The Court of Federal Claims recently reaffirmed an important rule for contractors who challenge the award of a federal government contract based on an obvious (or “patent”) error in the solicitation. In Shamrock Foods Company, (Shamrock Foods Company v. United States, No 10-109C (April 22, 2010), a case involving the protest of an award to provide food and beverage services to Fort Bliss, Texas, the Court confirmed that a protestor must object to obvious errors in the terms of the solicitation prior to the close of the bidding process. The Court applied this so-called “Waiver Rule” to deny Shamrock’s protest and set forth new, detailed explanations of the extent to which this rule applies to bid protests. First, the Court rejected the protestor’s argument that the Waiver Rule did not apply to a plaintiff that refrains from participating in the solicitation process. Shamrock asserted that because it did not compete for the contract, it was not required to assert its objections prior to the close of the solicitation. Noting that only “interested parties” – i.e., those with a stake in the outcome of the solicitation – have standing to protest, the Court pointed out that a party that fails to submit a bid does not have the requisite interest in the outcome of the solicitation and therefore does not have standing to protest the award. Accordingly, the Court determined that Shamrock did not have standing to protest.
Second, the Court rejected the argument that the Waiver Rule did not apply because Shamrock was “not aware of the full details” of the contract until after the bidding period had concluded. The Court determined that not knowing a contract’s details before the close of the solicitation process was irrelevant where Shamrock’s arguments addressed the mechanisms by which the contract was procured, not the details of its performance. Therefore, even if Shamrock had standing to protest the award, the protest would be untimely and all objections to the solicitation process would be forfeited under the Waiver Rule. The Shamrock Foods decision reinforces the importance of monitoring solicitations – in both the sealed bidding and negotiated procurement contexts – and protesting defects in the terms of the solicitation in a timely manner. Contractors should be aware that they must challenge ambiguous or defective solicitation provisions before submitting a bid or proposal, or risk losing their right to challenge the award of the contract. The full text of the decision is available at: http://www.uscfc.uscourts.gov/sites/default/files/BUSH.SHAMROCK042210.pdf. If you have questions about the decision or how to effectively utilize the bid protest process to preserve your rights, please contact Mark Blando at [email protected] or 612-236-0160