Observations on the Federal Circuit’s Impact on Bid Protest Litigation Since the ADRA
James J. McCullough[*]
Michael J. Anstett[*]
Brian M. Stanford[*]
TABLE OF CONTENTS
I. Introduction 3
II. The Federal Circuit’s Early Post-ADRA Protest Decisions 161211
III.. The Federal Circuit’s Record in Resolving Conflicts 211716
A. Implied-in-fact Bid Protest Jurisdiction 221817
B. Protest Timeliness 292322
C. Scope of Record for Review 322524
D. Other Open Issues 342725
IV. The Federal Circuit’s Impact on the U.S. Government Accountability Office 372928
V. Conclusion 403331
I. Introduction
The year was 1982, the United States Court of Appeals for the Federal Circuit had recently been created by the Federal Courts Improvement Act,[1] and the court had just begun to exercise appellate jurisdiction over appeals from the newly constituted United States Claims Court— (which would becomenow the United States Court of Federal Claims (COFC))[2] —and the General Services Administration Board of Contract Appeals (“GSBCA”).[3] Although disappointed bidders still had two other venues in which to file bid protests, —the U.S.nited States district courts and the United States General Accounting Office, (“GAO”) (which would become the Government Accountability Office (GAO)[4]), —the consolidation of the Federal Circuit’s appellate jurisdiction over appeals from the Claims Court and the GSBCA had squarely positioned the Federal Circuit to become the preeminent arbiter of bid protest issues.[5] However, IiIn its early years, however, however, the Federal Circuit issued only a handful of bid protest decisions.[6] From 1983 through 1987, the Federal Circuit issued published opinions in only 11 bid protest cases (6 six arising out of the Claims Court).[7] Yet, even even as while the court gained its sea legs, the potential was there was potential potential for the Federal Circuit to have a profound impact on bid protest law was there.[8]
Much has changed since those early days of the Federal Circuit and its emerging role in bid protest jurisprudence.[9] The Federal Circuit is no longer just the “principal” appellate tribunal for bid protests.[10], Iit is, de facto, the appellate tribunal for all bid protest cases.[11] The passage of the Administrative Dispute Resolution Act of 1996 (“ADRA”),[12] and the expiration in 2000 of district court jurisdiction over bid protests in 2000, have left the Federal Circuit as the sole appellate court for bid protest appeals.[13] If in 1987, the court was poised to have a significantly influence on the development of bid protest law and to bring clarifyty to an area of the law that was in disarray, surely, in the years following ADRA, the potential for the court to influence bid protest law increased even more after the ADRA.[14]
So now, looking back on the past fifteen years since the Congress passed the age of ADRA, is it worthwhile for bid protest practitioners to ask, how has the Federal Circuit influenced the development of bid protest law?
The Federal Circuit unquestionably has had an impact on the development of bid protest law.[15] With the issuance of Having issued more than 60 published and unpublished decisions in bid protest cases since the ADRA, the Federal Circuit could not avoid shaping the development of bid protest law (even if , in the grand scheme of things, the courtit has authored a relatively small number of bid protest decisions compared relative to other areas of government contract law).[16] But what has been the reach of that impact? Has the Federal Circuit fulfilled its role as the appellate tribunal charged with harmonizing conflicting trial court decisions of the trial courts? Has the Federal Circuit developed a coherent body of case law that allows for efficient and meaningful judicial review of agency procurement decisions? As the de facto Supreme Court[17] for bid protest cases, what has the Federal Circuit done to provide consistent guidance to federal agencies, the Court of Federal Claims (COFC), and other stakeholders in bid protest litigation? The answers to these questions are decidedly a mixed bag.[18]
The ADRA’s jurisdictional grant provided that:
[T]the United States Court of Federal Claims . . . shall have jurisdiction to render judgment on an action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement. [T]he United States Court of Federal Claims . . . shall have jurisdiction to entertain such an action without regard to whether suit is instituted before or after the contract is awarded.[19]
28 U.S.C. §1491(b)(1) (emphasis added). This new jurisdictional provision required sorting out in the years following its enactment, and the Federal Circuit fairly quickly provided some much needed guidance in the wake of the ADRA to establish the basic ground rules for bid protest litigation in the Court of Federal ClaimsCOFC.[20] Specifically, the Federal Circuit provided guidance concerning Court of Federal ClaimsCOFC jurisdiction and standing in bid protests in two early decisions, RAMCOR Services Group, Inc. v. United States, 185 F.3d 1286 (Fed. Cir. 1999),[21] and American Federation of Government Employees, AFL-CIO v. United States, ( 258 F.3d 1294 (Fed. Cir. 2001) (“AFGE”).[22] In RAMCOR, the court broadly construed the ADRA’s jurisdictional grant concerning what types of protests could be brought to the Court of Federal ClaimsCOFC by interpreting the ADRA’s “operative phrase ‘in connection with’” to be “very sweeping in scope” and concluding that the statute was broad enough to allow the COFC to review an agency’s decision to override the automatic stay provision. “‘procurement’ includes all stages of the process of acquiring property or services, beginning with the process for determining a need for property or services and ending with contract completion and closeout.”[23] In AFGE, the court applied the definition of “interested party” used in the Competition in Contracting Act of 1984 (“CICA”)[24] to define who would have standing to pursue a bid protest pursuant to the ADRA to include an “actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract.”[25] The Federal Circuit resolved aA third issue— the proper standard of review for bid protests— was resolved by the Federal Circuit in Impresa Construzioni Geom. Domenico Garufi v. United States.,[26] 238 F.3d 1324 (Fed. Cir. 2001), where In this case, the court made clear that bid protest cases were to be reviewed under the “arbitrary and capricious” standard set forth in the Administrative Procedure Act, 5 U.S.C. § 706(2)(A) (2006).[27]
In these early decisions, the Federal Circuit resolved several of the most pressing issues for the judges of the Court of Federal ClaimsCOFC judges: who could protest, what could they protest, and what standard of review would the be courts applyied by the courts in reviewing those protests.[28] In all three instances, the Federal Circuit brought harmony to conflicting COFC decisions issued by the judges of the Court of Federal Claims.[29]
But that wasthese decisions were just the beginning, and, for the Federal Circuit, there remainesd—and there still remains today, almost fifteen 15 years latersince the early decisionsout, —a number of significant gaps to fill and conflicts for the Federal Circuit to resolve in the area of post-ADRA bid protest litigation.[30] It is a practical reality that, despite the Federal Circuit’s role as the de facto final word on bid protest law, the oracle rarely speaks on such matters.[31] With so few opportunities to consider the nuances of bid protest litigation after the ADRA, the Federal Circuit’s decisions have taken on an almost Delphic aura.[32] And whatever the reason for the relatively few Federal Circuit, bid protest decisions issued by the Federal Circuit since 1997, thise dearth of case law arising from the Federal Circuit has meant that the court has not had nearly the impact it might otherwise have had.[33] Moreover, even when the court has had an opportunity to address open issues squarely—or at least to provide some measure of guidance—the court has consistently declined many of those opportunitiesto do so, leaving the judges of the Court of Federal ClaimsCOFC and the bid protest bar to speculate about what the Federal Circuit might think, without the benefit of authoritative judicial guidance from the only source that can provide it.[34]
Thus, it appears that, as an institution, the Federal Circuit has not lived up to its full potential as the only appellate court (at least for practical purposes) with the ability to provide guidance in bid protest matters. Perhaps the most frustrating aspect of these past fifteen years has been the Federal Circuit’s reluctance to resolve existing conflicts in bid protest law and thewhich results ining significant transactional costs for both federal agencies and government contractors.[35] AndAdditionally, although while it is true that the Federal Circuit cannot reach out and decide all the issues it might want to address, that its constraint in the bid protest context may be aggravated by a very stark trend in the Federal Circuit’s decisional law. —Pprotesters very rarely, if ever, prevail on appeal to the Federal Circuit.[36] Indeed, the number of “wins” (or even partial wins) for protesters that have appealed to the Federal Circuit since the passage of the ADRA can be counted on one hand.[37] Thus, at least for protesters, the outcome of an appeal to the Federal Circuit seems almost predetermined. For protesters, the question is: Why throw good money after a bad outcome? For the Government, however, the message is quite the opposite: When the Government appeals in bid protest cases, the Government generally always wins.[38] Since the enactment of the ADRA, it appears that the Government has prevailed in every bid protest appeal it has taken to the Federal Circuit.[39]
In the discussion that follows, we highlight several of the ways in which the Federal Circuit has had an impacted on the development of bid protest law since the enactment of ADRA.
II. The Federal Circuit’s Early Post-ADRA Protest Decisions
In enacting the ADRA, Congress ushered in a new era of judicial review of federal agency procurement decisions by significantly expanding the bid protest jurisdiction of the Court of Federal Claims COFC and by establishing the Federal Circuit as the sole reviewing authority for bid protests, once following the expiration of the ADRA’s grant of concurrent jurisdiction over bid protests to the district courts expired in 2000.[40] The ADRA fully empowered the Court of Federal ClaimsCOFC with specific statutory jurisdiction, as well as and remedial powers, over both pre-award and post-award protests.[41] Thus, following the enactment of the ADRA, the Federal Circuit became the de facto final forum of appellate review for all bid protests.[42]
In this role, the Federal Circuit generally has taken a broad view of the types of issues that parties can be broughtbring to the Court of Federal ClaimsCOFC, while at the same time taking a more limited view of who has standing to bring those claims and, in the end, the level of scrutiny courts must to be applyied to the actions of federal agency officials.[43]
Thus, Ffor example, the Federal Circuit has been relatively consistent in its viewstance that the ADRA’s jurisdictional grant over protests “objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement” is very expansive.[44] Early on, in RAMCOR Services Group, Inc. v. United States, 185 F.3d 1286 (Fed. Cir. 1999), the court held that “the operative phrase ‘in connection with’ is sweeping in scope.”[45] Adopting the definition of “procurement” set forth in 41 U.S.C. §403(2), the court concluded that the phrase “in connection with a procurement or proposed procurement” covered all stages of the acquisition process, including “the process for determining a need for property or services.”[46] Thus, in RAMCOR, the court held that the ADRA authorized the COFC Court of Federal ClaimsCOFC to hear a protest challenging the override of an automatic stay triggered by the CICA., 31 U.S.C. §3553(c)(1).[47]
On the other hand, the Federal Circuit has taken a narrow view of standing under the ADRA, adhering to CICA’s definition of “interested party” for GAO protests and adopting a standard that is more restrictive than the standing requirements under aArticleIII.[48] This more narrow view of standing in Court of Federal Claims COFC bid protest cases is manifested in the twin requirements that the protester demonstrate that it was an “actual or prospective bidder” and that it was prejudiced by the challenged action.[49] Thus, in AFGE, the court held that the term “interested party” in §1491(b)(1) “is limited to actual or prospective bidders or offerors whose direct economic interest would be affected by the award of the contract or by failure to award the contract.”[50] By construing the term “interested party” in accordance with the definition set out in CICA— thus requiring protesters to be “actual or prospective bidders” and to possess a “direct economic interest that would be affected by the award of the contract or by the failure to award the contract”[51]— the Federal Circuit has confirmed that, in the post-award protest context, the protester needs to have, at a minimum, submitted a timely proposal in a competitive procurement.[52] With respect to sole source procurements, the Federal Circuit has held that a protester must show that it was at least a minimally qualified bidder.[53] Finally, in addressing the requisite degree of prejudice (which the Federal Circuit confirmed as a “necessary element of standing”),[54] the court has required a threshold showing of harm by way of a protester’s “substantial chance” of receiving a contract award that was thwarted due to the Government’s alleged error.[55]