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.

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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March Bid Protest Roundup (Law360 Spotlight)

March Bid Protest Roundup (Law360 Spotlight) | Government Contracts Insights

James A. Tucker

Neither rain nor sleet nor quarantine restrictions stop bid protests or our monthly roundup.  Thus far the virus has not resulted in dramatic changes to GAO processes, as they have been almost completely electronic from the start.  It is possible, though, that contractors may see more written debriefings, debriefings conducted by phone, or delayed debriefings, all of which may have impacts on potential bid protests.This installment of our <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt857f4bc6fa40688b/627318db220ab5285f519155/200406-march-bid-protest-roundup.pdf" target="_blank" rel="noopener noreferrer">monthly Law360 bid protest spotlight</a> examines three protest decisions addressing challenges to unavailability of key personnel, disparate evaluations, and NAICS code designations.  In NCI Information Systems, Inc., the GAO found an awardee had no responsibility to inform the procuring agency of a key person’s alleged unavailability during the pendency of corrective action where the awardee lacked actual knowledge of the alleged unavailability before the re-affirmation of its award.  In Office Design Group, the Court of Appeals for the Federal Circuit adopted an existing Court of Federal Claims standard for deciding disparate-treatment allegations.  In Paradigm Engineers & Constructors, PLLC, the Court of Federal Claims established a “plausibly related” test in reviewing NAICS code designations.______________________<a href="https://www.gao.gov/assets/710/705402.pdf" target="_blank" rel="noopener noreferrer">NCI Information Systems, Inc.</a><a href="#_edn1" name="_ednref1">[i]</a> involved the unavailability of key personnel—a protest ground that has become increasingly common—and what happens when a key person becomes unavailable during post-protest corrective action, but the offeror learns that fact only after the agency has reaffirmed its initial award.AnalysisAmong various other protest grounds, the protester alleged that one of the awardee’s proposed key personnel became unavailable during voluntary corrective action taken in response to a prior protest.  The protester argued that, under the GAO’s precedents, the awardee should have notified the agency of the alleged unavailability.  Because the awardee did not do so, and because its key person allegedly was not available as of the agency’s decision to reaffirm the original contract award, the protester argued the awardee was ineligible for award.  The protester’s basis for alleging unavailability appears to have been an internet search that supposedly showed the key person changed jobs and moved to Arizona during the pendency of the prior protest.The agency countered that re-evaluation of key personnel was not within the scope of the corrective action and, in any event, the allegedly unavailable person had not given notice of unavailability.  As far as the agency and awardee were aware, the person (who was proposed as a contingent hire) remained available as proposed, in accordance with his signed commitment letter, which he had not revoked.The GAO found it unnecessary to resolve whether the proposed key person was actually unavailable, as the awardee provided a declaration that it had no actual knowledge of unavailability and the proposed key person, who was another company’s employee, had not rescinded his commitment letter.  The GAO found this lack of actual knowledge of unavailability was sufficient to deny the protest ground: “While an offeror generally is required to advise an agency where it knows that one or more key employees have become unavailable after the submission of proposals, there is no such obligation where the offeror does not have actual knowledge of the employee’s unavailability.”Because it resolved the protest ground on actual knowledge, the GAO did not address a much more interesting question.  The agency argued there is no legal basis for protesting the unavailability of key personnel in the context of corrective action that does not include re-evaluating key personnel.  One also might question, regardless of the scope of corrective action, whether the GAO’s rule for reporting key personnel unavailability that occurs before award even applies when the key personnel (allegedly) become unavailable only after the initial award decision (but prior to the conclusion of corrective action).  The GAO left those questions for another day.TakeawaysLong drawn-out procurements can present a number of challenges, including how to keep proposed key personnel available for an indefinite period of time.  The time required for protests and potential corrective action to play out only exacerbates that difficulty.  If the COVID-19 pandemic ends up delaying procurements (which seems like a reasonable possibility), more of these issues may be seen.  As long as the GAO maintains its current requirement to self-report any discovered unavailability of key personnel—sometimes long after the proposal was submitted—offerors will remain in the difficult position of trying to remain reasonably assured of continuing availability of their proposed candidates while simultaneously not putting themselves in the position of unnecessarily gaining actual knowledge of a disqualifying problem they will have to report.______________________In <a href="https://www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-1337.Opinion.3-6-2020_1546225.pdf" target="_blank" rel="noopener noreferrer">Office Design Group</a>,<a href="#_edn2" name="_ednref2">[ii]</a> the Federal Circuit adopted COFC’s “substantially indistinguishable” test in assessing a protester’s allegations of disparate treatment in the evaluation of proposals. The protester alleged the Department of Veterans Affairs (VA) unfairly downgraded its proposal to supply healthcare furniture and related services, alleging that its proposal was “sufficiently similar” to the awardees’ proposals to merit the same ratings. Unfortunately for the protester, all three tribunals that heard the protest found the argument unconvincing.The VA issued five nearly identical solicitations to supply goods and services across five geographic regions, intending to award four or five contracts per region.  The protester submitted an offer for all five regions.  The VA found all of the protester’s proposals technically unacceptable.  Under one of the solicitation’s evaluation subfactors, offerors had to answer 33 yes-or-no questions, which the agency would convert into points.  A passing score for the subfactor was 40 points.  The protester received 12 points.After failing to convince the GAO or COFC that it was the victim of disparate treatment, the protester appealed to the Federal Circuit on the same grounds, alleging seven examples of disparate treatment.AnalysisThe protester had no better luck on appeal.  The Federal Circuit observed that it had not previously articulated a standard for assessing disparate evaluation protest grounds.  The court noted that to prevail at the Claims Court, a protester must show the agency unreasonably downgraded the protester’s proposal for deficiencies which were “substantially indistinguishable” or “nearly identical” to those contained in proposals that were rated differently.  The Federal Circuit adopted the lower court’s precedents and held that, unless a protester makes such a showing, a reviewing court should dismiss the protest.  Doing otherwise would give a court “free reign [sic] to second guess the agency’s discretionary determinations,” exceeding its mandate.The court then identified four ways in which the protester’s proposal was “substantially distinguishable” from the winning proposals, including its failure to address hardware and software requirements, staff experience with applicable codes and standards, and whether its staff would use AutoCad or PDFs to produce the requisite drawings.  For these reasons, the court determined the protester could not prevail on the majority of its disparate treatment claims.The Federal Circuit found the protester did succeed in establishing disparate treatment in two instances, entitling it to six additional points. However, the resulting additional six points were insufficient for the protester’s proposal to be found acceptable under the stated evaluation criteria.The errors being de minimis, the court found the protester was unable to show prejudicial error from the two evaluation errors, and affirmed the lower court’s dismissal.TakeawaysThe Federal Circuit’s adoption of the “substantially indistinguishable” or “nearly identical” standard now provides binding precedent for disparate treatment arguments brought to COFC.  The Federal Circuit’s citation of five COFC cases invoking the same standard of review provides further guidance to would-be litigants in determining just what counts as substantially indistinguishable.<a href="#_edn3" name="_ednref3">[iii]</a>______________________<a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2019cv2014-38-0" target="_blank" rel="noopener noreferrer">Paradigm Engineers and Constructors</a><a href="#_edn4" name="_ednref4">[iv]</a> involved an allegation that the VA assigned an incorrect NAICS code to small-business set-aside procurement and that the Small Business Administration (SBA) Office of Hearings and Appeals (OHA) wrongly upheld the assignment of that code.  The VA sought to renovate a Medical Center building and issued a pre-solicitation notice for design services, setting the solicitation aside for Service-Disabled Veteran-Owned Small Businesses. The Statement of Work called for renovation designs and the replacement of second-story windows and the heating, ventilation, and air-conditioning (HVAC) systems in the building.  What was the proper NAICS code to characterize that work?In the pre-solicitation notice, the contracting officer initially referenced NAICS codes for both Engineering Services and Architectural Services, despite a regulatory requirement to select a single code.  The VA, realizing its error, issued the formal solicitation with the NAICS code Engineering Services only, and a corresponding size standard of $16.5 million.  In response to the solicitation, the VA received five proposals, including that of the protester, Paradigm. After the receipt of proposals, the VA changed its mind again and amended the solicitation to replace the Engineering Services NAICS code with the Architectural Services NAICS code, and that code’s corresponding size standard of $8 million.The change in NAICS codes—and thus in size standards—prejudiced Paradigm, as it qualified as a small business under the $16.5 million standard but not under the much smaller $8 million standard.  Paradigm first appealed the changed designation to OHA, which affirmed the solicitation’s designation as proper, finding the VA had properly considered the primary purpose of the procurement.  Unsatisfied with the result, Paradigm then took the case to the Court of Federal Claims (COFC), appealing both the VA’s assignment of the final NAICS code and OHA’s decision upholding that assignment.AnalysisCOFC, after finding jurisdiction to review OHA’s decision under the Tucker Act, found the plaintiff a “prospective bidder” who “diligently pursued its rights” in alleging a “non-trivial competitive injury,” as so had standing as an interested party.  The court noted, however, its own “highly deferential” posture on review of any agency’s procurement decisions, and that decisions of OHA judges warrant “special deference” given the judges’ “administrative expertise and . . . familiarity” with the SBA regulatory scheme.  The court summarily dismissed the direct challenge of the VA’s decision for lack of jurisdiction, leaving only the OHA decision before the court.The protester argued that OHA’s decision was arbitrary, capricious, and an abuse of discretion because engineering-related salary costs were the largest cost component of the Independent Government Cost Estimate (IGCE).  The government countered that OHA’s decision, based on the actual description of the work required, was rational and that Paradigm failed to meet its burden in surmounting the “special deference” afforded to OHA decisions.  The court found the government’s argument more persuasive.The record showed that OHA compared the scope of the work as described in the solicitation with the descriptions found in the NAICS Manual.  OHA found the work did not “involve applying physical laws and principles of engineering,” as designing the HVAC system did not qualify as “cutting-edge engineering.”  Rather the work mostly entailed designing the renovations, which fit “squarely within the definition” of the Architectural Services NAICS code.The court found unpersuasive the protester’s allegation that OHA ignored the IGCE in making its determination, because each of the labor categories Paradigm pointed to as engineering-related also related to architectural services: Supervisors, Designers, Drafters, Specification Writers, and Typists.  The protester sought to buttress its defense at oral argument by analogizing to RLB Contracting Inc.,<a href="#_edn5" name="_ednref5">[v]</a> a case in which both the contracting officer’s and OHA’s determinations were found arbitrary and capricious.  The court distinguished the earlier precedent, in which both the contracting officer and OHA failed to quantitatively analyze the extent of dredging work the contract contained, on the basis that here OHA properly “looked behind the tasks in the Statement of Work” in determining that “design[ing] the HVAC, window replacement, bid plans, and construction plans” properly constituted “design services.”  Thus, the principal purpose of the solicitation was to procure Architectural Services.The court found that OHA’s application of the “principal purpose” test accorded with the FAR and the SBA’s regulations.<a href="#_edn6" name="_ednref6">[vi]</a>  Although the regulations provide that procurements are “usually” classified according to their greatest cost component, an agency retains discretion to conduct its own principal purpose analysis.  The court announced that, “when two NAICS Codes may be plausibly related and the Agency’s choice is upheld by the OHA with reasoned explanation for that choice, this Court has nothing further to do.”The court did do more, however, and considered the protester’s alternative challenge that OHA erred by ignoring the VA’s use of the Engineering Services NAICS codes in allegedly similar procurements in the past.  The court noted that, in 2011, the FAR Council removed the requirement to consider previous procurements as a basis for NAICS code determinations.  The amended SBA and FAR regulations give “primary consideration” to the NAICS Manual, the product or service description, the relative value of components, and the function of the goods or services.<a href="#_edn7" name="_ednref7">[vii]</a>  The court determined that OHA’s interpretations of the regulations were consistent with the regulatory text, which was specifically amended to remove the prior language requiring comparison to previous procurements, and were reasonable.TakeawaysIn Paradigm, the Court of Federal Claims drew a bright-line rule that where two NAICS codes are “plausibly related” to a procurement, OHA need only to provide a “reasoned explanation” supporting its decision to uphold the agency’s choice.  Would-be protesters should bear in mind the high bar to overcome the court’s “special deference” to OHA’s administrative expertise in matters pertaining to size standards and associated NAICS codes.<a href="#_ednref1" name="_edn1">[i]</a> NCI Information Sys., Inc., B-417805.5 et al., Mar. 12, 2020.<a href="#_ednref2" name="_edn2">[ii]</a> Office Design Grp. v. United States, 2019-1337 (Fed. Cir. Mar. 6, 2020).<a href="#_ednref3" name="_edn3">[iii]</a> See Enhanced Veterans Solutions, Inc. v. United States, 131 Fed. Cl. 565, 588 (2017); Red River Comput. Co. v. United States, 120 Fed. Cl. 227, 238 (2015); Sci. Applications Int’l Corp. v. United States, 108 Fed. Cl. 235, 272; Chenega Mgmt., LLC v. United States, 96 Fed. Cl. 556, 585 (2010); Hamilton Sundstrand Power Sys. v. United States, 75 Fed. Cl. 512, 516 (2007).<a href="#_ednref4" name="_edn4">[iv]</a> Paradigm Engineers and Constructors, PLLC v. United States, No. 19-2014C (Fed. Cl., Mar. 25, 2020).<a href="#_ednref5" name="_edn5">[v]</a> RLB Contracting, Inc. v. United States, 118 Fed. Cl. 750 (2014).<a href="#_ednref6" name="_edn6">[vi]</a> FAR 19.303(a)(2) and 13 C.F.R. § 121.402(b).<a href="#_ednref7" name="_edn7">[vii]</a> 13 C.F.R. § 121.402(b)(1) and FAR 19.303(a)(2). *Markus Speidel is a Law Clerk in the Washington, D.C. office and is not admitted to the bar.

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