In the case of Digitalis Education Solutions, Inc. v. United States, 664 F.3d 1380 (Jan. 4, 2012). the United States Court of Appeals for the Federal Circuit affirmed the Court of Federal Claims decision that the appellant was not an “interested party” with standing to challenge a sole source procurement for digital planetariums to be used in DoD schools.

On September 17, 2010, the Department of Defense posted on a notice of intent to award a sole source contract – and the notice stated that any party challenging the sole-source contract should file a capability statement by September 22nd detailing its capability to fill the order. On September 25th, DoD awarded the sole-source contract to Science First.

On October 11th, Digitalis contacted its Congressman. On December 6th, it filed a post-award bid protest with the Court of Federal Claims. The government filed a motion to dismiss for lack of standing.

The Court of Claims held that Digitalis did not have standing to protest – because it did not have a substantial chance of winning the contract since Digitalis failed to submit a statement of capability during the prescribed 5 day period as required in the fedbizopps notice.

Only “interested parties” have standing to challenge government contract awards. But who is an interested party? An actual or prospective bidder whose direct economic interest would be affected by the award of the contract.

To prove a direct economic interest, a party must show it had a substantial chance of winning the contract. In order to protest – one who has not actually submitted an offer must be expecting to submit an offer before the closing date. If the date for receipt of proposals passes without submitting a bid, the opportunity to become a prospective bidder ends.

In this case, bids were not invited, but interested parties had a deadline to submit capability statements. Digitalis failed to submit a statement during the prescribed period, so it does not have the required direct economic interest to have standing to pursue a bid protest.

The case also includes a discussion of whether 5 days would be considered a sufficient time to require capability statements — without answering the question. The decision says the standard would be whether it is reasonable to expect contractors to see a notice and respond. However, since Digitalis did not have standing to protest, the Court did not decide this issue.

See more government contracts news. Contract Karen S. Hindson for more information.