The False Claims Act case against Lance Armstrong lasted longer than his 7 year Tour de France win streak.

While the settlement of the False Claims Act case against Lance Armstrong has generated a press release, a quick online search didn’t produce a copy of the actual agreement. So I filed a Freedom of Information Act request and the next day the Department of Justice provided me a copy of the Lance Armstrong settlement agreement.  Thank you, Team DOJ!  Below is my take on that agreement and what it tells us about the case.

The settlement amount

The settlement agreement provides that Lance Armstrong will pay $5 million to the Government and $1.65 million to the relator Floyd Landis. To put this in context, the Postal Service had paid about $40 million to sponsor Team Postal. Trebling that amount, and throwing in civil penalties and investigative costs, bumps up potential damages to well over $100 million. The settlement amount was thus less than 7 cents on the dollar.

Damages was always the Government’s weakness – because there weren’t any. This should have been apparent at the outset from the contemporaneous USPS reports on how much publicity and new revenue the Team Postal sponsorship had generated. These reports were poppycock, of course, but they still posed insurmountable problems for the Government’s case.

Continue Reading What the Lance Armstrong Settlement Agreement Tells Us about the Government’s Case

David Williams Operations Update at PostCom June 2012Not your typical federal agency, the U.S. Postal Service is an “independent establishment” of the executive branch of the United States government. (39 U.S.C. § 201.)  As a result, many federal procurement rules do not apply to the Postal Service. Here are the major differences between USPS’s purchasing policies and those of other federal agencies:

  1. Not only is the Federal Acquisition Regulation (FAR) inapplicable, but the Postal Service’s own special purchasing rules were not issued as regulations. Instead, the agency considers its Supplying Principles and Practices manual to be “advisory” and non-binding.
  2. While the rest of the federal government is bound by the Competition in Contracting Act and must obtain “full and open competition,” the Postal Service has no such mandate. When it competes a requirement, it need only obtain “adequate competition whenever appropriate.”
  3. All purchases are conducted as negotiated procurements; there are no Invitation for Bids (IFBs). All proposals are evaluated on a “best value” basis.
  4. The Truth in Negotiation Act (TINA) does not apply to the Postal Service. The Postal Service, however, sometimes employs a contract clause that imposes a similar requirement. TINA’s statutory exceptions therefore do not apply, so the Postal Service could seek cost information when other agencies would be prohibited from doing so.
  5. There are no mandatory set-aside procurements for small, disadvantaged businesses, and USPS does not participate in the SBA’s Section 8(a) program. The Postal Service does actively seek diversity in its procurements, and tracks contract and subcontract awards to small, minority-owned, and women-owned businesses.
  6. Prequalification of contractors is regularly used by the Postal Service to limit competition to prequalified suppliers.
  7. Postal Service acquisitions are made with agency funds, and thus there are no legal restrictions on multi-year procurements or limitations imposed by Congressional funding.
  8. The Postal Service can seek title to intellectual property, not just unlimited rights. The Postal Service may also limit contractors from selling intellectual property developed for USPS to postal competitors.
  9. In the proposal evaluation and award process, there are no competitive range determinations or regulations governing Best and Final Offers (BAFOs). The term “discussions” has its ordinary dictionary meaning, and discussions may be held multiple times with one offeror and less frequently with other offerors. Revised proposals need not be submitted on a common cut-off date. Once a prospective awardee is selected, the Postal Service can conduct pre-award negotiations with the selected offeror.
  10. The GAO has no authority to consider protests involving Postal Service purchases. Instead, the Postal Service has its own internal “disagreement” process and a Supplier Disagreement Resolution Official (SDRO). The SDRO, however, is not independent of Supply Management and does not make any documentation available to the protester. Protests can also be brought before the U.S. Court of Federal Claims.