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

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

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

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Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters. He has represented both protesters and awardees in scores of protests before the Government Accountability Office, the Court of Federal Claims, and procuring agencies, in acquisitions ranging from small business procurements to multibillion-dollar contracts of global significance. His representative protest matters span the aerospace sector, the Intelligence Community, base operations and logistics, healthcare, nuclear and environmental work, and information technology and software acquisitions. His protests have included both classified and unclassified programs. In addition to prevailing in published decisions, Jim has also secured favorable corrective action on behalf of clients in a wide variety of protests that were resolved without a published decision.Jim’s work also focuses on disputes over cost allowability and compliance with the Cost Accounting Standards, and he has appeared before the Armed Services and Civilian Boards of Contract Appeals, in size and status protests before Small Business Administration (SBA) area offices, and appeals before the SBA Office of Hearings and Appeals. Jim regularly counsels clients on contract interpretation, organizational conflicts of interest, and small business compliance.Jim graduated with high honors from the George Washington University Law School, where he focused his studies on federal procurement law, was a member of the Law Review, and interned with the General Services Administration’s suspension and debarment office. Jim also holds a degree in theology magna cum laude from the Pontifical Gregorian University in Rome and a bachelor’s degree in classical languages and literature summa cum laude from the University of Kentucky, where he graduated Phi Beta Kappa.

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Jim maintains an active practice in bid protests before the Government Accountability Office and contracting agencies and counsels clients in contract disputes and compliance obligations.

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office. Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters.

James Tucker

<div style="margin-bottom: 15px;" class="videoWrapper"><iframe class="sticky-video" title="Meet Alex Ward, Government Contracts Practice Co-Chair" src="https://www.youtube-nocookie.com/embed/TkliwdSlTaQ?rel=0" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen="1" title="iframe"></iframe></div>J. Alex Ward is co-chair of Morrison Foerster’s Government Contracts and Public Procurement group. His practice covers a full range of government contracts matters, including investigations, bid protests, claims, general litigation, corporate transactions, and counseling. Alex strives in all matters is to provide his clients the highest level of efficient and effective representation.Alex represents contractors in internal and external investigations, disclosures to the government, and qui tam litigation, with great success in reducing or eliminating his clients’ exposure through active engagement with the government. His work in this area includes obtaining numerous declinations and dismissals of False Claims Act cases in their earliest stages, sparing his clients the cost, risk, and exposure of litigation.He has also served as lead counsel in dozens of bid protests involving military and civilian agency procurements of a wide range of products and services, including all manner of pre- and post-award protests in the GAO, the U.S. Court of Federal Claims, and state tribunals, as well as appeals to the U.S. Court of Appeals for the Federal Circuit and size protest appeals before the SBA’s Office of Hearings and Appeals.Alex handles all aspects of the claims process, from the initial assessment and drafting of requests for equitable adjustment through litigation in the Boards of Contract Appeals and the Court of Federal Claims. Alex’s practice also covers the full gamut of other controversies confronting government contractors, including prime-sub, teaming partner, employer-employee, competitor, and indemnification disputes. His litigation work also includes a wide variety of pro bono engagements, in which he has represented both individual and institutional clients in matters ranging from immigration and criminal defense to sustainable procurement and protection of the environment.Prior to joining the firm, Alex served in the U.S. Army as a commissioned officer and an Assistant to the General Counsel of the Army responsible for civil works and international matters, and as a clerk for judges on the U.S. Courts of Appeals for the Armed Forces and the D.C. Circuit. He is a member of the Boards of the Morrison & Foerster Foundation and the Chesapeake Bay Foundation and of Law360’s Government Contracts Editorial Board.

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Alex is co-chair of Morrison Foerster’s Government Contracts and Public Procurement practice. His practice covers a full range of government contracts matters, including bid protests, claims, investigations, corporate transactions, and counseling.

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

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Our monthly bid protest <a rel="noopener noreferrer" target="_blank" href="https://www.law360.com/articles/1157445">Law360 spotlight </a>will discuss a handful of interesting bid protests from the preceding month, highlighting the most noteworthy aspects of the decisions for companies competing for contracts and agencies seeking procurement.This installment of our bid protest roundup takes a look at three interesting protests from May.The first examines the Government Accountability Office’s (GAO) rejection of an agency’s exclusion of an offeror from competition due to a subcontractor’s employment of a former government employee who had a connection to the procurement at issue and a prior professional relationship with at least one of the agency’s evaluators.Our second decision is a case of “third try’s a charm,” where the Court of Appeals for the Federal Circuit found in favor of the protester after the GAO and the Court of Federal Claims denied a protest challenging a longstanding award limitation found in certain Centers for Medicare & Medicaid Services (CMS) solicitations.We conclude with a GAO protest involving commercial and government entity (CAGE) codes and facility clearances (FCLs) and the importance of being clear with what one is requesting.<a href="https://www.gao.gov/assets/700/699275.pdf">Obsidian Solutions Group, LLC, B-417134, B-417134.2</a>:  The GAO sustained this protest objecting to the agency’s exclusion of an offeror due to the offeror’s subcontractor’s hiring of a former government employee and that person’s appearance at an oral presentation on the offeror’s behalf.Facts:The procurement involved multiple-award indefinite delivery/indefinite quantity (IDIQ) contracts, with awards to be made to all offerors that satisfied the solicitation’s minimum qualification requirements.  As relevant here, the solicitation required each offeror to make an oral presentation addressing, among other things, the offeror’s approach to a scenario involving the Marine Air-Ground Task Force Staff Training Program (MSTP).The protester, in advance of its oral presentation, submitted a slide deck that pictured its oral presentation team and a list of participants, including a particular subcontractor employee.  This employee was a former government employee who recently retired from the MSTP and had been involved in the issuance of the MSTP standard operating procedures, which were incorporated by reference into the solicitation.  The employee’s government ethics officer had issued him a post-government employment opinion letter, opining that he was not prohibited from representing the protester and its subcontractor before the government after leaving government service.The contracting officer notified the protest that the former government employee’s participation gave the “appearance of impropriety” and created an apparent Organizational Conflict of Interest (OCI) because:  (1) his name appeared in “the solicitation materials”; (2) his knowledge of the MSTP standing operating procedures might influence the agency’s evaluators; (3) the MSTP procedures were “relatively recent” with respect to the procurement cycle; and (4) the employee previously was the supervisor of one of the technical evaluation team members.  The contracting officer subsequently issued formal notice of the protester’s exclusion from the competition based upon the possibility that the former government employee gave the protester access to competitively useful non-public information and potentially influenced the agency’s evaluators as a result of his role in issuance of the MSTP procedures.Following notice of its exclusion, Obsidian protested to the GAO.Analysis:The GAO first clarified that, although the agency referred to an apparent OCI, allegations that an offeror’s hiring or association with former government employees who are alleged to have access to non-public, competitively useful information are more accurately categorized as unfair competitive advantages under FAR subpart 3.1 rather than as OCIs under FAR subpart 9.5.As with OCIs, however, allegations of unfair competitive advantage and the appearance of impropriety must be based on “hard facts” and not “mere innuendo or suspicions.”  The GAO cited its prior precedents for the principle that “[a] person’s familiarity with the type of work required resulting from the person’s prior position in the government is not, by itself, evidence of an unfair competitive advantage.”Here, because every qualified offeror would receive an IDIQ contract award, the GAO found that hiring a former agency employee did not give the protester a competitive advantage over the other offerors.  Nor did the GAO find the agency had identified any “hard facts” establishing access to competitively useful information.  First, the MSTP standard operating procedures was a public document, and the employee’s insider knowledge of how it was drafted and what was excluded from it was irrelevant, and there was no suggestion he “steered” the process to benefit the protester.  Second, his knowledge of budgets was irrelevant, as price was not an evaluation factor for the competition, and the total ceiling value of all task orders was published in the solicitation.  Finally, his potential knowledge of the incumbent’s performance shortfalls was irrelevant, as the agency could articulate no basis for how such knowledge could harm the incumbent’s chance for award, or enhance the protester’s.Because the record failed to establish the agency’s position that the protester had access to competitively useful non-public information, the GAO sustained the protest.Takeaway:The unusual nature of this procurement, where every qualified offeror was guaranteed a contract award, made it significantly more difficult for the agency to demonstrate the competitive advantage that might be gained by any non-public information the former government employee might have possessed.  This contributed in large measure to the protester’s victory.Although the agency’s desire to avoid the appearance of unfairness was admirable, the record as described in the GAO decision lacked any “hard facts” establishing an improper advantage.  In other words, the record contained facts that made the agency uncomfortable, but the agency failed to document a rigorous analysis of why those facts required the exclusion of the offeror from the competition.Although the protester prevailed here, offerors should engage counsel and carefully weigh the pros and cons of involving former government employees in proposal efforts where an agency or a competitor might perceive the potential for the appearance of impropriety or OCI.  Even where the revolving-door regulations do not prohibit the former government employee from participating, the question of the appearance of impropriety is broader and more nebulous than those regulations.  Thus, even where an agency ethics officer has “cleared” the individual to participate in a matter, an offeror should consider his or her potential usefulness to the proposal effort and the firmness of the offeror’s conclusion that no appearance of impropriety exists.  In cases of doubt, a good firewall will go a long way toward avoiding the risk of an exclusion or a successful protest.<a href="https://www.cafc.uscourts.gov/sites/default/files/opinions-orders/18-1927.Opinion.5-2-2019.pdf">National Government Services, Inc. v. United States (Federal Circuit 2019)</a>:  Following an unsuccessful GAO protest, and an unsuccessful second-bite protest at the Court of Federal Claims, the protester prevailed before the Court of Appeals for the Federal Circuit in its challenge to award limitations that for nearly a decade have featured in certain solicitations issued by CMS.Facts:CMS uses contractors called Medicare Administrative Contractors (MACs) to administer claims and benefits related to the Medicare program, with MAC contracts covering 12 geographic “jurisdictions” across the country.  For nearly a decade, MAC solicitations have included an award limitation policy, preventing any single contractor from receiving more than 26 percent of the national Medicare A/B workload or any set of affiliated contractors from receiving more than 40 percent of the workload.  CMS says these limitations are designed to further competition and reduce the risk of placing an overly large share of claims administration with any one entity or family of entities.  As it had for prior competitions, CMS included the limitation policy in its solicitation for selecting a MAC contractor for Jurisdiction H.The protester here objected to the award limitation policy, arguing that it should be able to compete for Jurisdiction H, even if the award would cause it to exceed the maximum workshare percentage allowed by the limitation policy.  The protester filed a timely pre-award challenge to the solicitation terms with the GAO, which denied the protest.  The protester then filed a “second-bite” protest at the Court of Federal Claims, which similarly denied the protest.  The protester then took the unusual step of appealing the denial to the Court of Appeals for the Federal Circuit.Analysis:Without addressing the merits of CMS’s award limitation policy, the Federal Circuit focused narrowly on the procedural question of whether CMS complied with the Competition in Contracting Act’s (CICA’s) requirement that agencies procure goods and services using full and open competition unless the agency properly invokes one of the statute’s defined exceptions to full and open competition.The court first rejected the government’s argument that it has provided full and open competition as long as an offeror is allowed to “submit” a proposal.  The court held that any such submission would be futile in light of the limitation policy, notwithstanding the fact that, in exceptional circumstances, the policy allows a particular offeror to exceed the permitted percentage if no other awardable proposal has been submitted.The court also rejected the government’s argument that the policy does not run afoul of CICA’s competition requirements because the limitation is an evaluation factor rather than a limit on competition.  The court expressed skepticism about whether this was truly an “evaluation factor” but observed in any event that the policy applied to all jurisdictions and was not a particular performance requirement tailored to a particular solicitation.  Because the award limitation policy was “not based on some capability or experience requirement,” but rather on an “attempt to divvy up the MAC contracts,” it was in essence a competition limitation.The court then marched through the competition limitations permitted by CICA, and the procedures an agency must follow to invoke those exceptions, and found CMS had satisfied none of them prior to including the award limitation policy in the Jurisdiction H solicitation.  And although CICA and the FAR allow agencies to exclude certain sources from a competition under certain circumstances, the court found CMS did not undertake the necessary procedural steps to use those authorities in this procurement.As a result, and without reaching the question of whether the award limitation policy furthered legitimate agency goals, the Federal Circuit reversed the Court of Federal Claims and remanded the protest for further proceedings.Takeaways:There are a few takeaways here.First, agencies enjoy broad discretion in defining their requirements and imposing reasonable restrictions in solicitations to meet those requirements.  It is generally difficult to challenge such restrictions, although protesters occasionally prevail – as we <a href="https://govcon.mofo.com/protests-litigation/february-2019-bid-protest-roundup/">recently saw</a> with the challenge to restrictions in the General Services Administration’s (GSA’s) OASIS solicitation.  When the agency’s discretion crosses the line from imposing programmatic requirements to limiting the scope of who may compete, agencies must follow procedures that CICA and its implementing regulations carefully define.  Failure to do so may result in a protest being sustained.Second, protests are not easy to win.  It is even more difficult to win a second-bite protest at the Court of Federal Claims after losing at the GAO.  Prevailing at the Federal Circuit after suffering defeat at both the GAO and the Court of Federal Claims is quite rare but, as this case shows, not impossible.Finally, winning a protest does not necessarily mean one gets an award or, for a pre-award protest such as this, that one forces the agency to change the solicitation.  CMS lost on appeal because of procedural errors, and the court was careful to state it was not opining on the wisdom of the award limitation policy itself.  It will be interesting to see whether CMS’s corrective action will consist of changing the terms of the solicitation (and longstanding CMS policy) or simply doing a better job of documenting why a CICA exception is appropriate here, in light of the agency’s perceived needs.<a href="https://www.gao.gov/assets/700/699386.pdf">BDO USA, LLP, B-416504.2, May 22, 2019</a>:  Our final summary involves a firm successfully challenging the rejection of its proposal due to the agency’s failure to consider clearance information the offeror provided in its quotation.Facts:The agency issued a request for quotations (RFQ) to holders of the GSA’s Professional Services Schedule contract holders.  As relevant here, the RFQ required each vendor to identify its CAGE code and required the contractor to possess a Secret-level or higher FCL.  After an initial protest and cancellation of the RFQ, the agency reissued the RFQ and solicited new quotations.The protester submitted a timely quotation and identified its CAGE code, as required.  It also advised the agency that it held the required FCL under a different CAGE code, which was issued to the same legal entity as was submitting the quotation.  The protester’s quotation correctly advised the agency that different CAGE codes can be assigned to different offices of the same legal entity.This response apparently confused the agency, which asked the Defense Security Service (DSS) whether it could award a contract to an offeror under one CAGE code, even though the FCL was registered under a different CAGE code.  DSS replied that the vendor’s primary CAGE code did not have an FCL listed in the National Industrial Security Program, and any facility “would need to be cleared to the appropriate level of the classified contract.”  Based upon its understanding of DSS’s reply, the agency rejected the protester’s quote as failing to meet the RFQ’s clearance requirements.The firm then filed a timely protest of its exclusion, contending that it met the RFQ’s requirements.Analysis:The GAO first noted that, although CAGE codes can dispositively establish the identity of a legal entity for contractual purposes, the same legal entity can have multiple CAGE codes.  The quotation here specified that the protester as a single legal entity had two CAGE codes – one for its headquarters (which held the FCL) and one for the ordering site (which submitted the quote).The GAO found it unreasonable for the agency to reject the protester’s quotation based upon DSS’s responses.  First, the agency did not provide DSS either with the RFQ’s requirements or with the vendor’s response.  Thus, DSS was unable to opine on whether the protester was awardable.  Second, DSS’s own responses “suggest[ed] DSS may have improperly equated a CAGE code with a single entity and/or did not fully comprehend the circumstances of the procurement and the basis for the agency’s inquiry.”  Nor did DSS’s responses suggest the protester was not in compliance with DSS regulatory requirements, as the agency contended.The GAO therefore found that the agency unreasonably excluded the protester’s quotation and recommended it perform a reevaluation, taking into consideration the vendor’s explanation regarding its FCL and CAGE codes.Takeaways:Although CAGE codes are ubiquitous and many solicitations require security clearances, there often is misunderstanding – both by offerors and by procuring agencies – about what CAGE codes are and what FCLs require.  When a solicitation requires an offeror to demonstrate it has the appropriate clearances, it is worth being especially clear (as the vendor here was) about how clearances track to CAGE codes if there is a discrepancy between the CAGE code of the offeror’s submitting site and the site that holds the FCL.It also is important to seek clarification if a solicitation requires “the offeror” to hold a clearance, but the offeror intends to rely on a clearance held by an affiliate, a joint venture member, or a subcontractor to meet the requirement.  If the solicitation is susceptible to different interpretations, it is prudent to ask the agency a question before submitting a proposal.

Jim Tucker is of counsel in Morrison & Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.
Jim’s practice runs the gamut of litiga

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May 2019 Bid Protest Roundup

Our monthly bid protest Law360 spotlight will discuss a handful of interesting bid protests from the preceding month, highlighting the most noteworthy aspects o

May 2019 Bid Protest Roundup

Our monthly bid protest <a rel="noopener noreferrer" target="_blank" href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt3f54c7f10d0b291c/627318f14886af2aa2be1156/190506-bid-protest-spotlight.pdf">Law360 spotlight</a> will discuss a handful of interesting bid protests from the preceding month, highlighting the most noteworthy aspects of the decisions for companies competing for contracts and agencies seeking procurement.This month’s bid protest round-up includes decisions from the Court of Federal Claims (COFC), the Government Accountability Office (GAO), and the FAA’s Office of Dispute Resolution for Acquisition (ODRA).  These cases cover the implementation of the Rule of Two following the Kingdomware decision, the current trend against lowest-price technically acceptable (LPTA), and evaluation mistakes that agencies can make that often lead to sustained protests.<ol><li><a rel="noopener noreferrer" target="_blank" href="https://ecf.cofc.uscourts.gov/cgi-bin/show_public_doc?2018cv1568-26-0">COFC No. 18-1568C, Land Shark Shredding LLC v. United States</a>, March 21, 2019</li></ol>Land Shark involved a post-award protest to COFC in which a service-disabled veteran-owned small business (SDVOSB) objected to losing a Department of Veteran Affairs (VA) contract to a small business that was not an SDVOSB.  As many may recall, the Kingdomware series of cases took the fight about VA set-asides and the “rule of two” all the way to the Supreme Court.  In Kingdomware, the Supreme Court decided that the Rule of Two, imposed by the VA Act of 2006, was mandatory, even with Federal Supply Schedule orders.  The Rule of Two requires that a VA contracting officer must restrict a competition to concerns owned and controlled by veterans if the contracting officer has a reasonable expectation that two or more veteran-owned small business concerns will submit offers and that the award can be made at a fair and reasonable price that offers best value to the United States.In the Land Shark case, the VA attempted to meet its requirements under Kingdomware by using a tiered system to get to contract award in one evaluation cycle.  The first tier was SDVOSBs, followed by veteran-owned small businesses, all other small businesses, and then all other businesses (large).  Each tier would be given a preference over the next, moving down the tiers if an award could not be made at the tier above.  Only three offerors responded to the solicitation:  Land Shark (the protester), SafeGuard, and an unnamed third offeror.  Land Shark was an SDVOSB, SafeGuard was a small business, and the other contractor was large.  Land Shark’s proposal was more than five times the price of Safeguard’s proposal, as well as the independent government cost estimate (IGCE).  Due to this huge price discrepancy, the VA determined that Land Shark’s price was unreasonable and awarded to SafeGuard, as the most advantageous to the government.Land Shark made three central arguments against the award decision:  (1) the agency should not have subjected its proposal to a price reasonableness test, and comparing price to the IGCE for reasonableness was irrational; (2) Land Shark’s SDVOSB status was not given proper priority by the VA, in violation of Kingdomware; and (3) SafeGuard did not comply with the limitation on subcontracting provision.  In deciding the motion for a temporary restraining order, the Court addressed each argument and found them unavailing; thus, it denied the motion stating that the Protester had not “shown likelihood of success on the merits of its protest.”First, the Court concluded that, although an agency is not required to consider reasonableness of federal supply schedule (FSS) prices, an agency is not forbidden from doing so.  Further, the IGCE was reasonable in light of published prices and the fact that two of the three offerors submitted prices in line with it.  Second, the VA’s treatment of protester’s SDVOSB status was reasonable and not a violation of Kingdomware.  Kingdomware did not address price comparisons or the specific question of how the VA should determine an SDVOSB’s prices fair and reasonable.  The Court found no violation of the Kingdomware Rule of Two in the agency’s cascading system of preferences with SDVOSBs in the first tier.  Third, the protester failed to explain how Safe Guard would violate the limitation on subcontracting beyond vague conclusory assertions.Takeaways:  Following the Kingdomware decision, SDVOSBs and VOSBs may have felt on top of the world, but the VA is finding ways to fit its procurements within the Kingdomware parameters while still getting the competition it was aiming for previously.  Although the VA must give a preference to veteran-owned businesses, it does not need to do so at the expense of everything else, such as by accepting prices it deems unreasonable.  The fact that the SDVOSB protester’s price here was more than five times the price of the small business awardee lead the VA to declare the SDVOSB’s price unreasonable and remove it from the competition.Additionally, the tier system the VA used in this procurement is novel.  Now that it has been blessed by COFC, however, it may become more common going forward.  The VA does not want to have to run several procurements when it discovers no reasonable offers from each tier of small business, so it makes sense to include them all into one procurement.  Notably, in Land Shark, there was only one SDVOSB in the tier.  Still to come is to see how a similar case would be decided if there were two SDVOSBs, and yet the VA awarded to a non-veteran-owned small business.Finally, the COFC clarified that agencies may, in fact, consider price reasonableness under FSS contracts even if the Agency is not required to do so.  And agencies may do so even if the RFP does not specifically call for a price reasonableness evaluation, which further distinguishes price reasonableness from price realism.<ol start="2"><li>GAO B-417392.1, Inserso Corporation, April 2, 2019</li></ol>Inserso Corporation shows a protester successfully persuading an agency to alter course through a pre-award bid protest.  Inserso challenged the Department of the Air Force’s decision to use a lowest-price, technically acceptable (LPTA) approach in a solicitation for IT and cybersecurity services, arguing that the National Defense Authorization Acts (NDAAs) of fiscal years (FY) 2017 (§ 813(c)) and 2018 (§ 813(b)) provided that the Department of Defense should avoid using LPTA for IT or cybersecurity services.Although the agency attempted to argue that § 813(b) of the FY 2018 NDAA was not yet implemented into the DFARS, Inserso pointed out that the remaining subparagraphs became effective upon signing, and the agency, at a minimum, must meaningfully consider how to avoid the use of LPTA to the maximum extent practicable.  The agency opted to take corrective action on March 28, 2019, two weeks after the protest was filed.  The agency announced it would withdraw the original request for quotations and instead compete the requirement utilizing tradeoff evaluation criteria.  GAO dismissed the protest as academic on April 2, 2019.Takeaway:  Often protesters attempt to make arguments like this one after they have already lost the award.  Inserso did not wait to lose:  it recognized that the RFQ put it at a potential disadvantage and protested to remedy the wrong.  Contractors should read solicitations carefully to ensure there are no surprises later on.  If there is an opportunity for questions and answers, consider asking even what may appear to be obvious questions to have a written record of the agency’s interpretation of the solicitation.Secondly, the FY 2017 and 2018 NDAAs suggest a move away from LPTA and toward best‑value.  Generally, the preference between the two swings like a pendulum.  LPTA offers less flexibility in value but better price, and best-value could see the government paying a high premium for something only slightly better.  With IT and cybersecurity, at least, the pendulum swings to best-value.  Contractors and vendors with expensive, high-value products should take note.<ol start="3"><li><a href="https://www.faa.gov/about/office_org/headquarters_offices/agc/practice_areas/adjudication/agc70/Casefiles/view/docs/D18_00844fr.pdf">FAA ODRA 18-ODRA-00844</a>, Protest of Aquila Fitness Consulting Systems Ltd., February 13, 2019</li></ol>The Office of Dispute Resolution for Acquisition (ODRA) is a unique forum that decides protests of Federal Aviation Administration (FAA) awards, because FAA is not subject to the FAR.  ODRA follows its own protest rules, separate from the GAO or COFC.  At ODRA, the protester bears the burden of proving, by substantial evidence, that the award decision lacked a rational bases, was arbitrary, capricious or an abuse of discretion, or otherwise failed in a prejudicial manner to comply with the Acquisition Management System (AMS).  This analysis, of course, parallels the standard used by the Court of Federal Claims under the Administrative Procedures Act (APA).Aquila Fitness filed a protest with ODRA after FAA announced the award of a contract for “fitness training services” and fitness center management to Strive Well-Being, Inc.  Mediation attempts (common in ODRA) failed.  The protester argued that the agency unreasonably evaluated its proposal and treated offerors unfairly.ODRA sustained the protest in part, because the agency lacked a rational basis for assigning certain weaknesses to the protester.  On several occasions, the agency accorded the protester weaknesses for items missing from the proposal, which were, in fact, in its proposal.  Moreover, in some instances, the agency failed to accord weaknesses to Strive for similar proposal language to Aquila’s.Although ODRA declined to sustain other protest grounds raised by Aquila, ODRA concluded that Aquila may have been prejudiced by the unreasonable weaknesses assigned to its technical proposal.  Specifically, ODRA noted that Aquila was lower priced; thus, an increased technical score may have changed the best-value trade-off.  ODRA recommended the agency re‑evaluate proposals and make a new award decision within 60 days.Takeaways:  ODRA may seem unique to those comfortable with the ways of GAO, but it is a long-standing forum that bases its decision-making on the APA (similar to the COFC).  ODRA publishes its decisions on its website and includes detailed Findings and Recommendations to explain the Final Decision.  The most unique aspect of ODRA’s practice is its strong emphasis on mediation as part of the bid protest process.As this case demonstrates, however, where mediation does not resolve a matter, ODRA’s decisions are likely to parallel the same types of decisions in GAO.  One cannot imagine that the GAO would decide this case any differently.  The same principles apply to both types of protests:  agencies generally should adhere to the solicitation and not treat offerors unequally.  To do otherwise is to act arbitrarily and capriciously.

April 2019 Bid Protest Roundup

Our monthly bid protest Law360 spotlight will discuss a handful of interesting bid protests from the preceding month, highlighting the most noteworthy aspects o

April 2019 Bid Protest Roundup

Morrison & Foerster Government Contracts co-chair Alex Ward and associate Victoria Dalcourt Angle recently published an article in The Government Contractor, titled “<a rel="noopener noreferrer" target="_blank" href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltdc107bc777a4b3f5/627318da8e09542a15b7df63/190424-contracting-fog-war.pdf">Contracting in the Fog of War</a>.” An excerpt is provided below:<blockquote>The fog of war has long been known to cast its pall over military operations, but contractors feel its effects as well. Providing supplies and services to the military in war-torn corners of the world involves a great deal of risk. Armed conflicts can expose contractors to changing security requirements, the closure of border crossings, restrictions on access to military installations, and other events that impact the company’s bottom line.Contractors seeking to recover from the Government for increased costs due to these and other war risks can face an uphill battle. As the mixed results in the case law show, contractors can pursue a variety of legal theories when seeking payment for these costs. However, the Government also has a number of tools at its disposal, most notably the sovereign acts doctrine. The following case studies demonstrate that a contractor’s chances of recovery depend in large part on having the right factual situation—which can include making the right decisions as events unfold on the ground—and on selecting the appropriate legal strategy when it comes time to submit a claim.</blockquote>Read the rest of the article <a rel="noopener noreferrer" target="_blank" href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltdc107bc777a4b3f5/627318da8e09542a15b7df63/190424-contracting-fog-war.pdf">here</a>.

IAP Worldwide Servs., Inc.

Flight Support, Inc.

DynCorp Int’l LLC

Raytheon Co.

DynCorp International, LLC v. United States

URS Federal Servs., Inc.

DynCorp International, LLC

Planned Sys. Int’l, Inc.

Threat Mgmt. Group, LLC

Vencore Servs. & Solutions, Inc.

Jacobs Tech., Inc.

Cubic, Inc.

American Institutes for Research v. State of New Mexico

CACI-WGI, Inc.

Fluor Intercontinental, Inc. v. IAP Worldwide Servs., Inc.

IAP World Servs., Inc.

Size Appeal of IAP World Servs., Inc.

Al-Ghanim v. IAP Worldwide Servs., Inc.

O’Gara Training & Servs., LLC

IAP Worldwide Servs., Inc. v. Johnson Controls, Inc.

AAR Mobility Sys.

Matt Martin Real Estate Mgm’t, LLC v. United States

Pyramid Real Estate Servs., LLC v. United States

Harrington, Moran, Barksdale, Inc.

Homesource Real Estate Asset Servs., Inc. v. United States

Ocean Ships, Inc.

Keystone Sealift Servs., Inc.

ITT Corp., Sys. Div.

IAP Worldwide Servs., Inc. v. Fluor Intercontinental, Inc.

FedSys, Inc.

Academy Facilities Mgm’t v. United States

Academy Facilities Management -- Advisory Opinion

Evans Security Solutions, Inc.

Contingency Mgm’t Group, LLC and IAP Worldwide Servs., Inc.

Kellogg Brown & Root Services, Inc.

Liberty Power Corp.

J. Alex Ward is co-chair of Morrison Foerster’s Government Contracts and Public Procurement group. 

J. Ward

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Associate

Tori Dalcourt Angle is an associate in the Government Contracts practice in Morrison Foerster’s Washington, D.C. office.
Tori advises clients on various government contract matters, including both pre

Victoria Dalcourt Angle

Victoria Angle

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Contracting in the Fog of War (The Government Contractor article)

Last Week in the Federal Circuit (August 10-14): Clear Skies for Boeing After No-Waiver Ruling

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Morrison & Foerster Government Contracts co-chair Alex Ward and associate Victoria Dalcourt Angle recently published an article in The Government Contractor, ti

Contracting in the Fog of War (The Government Contractor article)

This month’s bid protest round-up includes decisions from the Court of Federal Claims and the Government Accountability Office regarding the Competition in Contracting Act (CICA) automatic stay, agency responsibility and discretion, and the importance of complying with solicitation requirements.Technica LLC v. United States and Aviation Security Management LLC, No. 18-2003C, February 22, 2019.Technica LLC involved the United States Department of Homeland Security, Transportation Security Administration’s (the “Agency”) decision to override the automatic stay of contract performance required by the Competition in Contracting Act (“CICA”).  Technica LLC (“Technica”) alleged that the Agency’s override decision was arbitrary and capricious and asked the Court of Federal Claims (“COFC”) to enjoin the Agency and awardee from performing.When the TSA authorized the override of the automatic stay of performance, the contracting officer cited “urgent and compelling circumstances” and supported its decision using the four‑part test established in Reilly’s Wholesale Produce v. United States.  73 Fed. Cl. 705, 711 (2006).  The test provides relevant factors the Agency should consider when asserting urgent and compelling circumstances:(1) “whether significant and adverse consequences will necessarily occur if the stay is not overridden”;(2) “whether reasonable alternatives to the override exist”;(3) “how the potential cost of proceeding with the override, including the costs associated with the potential that the GAO might sustain the protest, compare[s] to the benefits associated with the approach being considered for addressing the agency’s needs”; and(4) the impact of the override on competition and the integrity of the procurement system, as reflected in CICA.Nortel Gov’t Sols., Inc. v. United States, 84 Fed. Cl. 243, 247 (2008) (citing Reilly’s Wholesale, 73 Fed. Cl. at 711).  Although the Agency is not required to apply the Reilly factors, the COFC has often used them to determine whether an override was arbitrary and capricious.  Here, the Agency urged the COFC to simply make a finding rather than analyzing the factors, arguing that the factors were not dispositive.  Instead, the COFC looked to the Agency’s substantive use of the Reilly factors and deemed it logical to evaluate its decision using the same analytical framework.  The COFC’s evaluation revealed that none of the factors weighed in favor of the override.To preserve the integrity of the competitive procurement process, Technica’s motion for preliminary injunction was granted and stayed contract performance.Takeaway:  The agency has a rather hefty burden to overcome in terms of circumventing a statutorily prescribed process geared toward maintaining a fair procurement.  The decision to override a CICA stay is not one the Agency should take lightly, and while it is not required to use the Reilly factors, the COFC has historically applied the analytical framework to determine whether the majority weighs in favor of the override and will likely continue to do so.OGSystems LLC, B-417026, January 22, 2019We are often reminded of the vast discretion the agency retains in selecting an awardee.  With that discretion, however, comes a responsibility to, at the very least, support the basis for its determination.OGSystems, LLC (“OGS”) protested the award of a support services task order on several grounds.  Of relevance to this article was the allegation that the agency unreasonably evaluated the awardee’s technical proposal.  The GAO agreed.Under a fair opportunity proposal request (“FOPR”), the National Geospatial-Intelligence Agency (the “Agency”) issued a solicitation to firms holding one of its multiple-award indefinite-delivery, indefinite-quantity (“IDIQ”) contracts for support for day-to-day operations at an Agency campus.  Proposals would be evaluated using two factors:  technical and price.  The technical evaluation was divided into three equally weighted subfactors:  (1) east operations division support, (2) space and interiors division support, and (3) property division support.  The Solicitation provided the technical factor was “significantly more important than price.”Upon receipt and review of the first final proposal revisions (“FPR”) from two offerors, OGS and Higgins, Hermansen, Banikas, LLC (“HHB”), the Agency concluded the Performance Work Statement (“PWS”) needed revision.  The Agency issued a revised PWS and requested a second FPR.  The Agency assigned the following ratings for each element of the technical subfactors:  significant benefit, major benefit, minor benefit, meets the standard, minor risk, major risk, or significant risk.  OGS received a “major benefit” rating for all twelve elements of the evaluation subfactors, and HHB received two “major benefit” ratings, five “minor benefit” ratings, and five “meets the standard” ratings.  In selecting HHB for award, the source selection authority (“SSA”) concluded that HHB’s proposal provided the best overall value to the Government, and the added value of the OGS’s experience was not worth the 20% price premium.  OGS protested shortly thereafter.In its review of the Agency Record, OGS discovered that HHB’s first FPR received concerning ratings, including six major risks, one minor risk, and one significant risk.  OGS argued that the Agency failed to adequately address any of the risks assigned to HHB’s first FPR or how they were resolved.  The Agency simply suggested that it considered the revisions made to the first FPR reflected in the second and employed the Agency’s broadened understanding of the terms “risk” and “benefit,” as used in the FOPR.The contemporaneous record, however, does not address the rating revisions or the evolved understanding of the terms.  The Agency attempted to explain the revisions by citing to a statement from the technical evaluation team (“TET”), where it suggested HHB’s revised proposal “met all PWS requirements and was in accord with the historical staffing levels” referenced in the PWS.  The TET’s explanation of the broadened view of risk and benefit, which the Agency relied upon, was equally vague and suggested that it was fair because it applied the new view to both proposals.The GAO found that the Agency’s general explanations failed to provide any meaningful detail, even at the protest stage.  At no point did the Agency adequately address which risks or aspects of the risks identified in HHB’s initial proposal were resolved through revisions or the alternative understanding of the terms.   In fact, the GAO repeatedly concluded that the agency’s evaluation of HBB’s FPR “did not explain the basis for concluding that this major weakness had been resolved.”  As such, it was unable to find that the Agency’s determination was reasonable and thus justified selection of a less expensive, but also presumably less capable, awardee.Takeaway:  The Agency is required to at least support its findings, especially when an offeror’s ratings drastically change between revisions.  The Agency wields a lot of power, but it may not sleep on its responsibilities.People, Technology & Processes LLC, B-417208, March 21, 2019There is a fine line between agency obligation and agency discretion.  For some, that line may become blurred when the agency disagrees with what one might consider obviously obligatory.In this protest, People, Technology & Processes, LLC (“PTP”) challenged its exclusion from the competitive range.  The United States Special Operations Command (the “Agency”) issued a solicitation contemplating award of a single contract to provide intelligence services.  The proposals would be evaluated on a best-value trade-off basis considering five evaluation factors:  (1) qualifying criteria, (2) transition plan, (3) management plan, key personnel, and oral presentations, (4) past performance, and (5) price.  Factor 1, qualifying criteria, would be evaluated on a pass/fail basis.  The Agency would then conduct a trade-off analysis with the remaining factors.The Agency informed offerors that it would establish a competitive range including those proposals that received the highest ratings after the initial evaluation.  The source selection evaluation board (“SSEB”) conducted the initial evaluation and submitted a report to the source selection authority (“SSA”) summarizing each proposal and recommending a competitive range.  The SSEB did not include PTP’s proposal in its competitive range, and the SSA accepted the SSEB’s recommendations.PTP argued that the Agency abused its discretion by not seeking clarification on PTP’s proposal before excluding it from the competitive range.  The key personnel subfactor required offerors to submit resumes for three key personnel positions.  The SSEB would review the resumes against the required and desired qualifications in the statement of work, and then assess how similar the prior experience or position listed in the resume was to the contract requirements.  In reviewing PTP’s submitted resumes, the SSEB could not determine the experience of the proposed program manager and deputy program manager.  As a result, PTP received a significant weakness under the key personnel subfactor because the submitted resumes “inadequately demonstrated experience managing personnel on an effort of this magnitude.”PTP challenged the Agency’s decision, suggesting its omission could have been corrected had the Agency sought clarification.  The Agency argued that it was not required to seek clarifications and the significant weakness could not have been resolved through clarifications.  The GAO has held previously that an agency may “but is not required to engage in clarifications that give offerors an “opportunity to clarify certain aspects of proposals . . .  or to resolve minor or clerical errors.”  FAR § 15.306(a)(2); Valkyrie Entr., LLC, B-414516, June 30, 2017, 2017 CPD ¶ 212 at 5.  The only required communication pertains to offerors whose past performance is the determining factor in its exclusion from the competitive range, which did not apply to PTP.  FAR § 15.306(b)(1)(i).  As such, PTP was not entitled to or guaranteed an opportunity to clarify.Takeaway:  The agency is only required to engage in clarification communications when an offeror’s past performance is the determining factor in its exclusion from the competitive range.  When this is not the case, the agency maintains its discretion to request clarifications.Graham Technologies LLC, B-413104.25, February 25, 2019We have written before about the importance of responding to solicitation requirements; however, it seems to be a <a href="https://govcon.mofo.com/protests-litigation/hopeless-village-finds-hope-at-the-gao/">recurring protest theme</a>.Here, the Department of Health and Human Services, National Institute of Health (the “Agency”) issued a request for proposals (“RFP”) for information technology supplies and services.  The solicitation provided that the Agency would evaluate the proposals in two phases.  Phase 1 evaluated proposals under four go/no-go requirements: (1) compliant proposal, (2) verification of an adequate accounting system, (3) IT services for biomedical research, health sciences, and healthcare, and (4) domain-specific capability in a health-related mission.  If the proposal was found unacceptable in any of these requirements, it would be ineligible for further consideration.  Those proposals found acceptable would then move on to Phase 2.  Phase 2 consisted of a best-value trade-off methodology in which the Agency considered price and three additional factors.Graham Technologies, LLC (“Graham”) submitted a proposal, which the Agency rated Unacceptable in Phase 1 under the verification of an adequate accounting system subfactor, and thus eliminated it from further consideration.  Graham protested the Agency’s decision, arguing that its proposal did, in fact, comply with the solicitation.Graham cites to the following solicitation language in defense of its protest:As such, the Offeror must provide in its proposal a contact name and contact information . . . of its representative at its cognizant DCAA [Defense Contract Auditing Agency], DCMA [Defense Contract Management Agency], federal civilian audit agency, or third party accounting firm and submit, if available, a copy of the Pre-Award Survey of Prospective Contracting Accounting System (SF 1408), provisional billing rates, and/or forward pricing rate agreements.Graham argues that this language meant the verification requirement would be satisfied by providing contact information for the offeror’s representative of the cognizant federal audit agency and no additional information was necessary.  The Agency, however, argued that the solicitation required more than just contact information.  The Agency cited to additional language in the solicitation requiring “evidence that the [o]fferor . . . ha[s] an adequate accounting system” and failure to provide verification will result in an unacceptable rating.Additionally, and potentially most importantly, the Agency specifically addressed questions regarding the accounting verification requirement during the question and answer period.  It reminded offerors that “[v]erification of an adequate accounting system is required to be submitted with the proposal.”As such, the GAO concluded that when reading the solicitation as a whole, and taking into consideration the Agency’s prior warning, the Agency’s interpretation of the verification requirement was reasonable.Takeaway:  When the Agency specifically responds to questions regarding a solicitation requirement, it is in the contractor’s best interest to heed the Agency’s advice and ensure compliance with solicitation requirements.

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

Caitlin A. Crujido

Caitlin Crujido

March 2019 Bid Protest Roundup