Court Opinion

ID: 6938138
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:48:28.527247+00
Date Added: 2024-06-11T16:07:34.881525
License: Public Domain

PAULINE NEWMAN, Circuit Judge,
dissenting.
I respectfully dissent. After the contract with IBM was terminated, it could not simply be “reinstated.” The government stated to the Board:
GSA stipulates that the contract was awarded in violation of Federal Acquisition Regulation § 15.612(d).
When the agency determined that the procurement was fatally flawed, it terminated the contract for convenience, with accompanying costs including the costs of the protests. Whatever the reason for termination, the contract was voided. It could not simply be re-awarded as if nothing had happened.
The government cites 48 C.F.R. § 49.102(d) as its authority for “reinstating” the contract. However, that regulation contemplates reinstatement of a partially performed contract later determined to have been improvidently terminated. I do not read the regulation as allowing the government to re-award the same contract that it voided after admitting that it was illegally procured. To allow the agency to bypass the carefully regulated procurement process eviscerates the protections of the federal acquisition regulations.
The majority holds that since Data General’s initial bid was significantly higher than that of IBM there was not a “reasonable likelihood” that Data General would have been the successful bidder in the initial procurement, and therefore that it can not prevail in its protest of this new award. However, that is not the issue of concern. First, after legal error has been shown in the procurement, the protester need not show that it was reasonably likely to have received the award, but only that it had a “substantial chance” of doing so. CACI, Inc.-Fed. v. United States, 719 F.2d 1567, 1574-75 (Fed.Cir.1983). After the government voided the initial award, there was no evidence whatsoever to suggest that Data General might not have succeeded in a new procurement. Indeed, the initially bid technology was already obsolete, and a new procurement could well have been bid on a different basis.
The re-award of the admitted illegal contract was irregular and improper, and prejudicial to the participants in the competition. Prejudice is a sound basis for protest. See Greenleaf Distribution Services, Inc., B-221335, 86-1 CPD ¶422 (1986) (review board could not conclude that protester was not prejudiced when denied chance to revise its best and final offer and thus sustained the protest). Although the panel majority refers to Fortran Corp. v. Department of Transportation, GSBCA No. 12952-P, 95-1 B.C.A. (CCH) ¶ 27,350, 1994 WL 589482 (1994) as justification for the re-award without further procurement, in that case the Board found no possibility that the protester’s price would have been the lowest in a new round of bids because the protestor would have had no additional information that would prompt it to lower its bid. Data General stresses that in a reprocurement it would have had the opportunity to adjust its price/technical tradeoff in order to be more competitive.
In my view the agency’s admitted violation of law can not be simply ignored. The illegal procurement was terminated, and it is now irrelevant whether such action was necessary. The contract was over, and its immediate re-award, with no further procurement, was improper, and was validly protested by a competitor who had a substantial chance of success in a new procurement.