Government Contracts Lawyer Karen S Hindson

Post-Award Bid Protest Sustained for Flawed Award Decision

2011-12-28T19:08:00.002-05:00

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."

GAO Sustains Protest of Contract Award to Different Legal Entity

2011-12-28T18:42:00.006-05:00

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.

Post-Employment Restrictions for Government Employees

2011-11-30T11:55:00.002-05:00

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.

Court of Federal Claims Blasts Government for Sole Source Contract

2011-08-11T18:56:00.000-04:00

The Court of Federal Claims found that the government violated the Competition in Contracting Act in awarding a sole source contract for sixteen 50-man bare base shelter systems for troops in Afghanistan.

Even when facing unusual and compelling urency, the government must request offers from as many potential sources as is practicable. Since the government had 26 days between its awareness of the requirement and award of the contract, the government could easily have obtained competitive prices from other sources - and its failure to do so was in violation of law.

The Court also found that the Government had intentionally delayed posting the Justification & Approval for the sole source award until after performance was completed for the purpose of avoiding a bid protest. The Court found this action to be arbitrary and capricious.

The Court found the protest not to be moot because of an exception to the mootness doctrine - the Government's violation of statutory competition requirements for the war effort is capable of repetition, and could again evade review.

California Industrial Facilities Resources, Inc. v. United States, 100 Fed.Cl. 404 (July 8, 2011).

Department of Defense Contract Awards

2010-12-05T22:55:00.001-05:00

For daily update of Department of Defense government contract awards, see http://www.defense.gov/Contracts/default.aspx.

War Zone Government Contractor Tort Liability

2010-09-17T23:36:00.003-04:00

For a discussion of the ongoing Multi-District Litigation civil tort cases against government contractor Kellogg Brown & Root, Inc. (KBR, Inc.) and other LOGCAP contractors performing waste disposal and water treatment services for war zone military bases in Iraq and Afghanistan, see Karen S. Hindson PC government contract news update on KBR, Inc. Burn Pit Litigation, United States District Court, District of Maryland, September 8, 2010.

The door is open to potential civil liability for government contractors who provide services to the U. S. military in war zones.

For another case on contractor tort liability for actions in a war zone, see Karen S. Hindson PC August 6, 2010 blogpost.

Contact Karen S. Hindson P.C., government contracts attorneys, for your contract law questions or case evaluation.

Government Contractor Immunity Case - Katrina Litigation

2010-09-17T18:52:00.002-04:00

The Fifth Circuit Court of Appeals dealt a blow to government contractor Washington Group International, Inc. on September 14, 2010, when it overturned a District Court decision granting WGI government contractor immunity in the Katrina Canal Breaches Litigation.

The Fifth Circuit, reviewing de novo the summary judgment decision in favor of WGI, found that the government had not approved reasonably precise specifications - a necessary prong to the government contractor immunity test first articulated by the Supreme Court in 1988.

Contact Karen S. Hindson, government contracts attorney, for more information or to discuss your case.

COFC Jurisdiction - FDIC a Federal Agency for Bid Protest Purposes

2010-09-16T19:54:00.006-04:00

In Office Depot, Inc. v. U.S., decided by the Court of Federal Claims on August 24, 2010, Office Depot challenged the FDIC's award of a large national office supplies contract to Staples. One of the threshold questions was whether the Court of Federal Claims has jurisdiction to hear bid protests for FDIC procurements. (The jurisdictional statute refers to procurements by "federal agencies.")

FDIC procurements are not subject to the Federal Acquisition Regulations; they are covered by procedures found in a FDIC acquisition policy manual. The Court found that such a bid protest is indeed within the COFC's bid protest jurisdiction, and that the FDIC, like the USPS, is a corporation in which the United States has a proprietary interest, qualifying it as a federal agency for purposes of the jurisdictional statute.

Turning to the merits, the COFC considered Office Depot's challenges to the evaluation of its proposal, and denied the post-award bid protest. Office Depot failed to demonstrate that the award was arbitrary, capricious, an abuse of discretion, or otherwise contrary to law. Office Depot was the lowest priced proposal but did not receive the highest scores. Office Depot's objection to the failure to evaluate past performance was untimely, since it should have been brought prior to the date for receipt of proposals.

For questions about your government contract pre-award or post-award bid protest, contact Karen S Hindson PC at 843-720-3722.

Government Contractors Required to Display Rights Notice to Employees

2010-09-09T18:46:00.009-04:00

Executive Order 13496 requires contractors to display a notice to employees of their rights under Federal labor laws, specifically the National Labor Relations Act. The Executive Order applies to contracts based on solicitations issued on or after June 21, 2010.

The notice, in a form prescribed by Department of Labor, must be posted in a conspicuous place so that it is prominent and readily seen. A copy of the poster can be downloaded at www.dol.gov/olms/regs/compliance/EmployeeRightsPoster2page_Final.pdf.

Failure to comply with the posting requirements and related rules and orders of the Secretary of Labor may result in the contract being terminated or suspended, and also in the Contractor's suspension or debarment.

A new FAR clause 52.222-99 implements this requirement, and it applies to the acquisition of commercial items as well as other requirements above the simplified acquisition threshold. Contracts for work performed exclusively outside the United States are exempt.

For your contract compliance questions, contact government contracts law firm of Karen S Hindson PC.

Action for Breach of Implied Contract of Fair Dealing is Still Viable

2010-08-28T09:51:00.012-04:00

On August 23, 2010, the United States Court of Federal Claims issued a decision interpreting Resource Conservation Group, LLC v. United States, 597 F.3d 1238 (Fed.Cir.2010), stating that the COFC did not read Resource Conservation to preclude a plaintiff from claiming a breach of the implied contract of fair dealing in a bid protest.

In L-3 Communications Integrated Systems, L.P. v. United States, 2010 WL 3296862 (Fed.Cl), bidder L-3 protested the Air Force's award of two contracts to Lockheed Martin to modernize the C-5 Galaxy, after the former Principal Deputy Secretary of the Air Force Darleen Druyun was convicted of violating conflict of interest laws (for herself, daughter, and son-in-law negotiating for employment with Boeing Company while she was a top Air Force procurement official.)

L-3 complained that Deputy Secretary Druyun improperly assumed Source Selection Authority duties and changed evaluation ratings to justify selection of Lockheed Martin's higher cost proposal, and the Air Force thereby compromised the integrity of the procurement process and breached its implied contract to treat proposals fairly, honestly, and in good faith.

The United States moved to dismiss Plaintiff's claim for breach of the implied contract of fair dealing based on Resource Conservation, saying that decision stripped the COFC of jurisdiction to hear claims for breach of the implied contract of fair and honest consideration. These actions were previously brought under the Tucker Act, and the Defendant argued that the Administrative Dispute Resolution Act (ADRA), 28 U.S.C. Section 1491(b), now provides the exclusive ground for jurisdiction and relief in procurement protest cases. The COFC rejected this argument and denied Defendant's motion to dismiss the case.

Before ADRA, the COFC jurisdiction over bid protests was predicated on the implied-in-fact contract between the Government and prospective bidders to fairly and honestly consider bids in making a selection under Section 1491(a).
Congress passed ADRA to unify bid protest law and provide a single court and a single standard of review for all bid protest court challenges.

After ADRA, the Court of Federal Claims judges differed in their opinions as to whether a protester could still allege a breach of the implied duty of fair dealing as a cause of action in a bid protest case. In L-3, the COFC rejects Defendant's reading of the Resource Conservation case.

"The statute does not delete implied-in-fact or express procurement contracts from its reach. Section 1491(a)(1) continues to allow any plaintiff, including a disappointed bidder, to invoke this Court's general contract jurisdiction to recover money damages, including bid preparation and proposal costs. The revision of Section 1491(b) did not terminate the implied contract of fair dealing. Nor did a cause of action for breach of the implied contract of fair dealing under Section 1491(a)(1) cease to exist simply because a breach occurred in the context of a procurement decision and could also be denominated a 'bid protest'. On the contrary, as the Federal Circuit in Resource Conservation recognized, Congress intended ADRA 'to give the Court of Federal Claims exclusive jurisdiction over the full range of procurement protest cases previously subject to review in the federal district courts and the Court of Federal Claims.'" L-3 Communications Integrated Systems, L.P. v. United States.

Karen S. Hindson is a government contracts attorney with offices in Atlanta and in Charleston, SC. Contact Karen S. Hindson PC for assistance with your government contract law questions.

Government Insourcing Decisions - Challenge in COFC

2010-08-28T09:17:00.011-04:00

Since 2008, the government has been increasingly looking at insourcing in lieu of using outside contractors. The 2008 National Defense Authorization Act, at 10 U.S.C. Section 2463, required the Department of Defense to begin considering the use of its own resources to meet its needs.

Department of Defense implementation guidelines were issued on April 4, 2008, September 2, 2009, and in January 2010. These guidelines set forth cost comparison procedures comparing the cost of outsourced services versus in-house services. The cost of employee benefits are imputed to outside contractors - whether or not they pay them - in order to eliminate the cost advantage.

Where should challenges to government insourcing actions be made? It appears that the answer is the Court of Federal Claims (COFC). In Vero Technical Support, Inc. v. U.S. Dept. of Defense, 2010 WL 3269872 (S.D.Fla. Aug 18, 2010), the Court found the plaintiff's challenge to the Defendant's insourcing decision falls within the broad scope of the Administrative Dispute Resolution Act (ADRA) amendments to Tucker Act jursidiction of the COFC.

Prior to ADRA, federal district courts had APA jurisdiction to hear contract award challenges and violations of government contract law. This was often called Scanwell jurisdiction, which was shared jurisdiction with the COFC. ADRA ended this shared jurisdiction in 1996. The Tucker Act, 28 U.S.C. Section 1491(b)(1), as amended by ADRA, consolidated the COFC's jurisdiction, allowing the COFC to render judgment on an action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract, or to a proposed award, or the award of a contract. The statute continues by giving the COFC broad jurisdiction over the full range of procurement disputes -- any alleged violation of statute or regulation in connection with a procurement or a proposed procurement. Initially, both the COFC and federal district courts had shared jurisdiction over government contract and procurement disputes. As a result of a sunset provision, however, exclusive jurisdiction now rests with COFC.

Contact government contracts lawyer Karen Hindson for assistance with your government contract law questions.

Contractor Liable under False Claims Act for Subcontractor Payrolls

2010-08-22T13:52:00.009-04:00

In a case involving the Davis-Bacon Act (40 U.S.C.A. Section 3142) and the False Claims Act (31 U.S.C Section 3729(a)(1)(B)), the United States District Court for the Middle District of Tennessee found a contractor liable to the United States for treble damages under the False Claims Act (FCA) for submitting false payroll certifications to the government for subcontractor employees. United States ex rel. Wall v. Circle Construction, LLC, 700 F.Supp.2d 926 (June 16, 2010).

The Davis-Bacon Act requires government contractors to pay "prevailing wages" set by Secretary of Labor for government construction projects. Circle C had an Army contract for construction of buildings at Fort Campbell in Clarkesville, Tennessee. A subcontractor performed 98 percent of the electrical work, in excess of $500,000, without a written subcontract.

Contractors are required to make sure their subcontractors comply with the Davis-Bacon Act and pay appropriate DBA wages. One of the subcontractor's employees, Wall, brought this False Claims Act (FCA) case on behalf of the United States against the general contractor Circle C.

The Court found that the contractor failed to ensure that its electrical subcontractor complied with the DBA, and as a result that Circle C's DBA certifications to the Army were false. DBA requires contractors and subcontractors to submit weekly payroll certifications of wages paid to each employee that week. Regulations implementing DBA make the prime contractor responsible for submission of payrolls by all subcontractors. The prime contractor is responsible to ensure compliance with the Davis-Bacon Act.

Prime contractor Circle C was found liable for FCA treble damages to the United States for making a false statement to the government that was material to the government's payment decision. Under the current version of the FCA, specific intent to defraud is not required to impose liability. Liability is calculated at three times the difference between what the Government actually paid and what it would have paid had the Government known the true facts.

Contact government contract attorney Karen S. Hindson of Karen S. Hindson P.C., a Charleston and Atlanta government contract law firm, for your government contract law questions.

8(a) Contract Declared Void by District Court

2010-08-22T13:20:00.010-04:00

On August 16, 2010, the United States District Court for the Eastern District of Virginia declared a HUD 8(a) contract void ab initio (from the beginning) and unenforceable. The Court found the contract to be tainted by fraud and wrongdoing by both the contractor and subcontractor -- and ordered the Clerk to send a copy of the court's Order to the HUD contracting office. Morris-Griffin Corporation v. C & L Service Corporation, 2010 WL 3221975 (E.D.Va.).

The Court was concerned about circumstances where small business concerns enter teaming agreements, with their primary contribution to the team effort being their 8(a) eligibility. In this case, an 8(a) janitorial service firm (C & L) obtained a multi-million dollar contract for mortgage loan servicing.

C & L's subcontractor MGC in actuality performed more than 50% of the contract work, which violates the requirement that the 8(a) contractor perform at least 50% of the work. MCG wanted to be paid for the work under its subcontract. C & L and MGC wound up in a dispute, with C & L essentially trying to take over the HUD contract and cut its subcontractor out after using the subcontractor's qualifications to get the contract award. The subcontractor sued C & L to enforce it's subcontract and the Court refused to enforce it.

The Court found the subcontract unenforceable because it is against public policy - it hindered the 8(a)'s control of its contract and discouraged the development of the 8(a) firm. The Court also found the subcontract unenforceable as an agreement in furtherance of a unlawful purpose - the unlawful performance of a set-aside HUD contract. Finally, the Court found the subcontract unenforceable because under SBA regulations at 13 CFR Section 121, CLS as contractor could not be unduly reliant on its subcontractor. The subcontract yielded joint management to the subcontractor and gave the subcontractor the right to be paid for labor expenses in excess of the 50% limit. The Court quoted Quinn v. Gulf & Western Corp., 644 F.2d 89, 94 (2d Cir. 1981), stating "A court of law will not enforce an agreement which is illegal for the parties to make."

The Court concluded that both parties contributed to the fraud and wrongdoing of the subcontract and that this tainted the HUD contract, rendering it void from the beginning. The Court declared that both parties had "unclean hands" and refused to enforce the subcontract, declared the HUD contract void, and notified the agency contracting officer of its decision.

Prior to entering its ruling, the Court tried to get the parties to settle their dispute, and expressed its concerns about the contract. The parties failed to resolve their issues and insisted that the Court rule. As a result, both parties lost their contract.

For more information about 8(a) contracts and subcontracts, contact government contract attorney Karen Hindson at Karen S. Hindson PC, government contract lawyers in Charleston and Atlanta.

8(a) Set-Aside versus HUBZone Priority - Permanent Injunction

2010-08-16T08:42:00.006-04:00

On August 13, 2010, in DGR Associates, Inc. v. United States, 2010 WL 3199929 (Fed.Cl.), the United States Court of Federal Claims sustained the bid protest of a HUBZone company challenging the Air Force's decision to set aside for the 8(a) program a procurement of housing maintenance, inspection, and repair services at Eielson Air Force Base, Alaska. Plaintiff DGR argued that the Air Force violated the Small Business Act by not giving priority to HUBZone small business firms when there is a reasonable expectation that two or more such concerns would submit offers and the award could be made at a fair market price.

DGR previously filed a GAO protest and prevailed, but the Air Force refused to follow GAO's recommendation, so DGR filed for declaratory and injunctive relief in the Court of Federal Claims.

There is an ongoing dispute as to the relative priority of the 8(a) and HUBZone programs. The GAO and Court of Claims have both held that the plain meaning of the Small Business Act mandates a priority to the HUBZone program, but the executive agency has issued memoranda to the contrary. An appeal has been docketed on this issue in the case of Mission Critical Solutions v. United States, 91 Fed. Cl. 386 (2010), appeal No.2010-5099 (Fed.Cir. Apr. 2, 2010).

In the DGR decision, the Court of Federal Claims states "the language of the Small Business Act granting priority to the HUBZone program could not be more clear", and "Congress established a priority for the HUBZone program over other competing small business concerns." 15 U.S.C. Section 657a(b)(2)(B). "The executive agency memoranda reflecting disagreement with this interpretation, more than anything, simply express disbelief that Congress could have intended a priority for the HUBZone program." The memoranda referenced include an OMB July 2009 memo, a DOJ Office of Legal Counsel memo August 2009 memo, and an Office of the Under Secretary of Defense, Director, Defense Procurement and Acquisition Policy memo dated May 2010.

Significantly, in the DGR opinion, the United States Court of Federal Claims "permanently enjoins [the United States] from proceeding with the contract unlawfully awarded to [the 8(a) firm], and from awarding any contract that is not in compliance with the Small Business Act as interpreted herein."

For further information about HUBZone or 8(a) set asides, or to discuss your government contract bid protest questions, contact Karen S Hindson PC. (843)720-3722.

Air Force Challenged on Decision to Remove Credit Report Checks from 8(a) Program

2010-08-12T08:02:00.008-04:00

In the case of K-Lak Corp v. U.S., 2010 WL 3123265, August 3, 2010, the United States Court of Federal Claims found it had jurisdiciton to hear an incumbent 8(a) contractor's objection to the Air Force's failure to exercise its option on its contract to provide credit reports to the Air Force. The Air Force located a less expensive source on a Federal Supply Schedule (FSS), did not exercise K-Lak's option, removed the requirement from the 8a program, and awarded an FSS order to Equifax.

The government tried to get K-Lak's complaint in the Court of Federal Claims dismissed on jurisdictional grounds, arguing that the failure to exercise the option was a contract dispute that was not "ripe" for the Court's jurisdiction because no contracting officer final decision had been made. There is a line of cases holding that a plaintiff cannot bypass the Contract Disputes Act process by claiming it is challenging a procurement decision when in fact the objection goes to contract administration. The Court distinguished the K-Lak case from the case precedents by saying K-Lak was challenging more than just a failure to exercise its option -- it was challenging the removal of the requirement from the 8(a) program as well.

The other issue raised by the government was whether the plaintiff had standing to bring the case. The Air Force argued that plaintiff was not an actual or prospective bidder, but rather a successful bidder on the contract it had been awarded. This argument was rejected; K-Lak was an actual or prospective bidder on the contract for credit report checks which was awarded by the Air Force to Equifax. The fact that K-Lak was not on the Federal Supply Schedule is not fatal to it's standing as it is challenging the agency's decision to change course in the procurement and acquire the services through the Schedule.

K-Lak is an "interested party" within the meaning of the United States Court of Federal Claims bid protest jurisdiction to challenge the Air Force decision to procure credit report check services from the Federal Supply Schedule in lieu of continuing the requirement in the 8(a) program. The motion to dismiss was denied.

Contact Karen S Hindson PC for your government contract law or Federal Supply Schedule questions.

Tucker Act Breach of Implied Contract Claim Fails

2010-08-10T07:54:00.003-04:00

In the case of Peninsula Group Capital Corp. v. U.S., WL 3069581, August 6, 2010, the United States Court of Federal Claims dismissed a complaint filed against the United States for breach of a contract to transfer real estate. The Court found that no contract existed, and thus there could be no breach.

The Plaintiff and Department of the Army and United States Army Reserve conducted extensive negotiations in preparation for the transfer of the Aviation Support Facility located at the Orlando airport. Plaintiff expended large sums of money in furtherance of planning for the transaction. However, throughout the negotiation exchanges, both parties contemplated that the transaction would be the subject of a final written transfer agreement document. Ultimately, the plan was not consumated before intervening legislation changed the Army's direction for the excess property.

The Court of Federal Claims has jurisdiction to hear cases pursuant to the Tucker Act, 28 USC 1491, which waives the government's sovereign immunity for certain claims. Tucker Act jurisdiction includes claims founded on express or implied contracts with the United States.

A contract with the federal government requires offer, acceptance, and consideration, and someone with actual authority to bind the United States. In the case of an implied contract, a meeting of the minds and mutual intent to be bound is required. The court can infer a meeting of the minds by the conduct of the parties. In this case, the correpondence of the parties spanning several years contemplated that there would ultimately be a final written agreement executed by the parties. The Court found that no contract was ever entered into by the parties, so no breach of contract was possible, and dismissed the complaint.

Contact government contracts attorney Karen S. Hindson.

Government Contract Claims 101 - Valid Claim under CDA

2010-08-07T07:55:00.008-04:00

On June 17, 2010, the United States Court of Appeals for the Federal Circuit affirmed a United States Court of Federal Claims decision interpreting the Contract Disputes Act. M. Maropakis Carpentry, Inc. v. U.S., 609 F.3d 1323, C.A.Fed., 2010. This decision reads like a page from a course called government contract claims 101.

Maropakis was awarded a Navy contract for window and roof replacement at a warehouse building in Pennsylvania. The contract included a completion date, and a liquidated damages clause, FAR 52.211-12, that provided for liquidated damages of $650 per day for each day of delay past the completion date.

Apparently Maropakis did not begin work until after the scheduled completion date, and finished 467 days late. After completing the work, the contractor sent a letter to the contracting officer seeking an extension of 447 days delay based on several specified reasons. The Contracting Officer replied that the delay was not sufficiently substantiated, but invited the contractor to submit more information. The reply also said that it was not a Contracting Officer final decision.

No additional information was submitted, and the Contracting Officer made a demand to the contractor for liquidated damages for delay. Maropakis responded that the it would dispute the delay damages, but did not request a specific number of days of extension, and did not file a claim. The contracting officer issued a final decision holding Maropakis liable for liquidated damages for the delay.

The contractor filed a complaint in the United States Court of Federal Claims for breach of contract, seeking an extension due to government delay, and seeking remission of the liquidated damages. The government counterclaimed for the remaining balance due on its liquidated damages decision.

The United States Court of Federal Claims granted the government's motion to dismiss Maropakis' claim for time extension for lack of subject matter jurisdiction. Maropakis had failed to submit a "claim" to the contracting officer within the meaning of the Contract Disputes Act. The court also granted the government summary judgment on its liquidated damages counterclaim.

Maropakis appealed to the United States Court of Appeals for the Federal Circuit, which affirmed the Court of Federal Claims decision -- because the court's jurisdiction requires both a valid claim under the Contract Disputes Act and a contracting officer final decision. Maropakis' letter to the contracting officer seeking the delay was not a valid claim - it was not an unequivocal statement that gave the contracting officer adequate notice of the basis and amount of the claim, and it did not request a contracting officer final decision.

Since the Contract Disputes Act is a statute waiving sovereign immunity, it must be construed strictly. The Court of Federal Claims does not have jurisdiction to hear a breach of contract claim if the contractor did not file a valid claim with the contracting officer within the meaning of the Contract Disputes Act.

Maropakis argued excusable delay in response to the government's liquidated damages counterclaim. However, the Court found that Maropakis' failure to assert its excusable delay claim properly meant it could not use the delay as a defense to the government's liquidated damages claim; the contractor must first make the claim to the contracting officer before litigating the claim under the Contract Disputes Act.

This case reads like a lecture from Government Contract Claims 101. The Contractor failed to submit a proper claim to the contracting officer seeking an extension for excusable delays, and as a result was held liable for all of the delay. The contractor then spent considerable time and money litigating the issue in the United States Court of Federal Claims, and appealing to the United States Court of Appeals, Federal Circuit.

The teaching point of this case is to make sure up front that the contractor's correspondence to the contracting officer constitutes a valid claim under the Contract Disputes Act.

Contact the government contract law firm of Karen S Hindson PC for assistance with your government contract claim under the CDA.

Government Military Contractor Sued by Iraqis in Maryland District Court

2010-08-06T01:34:00.004-04:00

The case of Al-Quraiski v. Nakhla, 2010 WL 3001986, July 29, 2010, is a sobering opinion by a Maryland federal District Court discussing government contractor civil liability for conduct while performing as a contractor in support of military operations. The extensive use of government contractors in Iraq and Afghanistan has raised questions about when contractors, often working side-by-side with the military, can be held civilly liable for their actions. This decision discusses the development of case law surrounding the various theories of liability and denies the defendants' motions to dismiss the case.

In this case, Iraqi citizens who were detained in military prisons sued a translator employed by a government contractor, and also sued the government contractor, claiming that they were tortured. The case is currently pending.

There were twenty counts in the complaint, including torture, war crimes, conspiracy, assault, and negligent hiring counts. The claims were brought under the Alien Tort Statute, Iraqi state law claims, and negligence tort theories. The defendants (the translator and the government contractor providing civilian translation services to the military) sought to have the case dismissed, using a variety of legal theories.

Defendants claimed immunity under the laws of war, and claimed that the "political question doctrine" bars the suit (official policies and directives established by the executive branch are generally non-reviewable by the judiciary). They also claimed derivative sovereign immunity as a government contractor. They claimed that the Alien Tort Statute doesn't apply since they did not violate the law of nations. They argued that the Iraqi state law claims fail because the law of Iraq applies giving them immunity.

This opinion examines each of the defenses raised by defendants in their motion to dismiss the case, and rejects them one by one. This developing body of law should be of great interest to government contractors and their employees who provide contract services in a war zone.

For your government contract law questions, contact attorney Karen S. Hindson.

Bid Protest Sustained - No Meaningful Discussions in Negotiated Procurement

2010-08-03T08:18:00.009-04:00

An agency conducting discussions with an offeror for a government contract must convey the true nature of its concerns for the discussions to be meaningful.

GAO sustained the bid protest of AMEC Earth & Environmental, Inc., in B-401961, B-401961.2 (December 22, 2009), finding the agency's discussions were flawed. If discussions are conducted, they must be meaningful, equitable, and not misleading. AT&T Corp., B-299542.3, Nov. 16, 2007, 2008 CPD 6.

In the AMEC case, the agency's questions were misleading, and did not address its' true concerns. The agency viewed AMEC's proposed use of a certain project management software as a weakness, but the discussion questions did not communicate this concern. Instead, the agency questions focused on specific features of the project software. The agency reported to GAO that the agency did not want to direct AMEC toward a particular technical approach. GAO, however, concluded that the agency had conducted broad discussions with all firms, identifying weaknesses, and it was incumbent on the agency to do so with all offerors equally. The agency should have apprised AMEC of a perceived weakness in AMEC's proposal resulting from AMEC's choice of software product. The agency's discussions were materially misleading, depriving AMEC of the opportunity to address the concern. GAO sustained the bid protest.

Contact government contracts attorney Karen S. Hindson for your contract law questions.

Navy Reverse-FOIA Case - Court Favors Release of Unit Prices

2010-07-30T08:08:00.004-04:00

A July 23, 2010 decision by the District Court for the Southern District of California in the case of JCI Metal Products v. U.S. Dept. of the Navy, 2010 WL 2925436, affirmed the release of unit pricing on a prior 5 year contract that expired in 2007. This reverse-FOIA action was brought by JCI in an attempt to protect its former contract unit pricing from release to its competitors.

The Court cited several 9th Circuit Court of Appeals decisions favoring release under FOIA. The Court also noted that the Plaintiff had failed to keep the pricing information confidential during the case - a letter to the Contracting Officer including seventeen of the prices was posted by Plaintiff on the Court's electronic filing system which is publicly available. These prices have been in the public domain and were not subsequently sealed or otherwise made unavailable to the public, so Plaintiff cannot now claim that they are confidential.

The unit prices were out of date, and there were too many fluctuating variables for competitors to gain any advantage by the release. The Court found the Navy's determination that the prices were not protected by FOIA Exemption 4 or the Trade Secrets Act was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.

For questions about FOIA and protecting your confidential government contracts information, contact Karen S. Hindson.

Lessee of Federal Property no Standing to Sue -- Randolph Sheppard Act

2010-07-29T07:26:00.006-04:00

In 2008 the United States District Court in Hawaii found the Navy to be in violation of the Randolph-Sheppard Act (RSA) for not requiring private companies that lease Navy land at Pearl Harbor Naval Base to comply wth the RSA. Under the Act, blind vendors have priority to operate vending facilities on federal property, including leased premises.

The Bowfin Museum operated at Pearl Harbor by the Pacific Fleet Memorial Association is one such lessee. Bowfin brought an action attempting to exclude its leased museum property from the 2008 ruling.

In a July 23, 2010 decision PACIFIC FLEET SUBMARINE v. UNITED STATES DEPARTMENT OF THE NAVY, 2010 WL 2900992 (D.Hawai'i), the District Court found Bowfin has no standing to sue under the RSA, as the private association does not fall within the category of persons for which the statute confers standing to sue. This is consistent with earlier Court of Federal Claims precedent that disappointed bidders who are not blind vendors have no rights under the Randolph-Sheppard Act.

The next question was whether Bowfin has standing to sue under the Administrative Procedure Act (APA), 5 U.S.C. Section 702, which permits persons adversely affected by agency action within the meaning of a relevant statute to judicial review of the action. In this inquiry, a court looks to see whether the claimant's interest is within "zone of interests" to be protected or regulated by the statute.

The U. S. Supreme Court's guidance on the zone of interest test in Clarke v. Sec. Indus. Ass'n, 479 U.S. 388 (1987) is that the test should be construed generously. However, "if the plaintiff's interests are so marginally related to or inconsistent with the purposes implicit in the statute", then the Court should deny standing.

In its July decision, the Hawaii District Court found that Navy lessee Bowfin Museum's interests are clearly inconsistent with the purpose of the RSA, which provides employment and business opportunities for the blind. As a result, Bowfin has no implied standing to sue under the APA. Bowfin's action was dismissed.

Contact government contract lawyer Karen Hindson for your government contract law questions. (843) 720-3722.

False Claims Act Applies to Fraud, Not Normal Contract Disputes

2010-07-19T09:40:00.007-04:00

The United States Court of Appeals, Fourth Circuit, affirmed a Virginia District Court's decision granting summary judgment to the defendant in a qui tam suit brought under the False Claims Act. U.S. ex rel. Owens v. First Kuwaiti General Trading & Contracting Co., 2010 WL 2794369, C.A.4 (Va.), July 16, 2010.

In 2005 the State Department contracted with First Kuwaiti to build a new U.S. Embassy in Baghdad, comprised of more than twenty buildings plus infrastructure. This was one of the largest construction projects ever undertaken by the State Department.

John Owens was hired as a general construction foreman but his building was not yet underway, so he handled a variety of assignments around the embassy site. He apparently grew increasingly dissatisfied with his job and resigned the following year.

Owens subsequently brought a qui tam suit under the False Claims Act (FCA), 31 U.S.C. Section 3729 against First Kuwaiti. He alleged that the firm billed falsely for deficient work in connection with construction of the embassy buildings. He claimed to have witnessed a number of construction mistakes at the job.

In response to the lawsuit's fraud allegations, the U.S. government was obligated to investigate to determine whether to intervene in the FCA case. The government's expert examined the matter and concluded that the defects in the construction were minor and not unexpected for a project of this size. Further, they had been repaired. The government elected not to intervene in the qui tam action.

The Court determined that the essence of relator John Owen's claim is that his former employer failed to live up to its contractual obligations. He did not produce any evidence of knowing misrepresentations on First Kuwaiti's part.

The Fourth Circuit opinion stated "Congress crafted the FCA to deal with fraud, not ordinary contractual disputes. The FCA plays an important role in safeguarding the integrity of federal contracting, administering strong medicine in situations where strong remedies are needed. Allowing it to be used in run-of-the-mill contract disagreements and employee grievances would burden, not help, the contracting process, thereby driving up costs for the government and, by extension, the American public."

"The FCA provides that suit may be brought against anyone who "knowingly presents" to the government "a false or fraudulent claim for payment or approval." 31 U.S.C. Section 3729(a)(1). It similarly allows suit against anyone who "knowingly makes...a false record or statement material to a false or fraudulent claim." Id. at Section 3729(a)(1)(B). In adopting the FCA, "the objective of Congress was broadly to protect the funds and property of the government." Rainwater v. United States, 356 U.S. 590, 592 (1958)."

A specific intent to defraud is not required; reckless disregard of the truth or falsity of the information can satisfy the "knowingly presents" requirement. Congress did not intend the false Claims Act to punish honest mistakes or incorrect claims submitted as a result of mere negligence. FCA is a fraud prevention statute. "It does not allow a qui tam relator to shoehorn what is, in essence, a breach of contract action into a claim that is cognizable under the False Claims Act." United States ex rel. Kellogg Brown & Root, Inc. 525 F.3d 370, 373 (4th Cir.2008).

Contact Karen Hindson for your government contract law matter. www.hindsonlawfirm.com

Government Not Liable Under FTCA for Action of Government Contractor

2010-07-19T09:32:00.008-04:00

On July 14, 2010, in Moreno v. U.S., the United States Court of Appeals for the Third Circuit affirmed a Pennsylvania District Court decision that federal prisoner Moreno was not entitled to relief under the Federal Tort Claims Act (FTCA), 28 U.S.C. Section 2674, for allegedly inadequate medical care by a government contractor that resulted in blindness in one eye.

Under the FTCA, the United States is liable for torts like a private person would be. Federal prisoners may recover damages from the government for injuries sustained in prison as a result of negligence by government employees. However, the United States government is not liable under FTCA for actions by independent contractors. The question is whether the government has the power to "control the detailed physical performance of the contractor".

Contact government contracts attorney Karen Hindson for your government contract law issue. 843-720-3722

Anti-Assignment Acts - Government Must Give Clear Assent to Assignment

2010-07-19T09:14:00.005-04:00

The Anti-Assignments Acts (31 U.S.C. Section 3727 and 41 U.S.C. Section 15) invalidate assignments of government contracts (assigning contract proceeds to a third party) unless specific conditions are met. The Government may waive the requirements of the Anti-Assignment Acts if it is aware of, assents to, and recognizes the assignment.

Federal Acquisition Regulation (FAR) 32.8, "Assignment of Claims", sets forth the requirement that the assignment must be made to a "bank, trust company, or other financing institution, including any Federal lending agency."

The Government's actions must rise to the level of "clear assent" to the assignment to demonstrate a waiver.

On July 8, 2010, the United States Court of Appeals, Federal Circuit affirmed the decision of the Court of Federal Claims granting the government's summary judgment on an assignment case. While the government knew about the assignment, it never clearly assented and thus the assignee third party was not entitled to the payment. Ham Investments, LLC v. U.S., 2010 WL 2788206, (C.A.Fed., July 8, 2010).

Contact Karen S Hindson PC for more information about your government contracts issue.

Bid Protest of NASA Award - Space Station Cargo Transportation

2010-07-15T09:22:00.012-04:00

PlanetSpace, Inc. v. U.S., 92 Fed.Cl. 520 (April 26, 2010) is a post-award bid protest in the Court of Federal Claims by an unsuccessful bidder on the contract awarded by National Aeronautics and Space Administration (NASA) to provide cargo transportation to and from International Space Station (ISS).

The Source Selection Authority (SSA) evaluated the protester's bid as being very high risk - essentially questioning whether the bidder could successfully perform - in its proposal which relied heavily on much larger subcontractors for key portions of the project.

The complaint includes an allegation of undisclosed evaluation criteria (the SSA commented that the protester did not have a "backup plan" - even though one not required by the RFP). The Court states the Plaintiff must show that the federal procuring agency used a significantly different basis in evaluating the proposals than was disclosed in the solicitation. Here, the comment on the back-up plan was simply a part of the risk assessment of the overall proposal.

The Court reiterated the deference to be given to agency discretion, particularly in negotiated procurements: "The Court of Federal Claims cannot displace a reasonable conclusion of the source selection authority (SSA) in evaluating proposals for a federal government contract merely because the court has identified an alternate conclusion that might have been likewise reasonable, or even preferable."

NASA's Source Selection Authority (SSA) selected a technically superior but significantly higher priced offeror. “Although I recognized the evaluation criteria provided that Mission Suitability was more important than price, I could not conduct a ‘typical’ trade-off analysis since I believed there was a low likelihood PlanetSpace could successfully perform the contract.”

This statement in the SSA's decision gave rise to an allegation that the SSA made a de facto nonresponsibility determination, and made a flawed tradeoff analysis. It is the Contracting Officer who is to make responsibility determinations, not the SSA. The Court remanded the case to the agency on this issue and the legal sufficiency of the trade-off for further development.

To discuss your government contract law issues or questions, contact Karen S. Hindson. 843-720-3722

FAR Interim Rule - Reporting of Executive Compensation and First-Tier Subcontract Awards

2010-07-13T20:22:00.012-04:00

Federal Acquisition Circular 2005-44 issued July 8, 2010 establishes an interim rule amending the Federal Acquisition Regulation (FAR) to implement section 2 of Federal Funding Accountability and Transparency Act of 2006 (Pub. L. 109-282), as amended by section 6202 of the Government Funding Transparency Act of 2008 (Pub. L. 110-252).

OMB is required to establish a free public website containing full disclosure of all Federal contract award information. The public may view first-tier subcontract award data at http://usaspending.gov.

Contractors must now report executive compensation and first-tier subcontract awards on contracts and orders expected to be $25,000 or more (including all options), except classified contracts and contracts with individuals.

Reporting requirements are phased as follows:
1. Until September 30, 2010, any newly awarded subcontract
must be reported if the prime contract award amount was
$20,000,000 or more.
2. From October 1, 2010, until February 28, 2011, any newly
awarded subcontract must be reported if the prime contract award
amount was $550,000 or more.
3. Starting March 1, 2011, any newly awarded subcontract
must be reported if the prime contract award amount was $25,000
or more.

FAR 4.1400 requires the total compensation of the five most highly compensated executives of contractors and first-tier subcontractors to be reported by name and total compensation. There are certain exceptions which are detailed in the new FAR provisions, and certain definitions such as "compensation" are essential to fully understanding the new requirements.

For more information about the new requirements contact government contracts attorney Karen S. Hindson at (843) 720-3722 or at www.hindsonlawfirm.com.

Federal Prison Contractor Employee Liability Under Bivens

2010-07-13T00:08:00.002-04:00

The United States Court of Appeals, Ninth Circuit, Pollard v. Geo Group, Inc., 607 F.3d 583 (June 7, 2010), reversed the District Court for the Eastern District of California and held that employees of a private corporation operating a prison under a federal government contract acted under color of federal law for purposes of Bivens liability. This is in direct conflict with the Fourth Circuit decision in Holly v. Scott, 434 F.3d 287, 294 (4th Cir.2006).

The Ninth Circuit held a Bivens cause of action against the private corporation's employees for an alleged Eighth Amendment violation is available to a federal inmate. GEO Group, Inc. had a contract with Federal Bureau of Prisons to operate Taft Correctional Institute. Plaintiff Pollard fell and had injuries to his arms; he was nonetheless required to put on a jumpsuit and wear a mechanical restraint to see an outside orthopedist.

District Court dismissed the Bivens cause of action for failure to state a claim, finding state law provided alternative remedies in the form of tort actions for negligence or medical malpractice, and that federal government contractor GEO employees did not act under color of federal law.

Ninth Circuit reversed District Court and held that GEO employees acted under color of federal law for purposes of Bivens liability, intentionally breaking with the Fourth Circuit's reasoning.

The Ninth Circuit also held that availability of a state tort remedy did not foreclose plaintiff's ability to seek Bivens liability. This holding conflicts with both the Fourth Circuit decision and the Eleventh Circuit's holding in Alba v. Montford, 517 F.3d 1249, 1254 (11th Cir.2008).

The Ninth Circuit expressed concern that a prisoner in a contractor run facility might be foreclosed from relief while a prisoner in a government run prison would have a cause of action. However, in fact contractor employees are not entitled to qualified immunity, so prisoners in contractor-run prisons might recover more than their counterparts in government-run prisons.

Contact government contracts attorney Karen Hindson at 843-720-3722 or at www.hindsonlawfirm.com.

Second Tier Government Contractors Must Comply with State Licensing Requirements

2010-07-12T23:24:00.001-04:00

While general contractors are not required to be licensed in states where the contractor enters into a contract to perform work on a federal construction project, second tier contractors must comply with state licensing requirements. The Erie doctrine (applying state law) is applicable to issues of liability between general and subcontractors under the Miller Act where the issue does not involve construction or application of a federal statute.

In a June 29, 2010, decision in Technica, LLC v. Carolina Casualty Insurance Company, 2010 WL 2628715 (S.D.Cal.), the United States District Court for the Southern District of California granted summary judgment for the defendants (government general contractor and its bond surety), because California law requires the second-tier contractor plaintiff to be licensed as a contractor by California in order to bring suit there.

For more information regarding Miller Act, contact Karen Hindson at www.hindsonlawfirm.com.

Government Contractor Liability under Alien Tort Statute and Torture Victim Protection Act

2010-07-12T21:04:00.002-04:00

The estate of an Iraqi citizen shot and killed in Iraq sued a government contractor and the contractor's foreign private-security corporation whose personnel allegedly shot and killed him. The suit was brought in United States District Court, District of Columbia. Estate of Manook v. Research Triangle Institute, International and Unity Resources Group, L.L.C., 693 F.Supp.2d 4 (Feb. 5, 2010). The District Court held that the government contractor was not subject to liability under Alien Tort Statute (ATS) or under the Tort Victim Protection Act (TVPA).

The government contractor with a United States Agency for International Development (USAID) contract rebuilding Iraqi infrastructure was a private rather than official actor and thus did not act under color of law to give rise to liability on claims alleging war crimes under the Alien Tort Statute. The purpose for which RTI contracted with USAID did not give rise to Plaintiff's injuries.

Federal District Court has subject matter jurisdiction under the Alien Tort Statute when (1) an alien sues (2) for a tort (3) committed in violation of the law of nations or a treaty ratified by the United States. 28 U.S.C.A. Section 1350. But a corporation's potential liability is limited only to state actors, and in very narrow circumstances. (Generally only states, and not corporations or individuals, are liable for international law violations.)

The Torture Victim Protection Act provides a cause of action for United States residents to sue foreign states for torture. It cannot be used to sue federal government officers or private United States persons or corporations.

For assistance with your government contract legal issues, contact government contracts attorney Karen S. Hindson at 843-720-3722 or go to www.hindsonlawfirm.com.

False Claims Act Suit Against Blackwater Defendants

2010-07-12T07:02:00.003-04:00

A United States District Court in Virginia issued a ruling on July 2, 2010, in a False Claims Act suit against Blackwater Security Consulting's alleged owner and corporate defendants. United States ex rels. Davis v. Prince, 2010 WL 2679761 (E.D.Va.)

The "Relators" (those who file a False Claims Act complaint) were former Blackwater employees who brought a two-count complaint alleging that Blackwater defendants are liable under the False Claims Act, 31 U.S.C. Section 3729, for fraudulent misrepresentations they allegedly made in the course of performing two government contracts.

The first contract was a Homeland Security contract to provide security services in Louisiana after Hurricane Katrina. Relators allege that Blackwater defendants "forged and falsified to inflate hours worked and the number of employees", and further allege that they "claimed costs for payments to strippers, bar tabs, spa trips, protein shakes, weight-training supplements, haircuts, and gym memberships", and double-charged for certain costs.

The second contract was a State Department contract to provide security services in Iraq and Afghanistan. Relators allegations include that Blackwater defendants knowingly submitted reports documenting more employees than were actually employed and more expenses than were actually incurred.

False Claims Act claims must be specific, describing the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained as a result.

"The elements of a False Claims Act false statements claim are: (i) false representation or fraudulent course of conduct, (ii) made or carried out with knowledge of the falsehood, (iii) that was material, and (iv) that caused the goverment to pay out money". Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 788 (4th Cir.1999).

Allegations that Blackwater allowed disqualified persons to carry firearms in Louisiana and improperly used deadly force in Iraq and Afghanistan are not appropriately Flase Claims Act matters. These allegations amount to claims that Blackwater breached the terms of their contracts. No "objective falsehood" is demonstrated in the allegations.

In its July 2nd ruling, the Court dismissed the claim against the individual defendant Prince and Prince Group LLC, stating that the claim did not state with particularity a valid fraud claim against these defendants.

For more information about False Claims Act, contact government contracts lawyer Karen S. Hindson. www.hindsonlawfirm.com

Contracting Opportunities for Small Business - Presidential Memo

2010-07-11T23:18:00.001-04:00

By Presidential Memorandum dated April 26, 2010, President Obama established an Interagency Task Force on Federal Contracting Opportunities for Small Businesses.

Congress has established statutory and aspirational goals designed to help small businesses compete for government contracts. Goals: 23% of all prime contracting dollars to small business, 3% participation by small businesses in HUBZones, 5% participation by small businesses owned by women, 5% so socially and economically disadvantaged individuals, and 3% to service-disabled veterans.

The task force is to provide proposals and recommendations for using innovative strategies such as teaming to increase opportunities, removing barriers by unbundling large projects, expanding outreach to match firms with contracting and subcontracting opportunities, and establishing policies to assist with the objectives. The memorandum also directs development of a web site to improve transparency and accountability.

For more information on government contracts contracting and subcontracting opportunities for small businesses, contact Karen S. Hindson. www.hindsonlawfirm.com 843-720-3722. Atlanta office www.hindsonmelton.com 770-939-3936

Contract Disputes Act - California Contracting Officer Final Decision

2010-07-11T22:51:00.001-04:00

A contractor must request and obtain a contracting officer final decision in order to appeal under the Contract Disputes Act, 41 U.S.C. Sections 601-13. Appeals must be brought within the time limits permitted by law.

In Parker v. Donley, 20 WL 2330408 (C.A.Fed.), Mr. Parker was to provide software use license and support services to the Air Force for the Predator MQ-1 Unmanned Aerial Vehicle Multi-Task Trainer. The contractor was informed that no further delivery orders would be placed against his contract. Mr. Parker submited a certified claim for payment, which was denied. The contracting officer's final decision letter informed him of his appeal rights to the Board of Contract Appeals within 90 days or in the United States Court of Federal Claims within 12 months. Mr. Parker appealed after the statutory 90-day deadline, so there was no jurisdiction under the Contract Disputes Act.

Mr. Parker also submitted an invoice which was rejected, but the rejection letter did not state it was a final decision. Mr. Parker appealed to the Board of Contract Appeals, which found that the Board did not have jurisdiction under the Contract Disputes Act because the invoice did not use the word claim or request a contracting officer final decision. The Act states that "all claims by a contractor against the government relating to contract shall be in writing and shall be submitted to the contracting officer for a decision." FAR 2.101 states that an invoice, or other routine request for payment that is not in dispute when submitted is not a claim.

Mr. Parker appealed to the United States Court of Federal Claims, which affirmed the Board of Contract Appeals dismissing the claims for lack of jurisdiction as untimely and for filing to seek a contracting officer final decision.

For assistance with your government contract claims, contact government contracts lawyer Karen S. Hindson at 843-720-3722. For more information see www.hindsonlawfirm.com.

Post-Award Bid Protest by Incumbent Contractor Fails

2010-07-11T22:15:00.001-04:00

A potential contractor has standing to bring a post-award bid protest if it had a substantial chance of receiving the federal government contract award "but for" an alleged procurement error. An incumbent contractor that fails to submit a bid in response to a government solicitation, however, lacks standing to bring a post-award bid protest. This is true even if agency action is alleged to have prejudiced the non-bidder's ability to participate in the procurement.

In order to bring a Tucker Act bid protest action in the Court of Federal Claims, a party who has an opportunity to object to the terms of a government contract solicitation must do so prior to the close of the bidding process. Otherwise the right to protest the legality of the solicitation is waived.

An April 22, 2010, United States Court of Federal Claims decision in Shamrock Foods Company v. United States, 92 Fed.Cl. 339, dismissed a post-award bid protest by a non-bidder, finding that the waiver rule precluded raising an objection to a government solicitation after the fact in a post-award bid protest action. Only actual bidders are interested parties with standing to bring a post-award bid protest.

To discuss your government contract bid protest questions, contact Karen S. Hindson at 843-720-3722. See www.hindsonlawfirm.com for more information.

Procurement Integrity and Trade Secrets Act

2010-07-11T21:43:00.001-04:00

FAR 3.104 Procurement Integrity implements certain statutory provisions relating to protecting contractor bid or proposal information and source selection information.

The Trade Secrets Act, 18 U.S.C. Section 1905, makes it a crime punishable by fine or imprisonment for a government employee to divulge to any extent not authorized by law information relating to the trade secrets, processes, operations, style of work, confidential statistical data, profits, losses, or expenditures of any person, firm, partnership, corporation, or association.

FAR 3.104 also addresses agency officials and contacts with offerors regarding non-Federal employment. Post-employment restrictions for agency officials are designed to enhance procurement integrity and public confidence in the integrity of the government procurement process.

For your contract compliance issues, contact Karen S. Hindson PC, government contracts attorney.

Lockheed Martin Corporation Prevails in Cost Dispute with Air Force

2010-07-11T20:59:00.001-04:00

On June 10, 2010, the United States Court of Appeals, Federal Circuit, affirmed an Armed Services Board of Contract Appeals decision in favor of Lockheed Martin Corporation over the Air Force. Donley v. Lockheed Martin Corporation, 2010 WL 2302741 (C.A.Fed.).

In question was a Lockheed Martin challenge to a government claim asserted against the airplane manufacturer for costs negotiated in a "rephasing" of the F-22 fighter aircraft. The dispute was whether the government is entitled to recover a portion of the negotiated price increase on the ground that it resulted from a change in Lockheed's accounting practices.

The contract included FAR Cost Accounting Standards ("CAS") provisions which prescribe the manner in which a contractor may alter its accounting practices and the contractor's responsibilities when it makes such an accounting change. 41 U.S.C. Section 422(h). If an accounting change results in increased costs because expenses previously accounted as indirect are now directly charged to the government contract, the contractor is required to agree to a contract price adjustment over all of the contractor's affected CAS-covered contracts and subcontracts.

The Court of Appeals affirmed the Armed Services Board of Contract Appeals decision in favor of Lockheed Martin. Lockheed disclosed its new accounting practices to the Air Force's negotiating team, and the negotiations were a "repricing" action and unusually comprehensive. The F-22 contract was not an "affected contract" requiring renegotiation. Costs were not estimated under one accounting practice but reported under another. Additional accounting costs were not tacked on to the contract estimate; the parties created a wholly new cost estimate incorporating all of the additional expenses.

Contact government contracts attorney Karen Hindson at 843-720-3722 for more information.

Government Contracts - Continuing HUBZone Controversy

2010-07-11T19:26:00.002-04:00

A May 14, 2010 decision of the GAO - U. S. Government Accountability Office - in B.402494, DGR Associates, Inc., confirms that the GAO's interpretation of the law governing HUBZone set-asides continues to be in direct conflict with the interpretation of the Department of Justice.

In the DGR decision, GAO sustained the bid protest of a firm bidding on an Air Force housing maintenance RFP. The GAO finds the law governing Historically Underutilized Business Zone (HUBZone) priority to be unambiguous and requiring a HUBZone set aside if the statutory conditions are met (at least two HUBZone concerns and award will be at a fair market price). Nonetheless, the Air Force set the procurement aside for the Small Business Administration (SBA) section 8(a) program with the concurrence and support of the SBA and Department of Justice. This conflict throws the bid protest system into disarray, as the GAO sustains a bid protest and the Executive Branch agency refuses to follow the GAO decision. The GAO acknowledges this dilemma in its decision, noting that this issue will only be resolved by a change in the law or by a decision by the United States Court of Appeals for the Federal Circuit.

The Justice Department currently has an appeal pending in the case of Mission Critical Solutions v. United States, in which the Federal Claims Court agreed with GAO's interpretation of the law. Watch for a decision by the Federal Circuit. Contact government contracts attorney Karen S. Hindson for more information. Call 843-720-3722 today.

Oil Spill Disaster Recovery - Government Contracts

2010-07-11T19:23:00.001-04:00

Federal Acquisition Regulation FAR 26.202-1 allows government contract competitions to be limited to local businesses for disaster or emergency assistance contracts. The key is a declared disaster/emergency area. So far, no disaster/emergency has been declared for the Gulf BP Oil spill. Perhaps the absence of a disaster declaration is so that federal funds will not be available for cleanup or assistance to local individuals and businesses harmed by the spill. Contact Karen Hindson at 843-720-3722 for your government contract legal issues. Go to www.hindsonlawfirm.com for more information on your government contract or subcontract questions.

Government Contracts - Major Disaster or Emergency

2010-07-11T19:21:00.001-04:00

Department of Homeland Security lists federal disaster/emergency declarations by date and geographical area. Most declarations relate to storms or flooding. Once a federal disaster emergency declaration is made, the law allows Contracting Officers to "set aside" competitions to businesses residing or doing business primarily in the area affected by the disaster or emergency. FAR 6.207, 42 USC 5150. Contact Karen S. Hindson for more information. www.hindsonlawfirm.com or 843-720-3722.

Disaster Relief and Emergency Assistance Act

2010-07-11T19:18:00.000-04:00

The Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 USC 5150, commonly known as the "Stafford Act", gives contracting officers authority to restrict competition to the affected geographical area. This applies to FEMA contracts and other federal government contracts for disaster recovery. Contractors may file a GAO bid protest if they believe the award is to a firm not really residing in the area or primarily doing business in the area. Contact Karen Hindson at 843-720-3722 or karen@hindsonlawfirm.com for assistance with your government contracting issues.

GAO Bid Protest - "Doing Business Primarily in the Area"

2010-07-11T19:16:00.002-04:00

GAO Bid Protest decision B-299954.3 found a FEMA contract improperly awarded to a firm not "doing business primarily" in Mississippi. GAO looked to see where the firm does the majority of its business. This GAO decision has a good discussion of the Stafford Act preference for using local firms and individuals for disaster relief recovery contracts. Contact Karen Hindson at www.hindsonlawfirm.com for more information.

Emergency and Disaster Contracts for Local Business Firms

2010-07-11T19:10:00.001-04:00

Congressional intent in enacting the Stafford Act was to promote the use of local firms and individuals in the affected area in disaster relief contracts. "A Federal assistance program should be designed to revitalize the community by infusions of cash through the use of local people and business firms." (Senate Committee on Public Works report 91-1157). Contact government contracts attorney Karen Hindson at 843-720-3722 for assistance with your government contracts issue. http://www.hindsonlawfirm.com/