SB95 by Norris/HB84 by McCormick – Dept. of General Services
This bill was part of the administration’s package and revises certain provisions of Tennessee’s procurement code as follows:

Section 1: Rewrites the cooperative purchasing agreements statute (Tenn. Code Ann. § 12-3-701) to authorize the central procurement office and public institutions of higher education to participate in cooperative purchasing agreements for the procurement of goods or services with the cooperation of other states or local governments. The bill specifies that cooperative purchasing must be awarded through “full and open competition.”

Section 2: Rewrites the protest procedure statute (Tenn. Code Ann. § 12-3-514) to provide more detail with regard to a party’s standing to protest and to the calculation of the protest bond. The bill revises the procedure as follows:

A. Time
Previously: A protest must have been submitted in writing within seven calendar days after the claimant knew or should have known the facts giving rise to the protest. A stay of award may have been requested in the case of a pending award.

Now: A protesting party may submit a protest within seven calendar days after (a) the earlier of the notice of the award or (b) intent to award the contract is issued. Regarding a stay, the bill revises the requirement to specify that a stay of the solicitation, award, or proposed award will be granted upon receipt of a protest and the accompanying protest bond. A stay issued under this provision must not be lifted unless, after giving the protesting an opportunity to be heard, the chief procurement officer or the protest committee makes a written determination that continuation of the procurement process or the award of the contract without further delay is necessary to protect the interests of the state.

Continue Reading 2015 Legislative Update: Government Contracts and Procurement

On May 18, the House of Representatives unanimously passed legislation (H.R. 1382) that would allow the Department of Veteran Affairs (VA) to give a “preference,” in awarding contracts for the procurement of goods and services, to offerors who employ veterans on a full-time basis.  The act was sponsored by Rep. Kathleen Rice (D-N.Y.) and is titled, the “Boosting Rates of American Veteran Employment Act” or the “BRAVE Act.”

Currently, the VA gives preference on contracts for veteran-owned small businesses but not businesses that actively employ veterans.  Under the BRAVE Act, the VA would have the power to provide and determine what preference a contractor is given based on the offeror’s percentage of employees that are veterans.  The Act, however, does not specify or define what sort of “preference” the VA could provide to contractors.  Furthermore, the Act would allow the imposition of penalties for any contractor who willfully misrepresents the veteran status of their employees in order to receive the preference.  The penalty for such misrepresentation would be debarment from contracting with the VA for at least five years.  There appears to be no limitation on what types of companies can receive this preference, encompassing large and small businesses alike.

The BRAVE Act was received in the Senate and referred to the Committee on Veterans’ Affairs on May 20.

Please join us on Tuesday, June 9.

GK event June 9, 2015

8:00 a.m. – 8:30 a.m.
Networking Breakfast (Complimentary)

8:30 a.m. – 12:15 p.m.
TBA Program ($165 for members and $320 for non-members)

Bass, Berry & Sims PLC
The Pinnacle at Symphony Place
150 Third Avenue South, Suite 2800
Nashville, TN 37201
Parking in the Pinnacle garage will be validated.

Continue Reading Join us for Government Contracting in Tennessee

Employee severance packages and settlement agreements often include a broad waiver of any claims, known or an unknown, which an employee may have against the company.  Although such broad pre-filing releases are highly recommended, companies doing business with the government should be cautioned that these waivers do not always protect against False Claims Act (“FCA”) litigation.  A line of federal cases has established that these so-called “pre-filing releases” are sometimes unenforceable against suits filed by whistleblowers, or qui tam actions, for public policy reasons.

Pre-filing releases bar qui tam actions only if the government was already aware of the fraudulent conduct that forms the basis for the employee’s allegations.  The Ninth Circuit in an early case held that enforcing such a waiver where the government was not aware of the fraud until the filing of a qui tam complaint would be against public policy.  U.S. ex rel. Green v. Northrop Corp., 59 F.3d 953 (9th Cir. 1995).  The court noted that the FCA’s qui tam provisions are meant to incentivize whistleblowers to come forward with information that the government would not otherwise be able to obtain.  Thus, when the government first learns about alleged fraud from a whistleblower complaint, the pre-filing release will not be enforced.  This view is shared by the Fourth and Tenth Circuits.  See U.S. ex rel. Radcliffe v. Perdue Pharma, L.P., 600 F.3d 319 (4th Cir. 2010); U.S. ex rel. Ritchie v. Lockheed Martin Corp., 558 F.3d 1161 (10th Cir. 2009).

Continue Reading Enforceability of Employee Releases on Qui Tam Actions

United Parcel Service Inc.’s (“UPS”) recent settlement with the Department of Justice (“DOJ”) to resolve allegations that it submitted false claims to the federal government to conceal its failure to timely deliver packages serves as a reminder of the range of conduct that can lead to False Claims Act (“FCA”) liability for not satisfying the terms of a government contract.

The global package delivery giant, through contracts with the U.S. General Services Administration and U.S. Transportation Command, provides delivery services to hundreds of federal agencies. The lawsuit, originally filed under the FCA’s qui tam provision, alleged that from 2004 to 2014, UPS concealed its failure to deliver packages within their guaranteed delivery windows by knowingly recording inaccurate delivery times, applying inappropriate “exception codes” to justify tardy delivery, and providing agencies with inaccurate performance data. UPS’s concealment purportedly deprived the federal government of the opportunity to seek reimbursement for untimely deliveries.

Signaling DOJ’s continued commitment to combatting procurement fraud, Benjamin C. Mizer, Principal Deputy Assistant Attorney General of the Justice Department’s Civil Division, stated, “Protecting the federal procurement process from false claims is central to the mission of the Department of Justice…We will continue to ensure that when federal monies are used to purchase commercial services the government receives the prices and services to which it is entitled.”

ASBCA logoThe Armed Services Board of Contract Appeals (ASBCA) recently granted a claim sponsored by the prime contractor for its subcontractor’s employee severance costs under a fixed-price contract. Appeal of Government Contracting Resources, Inc., ASBCA No. 59162 (March 12, 2015).

Government Contracting Resources, Inc. (GCR), sought additional compensation for severance costs it incurred, along with its subcontractor, upon expiration of its service contract with NASA for the distribution of mail at the Kennedy Space Center. A collective bargaining agreement (CBA) between GCR subcontractor Creative Management Technology Inc. (CMT) and the International Association of Machinists and Aerospace Workers (IAMAW) granted severance pay to CMT bargaining unit employees who were not rehired by a successor company at the end of the service contract. The provisions of the CBA had been incorporated, through a modification, into GCR’s service contract with NASA.

Continue Reading Sponsored Claim for Subcontractor Severance Pay Granted under Fixed-Price Service Contract

A recent size appeal at the Small Business Administration (SBA) serves as a good reminder to government contractors to verify actual receipt of email appeals or risk having their protest dismissed as untimely. The SBA recently dismissed a size appeal for this very reason. Size Appeal of Supplies Now, Inc., SBA No. SIZ 5655 (2015) involved a set-aside procurement for office supplies. Supplies Now, Inc. filed an initial size protest against EZ Print Supplies that was deemed untimely and dismissed at the SBA. After receipt of the initial size determination on February 3, 2015, Supplies Now submitted its appeal the Office of Hearings and Appeals (OHA) via email on February 18, 2015. The SBA rules require a size protest appeal be filed within 15 business days after size notification. While the appeal was sent within the 15 day time period, OHA never actually received the appeal. In order for an appeal to be considered “filed” it must actually be received by OHA. Furthermore, Supplies Now, waited weeks to contact OHA after receiving no response during that period. An acknowledgement from the email system was deemed insufficient. SBA reiterated that an appeal is not considered filed until it is actually received, and while email is a permissive method of delivery, “the sender is responsible for ensuring a successful, virus-free transmission.” For those reasons OHA dismissed the appeal as untimely.

This case serves as an important reminder to those who wish to file a size protest or size appeal via email. Given OHA has no discretion to extend or waive the deadline, it is imperative to ensure your appeal is actually received. In the Supplies Now decision, OHA even encourages senders to contact OHA to verify receipt.

Despite fulfilling its contractual obligations and voluntarily disclosing its possible oversight, nLight Photonic, Inc. (“nLight”), a Washington-based small business, was pushed to a $420,000 settlement with the Department of Justice to resolve allegations that it violated the False Claims Act by knowingly submitting false certifications regarding its eligibility for contracts and grants under the U.S. Small Business Administration’s (“SBA”) Small Business Innovation Research (“SBIR”) program.

The SBIR program was created to encourage U.S. small businesses to conduct federal research & development that may also serve the community at-large. To be eligible for SBIR funds, a company must satisfy several conditions, including:

1. Having a U.S. place of business;
2. Being majority owned and controlled by individuals that are U.S. citizens (or permanent residents) or by another entity meeting this requirement; and
3. Employing fewer than 500 employees.

Continue Reading Small Business Reaches Settlement to Resolve Allegations it Falsely Certified Compliance with SBIR Program

If you’re in the area, join me at the The East Tennessee Chapter of the National Contract Management Association (NCMA) lunch meeting on Wednesday, May 6, 2015.

I’ll be speaking on Negotiating Contentious Flowdowns: From Data Rights to TINA. My presentation will include a discussion of:

  • Mandatory vs. Non-Mandatory Flowdowns
  • Penalties for Noncompliance with Flowdowns; and
  • Prime and Subcontractor Negotiation Strategies.

To register, click here.

On April 6, 2015, the Sixth Circuit delivered a costly blow to the United States government to the tune of $657 million when it issued its opinion in United States v. United Technologies Corporation and remanded the case back to the district court to review the damages award, yet again.

This was the second time that the Sixth Circuit heard arguments deriving from the United States False Claims Act case against Pratt & Whitney (“Pratt”), now owned by United Technologies, for false statements the company made when competing against GE Aircraft for contracts to build F-15 and F-16 jet engines. In 1983, in an attempt to outbid GE Aircraft and make it hard for the government to issue a split-award contract, Pratt misstated its projected costs and certified that the company’s bid included its “best estimates and/or actual costs.” After uncovering Pratt’s overstated costs projections, the government filed both an administrative action against the company in the Armed Services Board of Contract Appeals (“ASBCA”) under the Truth in Negotiations Act and a lawsuit in district court alleging violations of the False Claims Act.

Continue Reading United Technologies is Saved from $657 million False Claims Act Verdict by the Sixth Circuit

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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