A Lesson on Establishing "Standing" in Bid Protests

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A critical hurdle to filing a viable bid protest is to establish "standing." Standing, in the context of a bid protest, requires that the offeror bringing the protest be an "interested party," i.e., a prospective bidder whose "direct economic interest would be affected by the award of the contract or by failure to award the contract."

To meet this threshold, the prospective bidder must demonstrate that it had a substantial chance of winning the subject contract. Stated otherwise, you need to make a credible argument that you can knock out each offeror in line for award ahead of you. A recent decision by the Federal Circuit, HVF West, LLC v. United States, addresses this critical issue of standing under in the context of price-ranked evaluations.

Case Background

At issue in HVE West's protest was a contract with the Defense Logistics Agency for the purchase and destruction of surplus Government military property. To be eligible for award, offerors were required to meet certain technical (non-price) criteria, including a pre-award survey.

Under the terms of the solicitation, award was to be made to the bidder who offered the Agency the highest price per pound for the equipment and met the non-price criteria. Four bidders submitted offers to the Government in response to the procurement. Lamb Depollution Inc. submitted the highest offer and HVF West, LLC, the lowest.

In evaluating offers, the Contracting Officer only assessed the technical criteria for Lamb and finding it met the requirements, issued the award to Lamb. HVE unsuccessfully protested the award decision to the Agency and GAO before bringing the protest to the Court of Federal Claims (COFC).

The Appeal

In its protest before the COFC, HVE asserted that Lamb and the two intervening bidders were ineligible for award due to the fact that they failed to meet the requirements for a successful pre-award survey. The COFC accepted this broad assertion as adequate to establish that HVE would be next in line for award and, therefore, had standing.

However, the United States and Lamb appealed this determination to the Federal Circuit, which reversed the COFC and held that HVE's pleadings were based only on conjecture and, therefore, were inadequate to establish that HVE had a substantial chance of winning the disputed award. The Federal Circuit explained that the "speculative conclusions" made by HVE did not meet the detailed pleading requirements.

In juxtaposition to HVE's conclusory assertions, the appellate court noted examples of successful allegations including a protestor that detailed the technical non-compliance of leading offerors and another where the protestor based its assertion of standing on detailed reference to specific contract requirements and bid noncompliance of the offerors in line for award. In summarizing its position, the Federal Circuit explained that a protestor must present a credible challenge to the technical acceptability of all higher-ranked offerors in order to establish standing and be eligible to pursue a protest.

The Bottom Line

The lesson to be learned from this case is that standing should not be overlooked or cursorily addressed in a protest. It is essential to present a credible argument and explanation as to why you are next in line for award, or risk having your protest dismissed for lack of standing.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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