Busy contractors focused on day-to-day issues and future opportunities sometimes put other matters off to the extent they miss contractual deadlines. The recent decision of the Armed Services Board of Contract Appeals (ASBCA) in Black Bear Construction Company, ASBCA No. 61181 (November 14, 2017) serves as a reminder of the potentially high cost of excessive procrastination.
The matter involved an appeal by Black Bear Construction Company (Black Bear) of a contracting officer's denial of a claim seeking $462,160.00 for settlement costs due to the government’s termination for convenience of its contract for runway improvement construction in Afghanistan. Black Bear claimed the costs sought were incurred between its receiving a notice to proceed and the government’s terminating the contract for convenience. The government filed a motion for summary judgment based on the fact that Black Bear waited more than one year to file its settlement proposal as required by the contract.
The parties did not dispute that the contract incorporated by reference Federal Acquisition Regulation (FAR) clause 52.249-2, TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (FIXED-PRICE) (APR 2012)-ALTERNATE I. That clause provides in pertinent part: “After termination, the Contractor shall submit a final termination settlement proposal to the Contracting Officer . . . promptly, but not later than I year from the effective date of termination, unless extended in writing by the Contracting Officer upon written request of the Contractor within this I-year period.” Also undisputed was the time line: after the government terminated the contract for its convenience on August 12, 2012, Black Bear waited until March 25, 2017 before submitting its termination settlement claim to the contracting officer. The record contained no evidence that Black Bear had requested an extension of time from the contracting officer.
The Board first confirmed its jurisdiction over the appeal, explaining that the Court of Appeals for the Federal Circuit has held that the ASBCA has jurisdiction over termination settlement appeals where, as here, the contractor has failed to submit a settlement proposal within one year but has filed a certified claim with the contracting officer. It then made short work of Black Bear’s claim. FAR 52.249-2 allowed Black Bear one year to file unless it received an extension of time from the contracting officer. Because no extension of time was ever sought, much less granted, and the claim was submitted to the contracting officer after that one year period had passed, the Board had no trouble agreeing with the government that the claim was late and the appeal must be denied.
The takeaway here is simple: don’t let other concerns prevent you from timely preparing and submitting your termination settlement claim before the due date established by your contract. If you do, you’re essentially throwing money away.
Most contractors are familiar with the Far Part 15 discussions process during which the procuring agency identifies significant weaknesses and deficiencies in the proposals of the offerors in the competitive range. The procedure is intended to help those offerors improve their proposals so that the Government has the best possible options to choose from. In order to take advantage of the opportunity afforded by discussions, however, offerors need to listen—and respond--to what the agency says about what needs to be improved. The downside of failing to do so is amply illustrated in the recent Government Accountability Office (GAO) decision in Geotech Environmental Services, Inc., B-415035 (November 22, 2017).
The protest involved the award of a contract to Wadsworth Builders Company, Inc. (Wadsworth) for water wells on an Air Force base. The request for proposals (RFP) provided for award on a lowest price, technically acceptable basis, considering technical, past performance and price evaluation factors. Of relevance here, the solicitation made clear that to be evaluated as acceptable under the well stratigraphy technical subfactor, offerors were to provide evidence of prior performance of at least two domestic water well projects where a licensed geologist logged the well stratigraphy during the well drilling operation. It also stated that an unacceptable rating on any technical subfactor would render the proposal technically unacceptable overall and, therefore, ineligible for award.
After receiving proposals from six offerors, , the Air Force decided to establish a competitive range and conduct discussions because of the wide price disparity among the proposed prices. The competitive range consisted of the three offerors with the lowest-priced proposals, including Wadsworth (second-lowest priced) and the protester, Geotech Environmental Services, Inc. (Geotech) (lowest-priced).
During discussions, the agency issued three evaluation notices (ENs) to Geotech, one of which made clear that Geotech’s proposal had been found unacceptable under the well stratigraphy subfactor because the proposal did not note whether a licensed geologist performed the logs for one of the two projects Geotech identified in connection with that subfactor (the “Last Chance Basin” project). According to the GAO, the EN requested that Geotech clearly state whether or not a licensed geologist logged the stratigraphy for that project. In response, Geotech referred the Air Force evaluators to its previously submitted Technical Approach, water well logs, and geophysical logs and stated that “[s]tratigraphic logs will be prepared according to ASTM D2488 by a licensed geologist experienced in drilling.” In other words, Geotech essentially responded to the agency’s clear request for confirmation that a licensed geologist had been involved in its past drilling project by doubling down on the same information that resulted in the discussion question and then focused on the involvement of a licensed geologist in its (future) drilling under the contemplated contract.
Faced with this response, the source selection evaluation board found that Geotech’s proposal remained technically unacceptable, noting that “Geotech was given every opportunity to provide proof of technical acceptability and failed to do so.” The Air Force awarded the contract to Wadsworth, which it found had the lowest-priced, technically acceptable proposal.
Geotech protested, arguing that it had met all the RFP requirements. The agency responded that it had reasonably evaluated Geotech’s proposal and that it had simply failed to answer the question in the EN concerning well stratigraphy.
The GAO had little trouble agreeing with the Air Force. First, Geotech conceded in its protest briefing that “[w]hile Geotech’s response to the EN may not have expressly confirmed that a licensed geologist logged the stratigraphy for the project completed at Last Chance Basin, in identifying the previous contracts, it was presumed that a licensed geologist logged the well stratigraphy during the well drilling.” As the GAO noted, however, “An offeror is responsible for affirmatively demonstrating the merits of its proposal and, as here, risks the rejection of its proposal if it fails to do so.” Reliance on a presumption is simply not sufficient. On this point, the GAO stated, “Agencies are not required to infer information from an inadequately detailed proposal, or to supply information that the protester elected not to provide.” Finally, the GAO flatly rejected Geotech’s argument that the agency should have sought further clarification if its response was not sufficiently clear.
At the risk of oversimplifying things, this outcome appears to have resulted from the failure of an offeror to listen and actually respond to the concern raised by the agency in discussions. Contractors should learn from Geotech’s experience in this procurement: take advantage of what the agency tells you in discussion to improve your proposal—in ways that meaningfully address the concerns voiced by the agency. If you don’t, your chances at success may be sunk.
When interpreting and performing contracts, it’s important to remember that unless the contract language specifies otherwise, the FAR provides a default definition of the word “day” to mean a “calendar day.” The contractor in Family Entertainment Services, Inc., ASBCA No. 61157, learned this lesson when the Government deducted $81,692.34 from the Contract amount in a firm-fixed price contract to provide grounds maintenance to 3,897 acres at Fort Campbell in Kentucky. The contract contained numerous references to the term “day” and required different types of maintenance on the grounds to be performed in various cycles, e.g., every 14 days, every 21 days, etc.
After the performance period of the contract began and the contractor had failed to perform any of the required work within the first 14 calendar days of a 14 calendar day cycle, the contracting officer contacted the contractor to inquire about the failure to perform. At that point, the contractor for the first time indicated that it believed the period of performance was “actually work days not calendar days.” In its appeal of the Government’s reduction of the contract amount, the contractor asked the Armed Services Board of Contract Appeals (“ASBCA”) to find an ambiguity in the contract and to read the term “day” as “work day” instead of “calendar day.”
The ASBCA found that contractor’s interpretation was unreasonable. It noted that the contract clearly incorporated FAR 52.212-4, which in turn incorporated the FAR 2.101 definitions. FAR 2.101 defines “day” as “unless otherwise specified, a calendar day.” The definition was incorporated by reference into the subject contract.
While there were other issues with the contractor’s performance under the contract, the key takeaway here is “day” equals “calendar day” “unless otherwise specified.” The fact that FAR 2.101 is buried in references from other FAR clauses will not save you from having to perform in accordance with a calendar day schedule. So, make sure you bid--and perform--accordingly.