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FAR
8.405-2: Ordering procedures for services requiring a
statement of work |
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Comptroller
General - Key Excerpts |
With respect to
USIT's challenge to the agency's evaluation of 5D's price, USIT
complains that DLA relied upon a flawed independent government
estimate in evaluating prices, because the government estimate
($7,359,688) was overstated by approximately $900,000 due to the
inclusion of costs and labor hours associated with the technical
support tasks that had been removed from the procurement by
amendment 3. Protester's Comments at 9. USIT argues that 5D's
quoted price should have been found to be approximately 22.5
percent higher than the government estimate (and not 8 percent
higher) once the estimate was corrected to remove the hours and
costs associated with the deleted technical support tasks. See
Protester's Comments at 11; see also AR, Tab 20, Selection
Decision, at 12. USIT also argues that the price evaluation was
unreasonable because DLA did not evaluate 5D's reallocation of
labor hours from the deleted technical support tasks to the
customer support tasks in its revised quotation. Protester's
Comments at 11; Protester's Supp. Comments at 5.
When an agency issues an RFQ to vendors holding FSS contracts
for the delivery of services at hourly rates, and, as here, a
statement of work is included, the ordering agency must evaluate
the quotations received consistent with the stated evaluation
criteria. FAR sect. 8.405‑2(d). The FAR also requires the agency
to consider the level of effort and the mix of labor proposed to
perform the task being ordered, determine that the total price
is reasonable, and document the agency's price reasonableness
determination. FAR sect. 8.405‑2(d), (e) ; see also Advanced
Tech. Sys., Inc., B‑296493.6, Oct. 6, 2006, 2006 CPD para. 151
at 9-10.
In our view, the record here does not show that DLA's price
evaluation was reasonable. As noted above, vendors were required
to provide detailed pricing information, labor hours, and labor
mix for each PWS task and to demonstrate the relationship
between their pricing structure and their technical approach.
See RFQ sect. 4.2.4.1. USIT and 5D both provided labor
categories, corresponding labor rates, and hours by labor
category for each task, as required by the RFQ. USIT and 5D
apparently have very different approaches to performing the PWS
tasks, given the dramatic differences in the vendors' quoted
labor hours and labor mix for the PWS tasks. For example, with
respect to the customer support task (to which 5D reallocated
its labor hours from the deleted technical support task), USIT
quoted a total of [DELETED] hours at a price of $2.4 million,
and 5D quoted a total of [DELETED] hours at a price of $4.5
million.
At best, the record here indicates that the vendors' quoted
labor hours were reviewed by the [technical evaluation panel]
TEP, and found "sufficient to complete the tasks." See, e.g.,
AR, Tab 17, Final Consensus Evaluation Summary for 5D, at 1. As
noted above, the CO also compared 5D's quoted price to the
government estimate (noting that 5D's total price was within 8
percent of the government estimate) and concluded that 5D's
quoted price was fair and reasonable "based on the existence of
full and open competition, the fact that the [TEP] accepted the
total labor hours, and the use of [FSS] pricing." AR, Tab 20,
Selection Decision, at 12-13.
There is no documentation in the record demonstrating that the
TEP or the CO evaluated 5D's, or USIT's, labor mix to perform
the PWS tasks, or performed the analysis required by FAR sect.
8.405-2(d) to determine whether the labor mix proposed--albeit
at fixed hourly rates--would result in a reasonable price for
performance. Rather, the TEP's evaluation report and CO's
selection decision merely state that the TEP found that the
vendors' total labor hours were considered sufficient to perform
the PWS tasks. The record also lacks any analysis of 5D's
reallocation of over 6,000 labor hours (at a price over
$878,000) from a task that had been deleted from the PWS to
another task. There is also no explanation for why reallocating
these hours to another PWS task was reasonable. Moreover, no
such analysis or explanation has been provided in response to
this protest. On this record, we cannot find a basis to uphold
DLA's determination that the vendors' overall price (which is
based upon the application of the vendors' FSS rates to their
quoted labor hours for each labor category) was reasonable.
(U S Information Technologies
Corporation, B-404357; B-404357.2, February 2, 2011) (pdf)
The protester
asserts that it was improper for GSA to rescore the quotations
after receiving the evaluation materials prepared by IHS’s
technical evaluators. According to the protester, this rescoring
resulted in the technical superiority of CSN’s quotation being
exaggerated, and also ultimately led to the SSA’s not
considering OPTIMUS’s quotation in the price/technical tradeoff
decision, notwithstanding OPTIMUS’s substantial price advantage
over CNI.
We will not reevaluate quotations in reviewing a protest
challenging an agency’s technical evaluation; rather, we will
examine the record to determine whether the agency’s evaluation
conclusions were reasonable and consistent with the terms of the
solicitation and applicable procurement laws and regulations.
Engineered Elec. Co. d/b/a/ DRS Fermont, B-295126.5, B-295126.6,
Dec. 7, 2008, 2007 CPD para. 4 at 3-4.
GSA’s scoring changes here are unobjectionable. The record shows
that both the GSA program manager and SSA did not change the
scores in a vacuum; rather, the changes were made with reference
to the contents of the quotations and the evaluation materials
prepared by the IHS evaluators (and, in the case of the SSA, the
evaluation materials prepared by the program manager). In this
regard, the program manager states as follows:
I can testify that I created a consensus evaluation document
utilizing the comments from the first set of IHS’ evaluations.
As is common practice of the Project Manager, I reviewed all
[quotations] to verify the comments from the first set of
evaluations. I evaluated each [quotation’s] Past
Experience/Past Performance, Technical/Management Approach and
Staffing Plan. Each of these factors included multiple
criteria that received scores in the evaluation. The IHS
evaluators, however, did not correlate their scores to the
Evaluation Plan Criteria accurately thus resulting in
inaccurate scores. In the consensus document, I applied the
comments from the first set of evaluations, correlated such
comments to the Evaluation Plan Criteria, and applied the
correct score. (All [of the IHS evaluators’] evaluation
comments were preserved on the consensus evaluation document.)
I added comments on the consensus document when the score I
applied differed from the technical panel average score for
that factor.
Agency Submission, Dec. 8, 2008, Program Manager Affidavit, at
2. Similarly, the SSA states his rationale for changing the
scores a second time:
I can testify that the resulting scores from the initial
evaluations and consensus document resulted in fractional
scores. . . . The scoring criteria in the solicitation was
based on . . . whole number scores. . . . To determine whether
a score of 2.5 equaled a ‘2’ or a ‘3’, I re-read all 7
[quotations]. As the Source Selection Authority, based on my
reading of (1) the [quotations], (2) the solicitation
criteria, and (3) the comments of the evaluation panel and the
GSA [program manager], I determined the most appropriate whole
number score.
Agency Submission, Dec. 8, 2008, SSA Affidavit, at 2.
In the final analysis, ratings, be they numerical, color, or
adjectival, are merely guides for intelligent decision making in
the procurement process. Citywide Managing Servs. of Port
Washington, Inc., B-281287.12, B-281287.13, Nov. 15, 2000, 2001
CPD para. 6 at 11. The germane consideration is whether the
record shows that the agency fully considered the actual
qualitative differences in the technical quotations or
quotations. See, e.g., Bernard Cap Co., Inc., B-297168, Nov. 8,
2005, 2005 CPD para. 204 at 6.
Both GSA officials, after a detailed review of the evaluation
materials and the quotations themselves, assigned point scores
that they determined more accurately portrayed the relative
merits of the quotations, and were consistent with the terms of
the solicitation’s evaluation scheme. These actions were in no
way inconsistent with the RFQ, and the protester has not shown
that the revised scores inaccurately reflected the relative
merits of the quotations. We thus have no basis to object to the
rescoring. (OPTIMUS Corporation,
B-400777, January 26, 2009) (pdf)
The protester maintains that the agency failed to provide it
with meaningful discussions. According to the protester, the
agency’s request for price reductions after the submission of
initial quotations constituted the opening of discussions, which
obligated the agency to bring to OPTIMUS’s attention the
weaknesses the agency identified in the technical portion of its
quotation.
This assertion is without merit. As noted, this requirement is
being met through the FSS, and was conducted pursuant to FAR
part 8.4. There is no requirement in FAR part 8.4 that an agency
soliciting vendor responses prior to issuing a task order under
an FSS contract conduct discussions with vendors regarding the
contents of those responses, even where the solicitation does
not specifically advise firms of the agency’s intent to issue a
task order without discussions. Avalon Integrated Servs., Corp.,
B-290185, July 1, 2002, 2002 CPD para. 118 at 4. [5] Under FAR
sect. 8.405-2(c)(3)(ii), where, as here, an agency is placing an
order under the FSS that exceeds the maximum order threshold, it
is required to seek price reductions below the prices included
in the vendors’ FSS price lists. The agency’s request for price
reductions was pursuant to this requirement, and therefore did
not constitute the opening of discussions, such that the agency
was obligated to engage in meaningful discussions. (OPTIMUS
Corporation, B-400777, January 26, 2009) (pdf)
Because GSA administers the FSS program, we solicited GSA’s
views on the responsibility determination issue. In its filing,
GSA notes that the purpose of the FSS program, as set forth in
FAR Part 38, is to provide federal agencies with a simplified
process of acquiring commercial supplies and services. In
furtherance of this goal, GSA states, it is responsible for
awarding indefinite-delivery contracts in accordance with all
applicable statutory and regulatory requirements, including
compliance with the requirements relating to contractor
responsibility (see FAR sect. 38.101(d), (e)). GSA concludes
that, because it is tasked with making determinations of
responsibility pertaining to the award of FSS contracts,
ordering agencies, while not precluded from doing so, are not
required to make a responsibility determination prior to placing
an FSS order. Letter from GSA to GAO, July 26, 2006, at 1-3. We
agree. Responsibility is a contract formation term that
refers to the ability of a prospective contractor to perform the
contract for which it has submitted an offer; by law, a
contracting officer must determine that an offeror is
responsible before awarding it a contract. See 41 U.S.C. sect.
253b(c), (d); FAR sect. 9.103(a), (b). The concept of
responsibility expressly applies to “prospective
contractors”--not “current” or “existing” contractors--a
limitation that is repeated throughout the applicable statutes
and regulations, and that indicates that the requirement for a
responsibility determination applies before award of a contract.
See, e.g., 41 U.S.C. sect. 403 (“As used in this Act . . . the
term ‘responsible source’ means a prospective contractor . . .
.”); FAR sect. 9.100 (“This subpart prescribes polices,
standards, and procedures for determining whether prospective
contractors . . . are responsible”); FAR sect. 9.102(a) (“This
subpart applies to all proposed contracts with any prospective
contractor . . . .”); and FAR sect. 9.103(c) (“A prospective
contractor must affirmatively demonstrate its responsibility . .
. .”). Consistent with this statutory and regulatory framework,
once an offeror is determined to be responsible and is awarded a
contract, there is no requirement that an agency make additional
responsibility determinations during contract performance. E.
Huttenbauer & Son, Inc., B-258018.3, Mar. 20, 1995, 95-1 CPD
para. 148 at 2 (holding that a contracting officer was not
required to make a new responsibility determination before
deciding whether to exercise an option because the concept of
responsibility has no applicability with respect to a contract
once that contract has been awarded). Contrary to the
protester’s position, the extent of the requirement for a
determination of responsibility is not tied to the type of
contracting vehicle that the government elects to use for an
acquisition; thus, there is no basis to conclude that the
requirement for a responsibility determination is broader for
orders placed under FSS contracts. In this regard, we note that
FAR sect. 8.405 and sect. 8.406 set forth the ordering
procedures and ordering activity’s responsibilities,
respectively, with regard to FSS contracts; there is no
requirement in these provisions to make a responsibility
determination. In sum, we conclude that the initial
responsibility determination made by GSA in connection with the
award of the underlying FSS contract satisfies the requirement
for a responsibility determination regarding that vendor and
that there is no requirement that an ordering agency perform
separate responsibility determinations when placing orders under
that contract. In view of our conclusion, ATS’s challenge to
HUD’s consideration of PSI’s responsibility here does not give
rise to a valid basis of protest since HUD was not required to
perform a responsibility determination. (Advanced
Technology Systems, Inc., B-296493.6, October 6, 2006) (pdf)
Given the clear language of FAR sect. 8.405-2(d)--“the [o]rdering
activity is responsible for considering the level of effort and
the mix of labor proposed to perform a specific task being
ordered”--we conclude that HUD was required to consider each
vendor’s proposed level of effort and labor mix as part of its
evaluation of quotations here. As explained below, however,
while the record indicates that the agency did consider PSI’s
proposed level of effort and labor mix as part of its best value
determination, the record also indicates a complete lack of
support for the agency’s conclusion that PSI’s proposed level of
effort and labor mix were sufficient to perform the specific
tasks being ordered under this bridge contract. In order for us
to review an agency’s evaluation of vendors’ quotations, an
agency must have adequate documentation to support its judgment.
See Northeast MEP Servs., Inc., B-285963.5 et al., Jan. 5, 2001,
2001 CPD para. 28 at 7. Where an agency fails to sufficiently
document its evaluation findings, it bears the risk that there
may not be adequate supporting rationale in the record for us to
conclude that the agency had a reasonable basis for the source
selection decision. Southwest Marine, Inc.; American Sys. Eng’g
Corp., B-265865.3, B-265865.4, Jan. 23, 1996, 96-1 CPD para. 56
at 10. The record here does not provide any basis to support the
agency’s determination that PSI’s proposed level of effort and
labor mix were sufficient to perform the PWS requirements. The
agency’s source selection decision provides no support for the
contracting officer’s determination--it is simply a conclusion
without explanation. Similarly, in the statement submitted after
the filing of ATS’s protest here, the contracting officer merely
reiterates his conclusion that PSI’s proposed level of effort
and mix of labor were determined acceptable, again without
providing an explanation of how this determination was made. The
only additional information provided in the contracting
officer’s statement is that he spoke with other HUD personnel
who also concluded, again without explanation, that PSI had
proposed an acceptable level of effort and labor mix. FAR sect.
8.405-2(d) does not elaborate on the method or extent of
consideration an agency is responsible for giving to a vendor’s
proposed level of effort and labor mix in the circumstances
here. In our view, agencies are not required to conduct a formal
evaluation of the kind typically performed in a negotiated
procurement under FAR Part 15. However, here, in light of the
significant differences both between PSI’s and ATS’s proposed
levels of effort, and between PSI’s own prior and current
proposed levels of effort and labor mixes for the identical
TRACS requirements, the conclusory statements in the record
simply are not adequate to demonstrate that HUD reasonably
considered whether PSI’s level of effort and labor mix were
sufficient to perform the specific tasks, as required by FAR
sect. 8.405-2(d). We, therefore, sustain the protest on this
basis. (Advanced Technology
Systems, Inc., B-296493.6, October 6, 2006) (pdf) |
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Comptroller
General - Listing of Decisions |
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For
the Government |
For
the Protester |
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OPTIMUS Corporation, B-400777,
January 26, 2009 (pdf) |
U S Information Technologies
Corporation, B-404357; B-404357.2, February 2, 2011 (pdf) |
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Advanced Technology Systems, Inc.,
B-296493.6, October 6, 2006 (pdf) (responsibility determination) |
Advanced Technology Systems, Inc.,
B-296493.6, October 6, 2006 (pdf) (level of effort, labor mix) |
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U.
S. Court of Federal Claims- Key Excerpts |
D. FAR Part 15 and FAR 8.405-2(e)
Matt Martin contends that the AR does not
establish that the SSO conducted an
independent best-value analysis “or that she made any tradeoffs
or business judgments
that would justify accepting a technically inferior proposal.”
Pl.’s Mem. 18 (citing FAR
15.308) see also Pl.’s Mem. 11-12. This procurement was
conducted pursuant to FAR
Subpart 8.4. See AR Tab 13, at 360. FAR Subpart 8.4 and FAR Part
15 are different
provisions with different purposes. The amount of documentation
necessary in FAR
Subpart 8.4 procurements does not rise to the level required by
FAR Part 15.11 “The very
purpose of FAR Part 8 is to provide a more simplified and
flexible approach away from
the more formal and rigorous procedures for negotiated
procurements.” Allied Tech. Grp.
Inc. v. United States, 94 Fed Cl. 16, 50 (2010) (internal
quotation omitted). “Orders
placed against [Federal Supply Schedule] contracts are viewed as
involving ‘full and open
competition’ without requiring the use of procedures contained
in FAR Part 15.”
HomeSource, 94 Fed. Cl. at 486 (citing FAR 8.404(a)). The
Evaluation Plan uses some
language that also appears in FAR Part 15. See AR Tab 10, at
319. However, the use of
some of the same words in two procurements does not transform a
FAR Subpart 8.4
procurement into a FAR Part 15 procurement. See Ellsworth
Assocs., Inc. v. United
States, 45 Fed. Cl. 388, 394 (1999) (“The decisional law does
not support plaintiff's
contention that an FSS selection process that is handled more
like a negotiated
procurement must comply with the requirements of Part 15.”).
Matt Martin’s argument in criticism of the documentation of the
agency’s decision
in this case relies substantially on CRAssociates, Inc. v.
United States, No. 10-339 C, 2010 WL 4162118 (Fed. Cl. Oct. 4,
2010, reissued Oct. 20, 2010), and Femme Comp,
Inc. v. United States, 83 Fed. Cl. 704 (2008), Pl.’s Reply
11-15, 24-27, two cases
interpreting FAR Part 15, not FAR Subpart 8.4. In Femme Comp,
the court found that
the SSA had failed to document adequately her comparative
analysis of each proposal.
Femme Comp, 83 Fed. Cl. at 767-68. The court determined that the
SSA’s conclusions in
her Source Selection Document appeared to have relied on
assigned factor ratings instead
of underlying evaluations, in violation of FAR 15.308. Id. Matt
Martin’s reliance on
Femme Comp, as with its reliance on CRAssociates, see supra note
10, is similarly
unpersuasive because those cases involve alleged defects in a
procurement based on the
failure of the evaluations in those cases to comply with the
requirement of FAR Part 15. (Matt
Martin Real Estate Management LLC v. U. S. and HomeTelos, LP,
BLB Resources, Inc., Ofori & Associates, P.C., and PEMCO Ltd,
No. 10-675C, December 2, 2010) (pdf)
1. Analysis of cost.
The Technical Evaluation Panel used cost-realism analysis in
assessing the offerors' proposals while the contracting officer opted instead to perform
a reasonableness assessment under FAR Subpart 8.4 to determine which offerors' proposal
represented the "best value" to the government.
(sentences deleted)
Holloway seeks to apply
procedures from FAR Part 15 — procedures similar to the cost realism analysis mentioned by the Technical Evaluation Panel
— to this procurement.
(sections deleted)
However, the government is
not always obligated to perform a cost-realism analysis when analyzing competing proposals. Competitive procedures have
been classified into specific subtypes, of which competitive proposals are one and FSS
contracts are another. See Systems Plus, Inc. v. United States, 68 Fed. Cl. 206, 209 (2005).
Applying that distinction, the court in Systems Plus
f[ou]nd it persuasive that [FAR] subpart 8.404(a) explicitly
exempts supply schedule
procurements from [FAR] Parts 13 (with minor exceptions), 14,
and 15. . . . Thus, while
the agency can elect to use procedures from these other parts,
they are not presumptively
applicable.
Id. at 210. The distinction
between when “the more formal and rigorous procedures for
negotiated procurements set forth in FAR Part 15” are required,
and when they are not, has to do
with the nature of the procurement. See Labat-Anderson, Inc. v.
United States, 50 Fed. Cl. 99,
103 (2001). A procurement taking place under the FSS program
involves the selection of
“products and services from a list of eligible contractors whose
pricing schemes have been preapproved
by GSA.” Id. In this circumstance, because the GSA has already
determined that the
prices of supplies and services under FSS contracts are “fair
and reasonable,” the ordering
agency is “not required to make a separate determination of fair
and reasonable pricing, except
for a price evaluation as required by [FAR §] 8.405-2(d).” FAR §
8.404(d). In this context,
FAR § 8.405-2(d) instructs that the contracting agency “is
responsible for considering the level
of effort and the mix of labor proposed to perform a specific
task being ordered, and for
determining that the total price is reasonable.” FAR §
8.405-2(d) (emphasis added).
In short, “a procurement
under subpart 8.4 is different in kind from one conducted under
Part 15, even if some procedures also present in Part 15 are
u[s]ed.” Systems Plus, 68 Fed. Cl. at
211; see also Ellsworth Assocs., Inc. v. United States, 45 Fed.
Cl. 388, 395-96 (1999) (holding
that “consistent with the simplified and flexible approach Part
8 takes toward [FSS]
procurements, . . . the protester will not be able to prevail on
the theory that the procurement
procedure involved a clear and prejudicial violation of
applicable statutes and regulations,
because no applicable procedural regulations are contained in
[FAR] Part 8. A protester instead
must rely on establishing that the government officials involved
in the procurement process were
without a rational and reasonable basis for their decision.”).
Accordingly, a cost-realism
analysis that accords with FAR § 15.404-1(d)(1), quoted supra,
is not necessarily required when
reviewing offers made pursuant to a negotiated procurement under
the GSA’s FSS program.
This contrasts with the source selection decisions reviewed by
this court in Lumetra and>
Alabama Aircraft, neither of which involved an FSS procurement
but both of which explicitly
mandated that the agency “perform a cost-realism analysis.”
Lumetra, 84 Fed. Cl. at 560 (citing
Sections L and M of the Request for Proposals); see also Alabama
Aircraft, 83 Fed. Cl. at 671
(“Although the . . . contract was to be a fixed-price contract,
the RFP explicitly required the Air
Force to evaluate the ‘reasonableness and realism of the prices
and labor rates proposed’ by the
offerors.” (quoting the Solicitation-Request for Proposal)).
Here, no such mandate was included
in the RFQ.
Holloway argues that “[FAR]
8.4 does not prohibit cost realism assessment, which we
believe was required under this RFQ, and which was in fact
conducted by the [P]anel [and]
which the Source Selection Authority confirmed in the source
selection document.” See Hr’g Tr.
34:10-14 (Apr. 14, 2009). Holloway additionally points to CMS’s
second amendment to the
RFQ, in which CMS asked offerors to submit “a cost or price
proposal supported by cost and
pricing data adequate to establish the reasonableness and
realism of the proposed cost or price,”
AR 4-155 (Amendment #2 to RFQ) (emphasis added), as calling for
a cost-realism analysis by
the contracting officer. See Hr’g Tr. 36:2-7.
The second amendment to the RFQ introduced an ambiguity which
was not fully
resolved by CMS during this procurement. However, because the
RFQ expressly provided that the resulting award was to be a
“[t]ask [o]rder” under a “current GSA Schedule contract,” AR
1-1 (RFQ), all offerors were on notice that the framework
provided by FAR Subpart 8.4 applied.
In the circumstances at hand, a cost-realism analysis would be
required only if CMS had
specifically set out such a requirement. Moreover, the conduct
of CMS does not lend support to
the existence of a price-realism mandate. Although the Technical
Evaluation Panel at times used
cost-realism language, it frequently also referred to the
“reasonableness” of the price proposed
by various offerors. See, e.g., AR 14-1141 to 14-1144 (Business
Proposal Evaluation). In this
respect, the contracting officer opined that “[t]he main concern
of the TEP was whether or not
Grant Thornton’s proposed price was reasonable based on the
[Independent Government Cost
Estimate].” AR 26-1237 (Addendum to Source Selection Document)
(emphasis added). The
contracting officer restricted himself to a cost-reasonableness
analysis, omitting any mention of
cost-realism.Overall, CMS’s
contracting officer was not obligated by the RFQ to employ the
detailed
cost-realism procedures set out in FAR Part 15. It was
sufficient, under FAR Subpart 8.4, for the
contracting officer to have conducted, in conjunction with a
performance risk assessment, a “best
value” inquiry into the reasonableness of the competing
proposals. (Holloway & Company,
PLLC, v U. S. and Grant Thornton, LLP, No. 09-53C, May 14,
2009) (pdf) |
|
|
U.
S. Court of Federal Claims - Listing of Decisions |
| For
the Government |
For
the Protester |
|
Matt Martin Real Estate Management LLC
v. U. S. and HomeTelos, LP, BLB Resources, Inc., Ofori &
Associates, P.C., and PEMCO Ltd, No. 10-675C, December 2,
2010. (pdf) |
|
|
Holloway & Company, PLLC, v U. S. and
Grant Thornton, LLP, No. 09-53C, May 14, 2009 (pdf) |
|
|
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