Myth No. 2: We Should Always Protest.

*This post is the second in the ten part series, “Ten Myths of Government Contracting” and will be released weekly. Each week will introduce  a new myth and run for ten weeks.  The decision to file a protest highlights one of the unique features of contracting with the U.S. Government, involving as it does a long list of questions that must be addressed and the pressure of having to decide whether to sue a customer within a very short time frame. In Myth No. 1, “We should never protest,” I explained why there might be certain situations where a company really should protest.  As in other walks of life, however, a company’s reputation is an important part of its success, and its reputation could be … Continue reading

Informational Requirements Associated with Organizational Conflicts of Interest in Healthcare Related Contracts

Guest Author: Rodney L. Benson, Attorney, Buchanan Ingersoll & Rooney PC In recent solicitations, the Centers for Medicare and Medicaid Services (CMS) has required offerors to provide an increased amount of information for CMS’s evaluation of potential organizational conflicts of interest (OCI). For many years, CMS has been extremely vigilant in identifying and resolving potential OCIs. The agency has a myriad of statutory contracting authorities. Pursuant to these authorities, CMS utilizes contractor services to perform virtually all major functions and activities, including paying Medicare claims, identifying and investigating fraud and abuse and auditing and recovering improper payments. Because contractors act in a fiduciary capacity for the United States, and otherwise perform functions that require that they be free of financial interests that might impair their … Continue reading

Agency Lacks Jurisdiction to Hear Agency-Level Protest ???

If an agency lacks jurisdiction to decide a particular agency-level protest, can its dismissal of that protest on the grounds that the agency didn’t have jurisdiction to hear the protest in the first instance really be considered “adverse agency action”? In a protest before the GAO, Logis-Tech, Inc., a small business, protested award of a task order to Professional Solutions Delivered LLC (PSD). Logis-Tech argued that the Marine Corps misevaluated its proposal submitted in response to a USMC request for task order proposals (RFTOP). To determine which vendor provided the best value, the Marine Corps evaluated price and three non-price factors: understanding and approach, staffing and personnel, and past performance. Price was of equal importance to the three non-price factors combined. In its evaluation, the … Continue reading

GAO Recommends Little Relief to Incurred Cost Submission Backlog

Guest Authors: Capital Edge Consulting (http://capitaledgeconsulting.com/): The recent GAO report on the backlog of audits of Incurred Cost Proposals is unfocused.  The conclusion highlights the fundamental issue at hand in the statement, “DOD has fallen far behind in closing out its contracts, in part due to the large backlog of incurred cost audits that must be performed by DCAA…” The GAO’s “Recommendations for Executive Action” include recommending DCAA, “…assess whether its incurred cost backlog initiative is achieving the objectives of reducing the incurred cost audit backlog…”  With this suggestion, GAO is recommending DCAA engage in the same metric type exercise that landed it in hot water in 2009 (GAO Report 09-468, September 2009).  Clearly, the GAO’s recommendations lack substance on how to increase the rate of … Continue reading

Effectiveness Rate Up at GAO: Not a Green Light to Protest

The recent GAO report to Congress shows that GAO’s protest business is not in any danger of shrinking even though other Federal agencies are concerned about the looming fiscal cliff.  Nearly 2,500 protests were filed in FY 2012, a five percent increase from the prior year.  While GAO has had steeper annual increases, the raw number itself is telling because it shows that contractors are literally fighting for their lives.  Perhaps the most important figure in the report is the 42% “effectiveness rate,” i.e., a number showing the combination of actual sustains (106 as compared to 67 in FY 2011) plus cases in which the agency elected to take “corrective action” before GAO could rule on the merits.   Pundits can read a lot into … Continue reading

DLA’s Evaluation of Past Performance Found to be ‘Supremely’ Unreasonable

At the GAO, Supreme Foodservice (“Supreme”) protested award to ANHAM FZCO (“ANHAM”), of an indefinite-delivery/indefinite-quantity (IDIQ) contract issued by the Defense Logistics Agency (“DLA”) for the supply and distribution of perishable and semi-perishable subsistence products to the military in Afghanistan. The GAO sustained the protest on the grounds that competition was flawed in three ways. In evaluating proposals, the DLA was supposed to consider which proposal would be the most advantageous to the government, considering price, experience and past performance, distribution system/quality assurance, private convoy security capability, operational support, and socioeconomic considerations.  Of the non-price factors, experience/past performance was the most important factor. ANHAM’s proposal was for a lower price, but it also ranked lower technically than Supreme on subfactors within past performance.  Finding that … Continue reading

A Steady Drumbeat?

In every Organizational Conflict of Interest (OCI) bid protest decision, the Government Accountability Office (GAO) says that it will defer to the Contracting Officer (CO) – i.e., that it “will review the reasonableness of a contracting officer’s OCI investigation and, where an agency has given meaningful consideration to whether a significant conflict of interest exists, . . . will not substitute our judgment for the agency’s, absent clear evidence that the agency’s conclusion is unreasonable.” In past years, however, several GAO decisions raised doubt as to whether GAO was merely paying lip service to the deference standard.  In each of these cases, involving all three types of OCI’s, GAO reversed a CO’s determination made after what seemed to be a serious and reasonable investigation and … Continue reading

Agency Must Consider Price in All Best Value Selections

In any type of best value selection, the GAO has again made clear that the Agency must consider price.  Glotech, Inc., B-406761, Aug. 21, 2012.  In Glotech, the US Agency for International Development (“AID”) competed a Blanket Purchase Agreement (“BPA”) worth up to $900 million. The RFQ specified that award would be made on a best value basis, considering price and six technical factors.  Price was deemed a significant factor in the best value tradeoff. However, in evaluation of quotations, the contracting officer assigned point scores for the technical factors and ranked all proposals from 1 to 11.  Then, the contracting officer reviewed the cost/price quotations, but decided that direct comparison of quotations was not possible because each vendor quoted different discounts and could offer … Continue reading

Department of Defense has an Active Suspension and Debarment Process

The Government Accountability Office (“GAO”) recently issued a report finding that the Department of Defense (“DOD”) had effective processes to refer contractors for potential suspension or debarment, but that DOD was not reporting a small number of discretionary actions. Suspension and Debarment, DOD has Active Referral Processes, but Action Needed to Promote Transparency, GAO-12-932 (Sept. 19, 2012). The GAO noted that in fiscal year 2011, DOD had the federal government’s largest procurement budget, totaling over $375 billion.  DOD used suspensions and debarments as tools to protect the federal government against nonresponsible contractors, such as those who had committed fraud.  A suspension is a temporary disqualification of a contractor from receiving new government contracts pending completion of an investigation and any legal proceedings. A debarment is … Continue reading