The court found in a previous decision that the agency erred in awarding a contract to an offeror that was not registered with SAM.gov. But in that decision, the court also found that the protester was not prejudiced by the error because the protester itself was not registered with SAM. The protester appealed and moved for an injunction pending appeal. The court denied the motion, finding that the plaintiff was unlikely to prevail on the merits. To prove prejudice, a protester must show the agency’s error was connected to the protester’s failure to win the contract. Here, the error with SAM registration had played no role in the award decision. The protester had lost the contract due to its high price. Even if the agency had properly handled the SAM issue, the protester still wouldn’t have received the award.
G4S Secure Integration LLC v. United States, COFC No. 21-1817C
Background
The State Department posted a solicitation seeking security services in Angola. The solicitation incorporated FAR 52.204-7, which requires an offeror be registered with the System for Award Management when submitting an offer.
After receiving several proposals, State established a competitive range consisting of two offerors: G4S Secure Integration LLC and CGS-ORSA Security LLC. Following discussions, State awarded the contract to CGS.
G4S filed a protest with the Court of Federal Claims, claiming CGS was ineligible because it violated FAR 52.204-7. CGS was a joint venture. While CGS’s members were registered with SAM, the joint venture entity itself did not have an active SAM registration when it submitted its proposal.
The court, however, found this error was not prejudicial because G4S, which was also a joint venture, had also not registered with SAM. Even if CGS had been ineligible, G4S suffered from the same defect so it would not have been eligible for award either.
G4S appealed to the Federal Circuit and asked the COFC to enter an injunction pending appeal.
Legal Analysis
To obtain an injunction pending an appeal, the movant must prove, among other things, that it is likely to succeed on the merits of its appeal. The court found that G4S had not satisfied this element.
G4S argued that the court had erred in upholding the award to CGS. Instead, G4S contended, the court should have remanded the procurement back to the agency. Because there were no eligible offerors, the State Department would then have to reopen the procurement, and G4S would have had a substantial chance of receiving an award.
But, the court reasoned, a remand would only be necessary if G4S had been prejudiced. The court still did not believe G4S had been harmed by the agency’s error:
- The Agency’s Error Did Not Cause G4S to Lose the Contract – An offeror is only prejudiced by agency error it the error is connected to the protester’s failure to win the contract. Here, there was no connection between the error and G4S’s loss of the contract. Indeed, the offerors’ failure to register with SAM was irrelevant to the award decision. CGS won the contract because it had a lower price. G4S was not prejudiced because its proposal was rejected for different reason than the error, i.e., a higher price.
- Any Alleged Prejudice Was Speculative – There’s no prejudice when there is nothing besides conjecture to support a contention that another evaluation would give the plaintiff a substantial chance at receiving award. Here, the court would have to jump through “multiple theoretical hoops” to find that G4S was in line for award if the case were remanded. Given G4S’s higher price, it was not clear the company had a substantial chance of winning the award.
- Court’s Ruling Was Not Hypocritical – Implicit in G4S’s argument was that the court’s prior ruling was hypocritical because the court had found that the state could not waive FAR 52.204-7, but also that the state had effectively waived that provision. But the court reasoned that his argument conflated an agency’s discretion to waive a formality with the G4S’s burden to prove prejudice. These were two distinct concepts. Even if an agency erroneously waives a requirement, a protester must still prove it was prejudiced by the waiver. G4S, with its higher price, had not established this prejudice.
G4S is represented by Richard P. Rector, C. Bradford Jorgensen, Thomas E. Daley, Ryan P. Carpenter, and Christie M. Alvarez of the DLA Piper LLP. The intervenor, CGS, is represented by Robert Nichols, Michael Bhargava, Madison Plummer, and Andrew Victor of Nichols Liu, LLP. The government is represented by Daniel H. Hoffman of the Department of Justice and John W. Cox of the Department of State.
