ANOTHER SHUTDOWN LOOMS

Another government shutdown is possible before Thanksgiving.  There are 12 bills to fund all agencies which must be passed by November 21, 2019.  The current executive administration has shown it likes brinkmanship and the current resident of the White House likes to wrap as many issues as possible into a package to hold as hostage to Congressional approval of the entire package.  Also, there is the threat to shut down the government over the impending impeachment of the President.  So, it is time again to consider what government contractors should do if there is another shutdown.

We have discussed this before.  You can use our search tool to find what we've said.  However, we remain convinced that the situation again reminds us of the premium placed on sound contract administration.  Sound contract administration begins and ends with staying in close contact with your contracting officer.  It is extremely important to insist on clear direction.  Yes, insist on it to the point of importuning if necessary.  If your contracting officer gives you no direction or just stonewalls you, act reasonably to mitigate damages.

In the end, we believe a shutdown which interrupts your performance or delays or denies payments is a breach of contract.  This allows you to sue or file a claim for breach of contract.  It may be argued that the shutdown is covered by a contract clause giving rise to a suspension, changes or partial termination claim.  However, a shutdown is a serious repudiation of government obligations which should be viewed as a breach of contract.  The only remaining question is whether the government can defend by using the sovereign act defense.  We have written often about this defense.  We do not believe it applies since the government is taking this action to benefit itself and at least collaterally to relieve itself of contractual obligations.

So, prepare for the worst and maintain tight contract administration.  Mitigate damages.  Above all, document, document, document.  Keep records of the impact and set up separate charge accounts for activities during the shutdown.

bill@spriggsconsultingservices.com

IS THE G7 DORAL DECISION LEGAL?

Is the decision to host the G7 Summit at the Doral resort legal?  Probably not, but the Government Accountability Office (GAO) should investigate the facts either through its protest jurisdiction if it applies or under its Congressionally approved audit function.  Although the facts at this point are unclear, it appears that a government procurement contract may be or has been awarded to the Trump owned resort complex in violation of procurement statutes and implementing regulations.

The Competition in Contracting Act (CICA), 10 U.S.C 2304 and 41 U.S.C. 3301 require, with certain very limited exceptions for sole source awards, that contracting officers for the government must promote and provide for full and open competition in soliciting offers and in awarding government contracts.  The GAO has jurisdiction to hear protests that the rules were violated.  Prospective bidders can have standing to pursue such protests.  It is unclear whether offers were solicited and if so from which prospective bidders.  (Even if simplified acquisition is used, stringent rules must be followed for selection, approval and transparency.)

The Procurement Integrity Act, 41 U.S.C. 2102 prohibits disclosing procurement information.  The Trump owned complex is a private entity to which a contract may be or has been awarded with the office of the owner overseeing the bidding by other contractors for the contract.  Again, we do not know if there was a bidding process.  If not, CICA is implicated.  Other statues abound, some with criminal penalties which may apply to the process by which the White House reached this decision.

There are circumstances which permit other than full and open competition but they are limited and require careful scrutiny and high level approval within the government acquisition system.  One exception is where only one source is available and no other source will meet the requirements.  Certainly, that is not the case here.  Another exception is for unusual and compelling urgency.  Again, not applicable here.  None of the other exceptions even comes close.  Even in the case of "public interest", which requires high level authority and notification to Congress, there must be proof it is not in the public interest to have competition.

So, we question the legality of the G7 Doral decision and call upon prospective competing bidders to file protests at GAO and we ask GAO to conduct an audit of how this decision was made.

bill@spriggsconsultingservices.com            bill@spriggslawgroup.com