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COFC Warns: Protesters Must Prove Capability, Not Just Claim It

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In KL3, LLC v. United States, U.S. Court of Federal Claims, No. 24-2028 (June 2, 2025, reissued June 12, 2025), KL3 challenged the Department of Defense’s award of two sole-source contracts under the SBA’s 8(a) program, arguing that the agency improperly circumvented small business rules by breaking up and reclassifying work previously solicited under the ENCORE III procurement. KL3 contended that the awards to an 8(a) firm violated 13 C.F.R. § 124.504(a), which bars procuring agencies from shifting previously set-aside small business work into the 8(a) program. Despite the legal nuance, KL3’s protest was dismissed for lack of standing and failure to prove prejudice.

The Decision
The COFC dismissed the protest, ruling that:

  1. No Standing Without Capability: The Court found that KL3 failed to plausibly allege it could perform the work it was protesting. Although KL3 claimed a willingness to compete, it provided no evidence of technical capability or historical performance to support standing. In fact, the agency had already deemed KL3 not capable of performing at least one of the protested requirements.
  2. Partial Protests Can Undermine Jurisdiction: KL3 only challenged two of the four contracts resulting from the canceled ENCORE III procurement. The Court held that a protestor must show interest and capability across all components to justify relief—particularly when the protest hinges on how the work was divided.
  3. No Evidence of Prejudice, No Chance of Victory: Even if the agency had erred, KL3 failed to demonstrate how it was harmed. The Court found that it offered only conclusory claims that it would have competed and potentially won had the procurement been conducted differently. Without support in the record, the Court found no redressable injury.
  4. Mentor-Protégé Relationships Don’t Fill the Gaps: KL3 pointed to its SBA mentor’s prior work as proof of capability, but the Court noted that the mentor’s performance had been poor, and that KL3 could not simply impute the mentor’s credentials to itself under the SBA’s joint venture.

Key Takeaways for Contractors

  1. Standing Isn’t a Box to Check, It’s a Claim to Prove: To challenge a procurement, especially a sole-source award, you must demonstrate you could actually perform the work if given the chance.
  2. Prejudice Must Be More Than a Hunch: It’s not enough to say you were harmed. You must show how the alleged error changed your odds of winning. GAO and COFC will not infer prejudice for you.
  3. Targeting Half the Procurement Can Undermine Your Whole Case: When your protest rests on how an agency structured or bundled work, be prepared to challenge the entire structure, not just a slice of it.
  4. Mentorship Is Not a Shield: If your protest relies on joint venture or mentor-protégé capability, be ready to show how your entity—not just your partner—meets the technical requirements.
  5. Judges Won’t Fix a Thin Record: Courts won’t connect the dots or rescue a protest with legal conclusions that are not supported by facts. The burden of proof—and persuasion—is squarely on the protester.