Contractors must meet strict deadlines to ensure that their bid or proposal is timely submitted to be eligible to compete for government contracts. The Federal Acquisition Regulation (“FAR”) places the burden on contractors to timely submit their bids or proposals as specified in the Solicitation. FAR 14.304(b)(1); FAR 15.208. This obligation is strictly construed and is referred to as the “late-is-late” rule because if a contractor’s bid or proposal is received by the government after the exact time specified in the Solicitation, even by a minute, it is considered “late” or untimely and can be rejected with few exceptions.
The FAR provides three (3) very narrow exceptions to the “late-is-late” rule. The first exception applies where a contractor can show that its electronic bid or proposal was received electronically at the initial point of entry to the government by 5:00 p.m., at least one working day before the submission deadline (i.e., the “electronic commerce” exception). The second exception applies where a contractor can show that its bid or proposal was received at the government installation and was under government control before the proposal submission deadline (i.e., the “government control” exception). The third exception applies where the government receives only one bid or proposal. FAR § 52.212-1(f)(2)(i)(A)-(C); FAR § 52.215-1(c)(3)(ii)(A)(1)-(3).
However, not all situations fall neatly into those exceptions. What happens when a contractor timely submits their electronic proposal (i.e., the bid or proposal is received by the government before the Solicitation deadline) but the submission is bounced from the government server because it exceeds the maximum file size? This was the precise issue facing the Court of Federal Claims (“COFC”) in eSimplicity, Inc. v. United States, No. 22-543C (Fed. Cl. Oct. 13, 2022).
In eSimplicity, the Solicitation required proposals be submitted by e-mail no later than April 25, 2022, at 5:00 p.m. EST and included formatting instructions, providing that proposals be divided into volumes, one of which was subject to a 30-page limit, but did not mention a maximum file size. eSimplicity e-mailed its proposal before the deadline on April 25 and its e-mail application confirmed delivery to the government server. The electronic submission included three files totaling 23 MB. eSimplicity did not receive a confirmation of receipt or a delivery failure notification. After inquiring about the proposal status, eSimplicity learned that its proposal did not arrive in the recipient’s email account. The Defense Information Systems Agency (“DISA”) performed a forensic investigation, which revealed that eSimplicity’s proposal had been received by a DISA-managed server and queued for delivery but had been bounced back by the server because it exceeded the maximum file size.
The Department of the Navy rejected eSimplicity’s proposal as “late” because it was not received at least one working day before the submission deadline and thus did not fall into the “electronic commerce” exception. eSimplicity protested to the COFC, arguing the Navy applied unstated evaluation criteria by effectively rejecting eSimplicity’s proposal based on its file size, which was not a stated requirement or limitation included in the Solicitation.
The COFC agreed with eSimplicity, finding the Navy’s rejection of eSimplicity’s proposal based on file size was arbitrary and capricious. The COFC rejected the Navy’s arguments, finding that even if eSimplicity should have been aware that the government email servers had some theoretical limit on the file sizes, nothing in the record showed eSimplicity was on notice of the file size limitation.
The COFC further held that, contrary to the interpretation at the Government Accountability Office (“GAO”), the Navy should have considered the government control exception. The COFC explained that GAO interprets the “government control exception” as inapplicable to e-mail proposals because that “would essentially render the first exception [i.e., the electronic commerce exception] a nullity.” See e.g., Sea Box, Inc., B-291056, Oct. 31, 2002, 2002 CPD ¶ 181 at 3; Versa Integrated Sols., Inc., B-420530, Apr. 13, 2022 at 4; People, Technology & Processes, LLC, B-419385 et al., Feb. 2, 2021 at 7-9. In sharp contrast, the COFC has ruled, unlike the GAO, that applying the government control exception to electronic submissions would not make the electronic commerce exception superfluous. See e.g.,Watterson Constr. Co. v. United States, 98 Fed. Cl. 84, 93-96 (2011); Federal Acquisition Services Team, LLC v. United States, 124 Fed. Cl. 690, 703 (2016); Insight Sys. Corp. v. United States, 110 Fed. Cl. 564, 568 (2013). These cases highlight the issues that can arise when outdated FAR provisions governing the delivery of electronic proposals, some dating back to the last century, are applied to everchanging and advancing modern computer technology.
The overarching key takeaway here is that the COFC’s interpretation of the “government control exception” is more contractor-friendly and attempts to reconcile the intent of the FAR provisions with modern technology.
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