Government Contracts Legal Round-Up | 2022 Issue 7

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 Updates

1. OFCCP Update

The Office of Federal Contract Compliance Programs has announced a new Contractor Portal where contractors and subcontractors must register and certify their compliance with Affirmative Action Program requirements. June 30, 2022 is the deadline to submit initial certifications. After that, annual certifications will be required. Contractor Portal Link: https://contractorportal.dol.gov

2. GSA Contracting Price Increases Update

GSA published an Acquisition Letter, link AL MV-22-02: Temporary Moratorium on EPA Clauses (gsa.gov), which announces a temporary moratorium on GSA enforcement of certain limitations on contractors’ ability to seek Economic Price Adjustment (EPA). GSA cited inflation and supply chain concerns as the reasons for the moratorium. Noting that contractors are removing items from the Federal Supply Schedules to avoid selling them at a loss, GSA will permit more frequent requests for price adjustment. GSA will also make it easier for government acquisition professionals to approve such requests.

3. Goodbye DUNS, Hello Unique Entity Identifier

After years of study, the government has stopped using Dun & Bradstreet’s Data Universal Numbering System (DUNS) to identify government contractors. In its place, the government has transitioned to Unique Entity Identifiers (UEIs). Link to announcement: Unique Entity Identifier Update | GSA Contractors with existing SAM registrations have been assigned a UEI and will need to begin using the number. New registrants will request a UEI through SAM rather than register for a DUNS number as part of their SAM registration process.

Protest Cases

1. Spatial Front, Inc., B-420377 (March 7, 2022) (Published April 5, 2022)

  • GAO denied a protest challenging as unduly restrictive the terms of a solicitation issued by the Department of Commerce for enterprise-wide IT services. Specifically, the protester alleged that the requirement to possess a top-secret facility clearance (TS-FCL) was unduly restrictive and had an unreasonable impact on small businesses.
  • The protestor, a small business, argued that because only a “limited number of task orders” were likely to require the TS-FCL, the requirement was unnecessary and “unreasonably restricted competition.”
  • GAO found that the agency reasonably justified this restrictive provision. The agency documented the performance and cost issues caused by the current decentralized IT environment and the benefits that would flow from a single-award contract to implement a multi-domain environment. And the agency refuted the contention that only a subset of the work was classified, explaining that it expected classified requirements in each performance area. Moreover, the agency conducted ample market research demonstrating that a significant number of small businesses could meet the solicitation’s TS-FCL requirement.
  • GAO thus found that that the TS-FCL requirement was justified and within the agency’s discretion.

Agencies are generally afforded discretion to determine their needs and the best means to accommodate them. Where a requirement touches on matters of national security, such as in the present solicitation, an agency “has the discretion to define solicitation requirements to achieve not just reasonable results, but the highest possible reliability and/or effectiveness.”

2. Veterans Choice Medical Equipment, LLC, B-419991, B-419991.2 (October 20, 2021) (Published April 1, 2022)

  • GAO denied a protest challenging the Department of Veterans Affairs’ award of a contract for in-home oxygen and ventilator services.
  • The protester alleged that the agency unreasonably evaluated the awardee’s corporate experience because the awardee’s proposal lacked a reference contract containing all the required explanatory information. Further, the Source Selection Authority and another evaluator relied on their personal knowledge of the awardee’s experience that was not included in the proposal.
  • GAO found no basis to sustain the protest. The Solicitation’s proposal submission instructions afforded the agency discretion to consider experiences that did not conform to the submission requirements, and GAO found nothing improper with the evaluators considering corporate experience not found in the awardee’s proposal of which they had personal knowledge.

In certain circumstances, GAO has held that an agency may consider “close at hand” past performance or corporate experience information known to the agency and not found in an offeror’s proposal. But GAO has also made clear that the “close at hand” doctrine is not intended to remedy a failure to include required information in a proposal, and the burden rests on the offeror to submit a well-written proposal with adequately detailed information that allows for a meaningful review by the procuring agency.


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.


DoD Issues Final Rule Implementing Enhanced Debriefing Requirement

ByNoah B. Bleicher, Carla J. Weiss, Nathaniel E. Castellano, Moshe Broder, and Scott E. Whitman

On March 18, 2022, the Department of Defense (DoD) issued a final rule to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to mandate that DoD provide enhanced postaward debriefings to contractors. As we previously highlighted, these changes to postaward debriefings in DoD procurements originally were partially implemented by a Class Deviation issued by DoD in 2018, and further formalized through a proposed rule issued last May. With this final rule, DoD permanently implements important changes to the postaward debriefing process for defense procurements.

While the final rule tracks the proposed rule in most respects, the final rule contains several notable changes that may impact bid protest timeliness considerations. As highlighted, prior to the final rule, DoD provided enhanced debriefings pursuant to Class Deviation 2018-O0011, which permitted offerors to submit additional questions within 2 business days after receiving their postaward debriefing. Then, the agency would be required to respond in writing within 5 business days after receiving those additional questions. To that end, the proposed rule stated that a debriefing would not be considered closed until “[a]fter the second business day after delivering the debriefing, if no additional questions are received.” Thus, under the proposed rule, each offeror’s “enhanced” timeline automatically would be extended for two days—irrespective of whether that offeror actually submitted additional questions or not.  

The final provision at DFARS 215.506-70, however, now dictates that a debriefing is not concluded until the later of: (1) the date the debriefing is delivered; or (2) the date of the agency’s response to the offeror’s additional questions if those questions were timely submitted. Thus, the debriefing is extended only if the offeror submits follow-up questions. And, in turn, DFARS 233.104(c)(1)(D) confirms that the agency is required to implement a stay of performance if a GAO protest is filed within 5 calendar days after a debriefing is “concluded” in accordance with these timeframes.

Beyond the above clarification regarding timeliness, in sum, the final rule sets forth the following requirements DoD agencies must adhere to for any procurement in which an enhanced debriefing is available:

  • When timely requested, DoD must provide a debriefing for all contract awards (including task and delivery orders) valued at $10 million or more.
  • While these requirements apply to negotiated procurements, including contracts for the acquisition of commercial products and services, they do not apply to contracts valued below the simplified acquisition threshold.
  • Although as part of this process DoD agencies shall protect offerors’ confidential information, agencies are required to provide an offeror with a redacted version of the source selection decision document where—
    • the offeror is a small business or nontraditional defense contractor, the award is above $10 million, and a copy of the selection decision is requested; or 
    • for all offerors, where the award is greater than $100 million.
  • Within 2 business days after receiving a required debriefing an offeror may submit additional questions.
  • Within 5 days after an offeror timely submits additional questions the agency shall respond in writing.
  • And, as highlighted, the debriefing will not be considered “closed” until the debriefing is delivered, or if the offeror asks follow-up questions, when the agency answers those questions.

As we have suggested previously, contractors that are able to reap the benefits of DoD’s now-formalized robust debriefing process should do so. Regardless of whether the company is successful in the competition or not, contractors should consider targeted follow-up questions tailored to their unique experiences with that procurement and request a redacted version of the agency’s source selection decision. This information can better equip even a successful contractor to improve its next proposal submission and be a source of useful market intelligence. Conversely, and more immediately, this information can arm an unsuccessful offeror (and its attorneys) with critical insights to better assess the viability of a potential protest. 

Jenner & Block’s Government Contracts lawyers have extensive bid protest experience, including prior service as a supervising bid protest hearing officer at GAO, and stand ready to support any challenges to the award of a government contract. We continue to monitor developments relating to bid protests, and particularly timing considerations for contractors. Please stay tuned for forthcoming additional guidance in this area.


The Government Contract Legal Round-Up | Episode 21

In the latest episode of the Government Contracts Legal Round-Up, Partner David Robbins, co-chair of Jenner & Block’s Government Contracts Practice, introduces Special Counsel Nathan Castellano, who joined the firm in late February. They discuss Nathan’s background, frequent authorship, and important developments facing government contractors and grant recipients. Mr. Robbins and Mr. Castellano also bring the audience up to speed on recent rulings in claims, bid protests, and developments in False Claims Acts.

 


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.


The Government Contracts Legal Round-Up | Episode 20

Partner David Robbins, co-chair of Jenner & Block’s Government Contracts Practice, discusses the important developments facing government contractors and grant recipients in the latest episode of the Government Contracts Legal Round-Up. During the episode, Mr. Robbins brings the audience up to speed on recent rulings on vaccine mandates, recent bid protests, and an important False Claims Act decision, US ex rel Sheldon v. Allergan Sales LLC


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

Unavailable Key Personnel: CoFC Splits from GAO and Finds No Duty for an Offeror to Disclose

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By: Carla J. WeissNoah B. Bleicher, Moshe Broder, Sati Harutyunyan, Scott E. Whitman, and Jillian I. Stern

Government contractors are often faced with the dilemma of their proposed key personnel becoming unavailable for contract performance, through no fault of their own, at a point after proposal submission but prior to contract award. In such cases, the Government Accountability Office (GAO) has espoused a rule that obligates offerors to advise contracting agencies of material changes in proposed staffing, even after proposal submission. See, e.g., AttainX, Inc., B-419306, B-419306.2, Jan. 12, 2021, 2021 CPD ¶ 21. But a recent decision by the Court of Federal Claims (CoFC) challenges this rule, casting doubt on its basis in law or regulation. 

In Golden IT, LLC v. United States, No. 21-1966C, __ Fed. Cl.__, 2022 WL 334369 (Feb. 4, 2022), the awardee Spatial Front, Inc. (SFI) had proposed an individual (identified in the decision as “Mr. JH”) as a key personnel. At the time of submission, Mr. JH was an SFI employee, but departed the company prior to contract award. Golden IT alleged that SFI’s proposal misrepresented his availability and thus the company’s proposal should have been assigned a weakness. The court, however, concluded otherwise.

In its decision, CoFC Judge Matthew Solomson acknowledged that an offeror is not permitted to knowingly misrepresent a material fact in a proposal for the purpose of winning a government contract. But here, he found that the protestor had not met its burden of proving that SFI had any knowledge prior to proposal submission that Mr. JH intended to leave the company. Thus, there was no evidence that this was a deliberate misrepresentation by SFI.

But what about after proposal submission, prior to award? Addressing the aforementioned GAO rule—requiring offerors to alert agencies of changes in proposed staffing after proposal submission—Judge Solomson declared it to be “without legal basis” and “unfair.” The court emphasized that a proposal is submitted at a certain point in time, and that it is evaluated over what can become a lengthy period. Without question, an offeror should have a reasonable basis for all facts and representations made in its proposal at the time of proposal submission. But circumstances may change after proposal submission, and the government has the discretion to engage in discussions to verify proposal details or extract more information. 

Key to this decision, Judge Solomson asserted that no statute, regulation, or Federal Circuit decision requires offerors to routinely update the government of any changes during the government’s evaluation period. This position stands in stark contrast to GAO’s long-standing rule requiring an offeror to do just that. In reaching his conclusion, Judge Solomson also cited an article authored by a Jenner & Block team in 2018, which argued that “GAO has no jurisdiction to make recommendations to offerors – including a recommendation that an offeror disclose the unavailability of key personnel when the offeror first learns of this after proposal submission.” Instead, the court pointed to the solicitation itself as a guidepost for the extent to which key personnel must commit to an offeror, namely whether the solicitation contained any provisions that required commitment letters from proposed key personnel, constant verification of continued availability, or the requirement to update the Agency regarding departures of any employees proposed as key personnel.

In challenging head-on GAO’s expectation that an offeror notify the agency if a key person becomes unavailable after proposal submission, this decision highlights a conflict between the GAO and CoFC in this area. Could this decision turn the tide in favor of contractors currently stuck between a rock and a hard place when key personnel become unavailable during extended procurements? Until that happens, contractors should be reminded that CoFC decisions are not binding on other CoFC judges or GAO, and GAO has not signaled flexibility in its expectation that an offeror update the government whenever a key person’s status changes. In addition, for disappointed offerors raising key personnel non-availability issues in a protest, GAO may serve as the better forum for these arguments. Jenner & Block will continue to monitor any developments in this area of law.


Government Contracts Legal Round-Up | 2022 Issue 2

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.

COVID-19-Related Regulatory Developments

1. OSHA Withdraws COVID-19 ETS

  • Effective January 26, 2022, OSHA withdrew the vaccine-or-test emergency temporary standard issued on November 5, 2021, covering employers with 100 or more employees. 
  • OSHA did not withdraw the ETS as a proposed rule, however, and indicated it is working to finalize a permanent COVID-19 Healthcare Standard.
  • Given the Supreme Court’s stay of the OSHA ETS on statutory authority grounds, presumably OSHA would significantly revise the scope of any permanent standard to attempt to withstand judicial scrutiny.
  • It is worth remembering that OSHA may still attempt to pursue COVID-19-related safety issues, including under the General Duty Clause.
    • In response to the Supreme Court’s decision, on January 13, 2022, the Secretary of Labor stated: “We urge all employers to require workers to get vaccinated or tested weekly to most effectively fight this deadly virus in the workplace. Employers are responsible for the safety of their workers on the job, and OSHA has comprehensive COVID-19 guidance to help them uphold their obligation. Regardless of the ultimate outcome of these proceedings, OSHA will do everything in its existing authority to hold businesses accountable for protecting workers, including under the COVID-19 National Emphasis Program and General Duty Clause.”
    • Companies should evaluate their COVID mitigation efforts and expect that employees may submit complaints to OSHA related to those efforts.

2. Texas Court Enjoins Federal Government Employee Vaccination Mandate

  • On January 21, a judge in the Southern District of Texas issued a nationwide injunction against the mandatory vaccination requirement for federal government employees. Relying on the Supreme Court’s recent decision on the OSHA ETS, the judge held that getting vaccinated is not “workplace conduct” over which the President has authority because COVID-19 poses a universal risk no different from other day-to-day dangers. The judge noted that any broader interpretation of the President’s powers would permit regulation of “certain private behaviors by civilian federal workers outside the context of their employment.”
  • The Safer Federal Work Force Task Force has issued an updated Q&A stating that it has suspended enforcement of the vaccination requirement for federal employees pending appeal, but will continue to enforce the non-vaccine elements of the federal employee requirement.

3. The Contractor COVID-19 Mandate Stay Is Currently on Appeal in Multiple Appellate Courts

  • The federal government has appealed the multiple stays issued against the federal contractor COVID-19 vaccine mandate, including the nationwide stay issued by a Federal District Court for the Southern District of Georgia to the Eleventh Circuit.
  • The Eleventh Circuit ordered expedited briefing, which was completed on January 24, 2022.

4. The Southern District of Georgia Issued an Order in Response to the Biden Administration’s Request for Clarification of its Nationwide Injunction

  • The government requested clarification as to whether the nationwide injunction of the contractor mandate (1) “prohibit[s] private federal contractors from mutually agreeing with Defendants to include COVID-19 safety clauses in their federal contracts” and (2) “is limited to enforcement of the Safer Federal Workforce Task Force’s vaccination requirements, o[r] whether it also prevents federal agencies from enforcing requirements related masking and physical distancing and the identification of [person(s)] to coordinate COVID-19 workplace safety efforts at covered contractor workplaces.”
  • The court ordered declined to answer the first question, stating that it would be an advisory opinion. It then stated that it was unnecessary to answer the second question because its injunction was clear: it had specifically used the word “vaccine” and not mentioned any other requirements. It noted that, similarly, the underlying motion had not requested injunction of the other requirements.
  • Unlike for the federal employee COVID-19 requirements discussed above, the Safer Federal Work Force Task Force has not yet issued updated Q&As regarding enforcement of the non-vaccine elements of the contractor COVID-19 mandate. 
    • The website still provides that “[f]or existing contracts or contract-like instruments (hereinafter “contracts”) that contain a clause implementing requirements of Executive Order 14042: The Government will take no action to enforce the clause implementing requirements of Executive Order 14042, absent further written notice from the agency, where the place of performance identified in the contract is in a U.S. state or outlying area subject to a court order prohibiting the application of requirements pursuant to the Executive Order (hereinafter, “Excluded State or Outlying Area”).”
    • Contractors with contracts containing FAR 52.223-99, Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors, should be on the lookout for updates or clarifications on this issue.

Protest Cases

1. Insight Technology Solutions, Inc., B-420133.2 et al. (December 20, 2021) (Published January 20, 2022)

  • GAO sustained a protest and recommended that the agency disqualify an offeror for materially misrepresenting the qualifications of its key personnel.
  • In this procurement, the solicitation did not require that offerors submit resumes for key personnel, but offerors were required to clearly identify how proposed key personnel met or exceeded minimum qualifications.
  • The protester alleged that the awardee misrepresented the qualifications of its proposed project operations manager, claiming that publicly available information on LinkedIn showed the proposed individual to possess less experience than claimed by the awardee and less than the solicitation’s minimum requirement.
  • Following an initial unsatisfactory explanation, GAO afforded the awardee an additional opportunity to explain the discrepancy, but GAO found that the declaration submitted by the key person and the awardee’s explanation did not clearly support the experience claimed. This misrepresentation was material because the agency relied on the claimed experience to favorably evaluate the awardee.
  • GAO determined that the integrity of the procurement system “demanded no less” than the remedy of excluding the awardee from the competition, and accordingly recommended that the agency disqualify the awardee for misrepresenting its key personnel.

GAO will carefully consider allegations that an offer has materially misrepresented its capabilities, experience, and qualifications. Moreover, in considering such allegations, GAO will assess extra-record evidence that was not before the agency at the time it evaluated proposals, such as publicly available LinkedIn information. Contractors should be aware that misrepresenting key personnel capabilities and experience remains an area ripe for bid protest litigation.

Investigations and Enforcement

4th Circuit Adopts Objective Reasonableness Standard for FCA Scienter 

  • Last week the 4th Circuit adopted the objective reasonableness standard for False Claims Act scienter.
  • In U.S. ex rel. Sheldon v. Allergan Sales, LLC, 2022 WL 21172, the Fourth Circuit held that the FCA’s scienter element (or, the knowingly portion of knowingly submitting false claims) is not present if the defendant’s interpretation of the rules was objectively reasonable and no other guidance from a court or from the government warned the defendant the interpretation was not reasonable.

The Fourth Circuit is an important judicial circuit because it covers Maryland and Virginia, where a substantial number of government contractors are based. We will be watching the development of the objective reasonableness standard closely.