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Tuesday, September 13, 2011

Federal News Radio: Mergers and Acquisitions in the Federal Marketplace

On May 24, 2011, one of our Government Contracts lawyers, Marko W. Kipa, was interviewed by host Roger Waldron on Federal News Radio’s (Washington 1500AM) Off The Shelf – a weekly radio program devoted to topics of interest to the government contracting community. The interview focused on key issues facing government contractors when assessing an acquisition transaction and conducting a due diligence. Among other things, Marko discussed the risks associated with various contract types, small business contracts, the Anti-Assignment Act / Novations, the Mandatory Disclosure Rule, Organizational Conflicts of Interest, and foreign investors. In addition, Marko discussed recent regulatory changes impacting government contractors and due diligence best practices.

Click here to listen to the full interview.

Source: http://feeds.lexblog.com/~r/GovernmentContractsBlog/~3/_RPmftVReF4/

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Possible Extension of GAO's Protest Authority in the Works

By: Edward T. DeLisle

As part of the National Defense Authorization Act of 2008 (the 2008 Act), Congress provided the General Accounting Office (GAO) with the authority to hear protests involving certain task and delivery order contracts emanating from both defense and civilian agencies. At the time, this authority was limited to a period of three years, meaning that it was set to expire later this year. A few months ago, President Obama signed the National Defense Authorization Act of 2011 (the 2011 Act). As part of that Act, Congress partially extended the GAO’s authority. It permitted the GAO to continue hearing task and delivery order protests for contracts in excess of $10 million, but only for those contracts issued by Department of Defense agencies. For a reason not readily apparent, Congress failed to extend the GAO’s authority over civilian agencies. A bill has emerged in the Senate to address this omission.

As reported by Law360, Senate Bill 498, entitled the “Independent Task and Delivery Order Review Extension Act of 2011,” was recently introduced by Senate Homeland Security and Governmental Affairs Committee Chairman Joseph Lieberman, I-Conn. If passed, it would extend the GAO’s jurisdiction over task and delivery order protests relating to civilian agencies for an additional five and a half years, equaling the extension provided on DOD protests under the 2011 Act. This is an important development for government contractors. Many questions arose following passage of the 2011 Act. Why would Congress only extend the GAO’s authority over task and delivery orders on DOD work? It is possible that this was simply an oversight, though no one is quite sure. The legislative history is devoid of any discussion on the issue. Whatever the reason, if passed, S. 498 would maintain the status quo for five more years. We will continue to track this bill and report on its progress.

Edward T. DeLisle is a Partner in the firm and a member of the Federal Contracting Practice Group.

Source: http://feeds.lexblog.com/~r/FederalConstructionContractingBlog/~3/RKjehXekCOw/

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GAO Expands Its Jurisdiction to Consider All Task Order Protests

Prior to 2008, dating back to 1994, it was not permissible to protest a task order. The 1994 enactment of the Federal Acquisition Streamlining Act ("FASA") provided that protests over task or delivery orders were barred unless the protest alleged that the order increased the scope, period, or maximum value of the underlying contract through which the order was issued. That changed with the passage of the Defense Authorization Act of 2008 ("NDAA"), which contained an amendment that expanded the jurisdiction of the GAO to include protests of task or delivery orders valued in excess of $10 million. 41 U.S.C., Section 253j(e)(2). The NDAA also contained a sunset provision, which stated that the "subsection shall be in effect for three years." Section 253j(e)(3). The three year period expired on May 27, 2011. The question then arose as to whether the GAO could lawfully consider task and delivery order protests after May 27, 2011. That question was recently answered in the affirmative by the GAO.

In a protest filed by Technatomy Corporation, of Fairfax, Virginia, the protester argued that the agency unreasonably evaluated vendors' technical and cost quotations. The government argued that the protest should be dismissed because the GAO's jurisdiction had expired. In a decision issued on June 14, 2011, the GAO disagreed with the government and ruled that it now has jurisdiction to rule on all task and delivery order protests, regardless of their dollar value. The reasoning of the GAO was that the sunset provision which gave the GAO the authority to consider task and delivery protests in excess of $10 million (for three years) replaced the former statutory provision (1994 - “FASA”) that provided for only very limited task order review. The GAO concluded that when the three year period expired, its authority to consider task and delivery order protests did not simply revert to the pre-2008 jurisdictional level, but actually reverted back to the pre-1994 level.

In other words since the pre-2008 limitations were eliminated by the sunset provision in 2008, the only thing left is the pre-1994 jurisdiction under the Competition in Contracting Act which places no limitation on the GAO's authority to consider task and delivery order protests. The GAO will therefore accept jurisdiction of all protests involving task and delivery orders regardless of the dollar value. This also raises the interesting question of whether, based on the GAO’s decision in Technatomy Corporation, the Court of Federal Claims will now accept jurisdiction of task and delivery order protests, as well.

Michael H. Payne is the Chairman of the firm's Federal Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters, including teaming arrangements, negotiated procurements, bid protests, claims, and appeals.

Source: http://feeds.lexblog.com/~r/FederalConstructionContractingBlog/~3/aMyzPcyhTwk/

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The Time to File a Bid Protest

By: Michael H. Payne

The GAO requires, as provided in 4 CFR 21.2, that:

(a)(1) Protests based upon alleged improprieties in a solicitation which are apparent prior to bid opening or the time set for receipt of initial proposals shall be filed prior to bid opening or the time set for receipt of initial proposals. In procurements where proposals are requested, alleged improprieties which do not exist in the initial solicitation but which are subsequently incorporated into the solicitation must be protested not later than the next closing time for receipt of proposals following the incorporation.

(2) Protests other than those covered by paragraph (a)(1) of this section shall be filed not later than 10 days after the basis of protest is known or should have been known (whichever is earlier), with the exception of protests challenging a procurement conducted on the basis of competitive proposals under which a debriefing is requested and, when requested, is required. In such cases, with respect to any protest basis which is known or should have been known either before or as a result of the debriefing, the initial protest shall not be filed before the debriefing date offered to the protester, but shall be filed not later than 10 days after the date on which the debriefing is held.

Of course, filing a GAO protest may not achieve any meaningful relief unless the project is stayed pending resolution of protest. In this regard, FAR 33.104(c) provides that "When the agency receives notice of a protest from the GAO within 10 days after contract award or within 5 days after a debriefing date offered to the protester for any debriefing that is required by 15.505 or 15.506, whichever is later, the contracting officer shall immediately suspend performance or terminate the awarded contract," except when the interests of the United States will not permit waiting for a GAO decision. The key here is that, in a negotiated procurement, the agency must have received notice from the GAO within five days after the debriefing. That means that the protest needs to be filed as quickly as possible after the debriefing in order for there to be any realistic possibility that the GAO will notify the agency in time. In our experience, when agencies receive notice even one day late, they will refuse to impose a stay.

The rigid timeliness requirements of the GAO often lead protesters to file bid protests in the United States Court of Federal Claims where there is no 10-day, or 5-day, time limit, and where a debriefing is not a prerequisite to filing a protest on a negotiated procurement. The downside, however, is that the Court does not grant an automatic stay and a protester must file a motion for a temporary restraining order in order to halt further performance pending resolution of the protest. In our experience, the government frequently agrees to voluntarily stay performance once the protest is filed (often at the urging of the judge) and a TRO hearing is not always required.

It should also be noted that if a protest involves a matter that should have been raised prior to bid opening, or prior to the date for receipt of proposals, such as a challenge to the terms of the solicitation, a protest filed after award will be dismissed as untimely. The Court of Appeals for the Federal Circuit has held that “a party who has the opportunity to object to the terms of a government solicitation containing a patent error and fails to do so prior to the close of the bidding process waives its ability to raise the same objection subsequently in a bid protest action in the Court of Federal Claims.” (See Blue and Gold, 492 F.3d 1308). Accordingly, contractors should consult with legal counsel to be certain that all of the procedural requirements of a protest have been met.

Michael H. Payne is the Chairman of the firm's Federal Practice Group and, together with other experienced members of the group, frequently advises contractors on bid protests and federal construction matters.

Source: http://feeds.lexblog.com/~r/FederalConstructionContractingBlog/~3/csxynvoNC4Y/

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Design*Sponge At Home

Source: http://feeds.mocoloco.com/~r/mocoloco/KGTY/~3/wQL6KNfeAEQ/designsponge-at-home.php

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Should Agencies Send Non-Responsive Letters to Bidders Not Under Consideration for Award?

What should a public agency do with a non-responsive bid when the bidder is not the low bidder? Should the agency send the bidder a letter informing them they submitted a non-responsive bid or remain silent?

Send the Letter: While there are clearly arguments on both sides of the question, I would suggest that it is better to send the bidder a letter informing them that their bid is non-responsive. Here are the advantages and disadvantages of such an approach:

Disadvantages of Sending a Non-Responsive Letter

It Takes Time: Writing a letter describing the reasons why a bid has been declared non-responsive takes time, something in short supply, especially as many public agencies are faced with significant cuts in staffing. Some argue that if the bidder has no chance of being awarded the project, it's a better use of time for public employees to not take the time to craft such a letter.

The Risk of a Protest: By highlighting a non-responsive bid through a letter declaring a firm non-responsive, a public agency does pick up limited risk that the bidder might choose to file a protest, even though their bid is not low. Protests take time for public agencies and may delay award of a project.

Advantages of Sending a Non-Responsive Letter

Transparency: One of the fundamental concepts of public contracting is that the process should be transparent and open, with all facts disclosed to all parties. This has the impact of increasing the public's confidence in the process. Sending a non-responsive letter to a bidder, even one not under consideration for award, helps increase the transparency of the process.

Education: Perhaps the most important reason why a public agency should send a non-responsive letter to a bidder, even one not under consideration for award, is that it helps to educate that bidder what they did wrong. While they weren't the low bidder on this project, if they bid on another project where they submit the low bid, but are not aware of the irregularity in their bid, they may make the same mistake on future projects. That may result in protracted disputes and challenges to the bidding process. By addressing the non-responsive issue now when the stakes are low, a public agency helps ensure an educated bidder pool so that future projects don't have as many non-responsiveness issues arise.

Bottom Line: Take the time to send the non-responsive letter to the bidder, educating them why their bid is non-responsive. It will help the next time they bid a project not to make the same mistake, increasing their confidence in the public bidding process.