NEW RULE PERMITS SCHEDULE CONTRACTORS TO PROVIDE OFF-SCHEDULE ITEMS WITHOUT USING THE PREVIOUS “OPEN MARKET” PROCEDURES

The General Services Administration (“GSA”) issued a new rule that makes it considerably easier for GSA Schedule contractors to supply “non-schedule” materials and services, which are now referred to as “Order-Level Materials” or “OLM”. 83 Fed. Reg 3275 (Jan. 24, 2018). GSA states that this rule provides the same flexibility for the schedules (Federal Supply Schedules, or FSS) program that is currently authorized for other indefinite delivery, indefinite quantity (“IDIQ”) vehicles, which should help reduce administrative costs. The rule modifies the GSA Acquisition Regulation (“GSAR”) by adding a new Section, GSAR 552.238-82, “Special Ordering Procedures for the Acquisition of Order-Level Materials” and by making changes in GSAR subpart 515.408 and 538.72. Prior to this regulatory change, agencies could only purchase through a Schedule contract non-schedule … Continue reading

UNILATERAL MODIFICATION OF FUNDING CLAUSE BY AGENCY IS A BREACH OF CONTRACT, NOT A PROPER CHANGE ORDER

This blog recently discussed the limits of the use of the Changes Clause in a contract, noting that the clauses at Federal Acquisition Regulation (“FAR”) 52.243-1 through FAR 52.243-7 (Changes) are limited to the specific changed situations described in each clause, and cannot be used to change terms and conditions, including the payment clause of the contract. See “Changes Clause Can’t Be Used To Change terms and Conditions, Including Payment Clause” (Nov. 6, 2017). Now comes a later case where the Armed Services Board of Contract Appeals (“ASBCA” or “Board”) clearly states that an agency’s unilateral modification of a contract’s funding clause constitutes a breach of the contract. Kelly-Ryan, Inc., ASBCA No. 57168, Dec. 5, 2017. Kelly-Ryan was awarded a contract by the U.S. Army … Continue reading

GOVERNMENT WAIVER OF CONTRACT SPECIFICATIONS: WHEN AND HOW?

Waiver: The voluntary relinquishment or abandonment—express or implied—of a legal right or advantage. Black’s Law Dict. (10th Ed. 2014) This blog has discussed situations where the government has waived a delivery schedule in a contract. See “How Many Mistakes Can A Defense Logistics Agency Contracting Officer Make?” (January 2, 2018) and “Was Your Delivery Date Waived? Was Your Default Termination Improper?” (April 25, 2016). But there is another important waiver—when the Government waives contract specifications or requirements. How does that occur? A good example is found in American West Construction, LLC, ASBCA No. 61094, Dec. 19, 2017. The Army Corps of Engineers awarded a contract to American West to construct bridges over irrigation canals in Texas, near the border with Mexico. To access the site … Continue reading

IMPROPER DISCUSSIONS: AGENCY TREATED NEUTRAL PAST PERFORMANCE AS “INCREASED RISK” WITHOUT MENTIONING IT IN DISCUSSIONS

In a recent bid protest case, the Court of Federal Claims included two important conclusions: (1) in determining whether a deficiency or weakness exists in a proposal, an agency must use a fact-centered, materiality or competitive impact analysis, not a categorical statement that an offeror has received a “neutral” past performance rating; and (2) although a neutral past performance rating (described in FAR 15.305(a)(2)(iv)) may have been given to a proposal, the agency may not choose to treat the proposal as having an increased risk of unacceptable performance, unless it identifies it to the offeror as a significant weakness in discussions. Precision Asset Management Corp. v. United States, No. 16-261C (Fed. Cl. Dec. 13, 2017). The Federal Housing Authority issued a solicitation for asset management … Continue reading

NO ACCEPTANCE MEANS NO CONTRACT

The U.S. Forest Service manages our national forests, which includes organizing and administering timber sales. These sales result in government contracts—but in reverse—the timber companies bid a price they will pay the government for the right to remove (and presumably sell) the timber. Generally, the high responsible bidder in a timber sale is the awardee. This case address when a timber contract is formed. After reviewing two prospectuses for timber sales in two areas of the Plumas National Forest in California, Pew Forest Products submitted two bids. See Pew Forest Products v. U.S., COFC No. 09-814C (May 7, 2012). On June 26, 2007, the contracting officer opened the bids and declared Pew the high bidder on both. Because of negotiations with environmental groups, the Forest … Continue reading

IMPROPER AGENCY DISCUSSIONS AND MIS-EVALUATION OF PAST PERFORMANCE

Agencies continue to make errors in the way they handle discussions with offerors in the competitive range. Recently, in Language Select LLP, B-415097, Nov. 14, 2014, the Government Accountability Office (“GAO”) sustained a protest because the agency had improperly labeled a discussion question as a simple request for a clarification, thereby resulting in unequal discussions. The agency also mis-evaluated an offeror’s past performance. Before discussing Language Select, it may be worthwhile to restate the rules and typical mistakes in discussions, both of which were set forth in a blog titled “Six Recurring Agency Mistakes in Discussions” (May 9, 2016), as follows: Rules on Discussions Clarifications are limited exchanges, between the Government and offerors, that may occur where offerors are given the opportunity to clarify certain … Continue reading

RAND CORPORATION REVIEWS BID PROTESTS AND CONCLUDES THAT MAJOR CHANGES ARE NOT APPROPRIATE

The RAND Corporation, at the request of the Congress in the 2017 National Defense Authorization Act (“NDAA”) recently completed a study titled, “Assessing Bid Protests of U.S. Department of Defense Procurements—Identifying Issues, Trends and Drivers” by M. Arena, B. Persons, I. Blickstein, M. Chenoweth, G. Lee, D. Luckey and A. Schendt, January 2018. The study includes a wealth of information on bid protests at both the Governmental Accountability Office (“GAO”) and the Court of Federal Claims (“COFC”). However, the general conclusion of the assessment is that the system is working well and major changes in bid protests are not appropriate. Major Findings: DOD personnel are generally dissatisfied with the current bid protest system, believing that contractors have an unfair advantage in that they are able … Continue reading

ALWAYS CURE ANY MATERIAL OMISSION IN YOUR FINAL REVISED PROPOSAL

Offerors must take advantage of every opportunity they are given to maximize their chance for award in negotiated procurements. Unfortunately, not ever offeror seems to understand the way the system works. Geotech Environmental Services lost an opportunity to win an Air Force contract to construct water wells at Malmstrom Air Force Base, Montana because it failed to correct a material omission in its proposal when it submitted a final proposal revision. Geotech Envir. Svcs., B-415035, Nov. 8, 2017. The Federal Acquisition Regulation (“FAR”) makes it clear that in negotiated procurements, if negotiations (discussions) are held with an offeror in the competitive range, the intent of such discussions is to “allow[] the offeror to revise its proposal.” FAR 15.306(d). At a minimum, the contracting officer must … Continue reading

“WHEN IN DOUBT”AT THE GOVERNMENT ACCOUNTABILITY OFFICE

A recent Government Accountability Office (“GAO”) bid protest decision held that the source selection authority did not meaningfully explain the decision rationale in the written record, and the rationale appeared inconsistent with the contemporaneous evaluation record and the solicitation. Immersion Consulting, LLC, B-415155; B-415155.2, Dec. 4, 2017. The procurement was for program management services, and was issued by the Department of Defense Human Resources Activity. The GAO noted that competitive prejudice is an element of every viable protest. (A protester must demonstrate that but for the agency’s actions, it would have had a substantial chance of receiving the award). In this protest, GAO did not know what the ultimate source selection might have been if the source selection flaws had not occurred. GAO said “[in] … Continue reading

CONTRACTOR CANNOT WAIVE ITS RIGHT TO BOARD REVIEW UNDER THE CONTRACT DISPUTES ACT

A recent Armed Services Board of Contract Appeals (“ASBCA”) case confirms the fact that a contractor may not assign claims to a surety that waives the contractor’s right to appeal a contracting officer’s decision to the Board. Ikhana, LLC, ASBCA Nos. 60462 et al., Oct. 18, 2017. The government awarded Ikhana a contract to construct access lanes and remote screening facilities at the Pentagon. In connection with the contract, Ikhana executed performance and payment bonds with a surety, the Guarantee Company of North America. Part of the consideration the contractor offered was an indemnity agreement which stated that if an “event of default” occurred by Ikhana (defined as: the government declaring Ikhana in default, or Ikhana breaching any terms of the indemnity agreement, or the … Continue reading