Jump to content

Blogs

Our community blogs

  1. WIR-Sept-19-23-600x300.jpg

    Happy Friday, Readers. We have had some contrasting weather conditions here in Kansas, this week. One day we are at 100 degrees and the next day we are in the 60’s. You know what they say in Kansas? If you don’t like the weather, just wait a minute and it will change. That has certainly been true this week. I think I speak for all of us, when I say that the cooler temperatures of fall are a welcome change from the hot and dry conditions we have experienced throughout the summer.

    We hope you are able to get out an enjoy the weather in your neck of the woods this weekend. Here are a few articles we thought were particularly interesting concerning federal government contracting this week, including extension for the SBIR program, more Polaris solicitation drops, and inflation’s effects on contractors. Have a wonderful weekend!

    • GSA’s Polaris Contract Continues to Support Equity in Federal Procurement [GSA]
    • GSA opens second round of bid submissions for multibillion-dollar Polaris solicitation [FedScoop]
    • Federal agencies racing to spend billions by Sept. 30 [FedTimes]
    • DARPA launches new program to let small innovators behind the classified curtain [FedNesNet]
    • Pentagon Urges Defense Contractors to Wean Themselves Off China-Made Chips, Raw Materials [GovConWire]
    • Biden-Harris Administration Announces Groundbreaking Partnerships to Connect Small and Disadvantaged Businesses to Infrastructure Programs [SBA]
    • A Nonprofit Business Accelerator Is Offering Grants to Veteran Small Business Owners [Military]
    • Union organizers gain access to contractors working on government projects [FedNewsNet]
    • Former U.S. Department of Housing and Urban Development Assistant Inspector General Convicted of Falsifying Financial Disclosure Forms [DoJ]
    • General Services Administration backs inflation contract adjustments [FedTimes]
    • Commerce Department’s Minority Business Development Agency Awards $4.7 Million in Funding to Strengthen Business Centers Across U.S [DoC]
    • The SBA Announces Expansion of Ascent Online Digital Platform Programming [SBA]
    • SBA Announces Inaugural Small Business Cyber Summit to Take Place During National Cybersecurity Month [SBA]
    • GSA reveals 28 members of new acquisition policy advisory committee [FedScoop]
    • Why the US government will require software vendors to certify the security of their products [FedScoop]
    • Senate pulls SBIR back from brink of sunsetting [FedNewsNet]
    • How inflation has hit federal contractors [FedNewsNet]
    The post SmallGovCon Week in Review: September 19-23, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.

    View the full article

  2. September 30 marks the end of the federal fiscal year and the beginning of what has become a phenomenon in federal acquisitions known as the end of fiscal year buying season. In a nutshell, at the end of the fiscal year, unspent funds expire, and agencies make plans to spend their allocated dollars to exhaust the “use or lose” funds in their budgets.

    In 2021, 28% of all total federal fiscal year spending obligations were spent in the fourth quarter. According to Pulse.com, for the most part, federal agencies use 69% of their discretionary funding before the start of Q4 which leaves an average of 31% of all fiscal year funds available for the Q4 sprint.

    During the buying season frenzy, time is of the essence and it is essential that agencies have a way to make awards fast and in an efficient, simple, and easy manner.  Government-Wide Acquisition Contracts (GWACs) like CIO-SP3CIO-SP3 Small Business and CIO-CS are an excellent way for agencies to obligate any last-minute funds.

    Designed for Efficiency and Speed

    GWACs were established by the Clinger Cohen Act as a mechanism to streamline the information technology (IT) procurement process. In a nutshell, contracting officers found it was taking a long time to award IT procurement contractsso long that by the time the award was made, the technology being awarded, was obsolete. GWACs were created as a mechanism to reduce the timeframe to meet an agency’s mission-critical IT needs.

    The NITAAC GWACs can be used by any agency to acquire information technology services, solutions, and commodities from pre-qualified vendors at lower than open-market prices in less time than going the traditional full and open route.

    For federal agencies looking to award task orders quickly during this year’s buying season, CIO-SP3 and CIO-SP3 Small Business orders can be awarded in as little as 45 days. CIO-CS orders can be awarded in only two days, depending upon the complexity of the procurement.

    Everything IT

    What’s more, with the NITAAC family of GWACs, agencies are not limited in what they can purchase.  The CIO-SP3 and CIO-SP3 Small Business GWACs offer everything IT with IT services and solutions across ten Task Areas, ranging from biomedical research to software development.  CIO-CS also features everything IT across nine categories, ranging from hardware to managed services. You aren’t limited by categories or catalogs, either, because NITAAC can easily add products and services to the contracts as they emerge, taking advantage of innovations as soon as they are viable.

    Direct orders can be made through NITAAC’s secure, online ordering and competition management system known as e-GOS (the Electronic Government Ordering System.) And, you have up until close-of-business on September 30th to make your awards. As you may have heard, the CIO-SP3 GWACs have both been extended through November 1 so you can order through the end of the year. NITAAC is also committed to making sure there is no break in coverage and will extend again if necessary while CIO-SP4 is awarded and onboarded.

    Laptops and Desktops, Too

    NITAAC Government-Wide Strategic Services (GSS), now in Version 8, offers agencies five standard configurations of laptops, desktops and more than 3,483 EPEAT certified products to choose from. NITAAC GSS is available under the CIO-CS IT Commodities and Solutions Contract, part of the Category Management Initiative of preferred contracts of the White House Office of Management and Budget. As agencies look toward the end of the fiscal year and find themselves purchasing commodities, NITAAC can help. We are committed to providing EPEAT certified laptops, desktops, printers, monitors and servers to meet all our agency partner IT needs. If your needs are more complex, like Cloud-in-a-box, managed services or Everything-as-a-Service (XaaS), the CIO-CS GWAC is for your agency, too. Dozens of commercially available commodities and commodity-enabling solutions can be found on CIO-CS or added in a 24-hour turnaround technology refresh process (TRP). Direct awards are always quick and easy using NITAAC’s e-GOS.

    NITAAC is Your Single Source for End of Year Buying Needs

    From IT modernization to cyber to software to Health IT, NITAAC is your one-stop source for all your end of year spending needs. And nobody makes getting IT quite as easy as NITAAC.  You can find it and order it (with little or no training) through our easy-to-understand e-GOS. If your agency has “use or lose’ funding, maybe it’s time you lose yourself learning about NITAAC.

    For twenty-six years, NITAAC has been a trusted source for federal IT procurement. If you are interested in partnering with us on a requirement, or simply want more information, contact NITAAC Customer Support at 888-773-6542 to speak with an intake specialist or visit our homepage.

     

  3. Consider the following exchange between two people:

    Quote
    Speaker 1 (asking Speaker 2): What type of car do you drive, foreign or domestic?

    Speaker 2: I drive a red car.

    Obviously, Speaker 2's answer is not responsive to Speaker 1's question. Speaker 1 wanted to know about a particular aspect of Speaker 2's car:  its origin. Speaker 2 described a different aspect of his car:  its color. While Speaker 2's statement about the color of his car may be true, it doesn't tell us anything about the origin of his car.

    Easy enough, right? Ok, let's try another one. Consider the following exchange between two contract specialists:

    Quote
    Contract Specialist 1: Is Contract X a fixed-price or cost-reimbursement contract?

    Contract Specialist 2: Contract X is an indefinite delivery contract.

    Is Contract Specialist 2's answer responsive to Contract Specialist 1's question? No, the answer is no more responsive to the question than Speaker 2's answer was to the question of whether his car was foreign or domestic. Why? In this exchange, Contract Specialist 1 wanted to know about a particular aspect of Contract X:  ts compensation arrangement. Contract Specialist 2 described a different aspect of Contract X:  its delivery arrangement. While Contract Specialist 2's statement about the delivery arrangement of Contract X may be true, it doesn't tell us anything about the compensation arrangement of Contract X.

    Make sense? If so, see if you can spot anything wrong with the following passage of an article on contract types that recently appeared in the December 2010 issue of Contract Management (see Government Contract Types: The U.S. Government?s Use of Different Contract Vehicles to Acquire Goods, Services, and Construction by Brian A. Darst and Mark K. Roberts):

    Quote
    FAR Subparts 16.2 through 16.6 describe 11 different permissible contract vehicles. These vehicles can be subdivided into three different families:
    • Fixed-price contracts,
    • Cost-reimbursement contracts, and
    • Other contract vehicles that can be used when the quantity of supplies or services cannot be determined at the time of award (i.e., indefinite delivery, time-and-materials (T&M), labor-hour (LH), and level-of-effort contracts) or where it is necessary for the contractor to begin performance before the terms and conditions of the contracts can be negotiated (i.e., letter contracts).

    Do you see anything wrong?  Notice that the first two "families" are categorized by compensation arrangement. However, the third family contains a mix of terms used to describe compensation arrangement (T&M/LH), delivery arrangement (indefinite delivery), the extent of contractor commitment (level-of-effort), and a unique term used to describe a contract that is not definitive (letter contract). The way this passage is written implies that an indefinite delivery contract, a level-of-effort contract, and a letter contract are necessarily different (belong to a different "family") from a fixed-price or cost reimbursement contract. However, an indefinite delivery contract or a level-of-effort contract will have a compensation arrangement. The compensation arrangement can be fixed-price, cost-reimbursement, T&M/LH, or some combination thereof. A letter contract may or may not have a compensation arrangement when it is issued. You could conceivably have a letter contract that had a cost-reimbursement compensation arrangement, an indefinite delivery arrangement, and that provided for level-of-effort orders. As such, the authors? categorization of contract types makes as much sense as categorizing cars into three families?foreign, domestic, and red.

    Incentive Contracts? Not What You Think They Are

    Consider the following simplified description of a compensation arrangement:

    Quote
    The buyer agrees to pay the seller $100,000 to provide a specified quantity of medical transcription services. If the accuracy of the transcriptions exceeds 99%, the buyer agrees to pay the seller an additional $5,000.

    Does the preceding describe an incentive contract? Many would say yes, because the arrangement provides for an incentive--specifically, a performance incentive. However, that would be incorrect. Just because a contract contains an incentive does not mean that it is an incentive contract. FAR 16.202-1 contains the following statements in a description of firm-fixed-price contracts (similar statements pertaining to fixed-price contracts with economic price adjustment can be found at FAR 16.203-1.

    Quote
    The contracting officer may use a firm-fixed-price contract in conjunction with an award-fee incentive (see 16.404) and performance or delivery incentives (see 16.402-2 and 16.402-3) when the award fee or incentive is based solely on factors other than cost. The contract type remains firm-fixed-price when used with these incentives.

    [bold added].

    Further, FAR 16.402-1(a) states:

    Quote
    Most incentive contracts include only cost incentives, which take the form of a profit or fee adjustment formula and are intended to motivate the contractor to effectively manage costs. No incentive contract may provide for other incentives without also providing a cost incentive (or constraint).

    Thus, it's not enough for a contract to contain an incentive to be an incentive contract. It must contain a cost incentive (or constraint).

    In the aforementioned Contract Management article, an endnote references FAR 37.601(3) and misinterprets this paragraph as--encouraging the use of incentive-type contracts where appropriate.  Here's what FAR 37.601(3) actually says:

    Quote
    Performance-based contracts for services shall include-

    (3) Performance incentives where appropriate. When used, the performance incentives shall correspond to the performance standards set forth in the contract (see 16.402-2).

    The authors have made the mistake of assuming that a contract that contained a performance incentive was necessarily an incentive contract. In fact, when acquiring services FAR 37.102(a)(2) states the following order of precedence:

    Quote
    (i) A firm-fixed price performance-based contract or task order.

    (ii) A performance-based contract or task order that is not firm-fixed price.

    (iii) A contract or task order that is not performance-based.

    As shown above, a firm-fixed-price contract would take precedence over an incentive contract.

    A Genuine Misunderstanding

    In a discussion of additional contract types and agreements, the Contract Management article contained the following statement (which caused me to stop reading and start writing):

    Quote
    T&M and LH contracts are varieties of indefinite-delivery contracts and provide procuring agencies with the flexibility to acquire recurring services or when the amount of the effort required to deliver an end-item is uncertain.

    Huh? T&M/LH is a type of indefinite delivery contract? I'll let you readers ponder that one.

    The article concludes with a plug for the authors-two-day course in, you guessed it, types of contracts. I will pass.

  4. We all have different stories about how we entered the field of government contracting.  Here's mine.  I started working at the General Accounting Office (GAO) in July 1971.  At the request of a new Comptroller General, Congress changed the name to the to the Government Accountability Office because GAO didn't do accounting work.  For a political appointee, that's considered innovation.  GAO always had problems with titles.  I started as a GAO Auditor, then a GAO Analyst, then a GAO Evaluator and I was waiting to become a GAO Accountabilist.  It never happened so I kept telling people I was a GAO auditor.  

    Getting back to my story.  I never intended to be in government contracting.  I never intended to be in government.  I just wanted a job.  Having interviewed with GAO months earlier, I was offered a GAO position from out of the blue in a Friday afternon phone call.  At the beginning of my career, GAO had three primary operating divisions;  Civil Division, Defense Division, and the International Division.  Civil involved audit work of civilian agency programs, Defense included work at DoD agencies and the National Aeronautics and Space Administration, International was audit work around the world while you were stationed in Germany.  There were never any openings in the International Division.  If you can't imagine why, I can't help you. 

    In 1971, GAO hired "trainees" directly into its Civil Division and the managers of the Civil Division, for the most part, ran GAO.  Trainees in the Civil Division were assigned to GAO audit sites located within the office space paid for by the government agencies it audited.  Imagine a bunch of freeloaders watching what you did and squealing to your boss when you did something wrong.  That was GAO's Civil Division when I was hired.  A trainee in his/her first year would have 3 assignments:  1,  2-month assignment and 2, 4-month assignments before he/she moved on to a 1-year assignment.  To find out where you would go on your 1 year assignment, you had to visit GAO's personnel office and pick one of the openings that were available in GAO.  Those changes in assignments were referred to as the "rotation" process.   If you rotated at the beginning of a month for your 1-year assignment, you had a nice choice of places to go in the Civil Division.  By the end of the month, all the good slots were gone and you were left with the dregs of the agency.  My first two trainee assignments in the Civil Division were at the Department of Housing and Urban Development and the Department of Agriculture's Food and Nutrition Service which were in Southwest D.C.  My third trainee assignment was at the Food and Drug Administration in Rockville Maryland.  Nearly everyone in the Civil Division was young or relatively young.   It was growing and vibrant and the people were alive.

    Then there was the Defense Division.  It was a separate entity of its own.  Closed off from the rest of GAO, I never met any trainee that was hired into the Defense Division in 1971.  The Defense Division was located in GAO's dingy main building on its dingy 4th floor in Northwest DC.  The space was old and ugly and it was rumored to be staffed with old weirdos.  It seemed as if no one went into that "space" and no one came out.  Think of Dr. Brakish Okun from the 1996 movie, Independence Day greeting you at the door.

     

    Needless to say, new trainees learned one thing through the trainee grapevine.  Stay out of the Defense division!  Shortly after I was hired, GAO decided to shake things up in the Defense Division by reorganizing it into three new divisions; the Procurement and Systems Acquisition Division (PSAD) (pronounced P-sad), the Personnel, Logistics and Readiness Division (PLRD) (pronounced Plurd or P-lard) and the Federal Personnel and Compensation Division (FPCD).  The new GAO trainees didn't know that part of the shake-up in the Defense diivisions would involve human sacrifices too.  GAO couldn't fool its new trainees, though.  Instead of stay out of Defense, the new trainee warning became stay out of PSAD, PLRD, and FPCD.  As my Mother told me while I was growing up; you can't polish a turd.

    My rotation date for my 1-year assignment was scheduled for early Spring 1972 and, of course, it was at the end of the month.  I walked into the personnel office and was congratulated for completing my training assignmnets.  That was the last positive thing I heard that day.  I was given my choices to pick from and there were three available; one in PSAD, one in PLRD, and one in FPCD.  Like any 21 year old who suddenly believed his career had ended, I hemmed and hawhed as long as I could.  Then I was told, You know, we don't have to give you a choice.  After I had gone limp, I put my head down and picked PSAD.  No one in the Civil Division said anything good about my pick.  They just walked away from me.  I was now a member of P-sad.  Things went downhill after that.  

    There were three of us rotating into PSAD that Monday morning.  All graduating trainees from the Civil Division and we were never told we were part of GAO's human sacrifice experiment to reduce the overall age of the new defense divisions.  Once in PSAD, a PSAD representative explained that PSAD consisted of three sub-divisions titled Major Systems (MAG), Science and Techology (S&T), and General Procurement (GP).  The first two of us were going to MAG and S&T and when the work was explained to them it sounded interesting. Next, it was my turn and I was feeling a little better.  Then the PSAD representive tried to explain what GP did.  He tried to keep a straight face but he could only laugh.   The trainee who who went to S&T that day is still my friend today.  We often laughed about that meeting in PSAD and we still laugh about it today.  I tell him that I rotated into Geek Place and not General Procurement that day.  And so it was.  In the months ahead, I met Crazy Jack, Shaky Charlie, and the Slurper.  Then there was the Chomper.  I was told to avoid eye contact with the Chomper.  And I did.

    And that is how I was introduced into federal contracting.

     

     

  5. The U.S. Supreme Court slammed the brakes Thursday on a Biden administration vaccine-or-testing rule for private businesses with at least 100 employees, but let a stricter yet narrower rule aimed at the health care industry take effect nationwide.

    Today the Supreme Court of the United States struck down the “OSHA Vax or Test” rule imposed on most employers with over 100 employees stating, “[Congress authorized OSHA] to set workplace safety standards, not broad public health measures.” However, in a separate decision the Court upheld the vaccine mandate for workers at federally funded health care facilities. The Court reasoned “Congress has authorized the Secretary to impose conditions on the receipt of Medicaid and Medicare funds that ‘the Secretary finds necessary in the interest of the health and safety of individuals who are furnished services.’” This authorization permits the strict rules put into place for the covered health care facilities.

    While the two decisions may appear at odds, a common thread can be found. Congress holds the power to authorize the Executive, and its agencies, to create vaccine mandates or related testing requirements. However, Congress must be clear when delegating these powers and for what purpose. Both decisions can be found below, in full.

    https://www.supremecourt.gov/opinions/21pdf/21a240_d18e.pdf
    https://www.supremecourt.gov/opinions/21pdf/21a244_hgci.pdf

    The remaining federal, vaccine mandate is the one applicable to government contractors. That mandate was subject to a nationwide injunction; and, last month, the 11th Circuit Court of Appeals rejected an effort by the U.S. Government to overturn that injunction. Briefing on the merits of the government contractor mandate is not set to be concluded until late February, and oral argument before the 11th Circuit will not be held until early April. With the Supreme Court’s recent rulings, the viability of the government contractor mandate is certainly in question. That said, given the innumerable regulatory requirements already placed on government contractors, the contractor mandate arguably appears more akin to the CMS mandate than the OSHA mandate. Time, and the 11th Circuit, and probably the Supreme Court, will tell.

    Decision Review provided by David Warner, Parter & Tyler Freiberger, Associate Attorney

    The post Breaking Mandate Decisions appeared first on Centre Law & Consulting.

    View the full article

  6. At the beginning of Fiscal Year 2008 John Krieger and John Pritchard, two professors at the Defense Systems Management College, Defense Acquisition University, were kicking around the topic of Acquisition Reform. They reflected on what Jim Nagle wrote in the Epilogue to A History of Government Contracting, "If someone were asked to devise a contracting system for the federal government, it is inconceivable that one reasonable person or a committee of reasonable people could come up with our current system.  That system is the result of thousands of decisions made by thousands of individuals, both in and out of government.  It reflects the collision and collaboration of special interests, the impact of innumerable scandals and successes, and the tensions imposed by conflicting ideologies and personalities."

    They reflected that those thousands of decisions were like putting bandages on the acquisition, contracting and procurement processes.  Every time a piece of legislation is passed to “fix” the acquisition process, it’s another bandage.  Every time a change is made to the Federal Acquisition Regulation (FAR), it’s another bandage.  Every time a change is made to the Defense Federal Acquisition Regulation Supplement (DFARS), it’s another bandage.  Every time a procurement or contracting policy memorandum is issued, it’s another bandage. 

    They joked about that being a great visual aid for the classroom. (Remember classrooms, the places you went to learn before COVID-19?) And the joking became reality. They started with a golf ball, and added a bandage for each new law, executive order, regulation, guide handbook, etc. And it would grow, and grow, and grow. “Acquisition Reform and the Golf Ball” was born that day.

    The story of the golf ball was chronicled each fiscal year, and reported in the National Contract Management Association’s Contract Management (CM) after the end of each fiscal year. That is each year up until the report on the results for Fiscal Year 2020, when CM declined the latest installment in the series. Although John and John sought publication elsewhere, there didn’t appear to be a good fit, which brings the latest iteration, “Acquisition Reform and the Golf Ball—A Baker’s Dozen,” to Wifcon.com. (See attachment.)

    Acquisition_Reform_and_the_Golf_Ball_Bakers_Dozen_-FY2021-_Wifcon.com_v2.docx

  7. Robert Marcus, the liquidating trustee of the Las Uvas Valley Dairies sued Dean L. Horton and Frances H. Horton in the U.S. Bankruptcy Court of New Mexico. Mr. Marcus sought declaration that the main assets in the bankruptcy estate at issue were held in constructive trust for the estate he represents. Dean and Frances Horton applied for motion for judgment on the pleadings requesting the proceedings be dismissed for failure to state a claim. Mr. Marcus asserted he had a valid claim for recognition of a constructive trust.

    __ptq.gif?a=6093008&k=14&r=https%3A%2F%2

    View the full article

  8. In the 2019 National Defense Authorization Act (NDAA), Congress placed serious limitations on the Government’s use of Lowest Price, Technically Acceptable (LPTA) procurements. As a result, we should be seeing the Government issue more RFPs in which technology and innovation outweigh price. In these instances, contractors can seek a higher price but are expected to show substantial technological advantages. Two recent protests cases out of GAO illustrate the principles of technical proposal evaluation when technical factors are more important than price, and demonstrate the potential cost/technical trade-offs under these circumstances.

    Read the full article here

  9. ASHBURN, Virginia (September 19, 2018) The National Contract Management Association (NCMA)

    President Charlie Williams Announces the New NCMA Chief Executive Officer

    On behalf of the National Contract Management Association (NCMA) Board of Directors, I am pleased to announce the appointment of Kraig Conrad, CAE, CTP, as the new NCMA Chief Executive Officer. Kraig will formally take his position on November 1, 2018. Kraig joins NCMA with 20 years of association leadership experience. He most recently served as Chief Executive Officer of the Professional Risk Managers’ International Association (PRMIA), where he guided the PRMIA Board of Directors and its global network of more than 50,000 risk professionals to craft an enhanced vision for the group that includes a long-range strategic plan; new advocacy, certification, and training efforts; promoting the PRMIA brand; and enhancing membership benefits.

    Prior to PRMIA, he held many roles at the National Investor Relations Institute, including Acting Co-Chief Executive Office and Vice President for Programs and Development. Kraig has also served as Research Lead for Strategy Practice at Corporate Executive Board, Director of Corporate Finance and Risk Management and Director of Strategic Alliances at the Association for Financial Professionals. He started his career as a Financial Analyst at Credit Suisse.

    Kraig earned a Bachelor of Arts in Economics from the University of Southern California and a Master of Business Administration from the University of Illinois at Chicago. He is a Certified Association Executive and member of the American Society of Association Executives, and a Certified Treasury Professional and member of the Association for Financial Professionals.

    “We are excited to have Kraig join our team. Kraig has demonstrated time and time again exemplary leadership skills and thoughtful approaches to the business of association management,” says NCMA President Charlie Williams. “We are confident that Kraig is the right person at the right time for NCMA as we continue the NCMA journey that was begun over 59 years ago. As our new CEO, Kraig’s association leadership skills will be critical to the Board of Directors as it charts the association’s strategic path forward and seeks to further elevate the association’s relevance to the profession it serves.”

    The selection of Kraig concludes a national search supported by Staffing Advisors, a Washington, DC-based executive search firm. Kraig shares the NCMA dedication to professional growth and the educational advancement of acquisition and contracting professionals worldwide. Please join us in congratulating Kraig as we welcome him to the organization.

    Founded in 1959, the National Contract Management Association (NCMA) is the world's leading professional resource for those in the field of contract management. The organization, which has over 18,000 members, is dedicated to the professional growth and educational advancement of procurement and acquisition personnel worldwide. NCMA strives to serve and inform the profession it represents and to offer opportunities for the open exchange of ideas in neutral forums. For more information on the association, please visit www.ncmahq.org.

    Contact: Amanda Gillespie, Marketing & Communications Director agillespie@ncmahq.org (571) 382-1127

    NCMA_CEO Kraig Conrad - FINAL.pdf

  10. The long-standing principle that the federal government had the same implied duty of good faith and fair dealing as any commercial buyer was put in jeopardy by a 2010 decision of the U.S. Court of Appeals for the Federal Circuit, Precision Pine & Timber, Inc. v. U.S., 596 F.3d 817 (Fed. Cir. 2010). There a panel of the court adopted a narrow rule seemingly limiting application of the principle to situations where a government action was “specifically targeted” at the contractor or had the effect of taking away one of the benefits that had been promised to the contractor. Although the decision concerned a timber sales contract not a procurement contract, when I wrote it up in the May 2010 Nash & Cibinic Report (24 N&CR ¶ 22), I expressed the fear that the reasoning would be subsequently applied to procurement contracts.

    My fear was realized in a construction contract case, Metcalf Construction Co. v. U. S., 102 Fed. Cl. 334 (2011). In that decision, the judge described eggregious conduct on the part of the government officials that would have been held to be a breach of the implied duty of good faith and fair dealing under many earlier cases. However, the judge held that under the Precision Pine standard, the contractor had not proved that the actions were specifically targeted at the contractor. In the February 2012 Nash & Cibinic Report (26 N&CR ¶ 9), I criticized this decision but stated that I believed that even if the decision was affirmed on appeal, most contracting officers would not take this as a signal that the proper way to administer contracts was to abuse the contractor.

    Fortunately, a panel of the Federal Circuit has reversed the decision, Metcalf Construction Co. v. U. S., 2014 WL 519596, 2014 U.S. App. LEXIS 2515 (Fed. Cir. Feb. 11, 2014). The court held that the lower court had read Precision Pine too narrowly and that “specific targeting” was only one example of the type of conduct that could constitute a breach of the implied duty of good faith and fair dealing. Importantly, the court also rejected the government’s argument that this “implied duty” only could be found when it was footed in some express provision of the contract. The court concluded that the correct rule was only that the express provisions of a contract had to be examined to ensure that they had not dealt with the conduct of the government; for if they had, they would override the implied duty.

    This leaves us in a tenuous position with regard to the views of the Federal Circuit. We have one panel in Precision Pine stating a narrow rule, another panel in Metcalf Construction stating the traditional rule, and a third panel in Bell/Heery A Joint Venture v. U.S., 739 F.3d 1324 (Fed. Cir. 2014), ruling in favor of the government because the contractor had not alleged facts showing that the government had “engaged in conduct that reappropriated benefits promised under the contract” (which is part of the Precision Pine reasoning). Thus, it is difficult to state where the judges of the Federal Circuit stand. Hopefully, the court will agree to take either Metcalf Construction or Bell/Heery to the full court for an en banc review of the issue.

    I’ve never been sure why the Department of Justice has so vigorously argued that the government should not be held to the same standards of conduct as a commercial buyer. Of course, persuading the courts and boards that a narrower standard should be applied to the government is a way to win litigated cases. But, in my view, encouraging abusive or non-cooperative conduct hurts the government as much as it hurts its contractors. I have taught for many years that in the long run the government benefits from actions that show industry that it is a fair contracting partner. A line of published judicial decisions that demonstrates that the government is not such a partner is one more of the many messages that tell companies they should sell to the government only when they can find no other customer. Surely, this is not the message that government agencies in need of products and services on the commercial marketplace want to convey to companies that can provide those products and services.

    Many years ago when I came to Washington to work in the field of government contracting, I concluded that there was one major advantage to being on the government side of the negotiating table. That advantage was that I was under no pressure to extract money from the contractor by unfair bargaining or unfair contract administration. To me fairness was an integral part of the job of a government employee. I still believe it and teach it. Thus, no matter what the outcome of the good faith and fair dealing litigation, I will continue to urge government employees that fair treatment of contractors is the only way to go.

    Ralph C. Nash

  11. When I get older, losing my hair

    Many years from now . . . .

    When I'm Sixty-Four

    John Lennon, Paul McCartney

    Shortly after we celebrate our country's independence on July 4, 2013, Wifcon.com will end its 15th year on the internet. With much help from the Wifcon.com community, I've raised a growing teenager. When I started, I was 49 and my hair was so thick that I often shouted ouch or some obscenity when I combed it. Wifcon.com has existed in 3 decades and parts of 2 centuries. During that period, I've updated this site for every work day--except for the week or so when I called it quits. I remember the feeling of relief. I thought it was over. However, many of you convinced me to bring it back. Yes, just when I thought I was out, many of you pulled me back in.

    As I mentioned in an earlier post, someone once told me that Wifcon.com was my legacy. I once had great hopes for a legacy. Perhaps, a great saxophone player belting out a solo in front of thousands of fans and seeing them enjoying themselves. Instead, here I sit in my solitude looking for news, decisions, etc., to post to the home page. For many years, my dog Ambrose kept me company. Now, my dogs Blue Jay and Lily stare at me and look for attention. With my sights now set realistically, I accept that Wifcon.com is my legacy. It's the best I could do.

    Every now and then, I receive an e-mail from someone thanking me for Wifcon.com. They tell me how it helped their careers. These e-mails keep me and Wifcon.com going.

    Send me a postcard, drop me a line,

    Stating point of view

    Indicate precisely what you mean to say

    Yours sincerely, wasting away

    Give me your answer, fill in a form

    When I'm Sixty-Four

    John Lennon, Paul McCartney

    The thoughts in these e-mails won't let me quit. I still search each night for something to add to the site in hopes that it will increase your knowledge. If I find something new, I still get excited. Often, it feels like a self-imposed weight around my neck. What started as a release for my imagination has evolved into a continuing and daily addition to the contracting community. In the evenings, it is as if I'm Maillardet's automaton. I head over to my office, sit before the computer, and update. Then I send the updated pages to Virginia where it is accessed from around the world. Maybe I'm addicted to Wifcon.com; maybe I was born with the Wifcon.com gene.

    If you haven't added the numbers, I'm 64 now. Wifcon.com and I are showing our age. I can comb the top of my head with my fingers. The ouches and other obscenities caused by my once thick hair are gone. A recent upgrade to the discussion forum requires that I turn the "compatibility mode" off on my browser. In that mode, I realized that Wifcon.com is ugly. I have current software for the needed future redo of this site.

    I am Wifcon.com; Wifcon.com is me. It is my legacy and my albatross. As always, thank you for your support.

    You'll be older too,

    And if you say the word,

    I could stay with you.

    When I'm Sixty-Four

    John Lennon, Paul McCartney

×
×
  • Create New...