Background
Island Creek Associates held one of the Navy’s SeaPort-Next Generation indefinite-delivery, indefinite-quantity multiple-award contracts. The contract generally permitted only one SeaPort-NxG prime contract per company, including affiliates and joint ventures. In January 2024, however, the Navy modified the contract to let joint ventures participating in the Small Business Administration’s Mentor-Protégé Program hold a SeaPort-NxG contract even when their mentor and protégé members also held such contracts.
Island Creek filed a five-count bid protest in the Court of Federal Claims. Counts I–III and V alleged that the modification unfairly favored Mentor-Protégé Program joint ventures and violated federal procurement regulations. Count IV alleged that the Navy failed to investigate and mitigate an organizational conflict of interest involving a Navy contracting official and his spouse, a program manager for SeaPort-NxG contractor Precise Systems. After suit was filed, the Navy permanently reversed the challenged portions of the modification. The Court of Federal Claims dismissed the entire complaint because it concluded that Island Creek was not an “interested party.”
The Court’s Holding
The Federal Circuit affirmed the dismissal on alternative grounds. It held that the Navy’s corrective action mooted Counts I–III and V because there was no reasonable expectation that the challenged modification would recur and the Navy’s reversal eliminated its alleged effects. Island Creek offered only speculation to overcome the presumption that government officials acted in good faith, and the corrective action supplied the contract amendment that Island Creek had requested.
The court held that Count IV was barred by the Federal Acquisition Streamlining Act, 10 U.S.C. § 3406(f). Although that count did not identify a particular task order, the alleged organizational conflict was directly and causally connected to the Navy’s issuance of SeaPort-NxG task orders because Island Creek claimed the conflict skewed task-order competitions in Precise’s favor. To the extent Count IV instead challenged Precise’s underlying SeaPort-NxG contract award, Island Creek lacked statutory standing because it had won its own contract and was not an actual or prospective bidder for the contract awarded to Precise.
Key Takeaways
- An agency’s permanent reversal of a challenged solicitation or contract modification can moot a bid protest when it eliminates the alleged harm and there is no reasonable expectation of recurrence.
- FASA’s task-order protest bar can apply even when a complaint does not identify a specific task order, provided the challenged conduct has a direct and causal connection to task-order issuance.
- A successful multiple-award contract recipient generally cannot challenge another recipient’s contract award unless it was an actual or prospective bidder for that particular award.
Why It Matters
The decision underscores the breadth of FASA’s restriction on Court of Federal Claims review of disputes connected to task orders. Protesters cannot avoid the bar merely by framing their allegations as challenges to an organizational conflict of interest or broader procurement conduct when the asserted competitive injury arises through task-order awards.
It also confirms that meaningful corrective action may extinguish a protest even when the protester attributes the challenged agency action to a broader alleged conflict. Courts will focus on the violations pleaded and the relief requested, while applying the presumption of good faith to an agency’s representation that its corrective action is permanent.