E N D
1. Significant Decisions andLegislation/Policy Changesin 2008 Presented by Tony Steadman
2. 2 Court Decisions
Board Decisions
GAO Decisions
Legislation
Executive Orders
FAR and Other Policy Changes Overview
3. 3 False Claims Act "Presentment" Rule (Slide 4)
Competition through Prime Contractor (Slide 5)
"Section 1207" Set Asides (Slide 6)
Evaluation of Trade Agreements Act (TAA) Compliance (Slide 7)
Cumulative Impact Claim (Slide 8)
Incorporation by Reference (Slide 9)
Implied Actual Authority (Slide 10)
Implied Warranty (Slide 11)
Contractor Performance Assessment Report (CPAR) Dispute (Slide 12)
Reverse FOIA (Slide 13)
Automatic Stay Override (Slide 14)
Bad Faith (Slide 15)
Contract Disputes Act Certification (Slide 16)
Rational Basis for Award (Slide 17)
"Rule of Two" (Slide 18)
Past Performance Evaluation (Slide 19)
NDAA of 2008 (Slide 20)
NDAA of 2009 (Slide 21)
ARRA of 2009 (Slide 22)
Executive Orders (re Labor) (Slide 23)
FAR and Other Policy Changes (Slides 24-25)
Index of Issues
4. 4 Allison Engine Co. v. U.S. ex rel Sanders, 128 S. Ct. 2123 (2008)
Shipyard subcontract to build generators
Qui tam suit under False Claims Act, 31 U.S.C. §§ 3729-3731
Alleged that subcontractors submitted invoices for knowingly defective or non-compliant work and certifications falsely claiming work performed in accordance with Navy specifications
Filed in U.S. District Court where judgment rendered for subcontractors
Court of Appeals for Sixth Circuit reversed in part
Supreme Court held that it is insufficient to show that government money was used to pay claim
Plaintiff must prove that defendant intended that false statement be material to government's decision to pay or approve the false claim
Further held, it is not enough to show that alleged fraud scheme had the effect of causing private entity to make payments using money obtained from the government
It must be shown that conspirators intended to defraud the government
Court Decisions
5. 5 Distributed Solutions, Inc. v. U.S., 539 F.3d 1340 (Fed. Cir. 2008)
Subcontracts to provide software for joint acquisition and assistance management system (JAAMS) program--common computer platform between USAID and DoS
Software vendors protested alleging government circumvented federal procurement laws by delegating to prime contractor, w/out competition, selection of subcontractors
COFC dismissed protest as not w/in its jurisdiction
Awards were not "on behalf of a federal agency"
Federal Circuit reversed holding that Administrative Dispute Resolution Act (ADRA) confers jurisdiction in connection with a procurement or proposed procurement
Agency's initial Request for Information (RFI) involved a "proposed procurement"
See also Ezenia!, Inc. v. U.S., 80 Fed. Cl. 60 (Jan. 4, 2008); Savantage Financial Services, Inc. v. U.S., 81 Fed. Cl. 300 (Apr. 15, 2008)
Court Decisions
6. 6 Rothe Dev. v. Dep't of Def., 545 F.3d 1023 (Fed. Cir. 2008)
"Section 1207" set aside for computer maintenance and repair contract at Columbus AFB
Unsuccessful offeror (incumbent) filed suit alleging Section 1207 unconstitutional
U.S. Court of Appeals held that Section 1207 violated the equal protection component of the Fifth Amendment right to due process
Disparity studies were insufficient to demonstrate a nation-wide pattern or practice of discrimination by DoD in public contracting
Preferential treatment program did not withstand strict scrutiny
Court Decisions
7. 7 Klinge Corp. v. U.S., 82 Fed. Cl. 127 (2008)
Protestor challenged Trade Agreements Act (TAA) compliance of awardee (Sea Box) for Large Field Refrigeration Systems
GAO denied protest based on Sea Box's representations
Appealed to COFC and remanded to agency for further findings
Sea Box offered to move some operations from China to New Jersey to be TAA-compliant
Court found it was arbitrary and capricious for agency to accept Sea Box's original proposal
Unfair to allow awardee to change its place of manufacture after award
Klinge Corp. v. U.S., 83 Fed. Cl. 773 (2008)
Solicitation cancelled and reprocured through Request for Quotation (RFQ) under GSA Federal Supply Schedule (FSS)
Suit filed to enjoin award alleging agency intentionally thwarted Court's prior ruling
Court held that agency's mistakes in first procurement were in good faith and cancellation of RFQ not warranted
Court Decisions
8. 8 Bell BCI Co. v. U.S., 81 Fed. Cl. 617 (2008)
Contract to build laboratory building for National Institute of Health
NIH subsequently added a new floor and issued 200+ modifications for which Bell was paid $21.4M
Bell filed suit claiming cumulative impact, labor inefficiency and delays caused by government
Government argued individual releases were "accord and satisfaction"
Court held that none of the previous modifications released cumulative impact
Bell awarded $2M for cumulative impact of unchanged work
Court Decisions
9. 9 Northrop Grumman Info. Tech., Inc. v. U.S., 535 F.3d 1339 (Fed. Cir. 2008)
Delivery Order to lease a software program designed to minimize bandwidth required to send data over a network to multiple recipients
Consummated by a "Letter of Essential Need"
Certain terms and conditions incorporated by reference into Delivery Order including "required information relative to the essential use of the software"
Federal Circuit held that parties had not incorporated the actual "Letter of Essential Need"
Contract also contained an integration clause which excluded extrinsic evidence of any additional agreement
Court Decisions
10. 10 Stevens Van Lines Inc. v. U.S., 80 Fed. Cl. 276 (2008)
Contract for transportation of personal property shipments for military personnel
Transportation service providers (TSPs) relied on oral and written statements that government would continue to reimburse TSPs until new procurement became effective
Court awarded damages distinguishing between "apparent authority" and "implied actual authority"
Court Decisions
11. 11 Agredano v. U.S., 82 Fed. Cl. 416 (2008)
Plaintiff purchased SUV at U.S. Customs Service auction
Later arrested in Mexico for possession of marijuana found in vehicle
Claimed that government breached its duty of good faith and fair dealings by failing to search the vehicle before the auction
Court held that government breached its implied warranty that vehicle did not contain concealed contraband
But was not tantamount to lack of good faith
Plaintiff entitled to damages for past and future health problems caused by prosecution and incarceration in Mexico
Court Decisions
12. 12 BLR Group of Am., Inc. v. U.S., 2008 WL 5068673 (Fed. Cl. 2008)
Contract for air traffic management support services
Subcontractor was friends with Assessing Official (AO)
After falling out between prime and subcontractor, prime relationship with AO deteriorated allegedly resulting in negative Contractor Performance Assessment Report (CPAR)
Contractor unsuccessful in persuading agency to change CPAR
Complaint filed by contractor alleging that its performance was unfairly evaluated by AO
Court held that it has jurisdiction over "non-monetary" claims
Rejected previous line of board cases
Contractor was seeking "relief relating to a contract" and entitled to a "fair and accurate performance evaluation"
Court Decisions
13. 13 Canadian Commercial Corp. v. Dep't of the Air Force, 514 F.3d 37 (D.C. Cir. 2008)
Contract for repair, overhaul and maintenance of J85 turbojet engines
"Reverse" Freedom of Information Act (FOIA) suit brought to enjoin release of line-item pricing under Exemption 4
Disclosure would cause "substantial harm" to its competitive position
Enable rivals to undercut its prices in bidding for option-year work
District Court enjoined release
Air Force appealed
Court upheld district court's decision
Court Decisions
14. 14 Access Systems, Inc. v. U.S., 84 Fed. Cl. 241 (Oct. 10, 2008)
Original contract awarded by Marine Corps Systems Command for information technology services
1-year contract with 4 option years
Protest filed w/ GAO
Simultaneously with stay, agency issued 120-day bridge contract for identical services w/out competition
Action brought to enjoin performance on bridge contract
Award of bridge contract was allegedly a de facto override of automatic stay
Court held bridge contract was a new contract distinctly different from an override
Did not disturb status quo of original contract
Court Decisions
15. 15 Blackstone Consulting, Inc. v. Gen. Serv. Admin., CBCA No. 718, 08-1 BCA ¶ 33,770
Contract for janitorial services in federal buildings in Chicago
Contractor claimed damages for unexercised option years based on government's bad faith
Allegedly, the result of sexual harassment claim
Board concluded, in part, motion to dismiss was not appropriate
Contractor had sufficiently pled elements of bad faith
See also Michelle R. P'Pool, PSBCA, Nos. 5294, 5295, 08-1 BCA 33,824
Board upheld termination for default—evidence of bad faith not clear and convincing
Board Decisions
16. 16 Doyon Prop.-Am., JV, ASBCA No. 55842, 08-1 BCA ¶ 33,752
Contract for construction of platoon battle course at Fort Wainwright
Certified claim initiated by subcontractor and asserted through prime
Government moved to dismiss for lack of jurisdiction (failure of prime to certify claim)
Prime attempted to submit new Contract Disputes Act (CDA) certification and adopt subcontractor's prior certification by reference
Board dismissed claim for lack of jurisdiction
Certification after appeal was not sufficient
See also Teknocraft, Inc., ASBCA No. 55438, 08-1 BCA ¶ 33846
Signing CDA certification by typing "//signed//" not adequate Board Decisions
17. 17 The Boeing Co., B-311344 et al., June 18, 2008, 2008 CPD ¶ 114
GAO sustained the protest
Relative merits of proposals not assessed in accordance with evaluation criteria
Solicitation provision violated that no consideration be provided for exceeding key performance parameters (KPPs)
Unreasonable determination that awardee's tanker could refuel all aircraft required by solicitation
Discussions misleading and unequal regarding KPPs
Unreasonable determination that awardee's refusal to achieve organic depot-level maintenance w/in 2 years was "administrative oversight"
Costs improperly added to protester's most probably life-cycle costs GAO Decisions
18. 18 Delex Systems, Inc., B-400403, Oct. 8, 2008, 2008 CPD ¶ 181
Navy issued solicitation under multiple-award indefinite-delivery/indefinite-quantity (ID/IQ) contract for its general aviation training products (GATP) program
Agency had reserved right to solicit orders on a small business set-aside basis to meet Command's small business set-aside goal
Contract later changed to include unrestricted competition only
Protestor argued FAR 19.502-2(b), "Rule of Two," should apply and solicitation should have been issued as small-business set-aside
Agency argued the rule was inapplicable to multiple-award ID/IQ contracts
GAO held that rule does apply to such contracts GAO Decisions
19. 19 Helicopter Transport Services, LLC, B-400295, Sept. 29, 2008, 2008 CPD ¶ 180
Forest Service solicitation for helicopters
Four technical factors evaluated including past performance
Agency took in to account its own knowledge of protestor's performance without documenting its assessment
GAO held that without such documentation it had no basis to determine reasonableness of past performance evaluation GAO Decisions
20. 20 Procurement of Commercial Services (§ 805)
Services that are not offered and sold competitively in substantial quantities in commercial marketplace, but are of a type offered and sold competitively in substantial quantities in commercial marketplace, may be treated as commercial items
Only if CO determines in writing that offeror submitted sufficient information to evaluate price reasonableness
Inventories and Reviews of Contracts for Services (§ 807)
SecDef must inventory service contracts and ensure that "to the maximum extent practicable" activities are not "inherently governmental"
Task and Delivery Orders (§ 843)
See Policy Changes slide—Enhanced Competition for Task and Delivery Order Contracts, 73 Fed. Reg. 54008 (Sept. 17, 2008)
Public Disclosure of Justification and Approval Documents for Noncompetitive Contracts (§ 844)
Civilian agency contracts
Posted on the web w/in 14 days of award, unless exempt
Requirements for Senior DoD Officials Seeking Employment w/ Defense Contractors (§ 847)
Must request written opinion from ethics official
Report on Contractor Ethics Programs of Major Defense Contractors (§ 848)
See Policy Changes slide—Contractor Business Ethics Compliance Program and Disclosure Requirements, 73 Fed. Reg. 67064 (Nov. 12, 2008)
National Defense Authorization Act, 2008,P.L. 110-181, 122 Stat. 3 (Jan. 28, 2008)
21. 21 Sense of Congress on Performance by Private Security Contractors of Certain Functions in an Area of Combat Operations (§ 832)
Should ordinarily be performed by Armed Forces
Limitation on Length of Certain Noncompetitive Contracts (§ 862)
"Urgent and compelling" awarded contracts may not exceed the time necessary to meet requirement, and not longer than 1 year unless head of agency approves an exception
For contracts over simplified acquisition threshold
Requirements for Purchase of Property and Services Pursuant to Multiple Award Contracts (§ 863)
Requires FAR be amended w/in 1 year to require enhanced competition under multiple award contracts over simplified acquisition threshold, unless waived by CO
Limitations on Tiering of Subcontractors (§ 866)
Requires FAR be amended w/in 1 year to minimize excessive use by contractors of subcontractors that add no or negligible value
Database for Federal Agency Contract and Grant Officers and Suspension and Debarment Officials (§ 872)
GSA shall establish a database regarding integrity and performance of certain persons awarded Federal contracts and grants
National Defense Authorization Act, 2009,P.L. 110-417, ___ Stat. ___ (Oct. 14, 2008)
22. 22 Government Accountability Office Reviews and Reports (§ 901)
Examine any record of a contract or subcontract
Interview any employee of a contractor or subcontractor
Special Contracting Provisions (§ 1554)
To maximum extent possible, contracts funded under the Act shall be fixed-price competitive procurements; otherwise must be posted on the web
Use of American Iron, Steel, and Manufactured Goods
(§ 1605)
All iron, steel, and manufactured goods used in these projects must be produced in the U.S. (unless head of agency finds otherwise)
American Recovery and Reinvestment Act of 2009,P.L. 111-5, ___ Stat. ___ (Feb. 17, 2009)
23. 23 Notification of Employee Rights Under Federal Labor Laws, Exec. Order No. 13496 (January 30, 2009)
Requires contractors to post notices that describe employees' rights to organize pursuant to National Labor Relations Act
If not posted, contractor runs risk of contract termination and being declared ineligible for future awards
Economy in Government Contracting, Exec. Order No. 13494 (January 30, 2009)
Denies reimbursement for funds spent that "concern the manner of exercising rights to organize and bargain collectively"
Non-Displacement of Qualified Workers Under Service Contracts, Exec. Order No. 13495 (January 30, 2009)
After one contractor is replaced with another performing "same or similar services at the same location," successor must offer right of first refusal to qualified employees of predecessor
Does not apply to managerial or supervisory employees
May employ fewer employees than predecessor
Executive Orders
24. 24 Enhanced Competition for Task and Delivery Order Contracts, 73 Fed. Reg. 54008 (Sept. 17, 2008)
Authorized protest to GAO for task/delivery orders only when: (1) order increases scope, period or maximum value of the contract; or (2) order is over $10M
No task/delivery order over $100M (including options) to single source unless written agency determination
Give all contractors awarded such contracts a fair opportunity to compete for task/delivery orders over $5M
Contractor Business Ethics Compliance Program and Disclosure Requirements, 73 Fed. Reg. 67064 (Nov. 12, 2008)
FAR 52.203-13 is required to be included in all contracts over $5M and 120 days in length
Code of conduct and compliance program requirements still apply, with exceptions
Requires mandatory disclosure, in writing, to IG whenever contractor has credible evidence to believe that a principal, employee, agent or subcontractor has committed a violation of:
Federal criminal law involving fraud, conflict of interest, bribery or gratuity violations
Civil False Claims Act, 31 U.S.C. 3729-3733
Applies for at least three years after final payment under the contract
Also, knowing failure by contractor principal to timely disclose significant overpayment, violation of civil False Claims Act, or violation of federal criminal law is cause for debarment or suspension
E-Verify, 73 Fed. Reg. 67651 (Nov. 14, 2008)
DHS on-line system to verify employment eligibility
Non-COTS, $100K, 120 days of performance, inside the U.S.
Postponed to May 21, 2009
FAR and Other Policy Changes
25. 25 Suspension of Price Evaluation Adjustment, 73 Fed. Reg. 9304 (Feb. 20, 2008)
For 1 year, DoD suspended use of price evaluation adjustment for SDBs
DoD exceeded its 5 percent goal for contracts awarded to SDBs in 2007
Post-Government Employment Restrictions, 73 Fed. Reg. 36168 (June 25, 2008)
Provides new guidance explaining statutory restrictions as they apply to employees terminating service on or after January 1, 1991
Commercially Available Off-the-Shelf (COTS) Items, 74 Fed. Reg. 2710 (January 15, 2009)
Effective February 17, 2009, FAR will relax Buy American Act (BAA) domestic component test for COTS item contracts
FAR waiver does not apply to COTS procurements subject to Trade Agreements Act (TAA)
FAR and Other Policy Changes
26. Tony Steadman607 14th Street N.W.Washington, D.C. 20005-2003Phone: (202) 434-1604Fax: (202) 434-1690asteadman@perkinscoie.comwww.perkinscoie.com