Federal Court denies extension of Blue & Gold waiver rule
The United States Court of Appeals for the Federal Circuit, in SEKRI, Inc. c. United Statesadds to the growing body of case law which has refused to extend the scope of the Blue & Gold waiver rule. Under the Blue & Gold rule, “a party who has the opportunity to object to the terms of a government solicitation containing manifest error and does not do so before the close of the bidding process waives its ability to raise the same objection later in a protest action against the offer in “search. This remarkable decision is discussed below.
The Javits-Wagner-O’Day Act establishes a procurement system, known as the AbilityOne Program, in which the government purchases certain products and services from non-profit organizations that employ people who are blind or severely disabled.
In April 2020, the Defense Logistics Agency (DLA) issued a full and open tender for Advanced Tactical Assault Panels (ATAP), a military equipment transport system for use by paratroopers. SourceAmerica, one of the central nonprofit agencies that helps administer the AbilityOne program, then informed the DLA that ATAP was on the AbilityOne procurement list and that SEKRI – Southeastern Kentucky Rehabilitation Industries, Inc. – was the designated non-profit agency authorized to provide ATAP.
On October 7, 2020, the solicitation period ended. On January 21, 2020, prior to an award, SEKRI filed a lawsuit in the United States Federal Claims Court challenging, as contrary to law, DLA’s purchase of ATAP via competitive solicitation rather than through SEKRI as a mandatory source under the AbilityOne program. .
In March 2021, the court dismissed SEKRI’s claim because the court found that SEKRI was neither an actual nor potential bidder and therefore lacked standing. The court also found that SEKRI had not objected to DLA’s solicitation prior to the close of the bidding process and therefore waived its objection under Blue & Gold Fleet, LP v. United States, 492 F.3d 1308 (Fed. Cir. 2007). Subsequently, SEKRI appealed to the Federal Circuit.
The Federal Circuit reversed the court’s decision, finding that SEKRI had standing because it was the designated mandatory source for ATAP under the AbilityOne program. The Federal Circuit also found that SEKRI had not waived its right to protest under Blue & Gold. Specifically, the Federal Circuit held that, consistent with its decision in Harmonia Holdings Grp., LLC v. United States20 F.4th 759 (Fed. Cir. 2021) and the specific rules of the AbilityOne program, SEKRI has satisfied its obligation to submit a “timely and formal challenge” to the solicitation when SEKRI, through SourceAmerica, notified DLA that SEKRI was the mandatory source of ATAP under the AbilityOne program.
The Federal Circuit SEKRI decision was based on unique facts involving the AbilityOne program and, therefore, was a case of first impression regarding this program. The case, however, has broader significance in that it represents yet another judicial narrowing and modification of the Blue & Gold waiver rule. In addition to the 2021 Federal Circuit decision in Harmonia Holdings (mentioned above), the Court of Federal Claims of VS2 vs. United Statesfor example, recently rejected a novel Blue & Gold waiver argument put forward by the government, believing that the argument in this case “threatens[ed] reforge Blue & Gold from a reasonable shield against play and unjustifiable delays into a broadsword capable of slashing even meritorious arguments in a way. . . that [the] The federal circuit has never sanctioned. Taken together, the cases suggest that future government attempts to use the Blue & Gold The doctrine of waiver as a far-reaching tool for settling cases will likely come under closer scrutiny to determine whether the specific facts limit any potential waiver.
© 2022 Bradley Arant Boult Cummings LLPNational Law Review, Volume XII, Number 144