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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Govcon GAO Post Award Protest Timeline Article

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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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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

Kevin Mullen, Sandeep Nandivada, James Tucker, and Caitlin Crujido authored an article for Pratt's Government Contracting Law Report sharing 10 factors to consider when contemplating a classified protest."Find a law firm with a sufficient number of experienced bid protest lawyers with the requisite clearances," the authors wrote. "Even in a large firm, few attorneys typically have protest experience, and far fewer still have security clearances. The pool of available talent shrinks even further when high-level clearances are required. For a large, complex classified procurement, a party to a protest will typically need an entire team of cleared attorneys, and they will follow protocols that are different from those governing unclassified protests."Read the <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt48f9760619ebc3fc/64a8b4c5bd3ef87a037403fd/230707-considerations-litigating-classified-bid-protests.pdf" target="_blank">full article</a>.

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Kevin is former Co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. 

Kevin Mullen

Kevin is former co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. He has broad experience in numerous facets of government contracts matters including agency procurements, subcontracting, teaming and joint venture relationships, contract performance issues, intellectual property, compliance matters, due diligence for mergers and acquisitions, and procurement fraud matters.

Kevin P. Mullen

Sandeep Nandivada is a partner in the Litigation Department of Morrison & Foerster’s Washington, D.C. office.

Sandeep N. Nandivada

Sandeep Nandivada

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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Associate

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

Caitlin A. Crujido

Caitlin Crujido

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New DCMA Defective Pricing Pilot Team Will Possess Audit Resolution Authority

Kevin Mullen, Sandeep Nandivada, James Tucker, and Caitlin Crujido authored an article for Pratt's Government Contracting Law Report sharing 10 factors to consider when contemplating a classified protest.

Pratt’s Government Contracting Law Report: Key Considerations for Litigating Classified Bid Protests

Offerors whose proposals are disqualified for immaterial typographical and data input errors will want to read an interesting new protest decision from the Court of Federal Claims. In <a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2023cv0253-34-0">Aspire Therapy Services & Consultants, Inc. v. United States</a>, the Court sustained a protest because the procuring agency did not seek clarification before rejecting a proposal for what the Court found to be an “obvious and typographical” error in the protester’s proposal. While recognizing agencies ordinarily are not required to seek clarifications, the Court found the agency abused its discretion by not requesting a clarification under these facts. Although the Government Accountability Office (GAO) has never adopted such a rule and is unlikely to do so, and Aspire will not bind other judges of the Court of Federal Claims, this case may offer hope to some offerors with otherwise hopeless cases. Background and AnalysisThe error at issue was a mismatch between the 2,366 proposed direct hours appearing in the labor summary of the protester’s proposal and the 2,336 proposed direct hours appearing in its pricing sheet. (If you read that sentence quickly, you may not have noticed the third digits differ in the two figures.) If the labor summary’s figure was correct, the true price would be 0.063 percent higher than shown in the pricing sheet. Review of the math in the pricing sheet showed “with virtual certainty” that the labor summary’s 2,366 was correct, and the pricing sheet’s 2,336 figure was a data entry error. The procuring agency eliminated the discrepant proposal from the competition with no further ado. Likely realizing a protest was almost certain to fail under the GAO’s unforgiving precedents, the disqualified offeror took its protest straight to the Court of Federal Claims. The Government argued the erroneous digit was a material error the offeror could correct only through discussions and a proposal revision, which the agency rationally chose not to permit. The Court discussed the well-established difference between “discussions” and “clarifications.” The chief difference is that discussions under FAR 15.306(d) permit material proposal revisions (and must be offered to all offerors in the competitive range), whereas clarifications under FAR 15.306(a) permit an offeror only to “clarify certain aspects of proposals” and “resolve minor or clerical errors,” and need not be offered to all offerors. The Court rejected the agency’s position that only discussions could resolve the protester’s data entry error. The Court held the Solicitation’s repeated admonition to make sure all figures are consistent did not make perfect consistency a material requirement of the Solicitation. Transposition of one digit—with a negligible effect on total price—was, in the Court’s view, clearly a minor error for purposes of the clarification regulation. The Court also cited Federal Circuit precedents for the principle that clarifications can allow some proposal revision, even regarding price, as well as providing new information that may be essential for evaluation. The Court noted this is particularly true when the error is apparent on the face of the proposal, and when the correct information is already found elsewhere in the proposal. Having found that a clarification could resolve the discrepancy, the Court considered whether it was rational for the agency not to have exercised its discretion under these facts. The Court acknowledged that, under FAR Part 15, clarifications are always within an agency’s discretion. But it noted that, on a few occasions, some judges of the Court have found agencies to have abused that discretion by refusing to seek a clarification. Although there are no bright-line rules, the Court identified four factors that weigh against denying an offeror the opportunity to clarify an error:<ol><li>The error “is especially minor and can be easily corrected.”</li><li>The error is obvious from the face of the proposal.</li><li>The proposal is otherwise very competitive, particularly with respect to price.</li><li>Information elsewhere in the proposal could clarify or correct the error. </li></ol>The Court found all four factors weighed in favor of an exercise of discretion to conduct clarifications with the protester in this case. And the Government provided no rational countervailing reason not to have conducted them. Therefore, the Court enjoined the protester’s exclusion from the competition and directed the agency to allow the protester to clarify its proposal, after which the agency must evaluate the corrected proposal. Takeaways<ul><li>The first takeaway is to strive to submit a proposal without any discrepancies or errors (major or minor) in the first place. </li><li>The Aspire holdings work only for “minor” errors requiring information or alterations that do not materially alter the proposal. The bigger the problem in the proposal, the more likely it is to be an issue that only discussions can remedy. There is a large body of case law at the Court and GAO on where the fuzzy line between the two categories of error lies. </li><li>If an agency rejects your proposal for an error that meets one or more of the four Aspire factors, consider citing Aspire and asking the agency to allow a clarification. This may be more practicable in the context of a pre-award exclusion. </li><li>When considering a bid protest following an exclusion or adverse evaluation due to an error that could have been clarified, there likely is a higher probability of success (on that particular issue) at the Court than at the GAO. The Court, though, does not have jurisdiction to hear task order protests, and an automatic stay is not guaranteed. </li><li>If an agency has a uniform practice of not seeking clarifications without opening discussions, or looking for minor nits to cull proposals without further thought, Aspire provides an incentive to rethink that. The Court’s decision provides a thoughtful regulatory rationale for favoring clarifications as part of good acquisition policy. Clarifications generally remain in the agency’s discretion, and there will be good reasons for opting not to clarify in many cases. Under Aspire, though, an agency should stop to ask whether it has a rational reason for not seeking a clarification, particularly if multiple Aspire factors are satisfied. </li><li>A final caveat: Aspire is not binding on the GAO or any other judge of the Court. And the Federal Circuit has not yet endorsed (or rejected) the proposition that an agency can abuse its discretion by not seeking a discretionary clarification. The Aspire holding is also unusual, as the Court of Federal Claims has only rarely told an agency that it erred by not seeking clarifications in a FAR Part 15 procurement. So, Aspire is not a get-out-of-jail-free card. Each offeror still bears the burden of submitting a well-written proposal. But the decision is at least one potential tool for offerors whose proposals are derailed by some minor error or lack of clarity. </li></ul>

Offerors whose proposals are disqualified for immaterial typographical and data input errors will want to read an interesting new protest decision from the Court of Federal Claims. In Aspire Therapy Services & Consultants, Inc. v. United States, the Court sustained a protest because the procuring agency did not seek clarification before rejecting a proposal for what the Court found to be an “obvious and typographical” error in the protester’s proposal.

Clarifying Minor Errors: The Court Makes an Agency Seek a Clarification

In the extensive chatter since the Federal Acquisition Regulatory Council (“FAR Council”) published an interim rule on the new Federal Acquisition Regulation (FAR) 52.204-27, “Prohibition on a ByteDance Covered Application,” commentators have almost universally advised that if a federal contractor’s employee uses a device in connection with a government contract in any way, TikTok is banned on that device.  These conclusions seem to rely on the common understanding of the term “information technology.”  But both the underlying congressional statute and the new implementing FAR clause adopt a specific statutory definition of “information technology” that is far more nuanced and far from clear in its scope.  Contractors may be ignoring this nuance and reading too much into the clause to their disadvantage.  Rather than assume the ban is more extensive than the text of the interim rule requires, contractors should use the notice-and-comment period to ask the FAR Council to clarify the rule’s intended scope.Statutory and Regulatory FrameworkThe No TikTok on Government Devices Act became law on December 29, 2022, as part of the <a href="https://www.congress.gov/bill/117th-congress/house-bill/2617/text">Consolidated Appropriations Act of 2023</a>, Public Law 117-328 (the “Act”).  The Act requires all federal agencies to follow Office of Management and Budget (OMB) guidance to ensure that TikTok, and any other successor applications or services developed or owned by ByteDance Limited, are removed from all federal information technology.  The Act covers “information technology” as defined in 40 U.S.C.§ 11101(6), which states: <div></div>The term “information technology”—(A) with respect to an executive agency means any equipment or interconnected system or subsystem of equipment, used in the automatic acquisition, storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information by the executive agency, if the equipment is used by the executive agency directly or is used by a contractor under a contract with the executive agency that requires the use—(i) of that equipment; or(ii) of that equipment to a significant extent in the performance of a service or the furnishing of a product;(B) includes computers, ancillary equipment (including imaging peripherals, input, output, and storage devices necessary for security and surveillance), peripheral equipment designed to be controlled by the central processing unit of a computer, software, firmware and similar procedures, services (including support services), and related resources; but(C) does not include any equipment acquired by a federal contractor incidental to a federal contract.On February 27, 2023, the OMB released<a href="https://www.whitehouse.gov/wp-content/uploads/2023/02/M-23-13-No-TikTok-on-Government-Devices-Implementation-Guidance_final.pdf"> </a><a href="https://www.whitehouse.gov/wp-content/uploads/2023/02/M-23-13-No-TikTok-on-Government-Devices-Implementation-Guidance_final.pdf">Memorandum M-23-13</a> (“OMB Memorandum”), which provides guidance on implementing the Act’s mandates.  The OMB guidance also referenced the statutory definition of information technology in 40 U.S.C. § 11101(6), and noted (emphasis added): That definition reaches not only IT owned or operated by agencies, but also IT “used by a contractor under a contract with the executive agency that requires the use” of that IT, whether expressly or “to a significant extent in the performance of a service or the furnishing of a product.”  That definition does not, however, “include any equipment acquired by a federal contractor incidental to a federal contract.”OMB did not elaborate on what it means for a contract to “require[] the use” of particular IT, what a “significant extent” is, or what “incidental” means in this context.On June 2, 2023, the FAR Council published an<a href="https://www.federalregister.gov/documents/2023/06/02/2023-11756/federal-acquisition-regulation-prohibition-on-a-bytedance-covered-application"> </a><a href="https://www.federalregister.gov/documents/2023/06/02/2023-11756/federal-acquisition-regulation-prohibition-on-a-bytedance-covered-application">interim rule</a>, effective immediately, implementing the Act and OMB Memorandum and requiring inclusion of the new FAR 52.204-27 clause in solicitations issued on or after June 2.  The interim rule also calls for modification of indefinite-delivery contracts to apply the FAR clause to future orders, inclusion of the clause in existing contracts when options are exercised or the period of performance extended, and amendment of pending solicitations to add the clause by no later than July 3, 2023. In the “discussion and analysis” preface to the interim rule, the FAR Council stated, in an oft-quoted conclusion:  “The FAR clause at 52.204–27 prohibits contractors from having or using a covered application on any information technology owned or managed by the Government, or on any information technology used or provided by the contractor under a contract, including equipment provided by the contractor’s employees.”  88 FR 36431.  It also notes, however, that the interim rule “uses the statutory definition of ‘information technology’ because Public Law 117-328 does so.  This is different from the FAR definition of ‘information technology’ at 2.101, which excludes imbedded information technology.”  Id.Contributing to the perceived breadth of the interim rule, the FAR Council and Administrator for Federal Procurement Policy have decided to apply the new FAR clause to essentially all federal contracts, including contracts at or below the simplified acquisition threshold; contracts for commercial products and services, including commercially available off-the-shelf (COTS) items; and contracts at or below the micropurchase threshold.  The clause is also a mandatory flowdown in all subcontracts, including those for commercial products or commercial services.Open Questions Create Ambiguity in Application of the RuleAlthough Congress, the OMB, and the FAR Council all use the 40 U.S.C. § 11101(6) definition of information technology, none has explained what the definition means in this context.  This creates ambiguity in the application of the new FAR clause.  This is so because the definition does not encompass all contractor information technology, or even contractor information technology that may somehow relate to a covered contract.  Instead, the definition extends only to equipment that “is used by a contractor under a contract with the executive agency that requires the use— (i) of that equipment; or (ii) of that equipment to a significant extent in the performance of a service or the furnishing of a product.”  (Emphasis added.)  The rule also continues to carve out an exception for “equipment acquired by a federal contractor incidental to a federal contract.”  (Emphasis added.) Ambiguities abound, which prevent anyone from stating with certainty what the scope of this new rule is.  For example, what is the difference between an agency (i) requiring use of equipment, or (ii) requiring use of that same equipment to a significant extent?  The FAR Council, like Congress, joined these two requirements with a disjunctive “or,” so presumably they are intended to be two different categories of requirements.  But, if any contractually required use of the equipment triggers the ban, then required use “to a significant extent” are empty words that simply prohibit what is already prohibited under the first prong of the disjunction.  That is not the way statutes or regulations usually work, so the drafters almost certainly meant something other than what the text seems to say.[1]This mystery notwithstanding, it seems apparent that to meet the definition of “information technology” covered by the new FAR clause, a government agency must have required use of the equipment in connection with a government contract.  This happens with some regularity in terms of government-furnished equipment, or implicit requirements for contractors to use their own equipment to access government systems.  However, explicit agency directives do not generally extend to day-to-day use of company-issued laptops, or employees’ personal devices, to conduct all other work related to government contracts, such as email communications with customers.  Strictly applying the new clause’s text, a specific contractual requirement to use particular equipment would be necessary for the TikTok ban to apply.  There almost certainly would be no such requirement specified in a micropurchase order, or simplified purchase order for a COTS product.  It thus seems there is a significant disconnect between what most observers assume is an intended broad reach of the interim rule, and the textual definition of “information technology” in the rule itself. And what does the carve-out for “any equipment acquired by a federal contractor incidental to a federal contract” mean?  In the absence of an agency requirement for a contractor (or subcontractor) to use its own (or its employees’) information technology equipment in connection with a government contract, wouldn’t most contractor or bring your own device (BYOD) equipment fall within the “incidental” equipment exception? The authors of the congressional statute, the OMB Memorandum, and the interim rule adopted a narrow definition of “information technology” that is at odds with the much more extensive scope that most observers assume the “TikTok ban” has.  Lack of clarity in the statute, the memorandum, and the regulation is stymying contractors’ ability to know precisely what equipment is covered, and how they are supposed to implement the ban.  Ironically, the FAR Council, in concluding that the new clause imposes minimal burdens on contractors, states without providing any guidance:  “It will be particularly important for contractors to clearly explain to their employees when a covered application is prohibited on a personal device used in performance of a Federal contract.”  88 FR 36432.  If procurement attorneys and industry experts can’t explain with certainty what exactly is banned, it is unclear how businesses can be expected to explain it to their employees.   Issues for CommentThe FAR Council has invited industry to submit comments on the interim by August 1, 2023.  We urge impacted contractors, subcontractors, and the trade associations that represent them to accept that invitation.  Among the questions that require clarification are:<ul><li>If an agency does not specifically require use of specific information technology equipment, does that mean such equipment is not covered by the clause? </li><li>What would such a “requirement” look like?  For example, is it a requirement only if the contract itself (or a written order of the contracting officer) states the contractor must use the specific technology?</li><li>How can the clause apply to micropurchases when the mechanisms used for such purchases—primarily use of government purchase cards—often do not involve the flow down or transfer of any formal terms to the “contractor”?</li><li>Does the ban cover any device that sends, receives, or stores data generated in the performance of a government contract?  If so, why does the clause not say that?</li><li>What distinction is meant by use “(i) of that equipment; or (ii) of that equipment to a significant extent in the performance of a service or the furnishing of a product”?  Does the FAR Council mean to say that the equipment is covered only if the contractor is required to use it “to a significant extent” (whatever that means)?  Or is all equipment covered if a contract expressly requires its use, plus any implicitly required equipment only if the contractor actually uses it “to a significant extent”?    </li><li>What does “incidental to a federal contract” mean?  If a contract does not expressly require a contractor to acquire or use particular equipment, does that make the equipment incidental? </li><li>Is use of a personal or company device to answer email from government customers “incidental”?  What about a device occasionally used to take telephone calls from government employees who want to discuss contract performance?  What about devices employees use to log time they spend working on company projects, including covered contracts?</li><li>What about use of a personal or company device to market or sell a product to a government customer?</li><li>Are COTS product manufacturers expected to ban TikTok from every one of their employees’ devices if those employees are in any way involved in the development of a product that the U.S. government purchases?</li><li>In the BYOD context, how does the FAR Council expect contractors to enforce employees’ compliance with the rule?  Is it enough to institute the policy and provide training, or are contractors expected to conduct random checks of the applications employees have on their BYOD telephones?</li></ul>These are just a few of the many questions that spring to mind when reading the imprecise interim rule.  Without clarification and precision in language, some contractors will over-comply, others will under-comply, and no one will be able to figure out who is right. In addition to demanding clarification, industry should advocate for a common-sense balance between the federal government’s legitimate national security concerns and the actual threat posed by the potential presence of TikTok on some contractor employees’ personal devices.  Mitigation measures, such as use of container management features to isolate work-related programs from the remainder of an employee’s device, are a potential option.  Given the prevalence of BYOD policies, such measures are arguably more secure than a mere written policy requesting that employees not use certain apps on the own devices. At the end of the day, a well thought out final rule is needed for the government to address its real concerns about intrusive technology.  No one’s interests are served by broad-brush prohibitions that lack enforcement mechanisms and are difficult to comprehend or implement as written.[1] The OMB, in Memorandum M-23-13, appears to interpret the first prong to refer only to express contract requirements, whereas the second is intended to capture use that is not expressly required but nevertheless comprises a “significant extent” of contract performance.  But that is not what the statute or regulation says.

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

Tina Reynolds

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Locke Bell is a partner in the firm’s Government Contracts & Public Procurement practice.

Locke Bell

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In the extensive chatter since the Federal Acquisition Regulatory Council (“FAR Council”) published an interim rule on the new Federal Acquisition Regulation (FAR) 52.204-27, “Prohibition on a ByteDance Covered Application,” commentators have almost universally advised that if a federal contractor’s employee uses a device in connection with a government contract in any way, TikTok is banned on that device.  These conclusions seem to rely on the common understanding of the term “information technology.” 

When Does the So-Called TikTok Ban Really Apply to Contractors and Their Employees?

This past month, bid protest decisions from both the Government Accountability Office (GAO) and the Court of Federal Claims (COFC) provided important reminders of procedural rules that protesters and intervenors alike must keep in mind if they wish to succeed at either forum. Accordingly, we consider below recent decisions on timeliness, discovery reaching beyond the administrative record, and continuity of SAM.gov registrations.Infotrend, Inc., B-419956.301, May 11, 2023In Infotrend, the GAO dismissed a protest as untimely where the protester’s after-hours interaction with an email containing pre-award debriefing information started the clock for filing.The protester, Infotrend, sought award of a contract under the Department of Health and Human Services, National Institutes of Health (NIH or “the agency”) Chief Information Officer-Solutions and Partners (“CIO-SP4”) contract program.The CIO-SP4 request for proposals (RFP) here contemplated a three-phase proposal evaluation process. As is relevant to this protest, the first phase required offerors to submit self-scoring sheets documenting relevant experience and capabilities. Only those offerors who received high scores during this first phase would advance to the second phase of evaluation.Infotrend timely submitted a phase one response to the RFP but was informed by the NIH that it was not among the highest-rated proposals and therefore would not advance to the second phase of competition. On the same day that the agency provided this notice of unsuccessful offer, Infotrend requested a pre-award debriefing. The agency emailed a pre-award debriefing to Infotrend eight days later; the debriefing email was received by the protester’s designated representative on March 28, 2023, at 5:22 p.m., after the company’s regular business hours.On April 10, 2023, Infotrend filed a protest at the GAO arguing that the agency had failed to reasonably evaluate its proposal in accordance with solicitation terms. Infotrend argued in its protest brief that this filing was timely because, due to its business hours, the debriefing was deemed received on March 29; 10 days following March 29 was Saturday, April 8, and the next day on which the GAO was open was April 10, when Infotrend filed its protest. The GAO pointed out, however, that contrary to this argument, Infotrend had conceded in its initial protest filing that the debriefing was in fact received on March 28.The GAO sided with the agency, dismissing the protest as untimely, for two key reasons.First, the GAO found that the protester had failed to address timeliness adequately in its initial protest pleading, where it stated that the pre-award debriefing was received on March 28 and did not advance its argument regarding the receipt of the debriefing email after business hours. The GAO emphasized that it is the responsibility of the protester to provide all information necessary to establish the timeliness of its protest in its initial protest pleading pursuant to 4 C.F.R. § 21.1(c)(6).Second, the GAO found that, regardless of this insufficient pleading, the debriefing was received on March 28, not March 29, therefore making the April 10 protest filing de facto untimely. The GAO focused on the fact that, despite the debriefing arriving in Infotrend’s CEO’s inbox after business hours, Infotrend’s CEO forwarded the debriefing to other Infotrend employees on that date. While receipt of information outside of normal business hours is generally not considered constructive notice sufficient to start the clock for protest timeliness purposes, the GAO has found that a protester has actual notice of information where, upon receiving information outside of normal business hours, they interact with it in such a way so as to demonstrate receipt. Infotrend argued that its CEO had not actually read the emailed debriefing information, but instead had merely forwarded the email. The GAO found that this failure of the CEO to scroll further down in the email to read the debriefing itself did not counteract the fact that the CEO had notice of the email and the debriefing information contained therein by virtue of opening and forwarding it in the first instance.Takeaways:This decision serves as yet another reminder that protesters should always err on the side of caution when determining whether the GAO may consider a protest timely. Furthermore, if it is required to justify a protest’s timeliness, an argument containing pertinent facts should be presented up front in the initial protest filing.TekSynap Corp. v. United States, No. 23-36C, May 8, 2023In TekSynap Corp., the Court of Federal Claims took the unusual step of allowing limited discovery in a bid protest by granting the motion of the protester, TekSynap, to supplement the administrative record.TekSynap challenged the award of an enterprise management services contract, alleging initially only that the agency had conducted a flawed price realism analysis. TekSynap added, in its amended complaint, that the awardee had made material misrepresentations in its proposal.The material misrepresentation challenge concerned a letter of commitment submitted by the awardee wherein it indicated that a certain individual, Mr. Williams, would be available to perform “without reservation” the duties of a program manager position for the contract, without disclosing that Mr. Williams was both the president of the awardee company and another related company and therefore would be unable to fully dedicate his time to serving in the required key role under the contract. Additionally, during the initial protest of the contract award, Mr. Williams had reached out to a different individual, Mr. Roller, to ask him to instead fill in the key personnel role. TekSynap argued that these alleged misrepresentations were material because key personnel was the most important subfactor under the most important technical factor by which proposals were evaluated.TekSynap then filed a motion to supplement the administrative record and for limited discovery, first seeking to admit relevant declarations by Mr. Roller and another individual who had knowledge of the situation. In response, the awardee sought to admit competing declarations by Mr. Williams and another awardee employee. TekSynap responded with a second motion to supplement the administrative record, wherein it requested permission to depose all of the identified individuals.The court pointed out that supplementation of the administrative record is typically not permitted in bid protests, unless the court is unable to undertake effective judicial review of an agency’s decision without extra-record evidence. Pointing to the material misrepresentation claim and the requirement that TekSynap prove that Mr. Williams was in fact not committed to serving as key personnel, the court found that the protest could only be effectively considered with additional information. Accordingly, the court agreed to limited discovery by permitting TekSynap to depose the three most relevant individuals identified.Takeaways:While bid protests are almost always limited to the administrative record, where additional information is necessary to evaluate the underlying issues, parties may be permitted to conduct additional discovery. While an argument that such discovery is necessary would likely need to be strong to succeed, protesters and intervenors alike should remember that this is a tool available to them at the Court of Federal Claims.Myriddian, LLC v. United States, No. 23-443, May 23, 2023In Myriddian, the Court of Federal Claims granted a preliminary injunction in a post-award protest where it determined that the protest would likely succeed on the merits because company to whom the relevant contract was awarded was not continuously registered in the System for Award Management (“SAM.gov”) during the period required by the solicitation.The protester, Myriddian, sought award of an administrative contract with the Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMMS or “the Agency”). The solicitation indicated that offerors would only be eligible for award where they met all of its terms and conditions. The agency ultimately awarded the contract to Cloud Harbor Economics, LLC (“Cloud Harbor”).Myriddian’s protest sought to enjoin the agency from awarding the contract to Cloud Harbor because Cloud Harbor did not comply with FAR 52.204-7’s mandatory SAM.gov registration requirement, which was incorporated in the solicitation by reference. Myriddian showed Cloud Harbor’s SAM.gov registration had lapsed for a 17-day period between proposal submission and award, in violation of FAR 52.204-7’s requirement that an offeror continue to be registered in SAM.gov from the time it first submits an offer through the time of award.In determining whether Myriddian was likely to succeed on the merits of its protest, thereby justifying (in part) a preliminary injunction, the court considered first whether compliance with FAR 52.204-7 was mandatory. FAR 52.204-7(b)(1) requires that offerors “shall continue to be registered [in SAM.gov] until time of award” in order to be eligible. The court analyzed the plain language of this requirement to mean that an offeror must have been registered in SAM.gov without interruption from submission of offer through award, and found that, because the clause was incorporated into the solicitation, compliance with that requirement was necessary for an offeror to be eligible for award.The court determined that the awardee’s 17-day registration lapse constituted a failure to comply with a solicitation requirement, as set forth in FAR 52.204-7. In making this decision, the court pointed out that the agency did not adequately distinguish between the harm arising from a failure of an offeror to be continuously registered in SAM.gov and the harm that arises when an offeror is not registered in SAM.gov either at the time of proposal submission or at the time of award, both of which are fatal to an offeror’s chance of contract award. Finding that Myriddian was prejudiced by this failure of the agency to adhere to solicitation requirements, the court turned to the other requisite preliminary injunction factors and ultimately enjoined performance of the contract until the bid protest is fully resolved.Takeaways:While companies seeking to do business with the federal government are almost certainly aware that registration in SAM.gov is necessary both at the time that they submit proposals and when they may ultimately receive award, offerors should take care to ensure that their SAM.gov registration does not lapse between those two points in time. As evidenced by this decision, the Court of Federal Claims will interpret solicitation requirements strictly, in line with their clear language, in determining whether grounds for a protest may exist.GAO<a href="https://www.gao.gov/assets/830/820387.pdf" target="_blank">Infotrend </a>COFC<a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2023cv0036-70-0" target="_blank">TekSynap Corp. v. United States</a> <a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2023cv0443-34-0" target="_blank">Myriddian, LLC v. United States </a>

May 2023 Bid Protest Roundup: Timeliness, Discovery, Registration Gap

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May 2023 Bid Protest Roundup: Timeliness, Discovery, Registration Gap

GAO Finds CIO-SP4 Solicitation Is Unduly Restrictive of Competition

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This past month, bid protest decisions from both the Government Accountability Office (GAO) and the Court of Federal Claims (COFC) provided important reminders of procedural rules that protesters and intervenors 

On June 1, 2023, the Supreme Court issued a decision in United States ex rel. Schutte v. SuperValu, Inc., clarifying when a defendant “knowingly” submits a false claim for payment under the False Claims Act (FCA). The Court held that a defendant that submits a false claim does so knowingly when it subjectively believes the claim is false at the time of submission. We have been tracking this decision in our FCA Newsletter and our Government Contracts Insights as it changes the law of several circuits, which had held that an FCA defendant has not knowingly presented a false claim if its claim was consistent with an “objectively reasonable interpretation” of the relevant law, regardless of what the defendant believed about the claim.Read the <a href="https://www.mofo.com/resources/insights/230606-look-to-defendants-subjective-beliefs" target="_blank">full client alert</a>.

United States Supreme Court: Look to Defendant’s Subjective Beliefs to Decide Whether It “Knowingly” Submitted False Claim

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Adam L. Braverman is a partner in Morrison Foerster’s Investigations + White Collar Defense practice. Adam formerly served as an Associate Deputy Attorney General for the U.S. Department of Justice (DOJ) and as the U.S. Attorney for the Southern District of California. 

Adam L. Braverman

Adam L. Braverman is a partner in Morrison Foerster’s Investigations + White Collar Defense group. He represents companies and their executives in internal and government investigations, white collar criminal defense matters, and parallel civil litigation related to allegations of bribery, government procurement fraud, COVID-19 and CARES Act fraud, anti-money laundering violations, and matters involving organized crime.