Sometimes Meeting the Legal Definition of What is Economic Interested Party in Bid Protest Litigation is not Always Simple. If you are contemplating filing a bid protest, you must first be sure that you are an interested party. If you are not, the case will be dismissed.
The Federal Circuit borrowed the interested party legal definition from the Competition in Contracting Act, which “explicitly defines the term ‘interested’ as ‘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.’” Am. Fed’n of Gov’t Emps., AFL-CIO v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001) (quoting 31 USC 3551(2)).
Not all persons or companies are interested parties. When you file a bid protest, it takes valuable resources. Therefore, getting this right the first time. Under GAO bid protest regulations the interested party legal definition for a bid protest means that you must be an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or by the failure to award a contract. This definition is also similar to bid protests filed at the Court of Federal Claims (COFC).
Any interested party may file a protest against the government if they feel that a contract has been awarded inappropriately, the agency violated procurement law or the agency acted unreasonably. An party may protest the agency solicitation or another request by a Federal agency for offers for a contract for the procurement of property or services; the cancellation of such a solicitation or other request; an award or proposed award of such a contract; and a termination of such a contract, if the protest alleges that the termination was based on improprieties in the award of the contract.
In addition, knowing how to file a protest means that you must articulate that if GAO or COFC sustained the protest, you would have a substantial chance of getting the award. Examples of being “interested” would be:
- Your proposal is within the competitive range and the government unreasonably evaluated your technical proposal.
- An unduly restrictive pre-award solicitation and you would have submitted a proposal but for the Agency error.
- You were excluded from further consideration but the Agency made a mistake.
A common hurdle for meeting the definition of what is an interested party is when your company has already been excluded from competitive range. Unless you have challenged the exclusion, waiting until post-award can create an uphill battle for meeting the interested party protest definition.
Note: If your company would not be in line for award in the event your protest is sustained, you will lack the direct economic interest necessary to maintain bid protest interested party status. See PAE Gov’t Serv’s., Inc., B-407818, Mar. 5, 2013, 2013 CPD ¶ 91 at 3.
Examples of Contractors That Did Not Meet the Legal Definition of an Interested Party In a Bid Protest
In the bid protest context at the Court of Federal Claims, the standing issue required for filing a bid protest is carved out by the Tucker Act. This statute allows subject matter jurisdiction at the Court of Federal Claims over a bid protest brought by an “interested party.” See 28 USC 1491(b)(1).
The law here does not fully explain what is standing to bring a bid protest. However, the requirement for an interested party has been interpreted as “impos[ing] more stringent standing requirements than Article III.” Weeks, 575 F.3d at 1359 (citing Am. Fed’n of Gov. Employees v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001)).
One of the requirements to meet the legal definition of standing from an interested party is to also demonstrate prejudice. Myers, 275 F.3d at 1370 (“[P]rejudice (or injury) is a necessary element of standing.
To Meet the Interested Party Definition in Bid Protest Regulations, You Must Show Prejudice
When deciding how to file a protest, you should also we cognizant of the additional requirement to show prejudice. What does this mean? The easier explanation is that even if you can prove that the contracting agency committed error in the procurement, then to be an interested party, you must also show that your company was harmed or injured. In other words, you still have to show that the procurement errors caused prejudice.
How to File a Protest Under COFC and GAO Bid Protest Regulations – Teaming Partners or Subcontractors Do not Meet the Interested Party Definition
If you are a teaming partner or a subcontractor to the prime in a government contract proposal, you will have a hard showing that you meet the legal definition of what is an interested party.
Even if your proposal shows that the “team” as a whole would provide the proposed solution, this by itself will not allow you to file a bid protest and meet the interested party legal definition.
Under COFC and GAO protest regulations, there is simply no privity of contract between you as the teaming partner/ subcontractor and the federal government. Although the reality is that you will gain revenues from the award, you generally cannot establish your rights as an interested party in a GAO bid protest. See (Integral Systems, Inc., B-405303.1, August 16, 2011).
Technically Unacceptable Bidders Have No Economic Interest
Oftentimes, government contracting agencies will exclude your proposal as being technically acceptable. If you have not challenged that decision before the award, you will have a hard time showing that you are an interested party in protest because you will not convince GAO that you are next in line for award. See (DynCorp International LLC, B-294232; B-294232.2, September 13, 2004).
No Interested Party for Debarred Contractors
Since a proposed debarred contractor generally is not eligible for the award of a federal contract, Federal Acquisition Regulation § 9.405(a), such a protester would not be in line for contract award even if its protest were sustained.
You simply cannot show how you will be in line for the award to meet the interested party legal definition. See (Triton Electronic Enterprises, Inc., B-294221; B-294248; B-294249, July 9, 2004).
Court of Federal Claims Interested Party Legal Definition Requirements
To meet the interested party legal definition in a COFC bid protest, the action must first “in connection with a procurement or a proposed procurement[,]” The legal requirements of 28 USC 1491(b) also requires that you, the plaintiff, to be an “interested party” to proceed with a bid protest in the Court of Federal Claims. See, 28 USC 1491(b).
Even the Federal Circuit held in Distributed Solutions that a plaintiff is an “interested party” under § 1491(b) if it establishes that “(1) it was an actual or prospective bidder or offeror, and (2) it had a direct economic interest in the procurement or proposed procurement.” 539 F.3d at 1344 (citation omitted).
The legal definition of what is an interesed party under COFC and GAO bid protest regulations are factual and complex. Given the short deadlines to file a protest or even intervene, you want to get proper advice to protect your rights.
For additional help or representation with the interested party definition and economic protest parties definition in COFC and GAO bid protest regulations, call our bid protest lawyers at 1-866-601-5518.