It is well-recognized that, with limited exceptions, neither the GAO nor the Court of Federal Claims has been willing, historically, to assume jurisdiction over IDIQ task or delivery order protests.  Recently, there has been some loosening of that bar, in the form of Public Law No. 110-181, § 843, which grants the GAO exclusive jurisdiction for a period of three years over protests against task or delivery order awards valued at more than $10 million.  Even with that legislative development, however, there are many task orders and/or delivery orders that will jurisdictionally escape review via the protest process.

Contractors do, however, have another option, i.e., a Contract Disputes Act claim alleging a breach of the Government’s duty to provide the IDIQ contractor with a fair opportunity to compete under the IDIQ contract.  While the COFC has previously resisted the jurisdictional lure of this theory, board of contract appeals have been far more receptive to it.  Compare A&D Fire Protection, Inc. v. United States, 72 Fed. Cl. 126, 135 (2006) (“The Court does not agree with the theory that actions, that are in essence bid protests of task order awards, can be re-characterized as contract disputes in order to create jurisdiction in this court or in an agency board of contract appeals.”), with Burke Court Reporting Co., DOT BCA No. 2058, Sept. 11, 1997, 97-2 BCA ¶ 29,323; Community Consulting International, ASBCA No. 53489, Aug. 2, 2002, 02-2 BCA ¶ 31,940; L-3 Communications Corp., ASBCA No. 54920, 06-2 BCA ¶ 33,374.

The board cases referenced above primarily addressed the jurisdictional question.  They left open for another day issues relating to the question that, in the end, is most important to the aggrieved contractor, i.e., the measure of damages for such a breach and the level of proof needed to support recovery.  "Another day" has in fact arrived with the ASBCA’s recent decision in L-3 Communications Corp., ASBCA No. 54920, May 5, 2008, 2008 WL 2154902.

In L-3 Communications, the ASBCA awarded "reliance damages" in the form of "proposal preparation and submission costs" when the Air Force breached the fair opportunity to compete clause by conducting an improper cost/price evaluation.  The Board declined, however, to award the contractor its lost profits, employee severance and relocation costs because the contractor failed to prove that it would have been awarded the delivery order but-for the breach.  The Board cited heavily to the Federal Circuit’s Winstar decisions as support for its damages analysis and it is no secret that the thrifts and investors in those cases faced an extremely difficult burden in establishing entitlement to lost profits.

There were several problems confronting the contractor in L-3 Communications in its quest for lost profits.

  • It prevailed on only one of its numerous claims – it proved the cost/price analysis to have been faulty but failed to establish any errors in the evaluation of the remaining two factors (technical and past performance), which, when combined, were more important than cost/price.
  • The Government’s Order Award Authority further undermined any causal link between the cost/price errors and the ultimate award by testifying that he would have made the same award decision even if the evaluations had been adjusted to account for the error.  The Board found this conclusion to be rational even though the awardee offer was 46% higher in price, with a technical rating advantage of 28%.
  • The Board gave additional deference to the OAA’s conclusions given the nature and structure of the procurement – a best value delivery order involving specialized support for the F-15 trainer that allowed little margin for error.

Taking the foregoing into account, the Board reasoned that the specific cost/price error that had been identified would not have led to a different award decision and, therefore, the contractor did not demonstrate that it would have been awarded the delivery order but-for the breach.

L-3 Communications would seem to suggest that the road to lost profits for breach of a fair opportunity to compete for an IDIQ task or delivery order will not be smooth or easily traveled.  Then again, that road has never been smooth, as evidenced by the many cases in recent years in which claims based on inadequate Government estimates of its requirements have yielded little, if anything, by way of meaningful relief.  Plainly, it will require procurement errors far more pronounced than the one at issue in L-3 Communications to support the recovery of lost profits – greater error, a greater number of errors, a different evaluation scheme, a closer evaluation outcome, and/or perhaps a less war-critical product or service.  Whether any combination of such different factors would lead to a different result will need to wait, as is customary in the law, for "another day."  In the interim, contractors are best reminded that jurisdiction to grant relief does not mean that any relief, let alone meaningful relief, is necessarily in the offing.

Authored by:

John W. Chierichella

(202) 218-6878


Marko W. Kipa

(202) 772-5302