United States: COFC Splits With GAO On IDIQ Awardee's Standing To Protest Additional Awards

Last Updated: May 11 2016
Article by Daniel E. Chudd and Locke Bell

The Court of Federal Claims signaled recently, in a split with Government Accountability Office (GAO) case law, that the court would entertain a bid protest brought by an Indefinite Delivery Indefinite Quantity (IDIQ) contract awardee challenging an agency's decision to award additional contracts under the same solicitation.

In Nat'l Air Cargo Grp., Inc. v. United States, No. 16-362C, Judge Lettow held that increased competition for task orders under an IDIQ contract could constitute a "non-trivial competitive injury," creating standing in court to challenge an award to another contractor where the Government allegedly failed to follow the terms of a solicitation or applicable procurement law. This directly contradicts GAO's ruling on the same issue and facts in Nat'l Air Cargo Grp., Inc., B-411830.2, Mar. 9, 2016, 2016 CPD ¶ 85, in which GAO stated that, "where a solicitation contemplates multiple awards, an existing contract awardee is not an interested party to challenge the agency's decision to award another contract." GAO's refusal in this regard, coupled with GAO's jurisdictional limits prohibiting consideration of protests challenging task order awards under $10 million, can often leave parties with no means of recourse to challenge an agency's alleged improper or unlawful inclusion of an IDIQ contractor in the potential task order awardee pool. The court's ruling in Nat'l Air Cargo may change that.

In both the initial GAO protest and the subsequent protest at the court, National Air challenged the United States Transportation Command's ("TRANSCOM's") decision to award a contract for international cargo shipping services to United Air Lines after the agency had already awarded IDIQ contracts to five other providers, including National Air. Specifically, National Air alleged that TRANSCOM violated the terms of the solicitation by awarding more than four IDIQ contracts, as originally anticipated, and by "reopening" competition to award a sixth contract to United without following procedures outlined in the solicitation. National Air additionally argued that TRANSCOM unreasonably evaluated United's past performance.

An initial string of protests at GAO and the court led TRANSCOM to voluntarily take corrective action. After reevaluating proposals, TRANSCOM affirmed its decision to award a contract to all six awardees. National Air again filed a protest at GAO, which GAO dismissed, finding that National Air was not an "interested party," as required by GAO's Bid Protest Regulations, 4 C.F.R. § 21.0(a)(1). According to GAO, National Air "did not explain why it believes that the addition of United's contract will result in National receiving a volume of orders valued less than its minimum guarantee or why a sixth award will prevent National from competing for future task orders."  GAO noted that, although the addition of a sixth awardee had the potential to increase competition at the task order level, it would not necessarily do so because IDIQ contract holders were not required to compete for future orders. Further, GAO noted that the addition of United would not reduce the total volume of orders issued. GAO cited its decision in Recon Optical, Inc.; Lockheed-Martin Corp., Fairchild Sys., B-272239, B-272239.2, July 17, 1996, 96-2-CPD ¶ 21 at 3-4, for the proposition that "to constitute a cognizable protest when a solicitation contemplates multiple awards, an existing contract holder must credibly allege direct economic harm in order to challenge the award of another contract." Because National Air had failed to make such an assertion, according to GAO, National Air was not an interested party to challenge TRANSCOM's award to United.

National Air filed a subsequent protest at the court, in response to which the Government filed a motion to dismiss for lack of standing. National Air filed a cross-motion seeking a preliminary injunction.

Before reaching the issue of National Air's status as an "interested party" with standing, Judge Lettow first addressed the court's jurisdiction under the Tucker Act, 28 U.S.C. § 1491(b)(1), to hear the protest. As GAO recently held in Aegis Defense Servs., LLC, B‑412755, Mar. 25, 2016, 2016 CPD ¶ 98 at 3, the Government argued that National Air, as a contract awardee, was categorically precluded from bringing a bid protest, regardless of any alleged economic interest. Judge Lettow disagreed, pointing to Systems Application & Techs., Inc. v. United States, 691 F.3d 1374 (Fed. Cir. 2012) as a case where a contract awardee was permitted to file a bid protest in the court. As Judge Lettow notes in his decision, the Federal Circuit in Systems Application stated that the protester's status as the contract awardee was not material to the question of jurisdiction. GAO in Aegis, on the other hand, limited the Systems Application holding to cases where a proposed corrective action essentially returned the procurement to a pre-award status.

In fact, in Aegis, GAO cited for support many of the same Court of Federal Claims cases Judge Lettow distinguished in Nat'l Air Cargo, though in many instances the distinction is less than clear.  For instance, GAO in Aegis quoted Outdoor Venture Corp. v. United States, 100 Fed. Cl. 146, 152 (2011) (Hewitt, C.J.), which states:

Once a bidder has received a contract, it is no longer an actual or prospective bidder or offeror with regard to the particular procurement. Instead, the bidder has become an awardee, who is not an interested party for purposes of 28 U.S.C. § 1491(b)(1) and therefore lacks standing to bring a bid protest to protect its award.

In Nat'l Air Cargo, Judge Lettow does not address this language specifically, but rather lumps the court's decision in Outdoor Venture into a group of cases "holding that claims by an existing contractor on its contract or 'contract administration' claims, which are within the exclusive remedial scheme of the Contract Disputes Act ('CDA')." In those cases, according to Judge Lettow, the contractors alleged violations of rights arising out of existing contracts with the Government. By contrast, National Air alleged a violation of procurement law arising out of TRANSCOM's selection of awardees, and therefore its protest was not covered by the CDA.

Having determined that a parties status as a contract awardee does not, by itself, deprive the court of the court's protest jurisdiction, Judge Lettow moved on to the issue of standing. Like the GAO, the court requires a protester to be an "interested party" to have standing to bring a bid protest. Indeed, the court and GAO both define an interested party to be "an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract."  The court in Nat'l Air Cargo split with GAO, however, in its definition of "direct economic interest." In contrast to GAO, which in Nat'l Air Cargo stated that "[a] protester is not an interested party where it would not be in line for contract award were its protest to be sustained," the court held that "not all protesters seek the award of a contract" and recognized that the nature of a protest will dictate what factors may show a direct economic interest.

Judge Lettow, in Nat'l Air Cargo, identified two standards the court will apply depending on the nature of the protest at hand. In the more common type of bid protest, where a disappointed offeror seeks award, the protester must show that, but for the Government's actions, it would have had a "substantial chance" of winning the award. However, in cases where the "substantial chance" test is inapplicable – for instance, where the protester has already received award – the protester must instead demonstrate "a non-trivial competitive injury which can be redressed by judicial relief." As the court was ruling on the Government's Rule 12(b) motion to dismiss, it viewed the facts as they were most favorable to National Air to determine whether such a non-trivial competitive injury existed for the purposes of standing. Thus, whereas GAO required National Air to show as a preliminary matter that National Air would be prevented from competing for future task orders or would receive less than the stated $2,500 minimum value on the contract, the court found that, if National Air's alleged facts were correct, the competition for a total of nearly $296 million of task orders available to the IDIQ pool would be affected to National Air's detriment. Directly calling out GAO's decision, the court noted that the standard $2,500 minimum "satisfies the law of consideration, but it does not mean that IDIQ contractors lack a 'direct economic interest' in the competition for task orders." Instead, because the Government's alleged misconduct would significantly increase competition, National Air would be prejudiced by a non-trivial competitive injury and therefore had standing to protest.

Although the court denied the Government's motion to dismiss, National Air was similarly unsuccessful in its cross-motion for preliminary injunction, as the court held that National Air had failed to prove a substantial likelihood of prevailing on the merits of its protest. Nevertheless, the court's holding with regard to standing could have a significant effect on the court's bid protest jurisprudence, and may affect future GAO decisions. Although GAO and the court derive their standards for standing from different sources – GAO from 4 C.F.R. § 21.0(a)(1) and the court from the Tucker Act, 28 U.S.C. § 1491(b)(1) – the definitional language is identical, and Judge Lettow's decision clearly presents his disagreement with GAO's interpretation of that language.

When it all boils down, though, the GAO's and the court's decisions differ primarily in the angle from which they approach National Air's assertion that it will be competitively harmed by the introduction of United into the IDIQ pool. The court's willingness to take National Air at its word that it will face a non-trivial competitive injury was generated in large part by the fact that the court was viewing the standing issue through the lens of the Government's Rule 12(b) motion to dismiss, in addition to the Government's apparent admission that United will be a significant source of competition at the task order level. Perhaps if the court were considering the standing question while ruling on motions for judgment on the administrative record, the court would require National Air to more affirmatively prove this injury, as GAO did. Regardless, Nat'l Air Cargo signals the court's recognition that increased competition for task orders under a multiple-award IDIQ contract may create a competitive injury that provides contract awardees standing to challenge additional IDIQ contract awards.

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.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Daniel E. Chudd
Locke Bell
In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions