Good news on the Catch 22 of Interested Party Status & Whether to submit a Qualification Statement on Sole Source Procurements

October 23, 2012 On October 16th, the United States Court of Federal Claims released its Opinion and Order in the case of IHS Global, Inc. v. United States. In its 19 page decision, the court very briefly addressed one of the more difficult procedural issues facing Protestors who want to challenge sole-source procurements. This is whether to submit a Qualifications Statement or some other response to the sole-source Solicitation that they intend to challenge. In some cases, many Protestors feel that the Qualification Statement will only be used against them later in the bid protest proceedings and that the government has no genuine intent to consider any other offerors. In many cases, the Protestor is right. However, when a Protestor fails to respond to the Solicitation, federal Agency attorneys will sometimes argue that the Protestor waived its bid protest rights because the failure to respond made any award to the Protestor impossible. This is exactly what the United States argued in the IHS Gobal case. Although the United States won on other issues, it lost on that one. This is a big development for bidder's rights because it potentially removes one very large hurdle in the bid protest process for sole-source challenges. Federal law requires that a Protestor be an "interested party" in order to bring a bid protest. An interested party is generally defined as an actual or prospective bidder with the potential to be awarded the particular Solicitation in question. In order to protect themselves from potential bid protests, federal Agencies will oftentimes include language in the Solicitation such as the following:

This notice is neither a request for quotes nor a solicitation of offers, information received will be considered solely for the purpose of determining whether conducting a competitive procurement is in the best interest of the Government. Responses must provide clear and concise documentation indicating a vendor's bona fide capability to provide these services.

This sometimes can place an unwary Protestor into a Catch 22. This is because the Solicitation may be drafted in such a manner that no matter what the Protestor does, the Agency attorneys will be able to argue that the Protestor lost its bid protest rights. Because these Solicitations oftentimes contain little, if any detailed description of the goods or services sought, it may be virtually impossible to submit a properly tailored response. This allows Agency attorneys to argue that the contracting officer exercised reasonable discretion in finding that the Protestor was either nonresponsive or not sufficiently qualified. If a Protestor fails to explain why a competitive procurement is more appropriate in its response, it will oftentimes be deemed unqualified even though it is actually the government's burden to explain why competition would be inappropriate, not the other way around. However, if the Protestor fails to respond to the Solicitation, Agency attorneys may still argue that the Protestor is without standing. Agency attorneys will sometimes argue that the Protestor made an award to it impossible by failing to respond, resulting in a waiver of any bid protest rights. When faced with the question of whether or not to respond to the Solicitation, I have oftentimes advised clients not to respond unless there is a very good reason to do so. Simply filing a very well drafted pre-award bid protest can sometimes be the preferred approach. Although every case is unique, sole-source Solicitations almost always indicate strong Agency bias in favor of the presumptive awardee. This potentially increases the likelihood that any response submitted will be looked at in the light most favorable to the presumptive awardee and could be subsequently used against the Protestor during any bid protest proceedings. Although case law has been very unsettled on this issue, the IHS Global decision now appears to support the position that failure to submit a qualification statement does not necessarily operate as a waiver of bid protest rights. In that case, the court expressly stated that:

if IHS were otherwise a qualified offeror, its failure to submit a timely statement of capability would not constitute an independent bar to its maintaining standing to bring this suit.

Therefore, although every case is unique, the IHS Global decision does help Protestors by possibly leaving them with a few more options in the sole-source bid protest arena. Had the court gone the other way, challenges to sole-source procurements would have become much more difficult. Thankfully, that did not happen. For those of you who need the citation, please follow this link. The court's language on this issue is on the top of page 16.

Good Luck on that next bid!

Frank V. Reilly 101 NE Third Avenue, Suite 1500 Fort Lauderdale, FL 33301 (561) 400-0072 phone frank@frankvreilly.com www.frankvreilly.com