On January 8, 2010, the Government Accountability Office (“GAO”) submitted its Bid Protest Annual Report to the Congress for Fiscal Year 2009. Overall, the Report reflects that FY 2009 was a busier year for GAO, and a more successful year for protestors, than FY 2008.
The Government Accountability Office (“GAO”) is a stickler when it comes to the timing of bid protests. One misstep – even if that misstep causes you to miss a deadline by only seconds – and you could find yourself out on the proverbial curb. GAO has a saying when it comes to the timing of its bid protests: “Late is late.” And GAO means it.
If the whispering campaign is true and the Obama Administration has in fact embarked on a “war against contractors,” then Brett Lambert may well have been designated to “take the point.”
Contractors engaged in procurements under the Foreign Military Sales ("FMS") program can breathe a little easier after a Government Accountability Office ("GAO") ruling on November 5, 2009, in which the GAO denied the U.S. Army Material Command's ("Army's") assertion that a contractor is not entitled to reimbursement for its protest costs associated with an FMS procurement protest. In Alsalam Aircraft Company, B-401298.3, the GAO found that FMS trust funds have the "character of appropriated funds" and that the Arms Export Control Act, which authorizes the FMS program, allows for use of appropriated funds in an FMS procurement and provides for recovery of protest costs from the FMS customer.
Not so long ago, we called your attention to a troubling trend in the natural order of Government contracting. First, we recounted how DCAA has initiated itself into the dark art of intimidation. Then we described how a contracting officer’s mere disagreement with the DCAA could result in an IG referral for a poor CO who comes out on the other side of a DCAA recommendation. And when last we resumed our chronicle, we recalled that a call for an end to these frontal assaults on CO independence was issued – not only by us in the last several months – but by an ABA Ad Hoc Committee some 22 years ago.
In an attempt to promote "protection" and "provide transparency," the FAR Councils recently issued a final rule formally mandating Government Accountability Office ("GAO") auditor access to interview contractor personnel during an audit of the contractor's records. This final rule published on October 14, 2009 adopted, without change, an interim rule issued March 31, 2009, implementing section 871 of the Duncan Hunter National Defense Authorization Act for 2009 ("Section 871"), as codified at 41 U.S.C. 254d(c)(1) and 10 U.S.C. 2313(c)(1)." The American Recovery and Reinvestment Act of 2009 (the "Recovery Act") provides a similar interview right, but the Recovery Act provision extends that right to agency inspector generals. Congress limited Section 871 interview rights to the GAO.
In Caddell Constr. Co., Inc., B-401596, et al, Sept. 21, 2009, the GAO sustained a protest against the pre-qualification of a vendor on the grounds that the Department of State’s (DOS) determination that the vendor satisfied the qualification requirements of the Omnibus Diplomatic Security and Antiterrorism Act of 1986 (Security Act) was unreasonable. The GAO recommended that the DOS withdraw the pre-qualification, concluding that the vendor did not have the necessary experience required by the Security Act. This recommendation rejected the DOS’s method of aggregating dollar values to determine an offeror’s qualification under the statute.
Recently, contractors have begun receiving formal requests for information from the Defense Contract Audit Agency (“DCAA”). The purported purpose of these requests is to “[o]btain an understanding of the management control environment” of major government contractors. In pursuit of this goal, DCAA has crafted a letter that demands, among other things, the following:
The Administration has conceded that the American Recovery and Reinvestment Act (“ARRA”) has not worked as planned. With unemployment numbers continuing to climb, the Administration now acknowledges it “misread the economy.” But from the beginning not everyone believed ARRA would achieve the desired stimulative effect. After all, $787 billion cannot be disbursed without some complication.
On March 31, 2009, the FAR Councils issued several new interim rules (effective March 31, 2009) implementing the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) (also known as ARRA, The Recovery Act, or the Stimulus Act). See Federal Acquisition Circular (FAC) 2005-32, published at 74 Federal Register 14621-14652. The FAC issued new interim rules on a number of areas required under the Stimulus Act, including:
This blog focuses on the final three sets of rules – those relating to Auditor access; Whistleblower protections; and Buy American requirements. The first set of rules is discussed separately here.
The Government Accountability Office (“GAO”) denies more than three quarters of all bid protests decided on the merits. Certain categories of protests, however, tend to be more successful than others.
Three of our Government Contracts lawyers – Keith Szeliga, Marko Kipa, and Daniel Marcinak – recently published an article that assists protestors in identifying such allegations. Among other things, the article analyzes the most common categories of successful bid protest grounds and describes the circumstances under which each ground is likely to prevail. With permission of Briefing Papers, the article is reproduced in full in this issue of our blog.
Click here to view a PDF copy of the article.
Authored by:
Keith R. Szeliga
(202) 218-0003
kszeliga@sheppardmullin.com
and
Marko W. Kipa
(202) 772-5302
mkipa@sheppardmullin.com
and
Daniel J. Marcinak
202) 772-5391
dmarcinak@sheppardmullin.com
On December 19, 2008 DCAA issued new guidance for audit of and reporting on internal controls that -- in two short pages of sometimes cryptic text -- (a) redefines the agency's approach to the critical concepts of "significant deficiency" and "material weakness" in internal controls and (b) establishes new criteria for auditor reports of deficiencies in large contractor internal control systems, and recommendations as to the adequacy of the contractor systems, including recommendations that the Contracting Officer pursue suspension of progress payments on reimbursement of costs.
Continue Reading...In its 2008 report on the Government’s financial consolidated statements released on December 15, the Government Accountability Office criticized “serious financial management problems at the Department of Defense, the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and the federal government’s ineffective process for preparing the consolidated financial statements.” GAO further reported that the Government did not comply “with significant laws and regulations.” Ironically, this report issued just days after the Government forced all federal contractors to implement their own internal control systems under penalty of suspension or debarment.
Continue Reading...Determining whether to challenge the award of a contract to a competitor can be a daunting decision for a federal government contractor. This article seeks to make that decision more manageable by providing an overview of the bid protest process and by suggesting several factors a contractor should consider in determining whether to protest an award.[i]
[i] For a more detailed discussion of the GAO bid protest process, see U.S. Government Accountability Office. (2006). Bid Protests at GAO: A Descriptive Guide. (Publication No. GAO-06-797SP).
GAO will soon issue final procedural rules for its newly-formed Contract Appeals Board, a body established by the Consolidated Appropriations Act of 2008 to hear appeals from decisions of contracting officers relating to contracts with an agency in the legislative branch. On June 26, 2008, GAO published 25 pages of procedural rules as an interim agency rule subject to comment. The comment period closed August 25.
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