Protest challenging the agency’s decision to cancel a solicitation set aside for SDVSOBs and resolicit with less restrictive terms is denied, where the protester was not the lowest-priced, technically acceptable offeror, and therefore did not have a substantial chance at award. Although the protester styled its challenge as a pre-award protest, the court found the agency had evaluated proposals for technical acceptability and price, and therefore the “substantial chance” standard—not the “non-trivial competitive injury” standard—applied.
Veteran Shredding LLC protested the Department of Veteran Affairs’ cancellation of a solicitation for document destruction services, for which Veteran Shredding had submitted a bid. The plaintiff asked the court to void the cancellation, award the contract to plaintiff, and prevent the agency from resoliciting the procurement using a veteran-owned small business set-aside in place of the original service-disabled veteran-owned small business set-aside.
VA originally issued the solicitation as an SDVOSB set-aside on a lowest-priced, technically acceptable basis. During the process, Veteran Shredding expressed concern that the estimated weight of the paper to be shredded seemed unusually low and questioned whether the incumbent was actually serving the amounts identified in the previous solicitation. After submitting its proposal, Veteran Shredding again expressed its concern that the incumbent “grossly underestimated” the paper to be disposed and offered to justify its bid in detail.
After reviewing all proposals, the CO found that all offers were above the IGCE, even though the agency made only minor adjustments to the requirement. Based on the significant difference between the lowest-price offeror and the IGCE, the CO could not determine that prices were fair and reasonable. The agency notified the five bidders that because their quotes were not fair and reasonable, the VA would cancel the solicitation and open it up to additional competition. Notwithstanding the cancellation, the agency rated proposals from Veteran Shredding and two lower-priced offerors to be technically acceptable. Veteran Shredding requested a debriefing and this protest followed.
The government moved to dismiss, arguing Veteran Electric lacked standing, because it was not the lowest-priced bidder and therefore did not have a substantial chance of award. If the court were to overturn the cancellation, two other offerors would be in line for award before Veteran Electric.
In response, Veteran Shredding argued that in a pre-award context, the ‘substantial chance’ test does not apply. Instead, the plaintiff argued it need only show a non-trivial competitive injury which can be redressed by judicial relief. The non-trivial competitive injury it cites is the loss of a federal contract for which it was a prospective bidder submitting a reasonable price. Further, if VA re-solicits without the “service-disabled” qualifier, Veteran Shredding must then re-compete against a larger pool of bidders, whether VOSBs or small-businesses in general.
However, the court held the plaintiff erred in in asserting that the “non-trivial competitive injury” standard governs all pre-award protests. Instead, that standard provides an alternative to the “substantial chance” standard when there is a lack of a bid or other factual basis to evaluate a protestor’s chance at an award. In this case, the agency had evaluated the proposed prices of all offerors, so the court could evaluate whether Veteran Shredding had a substantial chance for award.
While the plaintiff’s proposal was among those rated technically acceptable, it was the highest-priced of the three. Further, its protest focused primarily on VA’s price reasonableness determination, which would affect each of the three technically acceptable proposals equally. Had the VA found Veteran Shredding’s offer fair and reasonable, it would have also found the two lower bids fair and reasonable. Accordingly, the court held that Veteran Shredding lacked a substantial chance at award and denied its protest for lack of standing.
Veteran Shredding LLC is represented by Joseph A. Whitcomb and Mark H. Wilson of Whitcomb, Selinsky, McAuliffe, PC. The government is represented by Igor Helman, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, with whom on the briefs were Joseph H. Hunt, Assistant Attorney General, Civil Division, and Robert E. Kirschman, Jr., Director, and Allison Kidd-Miller, Assistant Director, Commercial Litigation Branch, Civil Division, Department of Justice. Of counsel was Natica Chapman Neely, Staff Attorney, District Contracting National Practice Group, Office of General Counsel, Department of Veterans Affairs.
