READ THE EVALUATION FACTORS!

What is the first thing you should do when you get a solicitation for a competitive government buy?  Find the evaluation factors, read them, make sure you understand them, make sure they are fair, make sure they comply with the regulations and use them to manage your proposal effort.  If they are not clear, fair or if they do not comport with the regulations, protest immediately.  We can assure you most problems in competitive procurements are caused by improperly articulated evaluation factors.  The time to solve these problems is when the solicitation is first issued.

We are against protesting unless a regulation is violated.  We also are against writing stuff people do not understand.  If the evaluation factors are not written clearly and if they do not strictly follow regulatory requirements, protesting is an absolute necessity.  This is probably the one situation where there is no doubt about the propriety of protesting all the way up the line.  First, “protest” to the contracting officer.  Write a letter (emails are legal letters) thoroughly explaining what is unclear or illegal about the evaluation factor section of the solicitation.  Yes, it is illegal to fail to follow the regulation on evaluation factors.  If that doesn’t work, file a formal agency protest or protest to GAO.

Evaluation factors are discussed In FAR Parts 12, 13, 14 and 15.  All competitive procurements implicate FAR Part 15 principles, according to GAO.  Part 15 has the most thorough discussion of evaluation factors.  Although Parts 12, 13 and 14 have their own discussions and Parts 12 and 13 allow much more discretion as to what factors are used, Part 15 is the gospel on evaluation factors.  The main point to remember is that all competitive procurements require a solicitation contain evaluation factors.  They must also be written in plain English. 

If nothing else, failure to state evaluation factors is egregiously unfair.  How in the world can you compete if you don’t know how you will be judged?  Why would you engage in any competition without knowing the rules of the game? 

 bill@spriggsconsultingservices.com

IMPROVING THE FEDERAL AQUISITION WORKFORCE

The problem with today’s federal procurement workforce is that experienced hands are leaving, leadership is underperforming in finding ways to transfer expertise to the new generation and the younger workers lack the requisite initiative to find best practice experience and to follow it.

One of the main problems is communication with industry.  OPFF has issued best practice experiences in the form of myth busting memos which emphasize the need for communication.  The feds need to buy more like it’s done in the commercial world.  They need to talk more with industry to find out how it’s done and how commercial products and services can fill government needs.  Talking more with industry also helps the feds by encouraging private innovation and by learning how to take advantage of it.  But the myth busting best practice guide languishes in many agencies.  The word just does not get to the field. 

Communication isn’t the only problem.  Among the most serious is the emphasis on lowest price, technically acceptable procurement actions.  When the government overused detailed design specifications, performance specifications were born.  Detailed requirements lend themselves to pass or fail technical evaluation and award to the lowest price.  But we’re now in the performance specification era where best value tradeoffs should rule.  Performance specifications and lowest price technically acceptable selection are a bad mix.  Poor leadership at the top and inexperience at the bottom have created this problem.

There is such a thing as the wisdom of the ages in federal procurement.  We’ve learned that fixed prices for ill-defined statements of work are a bad idea.  We’ve also flirted with the notion that buying like the commercial world can be a good idea.  We’ve also learned that full and open debriefings prevent more protests than they encourage and that cooperation and communication with the contractor not only are legal requirements, they also help assure successful contractor performance.  There is a vast storehouse of valuable best practice information available in the memory of the retiring workforce on any number of subjects relevant to today’s procurement activities.  

We see a simple solution which will take some hard work.  First, OFPP needs to do more memo writing like the myth busters memos.  It needs to follow up on its best practices for contract administration guide and update and expand on it.  Senior acquisition executives who receive the OPFF memos need to do a better job of leadership in making sure the word gets to the field.  They also need to be held accountable for making sure the best practice experience is in fact practiced in the field.  Finally, the new generation needs to find the winners, understand their winning ways, and adopt the practices experience has taught will work.  In other words, they need to exercise better initiative in finding the wisdom of the ages in procurement. 

We propose that the retiring generation assist OFPP in writing down best practices for contract formation and administration.  Senior acquisition executives need to commit to making sure the word gets to the field.  And the new generation needs to exercise initiative in finding the best practice experience and in following it.  Start with communication.  The myth busting memos are the model.  Those best practices have been vetted thoroughly by the most experienced professionals in the business.  They represent the wisdom of the procurement ages.  The new generation would be well served by starting with OFPP’s advice on dealing with industry.

bill@spriggsconsultingservices.com

ANOTHER CICA STAY OVERRIDE OVERRULED

Former Chief Judge, now Senior Judge, Loren Smith of the Court of Federal Claims (COFC) has just overruled another CICA stay override decision this time of the United States Department of Homeland Security, Transportation Security Administration.  See Technica LLC v. United States and Aviation Security Management, LLC, COFC No. 18-2003-C, February 22, 2019.

The CICA stay is an integral part of the procurement system which assures the GAO time to render its decision on a bid protest.  It's tantamount to an automatic preliminary injunction if the protest is timely filed.  The stay is a protection of the integrity of the procurement system and can only be overridden under specific and special circumstances.

Judge Smith recites the court's four part test for review of an agency's decision to override the stay:

1. Whether significant adverse consequences will necessarily occur if the stay is not overridden;
2. Whether reasonable alternatives to the override exist;
3. How the potential cost of proceeding with the override, including the costs associated with the potential that the GAO might sustain the protest, compares to the benefits associated with the approach being considered for addressing the agency's needs; and
4. The impact of the override on competition and the integrity of the procurement system, as reflected in CICA.

In addition, the COFC must consider whether the agency's decision substantively meets the arbitrary and capricious APA review standard.  The agency decision would be arbitrary and capricious if the agency relied on factors which Congress has not intended, entirely failed to consider an important aspect of the problem, offered an explanation running counter to the evidence or is so implausible that it could not be considered a difference in view or the product of agency expertise.

Judge Smith ruled in favor of Technica LLC, declared the override was arbitrary and capricious and he overturned the override decision granting Technica's request for a preliminary injunction.

bill@spriggsconsultingservices.com                       bill@spriggslawgroup.com

GAO: TRADEOFF ANALYSIS BECAME LPTA

We've written about the problem with best value tradeoff analyses becoming lowest price technically acceptable (LPTA) awards.  GAO also is concerned and recently sustained a protest.  See Cyberdata Technologies, Inc., B-417084, February 9, 2019.  The protest involved the Department of Commerce source selection decision which failed to go beyond the adjectival ratings to explain why proposals were technically equal resulting in award to the lowest price offeror.

The protester claimed the government abandoned the best value selection process to award the contract to the lowest offeror because the adjectival ratings were technically equal.  The government argued it did nothing wrong since the contracting officer determined the proposals were technically equal.  GAO saw that conclusion as superficial and unsupported by the record.

GAO restated its position that it does not reevaluate proposals, but instead examines the record to see if the decision is consistent with the stated evaluation criteria and applicable procurement laws and regulations.

GAO emphasized that the award decision must be adequately documented for review.  GAO also has explained consistently that adjectival ratings are guides only.  The evaluation of proposals must be based on a qualitative assessment consistent with the solicitation's evaluation scheme.  Importantly, GAO reminded us the selection official must explain the basis for why proposals are considered technically equivalent.

In this case, the source selection decision did not demonstrate that the contracting officer conducted a meaningful analysis of the strengths of each of the proposals.  The contracting officer concluded that because each offeror received an overall rating of good, the determining factor became price.  The contracting officer failed to consider the qualitative value of the proposals.  GAO send the matter back for reevaluation consistent with its decision.

The lesson is clear.  Adjectival ratings are not the end all.  And the source selection official must carefully analyze and document a decision based on a thorough review of the quality of the proposals.  Above all, the government must follow the evaluation criteria and not turn a best value tradeoff procurement into one for lowest price, technically acceptable.

bill@spriggsconsultingservices.com           bill@spriggslawgroup.com 

CONTRACTORS CAN SUBMIT SHUTDOWN CLAIMS

When the government shuts down or restricts spending, some of all of the following things may take place: solicitations may be canceled; options may not be exercised; limitation of funds clauses will be used by agencies; payments may be delayed; only minimum orders may be placed under Indefinite Delivery/Indefinite Quantity (IDIQ) contracts; the changes clause may be used with greater frequency; the level of work may be reduced; the period of performance may be revised; the stop work order clause may be used; the suspension of work clause may be used; acceleration of performance may be ordered; and contracts may be terminated for default or convenience.

Theories of recovery include breach of contract and constructive changes.

This is quite a list and most commentators believe government agencies will use any or all of these actions.  So what should contractors do?  The preparations guide is simple but difficult.

Any interference in the contractor's performance gives rise to a constructive change for the breach of the government's obligation to cooperate with the contractor and not interfere in its performance.  Explicit contract clauses may be implicated.  So, contractors should set up separate charge accounts for the financial effects of a government shutdown.  The immediate effect may be a failure to pay or the inability to reach the contracting officer for direction.  The contracting officer may issue a suspension or stop work order because she is concerned about the Anti-deficiency Act (discussed elsewhere in these blog posts).

There is no question that a government shutdown is a government act in its sovereign capacity and therefore an excusable delay.  (The shutdown also is an act of the government in its contractual capacity.)  There should be no trouble extending schedules for delays caused by the government shutdown. 

Since the shutdown also is an act of the government in its contractual capacity, claims may be submitted under the Changes, Suspension or Stop Work clauses.  In response, the government may assert the sovereign act defense.  We've written about this elsewhere in these blog posts.  Simply put, the government can defend itself by showing the action was not undertaken to benefit it in its contractual capacity but rather was undertaken for the broad benefit of the public at large.  There are arguments on both sides.  The government will argue the shutdown was necessary for the public good.  Contractors may argue the action was in part self serving and designed to further the government's interests in its contractual capacity.

In United States v. Winstar Corp., 578 U.S. 839 (1996), the Supreme Court drew a distinction between a pubic act intended to accomplish a broad government objective and an action tainted by  a government objective of self-relief.  In the latter case, the sovereign act defense does not apply.  We believe that since the shutdown is a government act in its contractual capacity which furthers the government's interests, the sovereign act defense will fail.  In a shutdown, the government fully intends that its actions will result in non-payments, delayed payments, changes, claims and terminations.

So, what should a contractor do?  Document the effects of the shutdown.  Treat it as any other potential claim for equitable adjustment.  Set up a separate charge account to collect the financial impact of the shutdown.  Consider submitting a request for equitable adjustment or claim.  But most importantly, try to keep in touch with the contracting officer and request direction.  If she is unavailable, put in writing what you intend to do in response to the shutdown and ask for confirmation from the contracting officer.

And consult a professional to help you submit your claim.

bill@spriggsconsultingservices.com   bill@spriggslawgroup.com

TIPS FOR TRIAL AT THE ASBCA

Here are ten tips for trial at the Armed Services Board of Contract Appeals written from the perspective of the appealing contractor:

1. File your complaint with your notice of appeal.  You should know enough about the case to construct the complaint so there is no need to wait for the notice of docketing.
2. If the government has the burden of proof, consider filing a motion requiring the government to file the complaint.  But do this only if you do not understand the government's position.
3. Set a trial date as soon as the Board permits.  You need an end date to push against in order to move the case along.
4. Forget interrogatories.  They are a waste of time.  Narrow a request for production of documents only to those necessary to prove your case.  But be persistent.  Production of documents and supplementing the Rule 4 File is important.  Consider a deposition of the contracting officer who wrote the final decision.
5. Consider ADR.  However, the government likely will not agree that it be binding.  If agreement is not reached, you likely have delayed the trial date.  Mediation can be an excellent way to conduct discovery.
6. Use settlement discussions as one of your primary discovery tools.  Open, honest and sincere discussions often expose and narrow the issues.
7. Carefully craft your opening statement.  This is your opportunity to explain the case to the hearing judge.  Oral closing arguments are discouraged since the case will be decided on the record and written briefs are the rule.
8. Prepare, prepare, prepare for trial.  You must move the trial along smartly.
9. Limit cross examination to leading questions to which you know you have an answer from the documents.
10. Ask for simultaneous briefing if you have the burden of proof.  If the government has the burden, sequential briefing will give you the last word.

bill@spriggsconsultingservices.com       bill@spriggslawgroup.com

CONTRACTS OF ADHESION; FAR 52.301

Federal contracts are contracts of adhesion.  That is, the government dictates all elements of the contract including its terms and conditions.  Your opportunities to negotiate the terms of agreement are almost totally nonexistent.  This is just a reminder that when you deal in the federal marketplace, you must follow the rules including the restrictions on what goes into the agreement.  See also what we have written on the Christian doctrine which will read certain clauses into your contract whether they were in the contract initially or not.

And, remember to pay attention to 31 fine print pages in FAR which contain a matrix of clauses to be included in contracts.  See FAR 52.301.  That matrix lists all clauses and explains the contracts to which they apply.  You also can use this matrix in case you disagree that a clause belongs in your contract.  Be sure to complain before the time for submission of your bid or offer. 

bill@spriggsconsultingservices.com

SUPERIOR KNOWLEDGE OR EQUAL IGNORANCE

Courts and boards have long recognized an implied by law duty of the government to disclose information vital to contract performance.  Helene Curtis Industries v. United States, 315 F.2d 774 (Ct. Cl. 1963).  The elements of a claim for breach of this duty are: (1) possession of information the government knows or should have known is material to successful contractor performance; (2) the contractor neither knows nor should have known of the information through normal reasonable investigation; (3) the government knows or should have known of the contractor's ignorance; (4) the government fails to disclose the information; and (5) the contractor suffers injury as a result.

Any information significant to a proper appraisal of the cost and scope of the work falls within the rule.

One aspect of this rule which often is overlooked is what we can call "equal ignorance".  In a way, it is the corollary of the "should have known" rule.  It is also based on an old rule from what is now known as the Court of Appeals for the Federal Circuit (CAFC).  Aerodex, Inc. v. United States, 417 F.2d 1361 (Ct. Cl. 1969).  In Aerodex, a vital component part needed for contract performance was described in the specifications by dimension and performance requirements.  The contractor discovered during production that the government lacked the material specifications necessary to produce the component and therefore the contractor was unable to procure the component from the sole source supplier.  The court held it was reasonable for the contractor to expect the part to be available and the court concluded that the government, being in the better position to know the information, must bear the risk of the costs of failure to perform.

Thus, the contractor and the government may be equally ignorant of the information vital to successful performance.  However, the government may be in a better position to know and therefore the risk of performance extra costs is allocated to the government.  So, don't forget the Aerodex rule.  The government may well be allocated the risk of extra performance costs if it is in the better position to know or should have known as originally articulated in Helene Curtis, the seminal case on superior knowledge.

bill@spriggsconsultingservices.com     bill@spriggslawgroup.com

CONTRACTING OFFICER'S APPROVAL NOT REQUIRED

You may find it difficult to find the contracting officer.  See our post on Who is Your Contracting Officer?  In that post we point out you must keep track of who your contracting officer is and then keep him or her fully informed about problems during performance.  You must also seek redress for any changes as the problems arises.  And, you must deal with the contracting officer who has the authority to commit the government.

But the approval or authorization of the contracting officer is not always required.  If anyone in the government is responsible for a constructive change, approval of the contracting officer is not required.  By that we mean you do not need to show that the contractive officer ordered, acknowledged or agreed with the change.  In short, the constructive change doctrine arises on a totally separate theoretical basis from a formal change requiring the authorization of the contracting officer.

Why?  Because the constructive change theory is based on breaches of government duties which are implied by law in every contract.  Defective specifications is based on breach of the government's warranty of its data package.  A specification writer made a mistake.  Superior knowledge is based on breach of the government's obligation to provide information necessary for successful performance.  Someone in the government failed to alert the contractor to a change or problem.  Failure to cooperate is based on breach of the government's obligation to cooperate and not interfere in the contractor's performance.  Inspectors, engineers or contract specialists may be guilty of lack of cooperation and interference.  Commercial impracticability is based on the government's obligation to provide a specification which is commercially practicable.

Many people don't know the history of constructive changes.  Prior to the Contract Disputes Act of 1978, the boards of contract appeals did not have jurisdiction over breach of contract claims.  As the boards encountered more and more problems based on breaches of contract, they developed the theory that a breach was a "constructive change" to the contract.  That theory has now had a long history of approval from the boards and the courts.

And, constructive changes do not require approval of  acknowledgement of  the contracting officer.

bill@spriggsconsultingservices.com

WHO IS YOUR CONTRACTING OFFICER?

Who is your contracting officer and when did you last communicate with him or her?  Please read my posts on contract management and contract management revisited.  Most of the requests for equitable adjustment and claims we handle involve situations where the contractor fails to communicate effectively with the person who has the warrant to commit the government.  Not the contract specialist.  Not the contracting officer's representative.  Contractors must communicate with the contracting officer.

The first problem we've seen is identifying the contracting officer with the warrant for the contract.  This should be your first order of business.  Contractors should do whatever is necessary to remain informed about who is the decision maker with the authority to commit the government. 

The next problem is the failure to promptly raise with the contracting officer any issues which might conceivably give rise to a request for equitable adjustment or claim for breach of contract.  This means constant surveillance of contract performance and quick identification of performance issues.  Then, promptly notify the contracting officer with as much information as you possibly can muster.

Finally, submit the request for equitable adjustment as a place holder.  I cannot over emphasize this.  Yes, immediately submit your request or claim with as much information as you can.  In fact, you may want to develop a form which you use to fill in the blanks.  You always can amend your submission as more information, such as pricing, becomes available.

Deal with the contract specialist and contracting officer's representative as a matter of courtesy.  But make a pest of yourself, if need be, in your constant effort to identify the real contracting officer and to discharge your absolute obligation to your employer/client to raise performance problems as they occur.  And, don't just raise them.  Document them.  See our posts on how to write the request for equitable adjustment.

bill@spriggsconsultingservices.com    bill@spriggslawgroup.com