The following is an installment in Crowell & Moring’s Bid Protest Sustain of the Month Series.  In this series, Crowell’s Government Contracts Practice will keep you up to date with a summary of one of the most notable bid protest sustain decisions each month.  Below, Crowell Consultant (and former GAO Bid Protest Hearing Officer) Cherie Owen discusses the Court of Federal Claims’ decision in CAN Softtech, Inc. v. United States, which partially sustained a protester’s challenge to an agency’s corrective action.

The case involved a procurement conducted by the General Services Administration (GSA) on behalf of the Air Force for information technology (IT) support services.  In January 2024, GSA awarded the contract to CAN Softtech, Inc. (“CAN”).  Disappointed offeror (the incumbent) Octo Metric protested the award to GAO.  In response, GSA indicated that it planned to take corrective action and GAO dismissed the protest as academic.  Although GSA initially indicated that it planned to reevaluate quotes and make a new award decision, it later decided to cancel CAN’s award and resolicit for its requirements.  CAN filed a protest at the Court of Federal Claims challenging GSA’s corrective action (including both its initial decision to reevaluate and make a new award, and its revised decision to cancel CAN’s award and resolicit).  According to CAN, GSA’s basis for taking corrective action lacked a rational basis. 

After examining the record, the Court agreed with CAN—in part.  First, the Court found that the record demonstrated a rational basis for the agency’s decision to reevaluate quotes based on the alleged evaluation errors identified in the earlier GAO protest.  However, the record failed to demonstrate a rational basis for the agency’s decision to resolicit.  The Government’s memorandum purporting to explain the decision to resolicit identified “outdated” requirements and certain “ambiguities” in the Solicitation, but it failed to explain how the requirements were outdated, how the solicitation was ambiguous, or what clarification might be needed.  As a result, the Court found that, “[w]ithout a more sufficient description of the Agency’s findings and a clearer explanation connecting those findings to the determination made, the Court cannot uphold the cancellation on the current record.” 

In granting relief, however, the Court revealed that CAN’s victory may have been pyrrhic.  Noting that “the failure here is not necessarily based on the substance of GSA’s justifications, but rather the inadequacy of its explanation,” the Court declined to grant injunctive relief.  Instead, the Court observed that it “may be possible for GSA to articulate a reasonable explanation that rationally connects its findings related to outdated and ambiguous solicitation provisions to its cancellation decision”; therefore, the Court concluded that remand was the appropriate remedy.  The Court remanded the matter to the agency for 21 days with instructions to prepare a “supplemental decisional document further describing the CO’s basis for terminating the contract award . . . and re-soliciting under a revised solicitation.” 

Although the ability to challenge the breadth of corrective action may be somewhat curtailed in the wake of the Federal Circuit’s decision in Dell Federal Systems (previously discussed here), the CAN Softtech, Inc. decision demonstrates that protesters may still find success challenging agency determinations regarding the scope of corrective action.