On July 16, 2024, the Court of Federal Claims issued a decision in Independent Rough Terrain Center, LLC v. United States, et al., that found:

• The Court has bid protest jurisdiction over solicitations for follow-on production contracts issued using Other Transaction (OT) authorities where the contract contemplates the acquisition of goods and services; and
• The Federal Acquisition Regulation's (FAR) System for Award Management (SAM) continuous registration requirement applies to, and can defeat standing in, non-FAR-based acquisitions when the solicitation makes the regulation a mandatory eligibility requirement.  

Background

On December 16, 2022, the U.S. Army Materiel Command (AMC) issued a solicitation for the modernization of its Rough Terrain Container Handler (RTCH) vehicles, which the Army uses to lift and move shipping containers. AMC issued the solicitation pursuant to its OT authority, 10 USC §§ 4021 and 4022, as a follow-on production contract from an earlier OT prototype contract. As such, the solicitation stated that any reference to the FAR was "for the resulting contract execution only." However, in providing the mandatory eligibility requirements for award, the solicitation incorporated the FAR's SAM registration requirement. Specifically, the solicitation stated that award would only be made to an offeror eligible for award, and that to be eligible for award, an offeror had to be registered in SAM in accordance with FAR 52.204-7. In relevant part, FAR 52.204-7 states that "[a]n Offeror is required to be registered in SAM when submitting an offer or quotation, and shall continue to be registered until time of award." 

Independent Rough Terrain Center, LLC (IRTC) and Taylor Defense Products, LLC (Taylor), participants in the initial prototype phase, submitted proposals for the follow-on production contract. While IRTC had an active SAM registration when it submitted its proposal in February 2023, its registration lapsed for several months during the evaluation phase, though was active again as of August 10, 2023. 

AMC awarded the follow-on production contract to Taylor on September 20, 2023, which IRTC protested to the agency. In response, AMC took corrective action, including requesting revised portions of the offerors' proposals under amended evaluation criteria. IRTC then filed the subject pre-award protest to the Court, challenging the scope of AMC's corrective action and Taylor's ability to participate in the competition. The decision resolves Taylor's and the government's motions to dismiss IRTC's protest on the basis that the Court lacks jurisdiction over OT-based solicitations and that IRTC lacks standing because of its lapsed SAM registration. 

Decision

Jurisdiction

The Court found that "central" to its determination of whether it had jurisdiction over IRTC's bid protest was whether a follow-on production contract issued pursuant to OT authority was a "procurement" as contemplated by the Tucker Act, a matter of first impression for the Court. Ultimately the Court found that it was. In doing so, the Court highlighted that its bid protest jurisdiction was not limited to FAR-based contracts, nor procurement contracts under 31 USC § 6303. Instead, the Court's bid protest jurisdiction is based on the broad definition of "procurement" from 41 USC § 111, which includes "all stages of the process of acquiring property or services, beginning with the process for determining a need for property or services and ending with contract completion and closeout." While the Court acknowledged that the OT statutes at issue describe OT agreements as something other than procurement contracts, it was unwilling to find that necessarily meant that those statutes defined OT agreements as falling outside of 41 USC § 111's definition of procurement. 

The Court thus looked to the subject solicitation to determine whether it met 41 USC § 111's definition of procurement. In this regard, the Court found that the purpose of the solicitation was to acquire goods and services (for the modernization of the Army's RTCH vehicles) for the government's use. While AMC chose to use its OT authority, as opposed to FAR authority, to acquire those goods and services, this did not take the acquisition out of the realm of a procurement. The court thereby distinguished the holding in the SpaceX case, which found the prototype OT not to be a "procurement" because it did not involve the procurement of goods or services for the agency, but rather was issued to provide general investment in the launch service industry.   

Ultimately, because AMC's solicitation contemplated a contract for the acquisition of goods and services, the Court found that it met the definition of a "procurement." The Court therefore found that it had jurisdiction to review the solicitation regardless of whether it was issued under the agency's OT authority or under FAR authority. 

Standing

The Court next found that IRTC's lapse in SAM registration rendered it ineligible for award under the terms of the solicitation, and therefore stripped it of standing to file a bid protest. This was so despite the fact that the solicitation was for a non-FAR-based procurement and despite the fact that IRTC's SAM registration was active by the original award date and through corrective action, including amending the solicitation and requesting partially revised proposals. In so finding, the Court relied on two things: first, it found that the plain language of FAR 52.204-7 requires that offerors be continuously certified in SAM from proposal submission through award; and second, it found that despite being a non-FAR-based procurement, the solicitation nevertheless made compliance with this regulation a mandatory eligibility requirement. As such, while the Court was sympathetic to the arguably draconian result of its application of the regulation and IRTC's various policy-based arguments, the Court found that it did not have the authority to rewrite the terms of the solicitation or the regulation. 

Takeaways

• The Court has jurisdiction over bid protests of follow-on production OT contracts that seek to acquire goods or services for the government. As always, the facts matter, but if a solicitation is for the acquisition of goods or services, that will likely be sufficient for the Court to find it has bid protest jurisdiction regardless of whether the acquisition is being conducted pursuant to OT or FAR authority.
• It is imperative that offerors maintain active SAM registrations from proposal submission through award. This maxim is true, now, even in non-FAR contexts if the solicitation incorporates FAR 52.204-7.  

If you have questions about this case, OT procurements, your company's SAM registration, or bid protests generally, please contact one of the attorneys listed below:

Ashley Powers, apowers@milchev.com, 202-626-5564

Jason N. Workmaster, jworkmaster@milchev.com, 202-626-5893

Alex L. Sarria, asarria@milchev.com, 202-626-5822

Scott N. Flesch, sflesch@milchev.com, 202-626-1584

Alexandra S. Prime, aprime@milchev.com, 202-626-5940

Connor W. Farrell, cfarrell@milchev.com, 202-626-5925

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