Standing Threshold for Pre-Award Protests Clarified

The Court of Appeals for the Federal Circuit upheld the Court of Federal Claims' conclusion that a pre-award bid protester could challenge the terms of a solicitation because the CFC applied the appropriate standard and correctly found the protester had standing. The CFC held the protester had standing to protest the solicitation for indefinite-delivery/indefinite-quantity multiple-award task order dredging contracts (53 CCF 79,164), noting the protester was one of only three interested contractors that had unlimited bonding capability, hopper dredging equipment, and significant dredging experience. The CFC also found the protester would suffer competitive injury because the government's decision not to use sealed bidding procedures deprived the protester of the ability to compete for $1.39 billion in work. On appeal, the government conceded the protester was an actual or prospective bidder, but argued the protester did not show it had a substantial chance of receiving a contract award and therefore failed to meet the second prong of the interested party test previously articulated by the Federal Circuit (50 CCF 78,555). According to the government, the protester did not demonstrate prejudice or harm, and any potential injury was speculative. The protester responded the "substantial chance" test is inappropriate in the pre-award context and the CFC properly concluded a prospective bidder could establish the prejudice necessary for standing by showing a non-trivial competitive injury which can be redressed by judicial relief.

Competitive Injury

Noting the CFC has articulated several different standards for evaluating standing in pre-award bid protests (compare 48 CCF 78,215, 52 CCF 79,011, and 42 CCF 77,371), the Federal Circuit held the standard applied by the CFC here struck "the appropriate balance between the language of [28 USC] 1491(b)(1), which contemplates "an action by an interested party objecting to a solicitation for bids or proposals ... or any alleged violation of statute or regulation in connection with ... a proposed procurement"" and the standing requirements of Article III of the Constitution. Further, the Federal Circuit agreed with the CFC's assessment of the protester's non-trivial competitive injury. Thus, the protester was an interested party that demonstrated the requisite degree of prejudice for standing.

Divided Panel

Judge Dyk, dissenting, would have held the protester did not have Article III or statutory standing. According to the dissent, the majority's conclusion was inconsistent with Supreme Court precedent that requires a protester to show non-speculative injury. As the protester did not show it was likely to be awarded less dredging work under the IDIQ task order system, its injury was "conjectural" rather than "impending." The dissent also opined the majority decision was inconsistent with Federal Circuit precedent that requires a pre-award protester to show it has a substantial chance of securing an award and that it was disadvantaged by the government's decision. The dissent concluded the record showed the protester would "continue to receive exactly the same contracts that it would have received under the earlier sealed bidding procedure" and the majority's decision "vastly and improperly expand[ed] the number of parties potentially qualifying for standing." (Weeks Marine, Inc. v. U.S., CA-FC, 53 CCF 79,166)




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