CHARLES F. LETTOW, Senior District Judge.
Plaintiff Orbital Maintenance and Construction Co. ("Orbital") protests a contractual award for pest-control services at the VA Greater Los Angeles Healthcare System to CDS Services, Inc. d/b/a/Legion Pest Management ("CDS") by the United States Department of Veterans Affairs ("VA" or "the government"). As relief, Orbital requests that this court enjoin VA from proceeding with the commencement of the contract's performance, issue a declaratory judgment that the decision to award the contract to CDS was arbitrary, capricious, or contrary to law, instruct VA to terminate the contract award to CDS, re-evaluate the offers in accord with the law, order VA to pay damages to Orbital for its bid preparation and proposal costs, and grant any other relief the court may deem appropriate. See Compl. at 13-14, ECF No. 1.
The court concludes that Orbital has not satisfied the requisite standing to pursue this bid protest. Accordingly, defendant's motion to dismiss the complaint for lack of jurisdiction is GRANTED. Plaintiff's motion and defendant's cross-motion for judgment on the administrative record are both DENIED as moot.
In August 2018, VA issued a request for proposals seeking contract services for the development, management, operations, and maintenance of pest control and removal at the VA Greater Los Angeles Healthcare System. See AR 10-72 to 73.
After the issuance of the original proposal, VA made five subsequent amendments. The first amendment, issued on August 29, 2018, was meant to respond to vendor questions. See AR 11-117. Subsequently, on September 4, 2018, Precise Management, LLC filed a pre-award protest at the Government Accountability Office ("GAO"), arguing that the solicitation was vague and ambiguous. See AR 15. Responding to the protest, VA issued a notice of corrective action, averring it would amend the solicitation to cure the alleged deficiencies and requesting dismissal by GAO, see AR 16-243 to 244, which GAO granted, see AR 18-247.
The second amendment to the solicitation, issued on October 12, 2018, answered further vendor questions to eliminate ambiguities in the solicitation and extended the time for response until October 26, 2018. See AR 19-248 to 250. The third amendment, issued on October 22, 2018, answered additional vendor questions on the scope of work. See AR 20-277. On October 26, 2018, VA received three offers in response to the solicitation. See generally AR 21; AR 22; AR 23. Because CDS submitted the lowest-priced bid, VA awarded it the contract on December 17, 2018. See AR 27-488.
On December 26, 2018, Orbital filed a protest with the agency of the contract and award decision "based on [CDS] not being properly licensed to legally service the contract." AR 29-493. In response, VA withdrew the contract award and planned to "revisit the contract award decision." AR 31-498. During its reconsideration, the contracting officer determined that "the solicitation was ambiguous regarding exactly which licenses offerors were required to possess to be eligible for contract award, and which licenses a contractor needed to possess during contract performance to meet VA's requirements." Declaration of Kevin H. Vo at 6, ECF No. 14. VA sought to address these issues with its final two amendments. The fourth amendment, issued on April 9, 2019, had three purposes: (1) update the statement of work and qualifications; (2) update the instructions to offerors; and (3) update the evaluation section. AR 34-506. The amendment set a due date for revised proposals of May 6, 2019. AR 34-506. On April 25, 2019, VA issued amendment five answering more questions from vendors and amending the statement of work. See AR 37-545. At no point was the basis for contract award amended, i.e., the basis for contract award was always the lowest price.
In response to the amended solicitation, VA received three proposals. The bidders, ranked from lowest to highest price, were: (1) CDS, see AR 41; (2) Epic Pest Control & Landscape Services, Inc. ("Epic"), see AR 40; and (3) Orbital, see AR 42. After making a determination of CDS's responsibility, see generally AR 43, VA awarded the contract to CDS on June 10, 2019, see AR 44-746. VA's determination of responsibility for CDS analyzed CDS's financial stability, performance history, integrity and business ethics, and technical equipment capabilities, among other qualifications, and determined that the vendor was "qualified and eligible to receive an award." AR 43-682 to 683.
Orbital first filed a protest at GAO, see AR 49-758 to 767, but it was dismissed as untimely on July 18, 2019, AR 54-925. Orbital then filed this post-award bid protest on July 31, 2019. See Compl. Orbital's motion for a temporary restraining order was denied by this court on August 2, 2019. See ECF No. 16.
The government filed the administrative record on August 9, 2019. Orbital submitted its motion for judgment on the administrative record on August 19, 2019. See Pl.'s Mot. for Judgment on the Admin. R. ("Pl.'s Mot."), ECF No. 21. The United States opposed this motion and filed a cross-motion for judgment on the administrative record and a motion to dismiss. See Def.'s Cross-Mot. for Judgment on the Admin. R., Mot. to Dismiss, and Resp. to Pl.'s Mot. for Judgment on the Admin. R. ("Def.'s Cross-Mot."), ECF No. 22. Orbital then filed its response and reply. See Pl.'s Resp. to Def.'s Mot. to Dismiss and Resp. and Reply to Def.'s Cross-Mot. for Judgment on the Admin. R. ("Pl.'s Reply"), ECF No. 23. Following the conclusion of briefing, see Def.'s Reply in Support of its Cross-Mot. for Judgment on the Admin. R. and Mot. to Dismiss ("Def.'s Reply"), ECF No. 24, a hearing was held on September 19, 2019 in Washington, D.C. See Hr'g Tr. 3:4 to 56:17 (Sept. 19, 2019).
The Tucker Act vests this court with jurisdiction to "render judgment on an action 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." 28 U.S.C. 1491(b)(1).
Before reaching the merits, the court must determine whether Orbital has standing to challenge the contract award to CDS. As the plaintiff, Orbital has the burden of establishing standing. See Myers Investigative & Sec. Servs., Inc. v. United States, 275 F.3d 1366, 1369 (Fed. Cir. 2002) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)). "A party seeking to establish jurisdiction under § 1491(b)(1) must show that it meets § 1491(b)(1)'s standing requirements, which are `more stringent' than the standing requirements imposed by Article III of the Constitution." Diaz v. United States, 853 F.3d 1355, 1358 (Fed. Cir. 2017) (citing Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1359 (Fed. Cir. 2009)). To meet these more stringent requirements, a plaintiff must show that it is an "interested party," Digitales Educ. Sols., Inc. v. United States, 664 F.3d 1380, 1384 (Fed. Cir. 2012), and "that it was prejudiced by a significant error in the procurement process," Labatt Food Serv., Inc. v. United States, 577 F.3d 1375, 1378 (Fed. Cir. 2009).
An interested party is an "actual or prospective bidder[] or offeror[] whose direct economic interest would be affected by the award of the contract or by the failure to award the contract." Weeks Marine, 575 F.3d at 1359 (quoting American Fed'n of Gov't Emps. v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001)). In this case, Orbital was an actual bidder. See AR 42. Whether Orbital has a direct economic interest is at issue. To have a direct economic interest, Orbital must show that it had a substantial chance of winning the contract. See Digitales, 664 F.3d at 1384.
Additionally, Orbital must show prejudice. See Labatt, 577 F.3d at 1378. An interested party suffers prejudice from a significant procurement error when "but for the error, it would have had a substantial chance of securing the contract." CliniComp Int'l, Inc. v. United States, 904 F.3d 1353, 1358 (Fed. Cir. 2018) (emphasis omitted); see also Red Cedar Harmonia, LLC v. United States, 144 Fed. Cl. 11, 21 (2019), appeal docketed, No. 2019-2449 (Fed. Cir. Sept. 27, 2019). The prejudice inquiry and the economic-interest inquiry must not be conflated—"an error [may be] non-prejudicial to an economically interested offeror." CliniComp, 904 F.3d at 1380. "Despite the potential relevance of prejudice in determining substantial chance, direct economic interest should still be evaluated separately from prejudice." Veteran Shredding, LLC v. United States, 140 Fed. Cl. 759, 765 (2018). A party cannot be prejudiced unless it first has a substantial chance of award. Id.
VA received three offers for its solicitation, which sought the lowest-priced, responsible and technically acceptable bidder. The plaintiff, Orbital, was the highest-priced bidder, behind CDS and Epic. Orbital first claims that the solicitation was "defective because it lacked, or was ambiguous as to, licensure and other responsibility requirements." Pl.'s Mot. at 7. Additionally, Orbital alleges that CDS did not have adequate financial capacity or performance history to satisfy the responsibility determination, and that both CDS and Epic lacked the proper licenses. See id. at 7-11. These oversights, Orbital argues, would have led to an increase in both CDS's and Epic's prices such that Orbital would have had a substantial chance of award. See id. at 10-11. The government argues in opposition that Orbital has waived its right to challenge the defects in the solicitation. See Def.'s Cross-Mot. at 14. Alternatively, the government argues that even assuming the award to CDS was improper, Orbital has failed to show how Epic would not be next in line for award. See id. at 10-11.
The issue of waiver of Orbital's challenge to aspects of the solicitation is a secondary one in this litigation because the court finds that Orbital jurisdictionally lacks standing to pursue its claims.
Additionally, Orbital specifically argues that Epic failed to submit the proper proof of registration and licenses as required by the solicitation. See AR 37-548. But Orbital suffered from the same defect in failing to submit proof of at least one of the required licenses listed in the solicitation. See AR 42-673 to 681 (failing to include the Department of Pesticide Regulation — Qualified Applicator License Category A — Residential, Industrial and Institutional License). If, as Orbital suggests, this omission would render Epic ineligible for award, then Orbital, too, would be ineligible. Thus, this alleged procurement defect would prevent the plaintiff from meeting its burden of "show[ing] that it would have been a qualified bidder." CliniComp, 904 F.3d at 1358 (quoting Myers, 275 F.3d at 1370-71).
The basis for the award here was the lowest-priced technically acceptable bid. Orbital offered the highest-priced technically acceptable bid. None of the alleged defects in the procurement are sufficient to show that despite the price disparity, Orbital would have a substantial chance of award. Therefore, Orbital has not demonstrated a direct economic interest and consequently lacks standing to protest this contract award.
For the foregoing reasons, the court finds that Orbital lacks standing to protest the procurement award. Accordingly, defendant's motion to dismiss is GRANTED. Plaintiff's and defendant's motions for judgment on the administrative record are therefore both DENIED as moot. The clerk shall enter judgment accordingly.
No costs.
It is so