § 1491(b)(4) (2000), by which an
agency’s decision is to be set aside only if it is ‘arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law,’ 5 U.S.C. § 706(2)(A) (2000).” (internal
citations omitted)); Info. Tech. & Applications Corp. v. United States, 316 F.3d at 1319(“Consequently, our inquiry is whether the Air Force’s procurement decision was
‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’ 5
U.S.C. § 706(2)(A) (2000).”); Synergy Sols., Inc. v. United States, 133 Fed. Cl. 716, 734
(2017) (citing Banknote Corp. of Am. v. United States, 365 F.3d at 1350); Eco Tour
Adventures, Inc. v. United States, 114 Fed. Cl. at 22; Contracting, Consulting, Eng’g LLC
v. United States, 104 Fed. Cl. 334, 340 (2012). “In a bid protest case, the agency’s award
must be upheld unless it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law.’” Turner Constr. Co. v. United States, 645 F.3d 1377, 1383 (Fed.
Cir.) (quoting PAI Corp. v. United States, 614 F.3d at 1351), reh’g en banc denied (Fed.
Cir. 2011); see also Tinton Falls Lodging Realty, LLC v. United States, 800 F.3d at 1358
(citing Savantage Fin. Servs., Inc. v. United States, 595 F.3d at 1285-86) (“In applying
this [arbitrary and capricious] standard to bid protests, our task is to determine whether
the procurement official’s decision lacked a rational basis or the procurement procedure
involved a violation of a regulation or procedure.”) (alteration added); Glenn Def. Marine
(ASIA), PTE Ltd. v. United States, 720 F.3d 901, 907 (Fed. Cir.), reh’g en banc denied
(Fed. Cir. 2013); McVey Co., Inc. v. United States, 111 Fed. Cl. 387, 402 (2013) (“The
first step is to demonstrate error, that is, to show that the agency acted in an arbitrary and
capricious manner, without a rational basis or contrary to law.”); PlanetSpace, Inc. v.
United States, 92 Fed. Cl. 520, 531–32 (citing Weeks Marine, Inc. v. United States, 575
F.3d at 1358) (“Stated another way, a plaintiff must show that the agency’s decision either
lacked a rational basis or was contrary to law.”), subsequent determination, 96 Fed. Cl.
119 (2010).
33
The United States Supreme Court has identified sample grounds which can
constitute arbitrary or capricious agency action:
[W]e will not vacate an agency’s decision unless it “has relied on factors
which Congress has not intended it to consider, entirely failed to consider
an important aspect of the problem, offered an explanation for its decision
that runs counter to the evidence before the agency, or is so implausible
that it could not be ascribed to a difference in view or the product of agency
expertise.”
Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 658 (2007) (quoting
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)); see
also F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502, 552 (2009); Tinton Falls
Lodging Realty, LLC v. United States, 800 F.3d at 1358; Ala. Aircraft Indus., Inc.-
Birmingham v. United States, 586 F.3d 1372, 1375 (Fed. Cir. 2009), reh’g and reh’g en
banc denied (Fed. Cir. 2010); In re Sang Su Lee, 277 F.3d 1338, 1342 (Fed. Cir. 2002)
(“[T]he agency tribunal must present a full and reasoned explanation of its dec ision. . . .
The reviewing court is thus enabled to perform meaningful review . . . .”); Textron, Inc. v.
United States, 74 Fed. Cl. 277, 285–86 (2006), appeal dismissed sub nom. Textron, Inc.
v. Ocean Technical Servs., Inc., 223 F. App’x 974 (Fed. Cir. 2007). The United States
Supreme Court also has cautioned, however, that “courts are not free to impose upon
agencies specific procedural requirements that have no basis in the APA.” Pension
Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 654 (1990).
Under an arbitrary or capricious standard, the reviewing court should not substitute
its judgment for that of the agency but should review the basis for the agency decision to
determine if it was legally permissible, reasonable, and supported by the facts. See Motor
Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. at 43 (“The scope of
review under the ‘arbitrary and capricious’ standard is narrow and a court is not to
substitute its judgment for that of the agency.”); see also Dell Fed. Sys., L.P. v. United
States, 906 F.3d at 990; Turner Constr. Co., Inc. v. United States, 645 F.3d at 1383; R &
W Flammann GmbH v. United States, 339 F.3d 1320, 1322 (Fed. Cir. 2003) (citing Ray
v. Lehman, 55 F.3d 606, 608 (Fed. Cir.), cert. denied, 516 U.S. 916 (1995)); Synergy
Sols., Inc. v. United States, 133 Fed. Cl. at 735 (citing Impresa Construzioni Geom.
Domenico Garufi v. United States, 238 F.3d at 1332-33). “‘“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.”’” Weeks Marine, Inc. v. United States,
575 F.3d at 1371 (quoting 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)));
Limco Airepair, Inc. v. United States, 130 Fed. Cl. 544, 550 (2017) (citation omitted);
Jordan Pond Co., LLC v. United States, 115 Fed. Cl. 623, 631 (2014); Davis Boat Works,
Inc. v. United States, 111 Fed. Cl. 342, 349 (2013); Norsat Int’l [America], Inc. v. United
States, 111 Fed. Cl. 483, 493 (2013); HP Enter. Servs., LLC v. United States, 104 Fed.
Cl. 230, 238 (2012); Vanguard Recovery Assistance v. United States, 101 Fed. Cl. 765,
780 (2011).
34
Stated otherwise by the United States Supreme Court:
Section 706(2)(A) requires a finding that the actual choice made was not
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law.” To make this finding the court must consider whether the decision
was based on a consideration of the relevant factors and whether there has
been a clear error of judgment. Although this inquiry into the facts is to be
searching and careful, the ultimate standard of review is a narrow one. The
court is not empowered to substitute its judgment for that of the agency.
Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971) (internal citations
omitted), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977); see
also Mitchco Int’l, Inc. v. United States, 26 F.4th at 1384; U.S. Postal Serv. v. Gregory,
534 U.S. 1, 6–7 (2001); Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419
U.S. 281, 285 (1974), reh’g denied, 420 U.S. 956 (1975); Co-Steel Raritan, Inc. v. Int’l
Trade Comm’n, 357 F.3d 1294, 1309 (Fed. Cir. 2004) (In discussing the “arbitrary,
capricious, and abuse of discretion, or otherwise not in accordance with the law” standard,
the Federal Circuit stated: “the ultimate standard of review is a narrow one. The court is
not empowered to substitute its judgment for that of the agency.”); In re Sang Su Lee,
277 F.3d at 1342; Advanced Data Concepts, Inc. v. United States, 216 F.3d at 1058 (“The
arbitrary and capricious standard applicable here is highly deferential. This standard
requires a reviewing court to sustain an agency action evincing rational reasoning and
consideration of relevant factors.” (citing Bowman Transp., Inc. v. Arkansas-Best Freight
Sys., Inc., 419 U.S. at 285)); Lockheed Missiles & Space Co. v. Bentsen, 4 F.3d 955, 959
(Fed. Cir. 1993); Sys. Studies & Simulation, Inc. v. United States, 146 Fed. Cl. 186, 199
(2019); By Light Prof’l IT Servs., Inc. v. United States, 131 Fed. Cl. 358, 366 (2017).
In the bid protest currently at issue, the court observes that there are tensions
between the objectives of the statutorily and regulatorily established goals of the JWOD
Act and the AbilityOne Program, both designed to provide employment opportunities to
people who are blind or who are otherwise severely disabled through a mandatory set
aside in government procurements for certain products or services, as compared to
certain objectives of the Department of Defense (and potentially other agencies) to
procure items in a timely fashion, while assuring that necessary quantities of products are
available for mission success. In the current protest, the defendant has acknowledged
that “[t]he JWOD Act established the AbilityOne program whereby agencies must procure
designated products and services on a noncompetitive basis from qualified nonprofit
agencies that provide employment opportunities for blind individuals or individuals with
severe disabilities.” The JWOD Act indicates that the “Committee on its own or in
cooperation with other public or nonprofit private agencies may study problems related to
the employment of the blind and other severely disabled individuals,” and “the
development and adaptation of production methods that would enable a greater utilization
of the blind and other severely disabled individuals.” 41 U.S.C. § 8503. The implementing
regulations at 41 C.F.R. § 51-2.2 provide that the “Committee is responsible for carrying
35
out the following functions in support of its mission,” including to
[i]nform Federal agencies about the AbilityOne Program and the statutory
mandate that items on the Procurement List be purchased from qualified
nonprofit agencies, and encourage and assist entities of the Federal
Government to identify additional commodities and services that can be
purchased from qualified nonprofit agencies. To the extent possible,
monitor Federal agencies’ compliance with JWOD requirements.
41 C.F.R. § 51-2.2(e). As discussed above, in the above captioned protest, AbilityOne
vigorously aligned itself with the defendant. AbilityOne’s counsel signed on to the
defendant’s briefs, and Kimberly M. Zeich, Deputy Executive Director and Chief Operating
Officer of the AbilityOne, provided an unwavering declaration in support of the DLA. At
the same time, Ms. Zeich’s declaration acknowledged that “[i]n conjunction with other
regulations and policies, including the Federal Acquisition Regulation (‘FAR’), and unless
otherwise excepted, the JWOD Act requires the Federal Government to procure certain
products and services from qualified nonprofit agencies (NPA) employing individuals who
are blind or are severely disabled.” Ms. Zeich, however, stated that “[a]lthough the
Commission is a mandatory source of supply for Federal agencies, it is not the singular,
mandatory procurement source for Federal agencies in all circumstances.” Without
further explanation of the JWOD Act’s impact on the choices made to proceed with a
competitive procurement, Ms. Zeich commented,
[a]lthough the Commission encourages SourceAmerica and DLA Troop
Support to request that the Commission consider whether an NPA, such as
Goodwill [Industries of South Florida], would satisfy the suitability criteria
with respect to DLA Troop Support’s requirements for these products,
based on my 13 years of experience administering the Procurement List, I
understand that DLA Troop Support is currently under no obligation to
procure these specific quantities through the AbilityOne program because
DLA Troop Support’s requirements for the female IHWCU trousers have not
been added to the Procurement List.
Also, important for the analysis in this protest, throughout the proceedings, both
protestor and defendant have vigorously urged this court, in their filings with the court and
during hearings before the court, that the Women’s IHWCU Trousers are items that are
currently on the Procurement List. Moreover, in protestor’s filings with the court, Goodwill
Industries of South Florida consistently has contended that “Goodwill [Industries of South
Florida] is both ‘capable’ and ‘desirous’ of continuing to furnish the items on the
Procurement List, i.e., the Hot-Weather Trousers.” (alteration added). Protestor relies on
a declaration submitted to the court signed by Mark Marchioli, Vice President of Business
Development for Goodwill Industries of South Florida, in which Mr. Marchioli affirmed that
“Goodwill is ready, willing, and able to provide these items [the Women’s IHWCU
Trousers].” (alteration added).
36
On January 11, 2021, AbilityOne sent a Notice of Addition to the Procurement List
which added the Women’s IHWCU Trousers to the Procurement List, and which is quoted
above. In protestor’s motion for judgment on the Administrative Record, based on the
JWOD Act and its implementing regulations, protestor argues that when an item is on the
Procurement List, a JWOD qualified nonprofit is the mandatory source of supply for the
federal government and that federal agencies, including the DLA, must purchase the
items from Goodwill Industries of South Florida, or from some other JWOD Act qualified
nonprofit. Additionally, protestor argues that “Goodwill [Industries of South Florida]
maintains that as the mandatory source of supply, it should not have had to submit a
proposal to DLA in order to be awarded this requirement.” (alteration added). Protestor
also argues that any scope limitations on purchasing Procurement List items have no
basis “in the cited statute, nor in the cited regulation [sic].” (alteration added). As noted
above, defendant, by contrast, contends that “the JWOD Act does not require all entities
of the federal government to procure items on the procurement list through the AbilityOne
program.”
In a statutory construction analysis, “[t]he first step is ‘to determine whether the
language at issue has a plain and unambiguous meaning with regard to the particular
dispute in the case.’” Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450 (2002) (quoting
Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997)); see also Republic of Sudan v.
Harrison, 139 S. Ct. 1048, 1056 (2019) (quoting Caraco Pharm. Labs., Ltd. v. Novo
Nordisk A/S, 566 U.S. 399, 412 (2012) (“We begin ‘where all such inquiries must begin:
with the language of the statute itself.’” (quoting United States v. Ron Pair Enters., Inc.,
489 U.S. 235, 241 (1989)))); Jimenez v. Quarterman, 555 U.S. 113, 118 (2009) (“As with
any question of statutory interpretation, our analysis begins with the plain language of the
statute.”); LaBonte v. United States, No. 2021-1432, 2022 WL 3329950, at *8 (Fed. Cir.
Aug. 12, 2022) (“We begin our analysis, as we must, with the pertinent statutory
language.”); Nicely v. United States, 23 F.4th 1364, 1368 (Fed. Cir. 2022) (“When
interpreting a statute, we ‘begin with the language employed by Congress. ’”
(quoting Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., 541 U.S. 246, 252
(2004)); Wright v. Sec’y of Health and Human Servs., 22 F.4th 999, 1004 (Fed. Cir. 2022)
(“The ‘starting point’ in statutory construction ‘is the language of the statute’ —not a single
sentence or word of the statute, but rather ‘the provisions of the whole law,’ its object, and
its policy.”) (quoting Dole v. United Steelworkers of Am., 494 U.S. 26, 35 (1990)); AD
Global Fund, LLC ex rel. North Hills Holding, Inc. v. United States, 481 F.3d 1351, 1353
(Fed. Cir. 2007) (“The ‘first step “is to determine whether the language at issue has a
plain and unambiguous meaning with regard to the particular dispute in the case.”’”
(quoting Barnhart v. Sigmon Coal Co., Inc., 534 U.S. at 450 (quoting Robinson v. Shell
Oil Co., 519 U.S. at 340))); Starry Assocs., Inc. v. United States, 892 F.3d 1372, 1377
(Fed. Cir. 2018); PDS Consultants, Inc. v. United States, 907 F.3d at 1357; Bettcher
Indus., Inc. v. Bunzl USA, Inc., 661 F.3d 629, 644 (Fed. Cir.), reh’g and reh’g en banc
denied (Fed. Cir. 2011); Strategic Hous. Fin. Corp. of Travis Cnty. v. United States, 608
F.3d 1317, 1323 (Fed. Cir. 2010) (“When interpreting any statute, we look first to the
statutory language.”), reh’g and reh’g en banc denied (Fed. Cir. 2010), cert. denied, 562
37
U.S. 1221 (2011). “The plainness or ambiguity of statutory language is determined by
reference to the language itself, the specific context in which that language is used, and
the broader context of the statute as a whole.” Robinson v. Shell Oil Co., 519 U.S. at 341
(citing Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 477 (1992); McCarthy v.
Bronson, 500 U.S. 136, 139 (1991)); see also King v. Burwell, 576 U.S. 473, 474 (2015)
(“[W]hen deciding whether the language is plain, we must read the words ‘in their context
and with a view to their place in the overall statutory scheme.’” (quoting FDA v. Brown &
Williamson Tobacco Corp., 529 U.S. 120, 133 (2000))). In construing a statute, courts
“‘must begin with the language employed by Congress and the assumption that the
ordinary meaning of that language accurately expresses the legislative purpose.’”
Schindler Elevator Corp. v. United States, 563 U.S. 401, 407 (2011) (quoting Gross v.
FBL Fin. Servs., Inc., 557 U.S. 167, 175 (2009) (internal quotation marks omitted)). Even
“‘[w]hen terms used in a statute are undefined, we give them their ordinary meaning.’”
Schindler Elevator Corp. v. United States, 563 U.S. at 407 (quoting Asgrow Seed Co. v.
Winterboer, 513 U.S. 179, 187 (1995)); see also Unicolors, Inc. v. H&M Hennes & Mauritz,
L.P., 142 S. Ct. 941 (2022) (using the ordinary or commonplace definition of “knowledge”
to interpret statutory text); Wolfe v. McDonough, 28 F.4th 1348, 1354 (Fed. Cir. 2022) (“It
is a ‘fundamental canon of statutory construction’ that ‘unless otherwise defined, words
will be interpreted as taking their ordinary, contemporary, common meaning [] . . . at the
time Congress enacted the statute.’” (quoting Perrin v. United States, 444 U.S. 37, 42
(1979)). “[W]e consider each question [of statutory interpretation] in the context of the
statute.” Caraco Pharm. Labs., Ltd. v. Novo Nordisk A/S/, 566 U.S. at 412 (alteration
added) (citing Robinson v. Shell Oil Co., 519 U.S. at 341); Roberts v. Sea-Land Servs.,
Inc., 566 U.S. 93, 100 (2012); Bush v. United States, 655 F.3d 1323, 1329 (Fed. Cir.
2011), cert. denied, 566 U.S. 1021 (2012).
The initial inquiry into the statutory text ceases “if the statutory language is
unambiguous and ‘the statutory scheme is coherent and consistent.’” Barnhart v. Sigmon
Coal Co., 534 U.S. at 450 (quoting Robinson v. Shell Oil Co., 519 U.S. at 340); see also
King v. Burwell, 576 U.S. at 474 (“If the statutory language is plain, we must enforce it
according to its terms.”) (citing Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242,
251 (2010)); Sucic v. Wilkie, 921 F.3d 1095, 1098 (Fed. Cir. 2019) (quoting Barnhart v.
Sigmon Coal Co., 534 U.S. at 450); Bettcher Indus., Inc. v. Bunzl USA, Inc., 661 F.3d at
644; Arko Foods Int’l, Inc. v. United States, 654 F.3d 1361, 1364 (Fed. Cir. 2011)
(“‘[W]here Congress has clearly stated its intent in the language of a statute, a court
should not inquire further into the meaning of the statute.’” (quoting Millenium Lumber
Distrib., Ltd. v. United States, 558 F.3d 1326, 1328 (Fed. Cir.), reh’g denied (Fed. Cir.
2009)); Am. Airlines, Inc. v. United States, 551 F.3d 1294, 1300 (Fed. Cir. 2008). Thus,
when the “‘statute’s language is plain, “the sole function of the courts is to enforce it
according to its terms.”’” Johnson v. United States, 529 U.S. 694, 723 (2000) (quoting
United States v. Ron Pair Enters., Inc., 489 U.S. at 241 (quoting Caminetti v. United
States, 242 U.S. 470, 485 (1917))); see also Jimenez v. Quarterman, 555 U.S. at 118;
Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6 (2000)); Bartels
Trust for the Benefit of Cornell Univ. ex rel. Bartels v. United States, 617 F.3d at 1361
38
(citing Sharp v. United States, 580 F.3d at 1237); Candle Corp. of Am. v. U.S. Int’l Trade
Comm’n, 374 F.3d 1087, 1093 (Fed. Cir.), reh’g and reh’g denied (Fed. Cir. 2004).
When interpreting the plain meaning of the statute, it is the court’s duty, if possible,
to give meaning to every clause and word of the statute. See Setser v. United States, 566
U.S. 231, 239 (2012) (“Our decision today follows the interpretive rule they invoke, that
we must ‘give effect . . . to every clause and word’ of the Act.” (omission in original)
(quoting United States v. Menasche, 348 U.S. 528, 538–39 (1955))); see also Alaska
Dep’t of Env’t Conservation v. EPA, 540 U.S. 461, 489 n.13 (2004) (“It is, moreover, ‘“a
cardinal principle of statutory construction” that “a statute ought, upon the whole, to be so
construed that, if it can be prevented, no clause, sentence, or word shall be superfluous,
void, or otherwise insignificant.”’” (quoting TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001)
(quoting Duncan v. Walker, 533 U.S. 167, 174 (2001)))); Williams v. Taylor, 529 U.S. 362,
404 (2000) (describing as a “cardinal principle of statutory construction” the rule that every
clause and word of a statute must be given effect if possible); Wolfe v. McDonough, 28
F.4th at 1354–55 (“The presumption against surplusage additional provides that a ‘Statute
should be construed so that effect is given to all its provisions, so that no part will be
inoperative or superfluous, void or insignificant.’”) (quoting Hibbs v. Winn, 542 U.S. 88,
101 (2004) (citing 2A Norman J. Singer, Statutes and Statutory Construction § 46.06, at
18186 (rev. 6th ed. 2000))); Boeing Co. v. Sec’y of the Air Force, 983 F.3d 1321, 1327
(Fed. Cir. 2020) (quoting Shea v. United States, 976 F.3d 1292, 1300 (Fed. Cir. 2020)
(“[i]t is a ‘cardinal principle of statutory construction that courts must give effect, if possible,
to every clause and word of a statute.’” (quoting Williams v. Taylor, 529 U.S. at 364)));
Sharp v. United States, 580 F.3d 1234, 1238 (Fed. Cir. 2009). Similarly, the court must
avoid an interpretation of a clause or word which renders other provisions of the statute
inconsistent, meaningless, or superfluous. See Duncan v. Walker, 533 U.S. at 174 (noting
that courts should not treat statutory terms as “surplusage”). “[W]hen two statutes are
capable of co-existence, it is the duty of the courts . . . to regard each as effective.”
Radzanower v. Touche Ross & Co., 426 U.S. 148, 155 (1976); see also Xianli Zhang v.
United States, 640 F.3d 1358, 1368 (Fed. Cir.) (citing Cathedral Candle Co. v. U.S. Int’l
Trade Comm’n, 400 F.3d 1352, 1365 (Fed. Cir. 2005)), reh’g and reh’g en banc denied
(Fed. Cir. 2011), cert. denied, 566 U.S. 986 (2012); Hanlin v. United States, 214 F.3d
1319, 1321 (Fed. Cir.), reh’g denied (Fed. Cir. 2000).
The United States Supreme Court also has held that the specific terms of a statute
supersede general terms within that statute or within another statute that might otherwise
control. See Fourco Glass Co. v. Transmirra Prods. Corp., 353 U.S. 222, 228–29 (1957)
(“Specific terms prevail over the general in the same or another statute which otherwise
might be controlling.”) (quoting D. Ginsberg & Sons v. Popkin, 285 U.S. 204, 208 (1932)));
see also Bloate v. United States, 559 U.S. 196, 207 (2010); Bulova Watch Co. v. United
States, 365 U.S. 753, 761 (1961). In addition, the Supreme Court has endorsed “the
‘normal rule of statutory construction’ that ‘identical words used in different parts of the
same act are intended to have the same meaning.’” Gustafson v. Alloyd Co., 513 U.S.
561, 570 (1995) (quoting Dep’t of Revenue of Or. v. ACF Indus., Inc., 510 U.S. 332, 342
(1994)); see also Kislev Partners, L.P. ex rel. Bahar v. United States, 84 Fed. Cl. 385,
39
389, recons. denied, 84 Fed. Cl. 378 (2008). Furthermore, when “Congress has not
‘directly spoken to the precise question at issue,’” a court shall sustain the agency’s
approach “so long as it is ‘based on a permissible construction of the statute.’” Auer v.
Robbins, 519 U.S. 452, 457 (1997) (citing Chevron U.S.A. Inc. v. Nat’l Res. Def. Council,
Inc., 467 U.S. 837, 842–43 (1984)).
Regulatory interpretation uses a similar analytical framework as is applied to
statutory interpretation. The court must carefully examine “the text, structure, history, and
purpose of a regulation before resorting to deference.” See Kisor v. Wilkie, 139 S. Ct.
2400, 2415 (2019) (citing Chevron U.S.A., Inc. v. Nat’l Res. Def. Council, Inc., 467 U.S.
at 843 n.9 (adopting the same approach for ambiguous statutes)). When the text is
unambiguous, the court need only read the plain language of the regulation. See Breland
v. McDonough, 22 F.4th 1347, 1353 (Fed. Cir. 2022); see also Bauer v. Fed. Deposit Ins.
Corp., 38 F.4th 1114, 1121 n.2 (D.C. Cir. 2022) (stating that it was unnecessary to apply
Chevron deference when the “Federal Deposit Insurance Act and its implementing
regulations” were straight forward and were not ambiguous). A Judge of the United States
Court of Federal Claims explained:
This Court construes a regulation in the same way as a statute. Tesoro
Haw. Corp. v. United States, 405 F.3d 1339, 1346–47 (Fed. Cir. 2005)
(citing Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414–15 (1945)).
The Court’s analysis of a regulation begins with the plain language of the
regulation. See Barnhart v. Sigmon Coal Co., 5334 U.S. 438, 450 (2002)
(“As in all statutory construction cases we begin with the language of the
statute.”). If the regulatory language is clear and unambiguous, then the
Court does not need to conduct any further inquiry. Robert v. Dep’t of Navy,
440 F.3d 1341, 1350 (Fed. Cir. 2006).
Johnson v. United States, 157 Fed. Cl. 8, 18 (2021).
The United States Supreme Court in Kisor v. Wilkie wrote,
for not every reasonable agency reading of a genuinely ambiguous rule
should receive Auer deference. See Auer v. Robbins, 519 U.S. at 457. We
have recognized in applying the Auer case that a court must make an
independent inquiry into whether the character and context of the agency
interpretation entitles it to controlling weight.
Kisor v. Wilkie, 139 S. Ct. at 2416 (citing Christopher v. SmithKline Beecham Corp., 567
U.S. 142, 155 (2012)).12 By way of example, the Supreme Court in Kisor v. Wilkie
12Although not a precedential decision, as recently indicated by the United States Court
of Appeals for the Federal Circuit, an agency will receive Auer deference only if a
40
identified “some especially important markers for identifying when Auer deference is and
is not appropriate,” including “the regulatory interpretation must be one actually made by
the agency,” “the agency’s interpretation must in some way implicate its substantive
expertise,” and “[f]inally, an agency’s reading of a rule must reflect ‘fair and considered
judgment’ to receive Auer deference.” Kisor v. Wilkie, 139 S. Ct. at 2416–17. Further, the
“Court does not interpret statutes and regulations in a vacuum, the Court looks to other
relevant regulations in the same title.” Cully Corp. v. United States, 160 Fed. Cl. 360, 378
(2022). The statutory language which lays out the goals of the JWOD Act is clear and not
ambiguous as quoted above. The implementing regulations of the JWOD Act also are
clear and not ambiguous as stating the requirements of how to proceed to award
government contracts under the JWOD Act implementing regulations. See Breland v.
McDonough, 22 F.4th at 1353; see also Bauer v. Federal Dep’t of Ins. Corp., 38 F.4th at
1121 n.2.
As it relates to the above captioned protest, protestor notes that 48 C.F.R. § 8.703specifically references the DLA. Protester quotes the regulation at 48 C.F.R. § 8.704,
which states, in part:
(a) 41 U.S.C. chapter 85 [titled “Committee for Purchase From People Who
Are Blind or Severely Disabled”] requires the Government to purchase
supplies or services on the Procurement List, at prices established by the
Committee, from AbilityOne participating nonprofit agencies if they are
available within the period required . . . .
(b) No other provision of the FAR shall be construed as permitting an exception
to the mandatory purchase of items on the Procurement List.
48 C.F.R. § 8.704 (alterations added). Protestor also cites the regulation at 48 C.F.R.
§ 8.703, which states:
Many items on the Procurement List are identified in the General Services
Administration (GSA) Supply Catalog and GSA’s Customer Service Center
Catalogs with a black square and the words “NIB/NISH [National Industries
for the Blind/National Industries for the Severely Handicapped] Mandatory
Source,” and in similar catalogs issued by the Defense Logistics Agency
(DLA) and the Department of Veterans Affairs (VA). GSA, DLA, and VA are
central supply agencies from which other Federal agencies are required to
purchase certain supply items on the Procurement List.
Id. Moreover, protestor quotes 48 C.F.R. § 8.705-1(b), which states that “[s]upply
distribution facilities in DLA and GSA shall obtain supplies on the Procurement List from
the central nonprofit agency identified or its designated AbilityOne participating nonprofit
regulation “is genuinely ambiguous and only if the interpretation is reasonable,” and
reflects the agency’s “authoritative, expertise-based, fair, or considered judgment.” Davis
v. McDonough, No. 2021-1904, 2022 WL 2824673, at *2 (Fed. Cir. July 20, 2022).
41
agency.” 48 C.F.R. § 8.705-1(b). Furthermore, citing to 41 C.F.R. § 51-6.13, 13
“Replacement and similar commodities,” and 48 C.F.R. § 8.715, “Replacement
commodities,” protestor highlights that “this mandatory source of supply applies not only
to listed items, but also — ‘automatically’ – ‘to replacement commodities,’ ‘variations,’ and
‘essentially the same,’ or ‘similar’ items.”
At the oral argument, and in its motion for judgment on the Administrative Record,
protestor’s counsel relied on the decision in PDS Consultants, Inc. v. United States, 907
F.3d 1345, to support protestor’s position that the word “shall” in the JWOD Act, in 41
U.S.C. § 8504(a),14 “means it’s required. It’s not optional or anything short of absolutely
13 41 C.F.R. § 51-6.13 provides in its entirety:
(a) When a commodity on the Procurement List is replaced by another
commodity which has not been recently procured, and a nonprofit
agency can furnish the replacement commodity in accordance with the
Government’s quality standards and delivery schedules, the
replacement commodity is automatically considered to be on the
Procurement List and shall be procured from the nonprofit agency
designated by the Committee at the fair market price the Committee has
set for the replacement commodity. The commodity being replaced shall
continue to be included on the Procurement List until there is no longer
a Government requirement for that commodity.
(b) If contracting activities desire to procure additional sizes, colors, or
other variations of a commodity after the commodity is added to the
Procurement List, and these similar commodities have not recently been
procured, these commodities are also automatically considered to be on
the Procurement List.
(c) In accordance with § 51-5.3 of this chapter [41 C.F.R.], contracting
activities are not permitted to purchase commercial items that are
essentially the same as commodities on the Procurement List.
41 C.F.R. § 51-6.13.
14 As quoted above, 41 U.S.C. § 8504(a) states:
An entity of the Federal Government intending to procure a product or
service on the procurement list referred to in section 8503 of this title shall
procure the product or service from a qualified nonprofit agency for the blind
or a qualified nonprofit agency for other severely disabled in accordance
with the regulations of the Committee and at the price the Committee
establishes if the product or service is available within the period required
by the entity.
42
mandated by the statute.” See PDS Consultants, Inc. v. United States, 907 F.3d at 1357.
In PDS Consultants, Inc. v. United States, the United States Court of Appeals for the
Federal Circuit, in considering the same section of the JWOD Act, 41 U.S.C. § 8504(a),
explained that “[t]he JWOD generally requires that federal agencies, which on its face
would include but not be limited to the VA, purchase products and services on the
[Procurement] List from designated nonprofits.” PDS Consultants, Inc. v. United States,
907 F.3d at 1349 (alteration added). In PDS Consultants, Inc. v. United States, the
Federal Circuit also explained that “[r]egulations promulgated under the JWOD Act
mandate that AbilityOne, when deciding what items to place on the [Procurement] List,
consider, among other things, the additional service or commodity’s potential to generate
employment, the nonprofit agency’s qualifications and capability to meet Government
standards and schedules, and the impact on private contractors.” Id. (citing 41 C.F.R.
§ 51-2.4) (alteration added).
At the oral argument, protestor’s counsel also cited Superior Optical Labs, Inc. v.
United States, 150 Fed. Cl. 681, 685 (2020), to argue that “the Javits-Wagner-O’Day Act
requires all government agencies – that’s the word that’s in the decision, all – to purchase
certain products and services from designated nonprofits that employ blind and otherwise
disabled people.” A Judge of the United States Court of Federal Claims in Superior Optical
Labs, Inc. v. United States stated, “[t]he Javits-Wagner-O’Day Act (‘JWOD’), 41 U.S.C.
§§ 8501–06, requires all government agencies, including the VA, to purchase certain
products and services from designated non-profits that employ blind and otherwise
disabled people. Congress enacted the JWOD to provide employment opportunities for
the blind and ‘other severely disabled’ individuals.” Superior Optical Labs, Inc. v. United
States, 150 Fed. Cl. at 685; see also Top Gun Servs., LLC v. United States, 150 Fed. Cl.
696, 700 (2020) (“Once the Committee determines that a good or service is suitable for
procurement from a qualified nonprofit agency, the Committee places that item on a
published Procurement List and a federal agency wishing to obtain that item must do so
through a qualified nonprofit agency. 41 U.S.C. § 8503.”); Bona Fide Conglomerate, Inc.
v. United States, 96 Fed. Cl. 233, 236 (2010) (“Once a good or service is added to the
Procurement List, government entities—including executive agencies—are required to
procure the good or service from a qualifying nonprofit agency (‘NPA’) at a price
established by the Committee. 41 U.S.C. §§ 48, 48(c)[15 ]; FAR 8.704.”) (alteration added).
Protestor asserts that no exceptions exist in the JWOD Act and its implementing
regulations, which allow an agency not to procure Procurement List commodities or
services from JWOD qualified nonprofits, other than when the items to be procured
Id.15 The provision of the JWOD Act formerly at 41 U.S.C. § 48 has been recodified at 41
U.S.C. § 8504, and the provision of the JWOD Act formerly at 41 U.S.C. § 48c has been
recodified at 41 U.S.C. § 8506.
43
cannot be produced by a qualified nonprofit in sufficient quantities and/or within the
required timeframe for the procuring agency.16 Protestor argues:
By its plain meaning, and under controlling legal authority, the JWOD Act
itself expressly is Government-wide as long as “the product or service [is][17 ]
available within the period required by the” agency [41 U.S.C. § 8504(a)];
the JWOD Act clearly does not provide for, or even contemplate, set-asides
“in whole or in part.” All seven of these decisions of this Court[18 ]—and a
Federal Circuit decision, as well—cite the JWOD Act for the proposition that
the JWOD Act set-asides automatically extend throughout the entire
Federal Government. None of them suggests that the JWOD Act permits
the Committee to add an item to the Procurement List “in whole or in part.”
(first and third alterations in original).
On April 26, 2021, the DLA issued solicitation No. SPE1C1-21-R-0029 for
Women’s IHWCU Trousers, indicating that there were
two Lots for this solicitation, one set aside for HUBZone small business
concerns and one set aside for Small Business concerns. The Government
intends to award one contract per lot, making awards based upon an
integrated assessment of technical factors and price resulting in the best
value to the Government.
(capitalization in original). Solicitation No. SPE1C1-21-R-0029 was not restricted to
Goodwill Industries of South Florida, or to other JWOD Act qualified nonprofit agencies
or workshops. At the time solicitation No. SPE1C1-21-R-0029 was issued, protestor had
been producing the Women’s IHWCU trousers for Army-Natick through a merchandise
and development contract, which had been issued to Goodwill Industries of South Florida
consistent with the requirements of the Procurement List. Protestor alleges that because
Goodwill Industries of South Florida is a qualified nonprofit agency and because the DLA
16There is an exception, however, for “an industry established under chapter 307 of title
18 and that is required under section 4124 of title 18 to be procured from that industry,”
41 U.S.C. § 8504(b), a reference to “Purchase of prison-made products by Federal
departments.” 18 U.S.C. § 4124 (2018).
17The court finds it curious that protestor added brackets around “[is]” since the JWOD
Act contains the word “is.” See 41 U.S.C. § 8504(a).
18 Overall, the protestor refers to seven cases as relevant to the instant protest: PDS
Consultants, Inc. v. United States, 132 Fed. Cl. 117; Melwood Horticultural Training Ctr.,
Inc. v. United States, 153 Fed. Cl. 723; Top Gun Servs., LLC v. United States, 150 Fed.
Cl. 696; Superior Optical Labs, Inc. v. United States, 150 Fed. Cl. at 685; American
Innotek, Inc. v. United States, 128 Fed. Cl. 135 (2016); Akima Intra-Data, LLC v. United
States, 119 Fed. Cl. 520 (2014); Bona Fide Conglomerate, Inc. v. United States, 96 Fed.
Cl. 233.
44
is an “entity of the federal government,” the DLA violated the JWOD Act and implementing
regulations, by issuing a competitive solicitation, rather than seeking the production of the
items from one of the nonprofit organizations contemplated by the JWOD Act. Further, at
oral argument, protestor’s counsel stated that “[i]t’s not a normal thing for DLA to be doing
what it’s doing here and using commercial sources for an item that’s been procured from
the JWOD suppliers since time immemorial.” Protestor also asserts that there was no
finding by SourceAmerica, the appropriate central nonprofit agency, or by AbilityOne that
a qualified nonprofit organization or organizations would not be able to meet the quantity
and deadline requirements for the DLA and that absent such finding, any scope limitations
by the government violate the JWOD Act and its implementing regulations.
As indicated above, defendant responds that “[t]he JWOD Act does not require all
entities of the federal government to procure items on the Procurement List through the
AbilityOne Program.” Defendant, citing 41 U.S.C. § 8504(a) argues that
the statute does not provide that products on the Procurement List must be
procured by all entities of the Government. Rather, the statute provides that
“[a]n entity of the Federal Government intending to procure a product or
service on the procurement list [referred to in 41 U.S.C. § 8503] shall
procure the product or service from a qualified nonprofit agency for the blind
or a qualified nonprofit agency for other severely disabled in accordance
with regulations of” the Commission [AbilityOne and at the price AbilityOne
establishes if the product or service is available within the period required
by the entity].
(emphasis in original; alterations added). Additionally, defendant argues that the JWOD
Act and its implementing regulations allow an exception to the Competition in Contracting
Act and, cites to 41 U.S.C. ch. 85. Defendant argues that AbilityOne regulations authorize
AbilityOne to place scope limitations on the Procurement List by adding only portions of
a product requirement to the Procurement List. First, defendant points to the regulation
at 41 C.F.R. § 51-2.8(b) which provides that the Procurement List “identifies the name
and national stock number or item designation for each commodity, and where
appropriate, any limitation on the portion of the commodity which must be procured under
the JWOD Act.” 41 C.F.R. § 51-2.8(b). Second, defendant cites 41 C.F.R. § 51-2.5 which
provides that AbilityOne may “add a commodity or service in whole or in part to the
Procurement List.” 41 C.F.R. § 51-2.5. Third, defendant argues that 41 C.F.R. § 51-5.3(a)
authorizes AbilityOne to “place scope parameters and allocate a portion of the
requirement to the Procurement List,” and that “[w]here geographic areas, quantities,
percentages or specific supply locations for a commodity are listed, the mandatory
provisions of the JWOD Act apply only to the portion or portions of the commodity
indicated by the Procurement List.” 41 C.F.R. § 51-5.3(a). Defendant further argues that
in the protest currently before the court, “the plain language of the Procurement List
additions make clear that the additions apply only to (1) Army-Natick purchases of (2)
50% of the Army’s requirements,” as opposed to all entities of the federal government.
Therefore, defendant argues, Goodwill Industries of South Florida “simply is not a
45
mandatory source of supply for 100% of all Federal entities’ product requirements.”
(emphasis in original).
Protestor responds
if AbilityOne actually had clearly and unequivocally stated in the
Procurement List that only 50% of Army-Natick’s contractual requirements
for [sic] were being set aside for workshops, then under the JWOD Act’s
“suitability” standard, that would have been “arbitrary and capricious.” There
is no record here that establishes that 50% of Army-Natick’s contractual
requirements for the IHWCU-F trousers, and 0% of all other federal
contracting activities’ requirements, are “suitable” for workshop production.
On the contrary, 100% of the requirements for IHWCU-F trousers up to this
time have been made by workshops, and by all appearances, 100% of the
item remains “suitable” for such production in the future.
(emphasis in original; alteration added).
The court notes that the statutory language of the JWOD Act plainly provides:
An entity of the Federal Government intending to procure a product or
service on the procurement list referred to in section 8503 of this title [41]
shall procure the product or service from a qualified nonprofit agency for the
blind or a qualified nonprofit agency for other severely disabled in
accordance with regulations of the Committee and at the price the
Committee establishes if the product or service is available within the period
required by the entity.
41 U.S.C. § 8504(a) (emphasis and alteration added). Similarly, the regulatory language
of the JWOD Act provides:
(a) Nonprofit agencies designated by the Committee are mandatory
sources of supply for all entities of the Government for commodities and
services included on the Procurement List, as provided in § 51-1.2 of
this chapter.
(b) Purchases of commodities on the Procurement List by entities of the
Government shall be made from sources authorized by the Committee.
These sources may include nonprofit agencies, central nonprofit
agencies, Government central supply agencies such as the Defense
Logistics Agency and the General Services Administration, and certain
commercial distributors. Identification of the authorized sources for a
particular commodity may be obtained from the central nonprofit
agencies at the addresses noted in § 51-6.2 of this chapter.
(c) Contracting activities shall require other persons providing commodities
which are on the Procurement List to entities of the Government by
46
contract to order these commodities from the sources authorized by the
Committee.
41 C.F.R. § 51-5.2(a)–(c) (emphasis added). Further, the regulatory framework of the
JWOD Act uses mandatory language, stating that “[t]he Committee maintains a
Procurement List which includes the commodities and services which shall be procured
by Government departments and agencies under the JWOD Act from the nonprofit
agency(ies) designated by the Committee.” 41 C.F.R. § 51-2.8(a) (emphasis added). The
mandatory language of the JWOD Act and implementing regulations, as noted above,
does not differentiate among federal entities which wish to procure items on the
Procurement List. Only specific statutory exceptions, such as those pertaining to the
prison industries provision, see 41 U.S.C. § 8504(b), are situations in which a qualified
nonprofit or multiple nonprofits cannot provide the product or service identified by the
agency “within the period required by the entity.” See 41 U.S.C. § 8504(a). The
implementing regulations provide the procedures for when a qualified nonprofit cannot
meet the deadline required by a federal entity.
The regulation at 41 C.F.R. § 51-6.7 which governs “Orders in excess of nonprofit
agency capability,” provides:
Nonprofit agencies shall take those actions necessary to ensure that they
can ship commodities within the time frames specified by the Government.
In instances where the nonprofit agency determines that it cannot ship the
commodity in the quantities specified by the required shipping date, it shall
notify the central nonprofit agency and the contracting activity. The central
nonprofit agency shall request a revision of the shipping schedule which the
contracting activity should grant, if feasible, or the central nonprofit agency
shall issue a purchase exception authorizing procurement from commercial
sources as provided in § 51-5.4 of this chapter.
41 C.F.R. § 51-6.7(b). Moreover, as indicated in 41 C.F.R. § 51-6.7(b), the regulation at
41 C.F.R. § 51-5.4 provides the procedures for obtaining a purchase exception for a
Procurement List included item:
(a) A central nonprofit agency will normally grant a purchase exception for
a contracting activity to procure from commercial sources commodities
or services on the Procurement List when both of the following
conditions are met:
(1) The central nonprofit agency or its nonprofit agency(ies) cannot
furnish a commodity or service within the period specified, and
(2) The commodity or service is available from commercial sources
in the quantities needed and significantly sooner than it will be
available from the nonprofit agency(ies).
47
(b) The central nonprofit may grant a purchase exception when the quantity
involved is not sufficient to be furnished economically by the nonprofit
agenc(ies).
(c) The Committee may also grant a purchase exception for the reasons set
forth in paragraphs (a) and (b) of this section.
41 C.F.R. § 51-5.4(a)–(c). Therefore, if a nonprofit determines that it cannot furnish
Procurement List items to the procuring agency by the deadline required, see 41 C.F.R.
§ 51-6.7, or if AbilityOne or an appropriate central nonprofit agency, finds that a qualified
nonprofit or combination of nonprofits would not be able to meet the deadline, then the
appropriate central nonprofit agency or AbilityOne is authorized under the JWOD Act
implementing regulations to issue a purchase exception to the procuring agency to obtain
Procurement List items from commercial suppliers. See 41 C.F.R. § 51-5.4. Also, in
instances in which the appropriate central nonprofit agency properly finds that JWOD
qualified nonprofits “cannot provide the supplies or services within the time required, and
commercial sources can provide them significantly sooner in the quantities required,” 48
C.F.R. § 8.706(b)(1), or when “[t]he quantity required cannot be produced or provided
economically by an AbilityOne participating nonprofit agencies, the central nonprofit
agency granting the exception shall specify the quantity and delivery or performance
period covered by the exception.” 48 C.F.R. § 8.706(b)–(c); see also SEKRI, Inc. v. United
States, 34 F.4th at 1068 (“[P]urchase exceptions are appropriate under the FAR when
the nonprofit agency cannot provide the commodities in sufficient quantities or cannot
meet the required deadline.”).
In addition, AbilityOne “may, by rule made in accordance with the requirements of
section 553(b) to (e) of title 5, add to and remove from the procurement list products so
produced and services so provided.” 41 U.S.C. § 8503(b); see also PDS Consultants v.
United States, 907 F.3d at 1349 (AbilityOne “can make changes to the [Procurement] List
by posting notice in the Federal Register and following the notice and comment
procedures set forth in the Administrative Procedure Act.”) (alteration in original). With
only a few specific exceptions, identified above, the unambiguous words of limitation in
the JWOD Act statutory language, state, “if the product or service is available within the
period required by the entity,” allows a limitation on the mandatory source requirement
only when AbilityOne or the appropriate central nonprofit agency has determined that a
qualified nonprofit or qualified nonprofits cannot furnish the products in the timeframe
required by the procuring agency. As explained by the United States Supreme Court, “[i]f
the statutory language is plain, we must enforce it according to its terms.” King v. Burwell,
576 U.S. at 474 (citing Hardt v. Reliance Standard Life Ins. Co., 560 U.S. at 251).
In SEKRI, Inc. v. United States, 34 F.4th 1063, the United States Court of Appeals
for the Federal Circuit stated that “the AbilityOne Program is a complex system of
government procurement that imposes specific obligations on the government, central
nonprofit organizations, and nonprofit agencies that employ the blind and severely
48
disabled.” Id. at 1072. Although discussing the issue of standing, the Federal Circuit
acknowledged that JWOD qualified nonprofits like protestor SEKRI, Inc.
have established economic interest bona fides because they have been
qualified under the AbilityOne Program and are a mandatory source.
Congress has established that such entities must be prioritized over other
commercial sources, absent special circumstances. See 41 U.S.C.
§ 8504(a); see also 41 C.F.R. § 51–5.4 (providing for purchase exceptions);
48 C.F.R. § 8.706 (same).
SEKRI, Inc. v. United States, 34 F.4th at 1072. In addition, The Federal Circuit continued,
it would not make sense to impose upon mandatory sources an affirmative
obligation to monitor the federal government’s solicitations to identify
attempts to circumvent the AbilityOne Program and immediately bring
agency protests, especially where the JWOD Act places an affirmative
obligation on procuring agencies to determine whether the procurement is
subject to a mandatory source. Here, the onus is on the procuring agency,
not the nonprofit agency participating in the AbilityOne Program. See 41
U.S.C. § 8504(a) (requiring federal procuring agencies to procure certain
goods from a qualified nonprofit agency under the AbilityOne Program); see
also 41 C.F.R. §§ 51–1.2(a), 51–5.2. This is not to say that procuring
agencies have no way out of the JWOD procurement regime. To lawfully
procure the ATAP from a commercial source other than SEKRI through
competitive bidding, the government should have obtained a purchase
exception from SourceAmerica or the Committee. See 41 C.F.R. § 51–5.4;
48 C.F.R. § 8.706. The government does not show that it ever obtained, or
even sought, a purchase exception. On the record before us, therefore, the
government was required to procure the ATAP [Advanced Tactical Assault
Panel] from SEKRI using the appropriate process under the AbilityOne
Program. See 41 C.F.R. §§ 51–5.4, 51–6.1 (direct order process), 51–6.2
(allocation process); 48 C.F.R. §§ 8.705–2 (direct order process), 8.705–3
(allocation process).
SEKRI, Inc. v. United States, 34 F.4th at 1072–73 (alteration added).
Separate from the recent Federal Circuit decision in SEKRI, Inc. v. United States,
a number of earlier decisions issued by Judges of the United States Court of Federal
Claims are consistent with this court’s interpretation regarding the mandatory nature of
the JWOD Act and its implementing regulations. In Melwood Horticultural Training Center,
Inc. v. United States, 153 Fed. Cl. 723, a Judge of this court wrote:
Once a product or service is added to the Procurement List, it remains in
the AbilityOne program unless the Commission “determines that none of
the nonprofit agencies participating in the AbilityOne Program are capable
49
and desirous of furnishing the commodity or service to the Government, or
if [AbilityOne] decides that the commodity or service is no longer suitable
for procurement from nonprofit agencies employing people who are blind or
have severe disabilities.”
Id. at 731 (alteration in original). In Top Gun Services, LLC v. United States, a Judge of
this court wrote:
Once the Committee determines that a good or service is suitable for
procurement from a qualified nonprofit agency, the Committee places that
item on a published Procurement List and a federal agency wishing to
obtain that item must do so through a qualified nonprofit agency. 41 U.S.C.
§ 8503. There are specific requirements and conditions that nonprofit
agencies must satisfy to participate, and the Committee is required to
maintain and publish in the Federal Register the list of products and
services deemed suitable for procurement through AbilityOne. 41 U.S.C. §
8503(a). The Act does not define the suitability standard, but states that the
Committee “may prescribe regulations regarding specifications for products
and services on the procurement list . . . and other matters as necessary to
carry out this chapter.” 41 U.S.C. § 8503(c).
Top Gun Servs., LLC v. United States, 150 Fed. Cl.at 700–01 (alteration in original).19
The regulation at 41 C.F.R § 51-2.8(b), cited by defendant in support of its
arguments, provides that “[f]or commodities, including military resale commodities, the
Procurement List identifies the name and national stock number or item designation for
each commodity, and where appropriate, any limitation on the portion of the commodity
which must be procured under the JWOD Act.” 41 C.F.R. § 51-2.8(b). Defendant asserts
that this language in 41 C.F.R § 51-2.8(b) allows AbilityOne to limit the procurement of
the Women’s IHWCU Trousers by JWOD Act qualified nonprofit organizations to Army-
Natick, and, therefore, permits other federal entities, such as the DLA, to obtain
Procurement List items elsewhere, and in competitive procurements.
19 The court notes that in Top Gun Servs., LLC v. United States, although the Judge found
that protestor did not have standing to bring the protest, the Judge offered helpful
guidance on the operation of the JWOD Act in federal procurements: “‘[A] service that is
added to the procurement list may only be contracted through the [qualified nonprofit
agency] contractor selected by’ the AbilityOne Commission.” Top Gun Servs., LLC v.
United States, 150 Fed. Cl. at 705 (alterations in original) (quoting Akima Intra-Data, LLC
v. United States, 119 Fed. Cl. at 545).
50
Contrary to the defendant’s position, the regulation at 41 C.F.R. § 51-2.8(b) and
the words “any limitation on the portion of the commodity which must be procured under
the JWOD Act,” does not allow for limitation as to which agency or subset of an agency
is obligated to procure a Procurement List item pursuant to the JWOD Act from JWOD
Act qualified nonprofit organizations. The language in 41 C.F.R. § 51-2.8(b), “and where
appropriate, any limitation on the portion of the commodity” when read with the JWOD
Act statutory language in 41 U.S.C. § 8504(a) and JWOD Act implementing regulatory
language in 41 C.F.R. §§ 51-2.8, 51-6.7(b), 51-5.4; and 48 C.F.R. § 8.706, does not
change the fundamental mandatory guidance regarding agency acquisition of
Procurement List items. The JWOD Act implementing regulations direct that Only after
AbilityOne or the appropriate central nonprofit agency, find that the qualified nonprofit
organizations cannot produce the requested order by the procuring government agency
“within the time required,” 48 C.F.R. § 8.706(b), can AbilityOne or the appropriate central
nonprofit agency place a limit on the number of Procurement List items that must be
procured from qualified nonprofits. See 41 C.F.R. § 51-5.4(a)–(c). Alternatively, if the
qualified nonprofit producing the items concludes “that it cannot ship the commodity in
the quantities specified by the required shipping date, it shall notify the central nonprofit
agency and the contracting activity,” and the appropriate central nonprofit agency is
authorized to either (1) “request a revision of the shipping schedule” for the required items,
or (2) “the central nonprofit agency shall issue a purchase exception authorizing
procurement from commercial sources.” 41 C.F.R. § 51-6.7(b). Only after AbilityOne or
the appropriate central nonprofit agency grants a purchase exception to procure the
remainder of the items from a non-JWOD Act qualified source, can the item to be procured
from a commercial supplier or a different set aside source. See 41 C.F.R. § 51-5.4.
This reading of 41 C.F.R. § 51-2.8(b) is consistent with the policy of the JWOD Act
and its implementing regulations, which were designed specifically to “increase
employment and training opportunities for persons who are blind or have other severe
disabilities through the purchase of commodities and services from qualified nonprofit
agencies employing persons who are blind or have other severe disabilities.” See 41
U.S.C. § 8504(a); see also 41 C.F.R. § 51-1.1(a). The regulation at 41 C.F.R. § 51-2.8(b)
does not give AbilityOne, the appropriate central nonprofit agency, or a procuring
government agency blanket discretion when to alter how Procurement List items must be
acquired, add a scope or source limitations to an item on the Procurement List, or proceed
with issuing a competitive solicitation, without taking the necessary identified steps under
the JWOD Act and the JWOD Act implementing regulations to determine the capability of
JWOD qualified nonprofits to produce the items on the Procurement List.
Because both the DLA and Army-Natick are federal entities within the United
States Department of Defense, they are specifically subject to the requirements of the
JWOD Act and its implementing regulations when it comes to a federal entity procuring
Procurement List items. As noted above, the DLA is specifically listed in the applicable
regulation at 48 C.F.R. § 8.703 which provides, in relevant part, “GSA, DLA, and VA are
central supply agencies from which other Federal agencies are required to purchase
51
certain supply items on the Procurement List.” Id. In SEKRI, Inc. v. United States, the
Federal Circuit indicated:
If supplies are identified on the procurement list as available from the
Defense Logistics Agency (“DLA”) or the General Services Administration
(“GSA”) supply distribution facilities, then the supplies must be obtained
through those facilities, and in turn DLA and GSA “shall obtain the supplies
. . . from [SourceAmerica] or its designated AbilityOne participating nonprofit
agency.” See id. § 8.705–1 (emphasis added).
SEKRI v. United States, 34 F.4th at 1068 (emphasis, ellipses, and brackets in original) .
The language of the JWOD Act does not generally provide for exclusions for the DLA or
other federal government entities from its broad application. By issuing the competitive
solicitation and making an award pursuant to the competitive solicitation without following
the required procedures, as is discussed more fully below, the defendant failed to comply
with the JWOD statutory and implementing regulatory requirements. See 41 U.S.C.
§ 8504(a) (“An entity of the Federal Government intending to procure a product or service
on the procurement list referred to in section 8503 of this title shall procure the product or
service from a qualified nonprofit agency for the blind or a qualified nonprofit agency for
other severely disabled in accordance with regulations of the Committee and at the price
the Committee establishes if the product or service is available within the period required
by the entity.”); see also 48 C.F.R. § 8.706(b) (“Ordering offices may acquire supplies or
services on the Procurement List from commercial sources only if the acquisition is
specifically authorized in a purchase exception granted by the designated central
nonprofit agency.”).
To defend its position on the propriety of using a competitive procurement in the
current protest, defendant quotes selective parts of 41 C.F.R. § 51-2.5 and states that
“Section 51-2.5 provides that the Commission may ‘add a commodity or service in whole
or in part to the Procurement List[.]’” (alteration in original). The regulation at 41 C.F.R.
§ 51-2.5 provides in full:
The Committee considers the particular facts and circumstances in each
case in determining if a commodity or service is suitable for addition to the
Procurement List. When the Committee determines that a proposed
addition is likely to have a severe adverse impact on a current contractor, it
takes this fact into consideration in deciding not to add the commodity or
service to the Procurement List, or to add only a portion of the Government
requirement of the item. If the Committee decides to add a commodity or
service in whole or in part to the Procurement List, that decision is
announced in the Federal Register with a notice that includes information
on the effective date of the addition.
41 C.F.R. § 51-2.5. Although the process in 41 C.F.R. § 51-2.5 is available in the
appropriate circumstance, the problem with defendant’s reasoning and reliance on 41
C.F.R. § 51-2.5 is that this section of the Code of Federal Regulations addresses
additions to the Procurement List. In the present protest, according to both parties to the
52
litigation, the items to be produced already were on the Procurement List. Moreover, as
discussed above, the regulation at 41 C.F.R. § 51-6.7 indicates that when an item is
already on the Procurement List and
the nonprofit agency determines that it cannot ship the commodity in
quantities specified by the required shipping date, it shall notify the central
nonprofit agency and the contracting activity. The central nonprofit agency
shall request a revision of the shipping schedule which the contracting
activity should grant, if feasible, or the central nonprofit agency shall issue
a purchase exception authorizing procurement from commercial sources as
provided in § 51-5.4 of this chapter.
41 C.F.R. § 51-6.7(b). Defendant’s use of 41 C.F.R. § 51-2.5 to argue that AbilityOne may
opt to place scope limitations on items already on the Procurement List confuses adding
items to the Procurement List with removing items already on the Procurement List.
In addition, the JWOD Act implementing regulation at 41 C.F.R. § 51-6.8 provides:
(a) When a central nonprofit agency decides to request that the Committee
delete a commodity or service from the Procurement List, it shall notify the
Committee staff immediately. Before reaching a decision to request a
deletion of an item from the Procurement List, the central nonprofit agency
shall determine that none of its nonprofit agencies is capable and desirous
of furnishing the commodity or service involved.
(b) Except in cases where the Government is no longer procuring the item in
question, the Committee shall, prior to deleting an item from the
Procurement List, determine that none of the nonprofit agencies of the other
central nonprofit agency is desirous and capable of furnishing the
commodity or service involved.
(c) Nonprofit agencies will normally be required to complete production of any
orders for commodities on hand regardless of the decision to delete the
item. Nonprofit agencies shall obtain concurrence of the contracting activity
and the Committee prior to returning a purchase order to the contracting
activity.
(d) For services, a nonprofit agency shall notify the contracting activity of its
intent to discontinue performance of the service 90 days in advance of the
termination date to enable the contracting activity to assure continuity of the
service after the nonprofit agency’s discontinuance.
(e) The Committee may delete an item from the Procurement List without a
request from a central nonprofit agency if the Committee determines that
none of the nonprofit agencies participating in the AbilityOne Program are
capable and desirous of furnishing the commodity or service to the
Government, or if the Committee decides that the commodity or service is
no longer suitable for procurement from nonprofit agencies employing
people who are blind or have other severe disabilities. In considering such
an action, the Committee will consult with the appropriate central nonprofit
53
agency, the nonprofit agency or agencies involved, and the contracting
activity.
41 C.F.R. § 51-6.8. There is no indication in the Administrative Record before the court
that AbilityOne or the appropriate central nonprofit agency followed any of the procedures
in 41 C.F.R. § 51-6.8.”20
In addition, the regulation at 48 C.F.R. § 8.706(b) states: “Ordering offices may
acquire supplies or services on the Procurement List from commercial sources only if the
acquisition is specifically authorized in a purchase exception granted by the designated
central nonprofit agency.” Relevant to the above captioned protest, the Administrative
Record before the court does not reflect that AbilityOne or SourceAmerica, the relevant
central nonprofit agency, followed the steps required to issue a purchase exception and
limit the scope of the procurement to a portion of the government’s needs. Nor is there
an indication in the Administrative Record that Goodwill Industries of South Florida, alone
or in combination with other qualified nonprofits, could not meet the DLA’s production
deadline requirements, and, therefore, deliver the quantity identified “within the time
required.” See 48 C.F.R. § 8.706(b). There is also no indication in the Administrative
Record that Goodwill Industries of South Florida notified SourceAmerica or DLA, the
contracting activity, that “it cannot ship the commodity [the Women’s IHWCU Trousers] in
the quantities specified by the required shipping date,” (alteration added), or that the
competitive solicitation for an item on the procurement list would not “have a severe
adverse impact on a current contractor,” 41 C.F.R. § 51-2.3(4)(i), for the item on the
Procurement List. In fact, in the current protest, Goodwill Industries of South Florida
indicated that the opposite is true in its filings with the court and in the submitted
declaration signed by Mr. Mark Marchioli, which states that “Goodwill is ready, willing, and
able” to provide the Women’s IHWCU Trousers to the DLA.
20Additionally, the court notes, as indicated above, before adding or deleting an item from
the Procurement List, the JWOD Act implementing regulations state:
At least 30 days prior to the Committee’s consideration of the addition or
deletion of a commodity or service to or from the Procurement List, the
Committee publishes a notice in the Federal Register announcing the
proposed addition or deletion and providing interested persons an
opportunity to submit written data or comments on the proposal.
41 C.F.R. § 51-2.3. There is no indication in the Administrative Record before the court
that AbilityOne published a notice regarding the removal of the Women’s IHWCU
Trousers.
54
Defendant also cites to 41 C.F.R. § 51-5.3(a) of the JWOD Act implementing
regulations, which states:
When a commodity is included on the Procurement List, the mandatory
source requirement covers the National Stock Number or item designation
listed and commodities that are essentially the same as the listed item. In
some instances, only a portion of the Government requirement for a
National Stock Number or item designation is specified by the Procurement
List. Where geographic areas, quantities, percentages or specific supply
locations for a commodity are listed, the mandatory provisions of the JWOD
Act apply only to the portion or portions of the commodity indicated by the
Procurement List.
According to defendant, the implementing regulation at 41 C.F.R. § 51-5.3(a) provides
the flexibility needed to procure only a portion of Procurement List items from qualified
nonprofits and the remainder from other suppliers. In the case of the Women’s IHWCU
Trousers on the Procurement List, the words, “in some instances,” in 41 C.F.R. § 51-
5.3(a), did not give AbilityOne, the appropriate central nonprofit agency, or procuring
agencies, the discretion to unilaterally change the scope of the Procurement List items at
issue in this protest without first making the findings required by the JWOD Act and its
implementing regulations that qualified nonprofits could not meet the solicitation
requirements in the time required by the procuring agency. Because the JWOD Act
requires federal entities to obtain Procurement List items from JWOD qualified nonprofits
“if the product or service is available within the period required by the entity,” 41 U.S.C.
§ 8504(a), the statutorily expressed limitation is only for when qualified nonprofit or
nonprofits cannot furnish the products or services in the timeframe required by the
agency. See id.; see also 41 C.F.R. § 51-5.3(a); 48 C.F.R. § 8.706(b). It would be
inconsistent, therefore, to read the JWOD Act to allow AbilityOne to limit the procurement
of Women’s IHWCU Trousers to only 50% of Army-Natick’s needs without first making a
finding that the Women’s IHWCU Trousers would not be “available within the period
required by the entity” from a JWOD Act qualified nonprofit. If, as in the protest currently
before the court, the item is on the Procurement List, AbilityOne or the appropriate central
nonprofit agency, SourceAmerica, would first have had to determine that the JWOD Act
qualified nonprofits could not meet the time requirements of the solicitation before seeking
to procure the commodity competitively, and the Administrative Record before the court
does not indicate that AbilityOne or SourceAmerica determined that Goodwill Industries
of South Florida, alone or in combination with other JWOD Act qualified nonprofits, did
not have the capacity to produce the required Women’s IHWCU Trousers within the DLA’s
required deadline. It is inconsistent with the language of the JWOD Act and its
implementing regulatory framework for the DLA, a federal entity to which the JWOD Act
and its implementing regulations apply, to procure the Women’s IHWCU Trousers
competitively. Therefore, the DLA’s attempt to procure the Women’s IHWCU Trousers
from a commercial supplier in a competitive procurement was arbitrary and capricious.
See 5 U.S.C. § 706(2)(D).
55
Defendant also urges the court to find, based on an argument with regard to the
“C-List” reference in the January 11, 2021 Notice of Addition issued by AbilityOne, that
DLA Troop Support was not required to purchase the Female Improved Hot Weather
Trousers through the AbilityOne Program, because only the agency specified by the
Notice of Addition is required to purchase “C-List” items from JWOD qualified nonprofits.
As indicated above, the January 11, 2021 Notice of Addition, which was not promulgated
as a formal regulation, stated:
PROCUREMENT LIST
NOTICE OF ADDITION
TO: Army Contracting Command – Aberdeen Proving Ground, Natick Contracting
Division
SourceAmerica
In accordance with 41 CFR 51-6.13(b), the U.S. AbilityOne Commission
(Commission) has determined that the following products are additional
sizes, colors, or other variations of products already on the Procurement
List (PL) and that these products have not recently been procured.
Accordingly, the products are automatically considered to be on the PL
[Procurement List] at the Fair Market Prices (FMP) indicated
Product Name: Trouser, Improved Hot Weather Combat Uniform
(IHWCU), Permethrin, Women’s, Army
Product NSN Size
8415-01-687-6651 25-X Short
8415-01-687-6669 25-Short
8415-01-687-3100 25-Regular
8415-01-687-6659 28-A Short
8415-01-687-6201 28-Short
8415-01-687-6555 28-Regular
8415-01-687-6180 28-Long
8415-01-687-1971 31-X Short
8415-01-687-1339 31-Short
8415-01-687-1353 31-Regular
8415-01-687-6673 31-Long
8415-01-687-2126 31-X Long
8415-01-687-6147 35-Short
8415-01-687-2060 35-Regular
8415-01-687-1345 35-Long
56
8415-01-687-4018 35-X Long
The following information is applicable to all products listed above
Product Description: The Improved Hot Weather Combat Uniform
(IHWCU) trouser has one (1) button/buttonhole closure with seven (7) belt
loops along with a covered fly with three (3) buttons and buttonhole closure,
two (2) side hanging pockets, two (2) front side pleated cargo pockets with
three (3) buttons/two (2) buttonholes closure flaps. The trousers include a
double needle seat patch and knee reinforcement patches and a mesh
fabric attached on the inside of the trousers at the bottom of the legs as
inner cuffs. Both the bottom of the trousers legs and the inner cuffs have
drawstrings. The trouser is treated with permethrin, wind resistant, and
wrinkle free. UOI is PR.
Unit of issue: PR
FMP Category: Post Treated Garment - Rapid Fielding
FMP Change Mechanism: Negotiated
FOB Origin FMP: $62.34
FOB Destination FMP: $62.50
In accordance with 41 CFR 51-2.7, change to the FMP outside of the
approved methodology above and provisions in the U.S. AbilityOne Pricing
Policy 51.610, Pricing AbilityOne Products, must be approved by the
Commission before a contract is awarded or an existing contract is
modified.
Distribution: C-List
Contracting Activity: Army Contracting Command - Aberdeen Proving
Ground, Natick Contracting Division
Mandatory for: 50% of the requirement of the Department of Defense
Designated Source of Supply: Goodwill Industries of South Florida, Inc.,
Miami, FL, a nonprofit agency associated with SourceAmerica, is
authorized to accept orders for the products listed above.
This addition to the Procurement List is effective the date of this notice. In
accordance with 41 CFR 51-5.3, this change does not affect contracts for
the product awarded prior to the effective date of the Procurement List
addition or options exercised under those contracts. Please direct questions
regarding this Notice to Operations@abilityone.gov.
(capitalization and emphasis in original).
57
Although agreeing with protestor in general, that the Women’s IHWCU Trousers
were on the Procurement List, defendant argues that the “Commission recognized that
the AbilityOne program is sufficiently broad to include specialized or niche products made
pursuant to custom agency specifications (C List items),” citing the 2006 notice in the
Federal Register, 2006 Clarification, 71 Fed. Reg. at 69,536 (Dec. 1. 2006). Defendant
states,
[i]f the Commission finds that the contracting activity’s requirement is
suitable for procurement as a C List item through the AbilityOne program,
procurement of that requirement is only mandatory for that sponsoring
contracting activity and subject to any scope limitations placed by the
Commission necessary to tailor the requirement to the needs of the
contracting activity and the capability of the nonprofit agency supplier.”
Therefore, defendant asserts “DLA Troop Support’s requirements [for its required quantity
of Women’s IHWCU Trousers] are not on the Procurement List.” (alteration added).
Defendant continues,
[i]n this case, the Commission’s 2021 notice provided that the female
improved hot weather trousers were “C-List” items. The sponsoring
contracting activity is Army-Natick. As demonstrated above, DLA Troop
Support’s requirements are much broader and may require multiple
contractors to satisfy DLA Troop Support’s needs. Compare AR
[Administrative Record] Tab 13, at 234 (Army-Natick contract with Goodwill
[Industries of South Florida] for purchase for 68,991 combat pants), with AR
[Administrative Record] Tab 12, at 224 (Army fielding projections to DLA
Troop Support reflecting requirements for between 183,052 and 256,196
combat pants per year); see also AR Tab 16, at 296 (explaining that few
contractors have the capacity to support DLA Troop Support’s requirements
of combat pants). There is no record evidence showing that Goodwill is
capable of satisfying DLA Troop Support’s requirements.
(alterations added; internal citations omitted).
Moreover, defendant argues that the 2006 Clarification
is consistent with the Commission’s duty to ensure that a particular
requirement is suitable for provision through the AbilityOne program and its
regulatory authority to place scope limitations on additions to the
Procurement List. The “mandatory provisions of the JWOD Act,” therefore,
only apply to the portion of the sponsoring contracting activity’s requirement
that was added to the Procurement List.
In this protest, the contracting officer’s November 17, 2021 Memorandum for
Record indicated, in part:
58
DLA Troop Support considered the fact that the Procurement Notice of
Addition that added the IHWCU-F to the PL [Procurement List] identifies the
item as being a C list item, which from the 2006 Clarification means that it
is a specialized item designed to meet the needs of a single Agency or
group of customers. Further the 2006 Clarification indicated that the
products on the C list are only mandatory for the agency which sponsored
them. In this case, Natick has been designated as the Agency that
sponsored the addition of the IHWCU-F Coat and Trouser to the PL.
(emphasis in original; alteration added).
Ms. Zeich, the Deputy Executive Director and Chief Operating Officer of
AbilityOne, agreed with the defendant’s position, which she offered at hearings with all
parties and the court present, and in her declaration filed with the court. In Ms. Zeich’s
declaration, she stated:
As set forth in the 2006 clarification, only the sponsoring contracting activity
may procure C-List items through the AbilityOne program. The sole
sponsoring contracting activity for the female IHWCU Trousers is Army-
Natick. Thus, to the extent that DLA Troop Support seeks to procure those
products through the AbilityOne program, I understand that DLA Troop
Support has two options. First, it may refer its request to the sponsoring
contracting activity, Army-Natick. Second, it may request that the
Commission amend the Procurement List to add it as an additional
sponsoring contracting activity. Outside of these avenues, I understand that
DLA Troop Support must procure these products using competitive
procedures because it currently lacks authority to purchase these products
through the AbilityOne program.
(alteration added).
Protestor responds to the defendant’s arguments and Ms. Zeich’s statements in
her declaration regarding the 2006 Clarification by arguing:
Defendant seems to be suggesting here that it might have been justified in
ignoring the JWOD Act set-aside for IHWCU-F trousers, on the grounds that
DLA may be buying more trousers than the Army has. That suggestion is
clearly counterfactual. First, Goodwill [Industries of South Florida] actually
submitted a proposal in DLA’s procurement; Goodwill [Industries of South
Florida] wouldn’t have done that unless it could meet the requirement.
Second, Goodwill has represented to the Court that it is ready, willing and
able to meet the requirements set forth in the DLA Solicitations. Third, the
record is clear that DLA never even considered Goodwill [Industries of
South Florida] as a potential source; its “market survey” of suppliers never
even mentions Goodwill [Industries of South Florida], the only existing
59
manufacturer. Therefore, neither DLA nor AbilityOne has any rational basis
on which to conclude that Goodwill could not meet this need.
Moreover, it simply isn’t correct to say that DLA’s requirements are “much
broader” than the current requirements that Goodwill has been fulfilling (with
DLA money, under an Army prime contract). Goodwill [Industries of South
Florida] now is making and delivering approximately 8400 IHWCU-F
trousers each month, i.e., ~100,000 per year. The actual stated requirement
for this coming year is 166,158. AR 508. If DLA actually needed more than
the 100,000 that Goodwill [Industries of South Florida] is now producing,
however, then presumably, it already would have ordered more, through the
Army prime contract with Goodwill [Industries of South Florida].
As the Defendant itself notes, this requirement traditionally has been divided
between Goodwill and ReadyOne, another workshop, going back to 2010.
Although the Defendant has not spelled out the extent of ReadyOne’s
production in the record, it appears that even the highest figures cited for
DLA’s purchases don’t exceed what Goodwill [Industries of South Florida]
and ReadyOne already can produce for the Army—and, also, there is no
reason to think that Goodwill [Industries of South Florida] could not expand
annual production from 100,000 to 166,158 to cover all of it.
If one were to assume, arguendo, that workshops could not meet DLA’s full
requirement for this item, then the proper means for the Defendant to
proceed under the JWOD Act would have been for AbilityOne to make a
rational determination as to how much of the item would be “available
within the period required by the entity,” i.e., DLA, from workshops like
Goodwill [Industries of South Florida]. 41 U.S.C. § 8504(a). The record
reflects nothing of the kind. The Defendant’s speculation that Goodwill
[Industries of South Florida] might not be able to meet DLA’s requirements
certainly is no conceivable justification for cutting off Goodwill [Industries of
South Florida] production entirely.
(emphases in original; alterations added).
Furthermore, protestor correctly argues that
[t]he 2006 statement is not a regulation, or any other form of binding law.
See 5 U.S.C. § 553. The February 2006 notice that preceded it was not
identified as a notice of proposed rulemaking. It does not cite to, nor does it
rely upon, AbilityOne’s rulemaking authority. It is not codified in the Code of
Federal Regulations. It is, at best, a statement of the agency’s practice, and
therefore legally subservient to the JWOD Act, AbilityOne’s actual
regulations, and the FAR.
The 2006 Clarification, issued by AbilityOne as a notice and not promulgated as a
regulation, states:
60
The third category (the C List) contains specialized or niche products (i.e.,
adapted to a specific function or demand) that are most often designed and
manufactured to meet the needs of a single Federal agency, or a group of
customers with a unique requirement. These products, when furnished
under the JWOD Program, are sponsored by and have procurement
preference for the specific Federal agency or agencies that defined the
requirement. The JWOD procurement preference does not apply to Federal
Agencies that are not identified on the Procurement List documentation for
such items. Generally, C List items are only made available to Federal
customers through the distribution channels authorized by the requiring
office. If Federal agencies whose requirements are not specified on the
Procurement List would like to purchase C list items, they must refer their
request to the sponsoring contracting activity. Alternatively, Federal
agencies may ask the Committee to change the Procurement List in order
to add their agency as an additional contracting Activity.
See 2006 Clarification, 71 Fed. Reg. 69,535, 69,536.
Although in the January 11, 2021 Notice of Addition, “Army Contracting Command
– Aberdeen Proving Ground, Natick Contracting Division” was listed as the “Contracting
Activity,” neither the “mandatory for” line, nor the January 11, 2021 Notice of Addition,
however, address the steps that AbilityOne needed to undertake to limit the scope of a
procurement which involved an item on the Procurement List and subject to the JWOD
Act. As discussed above, AbilityOne should have followed, but failed to follow, the
required steps to establish that a JWOD Act qualified nonprofit would not be able to
produce the quantity needed in the time required by the DLA in order to support and issue
a competitive procurement. Under the terms of the JWOD Act and its implementing
regulations, qualified nonprofits are the mandatory sources of supply for all federal entities
for Procurement List items, and Goodwill Industries of South Florida already was a
supplier of the Women’s IHWCU Trousers. The words of the 2006 Clarification issued by
AbilityOne and defendant’s “C-List” arguments do not change the requirements of the
JWOD statute or the implementing regulations, nor does the 2006 Clarification change
Goodwill Industries of South Florida’s status as a qualified nonprofit provider for the
Women’s IHWCU Trousers under the JWOD Act. Protestor and defendant agree that the
Women’s IHWCU Trousers were added to the Procurement List. Therefore, defendant’s
reliance on the 2006 Clarification to avoid a mandatory source of supply created by the
JWOD Act and its implementing regulations is misplaced. The 2006 Clarification, which
enumerated, the “A-List,” “B-List,” and “C-List” structure and which purported to identify
and add a scope limitation to the JWOD procurement preference was not promulgated as
a regulation through notice and comment, see 2006 Clarification, 71 Fed. Reg. 69,535,
69,536 (Dec. 1, 2006), which, protestor correctly points out, is “legally subservient” to the
JWOD Act and its identified implementing, properly promulgated regulations. There is no
reference to “A-List,” “B-List,” or “C-List” items in the JWOD Act or in its implementing
regulations. In fact, the 2006 Clarification is inconsistent with the language of the JWOD
Act and its implementing regulations, which establish JWOD qualified nonprofits as the
61
mandatory source of supply for Procurement List items absent specific findings, and
which are controlling over a simple notice, albeit published in the Federal Register. See
41 U.S.C. § 8504(a); 41 C.F.R. § 51-1.2 (Mandatory source priorities); 41 C.F.R.§ 51-2.4
(Determination of suitability); 41 C.F.R. § 51-2.8 (Procurement list); 41 C.F.R. § 51-5.2(Mandatory source requirement); 41 C.F.R. § 51-5.3 (Scope of requirement); 41 C.F.R.
§ 51-5.4 (Purchase exceptions); 41 C.F.R. § 51-6.7 (Orders in excess of nonprofit agency
capability).
Furthermore, defendant’s discussion and reliance on a particular cabinet agency
subdivision of an agency sponsorship of a particular product does not address whether
or not the agency must, nonetheless, conform to the JWOD Act and implementing
regulatory program when continuing to procure a product on the Procurement List under
the JWOD Act and its implementing regulations. The Administrative Record before the
court does not establish that the requisite findings under the JWOD Act and its properly
promulgated implementing regulations were made in the protest currently before the
court, either by AbilityOne or by SourceAmerica, the relevant central nonprofit, that JWOD
Act qualified nonprofits could not meet the commodity production requests in the DLA’s
solicitation. See 41 C.F.R. § 51-6.7; 48 C.F.R. § 8.706(b). To the contrary, as indicated
above, the declaration filed with the court by protestor by Mark Marchioli, Vice President
of Business Development of Goodwill Industries of South Florida, states that Goodwill
Industries of South Florida is willing to meet the DLA’s needs and has the capability to
meet the DLA’s requirement. The declaration by Mr. Marchioli indicates that “Goodwill
[Industries of South Florida] is ready, willing, and able to provide these items as a stand -
alone item delivered to the Government directly, or as an item to a contractor selling larger
groups of other items to the Government, in accordance with the supply requirements in
the solicitations for the IHWCU-F trousers.” Once a qualified nonprofit so indicates, if the
agency wishes to issue a competitive procurement instead of awarding a contract to a
JWOD qualified nonprofit, the burden is on the central nonprofit agency or AbilityOne to
determine that a JWOD qualified nonprofit does not have the capacity to produce the
requirement “within the period required by the entity.” See 41 U.S.C. § 8504(a); see also
41 C.F.R. § 51-5.4(a)–(b). The 2006 Clarification does not excuse the DLA from first
having to obtain the Women’s IHWCU Trousers from qualified nonprofits unless such
JWOD Act qualified nonprofits cannot produce the quantity of Women’s IHWCU Trousers
for DLA Troop Sustainment in the required time. Because the DLA failed to follow the
existing statutory requirements of the JWOD Act and the properly promulgated, applicable
implementing regulations during the procurement of the Women’s IHWCU Trousers
before issuing a competitive, commercial procurement, defendant acted arbitrarily and
capriciously.
Prejudice
As discussed above, “[a] bid protest proceeds in two steps. First . . . the trial court
determines whether the government acted without rational basis or contrary to law when
evaluating the bids and awarding the contract,” and “[s]econd . . . if the trial court finds
that the government’s conduct fails the APA review under 5 U.S.C. § 706(2)(A), then it
proceeds to determine, as a factual matter, if the bid protester was prejudiced by that
62
conduct.” Bannum, Inc. v. United States, 404 F.3d at 1351; T Square Logistics Servs.
Corp. v. United States, 134 Fed. Cl. at 555; Archura LLC v. United States, 112 Fed. Cl.
at 496. In describing the prejudice requirement, the Federal Circuit also held that:
To prevail in a bid protest, a protester must show a significant, prejudicial
error in the procurement process. See Statistica, Inc. v. Christopher, 102
F.3d 1577, 1581 (Fed. Cir. 1996); Data Gen. Corp. v. Johnson, 78 F.3d
1556, 1562 (Fed. Cir. 1996). “To establish prejudice, a protester is not
required to show that but for the alleged error, the protester would have
been awarded the contract.” Data General, 78 F.3d at 1562 (citation
omitted). Rather, the protester must show “that there was a substantial
chance it would have received the contract award but for that error.”
Statistica, 102 F.3d at 1582; see CACI, Inc.-Fed. v. United States, 719 F.2d
1567, 1574–75 (Fed. Cir. 1983) (to establish competitive prejudice,
protester must demonstrate that but for the alleged error, “‘there was a
substantial chance that [it] would receive an award—that it was within the
zone of active consideration.’” (citation omitted)).
Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed. Cir. 1999)
(alteration in original); see also Glenn Def. Marine (ASIA), PTE Ltd. v. United States, 720
F.3d at 912; Allied Tech. Grp., Inc. v. United States, 649 F.3d at 1326; Info. Tech. &
Applications Corp. v. United States, 316 F.3d at 1319.
The court has determined that the defendant acted arbitrarily and capriciously
when it violated the JWOD Act and its implementing regulations by issuing a competitive
solicitation for the Women’s IHWCU Trousers without a determination by AbilityOne or
SourceAmerica that a qualified nonprofit was unable to meet the DLA requirement. This
is especially true given protestor’s assertion that it could produce the required quantity of
the Women’s IHWCU Trousers in a timely fashion in accordance with the deadline
requirements of the agency. See 41 C.F.R. § 51-5.4(a)–(b). Therefore, the court must
consider whether there was a substantial chance for Goodwill Industries of South Florida
to have received the contract, or requirement, absent the government’s error.
As explained above, the JWOD Act and its implementing regulations establish that
nonprofit agencies which employ people who are blind or who are otherwise severely
disabled are the mandatory sources of supply of items on the Procurement List for all
federal entities seeking to purchase such items, with limited exceptions that do not apply
to this protest. See 41 U.S.C. § 8504(a); see also 41 C.F.R. §§ 51-1.2, 51-5.2.8, 51-5.2,
51-5.4, 51-6.7; 48 C.F.R. §§ 8.701, 8.703, 8.704, 8.705-1(b), 8.706. As determined
above, the DLA is a component of the Department of Defense, and is an entity of the
federal government, see 41 U.S.C. § 8504(a), and the DLA is specifically named as an
entity covered by the JWOD Act and its implementing regulations. See 48 C.F.R. § 8.703.
Therefore, the DLA was required to purchase Procurement List items, including the
Women’s IHWCU Trousers from JWOD Act qualified nonprofit organizations in situations
in which a qualified nonprofit indicated it could meet the agency’s requirements in a timely
fashion. Moreover, Army-Natick had been procuring 50% of its supply of the unisex
63
IHWCU Trousers, the predecessor to the Women’s IHWCU Trousers, and the Women’s
IHWCU Trousers from Goodwill Industries of South Florida, and as a qualified nonprofit,
was apparently “ready, willing, and able” to produce the identified request. Because the
Administrative Record demonstrates Goodwill Industries of South Florida’s readiness to
timely produce the required product and the Administrative Record does not contain
information that Goodwill Industries of South Florida could not do so, alone or together
with another qualified nonprofit, or that AbilityOne or SourceAmerica went through the
required steps to issue a purchase scope exception to the Procurement List, the court
finds that, but for the DLA’s attempt to procure the Women’s IHWCU Trousers
competitively, Goodwill Industries of South Florida had, or should have had, a
“‘substantial chance that [it] would receive an award – that it was within the zone of active
consideration.’” Alfa Laval Separation, Inc. v. United States, 175 F.3d at 1367 (quoting
CACI, Inc.-Fed. v. United States, 719 F.2d at 1574–75).
Permanent Injunction
In its prayer for relief, protestor’s complaint requests a permanent injunction
prohibiting the “federal acquisition of the Goodwill items, and any replacement item or
variation of the Goodwill items, and any item that is ‘essentially the same’ or ‘similar,’ from
any source other than Goodwill [Industries of South Florida].” In Centech Group, Inc. v.
United States, the United States Court of Appeals for the Federal Circuit set out the test
for a permanent injunction, stating:
To determine if a permanent injunction is warranted, the court must
consider whether (1) the plaintiff has succeeded on the merits of the
case; (2) the plaintiff will suffer irreparable harm if the court withholds
injunctive relief; (3) the balance of hardships to the respective parties
favors the grant of injunctive relief; and (4) the public interest is served
by a grant of injunctive relief.
Centech Grp., Inc. v. United States, 554 F.3d 1029, 1037 (Fed. Cir. 2009) (citing PGBA,
LLC v. United States, 389 F.3d 1228–29 (Fed. Cir. 2004) (citing Amoco Prod. Co. v. Vill.
of Gambell, Alaska, 480 U.S. 531, 546 n.12 (1987))); see also Nat’l Steel Car, Ltd. v.
Canadian Pacific Ry., Ltd., 357 F.3d 1319, 1325 (Fed. Cir.) (finding that a plaintiff who
cannot demonstrate actual success on the merits cannot prevail on its motion for
permanent injunctive relief), reh’g and reh’g en banc denied (Fed. Cir. 2004); MVM, Inc.
v. United States, 149 Fed. Cl. 478, 492 (2020); Kiewit Infrastructure West Co. v. United
States, 147 Fed. Cl. 700, 712 (2020); Remington Arms Co., LLC v. United States, 126
Fed. Cl. 218, 232 (2016). Judges of this court have indicated that success on the merits
is “the most important factor for a court to consider when deciding whether to issue
injunctive relief.” Dellew Corp. v. United States, 108 Fed. Cl. 357, 369 (2012) (citing Blue
& Gold Fleet, L.P. v. United States, 492 F.3d at 1312). While success on the merits is
necessary, it is not sufficient for protestor to establish that it is entitled to injunctive relief.
See Contracting, Consulting, Eng’g LLC v. United States, 104 Fed. Cl. at 353 (“Although
plaintiff’s entitlement to injunctive relief depends on its succeeding on the merits, it is not
determinative because the three equitable factors must be considered, as well.”) (citing
64
PGBA, LLC v. United States, 389 F.3d at 1228-29). The four factors are to be considered
collectively, rather than individually. See Sheridan Corp. v. United States, 94 Fed. Cl. 663,
668 (2010). In Sheridan Corp. v. United States, a Judge of this court stated:
No one factor, taken individually, is necessarily dispositive. . . . [T]he
weakness of the showing regarding one factor may be overborne by the
strength of the others.” FMC Corp. [v. United States], 3 F.3d [424,] 427
[(Fed. Cir. 1993)]. Conversely, “the absence of an adequate showing with
regard to any one factor may be sufficient” to deny injunctive relief.” Id.Id. (first and second alterations in original; remaining alterations added); see also Comput.
World Servs. Corp. v. United States, 147 Fed. Cl. 584, 595 (2020); Wallace Asset Mgmt.,
LLC v. United States, 125 Fed. Cl. 718, 727 (2016); Amidon, Inc. v. United States, 124
Fed. Cl. 517, 522 (2015).
“In evaluating irreparable harm, ‘[t]he relevant inquiry . . . is whether plaintiff has
an adequate remedy in the absence of an injunction.’” Wavelink, Inc. v. United States,
154 Fed. Cl. 245, 288 (2021); see also Melwood Horticultural Training Ctr., Inc. v. United
States, 153 Fed. Cl. at 743 (stating that permanent injunctive relief is warranted when,
among other factors, “the movant will suffer irreparable harm absent an injunction.”). “This
Court consistently has held that the lost opportunity to compete for a contract constitutes
irreparable harm.” Sierra Nevada Corp. v. United States, 154 Fed. Cl. 424, 440–41
(2021); see also Sys. Studies & Simulation, Inc. v. United States, 146 Fed. Cl. at 203
(finding irreparable harm when the disappointed bidder “stands to lose not simply the
monetary value of the contract (a substantial sum), but also the training opportunities that
would naturally stem from performance of the contract”); Femme Comp Inc. v. United
States, 83 Fed. Cl. 704, 772 (2008) (“[A]ny offeror that should have been awarded a
contract, but was not, will be at a disadvantage when competing for future contracts. No
adequate remedy exists to make up for this potential loss of business or com petitive
advantage.”).
Finally, with regard to the public interest factor, “the public interest is served by
injunctive relief where the court has concluded that the government violated an applicable
regulation and related provisions in the solicitation, and ‘maintenance of the integrity of
the procurement process weighs heavily in favor of granting a permanent injunction.’” Q
Integrated Cos. LLC v. United States, 126 Fed. Cl. 124, 147 (quoting Springfield Parcel
C, LLC v. United States, 124 Fed. Cl. 163, 193 (2015)), appeal dismissed, 691 F. App’x
906 (Fed. Cir. 2016); see also Sierra Nevada Corp. v. United States, 154 Fed. Cl. at 441
(citing MVM, Inc. v. United States, 46 Fed. Cl. 137, 143 (2000) (“Many cases have
recognized that the public interest is served when there is integrity in the public
procurement system.”)); United Int’l Investigative Servs., Inc. v. United States, 41 Fed. Cl.
at 323 (“[T]he public has a strong interest in preserving the integrity of the procurement
process.”) (citing Parcel 49C Ltd. P’ship v. United States, 31 F.3d 1147, 1153 (Fed. Cir.
1994)); Am. Safety Council, Inc. v. United States, 122 Fed. Cl. 426, 444 (2015) (holding
that “the public interest will be served by an injunction by preserving the integrity of the
procurement process”); Applied Bus. Mgmt. Sol., Inc., LLC v. United States, 117 Fed. Cl.
65589, 608 (2014); BINL, Inc. v. United States, 106 Fed. Cl. 26, 49 (2012) (“With regard to
the public interest, it is well-settled that there is a public interest in remedying violations
of law.”); Bilfinger Verger AG Sede Secondaria Italiana v. United States, 94 Fed. Cl. 389,
393 (2010) (“The public interest in preserving the integrity and fairness of the procurement
process is served by enjoining arbitrary or capricious agency action.”); Sys. Studies &
Simulation, Inc. v. United States, 146 Fed. Cl. at 204 (“Public interest is best served by
requiring the government to comply with federal procurement law.”).
In the above captioned bid protest, Goodwill Industries of South Florida established
success on the merits by demonstrating that the government acted arbitrarily and
capriciously when attempting to procure the Women’s IHWCU Trousers using the
competitive solicitation approach without following the required procedures under the
JWOD Act and its implementing regulations for determining that qualified nonprofits were
unable to meet the DLA’s requirements. See Dellew Corp. v. United States, 108 Fed. Cl.
at 369. Having concluded that the protestor succeeded on the merits of its bid protest, the
court must consider the three additional factors to determine whether protestor is entitled
to a permanent injunction.
As described above, protestor must demonstrate that “it will suffer irreparable harm
if the court withholds injunctive relief.” See Centech Grp., Inc. v. United States, 554 F.3d
at 1037. To prove such irreparable harm, protestor points the court to the declaration of
Mark Marchioli, the Vice President of Business Development of Goodwill Industries of
South Florida. Mr. Marchioli declares under penalty of perjury:
If the IHWCU-F trouser [Women’s IHWCU Trousers] requirement is
awarded to any entity other than Goodwill [Industries of South Florida], it
will eliminate 114 direct labor positions, including approximately 85 people
with disabilities in March 2022. For IHWCU-F trousers, we would have to
lay off 114 people, with an annualized payroll of approximately $2.1M.
(alterations added). Mr. Marchioli also asserts in his Declaration:
Goodwill [Industries of South Florida] has spent what, for Goodwill
[Industries of South Florida], are enormous sums of money to establish this
production line. For equipment and production setup, the required
investment is $99,255. To discontinue the program, we will have idle
equipment valued at approximately $450,000, and underutilized space
valuing $150,000 annually. There is no practical means to recover these
losses.
The effect on these workers, on Goodwill [Industries of South Florida] would
be devastating. These losses would threaten the existence of Goodwill
[Industries of South Florida].
Layoffs to our disabled workforce would make it difficult, if not impossible,
to find new work in the current conditions. There are over 400,000
unemployed people with disabilities in the Miami-Dade and Broward
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counties, which exceeds the unemployment rate for non-disabled people.
Goodwill [Industries of South Florida] is ready, willing, and able to provide
these items as a stand-alone item delivered to the Government directly, or
as an item to a contractor selling larger groups of other items to the
Government, in accordance with the supply requirements in the solicitations
for the IHWCU-F trousers.
(alterations added). Protestor, citing Transatlantic Lines LLC v. United States, 68 Fed. Cl.
48, 56–57 (2005), alleges that “[t]o assess irreparable injury to the plaintiff, the inquiry
focuses on whether the company has an adequate remedy in the absence of an
injunction.” Protestor, citing to Red River Service Corp. v. United States, 60 Fed. Cl. 532(2004) and Varicon International v. Office of Personnel Management, 934 F. Supp. 440(D.D.C. 1996), alleges that
[i]f an injunction is not granted, Goodwill [Industries of South Florida] will
lose substantial revenue and profit for which it has no adequate remedy at
law, since lost profits are not recoverable for improperly awarded contracts.
Additionally, without injunctive relief, AGMA [sic] will have lost the protection
conferred on it by the JWOD Act and related regulations.
(alterations added).
Defendant has not directly challenged or addressed protestor’s arguments that
Goodwill Industries of South Florida would be irreparably harmed should the procurement
of the Women’s IHWCU Trousers be competitively solicited and if DLA were to award the
two contracts competitively, “one set aside for HUBZone small business concerns and
one set aside for Small Business concerns,” rather than make award to JWOD Act
qualified nonprofit organizations. The court finds that, given the declaration of Mr.
Marchioli, the operations of Goodwill Industries of South Florida, and its employees would
be irreparably harmed by the DLA competitive procurement at issue in this protest. Also,
the protestor would be irreparably harmed by the government’s decision to unilaterally
carve out exceptions to the JWOD Act and its implementing regulations without following
proper procedures and by awarding the contracts through a competitive process.
Third, protestor must demonstrate that “the balance of hardships to the respective
parties favors the grant of injunctive relief.” Centech Grp., Inc. v. United States, 554 F.3d
at 1037. As noted in System Studies & Simulation, Inc. v. United States, 146 Fed. Cl. 186,
“[a]lthough injunctions inevitably cause the government some delay, ‘only in an
exceptional case would [delay] alone warrant a denial of injunctive relief, or the courts
would never grant injunctive relief in bid protests.’” Id. at 203 (quoting Reilly’s Wholesale
Produce v. United States, 73 Fed. Cl. 705, 715 (2006)) (alteration in original). Protestor
alleges that the “balancing of hardships clearly favors Goodwill [Industries of South
Florida]. According to protestor, without relief, Goodwill [Industries of South Florida] will
have to shut down these production lines and Goodwill’s investment in them. Goodwill
[Industries of South Florida]’s workers will lose their jobs with little hope of finding others,
and Goodwill [Industries of South Florida’s] continued existence will be threatened.”
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(alterations added). Moreover, the court notes that it is important to maintain the integrity
of a congressionally enacted, statutory and a properly, promulgated, regulatory program,
including the procedures which the JWOD Act program establishes to the benefit of
people who are blind or otherwise severely disabled. With regard to the DLA’s obligations
under the JWOD Act, protestor asserts that “[a]dvancing the salutary purposes of the
JWOD Act is hardly a ‘hardship’; it’s a virtue.” On the other side of the balance of hardship
is the possible, but limited burden, given the procedures regarding the JWOD Act and
regulatory requirements on the government to have to go through the JWOD Act required
procedures to establish whether there is a nonprofit entity that can meet all or a portion
of the DLA requirement for the production for Women’s IHWCU Trousers before soliciting
for the contracts competitively. There is nothing in the Administrative Record before the
court that indicates that adhering to the requirements of the JWOD Act and implementing
regulations would have been unduly burdensome on the DLA to do it properly the first
time. There is also no indication in the Administrative Record before the court that
Goodwill Industries of South Florida, which indicated it is currently producing thousands
of pairs of Women’s IHWCU Trousers per month, or another qualified nonprofit entity,
could not meet the demand identified by the DLA. The required administrative procedures
imposed by the JWOD Act are not unduly burdensome, especially as compared to the
impact and the consequences to Goodwill Industries of South Florida and its employees,
who are disabled, making it difficult for them to find alternative employment. In sum, the
balance of the hardships weighs in protestor’s favor in this protest.
Finally, the court must consider whether “the public interest is served by a grant of
injunctive relief.” Centech Grp., Inc. v. United States, 554 F.3d at 1037. “[T]he public
interest is served by injunctive relief where the court has concluded that the government
violated an applicable regulation and related provisions in the solicitation, and
‘maintenance of the integrity of the procurement process weighs heavily in favor of
granting a permanent injunction.’” Q Integrated Cos. LLC v. United States, 126 Fed. Cl.
at 147 (quoting Springfield Parcel C, LLC v. United States, 124 Fed. Cl. at 193). According
to protestor, “it is well-established that the public interest is well-served by ensuring that
the government procurement process is fair,” and that the required, applicable statute
and implementing regulations are followed. In addition, protestor, citing Asia Pacific
Airlines v. United States, 68 Fed. Cl. 8, 27 (2005), asserts “the public interest will benefit
strongly from continued gainful employment by Goodwill [Industries of South Florida’s]
workers, as the JWOD Act intends.” Protestor also asserts that the public interest would
benefit from a permanent injunction because, by continuing to provide employment
opportunities through the JWOD Act to qualified nonprofits, the government would not be
“obliged to pay out approximately $15,000 per year in SSDI [Social Security Disability
Insurance] benefits to each unemployed disabled worker.” The court concludes that the
public interest is best served by requiring the government to comply with the JWOD Act,
and its properly promulgated implementing regulations. See Sys. Studies & Simulation,
Inc. v. United States, 146 Fed. Cl. at 204. The court finds that there is a public interest to
enjoining the DLA from procuring Women’s IHWCU Trousers on the Procurement List by
soliciting from competitive sources which do not qualify under the JWOD Act and its
implementing regulations, and to promote the statutory and regulatory goal to benefit
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people who are blind or otherwise severely disabled, and to preserve the integrity of the
established procurement system. On balance, the injunctive factors all weighed in favor
of protestor and in favor of granting the permanent injunction.
CONCLUSION
Based on the declared, immediate urgency for the court to decide the protest, the
court previously issued an oral decision informing the parties of its decision, which was
effective immediately. The court ruled that the actions of the government during the
procurement by the DLA of the Women’s IHWCU Trousers did not follow the existing
requirements of the JWOD Act and its implementing regulations, and that, therefore, the
DLA’s actions were arbitrary, capricious, and without a rational basis. This written Opinion
memorializes that oral decision. Protestor’s motion for judgment on the Administrative
Record, including protestor’s request for a permanent injunction, was granted.
Defendant’s motion for judgment on the Administrative Record was denied. Solicitation
No. SPE1C1-21-R-0029 to procure the Women’s IHWCU Trousers using competitive
procedures was enjoined at the time of the court’s issuance of the oral Opinion. The Clerk
of the Court shall finalize JUDGMENT consistent with this Opinion.
IT IS SO ORDERED.
s/Marian Blank Horn
MARIAN BLANK HORN
Judge
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