• Standing Threshold for Pre-Award Protests Clarified
• Complaint Was Properly Filed After Denial of Breach Claim
• Eligibility Finding Was Unreasonable

• Northrop Grumman - $3.8 Billion
• Multiple Contractors - $945 Million
• United Launch Services - $927 Million
• Aerospace Corp. - $926 Million
• American Water Operations & Maintenance, Inc. - $650 Million
• Carter Enterprises - $414 Million

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.

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.

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)

Complaint Was Properly Filed After Denial of Breach Claim

A breach of contract claim filed more than twelve months after the government's default termination decision was not barred by the statute of limitations, according to the Court of Federal Claims, because the claim was not an appeal of the termination decision, but of the contracting officer's denial of the contractor's breach claim.

The government, which engaged the contractor to provide prosthetic and orthotic services to military veterans, moved to dismiss the contractor's complaint for lack of subject matter jurisdiction, arguing the contractor's claims, which were filed more than twelve months after the default termination, were time barred. The contractor had appealed the termination decision, but the court had dismissed the contractor's breach of contract claim without prejudice to allow the contractor an opportunity to certify the claim and submit it to the CO for a final decision (52 CCF ¶78,984).

The contractor subsequently submitted a certified claim for breach of contract and breach of the implied duty of good faith and fair dealing. After seeking additional time to decide the claim, the CO denied it, stating the relief sought by the contractor was based on the same circumstances that formed the basis of the default termination decision. According to the government, the contractor's breach of contract claim required reconsideration of the CO's final decision terminating the contract, and was therefore barred by the Contract Disputes Act twelve-month statute of limitations.

The government's argument was unavailing, however. The contractor's monetary claim for breach of contract was separate and distinct from the government claim terminating the contract for default and therefore required certification and submission to the CO. Consequently, the contractor could not bring suit for damages until it had properly submitted the claims to the CO for a final decision. (Kenney Orthopedic, LLC v. U.S., FedCl, 53 CCF ¶79,162)

Eligibility Finding Was Unreasonable

The government's determination that an offeror was eligible to build an embassy was unreasonable because the offeror's experience was not sufficiently similar in complexity or value to the projects being bid. In response to a "Sources Sought Notice" several offerors submitted letters of interest with respect to three embassy design projects, each with a possible maximum cost of over $100 million.

The solicitations were subject to the Omnibus Diplomatic Security and Antiterrorism Act of 1986 (22 USC 4852), which provides that only "United States persons" and [U.S.] joint venture persons" are eligible to compete for embassy projects in excess of $10 million.

After several offerors, including the protester, were found eligible for the projects, the protester challenged the eligibility finding for one of the offerors. The protester argued the challenged offeror was not a U.S. person as required by the Act, due to its inadequate business volume, its lack of experience building projects similar in size and experience, and its lack of existing technical and financial resources to perform the projects.

The Comptroller General sustained the protest, finding the challenged offeror's experience did not meet the Act's requirement, that an offeror complete at least one construction project of similar complexity, size, and value as the projects being bid.

First, the government improperly based its evaluation on the prior year's projects, instead of conducting a new analysis with current information. In addition, the list of prior projects submitted by the offeror did not include a single completed project reaching even half the value of the least expensive project, or a third the value of the most expensive one. Further, combining the values of a list of projects did not demonstrate the necessary skills to complete and manage an entire embassy construction project. The Comptroller General recommended the government withdraw the challenged offeror's pre-qualification. (Caddell Construction Co., 24 CGEN ¶112,924)

Northrop Grumman - $3.8 Billion.

Northrop Grumman Technical Services of Herndon, Va., was awarded a $3.8 billion contract to provide contractor logistics services in support of Air Mobility Command assets. At this time, $4,000,000 has been obligated. 727 ACSG/PKA, Tinker Air Force Base, Okla., is the contracting activity.

Multiple Contractors - $945 Million.

AECOM, Long Beach, Calif., CH2M Hill Constructors Inc., Atlanta, Ga., Parsons Infrastructure and Technology Group of Pasadena, Calif., and URS Group Inc., Omaha, Neb., were awarded on September 17 and 18 a shared-capacity indefinite-delivery, indefinite-quantity contract for worldwide environmental remediation services with an estimated potential value of $945,000,000, initial announcement amount of $10,000. The contract is in support of the following programs: munitions clearance programs in support of contingency operations, the Military Munitions Response Program, the Hazardous, Toxic, and Radiological Waste Program, the Chemical Warfare Material Program, and other international operations. Military conventional and chemical munitions and hazardous wastes require a single response under both the Comprehensive Environmental Response Compensation and Liability Act and the Resource Conservation and Recovery Act. Work is to be performed worldwide during a base period of two years and three one-year option periods for a total of five years. Full & open unrestricted bids were solicited with 9 bids received. The U.S. Army Engineering and Support Center Huntsville, Ala. is the contracting activity.

United Launch Services - $927 Million.

United Launch Services of Littleton, Colorado was awarded a $927,720,071 contract to provide the Fiscal Year 2010 Evolved Expendable Launch Vehicle Launch Capability effort for the Delta IV and Atlas V families to launch vehicles. At this time, $16,000,000 has been obligated. SMC/LRSW, El Segundo, California is the contracting activity.

Aerospace Corp. - $926 Million.

Aerospace Corporation of El Segundo, Calif., was awarded a $925,636,600 contract to extend the existing contract for one year to provide scientific, engineering and technical effort in support of the Space and Missile Systems Center and other Department of Defense Programs. At this time, no money has been obligated. SMC/PIK, El Segundo, Calif., is the contracting activity.

American Water Operations & Maintenance, Inc. - $650 Million.

American Water Operations & Maintenance, Inc., Voorhees, N.J., is being awarded a maximum $650,262,714 firm-fixed-price, prospective redetermination contract for ownership, operation, and maintenance of potable water and wastewater utility systems. Other location of performance is Fort Meade, Md. Using service is Army. The original proposal was Web-solicited with two responses. Contract funds will not expire at the end of the current fiscal year. The date of performance completion is 2060. The contracting activity is the Defense Energy Support Center, Fort Belvoir, Va.

Carter Enterprises - $414 Million.

Carter Enterprises, Brooklyn, N.Y. is being awarded an estimated maximum value $414,427,770 firm-fixed-price, indefinite- delivery/indefinite-quantity contract for plate carriers, improved modular tactical vests, and associated spare and repair parts. An initial delivery order in the amount of $78,936,987 will be issued. Work will be performed in Brooklyn, N.Y. (77 percent); Sunrise, Fla., (23 percent), and work is expected to be completed September 2014. Contract funds will expire at the end of the current fiscal year. This contract is awarded as result of a competitive Historically Underutilized Business Zone (HUBZone) small business set-aside. Proposals were solicited via FedBizOpps, with 14 offers (one for the PC and one for the IMTV) received from seven different HUBZone Certified Small Businesses. The Marine Corps Systems Command (M67854), Quantico, Va., is the contracting activity.

You are subscribed to CCH® NetNews, sponsored by CCH INCORPORATED. Click here to unsubscribe. To manage your newsletter preferences or subscribe, click here.

To unsubscribe via postal mail, please contact us at: CCH Incorporated, Attn: Business Compliance Marketing, 2700 Lake Cook Rd., Riverwoods, IL 60015. Please include the email address you have been contacted with.