Mayvin, Inc v. United States
Filed Under Seal: July 24, 2025; Reissued: August 14, 2025 (2025)
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Rule of Law:
An agency's decision to cancel a procurement solicitation is arbitrary and capricious if its stated rationale is not supported by the administrative record. Furthermore, cancelling a solicitation set aside for small businesses constitutes a "withdrawal" under FAR 19.502-9, which requires the agency to follow specific notice and consultation procedures.
Facts:
- The U.S. Army's Program Executive Office for Simulation, Training and Instrumentation (PEO STRI) has relied on single-award contracts for Systems Engineering and Technical Assistance (SETA) services since 2004 due to insufficient government personnel.
- In 2021, an Army acquisition team conducted market research for the third iteration, SETA III, and concluded that a single-source contract was superior to other options for meeting PEO STRI's needs.
- The Army's Head of Contracting Activity (HCA) issued a formal determination authorizing a single-source award for SETA III, finding that the required tasks were "so integrally related that only a single-source can reasonably perform the work."
- On September 15, 2021, the Army issued the Request for Proposal (RFP) for the SETA III contract, structured as a single-source award with a $365 million ceiling, set aside for women-owned small businesses.
- Seventeen companies, including Mayvin, Inc., StraCon Services Group, LLC, and Technical and Project Engineering, LLC, submitted proposals.
- On June 5, 2023, the Army awarded the SETA III contract to Advanced Technology Leaders (ATL).
- During a subsequent review prompted by protests, the Army discovered that PEO STRI was utilizing seven smaller, separate "SETA-type" contracts, most of which were in place before the HCA's 2021 determination.
- Based on the existence of these other contracts, the Army's source selection authority concluded that the original justification for a single-source award was no longer factually supportable and decided to cancel the SETA III solicitation.
Procedural Posture:
- Following the Army's award of the SETA III contract to Advanced Technology Leaders (ATL), unsuccessful offerors, including Mayvin and StraCon, filed bid protests in the U.S. Court of Federal Claims.
- The government requested, and the Court granted, a voluntary remand to the agency to investigate an alleged Organizational Conflict of Interest (OCI) concerning ATL.
- During remand, the contracting officer rescinded the award to ATL and proposed amending the solicitation to allow offerors to revise their proposals.
- Mayvin filed a new complaint in the U.S. Court of Federal Claims, challenging the agency's proposed corrective action.
- The government took further corrective action, and the Court stayed the case pending a final decision from the agency.
- During the second remand, the agency decided to cancel the entire SETA III solicitation.
- Mayvin filed a supplemental complaint, and StraCon and TAPE filed new protests, all challenging the legality of the cancellation. The Court consolidated these cases.
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Issue:
Does the U.S. Army's decision to cancel the SETA III solicitation, which was set aside for women-owned small businesses, violate federal procurement law and regulations because the decision lacked a rational basis and failed to comply with mandatory procedures for withdrawing a small business set-aside?
Opinions:
Majority - Somers, Judge
Yes, the Army’s decision to cancel the SETA III solicitation violates federal procurement law and regulations. The cancellation was unlawful because it was both procedurally deficient and lacked a rational basis. First, the agency violated FAR 19.502-9. The court determined that cancelling a small business set-aside solicitation is a form of 'withdrawal' under the regulation, which mandates that the contracting officer provide written notice to the agency's small business specialist and the SBA Procurement Center Representative. The Army failed to follow this mandatory procedure. Second, the cancellation decision was arbitrary and capricious because it lacked a rational basis. The agency's justification—that the existence of seven smaller, 'SETA-type' contracts undermined the original determination that only a single source could perform the work—was circular and illogical. The court found that most of these contracts pre-dated the original determination and that the agency failed to explain how these few, smaller contracts refuted the detailed analysis supporting a single-award approach for the large, complex SETA III requirement. The agency is bound by the rationale it provided at the time of its decision and cannot rely on post-hoc justifications.
Analysis:
This decision reinforces the legal principle that an agency's procurement actions must be justified by the rationale articulated at the time of the decision, not by reasons developed during litigation. It establishes an important precedent by interpreting the cancellation of a small business set-aside as a 'withdrawal' under FAR 19.502-9, thereby triggering mandatory procedural protections for small businesses. This strengthens the legal framework ensuring that agencies cannot arbitrarily abandon set-aside procurements without proper review and justification. The ruling also underscores the court's scrutiny of agency reasoning, requiring a logical, non-circular connection between the facts found and the decision made.
