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Koprince Law LLC

Under the 2017 National Defense Authorization Act, the DoD has the discretion to forego a price or cost evaluation in connection with the award of certain multiple-award contracts.

The 2017 NDAA  includes some important changes that are sure to impact federal procurements. Section 825 of the NDAA, which allows DoD contracting officers to forego price or cost evaluations in certain circumstances, is one of these changes.

By way of background, 10 U.S.C. § 2305(3)(A) previously required that DoD solicitations for competitive proposals clearly establish the relative importance assigned to evaluation factors and subfactors, and must include cost or price to the government as an evaluation factor that must be considered in the evaluation of proposals. Section 825 of the 2017 NDAA, however, alters this section and provides the DoD with discretion as to whether to consider cost and/or price in some competitions for certain multiple-award IDIQ contracts (although not when the orders themselves are later competed).

As amended, 10 U.S.C. § 2305(a)(3)(C) provides that if an agency issues a “solicitation for multiple task order or delivery order contracts under [the DoD’s statutory authority governing multiple award contracts] for the same or similar services and intends to make a contract award to each qualifying offeror . . . cost or price to the Federal Government need not, at the Government’s discretion, be considered…as an evaluation factor for the contract award.”

Under this new statute, the multiple-award contract must be for “the same or similar services.” Solicitations for multiple-award contracts contemplating the award of orders to secure a wide range of services still require contractors to provide cost and pricing information.

Second, the agency must intend to make a contract award to each qualifying offeror. The new statute provides that an offeror is a “qualifying offeror” under the proposed statute if: 1) it is a responsible source, 2) its proposal conforms to the solicitation requirements, and 3) the contracting officer has no reason to believe that the contractor would offer anything other than a fair and reasonable price.

Third, this new authority is discretionary, not mandatory. Thus, DoD components may still require cost and pricing information, even when they would have the discretion not to do so. Also worth highlighting, this change only applies to DoD, and does not provide the same discretion to civilian contracting officers.

Finally, if the DoD will not consider cost or price, the qualifying offeror is not required to disclose it in response to the solicitation. However, qualifying offerors will still need to provide cost or price at the time of competition on these orders, unless an exception applies.

One final caveat to the proposed statutory change is of particular interest to participants in the SBA’s 8(a) business development program. Specifically, the changes outlined here do not apply to multiple task or delivery order contracts if the solicitation provides for sole source task or delivery order contracts be set-aside for 8(a) Program participants.

By granting DoD discretion to omit consideration of cost and/or price at the initial multiple-award stage, the statute may ease the burden on both the government and contractors alike, because pricing a multiple-award IDIQ contract is often challenging. For instance, at times, the government has resorted to hypothetical sample tasks to obtain some semblance of pricing, but the sample tasks may not accurately reflect much of the work that the government later procures under the IDIQ–and with no real “skin in the game,” offerors can be tempted to underbid the hypothetical task. In other instances, the government has insisted that offerors provide firm ceiling prices (for example, labor rate ceilings), which creates a conundrum for offerors: bid high and risk losing the IDIQ, or bid low and risk being unable to profit on orders? In settings like these, postponing the price/cost evaluation until the order competition may be a wise move.

As the President signed the 2017 NDAA into law on December 23, 2016, it will be interesting to see if DoD exercises any of its price or cost evaluation discretion accorded to it under Section 825. However, chances are that DoD contracting officers will refrain from exercising their new authority until DoD makes changes to the DFARS to provide contracting officers with more guidance on its use.


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Koprince Law LLC

GAO’s jurisdiction to hear protests of certain civilian task and delivery orders has been restored.

On December 15, 2016, the President signed the 2016 GAO Civilian Task and Delivery Order Protest Authority Act (the “ 2016 Act”) into law.  The 2016 Act restores GAO’s recently-expired jurisdiction to hear protests of civilian task and delivery orders valued in excess of $10 million.

As we recently blogged about here at SmallGovCon, the 2017 National Defense Authorization Act also restores GAO’s jurisdiction over task and delivery orders. But even while the 2017 NDAA awaits the President’s signature (or potential veto), Congress and the President have enacted separate legislation to permit GAO to resume hearing bid protests of civilian task and delivery orders.

This Act makes permanent the GAO’s authority to hear protests on civilian task or delivery contracts valued in excess of $10 million. It does so by deleting the sunset provision relating to the authorized protest of a task or delivery order under 41 U.S.C. § 4106(f).

While the 2016 Act permanently restores GAO’s jurisdiction over protests involving civilian task and delivery orders valued above $10 million, as noted in a prior blog, the 2017 NDAA will increase the threshold for challenging DoD task and delivery orders to $25 million. For now, however, DoD orders meeting the $10 million threshold, including those issued under civilian contract vehicles, are once again subject to GAO oversight.

The enactment of the 2016 Act reinforces the importance of bid protests in the procurement process, as evidenced by the fact that 46% of protests in Fiscal Year 2016 resulted in relief for the protester (either a “sustain” decision or voluntary agency corrective action). Congress made the right call in restoring GAO’s jurisdiction, and did so even faster than the 2017 NDAA would have allowed.


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Koprince Law LLC

Sometimes you may find yourself running late. It happens to the best of us for a multitude of reasons. But what happens to federal contractors when they are running late in performing under a contract and there is “no reasonable likelihood” of timely performance?

Unfortunately for contractors in this position, as illustrated by a recent Civilian Board of Contract Appeals (CBCA) decision, the result may be a default termination.

In Affiliated Western, Inc. v. Department of Veterans Affairs, CBCA No. 4078 (2017), the VA awarded AWI a contract to renovate the surgical unit at a VA Medical Center in Iron Mountain, Michigan. Following mounting issues in contractual performance, the Contracting Officer issued a default termination.

The contractual issues giving rise to the default termination began early on in contract performance. Specifically, the Solicitation “warned potential bidders, that the schedule for the project ‘is very aggressive’ and involves ‘a very important department to the facility.’” AWI, as the awardee, was to provide renovations in five phases within a 400-day deadline. Contract performance started off strained due to architecture and engineering errors and omissions in the contract specifications for which the VA required AWI to perform several changes. All the while the VA and AWI continued debate over schedule submissions, which the VA found inadequate and refused to approve.

The relationship between the parties became further strained. Six months into contract performance, the VA issued its first cure notice. After, AWI failed to complete phase 1 on time, and the VA denied AWI’s requests for contract modification for compensation and time extensions.

Performance issues came to a head when AWI’s subcontractor, one of only two contractors in the remote area of contract performance that held the medical gas certification necessary to perform the project, reported AWI’s failure to make prompt payment despite AWI receiving payment from the VA. Afterwards, the subcontractor walked off the job. Then, less than a year into contract performance, the contracting officer issued a show cause notice citing AWI’s failure to complete phases 1 and 2 within the time required by the modified contract and ultimately issued a default termination in accordance with FAR 52.249-10, Default (Fixed-Price Construction).

AWI appealed the VA’s default termination to the CBCA and sought conversion to a termination for convenience. The CBCA sustained the VA’s default termination finding and denied AWI’s appeal.

In making its decision, the CBCA noted that default termination is “a drastic sanction which should be imposed (or sustained) only for good grounds and on solid evidence.” When a default is based on the contractor’s failure to prosecute the work, the contracting officer must have a reasonable belief that there was “no reasonable likelihood” that the contractor could perform the entire contract effort within the time remaining for contract performance. A termination for failure to make progress “usually occurs where the contractor has fallen so far behind schedule that timely completion becomes unlikely.”

In this case, since the VA established reasonable grounds to believe that AWI may not be able to perform the contract on a timely basis in issuing a cure notice as a precursor to possible default termination, and since AWI had failed to respond to the cure notice with adequate assurances, the VA had met its initial burden of proving that there were good grounds and solid evidence to support the termination.

The burden then shifted to AWI to prove that “there were excusable delays under the terms of the default provision of the contract that render[ed] the termination inappropriate, or that it was making sufficient progress on the contract such that timely contract completion was not endangered.” To recover under this theory of excusable delay, AWI also needed to show: “(1) the delay is of an ‘unreasonable length of time,’ (2) the delay was proximately caused by the Government’s actions, and (3) the delay resulted in some injury to the contractor.”

Applying a critical path schedule analysis to these requirements, the CBCA rejected AWI’s argument that extension of time for part of the project should automatically extend the total performance date. Thus, AWI could not rely on the VA contract modifications to excuse its delay where AWI could not prove it affected AWI’s critical path schedule. Accordingly, the CBCA found that “AWI failed to provide any evidence that it had fulfilled the contract requirement to provide the contracting officer with a schedule identifying the critical path and demonstrating how the schedule would be impacted by the VA’s alleged actions.” The CBCA concluded the VA to have properly terminated AWI for default, and denied AWI’s appeal.

Undoubtedly, federal contractors seek to perform contracts on time and within budget. However, the facts present in AWI demonstrate that when there is “no reasonable likelihood” that the contractor could perform the entire contract effort within the time remaining for contract performance, the end result may be a default termination.


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Koprince Law LLC

The analysis of an offeror’s past performance is sometimes a crucial part of an agency’s evaluation of proposals. And an agency’s evaluation of past performance is ordinarily a matter of agency discretion.

Though broad, this discretion is not unlimited. An agency’s past performance evaluation must be consistent with the solicitation’s evaluation criteria. GAO recently reaffirmed this rule, by sustaining a protest challenging an agency’s departure from its own definition of relevant past performance.

 

At issue in Delfasco, LLC, B-409514.3 (Mar. 2, 2015), was an Army solicitation that sought the production of two types of practice bombs and a suspension lug, used for attaching the bombs to aircraft. Offerors would be graded under a best value evaluation scheme, which had three factors: technical ability, past performance (which included subfactors for quality program problems and on-time delivery), and price. An offeror’s technical ability was significantly more important than its past performance and price; past performance and price were equally weighted.

The past performance evaluation was to consider the relevancy of the offeror’s prior work. Relevant past performance was defined “as having previously produced like or similar items . . . as items that have been produced using similar manufacturing processes, including experience with casting, machining, forging, metal forming, welding, essential skills and unique technologies required to produce the MK-76 with MK-14, BDU-33 and the 25lb Suspension Lug.” The solicitation’s evaluation criteria further explained that relevant past performance is that which “involved similar scope and magnitude of effort and complexities this solicitation requires,” while somewhat relevant past performance “involved some of the scope and magnitude of effort and complexities this solicitation requires.”

Three companies submitted offers under the solicitation. Delfasco—a previous producer of the two bombs and the lug—was one of the offerors. Delfasco’s proposal noted that it had previously produced “millions” of the practice bombs and “thousands” of the suspension lug sought by the Army. It also contemplated using existing practices, technology, personnel, and equipment to continue this production. Nevertheless, the Army gave Delfasco a somewhat relevant past performance rating.

GTI Systems also submitted a proposal. The Army’s evaluation of GTI’s past performance indicated that GTI had much more limited experience than Delfasco. The Army noted that GTI “lacked relevant past performance with respect to two necessary skills identified in the RFP, and only somewhat relevant experience with respect to another skill.” But even though the Army’s evaluation concluded that GTI “does not appear to have relevant experience i[n] all aspects that will be required on this solicitation,” it nonetheless found that GTI’s “past performance does involve a similar scope and magnitude of effort and complexities this solicitation requires giving the offeror an overall relevancy rating of ‘Relevant[.]’”

In sum, then, Delfasco was given a somewhat relevant past performance rating. GTI Systems (“GTI”)—who had never produced these same practice bombs or the suspension lug—was found to have relevant past performance. In part because of this rating difference, GTI was named the awardee.

Delfasco filed a GAO bid protest challenging the Army’s award decision. In the course of the protest, the Army admitted that Delfasco should have received a relevant past performance rating. Nevertheless, the Army argued, the award result would have been the same even if Delfasco had been assigned a relevant past performance rating.

Delfasco contended, however, that the Army’s errors went beyond the somewhat relevant past performance rating initially assigned to Delfasco. Additionally, Delfasco contended, the Army had erred by finding GTI’s past performance to be relevant instead of somewhat relevant.

GAO wrote that an agency’s evaluation of past performance is ordinarily “a matter of agency discretion.” However, that discretion is not unlimited. An agency’s past performance review must be “reasonable and consistent with the solicitation’s evaluation criteria and with the procurement statutes and regulations, [and] adequately documented.”

In this case, GAO found that the Army had not properly exercised its discretion. GAO referred back to the solicitation’s definition of relevant past performance, and noted that the Army found that GTI “had not demonstrated ‘any’ relevant experience” in casting or forging, and only somewhat relevant experience in machining. Thus, GAO found that “GTI has only demonstrated ‘some’ of the skills necessary to produce the bomb bodies.” Given “limited relevant experience,” GTI’s relevant past performance rating was not justified. GAO sustained Delfasco’s protest.

A disappointed offeror protesting a past performance evaluation often faces an uphill battle, given the discretion agencies typically enjoy in conducting their evaluations. But Delfasco affirms that this discretion is not unlimited—where an agency fails to follow its own past performance evaluation criteria, GAO will sustain a protest.

 

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Koprince Law LLC

Picture this scenario: the government hires your company to do a job; you assign one of your best employees to lead the effort. He or she does such a good job that the government hires your employee away. The government then drags its feet on approving your proposed replacement and refuses to pay you for the time when the position was not staffed–even though the contract was fixed-price.

The scenario is exactly what happened to a company called Financial & Realty Services (FRS), and according to the Civilian Board of Contract Appeals, FRS wasn’t entitled to its entire fixed-price contract amount.

In Financial & Realty Services, LLC, CBCA No. 5354, 16-1 BCP ¶ 36472 (Aug. 18, 2016), FRS held a GSA Schedule contract for facilities maintenance and management services. The underlying Schedule contract included FAR 52.212-4 (Instructions to Offerors–Commercial Items).

In 2013, as part of that contract, GSA awarded FRS a task order to manage some federal buildings in the Dallas/Fort Worth [Texas] Service Center, Fort Worth Field Office. The task order, at its most basic, called for FRS to provide a property manager.

The task order was priced in firm fixed annual amounts, and GSA agreed that FRS could invoice in fixed monthly amounts.

Important to later events, the task order required that the property manager to be able to obtain a National Agency Check with Inquiries (NACI) clearance within three months of award and maintain it through the life of the contract. For the first year or so of performance, a FRS employee served in the property manager position. Then, in October 2014, the government solicited and hired the employee away, to do basically the same job he was doing for FRS.

A month later, FRS submitted a potential replacement to GSA, but that candidate took another job in the intervening time before the government gave FRS word that it had approved his/her NACI clearance. FRS then offered a second and a third option in January and February 2015. Finally, in March, the third potential replacement became the property manager.

FRS later submitted invoices for $49,280, seeking payment for the time between October 2014 and March 2015. GSA refused to pay, so FRS filed a claim with the contracting officer seeking payment of the disputed amount. The contracting officer denied the claim, so FRS appealed the denial to the CBCA, alleging that GSA “breached its contract with FRS by thwarting or precluding FRS' performance of the contract and by failing to pay the full contract price.”

GSA moved for the case to be dismissed. In its motion to dismiss, GSA argued there was no factual basis to determine that GSA had acted improperly.

FRS conceded that it did not actually provide a property manager during the relevant time frame. As one might expect, however, FRS argued that the task order was fixed-price (meaning, FRS said, that the government agreed to pay regardless of whether the position was staffed), and that the government actively prevented FRS from performing.

The CBCA disagreed. It pointed out that FAR 52.212-4(i) states that “[p]ayment shall be made for items accepted by the ordering activity that have been delivered to the delivery destinations set forth in this contract.” The CBCA continued:

Notwithstanding the task order’s “fixed price,” GSA was obligated to pay only for services that were delivered and accepted.  Whether GSA could “supervise” the FRS employees who performed the services is immaterial.  In light of the complaint’s allegations that FRS did not staff the task order during the months in dispute, the allegation that GSA “fail[ed] to pay the full Contract price” for that same period . . . does not state a claim on which the Board could grant relief.

As for the fact that the GSA hired FRS’s property manager, the CBCA wrote that FRS “identifies no factual basis to suspect that GSA did anything inconsistent with the normal federal hiring process.” The CBCA determined, “we do not see how an otherwise lawful recruiting or hiring action that an agency was not contractually barred from taking–which is all that has been plausibly alleged–could constitute undue interference entitling a contractor to be paid for work it did not perform.”

Finally, the Board held that GSA had not breached the contract by failing to timely approve a replacement property manager. The CBCA noted that the contract did not include “a contractual duty on GSA’s part to clear job candidates within a specified time . . . .” Under the circumstances, the CBCA found the delays in clearance to be reasonable.

The CBCA dismissed the appeal.

As an impartial observer, it is easy to have sympathy for FRS. It did nothing wrong. In fact, it seemingly did everything right. It staffed the position with someone so good that the government poached the worker away within a year. It suggested multiple replacements, at least one of which took a different job while the government was still in the process of authorizing clearance. It certainly would seem like FRS had reason to be upset, especially since the task order was fixed-price.

But let’s be real here. Fixed-price or not, the government isn’t too keen to pay for something it doesn’t receive from a contractor. As Financial & Realty Services demonstrates, that policy may apply even when the government itself causes the contractor to be unable to deliver.

 

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Koprince Law LLC

What goes around, comes around.

The government sometimes refuses to pay a contractor for a modification when the government official requesting the modification lacks appropriate authority.  But contractual authority isn’t a one-way street benefiting only the government.  A recent decision by the Armed Services Board of Contract Appeals demonstrates that a contractor may not be bound by a final waiver and release of claims if the individual signing on the contractor’s behalf lacked authority.

The ASBCA’s decision in Horton Construction Co., SBA No. 61085 (2017) involved a contract between the Army and Horton Construction Co., Inc.  Under the contract, Horton Construction was to perform work associated with erosion control at Fort Polk, Louisiana.  The contract was awarded at a firm, fixed-price of approximately $1.94 million.

After the work was completed, Horton Construction submitted a document entitled “Certification of Final Payment, Contractors Release of Claims.”  The document was signed on Horton Construction’s behalf by Chauncy Horton.

More than three years later, Horton Construction submitted a certified claim for an additional $274,599.  The certified claim was signed by Dominique Horton Washington, the company’s Vice President.

The Contracting Officer denied the claim, and Horton Construction filed an appeal with the ASBCA.  In response, the Army argued that the appeal should be dismissed because the claim arose after a final release was executed.

Horton Construction opposed the Army’s motion for summary judgment.  Horton Construction contended that “Mr. Chauncy Horton did not have the requisite authority or the intent to release a claim.”

The ASBCA noted that, when a party moves for summary judgment, it must demonstrate “that there are no disputed material facts, and the moving party is entitled to judgment as a matter of law.”  In this case, the information in the record did “not demonstrate the extent to which Mr. Chauncy Horton was authorized to enter agreements between Horton and the Army.”  The ASBCA concluded that “the Army failed to submit sufficient evidence to meet its initial burden, specifically whether Mr. Chauncy Horton was authorized to sign the final payment and final release for appellant.”

The ASBCA denied the government’s motion for summary judgment.

When issues of contractual authority arise, they usually seem to benefit the government.  But, as the Horton Construction case shows, the government cannot have it both ways.  Like the government, a contractor may not be bound by the signature of someone who lacks appropriate authority.


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Koprince Law LLC

In determining whether a prime contractor and subcontractor are affiliated under the ostensible subcontractor rule, the SBA is supposed to consider the totality of the relationship between the parties.  But when it comes to determining whether the ostensible subcontractor rule has been violated, not all components of the prime/subcontractor relationship are created equal.

In a recent decision, the SBA Office of Hearings and Appeals confirmed that there are “four key factors” that are strongly suggestive of ostensible subcontractor affiliation–especially if the subcontractor will perform a large percentage of the overall contract work.

OHA’s decision in Size Appeal of Charitar Realty, SBA No. SIZ-5806 (2017) involved a GSA solicitation for custodial, landscaping and grounds maintenance at two federal courthouses.  The solicitation was issued as an 8(a) set-aside under NAICS code 561720 (Janitorial Services), with a corresponding $18 million size standard.  The solicitation required, among other things, that offerors provide at least three past performance references, completed over the last three years, for similar work.

After evaluating competitive proposals, the SBA announced that Charitar Realty was the apparent successful offeror.  An unsuccessful competitor then filed a size protest.  Although the size protest was found to be untimely, the SBA believed that the protest raised valid concerns.  The Director of the SBA’s Fresno District Office initiated his own size protest against Charitar.

Charitar’s proposal identified itself as the prime contractor and Zero Waste Solutions, Inc. as its subcontractor.  ZWS was the incumbent contractor, but had graduated from the 8(a) Program and was not eligible for the follow-on contract.

The proposal stated that “the allocation of financial risk, responsibility, and profit sharing will be 51% [Charitar] and 49% [ZWS].”  The proposal included three past performance references: two for ZWS and one for Charitar.  The project performed by Charitar was much smaller in scope and value.

The proposed Project Manager was a current employee of ZWS, who had agreed to move to Charitar’s payroll if Charitar won the prime contract.  Additionally, the SBA Area Office found that Charitar’s “entire workforce” would be hired from ZWS.

The SBA Area Office determined that Charitar was unusually reliant upon ZWS.  The SBA Area Offices deemed the firms affiliated under the ostensible subcontractor rule.  The affiliation caused Charitar to be ineligible for award.

Charitar appealed to OHA.  Charitar argued that the SBA Area Office had erred by finding a violation of the ostensible subcontractor rule.

OHA began its opinion by reiterating that the ostensible subcontractor rule “provides that when a subcontractor is performing the primary and vital requirements of the contract, or when the prime contractor is unusually reliant upon the subcontractor, the two firms are affiliated for purposes of the procurement at issue.”  The rule is intended ” to prevent [large] firms from forming relationships with small firms to evade SBA’s size requirements.”

To determine whether a relationship violates the ostensible subcontractor rule, the SBA Area Office “must examine all aspects of the relationship, including the terms of the proposal and any agreements between the firms.”  However, OHA’s prior case law has “identified ‘four key factors’ that have contributed to the findings of unusual reliance.”  OHA explained that those four factors are:

(1) the proposed subcontractor is the incumbent contractor and is ineligible to compete for the procurement; (2) the prime contractor plans to hire the large majority of its workforce from the subcontractor; (3) the prime contractor’s proposed management previously served with the subcontractor on the incumbent contract; and (4) the prime contractor lacks relevant experience and must rely upon its more experienced subcontractor to win the contract.

When these four factors are present, “violation of the ostensible subcontractor rule is more likely to be found if the proposed subcontractor will perform 40% or more of the contract.”

In this case, all four of the “key factors” were present.  ZWS was “ineligible to submit its own proposal” under the solicitation.  Charitar “will staff its portion of the contract almost entirely with personnel hired from ZWS.”  Charitar proposed “a ZWS employee to manage the contract” as Charitar’s Project Manager.  And although Charitar had some experience in the industry, Charitar produced no evidence that it had “ever performed” a contract of the size defined as “Similar Work” in the solicitation.  Finally, ZWS was proposed to perform 49% of the work, “a larger proportion than the 40%” that heightens the risk of ostensible subcontractor affiliation.

OHA affirmed the SBA Area Office’s size determination.

Ostensible subcontractor affiliation is intensely fact-specific, and the SBA will examine the totality of the relationship between the parties.  But as the Charitar Realty case demonstrates, the risk of ostensible subcontractor affiliation increases significantly where the “four key factors” identified in the case are present–particularly where the subcontractor will perform more than 40% of the work.

Because ostensible subcontractor affiliation is so fact-specific, it’s difficult to be 100% sure that any specific relationship will pass muster.  That said, avoiding the four key factors will likely go a long way toward showing the SBA that there has been no ostensible subcontractor violation.


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Koprince Law LLC

One might think that when an electronic proposal is received by a government server before the solicitation’s deadline, the proposal isn’t late. A government server is under government control, so the proposal is timely, right?

Not necessarily, at least the way the GAO sees it. As one contractor recently learned, waiting until the last minute to submit a proposal electronically carries significant risk that the proposal will not be considered timely, even if the proposal reaches the government server in time.

Peers Health, B-413557.3 (March 16, 2017) involved a Navy RFQ for occupational health disability and treatment guidelines. Quotations were to be submitted no later than 12:00 p.m. EST on November 28, 2016. The RFQ stated that quotations were to be submitted via email to a certain point of contact, and at an email address identified in the solicitation. Alternatively, offerors could submit their proposals by regular or overnight mail.

The Solicitation incorporated FAR 52.212-1 (Instructions to Offerors – Commercial Items), which provides, among other things, that proposals not timely received will not be considered for award. Notably, FAR 52.212-1 provides the following exceptions under which the government may accept late proposals:

(A) If [the proposal] was transmitted through an electronic commerce method authorized by the solicitation, it was received at the initial point of entry to the Government infrastructure not later than 5:00 p.m. one working day prior to the date specified for receipt of offers; or

(B) There is acceptable evidence to establish that it was received at the Government installation designated for receipt of offers and was under the Government’s control prior to the time set for receipt of offers. . . .

FAR 52.212-1(f)(2)(i). As the regulation explains, proposals received after the deadline for proposal submission will be considered timely if they are submitted electronically the day before the submission deadline, or if the government received the proposal and was in control of it prior to the submission deadline.

Peers submitted its quotation by email at 11:59 a.m. on November 28, 2016—one minute before the deadline. While the government server received the submission at 11:59 a.m., Peers’ email did not reach its final destination (the point of contact identified in the RFQ)  until 3:49 p.m. GAO did not explain what caused the lengthy delay in transmission from the server to the Navy point of contact.

The Navy eliminated Peers from the competition, stating that Peers’ quotation was untimely. After Peers learned of the Navy’s decision, it filed a GAO bid protest.

Peers argued that under FAR 52.212-1(f)(2)(i)(B), its proposal was timely because the email was received by the government’s server at 11:59 a.m. As such, Peers contended, its proposal was eligible for the timeliness exemption under FAR 52.212-1(f)(2)(i)(B) because it was “received at the government installation designated for receipt of offers and was under the Government’s control prior to the time set for receipt of offers . . . .”

GAO was not convinced. GAO explained that in an earlier case, Sea Box, Inc., B-291056, 202 CPD ¶ 181 (Comp. Gen. Oct. 31, 2002), GAO had ruled that only FAR 52.212-1(f)(2)(i)(A) applied to electronically submitted proposals because it spoke directly to the issue of electronic submission. GAO concluded that applying the broader government control exception found in FAR 52.212(f)(2)(i)(B) to electronic submission would make the specific day prior requirements for electronic submission redundant. To the dismay of Sea Box, GAO concluded the government control exception does not apply to electronic submissions.

Applying its reasoning from Sea Box, GAO concluded Peers’ proposal submission was untimely because it was neither received by the intended recipient prior to the closing date for proposal submission, nor received before 5:00 p.m. the working day prior to proposals being due. As such, Peers’ proposal was properly eliminated from competition as untimely, even though it had reached a government server before the deadline.

Interestingly, the Court of Federal Claims disagrees with the GAO’s reasoning in Sea Box (and, presumably, in Peers Health, as well).  In Watterson Construction Company v. United States, 98 Fed. Cl. 84 (2012), the Court carefully analyzed the regulatory history of the exceptions, and concluded that the “government control” exception does apply to emailed proposals. The Court has since confirmed its ruling, most recently in Federal Acquisition Services Team, LLC v. United States, No. 15-78C (Feb. 16, 2016).

In our view here at SmallGovCon, the Court has the better position: and not just because arguing with a federal judge isn’t usually a good idea. The regulation states that a late proposal may be accepted where the electronic commerce “or” the government control exception applies. The plain language of the regulation (and the Court’s careful study of the underlying history) suggest to us that Peers should have won its protest.

As we’ve discussed on this blog before, it’s bad news when the GAO and Court disagree about an important matter of government contracting. True, the GAO isn’t required to follow the Court’s rules. However, a bid protest shouldn’t turn on which forum the protester selects. My colleagues and I hope that the GAO reconsiders its position in future protests.

Perhaps Peers will take its case to the Court and obtain a different result. For now, contractors should be aware that under the GAO’s current precedent, the only way to ensure that an electronic proposal submission is timely received is to file before 5:00 p.m. the day before proposals are due. If the proposal is submitted later, and gets stuck on the government’s server, a potential protester should make plans to skip the GAO and head directly to the Court of Federal Claims.


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Koprince Law LLC

This week I had the pleasure of speaking at the 20th Annual Government Procurement Conference in Arlington, Texas. It was a great event and I was glad to see so many familiar faces. Next up, I’ll be in Des Moines on August 23rd for the Iowa Vendor Conference, where I’ll be joined by my friend Guy Timberlake for a great day of networking and information sessions.

But even as I log miles on the air and on the highways, there’s no mistaking the fact that we’re in the last days of the government fiscal year–and that means a busy week of government contracting news.  This week, SmallGovCon Week In Review takes a look at stories involving an update to CAGE codes, some Milwaukee businesses under investigation for wrongly portraying themselves as veteran-owned and minority-owned, a lack of oversight allowed contractors to overbill a government customer, a look at the uptick in government spending as the fourth quarter winds down, and much more.

  • The Defense Logistics Agency will, for the first time in 44 years, allow CAGE codes to expire. [Defense Logistics Agency]
  • Has the Homeland Security Department and it’s components gone overboard with agile? [Federal News Radio]
  • Several Milwaukee-area businesses are under investigation for falsely claiming  they were owned by minorities and military veterans in order to win government contracts. [Daily Progress]
  • The Defense Information Systems Agency said it will amend the ENCORE III RFP to fix some of the problems pointed out by protesters that were upheld by the GAO last week. [Federal News Radio]
  • The U.S. Fish and Wildlife Service allowed contractors to overbill the government for more than $130,000 because the agency didn’t “always review contractor invoices to ensure costs claimed were allowable and adequately supported.” [The Daily Caller]
  • A proposed rule from the SBA would update the regulations governing the delivery and oversight of its business lending programs. [Federal Register]
  • The SBA is asking a judge to throw out a lawsuit claiming it uses “creative accounting” for federal contracting benchmarks. [Federal News Radio]
  • The procurement policy world is heating up as summer begins to wind down and we jump into the final stretch of the fiscal year. [Federal News Radio]
  • Companies fraudulently got $268 million in contracts, according to a recent affidavit. [BizTimes]
  • A trifecta of companies protested the Department of Defense TRICARE contract awards, including the winner of the contract. [Federal News Radio]
  • The SBA has launched a new website that helps women-owned small businesses more easily manage eligibility and certification documents for the WOSB Federal Contract Program. [GCN]
  • An increasingly sluggish security review process is forcing some recruiters, contractors and agencies to change the way they enlist new qualified, cleared candidates. [Federal News Radio]

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When multiple unsuccessful offerors protest a solicitation, the GAO ordinarily will dismiss any and all bid protests associated with the procurement in the event one unsuccessful offeror takes its case to federal court–even if some protesters would prefer to remain at the GAO.

As one federal contractor recently learned in Colleague Consulting, LLC—Reconsideration, B-413156.18 (Sept. 12, 2016), the GAO’s jurisdictional rules prevent it from deciding protests when the outcome of the protest could be affected by a pending federal court decision.

Colleague Consulting involved a competition for a GSA contract. Colleague Consulting, LLC was eliminated from the pool of successful offerors because its proposal was deemed technically unacceptable. After learning of its exclusion, CCL filed protest with the GAO.

Separately, another unsuccessful offeror under the same solicitation filed a bid protest before the GAO challenging the GSA’s decision not to conduct discussions. After a time, that second unsuccessful offeror withdrew its protest from the GAO and refiled it before the U.S. Court of Federal Claims.

One of the goals of the GAO protest process is to give government contractors an administrative alternative to pursuing their bid protests in federal court. The GAO process, by design, is typically faster and less expensive than pursuing a protest in court (though not always). Despite this option, contractors also are afforded the opportunity to pursue bid protests at the Court of Federal Claims.

Because both the GAO and the Court of Federal Claims are authorized to decide bid protests, there is the possibility that different adjudicators will come to differing—and potentially contradictory—conclusions. To prevent such an outcome, the GAO’s jurisdictional regulations, at 4 C.F.R. § 21.11(b), state that “GAO will dismiss any case where the matter involved is the subject of litigation before, or has been decided on the merits by, a court of competent jurisdiction.”

Returning to Colleague Consulting, after the GAO received notice of the Court of Federal Claims protest, determined that “disposition of the COFC case could render a decision by our Office on CCL’s protest academic.” The GAO dismissed CCL’s protest, citing 4 C.F.R. § 21.11(b).

CCL filed a motion for reconsideration, urging the GAO to reverse its decision and continue hearing its protest. CCL argued that the word “matter” within  4 C.F.R. § 21.11(b) should be construed narrowly to mean that the GAO must dismiss a protest only where the arguments before the GAO and Court are similar. In this case, CCL argued, the arguments were entirely dissimilar: CCL was protesting its technical evaluation whereas the other unsuccessful offeror was protesting the GSA’s decision not to hold discussions.

The GAO disagreed.  It wrote:

While the word ‘matter’ is not defined, there is nothing in the language of the regulation, or elsewhere, to suggest that it is meant to apply to the exact narrow issue involved in the protest before our Office. Instead, the matter before the court can properly be characterized as a dispute over which companies should have remained in the competition under the GSA solicitation. While that matter remains before the [federal court], GAO will not also decide the question.

GAO denied CCL’s request for reconsideration.

In today’s contracting environment, it is not uncommon for more than one offeror to pursue a protest over the same procurement. With each offeror being able to choose where it wants to file (i.e. GAO or the Court of Federal Claims), an offeror wishing to use the GAO’s administrative processes may nonetheless be out of luck if a competitor chooses the Court.

Ian Patterson, a law clerk with Koprince Law LLC, was this post’s primary author.


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I am back in Lawrence after a great trip to Huntsville, Alabama, where I spoke at the Redstone Edge Conference.  My presentation focused on the recent major developments in small business contracting, including the changes to the limitations on subcontracting and the new universal mentor-protege program.

Many thanks to Courtney Edmonson, Scott Butler, Michael Steen, and the rest of the team at Redstone Government Consulting for putting together this impressive event and inviting me to participate.  A big “thank you” as well to everyone who attended the presentation, asked great questions, and followed up after the event.

Next on my travel agenda, I’ll be in Wichita this Friday for a comprehensive half-day session on joint venturing and teaming for federal government contracts, sponsored by the Kansas PTAC.  Hope to see you there!


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The recently-finalized SBA small business mentor-protege program will change the landscape of set-aside contracting–for large businesses and small contractors alike.

I am excited to announce that Koprince Law LLC has partnered with GOVOLOGY to offer a live electronic training on this important new program.  Please join us on August 11, 2016 at 12:00 p.m. Central for this 90 minute training.  The training is open to the public, so please follow this link to register.  If you’re a Koprince Law LLC client or SmallGovCon newsletter subscriber, check your email for a special discount code.

See you online on August 11!


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An offeror’s proposal must conform to all technical requirements of an agency’s solicitation–even if the offeror believes those requirements to differ from standard industry practice.

In a recent bid protest decision, the GAO held that an agency appropriately rated an offeror’s proposal as technically unacceptable because the offeror failed to conform to certain material solicitation requirements; the offeror’s insistence that those requirements varied from standard industry practice was irrelevant.

In Wilson 5 Serv. Co., Inc., B-412861 (May 27, 2016), the VA issued a SDVOSB set-aside RFQ seeking facility maintenance support operations at the VA’s Capitol Region Readiness Center (CRRC). The CRRC operates on a 24-hour per day, 7-day per week, 365-days per year (24/7/365) basis and serves a mission-critical role in the VA National Data Center Network.

The RFQ’s PWS required offerors to “determine the appropriate onsite staffing levels to support a 24/7/365 operations.” In written responses to vendor questions, the VA confirmed that “t is a requirement for staff to work onsite in support of the CRRC 24/7/365.”

Wilson 5 Service Company, Inc. (“Wilson 5”) was one of three offerors to submit quotations. Wilson 5’s staffing plan included on-site staffing from 7am to 5pm and emergency “on-call” services after hours, with an ability to call back personnel to the facility if necessary.

The VA determined that Wilson 5’s “lack of off-hours onsite support represents a material failure to meet the Government’s requirement . . ..”  The VA rated Wilson 5’s quotation as unacceptable, and excluded Wilson 5 from the competitive range.

Wilson 5 filed a GAO bid protest. Wilson 5 acknowledged that its quotation did not provide for 24/7/365 onsite support. Wilson 5 argued, however, that the RFQ did not require vendors to provide onsite off-hours staffing. Wilson 5 noted that it is “standard industry practice for a contract to provide 24/7/365 coverage by calling back personnel to the facility for an emergency,” rather than staffing the facility onsite during off-hours.

GAO wrote that, when a protester and agency disagree over the meaning of a solicitation, GAO will read the solicitation “as a whole and in a manner that gives effect to all of its provisions.” In this case, GAO held, “the agency’s interpretation of the RFQ, when read as a whole, is reasonable, and the protester’s interpretation is not reasonable.” The GAO noted that various portions of the solicitation “advised vendors of the responsibility to provide onsite staffing to support the 24/7/365 operation.” GAO found that there was no indication that the solicitation could be interpreted to permit call back service as an alternative to the on-site staffing requirement. GAO denied Wilson 5’s protest.

This decision serves as a reminder that offerors must meet the Government’s technical requirements, even if those requirements appear to vary from standard industry practice. As Wilson 5 learned the hard way, the plain terms of a solicitation will trump standard industry practice.

Megan Connor, a summer law clerk with Koprince Law LLC, was the primary author of this post.


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I am very pleased to announce that Candace Shields is joining our team of government contracts bloggers here at SmallGovCon.

Candace comes to us from the Social Security Administration, where she was an Attorney Advisor for several years.  As an associate attorney at Koprince Law LLC, Candace’s practice focuses on federal government contracts law.

Please check out Candace’s online biography and great first blog post, and be sure to visit SmallGovCon regularly for the latest legal news and notes for small government contractors.


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Coming as welcome news for collaborative R&D, the 2017 NDAA will extend the life of the Small Business Innovation Research and Small Business Technology Transfer programs.

The conference version of the bill, which seems likely to be on the President’s desk in short order, contains provisions extending both programs for five years.

SBIR and STTR are unique research, development, and commercialization programs overseen by the SBA. Each program calls for a three-phase process. In the first two phases, R&D is funded by the government; the third phase of each program involves commercialization. Although the programs have many similarities, there are also important differences. For example, in the SBIR program, a small business may collaborate with a non-profit research institution; in the SBIR program, such collaboration is required.

Both programs were scheduled to expire on September 30, 2017. The 2017 NDAA extends the lifespan of the programs through September 30, 2022. This extension will allow small businesses to continue their collaboration with research institutions to develop new technologies for a variety of applications—good news for businesses and universities doing research in cutting edge fields.

2017 NDAA: The National Defense Authorization Act for Fiscal Year 2017 appears poised beneath the President’s pen for signing. It includes some massive changes as well as some small but nevertheless significant tweaks sure to impact Federal procurements in the coming year. For the next several days, SmallGovCon will delve into the minutia to provide context and analysis so that you do not have to. Visit smallgovcon.com for the latest on the government contracting provisions of the 2017 NDAA.


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Women-owned small businesses are increasingly seeking to become certified through one of four SBA-approved third-party WOSB certifiers.  But which third-party certifier to use?

There doesn’t seem to be any single resource summarizing the basics about the four SBA-approved certifiers, such as the application fees, processing time, and documents required by each certifier.  So here it is–a roundup of the key information for three of the four SBA-approved WOSB certifiers (as you’ll see, we’ve had some problems reaching the fourth).

First things first: why should WOSBs and EDWOSBs consider third-party certification?

As part of the 2015 National Defense Authorization Act, Congress eliminated self-certification for WOSB set-asides and sole sources. Despite the statutory change, the SBA continues to insist that WOSB remains a viable option indefinitely while the SBA figures out how to address Congress’s action. But can the SBA legally allow WOSBs to do the very thing that Congress specifically prohibited? I certainly have my doubts, particularly since the SBA has never explained the legal rationale for its position.

For WOSBs and EDWOSBs, third-party certification (which is still allowed following the 2015 NDAA) may be the safest option. There are currently four entities that the SBA has approved as third-party certifiers: the National Women’s Business Owners Corporation (NWBOC), Women’s Enterprise National Council (WBENC), the U.S. Women’s Chamber of Commerce (USWCC), and the El Paso Hispanic Chamber of Commerce (EPHCC). This post summarizes the cost, time, and application fees associated with three of those organizations.

After researching and speaking with three of the WOSB certifiers, we found that all three require a written application, and that the required supporting documents are largely similar. Anticipated processing times vary (and probably should be taken with a grain of salt, as no certifier wants to admit that it is slow). For all certifiers, the anticipated processing time from application to certification begins when a completed application is received. This point was reiterated time and again at each of the three certifiers we were able to reach. To facilitate the prompt consideration of an application, prospective WOSBs should make sure to submit all of the required documents and information the first time around; and to respond promptly if additional information is requested during the application process.

National Women’s Business Owners Corporation (NWBOC)

The NWBOC offers third-party certification to both WOSBs and EDWOSBs. All application information and documents needed are listed in the NWBOC’s application form, which is available on its website. The NWBOC also offer the option for potential WOSBs and EDWOSBs to purchase a tailored application kit to guide applicants through the process of applying. The fee to apply for certification is $400 at a minimum, and an applicant may be charged more if requests for more information are not met in a timely fashion. According to the NWBOC, the current processing time for certification is between 6-8 weeks. A completed application and all required documents must be mailed into the NWBOC before processing will begin.

Women’s Business Enterprise National Council (WBENC)

WOSB Certification through WBENC is free and very quick—for WBENC members. For companies that are already members of WBENC—especially those that are already certified as Women’s Business Enterprises (WBEs)—this option could be both the quickest and cheapest. For companies that are not members of WBENC, the cost for WBENC Membership starts at $350, and can go up based off of the applying company’s revenue. And although WBENC says that WOSB certification for its members is “virtually instant,” the process of becoming a member can take up to 90 days—which means that if a non-member elects to use WBENC, the application process could take 90 days or more. WBENC offers a WOSB application checklist on its website to aid in document production, as well as a guide to completing the application. WBENC suggests that the application be completed after document production, as it is done online and has a 90-day deadline from start to finish—and once it is submitted, no changes can be made. All documents required for the application, including the fee, must be provided before the application will be processed. WBENC only offers WOSB certification, not EDWOSB certification. Prospective EDWOSBs will need to look at another option.

The U.S. Women’s Chamber of Commerce

The USWCC offers WOSB and EDWOSB third-party certification, to both its members and non-members. According to the USCWCC’s website, certification takes between 15-30 days and costs $275 for Business and Supplier members and $350 for non-members. A possible bonus (or deterrent, for some) is that the entire application and document submission is completed online. The USWCC offers both a certification and document checklist and sample application on its website to aid applicants in document production and prepare them to answer the questions on the application, but it cannot be submitted in lieu of the online form. The USWCC also requires the application be completed in one sitting—it cannot be completed partially and saved to be completed later. This means that the applicant should be completely ready to apply prior to starting, or else risk getting almost done and being interrupted and then having to restart from the beginning.

The El Paso Hispanic Chamber of Commerce (EPHCC)

Unfortunately, we found that the EPHCC was difficult to contact, and we were unable to speak with any staffer regarding the EPHCC’s WOSB certification process. If we obtain information about the EPHCC, we will update this post to include it.

These four entities are currently the only ones approved by the SBA for third-party WOSB/EDWOB certification. While the SBA remains adamant that third-party certification remains viable indefinitely, women-owned businesses should decide for themselves whether they are comfortable with the SBA’s position. For women-owned businesses that decide to play it safe while the SBA addresses the 2015 NDAA, third-party certification is the way to go.

Molly Schemm of Koprince Law LLC was the primary author of this post.  


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A dissatisfied U.S. Postal Service customer filed an appeal with the Postal Service Board of Contract Appeals, seeking $50,000 in damages resulting from the Postal Service’s failure to deliver a Priority Mail package.

The appellant contended that it had a contract with the Postal Service, which was breached when the Postal Service failed to deliver the package.  But the appellant’s cleverness wasn’t enough to prevail: the Board held that it lacked jurisdiction over the appeal.

The case of Triumph Donnelly Studios LLC v. United States Postal Service, PSBCA No. 6683 (2017) began in August 2016, when Triumph Donnelly mailed a package from South Carolina to California using Priority Mail.  The package was never delivered, and the Postal Service admitted that the package was lost.

The Postal Service automatically insures most Priority Mail packages in the amount of $50.  Triumph filed a claim for this amount, and was reimbursed by the Postal Service.

But Triumph wasn’t satisfied with a mere $50.  Triumph filed a claim with the Postal Service’s National Tort Center seeking $50,000.  The National Tort Center denied Triumph’s claim and a subsequent request for reconsideration.  The National Tort Center advised Triumph that its decision was final, and that Triumph’s next legal option would be to file suit in federal district court.

Instead, Triumph filed an appeal with the Board, arguing that the Postal Service breached a contract when it lost the Priority Mail package.  The Postal Service asked the Board to dismiss the appeal for lack of jurisdiction.

The Board held that the Contract Disputes Act applies to the Postal Service.  Under the CDA, a Board of Contract Appeals has jurisdiction over “any express or implied contract . . . made by an executive agency for (1) the procurement of property, other than real property in being; (2) the procurement of services; (3) the procurement of construction, alteration, repair or maintenance of real property; or (4) the disposal of personal property.”

The Board wrote that its jurisdiction is limited “to the four contract types” identified in the CDA.  More specifically, the CDA “does not apply to a contract under which the government provides a service.”

Here, the Board determined, “ecause the alleged contractual relationship between the Postal Service and Triumph Donnelly would be just such a contract for the government to provide a service, we hold that it is not covered by the CDA.”  The Board concluded: “imply put, we do not have jurisdiction to decide disputes between the Postal Service and its customers involving delivery of the mail.”

The Board dismissed the appeal.

Sadly, the PSBCA’s decision doesn’t answer an obvious question: what the heck was in that Priority Mail package, anyway?  Cold cash?  Ultra-rare Nintendo games?  The possibilities are endless, and perhaps raw speculation is more fun than an answer.

The Triumph Donnelly case is interesting because of its facts, but it also demonstrates an important point of law: the jurisdiction of a Board of Contract Appeals is limited by the CDA to specific matters–and excludes cases in which the government provides a service.


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Having been a part of the federal contracting community for close to 30 years, I’ve seen quite a few changes in policy and process that have both improved and degraded the ability of small business concerns to participate as contractors and subcontractors. I’m not referring solely to changes where the language targeted small business, I’m also including those intending to change how business is done based on a specific commodity, contract cost type, procurement method, agency mission or government-wide initiative.

Img-1-guy.jpg

In this, my first contribution to GovCon Voices, I’m taking a look back at recent proposed changes that resulted in lots of conversations with my friend Steve Koprince, a slew of articles and blogs and way too many anxious moments awaiting the outcomes. This is the first of a three part series I’m calling ‘The Good, the Bad and the Just Plain Ugly Changes That Almost Were!’

 The Just Plain Ugly

The 2017 NDAA was chock full of changes that included:

  • DoD having the option to forego price or cost evaluation for certain multiple-award contracts;
  • GAO being mandated to provide Congress a list of the most common grounds for sustaining protests;
  • A pilot program for certain small subcontractors to receive past performance ratings;
  • Requiring justification for ‘Brand Name or Equivalent’ purchases, and;
  • Strengthening small business subcontracting plan enforcement, just to name a few.

One of the intended changes that died in conference was the provision introduced as Section 838 of the Senate version. Its name was “Counting of major defense acquisition program subcontracts toward small business goals.” and the very negative effects of this rule would be catastrophic to small business, if enacted.

guy-img-2.jpgNot familiar with Major Defense Acquisition Programs or MDAP? Think of program names like Global Hawk, the Presidential Helicopter, Arleigh Burke Class Destroyer, Littoral Combat Ship and more. Each of these and numerous other MDAP programs are critical to our Nation’s security. As a result, collectively thousands of small business subcontractors capturing tens of billions of dollars in revenues are engaged. Had this provision made it into the 2017 NDAA, the Department of Defense would be able to include 1st and 2nd tier subcontract dollars, reported by MDAP prime contractors, towards the Department’s overall small business set-aside goals. In short, DoD could reduce set-aside award dollars by replacing them with dollars that may have been awarded to small businesses via subcontracts.

The scenario represented potential lost dollars to small contractors starting in the area of $18,000,000,000 based on DoD’s FY16 OUSD Comptroller/CFO publication that indicated Major Defense Acquisition Programs (MDAPs) and Major Automated Information Systems (MAIS) accounted for 43% of the requested $177.7B. If we take 23% of $76B (the MDAP/MAIS portion of the OUSD FY16 request) what we end up with is the amount of set-aside obligations DoD would not have to issue in FY17 and beyond. The amount is effectively 1/3 of the dollars awarded to small business via set-aside or sole-source in FY2016. Let that sink in.

In the spaghetti western movie ‘The Good, the Bad and the Ugly’ there is a line I find very relevant to this legislative near-miss. It goes like this:

“In this world there’s two types of people my friend.
Those with loaded guns and those who dig. You dig.”

I’m beyond overjoyed this piece of legislation had to dig and I hope it stays buried.

Your comments and questions are always welcome! Stay tuned for ‘The Bad’ change that almost was.

Peace!

Guy Timberlake, The Chief Visionary
http://www.theasbc.org | @theasbcguy | @govconguy |@govconchannel

“The person who says it cannot be done should not interrupt the person doing it.”


Guy Timberlake, Chief Visionary Officer and Co-Founder,
The American Small Business Coalition, LLC
(410) 381-7378 x200 | founder@theasbc.org

‘Go-To’ Guy Timberlake is an accomplished veteran of federal contracting with nearly 30 years of experience, knowledge and relationships acquired in support of civilian, defense and intelligence agency programs since Operation Desert Storm. He’s called ‘Edutainer’ for his ability to make mundane discussions about business essential topics (like finding and winning federal contracts and subcontracts!) interesting, and presenting them so they are practical and sticky. Most important is that Guy is a devoted husband, a proud father and loves pizza night with his family and friends. ‘Go-To-Guy’ is the nickname given to him by his defense customers in the 1990’s.

GovCon Voices is a regular feature dedicated to providing SmallGovCon readers with candid news, insight and commentary from government contracting thought leaders.  The opinions expressed in GovCon Voices are those of the individual authors, and do not necessarily reflect the opinions of Koprince Law LLC or its attorneys.


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In its evaluation of past performance, an agency was permitted to disregard a past performance reference prepared by an offeror’s sister company–which also happened to be in line for a subcontracting role.

In a recent bid protest decision, the GAO upheld the agency’s determination that the sister company’s reference was “inherently biased” and need not be considered in the agency’s past performance evaluation.

The GAO’s decision in PacArctic, LLC, B-413914.3; B-413914.4 (May 30, 2017) involved a DoD Washington Headquarters Services solicitation for advisory and assistance services.  The solicitation, which was set-aside for 8(a) participants, called for the award of a single IDIQ contract.

Proposals were to be evaluated on a best value basis, considering three factors: technical capability, past performance, and price. With respect to past performance, the agency was to evaluate recent and relevant past performance.  The solicitation required offerors to submit past performance questionnaires from their customers for evaluation.

PacArctic, LLC submitted a proposal.  In its proposal, PacArctic included a PPQ completed by the president of PacArctic’s sister company, which shared “common ownership and control” with PacArctic.  The sister company, which was the incumbent contractor, said that PacArctic had performed subcontract work on the incumbent contract.  The sister company’s president rated PacArctic’s past performance as “exceptional.” PacArctic proposed the sister company as one of its subcontractors for the project.

In its evaluation of past performance, the agency elected not to consider the sister company’s PPQ. The agency explained that, because the companies shared common ownership, and because the sister company would be a subcontractor to PacArctic, the sister company was “inherently biased” in PacArctic’s favor.

The agency assigned PacArctic a “Moderate Confidence” past performance score.  The agency then awarded the contract to a competitor, which had received a “High Confidence” score.

PacArctic filed a GAO bid protest.  Among its arguments, PacArctic contended that it was improper for the agency to ignore the sister company’s PPQ.  PacArctic pointed out that nothing in the solicitation precluded a sister company from serving as a past performance reference.

The GAO agreed that the RFP did not prevent a sister company from serving as a reference.  Nevertheless, under FAR 15.305(a)(2)(i), the agency was to consider the “source of the information” as part of its evaluation.  The GAO continued:

Here, where the source of the PPQ was PacArctic’s sister company, which was proposed as a subcontractor in PacArctic’s proposal, we find that the agency reasonably concluded that the PPQ lacked sufficient credibility, given the sister company’s obvious stake in the evaluation.  Accordingly, we find nothing unreasonable regarding the agency’s decision to disregard the PPQ.

The GAO denied PacArctic’s protest.

PacArctic is a subsidiary of an Alaska Native Corporation.  It’s not uncommon for companies falling under the same ANC, tribal, or NHO umbrella to work together, as PacArctic and is sister company did on the incumbent contract.  Even outside of the ANC, tribal and NHO context, many small businesses have affiliates or close working relationships with other entities.  For contractors like these, it’s worth remembering that in a past performance evaluation, the “source of the information” must be considered.  As PacArctic demonstrates, when the source is a sister company, other affiliate, and/or proposed subcontractor, the agency may disregard the information provided.


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Resolving a protest challenging a past performance evaluation, GAO is deferential to the agency’s determinations. It is primarily concerned with whether the evaluation was conducted fairly and in accordance with the solicitation’s evaluation criteria; if so, GAO will not second-guess the agency’s assessment of the relevance or merit of an offeror’s performance history.

For protesters, therefore, challenging an agency’s past performance evaluation can be difficult. But a recent decision makes clear this task is not impossible—GAO will sustain a protest challenging a past performance evaluation if the agency treats offerors differently or unfairly, such as by more broadly reviewing the awardee’s CPARs than the CPARs of the protester.

At issue in CSR, Inc., B-413973 et al. (Jan. 13, 2017) was the Department of Justice’s evaluation and award of a blanket purchase agreement to Booz Allen Hamilton. The BPA sought performance measurement tool services for the Office of Justice Programs, to assist with the Office’s award of grants to federal, state, local, and tribal agencies for criminal justice, juvenile justice, and victims’ matters.

According to the solicitation, offerors were allowed to submit up to nine past performance examples. DOJ could supplement this information with “data obtained from other sources, including, but not limited to, other DOJ and OJP contracts and information from Government repositories[.]” CSR (the protester) submitted six past performance examples, three of which concerned task orders involving similar services previously performed for the agency.

Booz Allen scored an exceptional rating while CSR earned only an acceptable rating. CSR filed a GAO bid protest, alleging that these ratings were caused by DOJ’s disparate treatment of the offerors.

CSR contended that DOJ only considered CPARs for CSR’s submitted past performance examples (finding the quality of CSR’s prior work to be mixed) but considered Booz Allen’s CPAR ratings for past performance projects that were not identified in its proposal (finding them to be of high quality). CSR alleged that had DOJ considered CPARs for its other projects (as it had for Booz Allen), its past performance score would have been higher.

GAO found the past performance evaluation to be unequal. In doing so, GAO noted that it will not normally object to an agency’s decision to limit its review of past performance information. But this discretion comes with a large caveat—as a fundamental matter of fairness, offerors must be evaluated on the same basis and the evaluation must be consistent with the solicitation’s terms. Explaining its decision, GAO wrote:

[T]he agency’s evaluation of CSR’s past performance was based on only the most recent CPARs for those specific projects identified by the vendor in its quotation. However, when evaluating BAH’s past performance, the agency considered CPARs for other than the specific projects that BAH had identified in its quotation. . . . Quite simply, to the extent that the agency’s past performance evaluation of BAH considered CPARs for other than the projects specifically referenced by the awardee in its quotation, the agency was required to do the same when evaluating CSR’s past performance. As the agency was required to treat vendors equally and evaluate past performance evenhandedly, and failed to do so here, the agency’s actions were disparate and unreasonable.

GAO sustained CSR’s protest.

Though agencies typically enjoy discretion in evaluating past performance, CSR confirms that this discretion isn’t unlimited. Agencies must evaluate offerors fairly. This means that, if an agency considers a broad range of CPARs from one offeror, it must consider a similar range of CPARs for other offerors, too.


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It’s been a very busy week in government contracting with the SBA issuing its final rule on the small business mentor-protege program. It has given us here at Koprince Law a lot to read over and blog about so that SmallGovCon readers can stay abreast of all of the changes packed inside this lengthy document.

But as important as the mentor-protege rule is for small and large contractors alike, it’s not the only government contracts news making headlines this week.  In this week’s SmallGovCon Week in Review, you’ll find articles on proposed new whistleblower protections, opportunities for small businesses at the close of the fiscal year, significant pricing discrepancies under GSA Schedule contracts, and much more.

  • A new bipartisan measure would give subgrantees and personal services contractors the same whistleblower protections currently afforded contractors, grant recipients  and subcontractors. [Government Executive]
  • An advocacy group for small businesses is once again claiming that  giant corporations are reaping billions from federal small business contracts. [Mother Jones]
  • It’s not too late to get in on the fourth quarter government spending bonanza so long as you are a company that has some prospects in the pipeline. [Federal News Radio]
  • DoD’s new procurement evaluation process is moving toward objectivism and a more mathematical system of judgement, as part of an overall shift in favor of Lowest Price Technically Available evaluations.  [Federal News Radio]
  • Officials at five Army components failed to fully comply with rules for evaluating contractors’ past performance when awarding those firms work. [Government Executive]
  • An audit report shows that Army officials did not consistently comply with requirements for assessing contractor performance. [Office of Inspector General]
  • IT reseller contracts present significant challenges for the GSA’s schedules program, according to a GSA IG report. [Office of Inspector General]
  • Nearly half of the Democratic House caucus asked defense authorization conferees to remove “harmful language” narrowing the application of the Fair Play and Safe Workplaces executive order. [Bloomberg BNA]
  • Small businesses can find plenty of opportunities as the curtain comes down on the federal fiscal year. [Government Product News]
  • An update to the Freedom of Information Act was signed into law earlier this month and mandates a presumption of openness, and adds new appeal rights for citizens whose requests are denied. [Federal News Radio]

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Koprince Law LLC

For Federal Supply Schedule procurements, agencies are not required to evaluate past performance references of subcontractors, unless the solicitation provides otherwise.

As one offeror recently discovered in Atlantic Systems Group, Inc., B-413901 (Jan. 9, 2017), unlike negotiated procurements, where agencies “should” evaluate the past performance of subcontractors that will perform major or critical aspects of the contract, offerors bidding under FSS solicitations should not assume that a subcontractor’s past performance will be considered.

Atlantic Systems involved a solicitation for technical, engineering, management, operation, logistical, and administrative support for the Department of Education’s cybersecurity risk management program. The solicitation was set aside for SDVOSB concerns that held Schedule 70 contracts.

Pursuant to the solicitation, offerors were to be evaluated for both corporate experience and past performance. In order to enable the agency to conduct the past performance/experience evaluation, each “offeror” was to provide evidence of the experience “of the organization” with similar projects or contracts.

For corporate experience, offerors were to provide between 3 and 5 performance examples that demonstrated the offeror’s capabilities “with similar projects or contracts, in terms of the nature and objectives of the project or contract; types of activities performed; studies conducted; and major reports produced.” Similarly, under the past performance factor, offerors were to provide between 3 and 5 performance examples “performed in the past [3] years that were similar in size, scope, and complexity” to the solicitation. The solicitation did not specify how the agency would treat a subcontractor’s past performance.

Under both corporate experience and past performance categories, Atlantic Systems provided two examples of its own performance and two examples from its subcontractor. In its evaluation, the agency did not consider the subcontractor’s past performance. Rather, “since the solicitation asked for experience and past performance for the organization, offeror, the agency only considered the information provided for the entities in whose name the offers were submitted.” Based in part on this determination, the agency rated Atlantic Systems as “does not possess” for corporate experience, and “neutral” for past performance. The agency awarded the order to a competitor.

Atlantic Systems filed a bid protest at GAO. Atlantic Systems contended, in part, that the agency had erred by failing to consider the past performance and experience of its subcontractor. Atlantic Systems pointed out that in a prior bid protest, Singleton Enterprises, B-298576 (Oct. 30, 2006), GAO sustained the protest, holding that the solicitation contained a “latent defect”: the agency had reasonably concluded that “offeror” meant only the prospective prime contractor; the protester had reasonably believed otherwise.

But Singleton was a negotiated procurement; offers were evaluated under FAR Part 15. FAR 15.305(a) states that agencies “should” consider the past performance of a subcontractor that will perform major or critical aspects of the contract. FAR 15.305(a) was central to GAO’s ruling in Singleton, because it created a reasonable expectation that a subcontractor’s past performance would be considered.

Here, in contrast, “the solicitation was issued pursuant to FAR part 8,” which applies to FSS procurements. FAR Part 8 “does not suggest that in evaluating an offeror’s past performance an agency should also consider the past performance of its proposed subcontractors.” Accordingly, “we do not find that the solicitation here is ambiguous, and it was reasonable for the agency to consider the experience and past performance of the offeror (i.e., the entity that submitted the offer) and not its subcontractors.”

As a policy matter, it’s fair to wonder if the underlying rule for consideration of a subcontractor’s past performance should vary depending on which Part of the FAR applies to the acquisition. But as a practical matter, Singleton Enterprises stands for an important principle: if an FSS solicitation does not specifically indicate that a subcontractor’s past performance will be considered, there is no guarantee that it will be.


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When issues arise in performance of a federal contract, a contractor may seek redress from the government by filing a claim with the contracting officer. However, commencing such a claim may result in an exercise of patience and waiting by the contractor.

The Contract Disputes Act, as a jurisdictional hurdle for claims over $100,000, requires a contractor to submit a “certified claim” to the agency. The CDA also requires the contracting officer, within sixty days of receipt of a certified claim, to issue a decision on that claim or notify the contractor of the time within which the decision will be issued.

That second part of the equation can lead to some frustration on the part of contractors. As seen in a recent Civilian Board of Contract Appeals decision, a contracting officer may, in an appropriate case, extend the ordinary 60-day time frame by several months.

In Stobil Enterprise v. Department Veterans Affairs, CBCA No. 5616 (2017), the VA awarded Strobil a contract to provide housekeeping and dietary services for an inpatient living program at a VA facility. After encountering contractual issues, Stobil initially filed a claim in the amount of $166,000. The VA denied this claim, and Stobil appealed. The CBCA dismissed Stobil’s appeal because the underlying claim hadn’t included the required certification.

Stobil then went back to the drawing board and filed a certified claim, “based on the same contracts and similar issues as those presented” in the first claim. But the certified claim was in the amount of $321,288.20, plus a whopping $2.3 million in interest. Stobil filed its certified claim on November 28, 2016.

By way of a January 27, 2017 letter, the contracting officer notified Stobil that the contracting officer would issue a decision on the certified claim by March 31, 2017. According to the contracting officer, the decision would be issued about four months after Stobil had filed its claim–or about twice as long as the 60-day time frame set forth in the CDA.

Apparently frustrated with the delay, Stobil requested the CBCA direct the contracting officer to issue its decision sooner. The CBCA declined this request.

In its rationale, the CBCA noted that the CDA doesn’t require a contracting officer to issue a decision within 60 days, but instead provides the contracting officer the option of notifying the contractor of the time within which the decision will be issued. The CDA doesn’t provide an outer limit on the period in which the decision may be extended beyond 60 days. Instead, the question is whether the delay was reasonable in light of the specific facts and circumstances of the case.

The CBCA continued:

Typically, in evaluating undue delay and reasonableness [of the date proposed by the contracting officer for issuance of a decision on a claim], a tribunal considers a number of factors, including the underlying claim’s complexity, the adequacy of contractor-provided supporting information, the need for external technical analysis by experts, the desirability of an audit, and the size of and detail contained in the claim.

The CBCA explained that while the VA had previously issued a decision on Stobil’s claims involving similar matters,”Stobil nearly doubled the amount of its claim from its former appeal . . . and is also now seeking around $2.3 million in interest.” This is, the CBCA said, “by no means a slight up-tick in money sought, such that the contracting officer should be able to rely primarily on whatever documentation Stobil previously submitted” with its initial claim. The CBCA agreed with the VA that with the significantly increased monetary demand and possibility of new items requiring review, the contracting officer was not “unduly delayed” in issuing a decision. The CBCA concluded that the VA’s timeline for issuing a decision on the certified claim was “reasonable, constituting only a modest delay.”

It’s commonly understood that a claim filed pursuant to the Contract Disputes Act must be decided within 60 days. But as the Stobil Enterprise case demonstrates, agencies have the discretion to extend the 60-day period significantly, provided that the extension is deemed “reasonable.” Here, the contracting officer essentially doubled the underlying 60-day period, but was guilty of nothing more than a “modest delay.” Contractors availing themselves of the claims process should be prepared to play the waiting game.


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As a general rule, an agency is only required to evaluate a fixed-price offer for reasonableness (that is, whether the price is too high). Agencies are not required to evaluate fixed-price offers for realism (that is, whether the price is too low) and, in fact, cannot do so unless the solicitation advises offerors that a realism evaluation will be conducted.

GAO recently reaffirmed this principle when it denied a protest challenging an agency’s refusal to consider the realism of offerors’ fixed prices as part of a corrective action, even though the agency suspected that at least one offeror’s price was unrealistically low.

Under FAR 15.404-1(d)(3), an agency may evaluate fixed-price contracts for realism “in exceptional cases,” but it is not required to do so. Ripple Effect Communications, B-413722.2 (Jan. 17, 2017), confirmed the breadth of an agency’s discretion to evaluate—or not—fixed price offers for realism.

Ripple Effect involved a challenge to the terms of a corrective action following Venesco, LLC’s protest challenging an award made to Ripple. Venesco argued in its protest that the Army improperly declared its price to be unrealistic, in part because the solicitation was ambiguous as to whether offerors’ fixed prices would be evaluated for realism. The Army then announced that the procurement would be resolicited, and made clear that price realism would not be evaluated.

Ripple then protested the scope of this corrective action, arguing that the Army should be required to evaluate offerors’ prices for realism. Ripple noted that the Army’s evaluation of Venesco’s proposal already revealed concerns with Venesco’s labor rates, “which were far below the average of all evaluated proposals in all but one labor category.” Thus, “it would be unreasonable for the agency not to consider the risk posed by Venesco’s prices.”

In response to these arguments, the Army noted that it never intended to evaluate offerors’ proposed prices for realism. And although Venesco’s debriefing noted concern with unrealistic prices, the Army called this a “conclusory finding” that was not actually based on a completed price realism evaluation. In any event, offerors’ ability to submit revised proposals (including prices) mitigated any need for a price realism evaluation.

GAO agreed with the agency and denied the challenge to the corrective action. In doing so, it relied on an agency’s broad discretion to evaluate (or not) price realism under fixed-price solicitations:

Because the solicitation contemplates the award of a fixed-price contract, the agency’s intended evaluation approach is consistent with the Federal Acquisition Regulation (FAR), which establishes that an agency “may . . . in exceptional cases,” provide for a price realism evaluation when awarding a fixed-price contract, but is not required to do so. Given the agency’s broad discretion to decide whether to include a price realism evaluation in this instance, we have no basis to conclude that the agency’s decision was unreasonable.

Denying Ripple’s protest, GAO reaffirmed the principle that agencies have broad discretion to evaluate fixed-price offers for realism. Ripple Effect shows the breadth of this discretion—even where an agency has reason to suspect an offeror’s fixed-price might be unrealistically low, it is not required to evaluate that price for realism unless the solicitation specifically says otherwise.


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Ordinarily, whether an offeror’s proposed personnel actually perform under a contract is a non-protestable matter of contract administration. But GAO will consider the issue when an offeror proposes personnel that it did not have a reasonable basis to expect to provide during contract performance in order to obtain a more favorable evaluation. Such a “bait and switch” amounts to a material misrepresentation that undermines the integrity of the procurement and evaluation.

That’s exactly what happened in a recent protest, where the GAO disqualified the awardee from competition after determining that its proposal misrepresented the incumbent employees’ availability to continue working under the contract.

At issue in Patricio Enterprises, Inc., B-412738 et al. (May 26, 2016) was a task order solicitation to provide support for five product management teams for the Marine Corps’ Program Manager, Infantry Weapons Systems. Patricio and Knowledge Capital Associates (“KCA”) were each incumbents for some of these requirements under different existing task orders. The solicitation combined those services and contracts into one procurement.

The solicitation had three evaluation criteria: Management and Staffing Capability, Past Performance, and Price. The first (and most important) factor was comprised of two subfactors (Management and Staffing Capability). Under the Staffing Capability subfactor, offerors were required to provide a detailed approach to staffing that met the PWS requirements, and to provide detailed information (such as labor qualifications, proposed labor categories, and organizational structure) for its key personnel and other staff. The agency would then evaluate this subfactor by reviewing the “capabilities, qualifications, and experience of each offeror’s proposed key personnel” and the processes, resources, and organizational structure necessary to support the PWS tasks. The Government would also evaluate the offeror’s “approach to providing staffing necessary to achieve full performance by month five[.]”

Patricio and KCA timely submitted offerors, which were rated equally under the Management and Staffing Capability and Past Performance factors. Because KCA’s price was almost $5 million less than Patricio’s, KCA was named the awardee.

After Patricio’s attorneys obtained a copy of KCA’s proposal (probably as part of the Agency Report responding to Patricio’s initial protest), Patricio challenged KCA’s staffing approach. KCA, in short, touted its ability to begin work on “day one without missing a beat[.]” KCA further promised 100% staffing on “the very next day” following expiration of the existing support contracts.

KCA’s aggressive transition plan was based in part on KCA’s representations that it would employ incumbent personnel under its award. KCA went so far as to claim it had “signed contingent offers for select personnel” working for other companies (including Patricio) under incumbent contracts, and that these individuals “will be available at the immediate start of the Task Order.”

These representations, though, were (at best) misleading. Patricio produced sworn statements from its employees that were specifically named in KCA’s proposal, in which each person “stated that he or she had not been contacted by the awardee regarding potential employment for the PM IWS task order prior to the time for submission of proposals.”

In its own comments, KCA did not dispute these sworn declarations. Instead, KCA justified its proposal on the basis of discussions with Patricio employees, which led KCA to believe that the Patricio personnel identified in its proposal “would likely be willing to work for KCA in the event it was awarded the task order.” KCA claimed that its reference to “signed contingent offer letters” was misunderstood: according to KCA, this reference simply meant that the letters were prepared and signed by KCA’s president, not that the prospective personnel had signed them (or were even aware of them).

GAO found KCA’s reference to “signed contingent offers” and “signed contingent employment letters” to be an attempt to mislead the agency about KCA’s readiness to perform. GAO wrote that these references “appear[] purposefully crafted to convey that there had been communications with the individuals in question.” KCA’s apparent intent to later attempt to hire these individuals did not excuse this misrepresentation because “regardless of KCA’s intent to hire the individuals named in the proposal, the proposal misrepresented the commitment of the non-KCA employees to work for the awardee.”

KCA’s misrepresentation, moreover, impacted the Marine Corps’ evaluation. According to GAO, KCA earned a strength for its staffing approach and transition approach, which was based in part on KCA’s “approach to providing personnel, including key personnel, who would be capable of performing the work, and would be available at the start of performance.” Absent KCA’s pledge to provide incumbent staffing, it is unlikely that it would have been assessed such a strength.

GAO sustained Patricio’s protest. It also recommended that KCA be excluded from the competition:

[E]xclusion of an offeror from a competition is warranted where it made a material misrepresentation in its proposal and where the agency’s reliance on the misrepresentation had a material effect on the evaluation results. As our Office has stated, where an offeror’s material misrepresentation has a material effect on a competition, the integrity of the procurement system “demands no less” than the remedy of exclusion.

Patricio serves as a cautionary reminder: though offerors might want to increase their chances of award by hyping (or puffing) their abilities, going too far might amount to material misrepresentations. Here, the GAO found that KCA crossed the line–and deserved to be excluded.


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