FEDERAL CIRCUIT YEAR-IN-REVIEW 2015—THE FEDERAL CIRCUIT GIVETH, AND THE FEDERAL CIRCUIT TAKETH
[...]in G4S Technology LLC v. United States,20 the Federal Circuit held that assurances from the government of a prime contractor's financial viability were not enough to bestow thirdparty beneficiary status on a subcontractor, thereby taking away the subcontractor's ability to collect pay...
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| Published in: | Public contract law journal Vol. 45; no. 4; pp. 553 - 586 |
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| Main Authors: | , , , , , |
| Format: | Journal Article |
| Language: | English |
| Published: |
Chicago
American Bar Association Section of Public Contract Law
22-06-2016
American Bar Association |
| Subjects: | |
| Online Access: | Get full text |
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| Summary: | [...]in G4S Technology LLC v. United States,20 the Federal Circuit held that assurances from the government of a prime contractor's financial viability were not enough to bestow thirdparty beneficiary status on a subcontractor, thereby taking away the subcontractor's ability to collect payment for its services.21 The court also examined the extent to which different types of government entities are subject to the rules governing government contractors. In Colonial Press International, Inc. v. United States 22 the Federal Circuit affirmed that the Government Printing Office (GPO), a legislative agency, is not bound by the U.S. Small Business Administration (SBA) Certificate of Competency (COC) Program.23 The court "taketh" when it rejected a disappointed offeror's argument that the GPO was required to refer its responsibility determination to the SBA rather than make its own determination,24 Instead, the court confirmed that the Small Business Act does not apply to legislative agencies such as the GPO, and the COC Program is no exception.\n382 Raytheon argued that the Air Force's decision lacked a rational basis and that Northrop failed to show that the Air Force's conduct prejudiced Northrop.383 The COFC found the Air Force's decision to take corrective action to be reasonable because it had engaged in unequal discussions.384 The court further found that the GAO attorney, by reaching the merits of the protest, had implicitly concluded that Northrop had a substantial chance at receiving the award, a conclusion the COFC found to be rational given the equal technical ratings and relative price differential.385 Raytheon appealed.386 The Federal Circuit explained that it would uphold the Air Force's decision to reopen discussions if the grounds laid out by the GAO attorney in the outcome prediction conference (even though not a written GAO decision) were rational.387 The court found that the decision was rational because the Air Force had violated a regulation through its disparate communication about the treatment of IR&D costs and that this violation provided a rational basis for reopening the competition.388 The court also agreed with the COFC's determination on the prejudice issue.389 In upholding the GAO attorney's implicit finding of prejudice, the COFC presumed that the GAO attorney was relying on the same legal standards that GAO would have applied in deciding the protest-namely, the "substantial chance" standard.390 Given the price differential, it was reasonable for the GAO attorney to conclude that Northrop had a substantial chance at the award.391 Because this was a question of fact, the COFC appropriately gave deference to the GAO attorney.392 The court went on to reject three additional arguments made by Raytheon.393 First, Raytheon argued that Northrop waived its ability to challenge the Air Force's IR&D guidance by not challenging that guidance in a pre-award protest as a solicitation defect.394 The court rejected this argument, finding instead that the Air Force's violation here was providing disparate information to two offerors.395 Second, Raytheon argued that Northrop was not prejudiced because the Air Force's guidance could not have affected the offerors' proposals because that guidance was clearly inconsistent with existing law.396 The court found that Raytheon failed to carry its burden of proof with respect to this argument, especially in light of the "facially evident regulatory violation based on disparate information. |
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| ISSN: | 0033-3441 2162-8181 |