Morrison Foerster’s Government Contracts Insights provides our in-depth analysis of developments and trends impacting government contracting. Through Insights, our attorneys offer a real-time assessment of the statutory, regulatory, legal, and business-related developments and trends that are shaping the industry. We also examine a full array of non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Morrison Foerster’s nationally recognized Government Contracts and Public Procurement practice represents the world’s leading companies in the aerospace and defense, intelligence, cybersecurity, information technology, financial and professional services, education, healthcare, infrastructure, and logistics support sectors. We are enlisted to address our clients’ most complex and important legal issues. Our work includes contract and subcontract negotiation and other transactional matters, business and regulatory compliance counseling, internal investigations, bid protests, and a wide array of enforcement and litigation matters. Our clients range from Fortune 50 companies to small and medium-sized companies just entering the public sector. We advise both U.S. and non-U.S. companies involved in municipal, state, federal, and non-U.S. procurement matters.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Tina is Co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmaceutical companies, with a focus on general contract counseling and compliance, particularly concerning intellectual property, and cybersecurity matters and federal grant funding.Tina counsels contractors on compliance with federal, state and local acquisition and ethics regulations and with the evolving myriad of requirements pertaining to data security and cybersecurity. She has been involved with numerous internal investigations and compliance reviews, and with mandatory and voluntary disclosures to agencies, and litigation of False Claims Act matters.Tina routinely advises clients concerning:<ul><li>Prime-subcontractor relationships</li><li>Sources of supply and country of origin requirements</li><li>Price reductions and price reporting issues</li><li>Organizational conflicts of interest</li><li>Safeguarding of intellectual property and other proprietary interests</li><li>Licensing and data rights issues</li><li>Handling of classified materials and controlled unclassified information</li><li>Agency suspension and debarment proceedings</li></ul>She also assists clients with due diligence and other activities related to the acquisition of government contracting concerns, and with the drafting and negotiation of teaming agreements, subcontracts, licensing agreements, and cooperative research and development agreements. She also assists clients applying for federal grants (including SBIR and STTR agreements), and those who seek to obtain other transactional authority agreements, as well as those competing for state and local government work.Tina’s litigation experience includes government contracts claims litigation in federal courts and before boards of contract appeals, bid protests before the Government Accountability Office and the Court of Federal Claims, and complex disputes in federal courts, including civil fraud and False Claims Act litigation and reverse Freedom of Information Act litigation.Prior to joining Morrison Foerster, Tina worked at another large national firm and as a trial attorney in the Office of the General Counsel of the Navy, Navy Litigation Office.<h4>Representative Experience</h4><ul><li>Negotiation of largest CHIPS Act federal funding agreement between multinational semiconductor corporation and U.S. Department of Commerce.</li><li>Negotiated prime contract and major subcontracts related to the Department of Energy’s next generation supercomputer program, including extensive IP rights negotiations and negotiation of associated patent rights waivers.</li><li>Negotiated series of other transaction authority agreements with DARPA and associated subcontracts with more than a dozen research universities on behalf of a firm biotech client, including complex IP rights allocations and material transfer agreements.</li><li>Assist clients with FedRAMP authorization process and with development of license agreements for software products sold to federal, state and local government agencies.</li><li>Cyber incident response counseling to some of the largest companies and organizations impacted by security incidents.</li><li>Advises clients on Bayh-Dole reporting of inventions and IP strategies for contracts and grants.</li><li>Conducts due diligence for major government contract mergers and acquisitions.</li></ul>

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Tina is co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She counsels a wide variety of government contractors on compliance with federal acquisition and ethics regulations. She drafts and negotiates contracts on their behalf and has been involved with numerous internal investigations and compliance reviews, and with bid protest, contract claims, and False Claims Act litigation. She also advises on M&A transactions involving government contractors.

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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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This article is part of a monthly column that provides takeaways from recent bid protest cases. This installment highlights three decisions from the U.S. Government Accountability Office.

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Bid Protest Spotlight: Rule Of Two, Post Award, Cost Request | Government Contracts Insights

Alissandra Young McCann

This article is part of a monthly column that provides takeaways from recent bid protest cases. This installment highlights three decisions from the U.S. Government Accountability Office.Each of this month's decisions addresses a different type of challenge: a solicitation challenge during the course of corrective action, a post-award bid protest and a protester's request for recommended costs. From the "rule of two," to the Trade Agreements Act, to a recommendation for protest costs, each of these GAO decisions offers distinct, helpful reminders for both contractors submitting proposals and unsuccessful offerors looking to file protests.Knudsen SystemsKnudsen Systems Inc. involves the rule of two, and the market research that agencies must perform when setting aside contracts for small businesses.<a href="#_ftn1" target="_self">[1]</a>Specifically, under Section 19.502-2(b) of the Federal Acquisition Regulation, agencies are required to set a procurement aside for small businesses where the procurement is valued over the simplified acquisition threshold, and there is a reasonable expectation that at least two responsible small business concerns will submit offers and that award will be made at a fair market price.This is commonly known as the "rule of two." When setting aside a procurement for small businesses, agencies are required to perform adequate market research to ensure the rule of two is met.In Knudsen Systems, the U.S. Department of the Navy, Naval Undersea Warfare Center issued a solicitation for sonar sounding sets as a small business set-aside under North American Industry Classification System, or NAICS, code 334511, which is a manufacturing NAICS code.When a set-aside solicitation is assigned a manufacturing code, an offeror must either be a small business that manufactures the item being procured or qualify as a small business nonmanufacturer.To qualify as a small business nonmanufacturer, the offeror must, among other requirements, supply an end item of a small business manufacturer in the U.S., or obtain a waiver of such requirement.When the Navy initially issued the solicitation, it indicated that the Small Business Administration had issued a class waiver for the NAICS code. However, after the submission of proposals and after the Navy completed its evaluation of those proposals, it discovered that the SBA had not in fact issued a class waiver. The Navy therefore notified Knudsen Systems that it was ineligible for the award because it had proposed supplying the end product of a company from Canada, not from a U.S. small business.Knudsen Systems subsequently protested that decision, and the Navy took corrective action, and stated it would amend the solicitation to implement the correct nonmanufacturer rule status and conduct discussions to enable offerors to revise their proposals.After the Navy implemented the amendment to the solicitation, Knudsen Systems filed another protest, this time challenging the terms of the amendment.Specifically, Knudsen Systems challenged the Navy's decision to continue to set aside the procurement for small businesses in light of the amended terms of the solicitation removing the class waiver.Knudsen Systems argued that the Navy could not have performed adequate market research to find that the rule of two was still satisfied if there was no class waiver, and offerors had to either manufacture the end products themselves or supply end products manufactured by U.S. small businesses.In an Aug. 9 decision, the GAO agreed with Knudsen Systems, explaining that GAO precedent provides that where the nonmanufacturer rule applies to a solicitation, and the agency's market research fails to consider whether the firms identified in the market research can comply with the rule, the market research is unreasonable.Because the Navy's market research for the initial solicitation included an incorrect assumption that the class waiver applied, it did not consider whether small businesses could provide end products of U.S. small businesses. Therefore, the Navy could not rely on its initial market research to support its decision to continue to set aside the procurement after issuing the amendment.TakeawaysThis case is not only a reminder to agencies to ensure that they conduct adequate market research when setting aside a contract, but also a reminder to potential offerors that there is an avenue at the GAO to challenge an agency's decision to set aside a contract for small businesses.Offerors that may not qualify as small for a particular set-aside solicitation should monitor amendments to the solicitation for potential additional opportunities to make such a challenge.HPI FederalIn HPI Federal LLC, the GAO addressed whether the U.S. Air Force's acceptance of an awardee's representation of TAA compliance in a task order proposal was reasonable. The awardee's task order proposal was in response to an Air Force request for quotations, or RFQ, for the provision of certain information technology products.<a href="#_ftn2" target="_self">[2]</a>The Air Force issued the RFQ to holders of Client Computing Solutions III Blanket Purchase Agreements, which were issued pursuant to the holders' respective General Services Administration federal supply schedule contracts.The TAA requires that products be wholly made either in the U.S. or in a designated country, or substantially transformed in form, fit, or function in the U.S. or in a designated country.The RFQ required offerors to "provide a confirmation that the [quoted] end product for each product category is [TAA] compliant under the terms of this solicitation as required by [the offeror's] GSA schedule contract."Each offeror's blanket purchase agreement established a requirement that products must comply with the TAA. In addition, the blanket purchase agreements required, in accordance with Defense Federal Acquisition Regulation Supplement 252.225-7021 on trade agreements, that offerors provide a trade-agreements certificate pursuant to DFARS 252.225-7020 for each product offered in response to any solicitation issued under the blanket purchase agreement.The awardee, Transource Services Corp., provided a certification that certain LG monitors in its proposal were "assembled [in] Mexico, a TAA compliant country."However, HPI Federal LLC argued in its bid protest that it was unreasonable for the Air Force to accept this certification because it only related to assembly of the product. It did not specifically certify that the end product is an end product of Mexico.Agreeing with the protester, the GAO's Aug. 9 decision found that the Air Force could not rely on the certification because a product is not necessarily an end product of the country in which it was assembled, as assembly alone may not constitute substantial transformation.To constitute a reasonable determination, the Air Force was required to further investigate whether assembly in Mexico was, in effect, a confirmation that the monitors were the end product of Mexico.Because the Air Force did not determine that assembly of the proposed monitors in Mexico amounted to a substantial transformation of the monitors, the GAO found that the Air Force unreasonably determined that Transource had provided confirmation of TAA compliance.Thus, the GAO sustained the protest on this ground.<a href="#_ftn3" target="_self">[3]</a>TakeawaysThis case serves as a reminder for both offerors and protesters. Offerors should be mindful that if a solicitation requires certifications of TAA compliance, the language of such certifications should clearly address the TAA's requirements. Protesters should remember that TAA certification compliance is a potential protest ground to raise in such situations.NextStep TechnologyNextStep Technology Inc. is a case about a protester's submission of a request for recommended costs.<a href="#_ftn4" target="_self">[4]</a>If an agency takes corrective action in response to a protest, the GAO may recommend that the agency reimburse the protester for the cost of filing and pursuing the protest, including reasonable attorney fees, consultant fees and expert witness fees, and bid and proposal preparation costs.NextStep Technology Inc., a small business, protested the U.S. Army's award of a task order for programmatic support services to Gemini Industries Inc. The GAO subsequently conducted an outcome prediction conference call, during which the GAO indicated it would likely sustain NextStep's protest.As a result of the outcome prediction, the Army notified the GAO that it intended to take corrective action by terminating the award to Gemini, canceling the RFP and reviewing the agency's current requirements. It also asked the GAO to dismiss the protest as academic.NextStep objected to the dismissal request and asked the GAO to include a recommendation for the Army to pay NextStep its reasonable costs of filing and pursuing its protest.On Sept. 5, 2023, the GAO declined to issue a recommendation for the Army to pay NextStep's reasonable costs of filing and pursuing the protest and granted the Army's request for dismissal as academic.The GAO also notified NextStep that if there was a dispute about whether the agency would agree to reimburse NextStep, it could file a request for recommendation in accordance with Title 4 of the Code of Federal Regulations, Section 21.8.Under that regulation, a request for recommendation is due within 15 days after the date on which the protester learned — or should have learned, if earlier — that the GAO had closed the protest based on the agency's decision to take corrective action.Almost two months later, on Oct. 27, 2023, NextStep submitted a letter directly to the Army requesting reimbursement in accordance with Section 21.8(e).NextStep and the Army argued over the request for several months, until the Army issued a final determination on April 5, 2023, denying NextStep's request. Ten days later, on April 15, NextStep filed a request with the GAO seeking a recommendation for the reimbursement of costs.The Army corresponded with NextStep for several months regarding NextStep's Oct. 27, 2023, request, thus leading NextStep to believe it had followed the proper procedure. However, in an Aug. 16 decision, the GAO applied its regulations' strict timeliness rules. The GAO found that because NextStep did not file its request with the GAO within 15 days of the GAO dismissing the protest as a result of the agency taking corrective action, the request was considered to be untimely.TakeawaysThis case is an example of a hard lesson learned regarding strict adherence to where and when a protester can file a request for a recommendation to pay reasonable costs of filing and pursuing a protest.To avoid making the same mistake as NextStep, successful protesters should remember to file such requests with the GAO within 15 days of a protest being dismissed due to an agency's taking corrective action.<hr class="divider"><a href="#_ftnref1" target="_self">[1]</a>Knudsen Systems Inc., B-422433.2, Aug. 9, 2024, 2024 EL 3916166.<a href="#_ftnref2" target="_self">[2]</a>HPI Federal LLC, B-422583, Aug. 9, 2024, 2024 WL 3823852.<a href="#_ftnref3" target="_self">[3]</a>The protester raised an additional protest ground regarding the RFQ's requirement to certify countries of origin for certain component parts of proposed end products. However, the GAO denied this protest ground, finding that the awardee's certification was sufficient.<a href="#_ftnref4" target="_self">[4]</a>NextStep Tech. Inc. - Costs, B-421743.2, Aug. 16, 2024, 2024 WL 3876124.

Bid Protest Spotlight: Rule Of Two, Post Award, Cost Request

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