Blog - Archive for February 2012
Posted on Monday, February 27, 2012 10:00:54 PM
GAO recently sustained a protest where the agency failed to conduct discussions with the protester regarding adverse past performance reports that the protester had not previously had an opportunity to address.
As a general matter, GAO said, the evaluation of an offeror's past performance is a matter within the discretion of the contracting agency, and GAO will not substitute its judgment for "reasonably based" past performance ratings. However, GAO will question an agency's evaulation conclusions where they are unreasonable or not properly documented. The critical question is whether the evaluation was conducted fairly, reasonably and in accordance with the solicitation's evaluation scheme. Moreover, the evaluation must be based on relevant information sufficient to make a reasonable determination of the offeror's past performance.
In the case, the agency argued it did not consider positive past performance information reliable. GAO dismissed this argument since the agency had considered similar information other offerors had submitted with their proposals.
It is a fundamental precept of negotiated procurements that discussions, when conducted, must be meaningful, equitable and not misleading, GAO reiterates. Discussions must not mislead offerors and must identify deficiencies and significant proposal weaknesses that could reasonably be addressed in a manner to materially enhance the offeror's potential for receiving contract award. Agencies are also required to provide an offeror with a chance to address adverse past performance information to which the offeror has not previously had an opportunity to respond.
While discussions must be meaningful, leading an offeror into the areas of its proposal requiring amplification or revision, the agency is not required to spoon feed an offeror as to each and every item that could be raised to improve its proposal.
Finally, GAO said an agency cannot escape its obligations to conduct discussions in a reasonable manner by characterizing an evaluated weakness in past performance as something less than adverse. Although agencies must advise offerors during discussions of adverse past performance regarding which the offeror has not yet had an opportunity to respond, GAO says an offeror is not entitled to discussions if it has perviously had an opportunity to address the issue with the agency.
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Posted on Saturday, February 11, 2012 2:38:42 PM
In a recent case, GAO decided the rejection of a contractor's small business plan was improper because the requirement for an acceptable small business plan really was a matter of the contractor's responsibility which is to be determined from information received up to the time of award. The Navy had rejected the contractor's offer based on the inadequacy of the plan. GAO sustained the protest and recommended the contractor's proposal be evaluated for award and that the plan be used only to determine the contractor's responsibility. As is always the case in a sustained protest, GAO went on to find that the contractor is entitled to the costs of pursuing the protest, including reasonable attorney fees. See MANCON, B-405663, February 9, 2012.
MANCON argued that the small business subcontracting plan evaluation factor was pass/fail and therefore a matter of responsibility and not for evaluation of its technical acceptability. GAO agreed. The rule is the requirement for an acceptable plan is applicable to the "apparently successful offeror". This rule applies even where the RFP requires submission of the plan with the offer. Moreover, in this case, the plans were evaluated on a pass/fail basis and therefore, says GAO, "the agency's evaluation of those plans concern an offeror's responsibility."
Responsibility is to be determined based on information received by the agency up to the time award is to be made. It is axiomatic that the contracting officer has broad discretion in determining a contractor's responsibility. Therefore, GAO generally will not question the determination unless it is made unreasonably.
GAO also determined that the Navy erred in its belief that further exchanges with MANCON concerning its subcontracting plan would constitute discussions requiring that discussions be opened with all offerors. "We have found that where acceptability of a small business subcontracting plan is a responsibility issue, exchanges between the agency and an offeror concerning such plans are not discussions." This makes sense. And while we are at it, this rule is not rocket science. The case illustrates the Navy contracting officer's lack of fundamental understanding of the regulations to say nothing of the failure to communicate with the contractor.
This case is just another poignant reminder to study the regulations and read the cases. It also is another example of how protests protect the integrity of the procurement process and can cost you nothing if you are right.
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Posted on Thursday, February 9, 2012 4:33:08 PM
Spriggs Consulting Services (SCS), a small veteran owned business, announces the formation of the Spriggs Law Group (SLG) to serve clients engaged in disputes and litigation before federal agencies and tribunals. SCS was established January 1, 2011 to assist with solicitation and proposal review, compliance with contract and regulatory requirements, to identify and prevent contract (and subcontract) problems and to resolve disputes by negotiation and mediation, short of litigation. Alas, not all disputes can be resolved. SLG takes the problem solving effort through litigation at the federal level before the Court of Federal Claims, the Armed Services Board of Contract Appeals, the Civilian Board of Contract Appeals and the Government Accountability Office (the tribunals).
What does SCS do? Contractors and subcontractors can bid improvidently because they do not know the rules and do not have experienced eyes looking at solicitations. They can lose the award and need help deciding whether to protest. They can lose money and wonder if they can recover their losses from the government. They can run into compliance problems by not managing contract performance with a careful eye to contract and regulation requirements. SCS identifies problems and solves them short of litigation. Years of litigation teach dispute avoidance and resolution techniques which can avoid litigation. So, if you are bidding on a contract, have lost the award or are losing money on the contract, SCS is the place to go.
What does SLG do? If all else fails, SLG handles the litigation. SLG plans to hire sufficient attorneys to handle even the most complex litigation. However, as a small business, SLG is tuned into the budget constraints of other small businesses and medium sized businesses as well. Thus, SLG is able to provide flexible pricing designed to meet today's budget constraints. Having a lawyer as your contract manager always is a good idea (SCS). But having a lawyer for litigation is a practical if not legal requirement (SLG). If you want to file your protest at the Court of Federal Claims, you must have a lawyer admitted to that court. If you file a protest at GAO, you will need a lawyer so he or she can see the complete procurement file. If you go to one of the boards of contract appeals, you need qualified representation.
SCS continues its mission unchanged. SLG is now on board. The SLG web site is www.spriggslawgroup.com. That site is under construction but should be available soon. The SLG email address is email@example.com.
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Posted on Tuesday, February 7, 2012 2:00:02 PM
Judge Christine Miller of the Court of Federal Claims (COFC) has issued an injunction stopping performance on a Marine Corps Systems Command (MCSC) best value contract for tactical fuel and water systems. She agreed with the protester's argument the awardee made a material misrepresentation in its proposal that a certain firm was a subcontractor and that MCSC relied on this mispresentation in its evaluation of past performance. Under the facts in this case, Judge Miller determined the interests of national defense and national security do not prevail over upholding the integrity of the procurement process to redress a material misrepresentation.
After carefully reviewing the evidence, Judge Miller found that the successful awardee made a material misrepresentation listing a supplier, with which it had teamed, as a subcontractor and listed that supplier as part of its past performance presentation. The court also found that MCSC's evaluation showed MCSC relied on the misrepresentation in evaluating the successful awardee's past performance. All of this, said the court, was prejudicial to the protester. The court relied on precedent establishing the rule that any misstatement which materially influences how a proposal is evaluated should disqualify the proposal. "The integrity of the system demands no less. Any further consideration of the proposal in these circumstances would provoke suspicion and mistrust and reduce confidence in the competitive procurement system."
Judge Miller ordered the Marine Corps Systems Command, its officers, agents, employees and all other connected persons not to proceed with the performance of the contract and she ordered the contracting officer to direct the contractor to cease performance under the contract.
There are a number of obvious lessons here. You can get real relief in bid protest cases. There are consequences for misrepresenting your intentions in a proposal. Bait and switch by contractors can be found out and punished. Courts can order the government to stop performance on an awarded contract and to redo a procurement.
Why go to court versus the GAO? Or why go to GAO and then to court? Attend our bid protest seminar and we'll be happy to explain the many ins and outs and pros and cons. However, each case is different and requires careful analysis before you decide to protest and then select the forum.
Posted on Friday, February 3, 2012 5:55:06 PM
We have been asked whether it is possible to challenge an agency decision not to exercise an option under an existing government contract. Conversely, we have been asked whether a disappointed competitor can challenge the propriety of the agency's decision to exercise an option under an existing contract.
First, we address whether a contractor on an existing contract can challenge the government's decision not to exercise its option. Under recent judicial authority, when a contract contains an option to extend its term, unless the contract provides otherwise, the government enjoys broad discretion and is under no obligation to exercise the option. The government's decision can provide a vehicle for relief only if the contractor proves that the decision was made in bad faith or was so arbitrary or capricious as to constitute an abuse of discretion. Bad faith amounts to proof of specific intent to injure the contractor.
Second, is it possible for a disappointed bidder on the contract to challenge the government's exercise of an option under the contract it awarded to another contractor? By challenge, of course, we mean can one go to a board of contract appeals, the Court of Federal Claims (COFC) or the GAO seeking redress? Since the disappointed bidder has no contract, it cannot seek redress at a board of contract appeals or the COFC under the statute affording those tribunals jurisdiction over contract disputes. So, can the contractor challenge the proposed exercise of the option under the bid protest jurisdiction of COFC or GAO?
The rule is you cannot protest matters of contract administration but there are exceptions to the rule.
The Competition in Contracting Act (CICA) affords GAO jurisdiction relating to: (1) solicitations; (2) cancellation of solicitations; (3) award or proposed award of a contract; and (4) termination or cancellation of award if the protest is based on improprieties in the award of the contract. Based on CICA, it would appear GAO will not hear complaints about contract administration. However, we are aware of a 2010 case (citing other GAO cases) in which GAO undertook to review whether exercise of the option was proper. GAO found "no basis to question the agency's exercise of the option . . . ." GAO will not question an agency's decision "as long as it is reasonable". As far as we know, GAO has never granted such a protest.
The COFC has protest jurisdiction relating solely to solicitations and contracts or violations of statutes or regulations relating to procurements or proposed procurements. The COFC specifically declines protest jurisdiction over complaints involving contract administration. However, the COFC also heard a 2010 case in which a disappointed bidder protested the exercise of an option although the facts in that case are very unique and a definite exception to the rule.
So, you may always challenge wording in the solicitation, the nature and type of the procurement, the cancellation of a solicitation, an award under a solicitation and in some cases the termination or cancellation of an award. You may get GAO (of perhaps even the COFC) to hear your complaint about the exercise of an option but GAO will not second guess the agency unless its decision is unreasonable or an abuse of discretion.
Postscript: If the agency issues a solicitation as part of its decision making process on whether to exercise an option and then cancels the solitication, you could protest. However, the agency has broad discretion in cancellations and, again, it need only show it acted reasonably, rationally and that it did not abuse its discretion.
Posted on Friday, February 3, 2012 2:26:57 PM
On December 7, 2011, DOD introduced a new clause for contracts estimated to exceed the simplified acquisition threshold. DOD now requires contractors to certify that any request for equitable adjustment (REA) exceeding that threshold in amount is "made in good faith, and that the supporting data are accurate and complete to the best of [the contractor's] knowledge and belief."
Just to review the bidding, contractors may seek REA's for upward adjustments in price and schedule extensions on any government contract containing the standard Changes clause. For commercial item contracts awarded under FAR Part 12, it's a difference story. There, the changes clause says changes may only be made by mutual agreement of the parties. However, REA's can be submitted under breach of contract theories on commercial item contracts. In any event, if you have the new clause in DFARS 252.243-7002, you must certify your REA.
This is not the same certification required under FAR Subpart 33.2. If you desire to convert your REA to a claim, you must use the certification language at FAR 33.207. That certification adds another clause to the certification asserting the contractor's belief the amount accurately reflects what it believes the government must pay and attests to the certifier's eligibility to make the certification. If you want to request the contracting officer's final decision thereby affording yourself the opportunity to appeal that decision and you want to recover interest on your REA, you must certify it with the exact language from FAR 33.207. Although minor informalities in the language can be corrected later, you should use the exact language in the regulation.
REA's are an integral part of the public contracting scheme. One of the major differences between public and private commercial contracts is the use by the government of the Changes clause. Because the government dictates the mandatory use of this clause and thereby maintains total control over the contractor's performance, the law has developed various remedies for the contractor to recover additional costs (and profit on those costs) under various theories called constructive changes. (These constructive changes are actually breaches of the contract given a different name.)
We've written several blogs about breaches of government obligations under every contract. The government's specifications must be free of errors, conflicts and omissions and must permit commercially practicable performance. The government is obligated to cooperate with the contractor, not interfere in the contractor's performance and communicate with the contractor. The govenment is obliged to provide information vital to the contractor's performance. There are other types of constructive changes such as constructive acceleration of performance (where the government unjustifiably denies the contractor's request for a schedule extension). Differing interpretations of contract language give rise to constructive changes.
The take away points are these: (1) you have a right to seek redress for constructive changes; (2) if you submit an REA on a DOD contract, you must certify it under DFARS 252.243-7002; (3) if you want to convert your REA to a claim, you then must recertify it in accordance with FAR 33.207; and (4) call us as are experts at preparing REA's and claims.
Posted on Thursday, February 2, 2012 6:36:28 PM
It's time we got aggressive about our rights to debriefings. FAR 15.506 has a fairly detailed rule requiring debriefings which, for the most part, the government ignores. Dan Gordon encouraged open, thorough debriefings in his myth busters memorandum. What did he mean when he said thorough debriefings discourage protests? No doubt he was thinking about the far too commonplace situation where a bidder has to protest just to see what the SSEB and SSA did when that information should have been released, in redacted form to protect contractor proprietary information, at the debriefing. A proper FAR 15.506 debriefing prevents a protest just to find out what happened.
FAR 15.506 lists the minimum that should be disclosed at a debriefing. At a minimum. Dan has emphasized the regulation lists the minimum information required to be released. One of the requirements is a "summary of the rationale for award". As we've said before, we've attended at least one debriefing where the SSEB report and the SSA decision were released (in sparingly expurgated form). At a minimum, the government should thoroughly explain why it reached its award conclusion. There is nothing in the law to prevent release of all the post decision documents provided the contractor's rights in its trade secrets and proprietary data are protected.
Get aggressive. The regulation requires information. If you don't get it, threaten to protest. Yes, threaten to protest, which means you had better be prepared to actually file it. Protesting is a constitutional and statutory right. As a citizen, even more importantly as an interested bidder on a government contract, you have a right to protest. Protesting plays an important role in the taxpayers' procurement process.
When the courts first intervened in public procurements, they did so on the theory that disappointed bidders were acting on behalf of the taxpayers as "private attorney generals". So, you could say it not only is your right but it is also your obligation to protest. As a practical matter, why would you want to protest? So you can find out what happened. So you can see why you lost the award. That's why. And, if the government won't show you the SSEB report and SSA decision at the debriefing, tell the contracting officer you will go to GAO or the Court of Federal Claims to get the documents.
When you go to court or GAO you will not necessarily see the SSEB complete report and SSA decision but your lawyer will see them under a protective order. Your outside counsel will see everything once he or she is admitted to the protective order. Based on advice of counsel, you can then decide whether to proceed with the protest. If the SSEB report and SSA decision meet the legal tests, you can dismiss the protest. If they don't, you can proceed with the protest and perhaps achieve the kind of victory we have reported in the recent opinions by Judge Lynn Bush.
We once wrote an article about how not to protest. If your thorough debriefing or your case at court or the GAO reveals that the government followed the evaluation factors and awarded the contract faithfully following those criteria and the applicable regulations, you can forgo your protest. But always write a letter to the contracting officer explaining that on the basis of a thorough examination of the record you have decided that you will not protest. You must make maximum use of the word protest in your dealings with the government. The government must know that you are willing to be the "private attorney general" on behalf of the taxpayer but you only carry your challenge all the way through when you know the government has violated the rules.