## United States Court of Appeals for the Federal Circuit

2008-5034 WEEKS MARINE, INC., Plaintiff-Appellee,

v. UNITED STATES, Defendant-Appellant.

Michael H. Payne , Payne Hackenbracht & Sulliv an, of Fort Washington, Pennsylvania, argued for plaintiff-appellee. L. Misha Preheim , Attorney, Commercial Litigati on Branch, Civil Division, United States Department of Justic e, of Washington, DC, argued for defendant-appellant. With him on the brief were Jeanne E. Davidson , Director, and Harold D. Lester, Jr. , Assistant Director. Of counsel on the brief was Thomas J. Warren , CPT, JA, Office of the Chief Counsel, Assistant Counsel for Procurement Lawand Contract Disput es, United States Army Corps of Engineers, of Washington, DC. Appealed from: United States Court of Federal Claims Judge Thomas C. Wheeler

## United States Court of Appeals for the Federal Circuit

2008-5034

WEEKS MARINE, INC., Plaintiff-Appellee,

v. UNITED STATES, Defendant-Appellant.

Appeal from the United States Court of Federal Claims in 07-CV-700, Judge Thomas C. Wheeler.

_________________________ DECIDED: August 10, 2009

_________________________ Before RADER, SCHALL, and DYK, Circuit Judges

. Opinion for the court fi led by Circuit Judge SCHALL. Dissenting op inion filed by Circuit Judge DYK. SCHALL, Circuit Judge

. The United States appeal s the November 16, 2007 amended final judgment of the United States Court of Federal Claims, which granted Weeks Marine, Inc. (“Weeks”) a permanent injunction after sustaining its pr e-award protest. In sustaining Weeks’s protest, the court determined that the Army Corps of Engine ers’s (“Corps’s”) solicitation for indefinite duration indefin ite quantity (“IDIQ”) multiple-a ward task order contracts (“MATOCs”) for dredging was contrary to 10 U.S.C. § 2304(a), and lacked a rationalbasis. The court also determined that the so licitation was contrary to a requirement of the Corps’s Engineering Federal Acquisition Regulation Supplement (“EFARS”). Weeks Marine, Inc. v. United States , No. 07-700C (Fed. Cl. Nov. 16, 2007) (“Amended Final Judgment ”). For the reasons set forth below, we hold that the so licitation does not violate § 2304(a) and does not lack a rational basis. 1 We therefore reverse the Amended Final Judgment insofar as it enjoins the Corps from proceeding with the solicitation. In all other re spects the Amended Final Judgment is affirmed. BACKGROUND I. Weeks lodged its protest in response to the Corps’s solicitation relating to maintenance dredging and shore protection work in the Corps’s South Atlantic Division. The South Atlantic Division enc ompasses all or part of six st ates: North Carolina, South Carolina, Georgia, Florida, Al abama, and Mississippi. Currently , the Division has district offices in Wilmington, North Carolina; Charleston, South Ca rolina; Savannah, Georgia; Jacksonville, Florida; and Mobile, Alabama. Maintenance dredging removes material (f or example, silt and sand) from the bottom of a navigable waterway, in order to facilitate movement of commercial, pleasure, and military vessels. Shore protection restores l and along the shoreline that has been damaged by erosion or weather events by redepositing material (for example, sand) along the water’s edge.

1 As explained below, we need not decide whether the solicitation is contrary to EFARS.

2008-5034 2Up until now, the Corps has awarded dr edging contracts in t he South Atlantic Division on a district basis through the use of competitive sealed bidding. 2 For each project, the district in which the work is to take place prepares an invitation for bids (“IFB”) and receives bids from multiple dredging contractor s. After bid opening, the contract is awarded solely on the basis of price and price-rela ted factors. Each district office within the South Atlant ic Division assesses its own dredging needs and issues its own IFBs; there is little coordi nation between the districts. The MATOC solicitation repr esents a significant departu re from current Corps practice. First, the solicitation employs a ne gotiated, rather than s ealed bidding, format. Second, pursuant to the solicitation, mult iple contractors will be awarded indefinite duration indefinite quant ity multiple-award task order c ontracts (IDIQ MATOCs). It is envisioned that, thereafter, an unknown number (“indefinite qua ntity”) of task orders will be issued under each of the contracts. MATO C contractors will subm it bids and will compete with each other for task orders as t hey arise. Through the solicitation, the Corps is seeking to cover all dredging projec ts within the South Atlantic Division over the next five years. 3 The Corps created an Acquisition Plan to explain its decision to switch procurement methods, and to provide details about the procurement plan. The Acquisition Plan lists 108 potent ial projects divided into fo ur MATOC groups: Group I,

2 Currently, dredging contracts are awarded through the Savannah District (serving parts of North Caroli na, South Carolina, and Georgi a), the Jacksonville District (serving parts of Georgia and Florida), and the Mobile Distric t (serving parts of Georgia, Florida, Alabama, and Mississippi). See U.S. Army Corps. of Engineers, South Atlantic Division, available at http://www.sad.usace.a rmy.mil/contracting.htm. 3 Upon award, each MATOC contract will have a mandatory one-year base term and four one-year options. Hence, the “indefinite duration” label.

2008-5034 3certified hopper dredgi ng projects (2–5 tota l MATOC contracts); 4 Group II, small business set-aside projects (2–7 total MA TOC contracts); Group III, shore-protection projects (2–7 total MATOC contracts); and Group IV, other projects not listed in any of the other three categories (2–7 total MATOC contracts). Each group has an estimated cost of between $440 million and $500 million fo r the full five-year period. That means that, assuming all four option years are exercised, the total cost ofthe procurement will be approximately $2 billion. The minimum task order amount is $100,000, while the maximum is $500 million. Although each MATOC awar dee will be guaranteed a contractual minimum of $2500, there is no guarantee that any awardee will receive more than that amount. The Corps will evaluate proposals it receives in response to the solicitation on a “best value” basis. The evaluatio n will take into account four factors: (1) technical merit, (2) past performance, (3) price, and (4) utiliz ation of small busine sses. The technical merit factor will assess whether a party submitting a proposal possesses dredging equipment. A party’s past performance rating ma y vary from “very low risk,” to “very high risk,” with four intermediate levels. The risk factor will assess a prospective contractor’s competency in performing prior work (rated on a six-level scale), and the relevancy of that work (rated on a three-level scale). As fa r as price is concerned, the solicitation includes four representative tasks. Each party submitting a proposal in response to the solicitation will submit a bi d on one of the tasks, thereby allowing the Corps to evaluate the price factor for that party. Weeks Marine, Inc. v. United States , 79 Fed. Cl. 22, 27 (20 07) (“Initial Opinion ”). The Corps will pick several contractors for

4 Hopper dredging involves the use of specialized equipment. The Corps asserts only a small number of dredgers have this equipment.

2008-5034 4each MATOC based on the four listed fact ors. Individual task orders under the MATOCs will be awarded primar ily using Low Price Techni cal Acceptable procedures, although the Corps states in the Acquisition Plan that it will use Best Value Trade Off procedures for some tasks. Before issuing the solicitation, the Corps “conducted market research,” in order to evaluate potential interest in the solicitatio n and the availability of contractors for the task order work. Ten contractors, including Weeks, indicated interest in the solicitation. Weeks is a large marine construction and dredging company. It performed eighteen dredging contracts for the South Atlantic Div ision in the five years prior to the solicitation. Weeks was one of only three contractors that expressed interest in the solicitation that had (1) unlimited bondi ng capability, (2) hopperdredging equipment, and (3) significant dredging experience. II. The MATOC solicitation issued on June 4, 2007. On September 28, 2007, Weeks filed suit in the Court of Federal Claims, seeking dec laratory and injunctive relief to prevent the South AtlanticDivision from moving forwar d with the procurement. After the Corps filed a 2000 page administrative record, the parties filed cross motions for judgment on the administrative record. Afte r hearing oral argument, the court issued a sealed version of its opinion on November 1, 2007. The opinion was made public on November 6, 2007, after the parties had a chance to review the sealed version and submit proposed redactions of confidential information. Initial Opinion , 79 Fed. Cl. at
22.

2008-5034 5In the Initial Opinion , the Court of Federal Claims ruled that the MATOC solicitation violated 10 U.S.C. § 2304(a)(2), which provi des that sealed bidding must be used when an agency plans to award a contract based solely on price and price-related factors. Initial Opinion , 79 Fed. Cl. at 29–30. Although the Corps indicated it would be evaluating non-price-related fact ors, the court found that the “evaluation factors will not permit the determination of any meaningful distinctions among the offerors, nor will they allow for any different ways to make task orders awards.” Id. at 30. Thus, the court reasoned the Corps would actually be making its determination based on price. Id. The Court of Federal Claims also ruled that the MATOC solicitation had no rational basis. Having rul ed in its dispositi on of the § 2304(a) i ssue that the Corps would not be considering non-pric e related factors, such as contractor qualifications, the court rejected the additional justifications pro ffered for the Corps’s procurement action. Initial Opinion , 79 Fed. Cl. at 31–34. The gover nment asserted the use of IDIQ MATOCs would reduce the procurement cycle, but the court found “the record contain[ed] no evidence s howing that a shortened proc urement cycle would enhance [the] ability to complete projects in a timely manner.” Id. at 32. Although the government asserted that the new procurement scheme woul d reduce administrative costs by $1.5 million over two years, the court found “no eviden ce of how this savings is calculated, or how it will occur.” Id. at 33. Further, the c ourt found that the hours estimated for evaluating the proposals received in response to the solicitation were too low for a negotiated procurement, and that adm inistrative costs thus would likely be much higher than estimated. Id. The government also argued that IDIQ MATOCs would reduce the need for em ergency procurements. Howeve r, the court rejected this

2008-5034 6contention as well, indica ting that emergency procurem ents had constituted only 2.4 percent of South Atlant ic Division expenditures in the pr ior two years, and did not justify a “procurement overhaul.” Id. Additionally, the governm ent asserted that the IDIQ MATOCs would increase coordination betw een the districts in the Corps’s South Atlantic Division. The Court of Feder al Claims found, thoug h, that the need for increased coordination did not warrant a change from seal ed bidding, but rather necessitated the vesting of ov ersight in one office. Id. at 33–34. The court then dismissed in summary fashion all other argu ments proffered by the government, stating that the record was “devoid ofcredible evidence” that com petition would increase, that small businesses would benefit, orthat national security would be improved through the use of IDIQ MATOCs. Id. The court thus concluded that the proposed solicitation lacked a rational basis. Addre ssing the regulatory framework, the court concluded that the solicitation did not comply with the EF ARS requirement that indefinite delivery contracts could only be used in cert ain limited circumstances. Id. at 31. Having determined that the solicitation did not comply with § 2304(a) and the EFARS, and lacked a rational ba sis, the Court of Federal Cl aims ruled that Weeks had succeeded on the merits of it s protest. The court then tu rned to the remaining three factors to be considered in determining whether an injuncti on should issue: irreparable harm, the balance of hardships, and t he public interest. See, e.g. , Centech Group, Inc. v. United States , 554 F.3d 1029, 1036–37 (Fed. Cir. 2009); PGBA, LLC v. United States , 389 F.3d 1219, 1228–29 (F ed. Cir. 2004). Doing so, the court concluded injunctive relief was appropr iate. Initial Decision , 79 Fed. Cl. at 34–37. The court therefore granted Weeks’s motion for judgment on the administrativ e record, and denied

2008-5034 7the government’s motion. As a result, t he court entered an order enjoining the Corps “from using Solicitation No. W 912EP-07-R-0007 to receive proposals or to award negotiated IDIQ contracts or task orders for ma intenance dredging or shore protection services.” Id. at 37. On November 7 and 8, 2007, the Corps issu ed presolicitation not ices announcing individual negotiated procurem ents for the same four task orders that were to be used as the basis for proposal evaluation unde r the enjoined solicitation. The proposed contracts were styled as separate negotiat ed procurements (as opposed to IDIQs), and thus were viewed by the Corp s as eliminating the ability to issue any “follow-on task orders.” Asserting that these notices violat ed the injunction, Weeks filed a motion to enforce or amend the November1, 2007 judgment. It also requested an order to show cause as to why the Corps should not be found in contempt of court. The Court of Federal Claims conducted a hearing on these issues on November 15, 2007. On November 16, 2007, the court vacated the November 1 injunction, and issued a new order to amend and enforce j udgment. Amended Final Judgment , slip op. at 4. The new order enjoined the Corps with respect to three of the solicitations. Id. at 3. The court allowed the fourth solicit ation, relating to a dredging pr oject for Kings Bay, Georgia and Fernandina Harbor, Florida, to proceed because of unique obstacles to sealed bidding at those sites. Sp ecifically, the court noted particular “urgency surrounding this project,” and heightened military and national security needs. Id. at 3. The government has timely appealed the Amended Final Judgment

. 5

5 The parties have advised us that the Corps has suspended action on the MATOC procurement pending this appeal.

2008-5034 8DISCUSSION I. Under 28 U.S.C. § 1491(b)(1 ), the Court of Federal Claims is authorized “to render judgment on an action byan interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract . . . or [to] any alleged violation of statute or regulation in connection with a Federal procurement or proposed procurement.” 28 U.S.C. § 1491(b)(1). We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1292(a)(1) and (c)(1). We review the Court of Federal Claims’s “determination on the legal issue of the government’s conduct, in a grant of judgmentupon the administrative record, without deference.” Bannum v. United States , 404 F.3d 1346, 1351 (Fed. Cir . 2005). We thus apply the “arbitrary and capricious” standar d of the Administrative Procedure Act (“APA”), 5 U.S.C. § 706(2)(A ), conducting the same analysis as the Court of Federal Claims. 28 U.S.C. § 1491(b)(4); Bannum , 404 F.3d at 1351. In applying the APA to protests such as the one before us, we dete rmine whether “(1) the pr ocurement official’s decision lacked a rational basis; or (2) the procurement procedure in volved a violation of regulation or proc edure.” PGBA, LLC , 389 F.3d at 1225. On appeal, the government argues that Weeks has not alleged competitive injury, and therefore does not have standing to challenge the MATOC solicitation. On the meri ts, the government contends that the solicitation facially considers factors otherthan price, and thus does not violate 10 U.S.C. § 2304(a). It also arg ues that the decision of the Corps to s witch from sealed bidding to negotiated procurement IDIQ MATO Cs has a rational basis and does not violate the EFARS. We firs t address the issue of standing.

2008-5034 9II. “Federal courts are not courts of general jurisdiction; they have only the power that is authorized by Article III of the C onstitution and the statutes enacted by Congress pursuant thereto. For that r eason, every federal appellate court has a special obligation to ‘satisfy itself . . . of its own jurisdicti on . . . .’” Bender v. Williamsport Area Sch. Dist. , 475 U.S. 534, 541 (1986). “The Court of Federal Claim s, though an Article I court, . . . applies the same standing requirements enforc ed by other federal courts created under Article III.” Anderson v. United States , 344 F.3d 1343, 1350 n.1 (Fed. Cir. 2003). “Whether a party has standing to sue is a question that this court reviews de novo, although we disturb [the Court ofFederal Claims’s] factual findings only if they are clearly erroneous.” Myers Investigative & Sec. Servs., Inc. v. United States , 275 F.3d 1366 (Fed. Cir. 2002) (citations and internal quotation marks omitt ed) (alteration in original). The standing issue in this case is fram ed by 28 U.S.C. § 1491( b)(1), which we have found imposes more stringent standi ng requirements than Article III. Cf. Am. Fed’n of Gov. Employ ees v. United States , 258 F.3d 1294, 1302 (Fed. Cir. 2001) (“We . . . are not convinced that Congress, when using the term ‘interested party’ to define those who can bring suit under § 1 491(b)(1), intended to confer standing on anyone who might have standing under the [Administrative Procedure Act].”). Section 1491(b)(1) provides that the Court of Federal Claims has jurisdiction to render judgment on an acti on by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement. Both the United States Court of Federal

2008-5034 10Claims and the district courts of the United States shall have jurisdiction to entertain su ch an action wit hout regard to whether suit is instituted befor e or after the contract is awarded. 28 U.S.C. § 1491(b)(1). For purposes of this case, the pertinent part of § 1491(b)(1) is that which states that an “interested party” may object “to a solicitation . . . for bids or proposals for a proposed contract” or to “any al leged violation of stat ute or regulation in connection with a procurement or proposed procurement.” We have held that standing under § 1491(b)(1) “is limited to ac tual or prospective bidders or offerors whose direct economic interest would be affected by the aw ard of the contract or by the failure to award the contract.” Am. Fed’n of Gov’t Employees , 258 F.3d at 1302. Thus, to come within the Court of Federal Claims’s § 1491(b)(1) bid protest jurisdiction, Weeks is required to establish that it “(1) is an act ual or prospective bidder and (2) possess[es] the requisite direct economic interest.” Rex Serv. Corp. v. United States , 448 F.3d 1305, 1308 (Fed. Cir. 2006). We have stated that “[t]o prove a direct economic interest as a putative prospective bid der, [the bidder] is required to establish that it had a ‘substantial chance’ of rece iving the contract.” Id. ; see also Info. Tech. & Applications v. United States , 316 F.3d 1312, 1319 (Fed. Cir. 2003) (“To establish prejudice, [the protestor] must show that there was a ‘substantial chance’ it would have received the contract award but for the alleged error in t he procurement process.”) ; Statistica, Inc. v. Christopher , 102 F.3d 1577, 1580 (Fed. Cir. 1996) (same). The government concedes that the “prosp ective bidder” prong of the interested party test is met in this case. It acknowle dges that Weeks intends to bid on the MATOC contracts, is able to do so, and is capable of doing the dredging work contemplated by the contracts. At oral argument, government counsel stated, “[P] art of the standard

2008-5034 11requires that you actually be a contractor, that you have the financial wherewithal to actually bid on these projects , [and] the technical capability as well.” Oral arg. 8:20– 8:40 (Jan. 7, 2009), available athttp://oralarguments.c afc.uscourts.gov/mp3/2008- 5034.mp3. Continuing, counsel stated that this aspect of t he interested party test was not disputed. Id. at 8:45-47. As noted, Weeks performed eighteen dredging contracts for the South Atlantic Division in the five years prior to the solicitation. And, as also noted, Weeks was one of only three contractors that ex pressed interest in the solicitation that had (1) unlimited bondi ng capability, (2) hopperdredging equipment, and (3) significant dredging experience. Indeed, the gov ernment has conceded that Weeks will almost certainly be in the MATOC pool. See Appellant’s Br. 48 (“[E]ven the trial court recognized that Weeks would lik ely have received one of the awards under the MATOC.”). Turning to the “direct economic intere st” prong of the interested party test, however, the government argues that Weeks has failed to demonstrate prejudice or harm arising from the MATOC so licitation. According to t he government, any potential injury to Weeks is speculative, and is not the competitive injury required for standing because it is borne equally by all bidders. The government contends that Weeks’s allegations simply amount to a critique of IDIQ contra cts in general rather than a particularized injury due to the use of such contracts. Appellant’s Br. 46. The government argues that Weeks has not established a “harm that ties the company’s business situation to the solicitation at issue. ” Oral arg. 8:20–8:25. In other words, the government argues that Weeks cannot est ablish that there was “not only some significant error in the procurement proce ss, but also that there was a substantial

2008-5034 12chance it would have received the contra ct but for that e rror.” Statistica , 102 F.3d at 1582. The government urges that the “substant ial chance” test is the test for proving economic interest and prejudice, even in t he pre-award context. In making this argument, the government dr aws upon our standing discussions in post-award bid protests. See, e.g. , Info. Tech. , 316 F.3d at 1319 (“[B]ecause the question of prejudice goes directly to the question of standing, the prejudice issue must be reached before addressing the merits. . . . To establish prej udice, [the protestor] mu st show that there was a ‘substantial chance’ it would have rece ived the contract award but for the alleged error in the procurement process.”); Myers Investigative & Sec. Servs. , 275 F.3d at 1370 (“[P]rejudice (or injury) is a necessary element of standing. . . . [T]he substantial chance rule continues to apply.”). Weeks responds that it will suffer pr ejudice from having to compete in a “discretionary, subjective, and essentially unr eviewable process,” which, it contends, violates applicable laws and regulations. Appel lee’s Br. 41. Weeks also argues that “an unauthorized or irrational form of solicitation” will impact its ability to compete and thrive because it has “built [its] compan[y] and marketing plan” around the long-used system of sealed bidding. Oral arg. at 18:25–18:30. Weeks maintain s further that its injury is not merely a critique of the IDIQ procurem ent method, but rather stems from the “agency’s choice to use an un authorized contract vehicle that violated procurement statutes and regulations and lacked a rational basis.” A ppellee’s Br. 50. Finally, Weeks counters that the “substantial chance” test is inappropriate in the pre-award context because “[a]t the pre-award juncture, a plaint iff usually will not know who the other offerors are and may not know [its] bona fides .” Red River Serv. Corp. v. United States ,

2008-5034 1360 Fed. Cl. 532, 539 (2004). Thus, Weeks advoc ates for the pre-award test articulated by the Court of Federal Claims in WinS tar Communications, Inc. v. United States , 41 Fed. Cl. 748 (1998), and adopted by the Court of Federa l Claims in this case. In WinStar , the Court of Federal Clai ms stated that a prospective offeror could establish the prejudice necessary for standing by show ing “a non-trivial com petitive injury which can be redressed by judicial relief.” Id. at 763. Section 1491(b)(1) provides in pertinent part that an “interested party” may object to a solicitation . . . for bids or proposals for a proposed contract” or to “any alleged violation of statute or r egulation in connection with a procurement or proposed procurement.” As just discussed, the gov ernment does not dispute that Weeks meets the “prospective bidder” prong ofthe interested party test. We have not had occasion to discuss what is required to prove an economic interest, and thus prejudice, in a case such as this, where a prospective bidder/offeror is challenging a solicitation in t he pre-award context. In such a case, it is difficult for a prospective bidder/offeror to make the showi ng of prejudice that we have required in post-award bid protest cases. See, e.g. , Statistica , 102 F.3d at 1582 (holding that a contractor lacked standing becau se it failed to show a “subs tantial chance it would have received the contract award but for” agency erro r). The reason of course is that, in a case such as this, there hav e been neither bids/offers, nor a contract award. Hence, there is no factual foundation for a “but for” prejudice analysis. However, Article III considerations require a party such as Weeks to make a showing of some prejudice. See, e.g. , Lujan v. Defenders of Wildlife , 504 U.S. 553, 560 (1992) (“First, the plaintiff

2008-5034 14must have suffered an ‘injury in fact’ . . . .”); Myers Investi gative & Sec. Servs. , 275 F.3d at 1370 (“[P]rejudice (or injury) is a necessary element of standing.”). The Court of Federal Claims has advoc ated several different standards for evaluating standing in pre-award bid protests. In Red River Service Corp. , the court indicated it would follow the plain stat utory language and our holding in American Federation that § 1491(b)(1) “is limited to actual or prospective bidders or offerors whose direct economic interest would be affect ed by the award of the contract or by the failure to award the contract.” 60 Fed. Cl. at 539. The court declined to add any additional judicial gloss “until the United States C ourt of Appeals for the Federal Circuit directs otherwise.” Id. At the same time, in some pre-award cases, the Court of Federal Claims has continued to recite the substantial chance test. See, e.g. , L-3 Commc’ns EOTech, Inc. v. United States , 83 Fed. Cl. 643, 651 (2008); CNA Corp. v. United States , 81 Fed. Cl. 722, 725–26 ( 2008). In this case, the court chose to use the WinStarstandard, where standing is established byalleging “a non-tr ivial competitive injury which can be redressed by judicial relief.” See also Allied Materials & Equip. Co. v. United States , 81 Fed. Cl. 448, 456 (2008) (advocating the WinStar standard). Upon consideration of the matter, we c onclude that the standard applied by the Court of Federal Claims in this case strikes the appropriate balance between the language of § 1491(b)(1), whic h contemplates an “an action by an interested party objecting to a solicitation for bids or proposals . . . or any alleged violation of statute or regulation in connection with . . . a proposed procurement,” and Article III standing requirements. We therefor e consider whether Weeks has demonstrated a “non-trivial competitive injury which can be addressed by j udicial relief.” We conclude that it has.

2008-5034 15We agree with the Court of Federal Clai ms’s assessment of the “non-trivial competitive” injury faced by Weeks based u pon its contention as to the illegality of the MATOC solicitation. The court stated Weeks was one of only three cont ractors that had “unlimited” bonding capability, “significant ” dredging experience, and possessed Coast Guard certified equipment for Group One projects. AR 21. Under sealed bidding procedures, there is a substantial chance that Weeks w ould be the lowest responsive and responsible bidder on a significant portion ofthe $1,392,000,000 in projects in Groups I, III, and IV. Under the IDIQ task order solicitation, however, Weeks would only be guaranteed a minimum of $2,500 and [the South Atlantic Division] could deny Weeks all task orders for the next five y ears without any explanation or discussions, or any ability for Weeks to seek bid protest review. This non-trivial competitive injuryis capable of being redressed by this Court.

. . . . In this case, the solicitation pr events Weeks from competing for $1,392,000,000 in task or der awards over t he next five years through sealed bidding. Initial Opinion , 79 Fed. Cl. at 35. Weeks established an interest in bidding, sent in complaints and concerns, noted its contracting ability, and suggested it woul d likely receive a substantial percentage of the contracts in sealed bidding. Whether Weeks is the winni ng or losing bidder, according to Weeks’s theory of the case t he solicitation may event ually be overturned due to illegality. This is not a pre-award case where the a lleged violation is “immaterial” and will not have an impact on Weeks’ s economic situation. See CACI Field Servs., Inc. v. United States , 854 F.2d 464, 466 (Fed. Cir. 1988) (discussing prejudice in the pre-award context). Rather, Weeks has a definite economic stake in the solicitation being carried out in accor dance with applicable laws and regulations. If the MATOC

2008-5034 16solicitation is allowed to go forward, it will dictate Weeks’s bidding and government work in the South Atlantic Division fo r the next five years. In sum, Weeks is an interested party who has demonstrated the requisite degree of prejudice for standing. We therefore hold that it has established standing. Our conclusion that Weeks has standing to challenge the MATOC solicitation is consistent, we think, with our decision in Blue & Gold Fleet, L. P. v. United States , 492 F.3d 1308 (Fed. Cir. 2007). We bel ieve that Blue & Gold Fleet helps compel our conclusion that Weeks has st atutory standing. Section 1491( b)(1) specifically confers jurisdiction on the Court of Federal Claims to hear pre-aw ard bid protests, stating an “interested party” may object to “any alleged violation of statute or regulation in connection with a procurement or proposed procurement.” In Blue & Gold Fleetwe held “that a party who has the opport unity to object to the terms of a government solicitation containing a patent error and fails to do so pr ior to the close of the bidding process waives its ability to raise the same objecti on subsequently in a bid protest action in the Court of Federal Claims.” 492 F. 3d at 1313. In Blue & Gold Fleet , the government issued a solicitation for, inter alia, “ferry transportation” and “concessions” services at Alcatraz Island. Id. at 1311. After Blue & Gold lost the contract, it filed a protest indicating that the awardee had not properly included in its bid “the wages and benefits for its employees required by the Services Contract Act.” Id. at 1312. The Court of Federal Claims concluded that Blue & Gold was actually ch allenging the terms of the solicitation, and thus had waived its opportunity to protest. We agreed, noting that the solicitation itself “did not in clude any requirement that the bidders consider the Service Contract Act.” Id. at 1313. Thus, Blue & Gold was ac tually challenging the terms and

2008-5034 17requirements of the solicitation. In holdi ng that Blue & Gold had waived its opportunity to protest, we noted the GAO regulation, 4 C.F.R. § 21.2( a)(1), indicating that GAO protests “based upon alleged im proprieties in a solicitation which are apparent prior to . . . the time set for receipt of initial proposal s shall be filed prior to . . . the time set for receipt of initial proposals.” Blue & Gold Fleet , 492 F.3d at 1314. We stated that “‘[v]endors cannot sit on their rights to c hallenge what they believe is an unfair solicitation, roll the dice and see if t hey receive the award . . . .’” Id. (quoting Argencord Mach. & Equip. v. United States , 68 Fed. Cl. 167, 175 n.14 (2005)). In light of Blue & Gold Fleet , were we to hold that Weeks cannot now challenge the MATOC solicitation in the Court of Federal Claims, we effectively would be saying that this court has set up a judicial scheme w hereby a party runs afou l of the waiver rule if it waits to challenge a so licitation (as Blue & Gold did), but is properly dismissed on standing grounds if it raises the challenge pre-award (as W eeks has done). Such a result would be anomalous. Finally, by its terms, § 1491(b)(1) indicate s that interested parties are able to challenge facial defects in solicitations. Cf. Ramcor Servs. Group, Inc. v. United States , 185 F.3d 1286, 1289 (Fed. Cir. 1999) (“If § 1491(b) required a cha llenge to the merits of the contract award, the cont ractor would never need to us e the ‘violation’ prong but could always rely on other jurisd ictional grants in § 1491(b)(1 ).”). Thus, in some cases the injury stemming from a facially illegal so licitation may in and of itself be enough to establish standing; in such a case a bidder should not have to wait until the solicitation is applied unfavorably to establish injury.

2008-5034 18For the foregoing reasons, we conclude th at in a pre-award protest such as the one before us, prospective bidderor offeror must establish “a non-trivial competitive injury which can be redressed by judicial relief” to meet the standing requirement of § 1491(b)(1). Under that standard, we hold that Weeks has standing to challenge the MATOC solicitation in the C ourt of Federal Claims. We turn now to the merits. III. We first address Weeks’s contention that the MATOC solic itation violates 10 U.S.C. § 2304(a). Section 2304(a) provides that, in conducting a procurement for property or services, an agency “shall obtain full and open competition through the use of competitive procedures.” 10 U.S.C. § 2304(a)(1)(A). T he statute directs agencies to “use the competitive procedure or combination of competitive procedures that is best suited under the circumstances of the procurement.” Id. § 2304(a)(1)(B). In that regard, it states: (2) In determining the compet itive procedure appropriate under the circumstances, the head of an agency— (A) shall solicit sealed bids if— (i) time permits the solicitation, submission, and evaluation of sealed bids; (ii) the award will be made on the basis of price and other price-related factors; (iii) it is not necessary to conduct discussions with the responding source s about their bids; and (iv) there is a reas onable expectation of receiving more than one sealed bid; and (B) shall request competitive proposals if sealed bids are not appropriate under clause (A). Id. § 2304(a)(2). On appeal, the government argues that, on its face, the MATOC solicitation considers non-price-related fa ctors, and that therefore t he Corps is using a negotiated

2008-5034 19procurement under § 2304(a)(2)(B). Specifica lly, the government contends the Corps is addressing (1) technical merit, (2) past perfo rmance, and (3) small business concerns. The solicitation, the government notes, stat es that “past perform ance is considered significantly more important t han price” and that “all evaluat ion factors, when combined, are significantly more important than pric e.” Weeks responds t hat while the Corps states that it will be ev aluating non-price factors, and that the solicitation thus falls under § 2304(a)(2)(B), a closer look at the solicit ation and the dredging industry reveals that the Corps will continue to limit its inquiry to price and price-related factors only. Thus, Weeks contends the solicitation is covered by§ 2304(a)(2)(A) and that sealed bidding is required. We conclude that Weeks has not est ablished a violation of § 2304(a). The solicitation expressly states that the Corps wil l consider non-price fa ctors, and that past performance is “significantly more important than price.” In addition, in the solicitation the Corps explained how it will evaluate technical meri t, past performance, and small business factors. Moreover, Weeks acknowle dged at oral argument that, its arguments relating to the Corps’s intentions notwit hstanding, the Corps has complied with the requirements of § 2304(a): The Court: “It does on its face say ‘we’re going to consider non-price-related factors’—isn ’t that the end of it?” Weeks: “Facially yes . . . they have satisfied what the statute requires . . . .” The Court: “Doesn’t the case then come down to whether the government established a rational basis for the structuring of the procurement? Weeks: “Yes, I believe it does . . . I think that is more what the case is about.” Oral arg. at 30:51-31:21. It is to the issue of rational basis that we now turn.

2008-5034 20IV. The government argues that the Court of Federal Clai ms erred in ruling the Corps’s procurement action lacked a rationa l basis. In making this argument, it contends that the court should not have dismissed the Corps’s reasons for switching to a negotiated procurement schem e. The government argues, as it did in the Court of Federal Claims, that the IDIQ MATOCs will al low the Corps to (1) pick more qualified contractors because it will be able to rely on factor s other than price; (2) reduce procurement time; (3) lower administrative costs by an estimated $1.45 million in the next two years; (4) reduce or eliminate t he need for emergency procurements; (5) have greater coordination between individual districts of the South Atlantic Division; (6) facilitate the use of small businesses; and (7) promote national security through more timely execution of dredging near military bases. Addressing its first rationale, the gover nment argues that the responsibility determinations the Corps current ly is required to make pursuant to Federal Acquisition Regulation (“FAR”) § 9.401-1, 48 C.F.R. § 9. 104-1, when there is sealed bidding, are not adequate surrogates for the evaluatio ns of past performance it requires. 6 According to the government, a FAR responsibility determination only addresses whether a contractor has a “satisfactory performance re cord.” By contrast, the MATOC negotiated procurement scheme, it is urged, will allow for more nuanced evaluations. A prospective contractor may receive different ratings for various criteria, and the Corps will have the flexibility to weigh different factors as it sees fi t. The government indicates that the more detailed rating system fo r competency and relevancy in the MATOC

6 FAR § 9.104-1 provides that a contra ctor must satisfy seven criteria in order to be deemed “responsible.”

2008-5034 21solicitation will allo w the Corps to avoid hiring contra ctors who may do “satisfactory” work, but may not have the particular ex pertise needed to perform certain dredging jobs. Through the consideration of past performance, the gover nment contends the Corps will be able to have dredging work done by contractors with the highest skills and who offer the best value. See Acquisition Plan at 2 (“It has become increasingly difficult in today’s operating environment to obtain bids from respons ible contractors capable of meeting performance requirem ents and time constraints.”). As to reduction in procurem ent time, the government stat es that “time is of the essence” because (1) “environmental windows compress the schedule for dredging in much of the South Atlantic region,” and (2 ) unplanned events often arise that call for increased flexibility. The Corps estimates the IDIQ solicitation method could save as much as forty-five days per project in terms of the bidding period alone. 7 See Acquisition Plan (“It is estimated that this contracting mechanism will save as much as 45 days in the procurement cycle of each pr oject.”). Further, the government argues that the new procurement sc heme will “spare [the South Atlantic Division] from the need to construct time-intensive Invitation[s] for Bids, since a task order can be created more quickly,” thus saving additional time and resources. Appella nt’s Br. 30; see Acquisition Plan (“[T]here is limited time to prepare t he invitation for bid . . . or the request for proposal . . . . This will be mitigated by t he development of IDIQs which allow for a significant reduction in acquisit ion time. In addition, issuanc e of task orders is a faster

7 The Corps indicates that the ne w procurement scheme eliminates the fifteen-day notice period required before invitations for sealed bids, as well as the thirtyday response time for receipt of bids.

2008-5034 22procurement method and allows more time for actual project performance thereby minimizing schedule risks.”). As far as administrative costs are c oncerned, the government notes that the South Atlantic Division spent $2,183,949 on procurement labor in 2006 and 2007, whereas under the new IDIQ MATOC approach, the Corp s predicts it will spend $738,026 in the next two years on procurement labor. The Corps explained in the Acquisition Plan that these savings will be particularly im portant because “workload has significantly increased over the years while pers onnel staffing has either remained the same or decreased. . . . [The Corps] must implement more cost effective acquisition methods that reduce labor intensive proc edures in contracting, operations, & engineering.” Appella nt’s Br. 38. Regarding emergency procurem ents, the government poi nts out that the Corps has emphasized that the IDIQ MATOCs will al low for greater comp etition in emergency situations, because a pool of contractors will be ready to bid on a given project, and preparation of task orders will require less time than the preparation of IFBs. See Acquisition Plan (“[W]ith MATOCs in pl ace, any emergency dredging requirements could be competed among the MATOC holder s; thereby, eliminating the need for issuing costly sole source contracts.”); Appellant’s Br. 32, 38 –39. The government concludes this will lead to gr eater competition, faster results, and lower costs than the current emergency protocols. With respect to improved coordination am ong the districts of the South Atlantic Division, the government emphas izes that the Division cu rrently does not coordinate solicitations among the districts. In that regard, the Acqui sition Plan notes the need to

2008-5034 23“[d]evelop a consistent methodology and process for soliciting, monitoring and administering dredging and shore protection pr ojects.” It also notes the need to “[r]emove the continual struggle between the [South Atlantic Division] Districts over resources when contracting for work that falls within the same environmental windows.” Because the IDIQ MATOCs will enc ompass all projects for the Division for the next five years, no such conflicts will arise. Accord ing to the government, the Corps anticipates that this new procurement sch eme will allow it “to awar d a task order to a quality dredger that may be busy with work and therefore would not have submitted a sealed bid.” Appellant’s Br. 40; see also Acquisition Plan (“By having a ready pool of dredging companies who can do the work, [the South At lantic Division] can more easily allow quality performance to influence the decision making process.”). The government next argues the IDIQ MATOCs will enhance opportunities for small businesses because Group II is a smal l-business set-aside group, and the Corps will be able to readily evaluat e the small business factor because it no longer will be bound by the sealed bidding protoc ol of only considering price. Appellant’s Br. 42 n.9; see also Acquisition Plan (“[The Sout h Atlantic Division] int ends to group the projects which have historically been set aside for sma ll businesses and to solicit these projects under one grouping providing for the maximum pr acticable number of awards to small businesses in every known category, therebyproviding the sma ll business community with the same level of opportunity to compete for dredging projects as in the past.”). Finally, the government contends that IDIQ MATOCs will promote national security because task orders around militarybases will be assigned quickly, and completed efficiently and skillfully. The government argues that the Corps must

2008-5034 24possess the leeway to ensure military pr eparedness, stating that shoaling in the Southeast Atlantic and the Gulfof Mexico was so severe in recent years that emergency contracts were issued to ensure continued navigability for military needs. See Acquisition Plan (“Some shoaling became so severe that emergency contracts were required in order to maintain channel depths and allow access by both commercial and military vessels.”); A ppellant’s Br. 43. Weeks counters that the Court of Feder al Claims carefully analyzed and rejected the Corps’s asserted rationales , and properly found that the MATOC solicitation lacked a rational basis. As far as the selection ofmore competent cont ractors is concerned, Weeks argues that the Corps’s “technical me rit” concern only addresses whether the contractor has the appropria te equipment. Weeks states that, even under sealed bidding, FAR § 9.104-1 provid es that “a prospective c ontractor must—(f) have the necessary production, construction, and technica l equipment and facilities, or the ability to obtain them.” Weeks addit ionally contends that the Co rps’s new past performance evaluation is commensurate with the “responsibility determinat ion” the Corps currently undertakes when evaluating contractors in seal ed bidding. Weeks not es that, under the FAR, the Corps must ascertain whether each contractor has a “satisfactory performance record.” FAR § 9.104-3(b), 48 C.F.R. § 9-104-3(b). In that regard, it observes that FAR § 9.104-3(b) specifically prov ides that when eval uating a contractor’s past performance, the “contracting officer” should “consider the number of contracts involved and the extent of deficient performance in each contract . . . .” Id. Weeks further notes that a contracting officer must look to the “tenacity” and “perseverance” of each contractor, id. , and that an agency can develop and utilize spec ial, more probing responsibility

2008-5034 25standards, as long as those standards are published in the so licitation. FAR § 9.104-2, 48 C.F.R. § 9.104-2. Finally, Week recites that, underFAR § 9.105-1, 48 C.F.R. § 9.105-1, an agency can obtain significant information about a contractor who is “the low bidder” or “in range for [the] award.” Weeks urges that, under these various FAR provisions, a procuring officer can obtain all the information he or she needs in order to evaluate a prospective contra ctor. Appellee’s Br. 16. Turning to the rationale that the IDIQ MATO Cs will reduce the time required for the procurement cycle, Weeks argues that the administra tive record provides no evidence that normal sealed bidding procedures have caused, or will cause, unacceptable delay. Further, Weeks disputes the government’s cont ention that the new procurement scheme will save forty-five days per task or der, as the South Atlantic Division informed concerned cont ractors it intends to k eep the present thirty-day response period “whenever possible.” Theref ore, Weeks argues, t he Corps will save a maximum of fifteen days. Addressing the Corps’s asserted ability to prepare task orders more quickly than sealed bids, and thus reduce procurement time, Weeks notes that the four “seed” task orders, which the solicitation states will be used to evaluate the price factor, are over 1500 pages in total length. According to Weeks, these task orders are similar in length to the proposals used in sealed bidding, and therefore the Corps cannot seriously contend the new system will result in signifi cant savings of procurement time. Turning to administrative costs, Weeks notes that the Cour t of Federal Claims found the record “lack[ed] any evidence of how the agency determined the IDIQ and task order hours” used to evaluate those costs. Initial Opinion , 79 Fed. Cl. at 33.

2008-5034 26Weeks notes that § 207.170-3( ii) of the Department ofDefense FAR Supplement provides that “[s]avings in administrative or personnel costs alone do not constitute a sufficient justification for the consolidatio n of contract requirements unless the total amount of the cost savings is expected to be substantial in relation to the total cost of procurement.” In this case, Weeks states the total cost of dr edging procurements is approximately $800 million for tw o years. Thus, Weeks posit s that the savings which the Corps projects will aris e from the solicitation ($1,445,923 in savings for an $800 million contract) will only amount to 0.18% of the two-year co st of the procurement—far below “substantial” savings. Id. Continuing, Weeks states that, in a true emergency, ev en an IDIQ MATOC will not suffice. According to Weeks, the Corps st ill will have to resort to the provisions of the FAR because only that pr ocurement scheme allows the Corps to move rapidly enough to meet dredging an d shore protection needs in an emergency. 8 Appellee’s Br. 31–32. Addressing the matter ofcoordination of procurement activity, Weeks indicates that the Corps has provided no empirica l evidence indicating conflicts between the districts of the South At lantic Division. Id. at 34. Next, Weeks disputes the government’s assertion that the IDIQ MATOC scheme will benefit small businesses. First noting th at small businesses received $189 million of the $750 million spent on dredging projects over the past tw o years, Weeks argues that the new plan will actually r educe the ability of small businesses to compete. Group II

8 For provisions addressing em ergency situations, see, e.g. , FAR § 6.302-2, 48 C.F.R. § 6.302-2 (full and open competition is not required “[w]hen the agency’s need for the supplies or services is of such an unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources from which it so licits bids or proposals”); see also FAR part 18, 48 C.F.R. §§ 18.000–18.204 (“Emergency Acquisitions”).

2008-5034 27under the MATOC scheme, the small-business set-aside group, has a bonding requirement that ranges between $10 and $25 million. According to Weeks, this requirement exceeds the minimum bonding requi rement the Corps normally requires for small businesses ($10 million). Weeks cont ends that any small co mpany that can only post a $10 million bond will be precluded from co mpeting for contracts for which it could previously bid under sealed bi dding procedures. In ess ence, Weeks argues that the Corps has raised bonding requirements and has added barriers to entry for small businesses that want to com pete for dredging contracts. A ppellee’s Br. 36–37. As to the Corps’s final rationale, Weeks argues th at the Corps has not “provided any evidence that military waterways in the Southeast ev er have been imperiled or jeopardized.” Id. at 37 (quoting Initial Opinion , 79 Fed. Cl. at 34). V. We have stated that procurement decisions “invoke[ ] ‘highly deferential’ rational basis review.” CHE Consulting, Inc. v. United States , 552 F.3d 1351, 1354 (2008) (quoting Advanced Data Concepts, Inc. v. United States , 216 F.3d 1054, 1058 (Fed. Cir. 2000)). Under that standard, we sustain an agency action “evincing rational reasoning and consideration of relevant fa ctors.” Advanced Data Concepts , 216 F.3d at 1058. The Corps has presented seven reasons for its new procurement scheme. As seen, through the use of IDIQ MATOCs, the Corps expects to (1) obtain qualified contractors; (2) reduce procur ement time; (3) realize savings in administrative costs; (4) reduce or eliminate the need for emergen cy procurements; (5) allow for greater coordination between the districts in the South Atlantic Divisi on; (6) facilitate the use of small businesses; and (7) be able to address national security needs through more

2008-5034 28timely execution of dredging ne ar military bases. We thin k it can hardly be argued that any one of these is not a legitimate procurement objective. Recognizing our deferential review of an agency’s procurement decision, Weeks does not argue that the Corps’s objectives ar e not legitimate. Rather, it takes the position that the Corps has not demonstrat ed that IDIQ MATOCs are necessary to achieve those objectives. In so doing, Weeks makes much of the fact that the solicitation and the Acquisition Plan provi de little empirical evidence connecting the Corps’s needs to the new proc urement scheme. For the fo llowing reasons, we are not persuaded by Weeks’s argument. After the Court of Federal Claims decided this case, we rendered our decision in CHE Consulting . In CHE Consulting , the United States Naval Oceanic Office (“NAVO”) sought to solicit a single provider for the hardware and software maintenance of a complex supercomputer system. 552 F.3d at 1352. Eventua lly, after a request by CHE Consulting (“CHE”), the General Services Administration separated the procurement into two contracts—one for hardware and one for software. Id. at 1353. In response to the revised solicitation, CHE submitted a hardware maintenance proposal, but NAVO indicated it would not accept “de-bundled” proposals. Id. Following direction from NAVO, the General Services Administration, which had issued the so licitation, cancelled it, and issued a new solicitation requiring a single provider for both hardware and software maintenance. Id. Thus, the two maintenance requ irements were “bundled.” CHE brought a protest in the Court of Federal Claims, argui ng that the bundling requirement lacked a rational basis and r equesting an injunction with respect to the bundled solicitation. CHE , 552 F.3d at 1353. After examin ing the administrative record,

2008-5034 29the Court of Federal Claims found the eviden ce supporting the new solicitation “sparse,” and requested supplementati on of the record. Specifically, the court asked for a cost analysis and empirical survey evidence on the practices of other agencies. Id. After the record was supplemented, the court ruled the bundling requirement had a rational basis. Id. at 1353–54. Accordingly, the court rejected CHE’s challenge to the solicitation. Id. CHE appealed. On appeal, we determined not only that NAVO established a rational basis based on the supplemented reco rd, but also that no supplementation was required in the first place. Id. at 1354 (“NAVO established a rational basis to combine hardware and software services into one c ontract before the trial court requested supplementation. The additions to the administr ative record were thus not necessary.”). In our decision, we pointed to several concerns about “segregating the maintenance contracts,” which were stated in a memor andum and affidavit of NAVO’s contracting officer representative, both of which were present in the original admin istrative record. Id. at 1354–55. We indicated that those concerns provided a rational basis for NAVO’s procurement, even though the documents pr ovided no supporting evidence for the concerns expressed. Id. at 1355. Affirming the decision of the Court ofFederal Claims based upon the original adminis trative record, we stated: NAVO has no obligation to poi nt to past experiences substantiating its concerns in order to survive rational basis review. . . . Indeed NAVO has a re sponsibility to assess risks and avoid them before they become a historical fact. . . . In terms of this procuremen t, NAVO need not suffer some maintenance failures in order to substantiate its assessment of risks . . . . Thus, to satisfy it s obligation to supply a rational basis for its decisions, NAVO may supply a reasoned chronicle of its risk assessment, as it did in this case. CHE Consulting , 552 F.3d at 1355.

2008-5034 30CHE Consulting controls this case. The Corps has put forth seven specific reasons for its procurement action, each of which represents a legi timate procurement objective. And as seen, in the case of each reason, the Acquisi tion Plan states the underlying rationale. Perhaps the Plan’s fu llest statement of an underlying rationale relates to emergency procurements. In that regard, the Acquisitio n Plan states that “[t]he southeastern portion of the United States, simply fr om its geographic proximity to warm, tropical climatic conditions, is annually subjected to hurricanes and other potentially catastrophic natural disasters.” Continuing, t he Plan explains how “during the past several years,” hurricanes and othersevere storm events have increased shoaling in many channels, an d it states that some shoal ing became so severe that emergency contracts were required in orderto maintain channel depths and allow access by both commercial and m ilitary vessels. The Acquisition Plan recites that many of these emergency contracts were solicited using less than full and open competition in accordance with FAR 6.302-2, Unusua l and Compelling Urgency. See 48 C.F.R. § 6.302-2. The Acquisition Plan adds that, “[b]ased upon expert technical analysis, it is anticipated that this increase in shoaling will continue into the foreseeable future.” It states in addition that storms during the 200 4 hurricane season “devastated many miles of shoreline” in North and South Carolina and Florida. This damage, the Acquisition Plan notes, resulted in the award of twenty shore protection contracts with a total value of over $98 million. The Plan concludes the discussi on by stating that implementation of the MATOC procurement scheme “would virtually eliminate the need to limit competition in the case ofnatural disaster or othernational emergencies.”

2008-5034 31The Corps was required to “supply a reason ed chronicle of the risk assessment.” CHE Consulting , 552 F.3d at 1455. We think it did that by stating the reasons for its procurement decision and the thinking behind those reasons. Put most simply, given the Corps’s mission, and what the Acquisition Plan tells us, we conclude that the Corps has sufficiently demonstrated that it is wo rking to “avoid [risks] before they become historical fact” and that it has supplied a “reasoned chronicle of its risk assessment.” In sum, we hold that the Corps’s decision to issue the MATOC solicitation “evince[es] rational reasoning and consideration of relevant factors.” Were we to conclude otherwise, we wo uld be second-guessing the Corps’s action. That is something we are not permitted to do. “‘If the court finds a reasonable basis for the agency’s action, the court should stay it s hand even though it might, as an original proposition, have reached a different conclusi on as to the proper administration and application of the pr ocurement regulations.’” Honey well, Inc. v. United States , 870 F.2d 644, 648 (Fed. Cir. 1989) (quoting M. Steinthal & Co. v. Seamans , 455 F.2d 1289, 1301 (D.C. Cir. 1971)) (holding that the General Accounting Office’s determination that a bid for a procurement contract was responsive and properly disclosed the bidder’s identity had a rational basis). In this case, the Co rps has demonstrated a rational basis for the MATOC solicitation. VI. As noted, the Court of Federal Claims ru led that the MATOC solicitation did not comply with the Corps’s own procurement regul ation, the EFARS. At the time the case was before the court, EFARS § 16.501, S-103(a), limited the circumstances in which indefinite delivery contracts c ould be used. The Court of Federal Claims held that the

2008-5034 32government had failed to estab lish that any of the specif ied circumstances were met insofar as the MATOC solicitation was concerned. On appeal, the government argues that t he Court of Federal Claims erred in ruling that the MATOC solicita tion violated the EFARS. W eeks rejoins that the court’s ruling on the EFARS issue was correct. For two reasons, however, we conclude that it is not necessary for us to address the issue. First, as noted above, Weeks stated at oral argument that the case turns on the question of whether the Corps demonstrated a rational basis for its procurement action. We have held that it did. Second, on January 25, 2008, after entry of the Amended Final Judgment, the Corps rescinded EFARS § 16.501, S-103(a). Under thes e circumstances, even if we had not already ruled the Corps had a rational basis for its action, and we agreed with W eeks that the Corps failed to comply with the rescinded EFARS pr ovision, our ruling would have no practical import, since the Corps is no l onger bound by the provision. CONCLUSION For the foregoing reasons, we reverse the Amended Final Judgment insofar as it permanently enjoins the Corps “from usi ng Solicitation No. W 912EP-07-R-0007 to receive proposals or to award negotiated ID IQ contracts or task orders for maintenance dredging or shore protection services.” Acco rdingly, the Corps is authorized to proceed with the solicitation. Neither the governm ent nor Weeks has appeal ed the rulings of the Court of Federal Claims in the Amended Final Judgment with respect to the presolicitation notices issued by the Corps on November 7 and November 8, 2007. We therefore leave those ruli ngs undisturbed. Thus, the Amended Final Judgment is affirmed-in-part and reversed-in-part.

2008-5034 332008-5034 34 AFFIRMED-IN-PARTand REVERSED-IN-PART COSTS Each party shall bear its own costs.

## United States Court of Appeals for the Federal Circuit

2008-5034

WEEKS MARINE, INC., Plaintiff-Appellee,

v. UNITED STATES, Defendant-Appellant.

Appeal from the United States Court of Federal Claims in 07-CV-700, Judge Thomas C. Wheeler.
DYK, Circuit Judge , dissenting. I dissent from the majority’s holding that Weeks Marine has Article III and statutory standing to challenge the solicitati on of the U.S. Army Corps of Engineers (“Corps”). As described in the majority opinion, We eks Marine filed a pre-award challenge to a solicitation by the Corps. The solicit ation changed the Corp s’ method of awarding dredging work in the Southeast from a compet itive sealed bidding process to a process involving negotiated indefinite delivery indefi nite quantity (“IDIQ”) multiple-award task order contracts (“MATOCs”). Weeks Marine al leged, inter alia, thatthe solicitation was contrary to 10 U.S.C. § 2304(a)(2), which r equires the use of sealed bidding procedures under certain circumstances. Weeks Marine made no allegations of injury in its complaint and appears to have filed no affidavits or declarations providing a basis for a finding that the solicitation was likely to caus e injury. In its memorandum supporting itsmotions for injunctive and declaratory relief, Weeks Marine asserted it would be harmed by the “potential loss of valuable business . . . thatit could otherwise obtain under the required sealed bidding procedures.” Mem. P. & A. Supp. Pl.’s Mot. for TRO, Prelim. Inj., Permanent Inj. & Declar atory J. at 28, Weeks Mari ne, Inc. v. United States , 79 Fed. Cl. 22 (Fed. Cl. 2007) (No. 07-700C) (emphasis added). Weeks Marine did not allege that it was actuallylikely to be awarded less dredging work by the Corps under the solicitation. Indeed, the majority goes to gr eat pains to point out that Weeks Marine will continue to be included in the pool of prospective contractors. See Maj. Op. 12. At oral argument, Weeks Marine asserted that it had “thrived under the business model of sealed bidding and the low bidder” and “built [i ts] compan[y] . . . a nd marketing plan that way,” argued that it w ould be less able “to control [its ] own destiny” under the Corps’ new procedure, but admitted that “we don’t know” whetherthe new procedure would injure Weeks Marine. 1 Weeks Marine was unable to id entify any reason that it was

1 Q. You may be just as su ccessful in the future as y ou’ve been in the past. . . . It seems to me that it’s really specul ative to say that W eeks is going to be injured by this new approach to the contract. A. Well, we don’t know, your Honor, but here’s what we do know, you’re absolutely correct that Weeks and othercompanies have thrived under the business model of sealed bidding and the low bidder, and—and they’ve built their companies and—and market ed, ah—their marketing plan that way. . . .

. . . . Q. Why is it less likely that Weeks is going to be successful under this new system? A. Because they can control their own destiny in having low bids with which they can make money. They can’t c ontrol their destiny when the Corps of Engineers is going to introduce subjecti ve evaluations on things other than price. Oral Arg. 18:00- 18:31, 19:30-19:54.

2008-5034 2likely to lose business as a result of the change in procedures, or how it was disadvantaged compared to other bidders. I Lack of Article III Standing The government asserts that Weeks Ma rine lacks standing. In any event, “[b]ecause Article III standing is jurisdictional, this court must consider the issue sua sponte even if not raised by the parties.” Fuji Photo Film Co. v. Int’l Trade Comm’n , 474 F.3d 1281, 1289 (Fed. Cir. 2007). Article III standing requires “an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.” Lujan v. Defenders of Wildlife , 504 U.S. 555, 560 (1992) (footnote, citations, and quotation marks omitted). Put di fferently, “[t]he injury alleged must be . . . ‘distinct and palpable,’ and not ‘abstract’ or ‘conjectura l’ or ‘hypothetical.’” Allen v. Wright , 468 U.S. 737, 751 (1984) (citations omitted). Injurycan be established byaffidavits and other submissions that “present di spositively more than . . . me re ‘general averments’ and ‘conclusory allegations.’” Friends of the Earth, Inc. v. Laidlaw Envt’l Servs. (TOC), Inc. , 528 U.S. 167, 184 (2000). The Supreme Court has established the requirements for pre-contract award standing in Northeastern Florida Chapter of A ssociated General Contractors of America v. Jacksonville , 508 U.S. 656, 666 (1993), and Adaran d Constructors, Inc. v. Pena , 515 U.S. 200, 210-12 (1995). T he Supreme Court held in Associated General Contractors that a non-minority contractor had standing to challenge a city ’s practice of setting aside a percentage of its contracts for bidding only by minority contractors, because “the ‘injury in fact’ is the inability to compete on an equal footing in the bidding process, not

2008-5034 3the loss of a contract.” 508 U.S. at 666. Following Associated General Contractors in Adarand , the Supreme Court held that a subcontractor had standing to raise an equal protection challenge to government financial in centives provided to general contractors hiring disadvantaged s ubcontractors. See Adarand , 515 U.S. at 210-12. The plaintiff subcontractor alleged that because it wa s not a disadvantaged subcontractor, it would suffer future competitive harm from this prac tice. The Court held that the subcontractor had satisfied the requirem ent that “the alleged injury is not too speculative for Article III purposes—that the injury is ‘certainlyimpending’” because the record indicated that the subcontractor would “very likely” bid on future contracts subject to the government’s practice and “often must compete for su ch contracts against small disadvantaged businesses.” Id. at 211-12 (quoting Lujan , 504 U.S. at 565 n.2). The record does not show that Weeks Marine is likely to be disadvantaged by the Corps’ IDIQ MATOC solicitation. The Court of Federal Claims noted that Weeks Marine “admits that it is a ‘major player in the dredging industry’ and would likely be awarded an IDIQ contract and subsequent task orders. ” Weeks Marine v. United States , 79 Fed. Cl. 22, 34 (2007). Because Weeks Marine has not shown that it is likely to be awarded less dredging work under the MATO C system, its injury is “conjectural” rather than “impending.” The majority does not suggest that Weeks Ma rine is less likely to receive awards under the new procedure, or that it is likely to be in jured by any reductions in the amount of business it receives. The majo rity’s theory appears to be that the claimed illegality of the solic itation is itself sufficient to est ablish injury. However, the Supreme Court has made clear that the existence of illegal conduct is not sufficient to confer

2008-5034 4standing. “[A]n asserted right to have the Go vernment act in accordance with law is not sufficient, standing alone, to confer ju risdiction on a federal court.” Allen , 468 U.S. at 754. There must be a showing of injury in addition to a showing ofillegality to satisfy the requirements for standing, in order to “assure[] that ‘there is a real need to exercise the power of judicial review in order to protect the interests of the complaining party.’” Summers v. Earth Island Inst. , 129 S. Ct. 1142, 1149 (2009) (quoting Schlesinger v. Reservists Comm. to Stop the War , 418 U.S. 208, 221 (1974)). The majority also suggests that Wee ks Marine has establis hed standing either with its past reliance on the previous seal ed bidding procedure in establishing its business, or with its future reliance on t he new IDIQ procedure that might later be overturned as illegal. See Maj. Op. 13, 16. According to the majority , regardless of Weeks Marine’s level of success under the new solicitation procedure, such reliance may injure Weeks Marine’s ability to compet e for dredging contracts. But reliance, like alleged illegality, cann ot establish standing without a show ing of injury, and the majority cites no authority establishing that mere reliance without injury is sufficient. The majority appears to bolster its decis ion on the theory that Weeks Marine would later be barred from challenging t he new solicitation procedure. See Maj. Op. 18. There are two responses. First, if Weeks Mari ne were later injured bythe solicitation, it would not in fact be barred from challenging the solicit ation at that time. The theory that Weeks Marine’s challenge to the Corps’ MATO C solicitation would not be possible after the IDIQ contracts and task orders had been aw arded is based on a misreading of the statutes and regulations. Section 1491(b)(1) ofTitle 28 of the United States Code specifically provides that c hallenges to solicitations may be brought “without regard to

2008-5034 5whether suit is instituted befor e or after the contract is aw arded.” To be sure, 10 U.S.C. § 2304c(e)(1) provides that “[a] protest is not authorized in connec tion with the issuance of a task order or delivery orderexcept for -- (A) a protest on the ground that the order increases the scope, period, or maximum valu e of the contract under which the order is issued; or (B) a protest of an order va lued in excess of $10,000,000.” (emphasis added); see also FAR ¶ 16.505(a)(9). But the statute does not limit protests of an overall solicitation or IDIQ contract; it only li mits challenges to the task order or delivery order. Weeks Marine or anothe r contractor thus could c hallenge the Corps’ overall solicitation after, rather than only bef ore, the IDIQ or task order awards. 2 Second, standing is not created by the abs ence of parties with proper standing. “The assumption that if respondents have no standing to sue, no one would have standing, is not a reason to find standing.” Sc hlesinger v. Reservists Comm. to Stop the War , 418 U.S. at 227. “This view would conv ert standing into a requ irement that must be observed only when satisfied.” Valley Fo rge Christian Coll. v. Ams. United for Separation of Church & State, Inc. , 454 U.S. 464, 489 (1982); see also United States v. Richardson , 418 U.S. 166, 179 (1974). The fact t hat no party could satisfy the usual

2 Our holding in Blue & Gold Fleet, L.P. v. United States , 492 F.3d 1308 (Fed. Cir. 2007), is not to the contra ry. In Blue & Gold Fleet the bidder waited until after the contract award to challenge a solicitation. We held that “a party who has the opportunity to object to the terms of a gover nment solicitation cont aining a patent error and fails to do so prior to the close of the bi dding process waives its ability to raise the same objection subsequently in a bid protest ac tion in the Court of Federal Claims.” Id. at 1313. Our opinion in Blue & Gold Fleet does not suggest that a contractor can challenge a procurement system before actually suffering or being likely to suffer an injury. Blue & Gold Fleet holds only that if the cont ractor is injured and has the “opportunity to object” to the solicitation, it cannot defer its challenge to a period after which the contract is awarded.

2008-5034 6requirements for standing does not create standing in a party who has not suffered injury. II Lack of Statutory Standing As the majority recognizes, the applicable statute imposes even more stringent standing requirements. See Maj. Op. 10-11. Under the statute, the Court of Federal Claims has jurisdiction to render judgment on an action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute orregulation in connection with a procurement or a proposed procurement . . . without regard to whethersuit is instituted before or after the contract is awarded

. 28 U.S.C. § 1491(b)(1) (emphas es added). In American F ederation of Government Employees v. United States , we reviewed at length the history of § 1491(b)(1) and concluded that Congress did not intend to confer standing under the more liberal standing rules of the Administra tive Procedure Act, 5 U.S.C. § 702, but instead limited standing under § 1491(b)(1) to “disappointed bidders” and to prospective bidders whose chances of securing the award would be adve rsely affected. 258 F.3d 1294, 1302 (Fed. Cir. 2001). We stated that we “construe the term ‘interested party’ in § 1491(b)(1) in accordance with the [Competition in Contra cting Act, 31 U.S.C. §§ 3551-56], and hold that standing under § 1491(b)(1) is limited to ac tual or prospective bidders or offerors whose direct economic interest would be affected by the awar d of the contract or by failure to award the contract.” Id. at 1302 (emphasis added). In the case of pre-award protests , we have repeatedly limited standing under § 1491 to those bidders who have a “substantia l chance” of securing the award and who have been disadvantaged by the government pr ocurement decision t hey challenge. In

2008-5034 72008-5034 8 Rex Service Corp. v. United States , we held that a contractor did not have standing because it did not “establish t hat it had a ‘substantial chance ’ of receiving the contract” and thus “prove a direct economic interest as a putative prospective bidder.” 448 F.3d 1305, 1308 (Fed. Cir. 2006); see also Statistica, Inc. v. Christopher , 102 F.3d 1577, 1582 (Fed. Cir. 1996) (holding that a contractor failed to show a “substantial chance it would have received the contract award but fo r” agency error). In CACI Field Services, Inc. v. United States , we held that a contractor coul d not prevail in a pre-award bid protest without showing prejudice from an alleged violation of a procurement statute or regulation, because “prejudice is a separate element whic h must be proven.” 854 F.2d 464, 466 (Fed. Cir. 1988); see also Myers Investigative & Sec. Servs., Inc. v. United States , 275 F.3d 1366, 1370 (Fed. Cir . 2002) (“[P]rejudice (or injury) is a necessary element of standing.”). Weeks Marine here is not a “disappointed bidder ,” nor has it show n that its direct economic interests have been adversely affected. Indeed, for all the record reveals, Weeks Marine will continue to receive exactly the same contracts that it would have received under the earlier sealed bidding procedure. Allowing Weeks Marine to establish standing without a showing of conc rete injury vastly and improperly expands the number of parties potent ially qualifying for standing. Under these circumstances, it seems to me clear that Weeks Marine does not have Article III or statutory standing, and I respectfully dissent from the majority’s contrary conclusion.