An appeals panel within the Small Business Administration erred in May when it found Swift & Staley was too big to qualify for a $160-million Department of Energy set-aside contract for services at the Paducah Site in Kentucky, a U.S. Court of Federal Claims Judge ruled.
The ruling turned on whether a Swift & Staley joint venture at another DOE site has to be counted when tallying the company’s overall size, Federal Claims Judge Thompson Dietz wrote in a redacted order last week.
The Office of Hearings and Appeals (OHA) of the Small Business Administration (SBA) was wrong when it reaffirmed a local SBA office’s position that Swift & Staley is “other than small,” according to Dietz’s ruling. The decision should be reversed because it is “inconsistent with the plain language of the regulations,” Dietz wrote.
Specifically, OHA failed to properly apply the SBA’s size determination rules revised in 2016 for “populated” joint ventures. Dietz handed the dispute back to OHA with an order to apply that standard. A populated joint venture “uses its own employees to perform the contract, whereas an unpopulated joint venture uses employees of the joint venture partners” to do the work, according to the court order.
After the 2016 change, populated joint ventures are not to be considered joint ventures, so Swift & Staley’s Paducah bid “did not need to include in its size calculation its proportionate share” of another joint venture with DOE business, Portsmouth Mission Alliance, Dietz wrote in his order. North Wind Group is the lead partner on the Portsmouth team and Swift & Staley is a minority owner.
Dietz’s order was first issued Aug. 20 under seal and the Federal Claims Court approved release of a 10-page order, with certain business data withheld, for public release on Friday Aug. 27.
The road to Friday’s ruling began in December when Akima Intra-Data, an unsuccessful bidder for the Paducah work, protested DOE’s award on the grounds Swift & Staley’s minority stake in the services contractor for the Portsmouth Site in Ohio pushed the winner beyond the $41.5-million-annual-revenue size limit for the Paducah contract.
Portsmouth Mission Alliance has a five-year-plus deal, now worth $190-million, to provide support services at the Portsmouth Site in Ohio through at least Sept. 30. Swift & Staley’s exact ownership stake in the Portsmouth venture is one of the details deleted from the public version of Dietz’s order.
