Claims Feed

Government Contracts Legal Round-Up | 2022 Issue 8

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Protest Cases

1. CACI, Inc.-Fed., B-420441 et al. (April 7, 2022) (Published April 13, 2022) 

  • GAO sustained the protest where the Department of Homeland Security, Transportation Security Administration (TSA), reduced the corporate experience evaluation criterion to pass/fail instead of engaging in the solicitation’s required qualitative evaluation and tradeoff of corporate experience.
  • The solicitation provided that an initial aspect of the corporate experience evaluation would be conducted on a pass/fail basis during the first phase of evaluation, but the solicitation also included corporate experience as a critical element to the agency’s best-value tradeoff in the second phase of the evaluation.
  • GAO rejected TSA’s position that it could reasonably evaluate corporate experience only on a binary pass/fail basis, finding that the plain language of the solicitation required a qualitative evaluation and tradeoff of offerors’ experience.
  • Accordingly, while the Source Selection Authority summarily compared the satisfactory ratings assigned to both the protester and the awardee, GAO held that this comparison failed to constitute the requisite qualitative comparison of corporate experience.

Challenges to an agency following the terms of the solicitation remain a very common ground of protest. Where, as here, the parties disagree about the interpretation of a solicitation provision or the manner in which the agency was to evaluate proposals, GAO will resolve the matter by reading the solicitation as a whole and in a manner that gives effect to all of its provisions.

Claims Cases

1. CSI Aviation, Inc. v. DHS, CAFC No. 2021-1630 (April 14, 2022)

  • The United States Court of Appeals for the Federal Circuit reversed a decision issued by the Civilian Board of Contract Appeals (CBCA or Board), which had denied an appeal filed by CSI Aviation, Inc. (CSI), an air charter company.
  • CSI sought to recover $40.2 million under its General Services Administration federal supply schedule (GSA FSS) contract after the US Immigration and Customs Enforcement canceled 45 flights less than two weeks in advance.
  • CSI argued that the terms and conditions (T&C) (which included the cancellation policy) were incorporated by reference in the GSA FSS contract, but the CBCA held it was not.
  • On appeal, the Federal Circuit reiterated that a document is incorporated when it is cited in “express" and “clear” language. In this case, it found that "[t]he offer’s pricing policy contains a ‘terms and conditions’ provision that expressly states, ‘CSI terms and conditions … will apply to all operations and are included for reference,’’ and , "[t]rue to its word, a copy of the CSI terms and conditions, dated November 2008, is included as part of the offer."
  • Specifically, CAFC rejected the Board’s argument that CSI’s use of different language to incorporate different documents meant this document wasn’t incorporated: “[o]ur circuit … does not require 'magic words' of reference or of incorporation.'"

While often presented to commercial companies as a simple way to sell to the government, GSA schedule contracts actually involve complicated submissions to, and negotiations with, the government. It is important to be careful in these negotiations and clearly address any company-specific terms of sale and their relationship to standard government contract terms. Experienced counsel can help avoid costly litigation down the road as a result of unclear contract language.

Investigations and Enforcement

Jenner & Block lawyers David Robbins and Sati Harutyunyan analyzed the recently issued and long-awaited Interagency Suspension and Debarment Committee Report to Congress for FY2020.


Government Contracts Legal Round-Up | 2022 Issue 6

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Protest Cases

1. Starlight Corp., B-420276.3, B-420267.4 (March 15, 2022) (Published March 24, 2022)

  • GAO sustained a protest, in part, based on the agency’s insufficient documentation regarding the relevance of past performance.
  • The solicitation provided that among technically acceptable offers, a tradeoff would be made between past performance and price, with past performance significantly more important.
  • Here, the protester alleged there was no evidence in the record that the agency considered the scope, complexity, dollar value, and extent of subcontracting/teaming to determine the relevancy of the awardee’s past performance, as required by the solicitation.
  • GAO identified that while the evaluation report included the notation “relevant” for each contract, the evaluators made no mention of the relevance of contracts in relation to the solicitation requirements and provided no rationale for the relevancy ratings assigned. GAO accordingly found the agency’s documentation insufficient to allow it to assess the reasonableness of the past performance evaluation and sustained the protest.

Agencies are required to sufficiently document past performance evaluations to demonstrate their conclusions were reasonable. Failure to do so is a viable path for a sustained protest.

2. Eccalon LLC, B-420297, B-420297.2 (January 24, 2022) (Published March 22, 2022)

  • GAO sustained a protest challenging the Department of Defense’s (DOD) issuance of a task order for services to support the DOD’s Office of Small Business Programs in increasing small business participation in DOD acquisitions.
  • Under the solicitation’s technical approach factor, the agency was to assess the extent to which a vendor’s proposed approach demonstrated (1) the vendor’s understanding of the requirements, (2) practical and feasible methods to accomplish the required tasks, and (3) reliable methods for ensuring quality deliverables.
  • In declining to select Eccalon for award, the selection authority determined that the protester’s technical approach was only “somewhat superior” to the awardee’s because it relied on “experience and not necessarily innovation.” GAO agreed with the protester that this assessment reflected the consideration of unstated evaluation criteria.
  • More specifically, GAO concluded that if a vendor could demonstrate the attributes listed in the solicitation, a decision to downgrade an evaluation due to the vendor’s experience, as opposed to any innovation in its approach, raised a consideration not reasonably encompassed within the attributes of demonstrating understanding, practicality, feasibility, and reliability.
  • GAO also sustained the protest because the selection authority lacked a reasonable basis for disregarding an underlying evaluation finding regarding the awardee’s limited understanding of the requirement for cyber readiness and assessments, as well as because the record did not support the agency’s decision to increase the risk rating for the protester’s quotation under the management and staffing approach factor.

Although an agency properly may apply evaluation considerations that are not expressly outlined in the solicitation where those considerations are reasonably and logically encompassed within the stated evaluation criteria, there must be a clear nexus between the stated criteria and the unstated consideration. GAO will sustain a protest where an agency relies on unstated evaluation criteria.

3. Mitchco Int’l, Inc. v. United States, Fed. Cir. No. 2021-1556 (Published March 3, 2022)

  • The protester claimed, among other things, that the awardee violated the Procurement Integrity Act (PIA) by obtaining and using “contractor bid or proposal information” about the protester’s performance as a subcontractor under the incumbent effort. Critically, the awardee was also the prime contractor in the incumbent contract.
  • The Federal Circuit recognized a division in lower court precedent as to whether the PIA’s prohibition against obtaining and using contractor proposal information applies to private entities or is limited to present and former government officials. The Federal Circuit did not resolve this issue of statutory interpretation.
  • Instead, the Federal Circuit held that the PIA could not apply in this case because it was undisputed that the awardee properly obtained Mitchco’s performance information as part of the awardee’s performance of the incumbent contract, falling within a PIA safe harbor provision.

This case is another waypoint in the cluster of protest decisions relevant when a protester claims that the awardee had access to the protester’s proprietary proposal information. As discussed in the last Government Contracts Legal Round-Up, GAO consistently rejects such allegations when framed as an unequal access to information Organizational Conflict of Interest. In Mitchco, the Federal Circuit left open the possibility that there could be some recourse under the PIA where a competitor improperly obtains access to a protester’s proposal information, but not when the awardee properly obtained access to that information through the performance of a government contract.

Claims Cases

1. Appeal of AECOM Technical Services, Inc., ASBCA No. 62800 (February 8, 2022)

  • AECOM held an IDIQ contract for the performance of energy savings projects at government facilities. This IDIQ contract provided for issuance of competitive task order awards for specific energy savings performance contracts.
  • AECOM responded to an RFP for an ESPC project at Buckley Air Force Base in Colorado and was issued a document informing AECOM that it had “been selected as the Energy Savings Performance Contractor” for the project and that it was authorized to “proceed with Preliminary Assessment development and submission.” AECOM did so, developing and designing energy conservation measures for the project. Several months later, the government informed AECOM that it had decided not to pursue the ESPC project and had no plans to exercise its “option to obtain ownership of any submitted documentation pertinent to the project.”
  • Almost four years later, AECOM submitted a claim alleging that the Base’s own news article indicated that it used AECOM’s designs to pursue several of the ECMs. AECOM sought its costs for developing these ECMs.
  • The government challenged this claim on jurisdictional grounds and for failure to state a claim. The Armed Services Board of Contract Appeals most recently denied that latter motion, finding that AECOM had adequately alleged the existence of a contract with the government, and rejecting the government’s argument that it was allowed to retain AECOM’s designs as “proposal materials.”

Energy Services Contractors (ESCOs) provide valuable services to the government under a unique contracting regime. It is important for ESCOs to understand their rights vis-à-vis the government throughout each state of the contracting process and ensure they are being treated fairly.


Government Contracts Legal Round-Up | 2022 Issue 5

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Protest Cases

1. Choctaw Defense Munitions, LLC, B-420003, B-420003.2 (October 27, 2021) (Published March 1, 2022)

  • GAO dismissed a protest alleging, in part, that the awardee had an unequal access to information OCI, finding the information at issue was not obtained through performance of a government contract.
  • A former Choctaw executive, who had been a managing officer for the affiliate performing the incumbent contract, left Choctaw and began working with Cherokee. While working at Choctaw, this individual had direct oversight of the incumbent contract and was responsible for approving proposals related to that program.
  • Choctaw thus argued that this change in employment created an unequal access to information OCI, which Cherokee failed to disclose and the agency failed to evaluate and mitigate.
  • GAO dismissed the protest ground, explaining that an unequal access to information OCI exists where a firm has access to non-public information as part of its performance of a government contract, and where that information may provide the firm an unfair competitive advantage in a later competition for a government contract. In contrast, where information is potentially disclosed by a former employee of the other firm, this type of disclosure is “essentially a dispute between private parties.” Without evidence of government involvement, as was the case here, GAO will not consider the issue.

Allegations of an OCI will be considered a private dispute, and therefore not be considered by GAO, if the information at issue is obtained not through performance of a government contract, but through hiring a competitor’s employee.

2. K&K Industries, Inc., B-420422; B-420422.2 (March 7, 2022) (Published March 10, 2022)

  • GAO dismissed a protest as untimely where it was filed more than 10 days after the agency unambiguously stated that the protester’s enhanced debriefing had concluded.
  • Following notice of award, K&K requested and received its Department of Defense enhanced debriefing, which only closes following a question and answer period. After receiving its first set of answers, K&K submitted a second round of questions, and in response the agency stated: “Any additional questions must be submitted by December 1, 2021. This concludes your written debriefing.” K&K submitted a third round of questions by that date, and following the receipt of answers, K&K filed its protest.
  • Following the submission of the agency report and K&K filing a supplemental protest, GAO on its own requested briefing on timeliness.
  • In arguing that its protest was timely, K&K contended that the second agency response was ambiguous regarding the conclusion of the required debriefing, because it stated both “[a]ny additional questions must be submitted by December 1, 2021” and “[t]his concludes your written debriefing.”
  • GAO disagreed, holding that the agency unambiguously informed K&K that its written debriefing had closed following the second round of questions. The agency’s decision to answer additional questions did not toll the protest clock, as only an agency’s action can extend a debriefing, and a disappointed offeror cannot extend the debriefing by asking further questions.

GAO’s strict timeliness rules can be a trap for the unwary. If there is an opportunity to ask additional questions after the agency has stated that the debriefing is closed, confirm that the debriefing remains open until answers are received. Without such confirmation, disappointed offerors should assume that the 10-day protest clock has commenced and file accordingly.

Claims Cases

1. Central Company, ASBCA No. 62624 (February 3, 2022)

  • After it was terminated for default, an Air Force design and construction contractor brought an appeal claiming its performance delays were excusable due to the COVID-19 pandemic.
  • ASBCA denied the appeal, finding no evidence that the pandemic actually affected performance. To the contrary, the board determined that significant delay occurred before the pandemic’s onset in March 2020. Specifically, the contract required that work be completed in May 2020, but as of March 2020, the contractor had submitted only one design document, which was rejected.

The decision indicates that although COVID-19 impacts could excuse delay or non-performance in some scenarios, contractors cannot cite COVID-19 impacts to explain away all delays occurring during the pandemic. Contractors asserting pandemic-related impacts should be prepared to provide documentation and point to contemporaneous demonstration to the agency of when the delays occurred and their real effect on the contractor’s work.


Government Contracts Legal Round-Up | 2022 Issue 4

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Protest Cases

1. KPMG LLP, B-420388, B-420388.2 (February 16, 2022)

  • GAO denied a protest challenging the Defense Logistics Agency’s (DLA) decision to set aside a Federal Supply Schedule (FSS) procurement for service-disabled veteran-owned small businesses (SDVOSB).
  • The small business programs and the well-known “Rule of Two” generally are not applicable to FSS procurements. Instead, a contracting agency retains broad discretion to set aside FSS orders.
  • Among other arguments, KPMG challenged the adequacy of DLA’s market research, identifying differences between the description of the work provided in the agency’s sources sought notice and the precise requirements of the RFQ.
  • Nevertheless, GAO found unobjectionable the set-aside decision. GAO explained that in making set-aside decisions, agencies need only make an informed business judgment that there are small businesses that are capable of performing and can reasonably be expected to submit offers. DLA met that threshold here.

Agencies enjoy broad discretion to set aside an FSS procurement. A contracting officer need only make an informed business judgment that there is a reasonable expectation of receiving acceptably priced offers from small business concerns that are capable of performing the contract. In fact, a contracting officer may set aside a solicitation even where a skeptical competitor can identify contrasting information that could arguably justify rejecting the set-aside and holding a full and open competition.

2. Softrams, LLC; Chags Health Info. Tech., LLC, B-419927.4 et al. (February 7, 2022)

  • GAO sustained a protest where an agency made award to one company based, in part, on an oral presentation given by a different entity.
  • The protest involved a Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS), procurement for operations and management of the agency’s identity management system. CMS conducted the competition among GSA federal supply schedule contract holders.
  • During the multi-phase competition, the awardee had undergone a “vendor configuration change”; the vendor changed from a traditional prime-subcontractor arrangement to a GSA contractor teaming arrangement (CTA) (with the subcontractor as the team lead). The CTA participated in the oral presentation part of the competition. 
  • Softrams and Chags protested; the agency took corrective action and eliminated the CTA from the competition; the CTA filed an agency-level protest; and CMS permitted the original prime-subcontractor bidding entity back in the competition. The agency’s corrective action then involved a reevaluation of quotations, but CMS did not permit any vendor to make revisions to or provide a new oral presentation. Ultimately, CMS issued the FSS order to the prime-subcontractor entity.

GAO sustained the protest because CMS improperly relied upon the oral presentation made by the CTA in selecting the prime-subcontractor’s revised quotation for award. That is, the quotation that formed the basis of the selection decision technically was submitted by two different vendors—a prime-subcontractor team and a CTA.

Agencies generally have broad discretion to take corrective action when the agency has determined that such action is necessary to ensure fair and impartial competition, and GAO generally will not object to specific corrective action, so long as it is appropriate to remedy the concern that caused the agency to take corrective action. Here, GAO sustained the protest because the corrective action did not fully address the original error that CMS was attempting to correct. In the end, because CMS did not revisit the vendors’ oral presentations, the agency had unreasonably based its selection decision on a quotation that was composed of submissions from two different vendors.

3. Science Applications International Corporation, B-419961.3; B-419961.4 (February 10, 2022) (Published February 23, 2022)

  • GAO denied a protest alleging (in part) that the awardee, Leidos, Inc., gained access to non-public, competitively useful information through a consulting agreement with a former NASA official who provided proposal preparation assistance.
  • The protester claimed that the former government official (referred to as X) had access to SAIC’s proprietary information from the incumbent contract, as well as access to internal agency source selection information. SAIC also argued that NASA’s investigation concluding otherwise was unreasonable.
  • Specifically, following an investigation, the contracting officer concluded that while X had access to non-public proprietary information and source selection information due to the high-ranking position the individual held at NASA before retiring, this information was not competitively useful because the information had either become public or was outdated by the time initial proposals were due. The contracting officer also found that there was no evidence that any of the agency’s non-public, competitively useful information made its way into Leidos’s proposal.
  • Ultimately, GAO found NASA’s investigation meaningful and its conclusions reasonable. GAO identified that the protester’s disagreement with the agency’s findings about the competitive usefulness of information, without more, could not displace the agency’s reasonable judgment that the awardee did not have an unfair competitive advantage. Notably, GAO concluded that SAIC did not allege hard facts pertaining to X’s involvement in the procurement, instead only providing speculation, and thus the protester was not entitled to a presumption of prejudice from an unfair competitive advantage.

For companies relying on a former government official, either as an employee or as a consultant, proceed carefully to avoid an unfair competitive advantage. For protesters alleging that the awardee has such an advantage, it is crucial to allege with specificity how the awardee benefitted from the former government official’s knowledge and insights to meet the prejudice hurdle.

Claims Cases

1. Marine Construction, LLC v. United States, COFC No. 15-1189 (February 17, 2022)

  • COFC granted in-part and denied in-part the contractor’s motion for summary judgment alleging that its termination for default of a hydraulic dredging contract at the Quillayute River Waterway in La Push, Washington should be converted to a termination for convenience.
  • The contractor claimed that this was warranted for a number of reasons including, because: the government withheld superior knowledge of certain dredging specifications, the contractors properly gave notice of an excusable delay, the government breached the contract, and of differing site conditions.
  • While the court ultimately rejected some of these claims, reserved others for further consideration at trial, or was persuaded by the government’s defenses, COFC did grant summary judgment on the contractor’s superior knowledge claim.
  • Specifically, the court found that the contractor successfully established the government breached the contract under the superior knowledge doctrine for two of its four claims.
  • First, COFC agreed with the contractor that because the government “failed to disclose its superior knowledge of the 12” minimum sufficient discharge pipe size in the 2014 solicitation,” and the contractor began performance based on that original solicitation, the government breached the contract.
  • Second, the court found that because the contractor “bid on the solicitation without knowledge of the substantial quantities of man-made debris and sunken vessels in the boat basin,” the government’s failure to disclose that information before the contractor began performance constituted a breach of contract under the superior knowledge doctrine.
  • Notably, in agreeing with the contractor on those two grounds, COFC rejected various attempts by the government to defend itself by claiming that it had informed the contractor at some later point. Instead, the court emphasized that the operative question was whether the solicitation was clear and whether the contractor had performed (to its detriment) on the basis of those representations.

When issues arise during performance—especially those resulting from surprise or other potential misrepresentations by the government—contractors should consider the superior knowledge doctrine as an effective mechanism to have the courts/boards ensure that the government strictly adhered to the terms of the contract pursuant to which the contractor performed. And, where there is a mismatch between what the government represented and the reality of performance, the superior knowledge doctrine remains a vital tool contractors may employ to ensure they are compensated for any misalignment of expectations under the contract. Our team at Jenner & Block has substantial experience litigating superior knowledge claims, please contact us with any questions.


Government Contracts Legal Round-Up | 2022 Issue 3

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Protest Cases

1. AttainX, Inc., B-420313 (January 31, 2022) (Published February 1, 2022)

  • GAO denied a protest where a protester timely submitted a quotation that was not considered by the agency because of email delivery issues.
  • In this procurement, the protester submitted its quotation by email to the contract specialist shortly before the deadline for quotation submission but received an error delivery message. The protester made several attempts to contact the contract specialist, each time receiving an error message.
  • After the agency had awarded the task order to another vendor, a subsequently appointed contract specialist informed the protester that its proposal had been quarantined and was never viewed. The protester alleged that the agency improperly failed to consider its quotation.
  • GAO denied the protest. Although the protester timely submitted its quotation to the designated email address, the email was quarantined in the agency’s email server in a manner that made it inaccessible and thus the contracting personnel were unaware of the quotation.
  • GAO analogized to an agency misplacing a timely submitted quotation; in such cases, relief is available only where there is evidence of a deliberate intent to prevent selection of the firm or a systemic agency failure to receive and safeguard quotations. Here, the record lacked evidence of other vendors experiencing similar problems or broader systemic agency issues.
  • Notably, the agency had removed FAR 52.212-1(f) from the solicitation, which provides for the “government control exception” to consideration of late proposals.

While GAO described the situation as “unfortunate” and did not fault either party, the result was disappointing for the vendor who had complied with the solicitation’s instructions. While an unusual case, this decision serves as a cautionary tale for leaving ample time to submit proposals prior to the announced deadline, and where appropriate, confirming receipt.

2. CGS-SPP Security Joint Venture v. United States, No. 21-2049C (January 19, 2022) (Published February 3, 2022)

  • In this second-bite protest, the Court of Federal Claims (CoFC) disagreed with GAO’s prior holding and sustained a protest on the basis that the solicitation contained a latent defect regarding the email address to which proposals were required to be submitted.
  • Here, the solicitation required proposal submission by email and identified a specific office within the Department of State for proposal submission, but it did not designate any specific contracting personnel to receive proposals. The solicitation identified two contracting officers, as well as a contract specialist to respond to questions and comments and provided email addresses for a contracting officer and the contract specialist.
  • The plaintiff emailed its proposal to the two contracting officers identified in the solicitation, as well as an additional agency contracting officer. However, while the plaintiff addressed its proposal to the contract specialist, it did not include the contract specialist in the email submission. The contracting officers who received the proposal did not open the protester’s email or forward it to the contract specialist. Consequently, plaintiff’s proposal was never considered for award.
  • After awarding the contract to the incumbent contractor, plaintiff initially filed a protest at GAO, which dismissed the protest as untimely on the basis that the solicitation contained a patent ambiguity regarding the appropriate addressee for submission of proposals.
  • The CoFC disagreed, finding that the solicitation was ambiguous and susceptible to two reasonable interpretations. Further, the court held that the ambiguity was latent, not apparent on the face of the proposal, and created by State not informing potential offerors that proposals would only be considered if sent to one particular individual—the contract specialist—despite any direct textual support in the solicitation for this requirement. The court also held that the plaintiff complied with the most reasonable interpretation of the solicitation by sending its proposal to the two contracting officers identified in the RFP.

Contractors should remain vigilant about potential ambiguities in solicitations, generally, and specifically with respect to threshold matters like proposal submission instructions. Here, the CoFC reached a different conclusion than GAO regarding a latent ambiguity in what it described as a “close call.” As a general matter, however, in situations where a solicitation ambiguity is evident on its face, it will be considered patent and the potential offeror must seek clarification prior to award or risk waiving its objection.

Claims Cases

1. Aspen Consulting, LLC v. Secretary of the Army, CAFC 2021-1381 (February 9, 2022)

  • Contractor appealed final decision of the Armed Services Board of Contract Appeals (ASBCA) denying an appeal based on the government's failure to deposit payment in the correct bank account.
  • FAR 52.232-33 provides that “[t]he Government shall make payment to the Contractor using the [Electronic Funds Transfer] EFT information contained in the Central Contractor Registration (CCR) database. In the event that the EFT information changes, the Contractor shall be responsible for providing the updated information to the CCR database.”
  • The ASBCA held that the government had not breached the contract because the fault rested with the contractor for failing to properly update its information in the Central Contractor Registration (CCR) database; the United States Court of Appeals for the Federal Circuit (CAFC) disagreed.
  • Specifically, CAFC “conclude[d] that the government’s breach was material because the FAR clause serves an important purpose for both parties: it protects the government and the contractors who do business with it.”
  • CAFC remanded the case for further proceedings on the potential affirmative defense of payment, which may be available where the funds actually benefited the party claiming breach.

This case serves as a reminder that the Boards and Courts will hold parties to a government contract to strict adherence with the terms. When a dispute arises with the government, contractors should examine closely whether the government has satisfied its requirements under the contract. Here, the contractor benefited from application of that concept.

False Claims Act

This was a busy period for False Claims Act updates:

  • The Department of Justice announced $5.6 billion in fraud and False Claims Act recoveries in 2021, with a notable increase in recoveries from defense/government contracting suits to just shy of $100 million. Press release available here: https://www.justice.gov/opa/pr/justice-department-s-false-claims-act-settlements-and-judgments-exceed-56-billion-fiscal-year
  • The First Circuit announced its standard for False Claims Act dismissals, a broadly deferential standard to the Government’s dismissal authority. Decision available here: http://media.ca1.uscourts.gov/pdf.opinions/20-1066P-01A.pdf
    • To recap, the current circuit split on FCA dismissals is:
      • First and DC Circuits: government has broad dismissal authority
      • Third and Seventh Circuits: Voluntary dismissal authority in the Federal Rule of Civil Procedure 41(a)
      • Ninth and Tenth Circuits: Dismissal must serve a valid government purpose and there must be a rational relationship between dismissal and that purpose
  • The Eleventh Circuit held that non-intervened qui tam cases may be subject to the Excessive Fines Clause, while finding the case before the Eleventh Circuit did not violate the clause. Decision available here: https://media.ca11.uscourts.gov/opinions/pub/files/202010276.pdf

Government Contracts Legal Round-Up | 2022 Issue 1

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Vaccine Update

The Supreme Court Weighs in Regarding Vaccine Mandates, Sends Signals for Government Contractors (January 13, 2022)

  • On January 13, 2022, a divided Supreme Court stayed OSHA’s vaccine-or-test emergency temporary standard (ETS) but upheld the vaccine mandate issued by Centers for Medicare & Medicaid Services (CMS).
  • In both cases, the Court’s decisions focused on the limits of statutory authority. 
    • In the OSHA case, the majority held that the Occupational Safety and Health Act does not authorize a rule as broad as the OSHA ETS because OSHA’s authority is limited to issuing occupational safety and health standards—and not universal risks such as COVID-19.
    • In the CMS case, the majority held that the CMS vaccination mandate fits neatly within the language of the statute that authorizes the Secretary of Health and Human Services to impose conditions on the receipt of Medicaid and Medicare funds.
    • Although the Court upheld one rule and struck down the other, in both cases, it signaled a focus on whether the relevant statute authorized the agency’s mandate.
  • The OSHA ruling also resolves the question of whether the OSHA ETS could apply to contractors while the contractor mandate is preliminarily enjoined or if it is permanently struck down. The answer is no.
  • These two decisions shift the focus back to the government contractor mandate, which is preliminary enjoined nationwide while litigation proceeds in different jurisdictions around the country.
    • The nationwide injunction issued by a district court in the Southern District of Georgia remains in effect and is currently on appeal in the Eleventh Circuit.
    • The more limited injunctions issued by district courts in Kentucky, Florida, and Missouri are in various stages of litigation or appeal and the Biden Administration has appealed the Eastern District of Missouri injunction.

For the time being, both the OSHA ETS and contractor mandates are currently stayed. While attention shifts back to the lower courts, the Supreme Court’s decisions indicate that those mandates face difficult odds of ever coming into force and that future decisions will also be based on the scope of permitted statutory authority. For a detailed discussion of these decisions and their implications, read our client alert here and listen to our podcast here.

Protest Cases

1. Cherokee CRC, LLC, B-420205; B-420205.2 (December 21, 2021) (Published December 28, 2021)

  • GAO denied a protest challenging (in part) that the Bureau of Indian Affairs (BIA) conducted unequal discussions when it asked Walga Ross Group JV (WRG), the awardee, to clarify its proposal.
  • Under the RFP, BIA directed offerors to propose their “best prices for each of the Price Categories in accordance with the Statement of Work (SOW) and attachments.” With regards to price, award would be made to the lowest-priced, technically acceptable offeror whose overall price was determined to be “realistic, reasonable, and complete.”
  • In its final proposal, WRG specified a dollar figure for all of the categories except one; for value engineering, WRG’s proposal simply stated “TBD during design.” The evaluators found WRG’s proposal acceptable, but suggested the contracting officer clarify their intention regarding value engineering. The contracting officer emailed WRG asking the firm to “clarify whether or not your total price . . . includes value engineering analysis services.” WRG confirmed that it did, and BIA awarded the task order to WRG.
  • Cherokee protested, arguing that this exchange constituted discussions. The protester contended that WRG’s proposal was incomplete without a dollar figure for the value engineering price category, and WRG’s proposal was, therefore, unacceptable.
  • GAO denied the protest, concluding the exchange was clarifications. Specifically, GAO disagreed that WRG’s proposal was incomplete without the missing dollar figure, finding it was reasonable and consistent with the solicitation for the agency to determine that WRG’s proposal was complete because it submitted an overall price within the required format, even if it did not submit a dollar value for one price category in one breakdown. Moreover, WRG did not change its overall, single-CLIN price.

In situations where there is a dispute regarding whether communications between an agency and an offeror constituted discussions, the acid test is whether an offeror has been afforded an opportunity to revise or modify its proposal. In such protests, GAO will carefully scrutinize the record to reach its own conclusion regarding an agency’s conduct.

2. Meridian Knowledge Solutions, LLC, B-420150 et al. (December 13, 2021) (Published December 22, 2021)

  • GAO sustained a protest where the awardees’ General Services Administration (GSA) Federal Supply Schedule (FSS) contract was scheduled to expire prior to the end of the period of performance for the Blanket Purchase Agreement (BPA) that the Agency had awarded.
  • The Department of Homeland Security (DHS or Agency) issued a solicitation under the GSA FSS, Information Technology program (schedule 70) which contemplated an ordering period of “up to ten years from award,” including one base year and nine option years.
  • The Agency established BPAs with the three highest-rated vendors, each of which offered a lower price than Meridian, the protester.
  • As relevant here, two of the awardees submitted quotations based on FSS contracts that expired in 2022 and 2030, prior to the complete ten-year period of performance. The contracts issued to these awardees were tailored to the remaining duration of the vendors’ FSS contracts, extending to 2022 and 2030 respectively. The third awardee was issued a BPA that extended the full 10-year period of performance.
  • Here, GAO held that the plain language of the solicitation required vendors’ FSS contracts to cover the entire 10-year period of performance of the resultant BPA and did not permit the establishment of BPAs with varying lengths. Because this was a material requirement, the two vendors lacking a FSS contract of sufficient duration could not have been issued a BPA consistent with the terms of the solicitation.
  • GAO also acknowledged the price evaluation implications of comparing all vendors on the basis of complete 10-year pricing despite several vendors knowing that they would be unable to compete for all 10 years.

GAO has recognized that an FSS BPA is not established directly with the contractor; rather, it is established under the contractor’s FSS contract such that FSS BPA orders are ultimately placed against the vendor’s FSS contract. As a result, as a prerequisite to placing an order under an FSS BPA, a vendor must have a valid FSS contract in place, including an FSS contract of sufficient duration to coincide with the entire period of performance for the resultant BPA.

3. Science and Technology Corporation, B-420216 (January 3, 2022) (Published January 11, 2022)

  • GAO denied a protest challenging as unduly restrictive certain terms of a National Oceanic and Atmospheric Administration (NOAA) solicitation for scientific support services.
  • As a preliminary matter, GAO found that the protester’s objection to one of the key personnel requirements was untimely because protester Science and Technology Corporation (STC) failed to raise this issue with GAO within 10 days of adverse agency action following STC’s agency-level protest.
  • More specifically, STC sent a “letter of concern” to NOAA asserting, among other things, that the lead physical scientist requirement was unduly restrictive, and requesting that the number of key personnel positions be decreased. The next day, NOAA rejected STC’s request to amend the solicitation.
  • Even though STC apparently did not intend this letter to constitute an agency-level protest, GAO still determined that it was, because the letter expressed dissatisfaction and requested relief. Consequently, STC was required to file its protest arguments related to the key personnel requirements within 10 days of NOAA’s denial of STC’s request (regardless of whether the GAO protest was filed pre-proposal submission or not). But STC waited more than two weeks to file at GAO, and GAO therefore dismissed the argument as untimely filed.
  • Next, on the merits, GAO denied STC’s other protest argument objecting to NOAA’s decision to only consider the corporate experience of the prime contractor and not also the corporate experience of the prime contractor’s team members and/or subcontractors.
  • GAO found unobjectionable NOAA’s explanation that the goal of its experience evaluation requirement was to determine whether the prime contractor had the requisite scientific support services experience.
  • GAO explained that an agency’s desire to reduce the risk of unsuccessful performance can be rationally achieved by restricting consideration of experience to the firms which are contractually obligated to meet the agency’s requirements, which was the case here.

An offeror may be surprised to learn that its communications with a contracting agency could be deemed an agency-level protest even where the offeror did not intend to lodge any protest. In this respect, GAO will consider an offeror’s communications with a contracting agency to constitute an agency-level protest where the offeror’s letter conveys the “intent to protest” by a specific expression of dissatisfaction with the agency’s procurement actions and a request for relief—even if the written statement does not state explicitly that it is or is intended to be a protest.

In addition, contracting agencies are required to specify their needs in a manner designed to permit full and open competition, and may include restrictive requirements only to the extent they are necessary to satisfy the agency’s legitimate needs or as otherwise authorized by law. Where a protester challenges a specification or requirement as unduly restrictive of competition, the procuring agency has the responsibility of establishing that the specification or requirement is reasonably necessary to meet the agency’s needs. A solicitation requirement that limits the agency’s experience evaluation to that of the prime contractor’s experience does not unduly restrict competition where the record demonstrates that the requirement is reasonably related to the agency’s needs.

Claims Cases

1. OWL, Inc. v. Dept. of Veterans Affairs, CBCA 7183 (December 20, 2021)

  • OWL held an IDIQ contract to provide transportation for VA beneficiaries within the Southern Arizona Health Care System.
  • OWL alleged that, as a result of the COVID-19 pandemic, the VA issued directives and guidance that limited the number of patients per trip and reduced trip requests, including through increased use of telemedicine. OWL sought equitable adjustment as a result of “reduction in revenue and trips.”
  • The VA argued that the contract was illusory and unenforceable because the VA had failed to include a guaranteed minimum purchase by the government.
  • The CBCA granted the VA’s motion to dismiss for failure to state a claim, finding that the IDIQ failed to state a guaranteed minimum and that such a contract is binding only to the extent it was performed. The CBCA noted that the contract was also not a requirements contract and did not require the VA to order all relevant services from OWL. The CBCA held that “neither OWL’s expectations based on the parties’ past dealings nor the pandemic” alter the contract.

Contractors must pay close attention to what the government is actually promising to do in any IDIQ contract, which is often very little. The nature of IDIQ contracts is to provide the government with flexibility and one of the few constraints is that it must order the minimum amount specified. Unfortunately, the government will exploit that flexibility—including in unusual circumstances like the pandemic.


Government Contracts Legal Round-Up | 2021 Issue 23

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Regulatory Developments

1. Legal Wrangling Continues Regarding Federal Contractor Vaccine Mandate (December 3, 2021)

  • In an emergency motion, the US Department of Justice requested a stay of the three-state bar (KY, OH, and TN) to the federal contractor vaccine mandate in order to have time to appeal that injunction.  
  • The government argues that blocking Biden’s vaccine mandate risks irreparable harm by disrupting the government’s selection of federal contractors who must safely work while carrying out national security missions and manufacturing equipment for national defense.
  • The underlying vaccine mandate in Biden’s September executive order has thus far been implemented through clauses in new contracts and modifications to existing contracts.
  • The key question for the court is whether the President’s delegated power to manage federal procurement allows imposition of vaccines on the employees of federal contractors and subcontractors.
  • We are closely tracking legal challenges to the federal contractor mandate and stand ready to advise you on the impact of these challenges nationwide.

2. Changes to Guidance on Agency Enforcement of the Vaccine Mandate by Federal Employees, (November 29, 2021)

  • The Safer Federal Workforce Task Force updated its guidance to clarify agency enforcement of the vaccine mandate by federal employees.
  • For those not yet vaccinated, the guidance now advises an “appropriate” period of education and counseling, rather than a “brief,” or “five day” period. 
  • Following education and counseling, agencies may issue a letter of reprimand, followed by a short suspension, now described as 14 days or less. Continued noncompliance during the suspension can be followed by the agency proposing removal. However, depending on operational needs and individual circumstances, agencies may expedite or extend the enforcement process, such as by moving to a second suspension of 15 days or more prior to removal.
  • Agencies are cautioned that “consistency across Government in enforcement of this Government-wide vaccine policy is desired, and the Executive Order does not permit exceptions from the vaccination requirement except as required by law.”
  • Guidance for agency handling of unvaccinated employees provides a framework for federal contractors to use in fashioning their own policies. We continue to track the changes to guidance regarding vaccine-related workforce policies and stand ready to advise regarding your implementation of the federal contractor vaccine mandate.

Protest Cases

1. Enterprise Resource Planned Systems International, LLC, B-419763.2; B-419763.3 (November 15, 2021) (Published December 3, 2021)

  • GAO denied a protest alleging in part that the agency improperly performed a price realism evaluation.
  • A price realism analysis considers whether an offeror’s low price reflects a lack of technical understanding or risk. Agencies are only permitted to assess price realism if offerors are on notice such an evaluation will be performed.
  • Here, the solicitation did not include a price realism as an evaluation factor. ERPSI alleged that the agency nonetheless performed one, claiming the evaluators raised concerns about ERPSI’s proposed price being too low to fulfill the representations made in its technical proposal.
  • GAO denied this protest ground, finding that statements made by the evaluators did not demonstrate that the agency evaluated ERPSI’s price for realism. Instead, the record reflected the agency’s concern that the protester’s proposal carried technical risk in multiple respects, which in turn carried price risks. For instance, ERPSI’s proposal included ambiguities as to what, specifically, the firm was proposing as its technical solution; GAO found reasonable the agency’s conclusion that it might have to incur additional costs to satisfy the requirements of the contract due to these ambiguities.

Evaluation references to price risk do not necessarily constitute price realism. GAO maintains a distinction between cases where it is the protester’s price that raised concerns about the risk or feasibility of their technical approach, versus those where the agency had concerns about the firm’s technical approach that increased the possibility of additional costs during performance of the contract to meet the requirements.

2. Computer World Services Corporation; CWS FMTI JV LLC, B-419956.18 et al. (November 23, 2021)

  • GAO sustained a protest challenging the terms of the National Institutes of Health’s (NIH) Chief Information Officer-Solutions and Partners 4 (CIO-SP4) solicitation.
  • Relevant here, the solicitation included a self-scoring component in phase 1 of the competition under which an offeror could claim points for multiple criteria based on various experience (e.g., under the corporate experience criterion, performing in the RFP’s ten task areas). The RFP permitted an offeror to submit experience examples by mentor-protégé joint venture members, or members of a contractor team arrangement (CTA).
  • CWS and CWS’s mentor-protégé joint venture protested because, for a mentor-protégé joint venture, the solicitation limited the experience examples that a large business mentor could submit for credit. The protester argued that these limitations unreasonably restricted the ability of a protégé to take advantage of the experience of its large business mentor.
  • GAO first rejected CWS FMTI’s argument that the RFP violated 13 C.F.R. § 125.8, which provides that “[a] procuring activity may not require the protégé firm to individually meet the same evaluation or responsibility criteria as that required of other offerors generally.” GAO concluded that the RFP did not violate any specific statutory or regulatory provisions because the RFP’s limitations on the experience that could be submitted by the large business mentor did not impose on the protégé a requirement that was different than “other offerors generally,” because the protégé was not required to submit any experience itself.
  • Nonetheless, GAO sustained the protest because the restriction was unduly restrictive of competition.
  • NIH maintained that limiting the amount of experience that may be credited to a large business mentor would ensure that the agency would be able to meaningfully consider the experience of the protégé member of the joint venture, but GAO emphasized that the CIO-SP4 RFP did not actually require the protégé to submit any experience, and therefore did not ensure that the agency would be able to meaningfully consider that joint venture member’s experience after all. (This also distinguished the situation here from a comparable restriction GAO found unobjectionable in Ekagra Partners, LLC in early 2019.)

The purpose of the Small Business Administration’s mentor-protégé joint venture program is to allow small business protégés to benefit from the capabilities of mentor firms—which may be large or small businesses. GAO sustained one of the dozens of protests filed challenging the CIO-SP4 solicitation because NIH had no reasonable support for its decision to limit the submission of experience from a large business mentor, which essentially favored joint ventures with small business mentors.

Claims Cases

1. JKB Solutions and Services, LLC v. United States, Fed. Cir. 2021-1257 (November 17, 2021)

  • JKB received an IDIQ contract to provide training services to the US Army. The Army ordered 14 training sessions per year, but then failed to use or pay JKB for that many sessions. JKB brought an action for breach of contact.
  • After a series of motions, the government moved for summary judgment based on the contract’s inclusion of FAR 52.212-4 and the doctrine of constructive termination for convenience.
  • The Court of Federal Claims granted the government’s motion for summary judgment, holding that FAR 52.212-4 incorporated a termination for convenience clause and nothing limited the applicability of that clause to commercial items.
  • The Court of Appeals for the Federal Circuit disagreed, finding that FAR 52.212-4 does not apply to a services contract and, thus, the termination for convenience clause within it was not applicable. The court remanded to the lower court to consider whether the Christian Doctrine would read into the contract a different termination for convenience clause and whether the government’s actions would then permit constructive termination for convenience.

Courts have gone to great lengths to avoid holding that the government has breached its contract and is liable for breach damages. This decision recognizes basic limits on invoking termination for convenience and finding constructive termination for convenience. It also highlights the complexity of—and the need for experienced counsel in—any situation where the government refuses to live up to its end of the bargain and threatens termination.

Investigations and Enforcement

Yesterday, the President announced the United States’ Strategy on Countering Corruption. We link to the fact sheet from the White House, which further links to the strategy itself. Additional analysis to follow in future alerts.


Government Contracts Legal Round-Up | 2021 Issue 22

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Executive Orders

1. Executive Order on Nondisplacement of Qualified Workers Under Service Contracts (November 19, 2021)

  • President Biden has re-instituted the rule on non-displacement of qualified workers under service contracts subject to the Service Contract Act. In simple terms, this rule requires contractors to offer covered employed under the predecessor contract and its subcontracts a right of first refusal of employment under a successor contract in positions for which those employees are qualified.
  • Contractors should expect the Department of Labor to issue a final rule implementing the change no later than May 2022, with FAR implementation following within 60 days. Despite often bumping up against rulemaking deadlines, DOL could issue this rule in fairly short order due to the framework already provided by the original rule issued by President Obama, but rescinded by Trump. Regardless, contracting officers are likewise “strongly encouraged” to include the relevant clause in any contracts issued between the date of the Order and the final rule.
  • DOL may issue sanctions and remedies for noncompliance, including orders requiring employment and payment of wages lost; and, for willful violations, suspension or debarment.

Regulatory Developments

1. Class Deviation 2022-O0005: Pilot Program for Streamlining Awards for Innovative Technology Projects (November 18, 2021)

  • With a sunset date of October 22, 2022, this Class Deviation exempts from certified cost or pricing data requirements contracts, subcontracts, or modifications of contracts or subcontracts valued at less than $7.5 million awarded to a small business concern or nontraditional defense contractor, when awarded pursuant to 
    • A technical, merit-based selection procedure, such as a broad agency announcement (see FAR 35.016(b)(2));
    • The Small Business Innovation Research Program; or
    • The Small Business Technology Transfer Program.

2. Class Deviation 2022-O0004: Requirements for Nonavailability Waiver Determinations Under the Buy American Statute (November 18, 2021)

  • Defense Pricing and Contracting has issued a Class Deviation to implement key Biden initiatives designed to improve transparency of domestic sourcing (Buy America) waivers and increase the public’s trust in efforts to expand the US manufacturing base. 
  • In lieu of the relevant FAR provisions, this Class Deviation requires DoD contracting officers to execute an individual nonavailability waiver determination if no offer for a domestic end product is received in response to competitive acquisitions.
  • Contracting officers must post such waiver determinations digitally to MadeinAmerica.gov via System for Award Management (SAM.gov) for “Made in America Office” (MIAO) review unless an exception applies. Such exceptions include an urgent need or a prior class determination of nonavailability for the type of product to be purchased. Portions of this posting will be available to the public while source selection information will remain protected.
  • Contracting officers shall not make an award until receiving confirmation that the MIAO: (1) completed its review of the proposed nonavailability waiver determination; or (2) waived its review. The final decision to execute an individual nonavailability waiver determination shall be approved in accordance with DFARS 225.103(b)(ii).
  • A similar Class Deviation applies to civilian agencies and is available here: Class Deviation 2022-01.

Protest Cases

1. GAO Bid Protest Annual Report to Congress for Fiscal Year 2021 (November 16, 2021)

  • GAO issued its annual report to Congress providing data concerning GAO’s overall protest filings for Fiscal Year (FY) 2021.
  • 1,897 cases (including protests, cost claims, and requests for reconsideration) were filed, down 12% from the prior year. In comparison, FY 2018 saw a five-year high with 2,607 cases filed.
  • GAO’s sustain rate of 15% remained consistent with prior years.
  • The effectiveness rate (based on a protester obtaining some form of relief from the agency, either as a result of voluntary agency corrective action or GAO sustaining the protest) likewise remained steady at 48%.
  • The most prevalent reasons for sustaining protests during the 2021 fiscal year were: (1) unreasonable technical evaluation; (2) flawed discussions; (3) unreasonable cost or price evaluation; and (4) unequal treatment.

2. ASHLIN Management Group, B-419472.3; B-419472.4 (November 4, 2021) (Published November 15, 2021)

  • GAO sustained a protest alleging that the agency should have evaluated the awardee’s quotation as technically unacceptable because one of the awardee’s quoted key personnel became unavailable during corrective action.
  • In January 2021, the Department of Labor took corrective action following a protest challenging the award to Booz Allen Hamilton (BAH). When BAH had submitted its quotation in October 2020, one of its then-current employees was slated to fill a key position. In March 2021, the individual submitted a resignation letter notifying BAH of the employee’s intent to leave BAH in two weeks’ time; the employee left the company in April. During this period, the agency was still implementing its corrective action; BAH did not provide notice that the key personnel had departed. The agency again awarded the task order to BAH.
  • The protester argued that BAH’s quotation became technically unacceptable during the corrective action period because this individual was no longer available.
  • GAO sustained the protest, finding that BAH had actual knowledge of the unavailability of one of its quoted key personnel during the corrective action period and failed to notify the agency.
  • GAO was unpersuaded by BAH’s argument that it did not have actual knowledge of the individual’s unavailability because BAH might seek to re-hire the individual if the agency rejected a key personnel substitution, and he might agree to be rehired. GAO also did not accept BAH’s argument that no duty to notify arose here because the task order issued to BAH in December 2020 remained in place throughout the corrective action period, making this the replacement of a key person after award that is a matter of contract administration not for consideration by GAO.

The question of whether to notify agencies regarding the departure of key personnel is one that perpetually vexes contractors. GAO’s decision here reinforces that the failure to do so will render the proposal technically unacceptable—even if the departure occurs during corrective action. If faced with this situation, the proposal team should consult with legal counsel for guidance navigating the traps.

Claims Cases

1. Appeal of Lockheed Martin Aeronautics Co., ASBCA No. 62209 (October 27, 2021)

  • Lockheed submitted a claim for excessive “over & above” work on a contract to upgrade C-5 aircraft.
  • The parties engaged in an increasingly contentious discovery process, with multiple motions to compel. The ASBCA appears to have become increasingly frustrated with the parties and pointedly noted that it “is optimistic that this will be the final [motion to compel] and [the decision] will guide the parties in working together to resolve any future discovery disputes.”
  • The ASBCA noted that broad discovery is permitted before the Board, subject to limits of relevance and proportionality. It then found that Lockheed’s requests were within the bounds of relevance and permitted discovery. Specifically, Lockheed had identified its intent to use a measured mile approach in demonstrating quantum and was entitled to seek information that might support that approach. The government’s view that Lockheed did not have sufficient facts to prove entitlement did not permit the government to refuse to engage in discovery.
  • The ASBCA also rejected the government’s boilerplate objections to interrogatories. The Board found that generalized objections—such as it being “unduly burdensome to attempt to locate” relevant individuals or information—were not sufficient. Such a response failed to demonstrate that the government engaged in a good faith effort to respond to the interrogatories and failed to identify the actual burden the government might face in responding.

Discovery disputes can be costly and time consuming for both parties. They also fail to serve the government’s interest and obligation to treat contractors fairly. Carefully articulated discovery requests and thoughtful trial strategy can help reduce unnecessary costs and painful delay during the discovery process.


Government Contracts Legal Round-Up | 2021 Issue 21

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Executive Developments

1. White House Announces Extension of Contractor COVID-19 Vaccine Mandate to January 4, 2021 (November 4, 2021)

  • In a Fact Sheet dated November 4, the Biden Administration extended the deadline for federal contractors to comply with the COVID-19 vaccine mandate to January 4, 2021, matching the deadline of the vaccine mandates published by the Department of Labor’s Occupational Safety and Health Administration (for workers at private companies with more than 100 employees), and the Department of Health and Human Services (for health care workers at facilities participating in Medicare and Medicaid).
  • The Fact Sheet clarifies that the OSHA mandate, which allows testing in lieu of vaccination, is inapplicable to workplaces that are subject to the federal government contractor mandate.
  • The deadline extension comes amid legal challenges (which have temporarily blocked the OSHA mandate) and a variety of guidance, public meetings, and Q&A publications from the White House and the Safer Federal Workforce Task Force.
  • The Q&A Guidance clarifies, among other things, that affiliates may become covered contractor workplaces if covered contractor employees are present.

Regulatory Developments

1. Department of Defense Announces “CMMC 2.0” (November 4, 2021)

  • DoD announced that it is suspending the original CMMC piloting efforts and will not require CMMC in any contract prior to completion of a newly announced CMMC 2.0 rulemaking process. That process will last between nine and twenty-four months and will involve opportunities for public comment and stakeholder input.
  • CMMC 2.0 streamlines the original model from five levels to three: Level 1 with 17 practices; Level 2 with 110 practices that align with NIST SP 800-171; and Level 3 with 110+ practices based on NIST SP 800-172.
  • CMMC 2.0 reverts back to a self-assessment for Level 1 and some (but not all) Level 2 programs. It also imposes triannual third-party assessments for Level 2 programs with critical national security information, and triannual government-led assessments for Level 3. Programs requiring the most advanced cybersecurity standards and third-party assessments have yet to be identified. 
  • Plans of Action and Milestones (POA&Ms) for those unable to meet all criteria will be permitted in some cases.
  • During the interim period while the rulemaking is underway, DoD encourages contractors to continue to enhance their cybersecurity posture. Project Spectrum is a new tool to help companies assess their cyber readiness.

2. Federal Acquisition Regulation: Revision of Definition of Commercial Item, Final Rule (November 4, 2021)

  • DoD, GSA, and NASA have issued a final rule that redefines “commercial item” by replacing it with definitions of “commercial product” and “commercial service.”
  • The amendment to separate “commercial item” into “commercial product” and “commercial service” does not expand or shrink the scope of products or services that the Government may procure using FAR part 12, nor does it change the terms and conditions with which contractors must comply.

Protest Cases

1. Aero Spray, Inc. d/b/a Dauntless Air v. United States, COFC No. 21-1079C (October 28, 2021)

  • COFC dismissed a bid protest filed by a contract awardee because the awardee in this procurement lacked standing to protest.
  • The Department of the Interior awarded indefinite-delivery, indefinite-quantity (IDIQ) contracts to four companies, including Aero Spray, for aircraft services for wildfire firefighting.
  • Aero Spray lodged a protest on the basis that two of the awardees failed to comply with the solicitation’s aircraft configuration requirements. Aero Spray contended that it “spent significant funds” to comply with the requirement and that it would suffer economic harm from increased future competition for task orders resulting from the allegedly improper IDIQ contracts.
  • In finding that Aero Spray, as an awardee, lacked standing, the Court followed Federal Circuit precedent and turned to the Competition in Contracting Act’s definition of an “interested party,” i.e., “an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract.”
  • Applying the CICA definition, the Court concluded that Aero Spray, “having received a contract award for all that it proposed, was not, and is not, an actual offeror ‘with respect to’ the other contract awards to which Aero Spray now objects.”

GAO has consistently rejected the notion that a contract awardee qualifies as an interested party to file a bid protest, but the COFC has reached different conclusions under similar facts. Here, however, the Court emphasized “the general rule [] that ‘[o]nce a party becomes an awardee, they are no longer an ‘interested party’ with standing to bring a bid protest claim under 28 U.S.C. § 1491(b).” More specifically, this case stands for the proposition that “where an offeror received the very contract it sought,” that the company cannot be considered an actual offeror (and thus an interested party) with respect to the other contract awards it did not seek. But an awardee still may establish interested party status (at the Court) where it claims it should have won different or additional contracts.

2. ICI Services Corp., B-418255.5; B-418255.6 (October 13, 2021) (Published October 28)

  • GAO denied a protest challenging that the Navy failed to properly evaluate Serco, Inc.’s eligibility for award as a corporate successor-in-interest to Alion Science and Technology Corporation, the entity that originally submitted a proposal.
  • The Navy issued the RFP to the Navy’s SeaPort Next Generation (SeaPort-NxG) IDIQ contract holders. Prior to its proposal submission, Alion entered into a definitive agreement with Serco, another SeaPort-NxG contract holder, whereby Serco would acquire, among other things, Alion’s Naval Systems Business Unit (NSBU).
  • In its initial proposal, Alion informed the Navy about the existence of the definitive agreement with Serco, advised that the corporate transaction was expected to close later in the year, and indicated that the “resources identified and included in this proposal will remain the same.” Specifically, within the NSBU, the Ship Systems Business Unit (SSBU) was the largest organization and “owned” the employees, facilities, and other resources that comprised Alion’s proposal, as well as the cost history and past performance included in Alion’s proposal.
  • The transaction was finalized after initial proposal submission, but prior to discussions. Because the Alion NSBU was now a part of Serco, the agency’s discussions were held with Serco. The Navy sought and received detailed information regarding the Serco-Alion transaction.
  • The contracting officer subsequently determined that: (1) Serco had acquired the entirety of the business entity that had submitted Alion’s proposal and which was proposed to perform; and (2) Serco’s purchase of Alion’s NSBU resulted in all relevant proposal assets—i.e., employees, leases/subleases, “any and all” other SSBU resources needed to perform the task order—being transferred from Alion to Serco. The Navy concluded that Serco could be substituted for Alion as an offeror under the RFP and, ultimately, awarded the task order to Serco.
  • The Protester alleged that Serco was not a complete successor-in-interest to Alion, as evidenced by the lack of a novation of Alion’s SeaPort-NxG contract, which rendered improper the selection of, and award to, Serco.
  • GAO denied the protest, first finding that there is no requirement that the entirety of Alion’s SeaPort-NxG contract be transferred, or novated, in order for Serco to be a complete successor-in-interest to Alion with respect to the entire portion of the business embraced by the Alion proposal.
  • GAO also found that ICI failed to establish that the Alion “corporate distinctions” which allegedly did not transfer to Serco were ones likely to have a significant cost or technical impact on performance of the task order.
  • Finally, GAO found it relevant that the Navy’s evaluation and award decision were not based on Alion’s initial proposal, but on Serco’s final proposal after the agency reasonably found Serco to be a proper successor-in-interest to Alion. GAO noted that there is no assertion that Serco’s performance of the task order would be in a manner materially different from that which Serco proposed in its final proposal, which is the ultimate nature of GAO’s concern regarding corporate transactions.

GAO’s case law regarding matters of corporate status and restructuring are highly fact-specific, and turn largely on the individual circumstances of the proposed transactions and timing. If you are the entity involved in a corporate transaction while in the midst of a procurement, take steps to provide the agency with the information necessary to determine you are eligible for award—which also insulates you in the case of a subsequent protest.

Claims Cases

1. Appeal of Tactical Network Corporation, ASBCA No. 62963 (October 13, 2021)

  • Tactical Network filed a dizzying number of motions as it sought to challenge the government’s interpretation of the contract and its concerns with pending deliverables. Specifically, Tactical Network sought an order directing the government to receive pending deliverables and filed a motion to compel seeking an order that the government refrain from taking further contract actions.
  • After the claim was appealed, the government terminated Tactical Network’s contract for default. Tactical Network then filed a “motion to join” seeking to convert the termination for default to a termination for convenience and consolidate the challenge with its existing appeal.
  • The Board denied Tactical Network’s motion to compel and similar requests in its complaint, reiterating that it does not possess jurisdiction to provide injunctive relief or order specific performance. The Board then interpreted Tactical Network’s motion to join as a notice of appeal of the termination and consolidated that appeal with the existing appeal.

Performance problems and threats of termination for default demand a serious and comprehensive response from the contractor. But it is important to understand and work within the limits of board jurisdiction in order to effectively resolve these significant issues.

Investigations and Enforcement

1. Deputy Attorney General Lisa Monaco announced several important changes to the Department of Justice’s corporate criminal enforcement policies and practices

On October 28, 2021, Deputy Attorney General (DAG) Lisa Monaco delivered a speech and issued a memorandum announcing several important changes to the Department of Justice (DOJ)’s corporate criminal enforcement policies and practices. These changes, which will apply to current and future corporate defendants, include:

  • Restoring prior DOJ guidance that in order to receive any cooperation credit in resolutions, companies must provide all non-privileged information regarding all individuals involved in the wrongdoing—not just individuals who were substantially involved;
  • Signaling an increased willingness to impose corporate compliance monitors on companies when resolving criminal investigations;
  • Considering a company’s entire history of misconduct—rather than only similar past misconduct—in deciding how to resolve a criminal investigation; and
  • Applying heightened scrutiny to companies’ adherence to deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs), as well as demonstrating increased willingness to declare companies in breach of those agreements when warranted.

Taken together, these revisions signal DOJ’s intent to pursue broader investigations and implement stricter enforcement measures than were the norm during the previous administration. DOJ plans to implement several structural changes to support these initiatives.

2. Senator Grassley Seeks False Claims Act Amendments

  • The Iowa Republican Senator, long a champion of the civil False Claims Act, continues his attempts to amend the FCA.
  • The current amendment would add “[i]n determining materiality, the decision of the Government to forego a refund or pay a claim despite actual knowledge of fraud or falsity shall not be considered dispositive if other reasons exist for the decision of the Government with respect to such refund or payment.”
  • This is the latest effort to blunt the impact of continued government payment on a FCA case’s materiality analysis. We will continue to watch these proposed amendments and issue further updates as needed.

Ask the Judge - by the Honorable Jeri Somers

After 18 years on the bench, I have some insight into how judges think about a vast variety of things. I will attempt to answer some of the questions that litigants frequently ask when trying to navigate the government contracts world.

Question: “How do judges react to discovery disputes? Do they enjoy them?”

Answer:

  • I personally considered discovery disputes a necessary evil, particularly when the discovery involves gnarly issues of privilege assertions. However, I found that if parties approach discovery disputes by providing the judge with clearly identified issues, with appropriate legal support for claims of privilege, the judge will be more willing to engage with the parties and rule on disputed issues. If you claim privileges in response to discovery disputes, you have an obligation to produce any information that is not considered privileged, and to provide a privilege log.
  • No one enjoys creating privilege logs. In fact, most lawyers spend little time thinking about how or why privilege logs should be created. While litigants frequently attempt to produce what they consider nonprivileged and to withhold from production whatever the party has identified as privileged, the rational assumption for the requesting party is that the other side is simply withholding discovery because it will either help the requesting party or harm its own case.
  • Nonetheless, FRCP 26(b)(5) requires a party to provide a list (the privilege log) of the information being withheld from a discovery production as privileged. Normally a privilege log will identify the basic information needed to describe the documents or electronically stored information withheld; and a clear statement of which privileges the responding party believes cover those documents. But, for whatever reason, the majority of parties neglect this obligation when claiming privilege. This leads the requesting party to file a motion to compel discovery, inevitably combined with a motion for sanctions. It is at those times that the judge may look unfavorably on the entire discovery dispute. How can a judge deal with these claims of privilege without the privilege log? It can be very frustrating.

Best Practice:

  • Anticipate the need to create the log by identifying those records that are responsive to discovery and then prepare for production, with the privileged records still in place. The privileged materials should then be removed, segregated, and loggedThis approach will enable the judge to make an informed ruling in this type of discovery dispute.

If you have any questions for me to address in future columns, please email me at jsomers@jenner.com. I look forward to hearing from you!


Government Contracts Legal Round-Up | 2021 Issue 18

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Executive Actions

1. The Safer Federal Workforce Task Force Vaccination Guidance (September 24, 2021)

  • This guidance implements President Biden’s Executive Order (EO) 14042: Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors (full advisory on that EO here).
  • This highly anticipated guidance imposes broad requirements for covered contractor employees (and subcontractor employees) to be vaccinated by December 8, 2021, regardless of whether they work full-time or part-time, whether they work at a contractor workplace, federal workplace, or from their homes, and whether they work directly on a covered government contract, indirectly, or only at the same workplace as those who do. 
  • See Jenner & Block’s advisory for details regarding applicability and operation.
  • The Department of Defense has announced an early engagement opportunity for industry to comment, due no later than October 17, 2021.

Regulatory Developments

1. GSAR Case 2016-G511, Contract Requirements for GSA Information Systems, Proposed Rule Issued September 10, 2021, Comments Due by November 9, 2021

  • The GSA is proposing to amend the General Services Administration Acquisition Regulation (GSAR) to streamline and update requirements for contracts involving GSA information systems.
  • The proposed rule will replace outdated text with existing policies issued by GSA’s Chief Information Officer and provide centralized guidance to ensure consistent application across the organization. 
  • The updated GSA policy will align cybersecurity requirements based on items being procured by ensuring contract requirements are coordinated with GSA’s Chief Information Security Officer.
  • After finalization, this rule will require contracting officers to incorporate applicable cybersecurity requirements in statements of work to ensure compliance with federal guidelines and to prevent cyber incidents.

2. Notice of Rate Change for Minimum Wage Federal Contracts Covered by Executive Order 13658 (September 16, 2021)

  • The Wage and Hour Division of the Department of Labor issued this notice to announce the applicable minimum wage rate for workers performing work on or in connection with federal contracts covered by President Obama’s EO 13658. Beginning January 1, 2022, the rate paid workers on covered contracts will increase to $11.25 per hour, while the required minimum cash wage to tipped employees will increase to $7.90 per hour.
  • Covered contracts that are entered into on or after January 30, 2020, or that are renewed or extended on or after that date, will be generally subject to the higher $15.00 minimum wage rate established by President Biden’s EO 14026.

3. Extension of Time for Comments on FAR Buy American Act Requirements (September 23, 2021)

4. Request for Public Comments on Risks in the Semiconductor Supply Chain (September 24, 2021)

  • The Department of Commerce is seeking comments from those impacted by ongoing shortages in the semiconductor supply chain.
  • The goal is to accelerate information flow and reduce data gaps across the various supply chain participants, including domestic and foreign semiconductor design firms, semiconductor manufacturers, materials and equipment suppliers, as well as semiconductor intermediate and end-users.
  • Comments are due November 8, 2021.

Protest Cases

1. Marquis Solutions, LLC, B-419891; B-419891.2 (September 14, 2021) (Published September 21, 2021)

  • GAO sustained a protest where the agency had unreasonably and disparately evaluated the protester’s quotation, resulting in its quotation not receiving further consideration in the competition.
  • The Department of Veterans Affairs (VA) issued a solicitation for medical courier services in the New York metropolitan area under FAR Part 13 simplified acquisition procedures.
  • GAO observed that not only did the solicitation lack detailed instructions for preparation of technical quotations, the agency’s evaluation of the protester’s technical quotation was equally vague and took issue with the protester’s compliance with solicitation instructions.
  • GAO held that the agency had not adequately documented the basis for its evaluation and source selection decision. In particular, the evaluators failed to explain (or provide examples of) the details lacking in the protester’s quotation, instead levelling “vague and conclusory” critiques against the protester’s quotation.
  • GAO also found that the VA engaged in disparate treatment, including because the Agency found the protester’s quotation unacceptable for copying from the statement of work but overlooked the same concerns in the awardee’s proposal.

Even in competitions conducted under the simplified acquisition procedures under FAR Part 13 (meaning that the agency was not required to perform the in-depth evaluation required under FAR Part 15), agencies are still required to treat competitors fairly and equally and to sufficiently document the basis of its decisions.

Claims Cases

1. MLB Transportation Inc. v. VA, CBCA 7019 (September 3, 2021)

  • MLB Transportation, Inc. had a contract with the Department of Veterans Affairs to transport patients from a VA hospital to their homes. 
  • Although the parties treated the contract as if it was an IDIQ contract, the contract did not include any language indicating that it was an IDIQ contract. The parties both acknowledged that the contract was intended to be an IDIQ contract but that it lacked a guaranteed minimum clause (previous contracts between the parties did contain the clause).
  • As a result of the COVID-19 pandemic, the contractor could not recover its costs. MLB submitted a claim seeking reimbursement of the indirect additional costs.
  • On appeal, the board determined that the contract did not contain a minimum guarantee of the services to be ordered. The board noted that an IDIQ contract that lacks a guaranteed minimum is illusory and unenforceable, since the government had not made a binding promise regarding the minimum amount it will purchase. 
  • The board opined that although the contract was not enforceable at its inception, the VA’s obligations were limited to compensation for services provided, but nothing more.

Contractors should take care to not only read all contract provisions but also to note any provisions that are absent. Ask for clarification where the contract type is unclear or where something seems to be missing. Don’t assume that provisions from prior contracts will carry over. Remember that IDIQ contracts will not be enforced unless they contain a guaranteed minimum clause.

2. Anglin Consulting Group, Inc. v. Department of Homeland Security, CBCA 6926 (September 7, 2021)

  • The government entered into a contract with Anglin Consulting Group, Inc., for accounting and general clerk services. The firm fixed price contract had one base year and four one-year options. The government exercised two of the option years.
  • Through bilateral modifications to the contract, the parties agreed to remove the position of finance clerk, and remove two of the remaining three other positions from the contract.
  • Anglin submitted a request for equitable adjustment (REA), asserting that the descoping and deletion of work by these modifications caused it to absorb losses for costs incurred and caused loss profits. When the contracting officer denied the REA, stating that the underlying contract was a firm fixed price contract and the contractor had released all claims without reservation through the bilateral modification.
  • The contractor submitted a certified claim on the same grounds as the REA, but added that none of the modifications released its claims. The contracting officer denied the claim. Anglin appealed.
  • For the first time on appeal, Anglin argued that it only signed the modifications due to economic duress and that the government had breached its duty of good faith and fair dealing.
  • In response to the government’s predictable motion for dismiss for lack of jurisdiction on the grounds that those claims had not been presented to the contracting officer, Anglin filed an amended complaint, adding yet another new claim.
  • The Board dismissed the additional claims, finding that it did not have jurisdiction to hear claims that had not been presented to the contracting officer.

Ensuring that claims are presented at the right time and in the right way is essential and can be complicated. Legal advice from experienced government contracting attorneys can help contractors navigate this process.