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GovCon Legal Round Up™ - May 19, 2021

The GovCon Legal Round Up™                                                                                                                                                      May 19, 2021
 

U.S. COURT OF APPEALS FOR THE FEDERAL CIRCUIT DECISIONS

Pacific Coast Community Services, Inc. v. U.S. (April 30, 2021)
A government contractor (Pacific Coast Community Services) filed an appeal of a decision by the U.S. Court of Federal Claims dismissing its case.  Contractor alleged that the federal government agency (Federal Protective Service) breached its firm-fixed price contract by underpaying it.  Under the contract, the contractor was required to provide five full-time employees (FTE’s) to perform the contract work and submit invoices at the end of each month reflecting work actually performed.  The contracting officer made unilateral deductions for hours invoiced but not actually worked. Contractor did not allege that its invoices were accurate or that its employees worked the required monthly hours.  Rather, contractor essentially argued that because the contract was a firm fixed price contract, it was owed the monthly fixed price regardless of its performance.  The Court of Appeals disagreed, concluding that the contract as a whole was for a deliverable number of productive hours, and that a firm fixed-price contract does not require the government to pay when a contractor does not deliver services.  (Read decision here.)

GAO BID PROTEST DECISIONS

In re M R Pittman Group, LLC (Released May 6, 2021)
GAO dismissed a government contractor’s (M R Pittman Group, LLC) bid protest as untimely.  The agency (Army, Corp of Engineers) issued an invitation for bids (IFB) for repair and maintenance services.  Although the agency intended to set aside the requirement for small businesses, it did not identify in the IFB the NAICS code or the small business size standard.  The IFB did, however, incorporate several FAR clauses that are applicable to small business set aside contracts, including FAR 52.219-6, Notice of Total Small Business Set-Aside.  Although contractor’s bid was the lowest, the agency applied the NAICS code and size standard contained in its pre-solicitation notice and found contractor ineligible because it was other than a small business. Contractor challenged the agency’s denial of the award, arguing that by failing to include in the IFB a NAICS code and size standard, as FAR requires for small business set-asides, the agency should not have treated the IFB as a set-aside.  GAO, however, determined that the IFP was “patently ambiguous” and that the time for contractor to raise the solicitation’s ambiguity was before the closing time for receipt of bids.  (Read decision here.)

In re AECOM Management Services, Inc. (Released April 30, 2021)
GAO sustained the protest of a government contractor (AECOM Management Services, Inc.) that alleged an agency (Navy) conducted unfair exchanges with a winning bidder awarded a task order under a fair opportunity submission request (FOSR).  Although the procurement was conducted under FAR 16.505, which applies to indefinite delivery contracts, and, thus, oral and written discussions under FAR Subpart 15.3 were not required, the FOSR stated that all offerors would be treated fairly.  The agency gave the winning bidder an opportunity to make significant revisions to its proposal after the agency identified deficiencies in the agency's interchange notice.   In contrast, the agency failed to alert the protesting contractor of a confidence decreaser with regard to one of the evaluation factors and did not permit the contractor to submit proposal changes or to revise its proposal.  Instead, the agency merely permitted the contractor to submit evidence that clarified an unclear element of one of its evaluation factors.  GAO concluded, therefore, that the interchanges were not fair because the winning bidder was provided with a significantly greater opportunity to enhance its proposal. (Read decision here.)

In re Deloitte Consulting, LLP (Released April 27, 2021)
GAO also ruled in favor of a government contractor (Deloitte Consulting, LLP) that protested the award of a task order issued by the General Services Administration (GSA) under a federal supply schedule (“GSA schedule”).  The GSA’s request for proposal (RFP) sought quotations to provide cybersecurity support services for the Department of Housing and Urban Development (HUD).  Contractor argued that the winning bidder had submitted quotations for labor categories specified by the RFP that went beyond the labor categories that were actually set forth in the bidder’s GSA contract. GAO agreed, finding that the labor categories in the bidder’s GSA contract that formed the basis for award could not be reasonably interpreted to include the services that the bidder proposed and that were required by the solicitation.  (Read decision here.)

In re US21 (Released April 27, 2021)
GAO ruled that a government contractor’s (US21, Inc.) bid protest was untimely.  The agency (Defense Logistics Agency) issued a request for information (RFI) seeking potential sources of supply for its fuel requirements.  The agency later issued a solicitation for its fuel requirements but mistakenly posted the requirement as a “sources sought” rather than as a “solicitation.”  After the solicitation was closed, contractor telephoned the agency to inquire about the procurement and was informed of the mistaken posting and that the solicitation requirement was closed.  For several weeks after that telephone call, contractor made repeated requests to the agency to re-open the solicitation, but the agency declined and subsequently made an award to another bidder.  Contractor then filed its bid protest arguing that the agency’s mischaracterization of the solicitation as a sources sought notice unreasonably limited competition and prevented it from submitting a response.  Although contractor insisted that its protest was of the agency’s award, GAO agreed with the agency that the basis for the protest solely concerned the manner of solicitation and not the purported award. Consequently, since contractor failed to submit a protest within ten (10) days after its telephone call with the agency during which it was informed of the agency’s mistaken solicitation, GAO dismissed the protest as untimely.  (Read decision here.)

In re Innovate Now, LLC (Released April 26, 2021)
GAO sustained the protest of a government contractor (Innovate Now, LLC) that challenged the terms of a request for proposal (RFP) issued by an agency (Air Force) seeking engineering, professional and administrative support services.  The contractor argued that the RFP violated SBA regulations applicable to mentor-protégé relationships by requiring each member of a joint venture offeror to satisfy the same work experience requirements applicable to all offerors.  GAO agreed that the requirement violated the prohibition against requiring a protégé firm to individually meet the same evaluation or responsibility criteria as that required of other offerors generally.  GAO also sustained contractor’s arguments that other aspects of the RFP were ambiguous and not likely to provide insight to the agency.  (Read decision here.)

SBA OFFICE OF HEARING AND APPEALS DECISIONS

In re Joint Information Network (April 7, 2021)
In this decision, the SBA’s Office of Hearing and Appeals (OHA) ruled that a contractor (Joint Information Network) was not a women-owned small business (WOSB).  The agency (U.S. Navy Naval Information Warfare Center) had awarded a WOSB sole-source contract to the contractor, which had self-certified as a WOSB.  However, when the contract period expired three years later, a final voucher was left unpaid.  Indeed, six months after the contract closing date, rather than paying the voucher the agency’s contracting officer filed a protest challenging the contractor’s WOSB status and concluded that the contractor improperly misrepresented its WOSB status at the time of its offer and throughout contract performance.  The contracting officer based the claims on a report by the agency’s office of inspector general (OIG) detailing the origins of the contractor business, which was purportedly owned by a father-daughter partnership.  OIG found that the contractor's partnership agreement was inconsistent with the company’s actual business practices and that, contrary to the terms of the partnership agreement, the daughter-owner had not actually made capital contributions to the partnership.  OIG ultimately recommended that the agency contracting officer file a status protest with the SBA, which the contracting officer did.  After reviewing the contractor’s submissions, the SBA concluded that the contractor did not meet the WOSB eligibility requirements and could no longer represent itself as a WOSB.  The contractor then appealed the decision to OHA, which affirmed the SBA’s determination.  However, in affirming that the contractor was not an eligible WOSB, OHA pointed out that its determination might have no impact on the procurement.  Under the SBA’s regulations, upon a finding that a contractor is ineligible, a contracting officer is directed to terminate a contract or contract award or to suspend contract performance, but these remedies seemingly are ineffective when the contractor has already completed contract performance.  (Read decision here.) 

Executive Order Raises Minimum Wage For Government Contractor Employees

April 30, 2021
EXECUTIVE ORDER RAISES MINIMUM WAGE FOR GOVERNMENT CONTRACTOR EMPLOYEES

On April 27, 2021, President Biden announced an executive order that raises the minimum wage for non-tipped employees of federal government contractors and subcontractors to $15 per hour beginning on January 30, 2022.  Significantly, the executive order requires the minimum wage to be increased annually by an amount determined by the U.S. Department of Labor (DOL) and based on the Bureau of Labor Statistic’s Consumer Price Index.

Under the executive order, the minimum wage for tipped employees of federal government contractors and subcontractors increases to $10.50 per hour on January 30, 2022, and increases, on January 30, 2023, to 85% of the minimum wage for non-tipped employees.  Beginning on January 30, 2024, the minimum wage for tipped employees of contractors and subcontractors will be the same as the minimum wage for non-tipped employees.

The executive order requires DOL to issue regulations by November 24, 2021, in order to implement the executive order’s requirements. The executive order also requires the Federal Acquisition Council to amend the Federal Acquisition Regulation (FAR) within 60 days of the issuance of the DOL regulation in order to ensure that government contracts entered into after January 30, 2022 comply with the minimum wage requirements.

The executive order does not apply to federal government grants, but will apply to new solicitations on or after January 30, 2022, and to new government contracts, government contract extensions and government contract renewals entered into on or after January 30, 2022.  It will also apply to the exercise of options on or after January 30, 2022, on contracts for services or construction, on contracts for services covered by the Services Contract Acts, on contracts for concessions, and on certain contracts with the Federal government in connection with Federal lands or property, if the workers are covered by the Fair Labor Standards Act, the Services Contract Act, or the Davis-Bacon Act. 

As for employees under existing federal government contracts, the executive order strongly encourages agencies to ensure that wages paid to employees of contractors and subcontractors are consistent with the executive order.

To read the executive order, go here.

To read other articles from The GovCon Bulletin™ go here.

GovCon Legal Round Up™ - April 21, 2021

The GovCon Legal Round Up™                                                                                                                                                      April 21, 2021
 

U.S. COURT OF FEDERAL CLAIMS (COFC) DECISIONS

Microgenics Corp. v. U.S. (March 30, 2021)
Contractor (Microgenics) filed a bid protest against the Administrative Office of the United States Courts (AOUSC), an entity within the judicial branch, in connection with a solicitation for equipment, supplies and consumables used to operate on-site drug testing laboratories. The COFC, however, dismissed the suit, deciding that the AOUSC was not a “Federal agency” for purposes of bid protests under the Tucker Act.  (Read decision here.)

Rocky Mountain Mobile Medical v. U.S. (April 6, 2021)
Contractor (Rocky Mountain Mobile Medical) filed a bid protest alleging that the agency (Air Force) (1) failed to conduct discussions with it to address past performance information, (2) should have excluded a competing bidder’s technical capability volume as noncompliant, (3) assigned contractor an irrational performance confidence rating, and (4) treated the contractor unequally by assigning a “substantial confidence” rating to a competing bidder's past performance rating.  On the issue of conducting discussions, the COFC determined that the solicitation stated that the competitive selection would be made in accordance with the Simplified Acquisition Procedures under FAR Part 13.  Although the solicitation also stated that “exchanges” - which are referred to in FAR Part 15 and not in FAR Part 13 - might be conducted with some or all offerors, COFC disagreed with contractor that the agency was required to comply with the discussion requirements under FAR Part 15.  COFC determined that, in any event, if contractor believed the agency’s description of potential exchanges was inconsistent with FAR Part 15, the time to complain was prior to bidding.  COFC also rejected contractor’s remaining protest arguments.  (Read decision here.)

GAO BID PROTEST DECISIONS

In re Relyant Global, LLC (Released April 9, 2021)
GAO denied the bid protest of a contractor (Relyant Global, LLC) that challenged an agency’s (Army, Corp of Engineers) decision to amend rather than cancel its request for proposals (RFP).  Contractor submitted a timely proposal in response to the initial solicitation and argued that the agency’s subsequent changes to the solicitation were so substantial that the agency should have cancelled the solicitation and reissued a new one.  Contractor also argued that the binding teaming agreements it entered into based on the unamended solicitation prevented it from competitively bidding on the revised solicitation.  GAO ruled that the contractor was not an interested party for purposes of claiming that the solicitation should have been cancelled and reissued under FAR 15.206(e), which authorizes cancellations so that potential bidders who did not submit proposals have an opportunity to compete.  GAO also found that, rather than any unfair action by the government, it was contractor’s own business decision to enter into teaming agreements that could not be modified after a solicitation has been amended that placed the contractor at a competitive disadvantage.  (Read decision here.)

In re SAGAM Securite Senegal (Released April 7, 2021)
GAO dismissed as untimely a protest by a contractor (SAGAM Securite Senegal) that challenged an agency’s (Department of State) decision to cancel a solicitation.  The contracting officer e-mailed a notice of cancellation to the contractor’s director of operations, who did not acknowledge receipt of the notice.  The contracting officer e-mailed the director again five and eight days after the initial notice.  After an additional e-mail by the agency to the contractor’s program manager on the eighth day after the initial notice, the contractor’s director finally responded, and ten days after that day, the contractor filed a protest with the GAO.  In arguing that its protest was timely, contractor alleged that automatic e-mail replies by its director indicated that his access to e-mail was limited and instructed that urgent matters should be addressed to the program director.  Contractor insisted that it did not receive actual or constructive notice of the cancellation until the director accessed his e-mails on the date the agency e-mailed the contractor’s program director.  In deciding the protest was untimely, GAO ruled that mechanical receipt of an e-mail during a firm’s normal business hours constitutes notice to a party, that the agency’s first e-mail to the director was available to be opened, and that the director’s inability to access his e-mails did not toll the protest filing deadline.  (Read decision here.)

In re APR Staffing, LLC (Released April 6, 2021)
GAO dismissed the protest of a contractor (APR Staffing, LLC) that challenged an agency’s (Department of Energy) decision not to exercise options under the contractor’s blanket purchase agreement.  The contractor alleged that the agency’s evaluation of its performance during the base period and that formed the basis for the agency’s decision not to exercise the options constituted a procurement process that could be protested with the GAO.  In dismissing the protest, GAO reasoned that option provisions are generally exercisable at the discretion of the government and that the protestor’s disagreement over the agency’s assessment of its performance did not transform the decision not to exercise the options into a procurement action.  (Read decision here.)

In re TekSynap Corporation (March 30, 2021)
In a rare case, GAO sustained a contractor’s (TekSynap Corporation) protest challenging an agency’s (National Geospatial Intelligence Agency) evaluation of non-price evaluation factors.  The agency issued a request for proposal contemplating a single award of an IDIQ and simultaneous task order.  Initially finding that the contractor’s pricing information was incomplete, the agency sent the contractor items for discussion pointing out flaws and instructing it to revise its pricing proposal.  After conducting discussions with offerors, the agency requested final proposal revisions.  Upon evaluating the final proposals, the agency found contractor’s pricing proposal was still incomplete, thus precluding the agency from making a pricing reasonableness determination.  The agency also concluded that the contractor’s technical/management rating was lower than the rating of the competing bidder that ultimately received the award.  Given the contractor’s lower technical/management rating, the agency decided not to conduct discussions with the contractor and made the award to the competing bidder.  On review, GAO ultimately decided that the agency’s evaluation of the competing bidder’s proposal as superior to the contractor’s was unreasonable, and thus, the agency’s decision not to reopen discussions was also unreasonable.  In its decision, GAO highlighted several of the agency’s assessments that it concluded were unreasonable, including: (1) assignment of only a slight weakness rating to the competing bidder’s proposal for the failure of one of its proposed key personnel to demonstrate a mandatory qualification; and (2) assignment of a moderate strength rating to the contractor’s proposal for management approach, despite positive remarks by evaluators and where the RFP indicated that assignment of a significant strength rating was warranted.  (Read decision here.)

ARMED SERVICES BOARD OF CONTRACT APPEALS DECISIONS

In re URS Federal Services, Inc. (March 23, 2021)
Contractor (URS Federal Services, Inc.) submitted a claim against the federal government (U.S. Coast Guard) under the Contract Disputes Act seeking payment for maintenance and repair services that the government accepted but did not pay for.  Contractor also alleged that the government’s refusal to pay constituted a breach of the implied duty of good faith and fair dealing.  The Armed Services Board of Contract Appeals (ASBCA) struck the breach of implied duty claim from contractor’s complaint because the contractor did not first present the claim to the contracting officer.  With regard to the claims under the Contract Disputes Act seeking payment for both unpaid invoices and “unbilled” services, although the contractor submitted invoices to the government during and shortly after contract performance, it did not present a claim to the contracting officer for billed and unbilled services until more than eight years after the last invoice for billed services.  The ASBCA ruled that the contractor knew or should have known that it could have converted its invoices to claims within a reasonable time after submitting them to the government and that the contractor’s claim for payment under the Contract Disputes Act was barred by the six-year statute of limitations.  (Read decision here.)

CIVILIAN BOARD OF CONTRACT APPEALS DECISIONS

Microtech Technologies LLC v. Department of Justice (March 31, 2021)
Contractor (Microtech Technologies, LLC) filed an appeal of the federal government’s (Department of Justice) decision to deny contractor’s claim for termination costs.  Contractor held a multi-award government-wide acquisition contract under which the government issued a delivery order for workstation perpetual software licenses, as well as software maintenance for one base year and two additional option years.  At the beginning of the base year, the contractor purchased the perpetual software licenses and also purchased from the manufacturer software maintenance in order to satisfy the maintenance requirement for the base year and the two option years.  At the end of the base year, the government initially exercised the software maintenance option for the next following year but then reversed itself and terminated the option year with a unilateral contract modification after it determined that it had exercised the option in error.  Contractor subsequently sent the government a claim for termination costs in an amount that represented the cost of software maintenance for one year.  Contractor argued that the one-year maintenance cost was non-refundable and that is was a reasonable charge resulting from the termination of the option.  The Civilian Board of Contract Appeals (CBCA), however, remained unconvinced finding that the contractor failed to prove that the pre-payment of the maintenance cost a year in advance was required or that it was non-refundable, or that the contractor took action to activate the software maintenance after the contract modification that terminated the option.  The CBCA concluded, therefore, that the contractor failed to prove that the software maintenance cost arose from the government's contract modification that terminated the option.  (Read decision here.)  

GovCon Legal Round Up™ - March 31, 2021

The GovCon Legal Round Up™                                                                                                                                                      March 31, 2021
 

U.S. COURT OF FEDERAL CLAIMS (COFC) DECISIONS

SEKRI, Inc. v. U.S. (March 22, 2021)
The COFC dismissed a pre-award bid solicitation protest that was filed directly with the court after an agency (DLA) failed to designate the protestor (SEKRI) as a mandatory source of supply for certain military equipment under the AbilityOne Program.  The COFC deviated from the arguments of both protestor and DLA and ruled, on its own, that the protestor lacked standing under the Tucker Act because, having failed to file a protest before the proposal deadline, it was neither a bidder nor a prospective bidder.  The COFC ruled alternatively that even if the protestor had standing, because it did not object before the close of bidding, it waived its challenge under the Blue & Gold Fleet waiver rule.  (Read decision here.)

Mortgage Contracting Services, LLC v. U.S. (March 18, 2021)
In the second ruling in as many days in favor of a bid protestor, the COFC overruled both the agency (USDA) and GAO and ruled in favor of a protestor (Mortgage Contracting Services).  COFC found that the agency’s evaluation of the winning bidder’s proposal was arbitrary and capricious, that protestor was prejudiced by the agency’s actions, and that protestor was entitled to an injunction against further contract performance by the winning bidder.  In a lengthy analysis, the COFC first determined that the agency’s past performance rating for the winning bidder (which was the same rating given to protestor) was arbitrary and capricious because the agency’s evaluations of two of the three past performance references were unreasonable and not performed in accordance with the solicitation. The COFC also determined that the agency’s technical factor evaluation, which was based in part on relevant experience, and its price realism analysis were both inadequate.  In overturning GAO, the COFC concluded that GAO’s analysis of the past performance issue was lacking and its conclusions summary, and that the GAO did not critically examine the price realism issues.  (Read decision here.)

AGMA Security Service, Inc. v. U.S. (March 16, 2021)
In an earlier decision in favor of a bid protestor, the COFC overruled the agency (FEMA) and determined that its award of a sole-source contract was arbitrary and capricious.  At the beginning of the procurement process, the agency issued an RFP for armed security services, and, at first, made an award decision in favor of the protestor (AGMA Security Service).  After the then-incumbent filed a protest with GAO, the agency took corrective action and subsequently reversed itself and awarded the contract to the incumbent.  The protestor then filed a bid protest with the COFC, which ultimately found no explanation for the agency’s reversal and enjoined the agency from continuing the contract with the incumbent.  Undeterred, the agency nevertheless decided to issue a sole source bridge contract to the incumbent on the grounds that there was insufficient time for a full and open competition.  The protestor then filed a bid protest challenging the sole-source award.  The COFC concluded that the sole-source award was improper and that there was no rational basis for the agency’s sole source decision, and permanently enjoined the agency from continuing its sole source contract with the incumbent.  (Read decision here.)

SBA OFFICE OF HEARING AND APPEALS

In re Size Appeal of Leumas Residential, LLC (Released March 16, 2021)
The SBA’s Office of Hearing and Appeals (OHA) granted a contractor’s (Leumas Residential, LLC’s) appeal of the SBA Area Office’s determination that it was not a small business.  The agency (Navy) had issued an RFP for grounds maintenance services under a contract set aside for 8(a) businesses with a size standard of $8M.  The contractor was awarded the contract but another offeror filed a protest alleging that the contractor was unduly reliant on its subcontractor and in violation of the ostensible contractor rule.  The SBA area office, however, ultimately determined that the contractor and its subcontractor were joint venturers and generally affiliated, that the contractor was not small, and that the ostensible contractor issue was moot.  On appeal, OHA determined that since the proposal was submitted by the contractor, and not a joint venture, the Area office should have addressed the question before it - namely, whether the contractor was in violation of the ostensible contractor rule.  OHA, thus, sent the case back to the Area office for a size determination under an ostensible contractor analysis.  (Read decision here.)

GAO BID PROTEST DECISIONS

In re ISS Action, Inc. (Released March 24, 2021)
GAO denied the bid protest of an offeror (ISS Action) that alleged the agency (DOE) improperly evaluated the winning bidder’s lowest-priced, technically acceptable (LPTA) under personnel qualifications and staffing criteria.  Among its arguments, the offeror objected that the bidder identified as the project manager an employee of the current incumbent, which was proposed to serve as a subcontractor to the bidder.  GAO rejected offeror's arguments, including by concluding that the RFP did not require the project manager to be a direct employee of an offeror.  (Read decision here.)

In re CACI, Inc. - Federal  (Released March 23, 2021)
An agency (Army) relaxed the deadline for offerors to submit notices of intent to propose when it accepted late notices.  After making an award to an offeror that submitted an untimely notice but filed a timely proposal, the protestor (CACI) filed a bid protest arguing that the winning bidder was ineligible for the award because of its untimely notice.  GAO dismissed the protest, concluding that even if the notice deadline waiver was material, the protestor was not next in line for the award in any event and, thus, was not an interested party.  (Read decision here.)

In re Pathfinder Consultants, LLC (Released March 23, 2021)
GAO denied the pre-bid solicitation protest of an offeror (Pathfinder Consultants) that argued the agency (VA) unreasonably omitted past performance from its RFP evaluation factors.  GAO concluded that the agency adequately explained the basis for omitting past performance - namely, that the services sought were not complex or difficult, thus requiring only an assessment of technical approach.  GAO, likewise, rejected the other grounds for offeror's protest based on the agency's failure to respond to its pre-bid questions.  GAO ruled that the offeror failed to demonstrate how the solicitation was inadequate, unclear or ambiguous.  Thus, GAO could not conclude that the agency's failure to respond resulted in unfair or unequal treatment.  (Read decision here.)

In re Jade Excavation, Inc. (Released March 19, 2021)
An offeror (Jade) protested an award by an agency (DOT) to the lowest bidder because it did not have an active SAM registration at the time of its bid submission as required by the invitation for bid.  GAO, however, rejected the protest, relying on its prior decisions that minor informalities related to SAM registration generally do not undermine the validity of an award and are waivable.  (Read decision here.)