Government Raids Contractor

June 16, 2011

In one of my first posts on this blog, I said “the government customer is still the one customer that has its own cadre of policemen and is quite willing to send them after vendors whom they find annoying.”  (  Now, undoubtedly to provide an updated confirmation of my platitude, the FBI and IRS CID have raided the offices of a government contractor in Meriden, Connecticut. ( The contractor was involved in $3.3 billion in military housing contracts with the U.S. Navy in the Pacific Northwest for more than 600 homes; with the U.S. Air Force at bases in Florida, Georgia, Arkansas and Massachusetts, and at a U.S. Army base in Missouri.. Every one of these projects collapsed with deadlines missed and subcontractors suing for payment. Although, as I know from personal experience, the military services aren’t very well staffed to manage the development of privately owned military housing, eventually the compounding contracting disasters brought so much attention that the contractor obviously came to the attention of those government agents who carry guns and they swooped in and carted off boxes of document and computers.

The poor attorney who apparently has been representing the company in its negotiations with the government was not aware of the raid when contacted by a reporter. Naturally, the reporter didn’t hear from the attorney again. I only hope he had learned the rule of legal representation that I was taught while an in-house attorney with GE: the lawyer never goes to jail. Which is to say, advise the client, but don’t participate in the conspiracy.

While this is perhaps an extreme example of a government contract (and possibly a government contractor) gone bad, it is good to remember that for the government contracting officer, the agents with guns are only a phone call away. To be successful in this business, government contractors must have both knowledge and integrity. Either one without the other is a good recipe for one of these surprise visits.

Finessing CICA Redux: Another Attempt by Government IT Offices to Avoid Competition

January 11, 2011

A bit over a year ago, I wrote about an interesting government agency strategy to avoid having to deal with the messiness of “full and open competition.” (See Now it is time to discuss another ploy to avoid the annoyance of competition, the purported standardization determination.

On January 3, 2011, the Court of Federal Claims issued a preliminary injunction against the Department of the Interior’s attempt to standardize on Microsoft’s email system without conducting a competition. After attempting unsuccessfully to interest the Department in its ability to provide an email system for the Department, Google protested various actions of the Department to implement its sole source decision to use the Microsoft product. You can see a copy of the opinion at

From the opinion, it is pretty clear that Interior had made the decision to standardize on Microsoft some time ago, perhaps as early as 2007. For months, in 2009 and 2010, Google corresponded with and met with Interior officials to pitch its competing product. Up until late 2010, Interior essentially led Google on, claiming that a competition would be held for the Department’s email system. When solicitation documents became public in late 2010, it was finally clear that there was to be no competition and that Interior had made a final, internal decision to go with Microsoft. The actual solicitation was issued only to selected Microsoft resellers to implement the standardization decision.

This is not a new tactic among government IT offices. In 2007, the Department of Homeland Security tried to do the same thing with the acquisition of financial systems software. (See Savantage v. US, Both DHS and Interior set up the actual solicitation so that the real party in interest, the software developer, could not bid on the procurement by making the procured services only for implementation of a sole source designation of the software to be used. This appears to be an effort to simply avoid having to have a competition for the software since IT personal have developed their own preferences for a particular company’s software and choose not to subject that preference to the competitive market place. Obviously, the strategy becomes problematic when the sole source determination fails to meet statutory and regulatory requirements. Secondarily, the strategy also makes it more difficult for the software developer to challenge the procurement.

It would appear that GAO simply will not address this type of procurement law violation because the protester is not, and cannot be, a bidder. The Court of Federal Claims, on the other hand, has repeatedly shown a willingness to address CICA finessing ploys of various types. I assume this is because the two bid protest forums work under quite different jurisdictional mandates. The statutory mandate to GAO in ruling on bid protests is to “determine whether the solicitation, proposed award, or award complies with statute and regulation.” 31 U.S. Code 3554(b)(1). The Court, however, is under a mandate “to render judgment on an action by an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” 28 U.S. Code 1491(b)(1). What the Court has that GAO does not is jurisdiction over “any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” The Court interprets this third leg of its jurisdictional statute quite broadly, relying on the very broad definition of “procurement” from the Office of Federal Procurement Policy Act, 41 U.S. Code 403(2)(which is mirrored in the FAR at 2.101). See Ramcor Services Group, Inc. v. United States, 185 F.3d 1286, 1289 (Fed. Cir. 1999).

So what is going on here? Why the tendency for this type of ploy to show up in the government IT arena? I would suggest that defining requirements, as would be necessary for a competitive procurement, is really not an easy task. By just getting comfortable and familiar with and then specifying one software product, the requiring office can avoid the unpleasant task of actually articulating what the agency needs. It would appear that procurement officials, perhaps because of a lack of technical expertise, can get snowed by inadequate sole source justifications. This is then compounded with use of all of the IDIQ type contracts available to the contracting officer (e.g., GSA schedule contracts, GWACS, various agency BPAs) which also help disguise the real sole source selection. Since the Savantage decision, and now certainly after the Google decision, it hopefully will be obvious that this particular CICA finessing ploy isn’t all that likely to succeed.

Non-US Contractors Taxed To Pay For 9/11 Medical Benefits

January 3, 2011

The James Zadroga 9/11 Health and Compensation Act of 2010 was signed by President Obama on January 2, 2011. The Act established the World Trade Center Health Program and, among other things, provides for medical monitoring and treatment benefits to eligible emergency responders and recovery and cleanup workers who responded to the September 11, 2001, terrorist attacks.

To pay for the costs of this program, the Act imposes what amounts to a two percent gross revenue tax on “foreign persons” for amounts received as US government contractors for work performed in certain countries. The US Government contracts covered are those for services performed in, or goods produced or manufactured in, any country which is not a party to an international procurement agreement with the United States.

There are several bilateral trade agreements covering government procurement, but the primary multilateral agreement covering government procurement is the World Trade Organization Agreement on Government Procurement. Although the specific countries covered by this definition will most likely be specified in regulations that will certainly be issued to implement this Act, the countries most likely covered are Iraq, Afghanistan, Pakistan, India, central Asia and the Middle East (excluding Israel but including the Persian Gulf countries), and Turkey.

The Act defines “foreign person” as any person other than a United States person. The tax will apply to contracts awarded on or after January 2, 2011.

Protesting in the Nation’s Capital

September 6, 2010

It’s not what you’re thinking. Public protests and rallies, political or otherwise, are a time honored and cherished democratic tradition here in Washington DC, but that’s not the kind of protest I’m talking about.  My interest is the procurement process of the District of Columbia Government and its pre-award dispute process, the bid protest.  I recently had occasion to review this bid protest remedy and here for your education (as opposed to legal advice – since it’s free) is a summary of what I found.

The federal bid protest remedies (at the Government Accountability Office (“GAO”) and the U.S. Court of Federal Claims (“COFC”)) are reasonably well known.  Not as well know is that many state and local public procurement systems also have bid protest remedies of varying degrees of independence and professionalism.  For contractors doing business with the District of Columbia government there is a bid protest remedy at the DC Contract Appeals Board (“CAB”).  The CAB bid protest has many similarities to GAO and COFC bid protests, but some important differences as well.

Here’s what you need to know: Protests are possible against most but not all DC Government entities.

Only “aggrieved parties” can protest.  “Aggrieved parties” are essentially the same as “interested parties” under GAO and COFC bid protests.  An aggrieved party is defined as “an actual or prospective bidder or offeror (i) whose direct economic interest would be affected by the award of a contract or by the failure to award a contract, or (ii) who is aggrieved in connection with the solicitation of a contract.”

Timeliness rules are very strict, similar but not exactly the same as GAO.  A protest based on problems with a solicitation must be filed prior to bid opening or the time set for receipt of proposals.  Other protests (essentially post-award protests) must be filed no later than ten (10) business days after the basis of the protest is “known or should have been known.”

There are provisions for an automatic stay of contract performance which can be over-ridden by the agency.  Similar to GAO protests, the agency must file a report and the protestor must file comments.  However, the time frames are 20 days for the report and 7 days for the comments.   The CAB’s decision must be issued within 60 business days from the date the protest is filed

As with GAO, a protester can be represented by a non-attorney officer.  Of course, that can result in the protester not having access to confidential agency information. The CAB has a protective order process that allows attorneys and consultants to have access to the confidential information.

Here are some technical details: The DC Contract Appeals Board is the designated forum for hearing and deciding both contractual disputes and bid protests involving the DC government pursuant to the DC Procurement Practices Act of 1985, effective February 21, 1986 (D.C. Law 6-85) (D.C. Code Ann. §§ 2-301.01 to 2-311.02).  The Act applies to all contracts and intergovernmental and interagency agreements for the procurement or disposal of goods and services by executive agencies and employees subordinate to the Mayor.

The Board is composed of Administrative Judges who hear and decide the cases. DC Code § 2-309.08 (“Protest procedures”) and Chapter 3 of the Board Rules provide detailed requirements and rules governing protests of solicitations and awards.

The Board issues written decisions, which are published in the District of Columbia Register (DC Reg).  Full text searches of the Board’s published decisions are possible at the published decisions search page of the CAB website (  The CAB has provided for comprehensive electronic filing in bid protest (and other) cases through the LexisNexis File & Serve.

While no bidder should protest frivolously, you may want to think twice about doing so before the DC CAB.  If the Board decides a protest has been frivolous, it can order the protester to pay the agency’s attorney fees (fortunately limited to $100 per hour) and damages for delay of an awarded contract.

Notwithstanding that interesting fillip in the rules, it is good to see that the DC procurement process has a judicial remedy for problems in the award of contracts.

14 Tips for the Truly Clueless Contractor

May 29, 2010

Vern Edwards, in his blog on, tells a sad tale about a government contracting situation that went very bad for the contractor, but which could have been prevented if the contractor had understood the significant differences between government and commercial contracting. [You can read the whole story at At the end of this blog entry, Vern lists 14 tips “for the Truly Clueless Would-Be Government Contractor.”

Of course, none of my clients fall into the “truly clueless” category (among many other reasons, because they are my clients). Nevertheless, the 14 tips are a great basis for considering how we deal with government customers. The 14 tips would be absolutely priceless to a new government contractor and they aren’t all obvious even to an experienced government contractor. There are several that anyone would do well to think about, especially #5 and #8. Of course, I really like #14. Feel free to keep my phone number and email address handy. For those of you in the business for a while, some of the tips should be worth a chuckle or two.

Although this is not news to my clients, I would note that new contractors often confuse dealing with government customers and dealing with commercial customers. Commercial purchases can be very subjective and personal relationships can be very important. With the government, the customer is not an individual but a bureaucracy that is obligated to follow very specific rules in the purchasing process. Filing a claim or a bid protest can be necessary to keep the bureaucracy focused on following the rules. It’s not personal and can always be handled professionally to minimize personal animosity. While you may not want your company to get a reputation for going to court at the drop of a hat, getting a reputation for never standing up for your legal rights is much worse. The impersonal bureaucracy can hardly resist taking advantage of that.

So here are Vern’s 14 tips verbatim. Enjoy.

Here are 14 tips for the Truly Clueless Would-Be Government Contractors who think that winning a government contract is the yellow brick road to riches:

1. If you are thinking of competing for a government contract, hire good professional help to negotiate and manage the contract, and listen to them.

2. Your technical and marketing employees are the ones who are going to get you into trouble on a government contract. Keep them on a leash.

3. Buy first-rate training for all of the people who will be involved with government contracts. If you will not invest in training you have no business doing business with the government.

4. Don’t compete for a government contract if you are not sure that you can do the job to the government’s satisfaction. Make sure that you know what it will take to satisfy the government before you submit a bid or proposal.

5. Don’t assume that the government’s representatives know what they’re talking about when they explain rules, specifications, and the contract clauses. In my experience, most of them don’t.


7. If you win the contract, take a firm, formal, arm’s-length, businesslike approach to all aspects of the deal. Comply strictly with all contract terms and insist that the government do the same. Know all of your contractual deadlines and meet them. Know all of the government’s contractual deadlines and notify them in writing the moment that they are late. The very moment. Neither ask for nor grant exceptions except through formal processes, such as engineering change proposals, formal waivers, and change orders. Know your obligations and fulfill them. Know your rights and insist upon them. When you truly believe that the government owes you something, ask for it in writing. If you don’t get favorable action within a reasonable period of time, submit a claim in accordance with the contract Disputes clause and FAR Subpart 31.2. If the contracting officer does not make a decision within the deadlines set by the Disputes clause, hire an attorney and appeal to a board of contract appeals or to the Court of Federal Claims, unless you are willing to let the government keep what you think is yours.

8. Never yield to threats from a contracting officer or a contracting officer’s representative. If you do, things will only get worse. When you insist upon your rights and the contracting officer’s representative says: That cuts both ways, just say: Yes, and we can live with that.

9. Don’t rely on personal relationships with government personnel. Good personal relations are important and desirable; but, in the end, it’s a dog-eat-dog world. Never consider a government representative to be your “friend.” Remember that government personnel are not business persons. They are government officials with limited authority, limited knowledge, a heavy workload, and lots of people looking over their shoulders. They will not (and should not) stick their necks out for you. If they do they are either stupid or dishonest and cannot be trusted. Some will make an extra effort for you, which is okay, but many will not. Assume from day one that you are on your own.

10. Keep good records. Document every telephone call and meeting. EACH AND EVERY ONE. Write down who, what, when, where, why, and how, and make your people do it as well. Check to see that they do. File every email and letter. EACH AND EVERY ONE. He or she who does not document or who skimps on documentation is a fool.

11. Promptly follow up on oral understandings and agreements in writing. Send crucially important communications by certified mail, return receipt requested, including confirmation of emailed and oral understandings and agreements.

12. It’s business, not personal. When speaking with and corresponding with government personnel, always be calm and polite, no matter how badly they have behaved or how angry about it you are, but always be determined and firm.

13. Remember the 999/1,000 rule: You can do things wrongly 999 times out of 1,000 and nothing bad will happen. It’s the 1,000th time that will do you in.

14. Make sure that you have the telephone number, email address, and street address of a good government contracts attorney and a good government contracts accountant. If you can’t afford that kind of help, stay away from government contracts.

Women-Owned Small Business Set-Asides Finally For Real?

April 2, 2010

On March 4, 2010, the Small Business Administration proposed new regulations for the Women-Owned Small Business (WOSB) Federal Contract Program. (75 Fed. Reg. 10030-10058) These regulations are authorized by legislation enacted in 2000, and follow a long and convoluted rule making process. The biggest change from previously promulgated regulations is making the the program applicable to 83 NAICS Industry Codes as opposed to the four Industry Codes previously included in the program. The list of these newly selected Industry Codes can be found at 75 Fed. Reg. 10036-10037. The list of Industry Codes won’t be included in the regulation, but will be available on the SBA website. This change in selected Industry Codes is based on an extensive rethinking of the process for identifying Industry Codes in which women-owned small businesses are either “underrepresented” or “substantially underrepresented.” The details of how these Industry Codes are selected is probably of interest only to those with graduate degrees in statistics and a great deal of patience.

One other interesting change is the elimination of a requirement that an agency must make its own analysis “that would justify a restriction on competition under the equal protection requirements of the Due Process Clause of the Fifth Amendment of the Constitution” and, based on an analysis of the its procurement history “make a determination of whether there is evidence of relevant discrimination in that industry by that agency.” (13 CFR 127.501(b)) I think it’s a fair guess that most agencies would be, and probably have been, slow to tackle this burden.

The WOSB Program is probably not the panacea that some might hope since the statute allows WOSB set-asides only for procurements of less that $5,000,000 for contracts classified under the manufacturing Industry Codes and $3,000,000 for other contracts. Nevertheless, it’s nice to see that the ten-year old legislation might now be given a reasonable chance to have the impact originally intended.

Court of Federal Claims Jurisdiction Over Non-Procurement Protests

January 16, 2010

In a recent Court of Federal Claims decision (Ozdemir v. United States, 19 November 2009), Judge Damich clarified the Court’s jurisdiction over protests of solicitations and awards of contracts other than procurement contracts. In a time when the government is pumping out vast sums for economic recovery through a number of formal vehicles (grants, etc.), this remedy could become increasingly important to those frustrated in their dealings with the federal government.

The Ozdemir case arises from the very first solicitation issued by the Department of Energy’s Advanced Research Projects Agency (“ARPA-E”). This solicitation requested concept papers so ARPA-E could select promising energy-related technologies for research and development funding. To provide this funding, the solicitation identified grants, cooperative agreements and technology investment agreements as the anticipated legal vehicles. Interested parties were required to request an “application control number” by a given deadline. Mr. Ozdemir failed to make a timely request for this number and the agency refused to consider his concept paper when he submitted it.

The government chose to defend against Mr. Osdemir’s protest by moving to dismiss on the theory that the Court did not have jurisdiction because the solicitation did not relate to a procurement. Although the parties argued over whether or not the solicitation related to a procurement (the solicitation included one reference to a procurement instrument), the Court sidestepped this issue to deal with a more fundamental issue, whether the Court had jurisdiction over non-procurement protests.

After concluding that the precedents offered by the government did not support their position that the Court’s bid protest jurisdiction did not extend beyond procurement matters, the Court proceeded to set out two bases for its conclusion that its bid protest jurisdiction extends beyond procurement matters. (Senior Judge Merrow applied similar reasoning in Red River Holdings, LLC, v. United States, July 17, 2009, however, in that case the protest involved a maritime contract, which was clearly a procurement matter, and the parties agreed that the Court had jurisdiction; the jurisdiction issue was raised sua sponte by the Court.)

First, the Court found support in something cleverly called the Last Antecedent Rule (which, it turns out, is rather like the Pirate Code, more of a suggestion than a rule). The Last Antecedent Rule is a rule of statutory interpretation that was explained by the Federal Circuit in Anydrides & Chems. Inc. v. United States, 130 Fed.3d 1481, 1483 (Fed. Cir. 1997) (quoting 2A Sutherland Statutory Construction, 4th ed., § 47.33):

The rules of grammar apply in statutory construction:

Referential and qualifying words and phrases, where no contrary intention appears, refer solely to the last antecedent, which consists of “the last word, phrase, or clause that can be made an antecedent without impairing the meaning of the sentence.”

The government focused on the last phrase of the jurisdictional statute (28 USC § 1491(B)(1)), “in connection with a procurement or proposed procurement,” claiming that this phrase modified the entire sentence. Because there is no comma immediately before this phrase, the Court, applying the Last Antecedent Rule, determined that the phrase modified only the immediately preceding phrase (“any alleged violation of statute or regulation”), not the entire sentence. Thus, the rest of the sentence provides several independent bases of jurisdiction, including a protest against a solicitation for proposals for a proposed contract and a protest against a proposed award. The Court found its jurisdiction in these phrases since ARPA-E had clearly issued a solicitation which contemplated an award.

Also the government argued that “contract” in this context meant procurement contract, relying on the definitions in the Federal Grant and Cooperative Agreement Act (31 USC 6301-08), the Court found this assertion unsupported and held that “contract” in § 1491(b)(1) encompasses a wide range of formal agreements, including grants and cooperative agreements.

The Court also noted that the ARPA-E solicitation clearly contemplated an “award,” giving the Court a second basis for jurisdiction as a protest against a proposed award. This does not seem to me to be as strong a basis for jurisdiction, since at best, Mr. Ozdemir was complaining about a refusal to consider an award to him, not a proposed award to a third party. However, given the Court’s expansive reading of 1491(b)(1) (including the noted “hexadic” use of the conjunction “or”), the idea that one could protest an “award,” without reference to a contract (however defined) and without reference to a solicitation raises some interesting possibilities. Might it cover a financially significant endorsement of a commercial product by a federal agency or federal official that prejudiced a competitor (prejudice being a required element of the Court’s jurisdiction)?

The Court found further support for its reading of § 1491(b)(1) in its analysis of the history of the Court’s bid protest jurisdiction. Specifically, the Court noted that prior to enactment of the current language in § 1491(b)(1) in the Administrative Dispute Resolution Act of 1996 (“ADRA”), the Court had jurisdiction over protests involving award of non-procurement contracts, such as timber sales, and that there is no indication that ADRA in any way was intended to restrict the Court’s bid protest jurisdiction, only to expand it.

Although this decision was not the first since 1996 to recognize the Court’s jurisdiction over non-procurement protests, it certainly is unique in its thorough discussion of the issue, all the more intriguing for having occurred in a pro se case.

My personal perspective is that federal agencies have for some time been looking for creative ways to avoid exposure to bid protests, mostly by using highly complex, multi-agency IDIQ procurement vehicles or by having support contractors doing what would normally be agency procurements. It will be interesting to see, in this environment, how the agencies react to this clear assertion of the Court’s jurisdiction over non-procurement bid protests.

The Return of e-Verify

July 13, 2009

After extensive delay, the Obama Administration has adopted the Bush Administration’s regulation imposing the e-Verify system on government contractors. The FAR change will now be effective as of September 8, 2009. The final rule of November 14, 2008 (73 Fed. Reg. 67651) remains unchanged. The only change to my blog entry of December 15, 2008 (below) is the new effective date.

Government Contractors Re-Enlisted for Yet Another Program

December 15, 2008

Continuing a decades long practice of using government contracts to implement every conceivable social or policy program, usually having nothing remotely to do with the efficiency or integrity of the public contracting process, the administration has just issued a new regulation that requires government contractors to use the Homeland Security Department’s e-Verify system to verify the eligibility of their employees to work in the United States.  The FAR already requires contractors to label ozone-depleting substances, to reduce waste and encourage recycling, to not participate in the international trafficking in persons, and to comply with prohibitions on the importation of goods manufactured with child labor.  Preferences for small businesses and small disadvantaged businesses are so embedded in the procurement system that we no longer think of them as implementing social policies.  So it should not be surprising that the administration wants government contractors to assist in enforcing the immigration laws.

E-Verify is a free, Internet based system operated by the Department of Homeland Security that allows participating employers to electronically verify the employment eligibility of their newly hired employees.  Based on the information provided by the employee on the Form I-9, E-Verify checks this information electronically against records contained in DHS and Social Security Administration (SSA) databases.

The new regulation, which is effective on January 15, 2009, adds a new Subpart 22.18 to the FAR.  Agencies are required to include a new contract clause entitled Employment Eligibility Verification, found at FAR 52.222-54, in contracts that are:

1.     Over $100,000,
2.     Include work within the United States,
3.     Have a period of performance of 120 days or more, and
4.     Include items or services that are not “commercially available off-the-shelf” as defined by the regulation (FAR 22.1803(c)).

The clause requires a contract to do the following:

1.     Enroll as a federal contractor in the e-Verify program within 30 days of contract award, if not already enrolled. The includes signing the e-Verify program MOU (which is not negotiable).
2.     Verify employees “assigned to the contract” as that is defined by the clause within 90 days after enrollment in the program, 90 days of contract award, or 30 days of assignment of the employee to the contract, whichever is later.
3.     Beginning within 90 calendar days after enrollment in the e-Verify program or the date of award, whichever is later, verify all new employees whether or not they are assigned to the contract within 3 business days after the date of hire.

Contractors have the option of verifying all employees hired after November 6, 1986.  Individuals with active security clearances or who have had background checks and credentials HSPD-12 do not have to be verified.  Information on the e-Verify program can be found at

An employee is not considered to be directly performing work under a contract if the employee:
(1)     Normally performs support work, such as indirect or overhead functions; and
(2)     Does not perform any substantial duties applicable to the contract.

Employees subsequently assigned to the contract must be verified within 30 days of being assigned to the contract.

Check out my compliance time line on JD Supra listed on the RSS feed on the right side here.

Finessing CICA: the Open-Ended Support Contract Ploy

September 5, 2008

CICA, the Competition in Contracting Act (41 USC 253 et seq.), requires the government to obtain supplies and services through “full and open competition through the use of competitive procedures.” There are, of course, a number of exceptions to this requirement and sometimes it seems to me that federal procurement officials put more effort into avoiding competition than they put into running an appropriate competition. Agencies appears to have developed a number of ploys to avoid competition involving task order IDIQ contracts, buzzwords like “standardization,” and (today’s entry) the open-ended support contract.

Here’s how it works. The agency finds an IDIQ or schedule contract, a BPA or some similar contractual ordering vehicle (in this case a Government Wide Acquisition Contract (GWAC)) and issue a task order for “support” to a program. Then, with or without the help of the support contractor, the agency decides what the program needs, say IT services or software tools. The support contractor is then directed to go out and buy whatever is needed. Since the purchase is a subcontract, most federal procurement regulations (specifically the requirement for “full and open competition”) do not apply, making it much easier for agency personnel, who activity participate in the selection process, to get what they want without having to worry about messy things like solicitations, source selection evaluations and bid protests. Or so the theory goes.

This was apparently the plan in a case recently decided the by Court of Appeals for the Federal Circuit. (Distributed Solutions, Inc., and STR, L.L.C., v. United States, No. 2007-5145, August 28, 2008) This case involves a procurement of software for the Joint Acquisition and Assistance Management System program (JAAMS), a joint United States Agency for International Development (USAID) and Department of State (DOS) program to develop a common computer platform between the two agencies. In November 2003, a task order was issued to SRA International, Inc. (SRA), under GSA’s Millennia GWAC to provide “technical services and support for information technology purposes.” In June 2005, the agency, assisted by SRA, issued a Request for Information (the June RFI) soliciting sources for “commercial off-the-shelf (COTS) Acquisition and Assistance (A&A) solutions for JAAMS.” After reviewing the June RFI responses, the agency announced that it had decided “to pursue alternative courses of action.” The agency then decided to task SRA with selecting the software vendors, which SRA did first by issuing an RFI of its own (the August RFI) and then making a selection. Two disappointed software vendors unsuccessfully protested to GAO and subsequently to the Court of Federal Claims. Both GAO and the Court treated the protests as nothing more than subcontractor protests, which neither forum will hear.

The Court found that the contractors had standing (i) because they responded to the June RFI, demonstrating that they were potential offerors, and (ii) because they had a direct economic interest, having been deprived of the opportunity to compete to provide the software solution, a contract that could have been worth $10 million. The Court also found that the contractors had alleged a number of non-frivolous statutory and regulatory violations.

This left the key question, whether the complaint alleged statutory and regulatory violations “in connection with a procurement or a proposed procurement.” The Court of Federal Claims jurisdictional statute for bid protests, 28 USC 1491(b), includes three bases for jurisdiction: (I) objections to a solicitation; (ii) objections to an award; and (iii) “any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” The contractors relied on the third basis for bid protest jurisdiction.

The Court, citing RAMCOR Services Group, Inc. v. United States, 185 F.3d 1286, 1289 (Fed. Cir. 1999), noted that the operative phrase “in connection with” is very sweeping in scope. Acknowledging that the bid protest jurisdictional statute (28 USC 1491(b)) does not define either “procurement” or “proposed procurement,” the Court adopted the statutory definition of “procurement” found in the OFPP Act at 41 U.S.C. § 403(2). Under this definition, “procurement” includes “all stages of the process of acquiring property or services, beginning with the process for determining a need for property or services.” Although the Court did not comment on this, the statutory definition from the OFPP Act has been adopted by the Federal Acquisition Regulation. See 48 CFR 2.101.