IS THE ENTIRE FEDERAL ACQUISITION REGULATION (FAR) INCORPORATED IN YOUR GOVERNMENT CONTRACT?

The Federal Acquisition Regulation (“FAR”) is found in Title 48 of the Code of Federal Regulations. It consists of 37 Chapters (Chapter 1, some 2,000+ pages, which applies to all agencies, and then various agency supplements plus the Cost Accounting Standards). In all, the FAR is thousands of pages long. Are all of the relevant parts of the FAR incorporated into your government contract? The simple answer is “NO,” but first a bit of background. A recent Court of Federal Claims Case, James M. Fogg Farms, Inc. v. United States, No. 17-188C (Fed. Cl. Sept. 27, 2017), considered a similar issue. The question in Fogg was whether federal statutes (specifically, an Agriculture Conservation Program in the Farm Bill, title 16 of the U.S. Code) was … Continue reading

SOLICITATIONS FOR REQUIREMENTS CONTRACT MUST INCLUDE REALISTIC ESTIMATED QUANTITIES, NOT JUST HISTORICAL DATA

In a recent decision overruling the Court of Federal Claims, the Federal Circuit upheld a contractor’s claim of negligent estimates in a requirements contract, where the agency provided historical data in the solicitation, but failed to include information on anticipated troop movements and a surge of equipment and material that would become part of the contract as the units departed. Agility Defense & Gov’t Services, Inc. v. United States, 847 F.3d 1345 (Fed. Cir. 2017). REQUIREMENTS CONTRACTS A requirements contract provides for filling all of the purchase requirements of designated Government activities for supplies or services during a specified contract period from one contractor, with deliveries or performance to be scheduled by placing orders with the contractor. Federal Acquisition Regulation (“FAR”) 16.503(a). The FAR states … Continue reading

DISMISSAL OF AN INCOMPLETE (IMPROPER) CLAIM OR APPEAL

A recent Armed Services Board of Contract Appeals (“ASBCA”) decision is a strong reminder that contractors must submit complete and proper claims, or they will be dismissed by either the Contracting Officer or a board or court, if appealed to one of those forums. Andrews Contracting Services, LLC, ASBCA No. 60808 (May 22, 2017). Andrews submitted to the Contracting Officer a “Request for Equitable Adjustment” for $292,797.51 in connection with its contract. The REA contained a certification required by the Defense Federal Acquisition Regulation Supplement (“DFARS”) 252.243-7702 where the contractor’s President certified that “the request is made in good faith and that the supporting data are accurate and complete to the best of my knowledge and belief.” The Contracting Officer denied the REA three months … Continue reading

AGENCY’S SHOCKING DISREGARD OF THE TRUTH AND MISCONDUCT AND THE EQUAL ACCESS TO JUSTICE ACT

In a precedent-setting case, the Court of Federal Claims found that there was a good reason to award more than the minimum $125 hourly rate for attorney fees under the Equal Access to Justice Act (“EAJA”). In Starry Associates, Inc. v. United States, (Fed. Cl. No. 16-44C), March 31, 2017, the court held that the numerous examples of agency misconduct during the procurement process as well as the “shocking disregard of the truth by the agency” warranted the application of a “special factor” award granting the protester the higher amount of actual attorney fees that were billed. The proceedings involved three protests at the Government Accountability Office (“GAO”) and one protest at the Court of Federal Claims, ultimately resulting in victory for Starry Associates. Starry … Continue reading

CONDUCT OF LITIGATION RESERVED TO DEPARTMENT OF JUSTICE

The Corps of Engineers learned the hard way that 28 U.S.C. § 516 means what it says, and that the Department of Justice has the right to conduct (and settle) litigation to which the United States is a party or is interested in. This section of the U.S. Code provides that: Except as otherwise authorized by law, the conduct of litigation in which the United States, an agency, or officer thereof is a party, or is interested, and securing evidence therefor, is reserved to officers of the Department of Justice, under the direction of the Attorney General. In U.S. Coating Specialties & Supplies, LLC, ASBCA No. 58145, 17-1 BCA ¶ 36710, the government sought to terminate U.S. Coating’s contract for default, and filed a motion … Continue reading

SEQUESTRATION: A DOZEN WAYS THE GOVERNMENT CAN REDUCE OR ELIMINATE YOUR CONTRACT

As of the last week in August 2017, there is no agreement in Washington, DC on a great budgetary trifecta: (1) a needed increase in the debt ceiling, which now stands at $19.86 trillion; (2) a budget for fiscal year 2018–the fiscal year that begins on October 1, 2017, without which the government will shut down; and (3) possible “sequestration,” or the automatic cancellation (cut) of agency budgets because of spending that exceeds statutory caps. Indeed, the Office of Management and Budget (“OMB”) Sequestration Report for Fiscal Year 2018, issued on August 18, 2017, states that “if the 2018 discretionary caps remain unchanged, [], if enacted, the actions to date by the House of Representatives would result in a sequestration of $72.4 billion in the … Continue reading

FOUR REASONS WHY SPECIFICATIONS TAKE PRECEDENCE OVER DRAWINGS

Most construction contractors understand that Federal Acquisition Regulation (“FAR”) 52.236-21, Specifications and Drawings for Construction, specifically states that “in case of difference between drawings and specifications, the specifications shall govern.” This clause is mandatory for use in fixed-price construction contracts over $150,000. FAR 36.521. A recent construction contract not only included FAR 52.236-21, but three other clauses that similarly stated that the specifications took precedence over the drawings. ATI TACOSE S.C.a R.L. (“TACOSE”), ASBCA Nos 59157, 59200, January 4, 2017. These clauses related to two claims for constructive changes by the government. The Navy awarded a contract to TACOSE to design and build a dormitory at Aviano Air Base in Italy. The solicitation did not include a finished design, but rather, a package setting forth … Continue reading

PRIME MAY VIOLATE OSTENSIBLE SUBCONTRACTOR RULE EVEN IF IT PERFORMS PRIMARY AND VITAL REQUIREMENTS OF CONTRACT

The Small Business Administration (“SBA”) size regulations include an “ostensible subcontractor” rule. This rule provides that when a subcontractor is actually performing the primary and vital requirements of the contract, or when the prime contractor is “unusually reliant” upon its subcontractor, the two firms are affiliated (and frequently are “not small”) for purposes of the procurement. 13 CFR § 121.103(h)(4). This rule is designed to prevent “false fronts”—situations where large firms form relationships with small firms to evade SBA’s size requirements. To determine if a prime-sub relationship creates an ostensible subcontractor, all aspects of the relationship are examined. In a recent case, Charitar Realty, SBA No. SIZ-5806 (Jan. 25, 2017), the SBA found a violation of the ostensible subcontractor rule where a prime contractor was … Continue reading

WHO IS THE MANUFACTURER IN A SMALL BUSINESS SET-ASIDE?

When a manufacturing or supply contract is set aside for small businesses, the Small Business Administration (“SBA”) size regulations require that the prime contractor either be the manufacturer of the end item being procured (and the end item must be manufactured or produced in the United States); or must comply with certain nonmanufacturer exceptions. 13 CFR § 121.406. A recent Size Appeal at the SBA Office of Hearings and Appeals (“OHA”) considered what type of actions by a company qualifies it as a “manufacturer.” Size Appeal of MPC Containment Sys., LLC and GTA Containers, Inc., SBA No. SIZ-5802, Jan 11, 2017. The Defense Logistics Agency was procuring collapsible fuel tanks, and set aside the procurement for small businesses in a North American Industry Classification System … Continue reading

ONE TRUTH ABOUT THE TRUTH IN NEGOTIATIONS ACT

The Truth in Negotiations Act (“TINA”) requires that contractors furnish cost or pricing data before an agreement on price for most negotiated procurements of more than $750,000. Cost or pricing data mean all facts that a prudent buyer or seller would reasonably expect to significantly affect price negotiations, and that were available at the time the contract price was agreed to. This data (which is factual and verifiable, such as vendor quotes, nonrecurring costs, unit cost trends—but not estimates or projections) must be certified by the contractor as “accurate, current and complete.” The government uses the data to determine price reasonableness, and you can easily see how a contract price that relied on a subcontractor quote could be significantly reduced, based on the contractor’s furnishing … Continue reading