Georgia Tech Procurement Assistance Center

COFC: “Rule of two” must be analyzed before “any” acquisition

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Court of federal claimsOn November 30, 2020, the U.S. Court of Federal Claims (COFC) issued a decision that supported the Small Business Administration’s position regarding the Rule of Two analysis requirements for government acquisitions.  The central question surrounding the case was whether the U.S. Army could cancel a Federal Acquisition Regulation (FAR) Part 8 service-disabled veteran-owned small business (SDVOSB) set-aside procurement under the General Services Administration’s Federal Supply Schedule (FSS) and move the requirement to a multiple-award indefinite-delivery, indefinite-quantity (MAIDIQ) contract vehicle that the plaintiff, The Tolliver Group, Inc. (Tolliver), did not hold.

In its protest, Tolliver argued, in part, that the Army’s actions violated the Rule of Two because the agency was required to determine whether two or more small businesses were capable of performing the requirement prior to choosing to put the procurement on the MAIDIQ contract.  The COFC’s decision confirms that the Rule of Two analysis applies before an agency elects to procure a requirement from a multiple-award contract (MAC) vehicle under FAR Part 16.5.

Continue reading at:  Piliero Mazza

Size recertification prior to award – when is it required?

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Court of federal claimsThe U.S. Court of Federal Claims (COFC) decision in HWI Gear, Inc. v. United States highlights the importance of reviewing a solicitation to determine if the text of Federal Acquisition Regulation (FAR) 52.219-28 is included in it, as well as the risk of engaging in corporate transactions while a proposal to a procuring agency is pending.  In this case, the COFC held that an offeror was required to recertify its size status during a procurement, and the agency’s failure to enforce this requirement invalidated the award.

In HWI Gear, Mechanix Wear, Inc. (Mechanix) and HWI Gear, Inc. (HWI) submitted proposals in response to a solicitation set aside for small businesses.  After proposal submission but before award, Mechanix informed the procuring agency that it had changed its corporate structure from a corporation to a limited liability company and changed its corporate name, but that all other terms and conditions in its proposal remained unchanged.  Mechanix, however, did not inform the agency that its change in corporate structure was the result of a merger with a large business and that Mechanix no longer qualified as a small business under the size standard established for the procurement.  The agency ultimately selected Mechanix as the awardee, and HWI filed a bid protest challenging the agency’s evaluation.

Continue reading at:  Bass, Berry & Sims

In submitting a bid or proposal – timing is everything!

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In its recent decision in Criterion Systems, Inc. v. U.S., , the U.S. Court of Federal Claims (COFC) denied protester’s pre-award protest challenging the Agency’s rejection of its late submission of a revised quote in response to a solicitation amendment and request for revised quotations.  In this case, the solicitation provided that “[f]ailure to follow procedures or provide any of the documents or information may be considered a material omission and may adversely affect a Vendor’s evaluation or result in elimination of the Vendor from the competition.”  It also provided that “LATE QUOTES WILL NOT BE ACCEPTED.”  Criterion timely submitted its initial proposal and was in the competition.  The Agency issued subsequent amendments to the solicitation and sought submission of revised quotes through a government portal, FedConnect, “no later than 5:00pm ET on November 21, 2018.”  Each amendment and the request for revised quotes stated that “LATE QUOTES WILL NOT BE ACCEPTED.”

Criterion “created” its revised quote on the designated electronic portal at 2:36:54 PM on November 21, 2018, but it did not “submit” it until 5:01:30 PM ET, 90 seconds after the deadline for quote submission.  When asked for an explanation by the Agency, Criterion indicated it may have had “latency” issues and that this was its first time submitting documents using the portal.  Criterion did not provide any evidence to justify or further explain its late submission.  The Agency rejected Criterion’s quote as untimely.

Criterion brought its protest alleging that the Agency’s actions in rejecting its quote were arbitrary and capricious.  The Court held that protester failed to establish that there was a “significant error” in the procurement process:

“Ninety seconds late may appear to be a minimal infraction, but deadlines are set for a reason, and an agency’s strict adherence to a deadline places all bidders on an equal footing and avoids the sorts of issues Criterion is seeking to raise here.  Further, Criterion’s failure to submit a timely bid was entirely within its own control.  The Agency’s refusal to deviate from the express RFQ terms is not arbitrary, capricious, or contrary to law.”

Criterion makes clear that all those who compete in procurements must comply with the express terms of the solicitation.  This is an essential truth in government procurement.  A bidder’s or offeror’s failure to comply with such terms can result in its loss of the opportunity to be considered for award.

Read more at:  Government Contracting Matters

Government’s subjective views about contractor’s performance do not justify termination for default

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The U.S. Court of Federal Claims recently overturned an agency’s decision to terminate a government contractor for default ─ finding that the government allowed a series of contract disputes, poor practices, conflicting personalities, and a lack of effective communication to cloud its termination analysis.  The case serves as an important reminder that, when reviewing a termination for default, the Court gives little credence to the government’s “subjective beliefs” regarding the contractor’s ability to perform.  Rather, the Court conducts an objective inquiry and scrutinizes the events, actions, and communications that led to the agency’s termination decision.

Background

The National Guard Bureau (“Agency”) awarded a firm-fixed price construction contract in 2014 to Alutiiq Manufacturing Contractors, LLC (“AMC”) to repair asphalt roads at an Air Force base.  From the outset, AMC experienced performance issues on the project: its key personnel were not staffed on the project; it had difficulty finding a qualified subcontractor; and it failed to timely submit required contract documentation.  None of these deficiencies, however, would have prevented the contractor from timely completing the contract.

Nevertheless, these early performance problems engendered hostility towards the contractor among the government’s contract management personnel.  The Agency issued a Letter of Concern and multiple cure notices to the contractor.  In response, AMC adopted corrective measures to help move the project forward.  AMC developed a new asphalt design, made personnel changes, and submitted a revised baseline schedule.  It also worked with its main subcontractor to develop a recovery schedule under which AMC anticipated it could complete its work two days ahead of the original contract deadline.

At the same time the contractor was working to get the project back on schedule, however, Agency personnel were holding discussions on when and how to terminate AMC’s contract for default.  Ultimately, an onsite Agency representative took a “quick glance” at AMC’s proposed recovery schedule and determined it was not viable.  The Agency did not conduct a critical path analysis of the recovery schedule, but instead performed only a “cursory assessment” of the plan.  The Agency terminated AMC’s contract for default shortly thereafter.  AMC then challenged the Agency’s grounds for termination at the Court of Federal Claims.

Continue reading at:  Covington

COFC issues decision on Cost Accounting Standards and ‘offsetting’

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The Boeing Company v. United States, Civil No. 17-1969C (May 29, 2019) reveals the Court of Federal Claims’ (COFC) interpretation of the Cost Accounting Standards (CAS) statute as primarily benefiting the government, and directs contractors challenging the Federal Acquisition Regulation (FAR) 30.606(a)(3)(ii) prohibition on offsetting the impact of simultaneous cost accounting practice changes to raise those challenges in a pre-award protest or risk waiver.  Importantly, the court’s decision could have broad implications, requiring contractors to protest the applicability and interpretation of any extra-contractual FAR provisions—not just those involving the CAS statute—that expound upon a FAR Part 52 contract clause.

Adopting a novel theory rooted in the US Constitution, The Boeing Company (Boeing) filed an action under the Contract Disputes Act (CDA) alleging that the FAR 30.606 offset prohibition is an “illegal exaction” in violation of the CAS statute, which specifically prohibits windfalls to the government resulting from changes to a contractor’s cost accounting practices.  Boeing also claimed that FAR 30.606 was “extra-contractual” and therefore, should not preclude Boeing from offsetting changes that increase costs to the government from those that decrease costs.  The COFC dismissed Boeing’s constitutional claim for lack of subject matter jurisdiction and concluded that Boeing had effectively waived its contract claims upon failing to raise them in a pre-award protest or during negotiations with the government.

Continue reading at:  Arnold & Porter

2018 bid protests: Strong success rate at GAO continues while protest numbers spike in court

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Protesters remained active and fairly successful in their challenges to agencies’ procurement actions at the Government Accountability Office (GAO) in 2018, while protests at the Court of Federal Claims spiked.

According to Ralph White, Managing Associate General Counsel for Procurement Law at GAO, presenting at West’s Government Contracts Year In Review Conference, the number of protests at GAO held steady, despite the mid-year implementation of a $350 filing fee. A previous blog post with GAO statistics can be found here. White credited a number of competing factors with the steady numbers.  The filing fee, enhanced Defense Department debriefings and the suspension of one particularly active “nuisance protester” likely worked to reduce the number of protests, while the highly competitive procurement environment, increased DoD spending, an increase in the dollar threshold for GAO’s task order jurisdiction and the steady but significant success rate for protesters worked to increase the number of protests.

That success rate – the number of protests where the protester sees some kind of remedy, whether from a sustain decision or agency corrective action – remains around 44 percent, similar to previous years, White said. For the third consecutive year, not a single agency refused to follow a recommendation issued by GAO.

The Court of Federal Claims saw a marked increase in protests in 2018 – 179, compared to 129 in 2017, a 40 percent increase.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=785248

Ruling highlights bid protester standing issues

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A protester must have a genuine stake in the government decision it hopes to challenge. Protesters do not have standing to challenge procurements they cannot hope to perform. There is friction, however, between the need for courts to consider the standing of protesters (e.g., their ability to perform a challenged contract) and the exclusive authority of the procuring agency to perform evaluations. The Federal Circuit’s Sept. 19, 2018 decision in CliniComp provides an illustration of this friction.

In CliniComp International Inc. v. U.S., the protester challenged a proposed sole-source award of a national electronic health records contract by the U.S. Veterans Administration to a much larger competitor. The Federal Circuit affirmed the underlying quasi-evaluation by the U.S. Court of Federal Claims decision, which compared CliniComp’s current operations with the details of the proposed sole-source contract. The Federal Circuit upheld the COFC’s finding that CliniComp did not have standing, as it had not shown itself to be capable of performing a national contract much larger than any of its current efforts.

While the decision is technically limited to protests challenging sole-source awards, the opinion could be read to suggest that even protesters challenging the terms of a solicitation may need to submit significant evidence at the outset of a protest to demonstrate that they could credibly propose to perform the full scope of work contemplated by the agency. Practitioners should take heed of the potentially critical importance of this threshold showing.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=740592

Pentagon seeks to limit bid protests in federal court

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The Defense Department is proposing legislation to impose new constraints on government contractors’ ability to protest federal agencies’ award decisions, including by rolling back their rights to file bid protests in federal court.

Currently, companies who believe an agency mishandled a contract award have two independent forums to file protests: the Government Accountability Office and the U.S. Court of Federal Claims (COFC). But some firms opt to take their cases to both.

If, for example, GAO denies or dismisses their protest, they still have the right to file a new claim at the COFC.

DoD’s proposal would essentially eliminate that option by requiring contractors to bring cases to COFC within 10 days of the agency’s award decision: the same deadline used by GAO. Since GAO has up to 100 days to sustain or deny a protest, a company could not wait and use the court as a backstop if it loses its case at GAO.

Keep reading this article at: https://federalnewsradio.com/defense-main/2018/05/pentagon-seeks-to-limit-bid-protests-in-federal-court/

COFC rejects SBA decision that future conditions on stock ownership destroy ‘unconditional ownership’

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Veteran-owned small businesses have long grappled with seemingly benign drafting inconsistencies between Small Business Administration (SBA) and Department of Veterans Affairs (VA) regulations that can leave a business qualified as a Service-Disabled Veteran-Owned Small Business (SDVOSB) by VA standards, but not at the SBA (or vice versa).

One such puzzler is the requirement for unconditional ownership by a service-disabled veteran, a requirement that is common to both SBA and the VA, but for which the VA provides a substantially more detailed definition.

  • Compare: 13 C.F.R. § 125.12 (“A concern must be at least 51% unconditionally and directly owned by one or more service-disabled veterans.”)
  • With: 38 C.F.R. § 74.3(b) (adding that “[o]wnership must not be subject to conditions precedent, conditions subsequent, executory agreements, voting trusts, restrictions on assignments of voting rights, or other arrangements causing or potentially causing ownership benefits to go to another (other than after death or incapacity)”).

This additional detail has created some conflicting results, which is not helped by divergent interpretations of unconditional at SBA and the Court of Federal Claims, all of which has left many a veteran business owner (and more than a few legal practitioners) scratching their heads.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=655422

CORs weren’t authorized to order additional work, so contractor goes unpaid

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A contractor’s performance of extra work outside the scope of the contract may go uncompensated if a contractor does not receive appropriate authorization in accordance with the contractual terms.

A Court of Federal Claims decision reinforced that a contractor should only perform work required under the terms of the federal contract or directed by an authorized government agent in accordance with the contractual terms. And importantly, a Contracting Officer’s Representative isn’t always authorized to order additional work – even if that person acts as though he or she has such authority.

The Court’s decision in Baistar Mechanical, Inc., v. United States, No. 15-1473C (2016) involved a ground maintenance and snow removal services contract for the Armed Forces Retirement Home’s property in Washington, D.C., which included 270-acre property providing residence to several hundred retired military members. Baistar successfully bid on and was awarded the contract, which was executed in December 2011. The contract contemplated a five-year period of performance beginning on December 16, 2011.

Keep reading this article at: http://smallgovcon.com/u-s-court-of-federal-claims/cors-werent-authorized-to-order-additional-work-so-contractor-goes-unpaid/

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