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.

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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.

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James A. Tucker

Bid Protest Spotlight: Jurisdiction, Price Range, Late-Is-Late

Trump Issues Executive Order on Cybersecurity Rolling Back Some Prior Policies and Introducing New Ones

GAO Reaffirms Agencies’ Discretion to Award Sole-Source SBIR Phase III Contracts (Even to a Successor-in-Interest)

Ongoing FAR Overhaul: Market Research and the New FAR Part 10

Bid Protest Spotlight: Size, Supply Schedules, SINs

The fast and furious Jenga game over when and with which federal vaccine mandate a company must comply might finally have reached a turning point. On January 13, 2022, the Supreme Court issued dual per curiam opinions in which it blocked the Occupational Safety and Health Administration’s (“OSHA’s”) emergency temporary standards (“ETS”), otherwise known as the “vaccine or test” mandate, and lifted the injunction of the vaccine mandate issued by the Centers for Medicare & Medicaid Services (“CMS”), as further reported on in this <a rel="noopener" target="_blank" href="https://www.mofo.com/resources/insights/220113-supreme-court-nixes-osha.html">client alert</a>. Those decisions may signal an ominous fate for Executive Order 14042 (“EO” or “EO 14042”) and the federal contractor vaccine mandate, which has now shambled past the January 18, 2022 vaccination deadline. Nevertheless, contractors should continue to track developments in all major cases, particularly including the U.S. Court of Appeals for the Eleventh Circuit’s review of the nationwide preliminary injunction, as well as any case challenging the EO in the Supreme Court. This alert accordingly provides updates on the Safer Federal Workforce Task Force (“Task Force”) FAQs, five major cases in which district courts have issued preliminary injunctions, and key takeaways from the Supreme Court’s recent federal vaccine mandate opinions.Read more in our <a rel="noopener" target="_blank" href="https://www.mofo.com/resources/insights/220121-updates-to-task-force-guidance.html">client alert</a>.

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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Updates to Task Force Guidance | District Courts Follow Different Reasoning to Hold Executive Order 14042 Invalid: Circuit Courts to Determine Which Arguments Succeed or Fail

Another Ticking Clock: Additional District Court Preliminarily Enjoins EO 14042 | Increasing Need for OMB Update on GA Court Clarification Order

The fast and furious Jenga game over when and with which federal vaccine mandate a company must comply might finally have reached a turning point. On January 13

Updates to Task Force Guidance | District Courts Follow Different Reasoning to Hold Executive Order 14042 Invalid: Circuit Courts to Determine Which Arguments Succeed or Fail

The cybersecurity posture of government contractors was an area of intense focus and ongoing regulatory development for the federal government in 2021. The coming year will also include many anticipated cybersecurity-related changes and developments.To learn more, read our <a rel="noopener" target="_blank" href="https://www.mofo.com/resources/insights/220111-top-cybersecurity-considerations.html">client alert</a>.

Tina is a partner in Morrison & Foerster’s Government Contracts practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmace

Tina Reynolds

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Top Cybersecurity Considerations for Government Contractors in 2022

GAO Finds CIO-SP4 Solicitation Is Unduly Restrictive of Competition

The cybersecurity posture of government contractors was an area of intense focus and ongoing regulatory development for the federal government in 2021. The comi

Top Cybersecurity Considerations for Government Contractors in 2022

This month’s <a href="https://www.law360.com/articles/1453859">Law360</a> Bid Protest Roundup focuses on two Government Accountability Office (GAO) decisions and one recent Federal Circuit decision. These decisions involve (1) the risks of using former government employees in the proposal process, (2) the requirements for an agency’s brand-name justification, and (3) whether there is a presumption of prejudice if a protester shows a procuring agency has acted irrationally.Serco Inc.<a href="#_ftn1" name="_ftnref1">[1]</a>Contractors can acquire valuable institutional knowledge by hiring former federal government officials. However, they should proceed cautiously when using these officials in obtaining contracts. The GAO has held that when a former government official assists an offeror in a competition for a government contract, the former official is presumed to use any useful, non‑public information to which she had access as a government employee.<a href="#_ftn2" name="_ftnref2">[2]</a> In Serco, the GAO affirmed this principle and sustained a protest for a $372 million Navy professional support services task order on the basis that the awardee obtained an unfair competitive advantage in its proposal by using non-public information provided by former Navy officials.The procurement at issue in Serco was a follow-on to a task order first issued in 2014 by the Navy. Under the original task order, the incumbent Serco provided support services to four Navy program offices and interfaced with the offices’ program managers by attending weekly meetings and submitting monthly progress reports. These reports included information on Serco’s labor rates, employees’ names and hours, significant achievements, and problem areas encountered and anticipated.During this time, Booz Allen Hamilton (BAH), which had competed for—and lost—the original 2014 task order, began preparing for the anticipated follow-on contract. In 2018, BAH recruited and hired two former Navy program managers through its subcontractor agreements. These program managers assisted BAH in its proposal preparation for the follow-on contract and revealed some of Serco’s performance issues on the 2014 task order, including that the company was “not providing consistent delivery” and “doesn’t do cyber well.”<a href="#_ftn3" name="_ftnref3">[3]</a>In July 2019, the Navy issued a solicitation for a follow-on to the 2014 task order. Serco and BAH were the only offerors. On February 5, 2021, the Navy awarded the task order to BAH because of its proposal’s strengths, including “manpower, personnel, and training” and “data analytics.”<a href="#_ftn4" name="_ftnref4">[4]</a>On February 23, 2021, Serco filed a protest, asserting that the Navy failed to consider BAH’s unfair competitive advantage through its access to non-public, competitively useful information from the Navy officials. The Navy stated it would take corrective action, and GAO dismissed the protest. However, the Navy ultimately “found no evidence that current or former government employees provided BAH with unequal access to non-public competitively useful information that would have provided it with an unfair competitive advantage.”<a href="#_ftn5" name="_ftnref5">[5]</a> Serco filed another protest, asserting that BAH gained an unfair advantage in the procurement by hiring the Navy officials who had unfettered access to non-public information regarding Serco’s staffing, costs, technical approach, and past performance. Serco listed several supporting factors including:<ul><li>Former Navy employees’ access to Serco’s proprietary information such as labor rates and employee names, positions, and hours as the Navy office program managers</li><li>Former Navy employees’ access to Serco’s past performance ratings as the Navy office program managers</li><li>Evidence that the Navy employees were expressly recruited before or immediately following retirement</li><li>Evidence that BAH did not impose any limitations on the Naval program managers’ input on the bid proposal for the task order</li></ul>The GAO sustained the protest and rejected the Navy’s assertion that there was no evidence of an unfair competitive advantage in BAH’s proposal. The GAO first reiterated its standard for evaluating whether a firm has an unfair competitive advantage from hiring a former government employee: if an offeror chooses to hire a former government official who had recent access to competitively useful information and uses that official to prepare a proposal, even the appearance of an unfair competitive advantage merits disqualification of the proposal. Further, the offeror is presumed to have benefitted and accessed any non-public, competitively useful information that the former government official presumably acquired. The GAO then found that BAH pursued Navy officials who had unbounded access to Serco’s proprietary information. The GAO also found that BAH recruited the officials prior to their retirement to assist with its proposal, and both officials were very involved in the proposal process. Finally, the GAO found that the Navy scored BAH higher based on this non-public information and did not properly consider all the evidence that BAH had obtained access to non-public, competitively useful information. Thus, the Navy’s conclusion that there was no unfair competitive advantage was unreasonable.TakeawaysGAO’s standard for evaluating whether a firm has an unfair competitive advantage from hiring a former government employee (FAR subpart 3.1) is “virtually indistinguishable” from the unfair competitive advantage arising from unequal access to information as result of an organizational conflict of interest (FAR subpart 9.5)—if a former government official has access to competitive information, a proposal is properly disqualified based on even the appearance of an unfair competitive advantage. However, contractors should not be afraid to employ former government employees; Serco was sustained because there was clear evidence that the awardee did not put any limitations in place to prevent the unfair advantage. An offeror generally can prevent disqualification by implementing and documenting a firewall between the proposal team and the former federal employees with potentially useful non-public information. To be effective, the offeror should establish the firewall before the proposal team has an opportunity to interact with the former government employees in question.Westwind Computer Products, Inc.<a href="#_ftn6" name="_ftnref6">[6]</a>Except in limited circumstances, agencies are required to procure goods and services through full and open competition. When an agency wants to limit competition to only brand-name items, its reasoning must be adequately justified. GAO recently affirmed this principle in Westwind, where it sustained a protest against the terms of a solicitation because the agency failed to adequately justify the solicitation’s restriction to one brand-name source for software.The United States Department of Agriculture (USDA) issued a request for quotations (RFQ) for a task order under a government-wide acquisition contract, seeking quotations to support the agency’s enterprise business requirements. The RFQ specifically required that any software must support the existing email system and IT infrastructure and that “USDA has standardized on Microsoft Office, email, and cloud and has been using these tools for over 20 years.”<a href="#_ftn7" name="_ftnref7">[7]</a>As required by FAR 16.505(a)(4), USDA also issued a brand-name justification. A brand-name justification must meet two conditions: it must show that the brand name is essential to the agency’s requirements and include market research that other companies’ similar products do not meet, or cannot be modified to meet, the agency’s needs. Thus, an agency must show both why the brand name is necessary and why no other product will suffice.The USDA justification listed several factors to support its contention that “Microsoft products are essential to the government’s need to provide software and security support necessary to meet operational, mission, Executive, and legislative requirements,”<a href="#_ftn8" name="_ftnref8">[8]</a> including that over 96% of the agency’s systems run Microsoft Windows operating systems and over 120,000 users in 7,500 field offices already use the software. Additionally, the current USDA Microsoft structure already supported nationwide public interest programs such as wildfire management and school lunch programs, and was needed to support the agency’s cybersecurity needs.Regarding market research, the justification stated that standard industry practices indicated that all other products would need at least a three-year timeline for transition and implementation and would take at least four years for complete data migration. Finally, the justification noted that due to the pandemic, a new product would delay USDA’s operations and cause significant operational difficulties and “at this time no other company’s product can meet the agency’s need to meet USDA’s performance and risk requirements.”<a href="#_ftn9" name="_ftnref9">[9]</a>Westwind filed a pre-award bid protest at the GAO, challenging the RFQ’s limitation to Microsoft software as unduly restrictive. GAO agreed and found that USDA failed to meet the second prong of the brand-name justification test—market research that indicates other companies’ similar products, or products lacking a necessary feature fall short or cannot be modified to meet the agency’s needs. Thus, while the justification did meet the first condition that the brand-name be essential to the agency’s requirements, the market research prong failed because the justification indicated only that a transition to a new software platform would be inconvenient to USDA. It failed to show that no other software could meet or be modified to meet the agency’s needs and did not address the FAR requirement that a justification specify the “particular feature” that distinguishes the brand name product from similar products. Thus, because USDA’s justification did not state that the product or services that USDA requires are offered only by Microsoft or that other companies’ software cannot be modified to meet the agency’s needs, the agency did not meet the brand-name restriction requirements.TakeawayThe brand-name justification requirement makes it clear that agencies are required to obtain competition to the maximum extent practicable; Westwind illustrates that an agency cannot justify its brand-name requirement by simply stating it would be inconvenient to switch products. Prospective offerors should closely scrutinize brand-name requirements in solicitations and not get discouraged if the requested product differs from their own product. If offerors believe their own preferred supply or service would meet the agency’s needs, they should consider filing a protest to challenge the restrictive terms before the date set for submissions of proposals.System Studies & Simulation, Inc.<a href="#_ftn10" name="_ftnref10">[10]</a> In its final opinion of 2021, System Studies & Simulation, Inc., the U.S. Court of Appeals for the Federal Circuit held that there is no presumption of prejudice in a bid protest, even where a protestor successfully shows that an agency action was “irrational.”In 2018, the Army issued a solicitation to provide the agency with advanced helicopter flight training services. S3 filed a bid protest action at the Court of Federal Claims, and the court found that the agency failed to perform a proper tradeoff analysis. The court set aside the award, and the Army reevaluated the bids. In May 2020, the agency awarded the contract to CAE. S3 filed another bid protest, arguing that the agency’s decision to award the contract to CAE was arbitrary and capricious. Although the court rejected the majority of S3’s arguments, it agreed that the agency’s assignment of a certain “strength” to CAE was arbitrary and capricious. Nonetheless, the court upheld the Army’s decision to award the contract to CAE because S3 had not been prejudiced by the error; even without the error, S3 did not have a substantial likelihood of award.S3 appealed to the Federal Circuit, arguing that when the COFC determines that an agency acted arbitrarily or irrationally, there is a presumption of prejudice to the protestor. In its argument, S3 relied on Impresa Construzioni Geom. Domenico Garufi v. United States, (Garufi), where the Federal Circuit held that a bid award may be set aside if either (1) the agency official’s decision lacked a rational basis or (2) the procurement procedure involved a violation of regulation. The Garufi court continued that, “[w]hen a challenge is brought on the second ground, the disappointed bidder must show ‘a clear and prejudicial violation of applicable statutes or regulations.’”<a href="#_ftn11" name="_ftnref11">[11]</a> S3 reasoned that the specific discussion of a prejudice showing for a regulatory violation implies there is an automatic presumption of prejudice for irrational decisions, such as the arbitrary and capricious assignment of a strength here. S3 noted that a handful of COFC judges have applied exactly such a presumption of prejudice in a few cases.The Federal Circuit rejected this argument. The court first noted that in accordance with its jurisdictional statute, 28 U.S.C. § 1491, the Administrative Procedure Act (APA) standard governs its review of bid protests. The APA mandates that when courts review agency action, “due account shall be taken of the rule of prejudicial error”; the prejudicial-error rule applies the harmless error principle in review of agency action.<a href="#_ftn12" name="_ftnref12">[12]</a> The court next stated Garufi only expressly acknowledges the prejudice-showing requirement where a “‘violation of a regulation or procedure’ is at issue while omitting reference to prejudice where the absence of ‘a rational basis’ is at issue.’” However, just because Garufi states a prejudice showing is necessary for regulatory violations, that does not imply that a prejudice showing is not also necessary for arbitrary and capricious or abuse of discretion actions.The court held that Garufi does not establish a presumption of prejudice, even when the agency acts irrationally. Rather, a protestor bears the burden of showing that an error (whatever its nature) was actually prejudicial. This is a two-step process where there must first be a showing that the agency’s actions were “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” and next that the error was prejudicial. Because harmless errors are not actionable, an award cannot be set aside unless both requirements are met. Thus, to demonstrate prejudice in a post-award protest, a protestor must show it would have had a substantial chance of award but for the error.TakeawayIn System Studies & Simulation, Inc., the Federal Circuit clears up any confusion on whether a presumption of prejudice exists for irrational agency actions—“[t]o the extent that there has been uncertainty on this point in [COFC], we now reject the interpretation on Garufi on which the uncertainty rests.”<a href="#_ftn13" name="_ftnref13">[13]</a> Ultimately, prejudice is the core factual question of whether an agency’s procurement errors actually harmed the protestor. Even if a protestor can prove there was an error in the procurement process, it must also show the error plausibly might have kept it from being awarded the contract if the protestor wants to win its protest.<a href="#_ftnref1" name="_ftn1">[1]</a> Serco Inc., B-4196172.2 et seq., Dec. 6, 2021.<a href="#_ftnref2" name="_ftn2">[2]</a> See, e.g., Health Net Fed. Servs., LLC, B-401652.3 et seq., Nov. 4, 2009.<a href="#_ftnref3" name="_ftn3">[3]</a> Serco at *4.<a href="#_ftnref4" name="_ftn4">[4]</a> Id. at *7.<a href="#_ftnref5" name="_ftn5">[5]</a> Id.<a href="#_ftnref6" name="_ftn6">[6]</a> Westwind Computer Products, Inc., B-420119, Dec. 8, 2021.<a href="#_ftnref7" name="_ftn7">[7]</a> Id. at *2.<a href="#_ftnref8" name="_ftn8">[8]</a> Id.<a href="#_ftnref9" name="_ftn9">[9]</a> Id. at *4.<a href="#_ftnref10" name="_ftn10">[10]</a> Sys. Stud. & Simulation, Inc. v. United States, No. 21-01469 (Fed. Cir. 2021).<a href="#_ftnref11" name="_ftn11">[11]</a> Id. at 5 (citing Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (Fed. Cir. 2001)).<a href="#_ftnref12" name="_ftn12">[12]</a> See id. at 4.<a href="#_ftnref13" name="_ftn13">[13]</a> Id. at 7.

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Associate

Roke Iko is an associate in the Litigation Department in Morrison & Foerster’s Washington, D.C. office.
Roke assists clients in the full range of government contracts litigation and compliance matters

Roke Iko

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December 2021 Bid Protest Roundup

This month’s Law360 Bid Protest Roundup focuses on two Government Accountability Office (GAO) decisions and one recent Federal Circuit decision. These decisions

December 2021 Bid Protest Roundup

At our annual MoForward event in October 2021, Lisa Phelan offered practical advice about avoiding U.S. Department of Justice (DOJ) criminal antitrust enforcement of “no poach” agreements, predicting the defense industry would soon become a target. Regrettably, Lisa’s prediction has come true.To learn more, read our <a rel="noopener" target="_blank" href="https://www.mofo.com/resources/insights/211227-moforward-warning-comes-true.html">client alert</a>.