This month’s bid protest spotlight features a trifecta of decisions from the U.S. Court of Federal Claims.
In MVL USA Inc. v. United States, a consolidated bid protest involving seven protesters, the Court rejected protesters’ plea to direct the rescission of Executive Order (EO) 14063, Use of Project Labor Agreements (PLAs) for Federal Construction Projects, and the regulations pursuant to that EO.
In Gemini Tech Services, LLC v. United States, the Court determined the Army erred in establishing the competitive range prior to holding discussions.
In Kropp Holdings Inc. v. United States, the Court found the Defense Logistics Agency erred in awarding a contract to an untimely proposal.
MVL USA Inc.
PLAs are pre-hire collective bargaining agreements establishing the terms and conditions of employment. In 2022, President Biden signed EO 14063, mandating PLAs in federal construction contracts over $35 million, though President Trump has rescinded this EO.[1] On January 19, 2025, the Court granted plaintiffs’ motion for judgment on the administrative record, holding that several agencies erred in requiring PLAs when the agencies found during market research that PLAs would be anticompetitive, thus violating the Competition in Contracting Act of 1984. Plaintiffs initially sought permanent injunctive relief but disputed whether such relief should take the form of a general or specific injunction against the PLA’s application. The Court, however, did not grant injunctive relief, instead remanding the solicitations to the agencies.
Following corrective action, the protesters sought permanent injunctive relief, requesting the Court to order the government to rescind the EO and the promulgated regulations. According to the plaintiffs, “[a]bsent permanent injunctive relief, [p]laintiffs will suffer irreparable harm if the [g]overnment continues to mandate through the FAR that procurement agencies include the unlawful PLA Requirements in all large-scale construction solicitations on which [p]laintiffs may bid in the future.”
The Court declined. The protesters argued the Court’s jurisdiction to adjudicate the validity of regulations in the context of a Contract Disputes Act claim should enable it to do the same in a bid protest, thereby extending the holding of Boeing Co v. United States, 119 F.4th 17 (Fed. Cir. 2024).
The Court rejected protesters’ expansive reading of Boeing, holding that Boeing does not suggest the Court may order the outright recission of a regulation in a bid protest. The Tucker Act limited the Court’s power in bid protests to the particular procurements before it, and the Court was unconvinced that the Tucker Act permitted the Court to enjoin the government into rescinding the regulations based on future harm in future procurements. Additionally, the Court cited DGR Associates Inc. v. United States, 690 F.3d 1335, 1341 (Fed. Cir. 2012), where the Federal Circuit instructed that the Court lacks authority to invalidate properly promulgated regulations. Reading both cases together in harmony, the Court held that it lacked jurisdiction to vacate or “universally enjoin” the EO and related FAR regulations beyond the specific interested parties and the seven consolidated bid protests challenging the particular procurements before it. And, because the government’s corrective action had removed the challenged PLA requirements from these procurements, there was no further relief the Court was able to provide.
Takeaways
The boundaries of the Tucker Act can only stretch so far. Protesters seeking injunctive relief at the Court can only request a remedy specific to a procurement or proposed procurement. Even if the Court could enjoin an agency from applying a given regulation or EO in a particular way in a particular procurement on behalf of specific interested parties, the Court does not necessarily have jurisdiction to entertain protests seeking to strike down those same regulations or EOs altogether.
Gemini Tech Services, LLC
The FAR permits agencies to conduct discussions prior to award. FAR 15.306(c)(1) provides that “if discussions are to be conducted, [the Agency shall] establish the competitive range.” The FAR further instructs that the competitive range be “comprised of all the most highly rated proposals, unless the range is further reduced for purposes of efficiency.” Suppose all “highly rated proposals” were deemed unacceptable, could the government enter discussions? Although this hypothetical was not entirely applicable to this case, the Court held that the Army improperly entered discussions when its competitive range did not consist of the most highly rated offerors.
The Army issued a FAR Part 15 solicitation on October 3, 2023, contemplating a three-step evaluation and selection process. The Army also reserved the right to conduct discussions at any point.
To be considered for Step 1, proposals must be technically compliant. The Army would then evaluate proposals for technical acceptability until it assessed at least five offerors or 25 percent of proposals as technically acceptable. The three lowest-priced, acceptable proposals would advance to Step 2. The Army would then evaluate the proposals against recent and relevant performance and conduct a price realism analysis. Proposals receiving a “Substantial Confidence” rating would advance to Step 3, award to the responsible offeror with the lowest total evaluated price.
Six offerors timely submitted proposals for this solicitation, and each advanced to Step 1. Trouble ensued. The Army found all six proposals were technically unacceptable. After a second round of evaluations, the Army again determined all six proposals unacceptable. After a third round of evaluating the same proposals, Army evaluated Gemini Tech Services, LLC’s (Gemini) proposal as the only technically acceptable submission.
Notwithstanding Gemini’s acceptable proposal, the Army conducted discussions with all six offerors, stating it would be in the best interests of the government to maximize competition and promote efficiency. The Army’s explanation for initiating discussions mistakenly stated that all six proposals were technically unacceptable and that none could proceed to Step 2.
The Army opened discussions with the five technically unacceptable offerors. Each submitted revised proposals, and the Army determined all five to be technically acceptable. The Army then closed discussions, but it reopened so Gemini could submit a final revised proposal, which it opted not to because the Army informed Gemini that its proposal was technically acceptable.
The Army then selected Gemini, JP Logistics, and a third offeror to proceed to Step 2. Both Gemini and JP Logistics received a Substantial Confidence rating, but the third offeror did not. Because it had the lowest total evaluated price, JP Logistics received the award.
Gemini then filed a protest at the GAO, asserting that the Army erred in entering discussions with technically unacceptable offerors. GAO determined that, because the Army reserved the right to conduct discussions at any stage of the evaluation, the Army was permitted to open discussions prior to assessing the final Step 1 evaluation ratings. GAO further found Gemini was not prejudiced by the Army’s decision because Gemini took part in discussions and could not establish that a revision to its proposal would result in a substantial chance for award.
Gemini’s protest at the Court followed.
The sole protest ground before the Court was whether the Army erroneously opened discussions. The Court held that under FAR 15.306(c)(1), the Army erred.
The Court determined that opening discussions to technically unacceptable offerors violated the procedures set in FAR 15.306(c)(1). Although the Army stated it opened discussions for the purposes of efficiency, that explanation was insufficient to establish the competitive range. The Army, the Court explained, was required to analyze how or why the offerors in the competitive range were considered the most highly rated. The Court further held that—to the extent the Army could argue that all offerors were the most highly rated—the Army could not justify opening discussions. The record demonstrated that the opposite was the case: the record revealed that all six offerors were technically unacceptable. The Court then found that Gemini was prejudiced by the Army’s actions as the offeror with the only technically acceptable rating and the second-lowest total evaluated price.
Takeaways
The Court’s decision emphasizes the importance of documentation in justifying agency decisions. Post-hoc rationale will never justify an agency’s decision. Protesting parties, of course, do not have access to the record upon commencing a bid protest at either the Court or the GAO, so arguments relying on insufficient justification may not always succeed. One other difference between GAO and the Court that this case illustrates is how each forum assesses agency conduct. GAO is less likely to sustain a protest where the protested action is something that increases competition, but the Court will likely sustain a protest where the agency conduct involves a violation of regulation.
It is also worth noting that while FAR 15.306(c)(1) does reference “efficiency,” the Army’s rationale—as stated in the opinion—misapplies the term “efficiency.” The FAR is clear that if there are too many offerors with the most highly rated proposals, the agency may reduce the competitive range for efficiency. But, the agency may only do so if it reserved the right in the solicitation. The FAR does not state an agency may expand the competitive range if there are too few most highly rated proposals.
Kropp Holdings Inc.
The “late-is-late” rule—an untimely submission is ineligible for award—has few exceptions. One such exception is the government control exception: an untimely offeror may be accepted if it was received at the “Government installation” designated for receipt of offers and was under the “Government’s control prior to the time set for receipt of offers.” FAR 52.212-1(f)(2)(i). Although protesters typically raise exceptions, this case presents an unsuccessful attempt for the awardee to use the government control exception for an untimely email.
The Defense Logistics Agency (DLA) issued a solicitation with a due date of August 19, 2021, at 10:00 a.m. Eastern Time. The solicitation informed offerors that proposals received after the deadline would be considered late. Timeliness of an offer would be based upon the receipt timestamp on the submission inbox.
Kropp Holdings Inc. (KHI) submitted its proposal on August 18, 2021, and Associated Energy Group (AEG) submitted its proposal on August 19, 2021. As revealed in the Court’s administrative record, AEG’s submissions for two volumes of its proposal, however, had timestamps after 10:00 a.m. The DLA concluded that KHI and AEG were the only acceptable offers and awarded the contract to AEG on June 3, 2022, despite recognizing that AEG untimely submitted two volumes. Following years of back-and-forth protests at the GAO, resulting in several rounds of corrective action, KHI filed its bid protest at the Court.
Relying on the plain language of the solicitation—providing that submissions would be timely based upon the receipt timestamp on the submission inbox—the Court held that AEG’s proposal was late. DLA asserted that AEG’s proposal was timely because the timestamps on the emails themselves demonstrated timeliness. The Court rejected this argument, distinguishing between the email’s timestamp and the submission inbox’s timestamp.
AEG’s reliance on the government control exception fared no better. It asserted the proposal arrived at the government installation—the Defense Information Systems Agency (DISA) server—at 10:00 a.m., and thus, the government control exception would excuse the untimeliness. AEG cited timestamps for the TLS Handshake—a protocol that establishes exchange of server certificates—and a security protocol, to assert that the government timely received the proposal. Skeptical as to whether an email server constituted a government installation, the Court rejected AEG’s argument. First, DISA was not the procuring agency. Second, the Court held that the exception applies when the proposal was submitted prior to the time set for receipt of offers. Neither the TLS Handshake nor the security protocol established that the DLA received the proposal. Instead, these technologies only proved contact between servers, not timely submission.
Takeaways
The GAO does not apply the government control exception to electronic submissions, unlike the Court, which has applied the exception to electronic submissions. In this case, even under the most forgiving interpretation of the exception, the Court did not need to differ from GAO.
The case also presents a scenario where access to the full administrative record at the Court could reveal potential protest grounds that may escape notice at the GAO. Only after four years of litigation did the protester realize that AEG submitted an untimely proposal. Unless a protester requests the timestamps of the proposals at the outset, the GAO record would not include such information.
[1] A district court recently enjoined President Trump’s rescission, so EO 14063 is likely still in effect.
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