Government Contracts Legal Round-Up | 2023 Issue 22 | Jenner & Block

Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.

Federal Circuit Docket

During its December court week, the Federal Circuit held oral argument in three appeals presenting important government contract issues:

  • In BCC-UIProjects-ZAAZTC Team JV v. Secretary of the Army, the panel discussed jurisdictional issues that can arise under the Contract Disputes Act (CDA) when there are questions as to which individual or entity within a Joint Venture is authorized to file a claim on the JV’s behalf.
  • In Nauset Construction Corporation v. Secretary of the Army, the panel debated the jurisdictional implications when an agency fails to properly notify a contractor of its appeal rights under the CDA.
  • In Newimar S.A. v. United States, the argument focused on the responsibility implications when an awardee chosen to perform in a foreign country is arguably not in compliance with local law, as well as the importance of carefully preserving protest arguments in briefing at the Court of Federal Claims.

Shortly after argument, the Federal Circuit summarily rejected the Newimar appeal, without opinion, pursuant to Federal Circuit Rule 26. Contractors, agency contracting offices, and their counsel should keep an eye on the two remaining appeals. As always, recordings of these arguments are available online at the Federal Circuit’s webpage.

Supply Chain Resilience Council

On November 27, 2023, the Biden Administration hosted the first-ever meeting of the Supply Chain Resilience Council. The council—created to strengthen and monitor critical supply chains in response to inflation and pandemic-related disruptions—consists of over 25 members from the administration, including Lael Brainard (Assistant to the President and National Economic Advisor), Janet Yellen (Secretary of the Treasury), Pete Buttigieg (Secretary of Transportation), and other cabinet members, assistants, and key decision makers. The council announced 30 new actions to strengthen supply chains, monitor disruption indicators, and mitigate future issues as they arise. Some notable efforts include:

  • Using the Defense Production Act to authorize investment in critical medicines and medical countermeasures to mitigate drug and medical supply shortages;
  • Enhancing cross-governmental supply chain data-sharing capabilities;
  • Furthering public-private partnerships aimed at creating common understanding of supply chains to facilitate the flow of goods;
  • Investing in critical supply chains, including the domestic food and energy supply chains; and
  • Partnering with international allies to develop early warning systems and coordinate responses to future supply chain disruptions.

Government contractors will be vitally important to the administration’s understanding of domestic and international supply chain concerns. For more information on the council’s development of supply chain-related policies and programs, contractors can review the White House fact sheet highlighting some of the recent developments.

Protest Update

SecuriFense Inc., B-421818.2 et al. | October 23, 2023

  • GAO sustained a protest where the Defense Intelligence Agency (DIA) failed to evaluate quotations equally.
  • As part of oral presentations, vendors were instructed to address how staffing plan mitigation strategies would reduce the risk of negative schedule impacts if staffing fell below 75 percent.
  • Although the protester discussed how it would address various types of staffing shortages, it did not specifically address strategies for reducing the potential negative impacts on the training execution mission if staffing fell below 75 percent. Accordingly, DIA found it had reduced confidence in the protester’s quotation.
  • The awardee similarly discussed staffing risk mitigation techniques but stated it did “not expect staffing to fall below 75 percent” and thus did not address specific strategies in the event staffing fell below 75 percent. During the course of the protest, DIA defended its evaluation by reiterating that the awardee would never let staffing fall below this threshold.
  • GAO rejected the agency’s explanation and agreed that DIA unequally evaluated vendors. GAO explained that the agency’s position does not account for the solicitation’s specific request for mitigation strategies in the event staffing fell below 75 percent, and the solicitation was not limited to what vendors would do to prevent staffing from falling below 75 percent in the first place.
  • Given that neither the protester nor the awardee discussed mitigation strategies in the event staffing fell below 75 percent, GAO found that it was unreasonable for DIA to assign the protester but not the awardee a finding of deceased confidence.

It is a fundamental principle of federal procurement law that a contracting agency must treat all offerors equally and evaluate their proposals evenhandedly against the solicitation’s requirements and evaluation criteria. Similarly, GAO has recognized that an agency fails to treat offerors equally when it applies different levels of scrutiny when evaluating different proposals by reading some offerors’ proposals in an expansive manner and resolving doubt in favor of the offeror, while reading other offerors’ proposals narrowly and applying a more exacting standard.

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