Earlier this month, in Bannum, Inc. v. United States, the United States Court of Appeals for the Federal Circuit affirmed the Court of Federal Claims’ dismissal of two separate bid protests filed by Bannum Inc, challenging the Bureau of Prisons’ award of contracts for the operation of residential “reentry centers” in Mississippi and South Carolina. The Court of Federal Claims dismissed each protest after concluding that Bannum was not an “interested party.” The Federal Circuit affirmed upon different grounds, holding that in both cases, Bannum had waived its ability to challenge the solicitations’ terms. In so doing, the Court clarified the protest preservation requirements previously outlined in Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1315 (Fed. Cir. 2007).
At issue in both protests was the Bureau of Prisons’ amendment of the solicitations subsequent to the receipt of initial offeror proposals to incorporate requirements of the Prison Rape Elimination Act (PREA), 42 U.S.C. § 15602. Bannum responded to the amendments with letters affirming its earlier-proposed prices but noting that those prices “do not, and cannot reflect any consideration for the effects of [the new Amendment]” because pricing the new contract requirement involves an “enormous amount of information.” Bannum also placed an asterisk next to the term of the Amendment requiring PREA compliance and stated that its response was “subject to Bannum’s reservation of all rights and protests,” and for one of its proposals, labeled its letter “Agency Protest.” In response to a request for final proposals, Bannum reiterated these objections. It did not, however, file a formal pre-award protest, either with the Bureau of Prisons or in any other forum. After the Bureau of Prisons awarded each contract to other offerors, Bannum protested.
Separate judges at the Court of Federal Claims dismissed the protests, finding that Bannum was not an “interested party” entitled to bring a protest under 28 U.S.C. § 1491(b) because, as a result of the reservation language contained therein, its final proposals were materially noncompliant with each solicitation’s express requirements. On appeal, Bannum argued that the solicitations were defective because of the PREA requirements, and that it had noted its objections in the letters it submitted subsequent to the relevant solicitation amendments.
In rejecting those arguments, the Federal Circuit explained that even though the government was aware that Bannum was dissatisfied with the solicitations’ terms, “mere notice of dissatisfaction or objection is insufficient to preserve Bannum’s defective-solicitation challenge.” Instead, per Blue & Gold, Bannum should have submitted a challenge to the solicitations’ terms prior to the submission of its final proposals. The Court was not convinced by Bannum’s argument that, despite the lack of a formal protest, the Bureau of Prisons should have contacted Bannum in response to multiple requests for guidance. The Court noted that a formal protest would have prompted a Bureau of Prisons response addressing Bannum’s concerns. By waiting until after award to file a protest, Bannum waived its ability to challenge the terms of the solicitation. Having decided that the argument was waived under Blue & Gold, the Court did not reach Bannum’s interested-party status, the basis of the lower court dismissals.
The Court’s decision is significant because it clarifies that protestors can bring post-award challenges to the terms of a solicitation in the Court of Federal Claims so long as it preserves this argument in the form of a formal pre-award protest, either before the procuring agency or the Government Accountability Office. While contractors often prefer to express their dissatisfaction over a solicitation provision with a softer touch, as Bannum did here with its written objections, a decision not to file a pre-award protest can leave an unsuccessful offeror without an opportunity to be heard at the Court of Federal Claims.