Federal Contracts Report™ delivers concise, authoritative reports covering the complete spectrum of issues affecting the federal acquisition of goods and services, to keep you abreast of policies...
By Ken Weckstein and Tammy Hopkins
Ken Weckstein is a Partner in the Government Contracts & Litigation Group of Brown Rudnick LLP. He represents clients on matters related to government contracts, complex civil litigation and trade secrets law.
Tammy Hopkins is Counsel at Brown Rudnick LLP and a member of the Government Contracts & Litigation Group. She represents clients in a wide variety of issues relating to the formation and administration of government contracts, as well as bid protests, contract disputes and litigation.
As most contractors are aware, the expiration of a federal government contract does not always line up with the start date for a new follow-on contract. Sometimes this is because contract award is delayed as a result of a protest. According to the Government Accountability Office (GAO), the delay many times is the result of multiple factors, including late completion of acquisition planning.1
Government agencies may use “bridge contracts” or remaining contract options to continue performance of contract work during the gap. The government must comply with the law when filling its needs during these gaps. That means that even though the incumbent contractor may have an inherent advantage, competitors should monitor how an agency intends to fill the need for “bridge” services and seek the opportunity to compete for the work in appropriate circumstances.
Recent GAO reports suggest that government agencies have room for improvement in how they go about filling gap or “bridge” requirements.2 In one report, the GAO found that the Army consistently used the Option to Extend Services contract clause improperly at one location.
Specifically, at Redstone Arsenal, Ala., the Army repeatedly extended contract performance for a period greater than the six months provided for in the Option to Extend Services clause. In another report, the GAO examined select agencies' use of bridge contracts. GAO found that in most cases, the use of bridge contracts increased the cost to the government for goods/services. That was not to say that bridge contracts do not serve an important function, but GAO concluded more could be done to track the use of the contracts.
Sometimes the use of bridge contracts is appropriate. The GAO recently denied a protest against the award of a sole-source bridge contract in American Systems Corporation, B-412501.2, et al., March 18, 2016, 2016 CPD 91. There, the agency decided to enter into a bridge contract while it undertook corrective action in response to a protest. The protester, American Systems, argued that the agency did not reasonably demonstrate that Booz Allen Hamilton was the only contractor that could satisfy the government's requirements. The GAO concluded that American Systems failed to demonstrate that the requirements feasibly could have been competed without interruption of services.
The Justification and Approval (J&A) explained that any contractor other than Booz Allen “would need to develop and implement a management plan to recruit, hire and train employees and to become knowledgeable of critical and complex [agency] requirements.” Id. American Systems apparently was unable to refute this finding to the satisfaction of the GAO.
American Systems also asserted that the urgency of the requirement was the result of the lack of advance planning by the agency. Id. As explained by the GAO: “Noncompetitive procedures may not justify a noncompetitive award on the basis of urgency where the agency's requirements have become urgent as a result of lack of advanced planning.” Id. (internal citations omitted). In finding that the urgency in American Systems was not the result of lack of advanced planning, the GAO contrasted the agency's actions in American Systems with those of the agency in Xtec, Inc., B-410778.3, Oct. 1, 2015, 2015 CPD 292.
In Xtec, the agency reportedly had documented the need for more detailed solicitation requirements for nearly four years before it attempted to award a sole-source contract because of urgency. The GAO concluded that the urgency in Xtec resulted from a lack of advance planning on the part of the agency and sustained the challenge to the sole-source award. In contrast, in American Systems, the GAO found that the Navy had “proactively sought to address” concerns with the request for proposals evaluation criteria — even though the Navy's efforts to do so may have introduced new problems.
The recent GAO reports and protest decision are instructive. The government must exercise contract options strictly by the terms of the existing option clause and award bridge contracts in accordance with the law.
Where a bridge contract is to be awarded on the basis of “unusual and compelling urgency,” the “urgency” cannot be caused by the lack of advance planning by the agency, and the government still is required to “request offers from as many potential sources as is practicable under the circumstances.” 3
Where there are no options remaining on a predecessor contract and the follow-on procurement is delayed, a competitor may be able to objectively demonstrate that it is ready, willing and able to fulfill the government's “bridge” contract needs. In that case, the offeror can so advise the agency and seek the opportunity to compete for any follow-on “bridge” contract. If the agency refuses to permit the offeror to compete for the bridge contract, the offeror may have the basis to protest.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)