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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.
FOIA Exemption 4
1. Notice of Request Under the
Freedom of Information Act for Federal Contractors’ Type 2
Consolidated EEO-1 Report Data (August 19,
2022)
- Department of Labor (DOL) Office of Federal Contract Compliance
Programs (OFCCP) issued a notice warning about potential public
release of federal contractors’ Equal Employment Opportunity
(EEO) compliance reports. Specifically, the OFCCP is preparing to
respond to a Freedom of Information Act (FOIA) request that broadly
seeks federal contractor (and subcontractor) EEO-1 Type 2 Reports
from 2016-2020. - OFCCP set a deadline of September 19, 2022 for contractors to
object to release of their reports pursuant to FOIA Exemption 4,
which protects confidential commercial information. Absent timely
objection, it appears OFCCP will release the reports.
Contractors interested in protecting information in their EEO-1
Type 2 reports should proceed promptly, carefully, and
strategically. The legal landscape around FOIA Exemption 4 is
volatile, and the extent to which FOIA Exemption 4 may be used to
withhold EEO-1 Type 2 reports has already been the subject of
contentious litigation. Our Government Contracts team has been
closely following this area of law; Special Counsel Nathan Castellano recently
published a Briefing Paper summarizing best
practices and recent developments for contractors using FOIA
Exemption 4 to protect confidential commercial information from
public release.
Protest Cases
1. G4S Secure Integration LLC, et
al., v. United States, No. 22-256C (Fed. CL. August 16,
2022)
- This is the latest in a series of COFC bid protest decisions
addressing the State Department’s interpretation of the SAM
registration requirements of FAR 52.204-7(b)(1). Initially, State
interpreted the rule to not require a JV entity to separately
register in SAM where the individual JV members were already
registered. - In a prior round of protest litigation, COFC Judge Hertling
rejected State’s interpretation and found that the awardee JV
was not properly registered in SAM. Judge Hertling ultimately
denied the protest, however, because the protester suffered from
the same SAM registration error, and therefore there was no
possibility of prejudice. That decision is currently pending appeal
before the Federal Circuit. - Meanwhile, in a separate but similar procurement, State decided
to apply Judge Hertling’s interpretation of the SAM
registration requirement and in doing so deemed several
competitor’s ineligible without providing notice or amending
the solicitation. - COFC Judge Somers held that State was required to amend the
solicitation when it changed its interpretation of what was
required with respect to JV SAM registration. Judge Somers held
that the protesters were not raising an untimely challenge to the
solicitation terms under Blue & Gold because any
ambiguity in the registration requirement was latent and not
revealed until the separate litigation before Judge Hertling.
This line of protest litigation addresses a host of interesting
issues, including (a) the prejudice standard that applies when a
protester’s proposal suffers the same defect as the
awardee’s, (b) SAM registration requirements for JVs, and (c)
identification of latent ambiguities under the Blue &
Gold rule. The bid protest bar should keep an eye on these
cases, including the potential for at least one Federal
Circuit decision. In the meantime, at a minimum, contractors and
agencies should pay careful attention to SAM registration
requirements, particularly when a JV is involved.
Claims Cases
1. The Tolliver Group, Inc. v.
United States, Fed. Cl. No. 17-1763 (August 17,
2022)
- In an interesting turn to a long-running claim dispute that has
already generated one Federal Circuit decision and significant
commentary, COFC Judge Lettow held that a contractor with a
firm-fixed-price, level-of-effort development contract is entitled
to recover litigation costs associated with successfully defending
against a qui tam action. - The opinion reasons that the FAR Part 31 cost principles
applied to the contract, specifically FAR 31.205-47, which covers
certain costs of defending against FCA allegations. Judge Lettow
found that the FAR required the agency to conduct a cost analysis
before awarding the relevant task order, recognizing that a
firm-fixed-price, level-of-effort development contract is, in
practice, more akin to a cost-type contract than a fixed-price
arrangement. - Having concluded that FAR 31.205-47 is a mandatory and
important clause, and thus incorporated into the contract by the
Christian doctrine, the Court concluded that the
contractor’s legal fees were reasonable and properly
allocated.
This decision-which is best paired with the previous COFC and
Federal Circuit opinions and oral arguments generated through this
litigation-are good reminders of the need to think critically,
creatively, and strategically when seeking to recover litigation
costs under a government contract. Not all theories of recovery
will be apparent from the face of the contract, the FAR, or even
the case law.
2. Caring Hands Health Equipment
& Supplies, LLC v. Department of Veterans Affairs,
CBCA No. 6814 (August 23, 2022)
- In this decision, the CBCA distinguished between a requirements
contract and an indefinite delivery, indefinite quantity (ID/IQ)
contract, and held that the contract at issue was an IDIQ contract
because it lacked indicia of exclusivity. - The contractor held a series of contracts with the Department
of Veterans Affairs (VA) to deliver Government-owned home medical
equipment to beneficiaries. Upon discovering that the VA had placed
orders from other entities, the contractor complained to the VA
that its contracts were considered requirements contracts and thus
the VA was obligated to place all orders with it. - The CBCA disagreed, finding that the contracts at issue were
not requirements contracts. As the Board explained, a requirements
contract is defined by an obligation to purchase exclusively from a
single source, and the contracts here do not contain the FAR
52.216-21 Requirements clause “or any other provision or
language containing ‘words of exclusivity.'”
Contractors should be pay close attention to the terms of the
contract in determining the parties’ rights and obligations.
And the parties’ views regarding interpretation of the contract
may not be controlling where the contract is unambiguous on its
face.
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.
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