June 3 rd, Cyrus E. Phillips IV (757) Direct Line (703) Facsimile (703) Mobile

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1 June 3 rd, 2016 Cyrus E. Phillips IV (757) Direct Line (703) Facsimile (703) Mobile lawyer@procurement-lawyer.com VIA ELECTRONIC MAIL Paula A. Williams Senior Attorney Office of General Counsel U.S. Government Accountability Office PLCG 441 G Street, N.W. Washington, D.C Re: B Pre-Award Protest of Trademasters Service, Incorporated Under General Services Administration, Public Buildings Service, Solicitation Number RFP-GS- 11-P-16-DC-D Dear Ms. Williams: This is the Response of Trademasters Service, Incorporated (Trademasters) to the Agency Request for Dismissal, 4 C.F.R. 21.3(b), filed on behalf of the General Services Administration s Public Buildings Service (GSA). Trademasters challenges the aggregation of continuing Operation and Maintenance services on which GSA s Solicitation Number RFP-GS-11-P-16- DC-D-7006 (Solicitation) is premised, and Trademasters likewise challenges the terms under which this Acquisition is proceeding. GSA says that because Trademasters and other qualifying Small Businesses have submitted Proposals Trademasters cannot now pursue its bundling ground. And GSA says that Trademasters cannot show, because they violate no requirements of the Federal Acquisition Regulation, that the terms under which the Acquisition is proceeding are unreasonable.

2 We begin with the statutory scheme which abjures Agency bundling of requirements previously provided by Small Businesses under separate smaller Contracts save upon an Agency s written determination invoking the particular circumstances set out in that scheme. This statutory scheme is collected in 15 U.S. Code Chapter 14A AID TO SMALL BUSI- NESS. It begins with 15 U.S.C. 631 Declaration of Policy. Here subsection (j) Contract bundling, reads: In complying with the statement of congressional policy expressed in subsection (a), relating to fostering the participation of small business concerns in the contracting opportunities of the Government, each Federal agency, to the maximum extent practicable, shall (1) comply with congressional intent to foster the participation of small business concerns as prime contractors, subcontractors, and suppliers; (2) structure its contracting requirements to facilitate competition by and among small business concerns, taking all reasonable steps to eliminate obstacles to their participation; and (3) avoid unnecessary and unjustified bundling of contract requirements that precludes small business participation in procurements as prime contractors. 15 U.S.C. 631(j). GSA would have it that unless a Small Business can demonstrate it is precluded from participation as a Prime Contractor, the bundled Contract requirements for which it is competing are neither unnecessary nor unjustified. Agency Request for Dismissal, June 1 st, 2016, at pages 2 through 3 of 5. The statutory scheme continues with 15 U.S.C. 632 Definitions. Here subsection (o) Definitions of bundling of contract requirements and related terms, reads: In this chapter: (1) Bundled contract The term bundled contract means a contract that is entered into to meet requirements that are consolidated in a bundling of contract requirements

3 (2) Bundling of contract requirements The term bundling of contract requirements means consolidating 2 or more procurement requirements for goods or services previously provided or performed under separate smaller contracts into a solicitation of offers for a single contract that is likely to be unsuitable for award to a small-business concern due to (A) the diversity, size, or specialized nature of the elements of the performance specified; (B) the aggregate dollar value of the anticipated award; (C) the geographical dispersion of the contract performance sites; or (D) any combination of the factors described in subparagraphs (A), (B), and (C). (3) Separate smaller contract The term separate smaller contract, with respect to a bundling of contract requirements, means a contract that has been performed by 1 or more small business concerns or was suitable for award to 1 or more small business concerns. 15 U.S.C. 632(o). GSA would have your Office ignore the following, specific provision of the statutory scheme, and GSA relies on Manus Medical LLC, B , January 21 st, 2016, 2016 U.S. Comp. Gen. LEXIS 25, *9-*10, which holds, premised on the general definition in 15 U.S.C. 632(o)(2), that Small Businesses which compete admit that the bundled requirements they challenge are not unsuitable for award to a small business concern. Agency Request for Dismissal, June 1 st, 2016, at pages 2 through 3 of 5. GSA and Manus Medical both ignore specific provisions of the statutory scheme which allow Agency bundling of requirements previously provided by Small Businesses under separate smaller Contracts. This is 15 U.S.C. 644 Awards or contracts. Here subsection (e) Procurement strategies; contract bundling, reads: (1) In general To the maximum extent practicable, procurement strategies used by a Federal department or agency having contracting authority shall facilitate the maximum participation of small business concerns as prime contractors, subcontractors, and suppliers, and each such Federal department or agency shall - 3 -

4 (A) provide opportunities for the participation of small business concerns during acquisition planning processes and in acquisition plans; and (B) invite the participation of the appropriate Director of Small and Disadvantaged Business Utilization in acquisition planning processes and provide that Director access to acquisition plans. (2) Market research (A) In general Before proceeding with an acquisition strategy that could lead to a contract containing consolidated procurement requirements, the head of an agency shall conduct market research to determine whether consolidation of the requirements is necessary and justified. (B) Factors For purposes of subparagraph (A), consolidation of the requirements may be determined as being necessary and justified if, as compared to the benefits that would be derived from contracting to meet those requirements if not consolidated, the Federal Government would derive from the consolidation measurably substantial benefits, including any combination of benefits that, in combination, are measurably substantial. Benefits described in the preceding sentence may include the following: (i) Cost savings. (ii) Quality improvements. (iii) Reduction in acquisition cycle times. (iv) Better terms and conditions. (v) Any other benefits. (C) Reduction of costs not determinative The reduction of administrative or personnel costs alone shall not be a justification for bundling of contract requirements unless the cost savings are expected to be substantial in relation to the dollar value of the procurement requirements to be consolidated

5 (3) Strategy specifications If the head of a contracting agency determines that an acquisition plan for a procurement involves a substantial bundling of contract requirements, the head of a contracting agency shall publish a notice on a public website that such determination has been made not later than 7 days after making such determination. Any solicitation for a procurement related to the acquisition plan may not be published earlier than 7 days after such notice is published. Along with the publication of the solicitation, the head of a contracting agency shall publish a justification for the determination, which shall include the following information: (A) The specific benefits anticipated to be derived from the bundling of contract requirements and a determination that such benefits justify the bundling. (B) An identification of any alternative contracting approaches that would involve a lesser degree of bundling of contract requirements. (C) An assessment of (i) the specific impediments to participation by small business concerns as prime contractors that result from the bundling of contract requirements; and (ii) the specific actions designed to maximize participation of small business concerns as subcontractors (including suppliers) at various tiers under the contract or contracts that are awarded to meet the requirements U.S.C. 644(e) (Emphasis added). Relying on Manus Medical, GSA wants your Office to look only to the unsuitable for award to a small business concern proviso of 15 U.S.C. 632(o)(2), and to ignore the express intent of Congress set out in 15 U.S.C. 644(e)(1) which requires written determinations before bundled Acquisitions may proceed, this to ensure that procurement strategies used by a Federal department or agency having contracting authority shall facilitate the maximum participation of small business concerns as prime contractors, subcontractors, and suppliers. The specific requirement of 15 U.S.C. 644(e)(1) for maximum participation by Small Businesses is a far broader and different criterion than the general not unsuitable for award - 5 -

6 to a small business concern proviso of 15 U.S.C. 632(o)(2). GSA would, and your Office has, allowed the general definition of 15 U.S.C. 632(o)(2) to repeal by implication the specific requirement of 15 U.S.C. 644(e)(1). This is not the law. Canons of statutory construction demand that statutes relating to the same subject (here, these sections 632 and 644 collected in 15 U.S. Code Chapter 14A AID TO SMALL BUSI- NESS) must be construed harmoniously if possible, and if not, then the more specific sections prevail over the more general sections: The court also is guided by the familiar canon of statutory construction that a specific statute controls over a general one without regard to priority of enactment. Thiess, 100 F.3d at 919 (quoting Bulova Watch Co. v. United States, 365 U.S. 753, 758, 81 S. Ct. 864, 6 L. Ed. 2d 72, C.B. 782 (1961)). Repeals by implication are strongly disfavored. Cathedral Candle Co. v. U.S. Int l. Trade Comm n, 400 F.3d 1352, 1365 (Fed. Cir. 2005); Inter-Coastal Xpress, Inc., 296 F.3d at (citing Randall v. Loftsgaarden, 478 U.S. 647, 661, 106 S. Ct. 3143, 92 L. Ed. 2d 525 (1986) ( It is, of course, a cardinal principle of statutory construction that repeals by implication are not favored. )); S.W. Marine of S.F., Inc., v. United States, 896 F.2d 532, 533 (Fed. Cir. 1990) ( This is particularly true when, as here, we are urged to find that a specific statute... has been superseded by a more general one. ). [W]here two statutes are capable of co-existence, it is the duty of the courts, absent a clearly expressed congressional intention to the contrary, to regard each as effective. Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1018, 104 S. Ct. 2862, 81 L. Ed. 2d 815 (1984) (internal quotation omitted). Evidence of intention to repeal an earlier statute must be clear and manifest ; courts must read seemingly conflicting statutes to give effect to each if we can do so while preserving their sense and purpose. Cathedral Candle Co., 400 F.3d at 1365 (quoting Watt v. Alaska, 451 U.S. 259, 267, 101 S. Ct. 1673, 68 L. Ed. 2d 80 (1981)); see also Inter-Coastal Xpress, 296 F.3d at 1370 ( For a more recent statute to impliedly repeal an existing one, it is insufficient to demonstrate that the two statutes produce differing results when applied to the same factual situation.... The legislative intent to repeal must be manifest in the positive repugnancy between the provisions of the two statutes. (internal quotation omitted))

7 Xianli Zhang v. United States, 89 Fed. Cl. 263, (2009). See also VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, (Fed. Cir. 1990) (quoting Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, (1957) ( [T]he law is settled that [h]owever inclusive may be the general language of a statute, it will not be held to apply to a matter specifically dealt with in another part of the same enactment.... Specific terms prevail over the general in the same or another statute which otherwise might be controlling. ); Tug Allie-B, Inc. v. United States, 273 F.3d 936, 948 (11 th Cir. 2001) ( if two statutes conflict, the more recent or more specific statute controls ). GSA and Manus Medical would have it that Small Businesses wishing to continue performance under separate smaller Contracts bundled into Competitions for larger requirements cannot challenge an Agency bundling decision if they submit an Offer, Quotation, or Proposal in response to the bundled Acquisition. In 15 U.S.C. 644(e)(3) Congress has fashioned procedures subject to public review and in 15 U.S.C. 644(e)(2) Congress has set out parameters which must be satisfied before bundled Acquisitions may proceed. 15 U.S.C. 632(o)(2) may not be read as an implied repeal of these provisions, yet this is how it is read by GSA and Manus Medical. Again, not the law. Until it filed its Agency Request for Dismissal on June 1 st, 2016, GSA has proceeded under 15 U.S.C. 644(e)(2) and 15 U.S.C. 644(e)(3). Here is Question 151 and the Answer from the Questions and Answers published by GSA: Question 151: Throughout the GSA process, including public comments, the GSA has stated that their justification for this aggregation was the potential for money savings due to contractor innovation. a) Has the GSA abandoned the contractor innovation approach for a low price one? b) Is the GSA required to revise its consolidation analysis report describing this new approach and re-analyzing the potential cost savings? Answer 151: GSA expects savings stemming from a number of sources, including contractor innovation, economies of scale, reduction of administrative and personnel costs, natural competitive forces and the source selection strategy. All of these considerations are addressed in the approved consolidation analysis. Appendix, pages 288 and U.S.C. 644(e)(2) and 15 U.S.C. 644(e)(3) are Procurement statutes within the ambit of review by your Office under 31 U.S.C. 3552(a). The - 7 -

8 Agency s Request for Dismissal should be denied, and this Pre-Award Protest, and your review, should proceed. The second ground of Trademasters Pre-Award Protest challenges as unreasonable the terms under which this Acquisition is proceeding, and there Trademasters points to the absence of a mechanism to assure that the chosen Offeror with the lowest Price has an independent understanding of the complexity of the tasks required for successful delivery of these bundled Operation and Maintenance services. GSA seeks summary Dismissal, asserting that the Agency does not understand the Federal Acquisition Regulation to require such an evaluation criterion, that GSA believes any offeror that has successfully performed simultaneous operation and maintenance services at multiple buildings understands how to do so. Agency Request for Dismissal, June 1 st, 2016, at page 4 of 5. It is a fundamental precept of Federal Procurement that exercise of... judgments in the evaluation of proposals must be reasonable and must bear a rational relationship to the announced criteria upon which competing offers are to be selected. The Boeing Company, B et al., June 18 th, 2008, 2008 U.S. Comp. Gen. LEXIS 104, *63; Boeing Sikorsky Aircraft Support, B , B , September 29 th, 1997, 1997 U.S. Comp. Gen. LEXIS 343, *21 ( the agency s actual evaluation must be shown to lack a reasonable basis ). Simply because the Federal Acquisition Regulation requires no demonstration of an independent understanding of the required tasks, or as the Solicitation here, requires no Price Realism analysis, Computer World Services Corp., B et al., June 17 th, 2015, 2015 U.S. Comp. Gen LEXIS 178, *25-*26, does not make for a reasonable evaluation. With this Solicitation GSA has retained no ability to assess whether the lowest priced Offeror has demonstrated an independent understanding of the required tasks, and no way to assess whether that Offeror s low Price reflects a lack of technical understanding. Even if the lowest-priced Offeror has successfully performed simultaneous operation and maintenance services at [other] multiple buildings, how about the low Price on offer for these buildings and these tasks? This is facially unreasonable

9 Cc: Jackson Reams Assistant Regional Counsel Office of Regional Counsel United States General Services Administration th Street S.W., Room 7038 Washington, District of Columbia Telephone: (202) Electronic Mail: jackson.reams@gsa.gov William K. Walker Walker Reausaw th Street, N.W., Suite 800 Washington, District of Columbia Telephone: (202) Electronic Mail: wkw@att.net Kind regards, ALBO & OBLON, L.L.P. /s/ Cyrus E. Phillips IV Cyrus E. Phillips IV Virginia State Bar Number