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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Our government contracts and procurement attorneys counsel businesses on legal and compliance issues encountered when doing business with government entities.

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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.

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James A. Tucker

Kickstarting AI in the Federal Government: OMB’s Policy to Implement Executive Order 14179

Bid Protest Spotlight: Instructions, Price Evaluation, Standing

FAR Overhaul Underway

FedRAMP 20x: Reformulating the Authorization Process

Court of Federal Claims Confirms Jurisdiction over Other Transaction (OT) Bid Protests

This is the fourth in our multipart series of alerts addressing proposed regulations published in the Federal Register on September 24, 2019, for the Committee on Foreign Investment in the United States (CFIUS) to implement the Foreign Investment Risk Review Modernization Act (FIRRMA).One of the most anticipated changes in FIRRMA is the concept of a “white list” of investors exempted from certain aspects of CFIUS’s foreign investment review jurisdiction. Another prominent feature of FIRRMA is the heightened CFIUS scrutiny on foreign government-owned investors, which left many wondering what this will mean for the viability of future investments in which a foreign government has an interest. The proposed regulations address both of these concepts and provide some initial answers, while raising several new questions for investors and U.S. businesses about which deals will get a green light in 2020, and which will need to hit the brakes.

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Foreign Investment 2020 (Part 4): Who’s In, Who’s Out, and Why It Matters

Foreign Investment 2020 (Part 5): Final CFIUS Rules Announced

This is the fourth in our multipart series of alerts addressing proposed regulations published in the Federal Register on September 24, 2019, for the Committee 

Foreign Investment 2020 (Part 4): Who’s In, Who’s Out, and Why It Matters

In order to provide an overview for busy in-house counsel and compliance professionals, we’ve summarized below some of the most important international anti-corruption developments from the past month, with links to primary resources. This month we ask: How will new U.S. Department of Justice (DOJ) guidance affect cash-strapped companies seeking to resolve criminal matters? What are the latest developments in the investigations into corruption at Mexico’s national oil company? How will a new whistleblower law affect anti-corruption enforcement in the European Union? The answers to these questions and more are here in our October 2019 Top 10 list.Read our <a href="https://www.mofo.com/resources/publications/191114-anti-corruption-developments.html?utm_source=publication&utm_medium=email" target="_blank" rel="noopener noreferrer">client alert.</a>

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James Koukios is co-chair of Morrison Foerster’s Investigations + White Collar Defense Group and also serves as co-head of the FCPA + Global Anti-Corruption Practice.

James Koukios

James Koukios is co-chair of Morrison Foerster’s Securities Litigation, Enforcement, and White-Collar Defense Group and serves as Global Co-Head of the FCPA + Anti-Corruption Practice.

James M. Koukios

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Charles (Chuck) Duross serves as co-chair of the firm’s Investigations + White Collar Defense Practice Group and is a co-leader of the FCPA and Global Anti-Corruption practice.

Charles Duross

Charles (Chuck) Duross serves as co-head of Morrison Foerster’s FCPA + Global Anti-Corruption practice.

Charles E. Duross

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Top 10 International Anti-Corruption Developments for October 2019

Top 10 International Anti-Corruption Developments for March 2021

In order to provide an overview for busy in-house counsel and compliance professionals, we’ve summarized below some of the most important international anti-cor

Top 10 International Anti-Corruption Developments for October 2019

On October 31, 2019, the Trump Administration revoked <a href="https://www.govinfo.gov/content/pkg/DCPD-200900039/pdf/DCPD-200900039.pdf">Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts</a> (“EO 13495”), removing the requirement for federal service contractors to offer employment to employees of predecessor contractors.Issued by President Obama on January 30, 2009, EO 13495 required federal contractors awarded contracts covered by the McNamara-O’Hara Service Contract Act (“SCA”) to offer employees working under predecessor contracts “a right of first refusal of employment,” with some limited exceptions.  EO 13495 only applied to successor contracts where the work would be performed at the same location on the same contract.  Successor contractors were generally restricted from hiring new employees to work on a recently awarded service contract until provided job offers to qualified employees of the predecessor contractor and kept those open for at least ten days.  EO 13495 also required contractors to provide employees with a workplace notice informing them o their rights or with notices delivered to the employees individually.Although many anticipated that EO 13495 would be promptly rescinded after President Trump was elected, it surprisingly took three years for the Trump administration to rescind it. The new order requires the government to promptly remove all “orders, rules, regulations, guidelines, programs, or policies implementing or enforcing Executive Order 13495,” and it halts all existing investigations or compliance actions based on EO 13495.Practical ImplicationsThe revocation of EO 13495 is a welcome development for federal service contractors as it gives them more flexibility to select employees to work on their service contracts.  In practice, even before EO 13495, successor service contractors usually hired many, if not all, predecessor employees because it allowed for a smoother transition and retained experienced workers with prior training and familiarity with government personnel, facilities, and contract requirements.Many contractors, however, found EO 13495 unnecessarily burdensome because it tied their hands in hiring predecessor employees, and often pressured contractors to offer jobs to employees who were largely unqualified or may have been partially responsible for the predecessor losing the contract.   With the removal of EO 13495, contractors once again have the option to choose which predecessor employees to retain.  It also frees contractors from having to post or provide notices required by the order.Predecessor contractors also now have more ability to enforce noncompetition agreements for employees seeking to go to successors who are competitors, assuming they still are valid under applicable law.  In some instances, employees moving to successor contractors used EO 13495 to argue that noncompetition agreements were unenforceable since it contravened the public policy under EO 13495.This change also reduces the risk of having to accept a predecessor’s collective bargain agreement.   Because EO 13495 required successors to offer jobs to predecessor employees, it made it easier for unions representing predecessor employees to contend that the successor was automatically bound by the collective bargaining contracts as perfectly clear successors under labor law.

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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

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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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In a Long-Anticipated Move, the Trump Administration Revokes Executive Order 13495, Giving Service Contractors More Flexibility when Hiring Predecessor Contractor Employees

Ready, Set, Certify: OFCCP Releases Mandatory Annual AAP Certifications

On October 31, 2019, the Trump Administration revoked Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts (“EO 13495”), removing

In a Long-Anticipated Move, the Trump Administration Revokes Executive Order 13495, Giving Service Contractors More Flexibility when Hiring Predecessor Contractor Employees

This installment of our monthly bid protest <a rel="noopener noreferrer" target="_blank" href="https://www.law360.com/governmentcontracts/articles/1216844/bid-protest-spotlight-jurisdiction-standing-gao-limits">Law360 </a>spotlight examines three protest decisions released in October 2019.  In the first decision, Akira Technologies, Inc. v. United States, COFC No. 19-1160C (Fed. Cl. Oct. 10, 2019), the Court of Federal Claims (COFC) concluded that it does not have jurisdiction to review task order modifications.  In the second decision, American Relocation Connections, LLC, v. United States, No. 2019-1245 (Fed. Cir. Oct. 11, 2019), the U.S. Court of Appeals for the Federal Circuit clarified the difference between the prejudice needed for standing to protest and the prejudice needed for a successful protest on the merits.  In the third decision, Team Wendy, LLC, B-417700.2, Oct. 16, 2019 CPD ¶ ___, the Government Accountability Office (GAO) clarified its limited authority to review bid protests involving the AbilityOne procurement list.<a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2019cv1160-43-0">Akira Technologies, Inc. v. United States, COFC No. 19-1160C (Fed. Cl. Oct. 10, 2019).</a>This protest concerned task orders issued under a multiple award indefinite delivery indefinite quantity (IDIQ) contract.  The Federal Acquisition and Streamlining Act of 1994 (FASA) prohibits the COFC from hearing protests concerning the issuance of task orders.  The protester attempted to circumvent this jurisdictional bar by arguing that it was not protesting the issuance of a task order, but a task order modification.FactsThe U.S. Centers for Medicare & Medicaid Services (CMS) awarded contracts to Akira and C-HIT under SPARC, a multiple award IDIQ contract to modernize CMS identity management systems and to migrate CMS applications to a cloud-based environment.  Both Akira and C-HIT could compete for task orders under SPARC.  CMS awarded one maintenance task order to C-HIT.  Under the task order, C-HIT was required to maintain CMS’s old platform.  CMS also issued a migration task order to Akira.  Under this task order, Akira would be responsible for migrating CMS’ applications to the new platform.After contract performance had begun, CMS decided that it would not exercise the option years on Akira’s migration task order and instead modified C-HIT’s task order to include the necessary migration services.Akira filed a post-award bid protest challenging CMS’s sole-source award decision.  CMS moved to dismiss Akira’s protest for lack of subject matter jurisdiction on the grounds that FASA bars the court from hearing protests in connection with the issuance of a task order, except on the grounds that the order increases the scope, period, or maximum value of the IDIQ contract.  Akira attempted to circumvent the court’s lack of jurisdiction by arguing that it was not protesting the award of the task order, but instead was seeking review of CMS’s task order modification.Holding The court concluded that “[a] protest of a task order modification to acquire additional services directly connected to the services provided in a previously issued task order that does not otherwise increase the scope, period or the maximum amount of the IDIQ contract is a protest ‘in connection with the issuance of a task order.’”  Therefore, the court granted CMS’s motion to dismiss for lack of jurisdiction.First, the court explained that the FAR does not distinguish between new task orders and modifications of task orders.  Here, CMS used a task order modification to order additional services within the scope of the established IDIQ contract.  The court rejected Akira’s argument that a task order modification was different enough from a task order to not fall under the bar.The court further explained that even if a task order modification for additional services is not a task order, Akira’s protest to the task order modification at issue is a protest made in connection with the maintenance task order originally issued to C-HIT.  The modification was directly related to C-HIT’s original maintenance task order work.  The fact that CMS later ordered additional migration services through the task order modification does not defeat FASA’s jurisdictional bar for protests made “in connection with” the issuance of a task order.  Thus, the protest is barred under the plain terms of FASA.Takeaway: The COFC Lacks Jurisdiction to Hear Protests Concerning Task Order ModificationsThe Court’s decision is an important reminder that FASA bars the COFC from hearing protests made in connection with the issuance of task orders.  Contractors should note that the Court does not make a distinction between task orders and task order modifications in assessing its jurisdiction under FASA.  The legislative intent behind FASA was to allow agencies to issue task orders under IDIQ contracts without worrying about protest delays, and subsequent decisions have demonstrated that FASA bars protests over procurement decisions connected to task orders.  The court, therefore, concluded that FASA’s protest bar for any protest “in connection with” the issuance of a task order should be interpreted to include protests concerning task order modifications.<a href="https://www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-1245.Opinion.10-11-2019.pdf">American Relocation Connections, LLC, v. United States, No. 2019-1245 (Fed. Cir. Oct. 11, 2019).</a>American Relocation Connections, LLC (ARC) filed a pre-award bid protest arguing that Customs and Border Protection (CBP) violated Small Business Administration (SBA) regulations by failing to consult with the SBA during its market research for a solicitation for the procurement of employee relocation services.  The Federal Circuit affirmed the COFC’s decision dismissing the protest because ARC could not show that it was prejudiced by CBP’s failure to consult with the SBA.FactsSBA regulations require that agencies setting aside orders placed against multiple award contracts for small business concerns under the Small Business Jobs Act of 2010 “conduct market research to determine the type and extent of foreseeable small business participation in the acquisition.”  13 C.F.R. § 125.2(c)(2).  The regulations require agencies to consult with the SBA during their market research.The CBP had a 2014 contract for employee relocation services that had been set aside for small businesses under the General Services Administration Federal Supply Schedule (FSS).  The CBP decided to re-compete its employee relocation services contract under a different NAICS code.  In preparation for the re-compete, the CBP conducted market research to determine whether the new solicitation should be set aside for small businesses.  Its research found that only one certified small business was available to compete under the assigned NAICS code.  Because there was not enough small business vendors to meet the competition threshold, the CBP issued its request for quotations (RFQ) without restricting the procurement to small businesses.ARC questioned the agency’s decision not to set aside the RFQ for small businesses.  The agency responded that it had changed NAICS codes for the re-compete, and stated that under the new NAICS code ARC was designated as a large business.  The CBP added that, even if ARC were a small business under the applicable NAICS code, there were not enough certified small businesses to meet the competition threshold.ARC initially filed a protest with the GAO.  The GAO concluded that the decision to set aside orders for small businesses was within the agency’s discretion and dismissed the protest.  ARC then filed a pre-award bid protest with the COFC, arguing that that CBP failed to set aside the RFQ for small businesses and failed to consult with the SBA during its market research, as required by 13 C.F.R. § 125.2(c)(2).  The COFC found that ARC was not prejudiced by the CBP’s failure to consult with the SBA during its market research because, even if CBP had consulted with the SBA, there would not have been enough small businesses to meet the competition threshold.  Therefore, the COFC granted the government’s motion for judgment on the administrative record and dismissed ARC’s protest.  ARC appealed the COFC’s dismissal of its protest to the Federal Circuit.HoldingOn appeal, the Federal Circuit agreed with the COFC’s finding that ARC could not show that it was prejudiced by CBP’s failure to consult with the SBA during its market research.First, the Federal Circuit rejected ARC’s argument that it only needed to establish standing to protest the RFQ to show that CBP’s failure to consult with the SBA was prejudicial error on the merits.  The Court explained that there is a difference between whether a protester has alleged an injury-in-fact (or prejudice) to establish Article III standing and whether a protester can prove prejudicial error on the merits:<blockquote>To establish standing in a bid protest case, the protestor must show that it is an ‘interested party’ under 28 U.S.C. § 1491(b)(1), ‘which . . . imposes more stringent standing requirements than Article III.’  Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1359 (Fed. Cir. 2009).  Under § 1491(b)(1), a party must show that it ‘(1) is an actual or prospective bidder and (2) possess[es] the requisite direct economic interest.”  Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006).  In a post-award bid protest, the prospective bidder ‘must show that there was a ‘substantial chance’ it would have received the contract award but for the alleged error in the procurement process.’ Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir. 2003).  In a pre-award bid protest, however, a prospective bidder need only allege a ‘non-trivial competitive injury which can be addressed by judicial relief.’ Weeks, 575 F.3d at 1363.</blockquote>In this case, ARC claimed that CBP failed to comply with SBA regulations requiring agencies to consult with the SBA during market research.  ARC further alleged that if the agency had consulted with the SBA, CBP would have set aside the RFQ for small businesses.  The Federal Circuit acknowledged that if ARC were to succeed on the merits of its claim, and if CBP re‑issued the RFQ as a small business set-aside, then ARC would be in a better competitive position to win the contract.  However, while ARC may have suffered a non-trivial competitive injury and, thus, had standing to challenge the RFQ, this did not necessarily mean that it had shown that CBP’s failure to consult with the SBA was prejudicial error on the merits.In order to show prejudicial error on the merits, the Federal Circuit explained that “ARC must ‘show a significant, prejudicial error in the procurement process,’ meaning it must show that there is a greater-than-insignificant chance that CBP would have issued the 2018 RFQ as a set-aside for small businesses” had it not failed to consult with the SBA during market research.  The Federal Circuit stated that “the record shows that even if CBP had consulted with the SBA during its market research, it would not have issued the 2018 RFQ as a small business set-aside because there were not enough qualifying small businesses to compete under the applicable NAICS code.”  Therefore, the Federal Circuit affirmed the COFC’s dismissal of ARC’s protest.Takeaway: Always Consider PrejudiceThis case serves as a warning to all potential protesters to always think about prejudice.  As the Court pointed out, many bid protest cases allow discussions of prejudice and standing to blend together, but that does not mean that satisfying § 1491(b)(1)’s standing requirements necessarily established that any error committed by the agency was prejudicial error on the merits.  In order to succeed, a protester must always demonstrate that the procuring agency’s mistake was not just a harmless error and that it was prejudiced by the agency’s actions.<a href="https://www.gao.gov/assets/710/702195.pdf">Team Wendy, LLC, B-417700.2, Oct. 16, 2019 2019 CPD ¶ ___.</a>This protest concerned an item on the AbilityOne Commission’s procurement list.  The AbilityOne Commission works with nonprofit agencies to provide employment opportunities for people who are blind or have significant disabilities in the manufacture and delivery of supplies and services to the Federal Government.  The Javits-Wagner-O’Day (JWOD) Act authorizes the AbilityOne Commission to maintain a procurement list of supplies and services provided by qualified nonprofit agencies that train and employ people with disabilities.  AbilityOne’s procurement list is a mandatory source for federal agencies, and the JWOD Act authorizes agencies to engage in noncompetitive procurements for supplies and services on the list.  Nonprofit agencies, such as the National Industries for the Blind (NIB), also help administer the AbilityOne program.  For example, the NIB has the ability to recommend to the AbilityOne Commission whether to add a product to the list.FactsThe procurement at issue in this protest concerned helmet pad inserts used in the U.S. Marine Corps’ enhanced combat helmets (ECH).  The pad inserts are on the AbilityOne procurement list; therefore, under the JWOD Act, the NIB procurement list is the mandatory source for the pad inserts.The Marine Corps issued a request for proposals (RFP) for ECHs.  The RFP stated that the NIB was the mandatory source for the pad inserts.  However, the Marine Corps awarded the contract to Gentex, Inc., and issued a notice of a proposed sole-source award for Gentex’s “Lux Pucks” pad inserts, even though Gentex’s Lux Pucks were not on the AbilityOne procurement list. Team Wendy, LLC, a small business, was previously selected by the AbilityOne Commission to provide the helmet pad inserts listed on the procurement list.  The specific pad insert that Team Wendy produced met the requirements of the Corps’ purchase description.  Team Wendy challenged the Marine Corps’ sole-source award in a GAO protest.  The protest alleged, among other things, that the proposed award was an improper attempt to circumvent the JWOD Act’s mandate to purchase through the AbilityOne program.The Marine Corps took corrective action and advised the GAO that it had canceled the notice of intent and had not awarded a contract pursuant to the notice.  Therefore, the GAO dismissed the protest as academic.After its initial protest was dismissed, Team Wendy learned that the Corps had requested that NIB work with Gentex to add the Lux Pucks to the procurement list.In its second protest before the GAO, Team Wendy argued that the Corps was still attempting to make an improper sole-source award to Gentex.  Team Wendy alleged: (1) the Corps improperly requested that NIB recommend to the AbilityOne Commission that Gentex’s Lux Pucks pad inserts be added to the procurement list, (2) the agency attempted to improperly modify the helmet contract’s requirements for pad inserts to accommodate Gentex’s Lux Pucks, and (3) the Corps failed to implement the corrective action it committed to undertake in response to Team Wendy’s initial protest. HoldingThe GAO held that Team Wendy’s protest grounds regarding the AbilityOne program were matters that the GAO does not review.  The Office explained: “GAO will not consider protests challenging the AbilityOne Commission’s determination regarding items to be included on the procurement list, as such determinations are within the exclusive authority vested in the Commission to establish and maintain the list in accordance with the overall purpose of the JWOD Act.”The GAO concluded that “[a] decision by NIB to propose a Gentex pad insert for addition to the procurement list” is not the type of matter it would review.  “Similarly, a decision by the AbilityOne Commission to accept a recommendation by NIB regarding the addition of a product to the procurement list is not a matter our Office will review” because “they are matters committed to the discretion to the AbilityOne Commission” and its nonprofit partners like NIB.Team Wendy asserted that the GAO should review its protest “because it does not challenge NIB’s discretion to propose the addition of items to the procurement list.”  Instead, the protester alleged that the procuring agency engaged in improper exchanges with the NIB by requesting the addition of Gentex’s pad inserts to the AbilityOne procurement list and argued that the Corps’ “‘ongoing procurement actions constitute an improper use of the AbilityOne program’ to enable the agency to make a sole-source award to Gentex for pad inserts.”The GAO dismissed this argument, explaining: “[f]or purposes of determining whether our Office will review a challenge concerning the addition of a product to the AbilityOne procurement list, we see no difference between an agency’s request to add a product and the AbilityOne Commission’s review of that request.”  The GAO concluded that “these matters are either specifically authorized for procuring agencies or committed to the discretion of the AbilityOne Commission under the JWOD Act and its implementing regulations.” Takeaway: The GAO’s Decision Clarifies its Limited Review of Protests Involving the AbilityOne Procurement ListContractors should take notice of GAO’s limited authority to review bid protests involving AbilityOne procurements.  The GAO’s decision dismissing Team Wendy’s protest demonstrates the Office’s high degree of deference to the AbilityOne Commission’s determinations regarding goods and services to be added to the AbilityOne procurement list.  This deference is warranted because such determinations are “within the exclusive authority” vested in the AbilityOne Commission “to establish and maintain” the AbilityOne procurement list.  As a result, the GAO’s review of protests involving the AbilityOne procurement list is limited to “protests challenging a procuring agency’s actions in the context of the JWOD Act and its implementing regulations.”  For instance, the GAO stated that it would “review whether a procuring agency has met its obligation to procure products from the procurement list or is improperly procuring products that are not on the procurement list.”*Victoria Dalcourt Angle is a member of our Government Contracts practice in our Washington, D.C. office and not admitted to the bar.*Roke Iko contributed to this blog post. Roke is a full-time law student at Georgetown Law and a Law Clerk with Morrison & Foerster’s government contracts practice group.

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October 2019 Bid Protest Round-Up

This installment of our monthly bid protest Law360 spotlight examines three protest decisions released in October 2019.  In the first decision, Akira Technologi

October 2019 Bid Protest Round-Up

On November 5, 2019, the Department of Justice (DOJ) <a href="https://www.justice.gov/opa/pr/justice-department-announces-procurement-collusion-strike-force-coordinated-national-response">announced</a> the creation of a new Procurement Collusion Strike Force (PCSF) focused on deterring, detecting, investigating, and prosecuting antitrust crimes, especially bid-rigging, in government procurement at the federal, state, and local levels.  This follows several criminal indictments in the past year of bid rigging among government contractors, as well as recent statements by senior DOJ Antitrust Division (Division) officials that the DOJ intends to aggressively pursue anti-competitive conduct impacting government purchasers.  Companies who contract with the U.S. government should be aware of this development and several related considerations, including the Division’s recent change of policy incentivizing antitrust compliance programs.Procurement Collusion Strike ForceThe PCSF will be composed of investigators across the federal government, including the FBI, and prosecutors from the Division and 13 participating U.S. Attorneys’ Offices.  The strike force will take the lead on investigation and prosecution efforts.  The stated geographic areas of initial focus will be, among others, Chicago, New York, Los Angeles, Miami, and Washington, D.C.  As part of the announcement, Assistant Attorney General Delrahim (AAG Delrahim) stated that, “The investigation and prosecution of individuals and organizations that cheat, collude and seek to undermine the integrity of government procurement are priorities for this administration . . . [and] we will aggressively investigate and prosecute those who violate our antitrust laws to cheat the American taxpayer.”Creation of PCSF Follows on Recent Emphasis on Prosecutions in Government Procurement This is a significant move that represents an extension of, and increased focus on, the work that the Division has done in recent years related to big rigging in government contracting.First, in November of last year, Assistant Attorney General Makan Delrahim <a href="https://www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-remarks-american-bar-association-antitrust">announced</a> a renewed use by the Division of its authority under Section 4A of the Clayton Act to seek civil treble damages when the government is a victim of antitrust crimes.  Until 2018, the Division has rarely invoked this authority to seek increased financial penalties.  This reinvigorated use of Section 4A significantly increases the financial risk of antitrust violations by government contractors.Second, the Division has several active investigations into government procurement, bringing criminal charges against companies and individuals in three over the past year.  Last November (simultaneous with the Division’s public statement regarding Section 4A), the Division <a href="https://www.justice.gov/opa/pr/three-south-korean-companies-agree-plead-guilty-and-enter-civil-settlements-rigging-bids">announced</a> settlements with three South Korea-based fuel companies for their role in a decade-long bid-rigging conspiracy targeting fuel-supply contracts to U.S. military forces in South Korea imposing treble damages on the companies.  In addition to obtaining $82 million in criminal fines, the DOJ recovered $154 million in civil fines, the largest ever recorded since the enactment of Section 4A.  In that investigation, DOJ has secured five corporate guilty pleas and indicted seven individuals (all South Korean nationals).  In addition to military fuel supply, the Division has active investigations in <a href="https://www.justice.gov/opa/pr/insulation-contractor-branch-manager-pleads-guilty-bid-rigging-and-fraud">government insulation installation contracts</a> and online auctions for <a href="https://www.justice.gov/opa/pr/online-bidder-pleads-guilty-antitrust-charge-rigging-bids-government-auctions">surplus government equipment</a> and has reached multiple criminal pleas with individuals in both.TakeawaysFirst, these developments, along with continued recent public statements by Division leadership that investigations, and prosecutions, in this space are a priority, signal that government procurement will continue to be a strong focus of enforcement moving forward.  Indeed, the announcement states that the PCSF will conduct outreach and training of procurement officials on antitrust risk of the procurement process, which will likely include training officials on spotting red flags of bid-rigging and other fraudulent schemes.  The PCSF will likely face pressure from leadership to bring cases in this space to demonstrate real results from this newly created partnership.Second, in order to mitigate potential antitrust risk, companies who do business with the U.S. government – domestically and abroad – will want to take a fresh look at their antitrust compliance programs.  This is more important now than ever before given the Division’s recent policy change that it will now consider the effectiveness of a violating company’s antitrust compliance when making charging decisions and sentencing recommendations.  Notably, a company could obtain a deferred prosecution agreement (avoiding criminal charges and penalty in exchange for cooperation) or a more lenient financial penalty.  To benefit, companies will want to make sure their compliance programs meet the hallmarks of the Guidelines.  Finally, an added potential advantage of a comprehensive antitrust compliance program could be early detection of a violation, allowing a company to consider reporting its conduct to the Division as part of the Leniency Program.

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Megan E. Gerking is a partner in Morrison & Foerster’s Global Antitrust Law Practice, where she specializes in government-facing antitrust matters. Megan represents companies in criminal and civil con

Megan Gerking

Megan E. Gerking

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DOJ Takes Aim at Collusion in Government Procurement with New Strike Force

CIO-SP4 Draft RFP Implications for JV/Partnerships