Federal Circuit Corrects CFC’s Standing Analysis

The Court of Federal Claims erred in dismissing a protester’s challenge to its exclusion from competition, according to the Court of Appeals for the Federal Circuit, because the government had the discretion to consider the protester’s incomplete proposal, and the protester had a substantial chance of award. The protester argued the exclusion of its proposal for support services for failure to comply with a solicitation requirement to provide cost/price data for teaming partners lacked a rational basis. The CFC held the protester lacked standing because it had no chance of award and could not have been injured by the government’s failure to evaluate its proposal ( 56 CCF ¶79,708).

Discretion to Exclude

The standing dispute concerned whether the protester had a direct economic interest that would be affected by the contract award. The Federal Circuit rejected the protester’s contention the applicable standard was whether it had suffered a “non-trivial competitive injury” because it was a limited exception for pre-award, pre-bid challenges based solely on the solicitation. The appropriate inquiry for standing was the “substantial chance” test, and there was an adequate factual predicate to determine whether the protester was prejudiced by the exclusion of its proposal. Under this standard, the protester had standing because the solicitation stated an incomplete proposal “may” not be considered for an award. The permissive language reserved to the government discretion whether to exclude the protester’s proposal. Moreover, it was likely the protester could have competed for the contract because its cost/price was within the competitive range. “The fact that the missing information was critical to the cost realism analysis and may have prevented the [government] from analyzing the proposal is relevant to the reasonableness of the [government’s] decision-making, not to determining prejudice for standing purposes.” Nevertheless, the Federal Circuit affirmed the dismissal of the protest based on the CFC’s alternate ruling the government acted rationally in excluding the proposal from consideration. ( Orion Technology, Inc. v. U.S., et al., CA-FC, 57 CCF ¶79,981)