Recognizing that a number of cases have reached a different conclusion, in a recent bid protest case the court held that NPS concessions contracts are not “procurements.” (Notably, however, in doing so, the court said it was not bound by NPS’s belief in this regard.) This holding, while not universally binding, not only affected the jurisdiction for this case but could have some implications to future cases sought to be brought under the Contract Disputes Act which relates to procurements.
Although the court found that jurisdiction did not exist under statutory rules that cover only procurements, it did invoke the fiction of an “implied contract to fairly and honestly consider bids” and the alleged breach of that contract to find jurisdiction.
Here, NPS issued a prospectus for guided tours, related transportation and food service. The resulting contract was to constitute a “qualified concession contract,” i.e., it was estimated to result in annual gross receipts of less than $500,000, or was considered an outfitter and guide concession contract. As such, any incumbent contractor who had performed its contract satisfactorily had a limited right of preference, i.e., it could match the best offer of any competing bidder. However, in order to exercise that limited right of preference, the incumbent contractor must have submitted a responsive proposal for the qualified concession contract.
The prospectus at issue required each offeror to submit certain financial information in its proposal to allow the NPS to evaluate the financial capability of the offeror to carry it out. Two of the three offerors, each of whom were satisfactorily performing incumbents (thus possessing a limited right of preference), failed to provide all of the financial data required.
Despite these omissions, NPS found that both proposals were “responsive to the minimum requirements of the Prospectus” because the omitted financial information was deemed not material to an effective evaluation of the proposals. In this regard, the prospectus instructions limited the “information required by the prospectus” to only such information as is “material, as determined by the Service, to an effective evaluation of the proposal under the applicable selection factor.”
Given NPS’s belief that the proposals were responsive, each offeror was given the right to match the best proposal received, i.e., the one submitted by the protestor.
The court found that the protester’s challenge to NPS’s having reserved the discretion to determine what was material was untimely and that, even if that were not the case, its challenge would fail for the additional reason that such a limitation is not contrary to law, i.e., although NPS regulations do not expressly provide for carving-out discretion as to materiality, they also do not preclude it.
Nevertheless, the court did conclude that NPS had acted arbitrarily and capriciously in concluding that the financial information omitted from the two proposals was immaterial, and that the proposals were responsive to the requirements of the prospectus. Accordingly, in allowing the two offerors to match the better terms of the protester’s proposal, NPS breached the implied contract to fairly and honestly consider bids.
However, the court held that the protestor was precluded from obtaining the injunctive relief that it sought to halt the two improper contracts and was limited to recovery of monetary damages that comprise the costs the protestor incurred while preparing its proposal.