Protest of Contract Awards
The Administrative Dispute Resolution Act of 1996 (ADRA),
Pub. L. 104-320, § 12, 110 Stat. 3870, 3874 (1996) grants the
Court of Federal Claims exclusive jurisdiction over procurement
protests (i.e., protests that relate to the Government's
acquisition of goods and services). See Resource Conservation
Group, LLC v. United States, 597 F.3d 1238 (Fed. Cir. 2010);
Emery W.W. Airlines, Inc. v. United States, 264 F.3d 1071,
1078-79 (Fed. Cir. 2001); see also Rothe Dev., Inc. v. United
States, 666 F.3d 336 (5th Cir. 2011); Vero Technical
Support, Inc. v. United States, 437 Fed. Appx. 766 (11th Cir.
2011). The Federal Circuit has held that the ADRA does not affect
the jurisdiction of the Court of Federal Claims with respect to
non-procurement protests (e.g., protests that relate to the
Government's acquisition of land). Id. |
The Court of Federal Claims has prescribed procedural guidance
specifically tailored for bid protest litigation to enhance the
overall effectiveness of protest resolution. See Appendix
C of the Rules of the Court of Federal Claims (RCFC).
Standing to bring a bid protest "is framed by 28 U.S.C.
§ 1491(b)(1), which ... imposes more stringent standing
requirements than Article III." Weeks Marine, Inc. v. United
States, 575 F.3d 1352, 1359 (Fed. Cir. 2009). A litigant must
be an "interested party," 28 U.S.C. § 1491(b)(1), which in this
context, requires the protestor to establish that it: "(1) is an
actual or prospective bidder and (2) possesses the requisite direct
economic interest." Id.; see also Rex Serv. Corp. v.
United States, 448 F.3d 1305, 1307 (Fed. Cir. 1996). To satisfy
the first factor, the courts will consider a protester to be an
actual bidder if it submitted an offer in response to the relevant
solicitation. See Rex Serv., 448 F.3d at 1307 ("[the
protester] did not bid, and therefore, it is not an 'actual
bidder.'"). To satisfy the second prong, the "direct economic
interest" requirement, in a post-award protest, a plaintiff "must
show that there was a substantial chance it would have received the
contract award but for the alleged error in the procurement
process." Info. Tech. & Applications Corp. v. United States,
316 F.3d 1312, 1319 (Fed. Cir. 2003). In other words, the protester
must show that the Government's error prejudiced it. Labatt Food
Serv. v. United States, 577 F.3d 1375, 1378 (Fed. Cir. 2009);
see also Myers Investigative & Sec. Servs. v. United States,
275 F.3d 1366, 1370 (Fed. Cir. 2002) ("In fact, prejudice (or
injury) is a necessary element of standing."). In pre-award bid
protests, the Federal Circuit has held that a prospective offeror
may establish prejudice by demonstrating it has suffered a
"non-trivial competitive injury which can be redressed by judicial
relief." Weeks Marine, 575 F.3d at 1363.
Standard of Review
The proper standard of review in a bid protest is whether
the agency action was arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law. 28 U.S.C. §
1491(b)(4); 5 U.S.C. § 706(2)(A); Glenn Defense Marine (Asia)
PTE, Ltd. v. United States, 720 F.3d 901, 907 (Fed. Cir. 2013)
("In a bid protest case, the inquiry is whether the agency's action
was arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law and, if so, whether the error is
prejudicial"); Impresa Construzioni Geom. Domenico Garufi v.
United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001); see
also Citizens to Preserve Overton Park, Inc. v. Volpe,
401 U.S. 402, 416 (1971), overruled on other grounds,
Califano v. Sanders, 430 U.S. 99 (1977). When a challenge is
brought on the theory that the agency lacked a rational basis for
its decision, "the test is whether the contracting agency provided
a coherent and reasonable explanation of its exercise of
discretion." Banknote Corp. of Am., Inc. v. United States,
365 F.3d 1345, 1351 (Fed. Cir. 2004) (internal quotation omitted);
see Advanced Data Concepts, Inc. v. United States,
216 F.3d 1054, 1058 (Fed. Cir. 2000) ("This standard requires a
reviewing court to sustain an agency action evincing rational
reasoning and consideration of relevant factors.") (citation
An agency's decision lacks a rational basis if the contracting
officer "entirely failed to consider an important aspect of the
problem, offered an explanation for its decision that runs counter
to the evidence before the agency, or is so implausible that it
could not be ascribed to a difference in view or the product of
agency expertise." Motor Vehicle Mfrs. Ass'n of the U.S., Inc.
v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). A
disappointed bidder bears a heavy burden of showing that an
agency's decision lacked a rational basis. Banknote, 365
F.3d at 1351; Impresa, 238 F.3d at 1332-33. This burden "is
not met by reliance on [the] pleadings alone, or by conclusory
allegations and generalities." Bromley Contracting Co. v.
United States, 15 Cl. Ct. 100, 105 (1988); see also Campbell
v. United States, 2 Cl. Ct. 247, 249 (1983).
The rational basis standard of review is highly deferential,
PAI Corp. v. United States, 614 F.3d 1347, 1351 (Fed. Cir.
2010), and an agency's decision must be sustained if it has a
rational basis, Motor Vehicle Mfrs. Ass'n, 463 U.S. at 43.
In reviewing the agency's procurement decisions, the court should
recognize that the decision is entitled to a "presumption of
regularity," Citizens to Preserve Overton Park, 401 U.S. at
415 (citations omitted), and that the reviewing court may not
substitute its judgment for that of the agency. Motor Vehicle
Mfrs. Ass'n, 463 U.S. at 43. The court need not consider
whether the agency is correct or whether the court would have
reached the same decision as the agency, but whether there was a
reasonable basis for the agency's actions. Honeywell, Inc. v.
United States, 870 F.2d 644, 648 (Fed. Cir. 1989) ("If the
court finds a reasonable basis for the agency's action, the court
should stay its hand even though it might, as an original
proposition, have reached a different conclusion as to the proper
administration and application of the procurement regulations."
(internal quotation omitted)).
Finally, even if the protestor can demonstrate errors in the
procurement process, the protestor must then show that it was
"significantly prejudiced" by those errors. Bannum, 404 F.3d
at 1357. To establish significant prejudice, the protestor must
show that "there was a 'substantial chance' it would have received
the contract award but for the [agency] errors in the bid process."
Id. at 1358 (citations omitted).
Judicial review of the government's action in a bid protest is
not a de novo preceding. Rather, the scope of review is
limited to the administrative record. Axiom Res. Mgmt., Inc. v.
United States, 564 F.3d 1374, 1379 (Fed. Cir. 2009) ("[T]he
focal point for judicial review should be the administrative record
already in existence, not some new record made initially in the
reviewing court.") (quoting Camp v. Pitts, 411 U.S. 138, 142
(1973)). In cases decided pursuant to the court's bid protest
jurisdiction, 28 U.S.C. § 1491(b)(1), the court is required by
statute to apply the standard of review from the Administrative
Procedure Act (APA). See 28 U.S.C. § 1491(b)(4) ("In any
action under this subsection, the courts shall review the agency's
decision pursuant to the standards set forth in section 706 of
title 5."). Accordingly, the "task of the reviewing court is to
apply the appropriate APA standard of review, 5 U.S.C. § 706, to
the agency decision based on the record the agency presents to
the reviewing court." Axiom, 564 F.3d at 1379 (quoting
Florida Power & Light Co. v. Lorion, 470 U.S. 729, 743-44
(1985)) (emphasis added by Federal Circuit).
"The purpose of limiting review to the record actually before
the agency is to guard against courts using new evidence to
'convert the 'arbitrary and capricious' standard into effectively
de novo review.'" Id. at 1380 (citation omitted).
Accordingly, "supplementation of the record should be limited to
cases in which 'the omission of extra-record evidence precludes
effective judicial review'" and the court must decide "whether
supplementation of the record [is] necessary in order not 'to
frustrate effective judicial review.'" Id. at 1381
(citations omitted); see also Murakami v. United States, 46
Fed. Cl. 731, 735 (2000), aff'd, 398 F.3d 1342 (Fed. Cir.
2005). The administrative record "should be supplemented only if
the existing record is insufficient to permit meaningful review
consistent with the APA." Axiom, 564 F.3d at 1381 (emphasis
In sum, a "court that orders an administrative agency to
supplement the record of its decision is a rare bird." Marcum
v. Salazar, 751 F. Supp. 2d 74, 78 (D.D.C. 2010).
Type of relief
The plain language of 28 U.S.C. § 1491(b)(2) provides
that "the courts may award any relief that the court considers
proper, including declaratory and injunctive relief except that any
monetary relief shall be limited to bid preparation and proposal
costs." We maintain that a successful bid protest plaintiff may
receive its bid and proposal preparation costs or injunctive
relief, but not both.
Protesters usually seek injunctive relief. The Supreme Court
has held that an "injunction is a drastic and extraordinary remedy,
which should not be granted as a matter of course." Monsanto
Co. v. Geertson Seed Farms, 130 S.Ct. 2743, 2761 (2010)
(citation omitted). Accordingly, even if a plaintiff were to
succeed upon the merits of its case, the court must also consider
three additional criteria before ordering a permanent injunction:
1) "whether the plaintiff will suffer irreparable harm if the court
withholds injunctive relief"; 2) "whether the balance of hardships
to the respective parties favors the grant of injunctive relief";
and 3) "whether it is in the public interest to grant injunctive
relief." PGBA, LLC v. United States, 389 F.3d 1219, 1228-29
(2004) (citations omitted). The plaintiff must establish an
entitlement to injunctive relief by clear and convincing evidence.
Baird Corp. v. United States, 1 Cl. Ct. 662, 664 (1983)
("Where injunctive relief is sought, which relief is deemed drastic
in nature, the court must exercise great caution and even then, the
aggrieved bidder should be made to establish its right to such
drastic relief by means of clear and convincing evidence.")
If a plaintiff does not demonstrate irreparable harm, then the
court must deny its request for a permanent injunction. See
eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006);
cf. Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239
F.3d 1343, 1350 (Fed. Cir. 2001) ("a movant cannot be granted a
preliminary injunction unless it establishes both of the
first two factors, i.e., likelihood of success on the merits
and irreparable harm.") (emphasis in original).
The court may award attorney's fees and protest costs pursuant
to the Equal Access to Justice Act, 28 U.S.C. § 2412(d)(1)(A).
Crux Computer Corp. v. United States, 24 Cl. Ct. 223 (1991);
Bailey v. United States, 1 Cl. Ct. 69 (1983).
Appeals from decisions of the court are taken to the
Federal Circuit. 28 U.S.C. § 1295(a)(3).
[updated September 2013;
cited in USAM 4-4.420]