The case of Green Valley Company, ASBCA No. 61275, presents an interesting conundrum for contractors facing fraud allegations who also have a contract claim against the government.  In 2006, the contractor presented invoices for payment to the government.  In 2017, the contractor converted those invoices into a certified claim requesting payment.  Under the CDA, the contractor had clearly exceeded the 6-year statute of limitations.  However, the contractor requested the ASBCA equitably toll the CDA for what appeared to be sensible grounds.  From 2009 until 2016, the contractor had been defending a lawsuit the government filed against it alleging false claims act violations and breach of contract among other causes of action. The government had simultaneously been considering the contractor for debarment, the death penalty of government contracts.

The contractor argued it could not have submitted its claim to the contracting officer while the lawsuit was pending because the government would have alleged the contractor had made yet another false claim thus further potentially exposing the contractor to additional treble damages.  The ASBCA rejected the contractor’s argument stating “[n]or does [the contractor] explain why the possibility that the government might respond to its claim with fraud based defenses or causes of action would block it from submitting a claim.  The mere fact that such a response from the government might be undesirable to [the contractor] is irrelevant.”  Thus, the contractor’s claim was held to be outside the statute of limitations and the appeal was considered time-barred. Continue Reading Threat of Contractor Death Penalty Does Not Toll the CDA Statute of Limitations

Oles Morrison partner Adam Lasky will co-present with Shene Commodore, president of Commodore Consulting, LLC during National Contract Management Association’s “Maximizing Teaming Under SBA’s Joint Venture Rules” webinar.

Hear about new rules and major changes the U.S. Small Business Administration (SBA) has made to its joint venture programs.

Learn:

  • SBA’s teaming regulations,
  • Joint venture requirements,
  • Principles for establishing joint venture programs, and
  • How to draft agreements that comply with SBA regulations

Click here to register for the webinar.

As we were reviewing the regulatory agendas of various federal agencies for upcoming regulations that might impact federal contractors, we noticed that the U.S. Small Business Administration’s (“SBA”) most recent regulatory agenda included an upcoming proposed regulation entitled “Consolidation of Mentor Protégé Programs and Other Government Contracting Amendments.”  Specifically, SBA’s regulatory agenda states that:

SBA proposes to consolidate the All Small Mentor Protégé Program and the 8(a) Business Development Mentor Protégé Program into one program.  This rule will also make other revisions in the Government Contracting programs, including the process for approving management changes in entity owned concerns.

According to SBA’s regulatory agenda, this proposed rule was estimated for release in March 2018.  While that obviously did not happen, it is not uncommon for SBA (or other agencies) to issue proposed regulations months (or even years) after originally estimated.

For an 8(a) contractor, there is little (or arguably no) benefit to applying to the 8(a) Mentor-Protege Program (8(a) MPP) instead of the All-Small Mentor-Protege Program (ASMPP), and SBA reviews and approves mentor-protege agreements at a much faster rate if one applies to the ASMPP.  While the ASMPP has been around for over a year now, many 8(a) contractors are still under the misconception that they need to be in the 8(a) MPP in order to bid as a joint venture on 8(a) set-asides.  This is simply not the case, as the ASMPP provides the same advantages to an 8(a) protege as the 8(a) MPP.  Consolidation of these two program should streamline the mentor-protege approval process, and result in the elimination of duplicative and confusing regulations.  We eagerly anticipate the issuance of this proposed regulation to consolidate SBA’s two mentor-protege programs, and hopefully SBA will at the same time address some of the other problems with the mentor-protege regulations (such as eliminating the requirement for SBA to approve a joint venture agreement before award of an 8(a) contract).

 

For years bid protest filings at the Government Accountability Office (GAO) have been done by e-mail (or even fax, mail or hand delivery).  In January 2014, Congress directed GAO to establish a electronic filing and document dissemination system (not unlike the PACER system used by federal courts), and authorized GAO to charge a filing fee to those filing bid protests.  Since that time, GAO has been working on developing an electronic filing system, which GAO calls “EPDS.”  The process has taken longer than most expected, but in February 2018 GAO announced EPDS was almost ready and started handling some protests on EPDS as part of a pilot program.  Today, GAO issued the final rule for EPDS, and announced that rule would take effect on May 1, 2018.  This means that starting in May all bid protest at GAO must be filed through EPDS (protesters will no longer be able to file protests by email) and GAO will charge a $350 fee for filing a protest.

Given the short and strictly enforced time limits for filing protests at GAO, those who file bid protests should consider signing up for an account immediately at https://epds.gao.gov/, and familiarize themselves with the new rules well before they take effect May 1st.  GAO has provided handy instruction manuals and videos for EPDS at https://www.gao.gov/legal/bid-protests/file-a-bid-protest.

As we previously discussed, when Congress passed the FY 2018 NDAA it required the Department of Defense (“DoD”) to issue regulations providing for enhanced post-award debriefing rights on certain DoD procurements.  Specifically, Congress mandated enhanced content requirements, a follow-up question process, and corresponding changes to the time to file a bid protest at GAO with a suspension of performance of the protested contract (a “CICA stay“):

  • Enhanced Content Requirements:  While protecting the confidential and proprietary information of other offerors, the debriefing shall include, at a minimum, the agency’s written source selection award determination, redacted to protect the confidential and proprietary information of other offerors.  These enhanced content requirements apply to “required” debriefings if (1) the contract award exceeds $100M, or (2) the contract award exceeds $10M and the contractor requesting the debriefing is a small business or nontraditional contractor who request such disclosure.
  • Follow-up Question Process:  Disappointed offeror would be allowed the opportunity for follow-up questions within two business days of receiving a post-award debriefing to be answered in writing by the agency within five business days.
  • Time to file protest at GAO and obtain a CICA stay:  The debriefing would not be considered concluded, and the five day post-debriefing period pertaining to when a protest needs to be filed to invoke a CICA stay would not commence, until the day the agency delivers its written responses to the disappointed offeror’s follow-up questions.

The enhanced content requirements were to be implemented through DFARS regulatory changes, which DoD has until June 2018 to issue.  On the other hand, the follow-up question process, and corresponding changes to the time to file a bid protest at GAO with a CICA stay, are already reflected in statutory changes (10 U.S.C. 2305(a)(5) and 31 U.S.C. 3553(d)(4)).  Still, changes to the DFARS were expected to implement the follow-up question process.  But this week, in advance of changes to the DFARS, DoD issued Class Deviation 2018-O0011 – Enhanced Postaward Debriefing Rights, which provides for the immediate implementation of the follow-up question process (and corresponding changes to the time to file a protest at GAO and obtain a CICA stay): Continue Reading DoD Begins Implementation of Enhanced Post-Award Debriefing Rights

Since at least 1945, the U.S. Supreme Court has upheld the unique ability of government agencies to create binding, unwritten interpretations of their own regulations. What is most troubling about this is that the agency can make or amend its regulations during the course of a contractor’s performance.  This government interpretation is binding on the contractor and the contractor may not be entitled to additional compensation if its cost of performance is increased by such amended interpretation.  A bitter pill for contractors, the Supreme Court recently refused to reconsider this principle on March 19, 2018, in Garco Construction, Inc. v. Robert M. Speer.

The principle is known as the Seminole Rock deference and requires courts to give “controlling weight” to how a government agency interprets its own regulations. Significantly, the agency’s interpretation does not need to be “the best” reading of the regulation and is valid as long as it is not “plainly erroneous or inconsistent with the regulation.” Contractors must beware that in practice, the Seminole Rock deference permits agencies to “unilaterally modify a contract by issuing a new clarification with retroactive effect.”  Continue Reading Supreme Court Denial Highlights Risk to Contractors of Rule Giving Deference to Agency’s Interpretation of Regulations

The termination for convenience clause arose at the end of the Civil War so the government could terminate construction contracts made during wartime once peace ensued, and not be liable for the contractor’s loss of anticipated profits.  The War (now Defense) Department continued to use this clause throughout the 19th and 20th centuries.  The clause allowed the government to enter into a 10-year contract to buy arms without worrying about the conflict ending in three years and being liable for seven years of the contractor’s anticipated profits.

Eventually, the termination for convenience clause became mandatory in all federal contracts, civilian and military, and then found its way into almost every construction contract, both public and private.

Damages that can be awarded when a contract is terminated for convenience or where a default termination is converted to a constructive termination are governed by both federal regulation and the contract at issue.  See FAR 52.249-1 to 52.249-5; United Partition Systems, Inc. v. U.S., 90 Fed. Cl. 74 (2009).  Contractors terminated for convenience are entitled to recover the amount of the cost of the contract work performed prior to termination, plus a fair and reasonable profit on that work.  (See FAR § 52.249-2, (g)(2), see also Alternate I (SEP 1996) (g)(1), which is applicable to construction contracts.)  In this scenario, the contractor has the burden of proving the actual value of the termination for convenience damages; and they must be proved with certainty so that the amount of damages will be more than mere speculation.  Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 765 (Fed. Cir. 1987) 

Continue Reading Recovery When the Government Terminates For Convenience

The Granston memorandum released in early 2018 caused a stir amongst False Claims Act qui tam relators and defendants alike. The practical effects of the Granston memo, however, are not yet fully apparent. Defendants in FCA suits should nonetheless take note that following the release of the Granston memo, the Department of Justice has doubled-down on the importance of its dismissal power.

Leveraging the Government’s Position

One issue the Granston memo raises is whether defendants can leverage the government’s dismissal power in qui tam suits pursuant to seek dismissal pursuant to 31 U.S.C. § 3730(c)(2)(A). Two months after the Granston memo’s release there is some indication that it may have a positive effect on dismissals. Deputy Associate Attorney General Stephen Cox delivered confirming remarks at the Federal Bar Associations Qui Tam Conference on February 28, 2018:

Continue Reading Borrowing a Page from the USAO’s Playbook—Get Your FCA Suit Dismissed

Oles Morrison attorney, Jim Nagle, has been tapped to give the keynote presentation at the Alliance Northwest 2018 Conference on March 15.  Jim’s keynote, “Contracting in the age of Trump,” will cover President Trump’s impact on the regulatory process, the Buy American act, the role of contractors in fulfilling the work of the executive branch, and how budgetary priorities sets an array of challenges and opportunities for everyone involved in the contracting process. Any new administration, especially one of a different political party than its predecessor, involves different priorities and often total reversals from the previous president’s. The Trump administration is no exception but its impact on procurement both what is being purchased and the process is monumental.

The Alliance NW Conference is the premier government contracting event in the northwest, bringing together prime contractors, government agencies and small businesses for a full day of relationship building and educational opportunities.

A nationally recognized attorney and thought leader in government contract law, Jim Nagle is sought after for his valuable counsel as consultant, expert witness or arbitrator/mediator by the government and its federal contractors. He has unrivaled experience working on supply, services, international, major systems and construction contracts. Throughout his distinguished career, Jim has represented owners, contractors, subcontractors, sureties, architects, engineers and all parties in the contracting process. Prior to joining the firm, he served as chief of the Logistics and Contract Law Branch of the Department of the Army staff and as a trial team chief in the Army’s Contract Appeals Division.

Jim is committed to sharing his extensive knowledge of government contract law to advance the next generation of attorneys. He is the author of seven books on federal contracting and more than 100 articles that have appeared in publications such as Public Contract Law Journal, Military Law Review, National Contract Management Association (NCMA) Journal, and Contract Management. Jim is a coveted lecturer on federal government contracts and construction law. He regularly teaches a course on Government Contract Law for Educational Services Institute on behalf of George Washington University and has taught Government Contracts for the University of Washington and Seattle University.

Cooperative Agreements” are legal instruments that facilitate the transfer of something of value from federal executive agencies to states, local governments, and private recipients for a public purpose or benefit.

Cooperative Agreements are distinct from traditional procurement contracts and thus are not subject to the Federal Acquisition Regulation (FAR). Like Other Transaction Authority, this approach provides agencies greater freedom to craft the terms of an agreement around new or innovative endeavors. For example, the FDA uses this freedom to advance food safety with states by funding implementation of food safety rules. As the Federal contracting landscape becomes increasingly complex, Cooperative Agreements represent an opportunity for some contractors to pivot to a more streamlined federal funding mechanism. Continue Reading An Overview of Cooperative Agreements in Federal Contracting