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Protest based on False Claims?


sdvr

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A question for you all...

A contractor is awarded a FFP best value contract where the most important evaluation factor is social-economic status. Then well outside the protest period (6 months later) it is determined the contractor made false representations to gain the social-economic status. What are the possible actions? Should the government take action? Should the SBA? Should a false claims act be filed? Would a GAO protest now be timely, as the information was only recently discovered?

Thanks for your input!

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Are you an interested party per the protest rules, if so then...assuming the Government does a full or partial termination of the existing contract based on your information...

Per GAO: By law, a GAO protest must be filed by an "interested party," which means an actual or prospective bidder or offeror with a direct economic interest in the procurement. 4 C.F.R. § 21.0(a). In challenges of the evaluation of proposals and the award of contracts, this generally means an offeror that would potentially be in line for award if the protest were sustained.

WHAT TO PROTEST: Although most protests challenge the acceptance or rejection of a bid or proposal and the award or proposed award of a contract, GAO considers protests of defective solicitations (e.g., allegedly restrictive specifications, omission of a required provision, and ambiguous or indefinite evaluation factors), as well as certain other procurement actions (e.g., the cancellation of a solicitation). The termination of a contract may be protested if the protest alleges that the termination was based on improprieties in the award of the contract. 4 C.F.R. § 21.1(a). Where the agency involved has agreed in writing, GAO will consider protests concerning (1) awards of subcontracts by or for a federal agency, (2) sales by a federal agency, and (3) procurement actions by government entities that do not fall within the strict definition of federal agencies in 4 C.F.R. § 21.0©. 4 C.F.R. § 21.13(a).

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...it is determined the contractor made false representations to gain the social-economic status...

Any competing contractor could have protested the successful contractor's small business status before or immediately after the contract was awarded.

There isn't anything to protest now, is there? Protests are made against Government actions during an acquisition -- how can one protest another offeror's criminal conduct, and that long after the contract was awarded? What has a Government official done that can be protested? What does "it is determined" really mean?

The Government could consider terminating contract for the contractor's default, or might try to consider the contract as void from its inception -- but this matter is between the Government and the contractor -- there's no role for an outside party.

If the Government takes some action related to a procurement in the near future, there might be a basis for protest -- for example, if the Government decides to exercise an option with the existing contractor -- or if the Government decides to sole-source a replacement contract instead of competing it. But if the Government decides to let the contract run to its natural end, it's hard for me to see a basis for protest. In this post, I use "protest" as it is used in FAR Subpart 33.1

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Ji and BZ - Thanks for the answers... Yes we are interested party, we were # 2. A protest wasn't filed originally because no one was aware the social economic status wasn't legitimate. The SBA just pulled the certification this week.

My thought was the government should cancel the contract, but you confirmed my fear, they are under no obligation to. I guess the last question would be if a protest could be called timely, since the information was just discovered..

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The GAO sometimes takes untimely protests if there is a compelling reason -- but I still don't see the basis for a protest. Do you want to force the Government agency to terminate the existing contract AND force it to make an award to you for the remaining quantity or time? You know the facts better than I do, but just because the SBA pulled an 8(a) or HUBZone certification today doesn't necessarily mean that any or all award decisions made before the pull are invalid.

You don't need to be threatening a protest, it seems to me -- you need to be politely knocking at the contracting officer's (or program manager's) door offering yourself as a solution to his or her problem (if he or she has one) -- you can extend the validity of your six-month old offer.

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sdvr, remember a bid protest asserts that the government violated a procurement law or regulation in a way that harmed the protester. You have not identified any action by the government that meets this standard.

On the other hand, a size or status protest is filed with the SBA. If such a protest is succesful, but award has already been made, the government is not obligated to terminate the contract.

With these thoughts in mind, what could you protest and what would it get you if successful?

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Ji- Sorry if I came across as threatening, not my intent. Just trying to understand the process and the options in front of us.

Retreadfed - Great point. The government did nothing wrong in this scenario. False claims would probably be the only viable option, and that is whole other can of worms.

It looks like my real question was what is the government required to do, and the answer is nothing. No tasks have been completed so we will hope they cancel and at the very least re-compete. Thanks again to all for your answers.

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Guest Vern Edwards

sdvr:

You said "false representation." Did the SBA determine, say, or suggest that the contractor intentionally misrepresented its status, or did it merely determine that the offeror was not, in fact, a small business?

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Guest Vern Edwards

"From what we can tell"? What the heck does that mean? Did the SBA formally state that the contractor intentionally misrepresented its status nor not? In writing, or did someone tell you that on the phone? Or is that just your surmise?

You'd better be careful about making accusations without proof.

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The company in question had a "virtual office" as their primary Hubzone address. This was pointed out to the SBA (not by us) and the SBA has pulled the certification (it no longer shows in the SBA dynamic search). I say as best as we can tell as we don't know what actions the SBA will or has taken. There is more to this story, but I am only talking about the facts, no guesses here. :)

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Guest Vern Edwards

In other words, you don't know that the certification was an intentional misrepresentation. That's your supposition based on what someone told you and on what you believe (or want to believe). That's what I suspected.

I was going to make some suggestions to you, but I'm glad I checked out your story first. There's always more to the story, isn't there?

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I disagree with almost everything posted here, even though all these posters are smarter and more experienced than me. Keep that last part in mind while reading my response.

The Government doesn't have to make an intentional error, or even an accidental error, for there to be a valid basis for protest.

A protest is challenging an outcome, not a government action.

The government action is simply the entrée, the thing that gives the CO or GAO jurisdiction or a basis for taking corrective action.

In my opinion, from what facts you have presented here, the Government didn't do anything wrong, and yet you can still protest the outcome.

If the government awarded a contract, failed to award a contract, canceled a solicitation, whatever,

and if you are an interested party,

and if you were injured,

and if there was some something that wasn't right,

___ whether an impropriety by SOMEONE, including a competitor,

___ or even if the proximate cause was an innocuous act of God,

and if you act timely - within 10 days of learning the basis of your protest -

then the CO will consider your protest.

This is one of the extremely rare situations where I would recommend an Agency protest over a GAO protest.

As others suggest, you ought to collect as much factual data as you can to put in your protest.

If I were you, and the contract was worth the effort, I would take photos, make screen shots, put together an easily read narrative of what happened, and recommend a specific course of action.

Include an Affidavit from the local SBA PCR, if you can get one.

Maybe even give the offending party an opportunity to respond, and include that in your package.

Who knows ? They might have a reasonable explanation for what happened.

Make it easy for the CO. Don't expect them to do YOUR research.

Have someone with some objectivity proofread it.

The Government was defrauded.

The CO will probably care very much about that, after they find out about it.

But if nobody files a complaint, and all the CO has are vague suspicions or whispered allegations, the easier course of action might to be to just let it slide.

Heck, the CO probably doesn't even know yet that they were defrauded.

You would be doing the Agency a favor by filing an Agency Protest.

Of course, pursuant to FAR 33.103(b,) prior to submission of an agency protest, all parties shall use their best efforts to resolve concerns raised by an interested party at the contracting officer level through open and frank discussions.

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Keep in mind that the CO may decide to simply not exercise options, rather than terminating and making a new award, or resoliciting.

Heck, the CO even has discretion, upon finding that the contractor committed fraud, of simply doing nothing.

The CO has to consider a lot of other things besides what you would consider "fairness:"

criticality, continuity, seriousness, criminal intent, &tc.

So, even if you protest and have a solid case, you might not get what you want.

As a separate matter, SBA has been known to get the Justice Department to investigate and bring charges in cases where an ineligible business falsely represented that they were eligible for a preference program.

I occasionally read about those cases on the WIFCON front page.

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I've been reading this site for years.

I have some apprehension of my limitations.

I tend to think that a GAO Protest is the appropriate response to any situation:

It's raining - file a protest. It's not raining - file a protest.

I don't mean that only you and Don and Bob and Joel are smarter than me. Everyone here is, though you do seem to be the smartest.

But I think you missed the call on what the operative comment is.

I think its:

"A protest is challenging an outcome, not a government action."

I'd be interested in seeing your response to that.

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