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.

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

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Forty-five years after enactment of the Contract Disputes Act of 1978 (CDA), contractors and agencies still often struggle to identify what is and isn’t a CDA claim—a term the CDA itself does not define. Until the CDA’s administrative dispute process is complete, a contractor is jurisdictionally barred from bringing its claim (or its challenge to a government claim) to a Board of Contract Appeals or the Court of Federal Claims. For contractors (and agencies) navigating the CDA’s superficially simple procedures and deceptively clear timelines, such uncertainty can jeopardize otherwise meritorious claims.    In <a href="https://cafc.uscourts.gov/opinions-orders/22-1035.OPINION.4-25-2023_2116161.pdf" target="_blank">Lockheed Martin Aeronautics Company v. Secretary of the Air Force</a>, the Court of Appeals for the Federal Circuit provides a clear answer to what a claim is, at least with respect to a contracting officer’s unilateral definitization of an undefinitized contract action (UCA).  Federal Circuit: A Unilateral Definitization Is Not a CDA ClaimUCAs or “letter contracts” are mechanisms that allow an agency to authorize critical contract performance to begin before the parties have settled on all contractual terms and conditions—even price. In a typical UCA scenario, the agency authorizes the contractor to begin work and reimburses a fraction of the contractor’s incurred costs, subject to a cost ceiling, and the parties agree promptly to determine definite terms and figure out a price while performance proceeds. As we have commented before (<a href="https://govcon.mofo.com/topics/undefinitized-contract-action-proposed-rule" target="_self">Undefinitized Contract Action Proposed Rule</a> and <a href="https://govcon.mofo.com/topics/the-basics-of-undefinitized-contractual-actions-ucas" target="_self">The Basics of Undefinitized Contractual Actions (UCAS)</a>), UCAs pose risks to contractors, have a history of abuse, and are supposed to be used only on those rare occasions when it is critical that work begin immediately and there is no time to negotiate definitive terms. See FAR 16.302; DFARS Subpart 217.74. In Lockheed Martin, two UCAs worth billions of dollars remained undefinitized for years before the Air Force unilaterally definitized their terms and set their prices at amounts with which the contractor disagreed. (The fact that the government awarded the contracts as UCAs in the first place and then left them undefinitized for years is a cautionary tale for another blog post.) The contractor treated the unilateral definitizations as government claims and appealed them directly to the Armed Services Board of Contract Appeals. The government moved for dismissal of the appeal for lack of jurisdiction, arguing the underlying claim was really a contractor claim that was never submitted to the contracting officer for a final decision—thus barring an appeal. Is a unilateral definitization a government claim that may immediately be appealed? Or must a contractor first submit its own mirror-image claim to the contracting officer for what the contractor contends the correct definitization amount should be? The latter approach would entail requesting a contracting officer’s final decision on the same question the contracting officer has already decided and proceeding to a Board or the Court of Federal Claims only after receiving a contracting officer’s final decision, which presumably will be the same decision already reflected in the contracting officer’s definitization determination. In a divided opinion, the Armed Services Board held that an earlier Board decision from 1988 compelled it to dismiss the appeal for lack of jurisdiction. Over the dissent of one Board judge, the majority found that the 1988 case was still good law and binding precedent. Based on that precedent, the Board held that, if a contractor disagrees with a contracting officer’s unilateral definitization of a UCA, the contractor must submit its own claim to the contracting officer and wait for a final decision. Until that process is completed, the Board held it lacks jurisdiction over an appeal of the dispute. The contractor appealed, and the Federal Circuit <a href="https://cafc.uscourts.gov/opinions-orders/22-1035.OPINION.4-25-2023_2116161.pdf" target="_blank">affirmed</a> the Board’s decision. The Court acknowledged “it is not always clear whether a claim has been made and, if so, which party made it” and lamented that the CDA itself provides only “minimal guidance” on what a claim may be. Following its own precedent, the Circuit cited the Federal Acquisition Regulation’s definition of a “claim” as a “written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract.” FAR 2.101. The Court found the government’s unilateral definitization of price simply followed the definitization procedures spelled out in the UCAs themselves. The Court determined the contractor was the only party “making a demand or an assertion seeking relief,” and, therefore, only the contractor had a potential claim—one that it must submit to the contracting officer for a final decision before seeking review of the claim by a Board or the Court. This surely is not the result the contractor hoped for, but at least it is a clear and easily applied rule for future contractors to follow.  TakeawaysOver the years, the lack of clarity about what a CDA claim is has caused contractors and agencies many troubles and generated abundant litigation. The uncertainty about definitization claims is now resolved, but plenty of other CDA uncertainty remains. There is the recurring problem of when a request for equitable adjustment is a claim (sometimes it is, and sometimes it isn’t, without a bright-line way to distinguish one from the other). Guessing wrong can cause one to miss crucial deadlines to assert a claim or file an appeal. There is also <a href="http://cafc.uscourts.gov/sites/default/files/opinions-orders/09-5024.pdf" target="_blank">the problem</a> of when one party’s defense to a claim might constitute a separate claim: if a defense is deemed a separate claim, the defending party must run the defense through the administrative disputes process before a Board or the Court may consider it; if the defense isn’t deemed a claim, the party is not required to jump over those procedural hurdles. As Judge Solomson of the Court of Federal Claims <a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2020cv1903-29-0" target="_blank">recently commented in yet another controversy</a> over the definition of “claim,” the lack of clear rules “gives rise to the jurisprudential equivalent of situational ethics, jurisdictional confusion and, thus, extensive litigation,” which is “unfortunate and imposes unnecessary costs on the procurement system and, in turn, the public fisc.” It also can lead to injustice, when a party that does its best to comply with the fuzzy rules but guesses wrong and cannot recover on a meritorious claim. In Lockheed, the contractor was prudent enough both to file its immediate appeal of the definitization as a government claim and submit a contractor claim to the contracting officer—meaning its claim eventually will be judged on its merits, notwithstanding the loss in the Federal Circuit. The contractor’s attorneys clearly were tracking the risks, watching the statute of limitations, and taking steps to mitigate the uncertainty.   Thanks to Lockheed, we now know how to handle definitization-related claims. But, until the powers that be resolve all the other areas lacking clarity, contractors and contracting officers alike would do well to seek good legal counsel when deciding whether a CDA claim may have accrued or been asserted.

Challenging Unilateral Definitizations of Undefinitized Contract Actions: What Is a Claim?

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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Challenging Unilateral Definitizations of Undefinitized Contract Actions: What Is a Claim?

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Forty-five years after enactment of the Contract Disputes Act of 1978 (CDA), contractors and agencies still often struggle to identify what is and isn’t a CDA claim—a term the CDA itself does not define.

Some of you may recall the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2014 from nearly a decade ago. It amended the Small Business Act (SBA) to allow a contractor, under certain circumstances, to receive credit towards its subcontracting plan goals for awards made to small businesses at any tier under the contract. The Small Business Administration issued a final rule in 2016 to implement this reform. The Federal Acquisition Regulation (FAR), however, has significantly lagged behind the SBA regulations, and continues to restrict small business subcontracting credit to first-tier awards.Although the FAR Councils issued a <a href="https://www.federalregister.gov/documents/2019/06/26/2019-12481/federal-acquisition-regulation-credit-for-lower-tier-small-business-subcontracting" target="_blank">proposed rule</a> in 2019 to implement the same reform in the FAR, that rule has still not been finalized. It turns out it never will be. On March 30, 2023, the FAR Councils <a href="https://www.federalregister.gov/documents/2023/03/30/2023-06172/federal-acquisition-regulation-credit-for-lower-tier-small-business-subcontracting" target="_blank">announced the withdrawal</a> of the 2019 proposed rule. The Councils explained that, in 2020, Congress further tweaked the lower-tier subcontracting regime, and the SBA subsequently updated its own regulation in 2022 to reflect those statutory adjustments, mooting the proposed FAR rule from 2019. Rather than tweak the existing proposed FAR rule and finish the job, the FAR Councils will scrap the 2019 rule, open a new FAR case, and start over at some unspecified date in the future. In the meantime, the FAR continues to reflect the pre-2014 version of statutory rules for small business subcontracting, contrary to the current statutory regime and contrary to current SBA regulations. Until the FAR Councils promulgate an up-to-date final rule, contractors should note that new contracts with small business subcontracting plan requirements will continue to impose restrictions that are nearly a decade out of date: “Credit cannot be taken for awards made to lower tier subcontractors, unless the Contractor or subcontractor has been designated to receive a small business or small disadvantaged business credit from an ANC or Indian tribe.” FAR 52.219—9(l) (emphasis added).

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

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Damien C. Specht

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

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

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Back to the Drawing Board: Far Councils Withdraw Long-delayed Proposed Rule for Lower-tier Small Business Subcontracting Credit

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Some of you may recall the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2014 from nearly a decade ago. It amended the Small Business Act (SBA) to allow a contractor, under certain circumstances, to receive credit towards its subcontracting plan goals for awards made to small businesses at any tier under the contract. 

Back to the Drawing Board: Far Councils Withdraw Long-delayed Proposed Rule for Lower-tier Small Business Subcontracting Credit

The UK is pressing ahead with a reform to its government procurement laws that will diverge from the harmonized EU procurement regime that applied in the UK pre-Brexit. The proposals are intended to create a more transparent approach.Whether a different but simplified process is a casualty of Brexit or a benefit depends on your perspective.In 2020, the UK government consulted on a plan to reform public procurement after Brexit and the results of that consultation led to the <a href="https://bills.parliament.uk/bills/3159" target="_blank">Procurement Bill</a> (the “Bill”) that is currently progressing through the legislative process in the UK Parliament. The aim of the Bill is to simplify, streamline, and bring transparency to the UK procurement framework by replacing the current four main procurement regulations with a single Act.What’s new?While the new procurement law contains many familiar aspects from the current UK regime, there are also some significant differences. The key changes include:<ul><li>Replacing the existing five competitive tendering processes with two new processes. The first new option is a single stage tendering process without restrictions on who can submit tenders, and the second option will constitute any other competitive tendering procedures that the contracting authority considers appropriate. While option two lets authorities design more bespoke tendering processes, it also runs the risk of allowing tendering processes to become more complex and inconsistent, and therefore also more time-consuming and expensive. Under the current EU-derived procurement regime, authorities have less flexibility to design their own bid process, but bidders have more certainty as to the type of process that they will need to follow.</li><li>Giving authorities more power to exclude suppliers from procurement. For example, authorities will be able to exclude suppliers for prior poor performance (including failure to meet KPIs) and, in certain circumstances (such as where a supplier has breached the contract and their performance was unsatisfactory), authorities may need to publish a report about contract performance.</li><li>Allowing debarment. The UK government has long hankered after a way to debar certain bidders as a way of punishing government contractors for past prior performance on other projects – but that would have been incompatible with EU law. Freed by Brexit, the Bill provides for a new central list of debarred suppliers that will be compiled through contracting authorities giving notification to the relevant Minister, and Ministers may also have powers to launch investigations into whether a supplier should be excluded from bidding on UK government contracts.</li><li>Increasing transparency to allow for more scrutinization of procurement decisions. For example, authorities must publish notices and other information at various stages of the procurement process, including details about a supplier’s KPI performance, payments under public contracts, and evaluations of unsuccessful bidders. Furthermore, after a contract valued at over £2 million has been awarded, a copy of the contract must be published.</li><li>Creating new procurement objectives. Contracting authorities must bear in mind new objectives when awarding contracts, such as delivering value for money, maximizing public benefit, and acting with integrity.</li><li>Implementing new rules on direct awards and contract modification. For instance, before making a direct reward, contracting authorities must determine whether a supplier is an excluded supplier, and they can only make direct awards to excluded suppliers in narrow circumstances (e.g., where there is an overriding public interest to do so). Also, a contract can be modified where its purpose could otherwise be achieved through a direct award, and new notification obligations may be triggered upon modification.</li><li>Altering remedies for suppliers. Changes to the rules on automatic suspension include reducing the standstill period from ten to eight days (which will make bid protests harder) and introducing a new test for lifting automatic suspensions. The ineffectiveness remedy will be replaced with a new set aside remedy, which is similar to its predecessor but entails new set-aside conditions.</li></ul>What’s next?The Bill is currently under review in the House of Commons and is expected to become law during the course of 2023. However, contracting authorities and other affected organizations will likely have until early 2024 to comply with these changes, because the Bill will come into force at least six months after it becomes law. Any procurements started before the Bill comes into force will continue to be governed under the current procurement regime.Michelle Si-Ting Luo, a Trainee Solicitor in the London office, assisted in the preparation of this article.

UK Procurement Bill: Pursuing Simple and Accountable Procurement

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