Federal Construction Contracting Lawyer & Attorney : Payne Hackenbracht & Sullivan : Construction Law, Dredging and Claims

Effective May 23, 2008, there will be important changes that pertain to a contractor’s ability to protest task and delivery orders.  These changes are embodied in Section 843 of the 2008 Defense Authorization Act, "Enhanced Competition Requirements for Task and Delivery Order Contracts," and legislators expect the new provisions to increase competition for task and delivery order contracts.  Most notably, the new law allows a contractor to protest a task order in excess of $10 million to the GAO.  Previously, the Federal Acquisition Streamlining Act of 1994 (“FASA”) prohibited task order protests, except in very limited circumstances.  In addition, the new law requires that DOD task or delivery order contracts in excess of $100 million be awarded to multiple contractors, with certain exceptions, and the establishment of enhanced competition requirements, such as a requirement for debriefings on task or delivery orders in excess of $5 million under such multiple award contracts.  The GAO is currently revising its bid protest rules to address the newly acquired jurisdiction over task order protests. (The new rules will be posted on this blog as soon as they are issued).

At the April 19, 2007 hearing of the Senate Committee on Armed Services regarding the DOD’s management of costs under the Logistics Civil Augmentation Program (“LOGCAP”) contract in Iraq, Senator Carl Levin (D-MI) asked why ithe Army waited five years to split the contract among multiple contractors, allowing for competition of individual task orders.  The response from the Assistant Secretary of the Army for Acquisition, Technology, and Logistics was: "I don't have a good answer for you."  The provisions of Section 843 ensure that, absent compelling reasons not to, there will be competition in the award of task and delivery orders on future contracts of this type.  As far as we are concerned, however, there is an open question as to whether Multiple Award Task Order Contracts (‘MATOC”) are legally authorized under the Federal Acquisition Regulation for the procurement of construction. A protest raising that issue was filed by our firm and is pending before the United States Court of Federal Claims.

Section 843 of the Defense Authorization Act lifts the ban imposed by the Federal Acquisition Streamlining Act on protests to the Government Accountability Office (GAO) of task or delivery orders valued over $10 million.  This provision may be short-lived though: it contains a “sunset” provision and expires three years after it becomes effective. Congress enacted Section 843 in response to the need for enhanced competition requirements, and apparently believed that federal agencies had too little oversight when permitted to issue task order procurements that were not subject to protest.   After the FASA was enacted, federal agencies increasingly employed the indefinite delivery, indefinite quantity (“IDIQ”) contracts for expensive projects, purportedly to utilize “streamlining” but, in part, to circumvent the bid protest process.  It will be interesting to see whether the newly enacted right to file bid protests will have a “chilling” effect on agency plans to issue IDIQ contracts in the future.

The exclusive jurisdiction granted to the GAO means that the Court of Federal Claims (CFC) will not adjudicate these protests.  Under the current protest regime, both the GAO and the CFC are authorized to hear bid protests, and we would have preferred for that dual jurisdiction to have continued on task order protests, as well.  An advantage of the current system for contractors is that if they are unhappy with the outcome of a GAO protest, they can obtain de novo review of that same protest at the CFC.  Under Section 843, this second chance will not be available for task or delivery order protests. This has serious implications for contractors because only a small fraction of protests heard by the GAO are sustained.  

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks

As Federal government contractors know all too well, Federal procurement has entered the electronic age in a big way.  Not only are solicitations advertised solely through the internet at http://www.fedbizopps.gov, prospective contractors must be registered with another website, FedTeDS, www.fedteds.gov, in order to access plans, specifications and amendments electronically.  Prospective contractors must also be registered with the Central Contractor Registration site, www.ccr.gov, to be eligible to access FedTeDS. The Federal Acquisition Regulation, at FAR 4.1201, now provides that "Prospective contractors shall complete electronic annual representations and certifications at http://orca.bpn.gov. Instead of submitting executed Representations and Certifications with bids and proposals, prospective contractors can choose to rely on their electronic versions, FAR 52.204-8, in order to comply with the requirements of any particular solicitation.  However, what is the effect on a bidder or offeror's status if the information in the electronic file is wrong, missing, or incomplete? Is the bidder/offeror considered nonresponsive and is its bid/offer rejected?

In a recent decision of the Government Accountability Office, S4, Inc., B-299817, August 23, 2007, the Comptroller General found that the awardee’s failure to list NAICS code 541513 in its ORCA certifications did not render the proposal nonresponsive.  The GAO concluded that additional information was also available to the Contracting Officer and found that additional information made it reasonable for the Contracting Officer to conclude that the offeror met the small business size standard for the solicitation.  This is consistent with other GAO decisions that have repeatedly held that “the failure to include with a bid completed standard representations and certifications does not render the bid nonresponsive because it does not affect the bidder’s material obligations.  Such a failure therefore may be waived as a minor bidding irregularity and the information may be furnished after bid opening.

• Email This
• Print
• Comments
• Trackbacks

Under the federal Competition in Contracting Act, an automatic stay of a federal procurement goes into effect if an unsuccessful bidder files a bid protest with the GAO either within ten days after a contract award is made or within five days of an agency debriefing to the bidder, whichever is later.  During the stay, “the contracting officer may not authorize performance of the contract to begin while the protest is pending.”  Nonetheless, the agency may override the automatic stay under certain conditions:

The head of the procuring activity may authorize the performance of the contract (notwithstanding a protest of which the Federal agency has notice under this section) –

(i) upon a written finding that –

(I) performance of the contract is in the best interests of the United States; or

(II) urgent and compelling circumstancesthat significantly affect interests of the United States will not permit waiting for the decision of the Comptroller General concerning the protest; and (ii) after the Comptroller General is notified of that finding. 31 U.S.C. § 3553(d)(3)(C).

Proesters offen fear that an agency will seek to override the automatic stay because of national security or other exigent circumstances, but an override rarely occurs because of the need to obtain higher authority approval.  (The Army Acuisition Corps actually published a manual in 2004 entitled the "The Competition in Contracting Act Automatic Stay Override Guide.")  Recently, in a case decided by the United States Court of Federal Claims, Superior Helicopter LLC and Ranier Heli-Lift, Inc. v. United States, three unsuccessful bidders protested a solicitation issued by the Forest Service (the “Service”), a component of the United States Department of Agriculture, for exclusive-use contracts for helicopter services to support firefighting efforts.  The three unsuccessful bidders for awards – Superior Helicopter LLC (“Superior”), Ranier Heli-Lift, Inc. (“Ranier”), and Erickson Air-Crane, Inc. (“Erickson”) – filed bid protests with the Government Accountability Office (“GAO”), triggering an automatic stay under the Competition in Contracting Act, 31 U.S.C. §§ 3551-56, of the contracts awarded in the procurement.  After the Forest Service acted on July 9, 2007 under 31 U.S.C. § 3553(d)(3)(C) to override the stay based on findings of exigent circumstances and the best interests of the government, the three helicopter operators filed suit in the United States Court of Federal Claims on July 11, 2007, seeking a temporary restraining order, a declaratory judgment, and preliminary and permanent injunctive relief from the Forest Service’s decision to override the stay.

The Court found that the Forest Service’s assertion that exclusive-use contracts were needed to face the significant risks posed by the 2007 fire season was misleading. No one doubted that the risks of fire this season were significant, but exclusive-use contracts would not have added more resources to combat that risk. The Forest Service’s overarching justification as to why the override was in the “best interests” of the United States and based on “urgent and compelling circumstances” was that the exclusive-use contracts were better than the CWN contracts at guaranteeing helicopter availability.  But, the Service provided no data showing that more resources would be made available than were otherwise at the Federal Service’s disposal under the pre-existing exclusive-use contracts and the CWN contracts upon which the Forest Service had previously relied in the immediately prior firefighting seasons.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks

The Government Accountability Office (“GAO”) posted five protest decisions today and, not surprisingly, each protest was denied. One of those decisions, Metson Marine Services, Inc., B-299705, involved Metson’s protest of the award of a contract to Seaward Services, Inc. under a Request for Proposals (RFP) issued by the Department of the Navy, Military Sealift Command (MSC) to obtain port operation and vessel management services for the Athena high speed research vessel system.  Metson protested that the agency unreasonably concluded that its proposal was technically unacceptable, failed to conduct meaningful discussions with Metson, and conducted an unreasonable evaluation of Seaward’s past performance.

The GAO decided that the agency reasonably determined that the protester’s proposal was technically unacceptable and that it would not conduct further discussions with the protester, where protester’s final revised proposal, submitted after extensive discussions, failed to meet the solicitation’s requirements for a key personnel position. Metson had argued that the agency failed to conduct meaningful discussions.  More specifically, Metson maintained that when Metson’s proposed person was found to not meet the RFP requirements for this key personnel position, the agency was obligated to follow up with further discussions.  Had it done so, the protester asserted, the agency “would have realized that Metson’s proposed person was not only qualified, but exceeded the qualifications of the person Seaward had proposed for the same position.

This decision is not noteworthy because of any groundbreaking legal pronouncements; it simply highlights how difficult it is to overcome the deference that the GAO affords to government agencies.  While acknowledging that “when an agency engages in discussions with an offeror, the discussions must be meaningful,” the GAO nevertheless concluded that an offeror’s creation of a proposal defect which first appears in a proposal revision following discussions does not trigger an obligation to engage in another round of discussions and proposal revisions to advise the offeror of the newly-created deficiency and permit attempted correction. We find ourselves wondering why not?  Isn’t it the purpose of a negotiated procurement to use discussions to correct deficiencies and facilitate the selection of the best value?

In similar deference to agency discretion, the GAO dismissed the protester’s assertion that it was unreasonable for the agency to conclude that its key person failed to meet the solicitation qualification requirements for the position. Metson argued that this individual’s qualifications not only met, but exceeded, the solicitation requirements.  In response the GAO stated that “In reviewing a protest of an agency’s proposal evaluation, it is not our role to reevaluate proposals. Rather, we will consider only whether the evaluation was reasonable and consistent with the terms of the solicitation and applicable procurement statutes and regulations.”

While the agency and the GAO may have ultimately ruled correctly under the particular facts of this case, the GAO’s reluctance to look behind an agency’s decision not to continue or reopen discussions, or not to look behind an agency’s proposal evaluation, means that it is virtually impossible to win a protest where the reasonable exercise of agency discretion is at issue.  In our opinion, the GAO would foster a much more even-handed application of the negotiated procurement source selection procedures if it did not defer so easily to agency discretion.

• Email This
• Print
• Comments
• Trackbacks

In a decision issued on July 24, 2007, Matter of Panacea Consulting, Inc., the GAO ruled that protest costs should be awarded to the protester because the GAO attorney had indicated, during an Alternative Dispute Resolution proceeding, that the protest would be sustained if a GAO decision was issued.  The protester alleged that the agency improperly gave disproportionate weight to price versus technical considerations in the source selections, and failed to document the basis for the numeric scores assigned to the submissions during its evaluation and source selection.   In response to the comments of the GAO attorney, the agency advised the GAO that it intended to take corrective action by reevaluating the submissions in a manner consistent with the terms of the solicitations, and that it also intended to prepare narrative materials in support of its evaluation.  The agency then conducted a reevaluation and made the same source selection it had made in the fist place.  

When a procuring agency takes corrective action in response to a protest, the GAO may recommend that the agency reimburse the protester its protest costs where, based on the circumstances of the case, the GAO determines that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing the protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief. Bid Protest Regulations, 4 C.F.R. sect. 21.8(e) (2007).  A protest is clearly meritorious when a reasonable agency inquiry into the protest allegations would show facts disclosing the absence of a defensible legal position.

The record showed that the agency had weighted the evaluation criteria differently during the evaluations than the manner stated in the solicitations.  It likewise should have been apparent to the agency that the evaluation records were legally inadequate for proper source selection decisions, since the record contained no information explaining the basis for the scoring of the submissions or the source selection decisions. Blue Rock Structures, Inc., B-293134, Feb. 6, 2004, 2004 CPD para. 63 at 5 (where agency fails to adequately document the basis for its source selection decision, it runs the risk that GAO may be unable to determine that the agency’s decision is reasonable).  The GAO therefore concluded that the protest grounds in question were clearly meritorious.

The agency’s assertion that reimbursement was not warranted because the reevaluation resulted in the same source selection decision was without merit. Where an agency has taken corrective action, the determinative considerations for the GAO in deciding whether costs should be reimbursed are whether the corrective action was unduly delayed (here, the agency does not argue that it was prompt, and we generally consider action to be unduly delayed where, as here, it is taken after the agency report due date), and whether the arguments raised were clearly meritorious. The fact that a reevaluation as part of corrective action resulted in the same source selection decision had no bearing on the GAO’s assessment.

• Email This
• Print
• Comments
• Trackbacks

In what we regard as a somewhat unusual decision by the GAO, given its reluctance to interfere with matters of agency discretion, the GAO has concluded that the Air Force failed to make reasonable efforts to ascertain whether an acquisition was suitable for an SDVOSBC set-aside.  The GAO ruled that a procuring agency is required to make reasonable efforts to ascertain whether an acquisition is suitable for a set-aside for service-disabled veteran-owned small business concerns (SDVOSBC) before it can proceed with a small business set-aside. Under the circumstances presented in a decision issued on March 28, 2007, MCS Portable Restroom Service, B-299291, the GAO concluded that the Air Force failed to make reasonable efforts to ascertain whether this acquisition was suitable for an SDVOSBC set-aside and the protest was sustained.

The GAO reiterated that, generally, a procurement set-aside determination is a matter of business judgment within the contracting officer’s discretion, which “our Office will not disturb absent a showing that it was unreasonable.” The GAO further commented that although the use of any particular method of assessing the availability of firms for a set-aside is not required, measures such as prior procurement history, market surveys, and advice from the agency’s small business specialist may all constitute adequate grounds for a contracting officer’s decision to set aside, or not to set aside, a procurement. The assessment must be based on sufficient evidence so as to establish its reasonableness.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks

As we have mentioned previously, the growing use of multiple award task order contracts in federal construction contracting, as can be seen in much of the disaster recovery work in New Orleans, is limiting the competitive opportunities for small and mid-sized construction contractors.  Unless a contractor is the recipient of one of the major task order contract awards, there is no opportunity for a contractor to compete for upcoming individual task orders and the contractor is effectively precluded from competing for potentially millions of dollars of work to be awarded over a period of years. In the past, when there were more single award contracts, if a contractor lost out to a competitor, there was always another solicitation on the horizon.  If a contractor fails to become one of those selected to compete under a multiple award task order contract, there may be no, or very little, work “waiting in the wings.”

It follows that it is important to monitor the decisions of the GAO and the courts to see what is being done to protect the rights of contractors, and we will continue to do so.  In a newly issued GAO decision, Palmetto GBA, LLC, B-299154, December 19, 2006, the Comptroller General stated that according to the legislative history of the Federal Acquisition Streamlining Act (FASA), task and delivery-order contracts were intended to encourage the use of multiple-award, rather than single-award contracts, in order to promote an ongoing competitive environment in which each awardee would be fairly considered for each order issued.  H.R. Conf. Rep. No. 103-712, at 178 (1994), reprinted in 1994 U.S.C.C.A.N. 2607, 2608; S. Rep. No.103258, at 15-16 (1994), reprinted in 1994 U.S.C.C.A.N. 2561, 2575-76. In this regard, the Federal Acquisition Regulation (FAR) requires agencies to provide all awardees “fair opportunity to be considered for each order exceeding $3,000 issued under multiple delivery-order contracts or multiple task-order contracts.”  FAR sect. 16.505(b)(1)(i).

An interesting aspect of the Palmetto case is that the GAO reiterated that a task or delivery order that precludes competition for future task or delivery orders for the duration of the contract performance period may constitute a “downselection.”  The GAO has recognized downselections in circumstances not only where all work under a contract will be foreclosed from future competition, but also where specific categories of work will be similarly foreclosed for the duration of the contract.  While the GAO did not find that “downselection” occurred in the Palmetto case, it is important for contractors to recognize that a task order award that eliminates competition for future work can be successfully protested.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks

A disappointed bidder (on an Invitation for Bids), or an offeror (on a Request for Proposals), has the option to file a protest to the agency, to the General Accountability Office (GAO), or to the United States Court of Federal Claims. It is not always easy to decide where, and whether, to file a protest and contractors need to be aware of the pitfalls. One thing is certain, it is not easy to win a protest and a great deal of deference is given to contracting officers by the GAO and by the Court of Federal Claims.  It is incumbent upon a contractor to be certain that the issue raised is not frivolous, and that prior decisions of the courts or the GAO have not already established the correctness of the government's position.

It has been my experience that if a protest involves agency policy, it is usually a good idea to file a protest with the agency to give the Contracting Officer the opportunity to take corrective action. (See FAR 33.103 for the rules on Protests to the Agency). If a protester is dissatisfied with the result of an agency protest, the protester is still permitted to take the protest to the GAO or to the United States Court of Federal Claims. As far as taking a protest directly to the GAO is concerned, unless prior GAO decisions have shown a likelihood that the GAO will agree with your position, a GAO protest is not usually a very satisfying experience. (See FAR 33.104 for the rules on Protests to the GAO, and also see the Bid Protest Regulations issued by the GAO).  (Another useful resource is the GAO's Descriptive Guide on Bid Protests).

The statistics made available by the GAO demonstrate how difficult it is for a protester to win. In the period from 2001 through 2005, 6,543 protests were filed (an average of about 1,300 protests per year).  See the 2005 GAO report to Congress. Of these, only 1,528 resulted in a decision and in 303 of the decided cases the protester’s position was sustained. The way the GAO sees it, this means that protesters experience a 20% success rate. Of course, 20% is not very encouraging and, in reality, the way that the GAO calculates the percentage of sustained protests is misleading. By simply comparing the number of “sustains” to the number of decided cases during the period, the GAO ignores the 5,000 cases that were not decided for one reason or another. Some of those cases were probably dismissed summarily by the GAO, others were withdrawn only to be re-filed in the Court of Claims, and some of the protesters may have simply “thrown in the towel” as a result of frustration with the process. In any event, if you compare the number of “sustains” to the number of cases filed (303 out of 6,543), the protester prevailed in less than 5% of the protests. Take your pick, 20% or 5%, neither one is very good. (In 2006, there have been 1,327 protests filed to date, and 72 have been sustained).  See the 2006 GAO report to Congress.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks