Colonial Press International v. United States , 788 F.3d 1350 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
COLONIAL PRESS INTERNATIONAL, INC.,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2014-5036
______________________
Appeal from the United States Court of Federal
Claims in No. 1:13-cv-00403-MBH, Judge Marian Blank
Horn.
______________________
Decided: June 10, 2015
______________________
ANTHONY HAWKS, Hawks Law Office, Alexandria, VA,
argued for plaintiff-appellant.
WILLIAM JAMES GRIMALDI, Commercial Litigation
Branch, Civil Division, United States Department of
Justice, Washington, DC, argued for defendant-appellee.
Also represented by STUART F. DELERY, ROBERT E.
KIRSCHMAN, JR., DEBORAH A. BYNUM.
______________________
2 COLONIAL PRESS INTERNATIONAL v. US
Before LOURIE, PLAGER, and WALLACH, Circuit Judges.
PLAGER, Circuit Judge.
INTRODUCTION
This is a post-award bid protest case. Of the two
questions raised, one is of first impression in this court—
whether the Government Printing Office (“GPO”), 1 before
declining to award a contract to a small business concern,
must, as part of its bid-evaluation process, refer the
responsibility determination to the Small Business Ad-
ministration (“SBA”). The other question is a familiar
one—whether the deciding official’s determination was
arbitrary or capricious as tested by the law relating to
contract awards.
Because we decide that the GPO is not required to re-
fer such determinations to the SBA, and because we
decide that the GPO’s actions in awarding the contract at
issue in this case were not arbitrary or capricious, we
affirm the judgment of the United States Court of Federal
Claims.
BACKGROUND
GPO Bid Solicitation and Award
In June 2012, the GPO issued an invitation for bids
for a printing order for the Department of Health and
Human Services–Centers for Medicare and Medicaid
Services (“HHS”). The printing order involved the pro-
duction of sixty-three versions of English and Spanish
separate-covered, perfect bound publications entitled
“Medicare and You” in English, and “Medicare y Usted” in
1 The GPO is now the Government Publishing Of-
fice. See Consolidated and Further Continuing Appropria-
tions Act, 2015, Pub. L. No. 113-235, § 1301, 128 Stat.
2130, 2537 (2014).
COLONIAL PRESS INTERNATIONAL v. US 3
Spanish. The contract was for a term beginning on the
date of award and ending on January 31, 2014, with four
optional twelve-month extension periods.
The GPO received nine bids in response to its solicita-
tion. Appellant Colonial Press International, Inc. (“Colo-
nial Press”) was the lowest bidder with a discounted bid of
$2,418,443.54, while Fry Communications, Inc. (“Fry
Communications”) was the second lowest bidder with a
discounted bid of $2,502,545.05. Colonial Press was a
small business concern for purposes of the Small Business
Act, 15 U.S.C. §§ 631 et seq. (“Act”).
As part of its solicitation and evaluation process, the
GPO followed the protocols in its Printing Procurement
Regulation (“PPR”), found in GPO Publication 305.3 (Rev.
2-11). Under the PPR, the GPO can award contracts only
to “responsible” bidders. A responsible bidder must meet
certain minimum standards:
Prospective contractors must affirmatively
demonstrate their responsibility. This may be
achieved through satisfactory performance on pri-
or similar awards or through the presentation of
evidence of their ability to satisfy the contract re-
quirements. A Contracting Officer, prior to mak-
ing an affirmative responsibility determination,
shall be satisfied that the available information
sufficiently demonstrates that the prospective
contractor meets the minimum standards set
forth in subsection 4.
PPR, Ch. I, § 5.5(a).
As part of the minimum standards, a bidder must:
(b) be able to comply with the proposed delivery
schedules, taking into consideration other existing
commitments, commercial as well as governmen-
tal;
4 COLONIAL PRESS INTERNATIONAL v. US
(c) have a satisfactory record of performance in
regard to both quality and timeliness on previous-
ly awarded contracts.
Id. § 5.4.
If these standards are not met, or if there is doubt as
to the bidder’s productive capacity or financial strength
that cannot be resolved affirmatively, then the bidder
must be deemed non-responsible. Id. § 6.
Determinations of non-responsibility with respect to
contracts worth more than $100,000 must be documented
in a Determination and Findings (“D&F”) document. Id.
§ 6(a). The D&F:
constitutes a special form of approval or exercise
of judgment required as a prerequisite to taking
certain actions by procurement officials. A D&F
must stand alone on its own merits and should
ideally be confined to a single page, containing all
available findings, concisely stated, to support the
determination.
Id. § 3.5(a).
In Colonial Press’s case, and in accordance with the
PPR, the GPO reviewed Colonial Press’s compliance
history with respect to past GPO contracts. The GPO
prepared a Preaward Survey relevant to Colonial Press’s
responsibility, including information on its performance
history, quality samples, program history, correspondence
history, and investigation factors.
The Preaward Survey included a performance history
covering the prior thirteen months, on a month-by-month
basis. Over the thirteen-month period, Colonial Press
was late on just under 6% of the deliveries. During the
three months prior to the date of solicitation, Colonial
Press had three late deliveries in November (33% of
COLONIAL PRESS INTERNATIONAL v. US 5
deliveries were late in this month), zero in December, and
zero in January.
While preparing the Preaward Survey for Colonial
Press, the GPO contacted Colonial Press and requested an
explanation for the late deliveries and notification of any
corrective measures that may have been taken to avoid
such delays in the future. Colonial Press’s contract man-
ager Chris Seruga (“Seruga”) responded on the same day
with explanations.
On February 13, 2013, the GPO contracting officer
signed the Preaward Survey for Colonial Press and in-
cluded a recommendation of no award. The contracting
officer set forth the rationale in support of her determina-
tion in a D&F document. On the same day, the contract-
ing officer signed the Preaward Survey for Fry
Communications with a recommendation of award. 2
The next day, the contracting officer wrote a letter to
Colonial Press stating that it was found non-responsible.
On February 20, 2013, the contracting officer awarded the
contract and issued a purchase order to Fry Communica-
tions. On the same day, Seruga informed the GPO that
one of Colonial Press’s late deliveries was actually on-
time; however, the GPO responded that:
Because of the weighted critical delivery sched-
ules mandated by Congress, the remaining inci-
dents where Colonial Press was delinquent on
contracted deliveries was sufficient evidence to
support finding Colonial Press non-responsible for
such a high-profile Term Contract for the Medi-
care Handbooks.
2 The GPO performed a Preaward Survey for Fry
Communications, showing that over the prior thirteen
months Fry Communications had zero late deliveries.
6 COLONIAL PRESS INTERNATIONAL v. US
J.A. 16.
GAO Protest and the Question of SBA Referral
Under 31 U.S.C. § 3552, a disappointed bidder for a
government contract may appeal the decision of the
agency by filing a protest with the Government Accounta-
bility Office (“GAO”). On February 22, 2013, Colonial
Press filed its protest with the GAO. Colonial Press
alleged that the GPO’s determination of Colonial Press’s
non-responsibility constituted an abuse of discretion.
Colonial Press also argued that the responsibility deter-
mination should have been referred to the SBA. The
GAO, upon receipt of the protest, inquired of the SBA
whether the GPO, a Legislative branch agency and not a
part of the Executive branch, was nevertheless subject to
the requirements of the SBA Certificate of Competency
Program (“COC Program”) under provisions of the Small
Business Administration Act, specifically 15 U.S.C.
§ 637(b)(7).
Under the SBA’s COC Program, a “Government pro-
curement officer” may not preclude a small business
concern from being awarded a “Government contract” due
to non-responsibility without referring the matter to the
SBA for a final disposition. See 15 U.S.C. § 637(b)(7); 13
C.F.R. § 125.5. The SBA may thereafter issue a certifi-
cate of competency to a particular Government contract-
ing officer certifying that a small business concern is
responsible with respect to a particular Government
procurement contract. 13 C.F.R. § 125.5.
On March 15, 2013, the SBA responded to the GAO
inquiry stating that “based upon our review of the law in
this area we believe the requirements of the COC pro-
gram could, arguably, apply to GPO and other non-
executive agencies.” The SBA also stated that:
It is SBA’s view that an open question exists as to
whether the requirements of the COC program
COLONIAL PRESS INTERNATIONAL v. US 7
apply to GPO. While requirements for compliance
with most of SBA’s small business programs are
generally not extended to non-executive branch
agencies, the statutory provision creating the
COC program does not refer to agencies but in-
stead is directed more generally at government
procurement officers. As a result, SBA believes it
is possible to construe that provision as applying
to all procurement officers, regardless of the agen-
cy or branch of government for which they work.
J.A. 326.
Referencing Matter of Downtown Legal Copies, B-
289432, 2002 CPD ¶ 16 (2002) and Matter of Fry Commu-
nications, 62 Comp. Gen. 164 (1983), the SBA recognized
that the GAO had previously found that the referral
requirements of § 637(b)(7) did not apply to the GPO, but,
nevertheless, the SBA distinguished those decisions:
Those decisions focused broadly on the definition
of ‘agency’ in § 632(b) and used that as a basis for
reaching the sweeping conclusion that no portion
of the Small Business Act applies to any legisla-
tive branch agency. Those decisions do not go any
further than a consideration of § 632(b) and do not
examine the actual wording employed by Con-
gress in drafting § 637(b)(7)(A). As such, SBA
questions whether they are dispositive in this in-
stance.
J.A. 325–26.
Shortly thereafter, and after reviewing the SBA re-
port to the GAO, the GPO submitted the agency’s views to
the GAO. The GPO stated “‘the contracting officer had a
reasonable basis to conclude that the Colonial past per-
formance, especially the performance of Colonial in the
last quarter of 2012, caused her to have doubt about the
ability of Colonial to meet the stringent, constant, month-
8 COLONIAL PRESS INTERNATIONAL v. US
to-month demands of Program 199S [sic] for on time high
volume production.’” J.A. 17 (citation omitted). The GPO
“‘concluded that nothing in the comments from the SBA
changes the well-reasoned determination by GAO more
than thirty years ago that procurements of GPO are not
subject to the Small Business Act.’” Id. (citation omitted).
On May 6, 2013, the GAO denied Colonial Press’s bid
protest, along with another protest not at issue in this
appeal. The GAO found that the GPO was not subject to
the referral requirements of the SBA’s COC Program, and
determined that the contracting officer had a reasonable
basis for her determination of non-responsibility.
Trial Court and Appeal
After losing at the GAO, Colonial Press filed a post-
award bid protest in the United States Court of Federal
Claims, pursuant to 28 U.S.C. § 1491(b). Colonial Press
argued that the GPO’s award was improper because the
GPO failed to refer the responsibility determination to the
SBA, and because the GPO’s responsibility determination
was arbitrary and capricious and lacked a rational basis.
After determining it had jurisdiction, the trial court
held that the GPO did not violate the referral require-
ments of 15 U.S.C. § 637(b)(7), and that the GPO’s re-
sponsibility determination was not arbitrary or capricious
and did not lack a rational basis. The trial court denied
Colonial Press’s motion for judgment on the pleadings,
and granted the United States’s (“Government”) motion
for judgment on the administrative record.
Colonial Press appealed the trial court’s decision to
this court. Appellant essentially raises the same two
issues on appeal—whether the GPO was required to refer
the responsibility determination to the SBA, and whether
the GPO’s responsibility determination and award of the
contract to Fry Communications was arbitrary or capri-
cious or lacked a rational basis.
COLONIAL PRESS INTERNATIONAL v. US 9
We have jurisdiction under 28 U.S.C. § 1295(a)(3).
DISCUSSION
We review the trial court’s judgment on the adminis-
trative record without deference. Bannum, Inc. v. United
States, 404 F.3d 1346, 1351 (Fed. Cir. 2005). We reapply
the standard of 5 U.S.C. § 706 to determine whether the
GPO’s action in awarding the contract was arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law. See id.
In Allied Technology Group, Inc. v. United States, 649
F.3d 1320, 1326 (Fed. Cir. 2011), we said:
The plaintiff-appellant must show that the Con-
tracting Officer’s award “lacked a rational basis,”
Centech Grp., Inc. v. United States, 554 F.3d 1029,
1037 (Fed. Cir. 2009), or “violates to prejudicial ef-
fect an applicable procurement regulation,” CACI
Field Servs., Inc. v. United States, 854 F.2d 464,
466 (Fed. Cir. 1988). The test under the first
ground is “whether the contracting agency provid-
ed a coherent and reasonable explanation of its
exercise of discretion, and the disappointed bidder
bears a heavy burden of showing that the award
decision had no rational basis.” Centech, 554 F.3d
at 1037. The test under the second ground is
whether the disappointed bidder has shown “a
clear and prejudicial violation of applicable stat-
utes or regulations.” Id. To show prejudice, the
protestor must show that “but for the alleged er-
ror, there was a substantial chance that [it] would
receive an award—that it was within the zone of
active consideration.” Statistica, Inc. v. Christo-
pher, 102 F.3d 1577, 1581 (Fed. Cir. 1996) (inter-
nal citations omitted).
10 COLONIAL PRESS INTERNATIONAL v. US
I.
The GPO Was Not Required to Refer the Responsibility
Determination to the SBA
We begin with the language of that part of the Small
Business Act that relates to this question:
It shall also be the duty of the [Small Business]
Administration and it is empowered, whenever it
determines such action is necessary— . . . (7)(A)
To certify to Government procurement officers, and
officers engaged in the sale and disposal of Feder-
al property, with respect to all elements of respon-
sibility, including, but not limited to, capability,
competency, capacity, credit, integrity, persever-
ance, and tenacity, of any small business concern
or group of such concerns to receive and perform a
specific Government contract. A Government pro-
curement officer or an officer engaged in the sale
and disposal of Federal property may not, for any
reason specified in the preceding sentence pre-
clude any small business concern or group of such
concerns from being awarded such contract with-
out referring the matter for a final disposition to
the [SBA].
15 U.S.C. § 637(b)(7) (italics added).
The question of whether the GPO was required to
refer the responsibility determination to the SBA turns
upon the definitions of “Government procurement officer”
and “Government contract.”
If these terms are defined broadly, then § 637(b) could
require any government procurement officer, including
officers in the Legislative and Judicial branches, to refer
COLONIAL PRESS INTERNATIONAL v. US 11
responsibility determinations to the SBA. 3 If these terms
are defined narrowly, then § 637(b) could be limited to
certain categories of government procurement officers,
specifically those in the Executive Branch, and, as a
result, only certain officers would be required to refer
responsibility determinations to the SBA.
We do not construe statutes in a vacuum, and “the
words of a statute must be read in their context and with
a view to their place in the overall statutory scheme.”
Davis v. Mich. Dep’t of Treasury, 489 U.S. 803, 809 (1989);
accord FDA v. Brown & Williamson Tobacco Corp., 529
U.S. 120, 132–33 (2000).
Similarly, we do not read the Small Business Act as “a
series of unrelated and isolated provisions,” Gustafson v.
Alloyd Co., 513 U.S. 561, 570 (1995). We “must consider
not only the bare meaning of each word but also the
placement and purpose of the language within the statu-
tory scheme.” Barela v. Shinseki, 584 F.3d 1379, 1383
(Fed. Cir. 2009) (quoting Bailey v. United States, 516 U.S.
137, 145 (1995)). “Statutory interpretation is ‘not guided
by a single sentence or member of a sentence, but look[s]
to the provisions of the whole law.’” Hawkins v. United
States, 469 F.3d 993, 1000-01 (Fed. Cir. 2006) (quoting
Dole v. United Steelworkers of Am., 494 U.S. 26, 35,
(1990)).
We observe that neither of the specific terms “Gov-
ernment procurement officer” nor “Government contract”
3 Colonial Press proposes to avoid this categorical
distinction analysis by suggesting that a referral to the
SBA by GPO procurement officers should be required
when evaluating contracts awarded on behalf of executive
agencies, which are themselves subject to § 637(b)(7). See
Appellant’s Reply Br. at 17 n.4. We find this an unper-
suasive dodge of the basic issue.
12 COLONIAL PRESS INTERNATIONAL v. US
is defined in § 637(b) or in any section of the Small Busi-
ness Act. However, an examination of the statutory
scheme reveals that Congress defined related terms that
cast light on how these particular terms should be under-
stood.
In 15 U.S.C. § 637c(3), a “Government procurement
contract” is defined as “any contract for the procurement
of any goods or services by any Federal agency.” A “Fed-
eral agency” has “the meaning given the term ‘agency’ by
section 551(1) of Title 5, but does not include the United
States Postal Service or the Government Accountability
Office.” Id. § 637c(2). The terms “Federal agency” and
“agency” are also separately defined in § 632(b):
For purposes of this chapter [(Ch. 14A of U.S.
Code, Title 15, which includes § 637(b)(7))], any
reference to an agency or department of the Unit-
ed States, and the term “Federal agency”, shall
have the meaning given the term “agency” by sec-
tion 551(1) of Title 5, but does not include the
United States Postal Service or the Government
Accountability Office.
In turn, 5 U.S.C. § 551(1) provides that:
For the purpose of this subchapter [(Subch. II of
Ch. 5 of U.S. Code, Title 5)]— (1) “agency” means
each authority of the Government of the United
States, whether or not it is within or subject to re-
view by another agency, but does not include— (A)
the Congress . . . .
The GPO is a legislative agency under the direction
and control of Congressional administration. See United
States v. IBM Corp., 892 F.2d 1006, 1009 (Fed. Cir. 1989).
Although we have not previously examined the issue, we
agree with our sister circuit that “Congress” in § 551(1)
refers to legislative agencies and departments generally.
See Mayo v. United States Gov. Printing Office, 9 F.3d
COLONIAL PRESS INTERNATIONAL v. US 13
1450, 1451 (9th Cir. 1993) (determining the GPO is a unit
of Congress and therefore contained within the term
“Congress” in § 551(1)).
Therefore, we agree with both parties that the GPO,
as a legislative agency, is excluded from the definition of
‘agency’ in 5 U.S.C. § 551(1).
Colonial Press takes exception to the above analysis
and contends that the definitions of “Government pro-
curement contract,” “Federal agency,” and “agency” are
irrelevant because those terms do not appear in
§ 637(b)(7). Colonial Press also argues that § 637c does
not apply to the Small Business Act as a whole. Instead,
Colonial Press believes that § 637c only applies to the act
which contained it—An Act to Amend the Small Business
Act and the Small Business Investment Act of 1958, Pub.
L. 95-507, 92 Stat. 1757 (1978) (“1978 Amendments”).
Colonial Press argues that § 637c’s language “[f]or pur-
poses of this Act” limits its applicability to the 1978
Amendments only—and not § 637(b)(7).
However, if we were to adopt Colonial Press’s reason-
ing, we would interpret “Government procurement con-
tracts” to exclude contracts solicited by legislative
agencies in some portions of the Act, while interpreting
“Government procurement officers” to include contracting
officers of those same legislative agencies in another
portion of the Act—namely, § 637(b)(7). We agree with
the Government and the trial court that this is an unrea-
sonable and untenable construction.
Colonial Press’s analysis clashes with our “fundamen-
tal canon of statutory construction that the words of a
statute must be read in their context and with a view to
their place in the overall statutory scheme.” Mich. Dep’t
of Treasury, 489 U.S. at 809; accord Brown & Williamson
Tobacco Corp., 529 U.S. at 132-33.
14 COLONIAL PRESS INTERNATIONAL v. US
In this light, we construe “Government contract” and
“Government procurement officer” to limit those terms to
exclude contracts and contracting on behalf of legislative
agencies such as the GPO, regardless of whether such
agencies are contracting for executive agencies. (See note
3, supra.)
Moreover, though not dispositive, we note that the
GAO, GPO, and SBA have interpreted the Small Business
Act consistently since 1983 with our interpretation, i.e.,
that the GPO is not subject to the SBA’s COC Program
referral requirements. See J.A. 38–40, 388; Fry
Commc’ns, Inc., 62 Comp. Gen. 164, 167 (1983) (finding
the GPO was not subject to the Small Business Act).
Similarly, in Gray Graphics Corp. v. United States
Government Printing Office, No. 82-2890, 1982 U.S. Dist.
Lexis 18378, at *8 (D.D.C. Dec. 20, 1982), the district
court, relying in no small part on an affidavit from SBA
Associate General Counsel, held that the GPO is not
subject to the Small Business Act because the SBA “itself
does not now and has never regarded the GPO to be
subject to its jurisdiction.” See also Udall v. Tallman, 380
U.S. 1, 18 (1965) (“‘[T]he practical constructions given to
an act of Congress, fairly susceptible of different construc-
tions, by those charged with the duty of executing it is
entitled to great respect and, if acted upon for a number of
years will not be disturbed except for cogent reasons.’”)
(quoting McLaren v. Fleischer, 256 U.S. 477, 480–81
(1921)).
The SBA’s memorandum, cited above and written in
the context of the GAO bid protest, that the COC referral
process “could, arguably” apply to the GPO does not affect
our analysis. J.A. 324. The statement as thus qualified
by the SBA is true; it does not aid, however, in the ulti-
mate determination of the question of whether it should
be so interpreted.
COLONIAL PRESS INTERNATIONAL v. US 15
II.
The GPO’s Award Did Not Violate 5 U.S.C. § 706
Finally we turn to Colonial Press’s other argument on
appeal, whether the GPO’s award lacked a rational basis.
See Centech, 554 F.3d at 1037.
Colonial Press’s primary argument is that the D&F
lacks a rational basis because it focused on three months
of performance history instead of a longer period with a
lower rate of late deliveries and because, despite Seruga’s
explanations, the D&F stated there was no evidence that
would lead the GPO to believe performance would im-
prove. Colonial Press asserts the contracting officer failed
to carefully consider all information as required by PPR,
Ch. I, § 5.6.
Colonial Press also argues that the trial court erred—
and this court would err—by relying on material outside
the D&F to provide a rational basis since the D&F must
“stand alone” under PPR, Ch. I, § 3.5(a). But Colonial
Press admits a court may consult the administrative
record to ensure that the D&F findings are supported.
We do not agree with Colonial Press’s reasoning. The
contracting officer’s reference to the three-month period
instead of the thirteen-month period does not deprive the
agency’s decision of a rational basis nor is it sufficient to
overcome the wide discretion afforded to agencies in
making responsibility decisions. See John C. Grimberg
Co. v. United States, 185 F.3d 1297, 1303 (Fed. Cir. 1999)
(“Because responsibility decisions are largely a matter of
judgment, contracting officers are generally given wide
discretion to make this decision.”).
In either the three-month or thirteen-month period,
Colonial Press had late deliveries while Fry Communica-
tions had zero late deliveries. The contracting officer was
required to consider PPR, Ch. I, § 5.4 and, based on
Colonial Press’s past performance and Seruga’s evidence,
16 COLONIAL PRESS INTERNATIONAL v. US
the GPO determined that it had “no evidence that the
contractor has taken any actions that would lead us to
believe that their [sic] performance will improve.” J.A.
348. The ability to comply with proposed delivery sched-
ules was an important and mandatory consideration for
the contracting officer. Merely because some explanation
was provided for Colonial Press’s late deliveries does not
mean the contracting officer was required to accept these
explanations, nor did it change Colonial Press’s historical
past performance. Instead, the contracting officer had
discretion to state that, after considering the evidence on
both sides, she found the bidder non-responsible.
Similarly, to the extent Colonial Press argues there
were violations of applicable procurement regulations
with prejudicial effect, Colonial Press fails to show there
was an actual violation. See Centech, 554 F.3d at 1037.
Colonial Press alleges no violation of PPR, Ch. I, § 3.5 by
the contracting officer, and Colonial Press’s argument
that § 5.6 was violated is unpersuasive.
We will not substitute our own judgment for that of
the agency in this matter. See, e.g., Motor Vehicle Mfrs.
Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983). The contracting officer was within her discretion
to reject the explanations provided by Colonial Press as
insufficient to allay her concerns in the responsibility
determination.
We decline to address whether the PPR somehow pre-
cluded the trial court from relying on evidence within the
administrative record but outside the D&F—even if that
were the case, which we do not hold, the issue is moot
because there was sufficient rational basis provided by
the D&F itself. There was no need to rely on evidence
outside of it. The GPO provided a coherent and reasona-
ble explanation of its exercise of discretion in the D&F
itself.
COLONIAL PRESS INTERNATIONAL v. US 17
We have considered the other arguments raised on
appeal, including potential waiver, and found them un-
persuasive.
CONCLUSION
For the foregoing reasons, the judgment of the United
States Court of Federal Claims is affirmed.
AFFIRMED