United States: August 2018 Bid Protest Roundup

This month, we bring you three bid protests from three fora.  The first is not a decision at all, but an interesting dissenting opinion from two judges of the Court of Appeals for the Federal Circuit, calling into question that court's recent narrowing of the Court of Federal Claims' (COFC) jurisdiction over certain kinds of bid protests.  The second is a COFC decision adopting the Government Accountability Office's (GAO) approach to addressing key personnel who become unavailable after proposal submission.  The final decision is from the GAO, sustaining a protest because of ambiguities as to the identity of an offeror.

Cleveland Assets, LLC v. United States (Fed. Cir. 2018):  In the latest chapter of the Cleveland Assets bid protest, the Federal Circuit denied a petition for an en banc rehearing of its previous decision denying the protester's appeal.  Much more interesting than the one-paragraph denial is the nine-page dissent that followed.

This protest involved a challenge to the terms of a Government Services Administration (GSA) Request for Lease Proposals.  The protester filed suit at the COFC, alleging that GSA's solicitation sought to lease additional spaces not included in a prospectus that, pursuant to 40 U.S.C. § 3307, the agency was required to submit for Congressional approval.  The COFC dismissed this ground of the protest for reasons not relevant here, and the protester appealed.

The Federal Circuit, without addressing the basis for the lower court's dismissal of this ground, held that the COFC lacked jurisdiction to consider the protester's argument.  The court cited one prong of the COFC's protest jurisdiction under 28 U.S.C. § 1491(b)(1), which allows challenges to "any alleged violation of statute or regulation in connection with a procurement or a proposed procurement."  The Federal Circuit previously has held that "any alleged violation of statute or regulation in connection with a procurement or a proposed procurement" is a broad grant of jurisdiction, including statutory or regulatory violations connected "with any stage of the federal contracting acquisition process, including the process for determining a need for property or services."  Distributed Solutions, Inc. v. United States, 539 F.3d 1340, 1346 (Fed. Cir. 2008) (internal citations and quotations omitted).  The panel held, however, that the COFC's jurisdiction was not so broad as to encompass this protest ground because the protester alleged the violation of an appropriations statute rather than a violation of a procurement statute.

In their dissent, Judges Wallach and Newman observed that the relevant text of 28 U.S.C. § 1491(b)(1) provides jurisdiction over "any alleged violation of statute or regulation in connection with a procurement or a proposed procurement."  After reviewing binding precedents that emphasized the "sweeping" nature of this grant of jurisdiction, the dissenting judges argued that the majority erred by requiring, contrary to the plain language of the statute, that a protester allege a violation of a procurement statute.  A proper application of the statute, the dissenters insisted, provided jurisdiction because the alleged violation of the appropriations statute in question was directly "in connection with" the agency's authority to conduct a procurement and the specifically challenged terms of a solicitation.  The dissenters also chided the majority for failing to address why there was no jurisdiction under 28 U.S.C. § 1491(b)(1)'s separate grant of jurisdiction over "an action . . . objecting to a solicitation by a Federal agency" – which this protest fairly clearly was.

Takeaway:  The Federal Circuit's questionable jurisdictional holding in the previous decision, and its refusal to revisit that decision en banc, signals a narrowing of the COFC's ability to review certain kinds of bid protests.  Protesters invoking non-procurement statutes should carefully frame their pleadings to satisfy the Federal Circuit's most recent shift in its own precedent.

  United Valve Co., B-416277; B-416277.2, July 27, 2018:  What's in a name (or a CAGE code)?  Sometimes it is the difference between winning and losing a contract.  In this GAO protest, the agency sought helicopter parts that had to be manufactured by approved manufacturers.  The solicitation included a list of approved sources, along with the Commercial and Government Entity (CAGE) code and part number(s) corresponding to each approved source.  CAGE codes are unique government-issued codes that correspond to a particular contractor facility at a specific location.  The solicitation identified Logistical Support, LLC, CAGE code 55064, as the approved source for a particular part.  The agency received proposals from various offerors, including Logistical Support, LLC, CAGE code 1HFE7.  The approved CAGE code 55064 appeared nowhere in the offeror's proposal.  The agency asked for clarification of the discrepant CAGE codes, and the offeror replied that both codes belonged to the same facility at the same location.  The agency accepted the response and awarded the contract to Logistical Support, LLC.  A disappointed offeror filed a protest, alleging that the awardee was not an approved source and therefore was ineligible for award.

The GAO found the contemporaneous record insufficient to justify the agency's conclusion that Logistical Support, LLC, CAGE code 1HFE7 was the same entity as Logistical Support, LLC, CAGE code 55064.  The GAO noted that, although the record showed that the entities associated with CAGE codes 55064 and 1HFE7 shared the same name and address, they had different DUNS numbers, different Doing-Business-As names, and different activation dates in the System for Award Management.  The record also showed that various affiliated companies and subsidiaries shared the address listed for both entities.  Although it was fairly clear that the two entities were somehow related, the GAO found it was unreasonable for the agency to conclude that this record established that they were the same legal entity.  The GAO accordingly sustained the protest and recommended that the agency go back and figure out whether the putative awardee really was the approved source eligible for award.

Takeaway:  Offerors should be very careful about the names, addresses, CAGE codes, and DUNS numbers they put on their proposals.  The same legal entity may very well have two CAGE codes, and a fancy trade name may sound better than the offeror's official name of Acme Conglomerated, LLC.  But, if the proposal does not make completely clear the precise identity of the offeror, the company is inviting an agency to come to an adverse conclusion or for a disappointed offeror to file a protest that may be sustained.

C2C Innovative Solutions, Inc., B-416289; B416289.2, July 30, 2018 This procurement sought a Qualified Independent Contractor (QIC) to handle reconsiderations of denials of Medicare claims related to durable medical equipment.  As explained in the GAO decision, under Centers for Medicare and Medicaid Services (CMS) procedures, QICs provide the second level of appeals in the Medicare appeals process.  QIC decisions, in turn, may be appealed to a higher level of agency review.  If the QIC decision is overturned by higher review, an Administrative QIC (AdQIC) may refer an appeal of that decision to a review by the Medicare Appeals Council, prior to an aggrieved party having the right to seek judicial review.

The agency awarded the task order.  A disappointed offeror (the incumbent) protested to the GAO, raising various protest grounds, including alleging that the awardee was impeded by multiple OCIs.  The core of this allegation was that the awardee's wholly-owned subsidiary simultaneously served as an AdQIC under another CMS contract.

The protester alleged an Impaired Objectivity OCI arose because the AdQIC subsidiary would be in a position "to withhold issues regarding its own processing of QIC reconsiderations while at the same time emphasizing to CMS any discrepancies or aberrancies in the reconsideration of its competitors, including [the protester's], or any other non-affiliated QIC's."  The protester also alleged that the awardee, through its AdQIC subsidiary, "is authorized to make referrals to the Appeals Council of administrative decisions that overturn or partially overturn reconsideration decisions made by [the awardee]."  The GAO agreed there appeared to be a potentially significant OCI and found that the record indicated that the agency's OCI investigation failed to address this possibility of biased recommendations and improperly deferred to the awardee's conclusion that no OCI existed.

The protester also alleged an Unequal Access to Information OCI arose because the awardee potentially had access to non-public, competitively useful information in the Medicare appeals system as a result of its subsidiary's AdQIC contract – allegedly including files generated by the protester's own incumbent performance as a QIC contractor.  The GAO again found that the agency's analysis of the potential OCI was superficial and insufficient, notably "fail[ing] to address the substance of the conflict of interest inquiry required by the RFP, namely, whether the information was non-public and, if so, whether it might provide a competitive advantage."

On these two grounds, the GAO sustained the protest and recommended that the agency perform a reasonable and better documented OCI analysis.

Takeaway:  This case is a good reminder that an OCI can arise as a result of an affiliate's work.  Although there are mitigation strategies that may reduce that risk, an award is vulnerable to challenge if the procuring agency's own investigation is inadequate or insufficiently documented.

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.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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.

Disclaimer

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.

General

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