Protester Didn’t Submit a Bid by the Proposal Deadline. Why Did the Federal Circuit Hold the Protester Still Had Standing to Protest?

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The agency issued a solicitation seeking items in an unrestricted competition. The protester didn’t submit a proposal. After the proposal deadline, the protester filed a protest with the COFC, arguing that the agency was required to obtain the items from a mandatory source in the AbilityOne program, not through unrestricted competition. The COFC dismissed the protest for lack of standing, finding that because the protester never submitted a bid, it was not a prospective or actual bidder. The Federal Circuit reversed, reasoning that the items the agency sought were listed on the AbilityOne procurement list. The protester was a qualified AbilityOne participant and thus a mandatory source for that item. Therefore, the protester had standing as a mandatory source for that item regardless of whether it actually submitted a proposal.

Sekri, Inc. v. United States, Fed. Cir. 2021-1936

Background

Under the Javits-Wagner-O’Day Act, the government is required to procure certain items and services from nonprofit agencies that employ the blind or otherwise severely disabled. Procurement under the Act is overseen by a committee called the AbilityOne Program. The AbilityOne Program maintains a list of qualified nonprofit agencies that employ the blind and severely disabled. The AbilityOne regulations include a mandatory source requirement: if the government seeks an item or service that can be provided by a nonprofit agency on the AbilityOne list, then the government must procure the item or service from an agency on the list.

The Defense Logistics Agency (DLA) issued a solicitation seeking Advanced Tactical Assault Panels — i.e., harnesses that can be configured to attach magazines, grenades, canteens, or personal pouches. The solicitation was issued on an unrestricted basis. DLA planned to make an award on a best value basis. 

After issuing the solicitation, DLA was contacted by SourceAmerica, a central nonprofit agency in the AbilityOne Program that represents individual nonprofit suppliers. SourceAmerica told DLA that SEKRIi, Inc., a qualified nonprofit in the AbilityOne program, was authorized to provide the tactical panels to the government. DLA, however, refused to acquire the items from SEKRI and instead proceeded with an open competition.

The solicitation period ended on October 7, 2020. SEKRI filed a protest with the Court of Federal Claims in January 2021. The COFC, however, dismissed the protest. The COFC found that SEKRI had not submitted a bid by the proposal deadline and thus was not an actual or prospective bidder with standing to protest. Additionally, the COFC found that because SEKRI had not objected to the solicitation before the proposal deadline, so it had waived its protest under Blue & Gold Fleet, L.P., 492 F.3d 1308 (Fed. Cir. 2007). SEKRI appealed to the Federal Circuit.

Holding

SEKRI Had Standing to Protest

The court held that SEKRI had standing. SEKRI was designated as the mandatory source of the tactical panels. SourceAmerica notified DLA early in the soliciaton period that SEKRI was the mandatory source. Despite this, DLA opted to continue with competitive bid and thus knowingly violated its statutory and regulatory obligation to procure from SEKRI.

To be sure, SEKRI did not submit a bid, but the court reasoned that mandatory sources under the AbilityOne program are not treated the same as other interested parties. SEKRI obtained the right to supply the government by participating in the AbilityOne program, not by being a competitive bidder. Indeed, under the Javits-Wagner-O’Day Act, nonprofits like SEKRI establish their interested party status by being qualified under the AbilityOne Program. As a qualified mandatory source under the AbilityOne program, SEKRI had standing as a prospective bidder.

SEKRI Didn’t Waive Its Protest

The government argued that SEKRI waived its protest under Blue & Gold because it did not file a protest before the proposal deadline. But the court reasoned that a timely agency protest will exempt a case from the Blue & Gold waiver rule. Here, SEKRI, through SourceAmerica, gave notice to DLA that it was a mandatory source of the tactical panels. DLA responded to that notice, stating that it would proceed with an open competition. The court held that this communication amounted to an agency protest that preserved SEKRI’s protest under Blue & Gold.

Sekri is represented by Alan Grayson. The government is represented by Rafique Omar Anderson, Brian M. Boynton, Steven John Gillingham, and Martin F. Hockey, Jr. of the Department of Justice.

Fed Circuit - SEKRI Inc.