logo-titleBack in October 2016, we wrote about the Fair Pay and Safe Workplaces rule (commonly known as the contractor “Blacklisting” rule) and how its implementation had been temporarily halted by a federal court in Texas.  The Blacklisting rule would have allowed agencies to essentially debar contractors on a contract-by-contract basis if a contractor had a labor law violation on its record.  Many in the contracting community lobbied hard against this rule, arguing (among other things) that the Blacklisting rule would put contractors at risk of inconsistent disqualification from procurements without the same due process rights that go along with agency suspension and debarment programs.  Well, it now looks like Congress has decided to step in and flex a rarely used law to get rid of the Blacklisting rule for good.

Today, by a vote of 236-187, the House of Representatives passed a disapproval resolution pursuant to the Congressional Review Act to repeal the Blacklisting rule.   Continue Reading House Votes to Repeal the Fair Pay and Safe Workplaces (“Blacklisting”) Rule

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One of the first discussions we have with a client considering a bid protest is which forum to choose for the protest – the Government Accountability Office (“GAO”) or the U.S. Court of Federal Claims (“Court”). Choosing the right forum can mean the difference between winning or losing a protest. In deciding, here are some of the key factors you, as a protester, should consider.

Value of a Stay of Performance of the Protested Contract

Usually the first consideration we address with our clients is the value of, or need for, a stay/suspension of performance of the protested contract while the protest is pending. A stay can be valuable to a protester for several reasons. In a services contract, because a stay of the protested contract will usually result in an extension of the incumbent contract while the protest is pending, obtaining a stay can be valuable to an incumbent contractor filing a protest. Obtaining a stay may also be necessary in certain cases to preserve the potential for meaningful relief if your protest is ultimately sustained. This is particularly the case in construction and supply contracts, where it is difficult to untangle contract performance once it’s been substantially commenced. In such cases even if you win your protest, the GAO or the Court may limit your relief to your bid and proposal costs if performance has already substantially progressed during the protest.

Where obtaining a stay is critical or highly advantageous to the protester, there is a major incentive to file the protest at GAO, where the protester is entitled to an automatic stay of contract performance if it files the protest within a specific time period.

Conversely, at the Court a protester is not entitled to an automatic stay, and must either hope that the government agrees to a voluntary stay or the Court issues a temporary restraining order (“TRO”). While the government actually agrees to voluntary stays of performance in many protests, there is no guarantee one will be offered. And obtaining a TRO can be difficult and adds to the cost of the protest. If obtaining a stay of performance is critical to a protester, GAO is usually the preferable forum. Continue Reading Choosing the Best Forum for Filing Your Bid Protest – GAO vs. Court of Federal Claims

Trump_signing_order_January_27President Trump’s Executive Orders have been front page news for the past week, many of which have been quite controversial. Yesterday the President issued another Executive Order that, although unlikely to garner major media buzz, may be the most impactful yet for government contractors. The Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs, which some have referred to as the “Two-for-One” Order, is aimed at reducing the number of regulations across the federal government. The gist of the Order is that for every one new regulation that an executive branch agency proposes, it must repeal two existing regulations. In addition, the agency’s estimated cost of any new regulations must be offset by reductions in cost by repeal of existing regulations.

The Order makes exceptions for regulations pertaining to the “military, national security, or foreign affairs function of the United States,” “regulations related to agency organization, management, or personnel,” and any other category of regulations exempted by the Director of the Office of Management and Budget (“OMB”).

The problem with this Order is that its terms are vague, and the person charged with providing additional guidance on the Order has yet to be confirmed by the Senate. Continue Reading Trump’s Executive Order on Reducing Regulations Leaves Questions Unanswered

6713395469_81531a9bec_bIn the Size Appeal of Gregory Landscape Services, Inc., the U.S. Small Business Administration (“SBA”) Office of Hearings and Appeals (“OHA”) heard an appeal following a Size Determination in which the SBA Area Office held that Gregory Landscape Services, Inc. (“Appellant”) was not a small business under the applicable size standard associated with the subject procurement.  Through its decision, OHA made clear that a protest based on identity of interest through a familial relationship (see 13 CFR 121.103(f)) will only be presumed if the protested firm is given clear notice that identity of interest it being claimed and the precise familiar relationships at issue. Continue Reading Application of the Presumption of Affiliation Based on Identity of Interest Requires Clear Notice to Protested Firm

ASBCAWhile the Armed Services Board of Contract Appeals (ASBCA or Board) has jurisdiction over contract claims, the ASBCA does not have jurisdiction over fraud.  This can lead to competing cases in multiple jurisdictions if the government has a claim of fraud against a contractor while the contractor is pursuing a contract claim concerning the same contract at the ASBCA.  To manage these conflicts, the Board will stay the Board proceeding or dismiss it without prejudice pending the outcome of the fraud proceeding based on the consideration of the following four factors: 1) whether the facts, issues and witnesses in the two proceedings were similar; 2) whether the parallel matter would be compromised by proceeding here; 3) whether the non-moving party would be harmed by more delay; and 4) whether the duration of the suspension sought was reasonable.

In Kellogg Brown & Root Services, the ASBCA held that a request to stay or dismiss without prejudice had limits.  In 2010, Kellogg Brown & Root (KBR) submitted certified claims for subcontract settlement costs, which it later appealed to the ASBCA.  In 2013, the ASBCA dismissed these appeals without prejudice because of a pending FCA suit.  In February 2016, the ASBCA reinstated the appeals.  The government moved to stay or dismiss the appeals again because the FCA case was still in the discovery stage.  For the fourth factor, the Board held the stay sought was not reasonable because it would essentially be an indefinite stay.  For the third factor, the Board held another dismissal could prejudice KBR due to the length of time that had occurred since the certified claims had been submitted.  The Board found there was a “substantial risk” that evidence would become stale if a more significant delay occurred.  For the second factor, the government had admitted the Board proceeding would not compromise the government’s FCA case as long as it could obtain complete discovery and develop the record.  For the first factor, the Board held similarity of facts, witnesses, and issues between the two proceedings alone were insufficient to dismiss the appeal.  Therefore, the ASBCA denied the government’s motion to dismiss or stay the appeals. Continue Reading Fraud Jurisdiction at the ASBCA: Complicated and Complex

16064489288_1323da98f9_k (1)Two pieces of federal legislation that  recently became law will have a major impact on government contractors seeking to protest Department of Defense (DoD) and Civilian Agencies task order awards.  Some changes are for the worse, others are for the better.  However, the best news for contractors is probably that some of the changes that were proposed did not make it into the final legislation.

2017 NDAA Divests GAO of Protest Jurisdiction Over of DoD Task Order Awards Between $10 Million and $25 Million

Signed into law Dec. 23, 2016, the 2017 National Defense Authorization Act (2017 NDAA) amends 10 U.S.C. § 2304c(e)(1)(B) by increasing the GAO’s jurisdictional threshold value for DoD task order protests from $10 million to $25 million.  Naturally, this large increase greatly impacts contractors on DoD acquisitions.  No legal remedy to protest DoD task orders less than $25 million will now exist, unless the protestor contends that the the order increases the scope, period, or maximum value of the contract under which the order is issued.  Since DoD lobbied for this large increase, contractors can expect DoD will aim to issue task orders under the new $25 million threshold knowing those task order awards will not be subject to a protest at GAO.

Civilian Task Order Act Restores GAO’s Protest Jurisdiction Over Protests of $10 Million+ Civilian Agency Task Order Awards

The Government Accountability Office (GAO) Civilian Task and Delivery Order Protest Authority Act of 2016 (Civilian Task Order Act), signed into law Dec. 14, 2016, restores GAO’s protest authority over civilian task orders valued at over $10 million.  The reinstatement of civilian task order protest jurisdiction at GAO is welcome news for disappointed offerors on civilian task order procurement, since they had no remedy during the prior three months to protest civilian agencies’ task order awards.

Bottom Line 

Although the increase in the DoD threshold to $25 million is unwelcome news, contractors can breathe a sigh of relief that other proposed protest reforms were not part of the final enacted 2017 NDAA.  Those proposed changes included an attempt to require contractors earning more than $100 million in annual revenue to reimburse GAO for costs incurred for processing an unsuccessful GAO bid protest and to make an incumbent contractor-protestor forfeit profits earned on a bridge contract or extension received during the resolution of an unsuccessful GAO bid protest, and to preclude contractors from filing a bid protest at the Court of Federal Claims after unsuccessfully pursuing a protest at GAO.  However, these proposed changes may not be dead forever.  The 2017 NDAA mandates that DoD contract with an independent research entity to carry out a comprehensive study on the prevalence and impact of bid protests on Department of Defense acquisitions, including protests filed with contracting agencies, the Government Accountability Office, and the Court of Federal Claims.  One of the focuses of the report is too analyze bid protests filed by incumbent contractors.  Contractors should keep an eye out for this report, as it could be used as ammunition to limit bid protests rights in the future.

Image courtesy of flickr (licensed) by Dean Hochman

14076937585_ca93f6db1a_kAs past performance reviews become an increasingly important part of the bid evaluation process, the performance assessments catalogued in the Contractor Performance Assessment Reporting System (“CPARS”) will have greater significance than ever before. CPARS reviews generally set forth the Government’s evaluation of a contractor’s performance based on several factors, including quality of performance, adherence to performance schedule, cost control, and management capabilities. While each assessment is theoretically based on objective facts and data, it is not unheard of for contractors to receive biased, inaccurate, or misleading evaluations. These unfair assessments can substantially damage a contractor’s prospect for securing future Government contract awards, but contractors currently have limited avenues to address them.

The strongest remedy available in recent years has been a declaration from the Armed Services Board of Contract Appeals (“ASBCA”) or the Court of Federal Claims (“COFC”) that the evaluation was arbitrary and capricious together with a remand to the contracting officer with “proper and just” instructions, but this remedy does not necessarily scrub the negative review from CPARS. However, the ASBCA may have left the door open for a new type of remedy available to contractors who receive an unfair CPARS assessment. Continue Reading ASBCA Opens the Door to Contractors Seeking Monetary Damages for Unfair CPARS Reviews

4153762400_707fd468a0_oRecently, the U.S. Export-Import Bank (EXIM) issued a proposal that would align its size standards for determining whether a business qualifies as a “small business” with the Small Business Administration’s (SBA) current SBA Loan Program standards. Such a change would decrease inconsistencies among the entities, and potentially increase EXIM lending opportunities for small businesses that otherwise do not meet the SBA’s industry-based size standards as defined under the North American Industry Classification System (NAICS).

The EXIM Bank Charter requires the EXIM Bank to make at least 25 percent of its overall loan, guarantee, and insurance authority to supporting financing of exports by “small business concerns,” as defined by the Small Business Act, Section 3. Historically, the EXIM Bank relied on the SBA’s industry-based size standards to determine which participants in its programs may be considered small businesses. Continue Reading Export-Import Bank Proposes to Adopt Small Business Jobs Act Standard for Size Determination

9101006675_6dfba6afa4_kSea Sheppard Conservation Society (“Sea Sheppard”) recently found itself in the unfortunate situation of being in an auction bidding war against a single ineligible bidder in a General Services Administration (“GSA”) auction, resulting in Sea Sheppard having to pay a substantially higher sum for two vessels than if only eligible buyers had been allowed to participate in the auction.  Sea Sheppard submitted a claim contending that it should have been permitted to buy the vessels at lower prices than those it actually paid, because it was required to raise its own bid solely to beat out bids submitted by an ineligible bidder.  In denying Sea Sheppard’s claim on appeal, the U.S. Civilian Board of Contract Appeal (“CBCA”) may have created a real dilemma for future contractors bidding in government auctions.

In December 2014, the GSA listed for sale two Coast Guard vessels via an online auction.  As a condition to participate in the auction, all bidders were required to recognize that the sale was subject to specific Terms and Conditions (Standard Form 114C, April 2001).  Under the “Eligibility of Bidders” provision, the Terms and Conditions generally required bidders to: (a) be over 18 years of age; (b) not be a government employee of certain agencies or relative of same, and (c) not be debarred.  The Terms and Conditions also stated that bidding was not limited to U.S. Citizens, but some items would only be sold to U.S. Citizens.  Also, the Terms and Conditions put bidders on notice that all property was subject to all applicable export laws and regulations, including International Trafficking in Arms Regulations (“ITAR”) 22 CFR Part 120, et seq.

Sea Sheppard participated in the auction, ultimately against one other bidder (“Bidder 2”).  On the first vessel, the Pea Island, Sea Sheppard started with a bid of $100,000, and after submitting multiple bids, ultimately outbid Bidder 2 at $275,800.  On the second vessel, the Block Island, Sea Sheppard also started with a bid of $100,000, with its last bid being $155,100, before being outbid by Bidder 2.

Subsequently, the GSA determined that Bidder 2 was ineligible because it was not a U.S. Citizen.   Thus, GSA offered the Block Island to Sea Sheppard as the next highest bidder, at $155,100.  Sea Sheppard requested a price of $100,000, but that was rejected by the GSA contracting officer.  Sea Sheppard accepted the Block Island at $155,100. Continue Reading Government Auction Bidders Beware: CBCA Denies Relief to Bidder Whose Bid Price was Driven Up by an Ineligible Bidder

Protest Sustain and Effectiveness rates at GAOBack in January, we wrote about the dramatic spike in bid protests sustained at GAO during the first quarter of fiscal year 2016.  At the time we noted that GAO was on pace to shatter the prior year’s number of bid protest sustains.  Today, GAO released its Bid Protest Annual Report to Congress for Fiscal Year 2016, and that report shows that in indeed GAO did shatter last year’s sustain numbers.  The “Sustain Rate” at GAO increased from a paltry 12% in FY 2015, to a robust 22.6% in FY 2016.  This is the highest Sustain Rate at GAO since FY 2007, when the rate hit 27%, and the largest year-to-year percentage increase since GAO began reporting the Sustain Rate in FY 2001.  Not only did the Sustain Rate go up by more than 10%, the actual number of sustains more than doubled, from 68 to 139.  In fact, there was only one less protest sustained in FY 2016 than in FY 2015 and FY 2014 combined.

But the spike in the Sustain Rate is only the beginning, as this year’s statistics yield some other interesting takeaways.

Effectiveness Rate Remains Steady Despite Sustain Rate Nearly Doubling

GAO not only annually reports the percentage of protests decided on the merits which are sustained (the “Sustain Rate”), it also reports the percentage of protests that are resolved favorably for the protestor either because the protest is sustained or because the agency took voluntary corrective action in response to the protest (the “Effectiveness Rate”).

What makes this year’s statistics even more interesting is that despite the fact that the Sustain Rate nearly doubled, the “Effectiveness Rate” went up by a mere 1%!  In other words, the combined number of sustains and corrective actions stayed essentially the same.   Continue Reading GAO Reports a Dramatic Spike in its Bid Protest Sustain Rate in FY 2016