Government Contracts, Investigations & International Trade Blog : Government Contracts Lawyer & Attorney : Sheppard Mullin Law Firm : Bids, Licenses, Awards, Conflict of Interest.

By: Marko W. Kipa

The United States Court of Federal Claims recently reaffirmed the applicability of two exceptions to the Anti-Assignment Act (the “Act”). Liberty Ammunition, Inc. v. United States, 2011 WL 5150221 (Fed. Cl. Oct. 31, 2011). Specifically, the Court acknowledged that (1) the Government may prospectively waive the Act, and (2) the Act does not prohibit the transfer of an agreement where the transfer occurs by operation of law. Id. at *6-8. Notably, the Court’s decision provides further guidance for contractors undertaking corporate reorganizations and/or examining whether a particular acquisition transaction requires the execution of a novation agreement. We previously discussed the novation requirements here.

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By Marko W. Kipa

The saga began with the passage of the 2008 National Defense Authorization Act. While the Act contained a general prohibition barring bid protests of task and delivery order awards (excluding challenges to scope, period, or maximum value), it granted the GAO exclusive jurisdiction over bid protests of civilian and defense agency task and delivery order awards valued at over $10 million. The Act also included a sunset date – May 27, 2011. The reach of the Act’s sunset provision would prove to be critical in shaping the GAO’s and the Court of Federal Claims’ jurisdiction over bid protests of civilian agency task and delivery order awards.
 

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By Marko W. Kipa

After an unsuccessful bid protest, many contractors assume that their chance at getting a piece of the action has passed. They assume that they have exhausted their remedies and that all of the spoils inevitably will go to the victor. They let bygones be bygones and move-on to the next capture opportunity and ignore their competitor’s performance under the awarded contract. 
 

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The Federal Acquisition Streamlining Act's bid protest bar precluded contractors from challenging the award of a task or delivery order, subject to several limited exceptions -- i.e., if the task or delivery order increased the scope, period or maximum value of the underlying IDIQ contract. Recent amendments to the Act expanded GAO's bid protest jurisdiction to include challenges to task or delivery order awards valued at over $10 million. These amendments also provided for enhanced competition procedures for task or delivery order awards valued in excess of $5 million, but did not vest GAO or the Court of Federal Claims with jurisdiction to entertain bid protests based on alleged violations of those procedures. Thus, contractors seeking redress for agency errors in connection with the award of task or delivery orders valued at under $10 million were for the most part "out of luck."
 

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As the closing time for receipt of proposals approaches, controlled chaos starts to take over. For one reason or another, changes may be made to your Company's proposal that prevent it from putting its best foot forward. You are certain that the proposal meets the Solicitation requirements, but you also believe that one section of the proposal could have been better developed. While you would have liked further to have revised the proposal, you were forced to make sacrifices due to time constraints. You nevertheless were hopeful that the shortcomings would be addressed during discussions and in your final proposal revision (FPR). After several hectic days of red team review, your Company's proposal is submitted to the agency in the nick of time.
 

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It is well-recognized that, with limited exceptions, neither the GAO nor the Court of Federal Claims has been willing, historically, to assume jurisdiction over IDIQ task or delivery order protests.  Recently, there has been some loosening of that bar, in the form of Public Law No. 110-181, § 843, which grants the GAO exclusive jurisdiction for a period of three years over protests against task or delivery order awards valued at more than $10 million.  Even with that legislative development, however, there are many task orders and/or delivery orders that will jurisdictionally escape review via the protest process.

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Disappointed bidders intent on protesting an allegedly improper contract award could pursue traditionally two avenues of potential relief.  They could file a post-award bid protest either:  (1) at the Government Accountability Office ("GAO") within 10 days of when they learned of the protest grounds (or, where competitive proposals were involved, within 10 days of the requested and required debriefing), or (2) at the United States Court of Federal Claims ("Court of Federal Claims" or "COFC"), constrained primarily by the Court’s 6-year statute of limitations.  While disappointed bidders may retain ultimately the discretion to choose the forum of their choice, protests at the Court of Federal Claims outside of the 10-day period after contract award (or after a requested and required debriefing) are in danger of becoming an artifact of the past.  This potential change to the post-award bid protest jurisdiction of the Court of Federal Claims is one that every contractor should be watching closely.

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The Court of Federal Claims' most recent decision in Axiom Resource Management v. United States, 2008 WL 541675 (Feb. 26, 2008) ("Axiom II"), suggests that extended judicial oversight of contract administration functions may be a viable bid protest remedy, particularly in the context of organizational conflicts of interest (OCIs).  The case also highlights the importance of preparing and implementing an OCI mitigation plan that will withstand rigorous judicial scrutiny, during the proposal phase, so that the Government's and the offeror's apparent front end indifference to the issue of OCIs does not jaundice the court's views with respect to their willingness or inclination rigorously to implement a mitigation plan to which they were dragged "kicking and screaming."

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The Court of Federal Claims’ recent decision in Axiom Resource Management v. United States, 2007 WL 2840414 (Sept. 28, 2007), illustrates the trend toward more robust judicial review of organizational conflict of interest (OCI) allegations. The case also highlights several issues contractors should consider in drafting successful OCI mitigation plans.

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The United States Court of Federal Claims recently decided a case that addresses a contractor's remedy in the event of a government breach of contract and provides a useful reminder regarding managing expectations in the negotiation of contract prices with the government. Praecomm, Inc. v. United States, 78 Fed. Cl. 5 (Aug. 9, 2007).

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