Government Contracts Monitor
Update: The Court Refuses to Follow the Government Down the Rabbit Hole
February 25, 2013
As previously reported here, the Court of Federal Claims heard a bid protest in which the solicitation stated the deadline for proposal submission was 2:00 pm Central Time but the GSA’s e-Buy website, which was programmed to refuse proposals after 2:00 pm Eastern Time, rejected as untimely the protestor’s proposal submitted at 1:03 pm Central Time. Sound unnecessarily complicated? Judge Allegra thought so too and, thus, relied heavily on Lewis Carroll’s Alice’s Adventures in Wonderland. As the Judge explained, “Defendant, regrettably, has injected an Alice-in-Wonderland quality to this preaward bid protest case.” Ultimately, the Judge held, “Unlike someone on good terms with the Mad Hatter’s Time, the officials at the VA could not whisper a hint to Time and make the clock on this procurement go round, in a twinkling, to a time different than that listed in the solicitation. There is nothing on this side of the looking glass to support the VA’s rejection of plaintiff’s offer. It is time, via an injunction, for defendant to return to reality.” Laboratory Corp. of America v. United States, No. 12-622C (Fed. Cl. Jan. 14, 2013).
First, the Government argued that when the Contracting Officer (“CO”) amended the solicitation to require proposal submission through the e-Buy website, the CO incorporated as the new proposal submission deadline, the time provided on the website. However, the Government had no record of what the website looked like because the e-Buy website automatically purges all documentation after the close of the bidding process. Furthermore, the CO confirmed that he always believed the deadline was the time listed in the solicitation and did not know about the website discrepancy until the protestor brought it to his attention when the protestor tried to submit its bid.
Second, the Government argued that the proposal deadline discrepancy was a patent ambiguity which the protestor should have raised before the close of the bidding process. Despite the CO’s admission that the protestor called him before the solicitation’s stated deadline, the Government argued the protestor had waived its objections by not bringing a protest to the Court before the proposal deadline.
And third, the Government argued that, if the website deadline did not replace the solicitation deadline, then it was intended to be a second deadline. Thus, the offerors were required to submit their proposals on the website by 2:00 pm Eastern Time but the proposals did not have to reach the CO until 2:00 pm Central Time. Judge Allegra noted, “If defendant is right, then the VA’s contracting officer set up a second deadline via an amendment that made the due date listed in the solicitation really no deadline at all.” To this, Judge Allegra noted, “’Well! I’ve often seen a cat without a grin,’ thought Alice, ‘but a grin without a cat! It’s the most curious thing I ever saw in all my life!’”
The Judge found the Government’s arguments to be “worthy of the Mad Hatter,” but noted, “Fortunately, unlike the Mad Hatter’s unsolvable riddle for Alice (‘Why is a raven like a writing desk?’), the solution to the defendant’s contorted arguments is readily found in the Federal Acquisition Regulations and binding precedents.” The Judge rejected all of the Government’s arguments that the website time was a new or additional deadline holding, “The court cannot conceive why it ought to construe the amendment in a way that its language does not admit in order to give effect to an intent that the contracting officer never had.” The Judge also rejected the Government’s waiver argument noting (i) there was no patent ambiguity in the solicitation which unambiguously stated the deadline was 2:00 pm Central Time and (ii) even if it was ambiguous, it was enough that the protestor called the CO and notified him about the problem as soon as it was discovered. Therefore, the Judge found that the VA improperly rejected the protestor’s proposal as untimely.
Interestingly, the Court also addressed the issue of spoliation due to the e-Buy’s website automatic purge of the solicitation information. Spoliation is the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.” Spoliation sanctions are appropriate when the party having control over the evidence had an obligation to preserve it and the evidence was destroyed with a “culpable state of mind.” The Court found that it’s within the Court’s inherent authority to impose spoliation sanctions against the Government when the two-part test is met. Here, the Court found that the Government had an obligation to preserve all evidence relevant to a possible protest under the FAR and the Government’s failure to preserve the website information amounts to “negligence” or “culpable carelessness.” However, instead of imposing monetary sanctions, the Court determined that the best sanction for this situation is to prevent the Government from relying on any secondary evidence regarding what the protestor saw on the website.
In addition to conjuring up childhood memories of Alice and her adventures in Wonderland, this decision includes important precedent on the issues of waiver and spoliation. The decision establishes that contacting the CO may be sufficient to prevent waiving a protest to the terms of a solicitation. Additionally, this decision will likely have an effect on the Government’s increasing reliance on proposal submission websites and use of electronic archives. And finally, this decision will hopefully prevent the Government from ever again making legal arguments “worthy of the Mad Hatter” – at least in front of Judge Allegera.
Katie Calogero is the attorney responsible for the content of this article.