public procurement in the united states: overvie · states: overview sponsored by:!! ... federal...

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By in-house counsel, for in-house counsel.®

Association of Corporate Counsel 1025 Connecticut Avenue, NW, Suite 200

Washington, DC 20036 USA tel +1 202.293.4103, fax +1 202.293.4701

www.acc.com

InfoPAKSM

Public Procurement in the United States: Overview Sponsored by:

Public Procurement in the United States: Overview

Copyright © 2014 Association of Corporate Counsel

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August 2014

Provided by the Association of Corporate Counsel 1025 Connecticut Avenue, NW, Suite 200 Washington, DC 20036 tel +1 202.293.4103 fax +1 202.293.4107 www.acc.com

This InfoPAKSM provides practical analysis of topical cross-border issues and country-specific Q&A guides on public procurement law and practice worldwide. The Q&A guide aims to give a structured overview of the key practical issues including, for example, the applicable legislation, entities and contracts covered (and thresholds), procurement procedures, the regulation of concessions and PPPs and recent trends.

The country-specific Q&A gives a high level overview of applicable legislation, scope of rules, procurement procedures and enforcement, recent trends and proposals for reform. In particular, it examines entities and contracts covered, concessions, privatisations and PPPs, contract award criteria, alternative bids, and changes to an existing contract.

To compare answers across multiple jurisdictions, visit the Public Procurement Country Q&A tool at http://uk.practicallaw.com/0-521-3360 and the Public Procurement EU Country Q&A tool at http://uk.practicallaw.com/7-521-3187.

This Q&A is part of the Practical Law multi-jurisdictional guide to public procurement. For a full list of jurisdictional Q&As visit www.practicallaw.com/publicprocurement-mjg.

Contents

I. Legislative Framework ..................................................................................................................... 5

A. What Is the Principal Legislation that Regulates Public Procurement? What Regulatory Authorities Are Responsible for Public Procurement Enforcement? ......................................................................................................... 5

B. What Are the Overriding Principles of the Legislation Listed in Section I.A? ........................................................... 6

C. Regulation of Specific Industries ........................................................................................................................................... 7

II. Recent Trends ................................................................................................................................... 7

A. What Are the Recent Trends in the Public Procurement Sector? .............................................................................. 7

III. Scope of Rules ................................................................................................................................. 10

A. Entities Covered ..................................................................................................................................................................... 10

B. Contracts Covered ................................................................................................................................................................ 11

C. Concessions ............................................................................................................................................................................ 12

D. Privatisations and PPPs ......................................................................................................................................................... 13

E. Shared Services and "In-House" Arrangements .............................................................................................................. 13

IV. Procurement Procedures .............................................................................................................. 14

A. What Procedures Do Regulated Entities Use When Carrying out Procurements? Can Regulated Entities Freely Choose Between Procedures? When Is It Appropriate to Use Each Procedure? ..................................... 14

B. Key Features ........................................................................................................................................................................... 15

C. Technical Specifications ........................................................................................................................................................ 16

D. Alternative Bids ...................................................................................................................................................................... 16

E. Contract Award Criteria ..................................................................................................................................................... 16

F. Changes to an Existing Contract ........................................................................................................................................ 17

V. Enforcement .................................................................................................................................... 18

A. Who Can Bring a Claim for Non-Compliance with Procurement Legislation? What Are the Available Review Procedures? Are There Any Associated Statutes of Limitation? ................................................................. 18

VI. Reform ............................................................................................................................................. 19

A. Are There Any Proposals for Reform of the Procurement Legislation? If So, When Are They Likely to Be Implemented? .......................................................................................................................................................................... 19

VII. About the Authors ......................................................................................................................... 20

A. Richard O Duvall .................................................................................................................................................................... 20


Copyright © 2014 Practical Law Company (PLC) & Association of Corporate Counsel

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B. Terry L Elling ........................................................................................................................................................................... 20

C. Timothy J Taylor .................................................................................................................................................................... 21

For more ACC InfoPAKs, please visit http://www.acc.com/infopaks

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I. Legislative Framework

A. What Is the Principal Legislation that Regulates Public Procurement? What Regulatory Authorities Are Responsible for Public Procurement Enforcement?

1. Regulatory Framework

The US federal procurement system is subject to numerous statutes and international agreements. US state and local government procurements are not examined in this article, but are subject to similar requirements; indeed, many of the requirements discussed apply to state and local procurements when they are funded with federal monies.

The Federal Acquisition Regulation, 48 C.F.R. (FAR) (available at www.acquisition.gov/far) is the principal regulation governing federal procurements. The FAR applies to all executive departments, military departments, and independent establishments as defined in 5 U.S.C. §§ 101, 102, and 104(1), as well as to wholly owned government corporations as defined in 31 U.S.C. § 9101. These departments and entities have separate supplements to the FAR that apply to their procurements (see Section I.C.1). There are some entities not covered by the FAR (see Section III.A.1.b).

Two statutes are the foundation for modern federal procurement:

■ Federal Property and Administrative Services Act of 1949 (41 U.S.C.) (FPASA).

■ Armed Services Procurement Act of 1949 (10 U.S.C.) (ASPA).

■ Other applicable statutes include:

■ The Federal Acquisition Streamlining Act of 1994 (FASA) and the Federal Acquisition Reform Act of 1995 (FARA) which:

• simplified some aspects of the federal procurement process;

• encouraged federal agencies to procure commercial items.

■ The Competition in Contracting Act of 1984 (CICA) which:

• requires that federal procurements be competed on a "full and open" basis;

• provides for competitive negotiations;

• substantially restricts the use of sole-source and other non-competitive contract awards.



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■ The Truth in Negotiations Act of 1962 (TINA), which requires in many significant negotiated procurements that bidders submit formal cost or pricing data to permit the government to determine whether the contract price is fair and reasonable (see Section III.B.2.a). Failure to provide complete, current, and accurate cost or pricing data may entitle the government to adjust the price and to impose additional penalties after award.

There are many other federal laws that govern or affect federal procurement. The US became a party to the WTO Government Procurement Agreement on 1 January 1996, and various submissions that summarise US federal procurement law, policies, and procedure are available at www.wto.org.

2. Regulatory Authorities

The Office of Federal Procurement Policy (OFPP) in the Office of Management and Budget (OMB) has primary responsibility for public procurement policies and regulation. The OFPP shapes the policies and practices that federal agencies use to acquire the goods and services they need to carry out their responsibilities. Under FAR 1.202, the FAR is maintained through the co-ordinated action of the Defense Acqusition Regulations Council (which represents the US Department of Defense) and the Civilian Agency Acquisition Council (which represents non-defence US government agencies).

B. What Are the Overriding Principles of the Legislation Listed in Section I.A?

The overriding principles of the legislation listed are set out at FAR 1.102, and include:

■ Delivering the best quality products or services on a timely basis while maintaining the public trust and fulfilling policy objectives.

■ Maximising the use of commercial products and services.

■ Using contractors who have a demonstrated record of superior past performance.

■ Promoting competition.

■ Conducting procurement with business integrity, fairness, and openness.

■ Fulfilling public policy objectives (such as promoting small business and maximising use of products from the US and from qualifying countries with which the US has open trade agreements).

■ Exercising sound business judgement.


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C. Regulation of Specific Industries

1. Are Any Industries Subject to Specific Regulation?

The FAR contains many provisions that apply to particular industries, specifically: ■ Construction.

■ Manufacturers and providers of supplies.

■ Providers of services.

The FAR provisions relating to inspection and acceptance, terminations, and other clauses can differ significantly depending on whether the contract involves the acquisition of construction, supplies, or services. In addition, each of these industries is subject to different statutory and regulatory labour standards requirements, including minimum wage and benefit rates, and record-keeping requirements.

II. Recent Trends

A. What Are the Recent Trends in the Public Procurement Sector? In the 1990s, the federal procurement system was reformed to more closely resemble the commercial marketplace. Reforms included FASA's streamlined procedures for purchasing commercially available off-the-shelf items and re-organisation of the simplified acquisition procedures for small procurements.

Since then, however, federal procurement policy has largely reversed course. Over the past years, the federal government has imposed a considerable number of new requirements that apply to many contractors, including:

■ Mandatory disclosure of known violations of federal criminal laws or of the civil False Claims Act.

■ Creation of business ethics awareness and compliance programmes.

■ Participation in the Department of Homeland Security's E-Verify employment system.

■ Creation of screening systems to prevent employee conflicts of interest.



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Many of these new regulations relate to other current trends in government procurement including:

■ Contractors' increased use of bid protests. Contractors are increasingly using bid protests to pursue government contracts. In recent years, the percentage of successful bid protests (that is, those in which the protest was sustained or the agency took voluntary corrective action) has climbed, from 33% in 2001 to 42% in 2011. With a higher success rate, contractors have a greater incentive to file bid protests. Consequently, the number of bid protests filed before the Government Accountability Office (GAO) has also grown, from 1,146 in 2001 to 2,353 in 2011.

■ Attention has also turned to reforming the bid protest procedures at the Court of Federal Claims, where unsuccessful bidders can either file an initial bid protest or file a subsequent protest if they are unsuccessful before the GAO. There is concern that this procedure may unduly delay procurements. Recently, the Department of Defence proposed legislation requiring the Court of Federal Claims to follow the same prompt timelines as the GAO, which would eliminate the practice of protesters who are unsuccessful with the GAO trying their case a second time before the court. This proposal was rejected, but more substantive action may be taken on this issue in the future.

■ Regulatory reform of conflicts of interest. Actual and perceived risks of conflicts of interest by contractor employees (known as personal conflicts of interest (PCIs)) and companies (organisational conflicts of interest (OCIs)) have prompted new and proposed regulations, primarily directed at contractors and employees that provide advisory and technical services, or that have access to sensitive non-public information during contract performance. To address these risks, the government has established rules governing PCIs for the first time and begun reforming its regulation of OCIs:

• regarding PCIs, in December 2011 the FAR was amended to include a set of rules for contractor employees who perform acquisition functions closely associated with governmental functions (FAR 3.1103(a)). The new rules require these employees to be screened from projects in which they may have a financial or employment interest and to refrain from using non-public information gained through performance of a government contract for personal gain;

• the government is also re-evaluating its rules for OCIs. In 2010, the Department of Defense issued a limited rule prohibiting firms that engage in systems engineering or technical assistance for major defence acquisition programmes from participating in the performance of the programme as either a prime contractor or a subcontractor (FAR Subpart 209.571). A proposed draft of more general OCI rules is pending, which focuses on contractors' access to non-public information obtained under contractual duties to assist the government. The draft proposes several mechanisms for preventing the wrongful disclosure of information to others within the contracting firm, to subcontractors, and to third parties. The draft also proposes safeguards to ensure that employees with non-


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public information are screened from situations where that information might influence competitions for new contracts.

■ Sequestration and the prospect of decreased government spending. Sequestration is a product of the Budget Control Act of 2011. Among other things, the Act provides that if Congress fails to achieve significant reductions in the federal budget (a target amount of US$1.5 trillion), then automatic, across-the-board cuts (known as sequestration) to most discretionary government programmes will occur on 1 January 2013. It is projected that sequestration would result in reductions of 7.6% to 10% in most discretionary and some non-discretionary government programmes. Regardless of whether sequestration occurs, contractors and their government counterparts must be prepared for smaller budgets and increased competition. Austerity measures in Europe may foreshadow a US government budget that either shrinks or grows more slowly than in the past.

■ Expansion of the False Claims Act. In recent years the civil False Claim Act, which provides for penalties and damages for false representations made in order to obtain or perform federal contracts or receive other benefits, has been dramatically expanded. The Act provides that members of the public (referred to as relators) can initiate civil suits on the government's behalf and recover a portion of any damages paid by the contractor. Congress amended the statute in 2009 and 2010 to expose firms to new and greater risks of False Claim Act liability.

While claims initiated by the federal government have increased only slightly over the last ten years, claims brought by relators (that is, a private person allowed to bring a claim on the US's behalf) have increased dramatically. From 2001 to 2008, relators brought on average 365 claims per year. That figure increased to 433 in 2009, 575 in 2010, and 638 in 2011. The monetary value of settlements and judgments has also increased. From 2001 to 2008, the average yearly total of settlements and judgments was US$1.8 billion. That figure increased to US$2.5 billion in 2009, US$3.1 billion in 2010, and US$3 billion in 2011. The increased level of risk for contractors is made worse by their obligation to report known False Claims Act violations or face severe penalties.

■ Increased use of suspension and debarment. The federal government has a well-established administrative system for suspension and debarment of government contractors (in FAR Subpart 9.4) as a remedy to protect the government from irresponsible contractors. However, the impact of an adverse action is often punitive. Causes for debarment and suspension include (FAR 9.406-2 (debarment) and FAR 9.407-2 (suspension)):

• a conviction of or civil judgment for fraud or dishonest conduct;

• a serious violation of the terms of a government contract or certain statutes; and

• any other cause so serious or compelling as to justify the action.



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The scope of a suspension or debarment can vary based on the judgement of the suspending and debarring official. The action can be limited to a particular organisational element of the contractor or be extended to all organisational elements (FAR 9.407-1(c)and FAR 9.406-5). Fraudulent, criminal or other seriously improper conduct of officers, directors, employees or other individuals associated with the contractor can be imputed to the contractor, and vice versa (FAR 9.406-5(a) – (b)). In most suspensions or debarments, a cause is established by another determination, for example, a grand jury's decision to indict, or a conviction of or civil judgment for fraud. Increasingly, agencies are initiating fact-based debarment actions, where the agency conducting the proceeding attempts to establish that grounds for debarment exist. This is partly the result of pressure on agencies from Congress and the Office of Management and Budget to be more aggressive in this area of enforcement.

III. Scope of Rules

A. Entities Covered

1. Which Entities Must Comply with the Procurement Rules? Are There Any Exemptions?

a. Entities Covered

Most federal departments and agencies are subject to the FAR and to federal procurement statutes (see Section I.A).

b. Exemptions

There are no particular exemptions from procurement rules but there is a measure of flexibility. For example an organ of state may request exemption from any of the provisions of the PPPFA for reasons including that tenderers are likely to be international suppliers, among others. This exemption provision is designed to work on a case-by-case basis and exempts the organ of state from provisions of the PPPFA in respect of a specific tender. Many of the public entities listed in the PFMA were specifically exempted from the provisions of the PPPFA until 7 December 2012, after which date the exemption lapsed.


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Section 92 of the PFMA allows the Minister to exempt entities form specific provisions of the Act or the Treasury Regulations.

B. Contracts Covered

1. What Contracts Do Procurement Rules Cover? Are There Any Exemptions?

a. Contracts Covered

Public procurement rules apply to commercial contracts by organs of state, as defined, for the:

■ Acquisition of goods and services.

■ Disposal and letting of state assets, including the disposal of goods no longer required.

■ Conclusion of public private partnerships (PPPs).

b. Exemptions

Several US government entities, such as the US Postal Service, the Federal Aviation Administration, and the Federal Deposit Insurance Corporation are not subject to the FAR, but have their own procurement regulations that are similar to the FAR in most respects.

2. Are There Specific Thresholds to Determine If a Contract Is Subject to the Public Procurement Regime? Are There Any Aggregation/Anti-Avoidance Rules?

a. Thresholds

The FAR includes financial thresholds that trigger special, simplified procedures. For example, FAR Part 13 includes simplified rules that allow federal agencies to buy products or services more quickly, more economically, and with a focus on small businesses. These simplified FAR rules apply if the contract price is less than US$150,000. Contracts under this threshold are also set aside for award to small businesses.

Other provisions containing financial thresholds include the Truth in Negotiations Act and corresponding FAR provisions, that require that contractors submit formal cost or pricing data only for contracts and contract changes with a value greater than US$750,000.



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The FAR also includes thresholds over which the rules for the WTO GPA apply to federal procurements, with certain exceptions. These thresholds are adjusted approximately every two years. The current thresholds for federal procurements are US$202,000 for contracts for goods and services and US$7,777,000 for construction contracts.

b. Aggregation/Anti-Avoidance Rules

The FAR and other statutes and regulations include restrictions against both aggregating (that is, combining) and splitting procurements to avoid various procurement rules.

For example, the Small Business Act (15 U.S.C. § 632(o)) discourages agencies from bundling procurement requirements without adequate justification where doing so would impair the ability of small businesses to compete for larger contracts.

With regard to the WTO GPA rules, agencies cannot divide an acquisition with the intent of reducing its estimated value below the dollar threshold of the WTO GPA (FAR 25.403(b)( 3)). The total value of estimated contracts for the same type of product must be aggregated to determine whether the thresholds for application of the WTO GPA rules apply (see Section III.B.2.a).

C. Concessions

1. Does the Procurement Regime Apply to Concession Contracts? If Not, How Is the Award of Concession Contracts Regulated?

Concession contracts are commonly understood to involve arrangements where a provider of goods or services to the public holds a contract or licence to operate on federal property or at a federal facility. Because these contracts do not ordinarily involve the procurement of goods or services for the benefit of the US government, the FAR and other procurement statutes and regulations generally do not apply. Agencies that permit concessions have their own, relatively brief, regulations that govern these arrangements.

However, the FAR and other procurement rules apply if a concession contract involves more than a nominal benefit to the US government. For example, in Starfleet Marine Transportation, Inc., B-290181, July 5, 2002, 2002 CPD 113, a concession contract involving ferryboat services used primarily by members of the public was found to be subject to the FAR and other procurement requirements because the contract required the concessionaire to provide janitorial services for the agency's docks and piers as well as to provide transportation for a government employee who worked as a park ranger.


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D. Privatisations and PPPs

1. Are Privatisations and PPPs Subject to the Procurement Regime? If Not, What Are the Relevant Legal Rules?

a. Privatisations

Privatisation is subject to Office of Management and Budget (OMB) Circular A-76 and FAR Subpart 7.5. These set out requirements and procedures to ensure that privatisation contracts are awarded only where they result in some savings and do not involve inherently governmental functions.

In addition, the Department of Defense has specific statutory authority and provisions that relate to the procurement of contracts to privatise utilities infrastructure and military housing.

b. PPPs

There are no particular rules for federal PPPs as these are not commonly used on purely federal projects.

PPPs have become common at state and local government levels as vehicles to further the funding, development, construction and operation of large public infrastructure projects such as highways and mass transit systems. These projects are subject to state and local legal requirements and may also include federal requirements when federal funding is involved.

E. Shared Services and "In-House" Arrangements

1. Do Shared Services Projects and "In-House" Arrangements Trigger the Application of the Public Procurement Requirements? Are There Any Exemptions?

The most common form of shared services are:

■ The US General Services Administration (GSA) schedule contract system under FAR Part 8.

■ Government-wide acquisition contracts (GWACs).



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Both GSA schedule contracts and GWACS are multiple-award, indefinite delivery/indefinite quantity (IDIQ) contracts under which federal agencies can place individual, customised delivery or task orders for common types of supplies or services.

Agencies can also acquire goods or services directly from or through another agency, under interagency acquisitions that are usually subject to the Economy Act (15 U.S.C. § 1535) and FAR Subpart 17.5.

IV. Procurement Procedures

A. What Procedures Do Regulated Entities Use When Carrying out Procurements? Can Regulated Entities Freely Choose Between Procedures? When Is It Appropriate to Use Each Procedure?

1. Available Procedures

Under the FAR, agencies generally conduct procurements using sealed bidding under FAR Part 14 or negotiated competitive proposals under FAR Part 15. Agencies can use simplified acquisition procedures for the purchase of goods or services below US$150,000 (see Section III.B.2.a).

2. Freedom of Choice

Agencies have broad discretion in determining the procedures to apply to a particular procurement. Sealed bidding is used most often for construction and procurement of supplies where no modifications or developmental work is contemplated. Competitive proposals are used most often for services and for supplies (including major systems) where modification and/or developmental work is required and the award will be based in part on factors other than price.

3. Suitability

Sealed bidding is typically used when the following conditions apply (FAR 6.402(a)):

■ The award is made primarily on the basis of price.

■ It is not necessary to conduct discussions with tenderers.


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■ The agency reasonably expects to receive two or more bids.

Competitive proposals are typically used when (FAR 6.402(b)):

■ The award will be based at least in part on non-price factors and the agency wishes to conduct discussions, and potentially ask for revised proposals, from bidders.

■ Goods are to be provided or services performed outside the US.

B. Key Features

1. What Are the Key Features of Each Procedure? What Are the Applicable Time Limits?

Most federal procurements are widely advertised on the central website, www.fbo.gov, as well as on agencies' individual sites. Agencies have broad discretion in establishing the time limits and deadlines for submission of bids or proposals.

a. Sealed Bidding

Key features. Sealed bidding procedures are governed by FAR Part 14. Sealed bidding involves the following stages:

■ The publication of an invitation for bids.

■ Submission of bids by an established deadline.

■ Evaluation of bids following a public bid opening.

■ Award to the bidder whose bid is most advantageous to the government, based solely on price or price-related factors.

Time limits. Agencies have broad discretion over deadlines for submission of bids, but must publicise the invitation for bids a "sufficient time" before bid opening, to give bidders a reasonable opportunity to prepare and submit bids. There is no particular guidance or precedent as to what constitutes sufficient time for bidders to prepare bids; the length of time can be relatively short. If a bidder has a reasonable cause to believe that the time allowed is insufficient, the bidder should consider notifying the Contracting Officer and requesting time be extended.

b. Competitive Proposals Subject to Negotiations

Key features. The procedures for negotiated procurements based on competitive proposals vary greatly, both with respect to the source selection process as well as the degree of formality. In large, complex procurements it is not unusual for the agency to hold industry conferences and to publish draft proposals before issuing a final solicitation. Once a



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solicitation is issued and proposals are received, agencies may choose to limit the number of bidders it will consider for final award to a competitive range that only includes bidders it believes have a reasonable chance of success. An agency can then award the contract with or without discussions. If discussions are conducted, the agency may hold several rounds, and request one or more revised proposals based on discussions.

Time limits. The agency has great discretion in setting the time limits for submission of proposals, evaluation of proposals and conduct of any discussions, submission of revised proposals following discussions, and award.

C. Technical Specifications

1. Are There Any Requirements Concerning Technical Specifications of Tenders?

Agencies have reasonable discretion to establish technical specifications under tenders and are normally only required to show that there is a reasonable relationship between the specification and the agency's requirement for the supply or service being procured. Agencies must utilise commercial items rather than items that are subject to unique government specifications whenever a commercial item will satisfy their requirements (FAR Part 12). Agencies are also encouraged to use performance-based specifications (that is, specifications that state the salient characteristics for the supply or service) rather than detailed design or technical specifications (FAR 11.104). Agencies cannot draft technical specifications in a manner that unduly favours one manufacturer or service provider over others.

D. Alternative Bids

1. Are There Specific Rules in Relation to Alternative Bids?

Bidders must review individual solicitations carefully to determine whether alternative bids or offers are permitted. Even where alternative bids or tenders are permitted, bidders must often submit a bid that fully complies with the solicitation's requirements along with any alternative bid they may wish to submit.

E. Contract Award Criteria

1. What Are the Requirements Relating to Contract Award Criteria?

Contract evaluation and award criteria can vary significantly. Although agencies must consider price/cost and past performance of the bidder, they have significant discretion


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over the weight to give to these and other technical award criteria, provided that they can show that the criteria:

■ Do not unduly restrict competition.

■ Reasonably relate to the agency's requirements.

All award criteria must be set out in the solicitation, and the agency must amend the solicitation if it determines after the solicitation is issued that these criteria must be modified. An agency's failure to follow the established criteria, or the application of criteria not set out in the solicitation, is a common ground for bid protest.

F. Changes to an Existing Contract

1. Does an Extension or Amendment of an Existing Contract Require a New Procurement Procedure?

a. Extension of Contract

Many US government contracts include provisions that permit the extension of contracts without requiring a new procurement procedure.

For example, many contracts include FAR 52.217-8, which permits the government to extend the term of a contract for an option term (usually one year) at prices and other terms that are usually set at the time of contract award. The government is not obliged to exercise such options, and must provide advance notice to the contractor of its intent to exercise an option.

Many contracts also include FAR 52.217-9, which permits the government to extend contracts for necessary services or goods for a short period of time (no more than six months) at current prices to address an emergent need, usually when there is an unforeseen delay in the award of a new contract.

b. Amendment of Contract

Under FAR Part 43, the US government can make changes in contracts by issuing modifications (that is, amendments) that may add or reduce the amount of goods or services or affect other terms of the contract, provided any changes are within the general scope of the contract, as awarded.

In the event of a modification, the contractor may be entitled to an equitable adjustment in the contract's price, performance schedule, and other terms to the extent these are affected by a change. In the event of a dispute between the contractor and the government over the



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need or terms of an equitable adjustment, the contractor must usually file a formal claim and proceed with the contract performance (see Section V.A).

V. Enforcement

A. Who Can Bring a Claim for Non-Compliance with Procurement Legislation? What Are the Available Review Procedures? Are There Any Associated Statutes of Limitation?

1. Right to Bring a Claim

For an award claim (that is, a bid protest (see Section II.A)), only interested parties can file a protest. A bidder or potential bidder is usually considered to be an interested party if it has actually submitted a bid or proposal, or would be eligible to submit a bid or proposal if its protest were granted.

For a post-award claim, a contractor must first file a claim with the cognisant contracting officer under the Contract Disputes Act (41 U.S.C. §§ 7101–7109) (CDA). If the claim is for more than US$100,000, the contractor must certify the claim in the form prescribed by the CDA. The contracting officer must issue a final decision on the contractor's claim (or, for claims over US$100,000 provide an interim response with a date by which a decision will be issued) within 60 days. If the contractor is not satisfied with the contracting officer's final decision, or if the contracting officer fails to issue a timely decision, the contractor can use enforcement procedures (see Section V.A.2).

2. Enforcement Procedures

A bid protest can be filed either with the agency, before the GAO, or with the US Court of Federal Claims.

A post-award claim can be filed with either an agency Board of Contract Appeals (an administrative tribunal) or the US Court of Federal Claims.


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3. Statutes of Limitation

Bid protests before an agency or the GAO are subject to very strict deadline rules. Any protest of a term of a solicitation or other matter that is known to the bidder before the deadline for submission of proposals must be filed before this deadline. Any protest relating to an award must be filed within ten days of the award or the date the bidder learned of its grounds of protest (except in negotiated procurements under FAR Part 15 in which the agency must provide a debriefing, in which case the bidder must file its protest within ten days of the debriefing). Shorter deadlines apply if the bidder wishes to have the contract award delayed or performance suspended while the protest is handled.

Protests before the Court of Federal Claims against a term of a solicitation must also be filed before the deadline for submission of bids or proposals. Post-award protests to the Court of Federal Claims are subject to a six-year statute of limitations. However, the court may apply the doctrine of laches (that is, an equitable doctrine used where a claimant has delayed asserting its rights) to dismiss an otherwise timely protest where it appears the bidder has unduly delayed filing a protest.

A contract claim under the CDA must be filed with the contracting officer within six years of the date the contractor becomes aware, or should have become aware, of the basis for its claim. However, several FAR provisions require prompt notice of potential claims, and failure to comply with these requirements may result in loss of the right to claim. Following issuance of a final decision (or the contracting officer's failure to issue a timely final decision), contract claims must be filed with a Board of Contract Appeals within 90 days or with the Court of Federal Claims within 12 months.

VI. Reform

A. Are There Any Proposals for Reform of the Procurement Legislation? If So, When Are They Likely to Be Implemented?

There are a number of recent and pending proposals for reform of the public procurement process (see Section II.A).



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VII. About the Authors

A. Richard O Duvall Holland & Knight LLP

T +1 703 720 8620 F +1 703 720 8610 E [email protected] W www.hklaw.com

Qualified. Maryland, US, 1967; District of Columbia, US, 1971; Virginia, US, 1998

Areas of practice. Government contracts; litigation and dispute resolution; congressional investigations; False Claims Act defence; homeland security; Foreign Corrupt Practices Act; eminent domain and condemnation.

Recent transactions

■ Government contracts litigation and enforcement, and defence matters related to government contracts.

■ Working in defence of enforcement matters involving False Claims Act cases, suspension and debarment matters, investigations, procurement integrity matters, defence of audits, mandatory disclosure matters, advice and analysis of organisational conflicts of interests, and advice concerning compliance requirements.

■ Advised on bid protests, claims, and a wide variety of civil litigation.

B. Terry L Elling

Holland & Knight LLP


Qualified. Illinois, US, 1982; District of Columbia, US, 2003; Virginia, US, 2011

Areas of practice. Government contracts; litigation and dispute resolution.

Recent transactions


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■ Providing counsel and representation across the spectrum of government contract matters, including bid protests, claims, prime contractor-subcontractor disputes, small and disadvantaged contracting programmes, civil false claims, and transactional matters related to government contracts.

■ Working with government contractors on international issues, ensuring compliance with US export controls (ITAR, EAR and OFAC), the FCPA, and US Combatant Command acquisition requirements.

C. Timothy J Taylor

Holland & Knight LLP


Qualified. District of Columbia, US, 2011

Areas of practice. Government contracts; litigation and dispute resolution.

Recent transactions. Completed a one-year clerkship at the United States Court of Federal Claims, working on a variety of litigation involving the US government.

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