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March 22, 2021 article

But It Wasn’t Our Fault: Addressing Government-Caused Late Bids

Sean Dowsing

Being in house counsel for a federal contractor gave me the opportunity to do something that is usually problem-free but 1% of the time is the project’s life or death: deliver government bids/proposals. Admittedly, it was not the best use of my time to deliver a few of them by hand and electronically. But this mundane task let me see the process firsthand. 

This article focuses on that 1% of the time when the contractor's bid on a federal procurement is "late" and the offeror is not 100% at fault. There is a body of law that simultaneously clarifies and confuses the issue of handling two-party fault late bids. Two common situations are:

  1. Emailed submissions get caught in servers and either never make it to the recipient or get there late (files are too large, emails get bounced back, etc.); and
  2. Agencies' mailrooms delay delivery.
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    Let us assume the bid was late and both the offeror and federal government are at fault in some way. There will be some finger pointing and, once that has settled, the offeror must answer the question "Now what?" That is when counsel gets the phone call. Your client knows the time to protest is short. Depending on how the offeror delivered the bid, they may have spent days working with their IT department for electronic submissions or trying to get in touch with the courier who delivered it. When counsel gets the call, they must hit the ground running and at least know where to look. The rest of this article will focus on the scenarios above and address the case law, the questions counsel should ask, and the evidence they should gather. 

    Governing Federal Acquisition Regulations (FAR)

    There are identical FAR sections that govern late bids (52.214-7 for bids, 52.214-23 for two-step proposals, etc.). Generally, the FAR sections establish a harsh "late-is-late" rule unless there is evidence that the government received the bid at the installation designated for the receipt of offers and it was under the government's control before the due date/time. This exception is known as the Government Control Exception.

    What constitutes a government installation designated for the receipt and government control are questions answered by several GSA and Court of Federal Claims cases.

    Late Bid Submitted by a Courier

    The Government Accountability Office (GAO) in Matter of Cla-Val Company re-affirmed that commercial delivery records, like a courier's delivery receipt, do not establish when an offeror delivered a bid or proposal. The offeror used FedEx to submit its proposal to the Navy. The FedEx delivery receipt showed that the Navy's mailroom received the proposal before the deadline. The Navy had a conflicted record of when they logged in the proposal showing it was untimely. The GAO issued a harsh ruling stating delivery records alone do not establish the time of receipt but left the door open that, if the FedEx carrier provided a declaration, that the combination of the declaration and delivery record could establish the delivery time.

    Matter of Cla-Val Company, while seemingly an unfair ruling, provides strategic considerations to implement in the bid process. There could be a delay between the drop-off time and the time the government logs or timestamps the bid. For instance, I have delivered bids to mailrooms where the mail staff was unavailable, and another government employee takes the bid. Some tips to implement to win the protest are:

    1. Protest with a declaration from the person who delivered the bid stating they delivered the bid at the date and time on the receipt. This requires using a courier service where a call to customer service can get you in touch with the driver.
    2. Use the Amazon approach and take a photo of the bid being delivered. The photo should be timestamped, and photo's metadata will include the time the delivery person took it.
    3. If your client regularly hand delivers bids, consider a delivery log for couriers to fill out as soon as they deliver the bid that includes a brief description of the drop off. This is good evidence to overcome a hearsay evidentiary issue.
    4. Two people should deliver the bid whenever possible. In defending the protest, the government will have at least one declaration saying they did not receive the bid. The offeror should have two declarations to combat this.
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      Government Does Not Receive Emailed Bid on Time

      In today's world, we expect emails to arrive within seconds of being sent. That is until we remember emails go through multiple servers with virus protection software and file size limits.Email is neither foolproof nor instant.

      When the government receives an email late, the GAO and Court of Federal Claims (COFC) diverge on how they apply the FAR. The GAO in the Matter of Advanced Decisions Vectors, Inc. held that an offeror's showing they sent the email before the deadline does not make it timely because the contracting specialist still did not receive the email before the deadline. The GAO in that instance did not seem to evaluate when, or if, the email was delayed in any government servers. The GAO also emphasized that the offeror made no effort to follow-up to confirm the email's receipt and that in certain limited circumstances, when there has been no substantial evaluation of proposals, late proposals may be considered.

      The GAO held in the Matter of Spanish Solutions Language Services, LLC, using an analogous FAR provision for commercial services, the primary question for the Government Control Exception is when the contract specialist received the proposal; that is when the government received it. The GAO held that even though the offeror emailed the bid before the deadline, it was still not "received" under the Government Control Exception until the contract specialist had the email in their inbox.

      The COFC's approach differs from the GAO's approach. In Fed. Acquisition Servs. Team, LLC v. United States, the offeror submitted its proposal via email before the deadline. The email made it to the government servers before the deadline, but, because of security checks, it could not be forwarded to the contract specialist. The COFC held that "when an emailed proposal is received by the first server designated by the government to receive emails directed to the address contained in the solicitation, it has been received at the Government installation designated for the receipt of offers."  The COFC also held that by performing a security check and trying to forward the email, the government exercised control. This case takes a markedly different approach to the Government Control Exception than the GAO used. Under these rules, if the offeror can show the government received the email on one of its servers, it can win the protest.

      The divergence of case law inform both bid-submission strategy and protest-venue choice. Some tips to best position the protest are:

      1. Confirm via email and phone with the contract specialist after emailing the bid and be prepared to draft a declaration of your steps;
      2. Once you recognize a bid is late, pull the internet headers for the email, which will show some information about when government servers received the email;
      3. Specifically request the government provide the internet headers of their received email. You can request this as part of an agency report, too;
      4. Have an IT person review the headers and provide a declaration stating the government's servers received the email before the deadline.                            
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        With the amount of contracting the federal government does, there is a fair amount of two-party late bids. While this article does not address every pertinent question of a protest, like what venues have jurisdiction over what types of contracts, it should give you some idea how to handle the substantive issues involved when the government receives a bid late. The protest time frames are tight, and it is best to know in a first conversation with your client the basics of the FAR and how the GAO and COFC have applied it.

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Sean Dowsing

Manning & Kass, Ellrod, Ramirez, Trester Irvine, CA, Division 13 (Government Construction)