A bill to revise certain provisions of Tennessee’s procurement code has been introduced in both the House and the Senate of the Tennessee General Assembly. The bill comes from the central procurement office with the Governor’s support and is expected to pass rather quickly. The legislation, if passed by both houses and signed by the Governor, will:

  • Re-write the protest procedure statute (Tennessee Code Annotated, Section 12-3-512) to provide more detail with regard to a party’s standing to protest and to the calculation of the protest bond. The amount of a protest bond will be
    • 5% of the lowest bid or cost proposal,
    • 5% of the maximum or estimated maximum liability,
    • 5% of the estimated maximum revenue if the contract at issue will be revenue producing to the state, or
    • In the case of a no-cost contract, an amount to be determined by the chief procurement officer. Authorize the promulgation of rules by the procurement commission with regard to protest procedures.
  • Authorize the Tennessee Department of General Services and Tennessee public institutions of higher education to participate in cooperative purchasing agreements relating to maintenance and management of real property and construction, engineering and architectural services. Construction materials will be able to be procured cooperatively with other states or local governments.
  • Finally, rewrite the authority of the Chief Procurement Officer to authorize limitation of liability clauses in state contracts (Tennessee Code Annotated, Section 12-3-701).

The legislation is Senate Bill 95 (Norris) and House Bill 84 (McCormick).

Putting together a strong team for the pursuit of a government contract is a key component of modern government contracting. A team with the right mix of skills and experience will bolster a prime contractor’s chance of receiving an award, but building the team is only half the battle. Fully utilizing the breadth of experience provided by all key members of the team can mean the difference between success and disappointment. One way to utilize the strength of the team is to submit the relevant past performance of key subcontractors in a proposal.

The use of a subcontractor’s past performance recently was challenged in a bid protest before GAO. In Al-Razaq Computing Services, a disappointed offeror challenged the agency’s evaluation of the awardee’s past performance. In Al-Razaq, the awardee was a joint venture. As part of its past performance submission, the awardee joint venture submitted one contract for one of the joint venture partners, and two contracts for its subcontractor, Booz Allen. The protester argued that the agency improperly credited the awardee joint venture with the past performance of Booz Allen. GAO rejected this argument and denied the protest.

Continue Reading Learning from Bid Protests: Generally Okay to Utilize Subcontractor Experience

DHS Technologies LLC and subsidiary DHS Systems LLC recently agreed to pay $1.9 million to settle claims it defrauded the federal government by failing to disclose that it offered greater discounts to a commercial company as part of the renewal of its General Services Administration (GSA) Federal Supply Schedule contract in 2007.

Sharon McKinney, a former employee-turned-whistleblower, initiated the lawsuit under the qui tam provision of the False Claims Act. The contract was part of the GSA’s Multiple Award Schedule program that allows the government to order commonly used products and services from a list of approved vendors. These vendors are required to provide the government with complete and accurate information about prices charged to commercial customers to enable the agency to obtain the same or better pricing. Specifically, McKinney alleged that DHS Technologies failed to inform GSA of its lower prices for emergency mobile shelters offered to its largest commercial customer, Northrop Grumman. DHS’ failure to provide this complete information led to the overpayment, by the government, for these mobile shelters from 2007 thru 2013.

The defendant companies, based in Orangeburg, N.Y., did not admit wrongdoing in the settlement. As part of the settlement, McKinney will receive 19% of all payments obtained by the government.

The DOJ press release on the DHS Technologies settlement can be found here.

I recently co-wrote an article with John Kelly, Lindsey Fetzer and Shuchi Parikh that outlined three recent cases in which the Department of Justice pursued joint criminal and civil action against a government contractor. In the article we discuss these cases and provide guidance on what government contractors can do to avoid exposure to both criminal and civil enforcement risks.

The article, “Criminal Prosecutions of Gov’t Contractors on the Rise,” was published on January 8 on Law360.

Bass, Berry & Sims attorney Bob Horton authored the article, “Affirmative Action Plans – Your Common Questions Answered,” that was published by Contract Management magazine in the January 2015 issue. In the article, Bob answers some of the most common questions that are asked when a company is tasked with preparing an affirmative action plan. The answered questions include:

  • What is affirmative action? What is an AAP?
  • What does affirmative action mean?
  • Who has to prepare an AAP?
  • What about Medicare/Medicaid reimbursement? TRICARE participation?
  • Are all of my facilities covered?
  • What is in the AAP?
  • What happens after you prepare the AAP?

To read the full article and get answers to these questions, click here.

Lockheed Martin Integrated Systems (“LMIS”), a subsidiary of Lockheed Martin, agreed on Friday, December 19, 2014 to pay $27.5 million to resolve allegations that it inflated labor costs and submitted false claims to the government in violation of the False Claims Act.  Specifically, the Department of Justice (“DOJ”) alleged that LMIS overbilled for work performed by personnel who lacked the job qualifications required under Rapid Response and Strategic Services Sourcing contracts issued by the U.S. Army Communications and Electronics Command.

The overbilling allegations against LMIS are similar to the DOJ’s allegations in a separate case against DRS Technical Services Inc., which resulted in a $13.7 million settlement announced on October 7, 2014.  The DOJ also alleged in that case that DRS Technical Services overbilled labor costs for under-qualified employees under the Rapid Response contract.

Continue Reading Defense Contractor Reaches Settlement in Procurement Fraud Case Involving Overbilling Allegations

Earlier this year, Geoff Orazem founded Eastern Foundry, an incubator for government contracting companies in Washington, D.C. The veteran-owned business will leverage professional service providers, coaches, mentors, and BD support teams to provide structured and personal coaching for small businesses seeking government contracts.

We had a great time meeting with Geoff and his clients in their brand new building this week. Bryan and I gave a lunch presentation on the nuts and bolts of the bid and size protest processes at SBA, GAO and the Court. We also explained the advance planning and litigation strategy when pursuing and defending against a protest.

If you are interested in hearing our Protest 101 Presentation, contact me at toverman@bassberry.com.

Another chapter in the story of one of the most brazen procurement fraud schemes in United States history came to a close on Monday, December 15, 2014, when Eyak Technology LLC (“EyakTek”) and Eyak Services LLC (“ESL”) agreed to pay $2.5 million and relinquish all rights to any additional payments to resolve alleged False Claims Act and Anti-Kickback Act violations.

Between 2005 and 2011, EyakTek, an Alaska Native-owned corporation, held the Technology for Infrastructure, Geospatial, and Environmental Requirements (“TIGER”) contract, a $1 billion prime contract with the U.S. Army Corp of Engineers. It was alleged that throughout the term of the TIGER contract, EyakTek’s former director of contracts, Harold F. Babb, directed subcontracts to vendors that paid him illegal kickbacks. EyakTek and ESL, according to the DOJ, “submitted invoices to the Army Corp that included charges for work that was never performed by the subcontractors and lacked internal controls to detect the improper charges.” The government alleges that EyakTek may have been overpaid nearly $30 million as a result of the misconduct.

Continue Reading Government Contractor Reaches Global Settlement to Resolve Procurement Fraud Allegations

Solicitations for government contracts come with all manner of terms, specifications, requirements, etc. But one feature that is certainly common to all solicitations is the deadline for submission. No matter the procurement, the solicitation will establish a time and date by which all proposals must be received. Not surprisingly, it is the responsibility of the offeror to make sure the proposal is received by the agency prior to the deadline. A late proposal typically means a rejected proposal, so adhering to the deadline is of utmost importance. After all, you can’t win if you’re not in the game.

It is important to recognize the difference between submission and receipt. Modern solicitations provide for various acceptable methods of submitting a proposal, e.g., mail, hand-delivery, email, etc. Each method of submission comes with its own challenge that must be considered by the offeror in order to ensure the agency actually receives the proposal on time. Proposals to be submitted via email may sometimes lag due to large attachments. Couriers are sometimes delayed getting entrance onto a government installation. And sometimes, government agencies utilize mail sorting facilities which add delays to the delivery process.

Continue Reading Learning from Bid Protests: When Delivery Doesn’t Actually Mean Receipt

Bryan King, Amy Sanders and Shannon Wiley teamed up to author an alert titled, “RAC Dispute Could Have Far-Reaching Effects on Government Contracting” that was published by Bass, Berry & Sims on December 4, 2014. The article investigates the recent ruling by the U.S. Court of Federal Claims in CGI Federal Inc., v. United States, which leaves uncertain the future of Recovery Audit Contractor (“RAC”) audits and government contracts.

To read the full alert, click here.

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

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