Cgi Federal Inc. v. United States
2015 U.S. App. LEXIS 3685
| Fed. Cir. | 2015Background
- CMS issued 2014 RFQs under an existing Federal Supply Schedule (FSS) for Medicare recovery services, adding payment terms that deferred contractor invoicing until a provider’s appeal passed the second level (typically 120–420 days after demand).
- Under prior contracts contractors invoiced upon actual collection (about 41 days after demand); the revised terms materially delayed payment.
- CGI did not bid; it filed a timely pre-award protest at GAO challenging the payment terms. GAO denied the protest; three business days later CGI filed a protest in the Court of Federal Claims.
- The Court of Federal Claims denied the government’s motion to dismiss for lack of standing but ruled for the government on the merits, holding the payment terms did not violate law or unduly restrict competition.
- The Federal Circuit granted review, holding CGI had standing as a prospective bidder and concluding FAR Part 12 applies to FSS orders, reversing the merits decision and remanding.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing — prospective bidder status | CGI argued it achieved prospective-bidder status by filing a timely GAO protest during the solicitation and diligently pursued relief. | Government argued CGI lost prospective-bidder status because it never submitted a quote and bidding closed during the GAO protest. | CGI was a prospective bidder: timely GAO protest conferred status and it did not lose that status in the brief interval before filing in the Court of Federal Claims. |
| Standing — direct economic interest | CGI argued the payment terms caused it to refrain from bidding, a non-trivial competitive injury redressable by court. | Government argued the terms equally disadvantaged all bidders and thus did not cause a competitive injury to CGI. | CGI demonstrated a non-trivial, redressable competitive injury and therefore had standing. |
| Applicability of FAR Part 12 to FSS orders | CGI argued FAR Part 12 applies to the RFQs/orders for commercial items, prohibiting terms inconsistent with customary commercial practice. | Government and CFC argued FAR Part 12’s proscription does not apply to orders under existing FSS contracts. | FAR Part 12 applies to solicitations/orders for commercial items, including these RFQs under FSS; Part 12 controls any perceived inconsistency. |
| Legality of the revised payment terms | CGI argued the delayed-invoicing terms are inconsistent with customary commercial practice and therefore unlawful under FAR Part 12. | Government contended the terms were permissible for FSS orders and did not violate FAR Part 12. | The revised payment terms violate FAR §12.302(c) because they are inconsistent with customary commercial practice and no waiver was obtained. |
Key Cases Cited
- MCI Telecommunications Corp. v. United States, 878 F.2d 362 (Fed. Cir.) (timely filing during solicitation is required to attain prospective-bidder status)
- Federal Data Corp. v. United States, 911 F.2d 699 (Fed. Cir.) (withdrawing from competition before filing a protest negates prospective-bidder status)
- Rex Service Corp. v. United States, 448 F.3d 1305 (Fed. Cir.) (delay and inaction after agency denial can defeat prospective-bidder status)
- Digitalis Educ. Solutions, Inc. v. United States, 664 F.3d 1380 (Fed. Cir.) (failure to submit required materials and filing after award precludes prospective-bidder status)
- Weeks Marine, Inc. v. United States, 575 F.3d 1352 (Fed. Cir.) (non-trivial competitive injury and redressability support standing)