Government Contracts Legal Forum : Government Contracts Lawyers & Attorneys for Litigation & Counseling

On January 24, 2011, the FAR Council issued an interim rule to implement a congressional mandate that the public must have access to all information (excluding past performance reviews) in the Federal Awardee Performance and Integrity Information System ("FAPIIS"). FAPIIS was created in 2010 as a one-stop shop for contracting officers to review information about prospective contractors' business ethics, integrity, and performance. Click here for more information about FAPIIS.

After April 15, 2011, the public will have access to contractor-provided information about criminal, civil, and administrative proceedings, as well as government-provided information about contract terminations for default or cause and suspension and debarment. The new clause states that requests to review the information posted in FAPIIS before April 15, 2011, will be subject to the Freedom of Information Act process.

As to new contracts, contracting officers will be required to insert the new FAR clause in solicitations. As to existing contracts, contracting officers will be required to bilaterally modify existing contracts (including indefinite-delivery indefinite-quantity contracts) that contain the FAR clause 52.209-8.  If the contracting officer is unable to negotiate this modification prior to April 15, 2011, the contracting officer will be required to obtain approval at least one level above the contracting officer to negotiate an alternate resolution.

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On January 12, 2011, Crowell & Moring’s government contracts group hosted its first webinar of the new year. The theme of the webinar was "What Will the New Year Bring? Top Headlines, Headaches, and Legal Developments for Government Contractors to Watch in 2011."  If you missed it, you can watch the replay by clicking here.

Our team of government contracts experts offered forecasts and predictions about the issues that will be making headlines this year. We will be watching things closely to see if our predictions are accurate!
 

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On January 7, 2011, President Obama signed the National Defense Authorization Act for Fiscal Year 2011, which, among other things, extends the Government Accountability Office’s (“GAO”) protest jurisdiction over certain Department of Defense (“DoD”) task and delivery orders through September 30, 2016.  However, absent congressional action, GAO’s jurisdiction over protests of task and delivery orders under civilian agency procurements will lapse on May 27, 2011 (unless there is an allegation that the order is outside the scope of the underlying ID/IQ contract).

The 2008 National Defense Authorization Act, Pub. L. No. 110-181, established supplemental GAO protest authority for task and delivery orders over $10 million.  Section 843 of that Act contained dual conforming statutes in Title 10 (controlling DoD procurements) and Title 41 (controlling civilian agency procurements) of the U.S. Code.  Those parallel clauses contained a sunset provision, such that this supplemental protest authority would expire on May 27, 2011 (“this subsection shall be in effect for three years, beginning on the date that is 120 days after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2008.”). 

Section 825 of the NDAA for FY2011 extends until September 30, 2016, GAO’s supplemental protest authority over DoD task and delivery order procurements in excess of $10 million.  However, because Section 825 only amends Title 10 (but not Title 41), GAO’s supplemental jurisdiction over protests regarding task and delivery order order procurements for civilian agencies in excess of $10 million lapses on May 27, 2011.

The legislative history does not explain any policy rationale for this incongruity, and we are not aware of any reason to distinguish DoD from civilian agency procurements for these purposes.  It is possible that subsequent legislation will extend the sunset date for civilian agencies.  If not, some interesting questions may arise as the expiration of GAO’s jurisdiction approaches.  For example, if a protest is filed before the sunset date, will GAO have jurisdiction to decide that protest and issue a recommendation even if it is unable to do so before the sunset date? 

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With billions of dollars at stake in one procurement alone, or the future viability of a company hanging in the balance of a single contract award, federal Government procurements are highly competitive. And, as these procurements have been increasingly the subject of bid protests – which can alter both the terms of the solicitation or the outcome of the evaluation – contractors simply cannot afford to be ignorant of the bid protest strategies, process, and procedures. Did you realize that this right to protest was put in place to give all offerors an opportunity to ensure a fair and objective chance at competing for and winning government business? Did you know that protests are not just for large business and lawyers – they are important for all contractors seeking to do business with the government? And, most importantly, did you know that if you aren’t aware of the procurement rules and your own rights to challenge, you could lose your ability to protest?

Because of the significant role bid protests play in your company’s business as a government contractor, you might be interested in reading the 2010-2011 edition primer on bid protests by Crowell & Moring’s own contributing editors, Partner Amy Laderberg O’Sullivan and Counsel Puja Satiani. This book explains the key advance-planning, decision-making, litigation, and litigation avoidance practice pointers for bid protests before an agency, the U.S. Government Accountability Office (GAO), and the U.S. Court of Federal Claims.  It also offers guidance for newcomers on the fundamentals of where and how to protest and provides information on substantive developments for seasoned practitioners. Before filing a protest, the book explains:

• How to maximize the information obtained during a debriefing;
• Considerations that must be weighed when deciding whether to protest; and
• Advantages and disadvantages of the three forums.

The book also explains the full lifecycle of a protest and the related procedural requirements, including:

• Jurisdictional issues such as timeliness traps and standing concerns;
• Protective orders and associated pitfalls;
• Development of a protest, such as shaping the scope of the agency record;
• The standard of review applied by the adjudicator;
• Potential outcomes, including corrective action, withdrawal, or decision, and the types of relief available; and
• Options available after an unfavorable decision.

The book is available from West Publishing at http://west.thomson.com/productdetail/160715/40769688/productdetail.aspx.  . Using the book as a course manual, Amy and Puja also teach a full day seminar on bid protests for Federal Publications. Details and on-line registration for the seminar are available at: http://www.fedpubseminars.com/Basics/Government-Contracts-Bid-Protests-Practice-Procedure-and-Strategy/.

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The United States has intervened in yet another False Claims Act suit against GSA Schedule contractors alleging violations of the Trade Agreements Act. On November 24, 2010, the United States filed its Complaint in Intervention in U.S. ex rel. Navarro v. Divine Imaging, Inc. et al.  The complaint alleges that four different office supply companies with Schedule 75 contracts with GSA offered for sale and actually sold products that did not comply with the TAA. Unlike other recent False Claims Act cases against GSA Schedule contractors involving alleged TAA violations, this complaint appears to have evidence that the Government did, indeed, purchase non-compliant products. Earlier cases, such as the Folliard matter, were dismissed due to lack of evidence that the government actually purchased the non-compliant products listed for sale on the contractors’ Schedule contracts.

The Navarro case was initially filed as a qui tam action by Vanessa Navarro against over 50 office supply companies. The Government’s complaint in intervention, filed against only 4 of the original 50 defendants, does not provide any insight into Ms. Navarro’s relationship, if any, with the defendants. Perhaps she is a current or former employee of one of the companies, or works for a competitor and possesses industry-specific information about the origin of the defendants’ products, or perhaps she has no relationship with the defendants and simply conducted some research of publicly available information to develop her claims. The important point to keep in mind as a GSA Schedule contractor is that your price list, which identifies the products and services for sale, is usually publicly available on GSA’s website, so anyone – including a competitor or a member of the general public – can develop information from your price list and other public sources to bring an action alleging non-compliance with the Trade Agreements Act.

It is vitally important for GSA Schedule contractors to ensure, both at the start of contract performance and on a regular basis throughout the life of the contract, that items offered for sale to the government are compliant with the Trade Agreements Act. Conducting regular and on-going due diligence on the country of origin of products offered for sale on a GSA Schedule contract will go a long way toward protecting the contractor from a viable False Claims Act allegation.
 

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On December 29, 2010, DoD issued a final amendment to the Defense Federal Acquisition Regulation Supplement (“DFARS”) relating to organizational conflicts of interest (“OCI”) in major defense acquisition programs. The highlights of that rule are summarized here. One of the most interesting issues is what the rule does NOT cover.

The final rule is significantly narrower than the approach that DoD had outlined in April, 2010, when it issued a proposed rule. The proposed rule set forth a comprehensive approach, which would have been applicable to virtually all DoD procurements. DoD explained that finalizing the comprehensive approach in the proposed rule would have caused delay and possible confusion, and decided to limit the final rule. The proposed rule raised some important issues that have been left open to be dealt with in a proposed OCI rule to be issued by the FAR Council that will be effective government-wide and is expected to be issued soon. Examples of these issues include:

• Definition of OCIs
• Types of OCIs
• Required timing of OCI analysis
• Disclosure of information from offerors to assist contracting officers in identifying OCIs
• Guidance about specific mitigation techniques
• Waiver
 

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