Protest alleging that the government failed to adhere to the terms of a solicitation is sustained. The protester contended that the government erred by failing to consider technical information from bidders and treating the procurement like a sealed bid acquisition. The court found that the solicitation contained a patent ambiguity concerning when the agency was supposed to evaluate technical information; indeed, the court found the whole evaluation process borderline nonsensical. It was not clear whether the agency was supposed to evaluate technical factors as part of the evaluation or after award as part of a responsibility determination. The protester, however, had failed to challenge this patent ambiguity before bids were due and thus waived the argument. Nevertheless, the court found that the agency ignored the awardee’s failure to submit technical information required by the solicitation and thus erred in awarding the contract to an ineligible bidder.
The Defense Logistics Agency issued a solicitation for the purchase and destruction of military equipment—e.g., tanks, aircraft, practice bombs, etc. The solicitation required the contractor to purchase the military equipment from DLA and then demilitarize or mutilate the property, that is, make it unfit for military purposes. Once the equipment was demilitarized, the contractor would receive title to the scrap material.
Because the solicitation required the contractor to purchase property from the government—instead of the government purchasing goods or services from a contractor—the solicitation provided that award would go to the highest responsible bidder, whose bid, when other factors are considered, was the most advantageous to the government. The solicitation set forth an evaluation process and technical conditions that a bidder had to satisfy before award. But it was not clear when and to whom the process and the conditions applied. The solicitation did not state whether DLA would follow the process in evaluating all the bids, or whether the agency would first identify the highest bidder and then evaluate that single bid under the various technical factors.
DLA received four bids. It awarded the contract to Lamb Depollution, Inc. A losing bidder, HVF West, protested with the COFC, alleging that (1) DLA failed to follow the solicitation because it did not consider technical information from other bidders or when evaluating Lamb, and (2) Lamb failed to provide information required by the solicitation. Lamb intervened. The government and Lamb moved to dismiss the protest, contending that the court lacked subject matter jurisdiction and that HVF lacked standing. In addition, all the parties moved for judgment on the administrative record.
The court first addressed the motions to dismiss. The government and Lamb argued that the court lacked jurisdiction because the COFC only has jurisdiction over protests arising out of procurement. A procurement is the process of acquiring property or services. But in this case, the government and Lamb argued, the government was disposing of property, not acquiring it.
The court noted, however, that it has jurisdiction over mixed transactions, which occur when the government wants a contractor to buy property and provide a service. The court found that this was a mixed transaction. To be sure, the government was selling equipment as part of this arrangement. But the contractor only acquired title to the equipment after it was demilitarized and destroyed. Thus, the contractor was also providing a service—destruction of property—to the government. The court had subject matter jurisdiction.
The government and Lamb also argued that HVF lacked standing to protest. They contended that this was a sealed bid procurement, and that a protester challenging the award in a sealed bid acquisition only has standing if they have the next lowest price and are next in line for award. Here, there were two other bidders that had lower bids than HVF, and HVF had not challenged their eligibility for award.
But the court found that the sealed bid standard did not apply. In assessing a protester’s standing, the court focuses on the allegations in the protester’s complaint. In its complaint, HVF had essentially alleged that this was not a sealed bid procurement; indeed, HVF contended that by failing to evaluate technical factors, DLA had erred by treating the procurement as a sealed bid. Based on its protest theory, the court found that HVF had standing.
The court then turned to the merits of HVF’s protest. HVF first alleged that DLA had erred by not considering the solicitation’s nonprice factors when evaluating bids. Rather, HVF argued, DLA was supposed to conduct a holistic review of each bid and then identify the most advantageous bid. The government, however, argued that DLA was only required to select the highest bid and then evaluate under the technical factors to determine that bidder’s responsibility.
The court determined that the solicitation was susceptible to both interpretations. The court found that the solicitation was rife with inconsistencies and confusing headings. It did not detail any explicit process the agency would use for determining the awardee. The court found that the solicitation was effectively a “Rorschach test”—people could find different meaning in the same clauses. For instance, the solicitation stated that DLA would perform a holistic review of all bids, but it did not require bidders to necessarily submit technical information. The solicitation was therefore ambiguous.
The court found that the solicitation’s ambiguities were glaring. The solicitation’s headings were “borderline nonsensical” when read together and provided no guidance. Additionally, there were disconnects between the headings and the underlying content. What’s more, the solicitation did not offer meaningful process for evaluating bids. Given the obviousness of these errors, the court concluded that the solicitation contained patent ambiguities.
A protester must challenge a patent ambiguity before the close of bidding. HVF, however, did not raise these issues until after award. Thus, the court found that HVF had waived its protest concerning the DLA’s failure to consider nonprice information.
But this did not mean the protest was over. Even if DLA was only required to assess technical criteria after selecting the highest bidder, HVF argued that Lamb had still not satisfied those criteria. The court agreed, finding that Lamb was not eligible for award.
The solicitation required the puschader to submit cost projections to demonstrate their financial capability. Lamb failed to submit cost projections. The government contended that it was able to assess Lamb’s financial capability based on bank statements that Lamb did submit. But the court found this missed the point. The solicitation required DLA to assess financial responsibility based on materials the bidder was required to submit. Lamb failed to submit those materials and thus failed to follow the terms of the solicitation.
The solicitation also required a bidder submit a training, storage, and disposal plan. Lamb did not submit a plan; instead, it submitted a printout form a state environmental agency that simply stated a permit is not required for waste stored for a short period. The printout did not contain any information that DLA required. Moreover, the solicitation did not state that the requirement to submit a storage and disposal plan was optional. Lamb had thus failed to adhere to this solicitation requirement.
Having found that HVF had prevailed on the merits of its protest, the court also found that the company was entitled to injunctive relief. HVF would suffer irreparable injury from losing the contract. Its injury outweighed any harm to the government from a delayed performance. And finally, there was a strong public interest in ensuring that the government followed the terms of a solicitation and choose the most advantageous bidder.
HVF is represented by E. Sanderson Hoe. The intervenor, Lamb, is represented by Shar Bahmani. The government is represented by Margaret Joy Jantzen of the U.S. Department of Justice.
