Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives.
Supreme Court Update
The Supreme Court again weighed in on the False Claims Act in U.S. ex rel. Polansky v. Executive Health Resources, Inc., deciding that the government retains broad dismissal authority for False Claims Act actions, even if the government declines to intervene.
Protest Update
Aspire Therapy Services & Consultants, Inc. v. United States, Fed. Cl. No. 23-253 (June 13, 2023)
- An agency eliminated Aspire from a competition based on a proposal spreadsheet error that created a discrepancy within the proposal documents.
- Court of Federal Claims Judge Davis found that the FAR clarification process could have been used to fix the specific error at issue, and that it was an abuse of discretion for the agency to eliminate the proposal without seeking clarification.
- Judge Davis ordered the agency to restore the protester back to the competition and permit clarification of the error.
It is notoriously difficult for a protester to win an argument that an agency should have permitted clarifications or engaged in discussions, particularly at the Government Accountability Office, leading to the impression that such decisions are effectively non-reviewable. In recent years, however, several Court of Federal Claims judges have shown a willingness to scrutinize agency decisions to forego discussions, particularly for DoD procurements valued above $100 million where the DFARS describes discussions as the expected course. Through the Aspire decision, Judge Davis confirmed that the court will meaningfully review an agency’s decision to eliminate a proposal based on minor errors, rather than engaging in the clarification process. The evidence that while agencies certainly have broad discretion when it comes to discussions and clarifications, that discretion is not immune from review.
Claims Cases
- The Armed Services Board of Contract Appeals held that a design-build contractor on a Navy laboratory project was not entitled to reimbursement for differing site conditions because the contractor failed to show that on-site conditions differed from what the government represented in contract documents.
- The contractor sought compensation under a Type 1 differing site condition theory, which is premised on the government misrepresenting conditions at the site and the contractor reasonably relying upon the misrepresentation to its detriment.
- In this case, the soil was too weak to support construction and the contractor incurred almost $200,000 in additional costs to remediate site damage after heavy rains turned the site into a “muddy mess.”
- The ASBCA rejected the contractor’s arguments, concluding that the Navy had in the RFP’s boring logs sufficiently explained soil conditions. On this point, the Board underscored that the Navy’s borings were not a Navy guarantee the entire project site would consist of the subsurface conditions in each boring sample. Rather, the borings were a baseline for a reasonable contractor to operate from.
- Indeed, the contractor’s own contractually required geotechnical expert report warned of exactly the kinds of problems encountered at the site: soft or unsuitable soil in places that would need to be identified, removed, and replaced.
- Finally, the ASBCA concluded that even where the soil was weaker than what the boring logs reflected, the weakness was caused by weather conditions or by the contractor’s own work. The Board found compelling daily reports reflecting ample rain, poor jobsite maintenance, and local flooding caused by water main breaks that the contractor was responsible for maintaining.
The decision reminds construction contractors that to recover for a Type 1 differing site conditions, they must identify clear evidence that the encountered physical conditions were not foreseeable based on representations in the contract and related documents.
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