Georgia Tech Procurement Assistance Center

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

GSA rescinds all awards made on $15 billion Alliant 2 Small Business contract

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The government rescinded all awards made in the $15B Alliant 2 Small Business governmentwide acquisition contract for IT services procurement last week.

The move follows an order from the Court of Federal Claims that the General Services Administration must rescore every submission it received to address errors raised in protest from Virginia-based technology company, Citizant Inc.

The Alliant 2 SB is part of one of the largest federal IT opportunities of the decade. In February 2018, GSA announced its award to 81 small business, which federal agencies would be able to access for integrated IT solutions around their “current and evolving needs.” After the announcement, protests from dissatisfied bidders ensued.

In March 2018, Citizant, Inc. protested the bid to the Government Accountability Office. GAO dismissed the file in May 2018, but Citizant took complaints to court and won this week, resulting in the rescission.

Keep reading this article at: https://www.nextgov.com/cio-briefing/2019/03/gsa-rescinds-all-awards-made-15b-alliant-2-small-business-contract/155869/

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

GSA launches enhanced debriefing pilot, but why not make it permanent?

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The perception that bid protests are mucking up the federal procurement process is one of those urban myths that will not die, like how Paul McCartney died in a car crash in 1966 or that the Air Force hides away UFOs in the desert.

Despite the fact that these “theories” are continually disproven, the myths just will not go away. Plenty of people swear they hear “Paul is dead” when you play “Revolution No. 9” backward.

For instance the most recent attempt to limit bid protests to improve acquisition is from the Section 809 panel. It recommended making substantial changes to the federal bid protest process by limiting vendors to filing before the Government Accountability Office or the Court of Federal Claims, but not both, as well as prohibiting protests of contracts for “readily available” products or services of less than $15 million.

The Senate Armed Services Committee a few years ago tried to “restrain” bid protests by making it harder on contractors to bring complaints before the GAO.

Despite the well-known fact that protests impact less than 1 percent of all procurement actions a year, there is this ever-present concern that bid protests are fouling up the system and a major part of the reason why federal contracting takes so long.

Keep reading this article at: https://federalnewsnetwork.com/reporters-notebook-jason-miller/2019/02/gsa-launches-an-enhanced-debriefing-pilot-but-why-not-just-make-it-permanent/

Contractors oppose proposed limit on federal bid protests

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As the Senate Armed Services Committee last week began its markup of the fiscal 2019 National Defense Authorization Act, a contractors group was pushing committee leaders to reject a Pentagon proposal to curb time-consuming bid protests.

Seeking to eliminate what some senators call “frivolous” protests and what acquisition officials call “forum shopping,” the Defense Department this spring pressed for limiting the ability of contractors who unsuccessfully sought an award and are rejected by the Government Accountability Office to then continue their protest at the Court of Federal Claims. The plan would limit the so-called “second bite at the apple” in the court to within 10 days of knowing (or when they should have known) they had the basis for a protest.

Keep reading this article at: https://www.govexec.com/contracting/2018/05/contractors-oppose-proposed-limit-federal-bid-protests/148368/ 

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/

Court upholds ‘draconian and perverse’ SBA SDVOSB ownership rules

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The SBA’s strict SDVOSB ownership rules can produce “draconian and perverse” results, but are nonetheless legal, according to a federal judge.

In a recent decision, the U.S. Court of Federal Claims condemned the SBA’s SDVOSB unconditional ownership requirements, while holding that the SBA was within its legal rights to impose those requirements on the company in question.

The Court’s decision emphasizes the important differences between the SBA and VA SDVOSB programs, because the Court held that although the company in question didn’t qualify as an SDVOSB under the SBA’s strict rules, it was eligible for VA SDVOSB verification under the VA’s separate eligibility rules.

The Court’s decision in Veterans Contracting Group, Inc. v. United States, No. 17-1188C (2017), is the third in a series of ongoing battles between the SBA and a self-certified SDVOSB.  The cases involved an Army Corps of Engineers IFB for the removal of hazardous materials and the demolition of buildings at the St. Albans Community Living Center in New York.  The Corps set aside the IFB for SDVOSBs under NAICS code 238910 (Site Preparation Contractors).

Keep reading this article at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/court-upholds-draconian-and-perverse-sba-sdvosb-ownership-rules/

Breaking News: On Jan. 30, 2018, the SBA released its proposed consolidated rule for SDVOSB eligibility.  See details here: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/sba-proposes-consolidated-sdvosb-eligibility-rules/

GSA’s $50 billion IT contract delayed again

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The $50 billion Alliant 2 IT contract is again on hold following a third series of bid protests, this time in the U.S. Court of Federal Claims.

Tysons Corner, Virginia-based OBXTek filed a lawsuit in November with the U.S. Court of Federal Claims, and Falls Church, Virginia-based Centech did the same on Dec. 26—days after its bid protest and others were dismissed by the Government Accountability Office.

A General Services Administration (GSA) spokesperson told Nextgov the agency “is honoring a performance stay as a result” of the latest protest, the contract’s third delay due to protests. In November, GSA awarded 61 vendors a piece of Alliant 2, a governmentwide contract that will supply IT goods and services to agency networks for the next decade.

Keep reading this article at: http://www.nextgov.com/it-modernization/2018/01/gsas-50-billion-it-contract-delayed-again/144925/

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

Federal court interprets SDVOSB “unconditional ownership” less strictly than SBA

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The Court of Federal Claims recently issued an opinion that defines “unconditional ownership” of an SDVOSB in a more relaxed manner than the SBA, creating a split of authority on the issue.

The Court, rejecting SBA precedent, held that certain restrictions on ownership of an SDVOSB by a service-disabled veteran are acceptable under the SBA’s unconditional ownership regulations. In particular, the SDVOSB company can retain a right of first refusal that would allow it to purchase the shares of the veteran upon death, incompetency, or insolvency, and that right does not result in a violation of the unconditional ownership requirement.

With the Court and the SBA’s administrative judges staking out different positions, what should SDVOSBs do?

In Veterans Contracting Group, Inc. v. United States, No. 17-1015C, (Fed. Cl. Aug. 22, 2017), the Court examined the same facts that the SBA Office of Hearings and Appeals did in a recent decision addressed in the SmallGovCon blog post of September 19, 2017.  And, examining the very same facts, the Court reached the opposite conclusion.

Keep reading this article at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/federal-court-interprets-sdvosb-unconditional-ownership-less-strictly-than-sba/

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