The Construction Advantage, Department of Defense Enhances Debrief Opportunities for Unsuccessful Bids & Choosing a Court in the Contract: The Importance of Forum Selection
Department of Defense Enhances Debrief Opportunities for Unsuccessful Bids
On May 20, 2021, the U.S. Department of Defense proposed a rule that, if promulgated, will give unsuccessful bidders on federal defense contracts the right to receive enhanced information on why their bid was unsuccessful as well as additional opportunity to ask questions of the Department of Defense regarding the selection criteria and determination.
Contractors bidding on federal contracts will be familiar with the federal acquisition regulations system (referred to as “FARS”), which are the procurement regulations that govern federal contracting. Contractors bidding on Department of Defense contracts will be familiar with an additional set of regulations known as the defense federal acquisition regulations system (referred to as “DFARS”). FAR 15.506 permits a bidder (defined as an “Offeror” in federal contracting parlance) to request a debriefing from the contracting officer upon receipt of a notice that a contract has been awarded. Prior to 2018, this debriefing process obligated the government to provide a limited amount of information concerning the awarding agency’s review of the submitted bids and did not, importantly, provide access to the awarding agency’s source selection document. The source selection document is the agency’s written record of the agency’s application of the bid package evaluation criteria to the various offers. The proposed rule will greatly expand the information that contractors are entitled to during this debriefing process by giving them access to this document.
The proposed rule is the result of a provision enacted into law pursuant to the 2018 National Defense Authorization Act (NDAA) and referenced within the NDAA as Section 818, Enhanced Post-Award Debriefing Rights. Section 818 made two primary changes to the debriefing process described above.
First, Section 818 of the NDAA amended the U.S. Code to provide an opportunity for a disappointed offeror to submit additional questions related to the debriefing that were not otherwise provided for and further obligates the awarding agency to respond to such questions within five days. Additionally, the U.S. Code was changed such that the limited window to file a protest after the conclusion of a debriefing and to invoke an automatic stay (i.e. pause) in the contracting process will not begin to run until the agency has responded to all questions. Although it was anticipated that the Department of Defense would quickly propose rules implementing these question-and-answer periods, the Department of Defense instead put such time periods into effect almost immediately in 2018 by issuance of Class Deviation 2018-000011. Accordingly, contractors have enjoyed a greater ability to ask questions prior to filing a protest as a result of the NDAA since 2018.
Second, Section 818 of the NDAA provided disappointed offerors the opportunity to request a copy of the awarding agency’s written source selection award determination with certain redactions. This opportunity is available for any offerors on contracts in excess of $10,000,000. However, despite being passed pursuant to the NDAA in 2018, no directives have been issued or rules proposed to give effect to this opportunity until this most recent rule. The rule – proposed as DFAR 212.506 – is open for comment for sixty days and will take effect following resolution of any comments. Offerors will then have a codified right to access to the source selection award determination document upon the rule taking effect.
The Department of Defense’s proposed rule is a welcome development. Not only are robust post-award debriefings a valuable opportunity for all contractors to uncover lessons learned, the opportunity for, and amount of disclosure during, a debriefing can play a significant role in the need to file a bid protest. Where significant information is made available, a disappointed bidder can quickly determine whether a bid protest is justified while where there is little to no information made available, a disappointed bidder may protest simply to preserve its rights.
If you are a contractor questioning or looking to take greater advantage of your debriefing rights, contact our Construction Practice Group in ME or New Hampshire for answers.
Choosing a Court in the Contract: The Importance of Forum Selection
Before entering into a contract, parties should give serious thought to where they want to litigate if a breach occurs. Forum selection clauses in contracts are often small, but can have a big impact on the course of litigation. Little is more frustrating than seeking payment for a project by filing a lawsuit, only to be told by the court that the case must be litigated in another time zone.
This is exactly what happened to the plaintiff in Atlas Glass & Mirror, Inc. v. Tri-North Builders, Inc., when Atlas Glass & Mirror brought a claim against Tri-North Builders in the District of Massachusetts. Atlas entered into a subcontract with Tri-North, the general contractor, to provide window installation services at a hotel in Framingham, Massachusetts. Atlas performed the work as well as extra work requested by Tri-North, but filed suit contending that Tri-North owed a balance of over $88,000.00.
Unfortunately for Atlas, the subcontract contained a forum selection clause stating that “Forum and venue for any arbitration or litigation shall be Dane County, Wisconsin, and [Atlas] consents to the jurisdiction of the courts of Wisconsin.” Tri-North moved to dismiss on the basis that the forum selection clause required any litigation to occur in Wisconsin, and the District Court agreed, dismissing the case.
Atlas appealed the decision to the First Circuit, arguing that an earlier version of the subcontract had been accepted by Tri-Glass, and the earlier version did not include the forum selection clause. Atlas also argued that the forum selection clause should not be enforced because litigating in Wisconsin would be significantly more expensive and onerous. The First Circuit rejected these arguments and upheld the dismissal, noting that Atlas could have avoided some of the additional costs by filing suit in Wisconsin rather than Massachusetts. If Atlas refiles its lawsuit, it must refile in Dane County, Wisconsin.
The lesson is an important one: forum selection clauses may not be the meat and potatoes of the contract, but they can cause unforeseen problems in the event of a dispute over payments. The forum selection clause can apply to mediation, arbitration, or other forms of alternative dispute resolution, as well as litigation. Parties to a construction contract should carefully consider the ramifications of forum selection clauses, including the extra costs associated with the chosen forum.
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