In Uninteresting Result, Federal Circuit Leaves Offeror Standing Outside the Courtroom

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In order to bring an action in any United States tribunal, a party must have “standing.”  “The doctrine [of standing] limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong.”  Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016).  To establish constitutional standing a “plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Id.

However, under 28 U.S.C. § 1941(b)(1), disappointed offerors to government contract solicitations must meet a standard higher than the constitutional minimum set forth above.  To challenge a solicitation or an award, a party must show that it has “interested party” status.  “[A]n interested party is an actual or prospective bidder whose “direct economic interest would be affected by the award of the contract or by failure to award the contract.”  AFGE, Local 1482 v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001).  In the post-award bid protest context, an unsuccessful offeror must show that it had substantial chance of winning the contract but for the alleged error.  In other words, the interested party requirement often translates to a condition that the contractor protesting the award would have been eligible for and next-in-line for the award.  This is especially true when the protester challenges only the propriety of the awardee’s evaluation or proposal, that is, when a protester claims the awardee received unjust favorable treatment without challenging the evaluation of the protester’s own proposal.

Recently, in HVF West, LLC v. United States, a disappointed offeror attempted to circumvent the interested party requirement by making superficial allegations against the higher-ranked offerors.  HVF was fourth in line for award and sought to challenge the award on the ground that the awardee failed to satisfy specific non-price criteria required under a pre-award-survey, a claim found to be meritorious.  To support its alleged interested party status, HVF also asserted similar claims against the two higher-ranked bidders ahead of it.  Specifically, HVF asserted that one of the higher-ranked bidder’s website did not demonstrate experience with the type of work at issue.  HVF challenged the other higher-ranked bidder on the grounds that the individual representing it had not previously received a similar sized government contract.  The Court of Federal Claims found HVF’s claim against the awardee to have merit, and that the claims against the other higher-ranked bidders were sufficient to create standing for HVF.

On appeal, the United States Court of Appeals for the Federal Circuit found that HVF did not have standing.  In reaching this conclusion, the court took issue with HVF’s allegations against the higher-ranked bidders, characterizing them as speculative conclusions that “fail[ed] to provide a sufficient reason to question the eligibility of the intervening bidders.”  The court held that HVF’s challenges to the technical acceptability of the higher-ranked offerors were not credible challenges, and thus, HVF did not meet the interested party requirement because it would not be in line for award.

The moral of this story is that a disappointed offeror who wishes to challenge the awardee’s proposal without grounds to improve its own evaluation, and who is not next-in-line for the award, must assert legitimate non-speculative facts challenging the evaluations of all higher-ranked offerors’ proposals, in order for the tribunal to deem the challenge credible.  Otherwise, even if a protester’s challenge to the agency’s evaluation of the awardee’s proposal has merit, the protest is likely to be dismissed for lack of standing.  

 

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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