Federal Circuit Clarifies Prejudice Review In Bid Protest Cases

Explaining away seemingly contradictory precedent, the Federal Circuit in Bannum, Inc. v. U.S. (Apr. 21, 2005) clarified that, while the merits are reviewed on appeal de novo under the Administrative Procedure Act's "arbitrary and capricious or in violation of law" standard, the determination of whether a violation of law is prejudicial requires fact finding by the Court of Federal Claims and is reviewed for "clear error." Applying the clear error standard to this case, the appellate court found none in the trial court's determination that the violation had not prejudiced the protester.