Government Contracts Legal Round-Up | 2022 Issue 10 – Government Contracts, Procurement & PPP

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.

Protest Cases

1. Sekri, Inc. v. United States, No.
21-1936 (Fed. Cir. May 13, 2022)

• This appeal asked the Federal Circuit to decide how traditional
  timeliness and standing rules apply to bid protests brought by
  mandatory source suppliers that operate under the
  Javits-Wagner-O’Day (JWOD) Act, which is intended to prioritize
  federal procurement from the blind and severely disabled.




• The protester filed suit at the Court of Federal Claims arguing
  that the Defense Logistics Agency (DLA) had improperly issued a
  competitive solicitation for certain supplies that should have been
  purchased directly from SEKRI as a mandatory source pursuant to the
  JWOD Act.




• The Court of Federal Claims found that it was bound to apply
  the Federal Circuit’s existing framework for assessing bid
  protest timeliness and standing and dismissed the case because
  SEKRI did not submit a proposal under the DLA solicitation and did
  not file a formal protest before the proposal submission
  deadline.




• The Federal Circuit reversed, treating the case as one of first
  impression and holding that, based on the unique nature of the JWOD
  Act and mandatory source procurements, the traditional bid protest
  timeliness and standing rules do not bar SEKRI’s protest in
  this case.

This case confirms that the Federal Circuit is willing to
recognize that certain government contracts cases arise in unique
contexts that can warrant a departure from the traditional rules.
Contractors should not assume that this holding will be interpreted
to relax the otherwise strictly enforced timeliness and standing
rules that apply to protests arising outside the JWOD Act. The
opinion, however, is a valuable reminder of the Federal
Circuit’s unique position to shape procurement law, and the
potential power of a persuasive appeal.

2. BES Federal Solutions JV, LLC,
B-420550 et al. (May 11, 2022) (Published May 18,
2022)

• GAO denied the protest where the Department of the Air Force
  concluded that the protester’s proposal was unacceptable under
  the technical (staffing plan) evaluation factor.




• Under the mission essential plan (MEP) subfactor, the
  solicitation provided that offerors were required to explain how
  they would continue performing during a crisis, including handling
  employees exposed to COVID-19 and a return-to-work policy.




• The Air Force found BES’s approach unacceptable because it
  did not specifically address a quarantine policy or a procedure for
  notifying the contracting officer’s representative regarding
  positive COVID-19 test results.




• GAO rejected the protester’s argument that the Air
  Force’s evaluation imposed an unstated evaluation criterion.
  GAO explained, for example, that the Solicitation’s requirement
  to provide a COVID-19 testing policy reasonably encompassed an
  unstated requirement of where such testing would be performed.

Agencies may properly evaluate a proposal based on
considerations not expressly stated in the RFP where those
considerations are reasonably and logically encompassed within the
stated evaluation criteria, and where there is a clear nexus
between the stated and unstated criteria.

3. DCR Services & Construction, Inc.,
B-420179.2,B-420179.3 (April 28, 2022) (Published May 6,
2022)

• GAO denied in part and dismissed in part a protest challenging
  the National Park Service’s non-selection of DCR’s
  quotation for the establishment of a blanket purchase agreement
  (BPA) for contaminated site cleanup services.




• First, GAO denied DCR’s protest alleging flaws in its own
  evaluation.




• Next, GAO dismissed DCR’s protest challenging the
  evaluation of the awardee’s proposal and the best-value
  determination, finding that DCR was not an interested party to
  raise these challenges.




• GAO explained that even if DCR’s protest concerning the
  agency’s evaluation of the awardee’s quotation (and its
  treatment in the best-value determination) was sustained, DCR would
  not be in line to receive a BPA. The record reflects there were two
  other vendors that did not receive BPAs, yet the agency found their
  quotations to be a better value than DCR’s.

Where there is an intervening offeror who would be in line for
the award if a protester’s challenge to the award were
sustained, the intervening offeror has a greater interest in the
procurement than the protester, and GAO generally considers the
protester’s interest too remote to qualify as an interested
party. Protesters should be mindful of the competitive landscape
when filing protests, as they may be required to challenge not only
the awardee’s evaluation, but the evaluation of other
disappointed offerors.

Claims Cases

The Armed Services Board of Contract Appeals (ASBCA) issued a decision that cites an article published by Nathaniel Castellano for the observation that
the Contract Disputes Act (CDA) contains traps for the unwary,
despite being intended to create a fair and efficient mechanism for
resolution of government contract claims. Nathaniel’s article argues that, based on a recent line of
Supreme Court precedent, the CDA’s procedural requirements for
claim submission, certification, and timely appeal do not qualify
as jurisdictional prerequisites for maintaining CDA litigation.

Freedom of Information Act (FOIA) Exemption 4

1. Synopsis, Inc. v. Dept. of Labor, No.
20-16414, 20-16416, 2022 WL 1501094 (9th Cir. May 12,
2022)

• The Department of Labor (DOL) declined to release certain
  materials in response to a FOIA request; the requester filed suit
  in district court challenging DOL’s decision to withhold; the
  district court held in favor of the requester, directing DOL to
  release the disputed materials.




• After the district court issued its order directing DOL to
  release the materials, Synopsis attempted to intervene in the same
  case, claiming that the materials qualified as its confidential
  commercial information that must be withheld under FOIA Exemption
  4. The district court denied the motion to intervene as
  untimely.




• Synopsis separately filed an independent
  “Reverse-FOIA” action against DOL, asking the district
  court to enjoin DOL from releasing the same materials, again
  invoking Exemption 4. The district court rejected the Reverse-FOIA
  argument on the basis the court had already ordered DOL to release
  the materials.




• Synopsis appealed. The Ninth Circuit affirmed in an unpublished
  decision, finding that the district court did not abuse its
  discretion in denying the motion to intervene, and agreeing with
  the district court that, under Supreme Court precedent, once the
  district court ordered DOL to release the materials Synopsis could
  no longer sue to enjoin the release of those same materials.

This decision emphasizes how important it is for companies to be
vigilant when trying to protect confidential information that has
been submitted to the US Government. As soon as an agency provides
notice that confidential information has been requested under FOIA,
the company should promptly respond with legal and factual support
explaining why any proprietary or confidential commercial
information must be withheld. In the event a requester files suit
to obtain the materials, or the agency indicates it will release
sensitive information, the company should act quickly to intervene
and support the agency, or file suit to enjoin the agency, as
appropriate. For those interested in learning more about FOIA
Exemption 4, Nathaniel Castellano recently published a Briefing Paper discussing the latest
litigation developments and best practices.

Investigations and Enforcement

The Department of Justice announced an inflation adjustment to civil
False Claims Act penalties, increasing the range of penalties to
$12,537 to $25,076 per claim.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.