118 Fed. Cl. 1
Fed. Cl.2014Background
- EPA issued a sealed-bid IFB (set-aside for an 8(a) firm) to remediate soil at the Omaha Lead Site; bids were due May 8, 2012, with a 90-day minimum bid acceptance period in the solicitation.
- PK Management was low bidder; Coastal Environmental Group (Coastal) was second low. Both bids contained a 60-day entry on the standard form and a 90-day period in the solicitation clause.
- EPA initially found PK non-responsible; SBA issued a Certificate of Competency to PK and required award; EPA awarded the contract to PK on Sept. 26, 2012. Coastal protested at GAO and in this court.
- PK sought termination because delay imposed financial burdens; EPA and PK agreed to terminate the contract for convenience in March 2013. EPA then decided to resolicit rather than revive prior bids, effectively cancelling the original sealed-bid procurement.
- EPA later determined it did not need a new remediation contract (focusing on access agreements instead) and awarded a different, smaller contract. Coastal amended its complaint to challenge EPA’s constructive cancellation as arbitrary, capricious, and in bad faith.
- The Court held Coastal had standing but granted judgment for the government, finding EPA’s constructive cancellation rational and not rebuttably in bad faith.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to bring bid protest | Coastal was an actual bidder and had a substantial chance because PK’s bid was nonresponsive (conflicting 60/90-day periods) | Coastal lacked a substantial chance because its bid also showed a 60-day acceptance period and thus was nonresponsive | Coastal had standing; the solicitation’s Minimum Bid Acceptance Period clause controlled so Coastal’s bid read as 90 days and was not nonresponsive |
| Whether EPA constructively cancelled the procurement | EPA’s decision to resolicit (not revive bids) was a cancellation of the original IFB | EPA argued award to PK concluded procurement and it could not cancel post-award; alternatively, actions were lawful | Court found EPA’s decision to issue a new solicitation constituted a constructive cancellation of the original procurement |
| Whether cancellation lacked rational basis or was arbitrary/capricious | EPA gave no contemporaneous explanation; cancellation before reassessing needs and after treating PK differently suggests irrationality/bad faith | Agency actions are presumptively in good faith; where no regulation required an explanation, presumption stands absent record evidence of bad faith or irrationality | Coastal failed to rebut the strong presumption of good faith; EPA’s cancellation had a rational basis and was permissible (seeking revival of bids is discretionary) |
| Remedy (award to Coastal or other relief) | Coastal sought award to it as next low bidder or injunctive relief restoring the original procurement | Government sought dismissal or judgment for the agency | Court denied Coastal’s relief and granted government judgment; protest dismissed with prejudice |
Key Cases Cited
- Warth v. Seldin, 422 U.S. 490 (standing inquiry and justiciability)
- Weeks Marine, Inc. v. United States, 575 F.3d 1352 (Fed. Cir. 2009) (§1491(b)(1) standing stricter than Article III)
- Rex Serv. Corp. v. United States, 448 F.3d 1305 (substantial chance test for standing)
- Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001) (presumption of agency good faith; burden to rebut)
- Am-Pro Protective Agency, Inc. v. United States, 281 F.3d 1234 (Fed. Cir. 2002) (strong presumption that contracting officials act in good faith)
- Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (arbitrary and capricious standard limits court review)
- Banknote Corp. of Am. v. United States, 365 F.3d 1345 (standard of review for bid protests under 5 U.S.C. § 706)
- Bannum, Inc. v. United States, 404 F.3d 1346 (Bannum standard for judgment on the administrative record)