In This Issue

Federal Government

The Direction of Board Practice as the CDA Hits Middle Age: An Upbeat View

From the perspective of this member of the Armed Services Board of Contract Appeals (ASBCA), the practice before the Boards of Contract Appeals is thriving as the Contract Disputes Act (CDA)1 hits middle age. To push a metaphor that I hope is not too tired: at forty, the practice has grown more solid and is of more substance. Though it is, perhaps, a little less flexible than it was in its youth, it has found ways to work around those limitations. For the Boards, forty is the new [insert optimum age here], and our most interesting days are ahead of us.

Military

The Glenn Defense Marine Asia Problem: The Role of Ethics in Procurement Reform

Three overarching principles form the foundation of the U.S. system of government procurement: integrity, transparency, and competition.2 Integrity arguably, forms the cornerstone because “[b]ribery, favouritism, or unethical behavior ha[s] no place in a successful procurement system.”3 Transparency and competition help ensure integrity by “bringing in the sunlight, which serves as a disinfectant” to corruption.4 The contracting techniques utilized by a government agency affect the degree of transparency5 and competition in a given contract.6 But agencies also employ oversight mechanisms to guard against corruption.

National Security

Midlife Crisis: An Assessment of New and Proposed Changes to the Government Accountability Office Bid Protest Function

A bid protest is a legal challenge relating to the solicitation or award of a contract by the federal government.1 Bid protests may be pursued with the procuring agency, the Government Accountability Office (GAO), or the Court of Federal Claims (COFC), but most protests are brought at the GAO.2 The Competition in Contracting Act of 1984 (CICA)3 requires the GAO to render decisions on bid protests within 100 days4 and automatically suspends award and performance of a protested contract until the protest is resolved,5 which is commonly referred to as “CICA stay.”6 The GAO procurement law control group, which decides bid protests, as approximately thirty attorneys.7 Each year, the GAO’s procurement law group reviews on the order of a couple thousand bid protests, and publishes between 500 and 600 decisions,8 resolving virtually all protests within the statutory 100-day time frame.9

Real Estate

Recipe for Success: Why USDA’s Increased Participation in the HUBZone Program Is a Win for People Living in Poverty

The Fiscal Year (FY) 2018 White House Budget made the Trump Administration’s priorities for the future of the country very clear: it increased investment in defense and national security, called for dramatic spending reductions, and promised a more streamlined, efficient federal government.1 At the same time though, the budget proposal slashed funding for programs that largely benefit the 40.6 million Americans living in poverty.2 For example, it called for a twenty-one percent cut to the U.S. Department of Agriculture (USDA), the federal agency tasked with, among other things, administering food assistance programs for the nation’s most vulnerable populations like children and the elderly.3 It also advocated deep cuts to the Supplemental Nutrition Assistance Program (SNAP), which assisted forty-two million Americans in 2017,4 and the Meals on Wheels program, which serves food to 2.4 million seniors per year.5

Business & Corporate

The Amazon-ization of Federal Procurement : Using the Uniform Commercial Code to Moderate an Inevitable Innovation

The “Amazon effect” is coming to Washington, D.C.1 As Amazon and other e-commerce giants continue to disrupt the retail market, both online and in traditional brick-and-mortar stores, the commercial sector has undergone tremendous rapid technological advancement for nearly two decades.2 For the American consumer, digital marketplaces expand consumer choice, deliver product value, and offer near-instant gratification.3 In the first quarter of 2018 alone, the Census Bureau estimated U.S. retail e-commerce sales to be $123.7 billion.4 Yet despite spending over $50 billion annually5 to procure commercial goods, the government has largely been left sitting on the sidelines.6 With an e-commerce provision included in the recently enacted National Defense Authorization Act (NDAA) for Fiscal Year 2018 (FY18),7 Congress signaled its readiness to similarly disrupt the federal acquisition regime.

State Government

Medicare Part D: Buying Prescription Drugs Wholesale but Paying Retail

Across the country, patients with severe illnesses are delaying treatment, cutting pills in half, or skipping pills altogether because they cannot afford the cost of medication.1 When John Krahne was diagnosed with lung cancer in December 2016, he faced an impossible decision: pay over $6,000 in copayments immediately and start treatment now or wait until January and pay only $3,000.2 Mr. Krahne chose to wait.3 For millions of Americans, even those with health insurance, the cost to treat many illnesses is untenable, easily creeping up to tens of thousands of dollars in out-of-pocket expenses.4 Reflecting on his decision to stall treatment, Mr. Krahne said, “We hope it doesn’t hurt my chance of cure.”5 His story is not unique.

Real Estate

Bring Out the Bearcat !1 Reprioritizing the Transfer of DoD Property Under the 1033 Program

When asked in 2009 about the two grenade launchers the West Springfield, Massachusetts, police department added to its arsenal, then-Police Chief Thomas Burke explained, “The bad guys have no rules. We have all the rules. Don’t worry about us, we’re trained.”2 West Springfield, a sleepy industrial city of less than 30,000 people, acquired the launchers through the federal Law Enforcement Support Office (LESO). LESO, also known as the “1033 program,” in reference to the section of the National Defense Authorization Act (NDAA) of 1997 that created it, authorizes the Secretary of Defense to transfer Department of Defense (DoD) excess personal property to state and federal agencies.3 The two M79 grenade launchers acquired by West Springfield in the late 1990s were intended to launch M651 military tear gas cartridges.4 But the two launchers sat gathering dust until 2016,5 when the department returned them to the federal government.6 Speaking to reporters in 2016, Police Captain Mark Spyek remarked: “We will not miss the launchers,” and “we will not replace the launchers.”7

Continuing Legal Education

Suspension & Proposed Debarment in Federal Government Contracting: A Call for Pre-Exclusion Notice & Opportunity to Respond

Advocacy Resources Corporation (ARC) was a nonprofit organization that employed people with disabilities to fulfill government contracts, including a contract with the U.S. Department of Agriculture (USDA) to fortify vegetable oil with vitamin A.2 In 2006, ARC was on the verge of bankruptcy, struggling to obtain nonprofit funding.3 Jeff Callahan — who owned a management company overseeing several businesses performing government contracts — bought ARC and personally guaranteed the funds that ARC needed to keep its operations going.4 In 2009, a USDA auditor caught a single discrepancy amid multiple shipments totaling hundreds of thousands of dollars.5 The auditor reported the discrepancy to the USDA Office of Inspector General who executed a search warrant of ARC’s facilities without any prior communication with the company.6 In response to the search, ARC retained counsel, conducted an internal investigation, preserved records, and fully cooperated with the government’s investigation.7 ARC’s internal investigation revealed that a single rogue employee was responsible for the invoice falsification.8 The employee resigned and admitted wrongdoing to both the government and ARC’s counsel.9 ARC continued shipping the government vegetable oil for almost two years until, in 2011, the USDA suspended Callahan, his management company, and ARC by posting on a public website — the predecessor to the System for Award Management (SAM.gov).10 The USDA then notified Callahan and the other parties of their suspension.11 The basis for the suspension was that Callahan and his management company “knew or should have known” of the ARC employee’s misconduct.12

Federal Government

Drone Cruise Enterprises, Inc. v. United States Air Force - Brief for the Appellee

The COFC erred when it found the Government’s decision to terminate DCE’s contract for default was within the scope of review. COFC incorrectly applied the Fulford doctrine because, in both Fulford and similar cases, the relevant issue was the lack of monetary interest at the point of termination. Fulford Mfg. Co. v. United States, ASBCA No. 2143, et al., 1955 WL 808, at 15. Here, however, the Government’s decision to terminate the contract cost DCE either slightly less or significantly more than the amount in controversy sought for reprocurement, as described further below.

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