Government’s motion to dismiss protest for lack of standing is granted. The protester filed suit challenging the cancellation of a solicitation. While the protest was pending, the protester sold its assets to two other companies. The court found that as a result of the sale, the protester was no longer an interested party. The company now lacked the operational assets to perform the contract, and the personnel it proposed now worked for another company. By selling its assets, the protester had negated any chance it had of receiving the award.
The Department of Veterans Affairs posted a solicitation seeking document shredding services. The solicitation was set aside for SDVOSBs. The VA only received one timely proposal from Land Shark Shredding, LLC. The VA determined that Land Shark’s price was unreasonable; its prices were almost double the government estimate. Moreover, the agency found Land Shark’s proposal was technically unacceptable. Due to these deficiencies in Land Shark’s proposal—the only timely proposal—the VA cancelled the solicitation.
Land Shark filed a protest with the Court of Federal Claims, challenging the cancellation of the solicitation. While the protest was pending, Land Shark sold all the assets necessary to perform its government contracting business to Dunlap Government Services. Land Shark also sold its commercial document shredding business and assets to another company, Underground Vaults and Storage. Land Shark changed its name to Disabled Veterans Security, LLC.
Land Shark, moved to substitute Disable Veterans as the real party in interest or to change the case caption to reflect the name change. The government moved to dismiss Land Shark’s protest, arguing that due to the asset sale, Land Shark no longer had standing to maintain the protest.
The court found that amending the caption to substitute Disabled Veterans as a party was appropriate. Land Shark did not sell the solicitation at issue in this case when it sold it assets. Thus, the company retained its interest in the case.
But the court did not think that Disabled Veterans had standing as an interested party to maintain the case. To have standing a protester must be an actual bidder with a substantial chance at receiving the award. It was undisputed that Disabled Veterans was not an actual bidder.
Even if an offeror is not an actual bidder, they may have standing if they can demonstrate they will stand of the shoes of the bidder as a successor in interest. In this case, however, Disabled Veterans could not show that it was a successor to Land Shark. Disabled Veterans did not appear to possess the operational resources needed for performance. The key personnel from Land Shark’s proposal no longer worked for Disabled Veterans. In fact, it was unclear to the court whether Disabled Veterans had any employees at all.
Land Shark argued that Disabled Veterans could stand in its (Land Shark’s) shoes because Disabled Veterans could purchase the necessary equipment and subcontract the shredding work. The court reasoned that more is needed to demonstrate successor-in-interest status. That Disabled Veterans may be able to obtain the resources to perform did not demonstrate that it could provide the assets promised in Land Shark’s proposal.
Land Shark is represented by Joseph A. Whitcomb. The government is represented by Daniel B. Volk, Brian M. Boynton, Martin F. Hockey, and L. Misha Preheim of the Department of Justice as well as Natica Chapman of the Department of Veterans Affairs.
