Opinion ID: 528395
Heading Depth: 2
Heading Rank: 2

Heading: Disappointed Bidder Standing.

Text: 68 Lastly, appellants assert standing equivalent to that of a disappointed bidder in a government contract solicitation and award. Since Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859 (D.C.Cir.1970), this Circuit has recognized that a disappointed bidder in a government contract award has standing under section 702 of the APA, 5 U.S.C. Sec. 702, to act as a  'private attorney general,'  in order to prevent[ ] the granting of [a] contract[ ] through arbitrary or capricious action amounting to illegal [agency] activity. 424 F.2d at 864. See also National Maritime Union of America, 824 F.2d at 1236-38; Orange Park Florida T.V., Inc. v. FCC, 811 F.2d 664, 671-72 (D.C.Cir.1987); Delta Data Systems Corp. v. Webster, 744 F.2d 197 (D.C.Cir.1984). The disappointed bidder doctrine has since been recognized by most circuits 29 and Congress affirmatively recognized the doctrine in the legislative history of the Federal Courts Improvement Act of 1982. 30 69 We note that courts have applied disappointed bidder status to meet both Article III injury requirements 31 and zone of interest requirements. 32 This Circuit has considered disappointed bidder status as establishing the bidder's right to step into the shoes of the public and assert the public interest. In Scanwell Laboratories, Judge Tamm wrote for the Court: 70 [T]here is no right in [the disappointed bidder] to have the contract awarded to it in the event the district court finds illegality in the award of the contract.... Thus the essential thrust of [the disappointed bidder's] claim on the merits is to satisfy the public interest in having agencies follow the regulations which control government contracting. The public interest in preventing the granting of contracts through arbitrary or capricious action can properly be vindicated through a suit brought by one who suffers injury as a result of the illegal activity, but the suit itself is brought in the public interest by one acting essentially as a private attorney general. 71 Scanwell Laboratories, 424 F.2d at 864. More recently, now-Justice Scalia, while a member of our Court, restated this emphasis on the public interest: the main objective of the disappointed bidder doctrine is to assure that the government obtains the most advantageous contract[ ] by complying with the procedures which Congress and applicable regulations have provided. Delta Data Systems, 744 F.2d at 206. See also Orange Park Florida T.V., 811 F.2d at 672 ([A] wrongful award of a government contract constitutes a discrete economic injury to unsuccessful bidders, who [then] have an incentive to vindicate the public interest as well as their own by insisting on the integrity of the procurement process.) (citations omitted). 72 While Judge Tamm's original language in Scanwell Laboratories is broadly phrased, apparently to include as a disappointed bidder anyone who suffers injury as a result of the illegal activity, 424 F.2d at 864, a decade later he made it clear that disappointed bidder status is unavailable to those who cannot claim the special relationship found ... to exist between a bidder and the government; unlike the bidder in the context of a solicitation, they have not 'placed in the hands of the representatives of the Government the power to bind [it] to a contract.'  Control Data Corp. v. Baldrige, 655 F.2d at 293 (quoting Merriam v. Kunzig, 476 F.2d at 1242 n. 7. The government is obligated to provide the bidder under this special relationship with a legally valid and fair procurement, National Maritime, 824 F.2d at 1237-38, which presumably fosters competition amongst contractors thereby benefiting the public interest. See Gull Airborne Instruments, Inc. v. Weinberger, 694 F.2d 838, 842 (D.C.Cir.1982). Not every bidder in a solicitation may assert disappointed bidder standing, otherwise nuisance suits could handicap the procurement system. Rather, standing is conferred only to those bidders who are  'within the zone of active consideration' for the bid's award. National Maritime, 824 F.2d at 1237-38 n. 12 (quoting CACI, Inc.-Federal v. United States, 719 F.2d at 1574-75, other citation omitted). See also Morgan Business Assocs., Inc. v. United States, 223 Ct.Cl. 325, 619 F.2d 892, 896 (1980). Moreover, the special relationship ends once the solicitation and award process is complete and the bidder has received his lawful and fair procurement. See Gull Airborne Instruments, 694 F.2d at 842-43 (disappointed bidder standing does not provide right to challenge contract administration). 73 Neither appellants nor their members bid on a contract and, thus, have never placed themselves in the special relationship by which the government can bind them to the bid. Moreover, with no bid on a solicitation, it is impossible for them to be within the zone of active consideration. Thus, we hold that appellants do not have disappointed bidder standing to contest the contracting out decision made by Fort Sill. As we stated in National Maritime, regarding an assertion of disappointed bidder standing by a union representing employees of an unsuccessful bidder, the right is [the contractor's], not [the union's]. 824 F.2d at 1238.