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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Marking Commercial Technical Data After Flight Safety

Is Change Around the Corner? One Proposal to Forge Sweeping Changes to Defense Contracting

FAR Reform Now Underway

Deregulating Federal Procurement: Implications of Three Recent Executive Actions

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

Last month, Senator Marco Rubio, Chairman of the Senate Committee on Small Business and Entrepreneurship, released the Chairman’s mark to the Small Business Administration (SBA) Reauthorization and Improvement Act of 2019 (the “SBA Reauthorization Act”).  This legislation aims to modernize and streamline SBA programs, and would be the first comprehensive reauthorization of the Small Business Act in nearly twenty years.  Although the legislation appears stalled, it is likely that many of these initiatives will find their way into future policy initiatives. Here are a few potential changes to track in the SBA Reauthorization Act:<ul><li>Creation of a Centralized Certification Office. With a few exceptions, small business programs are based on self-certification by each firm.  This legislation would create a centralized certification office for firms wishing to participate in the SBA’s Socially and Economically Disadvantaged Business Development Program (8(a)), Women-Owned Small Business Program (WOSB), Service-Disabled Veteran-Owned Small Business Program (SDVOSB), and Historically Underutilized Business Zone Program (HUBZone).  This would increase certainty for Government officials relying on size representations and reduce the number of speculative size and status protests.  However, it may also create logistical and funding complications for the SBA due to the sheer volume of applications.</li><li>Increased Sole Source Authority. To increase the use of sole source awards for small businesses, the legislation would increase the contract-value limit on sole-source awards for the HUBZone, WOSB, and SDVOSB programs – from $6.5 and $7 million to $10 million for manufacturing contracts, and $4 million to $8 million for all other contracts.</li><li>Increased Venture Capital Investment in WOSBs. The legislation would allow women-owned and minority-owned firms to accept venture capital and equity investments that would exceed 50 percent ownership of the firm, so long as those venture capital and equity investment firms are themselves women-owned or minority-owned.  This would allow WOSB and 8(a) entities to accept needed investments and still maintain their program status.</li><li>Joint Venture Control and Workshare Clarifications. The legislation would direct the SBA to issue clarifying regulations relating to control and performance of work requirements for joint ventures under the mentor-protégé program.  Although the current regulations clearly state that the small business must control the joint venture and perform a majority of the work, it is not clear how the SBA actually determines whether the small business has actually met these requirements.  As more and more entities are investing time and resources into applying for the program and forming joint ventures thereunder, additional clarity from the SBA would be a welcome change.</li><li>Permanent Reauthorization of the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) Programs. The SBIR and STTR programs are currently set to expire in Fiscal Year 2022 if they are not reauthorized.  Reauthorization of these programs has been controversial over the years, and small businesses performing research and development would appreciate the consistency of a permanent program.</li><li>Increased SBIR and STTR Funding. Starting in 2024, the SBA Reauthorization Act would increase SBIR funding from 3.2 percent to 6.4 percent of extramural research and development funding and STTR funding from 0.45 percent to 1 percent.</li><li>Increased Venture Capital Access to SBIR/STTR Funds. Continuing the trend of increased venture capital access to these programs, all federal agencies would be allowed to spend up to 25 percent of their SBIR/STTR allocated funds towards entities that are owned in majority by multiple venture capital operating companies, hedge funds, or private equity firms, which is an increase from the current 15 percent cap.</li><li>SBIR/STTR Phase III Education. Despite the success of these programs, there have been continuing challenges in transitioning firms to Phase III.  The SBA Reauthorization Act would encourage federal agencies and prime contractors to educate contracting officers on executing Phase III sole source award contracts for SBIR and STTR programs.</li></ul>Whether these proposed initiatives pass in a single bill or just provide impetus for future reforms, the SBA Reauthorization Act is worth tracking closely.  We will be monitoring the development of these efforts going forward.

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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

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

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

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Highlights From the Currently Stalled Small Business Administration Reauthorization and Improvement Act of 2019

SBA’s Long-Awaited Implementation of the Runway Extension Act Is Finally Here

Last month, Senator Marco Rubio, Chairman of the Senate Committee on Small Business and Entrepreneurship, released the Chairman’s mark to the Small Business Adm

Highlights From the Currently Stalled Small Business Administration Reauthorization and Improvement Act of 2019

How To Handle Intellectual Property Rights In OTs:  The Department of Defense is actively pursuing “Other Transactions” (OTs) instead of procurement contracts. This allows DOD and its contractors to avoid many of the most burdensome aspects of the procurement regulations.  But it also allows for even more confusion than usual about how to handle intellectual property rights, particularly rights in technical data and computer software, because there are no “standard” IP clauses for OTs.Jay DeVecchio has written a Briefing Paper, published by Thomson Reuters, that sorts out these issues and offers clear, practical advice.  With Thomson Reuters’ permission we have attached Jay’s paper, which we hope will assist you in your OT negotiations.Read Jay’s article <a rel="noopener noreferrer" target="_blank" href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltefaca2a1a876415e/627317ca0d4d8e1d7f10f312/190701-dod-data-rights-ip-simplified.pdf">here</a>.

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DOD’s Other Transactions: Data Rights & Intellectual Property Simplified

FedPubs Intellectual Property Series (June 16-30)

How To Handle Intellectual Property Rights In OTs:  The Department of Defense is actively pursuing “Other Transactions” (OTs) instead of procurement contracts. 

DOD’s Other Transactions: Data Rights & Intellectual Property Simplified

Everyone knows that “ignorance of the law is no excuse.”  But what about ignorance of the facts?  In <a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2015cv0962-167-0">Woodies Holdings, L.L.C. v. United States</a>, the Court of Federal Claims recently rejected a Government defense against a contractor claim and an affirmative counter-claim based on the Government’s alleged unilateral mistake of fact.  In this post we’ll take a look at that decision and discuss the particular challenges posed by an argument that one party’s mistaken understanding of facts should lead a court to alter the unambiguous terms of the parties’ contract.  We’ll also note a special procedural hurdle one must clear before being able to raise this argument in an appeal covered by the Contract Disputes Act of 1978 (CDA).The FactsThe General Services Administration (GSA) leases office space for use by federal agencies.  In the 1990s, the GSA initiated a program to create an annual inventory of available properties, with the space available and lease pricing offered to be refreshed by property owners from year to year.  This system allowed the GSA rapidly to meet ordering agencies’ needs by matching their office space requirements and budget constraints to properties available in the inventory.  Because any particular lease might last for several years, the leases provided for price adjustments to account for increases or decreases in the property owner’s local property tax assessment:  the Government was required to make (or entitled to receive) adjustment payments based upon the percentage of the building’s square footage occupied by the Government.  The leases provided:  “The percent of the building occupied by the Government, for purposes of tax adjustments, will be established during negotiations.”  The correct Government occupancy percentage in leases with a particular property owner is at the heart of the Government’s mistake argument in this case.In 2000, a property owner, Woodies Holdings, L.L.C. (Woodies), submitted an offer to rent the GSA a property it owned in downtown Washington, D.C.  The building had both office space and retail space available.  In its offer, Woodies filled in a standard GSA form detailing the building’s space as: 316,420 square feet of rentable office space, an additional 163,609 square feet of retail space, and 480,029 total building square feet.  No lease resulted from this offer.  The following year, Woodies submitted its annual refresher offer to the GSA and provided the year’s available general purpose office space and retail space.  Again, no lease resulted from the offer.In 2002, Woodies tried again, offering the same building for lease and filling out the GSA’s standard form:  372,990 square feet of available office space, 139,240 square feet of retail space, and 512,230 total building square feet.  (The slight variations in building size across these offers was attributable to changing measurements and changes to the space itself.)  This time, the GSA chose Woodies for a lease of 48,410 square feet of office space for use by the Environmental Protection Agency.  The GSA’s negotiator filled out the lease forms to indicate the building (rather than the available office space) measured 372,990 square feet, and the Government occupancy was 12.98% (48,410 divided by 372,990).  The GSA negotiator apparently copied the wrong number from Woodies’ correct offer documents.  Although the GSA had access to “numerous supporting documents originating from Woodies,” as well as publicly available real estate records, no one at the GSA reviewed or verified whether the square footage figures used by the GSA were accurate.By using a smaller denominator in the Government occupancy fraction, the Government’s share of responsibility for any tax increases thus was larger than it would have been with a larger denominator.  When Woodies’ negotiator saw the GSA’s use of 372,990 square feet as the denominator for the occupancy percentage, he assumed this was the negotiated occupancy percentage for tax purposes and a fair number, given the differences between office space and retail space, and he did not object.Over the years, the GSA executed additional leases with Woodies.  In each one, the GSA calculated the Government occupancy percentage based on a total building size of 372,990 square feet, which the GSA personnel apparently copied and pasted from the first lease without attempting to verify the figure.  In 2009, the GSA changed over to an automated system, which did not allow Woodies to submit copies of documents as it previously had done.  When the system asked Woodies for total building size, Woodies’ negotiator entered 372,990 square feet based upon the parties’ prior practice, and followed up with a phone call to the GSA to explain that he used that figure (rather than total building size) for tax purposes based upon the figures to which the parties had agreed in the previous four leases.  The GSA issued a new lease with the usual figure, which Woodies took as confirmation that GSA concurred that was the correct approach.  In reality, it appears no one at the GSA attempted to verify any of the numbers and simply used the square footage GSA always had used.From 2008 to 2012, the GSA made tax adjustment payments to Woodies based upon the Government occupancy percentages incorporated into the leases.  In 2014, with Woodies’ claims for tax adjustments pending, a new GSA lease specialist noticed the discrepancy between the building square footage listed on the leases and the figure reported in other documents.  The specialist took the initiative to request independent real estate records, which confirmed that the building’s total size was 504,221 square feet, which he ensured would be reflected in all new leases.  Based upon the specialist’s calculation that the Government had been paying more than it should have paid for the space it occupied, the GSA denied Woodies’ pending tax adjustment claims for lease years after 2012.  Woodies took the denied claims to the Court of Federal Claims.Legal AnalysisThe court turned first to Woodies’ claims, as the plaintiff bears the burden of establishing its entitlement to damages. The court quickly found that the leases as written unambiguously entitled Woodies to tax adjustment payments at the percentages stated in the leases—approximately $3.5 million, plus interest. The court then considered whether the Government had an affirmative defense capable of defeating Woodies’ established claims.The Government asserted a defense of unilateral mistake of fact, asking the court to reform the contracts—that is, judicially to adjust the occupancy percentage in each lease at issue in Woodies’ claims (and thus the quantum of the claims) to the figure the Government argued was the one that should have appeared in the leases, based upon the total building square footage.  The Government also asserted a counter-claim based on the same argument, asking the Court to order Woodies to repay what the Government claimed had been past overpayments.The court noted that contract reformation is an extraordinary remedy, is rarely available when the alleged mistake is unilateral, and must in all events be supported by clear and convincing evidence—a standard substantially more onerous than preponderance of the evidence, which is the usual standard for establishing a defense:Reformation of a written contract is an extraordinary remedy.  It is generally only available on a showing by clear and convincing evidence that the intent of the parties is not expressed by the written instrument, which is to say that the parties both made the same mistake of fact.  Reformation will not be granted, unless the proof of mistake be of the clearest and most satisfactory character.  Where, as here, the mistake alleged is not mutual, the law requires the unmistaken party to have known, or have had reason to know, of the other party’s mistake.  Otherwise, reformation on the basis that only one party made a mistake is unavailable.Thus, defendant must show by clear and convincing evidence that GSA 1) made a mistake, not having borne the risk of that mistake, as to a basic assumption on which it made the contract; 2) that its mistake had a material effect on the agreed exchange of performance; and 3) either the result is unconscionable, or Woodies knew or had reason to know of it.At *11 (internal citations and quotation marks omitted).The court found a unilateral mistake of fact (for each lease except the one in which Woodies called the GSA to explain the figure used for total building size).  Based upon the testimony of GSA personnel who tried to recall the formation of these leases years before, the GSA did not intend to use a total building space measurement that excluded the building’s retail space.  And the court agreed this mistake affecting price involved a “basic assumption” of the contract and had a material effect on the agreed exchange of performance.The court also found, however, that the GSA bore the risk of that mistake.  A party may bear the risk of a mistake either because the contract itself places the risk on that party, or because the mistaken party failed to take reasonable steps that would have revealed the mistake before contract formation.  The court noted the GSA negotiator’s “cavalier and careless approach to his work, compounded by the equally careless oversight of his superiors, which in turn was facilitated by the agency’s compartmentalization of tasks regarding lease development and oversight, as well as its constantly evolving forms and terminology.”  The court expressed irritation at the testimony of numerous agency employees who testified that it “was not in their job description” to verify the accuracy of figures, despite having the means to do so without much effort.  The court noted only one employee took the initiative years later to investigate the issue after “easily” spotting the longstanding inconsistency in the building size descriptions.  The court found this was “precisely the sort of ‘conscious ignorance,’ or gross negligence, that the law will not countenance when a party seeks to avoid its contractual obligations by claiming it was mistaken.”Although the Government’s mistake defense was already dead, the court then turned to the third and final prong of the test, finding the Government had failed to meet its burden of proving “by clear and convincing evidence” that Woodies knew or should have known of the Government’s mistake.  Although the court thought the question was a close one, it accepted Woodies’ explanation that, although Woodies clearly knew the leases did not reflect the correct total size of its building, it reasonably believed the GSA intended to use the total office space (“the only space the lease was concerned with”) as the denominator of the occupancy fraction for tax purposes.  The court noted that Woodies had raised precisely that issue with the GSA prior to the execution of two leases—which was further indication that Woodies reasonably thought there had been a meeting of the minds.TakeawaysThe main takeaway from this case is that it is very hard to prevail on any claim or defense of mistake of fact, and prevailing on a theory of unilateral mistake is harder still.  That difficulty arises not only from having to meet each of the three prongs of the test for unilateral mistake discussed above, but also from the fact that the standard of proof is “clear and convincing evidence.”  This is a standard more onerous than the ordinary “preponderance of the evidence” standard that applies to most defenses.This case is also a good reminder that parties should undertake reasonable due diligence before signing a contract to be sure they understand the facts that are material assumptions of the bargain.  If a party fails to do so, it may be found to bear the risk of a mistake (as the GSA did here), and a court will enforce the terms of the contract as written.Finally, there is another consideration, which the court here did not address but that could further complicate asserting a mistake defense in a Government contract dispute.  Under the Federal Circuit’s controversial precedent in Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323 (Fed. Cir. 2010), a party asserting a defense to a contract claim must first assert its defense as a separate CDA claim if the defense essentially seeks “an adjustment of contract terms.”  609 F.3d at 1331.  This rule applies to the Government as much as to contractors.  See Raytheon Co. v. United States, 747 F.3d 1342, 1354-55 (Fed. Cir. 2014) (applying Maropakis to bar a Government defense where the defense sought an adjustment of contract terms but was not previously the subject of a contracting officer’s final decision).  At least one post-Maropakis decision of the Court of Federal Claims has rejected a mistake defense on jurisdictional grounds because the contractor failed first to submit a CDA claim to the contracting officer, asserting the mistake and seeking reformation of the contract terms.  TPL Inc. v. United States, 118 Fed. Cl. 434, 444 (2014) (dismissing mutual-mistake defense for lack of jurisdiction under Maropakis).Here, it appears the contracting officer’s 2015 final decision denying Woodies’ tax adjustment claims expressly raised the mistake defense, thus satisfying Maropakis.  (It is a separate question whether that assertion was timely under the CDA’s six-year statute of limitations in light of the court’s finding the Government reasonably should have discovered the mistake as early as the execution of the first lease in 2003.)  Absent a prior assertion of the mistake in a contractor claim (if the contractor is alleging a mistake) or a contracting officer’s final decision (if the Government is alleging it), however, an affirmative claim or a defense of mistake in the midst of litigation of a CDA-covered contract is vulnerable to dismissal for lack of jurisdiction under Maropakis.In short, although the doctrine of mistake is alive and well, it is a very challenging argument to make, and invoking it as a defense in a CDA-covered dispute may entail going through the additional procedural hoops imposed by Maropakis.

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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“Mistake” In Government Contracts

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Everyone knows that “ignorance of the law is no excuse.”  But what about ignorance of the facts?  In Woodies Holdings, L.L.C. v. United States, the Court of Fed

“Mistake” In Government Contracts

The President has issued the third in a series of executive orders (EOs) directed at tightening domestic-preference restrictions in Government procurements covered by the Buy American Act (BAA).  <a href="https://www.govinfo.gov/content/pkg/FR-2019-07-18/pdf/2019-15449.pdf">EO 13881</a> orders the Federal Acquisition Regulatory Council (FAR Council) within 180 days to “consider proposing” a rule with the following features:(i) an amendment to the applicable provisions in the FAR that would provide that materials shall be considered to be of foreign origin if:(A) for iron and steel end products, the cost of foreign iron and steel used in such iron and steel end products constitutes 5 percent or more of the cost of all the products used in such iron and steel end products; or(B) for all other end products, the cost of the foreign products used in such end products constitutes 45 percent or more of the cost of all the products used in such end products; and(ii) an amendment to the applicable provisions in the FAR that would provide that the executive agency concerned shall in each instance conduct the reasonableness and public interest determination referred to in sections 8302 and 8303 of title 41, United States Code, on the basis of the following described differential formula, subject to the terms thereof:  the sum determined by computing 20 percent (for other than small businesses), or 30 percent (for small businesses), of the offer or offered price of materials of foreign origin.The EO directs the FAR Council to consider public comments on the proposed rule and “promptly” promulgate a final rule “if appropriate.”The EO also calls upon the Secretary of Commerce and the Office of Management and Budget to recommend “any other changes to the FAR that the FAR Council should consider in order to better enforce the Buy American Act and to otherwise act consistent with the policy described in section 1 of this order, including whether and when to further decrease, including incrementally, the threshold percentage in subsection 2(a)(i)(B) of this order from the proposed 45 percent to 25 percent.”We will provide further analysis when the FAR Council promulgates a proposed rule.  In the meantime, check out our infographic on the Buy American and Trade Agreements Acts.Takeways:  (1) the EO has no immediate effect on contractors; (2) even if the FAR Council eventually adopts all of the provisions the President has ordered the Council to “consider,” the changes are mainly incremental adjustments to the currently-applicable rules for those procurements covered by the BAA; (3) there potentially will be a significant new 95 percent domestic content requirement specifically for iron and steel end products; and (4) the EO does not appear to contemplate any changes to procurements not covered by the BAA, such as acquisitions subject to the Trade Agreements Act and similar regimes that function as a BAA waiver.

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President Issues New Domestic Preference Executive Order

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The President has issued the third in a series of executive orders (EOs) directed at tightening domestic-preference restrictions in Government procurements cove

President Issues New Domestic Preference Executive Order

In order to provide an overview for busy in-house counsel and compliance professionals, we summarize below some of the most important international anti-corruption developments from the past month, with links to primary resources. This month we ask: What did a federal court have to say about the jurisdictional reach of the U.S. Foreign Corrupt Practices Act (FCPA)? How did the U.S. Department of Justice (DOJ) fare in the latest FCPA prosecution to be tried to a jury? Which companies saw their FCPA investigations come to an end? The answers to these questions and more are here in our June 2019 Top Ten list.Read our <a href="https://www.mofo.com/resources/publications/190716-top-international-anti-corruption-developments.html?utm_source=linkedin&utm_medium=social" target="_blank" rel="noopener noreferrer">client alert</a>.