Clinicomp International, Inc. v. United States
904 F.3d 1353
| Fed. Cir. | 2018Background
- The VA decided to sole-source a nationwide electronic health-record (EHR) contract to Cerner, invoking the public-interest exception to full and open competition; the contemplated contract would deploy and maintain an EHR across ~1,600 VA care sites and include comprehensive clinical and non-clinical services.
- CliniComp, an incumbent VA EHR vendor (serving ~100 facilities), protested in the U.S. Court of Federal Claims challenging the sole-source decision and sought injunctive relief.
- The Claims Court dismissed the pre-award protest for lack of standing, holding CliniComp failed to show a "direct economic interest" because it lacked evidence it could compete for the large, comprehensive contract.
- Key factual deficiencies identified: CliniComp’s limited facility coverage compared to the proposed contract scope and absence of demonstrated experience providing outpatient services and other comprehensive functions the VA required.
- On appeal, the Federal Circuit reviewed standing de novo (fact findings for clear error) and affirmed the dismissal, concluding CliniComp did not show a substantial chance of winning the contract if the procurement were competitive.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing — direct economic interest/substantial chance to win | CliniComp: as incumbent it would lose business and can compete for the contract | Gov/Cerner: CliniComp lacks the experience and scale to be a qualified bidder for the proposed Cerner contract | Court: No standing — CliniComp failed to show it was a qualified bidder or had a substantial chance to win |
| Prejudice standard for pre-award sole-source protests | CliniComp: Weeks Marine standard (non-trivial competitive injury) should apply | Gov: Myers standard (must show could compete; be a qualified bidder) applies; in any event CliniComp fails either test | Court: Applying Myers (and noting Weeks would yield same result), CliniComp did not show prejudice |
| Sufficiency/clarity of contract requirements | CliniComp: Contract requirements are not sufficiently known to show inability to compete | Gov: D&F and record set forth scope (1,600 sites, outpatient and inpatient, etc.); record suffices to evaluate capability | Court: Requirements were sufficiently described in administrative record; CliniComp still failed to show capability |
| Reliance on subcontracting to establish qualification | CliniComp: Could hire subcontractors to perform missing capabilities | Gov: No specifics provided to show viable subcontracting plan | Court: Vague, unsupported subcontracting assertions insufficient to cure lack of standing |
Key Cases Cited
- Diaz v. United States, 853 F.3d 1355 (Fed. Cir.) (defines "interested party" and direct economic interest test)
- Digitalis Educ. Sols., Inc. v. United States, 664 F.3d 1380 (Fed. Cir.) (standing review standards)
- Labatt Food Serv., Inc. v. United States, 577 F.3d 1375 (Fed. Cir.) (prejudice requirement separate from economic interest)
- Myers Investigative & Sec. Servs., Inc. v. United States, 275 F.3d 1366 (Fed. Cir.) (sole-source protest standard: plaintiff must show it could compete/be qualified)
- Weeks Marine, Inc. v. United States, 575 F.3d 1352 (Fed. Cir.) (pre-award challenge: "non-trivial competitive injury" standard)
- Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312 (Fed. Cir.) (prejudice and procurement error standards)
- Tinton Falls Lodging Realty, LLC v. United States, 800 F.3d 1353 (Fed. Cir.) (prejudice treated as fact question)