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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Partner

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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Of Counsel

Jim maintains an active practice in bid protests before the Government Accountability Office and contracting agencies and counsels clients in contract disputes and compliance obligations.

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office. Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters.

James Tucker

<div style="margin-bottom: 15px;" class="videoWrapper"><iframe class="sticky-video" title="Meet Alex Ward, Government Contracts Practice Co-Chair" src="https://www.youtube-nocookie.com/embed/TkliwdSlTaQ?rel=0" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen="1" title="iframe"></iframe></div>J. Alex Ward is co-chair of Morrison Foerster’s Government Contracts and Public Procurement group. His practice covers a full range of government contracts matters, including investigations, bid protests, claims, general litigation, corporate transactions, and counseling. Alex strives in all matters is to provide his clients the highest level of efficient and effective representation.Alex represents contractors in internal and external investigations, disclosures to the government, and qui tam litigation, with great success in reducing or eliminating his clients’ exposure through active engagement with the government. His work in this area includes obtaining numerous declinations and dismissals of False Claims Act cases in their earliest stages, sparing his clients the cost, risk, and exposure of litigation.He has also served as lead counsel in dozens of bid protests involving military and civilian agency procurements of a wide range of products and services, including all manner of pre- and post-award protests in the GAO, the U.S. Court of Federal Claims, and state tribunals, as well as appeals to the U.S. Court of Appeals for the Federal Circuit and size protest appeals before the SBA’s Office of Hearings and Appeals.Alex handles all aspects of the claims process, from the initial assessment and drafting of requests for equitable adjustment through litigation in the Boards of Contract Appeals and the Court of Federal Claims. Alex’s practice also covers the full gamut of other controversies confronting government contractors, including prime-sub, teaming partner, employer-employee, competitor, and indemnification disputes. His litigation work also includes a wide variety of pro bono engagements, in which he has represented both individual and institutional clients in matters ranging from immigration and criminal defense to sustainable procurement and protection of the environment.Prior to joining the firm, Alex served in the U.S. Army as a commissioned officer and an Assistant to the General Counsel of the Army responsible for civil works and international matters, and as a clerk for judges on the U.S. Courts of Appeals for the Armed Forces and the D.C. Circuit. He is a member of the Boards of the Morrison & Foerster Foundation and the Chesapeake Bay Foundation and of Law360’s Government Contracts Editorial Board.

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Alex is co-chair of Morrison Foerster’s Government Contracts and Public Procurement practice. His practice covers a full range of government contracts matters, including bid protests, claims, investigations, corporate transactions, and counseling.

J. Alex Ward

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Morrison Foerster’s Government Contracts Insights blog provides an in-depth analysis of news, developments, and trends impacting government contracting and procurement. Through Insights, attorneys from our nationally recognized Government Contracts and Public Procurement practice will offer a real-time assessment of the statutory, regulatory, legal, and business-related developments that are shaping the industry. This blog will also examine a full array of U.S. and non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Read about our <a href="http://govcon.mofo.com/editors/">Authors</a>.Never miss a post. Subscribe to get real-time updates.

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

Bradley Wine

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James A. Tucker

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

Bid Protest Spotlight: Standing, Relationships, Responsibility

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

New DFARS Regulation on Small Business Affiliate Past Performance

Bid Protest Spotlight: Unclear Criteria, Data Rights, Conflicts

Earlier this month, Deputy Attorney General Lisa O. Monaco <a href="https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-announces-new-safe-harbor-policy-voluntary-self" dir="ltr" target="_blank">announced</a> an important extension of <a href="https://www.justice.gov/d9/speeches/attachments/2023/01/17/criminal_division_corporate_enforcement_policy_january_2023_0.pdf" target="_blank">DOJ’s voluntary self-disclosure policy</a> aimed specifically at incentivizing companies engaged in mergers and acquisitions “to timely disclose misconduct uncovered during the M&A process.” Monaco said that the Department’s goal in rolling out the new policy “is simple: good companies – those that invest in strong compliance programs – will not be penalized for lawfully acquiring companies when they do their due diligence and discover and self-disclose misconduct.”The aptly named Mergers & Acquisitions Safe Harbor Policy (“M&A Safe Harbor Policy”) affords a presumption of declination of criminal charges against the acquiring company if it:<ol dir="ltr"><li>Promptly and voluntarily discloses criminal misconduct discovered in the acquired entity within specified safe harbor periods;</li><li>Cooperates with the ensuing investigation; and</li><li dir="ltr">Engages in requisite, timely, and appropriate remediation, restitution, and disgorgement.</li></ol>Read the <a href="https://www.mofo.com/resources/insights/231031-merge-acquire-voluntarily-self-disclose" target="_blank">full client alert</a>.

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Nathaniel (Nate) Mendell is a partner in Morrison Foerster’s Investigations + White Collar Defense and Privacy + Data Security practice groups and was the former Acting U.S. Attorney for the United States Attorney’s Office for the District of Massachusetts. 

Nathaniel Mendell

Nathaniel R. Mendell

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Carrie H. Cohen, partner, has deep experience in white collar defense, FCPA compliance, federal prosecutions, workplace misconduct  and securities enforcement.

Carrie H. Cohen

Carrie H. Cohen | White Collar Crime + FCPA Lawyer

Carrie H. Cohen has a distinguished record of success in the courtroom handling high‑stakes litigation, with a particular focus on white-collar and securities cases. She is the co-chair of the Women’s Strategy Committee.

Carrie Cohen

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Edward Imperatore is a partner in Morrison & Foerster’s Investigations + White Collar Defense practice group and is a former Assistant United States Attorney for the Southern District of New York (SDN

Edward A. Imperatore

Edward Imperatore is a partner in Morrison & Foerster’s Investigations + White Collar Defense practice group and is a former Assistant United States Attorney for the Southern District of New York (SDNY).

Edward Imperatore

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James Koukios is co-chair of Morrison Foerster’s Securities Litigation, Enforcement, and White Collar Defense Group and 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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Stacey is a member of Morrison Foerster's ESG + Sustainability, Global Ethics and Compliance, and FCPA + Global Anti-Corruption practices.

Stacey M. Sprenkel

Stacey is a member of Morrison Foerster's ESG + Sustainability, Global Ethics and Compliance, and FCPA + Global Anti-Corruption practices. She regularly advises clients on cross-border investigations and developing and implementing anti-corruption compliance programs.What do you like best about your job? I love helping our clients navigate the complex global anti-corruption landscape as they conduct business around the world. Our clients want to get things right and my job is to help them figure out how to conduct business while at the same time minimizing corruption risks. This means understanding current risks, identifying new corruption risks as clients explore new markets and new acquisition targets, and developing and implementing compliance programs designed to mitigate those risks.What do you enjoy diong in your free time? I love traveling and adventures, big and small. Whether it’s exploring restaurants in San Francisco, a weekend in the wine country, or a trip to a far-flung corner of the earth, I am in. I also love hanging out with my dog and reading a good book.What is your favorite book? There are so many. Two that are at the top of my list are George Orwell’s 1984 and John Steinbeck’s The Winter of Our Discontent.

Stacey Sprenkel

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Associate

Sheryl focuses her practice on internal and government-facing investigations, white collar defense matters, 

Sheryl Janet George

Sheryl George

Earlier this month, Deputy Attorney General Lisa O. Monaco announced an important extension of DOJ’s voluntary self-disclosure policy aimed specifically at incentivizing companies engaged in mergers and acquisitions “to timely disclose misconduct uncovered during the M&A process.” 

Merge, Acquire . . . Voluntarily Self-Disclose?

This month’s Bid Protest Roundup focuses on a recent U.S. Court of Federal Claims decision involving the limitations of the government’s deference defense and a U.S. Government Accountability Office (GAO)  that involved the proper application and discretionary nature of the so-called close-at-hand principle.Consolidated Safety Services, Inc. v. U.S.In Consolidated Safety Services, the Court of Federal Claims rebuked the National Oceanic and Atmospheric Administration for a solicitation’s improper North American Industry Classification System code assignment.[i] The court held that NOAA’s assignment was arbitrary, capricious and contrary to Small Business Administration regulations.  Consolidated Safety Services is a reminder that agencies do not have unlimited discretion when selecting NAICS codes for their procurements. More broadly, the case reflects that even a generally reasonable agency decision may be considered arbitrary and capricious if the agency neglects to adhere to relevant statutes and regulations. Statutes and regulations provide essential criteria that an agency must strictly follow and by which its decisions are assessed. Overview of NAICS CodesThe NAICS codes consist of six‑digit numbers and classify businesses based on their primary economic activities.The SBA uses NAICS codes to assess businesses’ eligibility for small business contracting preferences in government procurement.  The SBA assigns specific NAICS codes to industries and sets size standards based on either annual revenue or number of employees, depending on the industry.Relevant FactsOn February 17, NOAA issued a solicitation that contemplated the award of a single blanket purchase agreement with the express purpose of obtaining “necessary scientific, technical, and administrative services to efficiently and effectively support the mission and goals of [the National Centers for Coastal Ocean Science].”[ii]The agency classified the solicitation under the NAICS code for environmental consulting services, which carries a size standard of $19 million in average annual receipts. The disappointed offeror, Consolidated Safety Services, or CSS, could not compete for the procurement because its annual receipts exceeded that amount.CSS filed a NAICS Appeal with the SBA’s Office of Hearings and Appeals, or OHA, arguing that the solicitation primarily involved “performing research, not advising the agency about research.”[iii]  Thus, CSS argued, the agency should have categorized the solicitation under the NAICS code for research and development which has a size standard of 1,000 employees and under which CSS would be considered a small business. The OHA affirmed the agency’s selection of the NAICS code for environmental consulting services. Subsequently, CSS filed a bid protest lawsuit in the Court of Federal Claims, maintaining that the solicitation should be classified under the code for research and development.Court of Federal Claims’ AnalysisIn a lengthy opinion, Judge Matthew Solomson methodically dissected NOAA’s and OHA’s analysis, overturning OHA’s decision and holding that the agency’s environmental consulting services NAICS code designation was contrary to SBA regulatory requirements and that the research and development NAICS code was more suitable.  The court ruled that the solicitation predominantly sought scientific research and experimental development services. This conclusion was evidenced by dozens of research-oriented tasks and subtasks within the solicitation and the fact that over 85% of the solicitation’s labor hours were allocated to various types of research scientists.Critically, the court explained that SBA regulations do not provide the government with maximum discretion to select any reasonable NAICS code — the contracting officer must designate “the proper NAICS code and corresponding size standard in a solicitation, selecting the single NAICS code which best describes the principal purpose of the product or service being acquired.”[iv] While the court acknowledged that the SBA regulations do not require the contracting officer to select the perfect NAICS code  and reasonable minds may disagree, it found that the SBA regulations do require the court to consider whether the contracting officer and OHA reasonably concluded that the NAICS selected was the best description of the solicitation. Thus, the government cannot substantiate its selection of a particular NAICS code simply by asserting that it broadly aligns with the procurement or because the selection is deemed adequately suitable for government work. Further, SBA regulations limit the government’s discretion by noting that procurements are generally classified by NAICS code according to the component that accounts for the greatest percentage of contract value.[v]It is against these limitations that the court considered whether the agency had properly determined the NAICS code.The court found that NOAA and OHA erred in concluding that the solicitation did not seek research and development services. In its analysis, the court looked to the definition of “research” in the NAICS manual, the solicitation provisions that addressed providing administrative, scientific, and technical support to ensure timely delivery of research products, and at the specific tasks and subtasks listed in the solicitation that repeatedly mentioned research in some capacity. In comparison, the solicitation listed very few references to consulting services. In the court’s assessment, neither NOAA nor OHA adequately explained, with reference to the criteria imposed by the SBA regulations, why the NAICS environmental consulting services code best described the work solicited, when the NAICS research and development code was a much better match.The court was especially critical of OHA’s sparse, two-page analysis, which it found erroneously ignored important facts and solicitation details. As the judge stated, OHA’s decision “flatly ignores scores of tasks in the Solicitation that naturally fit the definitions of ‘research’ and ‘experimental development.’”[vi]  The court also took OHA to task for failing to grapple with its own conflicting case precedent on when NAICS research codes should apply. Due to the multiple factual errors, legal flaws, and omissions in OHA’s cursory decision affirming NOAA’s consulting services NAICS code, the court held that OHA acted in an arbitrary and capricious manner.  The court then enjoined the procurement from proceeding under the improper NAICS code and remanded the case to OHA for reconsideration.TakeawaysAlthough Consolidated Safety Services centers on agency NAICS code assignment, it considers the larger theme that agencies are required to adhere to certain regulations and government discretion. This case demonstrates that there are limits to the government’s deference defense. Agencies must offer reasoned justifications rooted in concrete facts and regulatory selection criteria. Explanations that ignore key evidence or past precedent will likely not survive judicial scrutiny.VectorCSP LLCVectorCSP LLC serves as a reminder of the boundaries of the “close-at-hand” principle in evaluating information known to agency personnel but not explicitly included in a proposal.[vii] Vector, the protestor, argued — unsuccessfully — that proposal evaluators should factor their prior knowledge of a predecessor contract, performed by Vector’s subcontractor, into their evaluation of its proposal. This protest emphasizes the risk of relying on evaluators’ presumed knowledge instead of submitting a thoroughly detailed and comprehensive proposal.Close-at-Hand PrincipleThe GAO recognizes the so-called close-at-hand principle, which requires agency evaluators to use their own knowledge when evaluating past performance on work that is “too close at hand” to the current procurement, even if the past performance is not explicitly mentioned in the company’s proposal.For example, if an offeror mentions a previous contract, evaluators may already know details and quality of the past performance under that contract due to their personal experience. In such cases, agencies must use their existing knowledge during the evaluation process.However, this principle does not require agencies to actively seek information beyond what is provided in the company’s proposal for the current procurement. Offerors are responsible for including detailed information in their proposals to ensure a thorough evaluation.  Additionally, the GAO has stated that the close-at-hand principle applies to past performance, but not technical matters.Vector’s ProtestIn Vector, the U.S. Coast Guard issued a task order request for proposals seeking contractor engineering support services. The solicitation outlined three evaluation factors in descending order of importance: corporate experience, management approach, and price. Under corporate experience, offerors were required to include up to four references showing experience similar in complexity and scope to the solicitation, with one reference showing the offeror had performed as the prime contractor. The agency evaluated the proposals and selected THOR Solutions LLC based on its corporate experience and management approach, despite its higher price. Vector filed a bid protest, alleging disparate and unreasonable evaluation of the technical proposals, and a flawed best-value tradeoff. Specifically, under the corporate experience evaluation, Vector challenged the agency’s contention that its second reference, related to the proposed subcontractor’s performance on a predecessor contract, was not relevant. The Coast Guard argued that Vector’s proposal failed to provide the required documentation to consider the scope of the work actually performed, as specified in the solicitation.The GAO disagreed with Vector on all allegations. Particularly relevant was its discussion of the “close‑at‑hand” issue. Vector argued that the agency was unreasonable in deeming the contract reference about its proposed subcontractor as irrelevant and asserted that the agency “entirely ignore[d] that the contract reference is the predecessor to the incumbent contract.”[viii] Vector claimed that this information was “too close at hand” to disregard. However, the GAO clarified that “close-at-hand” information is limited to past performance and does not extend to an experience evaluation. Evaluation under a corporate experience factor is distinct from evaluation of past performance—Under corporate experience, agencies consider an offeror’s technical ability to do the work. The solicitation at issue in Vector provided that references for corporate experience should show “similar technical difficulty, show relevant requirements, and show the company’s experience providing . . . capabilities similar to the requirements of the solicitation.”[ix] In contrast, evaluation under a past performance factor often focuses on the quality of the work performed.  Furthermore, it is the offeror’s responsibility to submit a well-written proposal that can be adequately evaluated; the agency is not obligated to consider close-at-hand information. Here, Vector had failed to provide the required documentation to be properly evaluated. Thus, the allegation was denied.TakeawaysVector illustrates the importance of providing comprehensive details, descriptions and explanations in proposals, rather than hoping evaluators will supplement what is provided with their personal knowledge. Given the discretionary nature of the close-at-hand principle, relying on evaluators to fill gaps in a proposal with their unstated knowledge is risky. While the close-at-hand doctrine may require agencies to consider relevant past performance experience not explicitly referenced in a proposal, under certain circumstances, the doctrine is limited only to past performance. Although corporate experience is very similar to past performance, the GAO has consistently held that they are different things, and the close-at-hand doctrine does not apply to corporate experience evaluations.Even for past performance evaluations, the close-at-hand doctrine applies only in instances where the evaluators have personal knowledge of the past performance and where the protester did not bear the burden of providing more information in its own proposal. There is no substitute for a well-written proposal. If citing a previous contract with which the agency is familiar, offerors should do more than mention the name or number and assume that the similarities are apparent. Offerors should thoroughly explain why the previous contract is relevant and how it correlates to the instant requirement.For IDIQ contracts or BPAs, documentation of specific task orders performed may be necessary. Offerors should not just reference the overall vehicle and expect evaluators to make the connection; they should include all relevant documentation.[i] Consol. Safety Servs., Inc. v. U.S., No. 23-521C, 2023 WL 6173385 (Fed. Cl. Sept. 22, 2023).[ii] Id. at *4.[iii] Id. at *5.[iv] Id. at *2 (citing 13 C.F.R. § 121.402(b)).[v] Consol. Safety Servs. Inc., No. 23-521C, 2023 WL 6173385 at *2 (citing 13 C.F.R. § 121.402(b)(2)) (citation omitted).[vi] Id. at *10.[vii] VectorCSP, LLC, B-421764, B-421764, 2023 WL 6477744 (Sept. 27, 2023).[viii] Id. at *8.[ix] Id. at *2.

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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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GAO Finds CIO-SP4 Solicitation Is Unduly Restrictive of Competition

This month’s Bid Protest Roundup focuses on a recent U.S. Court of Federal Claims decision involving the limitations of the government’s deference defense and a U.S. Government Accountability Office (GAO)  that involved the proper application and discretionary nature of the so-called close-at-hand principle.

September 2023 Bid Protest Roundup: Limits to Agency Discretion in Challenge to NAICS Code Assignments, Confines of the Close-at-Hand Principle

In the right circumstances, an agency-level protest can be a quick and efficient way to address certain procurement errors, <a href="https://govcon.mofo.com/topics/a-road-less-traveled-agency-level-protests" target="_blank">as we discussed a few years ago</a>. One downside of agency‑level protests, however, is their potential for creating doubt or confusion about the deadline for filing a follow-on protest with the Government Accountability Office (GAO). Under atypical facts, even sophisticated parties can miscalculate the GAO’s deceptively simple filing deadline (10 calendar days after adverse action on one’s agency-level protest).  The recent <a href="https://www.gao.gov/assets/870/861754.pdf" target="_blank" dir="ltr">protest of BDO Public Sector, LLC, B-421777.2, Oct. 3, 2023</a>, is a case in point. The story begins, in medias res, with a corrective action, in which the agency requested revised proposals from BDO (the original awardee) and Deloitte (the original protester). BDO filed an agency-level protest to challenge the corrective action, objecting that Deloitte should be excluded from consideration because it had unmitigable organizational conflicts of interest (OCIs) that rendered its proposal ineligible for award. In the protester’s view, a proper corrective action would result in an award to itself, as it was the only other offeror. On September 1, 2023, the agency issued a decision on the protest, in which it conceded that its prior OCI inquiry “may not have been sufficient” and stated “[t]o the extent that the protest calls for cancellation of the LIGHTSABER II award, the protest is sustained.” Indeed, the agency stated it would cancel not only the awarded task order, but also the whole procurement, and would resolicit at a later time. Ten days later, BDO filed a protest with the GAO, objecting to the cancellation as “pretextual and an attempt to avoid further review of the underlying OCIs.”The GAO dismissed the protest as untimely. Although BDO filed its GAO protest within 10 days of receipt of the agency-level protest decision, the agency had given BDO advance notice of what the decision would say, while the formal written decision was still undergoing security review. Specifically, on August 21, 2023, the agency had notified BDO’s counsel: “BDO’s Agency-level protest is sustained in part. The Agency will cancel the solicitation, resolicit its requirement in a manner that suits its best interests, and evaluate offerors for potential OCIs, including as raised in the protest.” Because the protester knew of the intended cancellation on August 21, 2023, any protest of the cancellation was due at the GAO within 10 days of that date—i.e., no later than August 31, 2023. Because BDO did not file its GAO protest until September 1, 2023, the GAO dismissed the protest as untimely. And, because this was a task order procurement, the protester cannot go to the Court of Federal Claims, which lacks jurisdiction over most task or delivery order protests. Takeaways<ul dir="ltr"><li>The 10-day deadline for filing a GAO protest following an agency-level protest begins to run from the moment the protester knows or should know the agency has taken adverse action on its protest. Often that moment is the date of a written decision denying the protest. But, as here, it could be earlier. </li><li>Adverse agency action might be in writing (as it was here), or it might be oral. It can even be no words at all, as when an agency proceeds with receipt of proposals without resolving a pending pre-award protest first. </li><li dir="ltr">Be careful about unintended agency-level protests. Companies sometimes try to engage a customer informally, with a written expression of disagreement about some aspect of a procurement and a request for the agency to do something differently. These communications can easily end up being treated as an agency-level protest (even if the communication is not labeled as such), which then can wreak havoc on subsequent attempts to file a timely GAO protest. It is prudent for legal counsel to vet this sort of communication before one sends it to a procuring agency.  </li></ul>

Timeliness Traps: Adverse Action Before Receipt of a Written Agency-Level Protest Decision

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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Timeliness Traps: Adverse Action Before Receipt of a Written Agency-Level Protest Decision

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The Small Business Administration (SBA) has issued a <a href="https://www.govinfo.gov/content/pkg/FR-2023-10-11/pdf/2023-22466.pdf" target="_blank">final rule</a> amending its regulation on lower-tier small business subcontracting credit to account for statutory changes introduced in the National Defense Authorization Act for Fiscal Year 2020. Most Federal contracts performed in the United States require large-business awardees to adopt subcontracting plans with specified small business subcontracting goals. Since 2016, SBA’s regulations have allowed prime contractors to receive credit for some small business subcontracts below the first tier under certain conditions. The new rule leaves the 2016 regulation largely intact, with a few tweaks. The key features of the amended lower-tier subcontracting rule are the following:<ul><li>A prime contractor may elect to take credit for lower-tier subcontracts only when its subcontracting plan applies to a single contract with one Federal agency. Thus, a prime contractor cannot receive subcontracting credit for lower-tier awards under a Government-wide acquisition contract. Nor can it receive lower-tier credit when using a commercial subcontracting plan applicable to multiple contracts. </li><li>Receiving lower-tier subcontracting credit is at the prime contractor’s option. Prime contractors are not required to avail themselves of this option. </li><li>Prime contractors will be required to report only their own first-tier awards. Lower-tier awards will be reported by the subcontractors that award them. </li><li>Prime contractors will have only one set of subcontracting goals. This removes a complication of the 2016 rule, which required the contractor to maintain one set of goals for first-tier awards and a second set for lower-tier awards. </li><li>Prime contractors will be required to maintain records of the procedures they use to substantiate the lower-tier credit they elect to receive. </li></ul>The new rule goes into effect on November 13, 2023. We note, however, that the FAR Council still has not gotten around to implementing the 2016 regulation and, earlier this year, <a href="https://govcon.mofo.com/topics/back-to-the-drawing-board-far-councils-withdraw-long-delayed-proposed-rule-for-lower-tier-small-business-subcontracting-credit" target="_blank">restarted that effort from scratch</a>. So, if one reads the SBA regulations, lower-tier subcontracting credit is permitted under the above conditions, but if one reads the FAR, credit is still restricted to first-tier subcontracts. This regulatory mismatch will continue to create confusion for both contractors and procuring agencies until the FAR is updated to reflect current statutes and SBA rules.

SBA Updates Its Regulations on Lower-Tier Small Business Subcontracting Credit