Court Opinion

ID: 6346521
Source: CourtListenerOpinion
Date Created: 2022-06-03 14:03:06.596447+00
Date Added: 2024-06-11T09:18:10.900952
License: Public Domain

Case: 21-1936   Document: 41     Page: 1   Filed: 05/13/2022

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                      SEKRI, INC.,
                    Plaintiff-Appellant

                            v.

                   UNITED STATES,
                   Defendant-Appellee
                 ______________________

                       2021-1936
                 ______________________

     Appeal from the United States Court of Federal Claims
 in No. 1:21-cv-00778-RAH, Judge Richard A. Hertling.
                  ______________________

                 Decided: May 13, 2022
                 ______________________

     ALAN GRAYSON, Orlando, FL, argued for plaintiff-ap-
 pellant.

     RAFIQUE OMAR ANDERSON, Commercial Litigation
 Branch, Civil Division, United States Department of Jus-
 tice, Washington, DC, argued for defendant-appellee. Also
 represented by BRIAN M. BOYNTON, STEVEN JOHN
 GILLINGHAM, MARTIN F. HOCKEY, JR.
                  ______________________

    Before NEWMAN, REYNA, and CUNNINGHAM, Circuit
                      Judges.
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 2                                             SEKRI, INC.   v. US

 REYNA, Circuit Judge.
      SEKRI, Inc. appeals a decision of the U.S. Court of Fed-
 eral Claims dismissing its bid protest action. The Court of
 Federal Claims determined that SEKRI lacks standing be-
 cause it does not qualify as an actual or prospective bidder
 and that SEKRI failed to state a claim because it waived
 its right to bring a bid protest action under Blue & Gold.
 We hold that, in view of the Javits-Wagner-O’Day Act and
 its implementing regulations, SEKRI qualifies as a pro-
 spective bidder for standing purposes and that SEKRI has
 not waived its right to bring its bid protest action under the
 Blue & Gold waiver standard. Accordingly, we reverse the
 Court of Federal Claims’ dismissal and remand for further
 proceedings consistent with this opinion.
                         BACKGROUND
                               I
                               A
      The Javits-Wagner-O’Day Act (“JWOD Act”) was origi-
 nally enacted in 1938 to prioritize purchasing of products
 from suppliers that employed blind individuals. U.S. Stat-
 utes at Large, 75 Cong. Ch. 697, 52 Stat. 1196 (June 25,
 1938) (JWOD Act). The JWOD Act established the “Com-
 mittee on Purchases of Blind-made Products” and charged
 it with various duties, including determining fair market
 prices of “brooms and mops and other suitable commodities
 manufactured by the blind and offered for sale to the
 [f]ederal [g]overnment by any non-profit-making agency
 for the blind.” Id. § 2. The Act stated, “All brooms and
 mops and other suitable commodities hereafter procured in
 accordance with applicable [f]ederal specifications by or for
 any [f]ederal department or agency shall be procured from
 such non-profit-making agencies for the blind in all cases
 where such articles are available within the period speci-
 fied at the price determined by the committee . . . .” Id. § 3.
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 SEKRI, INC.   v. US                                          3

     The legislative history of the 1938 JWOD Act shows
 that Congress intended to create a procurement system in
 which the government would be required to purchase cer-
 tain products from suppliers that employ blind individuals.
 Under the new system, the government would “distrib-
 ute . . . orders among . . . agencies for the blind. In other
 words, instead of the present cutthroat competition[,] the
 blind people who are engaged in this type of work will be
 able to obtain it at a fair price.” 83 Cong. Rec. 9111 (1938).
 The bill would take the buying of mops, brooms, and other
 suitable commodities “out of competitive bidding.” Id. (em-
 phasis added); see also S. Rep. 75-1330, at 2 (1938).
     Congress expanded the JWOD Act in 1971 to similarly
 protect suppliers that employ “other severely handicapped”
 individuals. Pub. L. No. 92-28, 85 Stat. 77, 80 (1971); see
 also S. Rep. No. 92-41, at 1 (1971) (stating Congress’s prin-
 cipal objectives). Congress again amended the law in 2011
 by, among other things, renaming the Committee to be
 called the “Committee for Purchase From People Who Are
 Blind or Severely Disabled.” Pub. L. No. 111-350, 124 Stat.
 3677, 3826 (2011).
     The JWOD Act today, 41 U.S.C. §§ 8501–06, estab-
 lishes a procurement system, overseen by the Committee,
 in which the government procures certain commodities and
 services from nonprofit agencies that employ the blind or
 otherwise severely disabled. The Committee has the re-
 sponsibilities of, among other things, (i) maintaining and
 publishing a “procurement list” identifying products and
 services made or rendered by qualified nonprofit agencies
 for the blind or severely disabled, (ii) designating one or
 more “central nonprofit agencies” to facilitate the distribu-
 tion of orders for the products and services on the procure-
 ment list, and (iii) prescribing regulations implementing
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 4                                              SEKRI, INC.   v. US

 the law. See 41 U.S.C. § 8503. Under the JWOD Act pro-
 curement system, if a federal agency
     intend[s] to procure a product or service on the pro-
     curement list . . .[,] [it] shall procure the product or
     service from a qualified nonprofit agency for the
     blind or a qualified nonprofit agency for other se-
     verely disabled in accordance with regulations of
     the Committee and at the price the Committee es-
     tablishes if the product or service is available
     within the period required by the entity.
 Id. § 8504(a) (emphasis added).
                                B
     The Committee has promulgated regulations that de-
 fine the complex “AbilityOne Program,” which is the Com-
 mittee’s name for the JWOD Act procurement system. 41
 C.F.R. pt. 51. These regulations reiterate the mandatory
 nature of the AbilityOne Program.         See 41 C.F.R.
 § 51–1.2(a) (stating that the JWOD Act “mandates that
 commodities or services on the [p]rocurement [l]ist re-
 quired by [g]overnment entities be procured” from a quali-
 fied nonprofit agency).
     The Committee’s regulations describe the role of the
 “central nonprofit agencies” in the AbilityOne Program.
 The regulations designate SourceAmerica (formerly known
 as NISH) as the central nonprofit agency that works, in a
 number of respects, with nonprofit agencies that employ
 people with severe disabilities other than blindness. Id. §§
 51–3.1 to –3.2. SourceAmerica is responsible for represent-
 ing those nonprofit agencies when dealing with the Com-
 mittee; evaluating the qualifications and capabilities of
 nonprofit agencies; recommending commodities and ser-
 vices for inclusion on the procurement list; distributing
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 SEKRI, INC.   v. US                                          5

 orders from government contracting activities; 1 and recom-
 mending price changes. Id. § 51–3.2.
     The regulations also impose requirements on partici-
 pating nonprofit agencies to, for example, initially qualify
 for participation in the AbilityOne Program and thereafter
 maintain their qualification. See id. pt. 51–4.
      The Committee’s regulations also set out “contracting
 requirements,” see id. pt. 51–5, including a mandatory
 source requirement: “Nonprofit agencies designated by the
 Committee are mandatory sources of supply for all entities
 of the Government for commodities and services included
 on the [p]rocurement [l]ist . . . .” Id. § 51–5.2(a) (emphasis
 added). Accordingly, “[p]urchases of commodities on the
 [p]rocurement [l]ist by entities of the Government shall be
 made from sources authorized by the Committee,” which
 “may include nonprofit agencies, [SourceAmerica], Govern-
 ment central supply agencies such as the Defense Logistics
 Agency and the General Services Administration, and cer-
 tain commercial distributors.” Id. § 51–5.2(b) (emphasis
 added). “Contracting activities shall require other persons
 providing commodities which are on the [p]rocurement
 [l]ist to entities of the [g]overnment by contract to order
 these commodities from the sources authorized by the
 Committee.” Id. § 51–5.2(c) (emphasis added).
     The Committee’s regulations provide for “purchase ex-
 ceptions” permitting a contracting activity to procure com-
 modities on the procurement list from commercial sources
 under certain circumstances. See id. § 51–5.4(a). For ex-
 ample, SourceAmerica or the Committee may grant such

     1  The Committee’s regulations specify that
 SourceAmerica “shall distribute orders from the [g]overn-
 ment only to nonprofit agencies which the Committee has
 approved to furnish the specific commodity or service.”
 41 C.F.R. § 51–3.4.
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 6                                              SEKRI, INC.   v. US

 exceptions when (i) qualified nonprofit agencies are unable
 to furnish a commodity within the specified period and
 (ii) a commercial source is able to provide the commodity in
 sufficient quantities “significantly sooner” than the quali-
 fied nonprofit. Id. § 51–5.4.
     The Committee’s regulations also establish procure-
 ment procedures under the AbilityOne Program. 2 One
 type of procedure is the “direct order process”: “Once a com-
 modity or service is added to the Procurement List,
 [SourceAmerica] may authorize the contracting activity to
 issue orders directly to a nonprofit agency without request-
 ing an allocation for each order.” Id. § 51–6.1(a). Alterna-
 tively, the regulations define an “allocation 3 process”: “In
 those cases where a direct order authorization has not been
 issued . . . , the contracting activity shall submit written re-
 quests for allocation to [SourceAmerica].” Id. § 51–6.2(a)
 (emphasis added). “Upon receipt of an allocation, the con-
 tracting activity shall promptly submit an order to
 [SourceAmerica] or [the] designated nonprofit agency(ies).”
 Id. § 51–6.2(h) (emphasis added). There is no requirement

     2    The Committee’s regulations also establish a vari-
 ety of other procedures in the AbilityOne Program. Such
 procedures apply to, among other things, adjustment or
 cancellation of orders where a nonprofit agency fails to
 comply with the terms of an order, id. § 51–6.5; orders in
 excess of the nonprofit agency’s capability, id. § 51–6.7; de-
 letion of items from the procurement list, id. § 51–6.8; cor-
 respondence and inquiries concerning deliveries of
 commodities, id. § 51–6.9; quality complaints, id. § 51–
 6.11; specification changes, id. § 51–6.12; and disputes be-
 tween a nonprofit agency and a contracting activity, id.
 § 51–6.15.
      3   “An allocation is not an obligation to supply a com-
 modity or service, or an obligation for the contracting ac-
 tivity to issue an order.” Id. § 51–6.2(g).
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 SEKRI, INC.   v. US                                          7

 that a duly established AbilityOne Program agency must
 submit a typical competitive bid for a procurement from a
 mandatory source to occur.
                                 C
     The Federal Acquisition Regulation (“FAR”) includes a
 separate set of regulations implementing the AbilityOne
 Program. 48 C.F.R. subpart 8.7. The FAR provisions over-
 lap substantively with the Committee’s regulations. For
 example, the FAR provides that, in general, “[o]rdering of-
 fices shall obtain supplies and services on the Procurement
 List from the central nonprofit agency or its designated
 AbilityOne participating nonprofit agencies . . . .” Id.
 § 8.705–1 (emphasis added). If supplies are identified on
 the procurement list as available from the Defense Logis-
 tics Agency (“DLA”) or the General Services Administra-
 tion (“GSA”) supply distribution facilities, then the
 supplies must be obtained through those facilities, and in
 turn DLA and GSA “shall obtain the supplies . . . from
 [SourceAmerica] or its designated AbilityOne participating
 nonprofit agency.” See id. § 8.705–1 (emphasis added).
 The FAR also describes both a direct order process, id.
 § 8.705–2, and an allocation process, id. § 8.705–3. The
 FAR also states that ordering offices may acquire supplies
 on the procurement list from commercial sources “only if
 the acquisition is specifically authorized in a purchase ex-
 ception granted by the designated central nonprofit
 agency.” Id. § 8.706(a). Such purchase exceptions are ap-
 propriate under the FAR when the nonprofit agency cannot
 provide the commodities in sufficient quantities or cannot
 meet the required deadline. Id. § 8.706(b). Under the FAR,
 the Committee may also grant a purchase exception in ap-
 propriate cases. Id. § 8.706(e).
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 8                                             SEKRI, INC.   v. US

                               II
     In July 2019, the DLA 4 issued Solicitation No.
 SPE1C1-19-R-0021, which contemplated awards for two
 separate lots: Lot 1 acquiring a Rifleman Set with Tactical
 Assault Panel (“TAP”) and Lot 2 acquiring the same with
 Associated Components. SEKRI, Inc. v. United States, 152
 Fed. Cl. 742, 745–46 (2021). On March 30, 2020, DLA
 awarded a contract for Lot 1 to Propper International, Inc.
 Id. at 746; Appx 40–41.
     On April 21, 2020, DLA issued a public notice of an
 amendment (“Amendment 6”) that changed Lot 2 from ac-
 quiring TAP to acquiring an “Advanced Tactical Assault
 Panel (ATAP) 5 and its associated components.” Appx
 40–41 (emphasis added); see also SEKRI, 152 Fed. Cl. at
 746. The notice stated, “This acquisition for Lot #2 will re-
 sult in the award of a single, firm fixed-price, long-term In-
 definite Delivery, Indefinite Quantity (IDIQ) contract
 consisting of a one (1) year base term and two (2), one (1)
 year option terms.” Appx 41. The notice further specified
 that “[t]he solicitation’s evaluation factors, which are listed
 in descending order of importance, will include Product
 Demonstration Models, Past Performance – Performance
 Confidence Assessment and Socioeconomic Program Sup-
 port.” Appx 41. In addition, offered prices “will be evalu-
 ated . . . to ensure that award will be made at fair and

     4   DLA is an agency within the U.S. Department of
 Defense. As such, it is subject to both the JWOD Act and
 the FAR.
     5   ATAP “is a fighting load carrier to be worn with a
 parachute harness” that “can be configured . . . to attach 6
 or more M4 magazines, two grenades, an Individual First
 Aid Kit (IFAK) and canteen/general purpose pouches.”
 Appx 38. ATAP “enables the paratrooper’s fighting load to
 in a ready to fight configuration when reaching the drop
 zone.” Appx 38.
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 SEKRI, INC.   v. US                                          9

 reasonable prices.” Appx 41. The notice also explained
 that “[t]he planned acquisition will be issued on an Unre-
 stricted Basis” and that “[t]he Government intend[ed] to
 make a single award to the responsible offeror whose pro-
 posal [met] all terms and conditions of the solicitation,
 [was] determined to be the best value to the Government
 and submit[ted] an overall price that is determined to be
 fair and reasonable by the contracting officer.” Appx 42. A
 subsequent amendment set an October 7, 2020, proposal
 deadline. SEKRI, 152 Fed. Cl. at 746.
     SEKRI, Inc., 6 a nonprofit agency qualified as a manda-
 tory source of ATAP under the AbilityOne Program,
 SEKRI, 152 Fed. Cl. at 745–46, became aware of Amend-
 ment 6 shortly after it issued, Appx 1087. Between
 June 10, 2020, and June 25, 2020, SourceAmerica ex-
 changed emails with DLA regarding DLA’s procurement of
 ATAP via a competitive bidding process. SEKRI, 152 Fed.
 Cl. at 746; Appx 1088. SourceAmerica informed DLA that
 ATAP appears on the Committee’s procurement list under
 the AbilityOne Program and that SEKRI is the nonprofit
 agency authorized to supply ATAP.              Appx 1091.
 SourceAmerica asked DLA if it intended to acquire the
 ATAP specified in the solicitation from SEKRI. Appx 1091.
 DLA’s contracting officer responded that, “[t]o best meet
 the Army’s requirements, DLA is purchasing the [ATAP]
 in the full & open unrestricted SPE1C1-19-R-0021” and
 that SourceAmerica “is invited to offer as a sub-contractor
 or as a prime contractor under this solicitation.”
 Appx 1090.
     On October 7, 2020, the solicitation period ended. On
 January 21, 2021, before an award was made, SEKRI filed
 a complaint in the U.S. Court of Federal Claims challeng-
 ing, as contrary to law, DLA’s procurement of ATAP

     6  SEKRI, Inc. is also known as Southeastern Ken-
 tucky Rehabilitation Industries, Inc. Appx 26.
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 10                                           SEKRI, INC.   v. US

 through a competitive solicitation rather than through
 SEKRI. Appx 26–45. SEKRI alleged that it is a “qualified
 nonprofit agency for other severely disabled workers” un-
 der the JWOD Act. Appx 28. It also alleged, for standing
 purposes, that it qualifies as an “interested party” under
 28 U.S.C. § 1491 “because it currently produces the ATAP,
 and because it is the mandatory source of supply for the
 ATAP.” Appx 27. According to the complaint, ATAP ap-
 pears on the Committee’s procurements list established
 under the JWOD Act, and the Committee designated
 SEKRI as the “Mandatory Source of Supply” for ATAP.
 Appx 37–38. SEKRI sought an injunction of the procure-
 ment prohibiting the federal government from procuring
 the ATAP from any source other than SEKRI, as well as
 attorney fees under the Equal Access to Justice Act. Appx
 42–45.
     On February 5, 2021, the government moved to dismiss
 the complaint for lack of subject matter jurisdiction or, al-
 ternatively, for failure to state a claim under the waiver
 rule established in Blue & Gold Fleet, L.P. v. United States,
 492 F.3d 1308 (Fed. Cir. 2007). SEKRI, 152 Fed. Cl. at 746;
 Appx 22. The government did not challenge SEKRI’s
 standing in its motion to dismiss. SEKRI, 152 Fed. Cl.
 at 746.
     On March 9, 2021, the Court of Federal Claims granted
 the government’s motion. Id. at 745. The court sua sponte
 raised the issue of SEKRI’s standing. Id. at 747. The court
 explained that, to establish standing as an “interested
 party” under 28 U.S.C. § 1491(b)(1), a plaintiff must show
 that “it (1) is an actual or prospective bidder, and (2) pos-
 sesses the requisite direct economic interest.” Id. at 748
 (quoting Rex Serv. Corp. v. United States, 448 F.3d 1305,
 1307 (Fed. Cir. 2006)).
    The court determined that SEKRI does not qualify as
 an actual or prospective bidder. Id. In determining that
 SEKRI does not constitute a prospective bidder, the court
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 SEKRI, INC.   v. US                                         11

 reasoned that SEKRI “cannot now claim to be a prospective
 bidder on the DLA’s solicitation because the solicitation pe-
 riod ended on October 7, 2020.” Id. The court also ex-
 plained that “a plaintiff qualifies as a prospective bidder if
 it diligently pursued its protest rights, such as bringing a
 bid protest prior to the close of bidding.” Id. (citing CGI
 Fed. Inc. v. United States, 779 F.3d 1346, 1349–50
 (Fed. Cir. 2015)). The court found that SEKRI did not dil-
 igently pursue its protest rights because the only action
 SEKRI took before filing its complaint was contacting DLA,
 through SourceAmerica, to inform DLA that SEKRI was a
 mandatory source of the ATAP specified in the solicitation.
 Id. at 749. The court observed that SEKRI did not submit
 a bid before the deadline despite DLA’s invitation. Id.
     The court also determined that “[e]ven if the plaintiff
 had standing, the Court finds that the plaintiff’s complaint
 must be dismissed under Blue & Gold.” Id. at 751. The
 court reasoned that SEKRI had the opportunity to object to
 Amendment 6 to the solicitation as containing a patent er-
 ror, namely the omission of ATAP’s mandatory source of
 supply, but SEKRI did not do so. Id. at 755. Further, the
 court explained, SEKRI failed to object to the solicitation
 before the close of the bidding process. Id. at 757. The
 court stated that “[t]o avoid waiver, a party must object be-
 fore the close of the bidding process.” Id.
    SEKRI appealed. We have jurisdiction pursuant to
 28 U.S.C. § 1295(a)(3).
                         STANDARD OF REVIEW
     We review determinations of standing de novo. Labatt
 Food Serv., Inc. v. United States, 577 F.3d 1375, 1379 (Fed.
 Cir. 2009); COMINT Sys. Corp. v. United States, 700 F.3d
 1377, 1381 (Fed. Cir. 2012). Any underlying fact findings
 are reviewed for clear error. Labatt, 577 F.3d at 1379.
     Whether a complaint was properly dismissed for fail-
 ure to state a claim upon which relief could be granted is a
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 12                                             SEKRI, INC.   v. US

 question of law that we review without deference. Land
 Shark Shredding, LLC v. United States, 842 F. App’x 589,
 591 (Fed. Cir. 2021). To state a claim, a complaint must
 allege facts plausibly showing entitlement to relief. Ac-
 ceptance Ins. Cos., Inc. v. United States, 583 F.3d 849, 853
 (Fed. Cir. 2009) (quoting Bell Atl. Corp. v. Twombly,
 550 U.S. 544, 545 (2007)).
                          DISCUSSION
                                I
                                A
     The Tucker Act, 28 U.S.C. § 1491, as amended by the
 Administrative Dispute Resolution Act of 1996, Pub. L. No.
 104–320, § 12, 110 Stat. 3870, 3874 (Oct. 19, 1996), “confers
 exclusive jurisdiction upon the Court of Federal Claims
 over bid protests against the government.” Distributed
 Sols., Inc. v. United States, 539 F.3d 1340, 1344 (Fed. Cir.
 2008); see also Impresa Construzioni Geom. Domenico
 Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir.
 2001). Section 1491(b)(1) reads:
      [T]he United States Court of Federal Claims . . .
      shall have jurisdiction to render judgment on an
      action by an interested party objecting to a solicita-
      tion 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 stat-
      ute or regulation in connection with a procurement
      or a proposed procurement,
 28 U.S.C. § 1491(b)(1) (emphasis added). This court has
 interpreted the phrase “interested party” in § 1491(b)(1) as
 consistent with the express definition given to that phrase
 in a related statute, the Competition in Contracting Act,
 31 U.S.C. §§ 3551–56: “an actual or prospective bidder or
 offeror whose direct economic interest would be affected by
 the award of the contract or by failure to award the
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 SEKRI, INC.   v. US                                         13

 contract.” 7 Am. Fed’n of Gov’t Emps., AFL-CIO v. United
 States, 258 F.3d 1294, 1302 Fed. Cir. (2001); see also
 31 U.S.C. § 3551(2)(A). We are not aware of any case
 where this court has specified the circumstances under
 which a qualified mandatory source of a commodity in the
 AbilityOne Program qualifies as a “prospective bidder or
 offeror” for purposes of standing to file a bid protest in the
 Court of Federal Claims. 8 This case therefore presents an
 issue of first impression.
                                  B
      SEKRI argues that it has standing under the Tucker
 Act as an actual or prospective bidder with a direct eco-
 nomic interest in DLA’s solicitation on the grounds that it
 is a qualified, mandatory source of ATAP in the AbilityOne
 Program. Appellant’s Br. 10. According to SEKRI, “[t]he
 only reason that there is any ‘actual bidder,’ apart from
 SEKRI,” is that DLA violated its express obligation under
 the JWOD Act and its implementing regulations to procure
 ATAP from SEKRI via the AbilityOne Program. Id.
     We agree with SEKRI. We hold that SEKRI qualifies
 as a prospective bidder for standing purposes under the

     7   In contrast, federal district courts have jurisdiction
 to review bid protests under the Administrative Procedure
 Act. See, e.g., Garufi, 238 F.3d at 1331.
     8   In cases not involving mandatory sources under
 the JWOD Act, this court has explained, for example, that
 “the opportunity to qualify either as an actual or a prospec-
 tive bidder ends when the proposal period ends,” Rex Ser-
 vice Corp. v. United States, 448 F.3d 1305, 1308 (Fed. Cir.
 2006), and that a protester can qualify as a prospective bid-
 der by “diligently and continuously pursuing its rights in
 the [agency] and then, immediately upon dismissal by the
 [agency], in the Court of Federal Claims,” CGI Federal Inc.
 v. United States, 779 F.3d 1346, 1349 (Fed. Cir. 2015).
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 14                                             SEKRI, INC.   v. US

 Tucker Act. SEKRI is the designated mandatory source of
 ATAP in the AbilityOne Program. 9 SEKRI, 152 Fed. Cl.
 at 745. SourceAmerica notified DLA early in the solicita-
 tion period that SEKRI is the mandatory source of ATAP
 in the AbilityOne Program. Id. at 749. Despite its aware-
 ness that SEKRI is the mandatory source, DLA opted to
 continue the competitive solicitation of bids for ATAP. Id.
 DLA thus knowingly violated its statutory and regulatory
 obligation under the JWOD Act and its implementing reg-
 ulations to procure ATAP from SEKRI using the Abil-
 ityOne Program. See Kingdomware Techs., Inc. v. United
 States, 579 U.S. 162, 171 (2016) (“Unlike the word ‘may,’
 which implies discretion, the word ‘shall’ usually connotes
 a requirement.”); see also 41 U.S.C. § 8504(a) (a contracting
 activity “shall procure” a product on the procurement list
 from a qualified nonprofit agency); 41 C.F.R. § 51–1.2(a)
 (the JWOD Act “mandates” that contracting activities pro-
 cure products on the procurement list from a qualified non-
 profit agency); id. § 51–5.2(a) (“Nonprofit agencies
 designated by the Committee are mandatory sources of
 supply for all entities of the Government for commodities
 and services included on the [p]rocurement [l]ist . . . .”); id.
 § 51–5.2(b) (“Purchases of commodities on the [p]rocure-
 ment [l]ist by entities of the [g]overnment shall be made
 from sources authorized by the Committee”); id. § 51–5.2(c)
 (“Contracting activities shall require other persons provid-
 ing commodities which are on the [p]rocurement [l]ist to
 entities of the [g]overnment by contract to order these com-
 modities from the sources authorized by the Committee.”).

      9  The government argued for the first time at oral
      argument that SEKRI is not a mandatory source of
      ATAP. Oral Arg. at 14:08–24:00. We find that argu-
      ment forfeited. Henry v. Dep’t of Justice, 157 F.3d 863,
      865 (Fed. Cir. 1998) (“The government’s argument . . .
      was raised for the first time at oral argument and
      comes too late.”).
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 SEKRI, INC.   v. US                                          15

 These circumstances suffice to qualify SEKRI as a prospec-
 tive bidder for standing purposes under the Tucker Act.
     The government argues that SEKRI does not qualify as
 a “prospective bidder” under the rubric established in this
 court’s past cases. Specifically, the government contends
 that SEKRI failed to submit a bid during the bidding period
 as required under Rex and SEKRI failed to file an agency
 protest during the bidding period and thereafter diligently
 pursue its protest rights in the Court of Federal Claims, as
 required under CGI. See Appellee’s Br. 9–10.
     The cases identified by the government do not involve
 mandatory sources of commodities participating in the
 AbilityOne Program. Indeed, the AbilityOne Program is a
 complex system of government procurement that imposes
 specific obligations on the government, central nonprofit
 organizations, and nonprofit agencies that employ the
 blind and severely disabled. We decline the invitation to
 treat mandatory sources of commodities participating in
 the AbilityOne Program the same as other potential inter-
 ested parties. SEKRI has already completed, for example,
 the process of initial qualification to participate in the Abil-
 ityOne Program, 41 C.F.R. § 51–4.2, and must undergo an
 additional, annual process to maintain its qualification, id.
 § 51–4.3. SEKRI therefore obtained the right to supply the
 government with ATAP by participating in the AbilityOne
 Program, not the competitive bidding route.
      It is unreasonable to require mandatory sources such
 as SEKRI to openly compete in the competitive bidding pro-
 cess given Congress’s intent to take participants in the
 AbilityOne Program out of the competitive process. See,
 e.g., 83 Cong. Rec. 9111. In the competitive bidding pro-
 cess, procuring agencies solicit bids because they do not yet
 know which entity or entities will best be able to supply the
 product. Not so under the JWOD Act. Entities like SEKRI
 have established economic interest bona fides because they
 have been qualified under the AbilityOne Program and are
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 16                                          SEKRI, INC.   v. US

 a mandatory source. Congress has established that such
 entities must be prioritized over other commercial sources,
 absent special circumstances. See 41 U.S.C. § 8504(a); see
 also 41 C.F.R. § 51–5.4 (providing for purchase exceptions);
 48 C.F.R. § 8.706 (same).
     In the context of competitive bidding, we have held that
 a bidder may “cease[] to be a prospective bidder” where it
 does not “pursue its rights in a diligent fashion.” Cf. CGI,
 779 F.3d at 1351 (discussing Rex, 448 F.3d at 1307). But it
 would not make sense to impose upon mandatory sources
 an affirmative obligation to monitor the federal govern-
 ment’s solicitations to identify attempts to circumvent the
 AbilityOne Program and immediately bring agency pro-
 tests, especially where the JWOD Act places an affirmative
 obligation on procuring agencies to determine whether the
 procurement is subject to a mandatory source. Here, the
 onus is on the procuring agency, not the nonprofit agency
 participating in the AbilityOne Program. See 41 U.S.C.
 § 8504(a) (requiring federal procuring agencies to procure
 certain goods from a qualified nonprofit agency under the
 AbilityOne Program); see also 41 C.F.R. §§ 51–1.2(a), 51–
 5.2. This is not to say that procuring agencies have no way
 out of the JWOD procurement regime. To lawfully procure
 the ATAP from a commercial source other than SEKRI
 through competitive bidding, the government should have
 obtained a purchase exception from SourceAmerica or the
 Committee. See 41 C.F.R. § 51–5.4; 48 C.F.R. § 8.706. The
 government does not show that it ever obtained, or even
 sought, a purchase exception. On the record before us,
 therefore, the government was required to procure the
 ATAP from SEKRI using the appropriate process under the
 AbilityOne Program. See 41 C.F.R. §§ 51–5.4, 51–6.1 (di-
 rect order process), 51–6.2 (allocation process); 48 C.F.R.
 §§ 8.705–2 (direct order process), 8.705–3 (allocation pro-
 cess). In this respect, SEKRI was a “prospective bidder.”
     We conclude that SEKRI, as a qualified mandatory
 source in the AbilityOne Program, has standing as a
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 SEKRI, INC.   v. US                                          17

 prospective bidder to bring its bid protest action in the
 Court of Federal Claims.
                                  II
      The government also contends that SEKRI waived its
 bid protest rights under Blue & Gold and has therefore
 failed to state a claim. Appellee’s Br. 14–26; SEKRI,
 152 Fed. Cl. at 745. The government states that SEKRI’s
 “belated protest fits squarely within the Blue & Gold rule”
 and that this presents a “classic” case of waiver. Appellee’s
 Br. 15. We disagree.
     We recently held that a bidder’s “timely, formal chal-
 lenge of the solicitation before [the agency] removes [a] case
 from the ambit of Blue & Gold and its progeny.” Harmonia
 Holdings Grp., LLC v. United States, 20 F.4th 759, 767
 (Fed. Cir. 2021). 10 Harmonia did not involve a mandatory
 source participating in the AbilityOne Program, but it is
 nevertheless instructive.          Here, SEKRI, through
 SourceAmerica—early in the bidding period and shortly af-
 ter SEKRI learned of the solicitation—gave notice to DLA
 that it was a mandatory source of ATAP participating in
 the AbilityOne Program. DLA confirmed its receipt of the
 SourceAmerica contact, and it responded with its determi-
 nation that it would proceed with a competitive bid. Based
 on these facts, SEKRI satisfied its obligation under Har-
 monia to submit a “timely, formal challenge” of the solici-
 tation. Thereafter, SEKRI filed its bid protest action before
 the Court of Federal Claims shortly after the close of the
 bidding period and prior to any award determination.
 SEKRI thus did not waive its right to bring its bid protest
 under Blue & Gold.

     10  The Court of Federal Claims issued its judgment in
 this case on March 9, 2021. This court issued its opinion in
 Harmonia on December 7, 2021.
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 18                                         SEKRI, INC.   v. US

      We conclude that DLA’s awareness during the bidding
 process that SEKRI is the mandatory source of ATAP re-
 moves this case from the application of the Blue & Gold
 standard of waiver. The government cites no case in which
 we have extended the requirements of Blue & Gold to man-
 datory sources of supply in the AbilityOne Program. That
 the government chose to ignore the potential violation of
 the JWOD Act does not give it a basis on which to claim
 that SEKRI has no standing. To do so turns the JWOD Act
 on its head. As a qualified, mandatory source of ATAP par-
 ticipating in the AbilityOne Program, SEKRI has the right
 to supply the ATAP separate and apart from the competi-
 tive bidding process, in accordance with the FAR, the
 JWOD Act, and its regulations. For these reasons, we re-
 verse the judgment of the Court of Federal Claims that
 SEKRI waived its right under Blue & Gold to bring its bid
 protest action.
                        CONCLUSION
     We hold that SEKRI qualifies as a prospective bidder
 for standing purposes because DLA was aware during the
 bidding process that SEKRI is a mandatory source of ATAP
 in the AbilityOne Program. We also hold that SEKRI did
 not waive its bid protest rights under Blue & Gold because
 DLA was on notice, during the bidding process, that SEKRI
 is the mandatory source of ATAP in the AbilityOne pro-
 gram. Accordingly, we reverse the Court of Federal Claims’
 dismissal and remand for further proceedings consistent
 with this opinion. We have considered the parties’ remain-
 ing arguments and find them unpersuasive.
                REVERSED AND REMANDED
                           COSTS
 Costs to appellant.