The ASBCA Imposes Conditions on Raising Excusable Delay as an Affirmative Defense to Default Termination

A recent decision by the Armed Services Board of Contract Appeals underscores the importance of timely filing a certified claim for excusable delay, and the risks of failing to do so. In ECC CENTCOM Constructors, Inc. (September 4, 2018), the ASBCA denied a construction contractor’s appeal from a termination for default. Critical to that ruling… Continue Reading

Threats, Coercion, and Duress — the Limits of Government Power and the Unenforceability of Certain Contractual Releases

Even though it sometimes seems otherwise, there are limits to the Government’s authority when it comes to enforcing a contractual release. As the following decision demonstrates, this is especially so when a contractor’s personal residence is on the line. In North American Landscaping, Construction, and Dredge, Co., Inc. (“NALCO”), ASBCA Nos. 60235 et al. Continue Reading

COFC Sustains Protest, Rejecting Agency’s Improper Reliance on Subcontractor’s Experience and “Next-In-Line” Requirement for Standing

In another recently released bid protest sustained by the Court of Federal Claims, the Court addresses a protestor’s standing and an offeror’s ability to rely on the experience of its subcontractors in satisfying technical evaluation criteria. This question of when and how to rely on an affiliate’s experience recently came up at an industry event… Continue Reading

Lock ‘Em Up or Lose ‘Em — The Importance of Early Execution of Key Subcontracts

A recent decision by the Armed Services Board of Contract Appeals reminds us of the importance of obtaining commitments from your key subcontractors after award. In CDM Constructors, Inc. (August 20, 2018), the ASBCA dismissed on summary judgment a construction contractor’s claim for increased costs arising out of a contract for the construction of dissolved… Continue Reading

Protest Alleging Unfair Treatment in the Evaluation Process Succeeds in the Court of Federal Claims

One of the most common, and challenging, arguments made in a post-award bid protest is that the contracting officer’s evaluation was arbitrary and capricious. The challenge with this argument is overcoming the substantial deference that the GAO and Courts grant to a contracting officer’s judgment. Because of this deference, it can be difficult to establish… Continue Reading

Different NAICS Codes and Industries Does Not Prevent Finding of Affiliation

In a recent decision the Small Business Administration’s Office of Hearings and Appeals (“OHA”) affirmed a determination that a company was other than small based on the company’s failure to provide adequate information in response to a size protest. In Perry Johnson & Assoc., Inc., SBA No. SIZ-5943 (2018) OHA confirmed that a failure to… Continue Reading

Clear As Mud: The Murky Waters of Past Affiliate Performance as Part of Evaluation Criteria

As restated in a recent GAO decision: “The evaluation of past performance is a matter of agency discretion, and we will review the evaluation only to ensure that it was reasonable and consistent with the solicitation’s stated evaluation criteria and applicable statutes and regulations.” Matter of: C2g Ltd. Co., B-415938.2 (June 26, 2018). In this… Continue Reading

The Importance of Modifications and Schedule Updates When Faced with a Termination for Default

A recent decision by the Armed Services Board of Contract Appeals reminds us of the significance of release language in a modification, this time in the context of a contractor seeking to overturn a termination for default of a construction contract. The decision also underscores the importance of keeping the Government advised of how you… Continue Reading

Get It in Writing: Contractor Must Comply With Contract Specifications Despite Government Accepting Nonconforming Goods and Goods Passing Applicable Testing

A recent decision from the Armed Services Board of Contract Appeals highlights the importance of memorializing changes to contract specifications in writing from the contracting officer, even if the Government’s actions suggest that it has accepted the changes. On June 27, 2018, the Board issued a decision in the appeal of Relyant, LLC (ASBCA No.… Continue Reading

Relief for Contractors Facing an Unreasonable Delay in Receiving a Contracting Officer’s Final Decision

The ASBCA recently issued a decision that provides contractors with relief and a viable option for progressing their claim when a contracting officer unreasonably delays issuance of a final decision. The critical triggering event, the Contracting Officer’s Final Decision (“COFD”), which allows a contractor to commence a lawsuit against the Government before the ASBCA and… Continue Reading

Overturning a Termination for Cause

A recent decision by the Armed Services Board of Contract Appeals provides guidance on overturning a termination for cause of a supply contract. In AEY, Inc. (June 22, 2018), the ASBCA in large part overturned the Government’s termination for cause of a Government contractor who had missed several of the original contract deadlines for supplying… Continue Reading

Time is Money—Recent Decisions on Liquidated Damages (Part II)

The second significant recent ASBCA decision on liquidated damages is American International Contractors, Inc. (May 29, 2018). In that case, the contractor did not complete the original contract work on time and was assessed liquidated damages. After the contractor completed the base contract work and demobilized from the site, and following unsuccessful negotiation of a… Continue Reading

GAO Decisions Remind Us: Timely Filing of a Protest is Strictly Construed

Recent GAO decisions serve as important reminders that timely filing of a protest is strictly construed. As Department of Defense contractors and agencies are adopting the enhanced debriefing rules, there has been some confusion—by agencies and contractors—as to what constitutes a timely protest. In a recent protest, the GAO addressed these timing issues and clarified… Continue Reading

ASBCA Rejects Government’s Attempt to Dismiss Pre-Novation Claim by Successor-In-Interest

Novations are not uncommon in Government contracting. FAR Subpart 42.12 contains standard novation language, in which the Government recognizes in part: “The Transferee by this Agreement becomes entitled to all rights, titles, and interests of the Transferor in and to the contracts as if the Transferee were the original party to the contracts.” Government contractors… Continue Reading

Seminar: Bidding Public Works and Construction Contracts

This Thursday at 2:45 p.m. pacific time, DWT partner Jonathan DeMella will join Colm Nelson of Foster Pepper PLLC and James Niemer, Sr. Legal Counsel for Sound Transit to speak on a panel about key risk shifting provisions for owners and contractors. The discussion will cover issues including differing site conditions clauses, indemnity, liquidated damages,… Continue Reading

Board Allows Government to Add Powerful “Unclean Hands” Affirmative Defense on Eve of Hearing

Last month, the Armed Services Board of Contract Appeals allowed the Government to amend its answer to add an “unclean hands” affirmative defense, a mere two months before the scheduled hearing date. Raytheon appealed from a Contracting Officer’s Final Decision denying its $48,195,191 claim for extra Systems Engineering and Program Management (SEPM) services under the… Continue Reading

OHA Confirms Competitors Cannot Protest 8(a) Sole Source Awards

In a decision issued on April 3, 2018, the SBA Office of Hearings and Appeals (“OHA”) confirmed competitors do not have standing to file size protests relating to 8(a) sole source awards. In Size Appeal of GovSmart, Inc., SBA No. SIZ-5894, 2018, OHA stated such protests may only be filed by contracting officers or the… Continue Reading

VA Obtains $685 Million for Construction and Renovation Projects

The U.S. Department of Veterans Affairs has set aside $685 million in congressional funding for several State Veterans Home construction projects. The projects will be funded through the VA State Veterans Home Construction Grant Program and will be used for repairs, renovation, or new construction. This is the largest appropriation to the grant program in… Continue Reading

General Release Cuts Off Subcontractor Pass-Through Claim

Last month, the Court of Federal Claims issued a decision reaffirming the importance of considering carefully subcontract release and waiver language in Government procurement. MW Builders, Inc. v. United States involved a subcontract between MW Builders, Inc., the prime contractor, and Bergelectric, a subcontractor, in which Bergelectric agreed to provide a complete electrical system in… Continue Reading

Government Contractor May Proceed With Delay Claim Notwithstanding Incomplete Project

A recent decision by the Civilian Board of Contract Appeals rejected the Government’s attempt to stay an appeal seeking recovery for delay damages “until the project is complete.” In CTA I, LLC v. Department of Veterans Affairs (March 9, 2018), the Civilian Board of Contract Appeals denied the Government’s motion to stay the appeal. The… Continue Reading

Feds Charge Alleged Sham Small Businesses Owners

On April 3, 2018, a federal grand jury indicted two Wisconsin residents and a construction business of fraud and other charges accusing them of wrongfully obtaining $200 million in contracts set aside for small businesses by misrepresenting the companies’ ownership status. Brian Ganos and Mark Spindler are accused of falsely certifying businesses owned and controlled… Continue Reading

Contractor’s Inferior Knowledge and Mistakes Are No Excuse for Avoiding the Preclusive Effect of a Contractual Release

As the following decision demonstrates, careful recordkeeping can be critical to avoid forfeiting a claim upon the completion of a project with the government. Appeal of Merrick Construction, LLC, ASBCA No. 60906 (March 22, 2018). In Merrick, the Armed Services Board of Contract Appeals (“ASBCA”) found that a contractor forfeited a claim against the Army… Continue Reading

GAO Announces Final Version of Amended Bid Protest Regulations

Earlier this week, the GAO announced the final version of its amended bid protest regulations, which take effect May 1, 2018. Significant changes to the regulations include the implementation of an electronic docketing system, imposition of a filing fee, possible reduction in the time within which the agency must respond to a protest’s specific document… Continue Reading

DoD Announces Enhanced Debriefing (and Extension to Deadline for Securing CICA Stay)

The traditional debriefing process, by which unsuccessful offerors can obtain information on the basis of the Government’s selection and contract award, was just improved to the benefit of contractors. Under the revised debriefing process, contractors will now have the opportunity to submit written questions and receive written responses from the procuring agency. Only after receipt… Continue Reading

OHA Clarifies Ostensible Subcontractor Rule

At the end of last year, the Small Business Administration Office of Hearings and Appeals (“OHA”) issued a decision that further clarified the “ostensible subcontractor” rule. This rule may result in affiliation when a small prime contractor is unduly reliant on its subcontractor. In Emergent, Inc. v. Kapsuun Group, LLC, SBA No. SIZ-5875 (Dec. 19,… Continue Reading

SBA Issues New Proposed Rule to Consolidate SDVOSB Eligibility Rules

On January 29, 2018, the SBA issued a proposed rule to address and resolve the existing conflicts between the current eligibility requirements in the SBA and VA regulations. This action comes after specific direction in the 2017 National Defense Authorization Act for the SBA and VA to work together on a consolidated rule. Following this… Continue Reading

Changes to DCAA’s Incurred Cost Audit Model: How May It Affect You?

It is no secret that the Defense Contract Audit Agency (DCAA) has been plagued by a significant backlog in processing incurred cost (electronically) proposals (“ICE proposals”). In 2011, there were approximately 31,000 ICE proposals awaiting audit.  While reduced, the current estimate is still a staggering 14,000.  While DCAA has implemented policies to reduce this backlog,… Continue Reading

Agency Erred By Failing to Tell Offeror During Discussions That “Neutral” Past Performance Was a Weakness

In December 2017, the Court of Federal Claims ruled in favor of protestor Precision Asset Management Corp. after finding the agency failed to inform Precision that the agency assessed Precision’s “Neutral” past performance rating negatively. In 2014, Precision submitted its proposal for a Department of Housing and Urban Development property management contract. After the agency… Continue Reading

2017 Government Contracts Year in Review

Last week, Kate Kennedy and I presented a 1-hour webinar to the members of the Pacific Northwest Defense Coalition titled “2017 Government Contracts Year in Review and Regulatory Update.” This was a fast-paced, high level review of topics such as the current Administration’s regulatory reform agenda, cybersecurity, the 2018 National Defense Authorization Act, bid protest… Continue Reading

COFC Ruling Confirms Harsh SBA Decision Regarding Ownership Requirements of SDVOSBs

In late December, the Court of Federal Claims upheld an SBA decision revoking a Service Disabled Veteran Owned Small Business’ (“SDVOSB”) status on the basis the business failed in the unconditional ownership requirement set forth in the SBA’s SDVOSB regulations. In Veterans Contracting Group, Inc. v. United Sates, No. 17-1188C, the SDVOSB was determined not… Continue Reading

Termination for Convenience: File on Time and Document Your Costs

Last month, the Armed Services Board of Contract Appeals issued two decisions involving terminations for convenience.  Both decisions are instructive regarding how contractors should anticipate contractual and regulatory requirements regarding termination for convenience, in order to maximize likelihood for a full recovery of incurred costs. The first case, Black Bear Construction Co., ASBCA No. 61181,… Continue Reading

Data Breaches in 2017

As we near the end of the year and look back on 2017, both the number of data breaches and magnitude of these breaches stand out.  There have been over forty very significant breaches of data stored on cloud computing systems in the past year – and it is safe to assume that we will… Continue Reading

Government Contractor Awarded Equitable Adjustment for Negligent Quantities Estimate in Fixed Price Contract

A recent decision by the United States Court of Federal Claims reminds us how important the Government’s estimated quantities are, even in a fixed price contract. In Agility Defense & Government Services, Inc. v United States (October 18, 2017), the Court of Federal Claims awarded Agility $6,906,339.20, plus interest, representing the cost of additional, unanticipated… Continue Reading

Pending Dispute Over Contract Performance Prompts Agency to Find Contractor Non-Responsible and Rescind Bid Award on Separate Project

This past summer, the Alaska Department of Transportation and Public Facilities (“DOTPF”) rescinded a bid award after determining that the awardee was not a responsible contractor within the meaning of DOTPF’s bid specifications. The primary basis for this determination? An unresolved dispute over the contractor’s performance on a separate project. On April 20, 2017, DOTPF… Continue Reading

Ostensible Subcontractor Rule Does Not Apply to Similar Entities

A recent bid protest decision confirmed that the ostensible subcontractor rule cannot apply to similarly situated entities. The rule can result in a finding of affiliation if a small business prime contractor is determined to be unusually reliant on its subcontractor.  However, on October 20, 2017, the GAO denied a protest that was partially based… Continue Reading

Deadline for DFARS Cybersecurity Compliance Approaching

Last week, I spoke in Portland, Oregon about cybersecurity requirements for federal contractors at an all-day seminar hosted by the Pacific Northwest Defense Coalition.  Speakers from the Department of Defense, the FBI, and consultants specializing in cybersecurity compliance offered interesting and (sometimes different) perspectives on compliance, which led to candid and robust discussion.  Many thanks… Continue Reading

Failing to Respond to Negative CPARS May Affect Future Contracts

When the performance of a federal contract runs into trouble, the contractor may face a variety of issues including threats of default, delays and acceleration, cost overruns, etc. During this time, worrying about the government’s evaluation of its performance is often not the contractor’s main focus. However, ensuring that the contractor responds timely and addresses… Continue Reading

Trump Taps Linda McMahon to Lead SBA

On December 7, 2016, President-elect Donald Trump announced he will nominate former professional wrestling executive Linda McMahon as the head of the Small Business Administration. McMahon, 68, is the former CEO of the WWE, who also unsuccessfully ran for Senate in 2010. Trump’s announcement stated that McMahon will assist his administration with generating stronger job Continue Reading

Final FAR Rule Proposed for Small Business Set-Asides on Multiple Award Contracts

On Tuesday, Dec. 6, 2016, the Federal Acquisition Regulatory Council published a proposed rule aimed at finalizing regulations for small business set aside contracts in multiple award procurements. The new rule allows more flexibility to set aside contracts for small businesses in multiple award procurements. The proposed rule provides additional guidance to contracting officials on… Continue Reading

Substantial Transformation of IT Products Under the TAA Requires Careful Consideration

The Trade Agreement Act (“TAA”) utilizes a “substantial transformation” test in determining the country of origin of an end product composed of various parts from various countries. Substantial transformation is assessed and determined on a case-by-case basis, examining the totality of the circumstances. Therefore, no one factor is determinative. TAA as well as “Buy American”… Continue Reading

SBA Adds Training Module to Mentor-Protégé Applications

Small and large businesses seeking to take advantage of the Small Business Administration’s (SBA) new All Small Mentor-Protégé Program will now have to jump through an extra hurdle as part of the application process. The SBA began accepting applications for the new program on Oct.1, 2016.  The program allows any qualifying small business to partner Continue Reading

Department of Defense Issues Final Rule on Network Penetration Reporting and Contracting for Cloud Services

Last week, the Department of Defense adopted as final, with several changes, its interim rule amending the DFARS on “Network Penetration Reporting and Contracting for Cloud Services.”  The changes went into effect immediately, as of October 21, 2016. Among the changes in the final rule, DFARS 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident… Continue Reading

Washington State Ruling Heightens Liability Risk for Design Professionals

Recently, the Washington Court of Appeals potentially expanded the scope of tort duties owed by design professionals. In a May decision, the court held that an engineer’s duty of care to developers and property owners encompasses “the prevention of safety risks” even when no personal injury or property damage has resulted from claimed deficiencies.  See… Continue Reading

SBA to Start Accepting Mentor-Protégé Applications

On Oct.1, 2016, the Small Business Administration (SBA) will begin accepting applications for the new All Small Mentor-Protégé Program. This program has been several years in the making and follows authorizations in the Small Business Jobs Act of 2010 and the National Defense Authorization Act of 2013, which allowed the SBA to create mentor-protégé… Continue Reading

State of Alaska Tightens Its Claim Provisions

In 2015, the Alaska Department of Transportation and Public Facilities significantly amended the claims provision of its Standard Specifications—105-1.17.  The amendments incorporate language from the standard conditions which had previously been utilized for public facilities construction and which had previously been upheld by the Alaska Supreme Court in North Pacific Erectors, Inc. v State Department… Continue Reading

Law360’s Trial Pros Profiles DWT’s Lisa Marchese

This week, Law360 profiles our very own Lisa Marchese, a partner in our Government Contracts Counseling and Litigation Group. Lisa joined Davis Wright Tremaine in January, 2015, having spent the previous seven years as the Trial Department Head for the Seattle and Anchorage offices of Dorsey & Whitney. Since earning her J.D. from Georgetown… Continue Reading

PNDC Government Contracting Updates with Jonathan DeMella

On Wednesday, February 11, 2016, DWT Partner Jonathan DeMella presented on a number of recent regulatory changes and judicial decisions that significantly affect those that are small business government contractors as well as large business in joint ventures or teaming agreements with a small businesses. These changes and developments involve: Small Business Mentor Protégé Program… Continue Reading
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