On May 10, 2023, the United States Court of Appeals for the Federal Circuit issued a decision regarding bid protest standing in CACI, Inc.-Federal v. United States et al. In that decision, the court declared previous decisions to no longer be good law and held that the Court of Federal Claims erred in finding the protester to lack standing.
A contractor has standing to file a bid protest at COFC if it is an “interested party.” In general, this means that the contractor must show it would have a “substantial chance” of receiving award but for the alleged error in the procurement process. Contractors must be vigilant about demonstrating standing, as an adverse ruling on standing can prevent a protest from reaching the merits.
The protester in CACI faced such an adverse ruling. During the procurement, the Army found the protester’s proposal to be technically unacceptable and thus ineligible for award. The protester challenged that finding at COFC. COFC determined that the protester was ineligible for a separate reason, however — by finding that the protester had an unmitigable organizational conflict of interest (“OCI”) — and dismissed the protest for lack of standing.
The Federal Circuit disagreed. Here’s what the court found:
“Interested Party” Status Is Not Jurisdictional. The issue of whether a protester is an “interested party” is a “question of statutory standing rather than Article III standing,” and the court’s “prior caselaw treating the interested party issue as a jurisdictional issue . . . is no longer good law in this respect.” Because statutory standing is not jurisdictional, an “initial determination” that the protester is an interested party “is not required before addressing the merits.”
The Ability to Make De Novo Findings Is Limited. Because judicial review of agency action is generally limited to the grounds the agency invoked when it took the action, a court is limited in its ability to make de novo findings regarding a protester’s interested party status — unless, for example, the question is purely a legal one. Under the particular facts of this case, COFC was not in a position to make a de novo determination concerning whether the protester had an OCI and thus was not an interested party, because “the statutory standing issue and the merits issue are overlapping.”
The Same Is True for Prejudice. Like interested party status, “the issue of prejudice is no longer jurisdictional unless it implicates Article III considerations,” and the court’s “cases to the contrary are no longer good law.”
Despite finding that COFC erred on the standing question, the Federal Circuit ultimately affirmed on the merits and upheld the contracting officer’s finding of the protester’s technical unacceptability. The impact of the court’s findings on standing, however, will be important to watch.