The Court of Federal Claims, interestingly, was not concerned that the protester submitted non-identical electronic and paper copies of the bid.  The electronic copy was submitted timely, but the non-identical paper copy of the proposal (which, according to the RFP, would control in the event of inconsistency) was not in the contracting offices’ hands until after the time set for receipt of proposals.  The contractor’s courier was logged in at the security gate prior to time for receipt of proposals and had spoken to a representative in the contracting office by telephone.  The Court found the proposal to be under the government’s control prior to the deadline under the facts of this government contract bid protest case.

Government control exception calls for a fact-specific inquiry.

In applying the government control exception to late proposal rule, the Court made a fact-specific inquiry looking to the instructions in the solicitation and the nature of the agency’s facilities.    The Court noted that the government contractor did not receive an advantage by late submission, such as access to post-deadline information or having more time to prepare its proposal, and consideration of the proposal would not compromise the competitive process.

In applying the government control exception in this bid protest, the Court stated that the proposal was “under the government’s control” when the offeror relinquished control over the proposal such that the offeror could no longer modify the proposal.   Under this standard, many proposals rejected as untimely would seem to qualify.  However, the Court emphasized the fact that the contractor had timely submitted a complete copy of the proposal electronically.   (The fact that the electronic proposal was not identical to the paper copy did not trouble the Court since the RFP did not require identical proposals).

Possibility of waiver as minor informality.

The Court went even further, finding that even if the late proposal was not under government control, the late delivery of the paper copy could be waived as a minor informality in this bid protest case.  The agency should look to see if the offeror gained a competitive advantage or prejudiced competing offerors, and if not, waive the late paper proposal as a minor informality.

The Court issued a permanent injunction requiring the DIA to consider the contractor’s late proposal.  The court concluded that the contractor, a Native American Indian, service-disabled veteran owned and certified small disadvantaged business, would be irreparably injured without a permanent injunction.  Recoupment of bid preparation costs was not considered a sufficient remedy, since this large dollar value contract represented a significant business-expansion opportunity for the small business.   The bid protest decision to issue an injunction would not work a significant hardship on the agency since the agency had not yet awarded a contract.

Government control exception calls for prompt action.

It was important to the contractor’s success in this bid protest case that it acted quickly to assert its rights.  The Court of Federal Claim’s decision to issue an injunction might have been different had the agency already awarded a contract.  If your company needs assistance with your late bid or proposal issue, contact Hindson & Melton LLC as early as possible for assistance with your case.
Karen S. Hindson – July 23, 2012

This bid protest jurisdiction of the Court includes reviews of agency corrective action taken in response to GAO protests.  The Court will review the action to determine whether it is reasonable under the circumstances.

Injunctive relief may be available in a bid protest case before the United States Court of Federal Claims, if:

• the plaintiff has succeeded on the merits of the case;
• the plaintiff will suffer irreparable harm if the court withholds injunctive relief,
• the balance of the hardships favors granting injunctive relief, and
• such relief would be in the public interest.   

See Great Lakes Dredge & Dock Co v United States, 60 Fed. Cl. 350 (2004) for a discussion of injunctive relief.

The standard of review the Court utilizes in reviewing agency action is whether it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”  5 U.S.C. Section 706(2)(A)  This is known as the Administrative Procedures Act (APA) standard.  This is a very high bar for the plaintiff challenging agency action.  The Court can look to see whether the agency action lacked a rational basis or if the agency’s decision-making involved a violation of regulation or procedure.  Agency decisions are given the benefit of the doubt and a presumption of regularity.  The Court will not simply substitute its judgment for a reasonable agency decision, even if the Court would have reached a different decision.

If the Court finds that an agency acted without a rational basis, then it must decide whether the plaintiff/protestor was prejudiced by the agency’s conduct.  For pre-award bid protests, the Court would look to see whether there is a competitive injury.  For a post-award bid protest, the protester must prove there is a substantial chance it would have received the award absent the violation.

Contact government contract lawyer Karen S. Hindson to discuss your questions about bid protests.

On September 17, 2010, the Department of Defense posted on www.fedbizopps.gov a notice of intent to award a sole source contract – and the notice stated that any party challenging the sole-source contract should file a capability statement by September 22nd detailing its capability to fill the order. On September 25th, DoD awarded the sole-source contract to Science First.

On October 11th, Digitalis contacted its Congressman. On December 6th, it filed a post-award bid protest with the Court of Federal Claims. The government filed a motion to dismiss for lack of standing.

The Court of Claims held that Digitalis did not have standing to protest – because it did not have a substantial chance of winning the contract since Digitalis failed to submit a statement of capability during the prescribed 5 day period as required in the fedbizopps notice.

Only “interested parties” have standing to challenge government contract awards. But who is an interested party? An actual or prospective bidder whose direct economic interest would be affected by the award of the contract.

To prove a direct economic interest, a party must show it had a substantial chance of winning the contract. In order to protest – one who has not actually submitted an offer must be expecting to submit an offer before the closing date. If the date for receipt of proposals passes without submitting a bid, the opportunity to become a prospective bidder ends.

In this case, bids were not invited, but interested parties had a deadline to submit capability statements. Digitalis failed to submit a statement during the prescribed period, so it does not have the required direct economic interest to have standing to pursue a bid protest.

The case also includes a discussion of whether 5 days would be considered a sufficient time to require capability statements — without answering the question. The decision says the standard would be whether it is reasonable to expect contractors to see a notice and respond. However, since Digitalis did not have standing to protest, the Court did not decide this issue.

See more government contracts news. Contract Karen S. Hindson for more information.

Pre-award or post-award bid protests on government contracts are most often filed with the General Accountability Office (GAO).  GAO Bid Protest Procedures are at 4 CFR Part 21.  Also see Federal Acquisition Regulation (FAR) 33.104.   A bid protest concerning the terms of a solicitation must be filed prior to the date that proposals are due (bid opening date) in order to be timely.  Pre-award bid protests may also be filed challenging an adverse agency action, such as an offeror’s exclusion from the competitive range and further participation in an ongoing procurement.  Pre-award bid protests filed with GAO typically stop award of a contract until the protest is decided, absent a high level determination that it is urgent and compelling that a predecision award be made.

Post-award bid protests challenge the agency’s award decision or procedures utilized in making the contract award and are available to disappointed bidders that believe an agency has not acted in accordance with statute or regulation in conducting the procurement.  The GAO gives the benefit of the doubt to agency action, frequently deferring to the agency’s exercise of discretion.  However, contracting activities must conduct proposal evaluations as described in the request for proposals, and in accordance with statute and regulation. GAO generally will not substitute its judgment for the judgment of the agency contracting official, but if a violation of statute or regulation is found, or if proposals are not evaluated as stated in the request for proposals (RFP),  the GAO will recommend corrective action.   GAO recommendations to agencies for successful post-award bid protests may include reopening the procurement, terminating a contract awarded improperly, and payment of the successful protester’s attorneys fees and other costs of pursuing the protest.

Contact the government contract law firm of Karen S. Hindson PC, Hindson & Melton LLC’s woman-owned, veteran-owned small business with over 30 years of government contract law experience.

Must have a valid “claim” within the meaning of the CDA and a contracting officer final decision for the United States Court of Federal Claims to have subject matter jurisdiction.  The FAR defines claim as: “a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract.” 48 C.F.R. § 33.201; FAR 33.201.

United States Court of Federal Claims has jurisdiction to hear breach of government contract claims under the Tucker Act, 28 U.S.C. §1491. Contracts may be express or implied.  COFC will also entertain bid protest cases based on breach of implied contract of fair dealing.

United States Court of Federal Claims also has bid protests jurisdiction under the Tucker Act.  28 U.S.C. §1491(b).  This includes both pre-award and post-award bid protests.  Generally only actual bidders are interested parties with standing to bring post-award bid protests.  Pre-award bid protests can object to a solicitation or proposed contract or any alleged violation of statute or regulation in connection with a procurement or proposed procurement (including preprocurement decisions).  Certain corporations in which the United States has a proprietary interest -such as FDIC and USPS – are “federal agencies” for purposes of COFC bid protest jurisdiction.

There was a time when federal district courts had jurisdiction under the Administrative Procedures Act to hear contract award challenges and violations of government contract law. The Administrative Dispute Resolution Act (“ADRA”) ended this shared jurisdictional arrangement, often called Scanwell jurisdiction, in 1996. The Tucker Act, 28 U.S.C. §1491(b)(1), as amended by the ADRA, consolidated the Court of Federal Claim’s (COFC) jurisdiction, allowing it:

• 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 (bid protest jurisdiction).
• to hear the full range of procurement disputes, including any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.

The statute initially had allowed the Court of Federal Claims and the federal district courts to share jurisdiction over government contract and procurement disputes. However, by virtue of a sunset provision, the statute now vests exclusive jurisdiction with the COFC.

United States Court of Appeals, Federal Circuit - hears appeals from the United States Court of Federal Claims.  Reviews questions of law de novo.  Also hears appeals from the Boards of Contract Appeals.

Claims submitted to the Contracting Officer -  governed by the Contract Disputes Act of 1978, 41 U.S.C.A. § 601 et seq.  For a claim to be valid under CDA, it must give the contracting officer adequate notice of the basis and the amount of the claim, and request a contracting officer decision.

General Accountability Office (GAO) - hears pre-award and post-award bid protests pursuant to the regulations at Title 4 CFR Part 21.

Federal District Courts - hear a variety of government contract cases such as reverse-FOIA, qui tam suits under the False Claims Act,contractor liability under statutes such as Alien Tort Statute or Federal Tort Claims Act

Boards of Contract Appeals (BCA)- jurisdiction to hear appeals filed from contracting officer final decisions under CDA within 90 days.  There are a number of BCA for the various agencies – such as the Armed Services Board of Contract Appeals (ASBCA).  Under the Election Doctrine, once a contractor makes a binding decision to appeal a contracting officer final decision to a BCA or to the Court of Federal Claims, the contractor cannot pursue the same claim in the other forum.

To discuss your government contract claim or dispute, contact government contracts attorney Karen S. Hindson.

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.”

Contact Karen S. Hindson of Hindson & Melton LLC for your post-award bid protest questions.

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).

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 of Hindon & Melton LLC at 770-939-3936 or 843-720-3722.

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 Hindson for assistance with your government contract law questions.

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.