A Better Leg to Stand On: Federal Circuit Court Eases Way for Protesters to Show Prejudice at COFC

If you’re a contractor thinking about protesting an award decision to the Court of Federal Claims (COFC), you have to show that the agency’s mistake prejudiced you in some way (the same goes for GAO, as we have explored before). That is, you have to show that there was a substantial chance you would have received contract award if not for the agency’s mistake. In a recent decision by the Federal Circuit Court of Appeals, it appears that the COFC will have to give protesters a good bit of benefit of the doubt on this question going forward. We explore that here.

In REV, LLC v. United States, Aptive Res., LLC, 91 F.4th 1156, 1159 (Fed. Cir. 2024), REV, LLC (REV) was a bidder on the VA’s Transformation Twenty-One Total Technology-Next Generation (T4NG) program. The bid process consisted of two steps before a competitive range of potential awardees was chosen. While REV passed the first step, it was eliminated at the second step. REV protested at COFC.

COFC dismissed REV’s protest in part for lack of prejudice. The COFC stated that REV couldn’t just assert it was next in line as there was no guaranteed number of awards. In other words, just because one company perhaps shouldn’t have been given the thumbs up by the VA, that doesn’t mean REV should have been given a thumbs up itself.

The Federal Circuit noted this analysis was mistaken, the VA had indicated it intended to give seven offerors a passing grade at that second step in the evaluation process, and furthermore that the VA’s decision on who would remain in the process was really based on the offerors’ relative ratings.

What’s key for other contractors to understand is the Federal Circuit’s position on what REV needed to show just to meet the prejudice requirement:

In assessing whether a party was prejudiced by purported errors in a procurement process, we must assume that the party will, if permitted to proceed with its claim, prevail on the merits. This means that our analysis assumes that REV would be successful in its challenges to the implementation of the Solicitation. In particular, we presume that the six bidders whom REV targets as having been improperly placed ahead of it – for reasons including organizational conflicts of interest, failure to submit signed veterans employment certifications, and making improper substantive changes to submissions – should have instead been excluded from the second competitive range, just as REV claims.

This is important as it means that just because it might be unlikely that the protest will be successful on all the issues raised doesn’t mean the court should just dismiss the case for lack of prejudice. Such a dismissal would be akin to a court simply saying, “We just don’t believe you,” without even allowing for the facts of the case to be determined. That is improper.

As such, this decision appears to make it far easier to survive a request for dismissal for lack of prejudice at COFC. Essentially, even if it is a longshot that you would actually end up winning on every issue, the court has to presume that you will when deciding on such a dismissal request. Even if there are a bunch of offerors ahead of you in the award decision, if you can make a (reasonable) argument that each one (or some subset of the awardees) should not be ahead of you, the court has to go by that notion at the outset of the case. This makes it more worth taking a chance on bringing a case where you have some reasonable arguments but need to access the record to see if your arguments bear out. So, it is good news for protesters.

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