Morrison Foerster’s Government Contracts Insights provides our in-depth analysis of developments and trends impacting government contracting. Through Insights, our attorneys offer a real-time assessment of the statutory, regulatory, legal, and business-related developments and trends that are shaping the industry. We also examine a full array of non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Morrison Foerster’s nationally recognized Government Contracts and Public Procurement practice represents the world’s leading companies in the aerospace and defense, intelligence, cybersecurity, information technology, financial and professional services, education, healthcare, infrastructure, and logistics support sectors. We are enlisted to address our clients’ most complex and important legal issues. Our work includes contract and subcontract negotiation and other transactional matters, business and regulatory compliance counseling, internal investigations, bid protests, and a wide array of enforcement and litigation matters. Our clients range from Fortune 50 companies to small and medium-sized companies just entering the public sector. We advise both U.S. and non-U.S. companies involved in municipal, state, federal, and non-U.S. procurement matters.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

Social

Search

GAO Protest Timeline

govcon-gao-protest-timeline-thumb.jpg

Govcon GAO Post Award Protest Timeline Article

Contract Disputes Act Claim Timeline

govcon-contract-disputes-timeline-thumb.jpg

The Bayh-Dole Act

govcon-bayhdole-thumb.jpg

Anatomy of a Protest

govcon-federalclaimsprotest-thumb.jpg

Allowability of Legal Costs

govcon-allowabilityoflegalcosts-thumb.jpg

Procurement Integrity Act

240715-procurement-integrity-act-resized.jpg

Govcon-Resources

Tina is Co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmaceutical companies, with a focus on general contract counseling and compliance, particularly concerning intellectual property, and cybersecurity matters and federal grant funding.Tina counsels contractors on compliance with federal, state and local acquisition and ethics regulations and with the evolving myriad of requirements pertaining to data security and cybersecurity. She has been involved with numerous internal investigations and compliance reviews, and with mandatory and voluntary disclosures to agencies, and litigation of False Claims Act matters.Tina routinely advises clients concerning:<ul><li>Prime-subcontractor relationships</li><li>Sources of supply and country of origin requirements</li><li>Price reductions and price reporting issues</li><li>Organizational conflicts of interest</li><li>Safeguarding of intellectual property and other proprietary interests</li><li>Licensing and data rights issues</li><li>Handling of classified materials and controlled unclassified information</li><li>Agency suspension and debarment proceedings</li></ul>She also assists clients with due diligence and other activities related to the acquisition of government contracting concerns, and with the drafting and negotiation of teaming agreements, subcontracts, licensing agreements, and cooperative research and development agreements. She also assists clients applying for federal grants (including SBIR and STTR agreements), and those who seek to obtain other transactional authority agreements, as well as those competing for state and local government work.Tina’s litigation experience includes government contracts claims litigation in federal courts and before boards of contract appeals, bid protests before the Government Accountability Office and the Court of Federal Claims, and complex disputes in federal courts, including civil fraud and False Claims Act litigation and reverse Freedom of Information Act litigation.Prior to joining Morrison Foerster, Tina worked at another large national firm and as a trial attorney in the Office of the General Counsel of the Navy, Navy Litigation Office.<h4>Representative Experience</h4><ul><li>Negotiation of largest CHIPS Act federal funding agreement between multinational semiconductor corporation and U.S. Department of Commerce.</li><li>Negotiated prime contract and major subcontracts related to the Department of Energy’s next generation supercomputer program, including extensive IP rights negotiations and negotiation of associated patent rights waivers.</li><li>Negotiated series of other transaction authority agreements with DARPA and associated subcontracts with more than a dozen research universities on behalf of a firm biotech client, including complex IP rights allocations and material transfer agreements.</li><li>Assist clients with FedRAMP authorization process and with development of license agreements for software products sold to federal, state and local government agencies.</li><li>Cyber incident response counseling to some of the largest companies and organizations impacted by security incidents.</li><li>Advises clients on Bayh-Dole reporting of inventions and IP strategies for contracts and grants.</li><li>Conducts due diligence for major government contract mergers and acquisitions.</li></ul>

reynolds_tina_blog_150x150.png

reynolds_tina_common_640x280.jpg

reynolds_tina_heroretina_2700x1160.jpg

reynolds_tina_mobileretina_750x1040.jpg

reynolds_tina_social_600x600.jpg

Partner

Tina is co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She counsels a wide variety of government contractors on compliance with federal acquisition and ethics regulations. She drafts and negotiates contracts on their behalf and has been involved with numerous internal investigations and compliance reviews, and with bid protest, contract claims, and False Claims Act litigation. She also advises on M&A transactions involving government contractors.

Tina D. Reynolds

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters. He has represented both protesters and awardees in scores of protests before the Government Accountability Office, the Court of Federal Claims, and procuring agencies, in acquisitions ranging from small business procurements to multibillion-dollar contracts of global significance. His representative protest matters span the aerospace sector, the Intelligence Community, base operations and logistics, healthcare, nuclear and environmental work, and information technology and software acquisitions. His protests have included both classified and unclassified programs. In addition to prevailing in published decisions, Jim has also secured favorable corrective action on behalf of clients in a wide variety of protests that were resolved without a published decision.Jim’s work also focuses on disputes over cost allowability and compliance with the Cost Accounting Standards, and he has appeared before the Armed Services and Civilian Boards of Contract Appeals, in size and status protests before Small Business Administration (SBA) area offices, and appeals before the SBA Office of Hearings and Appeals. Jim regularly counsels clients on contract interpretation, organizational conflicts of interest, and small business compliance.Jim graduated with high honors from the George Washington University Law School, where he focused his studies on federal procurement law, was a member of the Law Review, and interned with the General Services Administration’s suspension and debarment office. Jim also holds a degree in theology magna cum laude from the Pontifical Gregorian University in Rome and a bachelor’s degree in classical languages and literature summa cum laude from the University of Kentucky, where he graduated Phi Beta Kappa.

tucker_james_blog_150x150.png

tucker_james_common_640x280.jpg

tucker_james_heroretina_2700x1160.jpg

tucker_james_mobileretina_750x1040.jpg

tucker_james_social_600x600.jpg

Of Counsel

Jim maintains an active practice in bid protests before the Government Accountability Office and contracting agencies and counsels clients in contract disputes and compliance obligations.

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office. Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters.

James Tucker

<div style="margin-bottom: 15px;" class="videoWrapper"><iframe class="sticky-video" title="Meet Alex Ward, Government Contracts Practice Co-Chair" src="https://www.youtube-nocookie.com/embed/TkliwdSlTaQ?rel=0" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen="1" title="iframe"></iframe></div>J. Alex Ward is co-chair of Morrison Foerster’s Government Contracts and Public Procurement group. His practice covers a full range of government contracts matters, including investigations, bid protests, claims, general litigation, corporate transactions, and counseling. Alex strives in all matters is to provide his clients the highest level of efficient and effective representation.Alex represents contractors in internal and external investigations, disclosures to the government, and qui tam litigation, with great success in reducing or eliminating his clients’ exposure through active engagement with the government. His work in this area includes obtaining numerous declinations and dismissals of False Claims Act cases in their earliest stages, sparing his clients the cost, risk, and exposure of litigation.He has also served as lead counsel in dozens of bid protests involving military and civilian agency procurements of a wide range of products and services, including all manner of pre- and post-award protests in the GAO, the U.S. Court of Federal Claims, and state tribunals, as well as appeals to the U.S. Court of Appeals for the Federal Circuit and size protest appeals before the SBA’s Office of Hearings and Appeals.Alex handles all aspects of the claims process, from the initial assessment and drafting of requests for equitable adjustment through litigation in the Boards of Contract Appeals and the Court of Federal Claims. Alex’s practice also covers the full gamut of other controversies confronting government contractors, including prime-sub, teaming partner, employer-employee, competitor, and indemnification disputes. His litigation work also includes a wide variety of pro bono engagements, in which he has represented both individual and institutional clients in matters ranging from immigration and criminal defense to sustainable procurement and protection of the environment.Prior to joining the firm, Alex served in the U.S. Army as a commissioned officer and an Assistant to the General Counsel of the Army responsible for civil works and international matters, and as a clerk for judges on the U.S. Courts of Appeals for the Armed Forces and the D.C. Circuit. He is a member of the Boards of the Morrison & Foerster Foundation and the Chesapeake Bay Foundation and of Law360’s Government Contracts Editorial Board.

ward_alex_blog_150x150.png

ward_alex_common_640x280.jpg

ward_alex_heroretina_2700x1160.jpg

ward_alex_mobileretina_750x1040.jpg

ward_alex_social_600x600.jpg

Alex is co-chair of Morrison Foerster’s Government Contracts and Public Procurement practice. His practice covers a full range of government contracts matters, including bid protests, claims, investigations, corporate transactions, and counseling.

J. Alex Ward

favicon.ico

favicon-16x16.png

favicon-32x32.png

apple-touch-icon.png

MoFo Favicons

Morrison Foerster’s Government Contracts Insights blog provides an in-depth analysis of news, developments, and trends impacting government contracting and procurement. Through Insights, attorneys from our nationally recognized Government Contracts and Public Procurement practice will offer a real-time assessment of the statutory, regulatory, legal, and business-related developments that are shaping the industry. This blog will also examine a full array of U.S. and non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Read about our <a href="http://govcon.mofo.com/editors/">Authors</a>.Never miss a post. Subscribe to get real-time updates.

gov-con-feature-image-thumb1.jpg

Welcome to the Government Contracts Insights Blog

Welcome to the Government Contracts Insights Blog

gov-con-feature-image_(1)1.jpg

The United States Capitol building

Morrison Foerster’s Government Contracts Insights blog provides an in-depth analysis of news, developments, and trends impacting government contracting and proc

Announcements & Press

Blog - Terms of Use

Blog - Privacy Policy

Blog - Blog Disclaimer

Blog - Attorney Advertising

morrison-foerster-blog-logo.png

Provides insights and reports on the most current class actions lawsuits and product liability issues that affect consumer-facing companies.

Class Dismissed Blog

Class Dismissed

Looks behind the headlines to explore the trends, identify the opportunities, analyze the issues, and provide guidance for science and technology-based companies.

MoFo Tech

Mofo Tech

News and thought leadership from lawyers who are adding value to the legal profession and the communities we call home.

  External-Link

MoFo + Blog

Mofo+

Stay on top of emerging issues and stay informed of developments related to the law and business of social media.

Socially Aware

Our Government Contracts Insights blog provides in-depth analysis of developments and trends impacting U.S. government contracting and non-U.S. public procureme

Government Contracts Insights

  Linkedin

MoFo LinkedIN

Blog - Govcon RSS

Stay Connected

Never miss a post from Government Contracts Insights. Enter your email below to stay up-to-date.

Subscribe

The latest updates and analysis from Morrison Foerster

Morrison Foerster - Footer

Blogs -  Home Button

Home

Blog - Topics

Acquisition Regulations

Artificial Intelligence + Robotics

Compliance

Coronavirus

Cybersecurity & Data Privacy

Data Rights

Defense

Domestic Preferences

False Claims Act

Federal Procurement

Foreign Corrupt Practices Act

Grants

Health Care

Intellectual Property

International Public Procurement

Labor & Employment

Mergers & Acquisitions

National Security

Protests & Litigation

Resources

Schedule Contracting

Small Business

Topics

Blog - Editors

Editors

Blog - About

About

Blog - Subscribe

More

James A. Tucker

DoD Updates Data Rights Regulations for SBIR/STTR Programs

Proposed Regulation on Controlled Unclassified Information Standardizes Process for CUI Identification and Handling Across Federal Agencies

Changes to SBA’s Mentor-Protégé and Joint Venture Regulations

Better Late Than Never: FAR Council Finally Addresses OCI Rules

President Trump Rescinds Affirmative Action for Federal Contractors and Requires Enforcement Plan to End Unlawful DEI at Private Companies

This month’s Bid Protest Roundup examines three recent decisions by the U.S. Government Accountability Office (“GAO”) and the Court of Federal Claims (“COFC”). The first two protests involve late proposal submissions both at the GAO and at the COFC, and the third involves establishing interested party status and timeliness. FreeAlliance.com, LLC v. United States<a href="about:blank">[i]</a>We have written before about the GAO’s strict rules for late proposals and have noted that the COFC is often more forgiving. In the protest of FreeAlliance.com, LLC v. United States, however, the court took a page from the GAO’s book and upheld the agency’s application of the “late is late” rule.In late 2020, the Internal Revenue Service (“IRS” or “Agency”) issued a solicitation for a single‑award Blanket Purchase Agreement. The acquisition was to be conducted utilizing a multi-phased down select approach. Following a round of corrective action, the Agency issued an amendment to the solicitation advising Phase 2 participants of the new deadlines for questions and revised quotations. The Agency informed vendors that if responses were not received by the January 19, 2022 deadline, the vendor would be considered nonresponsive and removed from consideration for award. Shortly thereafter, the Agency issued a “clarification statement” to the amendment, extending the quotation deadline by two days to January 21, 2022, at 12:00 p.m. EST. On January 21, 2022, at 11:51 a.m., FreeAlliance.com, LLC (“FreeAlliance”) attached its revised quotation to an email to the contracting specialist. FreeAlliance did not receive a delivery receipt, so an employee sent the Agency a “test message” at 12:03 p.m. to determine whether the earlier message had been received. The contracting specialist responded to FreeAlliance’s test message at 12:10 p.m., confirmed that the email did not contain any attachments, and instructed FreeAlliance to zip the attachments or send in separate emails. At 12:15 p.m., FreeAlliance resent its quotation in a zip file to everyone copied on the contracting specialist’s email, including the contracting officer. At 3:00 p.m., FreeAlliance emailed the contracting specialist and requested confirmation of receipt and evaluation of its quotation. In response to FreeAlliance’s email, the contracting specialist asked the Agency’s IT department to determine the exact time FreeAlliance’s 11:51 a.m. email was received by the IRS servers.The IRS confirmed that FreeAlliance’s email reached its servers at 12:06 p.m. – six minutes past the deadline set forth in the clarification statement to the amendment. The contracting specialist emailed FreeAlliance to inform the company that because its revised quotation was received after the time stated in the Solicitation and in accordance with the “late is late” rule, FreeAlliance was thus ineligible for award. FreeAlliance then filed a protest at the COFC. FreeAlliance challenged the Agency’s decision in two respects. First, FreeAlliance argued the “late is late” rule was inapplicable because the original Solicitation did not include a late proposal submission and the amendment did not incorporate any explicit “late is late” provisions from the Federal Acquisition Regulation (“FAR”). FreeAlliance suggested that because the late quotation prohibition appeared on page one of the amendment and stated that the solicitation is “revised as identified on the following pages,” only pages two through five actually modified the solicitation. The court found this argument unconvincing because, when read in its entirety, the Agency clearly intended all pages of the amendment to modify the Solicitation. The court also concluded that, although the original solicitation did not include a proposal deadline and the amendment did not include a specific FAR timing provision, the amendment was enforceable on its terms.Second, FreeAlliance argued the Agency’s decision not to waive the quotation deadline was arbitrary and irrational because the Agency had the authority to waive the deadline as a minor informality. The court disagreed because that authority only applies in procurements governed by FAR Parts 12 and 15 and this was a FAR Part 8 procurement. Accordingly, the Agency’s decision to enforce the terms of the solicitation and reject FreeAlliance’s submission as late was rational. Takeaway: This case reiterates the importance of submitting proposals with ample time to account for technological glitches delaying transmission of your proposal. We are also reminded that where the solicitation and any of its amendments provide an explicit deadline for proposal submission, even the court will enforce the “late is late” rule. VERSA Integrated Solutions, Inc.<a href="about:blank">[ii]</a>Unlike the COFC, which has adopted certain exceptions to the “late is late” rule (none of which applied in FreeAlliance.com v. United States), the GAO has maintained a strict approach to late proposal submissions. Indeed, when presented with an express opportunity (or rather, a request) to revise this approach, the GAO has declined to do so. In the protest of VERSA Integrated Solutions, Inc., the Department of Health and Human Services (“HHS” or “Agency”) issued a Request for Proposals (“RFP”), which provided for the submission of proposals in two parts. Part one proposals were to be submitted electronically to the contract specialist with a courtesy copy to the contracting officer by November 12, 2021, at 12 p.m. EST. The RFP also incorporated FAR 52.212-1(f), which provides that any offer received at the Government office designated in the solicitation after the exact time specified for receipt of offers is considered late and will not be considered for award unless it is received before award is made, the contracting officer determines that accepting the late offer will not unduly delay the acquisition; and<blockquote>(A) If it was transmitted through an electronic commerce method authorized by the solicitation, it was received at the initial point of entry to the Government infrastructure not later than 5:00 p.m. one working day prior to the date specified for receipt of offers; or    </blockquote><blockquote>(B) There is acceptable evidence to establish that it was received at the Government’s installation designated for receipt of offers and was under the Government’s control prior to the time set for receipt of offers.</blockquote>48 C.F.R § 52.212-1(f)(2)(A)-(B). On November 12, 2021, the Agency received 20 part one proposals. On January 24, 2022, the Agency concluded its evaluation of proposals and sent advisory notifications to the 20 offerors. On February 8, 2022, a representative from VERSA Integrated Solutions, Inc. (“Versa”) contacted the contracting officer for an update on the status of its proposal. The contracting officer informed Versa that it had not received its part one proposal submission. Versa sent the Agency a series of trace logs from its server, showing that it had submitted its proposal to the Agency well in advance of the deadline. While the Agency’s IT personnel worked to verify whether Versa’s proposal made it to the Government servers, Versa filed a protest with the GAO. It was then discovered that Versa’s part one proposal was received prior to the submission deadline but quarantined by the Agency’s server and not received by either the contracting officer or the contract specialist.Versa argued the Agency’s rejection of its proposal was unreasonable because Versa submitted its part one proposal before the deadline and the Agency was in control of the proposal following submission. Most notably, Versa acknowledged that the GAO has previously considered and rejected the application of the “government control” exception in Sea Box, Inc., B-291056, Oct. 31, 2002, 2002 CPD ¶ 181. In its protest, however, Versa requested the GAO use this case as an opportunity to revisit its prior decision. The GAO declined to overturn its decision in Sea Box and explained that FAR 52.212-1(f)(2)(i)(A) applies to proposals submitted by electronic means and only permits a late proposal to be considered when it was received at the initial point of entry no later than 5:00 p.m. the preceding working day. The GAO further noted that if it were to consider electronically submitted proposals as eligible under FAR 52.212‑1(f)(2)(i)(B), regardless of whether they were received by 5:00 p.m. the day before the proposal due date, FAR 52.212-1(f)(2)(i)(A) would ultimately be rendered null. Accordingly, because Versa’s proposal did not arrive to the initial point of entry by 5:00 p.m. one working day prior to the deadline, in accordance with FAR 52.212-1, the GAO concluded that the Agency properly rejected Versa’s proposal. Takeaway: Where FAR 52.212-1 is included in the solicitation and proposals are to be submitted electronically, it is in the contractor’s best interest to submit its proposal by 5:00 p.m. one working day prior to the proposal submission deadline. If this is not possible, we recommend requesting confirmation of receipt of the proposal with enough time to allow resubmission if necessary. This protest is also yet another reminder of GAO’s strict adherence to the “late is late” rule, so it is best to avoid these types of protest arguments at all costs.U.S. Marine Management, Inc.<a href="about:blank">[iii]</a>Our final protest for this month’s Bid Protest Roundup covers interested party status and timeliness, both of which are critical to achieving a successful protest.In U.S. Marine Management, Inc., the Department of the Navy (“Navy” or “Agency”) issued an RFP under FAR Part 12, using the negotiated procurement policies under FAR Part 15, for a time charter of an ice-glass tanker vessel. The RFP included FAR 52.212-1, which allows an offer to be withdrawn by written notice that is received at any time before the exact time set for the receipt of offers.Marine Management, Inc. (“Marine Management”) submitted three proposals in response to the RFP, each proposing different vessels. The Agency engaged in discussions with Marine Management from August 12, 2021 through August 26, 2021. On September 7, 2021, Marine Management submitted one revised proposal, reaffirmed another proposal without revisions, and withdrew its third and final proposal. On November 3, 2021, the Agency notified Marine Management that, although its third proposal was ultimately withdrawn, it had been included in the competitive range. Marine Management’s remaining proposals – the ones it did not withdraw – were excluded from the competitive range.After the conclusion of discussions, the Navy set a date for final proposal revisions; Marine Management did not submit any final revised proposals. On December 23, 2021, the Navy informed Marine Management that it did not receive the tanker charter contract. The Notice of Award informed unsuccessful offerors of their right to request a debriefing, so Marine Management requested and received a debriefing for the proposal it withdrew. After receiving the Agency’s responses to Marine Management’s debriefing questions, Marine Management submitted the subject protest to the GAO, arguing the Agency relaxed or waived solicitation requirements for the awardee and that the awardee’s technical and price evaluation was unreasonable. The Agency submitted a motion to dismiss the protest, arguing in part that Marine Management is not an interested party because its proposals were either withdrawn or excluded from the competitive range. Marine Management responded that it was an interested party because the procurement errors alleged warrant the cancelation and resolicitation of the contract. The GAO was not convinced. The GAO explained that if it sustained Marine Management’s challenges to the awardees’s technical and price evaluation, the recommendation would be for the Agency to reevaluate proposals and make a new award decision. Such recommendation, however, would not involve consideration of any of Marine Management’s proposals because, as discussed, two of Marine Management’s proposals were excluded from the competitive range and one was withdrawn. Thus, if the GAO sustained Marine Management’s challenges, Marine Management would neither be next in line for award nor would it be able to submit a revised proposal. Accordingly, the GAO found that Marine Management did not qualify as an interested party to challenge the Agency’s technical and price evaluation of the awardee’s proposal.The Agency also argued that Marine Management’s protest was untimely because it was filed more than 10 days after Marine Management learned of the basis for its remaining protest ground. The Agency explained that Marine Management’s post-award debriefing was not required and was instead a courtesy that did not toll the 10-day period to file a protest. The GAO agreed, finding that because Marine Management withdrew its proposal in accordance with FAR 52.212-1, Marine Management was not considered an unsuccessful offeror entitled to a post-award debriefing. With that, the GAO analyzed the timeliness of Marine Management’s protest without the debriefing exception and determined that Marine Management’s protest was untimely.Takeaway: This protest is a reminder that contractors must overcome various jurisdictional hurdles before the GAO will hear its protest on the merits. Both interested party status and timeliness are key to achieving a sustained protest and should be analyzed carefully before pursuing a protest. <a href="about:blank">[i]</a> FreeAlliance.com, LLC v. United States, No. 22-132C, 2022 WL 1231248 (Fed. Cl. Apr. 22, 2022).<a href="about:blank">[ii]</a> VERSA Integrated Solutions, Inc., B-420530, Apr. 13, 2022, 2022 WL 1165978.<a href="about:blank">[iii]</a> U.S. Marine Management, Inc., B-420268, Apr. 14, 2022, 2022 WL 1184093.

Associate

Caitlin Crujido is an associate in the Government Contracts practice in Morrison Foerster’s Washington, D.C. office.

Caitlin A. Crujido

Caitlin Crujido

protests-and-litigation-600-300x148.jpg

April 2022 Bid Protest Spotlight: Late-Is-Late, Party Interest, Timeliness

GAO Finds CIO-SP4 Solicitation Is Unduly Restrictive of Competition

This month’s Bid Protest Roundup examines three recent decisions by the U.S. Government Accountability Office (“GAO”) and the Court of Federal Claims (“COFC”). The first two protests involve late proposal submissions both at the GAO and at the COFC, and the third involves establishing interested party status and timeliness. 

April 2022 Bid Protest Spotlight: Late-Is-Late, Party Interest, Timeliness

Aerojet and the qui tam relator have entered into a 13th hour settlement—after a jury was seated and the trial was underway—to resolve the much-watched United States ex rel. Brian Markus v. Aerojet Rocketdyne, Inc. False Claims Act (“FCA”) case. The parties—including the Department of Justice, which must consent to the settlement of qui tam claims—all seem to agree they do not want to run the risk of leaving this matter to be decided by a jury. Although it will not be the fully litigated test case for cyber-related FCA liability, the settlement shows that cyber noncompliance can have real financial consequences for government contractors.The relator, Aerojet’s former senior director of cybersecurity, alleged the company entered into several Department of Defense and NASA contracts while knowingly misrepresenting its compliance with applicable cybersecurity requirements. The relator raised two separate legal theories—implied false certification and fraud in the inducement—based on the company’s alleged failure to fully disclose the extent of its noncompliance with cybersecurity controls required by DFARS 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting, and NASA FARS 1852.204-76, Security Requirement for Unclassified Information Technology Resources. In 2019, the court denied the company’s motion to dismiss, rejecting the company’s argument that the relator had failed to demonstrate the cybersecurity requirements were material. We covered that decision in a <a href="/topics/federal-court-confirms-that-cybersecurity-gaps-can-form-the-basis-of-false-claims-act-violations.html">previous article</a>.In February of this year, Aerojet obtained a favorable summary judgment ruling on the implied false certification theory. The court rejected those claims because the only allegedly false certification was related to a contract awarded after the filing of the complaint. However, the court refused to end the relator’s claim for promissory fraud (often known as fraud in the inducement), holding that there were triable issues of fact as to whether Aerojet fraudulently induced the government to enter into contracts by materially misrepresenting its cybersecurity compliance. The open issues included factual questions as to the materiality of the cybersecurity requirements and the falsity of Aerojet’s compliance claims. We also addressed a similar FCA case concerning the materiality of alleged cybersecurity vulnerabilities <a href="/topics/u-s-district-court-for-the-district-of-columbia-finds-that-alleged-cybersecurity-vulnerability-is-not-material-under-false-claims-act.html">here</a>.As noted in our prior posts on this topic, the settlement confirms that noncompliance with cybersecurity requirements can form the basis of potential FCA exposure. Government contractors must carefully comply with cybersecurity requirements not just to avoid FCA liability but also contract claims and terminations for default. This is particularly true given the current administration’s focus on these issues, including the Department of Justice’s establishment of a cyber-fraud task force (see <a href="https://www.mofo.com/resources/insights/211012-doj-cyber-fraud-initiative.html">here</a>) and last year’s Executive Order on improving the nation’s cybersecurity (see <a href="/topics/210601-executive-order-on-cybersecurity.html">here</a>). Aerojet may be out of the woods, but we are likely to see more cases like this now that the FCA has proven it can be a viable tool for bringing cyber-related claims.

J. Alex Ward is co-chair of Morrison Foerster’s Government Contracts and Public Procurement group. 

J. Ward

Tori Dalcourt Angle is an associate in the Government Contracts practice in Morrison Foerster’s Washington, D.C. office.
Tori advises clients on various government contract matters, including both pre

Victoria Dalcourt Angle

Victoria Angle

false-claims-300x148.jpg

Aerojet Settles False Claims Act Case Alleging That the Company Misrepresented Its Compliance with Cybersecurity Requirements

MoForecast Podcast: Predictions on the False Claims Act (FCA)

Aerojet and the qui tam relator have entered into a 13th hour settlement—after a jury was seated and the trial was underway—to resolve the much-watched United S

Aerojet Settles False Claims Act Case Alleging That the Company Misrepresented Its Compliance with Cybersecurity Requirements

Lawyers for the U.S. government and challengers to the federal contractor vaccine mandate both faced tough questions from an Eleventh Circuit panel in Atlanta, Georgia on Friday, April 8, 2022.  The appeal from the Southern District of Georgia’s decision preliminarily enjoining Executive Order 14042 late last year primarily <a href="https://govcon.mofo.com/coronavirus/a-second-look-parties-spar-over-vaccine-mandate-in-eleventh-circuit-appeal-from-eo-14042-injunction/" target="_blank">raises questions</a> about the President’s authority under the Federal Property and Administrative Services Act (often referred to as the Procurement Act), whether plaintiffs had established the requirements for preliminary injunctive relief, and whether the <a href="https://www.mofo.com/resources/insights/220124-nationwide-preliminary-injunction.html">nationwide preliminary injunction</a> issued by the district court was overbroad.  Argument lasted nearly an hour, with Judges Britt C. Grant, J.L. Edmondson, and R. Lanier Anderson III giving each side 25 minutes to both present their case and answer the appellate court’s questions.Early on, Judge Edmonson pressed the government on the standard of review.  Noting that he thought it was a “hard” case, Judge Edmonson said he “wouldn’t be surprised at the end of the day if” either side ultimately prevailed.  But it was that uncertainty, he said, that made it difficult for him to conclude that the district court had abused its discretion.  “It’s not plain to me that your side is right,” Judge Edmonson told the government, “and I think that that’s enough to say that there’s been no abuse of discretion.”  The government pushed back that any error of law is an abuse of discretion, however, and argued that there should be no special deference in reviewing the purely legal question of the President’s authority under the Procurement Act.Judge Anderson, meanwhile, expressed some skepticism about the challengers’ likelihood of success on the merits.  “It makes common sense and is consistent with common experience, that if you’re not vaccinated there’s a much greater chance that you’re going to get sick and delay the work,” Judge Anderson said.  And he expressed the view that Executive Order 14042 is consistent with previous executive orders that courts had deemed lawful exercises of authority under the Procurement Act.  “I see no expansion of regulatory authority here,” Judge Anderson said.On the other hand, one potential sticking point for the court was the health component of Executive Order 14042, which the court pressed the parties to address.  The government argued that the executive order is a directive to agencies, akin to a quality control standard, and does not require modification of existing contracts.  The government further noted that fears of a mass exodus of employees over the vaccine mandate have proven largely unfounded.  Meanwhile, the challengers focused on their position that Executive Order 14042 is not related to the economy and efficiency of federal contracting, as the Procurement Act requires.  And they pointed to the absence of evidentiary data from the government to support the notion that the absence of a vaccination requirement would harm federal procurements.The panel also pushed counsel for the challengers about the scope of the preliminary injunction.  Judge Grant observed that the justification for nationwide relief provided in the district court was “rather thin.”  And Judge Edmonson expressed his concern that the injunction applied even to those federal contractors who “affirmatively don’t want the relief.”  Counsel for the challenger States pointed out that it would be “really complicated and difficult to understand how this was supposed to work if it didn’t apply to everyone.”  And counsel for challenger Associated Builders and Contractors, Inc., told the panel that nationwide relief was appropriate because it has members in every State.The Eleventh Circuit is the first court of appeals to receive full briefing and to hear oral argument in a <a href="https://govcon.mofo.com/coronavirus/patchwork-preliminary-injunctions-interpreting-contractor-compliance-obligations-under-eo-14042/">series of cases across the country</a> challenging the Biden administration’s efforts to impose vaccine requirements on federal contractors.  Appeals remain pending in several other circuits, including the Ninth, where the government filed a notice of appeal on April 8, 2022, from a preliminary injunction issued by an Arizona district court earlier this year.  As always, we will continue to monitor and provide updates on these cases as they develop.

palmore_joseph_blog_150x150.png

palmore_joseph_common_640x280.jpg

palmore_joseph_heroretina_2700x1160.jpg

palmore_joseph_mobileretina_750x1040.jpg

palmore_joseph_social_600x600.jpg

Joe Palmore co-chairs Morrison Foerster’s Appellate and Supreme Court practice. Chambers USA describes him as “an outstanding oral advocate,” who is “calm, focused, effective and doesn’t back down,” and has “complete command of the facts.” Joe “writes great briefs” (Chambers USA), with one client recounting that “the Court mirrored the language he thoughtfully chose in its ultimate order” (Legal 500).

Joseph R. Palmore

Joseph R. Palmore is co-chair of the firm's Appellate and Supreme Court Practice Group and Managing Partner for the Washington, D.C. office. Before joining Morrison Foerster, Joe was an Assistant to the Solicitor General at the United States Department of Justice and the Deputy General Counsel of the Federal Communications Commission (FCC).

Joseph Palmore

nunez_krista_blog_150x150.png

nunez_krista_common_640x280.jpg

nunez_krista_heroretina_2700x1160.jpg

nunez_krista_mobileretina_750x1040.jpg

nunez_krista_social_600x600.jpg

Krista Nunez is an associate in the firm’s Government Contracts & Public Procurement practice.

Krista A. Nunez

Krista Nunez is an associate in the Government Contracts practice in Morrison & Foerster’s Washington, D.C. office.

Krista Nunez

federal-600-300x148.jpg

Eleventh Circuit Hears Oral Argument in EO 14042 Preliminary Injunction Appeal

Five Peculiarities of Protests of Federal Supply Schedule Orders

Lawyers for the U.S. government and challengers to the federal contractor vaccine mandate both faced tough questions from an Eleventh Circuit panel in Atlanta, 

Eleventh Circuit Hears Oral Argument in EO 14042 Preliminary Injunction Appeal

Regulatory action around sustainable procurement and climate change continues to heat up. A recent Federal Acquisition Regulation (FAR) case on Sustainable Procurement takes another step towards implementing the Biden administration’s ambitious vision of leveraging federal procurement to confront the climate crisis. FAR case 2022-006 will implement portions of Executive Order (E.O.) 14057, on Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability, and OMB Memorandum (“OMB Memo”) M-22-06 on procuring of sustainable products and services. The FAR case will reorganize FAR Part 23 on Environment, Energy and Water Efficiency, Renewable Energy Technologies, Occupational Safety, and Drug-Free Workplace for consistency and clarity. The FAR case will also update the definition of a “biobased product” in agency affirmative procurement programs. A report on the draft proposed rule is due on May 18, 2022. Additional guidance from the Council on Environmental Quality (CEQ) is expected shortly and may set off a further round of FAR cases.Here is the essential context:<ul><li>Two FAR Cases Opened Last Year: The latest climate-related FAR case joins two open FAR cases from last year, which propose to implement different sections of E.O. 14030 on Climate-Related Financial Risk. FAR case 2021-015 anticipates implementing section 5(b)(i) of the E.O., directing the FAR Council to consider amending the FAR to require major federal suppliers to publicly disclose greenhouse gas emissions and climate-related financial risk while setting science-based reduction targets. A draft proposed rule is slated for internal FAR Council discussion on April 13, 2022. FAR case 2021-016 anticipates implementing section 5(b)(ii) of the E.O., and directs the FAR Council to consider amending the FAR to ensure that major agency procurements minimize the risk of climate change. An internal report on a draft proposed rule is due to the Defense Acquisition Regulations Council (DARC) on April 13, 2022.</li></ul><ul><li>E.O. 14057 Establishes Seven Sustainability Goals: To put the nation on a path to net-zero emissions by 2050, E.O. 14057 establishes seven government-wide goals. The goals are: (1) 100 percent carbon pollution-free electricity by 2030; (2) 100 percent zero-emission vehicle acquisitions by 2035; (3) a net-zero emissions building portfolio by 2045; (4) a 65 percent reduction in scope 1 and 2 greenhouse gas emissions; (5) net-zero emissions from federal procurement; (6) climate-resilient infrastructure and operations; and (7) a climate- and sustainability-focused federal workforce.</li></ul><ul><li>Lifecycle Costing & Emission Tracking: E.O. 14057 directs agencies to prioritize reused, refurbished, or recycled products; maximize cost-savings through full lifecycle cost methodologies; purchase products that contain recycled content, are biobased, or are energy- and water-efficient; and purchase EPA-identified or -recommended sustainable products and services to the maximum extent practical. The E.O. also directs agencies to pursue procurement strategies to reduce contractor emissions and embodied emissions in products acquired or used in federal projects, and tasked the General Service Administration with tracking greenhouse gas emissions by major federal suppliers.</li></ul><ul><li>OMB Guidance on Agency Targets and Third-Party Standards: OMB Memo M-22-06, which accompanies E.O. 14057, directs agencies on immediate actions and further requirements needed to comply with the E.O. In addition to guidance on establishing agency targets, the OMB Memo instructs the FAR Council to leverage existing third-party standards and systems in developing regulatory amendments. The OMB memo echoes the E.O. in stating that further “implementing instructions” and “recommended actions” will be issued by CEQ within 120 days of the E.O.’s issuance. That deadline is now at hand.</li></ul>We will continue to monitor sustainable procurement developments affecting the government contractor as they unfold.

speidel_markus_blog_150x150.png

speidel_markus_common_640x280.jpg

speidel_markus_heroretina_2700x1160.jpg

speidel_markus_mobileretina_750x1040.jpg

speidel_markus_social_600x600.jpg

Markus Speidel is an associate in Morrison & Foerster’s Government Contracts & Public Procurement group, in Washington, D.C. Markus assists clients across a wide range of contract matters, including contract claims and disputes, bid protests, compliance counseling, and investigations.

Markus Gerhard Speidel

Markus Speidel

190927-dod-promulgates.jpg

Sustainable Procurement FAR Case to Clarify FAR Part 23

New DCMA Defective Pricing Pilot Team Will Possess Audit Resolution Authority

Regulatory action around sustainable procurement and climate change continues to heat up. A recent Federal Acquisition Regulation (FAR) case on Sustainable Proc

Sustainable Procurement FAR Case to Clarify FAR Part 23

This month’s Bid Protest Roundup covers two recent Government Accountability Office (GAO) decisions and a decision from the Court of Federal Claims. All involve defense procurements, but each offers a unique lesson for offerors and government procurement professionals. This Roundup features a protester that fell victim to a timeliness trap by postponing debriefing, an unsuccessful challenge to an agency’s organizational conflict of interest (OCI) determinations, and an agency’s defeat due to an inadequately documented past performance evaluation.<h3>Battelle Memorial Institute</h3>In Battelle Memorial Institute,<a href="#_ftn1" name="_ftnref1" id="_ftnref1">[1]</a> the GAO dismissed as untimely a challenge to a Navy assessment of the protester’s qualifications in its response to an architectural and engineering (A/E) procurement conducted under Federal Acquisition Regulation (FAR) subpart 36.6.In an A/E procurement, the FAR directs agencies to issue a “synopsis” to which interested firms respond by submitting their qualifications using Standard Form 330 (“SF 330”). An agency evaluation board reviews offerors’ SF 330s and prepares a report recommending at least three firms that the board considers the most highly qualified. A source selection authority then reviews the board’s report and creates a ranked list of firms, called a “final selection.” The final selection both authorizes the contractor to begin negotiations and specifies, in order, the firms with which the contracting officer may negotiate a contract. The contracting officer begins negotiations with the most qualified firm and, if negotiations fail, proceeds down the list until an agreement is reached.The Navy issued a synopsis for a five-year, $100 million indefinite delivery/indefinite quantity (IDIQ) contract. Five firms, including Battelle, responded. The review board evaluated the firms and selected Geosyntec Jacobs as the most qualified. The Navy informed the other offerors of the results, and gave unsuccessful offerors the choice of either a pre-award briefing or post-award debriefing. Initially, Battelle requested a pre-award briefing, but two days later changed its request to a post-award debriefing. More than six months later, on November 30, 2021, the Navy awarded the contract to Geosyntec Jacobs; Battelle learned of the award the following day. Battelle received its post-award debriefing on December 9, 2021, then filed a protest with the GAO on December 10, arguing that the Navy’s evaluation of its SF 330 was unreasonable and that Battelle should have been selected as the most highly qualified firm.The Navy requested dismissal of the protest as untimely because Battelle did not request a pre-award debriefing. The Navy argued that, by selecting a post-award debriefing, Battelle failed to diligently pursue its protest grounds, which would have been discovered in the pre-award debriefing. In the Navy’s estimation, Battelle’s arguments were based on information it would have received if it elected to receive a pre-award debriefing. The GAO agreed.The GAO emphasized that its timeliness requirements sprang from “the dual requirements of giving parties a fair opportunity to present their cases and resolving protests expeditiously without unduly disrupting or delaying the procurement process.”<a href="#_ftn2" name="_ftnref2" id="_ftnref2">[2]</a> The GAO related this timeliness requirement to those for challenging improprieties in solicitations, which must be asserted before receipt of proposals, or within 10 days after the basis for a protest is known or should have been known. The resulting timeliness trap is similar to the timeliness trap that may accompany a competitive range determination.<a href="#_ftn3" name="_ftnref3" id="_ftnref3">[3]</a> If excluded from the competitive range, an offeror may request a debriefing, which the agency is obliged to provide; the offeror may, however, choose either a pre-award or post-award debriefing. The GAO has held that an offeror’s choice of a post-award debriefing waives future challenges of an agency’s competitive range determination.<a href="#_ftn4" name="_ftnref4" id="_ftnref4">[4]</a>TakeawaysDisappointed offerors must pay close attention to each instance in which a debriefing is required or offered as a matter of right. In choosing to delay a debriefing, an offeror may waive certain protest grounds. This is true not only in A/E procurements, but also with respect to exclusions from a competitive range under FAR part 15 negotiated procurements.<h3>Trident Technologies</h3>Organizational conflicts of interest (OCIs) are a perennial concern for offerors. A protest may be sustained if a protester can demonstrate the existence of an OCI through “hard facts” or by proving that an agency failed to consider relevant factors and reach a rational decision in response to an OCI allegation.In Trident Technologies,<a href="#_ftn5" name="_ftnref5" id="_ftnref5">[5]</a> Trident Technologies (“Trident”) filed a bid protest at the Court of Federal Claims (COFC) challenging the Missile Defense Agency’s (MDA) award of a contract for infrastructure, operations and maintenance, and cybersecurity engineering support to DTechLogic, LLC. Trident argued, among other grounds, that the award should be set aside because the MDA failed to investigate or mitigate alleged OCIs.<a href="#_ftn6" name="_ftnref6" id="_ftnref6">[6]</a> Trident alleged six OCIs, three for impaired objectivity and three for unequal access to information.The solicitation contained numerous provisions regarding OCIs. These included extensive disclosure requirements and disclosure forms, such as requirements that offerors identify their MDA-funded contracts and subcontracts as well as non-MDA-related business relationships with firms that independently do business with MDA. The solicitation also directed offerors to update their OCI assessments in the event of any changes. Finally, the solicitation incorporated the MDA’s OCI policy memorandum, which provides that “contractors which provide advisory and assistance services to the Agency, particularly in the engineering, acquisition support, and quality functional areas, cannot develop or support the development of the Agency’s research and development (R&D) efforts.”Initial proposals were received in October 2018. During the evaluation process, the agency reviewed DTechLogic’s OCI statements and documented its findings. The MDA was unable to determine whether an OCI arose from some of DTechLogic’s prior work for the Army; MDA contacted the Army for more information. The Army responded that there were potential OCI concerns because of the nature and scope of DTechLogic’s work. The MDA program manager received a copy of the scope of work from the Army, but concluded that, although the efforts were similar, the alleged conflicts did not give an unfair advantage to DTechLogic. Ultimately, the MDA selected DTechLogic for the award.Following the award, Trident and another disappointed offeror filed a protest at the GAO alleging (among other grounds) that the MDA failed to recognize OCIs apparent in DTechLogic’s proposal. The agency announced it would take corrective action, and the GAO dismissed the protest as academic.The corrective action included a review of the potential OCIs raised at the GAO. The MDA requested and received information from DTechLogic about one of its subcontractors and a joint venture member. The agency found a potential impaired objectivity OCI for the subcontractor, and, following discussions, DTechLogic removed the subcontractor from its proposed team. The agency investigated the joint venture member and another subcontractor, and verified the information DTechLogic provided. The MDA also convened internal OCI review panels and documented the findings of each investigation.After the agency again awarded the contract to DTechLogic, Trident filed a protest at the COFC, alleging six OCIs of two different types: impaired objectivity and unequal access to information. Trident alleged the MDA failed to properly investigate these circumstances to determine whether such an OCI existed.The agency countered that it had considered each impaired objectivity OCI that Trident alleged, and had created a reasonable mitigation plan that considered all relevant factors necessary to support its determination. The MDA also countered that it, not the contractor, would conduct and direct the relevant tests, and the contractor would have no role in designing or running the tests, thus eliminating any impaired objectivity concerns. Finally, the agency contended that Trident’s unequal access to information allegations were speculative, and lacked facts necessary to prove Trident’s claims or identify what competitively advantageous information DTechLogic supposedly derived from its prior contracts.The court found the contracting officer had addressed each OCI plaintiff alleged in its investigation, and created a reasonable mitigation plan fitting the circumstances. Trident’s allegations amounted to mere disagreement with the contracting officer’s conclusions. The court maintained that it would not find an OCI based upon inferences or suspicions, and found that Trident did not advance sufficient “hard facts” to show there was an OCI or explain how the approved mitigation plan was unreasonable or inadequate.TakeawaysA court will provide substantial deference to a contracting officer’s OCI determination. To mount an effective challenge, a protester needs to bring “hard facts” showing that the agency failed to consider an important factor, or that its mitigation plan is fundamentally flawed. Absent “hard facts” demonstrating an OCI, a court will likely find that the allegation is speculative or a mere disagreement with the agency’s determination. Firms that have potential or actual OCIs should work closely with the contracting officer to ensure the circumstances and mitigation plan are well-documented, and support a reasonable determination entitled to the deference that the MDA received in Trident.<h3>Starlight Corporation</h3>The GAO has little patience for agencies that fail to document evaluations. If a protester discovers that key evaluation determinations lack adequate documentation, this can be fertile ground for a supplemental protest. In Starlight Corporation,<a href="#_ftn7" name="_ftnref7" id="_ftnref7">[7]</a>the GAO sustained a challenge to a past performance evaluation, finding that the Air Force failed to adequately document its findings.Starlight protested the award of a contract for the servicing of Air Force transport aircraft at Dover Air Force Base on the grounds that the agency conducted an unreasonable past performance evaluation. The solicitation called for the award of a single contract as a small business set-aside pursuant to FAR Part 15. The evaluation procedures set forth in the solicitation indicated that technically acceptable offers would be evaluated for past performance and price, and that a tradeoff would be made between past performance and price, with past performance being significantly more important than price. The past performance evaluation examined the recency, relevance, and quality of past performance in the offerors’ proposals and past performance information that the agency obtained through other sources.Starlight and four other offerors submitted proposals. The Air Force determined that only one offeror, Empire Aircraft Services (Empire), had submitted a technically acceptable proposal and awarded the contract to it after determining its price was fair and reasonable. Starlight protested at the GAO, prompting the Air Force to take corrective action that resulted in dismissal of the protest. The Air Force then determined that all four offerors were in the competitive range, opened discussions, and requested and received final proposal revisions (FPRs).The agency assigned Starlight a past performance rating of “Satisfactory Confidence,” while Empire received a rating of “Substantial Confidence.” Although Starlight proposed a lower price, the Air Force concluded that Empire’s superior past performance was worth the price premium and again awarded the contract to Empire.Starlight filed another protest at the GAO, arguing that the agency failed to properly consider both its and Empire’s past performance and that it had conducted a flawed best-value determination. Although the Air Force found Empire’s past performance relevant, Starlight pointed to the lack of documentation regarding this relevancy determination. Without these records, Starlight contended, the Air Force could not show that it considered the scope, complexity, dollar value, or extent of subcontracting or teaming of Empire’s past performance as required by the solicitation. Starlight asserted that this made the relevancy determination unreasonable, rendering the past performance rating unreasonable as well. Starlight also alleged that the Air Force unfairly assigned low scores to its past performance questionnaires (PPQs), assigning “Satisfactory” scores despite the references’ overall exceptional ratings.The GAO observed that, although evaluation of past performance is generally within an agency’s discretion, it will question that evaluation if it is unreasonable or undocumented. In such circumstances, the agency bears the risk that the GAO may be unable to conclude there was a reasonable basis for the results of the agency’s evaluation.The GAO determined that there was not enough documentation to conclude that the Air Force’s evaluation of Empire’s past performance was reasonable. The only record indicating that the Air Force evaluated the relevancy of past performance at all was a table in the Source Selection Evaluation Board (SSEB) report providing a past performance relevancy score for each offeror. There was no documentation of the relevance of the previously performed contracts to the solicitation requirements or rationale for the relevancy ratings that the Air Force assigned.<a href="#_ftn8" name="_ftnref8" id="_ftnref8">[8]</a>The Air Force contended that nothing prohibits an agency from assessing relevancy with a “binary assessment.” The GAO was not persuaded, however, and pointed out that while there was no prohibition on assigning a binary assessment, evaluations must be sufficiently documented to permit review of the agency’s conclusions. A lack of supporting information prevents the GAO from finding a reasonable basis for the agency’s evaluation.The GAO also found that Starlight was prejudiced by the Air Force’s review of its PPQs. The solicitation required offerors to submit PPQs for their past performance references. The PPQ form requested a narrative explanation for marginal or unsatisfactory ratings, in the event cure or show cause notices were received, or where the reference indicated that the evaluator would not make another award to the company. The SSEB report showed that evaluators relied on these narratives to support confidence ratings.In one PPQ, Starlight received a rating of “Exceptional” and “Good,” and the reference attached no comments. The SSEB, citing the lack of additional comments, downgraded that rating to “Satisfactory.” In another PPQ, Starlight received an “Exceptional” rating but the SSEB determined the comments only showed Starlight met requirements, and it downgraded the score to “Satisfactory” as well. The GAO did not object to the second downgrade even though the RFP did not inform offerors that the agency would rely on narratives. The GAO ruled that it was not unreasonable for the Air Force to place greater emphasis on the comments than on the adjectival rating. In the first PPQ, however, there was no inconsistency between the ratings and the narrative—in fact, there was no narrative at all—yet the Air Force still downgraded the PPQ’s “Exceptional” rating to “Satisfactory.” The PPQ form did not require remarks for ratings of “Exceptional” or “Good,” thus the GAO found that the Air Force had improperly downgraded that rating.TakeawaysThe GAO will sustain a protest where a lack of documentation renders it unable to find a reasonable basis for the agency’s decision. The cursory documentation of the results in the SSEB report were not enough to demonstrate that the evaluators considered the past performance relevance factors provided in the solicitation.Additionally, agencies must ensure consistency in their forms and solicitations, which may be drafted independently of each other. The evaluators treated the remarks sections of PPQs in a very different way than was described on the form itself, and offerors received no notice that the agency would weigh narrative comments more heavily than adjectival ratings. Procuring agencies should carefully consider whether there may be conflicting instructions between the solicitations they write and the standardized forms they use.<a href="#_ftnref1" name="_ftn1" id="_ftn1">[1]</a> B-420403, Mar. 10, 2022, 2022 CPD ¶ _____; 2022 WL 808145.<a href="#_ftnref2" name="_ftn2" id="_ftn2">[2]</a> Citing United Int’l Investigative Servs., Inc., B‑286327, Oct. 25, 2000, 2000 CPD ¶ 173 at 4.<a href="#_ftnref3" name="_ftn3" id="_ftn3">[3]</a> VMD Systems Integrators, Inc., B-412729, Mar. 14, 2016, 2016 CPD ¶ 88.<a href="#_ftnref4" name="_ftn4" id="_ftn4">[4]</a> Id.<a href="#_ftnref5" name="_ftn5" id="_ftn5">[5]</a> Trident Techs., LLC v. United States, No. 21-2035C, 2022 WL 600261 (Fed. Cl. Mar. 1, 2022).<a href="#_ftnref6" name="_ftn6" id="_ftn6">[6]</a> OCIs can take different forms. Relevant here are the impaired objectivity OCI and unequal access to information OCI. Impaired objectivity OCIs occur when a contractor is applying its judgment or providing advice, but its interests could be affected by the judgment or advice it provides to the government. This can occur if a company is placed in a position where it will examine the performance of itself, an affiliate, or a competitor. The issue is not whether biased advice is provided, but whether a reasonable person would find the company could have been impaired. Unequal access to information occurs when a contractor (or one of its subcontractors or a member of its performance team) has access to non-public information that could provide a competitive advantage relative to other contractors. An OCI may be found if the contractor has access to the information, and actual use of the information does not have to be shown.<a href="#_ftnref7" name="_ftn7" id="_ftn7">[7]</a> B-420267.3, Mar. 14, 2022, 2022 CPD ¶ _____; 2022 WL 912078<a href="#_ftnref8" name="_ftn8" id="_ftn8">[8]</a> The GAO also noted that the Air Force failed to document its tradeoff analysis. Although the Air Force stated that it conducted a tradeoff between price and past performance, the GAO found no supporting analysis in the record.

March 2022 Bid Protest Roundup: Delayed Debriefings, Conflicts of Interest, and Insufficient Documentation

This month’s Bid Protest Roundup covers two recent Government Accountability Office (GAO) decisions and a decision from the Court of Federal Claims. All involve

March 2022 Bid Protest Roundup: Delayed Debriefings, Conflicts of Interest, and Insufficient Documentation

In the last three weeks alone, OFCCP has issued two significant Directives and a notice of proposed rulemaking, signaling its intent to be far more aggressive and less transparent in compliance evaluations than under the Trump Administration.Read the full <a target="_blank" href="https://www.mofo.com/resources/insights/220405-ofccp-more-aggressive-less-transparent-audits.html">client alert</a>.

Co-Chair, Global Employment and Labor Practice

Andrew co-chairs the firm’s Global Employment and Labor Group. He represents companies on a broad range of labor and employment litigation and counseling matters, successfully defending clients in number complex matters before federal and state courts and administrative agencies.

Andrew R. Turnbull

Andrew Turnbull represents companies on a broad range of labor and employment litigation and counseling matters. He has successfully defended clients in complex employment litigation before federal and state courts and administrative agencies. A primary focus of his practice involves helping companies navigate the unique employment issues that arise when doing business with the federal government, including advising on all aspects of OFCCP compliance, creating and implementing affirmative action plans, defending OFCCP audits and onsite investigations, conducting mock pay equity audits, drafting and developing business ethics policies and programs, and complying with the Service Contract Act, E-Verify, and the Drug Free Workplace Act.

Andrew Turnbull

litigation-3-300x148.jpg

OFCCP Signals Return to More Aggressive and Less Transparent Audits

In the last three weeks alone, OFCCP has issued two significant Directives and a notice of proposed rulemaking, signaling its intent to be far more aggressive a

OFCCP Signals Return to More Aggressive and Less Transparent Audits

Many government contractors, like other private enterprises, invest heavily in research and development (R&D) to improve the products and services they offer, in hopes of better meeting their customers’ needs.  When those R&D efforts are “independent” of any particular contract—hence “IR&D” or “IRAD”—the associated costs are properly allocated to the contractor’s indirect cost pools, rather than charged directly to any one customer.  This makes good sense, and is reflected in the Federal Acquisition Regulation (FAR) cost principles at 31.205-18, which provides that costs of performing basic or applied research, development, and systems and other concept formulation studies are generally allowable as IR&D so long as they are not “sponsored by a grant or required in the performance of a contract.” This regulatory guidance is vague, though, and years of debating what it really means for R&D efforts to be “required in the performance of a contract” ultimately led to the Federal Circuit’s landmark decision in ATK Thiokol, Inc. v. United States, 598 F.3d 1329 (Fed. Cir. 2010), in which the court held that such costs are properly charged as IR&D unless they are “specifically required” by a contract, rather than merely necessary for successful performance.For the first time, a federal court has applied this standard in the context of the False Claims Act (FCA). In an opinion published last week, United States ex rel. Steuert v. L3 Harris Technologies, No. 11-cv-3385 (D.N.J. Mar. 31, 2022), the U.S. District of New Jersey held that, to survive dismissal, a plaintiff alleging fraudulent mischarging of IR&D costs in violation of the FCA must plead sufficient facts, with sufficient particularity, to show the contractor knew or recklessly disregarded both (1) costs were being charged to IR&D and (2) those costs were for efforts specifically required by a contract. Because the qui tam relator-plaintiff in Steuert failed to “identify anyone at L3 who knew both that L3 was billing the Government for [R&D] work [as IR&D] and that billing the Government for [such] work was improper,” the court dismissed his claims.<a href="https://govcon.mofo.com/false-claims-act/false-claims-independent-research-development/#_ftn1">[1]</a>Fraud against the United States is a serious allegation. But one cannot defraud the government by honest accident, and not every cost accounting noncompliance is a false claim.  Instead, the FCA requires knowledge of a claim’s falsity, either through actual knowledge or by acting in deliberate ignorance or reckless disregard of the truth.  See 31 U.S.C. § 3729(b)(1). This often is referred to as the FCA’s “scienter” requirement.  As the court recognized in Steuert, showing a defendant “knew” that false claims were submitted to the government for purposes of scienter requires a plaintiff to establish the defendant knew the claims at issue were false.  And when it comes to claiming costs as IR&D, under ATK Thiokol, such claims “are not ‘false’ simply because [a specific customer] informally requested or benefitted from the work underlying the claims.”<a href="https://govcon.mofo.com/false-claims-act/false-claims-independent-research-development/#_ftn2">[2]</a>  Instead, scienter under the FCA “depends on whether [a defendant] actually knew that the work underlying its IR&D claims to the Government was ‘specifically required by’ [a particular contract], or recklessly disregarded the fact that bills to the Government were generated by work ‘specifically required by’ [that contract].”<a href="https://govcon.mofo.com/false-claims-act/false-claims-independent-research-development/#_ftn3">[3]</a>  Thus, to meet the heightened pleading standards for fraud allegations under Federal Rule of Civil Procedure 9(b), the government or a qui tam relator must plead particular facts sufficient to plausibly establish such knowledge.The district court’s opinion marks a significant positive development in the law for its affirmation of the principles in ATK Thiokol and their applicability under the FCA. IR&D should be encouraged, not deterred; it spreads costs equitably among customers (within and without the government) and creates incentives for private investment in government technology, reducing taxpayer burden for what are often high-risk projects. The FAR cost principles and the standard established by ATK Thiokol—and now also as applied under Steuert—foster this goal, even as government officials and the growing qui tam plaintiffs’ bar too often forget it.L3Harris is represented in the Steuert litigation by Morrison & Foerster LLP.<a href="https://govcon.mofo.com/false-claims-act/false-claims-independent-research-development/#_ftnref1">[1]</a> Slip op. at 13 (emphases in original).<a href="https://govcon.mofo.com/false-claims-act/false-claims-independent-research-development/#_ftnref2">[2]</a> Id. at 11.<a href="https://govcon.mofo.com/false-claims-act/false-claims-independent-research-development/#_ftnref3">[3]</a> Id.