Department of State Releases 2017 TIP Report

The Department of State has released its 2017 Trafficking in Persons (“TIP”) Report.  As with prior versions of the annual report, the State Department reviewed efforts made by more than 180 countries to address the minimum Prosecutorial, Protective, and Preventative standards necessary for effective anti-trafficking measures, as these standards are outlined in the United States’ Trafficking Victims Protection Act (“TVPA”).

The release of the report is notable because it can directly impact contractors’ diligence obligations for supply chain review under the Federal Acquisition Regulation (“FAR”) Human Trafficking Rule (located at FAR § 52.222-50).  As we have highlighted in previous articles, for those contractors required to submit compliance plans to the government, such plans should be appropriately shaped to the “nature and scope of activities to be performed for the Government . . .  and the risk that the contract or subcontract will involve services or supplies susceptible to trafficking in persons.”  See FAR § 52.222-50(h)(2)(ii).  Additionally, as set forth in a recent proposed memorandum, which remains the clearest articulation of the government’s views on supply chain diligence obligations to date (covered in a prior post), contractors are expected to take steps to “identify high-risk portions of [their] supply chain[s].”

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Predictability of Outcomes in Discovery Disputes at CBCA Improves During its First Ten Years

In recognition of the decennial anniversary of the U.S. Civilian Board of Contract Appeals (“Civilian Board”), we set out to determine notable trends in Civilian Board practice. Among other things, we identified a recent marked increase in the number of published decisions containing substantial discussions of discovery issues – more than half of the 24 decisions we identified and reviewed were issued in or after 2014. Through the publication of these decisions, the Board has provided important guidance to practitioners who may face the same (or similar) discovery issues in the future. We believe that this trend toward publication should generally result in greater predictability of outcomes in discovery disputes, and therefore should facilitate the resolution of potential discovery disputes more efficiently.

Earlier this month we published an article about this very topic in the Board of Contract Appeals Bar Journal. In our article, we focused our analysis primarily on three interesting decisions that pit statutory requirements related to the disclosure/production of information – the Privacy Act, the Inspector General Act, and the Freedom of Information Act – against the bounds of permissible discovery at the Civilian Board. These three decisions should provide a relatively high degree of outcome predictability in similar cases because of the rigid statutory requirements at issue.

In addition to the link to a PDF of the article above, the full text of the article is available below. Continue Reading

Key Takeaways from Trump Administration Memo on Buy American Laws

[This article also was published in Law360.]

On June 30, 2017, Commerce Secretary Ross and OMB Director Mulvaney issued a Memorandum to Federal agencies regarding the “assessment and enforcement of domestic preferences in accordance with Buy American Laws,” which includes the Buy American Act (“BAA”). Although the Memorandum purports to provide guidance to help agencies implement the vision expressed in President Trump’s April 2017 Buy American Executive Order (E.O. 13788), which we previously analyzed, the Memorandum focuses mostly on what agencies must include in the reports that they are required, under Section 3 of the Executive Order, to submit to the Commerce Department and OMB by September 15. It also offers some clues for contractors about how the Trump Administration plans to implement its “buy American” vision. Continue Reading

GAO: “Reasoned Judgment” Required When Establishing Competitive Range

On May 19, 2017, the U.S. Government Accountability Office (“GAO”) sustained a protest filed by Pinnacle Solutions, Inc. (“Pinnacle”) challenging its exclusion from the competitive range in NASA procurement for aircraft logistics, integration, configuration management, and engineering services.  GAO concluded that NASA had unreasonably evaluated and assigned weaknesses to Pinnacle’s proposal and, as is relevant here, excluded Pinnacle from the competitive range based on “unreasoned distinctions[.]”

The RFP contemplated the evaluation of proposals on two non-price factors: Mission Suitability and Past Performance.  The Mission Suitability factor consisted of three subfactors, Management Approach, Technical Approach, and Safety & Health Approach which were allocated point values of 700, 150, and 150 points, respectively.  Per the source selection plan, the points corresponded to adjectival ratings: an Excellent was worth 91-100 percent of the points, a Very Good was worth 71-90 percent of the points, a Good was worth 51-70 percent of the points, a Fair was worth 31-50 percent of the points, and a Poor was worth 0-30 percent of the points.

NASA received three proposals in response to the RFP.  Pinnacle’s proposal fell between the two others (identified as Offerors A and B).  Pinnacle received a 439 out of a total of 1000 points on the Mission Suitability factor.  Within the subfactors, Pinnacle’s Management Approach and Technical Approach were both rated Fair, receiving 266 points and 68 points, respectively.  Its Safety & Health Approach was rated Good and received 105 points.  Pinnacle was also assessed three strengths, one significant weakness, and eight weaknesses under the Management Approach subfactor, two weaknesses under the Technical Approach subfactor, and a strength and weakness under the Safety & Health subfactor.  Under the Past Performance factor, Pinnacle was found to merit Moderate Confidence.  Pinnacle’s probable cost was determined to be $180.6 million, approximately $10 million less than that of Offeror A, the most expensive offeror.

In establishing the competitive range, the agency excluded Pinnacle, purportedly because it had not received any significant strengths under the management approach or technical subfactors and it was “highly unlikely” that Pinnacle would be able to significantly improve its proposal after discussions.  In contrast, Offeror A, despite having a higher probable cost, was included in the competitive range.  Offeror A’s proposal had received 719 points for the Mission Suitability factor, 280 more than Pinnacle.  In reaching its decision, the agency noted that Offeror A was the “most highly rated” proposal because it had received very good adjectival ratings and a past performance rating of Moderate Confidence.  The agency determined that discussions with Offeror A were needed to address weaknesses and provide price clarifications.

In its protest, Pinnacle argued that the weaknesses assigned to its proposal were unreasonable, that NASA ignored strengths in Pinnacle’s Management Approach, and that Pinnacle should have been included in the competitive range.  GAO agreed, finding that NASA had conducted an unreasonable evaluation of Pinnacle’s proposal, and applied unstated evaluation criteria.

Significantly here, GAO also found that the Agency’s competitive range determination was unreasonable because it was based entirely upon the differences in point scores and adjectival ratings between the offerors.  GAO criticized NASA for failing to “look behind the scores or adjectival ratings, and . . . document a reasoned consideration of the actual evaluation findings or their basis in the proposals.”  In the absence of such consideration, GAO concluded that NASA had acted unreasonably in making a “blanket” determination that Pinnacle’s proposal would not benefit from discussions.

In reaching this decision, GAO reiterated that, while an agency may eliminate a proposal that is not among the most highly rated or does not have a reasonable prospect of award, the agency “may not exclude a technically acceptable proposal from a competitive range without meaningful consideration of the cost or price of the proposal to the government.”  Of note, GAO reiterated that “reasoned judgment” is required to exclude a proposal from the competitive range, and the decision cannot be based on “unreasoned distinctions” like point scores and “unfounded speculation” about the benefit of discussions.

Offerors should take heart from GAO’s decision.  GAO clarified that an agency cannot exclude an offeror from the competitive range without careful consideration of the substantive merits of the proposal, including an evaluation of cost.  Going forward, offerors who have been excluded from the competitive range should make sure to review their debriefings carefully to determine if the agency has met its burden.

CFC: Offeror on a GSA Lease Lacks Standing to Raise Appropriations Issues

In a recent decision, the Court of Federal Claims ruled that a pre-award protestor lacked standing to challenge the legality of a request for lease proposals (“RLP”) under an appropriations statute. Cleveland Assets, LLC v. United States, 132 Fed. Cl. 264 (2017). In particular, the Court ruled that the protestor could not enforce the statute’s alleged requirement that the General Services Administration (“GSA”) comply with House and Senate committee resolutions before awarding a lease. Continue Reading

ASBCA Issues Important Ruling in “Contractor-on-the-Battlefield” Dispute

Earlier this month, the Armed Services Board of Contract Appeals held that the U.S. Army breached its contractual obligation to provide physical security to its principal logistical support contractor, KBR, during the height of the Iraq War.  As a consequence, the Board found that KBR was entitled to be reimbursed for $44 million, plus interest, in costs that the Government had withheld from KBR relating to KBR’s and its subcontractors’ use of private security.  A copy of the opinion is available here.

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Highlights from DoD Industry Day on DFARS Cyber Rule

The Department of Defense (“DoD”) held an “Industry Information Day” on June 23, 2017 to address questions regarding DFARS Case 2013-D018 “Network Penetration and Reporting for Cloud Services,” including DFARS clauses 252.204-7012 “Safeguarding Covered Defense Information and Cyber Incident Reporting” and 252.239-7010 “Cloud Computing Services.”   DoD’s presentation lasted approximately four hours and covered a wide range of topics relating to DoD’s expectations for contractor implementation of cybersecurity requirements for information systems where controlled defense information (“CDI”) is processed, resides or transits.  On the panel and responding to attendees’ questions were representatives of DoD’s Chief Information Officer, the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics, and the Defense Information Systems Agency.

An in-depth discussion of key highlights from the briefing are provided in the attached Alert.

Section 809 Panel Urges Congress to Bring DoD Spending into the 21st Century

The Section 809 Panel recently released an interim report and supplement (the “Interim Report”) advocating in broad strokes for a host of improvements to the Department of Defense’s (“DoD”) acquisition system to better streamline the process and increase industry offerings to the government.  The NDAA for FY 2016 established the Section 809 Panel to address “fundamental problem[s]” in the means by which the DoD acquires goods and services to support its warfighters.  Indeed, in meeting with over 200 government and industry representatives, the Interim Report found that the DoD’s acquisition system creates obstacles that make it unattractive for small and large businesses alike to offer their goods and services to the government.  The Interim Report explains that “the United States’ ability to maintain technological, military, and economic superiority is being challenged,” as our adversaries are recognizing vulnerabilities in our forces and modernizing their militaries in response.  Thus, according to the Interim Report, DoD’s acquisition procedures must be improved to achieve “a degree of agility that DoD is not currently able to deliver.” Continue Reading

The Perils of Bad Recordkeeping: A Lack of Country of Origin Documentation Results in Adverse Inference of Non-Compliance with the Trade Agreements Act

In a recent False Claims Act (“FCA”) case, United States ex rel. Louis Scutellaro v. Capitol Supply, Inc., the U.S. District Court for the District of Columbia held that the defendant’s failure to retain Country of Origin (“COO”) documentation for the products it sold to the government entitled the relator and the government to an adverse inference that the defendant did not comply with the Trade Agreements Act (“TAA”).  This ruling highlights the consequences of poor document retention practices and could have far-reaching effects in FCA cases and beyond.

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