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Res-Care, Inc. v. United States

United States Court of Appeals, Federal Circuit

November 21, 2013

RES-CARE, INC., Plaintiff-Appellant,
v.
UNITED STATES, Defendant-Appellee.

Page 1385

Jonathan D. Shaffer, Smith Pachter McWhorter PLC, of Tysons Corner, Virginia, argued for plaintiff-appellant. With him on the brief was Mary Pat Buckenmeyer. Of counsel were John S. Pachter, and Armani Vadiee, of Vienna, VA.

Amanda L. Tantum, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With her on the brief were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director,

Page 1386

and Patricia M. McCarthy, Assistant Director. Of counsel on the brief were David R. Koeppel, and Peter J. Dickson, Attorney's, United States Department of Labor, of Washington, DC.

Before NEWMAN, PLAGER, and CHEN, Circuit Judges.

CHEN, Circuit Judge.

This case turns on the interpretation of the phrase " competitive basis" in the Workforce Investment Act (" WIA" ). See 29 U.S.C. § 2887(a)(2)(A). Res-Care, Inc. (" Res-Care" ) appeals the decision of the United States Court of Federal Claims (" Claims Court" ) interpreting the statute as permitting the United States Department of Labor (" DOL" ) to select a contractor for the Blue Ridge Job Corps Center (" Blue Ridge" ) program through a set-aside for small businesses. For the reasons set forth below, we affirm.

BACKGROUND

Under WIA, DOL administers a national Job Corps program that provides education, training, and support services to help at-risk youth obtain employment. 29 U.S.C. §§ 2881, 2884. There are 125 Job Corps Centers (" JCCs" ) across the nation, including Blue Ridge in Marion, Virginia, which Res-Care has operated since 1998.

In December 2011, DOL published a Sources Sought Notice for a Request for Information (the " Request" ) seeking information from potential bidders on an upcoming procurement for the operation of Blue Ridge. At the time, Res-Care was operating Blue Ridge under a contract that expired on March 31, 2013. The Request invited " [a]ll interested parties" to submit a response but specifically encouraged firms that qualify as small businesses to respond with a " capabilities statement" that demonstrated their ability to operate the facility successfully. In response to the Request, one large business and four small businesses submitted capabilities statements. Res-Care, a large business, did not respond to the Request.

Based on the responses, a DOL contracting officer found the large business and two of the four small businesses capable of operating Blue Ridge. In her review, the contracting officer considered twelve relevant areas of experience and the financial resources of each business. She specifically found that both small businesses were capable under " all of the capability areas identified in the [Request]." J.A. 3063. In particular, she found that, based on the responses from the two capable small businesses, DOL would likely receive bids (1) from at least two responsible small businesses and (2) at fair market prices. Because both of these requirements of Federal Acquisition Regulation (" FAR" ), 48 C.F.R. § 19.502-2(b) (the so-called " Rule of Two" ), had been met, the contracting officer recommended conducting the Blue Ridge contract selection as a small business set-aside. DOL subsequently issued a presolicitation notice indicating that the next Blue Ridge contract, with a value of $25 million, would be solicited as a " 100% Set-Aside for Small Business" for the two-year base period beginning April 1, 2013, with three unilateral option years.

On April 18, 2012, Res-Care filed its bid protest with the Claims Court alleging, inter alia, that DOL violated WIA by setting aside the Blue Ridge contract for small businesses.[1]Section 2887 of WIA

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describes how entities are selected for managing JCCs. 29 U.S.C. § 2887(a)(2)(A). It provides that DOL shall select entities " on a competitive basis," but enumerates certain exceptions set forth in 41 U.S.C. § 3304(a)-(c) of the Competition in Contracting Act (" CICA" ). Id. The exceptions in § 3304(a)-(c) describe instances in which the government may award a contract on a noncompetitive basis. Res-Care argued that ...


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