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.

Claims/Appeals

1. Zafer Constr. Co. v. United States, Fed. Cir. No. 21-1547 (Argued April 2022)

• The Federal Circuit is poised to issue a significant decision distinguishing between claims and requests for equitable adjustment (REAs) for purpose of establishing jurisdiction under the Contract Disputes Act (CDA).
• The Court of Federal Claims (COFC) dismissed the claim for lack of jurisdiction after finding that the contractor’s submission, styled as an REA, did not qualify as a claim under the CDA.
• On appeal, the contractor argues that its submission satisfies all of the requirements for a valid, certified claim, and that the COFC decision must be reversed for the same reasons that the Federal Circuit recently reversed the ASBCA in a similar case, Hejran Hejrat Co. Ltd. v. US Army Corps of Engineers, 930 F.3d 1354 (Fed. Cir. 2019).
• During oral argument, Federal Circuit judges Newman, Reyna, and Hughes appeared skeptical of the government’s position and the COFC’s holding. The argument revealed some uncertainty, however, as to how to distinguish claims from REAs based on existing Federal Circuit precedent.

While it is important that proper claims are not rejected for lack of jurisdiction based on procedural formalities, it is also important that contractors are able to submit REAs that do not constitute claims triggering the CDA dispute process. Contractors and their counsel should keep an eye on this appeal to understand how (if at all) the Federal Circuit draws the line between claims and REAs.

COFC Protest Decisions

1. Connected Global Solutions, LLC v. United States, COFC No. 22-292C (June 21, 2022)

• This is the latest decision in a long-running, high-profile protest that has already generated significant litigation before GAO and COFC.
• In a rare procedural ruling, the court previously granted limited discovery from the awardee relating to an alleged proposal misrepresentation.
• In this decision, the court considers whether to supplement the administrative record with various documents relevant to the alleged proposal misrepresentation, including the discovery responses.
• The opinion provides a helpful explanation of the interplay between record supplementation, judicial notice, and the Federal Rules of Evidence.

Contractors and protest counsel should watch this litigation carefully to understand the court’s evolving approach to alleged proposal misrepresentations, discovery in bid protests, and record supplementation.

GAO Protest Decisions

1. Insight Technology Solutions, Inc., B-410534 (May 27, 2022)

• The protester challenged a solicitation requirement that offerors demonstrate capability maturity model integration (CMMI) level 3 certification at the time of proposal submission.
• GAO rejected the protester’s challenge to the agency requirement for CMMI level 3 certification, deferring to the agency’s determination of its own requirements.
• GAO sustained the protest, however, finding that the agency could not support the requirement for CMMI level 3 certification at the time of proposal submission.

Solicitations typically impose compliance obligations and certification requirements. GAO will generally defer to an agency’s assessment of its requirements in this respect. GAO will, however, scrutinize the timing of those requirements, particularly where an agency demands that offerors demonstrate a certain certification or capability before performance begins. This line of precedent will be increasingly important as agencies seek to incorporate evolving cyber and information security qualifications into the procurement process.

2. Sabre Systems, Inc., B-420090.3, (June 1, 2022) (Published June 14, 2022)

• GAO sustained a protest because the contracting agency failed to evaluate the awardee’s total compensation plan in accordance with FAR 52.222-46 (Evaluation of Compensation for Professional Employees).
• FAR 52.222-46 contemplates evaluation of an offeror’s compensation for “professional employees, as defined in 29 CFR 541.” In this procurement, the agency determined that only a small subset of four labor categories should be considered “professional employees” as defined in 29 C.F.R. part 541. The agency reasoned that part 541 included various categories of employees, and so the agency excluded from its professional compensation analysis those employees whose duties more closely matched other categories of employees defined in part 541.
• GAO rejected this interpretation, holding instead that the plain language of FAR 52.222-46 unambiguously requires the agency to evaluate the compensation of a proposed employee that meets the definition of “professional employees” regardless of whether that employee also meets another part 541 labor category definition. GAO found that a portion of the employees the agency excluded from its analysis of professional compensation qualified as professional employees, and GAO sustained the protest on this basis.

The purpose of evaluating proposed compensation for professional employees is to assess each offeror’s ability to provide uninterrupted, high-quality work, considering the realism of the proposed professional compensation and its impact upon recruiting and retention. GAO will sustain a protest where an agency fails to reasonably evaluate offerors’ proposed total compensation plans in accordance with FAR provision 52.222-46, for example by unreasonably excluding from the agency’s analysis certain proposed employees who meet the definition of a professional employee as defined in subpart D of part 541.

3. The Ulysses Group, LLC, B-420566 (June 7, 2022) (Published June 8, 2022)

• GAO denied the protest challenging the Air Force’s decision to reject a late-submitted proposal where the offeror made multiple unsuccessful efforts to submit its proposal prior to the announced deadline.
• The solicitation required offerors to submit proposal volumes through a designated online DoD portal by the stated deadline, cautioning offerors not to wait until the last minute and that no exceptions would be made to the submission deadline.
• Beginning two days prior to the deadline for proposal submission, the company could not successfully upload its proposal to the portal. The company repeatedly sought the assistance of the portal help desk, to no avail. Prior to the deadline, the company submitted a copy of its technical volume to the help desk and discussed these issues with the contracting officer.
• The Air Force rejected the proposal because it was not submitted in accordance with the solicitation’s requirements. GAO denied the protest, upholding the Air Force’s decision.

Offerors are well advised to submit proposals early and leave time for unexpected technical hiccups. Otherwise, and at least at GAO, hardline principles relating to the time and manner of proposal submission may prevent a contractor from obtaining relief, even if the technical issue is seemingly caused by failures in the very government system required under the solicitation.

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. Sekri, Inc. v. United States, No. 21-1936 (Fed. Cir. May 13, 2022)

• This appeal asked the Federal Circuit to decide how traditional timeliness and standing rules apply to bid protests brought by mandatory source suppliers that operate under the Javits-Wagner-O’Day (JWOD) Act, which is intended to prioritize federal procurement from the blind and severely disabled.
• The protester filed suit at the Court of Federal Claims arguing that the Defense Logistics Agency (DLA) had improperly issued a competitive solicitation for certain supplies that should have been purchased directly from SEKRI as a mandatory source pursuant to the JWOD Act.
• The Court of Federal Claims found that it was bound to apply the Federal Circuit’s existing framework for assessing bid protest timeliness and standing and dismissed the case because SEKRI did not submit a proposal under the DLA solicitation and did not file a formal protest before the proposal submission deadline.
• The Federal Circuit reversed, treating the case as one of first impression and holding that, based on the unique nature of the JWOD Act and mandatory source procurements, the traditional bid protest timeliness and standing rules do not bar SEKRI’s protest in this case.

This case confirms that the Federal Circuit is willing to recognize that certain government contracts cases arise in unique contexts that can warrant a departure from the traditional rules. Contractors should not assume that this holding will be interpreted to relax the otherwise strictly enforced timeliness and standing rules that apply to protests arising outside the JWOD Act. The opinion, however, is a valuable reminder of the Federal Circuit’s unique position to shape procurement law, and the potential power of a persuasive appeal.

2. BES Federal Solutions JV, LLC, B-420550 et al. (May 11, 2022) (Published May 18, 2022) 

• GAO denied the protest where the Department of the Air Force concluded that the protester’s proposal was unacceptable under the technical (staffing plan) evaluation factor.
• Under the mission essential plan (MEP) subfactor, the solicitation provided that offerors were required to explain how they would continue performing during a crisis, including handling employees exposed to COVID-19 and a return-to-work policy.
• The Air Force found BES’s approach unacceptable because it did not specifically address a quarantine policy or a procedure for notifying the contracting officer’s representative regarding positive COVID-19 test results.
• GAO rejected the protester’s argument that the Air Force’s evaluation imposed an unstated evaluation criterion. GAO explained, for example, that the Solicitation’s requirement to provide a COVID-19 testing policy reasonably encompassed an unstated requirement of where such testing would be performed.

Agencies may properly evaluate a proposal based on considerations not expressly stated in the RFP where those considerations are reasonably and logically encompassed within the stated evaluation criteria, and where there is a clear nexus between the stated and unstated criteria.

3. DCR Services & Construction, Inc., B-420179.2,B-420179.3 (April 28, 2022) (Published May 6, 2022)

• GAO denied in part and dismissed in part a protest challenging the National Park Service’s non-selection of DCR’s quotation for the establishment of a blanket purchase agreement (BPA) for contaminated site cleanup services.
• First, GAO denied DCR’s protest alleging flaws in its own evaluation.
• Next, GAO dismissed DCR’s protest challenging the evaluation of the awardee’s proposal and the best-value determination, finding that DCR was not an interested party to raise these challenges.
• GAO explained that even if DCR’s protest concerning the agency’s evaluation of the awardee’s quotation (and its treatment in the best-value determination) was sustained, DCR would not be in line to receive a BPA. The record reflects there were two other vendors that did not receive BPAs, yet the agency found their quotations to be a better value than DCR’s.

Where there is an intervening offeror who would be in line for the award if a protester’s challenge to the award were sustained, the intervening offeror has a greater interest in the procurement than the protester, and GAO generally considers the protester’s interest too remote to qualify as an interested party. Protesters should be mindful of the competitive landscape when filing protests, as they may be required to challenge not only the awardee’s evaluation, but the evaluation of other disappointed offerors.

Claims Cases

The Armed Services Board of Contract Appeals (ASBCA) issued a decision that cites an article published by Nathaniel Castellano for the observation that the Contract Disputes Act (CDA) contains traps for the unwary, despite being intended to create a fair and efficient mechanism for resolution of government contract claims. Nathaniel’s article argues that, based on a recent line of Supreme Court precedent, the CDA’s procedural requirements for claim submission, certification, and timely appeal do not qualify as jurisdictional prerequisites for maintaining CDA litigation.

Freedom of Information Act (FOIA) Exemption 4

1. Synopsis, Inc. v. Dept. of Labor, No. 20-16414, 20-16416, 2022 WL 1501094 (9th Cir. May 12, 2022)

• The Department of Labor (DOL) declined to release certain materials in response to a FOIA request; the requester filed suit in district court challenging DOL’s decision to withhold; the district court held in favor of the requester, directing DOL to release the disputed materials.
• After the district court issued its order directing DOL to release the materials, Synopsis attempted to intervene in the same case, claiming that the materials qualified as its confidential commercial information that must be withheld under FOIA Exemption 4. The district court denied the motion to intervene as untimely.
• Synopsis separately filed an independent “Reverse-FOIA” action against DOL, asking the district court to enjoin DOL from releasing the same materials, again invoking Exemption 4. The district court rejected the Reverse-FOIA argument on the basis the court had already ordered DOL to release the materials.
• Synopsis appealed. The Ninth Circuit affirmed in an unpublished decision, finding that the district court did not abuse its discretion in denying the motion to intervene, and agreeing with the district court that, under Supreme Court precedent, once the district court ordered DOL to release the materials Synopsis could no longer sue to enjoin the release of those same materials.

This decision emphasizes how important it is for companies to be vigilant when trying to protect confidential information that has been submitted to the US Government. As soon as an agency provides notice that confidential information has been requested under FOIA, the company should promptly respond with legal and factual support explaining why any proprietary or confidential commercial information must be withheld. In the event a requester files suit to obtain the materials, or the agency indicates it will release sensitive information, the company should act quickly to intervene and support the agency, or file suit to enjoin the agency, as appropriate. For those interested in learning more about FOIA Exemption 4, Nathaniel Castellano recently published a Briefing Paper discussing the latest litigation developments and best practices.

Investigations and Enforcement

The Department of Justice announced an inflation adjustment to civil False Claims Act penalties, increasing the range of penalties to $12,537 to $25,076 per claim.

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. VERSA Integrated Solutions, Inc., B-420530 (April 13, 2022)

• GAO denied a protest challenging the Food and Drug Administration’s (FDA) decision not to consider a proposal that was not timely received by the agency in a manner consistent with the solicitation.
• While the proposal was received in the government’s electronic server before the submission deadline, the proposal submission email was quarantined by the server and did not reach the contracting officials before the deadline.
• In presenting its case, VERSA emphasized that it submitted its proposal prior to the deadline and maintained that the government was in control of its proposal following that submission. The protester relied on standard FAR provisions that allow the government to consider a late proposal where there is no risk of delay to the procurement and the proposal is under government control before the proposal submission deadline.
• But GAO strictly interprets the FAR’s “government control” exception, routinely holding that it does not apply to proposal submitted electronically. VERSA specifically asked GAO to reconsider this line of decisions—i.e., declining to apply the exception in circumstances similar to those here.
• GAO declined the invitation to revisit is interpretation of the government control exception and denied the protest.

As always, offerors should leave plenty of time to submit proposals well in advance of the deadline and anticipate that electronic submissions may encounter challenges that delay submission. In the event an agency does reject an electronic proposal submission as late, recognize that GAO and the Court of Federal Claims (COFC) analyze these issues differently, and COFC may provide the more favorable forum for protest. Specifically, several COFC judges have found that an electronic proposal submission that reaches a government server before the proposal submission deadline does qualify for the “government control” exceptions stated in FAR 52.212-1 and 52.215-1.

2. Rice Solutions, LLC, B-420475 (April 25, 2022)

• GAO sustained a protest because the agency unfairly engaged in discussions with only the awardee.
• The Department of Health and Human Services, Indian Health Service (IHS), received three proposals in response to IHS’s solicitation for certified registered nurse anesthetist (CRNA) services in South Dakota. Protester Rice’s proposal was rated as unacceptable.
• Despite not establishing any competitive range, IHS thereafter engaged in discussions with the awardee—the only offeror initially rated as acceptable.
• GAO faulted the agency for not conducting discussions with Rice. In doing so, GAO rejected the agency’s position that an initial rating of technically unacceptable automatically excluded Rice from the competitive range, had one been established by the agency.
• GAO also rejected the agency’s contention that it established “a de facto competitive range of one” because nothing in the record supported this contention.
• Thus, GAO ruled that because no competitive range had been established, the agency was required to conduct discussions with all offerors. Indeed, GAO emphasized that such discussions could have resulted in Rice submitting a revised final proposal that was found to be technically acceptable.

Although an agency has broad discretion in establishing a competitive range and is not required to memorialize its competitive range determination expressly in a formal document, the agency is required to provide sufficient information to adequately support its rationale. GAO will sustain a protest where the record is devoid of any documentation or support for the agency’s contention that a competitive range had been established before entering into discussions with only one offeror. Moreover, once an agency chooses to conduct discussions, it must do so with all offerors in the competitive range. FAR 15.306(d)(1).

3. NOVA Dine, LLC, B-420454, B-420454.2 (April 15, 2022)

• GAO rejected a protester’s contention that it was misled during discussions to raise its proposed labor rates.
• Over multiple rounds of discussions, the Defense Information Systems Agency (DISA) advised NOVA that 73 proposed labor rates appeared to be “unrealistically low,” and DISA asked NOVA to “review and provide revised rates, or provide rationale for the proposed rates.”
• In the end, NOVA increased its rates, resulting in an increase of nearly $50 million to the offeror’s total cost/price.
• NOVA argued that it was misled during discussions because the company’s total cost/price was higher than other offerors and because DISA compared rates to salary data taken from a more expensive geographic location (even though the contract would be performed around the world).
• GAO denied this ground of protest, finding that DISA did not coerce NOVA into raising its direct labor rates; rather, NOVA made an independent business judgment about how to respond to the agency’s discussion concerns.
• GAO also rejected the protester’s challenges to DISA’s evaluation under the past performance and management approach evaluation factors.

GAO generally will not find an agency’s discussions objectionable when an agency advises an offeror that certain rates appear low and provides the offeror the option of either raising the rates or justifying the rates. An offeror’s decision to raise rates—rather than justify—is typically viewed by GAO as a business judgment of the offeror. As GAO concluded here, “Ultimately, it was the offeror’s responsibility to recognize where it disagreed with the agency’s cost realism conclusions and explain why its own salary calculations were correct.”

Claims Cases

1. GSC Construction, Inc. v. Secretary Of The Army, Fed. Cir. 21-1803 (May 2, 2022)

• The United States Court of Appeals for the Federal Circuit (CAFC) affirmed the Armed Services Board of Contract Appeals (ASBCA or Board) decision holding that the United States Army Corps of Engineers (the Army) properly had terminated the contractor’s construction contract for default.
• GSC Construction, Inc. (GSC) contracted with the Army to build two warehouses, but then fell behind after disputing responsibility to remove soil for foundation work and failing to meet design requirements. Interestingly, the latter issue related to DOD’s Unified Facilities Criteria (UFC) Minimum Antiterrorism Standards. The contract required compliance only with an earlier, less stringent version but GSC mistakenly submitted its design under the more recent, more stringent version, with which it then failed to comply. The Army itself didn’t identify the error and evaluated the design under the wrong standard.
• Ultimately the Army terminated for default, and GSC filed an appeal with the ASBCA—arguing that the disputes concerning the soil and the design standard provided ground for an excusable delay, and seeking both damages and that the termination be converted to one for convenience.
• The Board denied the appeal and the Federal Circuit affirmed the ASBCA’s decision, agreeing that the contract assigned site preparation and design responsibility to GSC. The Army’s failure to identify GSC’s design standard mistake did not shift risk related to design to the government.
• In addition, the Federal Circuit rejected the argument that the Army had forfeited its right to enforce the contract by providing GSC with an extensiPublishon: “Given the Army’s repeated reservation of its rights during construction, we fail to see how the Board erred in holding that there was no forfeiture [and] GSC’s argument is thus unpersuasive.”

Termination for default is a serious threat in government contracting. Working with experienced counsel when encountering project delays or design disapproval can help avoid more costly litigation in the future, including by developing effective recovery plans and fully protecting rights under the contract.

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.

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.

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.

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.

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

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.

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.