Sekri, Inc. v. United States

In the United States Court of Federal Claims

No. 21-778C

Filed Under Seal: March 9, 2021

Reissued: March 22, 2021*

SEKRI, INC.,

Plaintiff,

v.

UNITED STATES,

Defendant.

Alan Grayson, Windermere, FL, for the plaintiff.

Rafique Anderson, Commercial Litigation Branch, Civil Division, U.S. Department of Justice,

Washington, D.C., Allison Eck, Defense Logistics Agency, of counsel, for the defendant.

MEMORANDUM OPINION

HERTLING, Judge

The plaintiff, SEKRI, Inc. (“SEKRI”), has filed this pre-award bid protest alleging that

the United States, acting through the Defense Logistics Agency (“DLA”), failed to designate in a

solicitation that SEKRI is the mandatory source of supply of a military-equipment item known as

Advanced Tactical Assault Panels (“ATAP”), which are components of protective ballistic vests.

The defendant has moved to dismiss the plaintiff’s claim for lack of subject-matter

jurisdiction under Rule 12(b)(1) of the Rules of the Court of Federal Claims (“RCFC”) or, in the

alternative, for failure to state a claim under RCFC 12(b)(6), arguing that the plaintiff has waived

its claim under the waiver rule established by Blue & Gold Fleet, L.P. v. United States, 492 F.3d

1308 (Fed. Cir. 2007).

Because the plaintiff is not an actual or prospective bidder, the plaintiff lacks standing to

bring a bid protest under 28 U.S.C. § 1491(b)(1). Although the defendant has not challenged the

*

Pursuant to the protective order in this case, the Court initially filed this opinion under seal

and gave the parties 14 days to propose redactions of confidential or proprietary information.

(ECF 21.) The parties have agreed that the opinion does not contain any information that

requires redaction. (ECF 24.) Accordingly, no redactions were made to this public version of

the opinion.

plaintiff’s standing, the Court must ensure it has jurisdiction over the case. Finding jurisdiction

absent, the Court must dismiss for lack of subject-matter jurisdiction. RCFC 12(h)(3).

Additionally, even if the plaintiff had standing, the Court would have to dismiss the plaintiff’s

claim under Blue & Gold Fleet, because the plaintiff failed to object to the solicitation upon

discovering a patent error before the close of the solicitation.

I. BACKGROUND1

The Javits–Wagner–O’Day Act (“JWOD Act”), codified at 41 U.S.C. §§ 8501-06, and its

implementing regulations, 41 C.F.R. pt. 51 and 48 C.F.R. subpt. 8.7, established the AbilityOne

Program. (ECF 1, ¶¶ 4-17.) The AbilityOne Program requires the government to procure certain

items included on a procurement list from designated qualified nonprofit agencies that employ

the blind or severely disabled. 41 U.S.C. § 8504(a). SEKRI is the designated, mandatory source

from which the U.S. Army must procure ATAP. (ECF 1, ¶¶ 18-19.)

In July 2019, the DLA issued solicitation SPE1C1-19-R-002 (“solicitation”). (ECF 13-2,

Decl. of Maria C. Aguayo ¶ 6.) The solicitation anticipated awards in two separate lots: Lot 1

sought to acquire a “Rifleman Set with Tactical Assault Panel” (“TAP”); Lot 2 originally sought

the same with “Associated Components.” (Id. ¶ 7.) The DLA awarded Lot 1 to Propper

International, Inc. (Id. ¶ 11; ECF 1, ¶ 23.) Because SEKRI is not a mandatory source of TAP, it

did not bid on either Lot 1 or Lot 2 of the solicitation.

On April 21, 2020, the DLA provided public notice of an amendment (“Amendment 6”)

to the solicitation. (ECF 1, ¶ 24.) Applying only to Lot 2, Amendment 6 changed the item to be

acquired to a Rifleman Set with ATAP, in place of TAP. (Id.) Amendment 6 did not list any

mandatory source of supply for ATAP. (See id.) The amendment became effective on June 3,

2020; it also established a July 20, 2020 proposal deadline. (ECF 13-1, App. at 74, 78.)

Ultimately, on September 18, 2020, another amendment extended the closing date for proposals

on Lot 2 to October 7, 2020. (Id. at 80-81.)

SEKRI learned of the change from TAP to ATAP shortly after the DLA issued

Amendment 6. (ECF 14-1, Decl. of Leo Miller ¶ 6.) SEKRI thus became aware that the DLA

was seeking ATAP through competition, rather than using SEKRI as the mandatory source of

supply. (Id.) Because SEKRI is a mandatory source of ATAP, it did not submit a proposal to

1

Because the Court grants the defendant’s motion to dismiss, the facts as alleged in the

complaint (ECF 1) are assumed to be true. This recitation of the facts therefore does not

constitute findings of fact; rather, the Court provides a recitation of the facts as alleged by the

plaintiff. For additional context, the Court refers to facts derived from exhibits submitted by the

parties in support of their briefs regarding the defendant’s motion to dismiss. These facts are

included only to add context and to provide a more complete background. In deciding the

jurisdictional issues, the Court considers evidence outside the pleadings, but in deciding the

defendant’s Blue & Gold Fleet waiver argument, the Court considers only the complaint and the

exhibits explicitly noted in Part III.B, infra.

2

compete for the award. (See ECF 14 at 14 (“SEKRI is not a bidder; on the contrary, SEKRI is a

required source of supply, and SEKRI maintains that there shouldn’t be any ‘bidders’ or

‘bidding’ for ATAP at all.”).) As SEKRI’s executive director explained, “[u]nder the JWOD

Act, . . . SEKRI is supposed to seek work by having requirements posted to the Procurement List

established by the federal agency Ability One, not by bidding against other government

contractors for such work.” (ECF 14-1, Decl. of Leo Miller ¶ 5.)

SourceAmerica is the central nonprofit agency through which SEKRI generally must

communicate regarding contracting activities under the AbilityOne Program. (ECF 1 at 10 n.6.)

Between June 10, 2020 and June 25, 2020, SourceAmerica emailed the DLA regarding the

solicitation, as amended by Amendment 6, on SEKRI’s behalf.2 (ECF 14 at 3; see also ECF 14-

2.) SourceAmerica explained to the DLA via email that SEKRI is the nonprofit agency

authorized to produce ATAP for the U.S. Army and inquired whether the DLA would be willing

to acquire ATAP under the solicitation through SourceAmerica, and thus through SEKRI.

(ECF 14-2.) The DLA’s contracting officer replied that “[t]o best meet the Army’s

requirements, DLA is purchasing the [ATAP] in the full & open unrestricted solicitation . . . .”

(Id.) Aside from this initial inquiry through email, SEKRI did not communicate further, either

directly or indirectly through SourceAmerica, with the DLA. SEKRI made no complaint, either

informal or formal, and lodged no protest regarding the solicitation, either with SourceAmerica,

the DLA, or the Government Accountability Office (“GAO”). SEKRI did nothing until it filed

this action before the Court in January 2021, more than three months after the solicitation closed.

On January 21, 2021, SEKRI filed this pre-award bid protest under the Tucker Act,

28 U.S.C. § 1491(b), alleging that the DLA had failed to designate SEKRI as the mandatory

source of supply for ATAP and seeking “to enjoin the award or continued performance of any

federal contract or contracts, or the modification of any federal contract or contracts, awarded to

or performed by entities other than SEKRI, for the production (in whole or in part) of a military

equipment item known as the [ATAP].” (ECF 1, ¶ 1.) The DLA has agreed not to make an

award for Lot 2 before May 31, 2021, unless the Court issues a decision allowing a contract

award to proceed. (ECF 11.)

The defendant has moved to dismiss for lack of subject-matter jurisdiction or, in the

alternative, failure to state a claim upon which relief can be granted, under Blue & Gold Fleet.

(ECF 13, corrected at ECF 18.) The defendant has not challenged the plaintiff’s standing to

maintain this action. The matter has been fully briefed, and upon the Court’s request, the parties

filed supplemental briefs addressing the issue of the plaintiff’s standing. The Court heard oral

argument on March 4, 2021.

2

The plaintiff asserts in its brief (ECF 14 at 3) that email exchanges regarding Amendment 6

between SourceAmerica and the DLA occurred between June 10, 2020 and June 25, 2020. The

only emails supplied by SEKRI are dated June 10, 2020; SEKRI has provided no emails from

after that date.

3

II. JURISDICTION AND STANDING

This court has jurisdiction over bid protests pursuant to the Tucker Act, 28 U.S.C.

§ 1491(b), which confers on this court jurisdiction over actions “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.” Id. § 1491(b)(1).

The defendant has moved to dismiss the complaint for lack of subject-matter jurisdiction,

pursuant to RCFC 12(b)(1) or, in the alternative pursuant to RCFC 12(b)(6), based on the waiver

rule established in Blue & Gold Fleet, discussed infra, III.A.3 To determine jurisdiction, the

“court must accept as true all undisputed facts asserted in the plaintiff’s complaint and draw all

reasonable inferences in favor of the plaintiff.” Trusted Integration, Inc. v. United States, 659

F.3d 1159, 1163 (Fed. Cir. 2011). The plaintiff has the burden of establishing jurisdiction by a

preponderance of the evidence. Id. When a plaintiff’s jurisdictional facts are challenged, only

those factual allegations that the government does not controvert are accepted as true. Shoshone

Indian Tribe of Wind River Rsrv. v. United States, 672 F.3d 1021, 1030 (Fed. Cir. 2012). The

court is not “‘restricted to the face of the pleadings’” in resolving disputed jurisdictional facts.

Id. (quoting Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1584 (Fed. Cir. 1993), cert.

denied, 512 U.S. 1235 (1994)). The court may review evidence outside the pleadings. Id. If the

court finds that it lacks subject-matter jurisdiction over a claim, RCFC 12(h)(3) requires the

court to dismiss the claim.

As a threshold issue, a plaintiff must establish standing. Although the defendant does not

dispute the plaintiff’s standing (see ECF 16 at 2), the Court raises the issue sua sponte. The

Court has “an independent obligation to determine whether subject-matter jurisdiction exists,

even in the absence of a challenge from any party.” Arbaugh v. Y&H Corp., 546 U.S. 500, 514

(2006).

In the context of a bid protest, standing connotes a concept narrower than the typical

inquiry to establish standing under Article III. Rather, to establish standing under § 1491(b), a

protestor must be an “interested party.” 28 U.S.C. § 1491(b)(1). The statutory term “interested

party” has been held to have a particular meaning under § 1491(b). The Federal Circuit rejected

3

The defendant argues that under Bannum, Inc. v. United States, 779 F.3d 1376, 1381 (Fed.

Cir. 2015), the Court must resolve its motion to dismiss under Blue & Gold Fleet before even

reaching the question of SEKRI’s standing. See also COMINT Sys. Corp. v. United States, 700

F.3d 1377, 1381-82 (Fed. Cir. 2012) (reaching the Blue & Gold Fleet issue without addressing

the issue of standing). The Court finds that the rationale of Inserso Corp. v. United States,

961 F.3d 1343 (Fed. Cir. 2020), undermines that aspect of Bannum and COMINT. In the wake

of Inserso, as discussed below, the Court determines that dismissal under Blue & Gold Fleet’s

waiver rule should be resolved under RCFC 12(b)(6). As a result, the issue of SEKRI’s

standing, and hence this Court’s jurisdiction, must be addressed and resolved as a preliminary

matter.

4

the dictionary meaning and the standing requirements of the Administrative Procedure Act

(“APA”). See Am. Fed’n of Gov’t Employees, AFL-CIO v. United States (“AFGE”), 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 § 1491(b)(1), intended to confer

standing on anyone who might have standing under the APA.”). Because Congress used the

same term in § 1491(b) as it did in the Competition in Contracting Act (“CICA”), 31 U.S.C.

§§ 3551-59, the AFGE court found that “Congress intended the same standing requirements that

apply to protests brought under the CICA to apply to actions brought under § 1491(b)(1).” Id.

Based on the CICA definition of “interested party,” the court held “that standing under

§ 1491(b)(1) is limited to actual or prospective bidders or offerors whose direct economic

interest would be affected by the award of the contract or by failure to award the contract.” Id.

Following the “interested party” definition from AFGE, the Federal Circuit later

established a two-prong test to establish standing under § 1491(b): the plaintiff must “establish

that it (1) is an actual or prospective bidder, and (2) possesses the requisite direct economic

interest.” Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006). Protestors

must meet both prongs to establish standing. See id.; see also CGI Fed. Inc. v. United States,

779 F.3d 1346, 1348 (Fed. Cir. 2015). SEKRI fails the first prong of this test.

SEKRI concedes that it is not an actual bidder for the DLA’s solicitation. (See ECF 14 at

14.) SEKRI’s executive director explained that it does not seek work “by bidding against other

government contractors for such work.” (ECF 14-1, Decl. of Leo Miller ¶ 5.) Instead, as a

mandatory source, it relies on obtaining work through the AbilityOne Program. (See id.) The

only issue therefore is whether SEKRI is a “prospective bidder.”

Both parties cite to Weeks Marine, Inc. v. United States, 575 F.3d 1352 (Fed. Cir. 2009),

to establish the plaintiff’s standing. In Weeks Marine, a non-bidder established standing because

it had demonstrated a non-trivial competitive injury in a pre-award bid protest. Id. at 1363. Both

parties argue that because SEKRI can demonstrate a non-trivial competitive injury, the result in

Weeks Marine would appear to give the plaintiff standing. The parties’ approach misinterprets

the analysis in Weeks Marine. The Federal Circuit did not deviate in that case from its two-

prong standing test and specifically noted that § 1491(b)(1) “imposes more stringent standing

requirements than Article III.” Id. at 1359 (citing AFGE, 258 F.3d 1294).

The court in Weeks Marine found that the protestor was a prospective bidder because the

protestor intended to bid and was able to perform the work contemplated by the contracts.

Weeks Marine, 575 F.3d at 1359-60. The government did not dispute the protestor’s intention to

bid or capability to perform. Id. Accordingly, the court moved on to the second prong. Its

holding is significant not because it gave non-bidders with a non-trivial competitive injury

standing but, instead, because it set the standard for the second prong in a pre-award bid protest.

Instead of requiring that a protestor demonstrate a “substantial chance” of obtaining the contract

but for the alleged error in the procurement process, as used for post-award bid protests, the court

held that, in pre-award bid protests, the “prospective bidder or offeror must establish ‘a non-

trivial competitive injury which can be redressed by judicial relief’ . . . .” Id. at 1363 (internal

quotation uncited) (emphasis added). In so holding, the Federal Circuit did not eliminate the first

prong of its standing test under § 1491(b)(1).

5

SEKRI has not established that it is a prospective bidder. Although SEKRI claimed to be

a prospective bidder at oral argument, it admits in its opposition brief that it “isn’t even

competing for award under [Amendment 6].” (ECF 14 at 17.) The plaintiff’s “opportunity to

qualify as a prospective bidder ends when the solicitation period ends . . . .” CGI Federal,

779 F.3d at 1350 (emphasis omitted). SEKRI has a timing issue; it cannot now claim to be a

prospective bidder on the DLA’s solicitation because the solicitation period ended on October 7,

2020.

Under CGI Federal, 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. CGI Federal, 779 F.3d

at 1349-50. The standing analysis here becomes blurred with the Blue & Gold Fleet waiver rule,

which requires a protestor with the opportunity to object to a patent error to do so prior to the

close of the bidding process. See Blue & Gold Fleet, 492 F.3d at 1313. Indeed, the Federal

Circuit, in declining to reach the standing issue after finding waiver under Blue & Gold Fleet,

noted that its case law “itself has taken into account, in certain circumstances, whether a party

has timely presented and diligently pressed its protest” to determine whether a protestor is an

“interested party.” Bannum, 779 F.3d at 1381 (citing CGI Federal, 779 F.3d 1346).

CGI Federal was a pre-award bid protest brought by a protestor who was not an actual

bidder. CGI Federal, 779 F.3d at 1347-48. The protestor instead argued that it was a

prospective bidder. Id. at 1348. Before bidding closed, the protestor filed a timely pre-award

protest at the GAO. Id. Although the bidding period closed while the GAO protest was pending,

the court held that the protestor had established its status as a prospective bidder by filing the

protest prior to the close of bidding. Id. at 1348, 1351.

SEKRI could likewise qualify as a prospective bidder if only it had “diligently pursue[d]

its protest rights” prior to the proposal deadline. Id. at 1349. SEKRI learned of Amendment 6

shortly after the DLA issued it, and SEKRI knew that the DLA was seeking ATAP through

competition, rather than using SEKRI as a mandatory source of supply. (ECF 14-1, Decl. of Leo

Miller ¶ 6.) On June 10, 2020 (before the proposal deadline), SourceAmerica emailed the DLA’s

contracting officer stating that SEKRI is the nonprofit agency authorized to produce ATAP for

the U.S. Army and inquiring whether the DLA would be willing to move forward with

SourceAmerica. (ECF 14-2.) The contracting officer replied that the DLA was purchasing the

ATAP through a full and open competition. (Id.) SourceAmerica relayed that information to

SEKRI on the same day and encouraged SEKRI “to respond to the commercial Solicitation

before it closes on July 20, 2020, while [SourceAmerica] continue[s] to look at other options.”4

(Id.) Disregarding SourceAmerica’s advice, SEKRI did nothing.

SEKRI lacks standing for the same reason it would lose on the merits under Blue & Gold

Fleet. It did not do anything in response to the solicitation; it neither submitted a bid nor

objected to the DLA or any other entity prior to the proposal deadline, despite knowing that the

4

The deadline was ultimately extended to October 7, 2020 on September 18, 2020. (ECF

13-1, App. at 81.)

6

DLA was procuring ATAP through competition. SEKRI did not diligently pursue its protest

rights through the SourceAmerica emails. SourceAmerica merely inquired on SEKRI’s behalf

whether the DLA would be willing to move forward with SourceAmerica, and the DLA replied

that it was proceeding through competition. SEKRI then did not formally protest the solicitation

until January 21, 2021, when it filed the present action in this court, 106 days after the close of

the solicitation. SEKRI also failed to protest or complain informally to the DLA in a manner that

might have salvaged its ability to claim status as a prospective bidder. SEKRI lost its

opportunity to qualify as a prospective bidder when the proposal deadline ended, without protest

or complaint of any kind by SEKRI, on October 7, 2020.

As a mandatory source of supply for ATAP, SEKRI can establish a non-trivial

competitive injury, but SEKRI never makes it to the second prong of the Federal Circuit’s test

for standing under § 1491(b). SEKRI argues that the Federal Circuit has addressed standing in a

mandatory-source protest under the JWOD Act. (ECF 17 at 5 (citing PDS Consultants, Inc. v.

United States, 907 F.3d 1345 (Fed. Cir. 2018).) PDS Consultants does not, however, help

SEKRI to establish standing. In that case, the Federal Circuit again used the CICA definition of

“interested party” to establish the protestor’s standing. PDS Consultants, 907 F.3d at 1356

(citing 31 U.S.C. § 3551(2)(A) and AFGE, 258 F.3d at 1302). The protestor in PDS Consultants

was preemptively challenging whether the agency could issue new contracts in the future, not

challenging either an existing contract or a closed solicitation. PDS Consultants, Inc. v. United

States, 132 Fed. Cl. 117, 125 (2017), aff’d, 907 F.3d 1345. In other words, there had not yet

been a solicitation period on the future contracts being challenged. There would have been no

CGI Federal prospective-bidder analysis required in those specific circumstances; indeed, the

Federal Circuit did not cite CGI Federal. See PDS Consultants, 907 F.3d at 1356. The Federal

Circuit held that the protestor had standing because “it is an actual or prospective service-

disabled veteran-owned small business bidder on the . . . procurements whose direct economic

interest would be affected by the contract award (or failure thereof).” Id. PDS Consultants

would help SEKRI if this case were about a potential future procurement of ATAP by the DLA

and the DLA had informed SEKRI that such a future procurement would again not include

SEKRI as a mandatory source. The case does nothing to establish standing for SEKRI to

challenge the now-closed DLA procurement at issue.

Although SEKRI has an economic interest as a mandatory source of supply, other

protestors that have been found to lack standing as non-actual or non-prospective bidders likely

have also had economic interests. In AFGE, for example, the protestors were federal employees

who allegedly had their employment at risk. AFGE, 258 F.3d at 1297. They alleged that if the

services at issue had been contracted to a contractor, rather than performed by agency personnel,

then the employees would be displaced. Id. In rejecting the dictionary meaning of “interested

party” and the APA standing requirements, the court adopted a meaning of “interested party” in

§ 1491(b) more stringent than merely a “‘person suffering legal wrong because of agency action,

or adversely affected or aggrieved by agency action.’” Id. at 1302 (quoting 5 U.S.C. § 702).

Rather, the court adopted the CICA definition in full. The ordinary sense of standing does not

apply; a protestor must be an actual or prospective bidder to establish standing under § 1491(b).

Because the federal-employee protestors in AFGE were not bidders or prospective bidders, the

court held that they did not have standing. Id.

7

Despite not being an actual or prospective bidder, SEKRI may have legal resource

beyond this court’s jurisdiction. The Tenth Circuit, for example, recognized the Federal

Circuit’s interpretation of “interested party” in § 1491(b). See City of Albuquerque v. U.S. Dep’t

of Interior, 379 F.3d 901, 910 (10th Cir. 2004). Because the Federal Circuit limited jurisdiction

under § 1491(b) to only actual or prospective bidders, the Tenth Circuit held that the district

court retained jurisdiction “to hear cases challenging the government’s contract procurement

process so long as the case is brought by someone other than the actual or potential bidder.” Id.

at 911. The district court’s jurisdiction derives from 28 U.S.C. § 1331 and the waiver of

sovereign immunity in the APA. Id.; see also Validata Chem. Servs. v. U.S. Dep’t of Energy,

169 F. Supp. 3d 69 (D.D.C. 2016) (Moss, J.) (criticizing the AFGE definition of “interested

party” while acknowledging APA jurisdiction in district court for claims by non-interested

parties).

SEKRI notes that the GAO, which applies the same standard from the CICA under its

bid-protest jurisdiction, has exercised jurisdiction over cases involving mandatory sources under

the JWOD Act. (ECF 17 at 5 (citing Training, Rehab. & Dev. Inst., Inc., B-418480, 2020 CPD

¶ 171, 2020 WL 2489778 (Comp. Gen. May 13, 2020); Goodwill Indus. of the Valleys, B-

415137, 2017 CPD ¶ 369, 2017 WL 6032987 (Comp. Gen. Nov. 29, 2017).) Although not

bound by GAO decisions, the Court may consider these decisions persuasive authority on the

application of the CICA’s definition of “interested party.” These cases do not appear to conflict

with the Federal Circuit’s approach, which is, of course, binding authority.

In Training, Rehab. & Development Inst., the GAO did not discuss the term “interested

party” or need to grapple with the issues raised in CGI Federal because the mandatory-source

protestor “timely filed a protest challenging the terms of th[e] solicitation before the . . . deadline

for submission of quotations.” 2020 WL 2489778, at *2. Here, in contrast, SEKRI did not file a

protest before the deadline for the submission of proposals.

In Goodwill Industries, the facts are closer but still distinguishable. The agency was

negotiating a new lease for a building with an incumbent lessor, VVP, LLC (“VVP”). 2017 WL

6032987, *2. Originally, the agency had contracted with Goodwill separately for custodial

services, for which Goodwill was the mandatory, designated source under the AbilityOne

program. Id. The new lease was to be a full-service lease, including the custodial services. Id.

VVP requested a proposal from Goodwill for the services, and Goodwill provided a proposal but

reminded VVP that it was the mandatory source for the services. Id. After the agency awarded

VVP the new full-service lease, the agency notified Goodwill that it would no longer contract

directly with Goodwill for the custodial services. Id. When Goodwill sought to confirm that the

agency was requiring VVP to procure the custodial services from Goodwill pursuant to the

AbilityOne regulations, the agency responded that it had no authority to direct VVP to do so. Id.

at *2-3. Goodwill filed its protest within ten days of that response. Id. at *4.

The agency argued that Goodwill was not an “interested party” because Goodwill, unlike

VVP, had not submitted a proposal to satisfy the space requirement. Id. at *5 n.10. The GAO

rejected this argument because Goodwill had no interest in providing space and “did, in fact,

submit a proposal to perform the custodial services at issue in response to a request from

VVP . . . .” Id. Here, SEKRI did not submit any proposal, and although it learned that the DLA

8

was proceeding with competition for ATAP in June 2020, it did not complain formally or

informally or protest until January 2021.

The GAO cases that SEKRI cites neither add clarity to the relevant standing issue before

the Court nor conflict with the Federal Circuit’s approach. They are insufficient to overcome the

clear mandate of the Federal Circuit’s precedents.

None of this is to say that the Court of Federal Claims lacks jurisdiction to hear claims

brought by mandatory-source suppliers of goods and services under the JWOD Act. Indeed,

SEKRI would have had standing to maintain this action if it had taken the necessary steps to

complain or protest the DLA’s planned procurement of ATAP through an open competition prior

to the closing date for the submission of proposals. It is that specific failure to have met the

Federal Circuit’s test for being a prospective bidder that undermines SEKRI’s standing, and not

the nature of its status as an alleged mandatory source under the JWOD Act.

Absent some exception to the Federal Circuit’s approach, the Court is bound by AFGE’s

definition of “interested party” and subsequent cases interpreting the standing requirement under

§ 1491(b). The Court is unaware of any such exception and the parties have cited none. The

Court notes that it makes sense intuitively that a mandatory source of supply in SEKRI’s

situation would have standing to challenge the solicitation even without being an actual or

prospective bidder, because SEKRI is challenging the mere fact that there was an open

solicitation for bids at all. The Federal Circuit precedents have never addressed the precise

situation confronting the Court. The test established by those precedents, however, is clear and

is not limited to the facts of the cases that were before the Court of Appeals as it devised the test.

Until the Federal Circuit clarifies the issue or creates a relevant exception to its test for standing

under § 1491(b), it is not for this Court to carve out its own exception in the face of binding

precedent.

Because SEKRI has not established that it is an actual or prospective bidder, it cannot

meet the first prong of standing under § 1491(b). SEKRI does not have standing to bring a bid

protest in this court, and the complaint must be dismissed under RCFC 12(b)(1) and 12(h)(3).

III. BLUE & GOLD FLEET

Given the novel situation presented by the issue of bid-protest standing for a mandatory-

source protestor, the Court also considers the substance of the defendant’s motion to dismiss.

Even if the plaintiff had standing, the Court finds that the plaintiff’s complaint must be dismissed

under Blue & Gold Fleet.

The defendant argues that SEKRI waived its claim under Blue & Gold Fleet and its

progeny. Because SEKRI filed this bid protest challenging the solicitation 106 days after the

deadline for proposals under that solicitation (October 7, 2020 – January 21, 2021), the

defendant argues that SEKRI’s claim is untimely under Blue & Gold Fleet. SEKRI argues that

Blue & Gold Fleet does not apply.

9

There is uncertainty whether the Blue & Gold Fleet waiver rule is jurisdictional. The

defendant has moved to dismiss either for lack of subject-matter jurisdiction under

RCFC 12(b)(1) or, in the alternative, for failure to state a claim under RCFC 12(b)(6). The Court

finds that the Blue & Gold Fleet waiver rule is not jurisdictional and thereby more appropriately

addressed under RCFC 12(b)(6).

A. Blue & Gold Fleet Waiver Rule

In Blue & Gold Fleet, the Federal Circuit held “that a party who has the opportunity to

object to the terms of a government solicitation containing a patent error and fails to do so prior

to the close of the bidding process waives its ability to raise the same objection subsequently in a

bid protest action in the Court of Federal Claims.” 492 F.3d at 1313. This “waiver rule” furthers

the statutory mandate in 28 U.S.C. § 1491(b)(3), which provides that “‘the courts shall give due

regard to the interests of national defense and national security and the need for expeditious

resolution of the action.’” Id. (quoting 28 U.S.C. § 1491(b)(3)) (emphasis in original).

The Federal Circuit reasoned that the same rationale underlying its patent-ambiguity

doctrine applies when a party recognizes a patent error but does not object until after the close of

the bidding process. Id. at 1314. Specifically, the court found that “[a] waiver rule . . . prevents

contractors from taking advantage of the government and other bidders, and avoids costly after-

the-fact litigation.” Id. The court explained the consequences of a contrary holding:

In the absence of a waiver rule, a contractor with knowledge of a

solicitation defect could choose to stay silent when submitting its

first proposal. If its first proposal loses to another bidder, the

contractor could then come forward with the defect to restart the

bidding process, perhaps with increased knowledge of its

competitors.

Id.

The Federal Circuit also found support in the fact that the GAO has adopted a similar rule

in its bid protest regulations, which provide that “‘[p]rotests based upon alleged improprieties in

a solicitation which are apparent prior to bid opening or the time set for receipt of initial

proposals shall be filed prior to bid opening or the time set for receipt of initial proposals.’” Id.

(quoting 4 C.F.R. § 21.2(a)(1)) (modification in original).

The Blue & Gold Fleet waiver rule has been reenforced and expanded in subsequent

cases. For example, in COMINT the Federal Circuit held that “the reasoning of Blue & Gold

applies to all situations in which the protesting party had the opportunity to challenge a

solicitation before the award and failed to do so.” 700 F.3d at 1382. More recently, the Federal

Circuit in Inserso cited the broader standard from COMINT and held that the contractor in that

case had forfeited its right to seek relief. 961 F.3d at 1349-52.

Courts have held that when Blue & Gold Fleet’s waiver rule applies, a court must dismiss

the action; it has no discretion to allow the plaintiff to maintain the action. See, e.g., Contract

10

Servs., Inc. v. United States, 104 Fed. Cl. 261, 273 (2012); Unisys Corp. v. United States, 89 Fed.

Cl. 126, 139 (2009); see also Per Aarsleff A/S v. United States, 829 F.3d 1303, 1317 (Fed. Cir.

2016) (Reyna, J., concurring) (“Dismissal is mandatory, not discretionary.”).

B. Standard of Review

Courts have not been consistent as to whether motions to dismiss under the Blue & Gold

Fleet waiver rule should be subject to RCFC 12(b)(1) or RCFC 12(b)(6). Compare Sys.

Dynamics Int’l, Inc. v. United States, 130 Fed. Cl. 499, 511 (2017) (finding that the waiver rule

is a jurisdictional requirement subject to a RCFC 12(b)(1) analysis), with Unisys Corp., 89 Fed.

Cl. at 137 (dismissing under RCFC 12(b)(6) a claim barred by the waiver rule). See also DGR

Assocs., Inc. v. United States, 690 F.3d 1335, 1343 (Fed. Cir. 2012) (discussing whether the

government’s Blue & Gold Fleet jurisdictional argument was substantially justified and holding

that it was).

Informed by the recent Federal Circuit precedent in Inserso, the Court finds that the Blue

& Gold Fleet waiver rule is not jurisdictional and thereby more appropriately addressed under

RCFC 12(b)(6).

The Supreme Court has held that “‘subject-matter jurisdiction, because it involves a

court’s power to hear a case, can never be forfeited or waived.’” Arbaugh, 546 U.S. at 514

(quoting United States v. Cotton, 535 U.S. 625, 630 (2002)). In Blue & Gold Fleet, the Federal

Circuit did not establish the waiver rule as a limit on jurisdiction; indeed, it noted that “the

jurisdictional grant of 28 U.S.C. § 1491(b) contains no time limit requiring a solicitation to be

challenged before the close of bidding . . . .” 492 F.3d at 1315. Blue & Gold Fleet rooted its

waiver rule in § 1491(b)(3), which requires courts to “give due regard to . . . the need for

expeditious resolution of the action.” See id. (quoting 28 U.S.C. § 1491(b)(3)).

Although § 1491(b) gives this court jurisdiction over bid protests challenging the terms of

solicitations, Blue & Gold Fleet limits when a court can grant relief. See Inserso, 961 F.3d at

1352 (holding, in applying the waiver rule, that the contractor had “forfeited its right to . . .

relief”). Against a challenge by Judge Reyna in dissent arguing that the Blue & Gold Fleet

waiver rule had not survived the Supreme Court’s decision in SCA Hygiene Prods. Aktiebolag v.

First Quality Baby Prods., 137 S. Ct. 954 (2017) (rejecting the application of laches to bar

statutorily timely patent claims), the majority in Inserso firmly grounded Blue & Gold Fleet’s

waiver rule in the statutory text of 28 U.S.C. § 1491(b)(3). 969 F.3d at 1349 n.1.

Section 1491(b)(3) provides in full: “In exercising jurisdiction under this subsection, the

courts shall give due regard to the interests of national defense and national security and the need

for expeditious resolution of the action.” 28 U.S.C. § 1491(b)(3) (emphasis added). In other

words, once the plaintiff has established jurisdiction, § 1491(b)(3) limits the relief that can be

granted, requiring the court to “give due regard to . . . the need for expeditious resolution of the

action.” See id. The court, for example, cannot grant relief to a protestor who challenges the

terms of a solicitation years after the proposal deadline, even if the protestor’s complaint is filed

before the statute of limitations. See 28 U.S.C. § 2501 (establishing the Tucker Act’s six-year

statute of limitations). Otherwise, the court would run counter to § 1491(b)(3)’s mandate.

11

The waiver rule applies in full force when, as here, the protestor seeks injunctive relief.5

For example, in Inserso, the protestor “asked the court to provide all bidders in the small-

business competition access to the unequally disclosed information and to reopen the

competition to accept revised proposals.” Inserso, 961 F.3d at 1352. The Federal Circuit held

that the policy behind the waiver rule was served because the protestor was “seeking the relief it

could have gotten from [the agency] earlier, before [the agency] had already expended

considerable time and effort evaluating the bidders’ proposals.” Id. Because it had not objected

to the solicitation before the submission of final proposals, the protestor forfeited its right to

relief. Id.

As noted in footnote 3, supra, the defendant has cited two cases that reached the Blue &

Gold Fleet issue without addressing the issue of standing, but those cases predate Inserso.

(ECF 16 at 2 (citing Bannum, Inc., 779 F.3d at 1381 and COMINT, 700 F.3d at 1381-82).) The

court in Inserso describes the waiver rule as a limit on the protestor’s right to relief, not a limit

on jurisdiction. See Inserso, 961 F.3d at 1352.

Because the Court determines that the Blue & Gold Fleet waiver rule is not jurisdictional,

the defendant’s motion does not put jurisdiction in question. Accordingly, the Court will

consider the defendant’s motion to dismiss under RCFC 12(b)(6) for failure to state a claim upon

which relief can be granted.

Dismissal for failure to state a claim upon which relief can be granted “is appropriate

when the facts asserted by the claimant do not entitle him to a legal remedy.” Lindsay v. United

States, 295 F.3d 1252, 1257 (Fed. Cir. 2002). The court must both accept as true a complaint’s

well-pleaded factual allegations, Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009), and draw all

reasonable inferences in favor of the non-moving party. Sommers Oil Co. v. United States,

5

Given the waiver rule’s statutory underpinning (28 U.S.C. § 1491(b)(3)) and the six-year

statute of limitations of 28 U.S.C. § 2501, the waiver rule may support a different outcome if the

protestor seeks bid preparation costs. See Inserso, 961 F.3d at 1352-56 (Reyna, J., dissenting)

(raising objections to the Blue & Gold Fleet waiver rule). Because protesters are primarily

interested in securing the contract award, the cases have focused on claims for injunctive relief.

The distinction between the type of relief sought in the application of Blue & Gold Fleet appears

to remain unexplored territory. One possible course through which the Federal Circuit will

resolve the various strands of precedent, including its labeling of the waiver rule in Inserso,

961 F.3d at 1352, as a limitation on relief, and wrestle with the substance of Judge Reyna’s

dissent would be to hold that waiver under Blue & Gold Fleet ultimately does not compel

dismissal, under either RCFC 12(b)(1) or (b)(6). Instead, the Federal Circuit could determine

that the waiver rule forecloses a court’s ability to grant injunctive relief. That approach, which

seems most consistent with the language of § 1491(b)(3) on which the waiver rule is based,

would leave open the possibility that plaintiffs could still obtain bid preparation costs, even in the

face of a Blue & Gold Fleet waiver. In any event, the Federal Circuit has not yet even started

down this path, and it would be irrelevant here given that SEKRI has not requested bid

preparation costs because it did not prepare or submit a bid.

12

241 F.3d 1375, 1378 (Fed. Cir. 2001). To avoid dismissal, a complaint must allege facts

“plausibly suggesting (not merely consistent with)” a showing that the plaintiff is entitled to the

relief sought. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007). “The plausibility standard

is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a

defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556).

In considering a motion to dismiss under RCFC 12(b)(6), courts are generally limited to

the consideration of the allegations in the plaintiff’s complaint. Dimare Fresh, Inc. v. United

States, 808 F.3d 1301, 1306 (Fed. Cir. 2015). RCFC 12(b)(6) thus differs from RCFC 12(b)(1),

under which courts may review evidence outside the pleadings when considering if jurisdiction

exists. See Shoshone Indian Tribe of Wind River Rsrv., 672 F.3d at 1030 (quoting Cedars-Sinai

Med. Ctr., 11 F.3d at 1584, cert. denied, 512 U.S. 1235 (1994).).

The law, at least prior to Inserso, was unclear as to whether a motion to dismiss under

Blue & Gold Fleet went to the court’s jurisdiction, and this case appears to be the first to address

the question since Inserso. As a result, the defendant brought its motion under RCFC 12(b)(1),

only citing to RCFC 12(b)(6) as an alternative basis for dismissal. In opposition to the

defendant’s motion under RCFC 12(b)(1), the plaintiff submitted exhibits to establish the Court’s

jurisdiction. The plaintiff attached to its opposition brief a declaration by SEKRI’s executive

director (ECF 14-1) and an exhibit containing emails between SourceAmerica and the DLA and

between SourceAmerica and SEKRI (ECF 14-2).

Because of the lack of clarity regarding the basis for dismissal under the Blue & Gold

Fleet waiver rule, in the interest of fairness and consistent with the narrow exception set out in

Dimare Fresh, the plaintiff should have every opportunity to support its defense against

dismissal under RCFC 12(b)(6). For the purposes of this motion, the Court will also therefore

consider the plaintiff’s additional materials to the extent that they support the plaintiff’s claim, as

if the materials are integral to the plaintiff’s complaint. See Dimare Fresh, 808 F.3d at 1306

(holding that courts may consider documents that are “‘incorporated by reference or integral’” to

the plaintiff’s claim) (quoting 5B Charles Alan Wright & Arthur R. Miller, Federal Practice and

Procedure § 1357 (3d ed. 2004)).

The defendant attached to its motion to dismiss the solicitation documents (ECF 13-1)

and a declaration of DLA’s contracting officer (ECF 13-2). Because the plaintiff refers to the

solicitation documents in its complaint, the Court also considers those solicitation documents but

does not consider the contracting officer’s declaration.

C. Application of the Waiver Rule

Under the Blue & Gold Fleet waiver rule, the plaintiff waives its claim if it (1) “ha[d] the

opportunity to object to the terms of a government solicitation containing a patent error,” and

(2) “fail[ed] to do so before the close of the bidding process.” Blue & Gold Fleet, 492 F.3d at

1313.

13

1. SEKRI had the opportunity to object to the DLA’s amendment

containing an alleged patent error.

A patent error is “‘an obvious omission, inconsistency or discrepancy of significance’”

that “could have been ‘discovered by reasonable and customary care.’” Per Aarsleff A/S,

829 F.3d at 1312-13 (quoting E.L. Hamm & Assocs., Inc. v. England, 379 F.3d 1334, 1339 (Fed.

Cir. 2004) and Analytical & Rsch. Tech., Inc. v. United States, 39 Fed. Cl. 34, 46 (1997)).

On April 21, 2020, the DLA provided public notice of Amendment 6, which modified the

solicitation from one seeking to acquire TAP to one seeking to acquire ATAP. (ECF 1, ¶ 24.)

Amendment 6 did not list ATAP as having a mandatory source of supply. (See id.) SEKRI

argues that this omission is error but that it is not patent. Accepting that it is error for the

purposes of the motion at hand, it must be a patent error because the omission of the mandatory

source constitutes an obvious discrepancy of significance.6 This obviousness is evidenced by

SEKRI’s own admission that it found out that the DLA was seeking ATAP through competition

shortly after the issuance of Amendment 6 and asked SourceAmerica to inquire about it. (See

ECF 14 at 3.)

Related to its opportunity to object, SEKRI argues that Blue & Gold Fleet applies only to

bidders and prospective bidders, and because SEKRI is neither a bidder nor a prospective bidder

but the mandatory source for ATAP, the waiver rule should not apply here.7 (Id. at 14-16.) For

support, SEKRI relies on this court’s decision in Red River Commc’ns, Inc. v. United States,

109 Fed. Cl. 497 (2013). In Red River, this court found that the waiver rule did not apply to a

non-offeror who was excluded from submitting a proposal by the solicitation’s terms. Id. at 511.

In that case, the solicitation at issue was not an open-source solicitation; instead, it “was issued

as a task order to an umbrella contract known as ‘NETCENTS–1.’” Id. at 500. It was advertised

only through the NETCENTS–1 website. Id. at 501. The protestor did not hold a NETCENTS–

1 contract. See id. at 510. Although the protestor in Red River learned of the solicitation prior to

the deadline for submission of proposals, the court found that Blue & Gold Fleet did not apply.

Id. at 511.

In Red River, the court distinguished other cases finding that Blue & Gold Fleet’s waiver

rule does apply to non-offerors. Id. at 507-10; see e.g., Shamrock Foods Co. v. United States,

92 Fed. Cl. 339 (2010); Infrastructure Def. Techs., LLC v. United States (“IDT”), 81 Fed. Cl. 375

(2008). Notably, unlike the solicitations in Shamrock Foods and IDT, the solicitation in Red

River was not publicly advertised. Red River, 109 Fed. Cl. at 510. The court found it “axiomatic

6

SEKRI also argues that Blue & Gold Fleet does not apply because there is no patent

ambiguity in Amendment 6. (ECF 14 at 10-12.) Blue & Gold Fleet, however, applies to cases of

patent error, not patent ambiguity. That case merely used the reasoning of the patent-ambiguity

doctrine to support the waiver rule. 492 F.3d at 1313-14.

7

SEKRI’s argument that Blue & Gold Fleet does not apply to it because it is neither an

actual nor prospective bidder undercuts the argument it makes to support its standing.

14

that if a contractor has no knowledge of the terms of a solicitation, it should not be charged with

the duty to bring any patent errors in that solicitation to the attention of the agency prior to the

close of bidding.” Id.

The protestor in Red River acquired the requisite knowledge of the solicitation’s terms to

bring a timely challenge, but the court reasoned that waiver was not appropriate. Id. at 510-11.

The court found that the policy undergirding Blue & Gold Fleet’s waiver rule—“the need for

expeditious resolution of the action” under 28 U.S.C. § 1491(b)(3)—supported an exception:

It will not serve that need [for expeditious resolution of the action]

if a protest filed by a non-offering contractor becomes ensnared in

an ancillary inquiry targeted to determining what the contractor

knew about the solicitation and when it knew it, or whether the

contractor chose the most effective means to bring the matter to the

agency’s attention.

Red River, 109 Fed. Cl. at 510. In other words, “the potential for time-consuming collateral

inquiries is too great to ignore” when a contractor is “excluded from submitting a proposal by a

solicitation’s terms and did not submit a proposal.” Id. at 511. The protestor therefore was not

required to satisfy the Blue & Gold Fleet waiver rule. Id.

The situation in Red River was different from the situation facing the plaintiff here. Most

significantly, the DLA provided public notice, “evidently through SAM.gov,” of Amendment 6

on April 21, 2020. (ECF 1, ¶ 24.) SEKRI does not allege that the amendment to the solicitation

was secret or circulated to a limited audience. It does not allege that it failed to find out about

the amendment in a timely manner such that it could not have brought a protest before the

agency or to this court while the solicitation was open. Rather, SEKRI explains that it “does not

consult such sources in order to participate in procurements, because it is a mandatory source of

supply, so it doesn’t need to.” (ECF 14-1, Decl. of Leo Miller ¶ 5.)

Although they go beyond the face of the complaint, the materials presented by the

plaintiff reveal that SEKRI found out about Amendment 6 shortly after the DLA issued it,

thereby learning of the DLA’s effort to acquire ATAP through competition. (ECF 14-1, Decl. of

Leo Miller ¶ 5.) SEKRI was not excluded from submitting a proposal by the solicitation’s terms.

As the alleged mandatory source of supply for the ATAP, SEKRI had an obligation to object to

the solicitation in a timely manner to preserve its ability to pursue a challenge in this court.

SEKRI is unable to explain why the rationale supporting the Blue & Gold Fleet’s waiver rule, as

most recently explicated by the Federal Circuit in Inserso, is inapplicable to its protest. Indeed,

the opposite is true. The policy behind Blue & Gold Fleet’s waiver rule is served because

SEKRI is “seeking the relief it could have gotten from [the DLA] earlier, before [the DLA] had

already expended considerable time and effort evaluating the bidders’ proposals.” See Inserso,

961 F.3d at 1352.

Although SEKRI’s complaint is devoid of allegations that it protested the solicitation to

the DLA, SEKRI presents the Court with documentation that it did make some effort to pursue

its claim to being the mandatory source for ATAP during the pendency of the solicitation. On

15

June 10, 2020, SourceAmerica emailed the DLA’s contracting officer regarding Amendment 6.

(See ECF 14-2.) At most the emails were an inquiry, not a complaint and certainly not a protest.

SourceAmerica explained that SEKRI is the nonprofit agency authorized to produce ATAP for

the U.S. Army and inquired whether the “DLA would be willing to move forward with

SourceAmerica” for the item. (Id.) The DLA replied that it was proceeding under the terms of

the amendment with a full and open competition. (Id.) SourceAmerica did not express

dissatisfaction or objection to the DLA in response; instead, it relayed that information on the

same day to SEKRI and encouraged SEKRI to respond to the solicitation before the proposal

deadline. (Id.) On June 10, the proposal deadline was July 20, 2020, but it was ultimately

extended to October 7, 2020. (See ECF 14-2; see also ECF 13-1, App. at 78.) Despite the

ongoing pendency of the solicitation, SEKRI took no further action, either through

administrative or judicial avenues, to challenge the solicitation and did not submit an offer.

SEKRI claims it had good cause to delay a protest because (1) it acted in accordance with

governing law through SourceAmerica; (2) it did not monitor beta.sam.gov and did not receive a

copy of Amendment 6 from the DLA; and (3) it is the DLA’s responsibility to comply with its

obligation to procure from mandatory sources. (ECF 14 at 18-19.)

Despite neither monitoring beta.sam.gov nor receiving a copy of Amendment 6 from the

DLA, SEKRI knew about it. (ECF 14-1, Decl. of Leo Miller ¶ 5.) SEKRI not only knew about

the amendment, but it pursued the issue through SourceAmerica. Following the June 10 email

exchange among SourceAmerica, the DLA, and SEKRI, SourceAmerica encouraged SEKRI “to

respond to the commercial Solicitation before it closes on July 20, 2020, while we continue to

look at other options.” (ECF 14-2.)

Given SEKRI’s economic interest in the procurement, it could not sit on its rights and

wait for the proposal deadline to pass, especially with the knowledge in June that the DLA was

not going to change course. SEKRI did not have good cause to delay a protest it would have had

until October 2020 to bring.

2. SEKRI failed to object to the DLA’s solicitation before the close of the

bidding process.

To avoid waiver, a party must object before the close of the bidding process, which

SEKRI argues means before an award is made. See Blue & Gold Fleet, 492 F.3d at 1313. In this

case, although the solicitation is closed, no award has yet been made.

The Federal Circuit has held that the waiver rule applies when a party does not challenge

the solicitation prior to the close of bidding. Per Aarsleff A/S, 829 F.3d at 1312-13; see also

MLS-Multinational Logistic Servs., Ltd v. United States, 143 Fed. Cl. 341 (2019) (“the Federal

Circuit has repeatedly determined that waiver can apply to pre-award protests as well as to post-

award protests.”). SEKRI brought the present pre-award bid protest on January 21, 2021, and

the DLA has agreed not to make an award before May 31, 2021. (ECF 1 & 11.) The close of

bidding, however, was on October 7, 2020. (ECF 13-1, App. at 81.) SEKRI did not bring a bid

protest before October 7, 2020.

16

The only question remaining is whether the SourceAmerica emails from June 10, 2020

constitute an objection to the procurement’s terms sufficient to avoid waiver under Blue & Gold

Fleet.

In 2015, the Federal Circuit held in Bannum that “mere notice of dissatisfaction or

objection is insufficient to preserve [the protestor’s] defective-solicitation challenge.” 779 F.3d

at 1380. Bannum reasoned that clarity is important for expeditious resolution of protest claims:

Requiring that the prescribed formal routes for protest be followed

(to avoid waiver) reduces uncertainty about whether the issue is

joined and must be resolved, and thereby helps prevent both the

wasted and duplicative expenses (of all bidders and the government)

and the delayed implementation of the contract that would likely

follow from laxer standards of timely presentation of solicitation

challenges.

Id.

The Federal Circuit suggested that a formal, agency-level protest or a pre-award protest

filed with the GAO would likely preserve a protestor’s challenge to a solicitation. Id. (citing

COMINT, 700 F.3d at 1382). In Bannum, because the contractor did not file a formal protest, it

waived its challenge, despite providing the contracting officer notice of its dissatisfaction with

the solicitation’s requirements. Id. at 1381.

Although there are some cases from this court applying a looser standard, these cases

predate the Federal Circuit’s decision in Bannum. See, e.g., DGR Assocs., Inc. v. United States,

94 Fed. Cl. 189, 202 (2010) (interpreting Blue & Gold Fleet to require only that “a party must

have done something prior to the closing date to protest the solicitation error”);8 Bannum, Inc. v.

United States, 115 Fed. Cl. 257, 274 (2014) (finding that a letter to the contracting officer

objecting to the solicitation requirements was sufficient to preserve the contractor’s challenge).

The discussion by the Federal Circuit in Bannum provides the controlling and decisive guidance

in the case now before the Court.

8

SEKRI cites to the related Federal Circuit decision, DGR Assocs., 690 F.3d 1335 (2012), to

argue that the Federal Circuit’s standard for what constitutes a sufficient objection is only that a

party have “done something.” (ECF 14 at 21.) Not only does that decision predate the Federal

Circuit’s decision in Bannum, which added some clarity to what is required to object, but the

applicability of DGR is limited because it discusses Blue & Gold Fleet in the context of an

application for fees under the Equal Access to Justice Act and addresses only whether the

government’s jurisdictional argument was substantially justified. See DGR Assocs., 690 F.3d at

1343-44.

17

SEKRI claims that it was following the procedures set forth by the JWOD Act and its

regulations when it raised the issue through SourceAmerica. (ECF 14 at 3.) The defendant

disagrees, pointing to the regulation governing disputes:

Disputes between a nonprofit agency and a contracting activity

arising out of matters covered by parts 51–5 [Contracting

Requirements] and 51–6 [Procurement Procedures] of this chapter

shall be resolved, where possible, by the contracting activity and the

nonprofit agency, with assistance from the appropriate central

nonprofit agency. Disputes which cannot be resolved by these

parties shall be referred to the Committee for resolution.

41 C.F.R. § 51–6.15. Although SEKRI argues that this provision only applies to the

administration of contracts, it appears to apply to disputes generally. Cf. § 51–6.9 (providing the

procedure for correspondence and inquiries during contracting activities). The regulation

demonstrates that SEKRI had an avenue to complain directly to the DLA rather than only going

through SourceAmerica to resolve its objection. Even if the regulation did not afford SEKRI a

route to complain directly to the DLA, nothing prevented SEKRI from protesting at the GAO or

this court when it discovered the alleged error in the solicitation.

SEKRI did not object to the DLA through an agency-level protest before the solicitation

closed. It did not protest at the GAO before the solicitation closed. It did not file an action in

this court before the solicitation closed. It did not do anything further prior to the proposal

deadline. As the defendant notes, SEKRI did not protest the solicitation until it filed the present

action in this court on January 21, 2021, 106 days after the close of the solicitation—more than

enough time to protest. Cf. Inserso, 961 F.3d at 1352 (noting that the protestor there “had

months to notify [the agency] of th[e] defect” in the solicitation and then an additional two

months before award); COMINT, 700 F.3d at 1383 (noting that the protestor “had two and a half

months between the issuance of [the challenged amendment to the solicitation] and the award of

the contract in which to file its protest. That was more than an adequate opportunity to object.”).

Bannum explicitly holds that a protestor must do more than provide notice of

dissatisfaction or objection to preserve its challenge. 779 F.3d at 1380. SEKRI did not do so.

3. SEKRI waived its challenge to the DLA’s amendment.

SEKRI argues that the Blue & Gold Fleet waiver rule does not apply when a challenge

rests on a statute that is protective of the protestor. (ECF 14 at 22-25.) Because the JWOD Act

is a protective statute, SEKRI argues that there should be an exception carved to the waiver rule

for its protest. The plaintiff argues that it is the government’s duty to comply with the statutory

and regulatory mandates of the AbilityOne program. (See id. at 3-4 (citing 41 U.S.C. §§ 8501-

06; 41 C.F.R. pt. 51; 48 C.F.R. subpt. 8.7).) This obligation imposed on the government should

excuse any application of the waiver rule to SEKRI.

The government is always obligated to follow the laws and regulations governing the

procurement process, but that does not remove the bidder’s responsibility to object to the

18

government’s patent errors in a timely manner if the bidder had the opportunity to do so, as

required by Blue & Gold Fleet. SEKRI does not cite to any case creating a protective-statute

exception to the Blue & Gold Fleet waiver rule (see ECF 14 at 22-25), and the Court does not

find that the basis of the plaintiff’s claim on the merits can overcome the statutory mandate in

§ 1491(b)(3), under which the Blue & Gold Fleet waiver rule derives its authority.

Because SEKRI had the opportunity to object to an alleged patent error in Amendment 6

but did not do so before the close of bidding, SEKRI waived its challenge.

IV. CONCLUSION

The plaintiff is not an actual or prospective bidder and thereby not an “interested party”

under 28 U.S.C. § 1491(b). Accordingly, the Court must dismiss sua sponte the plaintiff’s

complaint for lack of subject-matter jurisdiction under RCFC 12(b)(1) and 12(h)(3).

Even if the plaintiff had standing, it waived its claim under the Blue & Gold Fleet waiver

rule by failing to protest the solicitation upon discovering a patent error before the closing of the

proposal deadline. The Court grants the defendant’s motion to dismiss under RCFC 12(b)(6).

The Court will issue an order in accordance with this memorandum opinion.

s/ Richard A. Hertling

Richard A. Hertling

Judge

19