Recent Court of Federal Claims Protest Decision Highlights the Importance of Standing

September 9, 2019 | By Maria L. Panichelli, Michael A. Richard

Bid protests can be a powerful tool.  However, not just anyone can file a protest – only those contractors with “standing” can proceed.  If a party lacks standing, its protest will be dismissed; dismissal will occur even where the protest raises legitimate challenges to an Agency’s source selection decision.  The Court of Federal Claims’ August 14, 2019 decision in Zeidman Technologies, Inc. v. United States, highlights the importance of determining who does, and who does not, have “standing” to file a bid protest.

In Zeidman, the protestor challenged the US Air Force’s award decision in connection with an SBIR procurement relating to “Integrated Code Base and High Performance Embedded Computing Tool.”  Ten companies, including the protestor, submitted proposals.  The agency undertook evaluations,  assigned scores and ranks to each of the ten proposals, and chose to make an award to the highest ranked offerors only. Zeidman’s proposal was ranked lower than many of the other offerors.

The Court explained that, to have standing, a protestor must demonstrate that it is an “interested party”.  An “interested party” is defined as a party that: (1) is an actual or prospective bidder; and (2) has a direct economic interest in the award. To demonstrate the requisite “economic interest,” a protestor must show that there was a “substantial chance” that it would have received the contract award, if not for the alleged error being addressed in the protest. Because Zeidman was ranked lower than not only the awardee, but many other competitors, and because Zeidman had failed to establish that it had a “substantial chance” of award but for the Agency’s alleged procurement errors, the Court dismissed the protest for lack of standing.

The take away lesson here is that it is critically important for a contractor to perform a standing analysis before spending time, effort, and legal fees filing a protest. Unfortunately, determining if you comply with the 2-pronged “interested party” test can be deceptively difficult. Sure, if you bid on a project and lost then you likely satisfy the “actual or prospective bidder” element. But sometimes questions about timing, eligibility or other administrative concerns can really complicate this analysis. The second piece – regarding economic interest – can get even trickier. If you were next in line for award, you likely comply. But what if there was no clear “ranking”?  What if you were ranked quite low as compared to your competitors?

If you have questions about your standing, or about asserting a bid protest in general, Obermayer’s Government Contracting team is here to help!

About the Authors

Maria L. Panichelli

Partner

Maria is a partner and the Chair of the Government Contracting department.   She focuses her practice exclusively on federal government contracting and procurement, guiding her clients throughout the entire lifecycle of their...

Read More by Author

Michael A. Richard

Associate

Michael is an attorney in Obermayer’s Government Contracting Department, where he excels at getting clients to the settlement table. Michael’s tenacity is truly a force to be reckoned with. Over the past...

Read More by Author