AGENCY VIOLATIONS OF THE COVENANT OF GOOD FAITH AND FAIR DEALING

Two recent cases at the Armed Services Board of Contract Appeals (“Board”) demonstrate the importance and reach of the covenant (implied duty) of good faith and fair dealing.” This duty has been described by the Court of Appeals for the Federal Circuit as follows: “The covenant prevents parties from “act[ing] so as to destroy the reasonable expectations of the other party regarding the fruits of the contract.” Centex Corp. v. United States, 395 F.3d 1283, 1304 (Fed. Cir. 2005). The covenant “‘imposes on a party … the duty … to do everything that the contract presupposes should be done by a party to accomplish the contract’s purpose.’” Stockton E. Water Dist. v. United States, 583 F.3d 1344, 1365 (Fed. Cir. 2009) The Restatement (Second) of … Continue reading

GAO: AGENCY MISTAKES IN BID PROTESTS

For nearly a century, the Government Accountability Office (“GAO”) and its predecessor, the General Accounting Office, have provided an independent, impartial, and objective forum for bid protests on federal government solicitations and contracts. A bid protest is a written objection by an interested party to: A solicitation or other request by a Federal agency for offers for a contract for the procurement of property or services; The cancellation of such a solicitation or other request; An award or proposed award of a contract; A termination or cancellation of an award of a contract, if the written objection contains an allegation that the termination or cancellation is based in whole or in part on improprieties concerning the award of the contract; or Conversion of a function … Continue reading

ALLEGED “FINAL CONTRACTING OFFICER DECISION” DOES NOT CURE ABSENCE OF REQUIRED CERTIFICATION

The Armed Services Board of Contract Appeals recently considered a contractor’s claim for $381,000 for the return of liquidated damages as well as a time extension. Areyana Group of Const. Co., ASBCA No. 60648, May 11, 2018. The Board held that even though a project manager had sent Areyana a document which was described as “the final decision of the Contracting Officer” and notified the company of its appeal rights, there was no claim to appeal, and the appeal was dismissed. Areyana was awarded a contract to design and construct barracks for the Afghan National Police. It did not complete the project in a timely manner. The government withheld $381,000 for liquidated damages, and Areyana submitted two “requests for equitable adjustment” for time extensions and … Continue reading

ALLOWING ONLY 44 MINUTES TO RESPOND TO A SOLICITATION?

You may think that allowing offerors only 44 minutes to respond to a solicitation for quotations is too short a time, but the Government Accountability Office (“GAO”) held that it was acceptable where emergency circumstances in connection with inclement weather warranted the short response time. AeroSage, LLC, B-415893, 4, April 17, 2018. The Defense Logistics Agency (“DLA”) was procuring diesel fuel to meet Department of Veterans Affairs (“VA”) fuel requirements for a VA Medical Center. After issuing a “sources sought” email on January 4, 2018, the VA assessed whether the diesel heating fuel could be placed under a long-term DLA contract for another VA medical center, but concluded that it could not. However, VA and DLA concluded that DLA could place the order as a … Continue reading

ONE YEAR IS THE DEADLINE FOR SUBMITTING TERMINATION FOR CONVENIENCE SETTLEMENT PROPOSALS

During the Civil War, at the famous Andersonville Prison, on the inside of the stockade and twenty feet from it, there was a deadline established, over which no prisoner was allowed to go, day or night, under penalty of being shot. By the 1900s, the word “deadline” was being used to describe any line that shouldn’t be crossed, not just where the offender would be shot. In the 1920s, deadline was being used as a synonym for “time limit” and was primarily associated with newspaper jargon. In the newspaper business, to have the latest news and still get a newspaper printed and distributed on time requires strict time limits for those who write it. Why are deadlines important for government contractors? Because there are numerous … Continue reading

FINAL DECISION MUST SOLELY ASSERT FRAUD TO DEFEAT BOARD JURISDICTION

The Armed Services Board of Contract Appeals refused to dismiss appeals for lack of jurisdiction where the government had argued that the final decisions of the contracting officer were invalid because the decision’s basis for denying the claims purportedly was a suspicion of fraud. PROTEC, GmbH, ASBCA Nos. 61161 et al., March 20, 2018. The Board found that a suspicion of fraud was not the basis of the final decisions, that there were other bases for denying the claims, and therefore the Board had jurisdiction to consider the appeals. PROTEC submitted a certified claim regarding its Contractor Performance Assessment Reporting System (“CPARS”) evaluation, which rated its performance as unsatisfactory. The government also refused to pay certain PROTEC invoices, and PROTEC submitted a second and third … Continue reading

WHEN SHOULD THE GOVERNMENT BE REQUIRED TO FILE A COMPLAINT AT THE BOARDS OF CONTRACT APPEALS?

The rules of the Armed Services Board of Contract Appeals (“ASBCA”) and the Civilian Board of Contract Appeals (“CBCA”) require that within 30 days after the docketing of an appeal, the appellant [contractor] must file a complaint setting forth its claims in simple, concise and direct terms. ASBCA Rule 6(a); CBCA Rule 6(b). A recent case discussed the situation when the Board reversed the rule, and required the Government to file the complaint. Transworld Systems, Inc. v. Dep’t of Education, CBCA 6049, March 1, 2018. Transworld concerned a government claim made by the Department of Education (“ED”) demanding that Transworld repay $1.3 million in alleged overpayments that ED had made. The Board explained that Transworld was appealing ED’s claim, not its own, and it is … Continue reading

WHEN WILL BOARDS HAVE JURISDICTION TO ADJUDICATE MATTERS THAT RELATE TO SERVICE CONTRACT ACT ISSUES?

There is an interesting question of whether or not the Boards of Contract Appeals (as opposed to the Department of Labor, or DOL) have jurisdiction over certain matters involving the Service Contract Act, 41 U.S.C. Chapter 67. A recent case, Alcazar Trades, Inc., CBCA 5837, Feb. 27, 2018, is a case where the Civilian Board found that the dispute was solely within DOL’s jurisdiction, and dismissed an appeal involving a wage determination. There are other cases which are distinguishable, as explained below, where the BCA’s will accept jurisdiction under certain circumstances. Alcazar negotiated a new collective bargaining agreement (“CBA”) under a GSA schedule contract, and submitted the new CBA to the agency (Nuclear Regulatory Commission) contracting officer, requesting upward wage adjustments in the contract option … Continue reading

UNTIMELY CLAIMS: EQUITABLE TOLLING OR EXCUSABLE NEGLECT?

A recent Armed Services Board Case gave some insight on the 6-year statute of limitations for filing claims under the Contract Disputes Act (“CDA”), explaining the circumstances under which equitable tolling could operate to extend the 6 years. Unfortunately, it did not apply to the appellant in this case. Khenj Logistics Group, ASBCA No. 61178, Feb. 15, 2018. Khenj was awarded a construction contract by the Army for barracks, bunkers and support buildings in Afghanistan in May 2009. When the facility location changed, the Army terminated the contract for convenience, and subsequently agreed to pay Khenj the cost of its Defense Base Act insurance and the cost of its materials. When Khenj soon thereafter (June 2009) attempted to contact the contracting officer by phone and … Continue reading

WHEN IS A TASK ORDER OUT OF SCOPE?

Two recent Government Accountability Office (“GAO”) bid protest decisions are interesting because in both cases, the GAO held that a task order issued by the agency was outside the scope of either the underlying Indefinite Delivery, Indefinite Quantity (“IDIQ”) contract, or outside the scope of the task order itself. The cases are Western Pilot Service et al, B-415732 et al, March 6, 2018, involving an air tanker procurement by the Department of Interior Bureau of Land Management (“BLM”), and Alliant Solutions, LLC, B-415994, May 14, 2018, involving a General Services Administration (“GSA”) Government Wide Acquisition Contract. When an agency seeks to procure something using an underlying contract or a task order, the product or service sought must be within the scope of the contract or … Continue reading