Observations on the Federal Circuit’s Impact on Bid Protest
Litigation Since ADRA
James J. McCullough*
Michael J. Anstett*
Brian M. Stanford*
*
*
*
TABLE OF CONTENTS
I. Introduction ................................................ 3
II. The Federal Circuit’s Early Post-ADRA Protest Decisions ... 12
III.The
Federal
Circuit’s
Record
in
Resolving
Conflicts
17
A. Implied-in-fact Bid Protest Jurisdiction ................. 18
B. Protest Timeliness ....................................... 24
C. Scope of Record for Review ............................... 27
D. Other Open Issues ........................................ 29
IV. The Federal Circuit’s Impact on the U.S. Government
Accountability Office......................................... 32
V. Conclusion ................................................ 35
2
I.
Introduction
The year was 1982, the United States Court of Appeals for
the Federal Circuit had recently been created by the Federal
Courts Improvement Act,1 and the court had just begun to exercise
appellate jurisdiction over appeals from the newly constituted
United States Claims Court (which would become the United States
Court of Federal Claims)2 and the General Services Administration
Board of Contract Appeals (GSBCA).3
Although disappointed
bidders still had two other venues in which to file bid
protests—the United States district courts and the United States
General Accounting Office (GAO) (which would become the
Government Accountability Office)4—the consolidation of the
The Federal Courts Improvement Act of 1982, Pub. L. No. 97-164,
96 Stat. 25.
2 See The Federal Courts Administration Act of 1992, Pub. L. No.
102-572, § 902, 106 Stat. 4506, 4516. In addition to creating
the Federal Circuit and the Claims Court, the Federal Courts
Improvement Act of 1982 also abolished the United States Court
of Claims, which was established in 1855. See The Federal
Courts Improvement Act of 1982, Pub. L. No. 97-164. The Court
of Claims judges and the commissioners appointed by the judges
exercised both trial and appellate jurisdiction over claims
against the United States. See generally History of the Federal
Judiciary, Court of Claims, 1855-1982, THE FEDERAL JUDICIAL CENTER
(July 15, 2012),
http://www.fjc.gov/history/home.nsf/page/courts_special_coc.html
.
3 See History of the Federal Judiciary, Lankdmark Judicial
Legislation, THE FEDERAL JUDICIAL CENTER (July 15, 2012),
www.fjc.gov/history/home.nsf/page/landmark_22.html.
4 See GAO Human Capital Reform Act of 2004, Pub. L. No. 108-271,
§ 8(a), 118 Stat. 811, 814 (2004) (“The General Accounting
Office is hereby redesignated the Government Accountability
Office”).
1
3
Federal Circuit’s appellate jurisdiction over appeals from the
Claims Court and the GSBCA had squarely positioned the Federal
Circuit to become the preeminent arbiter of bid protest issues.5
In its early years, however, the Federal Circuit issued only a
handful of bid protest decisions.6
From 1983 through 1987, the
Federal Circuit issued published opinions in only 11 bid protest
cases (six arising out of the Claims Court).7
Yet, even as the
See History of the Federal Judiciary, Court of Claims, 18551982, supra note 2. As one experienced practitioner observed in
1987, the Federal Circuit’s new status in reviewing bid protest
appeals, “coupled with its widely recognized expertise in
government contract matters,” gave the Federal Circuit the
authority “to influence significantly the general development of
bid protest law.” David R. Hazelton, The Federal Circuit’s
Emerging Role in Bid Protest Cases, 36 AM. U. L. REV. 919, 922
(1987). Indeed, as Hazelton observed, the Federal Circuit’s new
role offered “an unprecedented opportunity to clarify an area of
the law that [was] in considerable disarray” because of the
differing procedural and substantive rules applied to bid
protest cases by the various tribunals—the Claims Court (and its
predecessor), the district courts, the GAO, and the GSBCA—
deciding those cases. Id. at 920.
6 See United States v. John C. Grimberg Co., 702 F.2d 1362 (Fed.
Cir. 1983) (en banc); Coastal Corp. v. United States, 713 F.2d
728 (Fed. Cir. 1983); F. Alderete Gen. Contractors, Inc. v.
United States, 715 F.2d 1476 (Fed. Cir. 1983); CACI, Inc.-Fed.
v. United States, 719 F.2d 1567 (Fed. Cir. 1983); ATL, Inc. v.
United States, 735 F.2d 1343 (Fed. Cir. 1984); Essex Electro
Eng’rs, Inc. v. United States, 757 F.2d 247 (Fed. Cir. 1985);
United States v. Amdahl Corp., 786 F.2d 387 (Fed. Cir. 1986);
Elec. Data Sys. Fed. Corp. v. GSBCA, 792 F.2d 1569 (Fed. Cir.
1986); NKF Eng’g, Inc. v. United States, 805 F.2d 372 (Fed. Cir.
1986); United States v. Thorson Co., 806 F.2d 1061 (Fed. Cir.
1986); Federal Data Corp. v. SMS Data Prods. Grp., Inc., 819
F.2d 277 (Fed. Cir. 1987).
7 See John C. Grimberg Co., 702 F.2d 1362; Coastal Corp. 713 F.2d
728; F. Alderete Gen. Contractors, Inc., 715 F.2d 1476; CACI,
Inc.-Fed. 719 F.2d 1567; ATL, Inc., 735 F.2d 1343; Essex Electro
Eng’rs, Inc., 757 F.2d 247; Amdahl Corp., 786 F.2d 387; Elec.
5
4
court gained its sea legs, the potential for the Federal Circuit
to have a profound impact on bid protest law was there.8
Much has changed since those early days of the Federal
Circuit and its emerging role in bid protest jurisprudence.9
The
Federal Circuit is no longer just the “principal” appellate
tribunal for bid protests, it is, de facto, the appellate
tribunal for all bid protest cases.10
The passage of the
Administrative Dispute Resolution Act of 1996 (ADRA),11 and the
expiration in 2000 of district court jurisdiction over bid
protests, have left the Federal Circuit as the sole appellate
court for bid protest appeals.12
If in 1987 the court was poised
to have a significant influence on the development of bid
protest law and to bring clarity to an area of the law that was
Data Sys. Fed. Corp., 792 F.2d 1569; NKF Eng’g, Inc., 805 F.2d
372; Thorson Co., 806 F.2d 1061; Federal Data Corp., 819 F.2d
277.
8 See generally History of the Federal Judiciary, Court of
Claims, 1855-1982, supra note 2.
9 See Michael J. Schaengold, Choice of Forum for Federal
Government Contract Bid Protests, 18 FED. CIR. B.J., 244, 295
(2008).
10 See e.g., id. at 299.
11 The Administrative Dispute Resolution Act of 1996, Pub. L. No.
104-320, § 12(d), 110 Stat. 3870, 3875 (codified at 28 U.S.C.
1491(b)).
12 Id. (“SUNSET.— The jurisdiction of the district courts of the
United States over the actions described in section 1491(b)(1)
of title 28, United States Code (as amended by subsection (a) of
this section) shall terminate on January 1, 2001 unless extended
by Congress”).
5
in disarray, surely, in the years following ADRA, the potential
for the court to influence bid protest law increased even more.13
So now, looking back on the past fifteen years since the
passage of ADRA, is it worthwhile for bid protest practitioners
to ask, how has the Federal Circuit influenced the development
of bid protest law?
The Federal Circuit unquestionably has had an impact on the
development of bid protest law.14
With the issuance of more than
60 published and unpublished decisions in bid protest cases
since ADRA, the Federal Circuit could not avoid shaping the
development of bid protest law (even if, in the grand scheme of
things, the court has authored a relatively small number of bid
protest decisions compared to other areas of government contract
law).15
But what has been the reach of that impact?
Has the
See Administrative Dispute Resolution Act of 1996, § 12(d)
(“SUNSET.— The jurisdiction of the district courts of the United
States over the actions described in section 1491(b)(1) of title
28, United States Code (as amended by subsection (a) of this
section) shall terminate on January 1, 2001 unless extended by
Congress”).
14 See Schaengold, supra note 9 at 326 (“because in most bid
protests the COFC resolves the case on motions for judgment on
the administrative record, the Federal Circuit reviews the bid
protest decision de novo, which means that the Federal Circuit
will freely review the entire opinion (without any deference to
the COFC”); see also Dysart v. United States, 369 F.3d 1303,
1310 (Fed. Cir. 2004).
15 To provide some context, roughly 5% of the Federal Circuit’s
caseload since 1996 has concerned various aspects of government
contracting, and bid protest cases have been a sliver of that
5%. See Statistics, United States Court of Appeals for the
Federal Circuit, http://www.cafc.uscourts.gov/the13
6
Federal Circuit fulfilled its role as the appellate tribunal
charged with harmonizing conflicting decisions of the trial
courts?
Has the Federal Circuit developed a coherent body of
case law that allows for efficient and meaningful judicial
review of agency procurement decisions?
As the de facto Supreme
Court16 for bid protest cases, what has the Federal Circuit done
to provide consistent guidance to federal agencies, the Court of
Federal Claims, and other stakeholders in bid protest
litigation?
The answers to these questions are decidedly a
mixed bag.17
ADRA’s jurisdictional grant provided that:
the United States Court of Federal Claims . . . shall
have jurisdiction to render judgment on an action by
an interested party objecting to a solicitation by a
Federal agency for bids or proposals for a proposed
contract or to a proposed award or the award of a
contract or any alleged violation of statute or
court/statistics.html (last visited July 16, 2012). For
example, based on an analysis of statistics available from the
court for Government Fiscal Year 2011, the total number of cases
pending before the Federal Circuit was 1,012, of which
approximately 5%, or 50, cases involved government contracts.
See id. In that same time period, the Federal Circuit issued
only 5 decisions in bid protest cases. See id. That said, the
Federal Circuit admittedly has been more active in the bid
protest arena than it was before ADRA. See supra note 7 and
accompanying text.
16 See Robert E. Korroch et al., 2005 Year in Review:
Analysis
of Significant Federal Circuit Government Contracts Decisions,
35 PUB. CONT. L.J. 581, 582 (2006) (noting the Federal Circuit is
the “Supreme Court” of government contract cases). There
appears to have been only one bid protest case decided by the
United States Supreme Court, and that was in 1940. See Perkins
v. Lukens Steel Co., 310 U.S. 113, 125 (1940).
17
7
regulation in connection with a procurement or a
proposed procurement. [T]he United States Court of
Federal Claims . . . shall have jurisdiction to
entertain such an action without regard to whether
suit is instituted before or after the contract is
awarded.18
This new jurisdictional provision required sorting out in the
years following its enactment, and the Federal Circuit fairly
quickly provided some much needed guidance in the wake of ADRA
to establish the basic ground rules for bid protest litigation
in the Court of Federal Claims.19
Specifically, the Federal
Circuit provided guidance concerning Court of Federal Claims
jurisdiction and standing in bid protests in two early
decisions, RAMCOR Services Group, Inc. v. United States,20 and
American Federation of Government Employees v. United States
(AFGE).21
In RAMCOR, the court broadly construed ADRA’s
jurisdictional grant concerning what types of protests could be
brought to the Court of Federal Claims by interpreting ADRA’s
“operative phrase ‘in connection with’” to be “very sweeping in
scope” and concluding that “‘procurement’ includes all stages of
the process of acquiring property or services, beginning with
the process for determining a need for property or services and
18
28 U.S.C. § 1491(b)(1) (emphasis added).
19
RAMCOR Services Group, Inc. v. United States, 185 F.3d 1286
(Fed. Cir. 1999).
21 American Federation of Government Employees v. United States,
258 F.3d 1294 (Fed. Cir. 2001).
20
8
ending with contract completion and closeout.”22
In AFGE, the
court applied the definition of “interested party” used in the
Competition in Contracting Act of 1984 (CICA)23 to define who
would have standing to pursue a bid protest pursuant to ADRA to
include 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.”24
A third issue—the proper
standard of review for bid protests—was resolved by the Federal
Circuit in Impresa Construzioni Geom. Domenico Garufi v. United
States,25 where the court made clear that bid protest cases were
to be reviewed under the “arbitrary and capricious” standard set
forth in the Administrative Procedure Act, 5 U.S.C. §
706(2)(A).26
In these early decisions, the Federal Circuit resolved
several of the most pressing issues for the judges of the Court
of Federal Claims:
who could protest, what could they protest,
and what standard of review would be applied by the courts in
reviewing those protests.27
In all three instances, the Federal
185 F.3d at 1289 (borrowing from the definition of procurement
in 41 U.S.C. § 403).
23 Pub. L. No. 98-369, 98 Stat. 1175 (1984).
24 258 F.3d at 1302 (quoting 31 U.S.C. § 3551(2)).
25 Impresa Construzioni Geom. Domenico Garufi v. United States,
238 F.3d 1324 (Fed. Cir. 2001).
26 238 F.3d at 1332.
22
27
9
Circuit brought harmony to conflicting decisions issued by the
judges of the Court of Federal Claims.28
But that was just the beginning, and, for the Federal
Circuit, there remained—and there still remain today, fifteen
years out—a number of significant gaps to fill and conflicts to
resolve in the area of post-ADRA bid protest litigation.29
It is
a practical reality that, despite the Federal Circuit’s role as
the de facto final word on bid protest law, the oracle rarely
speaks on such matters.30
With so few opportunities to consider
the nuances of bid protest litigation after ADRA, the Federal
Circuit’s decisions have taken on an almost Delphic aura.31
And
whatever the reason for the relatively few bid protest decisions
issued by the Federal Circuit since 1997, the dearth of case law
arising from the Federal Circuit has meant that the court has
not had nearly the impact it might otherwise have had.32
28
Need Cite. In 2005, one commentator looking back at the
court’s post-ADRA jurisprudence up to that point observed that
the Federal Circuit had “almost completed the mile in
eliminating inconsistencies within the [Court of Federal Claims]
under the ADRA,” and that, “with a few more steps, the Federal
Circuit will have developed a smooth, working body of law.”
Jennifer Wittmeyer, Note, Conflicts in the Court of Federal
Claims: The Federal Circuit’s Key Decisions and Resolutions Over
Bid Protest Practice, 13 FED. CIR. B.J. 507, 540 (2005). That
hope may have been overly optimistic.
29
30
31
Need cite. As another commentator has observed, if the
Federal Circuit were more “actively and knowledgeably” engaged
in shaping the federal procurement regime than it has been, the
32
10
Moreover, even when the court has had an opportunity to address
open issues squarely—or at least provide some measure of
guidance—the court has consistently declined many of those
opportunities, leaving the judges of the Court of Federal Claims
and the bid protest bar to speculate about what the Federal
Circuit might think, without the benefit of authoritative
judicial guidance from the only source that can provide it.33
Thus, it appears that, as an institution, the Federal
Circuit has not lived up to its full potential as the only
appellate court (at least for practical purposes) with the
ability to provide guidance in bid protest matters.
Perhaps the
most frustrating aspect of these past fifteen years has been the
Federal Circuit’s reluctance to resolve conflicts in bid protest
law and the resulting significant transactional costs for both
federal agencies and government contractors.34
And, although it
is true that the Federal Circuit cannot reach out and decide all
the issues it might want to address, that constraint in the bid
protest context may be aggravated by a very stark trend in the
Federal Circuit’s decisional law—protesters very rarely, if
ever, prevail on appeal to the Federal Circuit.
Indeed, the
number of “wins” (or even partial wins) for protesters that have
system likely “would move ever more rapidly towards progress.”
Steven L. Schooner, A Random Walk: The Federal Circuit’s 2010
Government Contracts Decisions, AM. U. L. REV. 1067, 1084 (2011).
33
34
11
appealed to the Federal Circuit since the passage of ADRA can be
counted on one hand.35
Thus, at least for protesters, the
outcome of an appeal to the Federal Circuit seems almost
predetermined.
money after bad?
For protesters, the question is:
Why throw good
For the Government, however, the message is
quite the opposite:
When the Government appeals in bid protest
cases, the Government always wins.36
Since the enactment of
ADRA, it appears that the Government has prevailed in every bid
protest appeal it has taken to the Federal Circuit.37
In the discussion that follows, we highlight several of the
ways in which the Federal Circuit has had an impact on the
development of bid protest law since the enactment of ADRA.
II.
The Federal Circuit’s Early Post-ADRA Protest Decisions
In enacting ADRA, Congress ushered in a new era of judicial
review of federal agency procurement decisions by significantly
35
See Paul R. Gugliuzza, Rethinking Federal Circuit
Jurisdiction, 100 GEO. L.J. 1437, 1466-67 (2012). That the
Federal Circuit has proven to be a hospitable forum for the
Government is not a phenomenon unique to bid protest appeals.
See id. (noting that the court has been a hospitable forum to
the government in many areas within the court’s jurisdiction).
Indeed, some have argued that, in government contracts matters
in general, the Federal Circuit has drifted away from what was
the preceived traditional role of its predecessor, the Court of
Claims, as the “conscience of the nation.” See W. Stanfield
Johnson, The Federal Circuit’s Great Dissenter and Her “National
Policy of Fairness to Contractors”, 40 PUB. CONT. L.J. 275, 346
(2011); Ralph C. Nash, Jr., The Government Contract Decisions of
the Federal Circuit, 78 GEO. WASH. L. REV. 586, 587-86 (2010).
36
37
12
expanding the bid protest jurisdiction of the Court of Federal
Claims and by establishing the Federal Circuit as the sole
reviewing authority for bid protests once ADRA’s grant of
concurrent jurisdiction over bid protests to the district courts
expired in 2000.38
ADRA fully empowered the Court of Federal
Claims with specific statutory jurisdiction, as well as remedial
powers, over both pre-award and post-award protests.39
Thus,
following the enactment of ADRA, the Federal Circuit became the
de facto final forum of appellate review for all bid protests.40
In this role, the Federal Circuit generally has taken a
broad view of the types of issues that can be brought to the
Court of Federal Claims, while at the same time taking a more
limited view of who has standing to bring those claims and, in
the end, the level of scrutiny to be applied to the actions of
federal agency officials.41
Thus, for example, the Federal Circuit has been relatively
consistent in its view that ADRA’s jurisdictional grant over
protests “objecting to a solicitation by a Federal agency for
bids or proposals for a proposed contract or to a proposed award
See 142 Cong. Rec. S11848 (daily ed. Sept.30, 1996) (statement
of Sen. Cohen) (stating that the proposed amendment to ADRA
would “expand the bid protest jurisdiction of the Court of
Federal Claims”).
39 See American Federation of Government Employees, AFL-CIO v.
U.S., 258 F.3d 1294, 1300 (C.A.Fed.,2001).
40 See Baltimore Gas and Elec. Co. v. United States, 290 F.3d
734,737 (4th Cir. 2002).
41 See infra notes 43-45, 48-55 and accompanying text.
38
13
or the award of a contract or any alleged violation of statute
or regulation in connection with a procurement or a proposed
procurement” is very expansive.42
Early on, in RAMCOR, the court
held that “the operative phrase ‘in connection with’ is sweeping
in scope.”43
Adopting the definition of “procurement” set forth
in 41 U.S.C. § 403(2), the court concluded that the phrase “in
connection with a procurement or proposed procurement” covered
all stages of the acquisition process, including “the process
for determining a need for property or services.”44
Thus, in
RAMCOR, the court held that ADRA authorized the Court of Federal
Claims to hear a protest challenging the override of an
automatic stay triggered by the CICA, 31 U.S.C. § 3553(c)(1).45
On the other hand, the Federal Circuit has taken a narrow
view of standing under ADRA, adhering to CICA’s definition of
“interested party” for GAO protests and adopting a standard that
is more restrictive than the standing requirements under
28 U.S.C. § 1491(b)(1).
185 F.3d at 1289.
44 Id.
45 Need Cite.
The court has placed some limits on what qualifies
as being “in connection with” a procurement. Need Cite. For
example, in Resource Conservation Group, LLC v. United States,
the court held that a lease of government property was not a
“procurement.” Resource Conservation Group, LLC v. United
States, 597 F.3d 1238, 1244 (Fed. Cir. 2010). Likewise, the
court in Creation Upgrades, Inc. v. United States, 417 F. App’x
957 (Fed. Cir. 2011), held that a sale of government property
was not a “procurement.” Creation Upgrades, Inc. v. United
States, 417 F. App’x 957 (Fed. Cir. 2011).
42
43
14
Article III.46
This more narrow view of standing in Court of
Federal Claims bid protest cases is manifested in the twin
requirements that the protester demonstrate that it was an
actual or prospective bidder and that it was prejudiced by the
challenged action.47
Thus, in AFGE, the court held that the term
“interested party” in § 1491(b)(1) “is limited to actual or
prospective bidders or offerors whose direct economic interest
would be affected by the award of the contract or by failure to
award the contract.”48
By construing the term “interested party”
in accordance with the definition set out in CICA—thus requiring
protesters to be “actual or prospective bidders” and to possess
a “direct economic interest that would be affected by the award
of the contract or by the failure to award the contract”49—the
See American Federation of Govt. Employees, AFL-CIO v. United
States, 258 F.3d 1294, 1302 (C.A. Fed., 2001).
47 See Id.
48 258 F.3d at 1302.
49 See American Federation of Govt. Employees, AFL-CIO v. United
States, 258 F.3d 1294, 1302 (C.A. Fed., 2001). The Court of
Appeals for the Fourth Circuit in Baltimore Gas & Electric Co.
v. United States, 290 F.3d 734 (4th Cir. 2002), followed the
Federal Circuit’s formulation in AFGE of ADRA’s standing
requirement. Id. at 738. In contrast, the United States Court
of Appeals for the Tenth Circuit has held that United States
district courts continue to have independent Tucker Act
jurisdiction (even after the sunset of district court bid
protest jurisdiction under ADRA) to hear protests of federal
government procurement decisions by parties whose economic
interests would be affected by the procurement, but who are not
actual or prospective bidders for the procurement. See City of
Albuquerque v. United States Dep’t of the Interior, 379 F.3d
901, 911 (10th Cir. 2004). See also Nat’l Treasury Emp’t Union
46
15
Federal Circuit has confirmed that, in the post-award protest
context, the protester needs to have, at a minimum, submitted a
timely proposal in a competitive procurement.50
With respect to
sole source procurements, the Federal Circuit has held that a
protester must show that it was at least a minimally qualified
bidder.51
Finally, in addressing the requisite degree of
prejudice (which the Federal Circuit confirmed as a “necessary
element of standing”),52 the court has required a threshold
showing of harm by way of a protester’s “substantial chance” of
receiving a contract award that was thwarted due to the
Government’s alleged error.53
v. IRS, No. 04-CV-0820, 2006 WL 416161, *6 (D.D.C. Feb. 22,
2006) (following City of Albuquerque).
50 See, e.g., Rex Serv. Corp. v. United States, 448 F.3d 1305,
1308 (Fed. Cir. 2006) (holding that regardless of any
illegalities by the Government in the competitive procurement
process, if the protester has not bid within the bidding period,
it is not an interested party).
51 See Myers Investigative & Sec. Servs., Inc. v. United States,
275 F.3d 1366, 1370-71 (Fed. Cir. 2002). The Federal Circuit
recently clarified this holding in Digitalis Education Solutions
v. United States, concluding that, where an agency requests
statements of capability from potential sources, a protester
must submit such a statement in order to be considered an
interested party for purposes of standing. Digitalis Education
Solutions v. United States, 664 F.3d 1380 (Fed. Cir. 2012). For
pre-award bid protests, the Federal Circuit recently adopted a
somewhat less rigorous standard, requiring that protesters
demonstrate a “non-trivial competitive injury which can be
addressed by judicial relief.” Weeks Marine, Inc. v. United
States, 575 F.3d 1352, 1362 (Fed. Cir. 2009).
52 Myers, 275 F.3d at 1370.
53 See, e.g., Alfa Leval Separation, Inc. v. United States, 175
F.3d 1365, 1367 (Fed Cir. 1999).
16
The Federal Circuit has also taken a relatively narrow view
of the level of scrutiny that should be applied to agency
procurement actions.54
In Impresa, the court adopted the APA
standard of review and held that an agency’s decision could be
set aside if “(1) the procurement official’s decision lacked a
rational basis” or “(2) the procurement procedure involved a
violation of regulation or procedure.”55
III. The Federal Circuit’s Record in Resolving Conflicts
In setting out the above parameters, the Federal Circuit
established the basic ground rules for resolving most post-ADRA
bid protest actions brought in the Court of Federal Claims.56
But it took the Federal Circuit many years to establish and
clarify some of these rules, and, beyond these most basic ground
rules, the Federal Circuit has left a number of other important
questions still unsettled.57
Of course, as an appellate court,
the Federal Circuit is not able to resolve issues in cases that
See Impresa, 238 F.3d at 1332-33.
Need Cite. Notably, the court did not adopt a standard of
review that was as strict as the standard urged by the
Government in that case. Need Cite. The Government argued that
post-ADRA bid protests should not be set aside “absent
allegations of fraud or bad faith.” Impresa, 238 F.3d at 1333.
However, as discussed below, the court in Impresa took the
unusual step of ordering the deposition of the Contracting
Officer to document the basis for the Contracting Officer’s
responsibility determination in the record so that the court
below could determine whether the determination had a rational
basis. Id. at 1339.
56 See supra section II.
57 See infra notes 61-110 and accompanying text.
54
55
17
the parties choose not to appeal.58
The Federal Circuit cannot
reach out to decide cases that are not properly before the
court.59
But, whatever the reasons (and there likely are a
number of independent and related reasons), it appears that the
Federal Circuit has not yet fully realized its potential to
bring harmony to the law of bid protests.
Indeed, the lack of
uniformity in the law and the length of time it has taken for
the Federal Circuit to resolve conflicting decisions among the
judges of the Court of Federal Claims has resulted in
significant transaction costs for the Court of Federal Claims
and litigating parties.60
The following examples illustrate the
point.
A.
Implied-in-fact Bid Protest Jurisdiction
Perhaps the most prominent example of the Federal Circuit’s
failure to address an open question created by ADRA has been the
issue of the Court of Federal Claims’ jurisdiction to hear
58
59
60
Unified Architecture & Eng'g, Inc. v. United States, 46 Fed. Cl.
56, 60-61 (2000) aff'd, 251 F.3d 170 (Fed. Cir. 2000)(holding
that implied in fact jurisdiction had survived ADRA); Block v.
United States, 66 Fed. Cl. 68, 77 (Fed. Cl. 2005) (holding that
implied in fact jurisdiction had not survived ADRA).
However, as one commentator has noted, there are those who do
not object to issues “percolating” up through the lower courts
towards an ultimate, if delayed, resolution. See Paul D.
Carrington & Paulina Orchard, The Federal Circuit: A Model for
Reform?, 78 GEO. WASH. L. REV. 575, 583 (2010).
18
protests founded upon the theory of breach of an implied
contract of fair dealing.61
Despite a number of conflicting
decisions issued by Court of Federal Claims judges, the Federal
Circuit in two relatively early opinions expressly declined to
provide any guidance on this issue.62
In both Impresa63 and Emery
Worldwide Airlines, Inc. v. United States,64 the Federal Circuit
acknowledged the issue, but it would take the court nearly a
decade to resolve the continuing conflict over this basic issue
among the judges of the Court of Federal Claims.65
Indeed, it
See 28 U.S.C. § 1491(a)(1) (premising jurisdiction on the
existence and breach of an express or implied contract).
62 ; Emery Worldwide Airlines, Inc. v. United States, 264 F.3d at 1081 n.9.
63 238 F.3d at 1332 n.6 (“Although it has been argued that the
implied contract theory survives the 1996 amendment [of the
ADRA] . . . we need not decide this issue.” (citation omitted)).
64 264 F.3d 1071, 1081 n.9 (Fed. Cir. 2001) (“[W]e decline to
address whether the implied contract theory survives the
ADRA.”).
61
65
Unified Architecture & Eng'g, Inc. v. United States, 46 Fed. Cl.
56, 60-61 (2000) aff'd, 251 F.3d 170 (Fed. Cir. 2000); Resource
Conservation Group, LLC v. United States, 597 F.3d 1238, 1245
(Fed. Cir. 2010); Forestry Surveys & Data v. United States, 44
Fed. Cl. 485, 491 (1999); Aero Corp. v. United States, 38
Fed. Cl. 739, 748 (1997).
By the time the Federal Circuit decided Resource Conservation,
the conflict among the Court of Federal Claims judges was acute.
Need Cite. In the decision under consideration by the Federal
Circuit in Resource Conservation, Judge Braden had adhered to an
earlier ruling in which she had joined some of her colleagues in
holding that implied-in-fact jurisdiction had not survived ADRA.
See Res. Conservation Group, LLC v. Dep’t of Navy, 86 Fed. Cl.
475, 486 (2009) (Braden, J.); Information Scis. Corp. v. United
States, 85 Fed. Cl. 195, 205 (2008) (Braden, J.); Biltmore
Forest Broad. FM, Inc. v. United States, 80 Fed. Cl. 322, 334
19
was not until 2010 that the Federal Circuit concluded that the
Court of Federal Claims continued to have implied-in-fact bid
protest jurisdiction, at least as to protests where ADRA did not
provide a remedy.66
In Resource Conservation Group, LLC v. United States,67 the
Federal Circuit held that the Court of Federal Claims could
continue to exercise its pre-ADRA jurisdiction under Section
1491(a)(1) over implied-in-fact contract claims.68
In so ruling,
the Federal Circuit apparently sought to make clear that ADRA’s
new jurisdictional grant under Section 1491(b) was limited to
the procurement context but that ADRA’s new jurisdictional
provision had not repealed the earlier jurisdictional grant set
forth in Section 1491(a)(1) with regard to non-procurement
(2008) (Merow, J.); Block v. United States, 66 Fed. Cl. 68, 77
(2005) (Firestone, J.); Lion Raisins, Inc. v. United States, 52
Fed. Cl. 115, 120 (2002) (C. Miller, J.). Several other Court
of Federal Claims judges, however, had reached the opposite
conclusion. See Hamilton Sundstrand Power Sys. v. United
States, 75 Fed. Cl. 512, 516 (2007) (Bruggink, J.); L-3 Commc’ns
Integrated Sys., L.P. v. United States, 79 Fed. Cl. at 453,
461-62 (2007) (Williams, J.); Hunt Bldg. Co. v. United States,
61 Fed. Cl. 243, 273 (2004) (Williams, J.); Phoenix Air Grp. v.
United States, 46 Fed. Cl. 90, 100 (2000) (Horn, J.); Unified
Architecture & Eng’g, Inc. v. United States, 46 Fed. Cl. 56,
60-61 (2000) (Tidwell III, J.); Forestry Surveys & Data v.
United States, 44 Fed. Cl 485, 491 (1999) (Gibson, J.); Aero
Corp. v. United States, 38 Fed. Cl. 739, 748 (1997) (Futey, J.).
66 Resource Conservation Group, LLC v. United States, 597 F.3d
1238, 1245 (Fed. Cir. 2010).
67 597 F.3d at 1245.
68
20
solicitations.69
In the non-procurement context, the court held,
the implied-in-fact contract jurisdiction survived ADRA’s
passage and could be exercised by the Court of Federal Claims or
the United States district courts.70
Curiously, in resolving
this important jurisdictional question that had remained open
since the enactment of ADRA, the Federal Circuit did not even
acknowledge that it was resolving such a long-standing conflict
among the judges of the Court of Federal Claims.71
Rather, the
opinion merely noted that it was addressing an issue that the
court had left open since its 2001 decisions in Impresa and
Emery Worldwide.72
Reading the decision in Resource
Conservation, one would have no inkling that the judges of the
Court of Federal Claims had been so divided for so long on this
issue.73
Id. at 1246 (quoting H.R. No. 104-841, which stated that ADRA
was not intended to affect existing jurisdiction applied by the
Court of Federal Claims in any other context).
70 Need Cite.
The Federal Circuit acknowledged that its ruling
would allow both the Court of Federal Claims and United States
district courts to exercise jurisdiction over implied-in-fact
contract cases, which arguably could lead to the same dualjurisdiction problems that had prompted the passage of ADRA and
the consolidation of procurement bid protest jurisdiction in one
court. Need Cite. Nevertheless, the Federal Circuit explained,
it was for Congress to address that potential problem in the
statutory scheme, and not the court. See Res. Conservation
Grp., 597 F.3d at 1246.
69
71
72
73
21
Although the decision in Resource Conservation at first
blush may appear to have finally provided closure on the
question of implied-in-fact contract jurisdiction in the Court
of Federal Claims, the Federal Circuit’s decision, in fact, has
spawned yet more conflicts among the judges of the Court of
Federal Claims.74
As Judge Lettow wryly observed after the
Resource Conservation decision, the Federal Circuit’s decision
“has been applied in varying ways.”75
Some judges have held that, pursuant to Resource
Conservation, the Court of Federal Claims has no jurisdiction to
hear an implied covenant of good faith and fair dealing claim in
a bid protest action.76
Other judges have held that the Court of
Federal Claims continues to have jurisdiction to hear impliedin-fact contract claims in bid protests under Section 1491(a)’s
Castle-Rose, Inc. v. United States, 99 Fed. Cl. 517, 530-31
(2011).
74
Castle-Rose, Inc. v. United States, 99 Fed. Cl. 517, 530-31
(2011).
75
76
See Linc Gov’t Servs., LLC v. United States, 96 Fed. Cl. 672,
693 (2010) (“[T]he ADRA added subsection [] 1491(b)(1) . . .
displacing the implied contract theory with an explicit
statutory grant of jurisdiction to adjudicate bid protest
actions.”)
;
Metro. Van & Storage v. United States, 92 Fed. Cl. 232, 249-50
n.7 (2010)
(concluding that, because the case involved a bid protest of a
procurement, the implied-in-fact contract theory was precluded
by Section 1491(b)).
22
jurisdictional grant.77
And still other judges have applied
Resource Conservation in a third way, concluding that “the
Federal Circuit [in Resource Conservation] did not determine
that the ADRA precludes a protester from alleging a breach of an
implied contract of fair dealing in a procurement case brought
pursuant to [S]ection 1491(b). . . .
[A] protester may
challenge arbitrary and capricious conduct based upon an
implied-in-fact contract to consider bids fairly theory as part
of a procurement protest in which Tucker Act jurisdiction is
based upon 28 U.S.C. § 1491(b)(1).”78
And in attempting to close the door on this basic question
about whether the Court of Federal Claims could hear protests
based on an implied in-fact contract theory, the Federal Circuit
also appears to have raised yet another question:
What is the
See L-3 Commc’ns Integrated Sys., L.P. v. United States, 94
Fed. Cl. 394, 398 (2010) (“[A]n implicit repeal of [Section]
1491(a)’s procurement jurisdiction would run counter to the
longstanding principle of statutory construction which
recognizes a strong presumption against an implied repeal of a
jurisdictional statute. . . . Without an express repeal . . .,
the common law developed under [Section] 1491(a) permitting bid
protests of procurements and [the] ADRA should be interpreted
‘in a manner which gives harmonious operation and effect to
both.’”).
77
78
Bilfinger Berger AG Sede Secondaria Italiana v. United States,
97 Fed. Cl. 96, 151-52 (2010).
. Accord Castle-Rose, Inc. v. United States, 99 Fed. Cl. at
530-31 (concluding that, “[w]hether or not this court has
jurisdiction to hear an implied-contract claim under
Section 1491(a) in a bid protest action, the court agrees with
Bilfinger Berger that it surely has jurisdiction to hear such a
claim under Section 1491(b) as added by the ADRA”).
23
standard by which the Court of Federal Claims should review a
non-procurement action that is subject to an implied-in-fact
contract breach action?79
Despite the existence of this open
question, the Federal Circuit in Creation Upgrades, Inc. v.
United States80 instead avoided the question in an unpublished
decision, even though the case provided the court with an
opportunity to address the issue.81
Although the court appeared
to apply an “arbitrary and capricious” APA standard of review in
that case, the panel issued the opinion as non-precedential, and
the question remains open.82
B.
Protest Timeliness
Protests filed with the Court of Federal Claims under the
court’s Tucker Act jurisdiction do not have the express
79
417 F. App’x 957, 960 (Fed. Cir. 2011) (stating that, in order
to maintain a claim for breach of an implied-in-fact contract of
fair dealing, the plaintiff must provide prima facie evidence of
an arbitrary and capricious action on the part of the
Government).
80
81
Need Cite. See also
Order Requiring Further Briefing on Proper Procedural Vehicle
for Resolving Bid Protest, Commc’n Constr. Servs., Inc. v.
United States, No. 10-878C, Order at 3-4 (Fed. Cl. Mar. 13,
2012) (Coster Williams, J.).
(ordering parties to file supplemental briefs to address the
proper procedural vehicle—whether cross—motions for summary
judgment or cross—motions for judgment on the Administrative
Record—for resolving a bid protest brought under 28 U.S.C.
§ 1491(a) under a breach of the implied contract of fair dealing
theory).
82
24
timeliness rules that are present in GAO bid protests.83
Thus,
except in rare cases, the Federal Circuit has generally avoided
imposing strict timeliness requirements on protesters.84
The
only substantial limitation the Federal Circuit has ever placed
upon the timeliness of protests concerns the Court’s
establishment of a “waiver rule” under Blue & Gold Fleet, L.P.
v. United States.85
Under the standard announced in Blue & Gold,
See Griffy's Landscape Maint. LLC v. United States, 46 Fed.
Cl. 257, 257-58 (2000) (sustaining protest where GAO had
previously dismissed the protest as untimely); Heritage of Am.,
LLC v. United States, 77 Fed. Cl. 66, 72 (2007) (and cases cited
therein) (rejecting Government's argument that the court should
dismiss the plaintiff's protest as untimely, noting that the
timeliness requirement was based on GAO rules, not on the COFC's
jurisdictional statues or rules); Software Testing Solutions,
Inc. v. United States, 58 Fed. Cl. 533, 535-36 (Fed. Cl. 2003)
(holding that the Court of Federal Claims is not subject to
GAO's timeliness rules and should look for unreasonable and
unexcused delay by the claimant, and prejudice to the other
party.); CW Gov't Travel, Inc. v. United States, 61 Fed. Cl.
559, 568 (Fed. Cl. 2004) aff'd, 163 F. App'x 853 (Fed. Cir.
2005) and aff'd, 163 F. App'x 853 (Fed. Cir. 2005)..
84 Heritage of Am., LLC v. United States, 77 Fed. Cl. 66, 72
(2007) (and cases cited therein) (rejecting Government's
argument that the court should dismiss the plaintiff's protest
as untimely, noting that the timeliness requirement was based on
GAO rules, not on the COFC's jurisdictional statues or rules);
Software Testing Solutions, Inc. v. United States, 58 Fed. Cl.
533, 535-36 (Fed. Cl. 2003) (holding that the Court of Federal
Claims is not subject to GAO's timeliness rules and should look
for unreasonable and unexcused delay by the claimant, and
prejudice to the other party.)
83
85
Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313-14
(Fed. Cir. 2007).
. The Blue & Gold decision confirmed an earlier line of Federal
Circuit decisions applying the doctrine of patent ambiguity—
imposing on bidders the obligation to seek clarification from
the Government of patently ambiguious solicitation provisions
25
if a protester has an opportunity to object to the terms of a
solicitation which contains a patent error, the protester must
bring that protest before the close of the bidding process or
otherwise face dismissal.86
In so ruling, the Federal Circuit
brought the timeliness rule for Court of Federal Claims protests
(at least with regard to challenges to solicitations) in line
with the GAO’s regulations and protest decisions.87
The Federal Circuit issued the Blue & Gold decision in
2007, nearly ten years after ADRA became effective.88
In the
decade preceding Blue & Gold, however, the judges of the Court
of Federal Claims had struggled to apply a consistent rule and
rationale to the timeliness of pre-award bid protests.89
It was
lest they waive the right to have their interpretation of the
solicitation be accepted in a subsequent bid protest challenging
an award to another bidder. See id. at 1313 (citing Stratos
Mobile Networks USA, LLC v.United States, 213 F.3d 1375, 1381
(Fed. Cir. 2000), and Statistica, Inc. v. Christopher, 102 F.3d
1577, 1582 (Fed. Cir. 1996)).
86 Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 131314 (Fed. Cir. 2007).
87
See 4 C.F.R. § 21.2(a)(1) (2012)
(requiring that “protests based upon alleged improprieties in a
solicitation which are apparent prior to bid opening or the time
set for receipt of initial proposals shall be filed prior to bid
opening or the time set for receipt of initial proposals”).
88 Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 131314 (Fed. Cir. 2007).
Compare
ABF Freight Sys., Inc. v. United States, 55 Fed.Cl. 392, 399-400
(Fed. Cl. 2003) (applying the GAO’s timeliness rule).
;
89
26
not until the Federal Circuit finally announced the rule in Blue
& Gold that a coherent rule with regard to timeliness for Court
of Federal Claims pre-award protests came into being.90
C.
Scope of Record for Review
The Federal Circuit’s post-ADRA jurisprudence has attempted
to ensure that an adequate record of an agency’s procurement
decision is available at the Court of Federal Claims in order to
facilitate meaningful judicial review of the agency’s rationale
for its decision.91
In Impresa, the Federal Circuit set the
standard for the sufficiency of an agency’s record justifying
its procurement decision.92
The court clarified that procurement
decisions, which are not formal adjudications or rulemakings,
N.C. Div. of Servs.s For Blind v. United States, 53 Fed. Cl.
147, 165-66 (Fed. Cl. 2002) aff'd sub nom. N. C. Div. of Servs.
for the Blind v. United States, 60 F. App'x 826 (Fed. Cir. 2003)
(same).
, with
Argencord Mach. & Equip., Inc. v. United States, 68 Fed. Cl.
167, 175 n. 14 (Fed. Cl. 2005).
(declining to apply the GAO’s timeliness rule); CW Gov't
Travel, Inc. v. United States, 61 Fed. Cl. 559, 568 (Fed. Cl.
2004) aff'd, 163 F. App'x 853 (Fed. Cir. 2005) and aff'd, 163 F.
App'x 853 (Fed. Cir. 2005)(same);EDP Enters., Inc. v. United
States, 56 Fed. Cl. 498 (2003) (same); MVM, Inc. v. United
States, 46 Fed. Cl. 126 (2000) (same).
90 Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 131314 (Fed. Cir. 2007).
91Axiom
Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 1379-83
(Fed. Cir. 2009); Impresa Construzioni Geom. Domenico Garufi v.
United States, 238 F.3d 1324, 1337-41 (Fed. Cir. 2001).
92
27
are subject to less stringent documentation requirements on the
part of the agency.93
Nevertheless, because a Contracting
Officer’s discretion in reaching procurement decisions is not
absolute, the Federal Circuit confirmed the Court of Federal
Claims’ authority to compel the agency to explain its rationale
in cases where evidence rebuts the presumption of the
“regularity” of the agency’s decision.94
In what the court
itself described as a “rare case,” the court concluded that the
lack of explanation on the part of the Contracting Officer in
reaching a responsibility determination constituted a “rare
case” in which the Contracting Officer’s rationale was not
apparent from the record.95
The Court concluded that additional
testimony from the Contracting Officer would be required in
order to establish the basis for his decision.96
However, the Federal Circuit more recently reiterated its
view that the Court of Federal Claims should only review the
administrative record before the agency in considering protests
of agency procurement decisions and that supplementation of the
record with extra-record evidence should be avoided.97
In Axiom
93
94
95
96
Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 137983 (Fed. Cir. 2009).
97
28
Resource Management, Inc. v. United States,98 the Court concluded
that the Court of Federal Claims had abused its discretion by
allowing extensive supplementation of the administrative record
without first determining whether the record before the court
was sufficient to allow for a meaningful judicial review.99
The
Federal Circuit reiterated that inclusion of extra-record
evidence in the administrative record is only proper in cases
where the record, without the additional evidence, was so
inadequate as to preclude meaningful review.100
D.
Other Open Issues
An emerging protest issue that requires resolution is in
the area of so-called “insourcing” (where a federal agency uses
federal employees in lieu of private contractors to meet the
agency’s needs).101
There are two conflicting lines of decisions
in the Court of Federal Claims concerning whether the court has
jurisdiction over a protest involving an insourcing decision.102
One judge concluded that, because the agency’s insourcing
98
99
Id..
Id.
100
Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 1379-83
(Fed. Cir. 2009).
See also
Levine v. United States, 453 F.3d 1348, 1350 (Fed. Cir. 2006).
.
101 Santa Barbara Applied Research, Inc. v. United States, 98
Fed. Cl. 536, 542-43 (2011) (Firestone, J.).
102 Hallmark-Phoenix 3, LLC v. United States, 99 Fed. Cl. 65, 68
(2011) (Allegra, J.).
29
decision was made “in connection with a procurement or proposed
procurement,” the court did have jurisdiction over the
protest.103
In the other case, the Court of Federal Claims judge
dismissed the protest of an agency’s insourcing decision,
holding that the protester lacked “prudential” standing to
challenge decisions related to the agency’s insourcing statutory
protocol.104
It appears that neither of these decisions was
appealed to the Federal Circuit, so the Federal Circuit has not
yet had an opportunity to resolve this conflict.105
It should be
noted, however, that two of the circuit courts of appeals have
Santa Barbara Applied Research, Inc. v. United States, 98
Fed. Cl. 536, 542-43 (2011) (Firestone, J.).
104 Hallmark-Phoenix 3, LLC v. United States, 99 Fed. Cl. 65, 68
(2011) (Allegra, J.) (reasoning that Congress did not enact the
Department of Defense’s in-sourcing statutes (10 U.S.C. §§ 129a
and 2463) for the benefit of dissatisfied contractors). See
also Triad Logistics Servs. Corp. v. United States, No. 11-43C,
slip op. at *33 (Fed. Cl. Apr. 16, 2012) (Horn, J.) (concluding
that the protester lacked a direct economic interest in the
procurement at issue because the protester had waited for its
contract to expire before challenging the agency’s decision to
in-source future contract tasks but leaving open the question of
whether an insourcing decision could be the subject of a proper
protest).
105 Compare Santa Barbara Applied Research, Inc., 98 Fed. Cl. at
542-43 with Hallmark-Phoenix 3, LLC, 99 Fed. Cl. at 68.
In yet another decision, Judge Bruggink sided with Judge
Firestone and held that the court had jurisdiction to hear a
protest regarding an in-sourcing decision. See Elemendorf
Support Servs. Joint Venture v. United States, No. 12-346C, slip
op. *10 (Fed. Cl. June 22, 2012).
103
30
held that the district courts do not have jurisdiction to hear
challenges to agency insourcing decisions.106
In yet another area of conflicting decisions, judges of the
Court of Federal Claims had held in the initial years after the
enactment of ADRA that, because of the Suits in Admiralty Act,107
which placed jurisdiction over maritime contracts in the
district courts, the proper venue for maritime bid protests was
the district court, regardless of the Court of Federal Claims’
ADRA or preexisting Tucker Act jurisdiction.108
In 2009,
however, one of those same judges reversed course and held that
the Court of Federal Claims did indeed have jurisdiction over a
bid protest, even though the underlying contract was a maritime
contract.109
Congress recently resolved this open issue
See Rothe Dev., Inc. v. United States Dep’t of Defense, 666
F.3d 336, 339 (5th Cir. 2011); Vero Tech. Support v. United
States Dep’t of Defense, 437 F. App’x 766, 771 (11th Cir. 2011).
In both decisions, the courts determined that challenges to insourcing decisions fell within the Court of Federal Claims’
exclusive jurisdiction under ADRA. 666 F.3d at 339; 437 F.
App’x at 771.
107 46 U.S.C. §§ 30901-30918 (2006).
108 See Bayship Mgmt., Inc. v. United States, 43 Fed. Cl. 535,
537 (1999) (Futey, J.) (concluding that regardless of the Court
of Federal Claims’ jurisdictional basis, because the subject
matter of the underlying contract at issue was maritime, the
court lacked jurisdiction due to the Suits in Admiralty Act);
accord Asta Eng’g, Inc. v. United States, 46 Fed. Cl. 674, 67677 (2000) (Merow, J.).
109 Red River Holdings, LLC v. United States, 87 Fed. Cl. 768,
797 (2009) (Merow, J.) (concluding that Astia Engineering had
been wrongly decided and the bid protest at issue was
“preliminary to a possible contract and lacks a maritime nature
or purpose”).
106
31
regarding the proper venue for bid protests relating to maritime
contracts by vesting exclusive jurisdiction over maritime bid
protests in the Court of Federal Claims.110
IV. The Federal Circuit’s Impact on the U.S. Government
Accountability Office
Although the other principal forum for bid protests, the
GAO, is not bound by the precedent of the Federal Circuit in
deciding bid protests, that does not mean the Federal Circuit’s
decisions have not influenced the GAO in its decision making.111
Sometimes the Federal Circuit and the GAO arrive at the same
conclusion on their own.112
And, in other instances, the GAO has
expressly acknowledged that a ruling from the Federal Circuit on
an issue that GAO has previously addressed could well cause the
GAO to reconsider its approach and follow the Federal Circuit’s
approach if it differs.113
And, for second-bite-at-the-apple
See 2012 National Defense Authorization Act § 861, 28 U.S.C.
§ 1491(b)(6).
111 See DGR Assoc., Inc., B-402494, May 14, 2010, 2010 CPD ¶ 115
at *3.
112 Cf. Performance Evacuators, Inc., B-291771, Mar. 17, 2003,
2003 CPD ¶ 63 at 3 (citing Emery Worldwide Airlines, Inc. v.
United States, 264 F.3d 1071, 1079 n.7 (Fed. Cir. 2001), and
noting that the Federal Circuit, on its own, had recently
reached the same conclusion as the GAO with regard to United
States Postal Service procurements being exempt from the GAO’s
bid protest jurisdiction).
113 See DGR Assoc., Inc., B-402494, May 14, 2010, 2010 CPD ¶ 115
(discussing the split between GAO and the Executive Branch
agencies regarding an interpretation of the Small Business Act’s
provisions and Small Business Administration regulations on
HUBZone set-aside procurements and stating that it would
continue to decide protests in accordance with its established
110
32
protests, the Federal Circuit has been the last word for bid
protests that began at the GAO.114
The Federal Circuit’s decisions have clearly informed the
GAO’s bid protest jurisprudence in numerous areas, and the GAO
has borrowed extensively from the Federal Circuit’s decisions in
the years following the passage of ADRA.115
Perhaps the most
recent example of this phenomenon has been the Federal Circuit’s
articulation of the appropriate standard for review of alleged
organizational conflicts of interests (OCIs) in federal
procurement.116
The Federal Circuit’s 2010 decision in Axiom
reaffirmed the application of the APA’s “arbitrary and
capricious” standard of review to Contracting Officers’
interpretation until the Federal Circuit issued a contrary
decision on the matter). Indeed, in response to the Federal
Circuit’s decision in Impresa, which held that the Court of
Federal Claims could enterain a protest concerning a contracting
officer’s responsibility determination, the GAO revised its
rules to allow the GAO to consider challenges to affirmative
responsibility determinations. See Final Rule, 67 Fed. Reg.
79,833, 79,836 (Dec. 31, 2002) (revising 4 C.F.R. § 21.5 to
allow for GAO bid protests “that allege that definitive
responsibility criteria in the solicitation were not met and
those that identify evidence raising serious concerns that, in
reaching a particular responsibility determination, the
contracting officer unreasonably failed to consider available
relevant information or otherwise violated statute or
regulation”).
114 See e.g., DGR Assoc., Inc., B-402494, May 14, 2010, 2010 CPD
¶ 115.
115FN Manufacturing, Inc., B-297172; Dec. 1, 2005, at 8-9.
116 Axiom Res. Mgmt., Inc. v. United States, 564 F.3d 1374, 137983 (Fed. Cir. 2009).
33
decisions regarding OCIs.117
Thereafter, the GAO expressly
adopted this standard, characterizing the Axiom decision as a
“mandate” from the Federal Circuit to do so.118
The following
year, in a protest that had started at the GAO before moving to
the Court of Federal Claims, the Federal Circuit rejected the
GAO’s reasoning for sustaining the protest based upon the
potential existence of OCIs.119
In that decision, the Federal
Circuit found that the GAO’s decision itself lacked a rational
basis and that the GAO had improperly substituted its judgment
for that of the agency Contracting Officer.120
Moreover, the
See Id. at 1386 (noting that a Contracting Officer’s review
of alleged OCIs and efforts to mitigate such OCIs are accorded
considerable discretion).
118 See, e.g., TriCenturion, Inc.; SafeGuard Servs., LLC,
B-406032 et al., Jan. 25, 2012, 2012 CPD ¶ 52 at *22-23.
119 Turner Constr. Co. v. United States, 614 F.3d 1377, 1385
(Fed. Cir. 2010).
120 614 F.3d at 1385.
The Federal Circuit’s decision in Turner
Construction, where the court rejected as arbitrary and
capricious the GAO’s recommendation, is one example of the
Federal Circuit specifically rejecting the reasoning of the GAO.
Id. The Federal Circuit’s treatment of the GAO’s analysis in
the Turner Construction decision may end up driving a wedge
between the GAO and the courts by increasing those instances
where agencies decline to follow GAO recommendations, thus
driving up the transaction cost for all stakeholders in bid
protest litigation. See Federal Circuit Holds That Agency Was
Arbitrary and Capricious in Following A Government
Accountability Office Recommendation, 125 HARV. L. REV. 1266, 1272
(2012) (observing that Turner Construction’s “likely effect will
be to increase the number of GAO recommendations that are not
followed by agencies” and noting that, from this, one of the
transaction costs likely will be that “the average cost of a GAO
decision to sustain a bid protest will increase, as the GAO will
more likely be obliged to report to Congress” that its
recommendation was not followed). The Turner Construction case
117
34
Federal Circuit confirmed that a protester must identify “hard
facts” that tend to indicate the existence or potential
existence of a conflict and that mere “suspicion and innuendo”
is not enough to establish the existence of an OCI.121
As a
result, the GAO’s subsequent decisions have referenced and
applied the “hard facts” standard established by the Federal
Circuit in Axiom and Turner.122
V.
Conclusion
ADRA ushered in a new era in bid protest litigation in many
ways, not the least of which was the consolidation of appellate
review of bid protest decisions in one forum—the Federal
Circuit.123
Following ADRA, the Federal Circuit became the one
tribunal with the power and, more importantly, the ability to
bring uniformity to the law of bid protests.124
Although the
court has provided answers to some of the most pressing
questions regarding bid protest litigation after ADRA, the full
is also notable for being one of several bid protest cases
decided in 2008 in which the Court of Federal Claims reached a
different result from the GAO. See Richard J. Webber, Bid
Protests: Different Outcomes in the Court of Federal Claims and
the Government Accountability Office in 2008, 44 THE PROCUREMENT
LAWYER 13 (2009) (discussing cases from 2008 in which the GAO and
the Court of Federal Claims reached differing results but
ostensibly applied the same legal standard).
121 Id. at 1385.
122 See, e.g., McTech Corp., B-406100 et al., Feb. 8, 2012, 2012
CPD ¶ 97, at *6.
123 Protests and appeals, 1 West's Fed. Admin. Prac. § 664 (4th
ed. 2012).
124
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promise of ADRA and the Federal Circuit still has not been
met.125
Perhaps the realization of that promise has been
hampered by the reality that few bid protest decisions are
appealed to the Federal Circuit.126
If that is the case, and
more appeals of Court of Federal Claims bid protest decisions
will be needed to smooth out the post-ADRA bid protest law, the
next fifteen years may prove to be very interesting, and the
Federal Circuit’s impact greater than it has been thus far.
Only time and many more appeals will tell.
125
126
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