ANOTHER SAD STORY OF MISPLACED RELIANCE ON A CONTRACT SPECIALIST AND IMPROPER EXERCISE OF OPTIONS






This blog has frequently discussed cases supporting the strong principle that the federal government has given the authority to enter into and modify contracts to only a limited class of government employees: namely, contracting officers. Federal Acquisition Regulation (“FAR”) 1.601(a). This section grants to agency heads the authority to contract for supplies and services and requires that “[c]ontracts may be entered into and signed on behalf of the Government only by contracting officers”. Also note that FAR 43.102 states that “Only contracting officers acting within the scope of their authority are empowered to execute contract modifications on behalf of the Government.” Other Government personnel are prohibited from executing contract modifications. Id. See also Winter v. Cath-dr/Balti Joint Venture, 497 F.3d 1339, 1344 (Fed. Cir. 2007). … Continue reading

Afterthoughts: Evaluating Cost & Price Realism






By Nicole R. Best On February 23, 2017, Professor Ralph Nash and Tim Sullivan hosted a virtual classroom on the topic of Evaluating Cost and Price Realism. Following the virtual classroom, I interviewed Professor Nash to ask questions related to the discussion during the training. Why does the government, as a buyer, care about cost and price realism? Those are two different things. Cost realism is important because when we are running a competition for cost reimbursement contracts, we don’t want companies to win by proposing an estimate that is unreasonably low. If the government awards at an estimate that is low and the contractor runs out of money on the contract but hasn’t finished the job, either (1) you won’t be able get money … Continue reading

Afterthoughts: Discussions versus Clarifications






By Nicole R. Best On March 30, 2017, Professor Ralph Nash and Tim Sullivan hosted a virtual classroom on the topic of Clarifications versus Discussions during negotiated procurements. Following the virtual classroom, I interviewed Professor Nash to ask questions related to the discussion during the training. To some extent a theme of the webinar was a discussion of the narrowing scope of what constitutes a clarification during the negotiated procurement source selection process. What exchange currently constitutes a clarification and, as a practical matter, do you think clarifications still have a significant and useful role in the negotiated procurement process? First, the narrowness of the definition is to some extent in the vagueness of the language. If you look at FAR 15.306(a) it says “Clarifications … Continue reading

INCORPORATION BY REFERENCE






Black’s Law Dictionary (5th Ed. 1979) defines “incorporation by reference” as the “method of making one document …become a part of another separate document by referring to the former in the latter, and declaring that the former shall be taken and considered as a part of the latter the same as if it were fully set out therein.” Agencies, which are the writers of government contracts, would be hard pressed to draft contracts without this artifice of language, and government contractors must be careful to understand its implications. A misuse of incorporation by reference was explained in a bid protest, IBM Corp. v. United States, 119 Fed.Cl. 145 (2014). The Federal Acquisition Regulation (“FAR”) and Incorporation by Reference Almost every government contract incorporates contract clauses … Continue reading

GAO APPROVES NEW BEST VALUE METHOD: HIGHEST TECHNICALLY RATED WITH FAIR AND REASONABLE PRICE; COURT OF FEDERAL CLAIMS AGREES






The Government Accountability Office (“GAO”) recently deemed as permissible the use of the “highest technically rated offerors with a fair and reasonable price” evaluation scheme in order to achieve best value. Sevatec, Inc. et al., B-413559.3 et al, Jan. 11, 2017. In a preceding case, the Court of Federal Claims opined that a similar evaluation methodology, with no tradeoff of cost and technical factors, complied with FAR 15.101. Octo Consulting Group, Inc. v. United States, 117 Fed Cl. 334 (2014). Sevatec concerned the Alliant 2 procurement by the General Services Administration (“GSA”), a multiple award, indefinite quantity set of contracts for information technology services. The RFP provided that GSA would select 60 awardees using a “highest technically rated with a fair and reasonable price” evaluation … Continue reading

DEPARTMENT OF JUSTICE EVALUATION OF CORPORATE COMPLIANCE PROGRAMS






In early February 2017, the Fraud Section of the Department of Justice (“DOJ”) Criminal Division issued an eight page paper on how DOJ evaluates corporate compliance programs. Those programs are one of the factors used by DOJ in conducting investigations of corporations, determining whether to bring charges and negotiating pleas and other agreements. Although DOJ does not use any rigid formula to assess the effectiveness of corporate compliance programs the DOJ asks common questions that are used in making each individualized determinations. Those questions are summarized in this blog, and repeat many of the topics in the following publications: United States Attorney’s Manual (“USAM”) United States Sentencing Guidelines (“USSG”) Fraud Section corporate resolution agreements A Resource Guide to the U.S. Foreign Corrupt Practices Act (“FCPA … Continue reading

FIRST ARTICLE DOES NOT REDEFINE CONTRACT SPECIFICATIONS FOR ACCEPTANCE






In a long and complex case, the Armed Services Board of Contract Appeals (“ASBCA”) recently explained that a First Article Test (“FAT”) does not add product specifications above those detailed in the contract, and that in order to reject production articles, the government must demonstrate that they are unacceptable because they do not meet specifications in the contract. Ensign-Bickford Aero. & Def. Co., ASBCA No. 57929, Oct. 20, 2016. The case involved MK 154 detonators procured by the Naval Surface Warfare Center. The MK 154 is used to explode charges from a safe distance. Explosive ordnance disposal personnel use the MK 154 to blow up improvised explosive devices (“IEDs”), suspect items, or unserviceable ammunition under controlled conditions. Ensign’s contract contained a detailed Technical Data Package … Continue reading

“YOU’RE OUT OF LUCK BUDDY” (NO EXTRA-CONTRACTUAL RELIEF)






In a timber sale contract (where the government contractor cuts down timber and sells it, presumably at a profit), the Civilian Board of Contract Appeals (“CBCA”) concluded that there was “no contractual provision that would relieve appellant of its obligations to pay the damages assessed [by the agency].” Translation: “You’re Out of Luck, Buddy.” Payne Enter. v. Dept of Agriculture, CBCA 2899, March 19, 2013. It was a bit of a heartbreaker, as you will see from the court filings, below. Payne was awarded the Sheriff West Timber Sale Contact by the Department of Agriculture in June 2001, and completed 92% of the contract, but couldn’t complete the remainder because of declining prices for the timber associated with the contract, overall economic decline, and a … Continue reading

Gift-Giving Policies: Seven Ethics Checks in Light of OGE’s Updated Standards






By Jayna Marie Rust If you have not updated your ethics and compliance program since November 18, 2016, dust it off and take a good look at it. November 18 was the day the U.S. Office of Government Ethics (“OGE”) issued a final rule that revised portions of the Standards of Ethical Conduct for Executive Branch Employees found at 5 C.F.R. 2635.[1]  The revisions modified and clarified the standards regarding Gifts from Outside Sources (“Standards”), which prohibit Executive Branch employees from soliciting and accepting gifts from “prohibited sources” as well as gifts given because of a Government employee’s official position. Because Government contractors and other regulated companies are almost always “prohibited sources,”[2] they should become familiar with the changes, which took effect on January 1.  … Continue reading

SO YOU THINK YOU GOT A GOVERNMENT CONTRACT? THINK AGAIN!






Many people think they have a valid government contract, but much of the litigation in the Courts and the Boards of Contract Appeals revolves around whether a contract was valid. To prove the existence of a contract with the government, a contractor must prove four basic elements: (1) mutuality of intent to contract; (2) offer and unequivocal acceptance; (3) consideration; and (4) a government representative having actual authority to bind the United States. See Cal. Fed. Bank, FSB v. United States, 245 F.3d 1342, 1346 (Fed.Cir.2001). In 1200 Sixth Street, LLC v. United States, No. 12-388C (Fed. Cl. Feb. 14, 2013), the Plaintiff (1200 Sixth) alleged that the Government breached a contract for purchase of real property in Detroit, but the Court found that the … Continue reading