Palladian Partners, Inc. v. United States, No. 14-5125 (Fed. Cir. 2015)
Annotate this CaseThe National Institute on Drug Abuse (NIDA) within the National Institutes of Health issued Request for Proposal for the “NIH Pain Consortium Centers of Excellence in Pain Education Coordination Center.” NIDA initially issued the solicitation as a small business set-aside under North American Industry Classification System code 541712, “Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),” which limits offerors to small businesses with 500 employees or fewer. A prospective offeror appealed the NAICS code designation to the U.S. Small Business Administration Office of Hearings and Appeals, which ordered NIDA’s contracting officer to amend the solicitation to change the NAICS code designation to 541611, “Administrative Management and General Management Consulting Services.” Palladian sought to enjoin NIDA from accepting and evaluating proposals under the new code, which rendered Palladian ineligible to compete. The Court of Federal Claims granted Palladian’s motion for judgment on the administrative record, finding that the contracting officer’s NAICS code amendment was arbitrary and capricious because NAICS code 541611 did not best describe the statement of work for the solicitation. The Federal Circuit reversed, finding that Palladian failed to exhaust its administrative remedies.
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