Associated Energy Grp., LLC v. United States

Authored by: Jeremy J. Gustrowsky

In a recent decision, the Federal Circuit addressed a challenge by Associated Energy Group, LLC (AEG) over a U.S. Department of Defense fuel contract for military bases in Djibouti. AEG argued that the Defense Logistics Agency (DLA) unfairly awarded a sole-source “bridge” contract to a competitor, United Capital Investments Group, Inc. (UCIG), for fuel delivery, allegedly shutting out AEG and others from competing. However, the court ultimately affirmed the dismissal of AEG’s protest—not because the contract was fair, but because AEG lacked the necessary legal standing to bring the case.

The heart of the matter was a requirement that any bidder must have a Petroleum Activities License (PAL) issued by the Djiboutian government. At the time of the contract, only UCIG had this license. AEG and its suppliers did not, and AEG’s complaint did not directly challenge the PAL requirement itself. The court noted that even if AEG succeeded in its protest and the contract was re-bid, AEG still would not be eligible to win the contract unless it obtained the required license.

The court also addressed whether the case was moot, since the bridge contract had already expired. It held that the dispute fell under the “capable of repetition, yet evading review” exception, because such short-term contracts are often completed before a court can review them. Nevertheless, this exception only allowed the court to consider the case; it did not cure AEG’s lack of standing.

Ultimately, the Federal Circuit’s decision highlights a key lesson for government contractors: to challenge a contract award, a company must not only allege errors in the process, but also show it was eligible and ready to perform the contract if the errors were corrected. Without the required license, AEG simply did not have a “personal stake” in the outcome, and the court could not grant the relief it sought.