Government Contracts Advisor | Legal, Legislative & Industry Insights

Access To Employee Records Valuable In Defending FCA Qui Tam Actions

May 15th, 2013 Posted in False Claims Act By Mason Smith

This blog post was drafted by Jennette Roberts and Mason Smith.

The court in United States ex rel. Yarberry v. Sears Holdings Corp., No. 09-cv-00588 (S.D. Ill.) recently upheld a defendant’s subpoena for the employment files of a career qui tam relator held by his former employer, denying that the subpoena was motivated by an intent to harass the relator.

The relator, a Kmart pharmacist, brought Anti-Kickback Act and False Claims Act allegations against Kmart based on alleged discounts given to Medicare customers. After Kmart discovered that the relator had brought two prior, unrelated qui tam suits against former employers (including CVS Caremark Corp.), Kmart subpoenaed the relator’s employment records in CVS’s custody. In responding to the relator’s motion to quash the subpoena, which alleged that the subpoena was an attempt to “attack and harass” the relator, Kmart noted that such records were relevant for assessing the relator’s credibility and for ascertaining the relator’s “litigiousness;” that is, whether the relator was a “serial qui tam plaintiff.” The judge did not quash or otherwise limit the subpoena, notwithstanding the fact that the relator had not brought retaliation claims against Kmart. (An employment file would tend to include relevant history regarding insubordination valuable to an employer’s defense of such a claim).

GSA Issues RFI on Use of Cybersecurity Standards in Federal Acquisitions

May 13th, 2013 Posted in Cybersecurity By Thomas A. Lemmer

The blog post was drafted by Tom Lemmer and Mike McGuinn.

Earlier today, the General Services Administration (“GSA”) issued a Request for Information (“RFI”) seeking input on the incorporation of cybersecurity standards into government contract acquisition and administration. 78 Fed. Reg. 27966 (May 13, 2013). Through this RFI, contractors are being given a significant opportunity to provide input on the potential compliance challenges and burdens associated with the FAR Council’s incorporation of cybersecurity standards into federal contracting.

Take Your “Late” Proposal to CoFC, Not GAO

May 7th, 2013 Posted in Bid Protests By Justin M. Ganderson

This blog post was co-authored by Luke Meier and Justin Ganderson.

If you submit a proposal on time but the Government rejects it as late, take your protest to the Court of Federal Claims. That is the lesson of Insight Sys. Corp. et al. v. United States, No. 12-863C, et al. (Fed. Cl. May 6, 2013), in which the Court agreed with a protester that the Government should not have rejected its proposal as late. Insight continues a trend of recent Court of Federal Claims’ decisions siding with the protester in late proposal disputes. See Guzar Mirbachakot Transp. v. United States, 104 Fed. Cl. 53 (2012) and Elec. On-Ramp, Inc. v. United States, 104 Fed. Cl. 151 (2012).

In Insight, the protester submitted its proposal documents via email at 3:38 pm, but because of a malfunction with the agency’s email servers, receipt was delayed until after 5:00 p.m, the deadline for receipt of proposals. In the protest, the Government defended the agency’s decision to reject the proposal as late, claiming that FAR 52.212-1(f) makes timely receipt the offeror’s responsibility, that the “Government Control” exception does not apply to electronic submissions, and that, in short, “late is late.” While the Government’s position was consistent with GAO’s interpretation of the same issues, see Sea Box, Inc., B-291056, Judge Allegra shot this position to smithereens. The Court found the “Government Control” exception does apply to instances where a proposal is “late” only because of agency technological error, and granted the protester’s request for a permanent injunction. In doing so, Judge Allegra commented that “[a]s . . . Federal agencies continue, in the name of electronic commerce, to exhort offerors to submit their proposals electronically, one might think that those same agencies would be hesitant to construe the FAR in a way that springs technological traps on their contracting partners – but, then again, perhaps not.”

Although it is possible that these recent Court of Federal Claims’ decisions may persuade GAO to revise its harsh stance on late proposals, in the meantime, contractors may be wise to pursue their late proposal protests at the Court.

Department of Energy Issues New Rules Regarding Allowable Legal Costs

May 7th, 2013 Posted in Department of Energy By Tyson Bareis

This blog post was co-authored by Mark Meagher and Tyson Bareis.

Friday, the Department of Energy published new guidelines (in the form of a final rule) concerning how contractors select and manage outside legal counsel. See 78 Fed. Reg. 25,795 (May 3, 2013). The guidelines provide rules for handling legal matters and associated costs by certain contractors whose contracts exceed $100,000,000 and, therefore, are most directly applicable to the DOE’s Management and Operations (“M&O”) contractors. Most notably, the guidelines address the content of legal management plans, the criteria for settlement agreement approval, and the determination of reasonableness of legal fees. The proposed rule also includes corresponding changes to the Department of Energy Acquisition Regulation necessary to implement the guidelines.

McKenna Long & Aldridge will issue a client alert detailing the new guidelines in the upcoming days.

CoFC Again Strikes Down the Government’s Fraud Counterclaims; Converts No-Cost Cancellation to a Termination for Convenience

May 3rd, 2013 Posted in Claims & Disputes, Fraud & Abuse By Justin M. Ganderson

This blog posted is authored by Katherine M. John and Justin M. Ganderson.

Last month we blogged about ASBCA and CoFC decisions demonstrating a growing trend in government contracts litigation: the government’s increased use of counterclaims asserting fraud in response to contactor claims under the Contract Disputes Act. Ulysses, Inc. v. United States, No. 06-436C, (Fed. Cl. Apr. 30, 2012) is the latest CoFC decision to address this topic.

Department of Defense Issues Implementation Directive for Better Buying Power 2.0

April 30th, 2013 Posted in Defense Contracting By Patrick J. Stanton

By Patrick J. Stanton

As part of its ongoing efforts to improve the defense acquisition process, last week the Department of Defense (DoD) issued an implementation directive for Better Buying Power 2.0 (BBP 2.0). While this directive does not represent a sea change in defense procurement, largely continuing and clarifying initiatives first set forth in Better Buying Power 1.0, several initiatives still merit the attention of the defense contracting community.

Tai Ming Cheung, Director, University of California Institute on Global Conflict and Cooperation, Will Make Keynote Speech at MLA’s LA Spring Seminar

April 29th, 2013 Posted in Government Contracts Briefing Series By Mike Rizzo

We have exciting news, Tai Ming Cheung, Director, University of California Institute on Global Conflict and Cooperation (IGCC), recently agreed to keynote our LA 2013 Government Contracts Spring Seminar.

Professor Cheung is a long-time analyst of Chinese and East Asian defense and national security affairs and will give a speech titled “Will China Be Able To Catch Up To The US As A Defense Technology Power.”

Professor Cheung is the leader of IGCCs Minerva project, which is entitled, “The Evolving Relationship Between Technology and National Security in China: Innovation, Defense Transformation, and China’s Place in the Global Technology Order.” Cheung spent time in Asia from the mid-1980s to 2002 covering political, economic, and strategic developments in greater China.

Our Los Angeles seminar is scheduled for Thursday May 2nd, at Shutters on the Beach in Santa Monica. The seminar is scheduled to begin at 8:00AM and will conclude at 3:00PM with a cocktail reception. Click here to view the full LA Spring Seminar agenda. If you would like to register for our LA Spring Seminar, please contact John Walsh at jjwalsh@mckennalong.com.

The Odds of Winning a Contract After Protesting Are Higher Than You Think

April 26th, 2013 Posted in Bid Protests By Justin M. Ganderson

This week, MLA colleagues Tom Papson, Jay Carey and Luke Meier published a featured comment in The Government Contractor, entitled “The Odds of Winning a Contract After Protesting Are Higher Than You Think”. Their article critically reviews the media’s misinterpretation of Professor Dan Gordon’s forthcoming article (“Bid Protests: The Costs Are Real, But the Benefits Outweigh Them”) which discusses a “protester’s likelihood of ‘ultimate’ success.” (Professor Gordon’s article will be published in the Spring 2013 issue of the Public Contract Law Journal.) They explain how media outlets such as The Washington Post have “misinterpreted the article’s data to suggest that fewer than one percent of protesters ultimately win the contract at issue in their protest . . . .” However, as my colleagues point out, the data provided in Professor Gordon’s article actually suggest “a protester has about a 12.2 percent chance of ultimately winning a contract award as a result of its protest . . . . [and] this calculation does not take into account other positive outcomes a protester might achieve aside from winning the protested contract” like settlements or other contracting opportunities which may arise from protests. The bottom line, as my colleagues suggest, is that “companies should recognize that success comes in many forms that are not always obvious from the statistics” and that “disappointed offerors considering a protest always should assess not just the strength of each potential claim, but also the type of relief that would result from success on the claim.”

John F. Walsh, U.S. Attorney for the District of Colorado, to Keynote MLA’s Denver Spring Seminar

April 22nd, 2013 Posted in Uncategorized By Steve Masiello

This blog post is authored by Steve Masiello.

On Tuesday, May 7, 2013, we are hosting our complimentary annual Denver Government Contracts briefing event in appreciation of our clients and friends of the firm at The Ritz- Carlton, 1881 Curtis Street, Denver, CO 80202. We personally encourage you, your colleagues and professional staff to attend.

Our event offers an exciting and insightful full day agenda. We are honored to present as our keynote speaker, Mr. John Walsh, U.S. Attorney, District of Colorado, to discuss his thoughts on Federal law enforcement in the field.

We are also featuring several “hot topic” sessions including Intellectual Property, Cybersecurity, IR&D, and Engineering/Construction Contracting, as well as a discussion on Counterfeit Parts from a panel of distinguished guests from Lockheed Martin Corporation and the Department of Justice. The event will also feature our traditional updates on Acquisition, Performance, Fraud and Compliance and Cost and Pricing issues. Click here to view the full Denver Spring Seminar agenda.

We are serving a light breakfast and offering a lunch presentation by one of our colleagues, Mr. Thurbert Baker, the former Attorney General of Georgia. Mr. Baker’s lunch address is followed by breakout sessions, and a cocktail reception follows the conclusion of the day’s program.

Overall, the event is designed to provide attorneys, senior executives and contracts and accounting professionals key insight in the most important Government Contract developments impacting industry, as well as an opportunity to network with clients, suppliers, colleagues and friends. Please feel free to invite all individuals within your organization that may benefit to sign up for the event.

We look forward to seeing you there. Please contact Ms. Jennifer Bonesteel (Phone: (202) 496-7614, email: jbonesteel@mckennalong.com) or Ms. Alyson McCoy (Phone: (303) 634-4437, email: amccoy@mckennalong.com) if you would like to attend. Also, please feel free to contact me directly to discuss any questions you may have concerning the program.

ASBCA Denies Contractor’s Appeal to Overturn Termination for Default Because Contractor Submitted False Documents to Obtain Contract

April 22nd, 2013 Posted in Fraud & Abuse By Justin M. Ganderson

This blog posted is authored by Katherine M. John and Justin M. Ganderson.

Earlier this month, we blogged about a growing trend in government contracts litigation: the government’s increased reliance on fraud allegations. This trends continues in a recent decision from the Armed Services Board of Contract Appeals (“ASBCA”): Servicios y Obras Isten S.L., ASBCA No. 57584.