Recent Federal Circuit Decisions Portend Potential Sea Changes in Bid Protest and Contract Disputes Act Litigation
Recently, the U.S. Court of Appeals for the Federal Circuit issued decisions in two bid protest cases that have potentially significant ramifications for bid protest practice as well as Contract Disputes Act (CDA) litigation. In these cases, the Federal Circuit has held that matters previously considered to be jurisdictional are, instead, issues of nonjurisdictional "statutory standing" or "claim-processing rules," and so can be waived by the government. This increases the likelihood that bid protest cases will be resolved on their merits instead of jurisdictional technicalities and indicates that in future cases, the Federal Circuit may similarly find that analogous CDA "claim-processing rules" are not jurisdictional and thus overturn existing precedent to the contrary in that context as well.
The first of the two recent cases is CACI, Inc.-Federal v. United States, General Dynamics Mission Systems, Inc., Sierra Nevada Corporation, 67 F.4th 1145 (Fed. Cir. 2023). In CACI, the Federal Circuit found that whether or not a protester is an "interested party" for standing purposes under the Tucker Act, 28 U.S.C. § 1491, (i.e., whether it is 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") does not implicate the court's Article III subject-matter jurisdiction, but rather is a question of so-called "statutory standing." 67 F.4th at 1151. In so doing, the court made clear that "our prior caselaw treating the interested party issue as a jurisdictional issue…is no longer good law in this respect." Id. Moreover, because the issue of whether a protester has been prejudiced is related to the issue of statutory standing, the Federal Circuit overruled its prior cases on this subject as well, holding that "prejudice is no longer jurisdictional unless it implicates Article III standing." Id. at 1153.1
The second case is M.R. Pittman Group, LLC v. United States, No. 2021-2325 (Fed. Cir. May 22, 2023), issued just twelve days after CACI. Pittman involved the issue of whether the rule established by Blue & Gold Fleet, L.P., v. United States, 492 F.3d 1308 (2007), under which protesters must challenge patent errors in a solicitation prior to the close of bidding or be found to have waived them, is jurisdictional. The Federal Circuit found that the Blue & Gold rule is not jurisdictional, noting that the U.S. Supreme Court "has stressed a distinction between 'jurisdictional prescriptions' and 'nonjurisdictional claim-processing rules.'" Pittman at 7 (citing Fort Bend Cnty., Texas v. Davis, 139 S. Ct. 1843 (2019)). In so doing, the Federal Circuit concluded that the Blue & Gold rule "is more akin to a nonjurisdictional claims-processing rule since it 'seeks to promote the orderly process of litigation by requiring that the parties take certain procedural step at certain specified times." Id. (quoting Henderson v. Shinseki, 562 U.S. 428, 435 (2011)). Despite finding that the Blue & Gold rule is not jurisdictional, the Federal Circuit nevertheless affirmed COFC's dismissal of the protest, but did so on the basis that the protester had failed to state a claim, rather than for lack of subject matter jurisdiction.
CACI and Pittman mean that, going forward, the questions of interested party, prejudice, and whether a protester has waived its protest rights under Blue & Gold will not provide a basis for COFC to dismiss a bid protest for lack of jurisdiction. Rather, those issues will be considered in resolving whether the protester has failed to state a claim, which means they could be waived if not properly and timely raised.
The CACI and Pittman decisions also indicate that the Federal Circuit is open to revisiting whether the "claim-processing rules" of the CDA and its implementing regulations are jurisdictional or not. Also just last month, during oral argument in the ongoing case of ECC International Constructors, LLC v. Secretary of the Army, No. 21-2323, the Federal Circuit questioned why the requirement that a CDA claim state a "sum certain" is jurisdictional when the CDA does not state the requirement is jurisdictional or even use that phrase.2 If the Federal Circuit finds that the "sum certain" requirement (and perhaps other CDA/Federal Acquisition Regulation (FAR) requirements governing the dispute process) are not jurisdictional, it could similarly lead to COFC and the boards of contract appeals more regularly reaching the merits of a contract dispute. In particular, such a holding would significantly reduce (if not eliminate) the risk that a purported CDA/FAR procedural defect that is not raised until long after the initiation of litigation would lead to dismissal.
If you have any questions about the Pittman or CACI decisions, or bid protests and contract claims generally, please contact one of the Miller & Chevalier attorneys listed below:
1The Federal Circuit in CACI also found that the Court of Federal Claims (COFC) had improperly conducted a de novo review of whether the protester had an organizational conflict of interest and that this issue should have been remanded to the agency for a determination in the first instance. 67 F.4th at 1153. Despite this, the Federal Circuit affirmed COFC's dismissal of the protest on the basis that the Army had reasonably assigned a technical deficiency to CACI's proposal, rendering it incapable of receiving the award.
2The requirement that a claim state a "sum certain" is established by the FAR, not the CDA itself.
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