In Matter of: Standard Communications, Inc., B-406021 (January 24, 2012), the Comptroller General sustained a bid protest because the agency engaged in discussions with the awardee, but not the protester.
The agency characterized it's communications with the awardee as clarifications rather than discussions, but the GAO was not persuaded. As a result of the "clarifications", the awardee's proposal went from being rated technically unacceptable to technically acceptable - thus GAO inferred that material changes in the awardee's quote had been allowed. GAO said discussions occur where a firm is allowed to make material revisions to its quote or proposal.
The agency did not afford protester an opportunity to revise its quote. Therefore, GAO sustained the protest and recommended the agency reopen the procurement and afford all competitors an opportunity to revise their quotations.
Contact Karen S. Hindson for more information.
Thursday, February 16, 2012
Standing to File Bid Protest in Court of Federal Claims
In the January 4th decision Digitalis Education Solutions, Inc. v. United States, 664 F.3d 1380 (Jan. 4, 2012). the United States Court of Appeals for the Federal Circuit affirmed the Court of Federal Claims decision that the appellant was not an "interested party" with standing to challenge a sole source procurement for digital planetariums to be used in DoD schools.
On September 17, 2010, the Department of Defense posted on www.fedbizopps.gov a notice of intent to award a sole source contract - and the notice stated that any party challenging the sole-source contract should file a capability statement by September 22nd detailing its capability to fill the order. On September 25th, DoD awarded the sole-source contract to Science First.
On October 11th, Digitalis contacted its Congressman. On December 6th, it filed a post-award bid protest with the Court of Federal Claims. The government filed a motion to dismiss for lack of standing.
The Court of Claims held that Digitalis did not have standing to protest - because it did not have a substantial chance of winning the contract since Digitalis failed to submit a statement of capability during the prescribed 5 day period as required in the fedbizopps notice.
Only "interested parties" have standing to challenge government contract awards. But who is an interested party? An actual or prospective bidder whose direct economic interest would be affected by the award of the contract.
To prove a direct economic interest, a party must show it had a substantial chance of winning the contract. In order to protest - one who has not actually submitted an offer must be expecting to submit an offer before the closing date. If the date for receipt of proposals passes without submitting a bid, the opportunity to become a prospective bidder ends.
In this case, bids were not invited, but interested parties had a deadline to submit capability statements. Digitalis failed to submit a statement during the prescribed period, so it does not have the required direct economic interest to have standing to pursue a bid protest.
The case also includes a discussion of whether 5 days would be considered a sufficient time to require capability statements -- without answering the question. The decision says the standard would be whether it is reasonable to expect contractors to see a notice and respond. However, since Digitalis did not have standing to protest, the Court did not decide this issue.
See more government contracts news. Contract Karen S. Hindson for more information.
On September 17, 2010, the Department of Defense posted on www.fedbizopps.gov a notice of intent to award a sole source contract - and the notice stated that any party challenging the sole-source contract should file a capability statement by September 22nd detailing its capability to fill the order. On September 25th, DoD awarded the sole-source contract to Science First.
On October 11th, Digitalis contacted its Congressman. On December 6th, it filed a post-award bid protest with the Court of Federal Claims. The government filed a motion to dismiss for lack of standing.
The Court of Claims held that Digitalis did not have standing to protest - because it did not have a substantial chance of winning the contract since Digitalis failed to submit a statement of capability during the prescribed 5 day period as required in the fedbizopps notice.
Only "interested parties" have standing to challenge government contract awards. But who is an interested party? An actual or prospective bidder whose direct economic interest would be affected by the award of the contract.
To prove a direct economic interest, a party must show it had a substantial chance of winning the contract. In order to protest - one who has not actually submitted an offer must be expecting to submit an offer before the closing date. If the date for receipt of proposals passes without submitting a bid, the opportunity to become a prospective bidder ends.
In this case, bids were not invited, but interested parties had a deadline to submit capability statements. Digitalis failed to submit a statement during the prescribed period, so it does not have the required direct economic interest to have standing to pursue a bid protest.
The case also includes a discussion of whether 5 days would be considered a sufficient time to require capability statements -- without answering the question. The decision says the standard would be whether it is reasonable to expect contractors to see a notice and respond. However, since Digitalis did not have standing to protest, the Court did not decide this issue.
See more government contracts news. Contract Karen S. Hindson for more information.
Tuesday, February 14, 2012
Subcontractor named in proposal sues for fraud
Small business subcontractors sometimes feel taken advantage of by larger businesses who use the small business as part of their proposal to bid on a federal project, but then fail to award an actual subcontract to the small business after award.
The case of L'Garde, Inc. v. Raytheon Space and Airborne Systems, 805 F.Supp.2d 932 (July 26, 2011) is one such dispute. L'Garde apparently signed a Letter Subcontract with a division of Raytheon to perform future work on a government airship contract.
L'Garde, Inc. alleges that Raytheon used its small business status in order to win a bid from Lockheed Martin, the prime contractor, then failed to negotiate a future definitive subcontract in good faith -- and L'Garde alleges that Raytheon breached its contract and committed fraud because it never intended to honor its agreement with L'Garde.
L'Garde, Inc. sued Raytheon Space and Airborne Systems (a business of Raytheon Company) in
Los Angeles Superior Court. Defendant Raytheon Space and Airborne Systems filed a notice moving the case to federal court. The Court's July 2011 decision affirmed that the case should properly be in federal court based on "diversity jurisdiciton ". Even though Raytheon has highly visible business activities in California, Raytheon Space and Airborne Systems is an unincorporated business division of Raytheon Company, which has its "nerve center" (the actual center of direction, control, and coordination) in Waltham, Massachusetts. Thus, with a California plaintiff and a Massachusetts defendant, federal court diversity jurisdiction of citizenship is met. The case will stay in federal court.
Another question in this case is whether state law (California) or federal common law will be applied to the case. Raytheon tried to establish that there are unique federal interests requiring the application of federal common law to the case; but the Court found that "federal question" jurisdiction did not exist, and California law would be applied to resolve the dispute in federal court. The court found that plaintiff L'Garde's allegations of fraud were sufficient under California law to go forward with the case. L'Garde alleged in its complaint facts indicating that "Defendant made material misrepresentations as to its intent to contract with Plaintiff a long term definitive subcontract and that Plaintiff reasonably relief on these misrepresentations to its detriment."
Thus, Raytheon succeeded in moving the case from California state court to California federal court - but as of this decision, failed to have the fraud claim dismissed. For more information or for a case evaluation, contact attorney Karen Hindson.
The case of L'Garde, Inc. v. Raytheon Space and Airborne Systems, 805 F.Supp.2d 932 (July 26, 2011) is one such dispute. L'Garde apparently signed a Letter Subcontract with a division of Raytheon to perform future work on a government airship contract.
L'Garde, Inc. alleges that Raytheon used its small business status in order to win a bid from Lockheed Martin, the prime contractor, then failed to negotiate a future definitive subcontract in good faith -- and L'Garde alleges that Raytheon breached its contract and committed fraud because it never intended to honor its agreement with L'Garde.
L'Garde, Inc. sued Raytheon Space and Airborne Systems (a business of Raytheon Company) in
Los Angeles Superior Court. Defendant Raytheon Space and Airborne Systems filed a notice moving the case to federal court. The Court's July 2011 decision affirmed that the case should properly be in federal court based on "diversity jurisdiciton ". Even though Raytheon has highly visible business activities in California, Raytheon Space and Airborne Systems is an unincorporated business division of Raytheon Company, which has its "nerve center" (the actual center of direction, control, and coordination) in Waltham, Massachusetts. Thus, with a California plaintiff and a Massachusetts defendant, federal court diversity jurisdiction of citizenship is met. The case will stay in federal court.
Another question in this case is whether state law (California) or federal common law will be applied to the case. Raytheon tried to establish that there are unique federal interests requiring the application of federal common law to the case; but the Court found that "federal question" jurisdiction did not exist, and California law would be applied to resolve the dispute in federal court. The court found that plaintiff L'Garde's allegations of fraud were sufficient under California law to go forward with the case. L'Garde alleged in its complaint facts indicating that "Defendant made material misrepresentations as to its intent to contract with Plaintiff a long term definitive subcontract and that Plaintiff reasonably relief on these misrepresentations to its detriment."
Thus, Raytheon succeeded in moving the case from California state court to California federal court - but as of this decision, failed to have the fraud claim dismissed. For more information or for a case evaluation, contact attorney Karen Hindson.
Tuesday, February 7, 2012
Department of Defense Contract Awards
For daily update of Department of Defense government contract awards, see http://www.defense.gov/Contracts/default.aspx.
Wednesday, December 28, 2011
Post-Award Bid Protest Sustained for Flawed Award Decision
In Firstline Transportation Security, Inc. v. United States, 100 Fed.Cl. 359 (Sept. 27, 2011), the Court sustained a post-award bid protest, finding that the agency's selection of a low-price technically inferior proposal in a best-value procurement was not justified.
Non-price factors were more important than price in the RFP. It was not sufficient for the government to simply state that the proposal's technical superiority is not worth the payment of the price premium; instead, the government must explain specifically why it does not warrant the premium.
The Court concluded that the best-value analysis performed by the SSEB was both irrational and inconsistent with the evaluation scheme set forth in the RFP - and thus contrary to law. The errors had the effect of converting the best-value procurement contemplated under the RFP into one based on low price and mere technical acceptability.
"In a best-value procurement, the relevant question is not whether the lowest-priced proposal will meet the minimum technical requirements set forth in the RFP; rather, the government must determine which proposal represents the best value to the government."
Non-price factors were more important than price in the RFP. It was not sufficient for the government to simply state that the proposal's technical superiority is not worth the payment of the price premium; instead, the government must explain specifically why it does not warrant the premium.
The Court concluded that the best-value analysis performed by the SSEB was both irrational and inconsistent with the evaluation scheme set forth in the RFP - and thus contrary to law. The errors had the effect of converting the best-value procurement contemplated under the RFP into one based on low price and mere technical acceptability.
"In a best-value procurement, the relevant question is not whether the lowest-priced proposal will meet the minimum technical requirements set forth in the RFP; rather, the government must determine which proposal represents the best value to the government."
GAO Sustains Protest of Contract Award to Different Legal Entity
In Matter of: W.B. Construction and Sons, Inc., B-405874, B-405874.2, December 16, 2011, GAO sustained a protest that the contracting agency improperly awarded an 8(a) contract to an entity that did not participate in the procurement.
The construction contract award was made to DQSI, Corporation, which was the 8(a) entity approved by SBA. However, the proposal had been submitted by DQSI, LLC. It is undisputed that the award was made to a legal entity other than the entity that submitted the proposal.
The protester alleges that DQSI, Corporation no longer exists because it converted to a LLC in 2009. Further, the protester alleged that DQSI, Corporation did not receive advance SBA approval of the change in business structure or ownership. SBA confirmed that DQSI, Corporation was the 8(a) eligible participant.
The protest against the 8(a) award to DQSI, LLC was sustained by GAO, and the Army instructed to terminate the contract for convenience if DQSI, LLC is not eligible for the 8(a) award.
The construction contract award was made to DQSI, Corporation, which was the 8(a) entity approved by SBA. However, the proposal had been submitted by DQSI, LLC. It is undisputed that the award was made to a legal entity other than the entity that submitted the proposal.
The protester alleges that DQSI, Corporation no longer exists because it converted to a LLC in 2009. Further, the protester alleged that DQSI, Corporation did not receive advance SBA approval of the change in business structure or ownership. SBA confirmed that DQSI, Corporation was the 8(a) eligible participant.
The protest against the 8(a) award to DQSI, LLC was sustained by GAO, and the Army instructed to terminate the contract for convenience if DQSI, LLC is not eligible for the 8(a) award.
Wednesday, November 30, 2011
Post-Employment Restrictions for Government Employees
Former government employees are subject to statutory post-employment restrictions, including both permanent restrictions and 2-year restrictions. In November 2011, GAO sustained a bid protest against a contracting officer's termination of a contract based on a finding of an appearance of impropriety. See information on post-employment activities and appearance of impropriety.
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