Protest challenging evaluation is dismissed for lack of standing. The court found that the protester did not have a substantial chance of receiving award. The protester had submitted a noncompliant proposal, and its price greatly exceeded available funding. Moreover, the protester had waived several arguments that were effectively challenges to the solicitation that should have been raised before the proposal deadline.
Background
NASA has a multi-phase acquisition for travel to the Moon called the Human Landing System (HLS) procurement. In the first phase of the procurement, NASA awarded contracts to develop preliminary HLS designs. Blue Origin Federation, LLC and Space Exploration Technologies Corp (SpaceX) each received initial design contracts.
NASA issued a solicitation to the design awardees for the next phase of the HLS procurement. The solicitation expressly stated that awards were contingent on agency funding.
Blue Origin and SpaceX submitted phase two proposals. Blue Orgini’s price was about $6 billion. SpaceX’s price was $2.9 billion. After NASA received proposals, Congress only appropriated $850 million to the HLS program. As a result, NASA concluded it did not have enough funding to negotiate with Blue Origin. While SpaceX’s price exceeded the available funding, NASA did not find its price insurmountable. NASA selected SpaceX for award and conducted post-selection negotiations, allowing SpaceX to reduce its price.
Following the selection of SpaceX, Blue Origin filed a protest with the Court of Federal Claims, alleging various evaluation errors. SpaceX intervened. The government moved to dismiss.
Legal Analysis
- Blue Origin Lacked Standing — The government alleged Blue Origin did not have a substantial chance of receiving an award and thus lacked standing. The court agreed. In the solicitation, NASA had expressly reserved the right to not award any contracts depending on available funding. Blue Origin’s price greatly exceeded the available funding. NASA could not select Blue Origin at the company’s proposed price or anything close to it. What’s more, Blue Origin’s proposal was noncompliant; the company had proposed advance payments, which were explicitly prohibited by the solicitation.
- Blue Origin Didn’t Have Standing Under a Hypothetical Alternative Proposal — Blue Origin argued NASA had waived solicitation requirements, and that if the company had known about the waived requirements, it would have submitted a different proposal. Blue Origin contended that this alternate proposal would have received higher ratings, a lower price, and a chance at receiving award. The court found that Blue Origin could not base standing on a speculative proposal with hypothetical pricing and technical ratings. Blue Origin could not just submit an over-priced, ineligible proposal and then claim that had it known what the agency wanted, it would submitted a better proposal.
- Blue Origin Waived Arguments — The court further found that Blue Origin had waived several of its arguments under the Blue & Gold rule. For instance, Blue Origin complained that NASA had waived solicitation requirements, but the court found that this argument was quibbling with a patent solicitation ambiguity that should have been raised before the proposal deadline. Likewise, Blue Origin alleged NASA should have amended the solicitation when Congress reduced funding for the HLS program. The solicitation, however, had stated awards were dependent on funding. If Blue Origin had a problem with this, it should have raised the issue before submitting a proposal.
- Challenges to the Evaluation Lacked Merit –– Although Blue Origin lacked standing, the court analyzed the merits of Blue Origin’s arguments—i.e., waiver of solicitation requirement, failure to amend, disparate evaluation, unequal discussions—and found none of them compelling.
Blue Origin is represented by Scott E. Pickens, Scott N. Godes, and Matthew J. Michaels of Barnes & Thornburg LLP. The intervenor, SpaceX, is represented by Kara L. Daniels, Mark D. Colley, Nathaniel E. Castellano, and Aime JH Joo of Arnold & Porter Kaye Scholer LLP. The government is represented by Anthony F. Schiavetti of the Department of Justice as well as Allison N. Genco and Brian M. Stanford of the NASA
