Courts often look at a party’s conduct for help in interpreting ambiguous contract terms. But this concept has broader application. Actions and positions that one side takes before a dispute arises may actually override a clear contract requirement. The Civilian Board of Contract Appeals’ recent decision in TKC Aerospace, Inc. v. Department of Homeland Security, CBCA No. 2119 (Jan. 31, 2012) [pdf] illustrates the point. The Board’s opinion identifies the contractor’s response to a problem during performance as the key factor in resolving the case.

The Court of Federal Claims has issued an important decision establishing that offerors will be held accountable for making inaccurate representations in proposals. According to the Court’s decision in GTA Containers, Inc. v. United States, No. 11-606C (Fed. Cl. Feb. 22, 2012) [pdf], proof that an offeror made a misrepresentation in its proposal is sufficient to sustain a bait-and-switch protest if the agency relied on the misrepresentation.

As part of the much-publicized $26 billion mortgage foreclosure settlement between the five largest mortgage lenders, 49 states attorneys general, and the United States, Bank of America has agreed to pay $1 billion to resolve False Claims Act allegations relating to its mortgage lending practices. According to the press release issued by United States Attorney for the Eastern District of New York Loretta E. Lynch, federal prosecutors had been investigating Bank of America since 2009.

As part of the SBA’s 8(a) Business Development Program, participants are permitted to form mentor-protégé relationships and to establish joint venture (JV) entities eligible for award of 8(a) set aside contracts. Before a mentor-protégé JV can be eligible for set-aside awards, its JV Agreement has to be approved by the SBA Office of Business Development. Approval is conditioned upon compliance with applicable regulations, including 13 C.F.R. § 124.513. After award of a set-aside contract, other offerors have the option of filing a size protest with the SBA challenging the awardee’s status as small.

In Size Appeal of Trident, LLC, SBA No. SIZ-5315 (Jan. 24, 2012) [pdf], the SBA Office of Hearings and Appeals (OHA) held that an SBA area office has no authority to review the substance of an 8(a) mentor-protégé JV agreement as part of a size appeal if it has already been approved by the SBA Office of Business Development and determined to be in compliance with applicable regulations. In that case, Trident appealed the area office’s determination that it was “other than small” and accordingly ineligible for award of an 8(a) set-aside for weather observation and forecasting services.

Husch Blackwell’s Postal Service Contracting practice group today released its list of the top 10 U.S. Postal Service suppliers for fiscal year 2011. For the ninth straight year FedEx claimed the No. 1 spot. Another air carrier, Kalitta Air, Inc., which transports military mail bound for Iraq and Afghanistan, claimed the second spot. The list is compiled by David P. Hendel, a partner in the firm who has served clients’ postal contracting needs for 30 years. 

Postal Service contracting highlights in 2011, and a look ahead to 2012, will be the focus of a complimentary webinar presented by Husch Blackwell on Tuesday, February 7, 2012 at 1 p.m. EST.

Postal contractors continue to be impacted by USPS cost-cutting efforts, reductions in requirements, and a renewed emphasis on obtaining competition. These pressures, …

The FAR Cost Principles and federal cost reimbursement contracts provide that only reasonable allowable costs are recoverable, including costs for executive compensation. A January 18, 2012 decision of the Armed Services Board of Contract Appeals rejected a government challenge to the reasonableness of compensation one contractor paid to executives and rejected the DCAA’s methodology for determining the reasonableness of the compensation. See J.F. Taylor, Inc., ASBCA Nos. 56105, 56322 (Jan. 18, 2012) [pdf].

Contributed by Ike Skelton and Russell Orban of Husch Blackwell’s Government Affairs Practice Group

The United States Department of Defense is the world’s biggest purchaser of goods and services, spending some $381 billion on contracts in FY 2011. But serious changes are on the way. The Iraq war is over and the Obama Administration is planning to withdraw from Afghanistan in the near future. Last summer’s hard-fought budget agreement requires $487 billion in cuts to the defense budget over the next 10 years. The President will soon recommend a defense budget that shaves $51 billion from its previous 2013 projections.

New mandates on how evaluation criteria must be stated in Postal Service solicitations are required by the recently revised USPS Supplying Principles and Practices (SPP) manual. The SPP revisions were issued on December 12, 2011. The full text of the new SPP is available by clicking here. In addition to these changes, the Postal Service has introduced a new “Simplified Purchasing” method. Simplified Purchasing will be more streamlined than the traditional method, will commonly use oral solicitations, and may be used on procurements valued at up to $1 million.