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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Our government contracts and procurement attorneys counsel businesses on legal and compliance issues encountered when doing business with government entities.

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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.

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James A. Tucker

Kickstarting AI in the Federal Government: OMB’s Policy to Implement Executive Order 14179

Bid Protest Spotlight: Instructions, Price Evaluation, Standing

FAR Overhaul Underway

FedRAMP 20x: Reformulating the Authorization Process

Court of Federal Claims Confirms Jurisdiction over Other Transaction (OT) Bid Protests

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This month’s bid protest roundup highlights three protest decisions released by the Government Accountability Office (GAO) and the Court of Appeals for the Federal Circuit (Federal Circuit) in March. The first discusses an offeror’s exclusion from the competitive range for failing to comply with the solicitation’s font type. The second involves an agency’s failure to conduct an adequate price analysis. The third confirms the Court of Federal Claims’ dismissal of a protest challenging a since-expired one-year, sole-source bridge contract award for lack of standing.Horizons Youth ServicesIn Horizons Youth Services, the solicitation established, that proposal volumes were to use 8.5 x 11-inch paper with margins of at least 1 inch and use font type Times New Roman, Arial, Garamond, or Calibri, with a font size 12 point or larger, with the exception of graphics, charts, and tables. The solicitation warned offerors that any pages in excess of the page limit would not be read or considered and any failure to comply could result in the proposal’s elimination from the competition.The agency’s technical evaluation panel reviewed Horizon’s proposal and found that Horizon used Arial Narrow font, which was different from the required Arial font and took up less horizontal space than Arial. As a result, it was impossible to confirm whether the proposal met the required page limit. The contracting officer reviewed the proposal and concluded that use of Arial Narrow allowed for at least three pages of additional text beyond the limit, giving the firm an unfair competitive advantage over other offerors who complied with the formatting requirements. Accordingly, Horizons was eliminated from the competition. This protest followed.Horizons acknowledged that its proposal used Arial Narrow but argued that Arial Narrow was consistent with the solicitation requirements because Arial is not a single font type, rather it is a “family of fonts” that includes Arial Regular and Arial Narrow. In response, the agency explained that the font type “Arial” as used in the solicitation is consistent with a font choice offered in common word processing software platforms, including Microsoft Word and Adobe Acrobat. The GAO agreed explaining that Horizons’ interpretation failed to read the solicitation as a whole, which identified four specific fonts (not families of fonts), and would require the GAO to read-in language that does not exist.Horizons further argued that even if it ran afoul of a formatting rule, the deviation was minor, and the agency’s rejection of its proposal was unreasonable. Although Horizons acknowledged the agency reformatted its proposal using 12-point Arial font (rather than 12-point Arial Narrow), the agency should have reformatted using 12-point Garamond font, the most compact of the allowable fonts, to meaningfully assess the impact. The GAO disagreed, explaining that “[e]ven if a reformatting effort by the offeror or the agency could be accomplished to allow for evaluation, the question is not what the agency could possibly do to cure a noncompliant submission, but rather, what it was required to do.” Accordingly, GAO found that given Horizons’ material departure from unambiguous solicitation requirements, the agency reasonably excluded Horizons’ proposal from consideration.Takeaway: Horizons is a reminder that any attempt to circumvent clear, unambiguous solicitation instructions will likely fail, particularly where those actions result in an unfair advantage—i.e., several additional pages beyond the page limit—over other offerors. To the extent there is any question regarding a solicitation requirement, it is in offerors’ best interest to submit a question during the procurement.SMS Data Products Group, Inc.In SMS Data Products Group, Inc., the Air Force issued a fair opportunity proposal request (FOPR) for Combined Air and Space Center Operations Center communications support. The FOPR advised offerors that the agency would evaluate the proposed professional compensation plans in accordance with FAR 52.222-46, and any failure to demonstrate a realistic compensation plan could render a proposal ineligible for award. The FOPR further stipulated that any proposals envisioning compensation levels lower than incumbent prices for the same work would be evaluated on the offeror’s ability to “maintain program continuity, uninterrupted high-quality work, and availability of required competent professional service employees.”The agency was also required to consider item, price, and supplier risk pursuant to DFARS 252.204-7024 to determine whether a proposed price is consistent with the historical prices paid for a product or a service or otherwise creates risk to the government.Following a two-phased evaluation, the agency awarded the task order to Trace Systems, Inc. (Trace) and SMS Data Products Group, Inc. (SMS) protested. SMS made several arguments challenging the award to Trace, including that the agency failed to conduct an adequate evaluation of offerors’ proposed professional compensation plans under FAR 52.222-46.Under FAR 52.222-46, the agency is required to engage in a two-prong evaluation of professional employee compensation plans. The analysis under the first prong equates to a price realism evaluation to confirm whether the offeror understands the contract requirements and whether the compensation plan is appropriate to meet those requirements. The second prong requires the agency to compare proposed compensation rates to the incumbent to determine whether the proposed compensation levels are lower than those of the predecessor contractors. If the offeror proposes lower professional compensation levels than that of the incumbent, the agency must further evaluate whether the compensation plan is sufficient to maintain program continuity.Under the first prong, the price team compared the proposed rates to an eight percent discount from incumbent direct labor rates for the same or similar categories. The agency explained that realism concerns may exist when proposed rates were more than eight percent below the incumbent rate or market data. In its initial realism evaluation, the agency determined that certain direct labor rates for the awardee’s professional employees were below the threshold. The agency requested the awardee address the low rates. In response, the awardee adjusted all rates except for one, which remained more than eight percent below the incumbent rate. The agency took no issue with the one rate that remained more than eight percent below the incumbent rate.The GAO, however, found that the agency failed to evaluate whether the lower rates were sufficient to maintain program continuity, uninterrupted high-quality work, and availability of required competent professional service employees, as required by FAR 52.222-46, while paying them up to eight percent less. SMS also argued the agency failed to properly analyze price risk in accordance with DFARS 252.204-7024. DFARS 252.204-7024 requires the contracting officer to utilize the Supplier Performance Risk System (SPRS) in evaluating a proposal’s price risk.The agency explained that the contracting officer reviewed SPRS, considered the risk assessments, and determined there were no concerns. The agency, however, ran a supplier risk report, not the required price risk report. The agency argued the DFARS 252.204-7024 price risk assessment was not used as part of the separate price evaluation because it was not part of the price evaluation criteria outlined in the FOPR. Instead, the agency relied on the price evaluation criteria outlined in the FOPR, which included the FAR 52.222-46 realism evaluation. GAO determined that because the agency’s evaluation under FAR 52.222-46 was noncompliant, the agency could not rely on that evaluation to satisfy the DFARS requirement.Takeaway: This protest serves as a reminder to agencies and disappointed offerors that where the regulations require a comprehensive evaluation that includes consideration of multiple factors, the agency may not engage in a mechanical review. The record must confirm the agency engaged in the requisite review and consideration of all factors.Associated Energy Group, LLC, DBA AEG Fuels v. United StatesIn Associated Energy Group, LLC, d/b/a AEG Fuels v. United States, the appellant, Associated Energy Group, LLC (AEG), initiated multiple protests concerning several contracts with the Defense Logistics Agency (DLA) to deliver fuel. The issue before the Federal Circuit was whether AEG had standing to challenge the award of a one-year, sole-source bridge contract to the incumbent contractor.In 2022, DLA issued a solicitation for a five-year contract to supply fuel to military bases throughout Africa, including Djibouti. To supply fuel in Djibouti, a fuel supplier must possess a petroleum activity license (PAL) issued by the local government. DLA awarded AEG an order to begin in February 2023. That same month, AEG alerted DLA that officials within the Djiboutian Ministry of Energy and Natural Resources (MOE) were taking certain actions that would threaten contract performance. Several months later, DLA discovered that the incumbent contractor was the only supplier with a valid PAL. AEG alleged that the MOE declined to issue permits and licenses to foreign companies who refused bribe demands.On September 1, 2023, DLA awarded a six-month, sole-source bridge contract to the incumbent contractor, with a six-month option. The solicitation provided that all offerors must possess a PAL from the MOE. AEG challenged the award of the sole-source bridge contract. The Court of Federal Claims (Claims Court) ruled that AEG lacked standing under Article III and the Tucker Act and dismissed the protest. AEG appealed.After establishing that AEG’s protest was not moot, even though the bridge contract was set to expire before oral argument, the court turned to the issue of standing. Article III standing has three requirements: (1) the plaintiff must have suffered an injury in fact; (2) that injury must be fairly traceable to the challenged conduct of the defendant; and (3) that injury must be likely to be redressed by a favorable judicial decision.In its complaint before the Claims Court, AEG argued the injury could be redressed by invalidating the PAL requirement, allowing AEG to bid. But in its complaint before the Federal Circuit, AEG did not challenge or seek relief related to the bridge contract’s PAL requirements. Accordingly, the court explained that even if the Claims Court was to grant AEG the relief sought, thereby requiring DLA to terminate the bridge contract and conduct a full and open competition, AEG would remain unable to perform because it did not possess the requisite PAL. To establish standing in contracting cases, the plaintiff must demonstrate that it is able and ready to bid on contracts and because AEG could not do that, the court held that AEG lacked Article III standing.The court took its analysis one step further and opined that even if AEG could establish Article III standing, it would affirm the Claims Court’s dismissal for lack of statutory standing. Under the Tucker Act, the plaintiff is required to make two separate showings. First, the party must show that it is an interested party, which requires a party to show that it is an actual or prospective bidder and has a direct economic interest in the procurement (i.e., a substantial chance of winning the contract). Second, the party must show that it was prejudiced by a significant error. The Claims Court explained that because AEG lacked the PAL and was thus ineligible for award of the bridge contract, AEG did not have a substantial chance of being awarded the bridge contract. AEG argued the Claims Court’s position conflicted with the longstanding precedent that a protester is not required to show it has a substantial chance of award despite the alleged errors. AEG suggested that it would have had a substantial chance of award had the agency conducted a competitive lawful procurement and did not impose terms that required the payment of illegal bribes. But because AEG did not challenge or seek removal of the PAL requirement in its complaint, the alleged procurement errors did not change the fact that AEG did not possess a PAL and would not have been able to secure the bridge contract. As such, the court agreed with the determination that AEG lacked statutory standing as well.Takeaway: When deciding whether to move forward with a protest, disappointed offerors should first ensure they can satisfy the jurisdictional requirements, such as standing. This case reiterates the importance of establishing that, but for the alleged procurement errors, the disappointed offeror would have had a substantial chance at receiving—and being able to perform—the contract.

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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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Last month, in Raytheon Co. v. United States,<a href="#_ftn1">[1]</a> the U.S. Court of Federal Claims (COFC) confirmed its jurisdiction to hear bid protests challenging the award of certain other transaction (OT) agreements. The decision names COFC the “de facto forum” for such protests, at least those that involve OTs awarded by the Department of Defense (DoD) for research and prototype projects under 10 U.S.C. §§ 4021 and 4022.Under Raytheon, an OT falls within COFC’s bid protest jurisdiction under the Tucker Act<a href="#_ftn2">[2]</a> if it is “an acquisition instrument other than a traditional procurement vehicle intended to provide the government with a direct benefit in the form of products or services.” This “requires an evaluation of the federal agency’s immediate endgame,” and provides jurisdiction where an agency has, with an OT award, “charted a more direct and interlinked path from research, to development, to production, to government purchase.” By contrast, where an agency is using an OT to “facilitat[e] the creation or expansion of a commercial market for the general public from which a federal agency or instrumentality might someday purchase,” the award falls outside COFC’s bid protest jurisdiction, such that any protest must be filed in a federal district court of general jurisdiction under the Administrative Procedures Act (APA).Raytheon is a logical continuation and attempted bookend of a developing body of case law <a href="https://govcon.mofo.com/topics/other-transaction-ot-bid-protests-a-call-for-clarity-and-consistency">we have discussed before</a>. Although decisions about if and where to file a protest are best made after careful consultation with counsel, the court’s decision offers some welcome clarity in an area of increasing importance. For more on OTs, check out our <a href="https://govcon.mofo.com/topics/dod-other-transactions-ots-desk-reference">DoD OT Desk Reference</a>.<a href="#_ftnref1">[1]</a> No. 24-1824C, 2025 WL 583350 (Fed. Cl. Feb. 24, 2025), available <a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2024cv1824-58-0">here</a>.<a href="#_ftnref2">[2]</a> 28 U.S.C. § 1491(b).

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

Locke Bell

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Thomas Lee

This month’s Bid Protest Roundup highlights two Court of Federal Claim decisions, addressing past performance and injunctive relief, and one by the U.S. Government Accountability Office (“GAO”), clarifying the applicability of new regulatory requirements to existing IDIQs.AcmeSolv, LLC v. United States<a href="#_ftn1" target="_self">[1]</a>AcmeSolv, Inc., a Small Business incumbent on a set-aside cybersecurity service contract challenged the United States Department of Agriculture’s award to Arlluk Technology Solutions, LLC. The protestor challenged the past performance evaluation and best value tradeoff analysis.Agencies must evaluate past performance in a manner both reasonable and consistent with the solicitation criteria and applicable law. A protestor, however, is not entitled to an exhaustive comparison of past performance. Here, the protestor argued the review was arbitrarily “superficial” because the agency considered only “top of the line” ratings in each questionnaire and contractor performance assessment evaluated. Consequently, the agency allegedly failed to consider the “depth and breadth” of the protestor’s past performance and ignored the context and trends of performance as required by the solicitation and the Federal Acquisition Regulation (“FAR”), engaging instead in a purely mathematical and quantitative approach.As evidence, the protestor pointed to two documents. First, the protestor cited to the Source Selection Decision Document, which noted the awardee received a High Confidence rating because “the majority of questionnaires” rated the awardee’s performance as “Exceptional” and only one as “Satisfactory.”  Second, one evaluator’s worksheet for the awardee stated that, “since there were three submissions, one was satisfactory and two were exceptional, this averages to high confidence.”  The protestor argued this fact proved the agency simply counted the number of “Exceptional” ratings when assigning its overall confidence rating.The court disagreed. Simply put, given that six evaluators submitted worksheets, if one conducted a “quantitative” past performance analysis, that did not upend the entire evaluation or prove that the work of the other five evaluators, the Source Selection Evaluation Board, and the Source Selection Authority, did not “collectively constitute a substantive review of past performance.”  Indeed, a worksheet from another evaluator showed more in-depth analysis, discussing the awardee’s experience and skills.The protest also foundered for want of prejudice. The court noted, that even had the protestor received a “High Confidence” rating for past performance, that would only put it on par with the awardee for non-price factors. The solicitation stated that price equaled all non-price factors in weight. The protestor’s proposal suffered from a $2.1 million premium. The record forestalled the protestor’s attempts to argue that its “Satisfactory” technical rating was superior to the awardee’s, and therefore—but for the erroneous past performance evaluation—it had a superior non-price proposal. The Source Selection Authority found the awardee’s technical rating superior to the protestor’s, citing two discriminators, and explained that even if the protestor’s non-price factors were increased, it would not warrant the substantial price premium because the awardee’s proposal was satisfactory, and the savings could be used elsewhere.Takeaways AcmeSolv is a timely reminder that success in a bid protest requires not only uncovering agency error, but also a showing that such error had a prejudicial effect on the source selection decision. Absent a demonstration of a material and prejudicial flaws in the evaluation of offers, a protest cannot succeed.Orion Government Services, LLC v. United States<a href="#_ftn2" target="_self">[2]</a>Orion illustrates the substantial challenges faced by a protestor in obtaining a preliminary injunction at the Court of Federal Claims. Orion Government Services, LLC challenged the U.S. Army Corps of Engineers award of a $181,551,864.00 firm-fixed-price contract to McCarthy Building Companies, Inc. for construction services in the Port of Houston. The protestor argued the agency erred by conducting a flawed price reasonableness analysis and failing to evaluate proposals for unbalanced pricing. The court disagreed. The court, moreover, noted that Orion failed to demonstrate irreparable harm, without which the protestor was not entitled to a preliminary injunction irrespective of any likelihood of success on the merits.A protestor at the Court of Federal Claims may obtain a preliminary injunction by showing (1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm in the absence of preliminary relief, (3) the balance of equities tips in its favor, and (4) an injunction is in the public interest. Although no single factor is dispositive, the first two are the most important and must be established. This contrasts with the GAO, where protesters obtain an automatic stay of contract performance upon filing a protest within 10 days of award or five days of a required debrief.The protestor argued that the agency erred when it found the awardee’s price reasonable on the basis that it was “within 25% of the Independent Government Estimate,” because that sort of determination did not equate to a price reasonableness analysis, which looks at whether a price is too high. Before considering the facts, the court noted that such a method is not only permitted but described in the FAR as acceptable. The court then turned to the record, which showed that the agency compared proposed prices to the IGE and to the other offerors before making a considered tradeoff analysis. Because the record showed the agency made a deeper analysis that the rote calculation the protestor complained of, the court was unpersuaded that the agency’s price analysis was improper.The protestor’s other price-related argument, that the agency failed to consider whether the awardee’s pricing was unbalanced, also failed. The protestor argued that the awardee underbid line items that were less likely to be performed and overbid those that were more likely to be performed. If the agency had evaluated proposals for unbalanced pricing, the protestor maintained, the agency would have found the proposed prices of all other offerors to be unbalanced. The court was not convinced.The agency pointed out that the evaluation board report noted that the cost/price team “evaluated for the appearance of unbalanced pricing,” and reviewed prices “for variation from the IGE, errors, and/or omissions.”  Those few words sufficed. The court held that while the evaluation board’s report “may not detail USACE’s analysis,” the evidence showed the agency evaluated unbalanced pricing “on some [acceptable] level.”The court then considered the protestor’s allegation of irreparable harm and found it wanting. To show irreparable harm, a protestor must demonstrate a financial injury “both certain and great” with “an immediate and substantial impact.”  According to the court, a protestor must show with facts or evidence an economic loss that “threatens the survival” of the protestor’s business. The court found the protestor’s broad assertions problematic, especially when juxtaposed to the agency’s declaration that a performance pause posed significant safety concerns to commercial vessel traffic and an additional cost to the Federal taxpayer of $9.44 million to procure critical dredging through a separate contract.TakeawaysIllustrating the uphill challenges protestors face in obtaining a preliminary injunction at the Court of Federal Claims, Orion underscores the reason GAO is often the preferred forum of choice for bid protests. With an automatic stay of performance when a protest is filed within 10 days of award, or within five days of a required debriefing, the GAO alleviates the need to meet the exacting preliminary injunction four-part test. Other considerations, including more fulsome discovery and greater opportunities for oral arguments, may tip the scales back in favor of the court. Disappointed offerors do well to consider the unique advantages, and disadvantages, of both forums when deciding where to file their complaint.Walsh Construction Company II, LLC<a href="#_ftn1" target="_self">[3]</a>In Walsh Construction, the GAO clarified that project labor agreement (“PLA”) regulations do not apply to new task orders under existing IDIQs. Walsh Construction Company II, LLC, protested the amended terms of a U.S. Army Corps of Engineers solicitation for the repair and renewal of the Naval Hospital Bremerton, in Jackson Park, Washington after the agency removed the requirement that offerors submit a valid PLA.In connection with large-scale construction projects the FAR now requires that every contractor and subcontractor to enter a PLA with one or more labor organizations.<a href="#_ftn4" target="_self">[4]</a> The FAR Council, pursuant to Executive Order 14063, issued a final rule on PLAs as prescribed in FAR subpart 22.5., effective January 2024. The agency issued the task order solicitation to all seven holders of the USACE’s multiple award task order contracts (“MATOCs”) for integrated design-build initial outfitting construction services in support of the Defense Health Agency’s medical sustainment, restoration, and modernization mission. The agency had awarded the MATOCs in February 2023, well before the FAR Council’s final rule on PLAs, which consequently did not contain the relevant FAR clause, 52.222-34.When issuing the task order solicitation in July 2024, the agency initially included the FAR provision requiring a PLA and emphasized the necessity of a PLA in two subsequent amendments, but then removed the requirement in October 2024, following a protest and subsequent corrective action. The amended solicitation explained that because the MATOCs were issued before the effective date of the PLA rule, and the MATOCs had not been bilaterally modified to include the PLA clause, the PLA requirement was not applicable to the task order solicited.The Protestor argued the removal of the PLA requirement violated applicable regulations as the task order was issued after the effective date of the FAR PLA regulations, the project value exceeded the dollar threshold, and the agency had not issued an exception. Moreover, the protestor argued it was competitively prejudiced by the elimination of the PLA requirement because it had entered into, and so was bound by, a PLA when its competitors were under no such obligations following the solicitation amendment.The GAO sided with the agency. The E.O. required agencies to consider implementing exceptions when awarding contracts. The GAO reasoned the timing made it “readily apparent” that an agency’s authority to include PLA requirements in a task order depends on whether the the PLA clause is included in the underlying IDIQ contract. Moreover, neither the E.O. nor the FAR prescription contemplated retroactive application. Therefore, the agency lacked the authority to include PLA requirements in subsequent task order absent modifications to the MATOCs.TakeawaysWalsh Construction clarifies that absent modifications incorporating the required PLA clause into the underlying IDIQ, agencies may not add PLA requirements to task orders solicited under pre-2024 IDIQs. Contractors in the construction industry do well to check the terms of any existing IDIQs to ascertain whether they contain the PLA clause or not. The decision has broader implications as well. Although explicitly discussing only PLA requirements under MATOCs, by logical extension the GAO’s reasoning applies to any novel requirement prescribed by a final rule whose effective date follows issuance of the base IDIQ. Potential offerors should be prepared to file pre-award protests to claim foul where such a requirement harms their interests.<a href="#_ftnref1" target="_self">[1]</a> <a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2024cv1282-46-0" target="_blank">AcmeSolv, LLC v. United States</a>, No. 24-1282 C, 2025 (Fed. Cl. Feb. 6, 2025) (reissued Feb. 11, 2025)<a href="#_ftnref2" target="_self">[2]</a> <a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2025cv0071-33-0" target="_blank">Orion Government Services, LLC v. United States, No. 25-71</a> (Fed. Cl. Feb. 4, 2025) (reissued Feb. 13, 2025)<a href="#_ftnref3" target="_self">[3]</a> <a href="https://www.gao.gov/products/b-423075.2" target="_blank">Walsh Construction Company II, LLC, B-423075.2, Feb. 20, 2025</a>, 2025 CPD ¶ _.<a href="#_ftnref4" target="_self">[4]</a> In a January 21, 2025, decision, the U.S. Court of Federal Claims found PLA’s unlawful for violating the Competition in Contracting Act. See <a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2024cv1057-97-0" target="_blank">MVL USA, Inc. et al. v. United States</a>,  No. 24-1057, 24-1077, 24-1144, 24-1219, 24-1398, 24-1433, 24-1461. As a result, class deviations have begun to follow.

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Markus Speidel is an associate in Morrison & Foerster’s Government Contracts & Public Procurement group, in Washington, D.C. Markus assists clients across a wide range of contract matters, including contract claims and disputes, bid protests, compliance counseling, and investigations.

Markus Gerhard Speidel

Markus Speidel

Bid Protest Roundup: Past Performance, Preliminary Injunctions, and Novel Regulatory Requirements

To kick off the new year, this bid protest spotlight highlights two U.S. Government Accountability Office decisions involving System for Award Management (SAM) registration requirements when submitting an “offer” and an agency’s improper reliance on technology in making procurement decisions. This spotlight also covers a decision from the U.S. Court of Federal Claims addressing how and when small businesses can properly rely on the past performance experience of their subcontractors.UNICA-BPA JV, LLC<a href="#_ftn1" target="_self">[1]</a>This successful post-award protest is one of many GAO decisions addressing SAM registration requirements when submitting a proposal—or, in this case, when submitting a final proposal revision. Importantly, the outcome is not impacted or changed by the interim FAR rule that recently amended SAM registration requirements in FAR 52.204-7.On November 29, 2023, the Department of Homeland Security issued a solicitation to procure management support services through the award of an 8(a) set-aside contract. UNICA-BPA JV, LLC, an 8(a) small business joint venture, timely submitted its proposal by the January 2 deadline.After receiving notice that it was excluded from the competitive range, UNICA filed its first protest with the GAO. The agency subsequently took corrective action, and the GAO dismissed the protest.As part of its corrective action, the agency included UNICA in the competitive range and entered into discussions. On July 10, UNICA submitted its final proposal revision, and on August 6, the agency issued a pre-award notice identifying UNICA as the apparent successful offeror.Soon after, another offeror filed a protest with the GAO, claiming the award was improper because UNICA lacked an active SAM registration at the time UNICA submitted its initial proposal. In response, the agency rescinded the pre-award notice and issued UNICA a “notice of exclusion” from award consideration.UNICA then filed the instant protest challenging its retroactive exclusion from award consideration on the basis that it did have an active SAM registration at the time of offer submission—here, its final proposal revision. The GAO agreed with UNICA and sustained the protest. In reaching its decision, the GAO considered the language of FAR 52.204-7 included in the solicitation and in effect at the time the protest was filed, which states, in relevant part:An Offeror is required to be registered in SAM when submitting an offer or quotation, and shall continue to be registered until time of award, during performance, and through final payment of any contract, basic agreement, basic ordering agreement, or blanket purchasing agreement resulting from this solicitation.The GAO then looked to FAR 2.101, which defines an “offer,” in relevant part, as “a response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract.” When read together, and with reference to FAR 15.307(b), the GAO concluded that “the submission of a final proposal revision demonstrates an offeror’s intent to modify or replace its initial offer, thus extinguishing an agency’s ability to accept the earlier offer.” As a result, the GAO found the agency could have excluded UNICA from award consideration on the date of its initial proposal submission, when UNICA lacked an active SAM registration, but not after entering into discussions, where it became “clear that UNICA’s initial proposal was superseded[,] . . . and only UNICA’s [final proposal revision] could be considered as the offer upon which an award could be made.” TakeawaysThis decision offers a few helpful reminders for joint ventures and protesters alike. First, given that a joint venture is legally independent from its members, joint ventures must proactively register themselves in SAM.gov—a process that can take months. When submitting proposals, all offerors should also ensure they have active SAM registrations through when a final award decision is made and any protests are resolved. Fortunately, per the recent changes to FAR 52.204-7, offerors can now correct any lapse in registration before an award is made.The Mission Essential Group, LLC<a href="#_ftn2" target="_self">[2]</a>This successful pre-award shows what can happen when an agency mistakenly relies on technology and fails to adequately substantiate its decision-making process when employing lowest price technically acceptable (LPTA) source selection procedures.On June 6, 2024, the Department of the Air Force issued a solicitation to holders of the agency’s Advisory and Assistance Services indefinite-delivery, indefinite-quantity (IDIQ) contract for follow-on task order services. The solicitation stated that an award would be made on an LPTA basis considering two technical sub-factors, including (1) past technical experience, and (2) a staffing plan.To receive an acceptable rating under the first sub-factor, an offeror had to demonstrate past technical experience performing work similar to the tasks spanning 46 pages of the performance work statement (PWS). An offeror’s staffing plan would be deemed acceptable under the second sub-factor if the offeror outlined a “unique planned approach” for performing those same tasks.On June 26, Mission Essential filed its first protest with the GAO, and the agency agreed to take corrective action. On September 18, the agency issued a limited solicitation amendment and completed a market research report and a two-page determination and findings (D&F) memorandum for using LPTA source selection procedures. Mission Essential timely filed the instant protest claiming, among other arguments, that the agency’s use of LPTA source selection procedures was improper and violated DFARS 215.101-2-70, and that the agency failed to avoid using LPTA procedures to the maximum extent practicable, as required under that same clause.In finding for the protester, the GAO first determined the agency failed to satisfy three of the criteria necessary for employing an LPTA source selection methodology under DFARS 215-101-2-70, which require the agency to establish that:(i) Minimum requirements can be described clearly and comprehensively and expressed in terms of performance objectives, measures, and standards that will be used to determine the acceptability of offers;(ii) No, or minimal, value will be realized from a proposal that exceeds the minimum technical or performance requirements; and(vii) The contract file contains a determination that the lowest price reflects full life-cycle costs [. . .] of the product(s) or service(s) being acquired.For the first criterion, the GAO found that neither the solicitation nor the D&F memorandum offered any explanation or guidance setting forth the clear, minimum requirements an offeror must demonstrate to receive an acceptable technical rating, particularly when considered against the 46 pages of PWS tasks.On the second, the GAO determined that the solicitation’s limited requirements and request for “unique” approaches to staffing plans suggested the agency could benefit from a proposal that exceeds minimum requirements. The agency’s bald recitation of the DFARS criterion in the D&F memorandum was also insufficient to support its position.The agency failed to satisfy the remaining criterion given that the requiring activity did not provide the requisite determination in the contract file. Moreover, the contemplated award had several cost-reimbursement CLINs with presently unknown costs, which the D&F memorandum and the agency’s post-protest statements both failed to explain or reconcile with the DFARS requirement.In addition, the GAO found the agency failed to avoid using LPTA procedures to the maximum extent practicable. To justify its position, the agency relied on its use of LPTA procedures for prior task order awards under the same procurement and the results of its “highly recommended” complexity analysis tool (CAT) “designed to ‘evaluate various [procurement] risk factors’” that supported the use of LPTA procedures here.In rejecting the first argument, the GAO found that neither the record nor the agency’s arguments explained why using procedures other than LPTA would be impractical. The GAO then took issue with the agency’s reliance on CAT, which generates a report based on the agency’s responses to 11 questions involving scope, cost, and resources, and requires responsive inputs consisting of numerical values between 0 and 5. In sum, the GAO determined that the agency’s CAT responses variously failed to account for the requirements of the initial IDIQ contracts and indicated that past performance was of low importance, yet the solicitation did not contemplate past performance. Moreover, it was “unreasonable for the agency simply to rely on the recommended approach generated by the CAT as its rationale and justification for using an LPTA approach,” particularly when the record fails to include any explanation of the tool’s findings.TakeawaysThis decision is a good example of agencies’ increasing reliance on technology in making procurement-related decisions, which opens the door to protesters to make similar challenges based on a lack of adequate documentation or independent decision making by the agency. The decision also suggests that if a procurement walks and talks like a best value trade-off procurement, chances are it is one (and thus LPTA procedures should not be used). DecisionPoint Corporation v. United States<a href="#_ftn3" target="_self">[3]</a>DecisionPoint reminds protesters of the checks and balances in place for determining when a small business awardee can lawfully rely on the past performance of a subcontractor in a set-aside procurement—including the terms of the solicitation, the limitations on subcontracting (FAR 52.219-14), and the ostensible subcontractor rule (13 C.F.R. § 121.103(h)).This post-award protest concerns the Department of the Army’s solicitation for maintenance and support services issued as a set-aside to Service-Disabled Veteran Owned Small Businesses (SDVOSBs). Offerors’ proposals were evaluated on a best value basis according to three factors, including (1) Key Personnel and Staffing, (2) Past Performance, and (3) Price. Proposals would receive an acceptable or unacceptable rating under the first factor, making the second and third factors—given “appropriately equal” weight—potential tiebreakers in the agency’s tradeoff decision.Importantly, the solicitation stated that, for purposes of past performance submissions, “the ‘offeror’ includes any joint ventures, subcontractors, and/or teaming partners proposed as part of the prime contractor’s team under this effort.” The only restriction was that offerors must comply with the limitations on subcontracting.For past performance, the agency assessed P&S Peterman & Sons Solutions (P&S) a “Satisfactory Confidence” rating and DecisionPoint the next-highest rating of “Substantial Confidence.” As relevant, P&S’s proposal included one submission for work it completed, and two submissions for work its subcontractor completed.Based on its best value award determination, the agency awarded the contract to P&S for a total price $1.7 million less than DecisionPoint’s proposal. DecisionPoint promptly filed suit.DecisionPoint claimed that P&S was ineligible for award because P&S and its subcontractor improperly formed a joint venture, and that P&S should have received a lower past performance rating. In support, DecisionPoint latched onto statements in P&S’s proposal that it would operate “as a single entity” with its subcontractor, and that “[a]s an integrated organization hereafter known as Team P&S, [they would] operate under unified plans, procedures, and controls[.]”In rejecting the plaintiff’s claims, the court found that the solicitation expressly allowed the agency to consider a subcontractor’s past performance, irrespective of a subcontractor’s size or status, and that the agency’s evaluation was reasonable. The court further determined that, regardless of the teaming language, the proposal demonstrated that P&S would “perform services for all management positions on the contract” and be responsible for more than 50% of the labor costs, demonstrating P&S’s compliance with the limitations on subcontracting and the ostensible subcontractor rule.TakeawaysAs the Small Business Administration explained in a <a href="https://www.federalregister.gov/documents/2023/04/27/2023-07855/ownership-and-control-and-contractual-assistance-requirements-for-the-8a-business-development" target="_blank">recent rulemaking</a>, nothing prohibits an agency from allowing small business offerors to rely on the past performance of their subcontractors. Offerors must, however, carefully craft their proposals to ensure their compliance with the limitations on subcontracting and the ostensible subcontractor rule.This decision also reaffirms that, to prevail on a past performance challenge, plaintiffs must point to clear, specific facts to demonstrate the unreasonableness of an awardee’s past performance rating. Greater success might also lie in challenges to a subcontractor’s past performance experience not clearly tying to the work the subcontractor will perform.<hr class="divider"><a href="#_ftnref1" target="_self">[1]</a> UNICA-BPA JV, LLC, B-422580.3, Jan. 8, 2025, 2025 CPD ¶ _.<a href="#_ftnref2" target="_self">[2]</a> The Mission Essential Grp., LLC, B-422698.2, Jan. 8, 2025, 2025 CPD ¶ _.<a href="#_ftnref3" target="_self">[3]</a> DecisionPoint Corp. v. United States, No. 24-782, 2024 U.S. Claims LEXIS 3489 (Fed. Cl. Dec. 9, 2024) (reissued Jan. 14, 2025).

Bid Protest Spotlight: Registration, Substantiation, Experience

Bid Protest Spotlight: Registration, Substantiation, Experience

This month’s bid protest roundup highlights one decision from the U.S. Court of Appeals for the Federal Circuit, addressing a proposal timely submitted but received late, and two decisions from the U.S. Government Accountability Office, highlighting the nuances of certification requirements and small business eligibility requirements, respectively. Whether maintaining small business eligibility, submitting timely proposals, or considering proposals that must meet certification requirements, each decision provides actionable insights concerning what government contractors should be considering pre- and post-award.ATP Gov, LLC[1]In ATP Gov, LLC, (ATP), a small business, protested the U.S. Air Force’s award of a delivery order for portable satellite terminals under the NASA Solution for Enterprise-Wide Procurement (SEWP) indefinite-delivery, indefinite-quantity (IDIQ) contract. The solicitation required offerors to propose a terminal assembly certified by the Army Forces Strategic Command for operation with the Wideband Global Satellite Communications (WGS) system at the time of proposal submission. ATP argued that iGov’s proposed terminal assembly failed to meet this requirement due to a forthcoming need to recertify and was therefore ineligible for award.The solicitation mandated compliance with specific technical requirements, including WGS certification. The solicitation also explicitly stated that the terminal assembly must be WGS‑certified at the time of proposal submission. This requirement was clarified through a question-and-answer (Q&A) exchange that became part of the solicitation.During the competition, ATP proposed a fully compliant terminal assembly that was certified for WGS operations. iGov, however, offered a base terminal that was WGS-certified but would require modifications to meet the solicitation requirements. Such modifications would, in turn, necessitate recertification of the terminal assembly. Nonetheless, the Air Force awarded the delivery order to iGov, which had proposed a lower price.The parties largely agreed on the facts: although the base terminal was WGS-certified at time of submission, the terminal—as certified—lacked the required auto-tracking capability. Thus, although the awardee proposed modifications to provide auto-tracking capability, those modifications would require the terminal assembly to be recertified.ATP argued that the iGov’s proposed terminal assembly did not meet the material requirement to be certified at the time of the submission. The agency responded that the solicitation was silent on timing of certification and that it would only make sense to impose the requirement at the time of integration testing. Yet, the agency also acknowledged that it confirmed in Q&As that the terminal must be WGS certified at time of proposal submission. The agency argued in the alternative that, if the Q&As modified the solicitation, the agency’s answers only meant that the offeror’s solution had to be based on a WGS-certified terminal.The GAO sustained ATP’s protest, finding that iGov’s proposed terminal did not, in fact, meet the solicitation’s material requirements at the time of proposal submission. The GAO emphasized that:<ul><li>The Q&As’ clarifications were incorporated into the solicitation as amendments.</li><li>The Q&As explicitly required WGS certification at the time of proposal submission.</li><li>iGov’s modified terminal assembly required recertification, which rendered it non-compliant with solicitation terms.</li><li>The Air Force’s acceptance of iGov’s proposal disregarded a material solicitation requirement, unfairly disadvantaging ATP.</li></ul>Key TakeawaysTiming is everything, and the timing of certification—or recertification—matters. If a solicitation mandates certifications at the time of proposal submission, offerors must ensure their proposed solutions meet these requirements upfront or challenge the requirement prior to proposal submission. Even minor deviations from solicitation requirements, including those that improve competitive pricing, can have significant consequences.eSimplicity, Inc.[2]In eSimplicity, Inc. v. United States, the Federal Circuit dismissed an appeal of a Court of Federal Claims (COFC) decision and, in doing so, chose not to address a long-standing split in how the GAO and COFC approach proposal timeliness issues.In the underlying case,[3] eSimplicity protested the Navy’s rejection of its proposal for technical support services due to an alleged late submission. Despite eSimplicity submitting the proposal approximately an hour and a half before the deadline, the Contracting Officer did not receive the proposal because of file-size limits and issues with the Navy server. Although the solicitation did not state any file-size requirements, the Navy deemed the proposal untimely and excluded it from consideration. eSimplicity argued that the rejection of its proposal relied on undisclosed evaluation criterion (file size) and that the Navy misapplied the late-is-late exceptions, namely the government control exception and the electronic commerce exception.Under the late-is-late rule, proposals must be received by the government by the deadline in the solicitation. If a proposal is even a minute late, it will be rejected as untimely. The government control exception, however, applies where an emailed proposal was received at the government installation that was designated for receipt of offers and was under government control at the time required by the deadline. Separately, the electronic commerce exception provides an exception for proposals “received at the initial point of entry to the Government infrastructure not later than 5:00 p.m. one working day prior to the date specified for receipt of offers.”[4]COFC ruled in favor of eSimplicity, finding file size was, in effect, an unstated evaluation criterion. While Simplicity did not meet the requirements for the electronic commerce exception to apply, the court discussed the distinctions and overlap between the two late-is-late exceptions. COFC concluded that the government control exception includes electronically submitted proposals. However, COFC did not resolve whether the elements of the government control exception were met in eSimplicity’s specific case.After losing the protest, the Navy issued a revised solicitation (Solicitation II), resolving the issue by including explicit file-size limits. Under Solicitation II, eSimplicity ultimately won the contract. The government nevertheless appealed the adverse COFC decision to the Federal Circuit.On appeal, the government argued, inter alia, that the government sought to “exercise its right to terminate eSimplicity’s contract upon the basis that it should not have been awarded in the first place.” The Court rejected that request for relief because the government was appealing a decision that concerned Solicitation I, whereas eSimplicity was awarded a contract under Solicitation II.The Court also highlighted that the government failed to appeal COFC’s holdings applying the government-control exception. That the government could have appealed the government-control-exception issue in previous cases but chose not demonstrated that the government merely wanted to appeal in this instance—not that the issue was capable of repetition, yet evading review.The Federal Circuit dismissed the government’s appeal as moot, emphasizing that the contract awarded to eSimplicity under Solicitation II resolved the dispute, leaving no live controversy for the court to address.In reaching this outcome, a split between COFC and GAO approach to timeliness remains intact: Where the GAO applies the rigorous late-is-late rule, COFC may be comparatively forgiving of email submissions received late due to government technical issues.[5]Key TakeawaysOn the one hand, agencies must ensure that all evaluation criteria, including technical requirements, such as file size limits, are explicitly stated in the solicitation to avoid disputes.On the other hand, those seeking to protest a determination that a proposal submission was untimely still may find a more favorable audience at COFC.Regardless, where file size has not been explicitly stated, offerors may benefit from submitting questions during the solicitation phase to mitigate risks. It is also best practice to submit electronic proposals before 5:00 p.m. on the day before the due date, avoid unusually large file sizes if practical, double-check that the submitted files are the files one intended to submit, and confirm that the designated agency addressee has received the submission in good order.Analytica[6]Analytica LLC protested its exclusion from a Department of Homeland Security (DHS) solicitation for data strategy support services, arguing that it complied with necessary procedural steps to acquire a Small Business Administration (SBA) 8(a) contract through novation by the General Services Administration (GSA). However, DHS deemed Analytica ineligible (over SBA’s objections) because SBA approval of the transfer occurred after the proposal submission deadline, a requirement under federal regulations.Potomac Management Solutions, LLC (Potomac), held an Oasis 8(a) contract that was among certain assets acquired by Analytica from Potomac. The same month that Analytica acquired Potomac, Analytica and Potomac sought approval from both GSA (through novation) and SBA (through the 8(a) waiver process) for the transfer of the OASIS 8(a) contract to Analytica. In response, GSA executed a modification recognizing the novation and Analytica as the contractor. Following the modification, the protester submitted a proposal in response to a request for proposals, and after evaluation, USCIS issued the task order to Analytica.Initially, the award to Analytica was protested by two unsuccessful offerors. In response, the GAO dismissed the protest when the agency indicated it was taking corrective action, including further investigation into whether Analytica was an eligible OASIS 8(a) pool 1 contract holder at the time of proposal submission. The investigation confirmed that a GSA contracting officer had novated the contract prior to the deadline for proposal submission. An SBA lead business opportunity specialist confirmed that, despite the novation, SBA had not approved a waiver request under 13 C.F.R. § 124.515 or a substitution under 13 C.F.R. § 124.518(c) at the time of proposal submission. Based on this fact, the investigation found that “Analytica has not obtained SBA approval to assume the Potomac Management Solutions OASIS 8(a) contract and should not have submitted a proposal for this action until that SBA approval was received.” As a result, Analytica was not eligible for award. Analytica challenged the agency’s decision to eliminate its proposal from the competition following the investigation.The Small Business Act, 15 U.S.C. § 637(a) provides broad discretion to the SBA in selecting procuring requirements for an 8(a) contract. Included in this broad discretion, “[w]here an 8(a) concern that received a contract will no longer perform, the 8(a) contract must be terminated for the convenience of the government unless the SBA Administrator waives the termination requirement.” In special circumstances, another 8(a) firm may complete performance, and SBA may permit novation without applying the termination for convenience or waiver provisions. USCIS argued that, because it had not waived the requirement to terminate for convenience when the contract was transferred, the agency was required to find Analytica ineligible for award.Analytica asserted that “GSA approved the novation pursuant to FAR 42.1204” and that “approval of the novation is dispositive of its validity,” arguing that, in the partnership agreement (PA) between SBA and GSA, SBA delegated authority to approve the novation to GSA. Analytica did not address USCIS’s contention that the waiver of the termination or grant of permission of novation is a nondelegable responsibility of the SBA Administrator. Analytica contended that GSA approval alone was sufficient.GAO requested SBA comments on the reasonableness of the ineligibility determination. In the SBA’s view, there was “no evidence . . . that Analytica knew or should have known that SBA had not authorized Potomac’s substitution request,” and the SBA did not believe that Analytica should have been deemed ineligible “by operation of SBA rules.” In essence, the SBA contended that Analytica was eligible for award because SBA authorized the novation—albeit after the proposal due date.The GAO disagreed, emphasizing that SBA’s explicit approval is critical for maintaining 8(a) eligibility during contract transfers. Despite receiving GSA’s approval for the novation, SBA’s nondelegable authority and timing requirements rendered Analytica ineligible, and “SBA’s interpretation of the regulations [was] unreasonable.” The GAO underscored that eligibility determinations depend on timely compliance with SBA regulations, not post hoc validations.Key TakeawaysContractors acquiring 8(a) contracts must be aware of the complicated regulations governing transfer of these contracts and the necessary coordination between SBA and procuring agencies that these regulations contemplate. Delays or incomplete approvals can disqualify an otherwise compliant proposal.Cody Fisher, an associate in our Washington, D.C. office, contributed to the writing of this article. [1] ATP Gov, LLC, B-422938, B-422938.2 (Dec. 12, 2024)[2] eSimplicity, Inc. v. United States, No. 2023-1216 (Fed. Cir. Dec. 16, 2024).[3] See eSimplicity, Inc. v. United States, 162 Fed. Cl. 372 (2022); see also Roke Iko, October 2022 Bid Protest Roundup: Late-Is-Late Rule, Compensation Plans, Morrison Foerster (Nov. 9, 2022).[4] FAR 52.212-1(f)(2)(i)(A).[5] Compare VERSA Integrated Sols., Inc., B‑420530, Apr. 13, 2022, 2022 CPD ¶ 98 (declining to overturn prior GAO decisions finding that FAR provision 52.212‑1(f)(2)(i)(B) does not apply to proposals submitted electronically), with eSimplicity, Inc. v. United States, 162 Fed. Cl. 372 (2022) (discussing the application of the government control exception to electronic submissions).[6] Analytica LLC, B-422681.3, B-422681.4 (Nov. 26, 2024).

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Cody Brianna Fisher

Cody Fisher

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Class Waivers of the Non-Manufacturer Rule:  New OHA Decision Creates Uncertainty

Bid Protest Spotlight: Certification, Lateness, SBA Eligibility

This month’s Law360 Bid Protest Roundup focuses on two Government Accountability Office (“GAO”) decisions and one Court of Federal Claims (“COFC”) decision. From COFC jurisdiction and standing, to meaningful relationship commitment letters, and responsibility determinations and unwarranted strengths, each decision serves a different helpful reminder for contractors submitting proposals and unsuccessful offerors looking to file a protest, alike.Acuity-CHS Middle East LLC<a href="#_ftn1" target="_self">[1]</a>Although Acuity-CHS Middle East LLC appears to be a case about organizational conflicts of interest (“OCI”) at first blush, the real meat of the case is about testing COFC’s jurisdiction and standing in the aftermath of the Federal Circuit’s surprising decision earlier this year in Percipient.ai v. United States, 104 F.4th 846 (Fed. Cir. 2024). A plaintiff has standing to challenge a procurement if it is an interested party, which is defined as an actual or prospective bidder that has a direct economic interest in the award of a contract. This usually means the protester must show that, but for the alleged procurement error, it would have had some likelihood of award itself. As a result, COFC has consistently held that subcontractors do not have standing to bring a bid protest as an interested party. In Percipient.ai, the Federal Circuit, however, found that standing in a protest extends to a prospective subcontractor when it has a substantial chance of being engaged by a prime contractor to meet the needs of the agency had the violations not occurred. Percipient.ai involved a supplier (Percipient.ai) of commercial software challenging a task order that the supplier alleged violated a statutory preference for products available commercially. Percipient.ai was, at most, a potential subcontractor for the task order. The Federal Circuit found Percipient.ai had standing because it had a direct economic interest in the alleged violation of the statute because it was an offeror of commercial or non developmental services or items. Importantly, the Federal Circuit clarified that it found the plaintiff had standing because it (1) invoked only the third prong of the Tucker Act protest authority (i.e., providing jurisdiction over interested parties challenging “any alleged violation of statute or regulation in connection with a procurement or a proposed procurement”); (2) asserted a violation of the statute providing preference for products available commercially and obligating the procuring agency to conduct market research; and (3) did not directly or indirectly challenge a solicitation for an actual or proposed award of a government contract. Here, Acuity-CHS Middle East LLC (“Acuity”) did not hold the underlying Department of State’s Diplomatic Platform Support Services IDIQ contract for the task order at issue. The task order was for Medical Support Services in Iraq (“MSSI”), which involves conducting drug testing of U.S. diplomatic and contractor personnel in Iraq. Acuity’s affiliate provides protective services in Iraq, and therefore its personnel are subject to the drug testing performed by the MSSI contractor. Therefore, State issued an OCI determination, and the terms of the MSSI task order solicitation stated that contractors holding, directly or through their affiliates, a contract for the protective services were prohibited from competing for the MSSI task order. Acuity filed a protest claiming that this arbitrarily and capriciously prevented it from participating in the task order as a subcontractor in violation of Federal Acquisition Regulation (“FAR”) 9.5. Specifically, Acuity argued the agency failed to reasonably consider and mitigate the OCI to allow it to participate as a potential subcontractor on the task order.Relying on Percipient.ai, Acuity argued it had standing to bring the protest and COFC had jurisdiction to hear it. Focusing solely on Acuity’s standing argument, COFC disagreed and dismissed the case. <a href="#_ftn2" target="_self">[2]</a> Specifically, COFC explained that Acuity could not show that it had a substantial chance of being selected as a subcontractor by the awardee (KBR) as KBR already had a subcontractor for the task order. There was also no record of a prior or current relationship between Acuity and KBR suggesting that Acuity would have a substantial chance of being KBR’s subcontractor for the task order in the future if KBR’s current subcontractor failed. COFC also explained that Acuity lacked subcontractor standing because it did not exclusively invoke the third prong of the Tucker Act. By alleging the contracting officer violated FAR 9.5 in determining that an immitigable OCI prevented it from participating in the task order, it inherently sought a determination that the task order was invalid and required reissuance, and thus also invoked the first prong of the Tucker Act’s protest authority. Furthermore, the alleged violation at issue here, unlike the violation in Percipient.ai, did not impose an ongoing legal obligation on the agency or the awardee. In other words, once State made its one-time OCI determination and awarded the task order to KBR, it imposed no continuing obligation on the agency or the awardee, according to the Court. Therefore, the regulatory violation here was not similar to the statutory violation in Percipient.ai, which involved a continuing obligation on the agency and its contractor to have a preference for commercial sources.TakeawaysAcuity-CHS Middle East LLC is the first test of how far the Federal Circuit’s holding in Percipient.ai might be applied. For those worried (or hopeful) that Percipient.ai blew the door open to subcontractor task order protests, Acuity-CHS Middle East LLC shows just how narrow COFC views that holding. Aggrieved prospective subcontractors should study this decision before rushing to the courthouse door. Mission SOLAIYA JV, LLC<a href="#_ftn3" target="_self">[3]</a>Mission SOLAIYA JV, LLC (“MSJV”), a Mentor Protégé Joint Venture under the Small Business Administration’s (“SBA”) Mentor Protégé Program, protested the General Services Administration’s (“GSA”) exclusion of MSJV’s proposal for award of the One Acquisition Solution for Integrated Services Plus (“OASIS+”) government wide acquisition contract due to noncompliance with a solicitation requirement. Specifically, despite scoring enough points for award, GSA excluded MSJV’s proposal for failure to provide a “qualifying project” from either the protégé member of the joint venture or from the joint venture itself, which was a mandatory requirement in Section L.5.1.3.1 of the Request for Proposals (“RFP”).MSJV argued, however, that the RFP permitted offerors, including members of a joint venture, to utilize resources from a parent company or affiliate to meet requirements of the RFP so long as a meaningful relationship commitment letter was submitted. Therefore, in lieu of submitting a qualifying project from MSJV or the protégé, MSJV submitted a qualifying project from the protégé’s parent company along with a meaningful relationship commitment letter. This, MSJV argued, should have been sufficient to meet the mandatory requirement for award.Unfortunately for MSJV, the GAO pointed out that the section of the RFP permitting reliance on an affiliate limited such reliance to scored sections of the RFP. And the mandatory qualifying project requirement for Mentor protégé Joint Ventures was not a scored section. Therefore, the GAO denied MSJV’s protest and found GSA’s determination that MSJV’s proposal was noncompliant was reasonable.TakeawaysIn a time where caselaw and regulations are continually redefining what agencies can and cannot require Mentor protégé Joint Ventures to submit to meet experience, past performance, and capabilities requirements, Mentor protégé Joint Venture offerors should pay close attention to the precise language of RFPs. As this case demonstrates, there are often subtle nuances that can become major pitfalls preventing award of the contract. When in doubt regarding the terms of a solicitation, be sure to submit a question to the agency during the Q&A period. If the response is unsatisfactory, a protest may be necessary prior to proposal submission.GOVCIO, LLC<a href="#_ftn4" target="_self">[4]</a>In GOVCIO, LLC, the protester, GovCIO, LLC, challenged the Department of Veterans Affairs’ (“VA”) award of a task order to General Dynamics Information Technology, Inc. (“GDIT”) for file conversion services, lodging multiple protest grounds. Of particular interest for this post are two of those grounds: (1) the sole successful ground regarding an unwarranted significant strength; and (2) an unsuccessful ground regarding allegations of nonresponsibility.First, the VA assigned GDIT’s Technical Evaluation two significant strengths, one of which related to GDIT’s perceived capability to exceed the estimated conversion requirement in the solicitation. Specifically, the VA assigned GDIT a significant strength for demonstrating a capacity to convert a redacted number of files per day, which the VA noted was a redacted percent higher than the solicitation’s estimated 1.2 million daily conversion rate.<a href="#_ftn5" target="_self">[5]</a> GovCIO argued this assessment was flawed because the 1.2 million daily rate from the solicitation was calculated based on calendar days, whereas GDIT’s was calculated using workdays. Therefore, the VA utilized an apples-to-oranges comparison when assigning the significant strength. When comparing the conversion rate using workdays as a common basis of comparison, however, GDIT’s estimated capacity did not come close to exceeding the required daily capacity by the percentage the VA noted in its evaluation.The GAO agreed with GovCIO that the VA’s assignment of a significant strength was unwarranted. Despite GovCIO having a lower Technical rating, no significant strengths, and fewer strengths than GDIT, the GAO further found this assignment of a significant strength prejudiced the protester. This was because the VA specifically mentioned it in the best value tradeoff as one of the benefits of GDIT’s proposal that warranted a price premium. Therefore, the GAO sustained the protest on this ground.Second, GovCIO unsuccessfully argued that the VA should have found GDIT nonresponsible due to allegations that GDIT allegedly attempted to gain an unfair competitive advantage by improperly pressuring one of GovCIO’s initially proposed subcontractors to rescind its commitment to support GovCIO. The VA argued that it evaluated responsibility at the time of award of the underlying IDIQ contract award, and the task order solicitation did not require an additional responsibility determination. It further argued that the issue raised by the protester was a private dispute rather than a violation of procurement law.The GAO agreed with the VA, citing to prior GAO case law finding that there is no requirement that an agency conduct an additional responsibility determination when issuing a task order under an IDIQ contract. It also explained that even if a responsibility determination was required, the VA was correct that this was a private dispute rather than relating to responsibility criteria or a violation of statute or regulation.TakeawaysThe two protest grounds discussed above provide different reminders for unsuccessful offerors. First, protesters should not shy away from raising legitimate arguments regarding assignment of strengths to an awardee’s proposal even if the awardee would still have a higher adjectival rating and number of strengths without the evaluation error. If the strength at issue was a differentiator in the best value determination, it could be a successful protest ground, as this case demonstrates. Second, protesters must raise challenges to responsibility at the IDIQ level, rather than the task order level. It is also worth remembering that disputes between private parties rarely rise to the level of a sustainable protest ground.    <a href="#_ftnref1" target="_self">[1]</a> <a href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2024cv1072-46-0" target="_blank">Acuity-CHS Middle East LLC v. United States, 2024 WL 4716428 (2024)</a>.<a href="#_ftnref2" target="_self">[2]</a> With regard to jurisdiction, Percipient.ai held that the Federal Acquisition Streamlining Act (“FASA”), which bars COFC from hearing protests “in connection with the issuance or proposed issuance of a task or delivery order,” did not bar Percipient.ai’s case because Percipient.ai neither protested the agency’s decision in issuing the task order nor sought to change anything about the task order itself. Rather, it was directed to the agency’s violation of the statute and related regulations after issuance of the task order. In Acuity-CHS Middle East LLC, COFC never reached the question of whether FASA barred the protest because it found Acuity did not have standing as an interested party.<a href="#_ftnref3" target="_self">[3]</a> <a href="https://www.gao.gov/assets/880/872947.pdf" target="_blank">Mission SOLAIYA JV, LLC, B-421775.11, Nov. 7, 2024, 2024 WL 4788549</a><a href="#_ftnref4" target="_self">[4]</a> <a href="https://www.gao.gov/assets/880/872724.pdf" target="_blank">GOVCIO, LLC, B-421290.8, Sep. 11, 2024, 2024 WL 4707095</a><a href="#_ftnref5" target="_self">[5]</a> The precise number and percentage were redacted in the GAO’s decision.

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

Alissandra Young McCann

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

Alissandra McCann

Bid Protest Spotlight: Standing, Relationships, Responsibility

This month’s Bid Protest Roundup highlights three recent protests: one from the U.S. Government Accountability Office and two from the Court of Federal Claims. The first protest concerns an agency using unstated evaluation criteria; the second involves the adequacy of an agency’s investigation into its own data rights; and the third addresses an unequal access to information organizational conflict of interest.Hometown Veterans Medical, LLC, B-422751, B-422751.2, October 11, 2024In this pre-award protest, the GAO held an agency improperly rejected Hometown Veterans Medical’s (“Hometown”) proposal because the agency (1) evaluated Hometown’s proposal using a cursory review, which was not described in the solicitation, and (2) required copies of two representations, even though the solicitation did not expressly require them.On April 29, 2024, the Department of Veterans Affairs (VA) issued a Request for Proposals (RFP) for commercial home oxygen services. The RFP included the standard solicitation provisions for commercial items and an addendum to the instructions at FAR 52.212-1. Specifically, paragraph “C” of the addendum stated proposals that did not include all required documentation and all criteria would not be considered.The RFP included FAR 52.204-24, Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment. Although the provision includes two representations, it contains instructions stating the offeror shall not complete the representations if it does not provide or use “covered telecommunications equipment.”Hometown posted completed online representations on SAM.gov, but because Hometown responded “does not” to the representations regarding using or providing covered telecommunications equipment, Hometown’s representations did not include FAR 52.204-24.The VA received eight proposals, including Hometown’s, and conducted an “initial cursory review” of each proposal. The Contracting Officer looked at each offeror’s SAM.gov records and looked for whether each offeror had attached completed responses to FAR 52.209-7 and 52.204-24 to their proposals. Four offerors did not include those representations in their proposals (including Hometown), so the VA rejected them. Hometown challenged the rejection, arguing it was based on unstated criteria.The GAO determined the VA’s removal of the four proposals was unreasonable. First, the GAO noted the VA’s initial cursory review was not consistent with the RFP. Second, the GAO disagreed that the solicitation’s requirement that “ALL documentation requested” meant offerors needed to include the specific representations at issue because the RFP instructed offerors to submit specific documentation (such as a table of contents, experience narrative, pricing schedule, etc.). Third, the GAO noted the VA’s argument is at odds with one of the basic purposes of SAM.gov: to be an electronic repository of offeror’s responses to FAR provisions. The GAO specifically distinguished this case from Futron, Inc., B-420703, July 25, 2022, 2022 CPD ¶ 189. There, the GAO rejected a protester’s argument that SAM.gov representations were an adequate response to an RFP requirement to submit a copy of the representation at FAR 52.204-24. GAO noted in Futron that the RFP explicitly required the provisions be attached to the cover letter. Here, the language was not so explicit, as the solicitation did not state offerors were required to provide copies of their SAM.gov representations. Therefore, GAO decided not to extend Futron’s holding and sustained the protest.Takeaway: GAO clarified its holding in Futron. Specifically, when an RFP does not have clear and explicit language indicating that representations must be attached to the responses, the Agency cannot simply reject the proposal as unacceptable if the proposal does not include them. Offerors should also be alert to the fact that sometimes more may be needed than their SAM.gov representations. Although the GAO ultimately decided the VA was unreasonable here, offerors should watch out for language requiring specific representations to be appended to their proposals.Rotair Aerospace Corporation v. United StatesIn this post-award protest, the Court of Federal Claims found the Defense Logistics Agency (DLA) conducted an adequate review of the government’s data rights by reviewing technical certificates provided by the Army.The Army Aviation and Missile Command (AMCOM) procures spare parts for the Apache combat helicopter. AMCOM provides instruction manuals known as “technical data packages” (TDPs), which include specifications and instructions on the manufacturing process for each part. AMCOM provides contractors with TDPs, however, the government does not necessarily have the same data rights in the underlying drawings, parts lists, and specifications as it does in the TDP itself, thereby limiting the usefulness of the TDPs. Further, some of AMCOM’s spare parts are identified as “critical safety items” that must be purchased from an approved source. A manufacturer can become an approved source through the Source Approval Request (SAR) process, which is managed by the Army. To complete the SAR process, a manufacturer must provide a complete and current copy of the TDP required for the part.On September 16, 2022, the DLA issued a pre-solicitation notice, after issuing a sources-sought synopsis. On September 20, 2022, the DLA executed a Justification and Approval (J&A) to use a sole source procurement to acquire arm assemblies and bell cranks from Boeing. For the J&A, the Contracting Officer (CO) stated the government did not have the necessary data rights to purchase from any additional sources besides Boeing, and Boeing was the only known source able to furnish the supplies. DLA issued a solicitation for the arm assemblies and bell cranks on September 30, 2022.On May 9, 2023, Rotair filed a bid protest with the Court. Rotair argued the DLA unreasonably prevented it from competing in the September 30th solicitation. Specifically, Rotair argued the DLA wrongly assumed Boeing maintained the data rights to the arm assembly and bell cranks, and because of this, DLA wrongly determined it could not share those specifications with other sources. Rotair argued the government was required to conduct a reasonable investigation into its data rights prior to making a sole source decision.Here, the Court determined the justification did meet the requirements of Competition in Contracting Act and DLA’s decision was rational. The Competition in Contracting Act allows an agency to use non-competitive procedures when the agency determines that its needs are only available from one responsible source and no other good will satisfy the agency’s need. Here, the government needed to review its own data rights. The Court found the government reasonably investigated its data rights. AMCOM provided a TDP list (“TDPL”) for each part to DLA. The TDPL for the arm assembly contained a “Technical Certification for Proposed Other than Full & Open Competitive Acquisition of Spare Parts,” which stated the data needed was not available. The TDPL for the bell crank contained the same certification and stated the government did not have the rights in the underlying data and could not be purchased. Both certifications concluded by stating there was a reasonable technical basis to conclude the items were only available from Boeing.The DLA used these certifications in the J&A. DLA stated the data was not available and could not be developed to allow full and open competition.Further, the Court clarified its broader holding in Chromalloy.<a href="#_ftn1" target="_self">[1]</a> The Court stated its holding in Chromalloy was to ensure an agency’s investigation was reasonable, not whether the agency took all possible investigatory steps to ascertain its rights. Here, Rotair argued DLA’s investigation was unreasonable because there was no evidence DLA, or the Army, reviewed any of its prior contracting history to determine its data rights. However, the Court disagreed and stated that the technical certifications provided showed that each part had undergone a full screening and that this was enough. Takeaway: This is another case that emphasizes the importance of understanding intellectual property rights. Further, the Court’s decision elaborates on what is considered a reasonable investigation into the government’s data rights. It seems clear that, so long as the government conducts a rather baseline review of the technical documentation for a specific part, that is good enough. Here, DLA simply relied on a certificate from the Army and the Court determined this to be adequate. Potential offerors should note that this decision inherently protects those offerors that use proprietary data to deliver goods or services to the government.ITellect, LLC v. United StatesIn this post-award protest the Court of Federal Claims determined the Defense Information Systems Agency (DISA) reasonably awarded LightGrid, LLC (LightGrid) the protested contract even though LightGrid did not disclose its president was married to a DISA Contracting Officer (CO).ITellect, LLC (ITellect) was the incumbent contractor providing Enterprise Voice Services (EVS) to DISA. DISA issued a solicitation to continue the EVS contract. Four offerors, including ITellect and LightGrid, submitted proposals. DISA awarded the contract to LightGrid on April 24, 2024.After LightGrid was awarded the contract, ITellect learned the president of LightGrid was married to a DISA CO who served as CO to ITellect’s incumbent EVS contract for two months in 2022 (Mrs. Smith). This was not disclosed on LightGrid’s proposal. LightGrid did not identify any current or potential organizational conflicts of interest (OCIs) and it did not mention a personal relationship between any of its employees and any DISA employees.ITellect protested, specifically claiming LightGrid did not disclose all its potential or actual OCIs and therefore made a material misrepresentation. After ITellect protested, the DISA CO who managed the procurement initiated an investigation to determine whether any OCI existed. ITellect made two main arguments. Specifically, DISA acted arbitrarily and capriciously by (1) not disqualifying LightGrid’s proposal for making a material misrepresentation and failing to comply with the solicitation’s requirement mandating disclosure of actual or potential OCIs, and (2) not disqualifying LightGrid for violating the FAR’s OCI provisions. ITellect also made an additional argument claiming DISA should have disqualified LightGrid due to the appearance of an OCI.The CO determined the only type of OCI that could have been applicable was unequal access to information. As part of the CO’s investigation, she reviewed communications between Mrs. Smith and LightGrid, Mrs. Smith’s sworn statement, and the Mrs. Smith’s Office of Government Ethics Form 450, in which Mrs. Smith had disclosed her relationship to the president of LightGrid. The CO also looked at Mrs. Smith’s roles in both the prior contract and current solicitation. The CO determined no OCI existed, which was consistent with the representations made by LightGrid.The Court first determined LightGrid did not make a material misrepresentation because DISA did not rely on, and nor was it influenced by LightGrid’s “omission.” The Court specifically noted Mrs. Smith did not play any role in the current solicitation. Second, the Court stated even if LightGrid did fail in disclosing the relationship between the president and Mrs. Smith, it was within the CO’s power to waive the irregularity and not disqualify LightGrid.Finally, the Court reviewed whether there was any appearance of OCI. The Court determined there was not. The Court distinguished this case from Asia Resource Partners, where the GAO found the Air Force was reasonable when it excluded an offeror because its owner was married to an Air Force CO.<a href="#_ftn2" target="_self">[2]</a> The Court noted in that case the CO and the owner hypothetically had access to nonpublic information. Here, however, Mrs. Smith did not have access to any relevant information regarding the instant procurement. Further, the Court stated, the simple existence of a family relationship did not create an appearance of an OCI.The Court concluded that the CO’s investigation was rational and entitled to deference.Takeaway: Although there was no OCI in the above case, that was not the issue. The issue was the appearance of an OCI. The Court noted LightGrid should have disclosed the relationship. LightGrid could have likely evaded this time consuming and expensive litigation had it simply disclosed the relationship between its president and the contracting officer from the start. Offerors should be thoughtful about what they do not disclose, especially with regard to OCIs, as it’s not just whether there is an actual or potential OCI but also whether the lack of disclosure might trigger or prolong an unnecessary protest.<hr class="divider"><a href="#_ftnref1" target="_self">[1]</a> Chromalloy San Diego Corp. v. United States, 145 Fed. Cl. 708 (2019).<a href="#_ftnref2" target="_self">[2]</a> Asia Resource Partners, B-400552, Nov. 5, 2008, 2008 CPD ¶ 201.

Bid Protest Spotlight: Unclear Criteria, Data Rights, Conflicts

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

Liam M. Bowers

Liam Bowers