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.

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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

Is it finally time to fix the outdated, incomplete, and often misunderstood novation regulations? Maybe. On April 5, 2024, the FAR Council released a Notice and Request for Comments requesting comments from federal contractors related to novation and change-of-name agreements under FAR 42.12. In particular, the FAR Council asks contractors to weigh in on whether the collection of contractors’ information under FAR 42.12 is necessary for the proper performance of the functions of federal government acquisitions. In addition, the FAR Council wishes to receive feedback on its estimated burden of this collection; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the information collection on respondents. Comments are due by June 4, 2024. As anyone who has done a novation knows, practice has moved so far beyond these regulations that it is about time contractors shared their frustrations with this process. Of course, this may also open the door to new unnecessary requirements, so the overall process bears watching.Contractors find themselves engaged in the processes set out in FAR 42.12 for various mundane reasons, including rebranding, sale/acquisition of assets, corporate conversions, internal restructurings, and more.  Unfortunately, novation is rarely mundane, as written, unwritten, real, and imaginary rules are then applied over the course of the months before approval. Indeed, despite assisting with countless novation packages, we regularly are called upon by clients to assist with ongoing agency requests for new, additional information that has no basis for collection in the regulations.  Realistically, some government officials may only see a handful of novation packages over the course of their career, and others may (for good reason) have little background in the mechanics of mergers and acquisitions, often misunderstanding the triggering events for novations. This combination can often result in unnecessary complications, delays, uncertainty, and legal fees.By the book, for a name change, contractors are required to supply the government with three copies of a name change agreement and one copy of (i) the document effecting the name change, authenticated by a proper official of the state having jurisdiction; (ii) an opinion of the contractor’s legal counsel stating that the change of name was properly effected under applicable law and showing the effective date; and (iii) a list of all affected contracts and purchase orders remaining unsettled between the contractor and the government.  See FAR 42.1205. The regulations don’t say that the three copies of the name change agreement need to be wet signed, but many government officials nonetheless impose this unwritten rule.For a novation, contractors face an increased burden, being required to supply the government with three signed copies of the proposed novation agreement with one copy, as applicable, of (i) the document describing the proposed transaction (purchase/sale agreement); (ii) a list of all affected contracts between the transferor and the government; (iii) evidence of the transferee’s capability to perform; and (iv) any other relevant information requested by the responsible contracting officer.  FAR 42.1204(e). Further,  the contractor also must provide (i) an authenticated copy of the instrument effecting the transfer of assets; (ii) a certified copy of each resolution of the corporate parties’ boards of directors authorizing the transfer of assets; (iii) a certified copy of the minutes of each corporate party’s stockholder meeting necessary to approve the transfer of assets; (iv) an authenticated copy of the transferee’s certificate and articles of incorporation (if the entity was formed for the purpose of receiving the assets involved in performing the government contracts); (v) the opinion of legal counsel for the transferor and transferee stating that the transfer was properly effected under applicable law and the effective date of transfer; (vi) balance sheets of the transferor and transferee as of the dates immediately before and after the transfer of assets, audited by independent accountants; (vii) evidence that any security clearance requirements have been met; and (viii) the consent of the sureties on contracts in which bonds are required, or a statement from the transferor that none are required. FAR 42.1204(f). Here, too, the bureaucrats regularly reject novation packages for failing to comply with the non-existing requirement for wet signatures. And auditors are rightly confused as to how it would be possible (or reasonable) to perform a full audit on a company’s finances on sequential days.Thanks to the FAR Council’s invitation for comments, contractors now can do more than grumble under their breath or complain to each other about the manifold inefficiencies and useless red tape. The FAR Council has now provided contractors the ability to weigh in directly on whether the collection of the above information is necessary for the proper performance of the functions of federal government acquisitions, including whether the information has practical utility, the accuracy of the estimate of the burden of the information collection, and ways to minimize the burden of the information collection on respondents, including the use of automated collection techniques or other forms of information technology. Do you have other suggestions for how the government can improve these archaic processes? The FAR Council wants to hear from you, and we encourage all interested parties to weigh in.The notice can be found on the <a href="https://www.federalregister.gov/documents/2024/04/05/2024-07276/information-collection-novation-and-change-of-name-agreements" target="_blank">Federal Register website</a>.

Airing of Grievances: FAR Council Invites Novation Comments

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Damien is a partner in the firm’s Government Contracts & Public Procurement practice. He represents clients in all facets of government contracts transactions, as well as regulatory counseling, subcon

Damien Specht

Damien C. Specht

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

Nicole Giles

Nicole E. Giles

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

Liam M. Bowers

Liam Bowers

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Airing of Grievances: FAR Council Invites Novation Comments

SBA Issues Final Rule on Appeals Process for PPP Loan Review Decisions

Is it finally time to fix the outdated, incomplete, and often misunderstood novation regulations?

This month’s Bid Protest Roundup highlights two Procurement Integrity Act (PIA) decisions from the U.S. Court of Federal Claims and one solicitation interpretation decision from the U.S. Government Accountability Office (GAO).Associated Energy Group v. U.S.In Associated Energy Group, the Court of Federal Claims rejected a disappointed bidder’s challenge to an agency’s handling of an inadvertent disclosure of source selection information as a PIA violation.Relevant FactsIn June 2021, the Defense Logistics Agency (DLA) issued a solicitation for a three-year, firm fixed price contract to provide credit cards to military services for purchase of commercial aviation fuel and related items. The solicitation contemplated award based on one preliminary evaluation factor—whether an offeror’s proposal was at no cost to the agency and a best-value tradeoff considering several factors, including technical approach, management approach, past performance, and price.Associated Energy Group, LLC (AEG) and Kropp Holdings, Inc. (KHI) submitted proposals, and in June 2022, DLA awarded the contract to AEG. KHI protested the award, and the agency took corrective action. After multiple rounds of corrective action and protest, DLA allowed offerors to make unrestricted revisions to their proposals in August 2023.In September 2023, AEG requested updated historical sales data from DLA, arguing that KHI as the incumbent had an unfair competitive advantage because it had access to more current purchasing data. The contracting officer approved the request and prepared a memorandum of record of her reasoning (Amendment 15 Memorandum), but mistakenly sent the memorandum to KHI. The agency never shared the memorandum with AEG. KHI corporate executives read the memorandum and shared it with their legal counsel. Although KHI admitted that both its executives and legal counsel had opened and viewed the memorandum, it confirmed that legal counsel and KHI executives had deleted the memorandum.DLA investigated the unauthorized disclosure in accordance with FAR 3.104-7 and found that the memorandum contained general information that provided no competitive advantage. The agency also found that the disclosure was not made knowingly or intentionally. Thus, the inadvertent, unauthorized disclosure had no impact on the procurement.AEG ultimately filed a protest at GAO alleging: (1) that the disclosure violated the PIA; and (2) DLA and KHI failed to sufficiently mitigate the disclosure. GAO denied the protest, rejecting AEG’s PIA allegation because of the lack of evidence that the disclosure was knowing or intentional. AEG later sought an injunction at the Court of Federal Claims to prevent DLA from proceeding with the procurement.Court’s AnalysisAt the court, AEG argued that DLA made an unauthorized disclosure of competitively useful information and failed to properly mitigate the effects of the unauthorized disclosure, resulting in competitive prejudice. Specifically, AEG alleged the disclosure, when combined with earlier debriefing information revealing AEG’s pricing from the initial award, gave KHI an unfair competitive advantage.The court systematically analyzed four pieces of information from the Amendment 15 Memorandum that AEG considered competitively useful source selection information, finding DLA reasonably concluded none of it was competitively useful, either separately or combined with the earlier pricing disclosure:<ul><li>Disclosure of historical sales data: The fact that AEG used historical sales data to develop its pricing was expected and directed by the RFP. It did not reveal specifics of AEG’s pricing approach.</li><li>Disclosure of AEG’s request for updated sales data: AEG’s request for updated sales data did not alert KHI to any of AEG’s potential pricing previsions.</li><li>Disclosure of DLA’s internal decision-making methodology: DLA’s rationale for releasing the updated data was already apparent and logical.</li><li>Disclosure of AEG and KHI as the only remaining offerors: AEG and KHI remaining as the only offerors was already known or discernable to the parties.</li></ul>The court emphasized the disclosed information contained no competitively useful information, and that AEG’s arguments relied on improper speculation.The court then rejected AEG’s demand for further mitigation beyond deletion, finding it was based on the faulty premise that the disclosure provided KHI an unfair advantage when DLA reasonably determined it did not. Having failed on the merits, the court denied AEG’s request for injunctive relief.TakeawayAssociated Energy Group reinforces agencies’ discretion in handling inadvertent disclosures and assessing competitive impact under the PIA. Contactors should become familiar with the types of information protected under the PIA and remember that disclosure alone is not enough to create a PIA violation.Additionally, contractors should consider the impact of inadvertent disclosure before pursing a bid protest. Even if an agency does inadvertently disclose confidential information and another party sees it, there must be some sort of competitive harm to be considered a PIA violation.Clean Team Janitorial Service, Inc. v. U.S.In Clean Team Janitorial Service, Inc., the Court of Federal Claims addressed the required timeliness for reporting alleged PIA violations and the adequacy of an agency’s investigation into such allegations. The court denied the protest, finding that the protestor timely reported the alleged violations, but the agency’s investigation was sufficient.Relevant FactsClean Team Janitorial Service, the incumbent contractor, protested the award of a follow-on janitorial services contract for a federal law enforcement training facility operated by the U.S. Secret Service (Secret Service). Clean Team alleged that over the course of several months, a contracting agency representative engaged in several inappropriate interactions with its staff:<ul><li>During the week of May 30, 2022, the representative approached Clean Team contract supervisor—a janitorial shift supervisor—and inquired about the number of employees on-site. The representative mentioned that he needed to provide the information to a new company taking over the contract.</li><li>On June 2, 2022, the representative asked the supervisor about her salary. When the supervisor declined to disclose the information, the representative returned with a piece of paper he claimed was part of a new contract being prepared and asked if the number was close to her salary. Later, the supervisor expressed her discomfort and suggested that the representative contact Clean Team headquarters.</li><li>On July 4, 2022, the representative approached additional Clean Team staff members and requested salary information.</li><li>Agency engineering staff initiated several inappropriate conversations with Clean Team staff members regarding contract matters.</li></ul>On August 9, 2022, Clean Team reported the alleged PIA violations to the contracting officer, requesting an investigation and the agency representative’s recusal. The Secret Service procurement division opened an internal investigation, during which the representative admitted to inquiring about the Clean Team supervisor’s salary and mentioning a new contract. The investigation concluded that although the representative engaged in inappropriate market research, his actions did not appear to have been for improper purposes.Follow-On ProcurementOn August 16, 2022, Secret Service reached out to several janitorial services companies in search of potential SBA 8(a) contractors for the follow-on procurement. ICMC Alliance (ICMC) immediately submitted its Capability Statement, and the agency ultimately awarded the contract to ICMC.Clean Team protested the award three times before the GAO, challenging the sole source nature of the follow-on procurement and the completeness of the agency’s investigation into the alleged PIA violations. In response, the agency took corrective action, and the protests were dismissed as academic. On September 15, 2023, the Secret Service again awarded the follow-on contract to ICMC. Clean Team filed protest at the Court of Federal Claims, alleging, in part, the prior PIA violations.Court’s AnalysisThe court first addressed the timeliness of Clean Team’s reporting of the alleged PIA violations. Under statute, a person may not file a protest against the award or proposed award of an agency alleging a PIA violation, and the GAO may not consider that allegation unless the person, “no later than 14 days after the person first discovered the possible violation, reported to the Federal agency responsible for the procurement the information that the person believed constitutes evidence of the offense.”<a href="#_ftn1" target="_self">[1]</a> Clean Team argued that its corporate leadership became aware of the potential violations on July 28, 2022 when janitorial staff first reported the agency representative’s inappropriate inquiries. Under this premise, the company’s August 9, 2022 reporting was timely. In response, the government argued that the 14-day clock began when the interactions between the representative and employees took place, between May 30 and July 4, 2022. The court applied the Federal Circuit’s vicarious liability rule, finding that the timeline began when Clean Team’s headquarters learned of the concerns. The court noted the Federal Circuit’s vicarious liability rule, which states that corporations act through their employees, and an agent’s knowledge is imputed to the principal when employees are acting within the scope of their authority or employment, absent special circumstances. With this rule in mind, it would be inappropriate to impute to a private employer the random musings or questions a government procurement official directs to an on-site member of the janitorial staff. The record did not indicate that the contract supervisor possessed any authority to take official actions on behalf of Clean Team. Thus, the timeline began when Clean Team’s headquarters learned of the concerns. The court reasoned that imputing knowledge of the government official’s inquiries to Clean Team based on the supervisor’s knowledge would force companies to “owlishly monitor on-site employees at every facility or require daily debriefings to mitigate risk, drastically increasing contract prices.”<a href="#_ftn2" target="_self">[2]</a>Next, the court considered the adequacy of the agency’s investigation into the PIA violation allegations. The court found the investigation to be more than sufficient, noting that two sets of federal law enforcement officials reviewed the allegations and interviewed the agency representative on two separate occasions. The court determined that there was no basis in law or fact to find the investigations inadequate.Finally, the court dismissed Clean Team’s allegations that the agency manipulated its estimated contract value to circumvent competition requirements and that the awardee was not an actual SBA 8(a) participant. The court held that despite errors and corrections to the estimate, the agency reasonably concluded that the anticipated award would fall below the regulatory threshold for competitive bidding.TakeawaysClean Team Janitorial Service highlights the importance of timely reporting alleged PIA violations and the deference courts give to agencies in investigating such allegations.Contractors should also ensure that they use clear internal procedures for employees to report suspected PIA violations. Timely reporting is crucial, as a PIA allegation may not be considered in bid protest if the protestor did not report the alleged violation to the agency within 14 days of discovering it.Southern Hog Control, LLCSouthern Hog Control, LLC serves as a reminder about an agency’s capacity to broadly interpret its own solicitation terms.Southern Hog, the protestor, argued – unsuccessfully – that the Department of Veterans Affairs (VA) unreasonably evaluated the awardee’s quotation for wildlife management services because it did not specifically have feral hog experience.Southern Hog’s ProtestIn Southern Hog Control, the VA issued a request for quotations (RFQ) for wildlife management services at Fort Mitchell National Cemetery in Fort Mitchell, Alabama. The agency primarily sought services to address sanitation issues and damage caused by feral hogs, requiring the vendor to trap, reduce, and control the feral hog population using methods delineated in the RFQ.Bidders were to propose a site manager with at least five years of experience performing all tasks in the scope of work and manage employees. The award would be made to the vendor offering the best value, considering technical capability, past performance, and price.The technical capability factor included two subfactors: (1) experience and training of personnel and technical services and (2) understanding of work requirement and performance work plan. Past performance was to be evaluated based on the vendor’s submission of at least three past performance references on projects performed within the last three years that were similar in size, scope, pricing, and vendor’s record of meeting contract requirements and reputation for quality work.The agency selected 3 Squared after evaluating the proposals. In its evaluation, the agency assigned strengths to 3 Squared under the technical capability factor based on its understanding of feral hog control and its current tracking and euthanasia methods and the capabilities of its site manager’s qualifications. It also assigned strengths under the past performance factor for submitting three relevant past performance references—one for feral hog control services.Southern Hog protested, claiming 3 Squared could not meet the technical capability and past performance requirements because it was not a feral hog control company, lacked feral hog control experience, and allegedly planned a “bait and switch” by contacting other firms to hire subcontractors. The agency countered that the RFQ did not require specific feral hog control experience, but rather a site manager with five years of wildlife management and employee supervision experience, and the awardee’s manager met this requirement. On this point, the GAO concurred, finding the RFQ did not require firms to have feral hog control experience, but instead required a site manager to have at least five years of experience with wildlife management and supervisory experience. 3 Squared demonstrated that it met these requirements, therefore the GAO found that the agency reasonably determined that it met the technical requirements.Southern Hog also contended that 3 Squared lacked the necessary feral hog control experience within the last three years to satisfy the past performance requirements. However, the GAO determined that the RFQ did not require past performance references to be specifically related to feral hog control, but rather similar in scope to the broader wildlife management work emphasized in the solicitation. 3 Squared’s quotation included three past performance references that met this standard.GAO also found Southern Hog’s “bait and switch” argument unavailing; the protestor had failed to show that the awardee either knowingly or negligently represented that it would rely on specific personnel without reasonable basis, that the misrepresentation was relied on by the agency, and that the agency’s reliance on the misrepresentation had a material effect on the evaluation results.TakeawayAlthough Southern Hog, seems straightforward on its face, there are a few takeaways that bidders should keep in mind when considering a solicitation.<ul><li>Read solicitation requirements carefully: The solicitation’s exact wording is crucial. In Southern Hog, the RFQ did not require the firm itself to have feral hog control experience, but rather the site manager to have wildlife management and employee supervision experience.</li><li>“Bait and switch” allegations are rarely successful at the GAO unless the protestor can show: (1) that the awardee either knowingly or negligently represented that it would rely on specific personnel that it did not have a reasonable basis to expect to furnish during contract performance; (2) that the misrepresentation was relied on by the agency; and (3) that the agency’s reliance on the misrepresentation had a material effect on the evaluation results. Thus, speculation that the awardee may not be able to support the contract is not enough to adequately assert a bait and switch.</li></ul> <a href="#_ftnref1" target="_self">[1]</a> 41 U.S.C. § 2106.<a href="#_ftnref2" target="_self">[2]</a> Clean Team Janitorial Service, Inc. v. United States, No. 23-1754C, 2024, 2024 WL 1399789 at 9.

Bid Protest Spotlight: Unwitting Disclosure, Agency Deference

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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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Bid Protest Spotlight: Unwitting Disclosure, Agency Deference

GAO Finds CIO-SP4 Solicitation Is Unduly Restrictive of Competition

This month’s Bid Protest Roundup highlights two Procurement Integrity Act (PIA) decisions from the U.S. Court of Federal Claims and one solicitation interpretation decision from the U.S. Government Accountability Office (GAO).

For the second time in as many years, the Department of Defense (DOD) has issued a <a href="https://www.federalregister.gov/documents/2024/02/15/2024-01220/defense-federal-acquisition-regulation-supplement-dfars-buy-american-act-requirements-dfars-case" target="_blank">final rule</a> that brings its Buy American Act (BAA) requirements into alignment with the Federal Acquisition Regulation (FAR). The final rule amends the Defense FAR Supplement (DFARS) Part 225 to introduce a stepwise increase in the percentage of domestic components needed for manufactured end products to qualify as domestically manufactured. The rule leaves untouched the higher threshold for products composed wholly or predominantly of iron or steel. As under the FAR rule, offerors unable or unwilling to meet the increased domestic content threshold remain eligible for award but must compete against the price preference given to domestic end products.New DOD contracts that are subject to the Buy American Act will require components from domestic or qualifying countries to make up at least 65% of a manufactured end product’s cost for the end product to qualify as “domestically manufactured” if delivered between 2024 and 2028. The threshold rises to 75% domestic or qualifying country components for manufactured end products delivered in 2029 and beyond. Previously, a domestic end product needed to contain only 55% domestic components to meet the definition of “domestically manufactured.”The final rule brings the DFARS into alignment with the regulations that apply to non-DOD procurements for the first time since October 2022, when a <a href="https://govcon.mofo.com/topics/220331-far-council-tightens-requirements" target="_blank">FAR rule took effect</a> that introduced the same stepwise increase in domestic content thresholds.  For contractors that sell to both the DOD and civilian agencies, the new alignment between the FAR and DFARS will make BAA requirements more consistent but may make compliance more expensive, given that stricter requirements now apply across the board.The new DFARS rule makes the following changes to BAA requirements for covered DOD contracts:<ul><li>Domestic end products must contain at least 75% domestic components, calculated by the value of components, beginning in calendar year 2029.  For calendar years 2024 through 2028, only 65% domestic components are required.  These thresholds replace the 55% threshold for domestic components that was set in a June 2022 final rule.  An earlier Obama-era rule had set the domestic component threshold at 50%.</li><li>The DFARS rule contains a fallback provision that will allow some contractors to wait until 2030 to comply with the new requirements, just as the FAR rule does.  Contractors may qualify for the 55% fallback rule if no domestic products are available at a higher threshold or if the cost to acquire compliant goods would be unreasonable.</li><li>The new DFARS rule provides for enhanced price preferences for critical items and critical components; however, the enhanced price preferences cannot take effect until the FAR defines which items and components are critical.  Once that list has been defined at FAR 25.105, the enhanced price preference rule will increase reporting requirements for interested contractors.</li><li>One difference between the DFARS and FAR Buy American requirements remains in place: components produced in more than two dozen qualifying countries outside the United States count towards qualifying as a domestic end product. In addition, end products from qualifying countries count as domestic end products. Thresholds for qualifying country end products will increase according to the same schedule as for domestic end products. Qualifying countries include those with a reciprocal defense procurement memorandum of understanding or another international agreement with the United States.</li></ul>Domestic sourcing requirements have become more difficult to navigate following repeated amendments over the last several years.  A single DOD contractor selling the same product might have to up to three versions of the Buy American rule across otherwise equivalent contracts.  The rule change applies only to new contracts; older versions of the Buy American clauses in existing contracts will remain in effect.  As a result, contractors should carefully monitor the requirements that apply to each contract—and each performance year in each contract—and prepare to comply with the 75% threshold.Contracts with a period of performance that spans a change in content threshold will require a change in domestic content during the contract’s performance.  That is, if a three-year contract begins in 2028, those manufactured end products delivered in 2028 must have at least 65% domestic content, but then must increase to at least 75% domestic content if delivered in 2029 and after. The DOD recognized that some contractors, especially those with indefinite-delivery, indefinite-quantity (IDIQ) contracts, might be unable to meet changing domestic content thresholds throughout the performance of a contract.  Alternate domestic content tests will be available for those contracts.  Contractors who receive the alternate test, with permission of the senior procurement executive, will only have to meet the domestic component threshold that applied at award of the IDIQ contract.The following DFARS clauses are amended by the new rule:<ul><li>DFARS 252.225-7000 Buy American—Balance of Payments Program Certificate</li><li>DFARS 252.225-7021 Trade Agreements</li><li>DFARS 252.225-7035 Buy American—Free Trade Agreements—Balance of Payments Program Certificate</li><li>DFARS 252.225-7036 Buy American—Free Trade Agreements—Balance of Payments Program</li><li>DFARS 252.225-7044 Balance of Payments Program—Construction Material</li><li>DFARS 252.225-7045 Balance of Payments Program—Construction Material Under Trade Agreements</li></ul>Updated versions of each clause are dated February 2024.The rule does not alter the exception to the component test for commercially available off-the-shelf (COTS) end products from the United States or qualifying countries. Similarly, the rule does not alter the higher threshold for end products that consist wholly or predominantly of iron or steel: 95% of the components in those end products, as measured by the cost of components, must be manufactured in the United States or qualifying countries.The new domestic content requirements and enhanced price preferences are likely to increase reporting requirements for defense contractors.  We will continue to watch for updates, including the definitions of critical items and components for which the enhanced price preference will apply.Ethan Sterenfeld, a Law Clerk, contributed to the writing of this post.