Term Paper on "Government Agency Making a Contracting Decision"

Term Paper 7 pages (1815 words) Sources: 8 Style: APA

[EXCERPT] . . . .

government agency making a contracting decision, the contracting officer must ensure that all of the rules and regulations of the Federal Acquisition Regulations (FAR)are satisfied. The purpose of FAR is to safeguard the integrity of the procurement process through both civil and criminal actions. By following the procedure laid out by FAR, the contracting officer is able to make what is known as a "responsibility determination."

FAR operates by stating specific requirements that a contractor looking to sell to the government must follow. FAR also states the terms upon which the government is to obtain ownership, title and control of the goods or services being purchased, along with providing rules pertaining to specifications, payments, conduct and actions as they relate to the solicitation of bids to contract or for payments owed.

FAR is codified under U.S. Code of Federal Regulations Title 48 and was issued pursuant to the Office of Federal Procurement Policy Act of 1974. The terms of FAR pertain to nearly every government agency except for, for example, the United States Postal Service. FAR is jointly maintained by the Administrator of General Services, the Secretary of Defense and the National Aeronautics and Space Administration.

The stated purpose of FAR is to "provide uniform policies and procedures for acquisition." (FAR 1.101). To do this, according to FAR 1.102(b) FAR looks to:

Satisfy customer's needs in terms of cost, quality, and timeliness;

Minimize administrative operating costs;

Conduct business with integrity, fairness and openness; and Fulfill other public policy objectives.

To meet these objectives, whenever a government agency issues a contract or a proposal for contracts, it must include a list of FAR provisions that are required to enter into the contract. If a party is to be awarded a contract, they must either comply with all the provisions listed or show that they are capable of complying with them. Based on this information, the Contracting Officer makes what is known as a responsibility determination. However, this determination is anything but simple, as there are numerous legal and practical implications that go along with the decision. Thus, in order to fully understand how a responsibility determination is to be made under FAR 9.104-1 and 9.402, one must look at case law for decisions pertaining to standards of review of challenges and the necessary elements of a legally compliant responsibility determination.

All challenges to a responsibility determination are to be brought before the Court of Federal Claims on appeal from an initial administrative decision. In a bid protest case, hereinafter referred to as a "challenge," the Court of Federal Claims is to treat the contractors bid fairly and honestly. In conducting a review, the following guiding principles apply:

breach occurs in such situations if the contracting agency acts in an arbitrary and capricious (irrational or unreasonable) manner in rejecting the bid. Such determinations that allow the court to enjoin the agency and interfere with the procurement process, should only be in "extremely limited circumstances."

The standard of proof to be used in determining the legitimacy of a challenge is "a high one."

If the court finds any reasonable grounds for the agency's action, the court should not take any negative action against the agency even if not all of the regulations were properly administered.

In making a challenge, the challenger must show that the agency's decision of nonresponsibility had "no rational basis" or that in making its decision, the agency "violated an applicable procurement statute or regulation in a manner prejudicial to the protesting bidder." Stapp Towing, Inc. v. U.S., 34 Fed. Cl. 300 (U.S. Court of Fed. Claims 1995).

In the Stapp Towing case, the above-mentioned rules were applied to an agency non-responsibility determination for the contracted business done by Defendant. According to the facts, the decision stemmed from Defendant's company having frequent spills of jet fuel while doing government contracted fuel transportation work. The agency at hand, the Small Business Administration Certificate of Competency Review Committee issued a non-responsibility ruling as to Plaintiff's bid. Defendant's bid was the lowest received. However, during the pre-award survey, the agency determined "unsatisfactory results" and thus rejected Plaintiff's bid. Plaintiff challenged the decision of the Agency arguing that it was not based on all the documentation and evidence submitted. However, the Court of Federal Review held that "supplementation of the administrative record is unhelpful...(and that no relevant information originally submitted to SBA-DC was ignored or improperly evaluated." Thus, Plaintiff's challenge is ruled not to meet the established burden of proof.

In another case involving a challenge to an administrative non-responsibility decision, the opposite was found. In Trilon Educational Corporation v. The United States, 578 F.2d 1356 (U.S. Ct. Cl. 1978), the Court upheld a business' challenge and awarded them damages in order to compensate them for their loss suffered by the agency's inappropriate denial of their bid based on a non-responsibility ruling. Unlike the previously discussed case, in this case the Court's decision is largely based on the finding that a contract already existed between the business and the agency and that the non-responsibility ruling made after the contractual agreement was a violation of a contract.

In this case, the parties entered into a naval procurement contract but, six weeks later, the agency canceled the award on the grounds of non-responsibility of the contractor. Plaintiff argues this was a breach of contract. Defendant argues that any finding of non-responsibility under FAR makes a contract void. Although this court properly states that "in evaluating the responsibility of a potential contractor...the regulations invest the contracting officer a considerable degree of discretion in arriving at a determination" this court hinged its decision on the fact that the decision came after the contract award was made. Thus, instead of applying the standards of the FAR, the Court instead applied traditional rules found under the law of contracts. From this decision, one can understand that a challenge will be upheld when the challenger was awarded a contract, entered into a formal contract with the agency, and only later had the contract withdrawn due to a non-responsibility decision. In other words, in order to be valid, a contracting officer must make a non-responsibility decision prior to the awarding of a contract.

In News Printing Company, Inc. v. The United States, 46 Fed. Cl. 740 (U.S. Claims 2000), the court upheld the Defendant's motion for summary judgment against the Plaintiff's challenge to a denial of a government bid. In this particular case, the bid request required a pre-award test, where the agency would visit the business' site to inspect the business' capacity to produce the necessary patents. The FAR further required a written quality control program and information on how billing data will be captured. According to the FAR requirements, "In the event compliance with the specifications cannot be demonstrated by the prospective contractor they shall be declared non-responsible."

In their challenge to the agency's declaration of non-responsibility, the Plaintiff contents that the three previously mentioned FAR provisions constitute "definitive responsibility criteria" that was not applied to all bidders. However, in making its decision, the court defined the legal issue as being "whether or not the court can review the alleged deficiencies because they relate to definitive responsibility requirements." Without such an ability, the Court lacks jurisdiction. The answer is based on whether the pre-award determination of a bidder's capability is a responsibility or a responsiveness inquiry. Responsibility refers to the ability of a bidder to "properly perform contract work." Responsiveness, on the other hand, is "a bid's conformity with, and commitment to meet, the material terms of an invitation for bids." Further, responsibility decisions are divided into special and general. According to the law, "general responsibility determinations will not be overturned, absent allegations of fraud or bad faith." Since the requirements being challenged are general responsibility issues, the challenger must show either fraud or bad faith. In the case at hand, Plaintiff fails to meet this burden of proof and thus the defendant's motion for summary judgment is granted.

Likewise, in the Matter of Universal Marine and Industrial Services, Inc. The business' challenge to a finding of responsibility for an awardee was not allowed as the challenger failed to show that "the contracting officer failed to consider available relevant information" or that there was a "violation of statute or regulation." In other words, according to this decision, when a company that fails to get the agency's award challenges the decision to award the bid to another company, the challenger's burden of proof includes showing either:

That the contracting officer did not consider all available evidence, or That the contracting officer's decision violated a specific statute or regulation.

In the 2004 decision of in the matter of ACS Government Services, Inc., another decision involving the challenge to the awarding of a contract to another business, Plaintiff argues that the awardee misrepresented information in their bid and that this misrepresentation materially affected the evaluation of the awardee's bid. In this case, the court upheld the challenge, stating that on review… READ MORE

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