8.5.09 Summit - Freling - Protests and Claims Presentations

Fundamentals of Government Contract Claims and Protests Scott A. Freling August 5, 2009

Overview •

Differences Between Protests and Claims

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Protests – – – – –

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Where to protest When to protest Protest procedures Examples of protest issues and remedies Strategic considerations

Claims – – – –

Basic statutory requirements Examples of claims Subcontract claims Alternative Dispute Resolution

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What is the difference between a Protest and a Claim?

• PROTEST – a complaint about the Government’s handling of the procurement process up to and including award – Pre-award (complaints about the rules of the game) – Post-award (complaints about the award decision and how the game was played)

• CLAIM – a complaint by a party to an existing contract against another party to the contract – Contractor Claims vs. Government – Government Claims vs. Contractors

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Why do these differences matter? • Strict timing rules apply, especially to protests. • Special procedures apply, especially to claims.

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Examples of Grounds for Claims and Protests • HHS releases an RFP that says that any party awarded a contract for vaccine will have to produce it in the United States.

• Manufacturer’s contract is terminated by DoD for default because of late deliveries, and DoD announces it will reprocure the item from another source.

• VA awards a contract to a competitor that you know lacks the capacity to do the job right.

• DoD instructs contractor to make changes to its product under fixed-price contract that will greatly increase contractor’s costs of performance.

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Protests

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Protests – Where to Protest?

• Agency – Contracting Officer – Higher Level Intra-Agency Authority • in the first instance OR as an appeal of the CO’s adverse decision

• Government Accountability Office (GAO) • U.S. Court of Federal Claims • Small Business Administration (SBA) – protests of small business status in set-asides

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Protests – Who and When?

• Who can Protest?

– Must be an “Interested Party” (i.e., an actual or prospective offeror whose direct economic interest would be affected by the award of a contract or by the failure to award the contract) – Subcontractors may not protest

• When to Protest?

– It depends on (a) the type of protest and (b) the protest forum – Deadlines are strictly enforced – a trap for the unwary!

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Protests – Basic Timing Requirements • Agency or GAO – Pre-award protests – before next offers are due – Post-award protests – if no debriefing, 10 days after notice • Debriefing request – 3 days after notice • Protest filing – 5 days after a “required” debriefing to invoke automatic stay – Protest filing still timely if 10 days after debriefing

• Exclusion from competitive range – similar to award notice

– Other Issues – within 10 days of knowledge • Intra-agency appeal of the CO’s adverse decision does not extend the time for appeal.

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Protests – Basic Timing Requirements • Court of Federal Claims – Court generally follows GAO rule as to pre-award protests.

– Equitable timing requirements – court will assess whether plaintiff has acted unfairly or without excuse in bringing suit long after award

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Protests – Sample Protest Issues • Pre-Award Issues: – – – – –

Restrictive Specifications Ambiguous Specifications Improper Sole Source or Limit on Competition Unreasonable Bundling of Agency Requirements Improper RFP Terms

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Protests – Sample Protest Issues • Post-Award Issues: – Improper Evaluation • Use of unannounced criteria • Failure to follow RFP criteria • Unfair application of criteria

– Improper Exclusion from Competitive Range • Failure to discuss significant weaknesses • Improper evaluation (see above)

– Unequal Discussions • Technical transfusion

– Basic Theme – lack of equal treatment among offerors

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Protest Procedures • Agency – Quick, informal resolution (generally, within 35 days).

– Relatively low legal costs.

– Little discovery, if any.

• GAO – – – –

Resolution in 100 days.

Relatively full discovery with protective order.

Supplemental protests based on documents produced.

Possible hearings.

• Court of Federal Claims – No set time for resolution, but proceedings can be extremely expedited.

– Relatively full discovery – possible depositions.

– Supplemental or amended protests possible.

– Oral argument on cross-motions.

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Protests – Strategic Considerations • Angering the customer.

– Agency protests less disruptive than GAO or Court.

• Likelihood of success.

– Depends on the issue.

• • • •

Effectiveness of a stay.

Cost / speed of decision.

Likelihood of discovery to uncover new errors.

Winning the protest vs. winning the contract.

– Possibility of “corrective action” that cures problem without helping protester.

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Protests – Strategic Considerations Forum Agency

GAO

Court

“Angering Customer” Lowest

Cost / Speed Lowest cost / Fastest decision

Moderate (depends on situation)

Relatively expensive / 100 days

Moderate (depends on situation)

Most expensive / Depends on the case

Discovery

Stay

Least discovery

Subject to override

Extensive discovery, protective order

Subject to override

Extensive discovery, protective order

Not subject to override, but can be more difficult to obtain 15

Claims

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Claims – Basic Statutory Requirements Contract Disputes Act

• CDA procedures begin with making a written demand or assertion to the Contracting Officer, which is called a “claim.”

– Claim may be presented within 6 years of when it accrues.

(Note different from appeal time from final decision.)

– Claims over $100,000 must be certified.

• Claim results in the CO’s “final decision.”

• Appeal from final decision – To the appropriate Board of Contract Appeals within 90 days, OR • Civilian Board of Contract Appeals (CBCA) • Armed Services Board of Contract Appeals (ASBCA)

– To the Court of Federal Claims within one year.

• CDA procedures are exclusive.

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Civilian Board of Contract Appeals • Established effective Jan. 6, 2007, by the National Defense Authorization Act for FY 2006.

• CBCA’s authority extends to all executive agencies other than DOD, NASA, the United States Postal Service, the Postal Rate Commission, and the Tennessee Valley Authority.

• Prior to the CBCA, contract disputes involving civilian executive agencies were heard and decided by eight different boards of contract appeals (i.e., GSA, Agriculture, Energy, HUD, Interior, Labor, Transportation, VA).

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Claims – Subcontractor Claims • CDA claims do not generally include subcontractor claims against prime contractor.

• Subcontractor claims are generally subject to ordinary state contract law governing contracts between private parties, with federal law used to interpret FAR-type provisions • Some subcontractors may obtain agreement of prime contractor to “sponsor” a CDA claim, in which the sub sues the Government in the prime’s name.

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Claims – Examples of CDA Claims • • • • •

Price Adjustment issues Excusable delay/Government-caused delay Appeal of default termination Defective pricing Alleged noncompliance with contract terms

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Claims – Examples of Claims NOT covered by CDA • • • •

Fraud / criminal matters Tort Claims Subcontractor claims Contracts between U.S. and Foreign Govt.

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Claims – Alternative Dispute Resolution • The Boards and the Court encourage ADR and have a variety of approaches: – – – –

Non-binding mini-trials; Mediation; Advisory opinions; and Party-designed processes.

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Questions?

• Scott A. Freling – sfreling@cov.com – Tel: 202.662.5244

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