San Antonio General Maintenance, Inc. v. Abnor

San Antonio General Maintenance, Inc. (SAGM) (plaintiff), a small, disadvantaged business (SDB), participated in the Section 8(a) Business Development Program (Section 8(a)). As part of Section 8(a), SAGM was awarded a subcontract from the Small Business Administration (SBA) (defendant), the prime contractor, to provide custodial services at Kelly Air Force Base. SAGM graduated from the Section 8(a) program in 1985. After SAGM’s graduation, a new contract for custodial services at Kelly Air Force base was awarded to a different subcontractor, Rite-Way Services, Inc., under the Section 8(a) program by mutual decision of the SBA and the Air Force (defendant). The SBA’s decision to keep the Kelly Air Force base contract in the Section 8(a) program was memorialized in a written memorandum articulating the relevant factors supporting the decision. SAGM filed for injunctive relief, arguing (1) SAGM, as the graduating Section 8(a) SDB holding the Kelly Air Force base contract, should have been allowed to competitively bid for the new custodial services contract; (2) SBA’s decision to keep the Kelly Air Force base contract within Section 8(a) was arbitrary and capricious; and (3) the Air Force’s decision to keep the Kelly Air Force base contract in Section 8(a), rather than awarding it as an SDB set-aside, violated Section 1207 of the National Defense Authorization Act, which required 5 percent of all Defense Department contracts must be awarded to SDBs.