Government Contracts Legal Round-Up is a podcast focusing on important developments facing government contractors and grant recipients.  Hosts David Robbins and Marc Van Allen discuss key developments in this ever-changing field in an easy-to-absorb style.  Often joined by colleagues and guests, programs focus on the most relevant executive orders, regulations, proposed and final rules that affect the FAR and relevant agency FAR supplements, decisions from GAO, the boards and courts.

June 22, 2022 Government Contracts Legal Round-Up | 2022 Issue 12

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Claims/Appeals

1. Zafer Constr. Co. v. United States, Fed. Cir. No. 21-1547 (Argued April 2022)

  • The Federal Circuit is poised to issue a significant decision distinguishing between claims and requests for equitable adjustment (REAs) for purpose of establishing jurisdiction under the Contract Disputes Act (CDA).
  • The Court of Federal Claims (COFC) dismissed the claim for lack of jurisdiction after finding that the contractor’s submission, styled as an REA, did not qualify as a claim under the CDA.
  • On appeal, the contractor argues that its submission satisfies all of the requirements for a valid, certified claim, and that the COFC decision must be reversed for the same reasons that the Federal Circuit recently reversed the ASBCA in a similar case, Hejran Hejrat Co. Ltd. v. US Army Corps of Engineers, 930 F.3d 1354 (Fed. Cir. 2019).
  • During oral argument, Federal Circuit judges Newman, Reyna, and Hughes appeared skeptical of the government’s position and the COFC’s holding. The argument revealed some uncertainty, however, as to how to distinguish claims from REAs based on existing Federal Circuit precedent.

While it is important that proper claims are not rejected for lack of jurisdiction based on procedural formalities, it is also important that contractors are able to submit REAs that do not constitute claims triggering the CDA dispute process. Contractors and their counsel should keep an eye on this appeal to understand how (if at all) the Federal Circuit draws the line between claims and REAs.

COFC Protest Decisions

1. Connected Global Solutions, LLC v. United States, COFC No. 22-292C (June 21, 2022)

  • This is the latest decision in a long-running, high-profile protest that has already generated significant litigation before GAO and COFC.
  • In a rare procedural ruling, the court previously granted limited discovery from the awardee relating to an alleged proposal misrepresentation.
  • In this decision, the court considers whether to supplement the administrative record with various documents relevant to the alleged proposal misrepresentation, including the discovery responses.
  • The opinion provides a helpful explanation of the interplay between record supplementation, judicial notice, and the Federal Rules of Evidence.

Contractors and protest counsel should watch this litigation carefully to understand the court’s evolving approach to alleged proposal misrepresentations, discovery in bid protests, and record supplementation.

GAO Protest Decisions

1. Insight Technology Solutions, Inc., B-410534 (May 27, 2022)

  • The protester challenged a solicitation requirement that offerors demonstrate capability maturity model integration (CMMI) level 3 certification at the time of proposal submission.
  • GAO rejected the protester’s challenge to the agency requirement for CMMI level 3 certification, deferring to the agency’s determination of its own requirements.
  • GAO sustained the protest, however, finding that the agency could not support the requirement for CMMI level 3 certification at the time of proposal submission.

Solicitations typically impose compliance obligations and certification requirements. GAO will generally defer to an agency’s assessment of its requirements in this respect. GAO will, however, scrutinize the timing of those requirements, particularly where an agency demands that offerors demonstrate a certain certification or capability before performance begins. This line of precedent will be increasingly important as agencies seek to incorporate evolving cyber and information security qualifications into the procurement process.

2. Sabre Systems, Inc., B-420090.3, (June 1, 2022) (Published June 14, 2022)

  • GAO sustained a protest because the contracting agency failed to evaluate the awardee’s total compensation plan in accordance with FAR 52.222-46 (Evaluation of Compensation for Professional Employees).
  • FAR 52.222-46 contemplates evaluation of an offeror’s compensation for “professional employees, as defined in 29 CFR 541.” In this procurement, the agency determined that only a small subset of four labor categories should be considered “professional employees” as defined in 29 C.F.R. part 541. The agency reasoned that part 541 included various categories of employees, and so the agency excluded from its professional compensation analysis those employees whose duties more closely matched other categories of employees defined in part 541.
  • GAO rejected this interpretation, holding instead that the plain language of FAR 52.222-46 unambiguously requires the agency to evaluate the compensation of a proposed employee that meets the definition of “professional employees” regardless of whether that employee also meets another part 541 labor category definition. GAO found that a portion of the employees the agency excluded from its analysis of professional compensation qualified as professional employees, and GAO sustained the protest on this basis.

The purpose of evaluating proposed compensation for professional employees is to assess each offeror’s ability to provide uninterrupted, high-quality work, considering the realism of the proposed professional compensation and its impact upon recruiting and retention. GAO will sustain a protest where an agency fails to reasonably evaluate offerors’ proposed total compensation plans in accordance with FAR provision 52.222-46, for example by unreasonably excluding from the agency’s analysis certain proposed employees who meet the definition of a professional employee as defined in subpart D of part 541.

3. The Ulysses Group, LLC, B-420566 (June 7, 2022) (Published June 8, 2022)

  • GAO denied the protest challenging the Air Force’s decision to reject a late-submitted proposal where the offeror made multiple unsuccessful efforts to submit its proposal prior to the announced deadline.
  • The solicitation required offerors to submit proposal volumes through a designated online DoD portal by the stated deadline, cautioning offerors not to wait until the last minute and that no exceptions would be made to the submission deadline.
  • Beginning two days prior to the deadline for proposal submission, the company could not successfully upload its proposal to the portal. The company repeatedly sought the assistance of the portal help desk, to no avail. Prior to the deadline, the company submitted a copy of its technical volume to the help desk and discussed these issues with the contracting officer.
  • The Air Force rejected the proposal because it was not submitted in accordance with the solicitation’s requirements. GAO denied the protest, upholding the Air Force’s decision.

Offerors are well advised to submit proposals early and leave time for unexpected technical hiccups. Otherwise, and at least at GAO, hardline principles relating to the time and manner of proposal submission may prevent a contractor from obtaining relief, even if the technical issue is seemingly caused by failures in the very government system required under the solicitation.

CATEGORIES: Bid protests, Claims

June 13, 2022 The Government Contracts Legal Round-Up | Episode 24

In the latest episode of the Government Contracts Legal Round-Up, Partner David B. Robbins discusses three bid protest cases: IAP Worldwide Services, Inc. v. United States, AT&T Mobility LLC, and Sehlke Consulting, LLC. Mr. Robbins outlines key takeaways for each case, noting that the IAP Worldwide Services matter may prove to be among the most significant Court of Federal Claims bid protest opinions of 2022.



CATEGORIES: Podcast

June 13, 2022 The Government Contracts Legal Round-Up | Episode 24

In the latest episode of the Government Contracts Legal Round-Up, Partner David B. Robbins discusses three bid protest cases: IAP Worldwide Services, Inc. v. United States, AT&T Mobility LLC, and Sehlke Consulting, LLC. Mr. Robbins outlines key takeaways for each case, noting that the IAP Worldwide Services matter may prove to be among the most significant Court of Federal Claims bid protest opinions of 2022.


 

PEOPLE: David B. Robbins

June 7, 2022 Government Contracts Legal Round-Up | 2022 Issue 11

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Protest Cases

1. IAP Worldwide Services, Inc. v. United States, No. 21-1570 (Fed. Cl. May 25, 2022)

  • In what may prove among the most significant Court of Federal Claims bid protest opinions of 2022, Judge Solomson provides a thorough explanation of the various remedies available at the Court.
  • In a prior decision as part of the same protest, the court found that the Army failed to comply with a DoD FAR Supplement (DFARS) provision requiring that DoD “should” open discussions before awarding contracts valued above $100 million. Although the court found that the protester established prejudicial error on this point, the court could not determine the appropriate nature of relief, if any.
  • After supplemental briefing, the court concluded that even though the protester could not demonstrate the irreparable harm necessary for a permanent injunction, it was nevertheless appropriate to remand the procurement back to the Army to comply with the DFARS provision in the first instance, whether by further explaining its initial decision to forego discussions, or preparing a new decision.

This opinion repays careful study. Protest practitioners should be careful to understand the various remedies available at COFC and craft their pleadings accordingly.

2. AT&T Mobility LLC, B-420494 (May 10, 2022) (Published May 23, 2022)

  • GAO sustained a protest alleging errors in the evaluation of both non-price and price factors, as well as the source selection decision.
  • First, GAO found that under the non-price factors, the agency assessed the proposals primarily on an acceptable/unacceptable basis without performing the kind of qualitative analysis required by the amended solicitation. Specifically, the solicitation contained provisions requiring offerors to provide, and the agency to assess, detailed narrative descriptions for many of the requirements. Instead of assessing these narrative descriptions, the agency improperly evaluated offerors on the basis of the pass/fail matrix that had been removed as a stand-alone evaluation factor.
  • Next, GAO determined that the source selection decision was flawed because it converted the procurement methodology from best value to lowest-priced, technically acceptable. Here, the agency did not conduct a price/technical tradeoff because the selection authority did not see any discriminators in the protester’s proposal “worth considering for a trade-off in value over price.” However, GAO found that the record did not show that there was any qualitative discussion of the underlying merits of the proposals and why they should have been considered technically equivalent, and instead the selection authority unreasonably relied upon adjectival ratings.
  • Finally, GAO held that the price evaluation was flawed because, contrary to the solicitation’s express terms, the agency excluded pricing for the transition portion of the base year and pricing for the optional CLINs from the price calculations used in the source selection decision. While as a standalone matter this may not have been prejudicial because the protester was still higher priced, GAO nonetheless sustained because it could not conclude with any certainty that, had the agency evaluated proposals consistent with the terms of the solicitation and performed a proper tradeoff analysis, that the selection authority would have made the same selection decision.

Agencies cannot establish one evaluation scheme yet follow another. Where debriefing materials indicate that the agency did not follow its own requirements, this can be a ripe avenue for protest.

3. Sehlke Consulting, LLC, B-420494 (May 18, 2022) (Published May 25, 2022)

  • GAO sustained a protest arguing the awardee’s proposal was unacceptable due to the subsequent unavailability of a proposed key person.
  • The solicitation, issued by the Department of Defense, National Reconnaissance Office (NRO), required offerors to provide resumes and letters of commitment for four specific key personnel positions, including a senior financial consultant.
  • In selecting KPMG for award, the selection decision identified that “specifically KPMG’s exceptional response to [the] most important management factor Key Personnel” warranted the associated cost premium.
  • The protester alleged that the agency should have evaluated the awardee's proposal as technically unacceptable when, prior to completing its evaluation of proposals and making its award decision, KPMG advised the agency that its proposed senior financial consultant had submitted a formal notice of resignation, thus putting the agency on notice that one of the company’s proposed key personnel was unavailable to perform the contract as proposed.
  • In response, NRO claimed that their evaluation was reasonable because despite the individual’s pending departure and despite the agency’s knowledge of the pending departure, the individual technically remained an employee of KPMG’s subcontractor on the date the agency executed the source selection decision.
  • GAO was not persuaded, finding that the agency could not ignore the pending departure of the key person. Unlike other cases, where a proposed key person’s unavailability was not sufficiently definite, here the fact that the senior financial consultant unambiguously resigned to take a position with a different firm made it clear that the individual was unavailable. GAO therefore determined that it was unreasonable for the agency to base its evaluation on the awardee’s offer of a senior financial consultant it had no realistic expectation would perform on the follow-on contract.

When assessing allegations regarding the unavailability of key personnel, GAO performs a fact-specific inquiry to determine whether the individual was actually unavailable and whether the agency had this knowledge prior to its award decision. GAO continues to maintain its position that when a key person becomes unavailable, agencies must either reevaluate proposals without reliance on this candidate for a required key person position, or open discussions and solicit revised proposals from all offerors.

CATEGORIES: Bid protests

May 25, 2022 Government Contracts Legal Round-Up | 2022 Issue 10

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Protest Cases

1. Sekri, Inc. v. United States, No. 21-1936 (Fed. Cir. May 13, 2022)

  • This appeal asked the Federal Circuit to decide how traditional timeliness and standing rules apply to bid protests brought by mandatory source suppliers that operate under the Javits-Wagner-O’Day (JWOD) Act, which is intended to prioritize federal procurement from the blind and severely disabled.
  • The protester filed suit at the Court of Federal Claims arguing that the Defense Logistics Agency (DLA) had improperly issued a competitive solicitation for certain supplies that should have been purchased directly from SEKRI as a mandatory source pursuant to the JWOD Act.
  • The Court of Federal Claims found that it was bound to apply the Federal Circuit’s existing framework for assessing bid protest timeliness and standing and dismissed the case because SEKRI did not submit a proposal under the DLA solicitation and did not file a formal protest before the proposal submission deadline.
  • The Federal Circuit reversed, treating the case as one of first impression and holding that, based on the unique nature of the JWOD Act and mandatory source procurements, the traditional bid protest timeliness and standing rules do not bar SEKRI’s protest in this case.

This case confirms that the Federal Circuit is willing to recognize that certain government contracts cases arise in unique contexts that can warrant a departure from the traditional rules. Contractors should not assume that this holding will be interpreted to relax the otherwise strictly enforced timeliness and standing rules that apply to protests arising outside the JWOD Act. The opinion, however, is a valuable reminder of the Federal Circuit’s unique position to shape procurement law, and the potential power of a persuasive appeal.

2. BES Federal Solutions JV, LLC, B-420550 et al. (May 11, 2022) (Published May 18, 2022) 

  • GAO denied the protest where the Department of the Air Force concluded that the protester’s proposal was unacceptable under the technical (staffing plan) evaluation factor.
  • Under the mission essential plan (MEP) subfactor, the solicitation provided that offerors were required to explain how they would continue performing during a crisis, including handling employees exposed to COVID-19 and a return-to-work policy.
  • The Air Force found BES’s approach unacceptable because it did not specifically address a quarantine policy or a procedure for notifying the contracting officer’s representative regarding positive COVID-19 test results.
  • GAO rejected the protester’s argument that the Air Force’s evaluation imposed an unstated evaluation criterion. GAO explained, for example, that the Solicitation’s requirement to provide a COVID-19 testing policy reasonably encompassed an unstated requirement of where such testing would be performed.

Agencies may properly evaluate a proposal based on considerations not expressly stated in the RFP where those considerations are reasonably and logically encompassed within the stated evaluation criteria, and where there is a clear nexus between the stated and unstated criteria.

3. DCR Services & Construction, Inc., B-420179.2,B-420179.3 (April 28, 2022) (Published May 6, 2022)

  • GAO denied in part and dismissed in part a protest challenging the National Park Service’s non-selection of DCR’s quotation for the establishment of a blanket purchase agreement (BPA) for contaminated site cleanup services.
  • First, GAO denied DCR’s protest alleging flaws in its own evaluation.
  • Next, GAO dismissed DCR’s protest challenging the evaluation of the awardee’s proposal and the best-value determination, finding that DCR was not an interested party to raise these challenges.
  • GAO explained that even if DCR’s protest concerning the agency’s evaluation of the awardee’s quotation (and its treatment in the best-value determination) was sustained, DCR would not be in line to receive a BPA. The record reflects there were two other vendors that did not receive BPAs, yet the agency found their quotations to be a better value than DCR’s.

Where there is an intervening offeror who would be in line for the award if a protester’s challenge to the award were sustained, the intervening offeror has a greater interest in the procurement than the protester, and GAO generally considers the protester’s interest too remote to qualify as an interested party. Protesters should be mindful of the competitive landscape when filing protests, as they may be required to challenge not only the awardee’s evaluation, but the evaluation of other disappointed offerors.

Claims Cases

The Armed Services Board of Contract Appeals (ASBCA) issued a decision that cites an article published by Nathaniel Castellano for the observation that the Contract Disputes Act (CDA) contains traps for the unwary, despite being intended to create a fair and efficient mechanism for resolution of government contract claims. Nathaniel’s article argues that, based on a recent line of Supreme Court precedent, the CDA’s procedural requirements for claim submission, certification, and timely appeal do not qualify as jurisdictional prerequisites for maintaining CDA litigation.

Freedom of Information Act (FOIA) Exemption 4

1. Synopsis, Inc. v. Dept. of Labor, No. 20-16414, 20-16416, 2022 WL 1501094 (9th Cir. May 12, 2022)

  • The Department of Labor (DOL) declined to release certain materials in response to a FOIA request; the requester filed suit in district court challenging DOL’s decision to withhold; the district court held in favor of the requester, directing DOL to release the disputed materials.
  • After the district court issued its order directing DOL to release the materials, Synopsis attempted to intervene in the same case, claiming that the materials qualified as its confidential commercial information that must be withheld under FOIA Exemption 4. The district court denied the motion to intervene as untimely.
  • Synopsis separately filed an independent “Reverse-FOIA” action against DOL, asking the district court to enjoin DOL from releasing the same materials, again invoking Exemption 4. The district court rejected the Reverse-FOIA argument on the basis the court had already ordered DOL to release the materials.
  • Synopsis appealed. The Ninth Circuit affirmed in an unpublished decision, finding that the district court did not abuse its discretion in denying the motion to intervene, and agreeing with the district court that, under Supreme Court precedent, once the district court ordered DOL to release the materials Synopsis could no longer sue to enjoin the release of those same materials.

This decision emphasizes how important it is for companies to be vigilant when trying to protect confidential information that has been submitted to the US Government. As soon as an agency provides notice that confidential information has been requested under FOIA, the company should promptly respond with legal and factual support explaining why any proprietary or confidential commercial information must be withheld. In the event a requester files suit to obtain the materials, or the agency indicates it will release sensitive information, the company should act quickly to intervene and support the agency, or file suit to enjoin the agency, as appropriate. For those interested in learning more about FOIA Exemption 4, Nathaniel Castellano recently published a Briefing Paper discussing the latest litigation developments and best practices.

Investigations and Enforcement

The Department of Justice announced an inflation adjustment to civil False Claims Act penalties, increasing the range of penalties to $12,537 to $25,076 per claim.

CATEGORIES: Bid protests, Claims, Compliance

May 17, 2022 The Government Contracts Legal Round-Up | Episode 23

In the latest episode of the Government Contracts Legal Round-Up, Partner David Robbins, co-chair of Jenner & Block’s Government Contracts Practice, discusses important developments facing government contractors and grant recipients. Mr. Robbins explains the Department of Defense’s final rule regarding commercial item determinations and a proposed FAR amendment regarding greenhouse gas emissions. He also discusses recent protest and claims cases.

 

May 17, 2022 The Government Contracts Legal Round-Up | Episode 23

In the latest episode of the Government Contracts Legal Round-Up, Partner David Robbins, co-chair of Jenner & Block’s Government Contracts Practice, discusses important developments facing government contractors and grant recipients. Mr. Robbins explains the Department of Defense’s final rule regarding commercial item determinations and a proposed FAR amendment regarding greenhouse gas emissions. He also discusses recent protest and claims cases.

 

PEOPLE: David B. Robbins

May 10, 2022 Government Contracts Legal Round-Up | 2022 Issue 9

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Protest Cases

1. VERSA Integrated Solutions, Inc., B-420530 (April 13, 2022)

  • GAO denied a protest challenging the Food and Drug Administration’s (FDA) decision not to consider a proposal that was not timely received by the agency in a manner consistent with the solicitation.
  • While the proposal was received in the government’s electronic server before the submission deadline, the proposal submission email was quarantined by the server and did not reach the contracting officials before the deadline.
  • In presenting its case, VERSA emphasized that it submitted its proposal prior to the deadline and maintained that the government was in control of its proposal following that submission. The protester relied on standard FAR provisions that allow the government to consider a late proposal where there is no risk of delay to the procurement and the proposal is under government control before the proposal submission deadline.
  • But GAO strictly interprets the FAR’s “government control” exception, routinely holding that it does not apply to proposal submitted electronically. VERSA specifically asked GAO to reconsider this line of decisions—i.e., declining to apply the exception in circumstances similar to those here.
  • GAO declined the invitation to revisit is interpretation of the government control exception and denied the protest.

As always, offerors should leave plenty of time to submit proposals well in advance of the deadline and anticipate that electronic submissions may encounter challenges that delay submission. In the event an agency does reject an electronic proposal submission as late, recognize that GAO and the Court of Federal Claims (COFC) analyze these issues differently, and COFC may provide the more favorable forum for protest. Specifically, several COFC judges have found that an electronic proposal submission that reaches a government server before the proposal submission deadline does qualify for the “government control” exceptions stated in FAR 52.212-1 and 52.215-1.

2. Rice Solutions, LLC, B-420475 (April 25, 2022)

  • GAO sustained a protest because the agency unfairly engaged in discussions with only the awardee.
  • The Department of Health and Human Services, Indian Health Service (IHS), received three proposals in response to IHS’s solicitation for certified registered nurse anesthetist (CRNA) services in South Dakota. Protester Rice’s proposal was rated as unacceptable.
  • Despite not establishing any competitive range, IHS thereafter engaged in discussions with the awardee—the only offeror initially rated as acceptable.
  • GAO faulted the agency for not conducting discussions with Rice. In doing so, GAO rejected the agency’s position that an initial rating of technically unacceptable automatically excluded Rice from the competitive range, had one been established by the agency.
  • GAO also rejected the agency’s contention that it established “a de facto competitive range of one” because nothing in the record supported this contention.
  • Thus, GAO ruled that because no competitive range had been established, the agency was required to conduct discussions with all offerors. Indeed, GAO emphasized that such discussions could have resulted in Rice submitting a revised final proposal that was found to be technically acceptable.

Although an agency has broad discretion in establishing a competitive range and is not required to memorialize its competitive range determination expressly in a formal document, the agency is required to provide sufficient information to adequately support its rationale. GAO will sustain a protest where the record is devoid of any documentation or support for the agency’s contention that a competitive range had been established before entering into discussions with only one offeror. Moreover, once an agency chooses to conduct discussions, it must do so with all offerors in the competitive range. FAR 15.306(d)(1).

3. NOVA Dine, LLC, B-420454, B-420454.2 (April 15, 2022)

  • GAO rejected a protester’s contention that it was misled during discussions to raise its proposed labor rates.
  • Over multiple rounds of discussions, the Defense Information Systems Agency (DISA) advised NOVA that 73 proposed labor rates appeared to be “unrealistically low,” and DISA asked NOVA to “review and provide revised rates, or provide rationale for the proposed rates.”
  • In the end, NOVA increased its rates, resulting in an increase of nearly $50 million to the offeror’s total cost/price.
  • NOVA argued that it was misled during discussions because the company’s total cost/price was higher than other offerors and because DISA compared rates to salary data taken from a more expensive geographic location (even though the contract would be performed around the world).
  • GAO denied this ground of protest, finding that DISA did not coerce NOVA into raising its direct labor rates; rather, NOVA made an independent business judgment about how to respond to the agency’s discussion concerns.
  • GAO also rejected the protester’s challenges to DISA’s evaluation under the past performance and management approach evaluation factors.

GAO generally will not find an agency’s discussions objectionable when an agency advises an offeror that certain rates appear low and provides the offeror the option of either raising the rates or justifying the rates. An offeror’s decision to raise rates—rather than justify—is typically viewed by GAO as a business judgment of the offeror. As GAO concluded here, “Ultimately, it was the offeror’s responsibility to recognize where it disagreed with the agency’s cost realism conclusions and explain why its own salary calculations were correct.”

Claims Cases

1. GSC Construction, Inc. v. Secretary Of The Army, Fed. Cir. 21-1803 (May 2, 2022)

  • The United States Court of Appeals for the Federal Circuit (CAFC) affirmed the Armed Services Board of Contract Appeals (ASBCA or Board) decision holding that the United States Army Corps of Engineers (the Army) properly had terminated the contractor’s construction contract for default.
  • GSC Construction, Inc. (GSC) contracted with the Army to build two warehouses, but then fell behind after disputing responsibility to remove soil for foundation work and failing to meet design requirements. Interestingly, the latter issue related to DOD’s Unified Facilities Criteria (UFC) Minimum Antiterrorism Standards. The contract required compliance only with an earlier, less stringent version but GSC mistakenly submitted its design under the more recent, more stringent version, with which it then failed to comply. The Army itself didn’t identify the error and evaluated the design under the wrong standard.
  • Ultimately the Army terminated for default, and GSC filed an appeal with the ASBCA—arguing that the disputes concerning the soil and the design standard provided ground for an excusable delay, and seeking both damages and that the termination be converted to one for convenience.
  • The Board denied the appeal and the Federal Circuit affirmed the ASBCA’s decision, agreeing that the contract assigned site preparation and design responsibility to GSC. The Army’s failure to identify GSC’s design standard mistake did not shift risk related to design to the government.
  • In addition, the Federal Circuit rejected the argument that the Army had forfeited its right to enforce the contract by providing GSC with an extensiPublishon: “Given the Army’s repeated reservation of its rights during construction, we fail to see how the Board erred in holding that there was no forfeiture [and] GSC’s argument is thus unpersuasive.”

Termination for default is a serious threat in government contracting. Working with experienced counsel when encountering project delays or design disapproval can help avoid more costly litigation in the future, including by developing effective recovery plans and fully protecting rights under the contract.

CATEGORIES: Bid protests, Claims

April 26, 2022 Government Contracts Legal Round-Up | 2022 Issue 8

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Protest Cases

1. CACI, Inc.-Fed., B-420441 et al. (April 7, 2022) (Published April 13, 2022) 

  • GAO sustained the protest where the Department of Homeland Security, Transportation Security Administration (TSA), reduced the corporate experience evaluation criterion to pass/fail instead of engaging in the solicitation’s required qualitative evaluation and tradeoff of corporate experience.
  • The solicitation provided that an initial aspect of the corporate experience evaluation would be conducted on a pass/fail basis during the first phase of evaluation, but the solicitation also included corporate experience as a critical element to the agency’s best-value tradeoff in the second phase of the evaluation.
  • GAO rejected TSA’s position that it could reasonably evaluate corporate experience only on a binary pass/fail basis, finding that the plain language of the solicitation required a qualitative evaluation and tradeoff of offerors’ experience.
  • Accordingly, while the Source Selection Authority summarily compared the satisfactory ratings assigned to both the protester and the awardee, GAO held that this comparison failed to constitute the requisite qualitative comparison of corporate experience.

Challenges to an agency following the terms of the solicitation remain a very common ground of protest. Where, as here, the parties disagree about the interpretation of a solicitation provision or the manner in which the agency was to evaluate proposals, GAO will resolve the matter by reading the solicitation as a whole and in a manner that gives effect to all of its provisions.

Claims Cases

1. CSI Aviation, Inc. v. DHS, CAFC No. 2021-1630 (April 14, 2022)

  • The United States Court of Appeals for the Federal Circuit reversed a decision issued by the Civilian Board of Contract Appeals (CBCA or Board), which had denied an appeal filed by CSI Aviation, Inc. (CSI), an air charter company.
  • CSI sought to recover $40.2 million under its General Services Administration federal supply schedule (GSA FSS) contract after the US Immigration and Customs Enforcement canceled 45 flights less than two weeks in advance.
  • CSI argued that the terms and conditions (T&C) (which included the cancellation policy) were incorporated by reference in the GSA FSS contract, but the CBCA held it was not.
  • On appeal, the Federal Circuit reiterated that a document is incorporated when it is cited in “express" and “clear” language. In this case, it found that "[t]he offer’s pricing policy contains a ‘terms and conditions’ provision that expressly states, ‘CSI terms and conditions … will apply to all operations and are included for reference,’’ and , "[t]rue to its word, a copy of the CSI terms and conditions, dated November 2008, is included as part of the offer."
  • Specifically, CAFC rejected the Board’s argument that CSI’s use of different language to incorporate different documents meant this document wasn’t incorporated: “[o]ur circuit … does not require 'magic words' of reference or of incorporation.'"

While often presented to commercial companies as a simple way to sell to the government, GSA schedule contracts actually involve complicated submissions to, and negotiations with, the government. It is important to be careful in these negotiations and clearly address any company-specific terms of sale and their relationship to standard government contract terms. Experienced counsel can help avoid costly litigation down the road as a result of unclear contract language.

Investigations and Enforcement

Jenner & Block lawyers David Robbins and Sati Harutyunyan analyzed the recently issued and long-awaited Interagency Suspension and Debarment Committee Report to Congress for FY2020.

CATEGORIES: Bid protests, Claims, SuspensionDebarment

April 25, 2022 The Government Legal Contracts Round-Up | Episode 22

In the latest episode of the Government Contracts Legal Round-Up, Partner David Robbins, co-chair of Jenner & Block’s Government Contracts Practice, discusses the Office of Federal Contract Compliance Programs’ new Contractor Portal, where contractors and subcontractors must register and certify their compliance with Affirmative Action Program requirements. He also explains the implications GSA’s recently published Acquisition Letter, AL MV-22-02: Temporary Moratorium on EPA Clauses, and the government’s decision to stop using Dun & Bradstreet’s Data Universal Numbering System (DUNS) to identify government contractors.

 

CATEGORIES: Podcast

April 22, 2022 The Government Contracts Legal Round-Up | Episode 22

In the latest episode of the Government Contracts Legal Round-Up, Partner David Robbins, co-chair of Jenner & Block’s Government Contracts Practice, discusses the Office of Federal Contract Compliance Programs’ new Contractor Portal, where contractors and subcontractors must register and certify their compliance with Affirmative Action Program requirements. He also explains the implications GSA’s recently published Acquisition Letter, AL MV-22-02: Temporary Moratorium on EPA Clauses, and the government’s decision to stop using Dun & Bradstreet’s Data Universal Numbering System (DUNS) to identify government contractors.

 

PEOPLE: David B. Robbins

April 12, 2022 Government Contracts Legal Round-Up | 2022 Issue 7

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Regulatory Updates

1. OFCCP Update

The Office of Federal Contract Compliance Programs has announced a new Contractor Portal where contractors and subcontractors must register and certify their compliance with Affirmative Action Program requirements. June 30, 2022 is the deadline to submit initial certifications. After that, annual certifications will be required. Contractor Portal Link: https://contractorportal.dol.gov

2. GSA Contracting Price Increases Update

GSA published an Acquisition Letter, link AL MV-22-02: Temporary Moratorium on EPA Clauses (gsa.gov), which announces a temporary moratorium on GSA enforcement of certain limitations on contractors’ ability to seek Economic Price Adjustment (EPA). GSA cited inflation and supply chain concerns as the reasons for the moratorium. Noting that contractors are removing items from the Federal Supply Schedules to avoid selling them at a loss, GSA will permit more frequent requests for price adjustment. GSA will also make it easier for government acquisition professionals to approve such requests.

3. Goodbye DUNS, Hello Unique Entity Identifier

After years of study, the government has stopped using Dun & Bradstreet’s Data Universal Numbering System (DUNS) to identify government contractors. In its place, the government has transitioned to Unique Entity Identifiers (UEIs). Link to announcement: Unique Entity Identifier Update | GSA Contractors with existing SAM registrations have been assigned a UEI and will need to begin using the number. New registrants will request a UEI through SAM rather than register for a DUNS number as part of their SAM registration process.

Protest Cases

1. Spatial Front, Inc., B-420377 (March 7, 2022) (Published April 5, 2022)

  • GAO denied a protest challenging as unduly restrictive the terms of a solicitation issued by the Department of Commerce for enterprise-wide IT services. Specifically, the protester alleged that the requirement to possess a top-secret facility clearance (TS-FCL) was unduly restrictive and had an unreasonable impact on small businesses.
  • The protestor, a small business, argued that because only a “limited number of task orders” were likely to require the TS-FCL, the requirement was unnecessary and “unreasonably restricted competition.”
  • GAO found that the agency reasonably justified this restrictive provision. The agency documented the performance and cost issues caused by the current decentralized IT environment and the benefits that would flow from a single-award contract to implement a multi-domain environment. And the agency refuted the contention that only a subset of the work was classified, explaining that it expected classified requirements in each performance area. Moreover, the agency conducted ample market research demonstrating that a significant number of small businesses could meet the solicitation’s TS-FCL requirement.
  • GAO thus found that that the TS-FCL requirement was justified and within the agency’s discretion.

Agencies are generally afforded discretion to determine their needs and the best means to accommodate them. Where a requirement touches on matters of national security, such as in the present solicitation, an agency “has the discretion to define solicitation requirements to achieve not just reasonable results, but the highest possible reliability and/or effectiveness.”

2. Veterans Choice Medical Equipment, LLC, B-419991, B-419991.2 (October 20, 2021) (Published April 1, 2022)

  • GAO denied a protest challenging the Department of Veterans Affairs’ award of a contract for in-home oxygen and ventilator services.
  • The protester alleged that the agency unreasonably evaluated the awardee’s corporate experience because the awardee’s proposal lacked a reference contract containing all the required explanatory information. Further, the Source Selection Authority and another evaluator relied on their personal knowledge of the awardee’s experience that was not included in the proposal.
  • GAO found no basis to sustain the protest. The Solicitation’s proposal submission instructions afforded the agency discretion to consider experiences that did not conform to the submission requirements, and GAO found nothing improper with the evaluators considering corporate experience not found in the awardee’s proposal of which they had personal knowledge.

In certain circumstances, GAO has held that an agency may consider “close at hand” past performance or corporate experience information known to the agency and not found in an offeror’s proposal. But GAO has also made clear that the “close at hand” doctrine is not intended to remedy a failure to include required information in a proposal, and the burden rests on the offeror to submit a well-written proposal with adequately detailed information that allows for a meaningful review by the procuring agency.

CATEGORIES: Bid protests, Compliance

March 29, 2022 Government Contracts Legal Round-Up | 2022 Issue 6

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Protest Cases

1. Starlight Corp., B-420276.3, B-420267.4 (March 15, 2022) (Published March 24, 2022)

  • GAO sustained a protest, in part, based on the agency’s insufficient documentation regarding the relevance of past performance.
  • The solicitation provided that among technically acceptable offers, a tradeoff would be made between past performance and price, with past performance significantly more important.
  • Here, the protester alleged there was no evidence in the record that the agency considered the scope, complexity, dollar value, and extent of subcontracting/teaming to determine the relevancy of the awardee’s past performance, as required by the solicitation.
  • GAO identified that while the evaluation report included the notation “relevant” for each contract, the evaluators made no mention of the relevance of contracts in relation to the solicitation requirements and provided no rationale for the relevancy ratings assigned. GAO accordingly found the agency’s documentation insufficient to allow it to assess the reasonableness of the past performance evaluation and sustained the protest.

Agencies are required to sufficiently document past performance evaluations to demonstrate their conclusions were reasonable. Failure to do so is a viable path for a sustained protest.

2. Eccalon LLC, B-420297, B-420297.2 (January 24, 2022) (Published March 22, 2022)

  • GAO sustained a protest challenging the Department of Defense’s (DOD) issuance of a task order for services to support the DOD’s Office of Small Business Programs in increasing small business participation in DOD acquisitions.
  • Under the solicitation’s technical approach factor, the agency was to assess the extent to which a vendor’s proposed approach demonstrated (1) the vendor’s understanding of the requirements, (2) practical and feasible methods to accomplish the required tasks, and (3) reliable methods for ensuring quality deliverables.
  • In declining to select Eccalon for award, the selection authority determined that the protester’s technical approach was only “somewhat superior” to the awardee’s because it relied on “experience and not necessarily innovation.” GAO agreed with the protester that this assessment reflected the consideration of unstated evaluation criteria.
  • More specifically, GAO concluded that if a vendor could demonstrate the attributes listed in the solicitation, a decision to downgrade an evaluation due to the vendor’s experience, as opposed to any innovation in its approach, raised a consideration not reasonably encompassed within the attributes of demonstrating understanding, practicality, feasibility, and reliability.
  • GAO also sustained the protest because the selection authority lacked a reasonable basis for disregarding an underlying evaluation finding regarding the awardee’s limited understanding of the requirement for cyber readiness and assessments, as well as because the record did not support the agency’s decision to increase the risk rating for the protester’s quotation under the management and staffing approach factor.

Although an agency properly may apply evaluation considerations that are not expressly outlined in the solicitation where those considerations are reasonably and logically encompassed within the stated evaluation criteria, there must be a clear nexus between the stated criteria and the unstated consideration. GAO will sustain a protest where an agency relies on unstated evaluation criteria.

3. Mitchco Int’l, Inc. v. United States, Fed. Cir. No. 2021-1556 (Published March 3, 2022)

  • The protester claimed, among other things, that the awardee violated the Procurement Integrity Act (PIA) by obtaining and using “contractor bid or proposal information” about the protester’s performance as a subcontractor under the incumbent effort. Critically, the awardee was also the prime contractor in the incumbent contract.
  • The Federal Circuit recognized a division in lower court precedent as to whether the PIA’s prohibition against obtaining and using contractor proposal information applies to private entities or is limited to present and former government officials. The Federal Circuit did not resolve this issue of statutory interpretation.
  • Instead, the Federal Circuit held that the PIA could not apply in this case because it was undisputed that the awardee properly obtained Mitchco’s performance information as part of the awardee’s performance of the incumbent contract, falling within a PIA safe harbor provision.

This case is another waypoint in the cluster of protest decisions relevant when a protester claims that the awardee had access to the protester’s proprietary proposal information. As discussed in the last Government Contracts Legal Round-Up, GAO consistently rejects such allegations when framed as an unequal access to information Organizational Conflict of Interest. In Mitchco, the Federal Circuit left open the possibility that there could be some recourse under the PIA where a competitor improperly obtains access to a protester’s proposal information, but not when the awardee properly obtained access to that information through the performance of a government contract.

Claims Cases

1. Appeal of AECOM Technical Services, Inc., ASBCA No. 62800 (February 8, 2022)

  • AECOM held an IDIQ contract for the performance of energy savings projects at government facilities. This IDIQ contract provided for issuance of competitive task order awards for specific energy savings performance contracts.
  • AECOM responded to an RFP for an ESPC project at Buckley Air Force Base in Colorado and was issued a document informing AECOM that it had “been selected as the Energy Savings Performance Contractor” for the project and that it was authorized to “proceed with Preliminary Assessment development and submission.” AECOM did so, developing and designing energy conservation measures for the project. Several months later, the government informed AECOM that it had decided not to pursue the ESPC project and had no plans to exercise its “option to obtain ownership of any submitted documentation pertinent to the project.”
  • Almost four years later, AECOM submitted a claim alleging that the Base’s own news article indicated that it used AECOM’s designs to pursue several of the ECMs. AECOM sought its costs for developing these ECMs.
  • The government challenged this claim on jurisdictional grounds and for failure to state a claim. The Armed Services Board of Contract Appeals most recently denied that latter motion, finding that AECOM had adequately alleged the existence of a contract with the government, and rejecting the government’s argument that it was allowed to retain AECOM’s designs as “proposal materials.”

Energy Services Contractors (ESCOs) provide valuable services to the government under a unique contracting regime. It is important for ESCOs to understand their rights vis-à-vis the government throughout each state of the contracting process and ensure they are being treated fairly.

CATEGORIES: Bid protests, Claims

March 22, 2022 DoD Issues Final Rule Implementing Enhanced Debriefing Requirement

ByNoah B. Bleicher, Carla J. Weiss, Nathaniel E. Castellano, Moshe Broder, and Scott E. Whitman

On March 18, 2022, the Department of Defense (DoD) issued a final rule to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to mandate that DoD provide enhanced postaward debriefings to contractors. As we previously highlighted, these changes to postaward debriefings in DoD procurements originally were partially implemented by a Class Deviation issued by DoD in 2018, and further formalized through a proposed rule issued last May. With this final rule, DoD permanently implements important changes to the postaward debriefing process for defense procurements.

While the final rule tracks the proposed rule in most respects, the final rule contains several notable changes that may impact bid protest timeliness considerations. As highlighted, prior to the final rule, DoD provided enhanced debriefings pursuant to Class Deviation 2018-O0011, which permitted offerors to submit additional questions within 2 business days after receiving their postaward debriefing. Then, the agency would be required to respond in writing within 5 business days after receiving those additional questions. To that end, the proposed rule stated that a debriefing would not be considered closed until “[a]fter the second business day after delivering the debriefing, if no additional questions are received.” Thus, under the proposed rule, each offeror’s “enhanced” timeline automatically would be extended for two days—irrespective of whether that offeror actually submitted additional questions or not.  

The final provision at DFARS 215.506-70, however, now dictates that a debriefing is not concluded until the later of: (1) the date the debriefing is delivered; or (2) the date of the agency’s response to the offeror’s additional questions if those questions were timely submitted. Thus, the debriefing is extended only if the offeror submits follow-up questions. And, in turn, DFARS 233.104(c)(1)(D) confirms that the agency is required to implement a stay of performance if a GAO protest is filed within 5 calendar days after a debriefing is “concluded” in accordance with these timeframes.

Beyond the above clarification regarding timeliness, in sum, the final rule sets forth the following requirements DoD agencies must adhere to for any procurement in which an enhanced debriefing is available:

  • When timely requested, DoD must provide a debriefing for all contract awards (including task and delivery orders) valued at $10 million or more.
  • While these requirements apply to negotiated procurements, including contracts for the acquisition of commercial products and services, they do not apply to contracts valued below the simplified acquisition threshold.
  • Although as part of this process DoD agencies shall protect offerors’ confidential information, agencies are required to provide an offeror with a redacted version of the source selection decision document where—
    • the offeror is a small business or nontraditional defense contractor, the award is above $10 million, and a copy of the selection decision is requested; or 
    • for all offerors, where the award is greater than $100 million.
  • Within 2 business days after receiving a required debriefing an offeror may submit additional questions.
  • Within 5 days after an offeror timely submits additional questions the agency shall respond in writing.
  • And, as highlighted, the debriefing will not be considered “closed” until the debriefing is delivered, or if the offeror asks follow-up questions, when the agency answers those questions.

As we have suggested previously, contractors that are able to reap the benefits of DoD’s now-formalized robust debriefing process should do so. Regardless of whether the company is successful in the competition or not, contractors should consider targeted follow-up questions tailored to their unique experiences with that procurement and request a redacted version of the agency’s source selection decision. This information can better equip even a successful contractor to improve its next proposal submission and be a source of useful market intelligence. Conversely, and more immediately, this information can arm an unsuccessful offeror (and its attorneys) with critical insights to better assess the viability of a potential protest. 

Jenner & Block’s Government Contracts lawyers have extensive bid protest experience, including prior service as a supervising bid protest hearing officer at GAO, and stand ready to support any challenges to the award of a government contract. We continue to monitor developments relating to bid protests, and particularly timing considerations for contractors. Please stay tuned for forthcoming additional guidance in this area.

March 18, 2022 The Government Contracts Legal Round-Up | Episode 21

In the latest episode of the Government Contracts Legal Round-Up, Partner David Robbins, co-chair of Jenner & Block’s Government Contracts Practice, introduces Special Counsel Nathan Castellano, who joined the firm in late February. They discuss Nathan’s background, frequent authorship, and important developments facing government contractors and grant recipients. Mr. Robbins and Mr. Castellano also bring the audience up to speed on recent rulings in claims, bid protests, and developments in False Claims Acts.

 

CATEGORIES: Podcast