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Protest of FedBizOpps Procurement Dismissed

A claim alleging the government violated FAR 1.102(b)(3) and FAR 1.102-2(c)(1) was dismissed by the Court of Federal Claims for lack of subject matter jurisdiction because neither provision imposes a substantive obligation on the government. Following two successful protests (50 CCF 78,616, 52 CCF 78,907) of contract awards for the development and management of the FedBizOpp.gov website, the protester sought damages for costs incurred "in pursuing" the solicitation. In the first count of its complaint, the protester alleged the government violated FAR 1.102 and FAR 1.102-2 by failing to conduct business with integrity, fairness, and openness, by failing to consider the protester's proposal fairly and honestly, and by awarding the contract on a sole source basis. The government moved to dismiss under CFC Rule 12(b)(1), arguing the sections provide only implementing guidance and judicial review under the Administrative Procedure Act was not available.
Unenforceable FAR Provisions

Two decisions of the Court of Appeals for the Federal Circuit were dispositive. In the first case (402 F3d 1345), the Federal Circuit held that another guidelines regulation, 19 CFR 113.13(b), provides only standards for government officials and does not impose specific requirements. FAR 1.102, entitled "Statement of guiding principles for the federal acquisition system," is similar in that it only indicates appropriate courses for government officials to follow, and subsection (b)(3) imposes no specific substantive obligations and is not therefore judicially enforceable. Another case (46 CCF 77,978), concluding DFARS 216.104 and FAR 35.006(c) provide only internal government direction and impose no mandatory, judicially enforceable requirements, was also instructive. FAR 1.102-2(c)(1) also provides only internal government direction, stating "each member of the [t]eam is responsible and accountable for the wise use of public resources as well as acting in a manner which maintains the public's trust ... [f]airness and openness require open communication among team members, internal and external customers, and the public." Moreover, FAR 1.102(b)(3) and FAR 1.102-2(c)(1) were originally drafted to serve as a preface to the Federal Acquisition Regulation's substantive sections, which supported the view they did not impose enforceable obligations.

Jurisdiction Unsettled

The second count of the complaint, which alleged the government breached its implied-in-fact contract with the protester by encouraging the protester to submit a proposal and then granting a sole source contract to the awardee, was also dismissed. Prior to the enactment of the Administrative Dispute Resolution Act of 1996, the CFC reviewed bid protests under 28 USC 1491(a)(1) based on an implied-in-fact contract theory. The ADRA explicitly provided protesters have an independent cause of action to "object[] to a solicitation by a [f]ederal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or proposed procurement" (28 USC 1491(b)(1)). However, the judges of the CFC disagree whether the implied-in-fact contract theory survived the enactment of the ADRA, and the Court of Appeals for the Federal Circuit has twice declined to resolve the issue. The more persuasive view is the ADRA divested the CFC of jurisdiction over common law claims in bid protest cases. The legislation introduced a new standard of review under 28 USC 1491(b), while making no change to 28 USC 1491(a)(1). If the right to bring an implied-in-fact contract claim under 28 USC 1491(a)(1) survived, these claims would be evaluated under a different standard than claims brought under the express bid protest jurisdiction of 28 USC 1491(b), and the legislative history suggests the ADRA sought to eliminate this situation. Further, the first count of the protester's complaint invoked bid protest jurisdiction under 28 USC 1491(b)(1), while the second count cited the 28 USC 1491(a)(1) standard. In other cases where a contractor presented claims under both sections, the claims based on an implied-in-fact contract theory have been dismissed. (Information Sciences Corp. v. U.S., FedCl, 53 CCF 79,049)


(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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