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.

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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>

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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.

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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.

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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

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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.

Brad is a partner in Morrison Foerster’s Litigation Department, Managing Partner of the Austin office, and Chair of the firm’s Israel practice. He is the former Co-Chair of the firm’s Global Litigation Practice and the Government Contracts + Public Procurement Practice.

Bradley Wine

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James A. Tucker

The Tortured Regulations Department: SBA’s New Rule and Its Effect on Investments

Bid Protest Spotlight: Standing, Relationships, Responsibility

House’s Passage of the SAMOSA Act Signals Policy Shift Towards Government-Wide Enterprise Software Licensing

New DFARS Regulation on Small Business Affiliate Past Performance

Bid Protest Spotlight: Unclear Criteria, Data Rights, Conflicts

This article is part of a monthly column that provides takeaways from recent bid protest cases. In this installment, we highlight decisions from the U.S. Court of Appeals for the Federal Circuit, the U.S. Government Accountability Office and the U.S. Court of Federal Claims.In its decision in Oak Grove Technologies LLC v. U.S., the U.S. Court of Appeals for the Federal Circuit clarifies the deadline by which an offeror may challenge an agency's decision not to conduct discussions in certain procurements.The U.S. Government Accountability Office decision in Matter of Ecology Mir Group LLC illustrates a common trap for the unwary with respect to the timeliness of protests of U.S. General Services Administration Federal Supply Schedule procurements subject to Federal Acquisition Regulation Subpart 8.4.The U.S. Court of Federal Claims decision in RTD Middleburg Heights LLC v. U.S., addresses the importance of contemporaneous documentation to the court's ability to find a price evaluation rational.Oak Grove TechnologiesThe Federal Circuit's Sept. 11 decision in Oak Grove Technologies reversed the Court of Federal Claims on multiple grounds. The decision is interesting for various reasons, including the fact that it upheld sanctions that the lower court imposed on the government for a defective record production. Of interest here, though, is the Federal Circuit's holding on the timelines applicable to an offeror's challenge of an agency's decision not to hold discussions.The procurement at issue had a ceiling value of $245 million and was for training services for special forces. In response to a protest, in 2021 the Court of Federal Claims found that DFARS 215.306(c)(1) creates a presumption in favor of discussions in covered procurements. Specifically, for Defense Department procurements conducted under FAR Part 15, DFARS 215.306(c)(1) provides that for "acquisitions with an estimated value of $100 million or more, contracting officers should conduct discussions."In the lower court's view, DOD agencies electing not to conduct discussions in such circumstances must document a sufficient basis for deviating from the general rule. The lower court found that the procurement record failed to provide a sufficient reason for foregoing discussions. Had there been discussions, the protester could have corrected the errors found in its own proposal.The court sustained the protest on that basis, among others, and enjoined the award. The government and the awardee appealed.On appeal, the Federal Circuit did not disagree with the protester's or the lower court's view on the meaning of DFARS 215.306(c)(1). Nor did it reverse the lower court's holding that this regulation creates a presumption in favor of discussions in covered procurements.Without addressing those merits, however, the court of appeals noted that the solicitation expressly provided that the government did not intend to hold discussions, although it reserved the right to do so. The court further observed that the solicitation incorporated the provision at FAR 52.215-1(f)(1). This provision states that an agency intends to award a contract without conducting discussions.In light of these solicitation provisions, the court held that it was obvious to prospective offerors that the agency did not intend to hold discussions. But no offeror objected until after the award was announced.Under the precedent of the 2007 Federal Circuit decision in Blue & Gold LP v. U.S., any prospective offeror aggrieved by the agency's obvious intent waived its right to complain if it did not protest before the receipt of proposals.Because the protester here saved its objection until after award, the Federal Circuit found that the protester had waived its right to challenge the lack of discussions in this procurement. Thus, even if the agency violated DFARS 215.306(c)(1), that was irrelevant to the protest.The Federal Circuit also rejected the various other protest grounds that the Court of Federal Claims had found meritorious and vacated the lower court's judgment and injunction. The appeals court did, however, affirm the lower court's imposition of sanctions on the government for defects in its production of the administrative record.TakeawaysIn the years since the Court of Federal Claims decided the Oak Grove protest in 2021, more than one decision of the Court of Federal Claims has allowed post-award protests of a lack of discussions in solicitations that provided discussions might not occur. The Federal Circuit's new decision establishes a different rule.Going forward, if a solicitation states that an agency reserves the right not to conduct discussions, and a prospective offeror thinks discussions should be held, its protest is due by the time set for proposal submission. A company is not permitted to sit on its rights and wait to object only after learning that it has not been awarded the contract.This has been the GAO's rule all along. The Federal Circuit has now essentially aligned the court's rule with the GAO's. Prospective offerors should read solicitations for large Defense Department acquisitions carefully, and consider whether to object promptly if a covered solicitation appears inconsistent with DFARS 215.306(c)(1).Ecology Mir GroupThe GAO's Sept. 12 decision in Ecology Mir Group addresses a trap for the unwary in GSA Federal Supply Schedule, or FSS, procurements subject to FAR Subpart 8.4. It is a hazard that occurs frequently due to widespread confusion within the industry and agencies about the rules governing FSS orders.On Aug. 16, the U.S. Department of the Navy informed Ecology Mir Group that it was unsuccessful in a competition conducted under FAR Subpart 8.4. The notice stated that the vendor's quotation was technically unacceptable. The vendor tried multiple times to learn the reason for this rating, but the agency refused to provide any further information.In its final attempt to pry information from the reticent agency, the vendor threatened to bring in its attorneys. It told the agency that it thought the agency was delaying further information until the new order had begun performance to frustrate a bid protest. The vendor was probably right about that, as the agency kept its silence and watched the clock.On Aug. 29, the vendor filed a protest with the GAO. Knowing nothing about the basis for its unacceptable rating, the vendor simply asserted that the rating was unreasonable. Three business days later, the agency requested summary dismissal of the protest as untimely.The GAO agreed with the agency: Because the protester knew the entire basis of its protest, such as it was, by Aug. 16, its protest was due by 10 calendar days later — Aug. 26. Because the vendor missed its protest window by three days, the GAO dismissed the protest outright.Readers may be surprised that the vendor's protest clock began running even though it had not received a debriefing. But this award was an FSS order under FAR Subpart 8.4. Under FAR Subpart 8.4, no vendor debriefings are required. The anemic "brief explanation" the agency provided was all that the law required.Was the vendor's quotation rated unacceptable for a valid reason? It may never find out.The agency's lack of transparency was poor procurement practice, but it was not illegal. And it did succeed in running out the GAO protest clock.The frustrated protester might consider refiling its protest with the Court of Federal Claims, where there are no 10-day clocks and agencies have a more difficult time hiding information. But agencies are surely aware that most FSS vendors will not be interested in paying lawyers to file a bid protest at the Court of Federal Claims over an order that may have a relatively low value.TakeawaysPay close attention to which FAR authorities an agency is using to run a procurement. The rules governing FAR Subpart 8.4 FSS acquisitions differ in significant ways from other procurement authorities.For protest purposes, the most salient differences are the lack of true debriefing rights and the absence of the GAO's debriefing exception to the ordinary protest deadlines. FSS vendors frustrated by uncommunicative agencies may wish to consider the Court of Federal Claims as an attractive alternative to the GAO in appropriate cases.RTD Middleburg HeightsIn RTD Middleburg Heights, the Court of Federal Claims considered whether the GSA's price evaluation was arbitrary and capricious for a lease procurement. Although the solicitation was released in 2019, the GSA did not award the lease until 2023. Then followed a series of protests and multiple rounds of corrective action — all centering on the GSA's repeatedly unsuccessful attempts to conduct a reasonable price evaluation.In response to the latest protest, on Aug. 16 the Court of Federal Claims found that the price evaluation was not flawed in the way that the protester claimed. This holding rested in part on the court's recognition that an agency's cost/price estimate does not have to be calculated with "impeccable rigor." Courts recognize that agencies enjoy relatively broad discretion in conducting a cost or price analysis.The court nevertheless found that the protester prevailed because the court was unable to determine how GSA determined the awardee's price. The protester demonstrated various apparent inconsistencies in the figures, where the price evaluation's connections to the awardee's proposal were not always apparent, and at times appeared to be in error or missing.The court also noted that the record failed to include native Excel versions of the evaluation worksheets, which prevented the court itself from discerning how the awardee's price was calculated.The government attempted to explain everything during oral arguments, but the court was "left to work out the math on its own," and the numbers did not appear to add up. Because the contemporaneous record was inadequate, the court found it necessary to remand the case for corrective action.The court also found that the inadequate evaluation record prevented it from ruling on the protester's claims that GSA evaluated offerors' prices disparately. Because this too prevented effective adjudication of the case, the court remanded this protest ground for corrective action as well.TakeawaysEvaluations of cost and price can be tedious to challenge, particularly when an agency's contemporaneous record is poorly documented and the agency has already had multiple opportunities to correct its errors. This decision is a useful example of how a protester can use an incomplete record to its advantage. And it is a warning to agencies that they should contemporaneously document everything and make sure their math adds up.

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 litiga

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New DCMA Defective Pricing Pilot Team Will Possess Audit Resolution Authority

Bid Protest Spotlight: Debriefings, Timeliness, Documentation

Last year, Justice Clarence Thomas’s dissent in United States ex rel. Polansky v. Executive Health Resources, Inc., 599 U.S. 419 (2023) (“Polansky”), resurrected an old debate about whether the False Claims Act (FCA) qui tam provisions violate Article II of the Constitution.  Under this theory, the FCA qui tam provisions improperly give a private party the authority to control litigation on behalf of the United States, a responsibility that the Constitution exclusively vests in the Executive Branch.  We <a href="https://www.mofo.com/resources/insights/230621-supreme-court-us-government-false-claims-act-suits" target="_blank">predicted</a> that Justice Thomas’s dissent could open the door to a constitutionality defense for defendants resisting qui tam suits.  Yesterday, our prediction came true.Judge Kathryn Mizelle of the U.S. District Court of the Middle District of Florida held that the FCA qui tam provisions violate Article II’s Appointments Clause by permitting “unaccountable, unsworn, private actors to exercise core executive power with substantial consequences to members of the public.”The FCA allows private individuals, known as “relators,” to bring lawsuits in the name of the United States against any person who knowingly presents a false claim for payment to the United States.  31 U.S.C. § 3730(b)(1).  A victorious relator may collect a typical award of 15 to 30 percent of the government’s total recovery, 31 U.S.C. § 3730(d), and thus is designed to encourage private individuals to bring suit on the government’s behalf.  The FCA allows a relator to initiate and direct litigation on the government’s behalf.  Unless the Department of Justice (DOJ) decides to intervene in the case, the relator can bind the federal government without direct accountability to anyone in the Executive Branch.  Absent intervention by the DOJ, a relator enjoys unfettered discretion to decide who to investigate, who to charge in the complaint, which claims to pursue, and which legal theories to employ.  Furthermore, a relator decides whether to appeal and which arguments to preserve, thereby shaping the broader legal landscape for the federal government.In 2019, Clarissa Zafirov sued her employer and other defendants, alleging that they violated the FCA by misrepresenting patients’ medical conditions to Medicare.  Zafirov never asserted that the defendants’ allegedly illegal conduct harmed her; instead, like a United States Attorney, Zafirov proceeded on behalf of the United States.  After the DOJ declined to intervene, Zafirov litigated the action on behalf of the United States for the next five years.In Zafirov ex rel. United States v. Florida Medical Associates, LLC, the defendants successfully argued that Zafirov exercised significant authority under the continuing position of relator but lacked proper appointment under the Constitution.  As a result, the court dismissed the case.Specifically, the defendants asserted that the FCA qui tam provisions violated the Appointments Clause because a relator is an improperly appointed officer of the United States.  Judge Mizelle agreed, concluding: (1) an FCA relator is an officer of the United States because they exercise significant authority pursuant to the laws of the United States and occupy a continuing position established by law, (2) historical examples of qui tam provisions do not exempt an FCA relator from the Appointments Clause, and (3) because Zafirov is not constitutionally appointed, dismissal is the only permissible remedy.In order to be an “Officer of the United States,” one must exercise significant authority pursuant to the laws of the United States and occupy a continuing position established by law.  Judge Mizelle explained that the power to initiate an enforcement action in the name of the United States to vindicate a public right constitutes significant authority.  This enforcement authority is inherent in, and crucial to, the executive power.  Furthermore, an FCA relator occupies a continuing position established by law because they have statutorily defined duties, powers, and emoluments.As a result, Judge Mizelle determined Zafirov was an officer subject to the Appointments Clause.  The Appointments Clause allows Congress by law to vest the appointment of inferior officers in the President, the head of an executive department, or a court.  By contrast, the FCA qui tam provisions permits any “person” to appoint themselves by initiating an enforcement action.  Because self-appointment does not satisfy the Appointments Clause, the defendants’ constitutional challenge succeeded, and the only remedy was to dismiss the case.Although this decision is likely to be appealed and is not binding on other courts, it is a welcome development for FCA defendants and defense attorneys.  At a minimum, yesterday’s decision will lead to further questioning of the constitutionality of qui tam actions.In Polansky, Justices Kavanaugh and Barrett echoed Justice Thomas’s concerns in a concurring opinion, noting that “the Court should consider the competing arguments on the Article II issue in an appropriate case.”  Polansky, 599 U.S. at 442.  That’s three justices already expressing public support for reconsidering the constitutionality of the FCA qui tam provisions.  If the right case makes its way to the Supreme Court, it may not be challenging to find a fourth justice willing to grant certiorari.  We have previously raised this same argument and will continue to monitor decisions from other federal courts addressing the constitutionality of the qui tam provisions.

IAP Worldwide Servs., Inc.

Flight Support, Inc.

DynCorp Int’l LLC

Raytheon Co.

DynCorp International, LLC v. United States

URS Federal Servs., Inc.

DynCorp International, LLC

Planned Sys. Int’l, Inc.

Threat Mgmt. Group, LLC

Vencore Servs. & Solutions, Inc.

Jacobs Tech., Inc.

Cubic, Inc.

American Institutes for Research v. State of New Mexico

CACI-WGI, Inc.

Fluor Intercontinental, Inc. v. IAP Worldwide Servs., Inc.

IAP World Servs., Inc.

Size Appeal of IAP World Servs., Inc.

Al-Ghanim v. IAP Worldwide Servs., Inc.

O’Gara Training & Servs., LLC

IAP Worldwide Servs., Inc. v. Johnson Controls, Inc.

AAR Mobility Sys.

Matt Martin Real Estate Mgm’t, LLC v. United States

Pyramid Real Estate Servs., LLC v. United States

Harrington, Moran, Barksdale, Inc.

Homesource Real Estate Asset Servs., Inc. v. United States

Ocean Ships, Inc.

Keystone Sealift Servs., Inc.

ITT Corp., Sys. Div.

IAP Worldwide Servs., Inc. v. Fluor Intercontinental, Inc.

FedSys, Inc.

Academy Facilities Mgm’t v. United States

Academy Facilities Management -- Advisory Opinion

Evans Security Solutions, Inc.

Contingency Mgm’t Group, LLC and IAP Worldwide Servs., Inc.

Kellogg Brown & Root Services, Inc.

Liberty Power Corp.

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

J. Ward

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Adam L. Braverman is a partner in Morrison Foerster’s Investigations + White Collar Defense practice. Adam formerly served as an Associate Deputy Attorney General for the U.S. Department of Justice (DOJ) and as the U.S. Attorney for the Southern District of California. 

Adam L. Braverman

Adam L. Braverman is a partner in Morrison Foerster’s Investigations + White Collar Defense group. He represents companies and their executives in internal and government investigations, white collar criminal defense matters, and parallel civil litigation related to allegations of bribery, government procurement fraud, COVID-19 and CARES Act fraud, anti-money laundering violations, and matters involving organized crime.

Adam Braverman

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Associate

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

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The FCA’s Qui Tam Provisions Under Fire

This article is part of a monthly column that provides takeaways from recent bid protest cases. This installment highlights three decisions from the U.S. Government Accountability Office.Each of this month's decisions addresses a different type of challenge: a solicitation challenge during the course of corrective action, a post-award bid protest and a protester's request for recommended costs. From the "rule of two," to the Trade Agreements Act, to a recommendation for protest costs, each of these GAO decisions offers distinct, helpful reminders for both contractors submitting proposals and unsuccessful offerors looking to file protests.Knudsen SystemsKnudsen Systems Inc. involves the rule of two, and the market research that agencies must perform when setting aside contracts for small businesses.<a href="#_ftn1" target="_self">[1]</a>Specifically, under Section 19.502-2(b) of the Federal Acquisition Regulation, agencies are required to set a procurement aside for small businesses where the procurement is valued over the simplified acquisition threshold, and there is a reasonable expectation that at least two responsible small business concerns will submit offers and that award will be made at a fair market price.This is commonly known as the "rule of two." When setting aside a procurement for small businesses, agencies are required to perform adequate market research to ensure the rule of two is met.In Knudsen Systems, the U.S. Department of the Navy, Naval Undersea Warfare Center issued a solicitation for sonar sounding sets as a small business set-aside under North American Industry Classification System, or NAICS, code 334511, which is a manufacturing NAICS code.When a set-aside solicitation is assigned a manufacturing code, an offeror must either be a small business that manufactures the item being procured or qualify as a small business nonmanufacturer.To qualify as a small business nonmanufacturer, the offeror must, among other requirements, supply an end item of a small business manufacturer in the U.S., or obtain a waiver of such requirement.When the Navy initially issued the solicitation, it indicated that the Small Business Administration had issued a class waiver for the NAICS code. However, after the submission of proposals and after the Navy completed its evaluation of those proposals, it discovered that the SBA had not in fact issued a class waiver. The Navy therefore notified Knudsen Systems that it was ineligible for the award because it had proposed supplying the end product of a company from Canada, not from a U.S. small business.Knudsen Systems subsequently protested that decision, and the Navy took corrective action, and stated it would amend the solicitation to implement the correct nonmanufacturer rule status and conduct discussions to enable offerors to revise their proposals.After the Navy implemented the amendment to the solicitation, Knudsen Systems filed another protest, this time challenging the terms of the amendment.Specifically, Knudsen Systems challenged the Navy's decision to continue to set aside the procurement for small businesses in light of the amended terms of the solicitation removing the class waiver.Knudsen Systems argued that the Navy could not have performed adequate market research to find that the rule of two was still satisfied if there was no class waiver, and offerors had to either manufacture the end products themselves or supply end products manufactured by U.S. small businesses.In an Aug. 9 decision, the GAO agreed with Knudsen Systems, explaining that GAO precedent provides that where the nonmanufacturer rule applies to a solicitation, and the agency's market research fails to consider whether the firms identified in the market research can comply with the rule, the market research is unreasonable.Because the Navy's market research for the initial solicitation included an incorrect assumption that the class waiver applied, it did not consider whether small businesses could provide end products of U.S. small businesses. Therefore, the Navy could not rely on its initial market research to support its decision to continue to set aside the procurement after issuing the amendment.TakeawaysThis case is not only a reminder to agencies to ensure that they conduct adequate market research when setting aside a contract, but also a reminder to potential offerors that there is an avenue at the GAO to challenge an agency's decision to set aside a contract for small businesses.Offerors that may not qualify as small for a particular set-aside solicitation should monitor amendments to the solicitation for potential additional opportunities to make such a challenge.HPI FederalIn HPI Federal LLC, the GAO addressed whether the U.S. Air Force's acceptance of an awardee's representation of TAA compliance in a task order proposal was reasonable. The awardee's task order proposal was in response to an Air Force request for quotations, or RFQ, for the provision of certain information technology products.<a href="#_ftn2" target="_self">[2]</a>The Air Force issued the RFQ to holders of Client Computing Solutions III Blanket Purchase Agreements, which were issued pursuant to the holders' respective General Services Administration federal supply schedule contracts.The TAA requires that products be wholly made either in the U.S. or in a designated country, or substantially transformed in form, fit, or function in the U.S. or in a designated country.The RFQ required offerors to "provide a confirmation that the [quoted] end product for each product category is [TAA] compliant under the terms of this solicitation as required by [the offeror's] GSA schedule contract."Each offeror's blanket purchase agreement established a requirement that products must comply with the TAA. In addition, the blanket purchase agreements required, in accordance with Defense Federal Acquisition Regulation Supplement 252.225-7021 on trade agreements, that offerors provide a trade-agreements certificate pursuant to DFARS 252.225-7020 for each product offered in response to any solicitation issued under the blanket purchase agreement.The awardee, Transource Services Corp., provided a certification that certain LG monitors in its proposal were "assembled [in] Mexico, a TAA compliant country."However, HPI Federal LLC argued in its bid protest that it was unreasonable for the Air Force to accept this certification because it only related to assembly of the product. It did not specifically certify that the end product is an end product of Mexico.Agreeing with the protester, the GAO's Aug. 9 decision found that the Air Force could not rely on the certification because a product is not necessarily an end product of the country in which it was assembled, as assembly alone may not constitute substantial transformation.To constitute a reasonable determination, the Air Force was required to further investigate whether assembly in Mexico was, in effect, a confirmation that the monitors were the end product of Mexico.Because the Air Force did not determine that assembly of the proposed monitors in Mexico amounted to a substantial transformation of the monitors, the GAO found that the Air Force unreasonably determined that Transource had provided confirmation of TAA compliance.Thus, the GAO sustained the protest on this ground.<a href="#_ftn3" target="_self">[3]</a>TakeawaysThis case serves as a reminder for both offerors and protesters. Offerors should be mindful that if a solicitation requires certifications of TAA compliance, the language of such certifications should clearly address the TAA's requirements. Protesters should remember that TAA certification compliance is a potential protest ground to raise in such situations.NextStep TechnologyNextStep Technology Inc. is a case about a protester's submission of a request for recommended costs.<a href="#_ftn4" target="_self">[4]</a>If an agency takes corrective action in response to a protest, the GAO may recommend that the agency reimburse the protester for the cost of filing and pursuing the protest, including reasonable attorney fees, consultant fees and expert witness fees, and bid and proposal preparation costs.NextStep Technology Inc., a small business, protested the U.S. Army's award of a task order for programmatic support services to Gemini Industries Inc. The GAO subsequently conducted an outcome prediction conference call, during which the GAO indicated it would likely sustain NextStep's protest.As a result of the outcome prediction, the Army notified the GAO that it intended to take corrective action by terminating the award to Gemini, canceling the RFP and reviewing the agency's current requirements. It also asked the GAO to dismiss the protest as academic.NextStep objected to the dismissal request and asked the GAO to include a recommendation for the Army to pay NextStep its reasonable costs of filing and pursuing its protest.On Sept. 5, 2023, the GAO declined to issue a recommendation for the Army to pay NextStep's reasonable costs of filing and pursuing the protest and granted the Army's request for dismissal as academic.The GAO also notified NextStep that if there was a dispute about whether the agency would agree to reimburse NextStep, it could file a request for recommendation in accordance with Title 4 of the Code of Federal Regulations, Section 21.8.Under that regulation, a request for recommendation is due within 15 days after the date on which the protester learned — or should have learned, if earlier — that the GAO had closed the protest based on the agency's decision to take corrective action.Almost two months later, on Oct. 27, 2023, NextStep submitted a letter directly to the Army requesting reimbursement in accordance with Section 21.8(e).NextStep and the Army argued over the request for several months, until the Army issued a final determination on April 5, 2023, denying NextStep's request. Ten days later, on April 15, NextStep filed a request with the GAO seeking a recommendation for the reimbursement of costs.The Army corresponded with NextStep for several months regarding NextStep's Oct. 27, 2023, request, thus leading NextStep to believe it had followed the proper procedure. However, in an Aug. 16 decision, the GAO applied its regulations' strict timeliness rules. The GAO found that because NextStep did not file its request with the GAO within 15 days of the GAO dismissing the protest as a result of the agency taking corrective action, the request was considered to be untimely.TakeawaysThis case is an example of a hard lesson learned regarding strict adherence to where and when a protester can file a request for a recommendation to pay reasonable costs of filing and pursuing a protest.To avoid making the same mistake as NextStep, successful protesters should remember to file such requests with the GAO within 15 days of a protest being dismissed due to an agency's taking corrective action.<hr class="divider"><a href="#_ftnref1" target="_self">[1]</a>Knudsen Systems Inc., B-422433.2, Aug. 9, 2024, 2024 EL 3916166.<a href="#_ftnref2" target="_self">[2]</a>HPI Federal LLC, B-422583, Aug. 9, 2024, 2024 WL 3823852.<a href="#_ftnref3" target="_self">[3]</a>The protester raised an additional protest ground regarding the RFQ's requirement to certify countries of origin for certain component parts of proposed end products. However, the GAO denied this protest ground, finding that the awardee's certification was sufficient.<a href="#_ftnref4" target="_self">[4]</a>NextStep Tech. Inc. - Costs, B-421743.2, Aug. 16, 2024, 2024 WL 3876124.

Bid Protest Spotlight: Rule Of Two, Post Award, Cost Request

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

Alissandra Young McCann

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

Alissandra McCann