Protester Lacked Standing to Protest Because Its Proposal Contradicted the Solicitation; Asset Protection & Security Services, L.P. v. United States, Fed. Cir. 2021-1008


Appeal of COFC order dismissing a protest for lack of standing is affirmed. The protester challenged an award, but the COFC found that the protester lacked standing because it had submitted a non-responsive proposal. The Federal Circuit agreed with the COFC. The solicitation had stated that offerors could not rely on the government’s tax exempt status in preparing price proposals. The protester, however, had calculated its price relying on the government’s tax-exemption. The Federal Circuit held that the protester’s proposal had contradicted the terms of the solicitation. The protester was ineligible for award and lacked standing to protest.

U.S. Immigration and Customs Enforcement (ICE) issued a solicitation seeking food and transportation services at a detention center in Arizona. While the solicitation was pending, ICE received a question from an offeror asking if the government would issue a tax exemption certificate so the successful offeror would not have to pay a state business tax. The government responded “Yes.”

Given ICE’s answer, the incumbent, Asset Protection & Security Services, submitted a proposal that relied on the tax exemption certificate and thus did not factor in state taxes.

But after conducting discussions, ICE issued an amendment to the solicitation that corrected it earlier response. ICE clarified that it could not delegate it tax exempt status to contractors and thus would not be issuing a tax-exempt certificate. ICE instructed offerors to revise their price proposals accordingly.

Asset acknowledged receipt of the amendment but informed ICE that its proposal did not require any revisions. Thus, Asset did not revise its proposal to change its reliance on the tax-exempt certificate. Indeed, ICE again clarified the tax-exempt question in another amendment. Again, however, Asset did not revise its proposal.

ICE awarded the contract to Akima Global Services, LLC. Asset filed a protest with the Court of Federal Claims. The COFC dismissed the protest. The court reasoned that Asset had filed a non-compliant price proposal and thus was ineligible. As an ineligible offeror, Asset lacked standing to protest the award. Asset appealed to the Federal Circuit.

The Federal Circuit agreed with the COFC. Asset did not have a substantial chance of winning the contract because its bid was not responsive to the solicitation. Asset’s bid had included information—reliance on a tax-exempt certificate—that expressly contradicted the solicitation’s terms. Having submitted a non-responsive bid, Asset was ineligible for award and thus lacked standing to protest.

Asset argued that its inclusion of the tax-exempt certificate had been a harmless error. Asset noted that the solicitation contemplated a firm-fixed price contract. Thus, Asset’s price was fixed. The inclusion of the tax-exempt certificate did not change Asset’s price, and the company bore the risk of loss on the contract.

The court was still not persuaded. Given the mismatch between terms of the solicitation and Asset’s bid, any agreement formed would have failed to satisfy the requirement of reasonable certainty of terms. This would have created a risk of future litigation under the contract. The government had a substantial interest in not creating an opportunity for litigation based on an erroneous bid it was not obligated to accept.

Asset is represented by David Thomas Ralston, Julia Di Vito, Frank S. Murray, and George Ellsworth Quillin. The intervenor, Akima, is represented by Che Peter Dungan, Roger V. Abbott, and Alfred Wurglitz of Miles & Stockbridge P.C. The government is represented by Daniel B. Volk, Brian Matthew Boynton, Robert Edward Kirschman, Jr., and Douglas K. Mickle.

Fed Circuit - Asset Protection and Security