Source: https://www.scribd.com/book/368286319/Key-Case-Law-Rules-for-Government-Contract-Formation
Timestamp: 2019-05-23 09:02:08
Document Index: 174150465

Matched Legal Cases: ['§ 3304', '§ 2304', '§ 2304', '§ 2', 'art 6', '§ 6', 'art 7', 'art 10', 'art 6', 'art 6', 'art 10', 'art 10', 'art 10', '§ 253', '§ 253', '§ 253', '§ 253', '§ 6', '§ 253', '§ 2304', '§ 2304', '§ 2304', '§ 2304', '§ 2304', '§ 2304', '§ 2304']

Key Case Law Rules for Government Contract Formation by Patrick Butler Lt. Col - Read Online
by Patrick Butler Lt. Col
344 pages12 hours
Publisher: Berrett-Koehler Publishers, Inc.Released: Sep 1, 2014ISBN: 9781567264500Format: book
Key Case Law Rules for Government Contract Formation - Patrick Butler Lt. Col
Overview of This Protest Ground: Protests often arise when a company wants to compete for a particular government requirement but the government has awarded a sole-source contract to a competitor or has otherwise failed to open the requirement up for competition. Sometimes these types of protests are filed against a modification to a contract that a protester believes is outside the scope of the awarded contract and, in its view, circumvents competition in violation of the Competition in Contracting Act (CICA).
Although there are legitimate and supportable reasons for the government to enter into sole-source (or limited-sources) contracts, the government is not allowed to circumvent competition because it failed to plan adequately for a competitive procurement. This statutory prohibition is set out at 41 U.S.C. § 3304(e)(5)(A)(i): In no case may the head of an agency… enter into a contract for property or services using procedures other than competitive procedures on the basis of the lack of advance planning…. For DOD this statutory prohibition is codified at 10 U.S.C. § 2304(f)(4)(A), which uses the same operative language.
CICA provides that sole-source procurements may not be used when the circumstances justifying the award were due to the agency’s own lack of advance planning. 10 U.S.C.A. § 2304(f)(4)(A); FAR 6.301(c)(1). To the extent that the [agency] justifies its sole-source award to [the awardee] on the short time line available to properly research responsible sources for [this] contract, this justification violates CICA. The time-frame for the award of this bridge contract was, on the record before the court, entirely the result of a lack of advance planning on the part of the [agency].
FAR Crosswalk: Definition of acquisition planning at FAR § 2.101; FAR Part 6 generally and FAR § 6.301(c) in particular; FAR Part 7, Acquisition Planning; and FAR Part 10, Market Research.
The COFC and the GAO will take a close look at the government’s reasons for circumventing competition. This is very much a case-by-case (fact-specific) analysis, but due in part to CICA’s requirement for the government to execute a J&A in support of a sole-source (or limited-sources) procurement, the burden is on the government to show why it was not able to set up at least a limited competition for the goods or services it is seeking. Under CICA, the government has an affirmative obligation to make the effort to obtain competition, unless a valid exception to CICA applies. A recent review of DOD contracting by the GAO found that in FY2012, DOD cited only one responsible source for a significant majority of the dollars that were obligated under any CICA exception.²⁹
The importance of a well-written J&A cannot be emphasized enough; the government cuts corners on the J&A at its own risk. The GAO and the courts expect the J&A to be a stand-alone document that fully describes the contemporaneous reasons supporting the government’s use of the specified CICA exception. The GAO and the courts find ex post facto explanations (usually asserted for the first time in heat of protest litigation) to be less persuasive. Furthermore, the GAO and the courts want to see the actual steps the government has taken to move the challenged procurement into a competitive posture. These forums pay little attention to government lip service regarding competition unless the agency can point to concrete steps it has taken to move the requirement into a competitive posture. In other words, the GAO and the courts are seldom persuaded by the fact that the government is assessing the possibility of competition or considering moving the requirement toward a competitive posture.
Overview of This Protest Ground: As a general rule, the Competition in Contracting Act requires the federal government’s contracting officers to promote and provide for full and open competition in soliciting offers and awarding Government contracts. CICA’s requirement for full and open competition can be thought of as a broad general rule with an array of exceptions. Protests in this area are almost always triggered when a company believes that it is being unlawfully excluded from competing for a government contract. There is some overlap here with the prior protest ground because some of the protests in this area are based on the allegation that the government’s use of a particular CICA exception is an attempt to legitimize a lack of advance planning.
The CICA competition requirements are primarily implemented in FAR Part 6, Competition Requirements. That part sets out three overarching levels of competition: (1) full and open competition, (2) full and open competition after the exclusion of sources, and (3) other than full and open competition. This protest topic focuses on the third category, other than full and open competition. CICA, as implemented in FAR Subpart 6.3, sets out seven permissible grounds for other than full and open competition: (1) only one responsible source and no other supplies or services able to satisfy agency requirements, (2) unusual and compelling urgency, (3) industrial mobilization; engineering, developmental, or research capability; or expert services, (4) international agreement, (5) authorized or required by statute, (6) national security, and (7) public interest.
Of the seven permissible exceptions to full and open competition, the most commonly used are the first two: only one responsible source and unusual and compelling urgency. Within DOD, the most commonly cited exception is only one responsible source. ³⁰ This exception can get complicated, particularly when the reason for using it is based on intellectual property concerns arising from the items (e.g., patents, copyrights, other proprietary data) being developed at private expense. This is an area where the agency’s procurement attorneys may seek guidance from the agency’s intellectual property attorneys to ensure that the government’s actions comport with the laws in this area.³¹ Contracting personnel are well-advised to raise any such issues with their agency’s attorneys, as such issues are often factually and legally complex.
The GAO and the courts will closely examine the reason that the government has decided to limit competition. They will first look to the particular exception the government is citing as authorization for the other than full and open competition contracting action. Once that exception is identified, the GAO and the courts will examine the factual record to determine whether the agency’s decision is reasonable and is supported by the facts. The GAO and the courts closely scrutinize the agency’s J&A document in making their determination regarding the reasonableness of the agency’s action.
The two types of authority for sole-source procurements at issue in this protest are only one responsible source authority, FAR 6.302-1, and unusual and compelling urgency authority, FAR 6.302-2. Although the FedBizOpps notice Confirmation identifies only FAR 6.302-1 as authority, the text of the J&A relies on both FAR 6.302-1 and FAR 6.302-2 for authority. The court notes that reliance on both of these provisions as authority for a sole-source procurement J&A is extremely rare, at least in procurements protested to GAO or this court. In fact, the court is not aware of another J&A which has attempted to rely on both of these statutory authorities for the same sole-source award.
The simple reason that this is such a rare circumstance is that the FAR forbids reliance on FAR 6.302-1 when FAR 6.302-2 is applicable. See FAR 6.302-1(b) ( This authority… shall not be used when any of the other circumstances [in FAR sections 6.302-2, 6.302-3, 6.302-4, 6.302-5, 6.302-6] is applicable. In other words, if a contracting officer is faced with a situation which can be addressed by applying the unusual and compelling urgency provisions of FAR 6.302-2, he or she may not rely on the only one responsible source provisions of FAR 6.302-1 to justify a sole-source award. One logical reason for this prohibition is that under FAR 6.302-2, the government is permitted in appropriate circumstances to limit [but not automatically reduce to one] the number of sources from which it solicits bids or proposals. FAR 6.302-2(a)(2); see also FAR 6.302-2(c)(2) ( This statutory authority requires that agencies shall request offers from as many potential sources as is practicable under the circumstances. ) Under FAR 6.302-1, however, the government is permitted in appropriate circumstances to solicit an offer from one source only. See FAR 6.302-1(b)(1). In essence, the prohibition in FAR 6.302-1(b) forces the agency to solicit offers from as many sources as is practicable, in situations of unusual and compelling urgency, before resorting to soliciting offers from only a single source, in circumstances which may also present unusual and compelling urgency.
The specific provisions in FAR Part 10 that have been violated here, in the court’s view, include FAR 10.001(a)(2)(ii), FAR 10.001(3)(i), and FAR 10.002(b). These provisions require market research if the contract is valued to exceed a threshold amount, require market research that identifies potential sources for the contract requirement, and require market research into the availability of commercial items. The record before the court does not show that the [agency] satisfied the market research requirements of FAR Part 10. The failure to conduct adequate market research also implicates FAR 6.302-1(b)(1), which requires a reasonable basis for the determination that only one responsible source exists to fulfill a contract requirement. The violation of FAR Part 10 in this procurement was a significant and serious violation of procurement regulations.
As a general matter, the Competition in Contracting Act (CICA) mandates full and open competition in government procurements obtained through the use of competitive procedures. 41 U.S.C. § 253(c)(1) (2006). CICA, however, provides several exceptions, including when an agency’s requirements can only be satisfied by one responsible source. 41 U.S.C. § 253(a)(1)(a). In this regard, we have recognized that an agency’s legitimate need to standardize the equipment it uses may provide a reasonable basis for imposing restrictions on competition.
Turning to the propriety of the sole-source bridge contract with [the awardee], we first find that the sole-source award was improper because it is not supported by a written J&A. In this regard, when an agency uses noncompetitive procedures, such as 41 U.S.C. § 253(c)(1) (2000), which authorizes the use of noncompetitive procedures when the property or services are available from only one responsible source, the contracting officer is required to execute a written justification with sufficient facts and rationale to support the use of the authority, certify its accuracy and completeness, and obtain approval of the action from the cognizant agency official prior to making an award. See 41 U.S.C. § 253(f)(1)(A), (B), (C); Federal Acquisition Regulation (FAR) §§ 6.303, 6.304. The only exception to this requirement is where the agency uses noncompetitive procedures because the agency’s need for the property or services is of such an unusual and compelling urgency that the government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals. See 41 U.S.C. § 253(c)(2), (f)(2). Here, the agency did not execute a J&A prior to awarding the letter contract, as required by the statute. While a draft J&A has been provided during the course of our consideration of this protest, the agency advises that this document is only the agency’s deliberative processes until a final document is issued. In fact, despite our requests, the agency still has not provided an executed and approved J&A. Thus, the agency’s letter contract award to [the awardee] constitutes an improper sole-source award.
CICA requires, with certain exceptions, that the head of an agency conducting a procurement of property or services obtain full and open competition. 10 U.S.C. § 2304(a); FAR 6.101. Subsection (c) of the statute provides for exceptions from the competition requirement, including when the agency’s need for the property or services is of such an unusual and compelling urgency that the United States would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals. § 2304(c)(2). However, even when an agency limits the number of sources because of unusual and compelling urgency, CICA requires the agency to request offers from as many potential sources as is practicable under the circumstances. § 2304(e); see also FAR 6.302-2(c)(2). CICA requires that any justification for a sole source award include a determination that the anticipated cost will be fair and reasonable. § 2304(f)(3)(C); see also FAR 6.303-2(b)(7).
The law permits an agency to post the public notice of a sole source award made because of unusual or compelling urgency within 30 days after contract award. 10 U.S.C. § 2304(l)(1)(B); FAR 6.305(b). In deciding when to post a J&A, the agency should not intentionally delay the posting, as it did here, as a means of avoiding potential bid protests. FAR 1.102-2(c) requires government officials to conduct business with integrity, fairness, and openness, and to thereby [maintain] the public’s trust. This provision comes into play in determining the reasonableness of government action when procuring officials engage in gamesmanship to avoid any review of an improper sole source award. In other circumstances, the application of FAR 1.102-2(c) to sustain a bid protest may be debatable. However, as a basic tenet of the FAR acquisition system, the Court is not inclined to ignore principles of integrity, fairness, and openness where they directly apply to government actions. The Court finds that, even though the posting of the J&A technically was within the 30-day period allowed by FAR 6.305(b), the conduct complained of was arbitrary and capricious, and cannot be condoned in any reputable procurement system.
The overriding mandate of the Competition in Contracting Act (CICA) is for full and open competition in government procurements, which is obtained through the use of competitive procedures. Where an agency’s needs are of such an unusual and compelling urgency that the government would be seriously injured if the agency is not permitted to limit the number of sources from which it solicits bids or proposals, the agency may use noncompetitive procedures pursuant to the authority set forth at 10 U.S.C. § 2304(c)(2). This authority is limited by 10 U.S.C. § 2304(e), which requires agencies to request offers from as many sources as practicable. An agency may limit a procurement to only one firm if it reasonably determines that only that firm can properly perform the work in the available time. We will object to the agency’s determination only where the decision lacks a reasonable