Government Contracts Update
News for the Week of July 9, 2018

Hot Topic:
FAC 2005-99's Interim Rules Implement NDAA Requirements
The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have issued Federal Acquisition Circular 2005-99, which contains two interim rules amending the Federal Acquisition Regulation.

The rule adds new FAR Subpart 4.20, Prohibition on Contracting for Hardware, Software, and Services Developed or Provided by Kaspersky Lab, consisting of FAR 4.2001, Definitions, FAR 4.2002, Prohibition, and FAR 4.2003, Notification. FAR 4.2004 prescribes the associated contract clause at FAR 52.204-23.

The interim rule in FAR Case 2017-018 implements section 1290 of the NDAA FY 2017 (PL 114-328), which addresses measures against persons and entities involved in activities that violate arms control treaties or agreements with the United States.

Pursuant to FAR 9.109-2, contracting officers may not award, renew, or extend a contract for the procurement of products or services with an entity identified as excluded in the System for Award Management database for involvement in activities that violate U.S. arms control treaties or agreements. FAR 9.109-3 sets out the statutory exception from the contracting prohibition for the procurement of products or services along a major route of supply to a zone of active combat or a major contingency operation.

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Regulatory News:
Mentor-Protégé Program Clauses Removed from EPAAR
A direct final rule amends the Environmental Protection Agency Acquisition Regulation by removing two contract clauses and their related prescriptions. The rule removes EPAAR 1552.219-70, Mentor-Protégé Program, EPAAR 1552.219-71, Procedures for Participation in the EPA Mentor-Protégé Program, and the prescriptions for the clauses at EPAAR 1519.203.
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Proposed FAR Rule Modifies CCPD Price Competition Exception
A proposed rule would amend the Federal Acquisition Regulation at FAR 15.403-1(c)(1) to provide a separate standard for adequate price competition for the Department of Defense, National Aeronautics and Space Administration, and the Coast Guard. The rule would limit the exception for price based on adequate price competition to circumstances in which there is adequate competition that results in at least two or more responsive and viable competing bids.
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Legal News:
Government Ordered to Return Provisional Incentive Fee
The Court of Federal Claims granted a contractor partial summary judgment on a claim for declaratory relief because, when considered together, the contract's provisions unambiguously provided for provisional incentive fees to remain in the contractor's custody until construction was completed. The court also found it troubling that the CO used the denial of the contractor's claim for refund to gain leverage over the contractor "through baseless retaliation." The court ordered the government to return the $21.6 million to the contractor until the project was completed. (CB&I AREVA MOX Services, LLC v. U.S., FedCl, 62 CCF ¶81,410)
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Protester Unfairly Excluded from Discussions Leading to FSS Award
Corrective action addressing evaluation errors in the award of a Federal Supply Schedule task order was patently unfair, according to the Court of Federal Claims, because the government engaged in discussions that permitted only the awardee the opportunity to improve the competitiveness of its proposal. It was clear that the government's communications with the awardee were not clarifications, because the awardee was given the opportunity to explain how, despite a noncompliant line item, its proposal met the request for quotations' requirements and to materially revise its transition plans. (Centerra Group, LLC v. U.S., et al., FedCl, 62 CCF ¶81,408)
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Protester Waived Challenge to MOU Process
The Court of Federal Claims dismissed for lack of jurisdiction a protest challenging the government's refusal to enter a memorandum of understanding with the protester because, by waiting until the government informed it that the government would not enter any new MOUs, the protester waived its right to object to the MOU process. Relying on a government official's representation it would receive an MOU to compete with other hotels for off-base lodging for visitors to Nellis Air Force Base in Las Vegas, the protester purchased a hotel and renovated it to meet the MOU requirements, only to be informed the base was "not adding any new facilities to [its] MOU listing at [that] time." (Couture Hotel Corporate v. U.S., FedCl, 62 CCF ¶81,415)
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Experience Evaluation Used Undisclosed Evaluation Factors
An evaluation of proposals for subsistence prime vendor support was unreasonable because the government applied unstated evaluation factors and failed to disclose its use of the criteria in discussions. Further, the discussions were improper. The Comptroller General recommended the government amend the RFP to include its experience requirements, accept revised proposals, reevaluate the proposals, and make a new source selection decision. (EFS Ebrex SARL, 33 CGEN ¶115,992)
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Major Contract Awards:
V-22 Aircraft — $4.1 Billion
Bell Boeing JPO, Amarillo, Texas, is awarded $4,191,533,822 for a modification to convert the previously awarded V-22 tiltrotor aircraft advance acquisition contract to a fixed-price-incentive-fee multiyear contract. This contract provides for the manufacture and delivery of 39 CMV-22B aircraft for the Navy; 34 MV-22B aircraft for the Marine Corps; 1 CV-22B for the Air Force; and 4 MV-22B aircraft for the government of Japan. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.
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Training — $2.4 Billion
Eight contractors will compete for each order of the $2,400,000,000 firm-fixed-price contract to provide and manage training and training assistance for military and civilian related subjects in a contingency operations, provide planning, and support for Army, joint, and security cooperation exercises and perform operations and maintenance sustainment functions for training aids, devices, and ranges. U.S. Army Contracting Command, Orlando, Florida, is the contracting activity.
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F/A-18 Aircraft — $1.5 Billion
The Boeing Co., St. Louis, Missouri, is awarded a $1,504,995,240 fixed-price-incentive-firm contract that provides for the production and delivery of 22 F/A-18E and six F/A-18F Super Hornets in support of the government of Kuwait. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.
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F-16 Aircraft — $1.1 Billion
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas; and Lockheed Martin, Greenville, South Carolina, have been awarded a $1,124,545,002 fixed-price-incentive-firm contract for the production of 16 F-16 V Block 70 aircraft. This contract involves 100 percent foreign military sales to the Kingdom of Bahrain. Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, Ohio, is the contracting activity (FA8615-18-C-6058).
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About this Newsletter

From Wolters Kluwer Legal & Regulatory's Government Contracts editors, here are summaries of the important recent developments in this practice area. Complete coverage of these issues, and more, appears in Government Contracts Reports, the Government Contracts Reporter, and related CCH products.

Complimentary Whitepaper:
Summary of various agency government contracts-related rules issued since January 1, 2018

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Federal Acquisition Regulation (FAR) & Department of Defense FAR Supplement (DFARS), July, 2018 Combo