COFC: All task orders are not contracts

Much has been made, in govconland at least, of the Supreme Court’s findings in Kingdomware, in which the court found that the Veterans Benefits, Health Care, and Information Technology Act of 2006 required the application of the “rule of two” to GSA Schedule orders. The act, which applies only to the VA, requires the department to set aside contracts for veteran-owned businesses when two or more could perform at fair and reasonable prices (the so-called rule of two).

In Great Southern Engineering v. U.S. and K.S. Ware & Associates, the plaintiff, GSE, argues a NASA solicitation that considers an IDIQ contract and its task orders as one “project” for purposes of past performance violates the Supremes’ decision that task orders are contracts.

Not so fast, says the Court of Federal Claims. What makes a Schedule order a contract? “A Federal Supply Schedule order creates obligations to pay for and deliver goods between the agency and the contractor.” Generally, task orders under other IDIQs create the same obligation. However, the Supreme Court “held that the agency’s interpretation did not warrant deference because a statute, not an agency decision, was the subject of interpretation.”

“The protest currently before the Court does not involve an FSS order and NASA is not subject to the Act at issue in Kingdomware” (the Veterans-First legislation). “The interpretative issue in this case involves a solicitation, not a statutory provision….In short, Kingdomware is not dispositive” and “does not stand for the general proposition that all task orders are considered contracts as a matter of law.”

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Jason Bakke
Proposal Manager
Censeo Consulting Group (Censeo)
Washington DC
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Replies

  1. Lots of legalese there…what does all that mean?

    I think it means “watch this space.” The small-business community has been gunning for the Schedules’ preference-program exclusions and smells the blood in the water (I forget the name of the gentlemen with the fitness-equipment company who zealously protested on set-aside grounds, but he must be very happy). Things have certainly changed since a few years ago when set-asides were integrated into part 8, and I think eventually we will see the requirement for set-asides below $150k and the Rule of Two applied to Schedules government-wide (meaning increased set-asides). I don’t think it’s outside the realm of possibility it will be a statutory remedy.

    The Court makes the point that GSE was the incumbent, which netted it zero points on that fifth evaluation criterion.
    I’m surprised this didn’t draw a preaward protest. For an incumbent firm, or one with relevant NASA quals, it may have made sense.

    ——————————
    Jason Bakke
    Proposal Manager
    Censeo Consulting Group (Censeo)
    Washington DC
    ————————————————————————-
    Original Message:
    Sent: 11-08-2016 08:11
    From: Raj Sharma
    Subject: COFC: All task orders are not contracts

    Lots of legalese there…what does all that mean Jason?  What is the bottom line?

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    Raj Sharma
    Public Spend Forum
    Washington DC
    ————————————————————————-
    Original Message:
    Sent: 11-07-2016 11:28
    From: Jason Bakke
    Subject: COFC: All task orders are not contracts

    Much has been made, in govconland at least, of the Supreme Court’s findings in Kingdomware, in which the court found that the Veterans Benefits, Health Care, and Information Technology Act of 2006 required the application of the “rule of two” to GSA Schedule orders. The act, which applies only to the VA, requires the department to set aside contracts for veteran-owned businesses when two or more could perform at fair and reasonable prices (the so-called rule of two).

    In Great Southern Engineering v. U.S. and K.S. Ware & Associates, the plaintiff, GSE, argues a NASA solicitation that considers an IDIQ contract and its task orders as one “project” for purposes of past performance violates the Supremes’ decision that task orders are contracts.

    Not so fast, says the Court of Federal Claims. What makes a Schedule order a contract? “A Federal Supply Schedule order creates obligations to pay for and deliver goods between the agency and the contractor.” Generally, task orders under other IDIQs create the same obligation. However, the Supreme Court “held that the agency’s interpretation did not warrant deference because a statute, not an agency decision, was the subject of interpretation.”

    “The protest currently before the Court does not involve an FSS order and NASA is not subject to the Act at issue in Kingdomware” (the Veterans-First legislation). “The interpretative issue in this case involves a solicitation, not a statutory provision….In short, Kingdomware is not dispositive” and “does not stand for the general proposition that all task orders are considered contracts as a matter of law.”

    ——————————
    Jason Bakke
    Proposal Manager
    Censeo Consulting Group (Censeo)
    Washington DC
    ——————————

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  2. Interesting stuff, Jason. When the Kingdomware decision was handed down, I saw a lot of discussion not only about how the VA was going to address it—though they’d already begun drafting guidance in the case the Court ruled against them—but what the ripple effect outside of the VA would be. Like you said, the Rule of Two applies only to the VA, so I think a lot of people wondered if there was precedent set for other agencies.

    Looks like this is (one of?) the first to test that question, and the Court of Federal Claims answered fairly definitively. 

    This may be a naïve question, but reading through that decision, another point jumped out at me, one of the five criteria used in the 100-point scale for the evaluation:

    5. Previous NASA contracts within the last ten years (i.e., maximum points if firm has not had any NASA contracts within the last 10 years) (5 points);

    The Court makes the point that GSE was the incumbent, which netted it zero points on that fifth evaluation criterion. So even if it had aced the past performance, it still wouldn’t have beaten its competitor’s score. 

    That strikes me as odd. Is it just a matter of wanting to broaden the supply base that a company’s score would be raised for never having worked with the agency before? A way to guard against incumbent bias? Is that common?

    Curious to hear anyone’s insights on that.

    ——————————
    Jonathan Messinger
    Public Spend Forum
    Washington DC
    ————————————————————————-
    Original Message:
    Sent: 11-07-2016 11:28
    From: Jason Bakke
    Subject: COFC: All task orders are not contracts

    Much has been made, in govconland at least, of the Supreme Court’s findings in Kingdomware, in which the court found that the Veterans Benefits, Health Care, and Information Technology Act of 2006 required the application of the “rule of two” to GSA Schedule orders. The act, which applies only to the VA, requires the department to set aside contracts for veteran-owned businesses when two or more could perform at fair and reasonable prices (the so-called rule of two).

    In Great Southern Engineering v. U.S. and K.S. Ware & Associates, the plaintiff, GSE, argues a NASA solicitation that considers an IDIQ contract and its task orders as one “project” for purposes of past performance violates the Supremes’ decision that task orders are contracts.

    Not so fast, says the Court of Federal Claims. What makes a Schedule order a contract? “A Federal Supply Schedule order creates obligations to pay for and deliver goods between the agency and the contractor.” Generally, task orders under other IDIQs create the same obligation. However, the Supreme Court “held that the agency’s interpretation did not warrant deference because a statute, not an agency decision, was the subject of interpretation.”

    “The protest currently before the Court does not involve an FSS order and NASA is not subject to the Act at issue in Kingdomware” (the Veterans-First legislation). “The interpretative issue in this case involves a solicitation, not a statutory provision….In short, Kingdomware is not dispositive” and “does not stand for the general proposition that all task orders are considered contracts as a matter of law.”

    ——————————
    Jason Bakke
    Proposal Manager
    Censeo Consulting Group (Censeo)
    Washington DC
    ——————————

    0
  3. Lots of legalese there…what does all that mean Jason?  What is the bottom line?

    ——————————
    Raj Sharma
    Public Spend Forum
    Washington DC
    ————————————————————————-
    Original Message:
    Sent: 11-07-2016 11:28
    From: Jason Bakke
    Subject: COFC: All task orders are not contracts

    Much has been made, in govconland at least, of the Supreme Court’s findings in Kingdomware, in which the court found that the Veterans Benefits, Health Care, and Information Technology Act of 2006 required the application of the “rule of two” to GSA Schedule orders. The act, which applies only to the VA, requires the department to set aside contracts for veteran-owned businesses when two or more could perform at fair and reasonable prices (the so-called rule of two).

    In Great Southern Engineering v. U.S. and K.S. Ware & Associates, the plaintiff, GSE, argues a NASA solicitation that considers an IDIQ contract and its task orders as one “project” for purposes of past performance violates the Supremes’ decision that task orders are contracts.

    Not so fast, says the Court of Federal Claims. What makes a Schedule order a contract? “A Federal Supply Schedule order creates obligations to pay for and deliver goods between the agency and the contractor.” Generally, task orders under other IDIQs create the same obligation. However, the Supreme Court “held that the agency’s interpretation did not warrant deference because a statute, not an agency decision, was the subject of interpretation.”

    “The protest currently before the Court does not involve an FSS order and NASA is not subject to the Act at issue in Kingdomware” (the Veterans-First legislation). “The interpretative issue in this case involves a solicitation, not a statutory provision….In short, Kingdomware is not dispositive” and “does not stand for the general proposition that all task orders are considered contracts as a matter of law.”

    ——————————
    Jason Bakke
    Proposal Manager
    Censeo Consulting Group (Censeo)
    Washington DC
    ——————————

    0
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