Claims Updates
- The Civilian Board of Contract Appeals affirmed that the Contract Dispute Act’s (CDA) 90-day timeliness deadline for challenging a Contracting Officer’s Final Decision (COFD) was jurisdictional and dismissed the Yerington Paiute Tribe’s untimely appeal for lack of jurisdiction.
- On February 21, 2023, the tribe received the COFD informing it that the agency would impose sanctions for the failure to comply with certain annual audit requirements. The tribe failed to appeal the COFD to the board within the CDA’s 90-day deadline, but argued before the board that the filing deadline was not jurisdictional and that equitable tolling principles should permit its appeal.
- The board acknowledged that recent Supreme Court and Federal Circuit decisions have raised questions on whether the CDA’s 90-day timeliness requirement is jurisdictional; however, the board concluded that its precedent holding that the 90-day timeliness rule was jurisdictional was still controlling and dismissed the tribe’s appeal for lack of jurisdiction.
This case serves as an important reminder that despite recent developments at the Supreme Court and Federal Circuit suggesting the CDA’s timeliness rules may not be jurisdictional, the CBCA has not yet adopted this view and continues to treat the 90-day deadline for appealing COFDs as a jurisdictional requirement. Contractors, regardless of forum, should remain vigilant of when the CDA’s appeal timeline is triggered.
- The Court of Federal Claims denied Sikorsky’s “self-styled motion to dismiss,” finding that this was a procedurally improper vehicle for plaintiff to raise its discovery-related concerns regarding information and material that fell outside the scope of the contracting officer’s decision.
- However, the court noted “the government may not simply sidestep the question of whether the requested discovery is relevant in accordance with Rule 26(b), on the basis that plaintiff’s motion has been improperly brought as [a] motion to dismiss.”
- Thus, when characterized as a motion for a protective order against the government’s discovery requests, the court did find that a protective order was warranted. Here, while the government sought to expand the scope of discovery beyond the projects evaluated under the COFD, the court limited the scope of the government’s discovery to information relevant to the S-92 Gearbox and H-60 Blackhawk-related improvement projects at issue before the court.
- Judge Lettow prohibited further expansion because the other projects would raise different operative facts and were not relevant to any party’s claim or defense in this particular case.
Sikorsky is a helpful demonstration of how the court interprets claims arising out of a COFD and shows that will limit discovery consistent with Rule 26.
Bid Protest Updates
- Court of Federal Claims Judge Solomson issued an important reminder to contractors about the potential pitfalls of hiring former government officials.
- The Department of the Navy eliminated Raytheon from a procurement for the development of countermeasures against radar-guided missiles for the F/A-18 fighter jet based on a determination that Raytheon’s employment of a retired Navy technical expert gave rise to an appearance of impropriety.
- Raytheon protested, arguing that the Navy’s material factual findings supporting its decision were not supported by the administrative record, and that the decision to eliminate Raytheon did not meet the standard set in NKF Engineering, Inc., v. United States, where the Federal Circuit held that the government may eliminate an offeror from procurement based on the mere appearance of impropriety.
- Judge Solomson reaffirmed that under the NKF standard, the government is not required to find that an alleged impropriety had an actual or even likely impact on the procurement, or even that the outcome of the procurement suggests that it was tainted or unfair, and thus denied Raytheon’s protest.
Raytheon Company reaffirms that contracting officers can legally disqualify offerors when they rationally find even a mere aroma of impropriety. This serves as an important reminder to contractors to remain cautious when hiring former government officials.
- GAO sustained a protest challenging that the protester/previous awardee, Pernix Federal, was ineligible for award for failing to submit a proposal that met the requirements of the solicitation.
- The Department of State (DOS) conducted a three-phase procurement for the design and construction of a compound in Turkey. The solicitation required offerors to submit statements of qualifications certifying their eligibility under the Omnibus Diplomatic Security and Antiterrorism Act of 1986, as amended (Security Act), which stipulates that only a “United States person” and a “qualified joint venture person” may bid on a diplomatic design/construction project when sufficient competition exists. The regulations implementing the Security Act permits de facto joint ventures (i.e., one without a formal agreement) to qualify.
- The solicitation also required entities seeking to leverage the experience or financial resources of any other legally dependent entity, including subsidiaries, to establish a joint venture.
- During phase 1, Pernix Federal, LLC submitted a prequalification letter certifying that it had entered into a de facto joint venture with Pernix Federal, Inc., and a sister company, BE&K Building Group. During phase 2, Pernix Federal, LLC submitted a letter to DOS stating that its performance team was comprised of Pernix Federal, LLC and another company, HOK.
- DOS initially awarded the contract to Pernix Federal, LLC, but after taking corrective action, DOS determined that Pernix Federal, LLC was ineligible for award as a stand-alone entity because it was not the same entity that was prequalified in the first two phases of the procurement. DOS also stated that the Pernix Federal joint venture was not registered in SAM at the time of the phase 3 proposal submission, which further rendered Pernix ineligible for award.
- GAO sustained Pernix’s protest challenging these determinations, finding first “that where a company chooses to utilize a de facto joint venture to qualify as a United States person in Security Act procurements, it can prequalify as a de facto joint venture and submit any subsequent responses from a stand-alone entity, i.e., the offering entity, and still be considered the same entity that was prequalified.” Here, Pernix Federal, LLC was the same prequalified entity—i.e., Pernix’s de facto joint venture—that submitted the phase 2 submission and phase 3 proposal.
- GAO also considered Pernix’s protest with respect to the solicitation’s SAM registration requirement—despite noting that it was untimely—because it presented a rare “significant issue” that warranted a merits decision. GAO sustained the protest because the agency could not reasonably show how a de facto joint venture could comply with the requirement to be registered in SAM.
This decision reflects that issues involving the identify of an offeror are often nuanced, and contractors should maintain awareness of the entities involved in a proposal.
MVM, Inc., B-421788.3 (March 5, 2024)
- In a post-award protest challenging the award of a contract for transportation of unaccompanied children in the government’s custody, GAO sustained on two bases.
- First, GAO found that the agency’s evaluation of proposed key personnel was unreasonable and not adequately documented where the awardee’s key personnel did not demonstrate the requisite years of experience as required by the solicitation, and the evaluators’ worksheets contained identical language that failed to document any consideration of the resumes.
- Second, GAO sustained a protest that the agency failed to consider whether the awardee was a responsible offeror notwithstanding a False Claims Act (FCA) settlement between an affiliate of the awardee and the Department of Justice.
- The protester raised the FCA settlement and a class action suit against the awardee in a prior protest, but the contracting officer’s responsibility determination failed to document any consideration of the FCA settlement despite it pertaining to allegations of fraud.
- In the absence of any consideration by the contracting officer as to whether known allegations of fraud against an affiliate affected the awardee’s responsibility, GAO concluded that the contracting officer failed to reasonably consider information that was known or reasonably should have been known that, by its nature, would be expected to have a strong bearing on whether the awardee should be found responsible.
Although GAO generally will not consider a protest challenging an agency’s affirmative determination of an offeror’s responsibility, it will, however, review such a challenge where the protester presents specific evidence that the contracting officer may have ignored information that, by its nature, would be expected to have a strong bearing on whether the awardee should be found responsible.
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