On March 10, 2015, the procurement world felt a groundswell beneath its feet. The United States Court of Appeals for the Federal Circuit in CGI Federal, Inc. V. United States 2014-5143 ruled that FAR 12 takes precedence when there is inconsistency in other FAR parts, particular to 8.4. FAR 12 governs the acquisition of commercial items, whereas FAR 8.4 governs the Federal Supply Schedule.

The Case

In the above referenced case, CGI filed a protest to the COFC stating that a 2014 RFQ bid under the GSA schedule violated FAR 12.302 (c) that states “the Contracting Officer shall not tailor any clause or otherwise include any additional terms or conditions in a solicitation or contract for commercial items in a manner that is inconsistent with customary commercial practice for the item being acquired.”

The client agency wanted to change some payment terms in the RFQ request and it was determined that FAR 12 disallows the revision as the new payment terms were inconsistent with customary commercial practice.

How will this ruling affect Government Contractors?

Your day-to-day operations are unlikely to be affected by this ruling.  However, future GSA RFQs may be scrutinized to comply with both FAR 8.4 and 12, and protests may see a slight increase.

Tangentially, this ruling also extends the definition of “Interested Party.”  The previous understanding of Interested Party was that you were an actual or prospective bidder and that you had a direct economic interest.  This case asserts that because CGI submitted a pre-award protest and the protest was not denied prior to the quote submission deadline, they did not have adequate time to respond to the bid and therefore remain a prospective bidder. Likewise, they were diligent in filing a second protest when the initial denial was received.

To demonstrate direct economic interest, CGI had to show “a non-trivial competitive injury which can be redressed by judicial relief.” CGI stated that the RFQ payment terms were illegal and therefore CGI filed a protest rather than a bid; this demonstrated non-trivial and competitive injury.

The takeaway from this litigation is that if you wish to protest, remember to be timely, responsive, and diligent.

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