October 2021 Bid Protest Roundup

• Published date: 15 November 2021
• Subject Matter: Government, Public Sector, Government Contracts, Procurement & PPP
• Law Firm: Morrison & Foerster LLP
• Author: Mr Lyle Hedgecock

This month's Law360 Bid Protest Roundup features three cases from the Court of Federal Claims (COFC). The court's decisions provide important insights into bid protest standing, challenges to Small Business Innovation Research (SBIR) decisions under bid protest jurisdiction, and the significance of timely filing requests for intervention.

Aero Spray

In multiple-award indefinite delivery/indefinite quantity (IDIQ) contracts, parties receiving awards sometimes seek to contest the award of an IDIQ contract to other offerors to help reduce the competition for task orders. This unique protest situation is not permitted at the Government Accountability Office (GAO). But the door was opened at the COFC with Judge Lettow's decision in National Air Cargo,¹ which held that winners of an IDIQ could have standing to contest awards to other offerors, creating a split between the GAO and the COFC. The recent case of Aero Spray, Inc. v. United States² departs from that rule and carries that split to the COFC itself, as Judge Solomson, after carefully considering the National Air Cargo opinion, chose to align with the GAO, finding a protester lacks standing to challenge an identical award to another offeror.

Importantly, with regard to this decision, the COFC has different standards for establishing standing in pre-award and post-award protests. Because injury in a post-award bid protest hinges upon the protester's loss of a direct economic interest, the protester must establish standing by showing that it stood a 'substantial chance' of receiving the award, absent the challenged conduct. In a pre-award protest, however, the Federal Circuit permits litigants to instead establish standing by demonstrating a 'non-trivial competitive injury that may be redressed by judicial relief.'³ Applying the standard of review applicable to a post-award protest could effectively close the courtroom doors to these protests, rendering them effectively unreviewable.

In the protest at issue, Aero Spray challenged a Department of the Interior IDIQ procurement seeking aerial firefighting services. Aero Spray protested, arguing it was unfair that it expended substantial funds to ensure its aircraft met solicitation requirements by the time proposals were due, causing its bid to be higher than other offerors whose bids were deemed acceptable despite not meeting all standards at that time, insisting these other offerors should not have received an award.

The court found that while Aero Spray would have had standing under the Administrative Procedure Act, which confers standing on any person aggrieved by agency action, Federal Circuit precedent has created a more exacting test for bid protest standing under the Tucker Act. The Federal Circuit has determined that 'interested party' under the Tucker Act has the same definition as 'interested party' in the Competition in Contracting Act of 1984.⁴ That is, an interested party is '[1] an actual or prospective bidder or offeror whose [2] direct economic interest [3] would be affected by [4] the award of the contract or by failure to award the contract.'⁵ The COFC concluded that under either the pre-award or post-award test, Aero Spray did not qualify as an interested party. To the court, the nature of the objection was important to establish interested party status. Here, Aero Spray was not objecting to a solicitation or the cancelation of a solicitation; instead, it was contesting award of a contract to other parties where it had also received the same award. Therefore, Aero Spray, having received a contract award, was not an actual offeror with respect to the other contract awards. Because Aero Spray had a contract, it could not obtain anything more than it already had.

The court distinguished this situation from other multiple-award procurements, such as a disappointed offeror challenging an award to...