Fundamentals of Government Contract Claims and Protests

1
Fundamentals of Government Contract Claims and
Protests

• August 17, 2005
• Alan A. Pemberton
• Covington Burling

2
Overview

• Differences Between Protests and Claims
• Protests
• Where to protest
• When to protest
• Protest procedures
• Examples of protest issues and remedies
• Strategic considerations
• Claims
• Basic statutory requirements
• Examples of claims
• Subcontract claims
• Alternative Dispute Resolution

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What is the difference between a Protest and a
Claim?

• PROTEST - a complaint about the Governments
  handling of the procurement process up to and
  including award
• Pre-award (complaints about the rules of the
  game)
• Post-award (complaints about the award decision
  and how the game was played)
• CLAIM a complaint by a party to an existing
  contract against another party to the contract.
• Contractor Claims vs. Government
• Government Claims vs. Contractors
• 3rd Party Beneficiary Claims?

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Why do these differences matter?

• Strict timing rules apply, especially to
  protests.
• Special procedures apply, especially to claims.

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Examples of Grounds for Claims and Protests

• HHS releases RFP that says that any party awarded
  a contract for vaccine will have to produce it in
  the United States.
• Manufacturers contract is terminated by DoD for
  default because of late deliveries, and DoD
  announces it will reprocure the item from another
  source.
• Government awards a contract to a competitor that
  you know lacks the capacity to do the job right.
• Government instructs contractor to make changes
  in product under fixed-price contract that will
  greatly increase contractors costs of
  performance.

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Protests
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Protests Where to Protest

• Agency
• Contracting Officer
• Higher Level Intra-Agency Authority
• Government Accountability Office
• U.S. Court of Federal Claims
• SBA
• protests of small business status in set-asides

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Protests Basic Timing Requirements

• Agency or to GAO
• Preaward protests before next offers are due
• Postaward protests if no debriefing, 10 days
  after notice
• Debriefing request 3 days after notice
• Protest filing 5 days after a required
  debriefing to invoke automatic stay
• Protest filing still timely if 10 days after
  debriefing
• Exclusion from competitive range similar to
  award notice
• Other Issues within 10 days of knowledge

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Protests Basic Timing Requirements

• Court of Federal Claims
• Court generally follows GAO rule as to preaward
  protests.
• Equitable timing requirements court will assess
  whether plaintiff has acted unfairly or without
  excuse in bringing suit long after award

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Protests Sample Protest Issues

• Pre-Award Issues
• Restrictive Specifications
• Ambiguous Specifications
• Improper Sole Source or Limit on Competition
• Unreasonable bundling of requirements
• Improper RFP terms
• Post-Award Issues
• Improper Evaluation
• Use of unannounced criteria
• Failure to follow RFP criteria
• Unfair application of criteria
• Improper Exclusion from Competitive Range
• Failure to discuss significant weaknesses
• Unequal Discussions
• Technical transfusion
• Basic Theme lack of equal treatment among
  offerors

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Protest Procedures

• Agency
• Quick, informal resolution, relatively low legal
  costs
• Little discovery
• GAO
• Resolution in 100 days
• Relatively full discovery with protective order
• Supplemental protests based on documents produced
• Possible hearings
• Court of Federal Claims
• No set time for resolution, but proceedings can
  be extremely expedited.
• Relatively full discovery possible depositions
• Supplemental or amended protests possible
• Oral argument on cross-motions

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Protests Strategic Considerations

• Angering the customer
• Agency protests less disruptive than GAO or Court
• Likelihood of success
• Depends on the issue
• Effectiveness of stay
• Cost / speed of decision
• Likelihood of discovery to uncover new errors
• Winning the protest versus winning the contract
• Possibility of corrective action that cures
  problem without helping protester

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Protests Strategic Considerations
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Claims
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Claims Basic Statutory RequirementsContract
Disputes Act

• CDA procedures begin with making a written demand
  or assertion called a claim.
• Claim may be presented within 6 years of when it
  accrues. (Note different from appeal time from
  final decision.)
• Claims over 100,000 must be certified.
• Claim results in Contracting Officers final
  decision.
• Appeal from final decision
• To a Board of Contract Appeals within 90 days OR
• To the Court of Federal Claims within one year.
• CDA procedures are exclusive.

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Claims Subcontractor Claims

• CDA claims do not generally include subcontractor
  claims against prime contractor.
• Subcontractor claims are generally subject to
  ordinary state contract law governing contracts
  between private parties, with federal law used to
  interpret FAR-type provisions
• Some subcontractors may obtain agreement of prime
  contractor to sponsor a CDA claim, in which the
  sub sues the Government in the primes name.

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Claims Examples of CDA Claims

• Price Adjustment issues
• Excusable delay/Government-caused delay
• Appeal of default termination
• Defective pricing
• Alleged noncompliance with contract terms

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Claims Examples of Claims NOT covered by CDA

• Fraud / criminal matters
• Tort Claims
• Subcontractor claims
• Contracts between U.S. and Foreign Govt.

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Claims Alternative Dispute Resolution

• Boards and Courts encourage ADR and have a
  variety of approaches
• Non-binding mini-trials
• Mediation
• Settlement judges
• Party-designed processes