While typically an offeror's decision to take an exception to a material term of a solicitation would render the offeror's proposal ineligible for award, the United States Court of Federal Claims (COFC) recently held that a protestor had standing to file its bid protest despite the fact that it had taken an exception to material solicitation requirements. In Centerra Group, LLC, Centerra Group, LLC (Centerra) protested the National Nuclear Security Administration's (NNSA) award of a contract for protective force services to defendant-intervenor SOC LLC (SOC). Centerra Group, LLC v. United States, No. 17-1348 C (Fed. Cl. filed Jan. 18, 2018). SOC filed a cross-motion for judgment on the administrative record, in which it argued that Centerra lacked standing to protest the award because it was not an interested party, id., because Centerra lacked a substantial chance of being awarded the contract since it had "conditioned portions 'of its price proposal on future equitable adjustments by the NNSA,' rendering its proposal 'materially noncompliant with the terms of the' solicitation." Id. at 21. Accordingly, Centerra did not have an economic interest in the solicitation and therefore lacked standing to protest the NNSA's award decision. Id. The COFC disagreed with SOC's position.

The COFC distinguished the facts in the instant case from the cases cited by SOC, noting that the solicitations in those cases did not contain a solicitation provision that addressed "the consequences of taking exception to a solicitation term." See id. at 22. In contrast, the solicitation in Centerra stated that exceptions to the solicitations terms would not automatically render proposals unacceptable for award. Id. Specifically, the solicitation provided that "exceptions might make a proposal unacceptable for award in the absence of discussions, and that if a proposal contain[ed] an exception, the contract could be awarded without discussion to an offeror who did not make exception to the terms of the solicitation." Id. (emphasis added). Accordingly, COFC found that Centerra had standing to protest the agency's contract award to SOC. Id. Stated differently, COFC held that Centerra's decision to take an exception to a solicitation term did not automatically render its proposal unacceptable under the express terms of the solicitation.

This decision serves as a reminder to government contractors of the importance of reading and understanding each solicitation's requirements, especially in the context of bid exceptions and assumptions. Contractors should not include bid assumptions or exceptions in proposals unless the solicitation makes it clear that taking an exception will not automatically render its proposal ineligible for award or increase the likelihood of a negative result should the Agency decide not to hold a discussion. Otherwise, they will likely find that their proposal is ineligible for award.