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 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

Many believed that the Government Accountability Office’s (“GAO’s”) jurisdiction over bid protests of civilian agency task and delivery order awards valued at over $10 million expired on May 27, 2011. This belief was based on the fact that certain broadened jurisdiction over civilian agency task and delivery order protests granted by the 2008 National Defense Authorization Act (“2008 Act”) expired on that date. With the expiration of the broadened jurisdictional grant found in the 2008 Act, many thus contended that a contractor would not be able to protest a civilian agency task or delivery order award at the GAO unless the protest alleged that the order exceeded the scope, period or maximum value of the underlying contract. Protests of Department of Defense task and delivery order awards valued at over $10 million were not similarly affected because Congress extended the GAO’s exclusive, broadened jurisdiction over these protests through the 2011 National Defense Authorization Act.
 

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By Marko W. Kipa

Over the past three years, government contractors have been able to pursue bid protests at the Government Accountability Office (the “GAO”) challenging awards of defense and civilian task and delivery orders valued at over $10 million. This expanded jurisdiction, however, is set to expire on May 27, 2011. Congress appeared to have addressed the issue in the National Defense Authorization Act for Fiscal Year 2011 (the “Act”) by including a provision extending the GAO’s expanded jurisdiction until September 30, 2016, but, for whatever reason, the Act captured only defense task and delivery order awards. This omission not only was strange, but it also seemed to run counter to the spirit of the original grant of task/delivery order jurisdiction. We analyzed the Act’s legislative history here and concluded that it did not provide a basis for only partially extending the GAO’s expanded jurisdiction. Shortly thereafter, the U.S. House of Representatives (the “House”) and the U.S. Senate (the “Senate”) introduced bills targeted at extending the GAO’s jurisdiction over civilian task and delivery order bid protests. See H.R. 899; see also S. 498.
 

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By Marko W. Kipa

With the passage of the National Defense Authorization Act for Fiscal Year 2008 (the “2008 Act”), Congress expanded the GAO’s jurisdiction to include bid protests in connection with civilian and defense contract task and delivery orders valued at over $10 million. See Section 843 of the 2008 Act, Pub. L. No. 110-181. Congress also included a sunset provision in the 2008 Act that limited that grant of expanded jurisdiction to 3 years – i.e., until May 27, 2011. See id. We previously discussed Section 843 of the 2008 Act and its implications here, here, and here.
 

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By David S. Gallacher

On September 27, 2010, President Obama signed into law the Small Business Jobs and Credit Act of 2010 (Pub. L. No. 111-240). The Act is intended to free up capital by providing tax cuts for small businesses (some of which are temporary) and to promote exports of U.S. products, all with a view to stimulating the small business sector as an engine of job creation.  But, as usual, the Administration’s efforts to improve the economy through stimulus measures also give rise to new risks for companies doing business with the federal Government – whether as a prime or a subcontractor, as a large or a small business.
 

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By Anne B. Perry and John S. Tobey

On March 15, 2010, the GAO determined that two Task Order Request for Proposals ("TORPs") to procure mentoring, training, and logistics support for the Afghan Ministry of the Interior and Afghan National Police were outside of the scope of a multiple-award indefinite delivery indefinite-quantity ('ID/IQ") contract for counter-narcoterrorism support services. DynCorp International LLC, B-402349.
 

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By Marko W. Kipa

On March 19, 2009, the FAR Councils issued a final rule providing for enhanced competition for task and delivery order contracts. See 75 Fed. Reg. 13416 (Mar. 19, 2009). The final rule was the culmination of a rulemaking process that surfaced in Section 843 of the National Defense Authorization Act of 2008, Pub. L. No. 110-181 (the "Act"), which went into effect on May 27, 2008. Subsequently, on September 17, 2008, the FAR Councils issued an interim rule with request for comments. See 73 Fed. Reg. 54008 (Sept. 17, 2008). The interim rule essentially mirrored Section 843 of the Act. Comments on the interim rule were submitted by industry and government representatives on November 17, 2008.
 

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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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The final rule mandating E-Verify for federal contractors became effective on September 8, 2009. The lawsuit that stayed implementation of E-Verify since January ended with the district court’s granting of the Government’s motion for summary judgment. As long as Congress continues to fund E-Verify, it should remain a permanent fixture of federal procurement.

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For the third time, the Government has agreed to delay the mandatory implementation of E-Verify for government contractors. They will not have to comply with E-Verify until June 30, 2009, when contracting officers can begin inserting FAR clause 52.222-54. Employment Eligibility Verification, into solicitations and contracts. 74 Fed. Reg. 17793.

E-Verify has been pushed back once already as a result of a lawsuit in federal district court filed by the U.S. Chamber of Commerce and other parties. As this Blog has previously reported, the plaintiffs challenge the mandatory use of E-Verify for government contractors by means of an Executive Order despite statutory language making its use voluntary. Plaintiffs moved for summary judgment, and the court agreed to a Government request to stay proceedings while the new Administration assesses the new rule.
 

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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

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Mandatory implementation of E-Verify by government contractors – which was originally scheduled for January 15, 2009 and postponed until February 20 – has been postponed again in connection with a lawsuit filed by the Chamber of Commerce of the United States of America and its co-plaintiffs in U.S. District Court seeking declaratory and injunctive relief on several grounds. The government has now agreed that contractors need not comply with E-Verify until at least May 21, 2009.
 

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Beginning on January 15, 2009, certain federal contractors will be required to utilize the E-Verify system to assure that employees assigned to work on federal procurement contracts and all new employees are authorized to work in the United States.  E-Verify is an Internet-based employment verification system administered by the Department of Homeland Security (“DHS”) designed to ensure the legal employment status of employees working in the United States.

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On September 17, 2008, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued interim rules providing for enhanced competition for task and delivery order contracts.  The interim rules essentially mirrored Section 843 of the National Defense Authorization Act of 2008 (the Act), which went into effect on May 27, 2008, and revised three provisions of the Federal Acquisition Regulation (FAR 16.503 – 16.505) to incorporate the Act’s enhanced competition requirements.  See 73 Fed. Reg. 54008 (Sept. 17, 2008).  As was discussed in an earlier blog article with respect to the interim rules when they were initially proposed, the rules targeted three primary areas:

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With the enactment of the Federal Acquisition Streamlining Act (FASA) in 1994, Multiple Award task and delivery order contracts were given a significant boost.  As part of that legislation came an almost ironclad bar to bid protests against the award of individual task or delivery orders.  Disappointed offerors were prohibited from protesting the award of task or delivery orders except if such orders increased the scope, period, or maximum value of the underlying contract.  Several exceptions subsequently were carved-out from the general prohibition, including protests of “down-selections” as well as task and delivery orders awarded under the GSA FSS program.  Otherwise, however, disappointed offerors could either air their grievances with the agency ombudsman (an individual who possesses no binding authority) or could take the road seldom traveled and file a CDA claim with the contracting officer alleging a breach of the "fair opportunity to compete" required by FASA, implementing regulations, and contract clauses.  Only recently was there any indication that damages could be awarded under the latter approach and, as expected, the standard for recovery is a difficult one for any contractor to meet.  The circumscribed recourse available to disappointed task or delivery order offerors did not occur by happenstance – it was the result of deliberate efforts by reformers to streamline the acquisition process and to avoid the delays and increased costs they attributed to the numerous, routine and purportedly needless protests encumbering the procurement system.
 

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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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Introduction by John W. Chierichella

In the halcyon days of yesteryear, IDIQ contracts occupied a quaint niche in Government contracting in which small quantities of idiosyncratic products or services could be acquired without much procurement ado. No more. Sparked by serial iterations of legislative procurement reform, IDIQ contracts have become bigger business than anyone ever anticipated. As the use of this once overlooked procurement vehicle has exploded across the federal landscape, so too has the potential for -- and the reality of -- disputes relating to the award, performance and termination of IDIQ contracts. Recently, three of our Government Contracts lawyers -- Jonathan Aronie, Marko Kipa, and Keith Szeliga -- published an article in the Public Contracts Law Journal surveying the state of the law in IDIQ-land. With permission of the Journal, their article is reproduced in full in this issue of our blog.

Click here to view a PDF copy of the document.

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