Appeal of COFC’s dismissal of a pre-award protest for lack of standing is denied, where the protester could not establish that it could perform the work required by a contract to be awarded on a sole-source basis and therefore could not show it had a direct economic interest in the procurement.
CliniComp International Inc. appealed a decision of the Court of Federal Claims dismissing its pre-award bid protest challenging a Department of Veterans Affairs procurement for an electronic health records solution.
After analyzing its options, VA decided to acquire a commercial off-the-shelf system, rather than attempt to modernize its existing system. The VA Secretary issued a determination and findings authorizing the agency to negotiate a sole-source contract with Cerner Corporation. Previously, the Department of Defense had awarded Cerner a contract for its EHR solution, but on a competitive basis.
Incumbent EHR systems provider CliniComp filed a pre-award protest with COFC, arguing VA’s decision violated CICA and lacked a rationale basis, and seeking a preliminary and permanent injunction preventing VA from awarding the sole-source contract to Cerner. COFC dismissed the protest for lack of standing, finding that CliniComp was not an actual or perspective bidder and did not have a direct economic interest in the procurement.
COFC concluded CliniComp had no interest in the procurement because it had failed to show that it could have competed for the contract had the procurement been competitive. Specifically, the court found that the protester failed to show that it had experience providing EHR services for the substantial number of facilities to be covered by the proposed contract to Cerner. Cerner’s contract would cover approximately 1,600 VA healthcare sites, while CliniComp had provided EHR services for only 44 VA healthcare facilities and 56 DoD medical treatment facilities.
The court also found that CliniComp had not demonstrated any experience providing the comprehensive services required under the proposed contract to Cerner. For example, the court noted that the proposed contract to Cerner would require support of in-patient and outpatient services, and CliniComp had not demonstrated experience providing outpatient services. Because CliniComp lacked standing, COFC dismissed the protest. CliniComp appealed.
The appeals court denied the appeal, finding no error in COFC’s conclusions. CliniComp argued that because it presented a pre-award protest, COFC should have applied a different test for prejudice. In Weeks Marine Inc. v. United States, the appeals court noted that, in that context of a pre-award challenge to a competitive solicitation, it is difficult for a prospective bidder/offeror to make the showing of prejudice that generally required in post-award bid protest cases. In that case, the court required the protester to show a non-trivial competitive injury which could be addressed by judicial relief.
However, in that case, the court found no dispute that the protester could perform the work. In this case, however, COFC found such a dispute and concluded that CliniComp failed to demonstrate that it could do the work required by the contract to Cerner. Absent such a showing, CliniComp could not satisfy the “non-trivial competitive injury” standard for prejudice. Therefore, even applying the different standard, the appeals court reached the same conclusion on standing.
The protester also argued that the requirements of the proposed Cerner contract are not known, and therefore, the court could not conclude that CliniComp is incapable of performing the contract. However, the appeals court noted that COFC already rejected that argument, finding that the administrative record contained ample evidence regarding the nature and scope of the work. For CliniComp, the problem was not that it was unable to demonstrate its ability to compete due to a lack of information about what is required, but that it failed to demonstrate its ability to perform clearly established requirements.
Finally, the protester argued it had standing because as the incumbent, it stood to lose work should the contract to Cerner proceed. However, the court explained that to have standing, CliniComp’s prejudice must be due to some alleged error in the procurement process. While CliniComp claimed prejudice from the government’s alleged error of awarding this contract on a sole-source basis, the court held that even if this alleged error were rectified, CliniComp still had not established it could compete for the resulting procurement. While CliniComp argued it could hire subcontractors to collaborate on the resulting contract, the court first noted that this argument was not raised before COFC and was therefore forfeited. Further, the protester did not state how or with whom it would subcontract to perform the requirement. The appeals court held that the protester’s vague, cursory references to using subcontractors to perform the work it is unable to do were insufficient to cure its otherwise deficient showing that it was a qualified bidder.
CliniComp International Inc. is represented by Richard J.R. Raleigh Jr. of Wilmer & Lee PA, and by Jerome S. Gabig and Christopher Lea Lockwood. The government is represented by William Porter Rayel, Commercial Litigation Branch, Civil Division, Department of Justice, with whom were Chad A. Readler, Robert E. Kirschman Jr., and Douglas K. Mickle. Cerner Corporation is represented by Gabriel Bell of Latham & Watkins LLP, with whom were Dean W. Baxtresser, David Hazelton, Kyle R. Jefcoat, and Anne W. Robinson
