Bannum, Inc. v. United States , 779 F.3d 1376 ( 2015 )

United States Court of Appeals
for the Federal Circuit
______________________
BANNUM, INC.,
Plaintiff-Appellant
v.
UNITED STATES AND DISMAS CHARITIES, INC.,
Defendants-Appellees
______________________
2014-5085
______________________
Appeal from the United States Court of Federal
Claims in No. 1:14-cv-00140-MCW, Judge Mary Ellen
Coster Williams.
------------------------------------------------------------------
BANNUM, INC.,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2014-5086
______________________
2 BANNUM, INC. v. US
Appeal from the United States Court of Federal
Claims in No. 1:14-cv-00040-NBF, Judge Nancy B. Fire-
stone.
______________________
Decided: March 12, 2015
______________________
JUSTIN HUFFMAN, Camardo Law Firm, P.C., Auburn,
NY, argued for plaintiff-appellant in 2014-5085 and 2014-
5086. Also represented by JOSEPH A. CAMARDO, JR.
ANTONIA RAMOS SOARES, Commercial Litigation
Branch, Civil Division, United States Department of
Justice, Washington, DC, argued for defendant-appellee
United States in 2014-5085 and 2014-5086. Also repre-
sented by RUSSELL J. UPTON, JOYCE F. BRANDA, ROBERT E.
KIRSCHMAN, JR., DONALD E. KINNER.
ALEXANDER D. TOMASZCZUK, Pillsbury Winthrop Shaw
Pittman LLP, McLean, VA, argued for defendant-appellee
Dismas Charities, Inc. in 2014-5085. Also represented by
ALEXANDER BREWER GINSBERG.
______________________
Before TARANTO, CLEVENGER, and CHEN, Circuit
Judges.
TARANTO, Circuit Judge.
Bannum, Inc. protests decisions of the Bureau of Pris-
ons of the United States Department of Justice to award
two contracts to other bidders. In two actions brought in
the Court of Federal Claims, Bannum complained that
the awards were improper, alleging a common defect in
the terms of the solicitations and, also, problems in the
evaluation of competing bids. In each case, the Court of
Federal Claims dismissed Bannum’s suit. Finding that
Bannum’s proposal, by failing to commit Bannum to a
BANNUM, INC. v. US 3
fixed price, was materially out of compliance with the
terms of the solicitation, the court concluded that Ban-
num was not an “interested party” entitled to bring its
protest under 28 U.S.C. § 1491(b).
We affirm the dismissals of Bannum’s suits, but on a
different basis. We conclude that, because Bannum did
not adequately present its objection to the solicitations
before the awards, Bannum waived its ability to challenge
the solicitations in the Court of Federal Claims. We also
conclude that, on appeal, Bannum failed to preserve its
separate challenges to the bid evaluations. We do not
reach the “interested party” ground of the Court of Feder-
al Claims’ decisions.
BACKGROUND
In the first of the two separately filed protest actions
before us on appeal, Bannum protests the government’s
award of a fixed-price, indefinite-delivery, requirements-
type contract to intervenor Dismas Charities, Inc., for the
operation of a residential reentry center for federal of-
fenders in Tupelo, Mississippi. The government pub-
lished the solicitation, Request for Proposals (RFP) No.
200-1168-SE, in February 2012, inviting interested bid-
ders to submit initial proposals by April 23, 2012. Only
Bannum and Dismas submitted offers.
Over the next fifteen months, the government sent
notices to the two bidders altering the contract require-
ments and requesting updated proposals. Amendment
No. 5, issued in February 2013, added a requirement that
the facility be operated in compliance with the Prison
Rape Elimination Act of 2003 (PREA), 42 U.S.C.
§§ 15601–15609. The government asked both bidders to
sign the amendment and submit a final proposal revision,
including any necessary changes in price.
Whereas Dismas evidently signed the amendment
without further ado, Bannum responded with a six-page
4 BANNUM, INC. v. US
letter labeled “Final Proposal Revision #3 and AGENCY
PROTEST,” in which it restated its earlier price proposal
and noted that those prices “do not, and cannot, reflect
any consideration for the effects of Amendment 5” because
of the “enormous amount of information [that] is required
prior to pricing this new contract requirement.” 14-5085
J.A. 11109. Bannum attached a signed copy of Amend-
ment No. 5, placing an asterisk next to the term requiring
PREA compliance and stating: “Subject to and limited by
Bannum’s response to [Final Proposal] #3 . . . submitted
herewith; also, subject to Bannum’s reservation of all
rights and protests.” Id. at 11115–16. Bannum repeated
its objection four months later, when the government
asked the bidders for final bids that confirmed their
pricing after incorporating updated wage rates. On July
19, 2013, the contracting officer evaluated the offers, and
on August 26, 2013, the government awarded Dismas the
contract.
In September 2013, after the award, Bannum filed a
protest with the Government Accountability Office (GAO),
alleging defects in the government’s evaluation of the
proposals. When its GAO protest failed, Bannum filed
suit in the Court of Federal Claims on February 19, 2014,
seeking a preliminary injunction to prevent implementa-
tion of the contract. Bannum again challenged the bid
evaluation as flawed and added a new allegation that the
solicitation itself was “materially defective” because of the
PREA-compliance requirement and the government’s
refusal to provide pricing guidance. 14-5085 J.A. 26. The
court denied Bannum’s request for preliminary relief.
Bannum, Inc. v. United States, 115 Fed. Cl. 257, 275
(2014). In a memorandum opinion issued several weeks
later, the court granted motions (by the government and
Dismas) to dismiss the case, concluding that Bannum was
not an “interested party” under § 1491(b) because it
submitted a bid that was materially out of compliance
with the terms of the solicitation. Bannum, Inc. v. United
BANNUM, INC. v. US 5
States, 115 Fed. Cl. 148, 155–56 (2014). Accordingly, the
court lacked jurisdiction to hear Bannum’s suit. Id. at
156.
Bannum’s second action differs from its first only in
ways we deem immaterial. The solicitation, RFP No. 200-
1182-SE, involves a different place of performance (Flor-
ence, South Carolina), a different competitor (the Alston
Wilkes Society, Inc.), and several minor differences in the
scope of work and evaluation criteria. But the procure-
ment followed essentially the same path as the Mississip-
pi procurement. The government amended the
solicitation to require PREA compliance, and Bannum
responded by explaining its inability to price PREA
compliance and clarifying that it “reserve[d] all rights to
[requests for equitable adjustments], Claims, and Pro-
tests,” 14-5086 J.A. 10882, though without featuring the
word “protest” as prominently as in its correspondence in
the Mississippi case, id. at 10876.
On August 8, 2013, the government evaluated the
bids and awarded the contract to Alston Wilkes. Bannum
filed a protest with the GAO on August 20, 2013, assert-
ing only that the government’s evaluation process was
flawed. The GAO denied the protest in November 2013,
and Bannum filed suit in the Court of Federal Claims on
January 16, 2014. As in the Mississippi action, Bannum
reasserted its challenge to the evaluation process and
newly argued that the solicitation itself was materially
defective.
Both sides moved for judgment on the administrative
record, and the government moved separately to dismiss
for lack of jurisdiction. The court granted the govern-
ment’s motion to dismiss, concluding that, because Ban-
num submitted a non-compliant proposal, it lacked the
economic interest in the outcome of the award necessary
to mount a protest under § 1491(b). Bannum, Inc. v.
6 BANNUM, INC. v. US
United States, No. 14-CV-40, 2014 WL 1373739, at *4–5
(Fed. Cl. Apr. 8, 2014).
Bannum timely appealed both decisions. We have ju-
risdiction under 28 U.S.C. § 1295(a)(3). We consolidated
the cases for oral argument and now decide them togeth-
er.
DISCUSSION
28 U.S.C. § 1491(b) grants the Court of Federal
Claims “jurisdiction to render judgment on an action by
an interested party objecting to” a solicitation or contract
award made by a federal agency. We review the Court of
Federal Claims’ legal conclusions de novo and its factual
findings for clear error. Daewoo Eng’g & Const. Co. v.
United States, 557 F.3d 1332, 1335 (Fed. Cir. 2009).
Where, as here, no material facts are in dispute, we
review the Court of Federal Claims’ determination of its
own jurisdiction without deference. Taylor v. United
States, 303 F.3d 1357, 1359 (Fed. Cir. 2002).
Because Bannum’s two distinct grounds for protesting
the awards—(a) a defect in the solicitations and (b) de-
fects in the bid-evaluation process—entail different reme-
dies and are subject to different legal standards, see
COMINT Sys. Corp. v. United States, 700 F.3d 1377, 1382
n.4 (Fed. Cir. 2012), we address them separately.
A
A bidder that challenges the terms of a solicitation in
the Court of Federal Claims generally must demonstrate
that it objected to those terms “prior to the close of the
bidding process.” Blue & Gold Fleet, L.P. v. United States,
492 F.3d 1308, 1315 (Fed. Cir. 2007). If it cannot do so,
the bidder “waives its ability to raise the same objection
afterwards in a § 1491(b) action.” Id.; see also COMINT,
700 F.3d at 1381–82.
BANNUM, INC. v. US 7
It is undisputed that the government received notice
of Bannum’s dissatisfaction with the PREA-compliance
requirement before awards were made. We conclude,
however, that mere notice of dissatisfaction or objection is
insufficient to preserve Bannum’s defective-solicitation
challenge. The solicitations at issue and the governing
regulations put Bannum on notice of the formal require-
ments for filing a “protest” that would trigger an agency
obligation of response and prompt resolution. Bannum
did not comply with those requirements; nor did it pursue
other available means of formal protest (e.g., to the GAO
or the Court of Federal Claims) until after the awards. In
these circumstances, it waived its solicitation challenges.
Our waiver rule implements Congress’s directive in
the Administrative Dispute Resolution Act (ADRA) of
1996, Pub. L. No. 104-320, § 12, 110 Stat. 3870, 3874, that
courts “shall give due regard to . . . the need for expedi-
tious resolution” of protest claims. 28 U.S.C. § 1491(b)(3);
see Blue & Gold, 492 F.3d at 1313. A waiver rule imple-
ments this statutory mandate by reducing the need for
the “inefficient and costly” process of agency rebidding
“after offerors and the agency ha[ve] expended considera-
ble time and effort submitting or evaluating proposals in
response to a defective solicitation.” Blue & Gold, 492
F.3d at 1314 (internal quotation marks and citation
omitted). In this context, clarity is not just readily
achievable but important. Requiring that the prescribed
formal routes for protest be followed (to avoid waiver)
reduces uncertainty about whether the issue is joined and
must be resolved, and thereby helps prevent both the
wasted and duplicative expenses (of all bidders and the
government) and the delayed implementation of the
contract that would likely follow from laxer standards of
timely presentation of solicitation challenges.
In COMINT, we suggested that filing a formal, agen-
cy-level protest before the award would likely preserve a
protestor’s post-award challenge to a solicitation, 700 F.3d
8 BANNUM, INC. v. US
at 1382, as might a pre-award protest filed with the GAO,
id. at 1383 (citing 4 C.F.R § 21.2 (“Protests based upon
alleged improprieties in a solicitation . . . shall be filed
prior to bid opening or the time set for receipt of initial
proposals.”) (emphasis added)). The rules applicable to
both GAO protests and agency-level protests make clear
why that should be so. The filing of a protest grants
protestors certain remedies (a stay of award) and ensures
that the government will resolve the matter in a timely
fashion.
In the GAO, the act of filing a protest generally trig-
gers an automatic stay of any award of the contract, 31
U.S.C. § 3553(c)(1), and requires the GAO to issue a
decision within 100 days, § 3554(a)(1); see also
§ 3554(a)(2) (requiring the Comptroller General to provid-
ed expedited review in certain cases). The Justice De-
partment’s acquisition regulations, promulgated in 1998
after an executive order directed agency heads to “provide
for inexpensive, informal, procedurally simple, and expe-
ditious resolution of protests,” Exec. Order No. 12979, 60
Fed. Reg. 55171, 55171 (Oct. 25, 1995), provide similar
guarantees. See 63 Fed. Reg. 16118, 16133 (Apr. 2, 1998).
Bidders that file a formal protest are entitled to a sched-
uling conference within five days of filing, an automatic
stay of the award pending disposition of the dispute, and
a guarantee of prompt resolution of the protest. See 48
C.F.R. § 2852.233-70(e), (i), (j).
Bannum does not dispute the availability of those
means for presenting and ensuring responses to solicita-
tion objections before an award is made, and at least two
of the means—a GAO protest and an agency-level pro-
test—were explicitly set forth in the solicitations at issue.
Nor does Bannum contend that its objections amounted to
a formal protest. Oral Argument at 11:45–12:05, Ban-
num, Inc. v. United States, 2014-5085, -5086 (“Bannum
did not submit a formal protest but it did . . . multiple
times ask for guidance.”). Bannum also has not chal-
BANNUM, INC. v. US 9
lenged any of the procedures made available to it as
unduly burdensome or impractical, or asserted that there
was good cause for excusing its failure to comply with
them. See COMINT, 700 F.3d at 1382 (failure to mount a
pre-award protest may be excusable where doing so “is
not practicable”).
Having failed to follow any of the various protest pro-
cedures available to bidders for swiftly resolving objec-
tions to the terms of the solicitation, Bannum cannot raise
the same challenge in the Court of Federal Claims now
that an award has been made. Bannum waived the
solicitation challenge by not properly raising it before the
close of bidding. See Blue & Gold, 492 F.3d at 1314. We
therefore need not address whether, regarding its solicita-
tion challenge, Bannum is an “interested party” under our
case law, which itself has taken into account, in certain
circumstances, whether a party has timely presented and
diligently pressed its protest. See, e.g., CGI v. United
States, No. 2014-5143 (Fed. Cir. Mar. 10, 2015).
B
Our conclusion that Bannum waived its challenge to
the terms of the solicitation does not dispose of the sepa-
rate question of whether, once we accept the PREA-
compliance requirement as beyond dispute, we should
conclude that Bannum is nevertheless an “interested
party” under § 1491(b) with standing to protest the alleg-
edly defective evaluation processes. As the government
agreed at oral argument, at least as a general matter, a
bidder cannot be expected to challenge an agency’s evalu-
ation of bids, in contrast to the terms of solicitation, until
the evaluation occurs. See Oral Argument at 29:14–29:43.
We need not address Bannum’s bid-evaluation challenges,
however, because we conclude that Bannum has failed to
preserve those challenges on appeal.
In its complaints, Bannum pleaded grounds for pro-
test that fall into two categories: a defect in the solicita-
10 BANNUM, INC. v. US
tions; and defects in the bid-evaluation processes. The
Court of Federal Claims in both cases ruled on Bannum’s
protest without treating the two types of grounds for
protest separately. It concluded in both cases that, be-
cause Bannum submitted a materially non-compliant bid,
its offer could not form the basis for a proper award and,
consequently, that Bannum lacked standing to challenge
any aspect of the procurement process.
On appeal, however, Bannum rests its argument for
standing exclusively on its challenge to the solicitation,
contending that, if it were to succeed in that challenge,
“the [government] would be obligated to rebid the con-
tract, and Bannum would have the opportunity to com-
pete in the resolicitation.” 14-5085 Appellant Opening Br.
7; 14-5086 Appellant Opening Br. 10 (identical language);
see also 14-5085 Appellant Opening Br. 6, 9 (Bannum
seeks “resolicitation of the contract”); 14-5086 Appellant
Opening Br. 11, 12. Bannum has not argued to us that
the denial of standing must be reversed, in any event, as
to its defective-evaluation challenges, which it did not
meaningfully mention in its briefs on appeal—either in its
opening briefs or, when responding to the government’s
waiver argument, in its reply briefs. Bannum has not
contended that it has standing independent of the resolic-
itation remedy it seeks or that resolicitation would be the
result of a successful challenge to the evaluation process-
es. It has focused entirely on the solicitation challenge
and has not asserted that, even if it cannot press that
challenge, it nevertheless is entitled to reversal of the
denial of standing to press its evaluation challenges.
“An issue that falls within the scope of the judgment
appealed from but is not raised by the appellant in its
opening brief on appeal” may properly be deemed waived.
Engel Indus., Inc. v. Lockformer Co., 166 F.3d 1379, 1383
(Fed. Cir. 1999); see Becton Dickinson & Co. v. C.R. Bard,
Inc., 922 F.2d 792, 800 (Fed. Cir. 1990). We see no reason
to depart from that practice here.
BANNUM, INC. v. US 11
AFFIRMED