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In a recently unsealed decision, Judge Damich of the Court of Federal Claims sustained a pre-award protest by The Electronic On-Ramp, Inc. (“EOR”), finding that the Defense Intelligence Agency (“DIA”) improperly rejected EOR’s bid as late where, although an electronic copy was timely received and the paper copy arrived at the base where DIA is located prior to the submission deadline, transfer of physical possession did not occur until after the deadline for receipt of proposals.

In this competition, the RFP required offerors to deliver an electronic copy of their proposals by e-mail as well as a paper copy by hand delivery to the DIA office on Joint Base Anacostia-Bolling. An hour before the deadline for submissions, EOR submitted its proposal to DIA via e-mail and sent a courier to deliver the paper proposal to DIA’s office on base. Although the courier arrived prior to the submission deadline, he was barred from entrance by base security as his military id was expired. EOR contacted the Contract Specialist who agreed to send someone to retrieve the paper proposal. Due to a miscommunication as to the location of the courier, the actual transfer of possession of the proposal to the Contracting Officer did not occur until after the deadline for submission. As such, the Contracting Officer rejected EOR’s proposal as late.

In his decision, Judge Damich analyzed the language of FAR 15-208 and 52.215-1 as well as the common law government misdirection exception recognized by the Court to determine that DIA improperly rejected EOR’s proposal. Based on the facts that EOR’s proposal was properly submitted via e-mail, the courier arrived prior to the deadline, and DIA acknowledged that the courier was present and it had timely received the e-mail version, Judge Damich found that DIA should have considered this a timely submitted proposal.

In rejecting the finding of the Contracting Officer, Damich noted that the focus should not be on the delivery of the paper copy but instead the accompanying facts including whether the delay actually benefitted the offeror. He stated that “[a]lthough submission deadlines typically are strictly enforced, the late proposal rule is not a draconian provision,” citing the explicit exceptions provided for in FAR 15.208. Specifically, Judge Damich found that EOR’s paper proposal was “under the government’s control” prior to the deadline for submissions, rejecting the argument that the Government must have physical possession of the proposal to meet this exception. As such, the Court found that DIA should have waived the late delivery as a minor informality.

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In September, I wrote about the Court of Federal Claims’ decision in MED Trends, Inc. v. United States, No. 11-420 (Fed. Cl. Sept. 13, 2011), where the Court concluded that it now enjoys jurisdiction over civilian task and delivery order procurements of any dollar value. Prior to this ruling, pursuant to 41 U.S.C. § 4106(f), protests of civilian task and delivery order procurements could be brought in the Court of Federal Claims only where the protest was based “on the ground that the order increases the scope, period or maximum value of the contract under which the order is issued.” § 4106(f)(1)(A). Under 41 U.S.C. § 4106(f), exclusive jurisdiction of all other task order protests rested with the U.S. Government Accountability Office (“GAO”). With the sunset of the task order jurisdictional provision of § 4106(f)(3), the Court confronted the question of whether their jurisdiction would regress to its pre-2008 Federal Acquisition Streamlining Act of 1994 (“FASA”) jurisdiction or whether it would follow the GAO’s conclusion that the sunset effectively reverted jurisdiction to the pre-FASA, Competition in Contracting Act of 1984 (“CICA”) jurisdiction, which made no distinction between contracts versus task or delivery orders.

Judge Bruggink concluded that the court’s jurisdiction defaulted to its general jurisdiction over bid protests under the Tucker Act (28 U.S.C, § 1491(b)(1)), which does not distinguish between protests of task order procurements and contract awards, and contains no language precluding the adjudication of protests of task order procurements. This meant that the Court of Federal Claims now enjoys jurisdiction over civilian task and delivery orders of any dollar amount, and under any otherwise cognizable basis of protest.  However, the Court denied MED Trends’ protest.

On August 24, 2011, MED Trends filed an appeal to the Federal Circuit of Judge Bruggink’s decision, which ultimately found for the Government on the merits. On October 24, 2011, the U.S. Department of Justice filed a cross-appeal in the case (No. 2011-5128). Although the documents are sealed, it seemly likely that the basis of the Government’s appeal is the determination by the Court of Federal Claims that the Court entertained jurisdiction over this procurement. As Judge Bruggink stated in his opinion, “There is no question that, had this protest been brought one month earlier, [prior to the sunset,] the court would not have been able to exercise jurisdiction.”  Notably, having won on the merits, the Department of Justice could not have appealed this decision had MED Trends not opted to file its own appeal first.

It will be interesting to see in the coming months whether the Federal Circuit accepts the Court of Federal Claims (and the GAO’s) reading of § 4106(f)(3). Because Congress has still not amended Title 41 to extend the 2008 NDAA grant of jurisdiction (as it has for Department of Defense task and delivery order procurements), the possibility exists that, if the Federal Circuit disagrees with the Court’s reading of its jurisdiction, the Federal Circuit and GAO could be operating under different interpretations of the same statute. It is likely though that, should the Federal Circuit interpret the sunset clause differently, GAO will modify its practice to conform to the Federal Circuit’s reading of the statute.

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In June I wrote about GAO’s conclusion that its protest jurisdiction over agency task and delivery order procurements will not only continue after the May 27, 2011 sunset date, but will expand. At that time, I noted that, to the extent the Court of Federal Claims agreed with GAO’s interpretation of the 41 U.S.C. § 4106(f)(3) (formerly codified at 41 U.S.C § 253j(e)) sunset clause, the Court’s existing jurisdiction over bid protests under the Tucker Act would not prevent it from hearing protests of civilian agency task and delivery order procurements. Three months have passed, and legislation to extend the GAO’s protest jurisdiction over these procurements remains stalled in Congress, but the Court of Federal Claims has spoken and has agreed that the sunset provision means that it is free to hear all protests of civilian task and delivery order procurements under its Tucker Act jurisdiction.

Under 41 U.S.C. § 4106(f), protests of civilian task or delivery order procurements may be brought in both the Court of Federal Claims and the GAO where the protest is based “on the ground that the order increases the scope, period or maximum value of the contract under which the order is issued.” § 4106(f)(1)(A). Since the 2008 amendments to the Federal Acquisition Streamlining Act (“FASA”), GAO has additionally enjoyed exclusive jurisdiction over any protests of orders in excess of $10 million. 10 U.S.C. § 2304c(e)(4) (Department of Defense (“DoD”)); 41 U.S.C. § 4106(f)(1)(B) (civilian agency).  The 2008 amended clauses included sunset provisions with a date of May 27, 2011. While the FY 2011 NDAA extended Title 10’s grant of jurisdiction to September 30, 2016, no similar extension has been passed to extend Title 41 jurisdiction past the May 27 sunset date.

In June, in Technatomy Corp., B-405140, June 14, 2011, GAO ruled that the sunset provision in 41 U.S.C. § 4106(f) did not remove GAO’s jurisdiction over civilian agency order procurements. Instead, GAO ruled that all of 41 U.S.C. § 4106(f) sunsetted, thereby eliminating any restrictions on GAO’s civilian agency task order jurisdiction, effectively reverting back to its pre-FASA, Competition in Contracting Act of 1984 (“CICA”) jurisdiction. Under CICA, GAO’s authority to hear bid protests made no distinction between contracts versus task or delivery orders, and did not require such orders to exceed $10 million. Additionally, under CICA, jurisdiction of these protests was not exclusively limited to GAO.  By announcing a reversion to this CICA jurisdiction, this decision meant that GAO asserted that it could hear a challenge over any civilian task or delivery order award, regardless of dollar figure, and that GAO’s jurisdiction over these protests was no longer exclusive.

At that time, it was unclear whether the Court of Federal Claims would agree with GAO’s interpretation of the § 4106(f) sunset clause. Earlier this week, in MED Trends, Inc. v. United States, No. 11-420 (Fed. Cl. Sept. 13, 2011), Judge Bruggink addressed this in the affirmative. 

On June 24, 2011, MED Trends challenged the award of a task order for information technology services issued by the DOL, acting through OSHA under the VETS GWAC vehicle. Shortly thereafter, the government moved to dismiss the protest asserting that the court lacked jurisdiction over this task order. Although the government conceded that a literal reading of the sunset provision meant that all of § 4106(f) was vacated, it argued that the legislative history demonstrated that Congress intended the sunset provision to repeal only the portion of that section granting jurisdiction to GAO over any protest of a FASA task order above $10,000,000 – the specific addition from the 2008 amendment. Based on a strict reading of the statute, Judge Bruggink disagreed, reading the term “subsection” to mean the entire division (f) of § 4106. In the absence of § 4106(f), Judge Bruggink concluded, the court’s jurisdiction defaulted to its general jurisdiction over bid protests under the Tucker Act (28 U.S.C, § 1491(b)(1)).  Unlike CICA, the Tucker Act does not distinguish between protests of task order procurements and contract awards and contains no language precluding the adjudication of protests of task order procurements.

Under this ruling, the Court of Federal Claims now enjoys jurisdiction over civilian task and delivery orders of any dollar amount and under any theory of law. Notably, since the previously parallel jurisdiction over DoD task and delivery orders under Title 10 was extended on January 7, 2011 to run through September 30, 2016, this means that – for the time being – the Court, with GAO, will have jurisdiction over all civilian task and delivery order procurements but will lack jurisdiction over DoD task order procurements protests not challenging the scope, period or value of the contract.

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With legislation to extend the GAO’s protest jurisdiction over civilian agency task and delivery order procurements stalled in Congress, GAO has concluded that its protest jurisdiction over those procurements will not only continue after the May 27, 2011 sunset date, but will expand.  The Federal Acquisition Streamlining Act (“FASA”) limited GAO’s protest jurisdiction to protests on the “ground that the order increases the scope, period or maximum value of the contract under which the order is issued” or involving orders in excess of $10 million. 10 U.S.C. § 2304c(e)(4) (Department of Defense (“DoD”)); 41 U.S.C. § 253j(e) (civilian agency). Since the 2008 amendments to FASA, GAO has enjoyed exclusive jurisdiction over protests of both DoD and civilian agency task and delivery orders. The amended clauses included sunset provisions with a date of May 27, 2011. While the FY 2011 NDAA extended Title 10’s grant of jurisdiction to September 30, 2016, no similar extension was passed to extend Title 41 jurisdiction past the May 27 sunset date.

On May 23, 2011, Technatomy Corporation protested the award of a task order issued by DISA under a GSA ID/IQ contract. Shortly thereafter, DISA filed a Motion to Dismiss arguing that GAO’s jurisdiction over civilian task order procurements sunsetted by operation of law on May 27, 2011, citing 41 U.S.C § 253j(e).

GAO denied that motion, ruling that the sunset provisions in 41 U.S.C. § 253j(e) jurisdiction did not remove GAO’s jurisdiction over civilian agency order procurements. Technatomy Corp., B-405140, June 14, 2011. Instead, GAO ruled that all of 41 U.S.C. § 253j(e) sunsetted, thereby eliminating any restrictions on GAO’s civilian agency task order jurisdiction, effectively reverting back to its pre-FASA, Competition in Contracting Act of 1984 (“CICA”) jurisdiction. Under CICA, GAO’s authority to hear bid protests made no distinction between contracts versus task or delivery orders, and did not require such orders to exceed $10 million. Additionally, under CICA, jurisdiction of these protests was not exclusively limited to GAO. By announcing a reversion to this CICA jurisdiction, the Technatomy decision means that GAO now asserts that it can hear a challenge over any civilian task or delivery order award, regardless of dollar figure, and that GAO’s jurisdiction over these protests is no longer exclusive.

Notably, to the extent that the Court of Federal Claims agrees with GAO’s interpretation of the § 253j(e) sunset clause, the Court’s existing jurisdiction over bid protests under the Tucker Act would not prevent it from hearing protests of civilian agency task and delivery order procurements.

Also of note in this decision is GAO’s analysis of whether the protest of this DISA task order award decision properly falls under Title 10 or Title 41 jurisdiction. The underlying contract vehicle, GSA VETS, was with GSA, a civilian agency. However, the task order competition was conducted by DISA, a DoD agency. Thus, there was a question of whether GAO’s jurisdiction over the protested task order award was authorized under Title 10 or Title 41. GAO’s interpreted the statutory language of Title 41 §§ 3101(c), 4103, to dictate that jurisdiction over task or delivery orders is determined by the agency issuing the underlying contract. As GSA issued the underlying contract, jurisdiction over the task order was authorized by Title 41, not Title 10.

With this ruling, GAO has potentially opened the door to new protests previously barred by the strict jurisdictional limits of § 253j(e), such as task order awards less than $10 million. Additionally, since the previously parallel jurisdiction over DoD task and delivery orders under Title 10 was extended on January 7, 2011 to run through September 30, 2016, this means that – for the time being – GAO will have broader jurisdiction over civilian task and delivery order procurements than they have over DoD task order procurements. It will be interesting to see if GAO’s decision spurs Congress to reinstate § 253j(e), but in the meantime GAO, and potentially the Court of Federal Claims, may entertain a broader protest jurisdiction over civilian task and delivery order procurements.

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Lost in the current political fight over the federal budget is the reality that a government shutdown may have consequences for civil litigation pending in the federal courts. If federal government attorneys are included in the approximately 800,000 staffers deemed non-essential, they will be banned from using email, accessing their Blackberrys, and doing any work on cases under the Anti-Deficiency Act. A spokesman for the Justice Department has stated that in U.S. Attorney offices, while “all criminal litigation will continue without interruption,” in the event of a shutdown, the department will be forced “to stop or significantly curtail” other activities including most civil litigation.

Despite the limitations on Department of Justice attorneys, the federal courts have stated their intention to continue with business as usual.  The Administrative Office of the U.S. Courts says that the Judiciary will use non-appropriated funds to keep the courts running for up to two weeks. According to David Sellers, spokesman for the Office, trials in federal courts will continue and litigants will be able to file lawsuits despite the likely furloughs. Thus, it appears that federal district courts and courts of appeals will continue to function at full staff and without interruption.

The Court of Federal Claims – where every case includes the U.S. government as a litigant – also plans to continue operations during the shutdown. Moreover, it appears the Court may not be very sympathetic to the Justice Department’s staffing limitations. Chief Judge Hewitt issued a statement that the court “does not expect to issue continuances based on the lapse or anticipated lapse of appropriated funds and will adhere to schedules currently in effect.” 

No formal announcements have been made by the Armed Services Board of Contract Appeals (“ASBCA”) or the Civilian Board of Contract Appeals (“CBCA”), but current expectations are that the ABSCA will close if there is a furlough, while the CBCA will continue to operate as normal. An ABSCA shutdown may lead to delays in proceedings before that Board although, under the rules, contractors should still be able to file notices of appeal via mail to satisfy the ninety day deadline set by the Contract Disputes Act.

The Government Accountability Office also plans to shut down for the duration of any work stoppage.

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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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