Government Contracts Negligent Negotiations Claim “Related” to a Contract
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Tuesday, August 6, 2019

Negligent Negotiations Claim “Related” to a Contract

By Government Contracts Editorial Staff

The Armed Services Board of Contract Appeals denied a motion to dismiss a claim alleging the government engaged in negligent negotiations because the contractor alleged the claim “relate[d]” to a contract and thus was within the board’s Contract Disputes Act jurisdiction. The dispute arose from a contract for base operations services. The contractor alleged it was harmed by the government’s negligent negotiations, in violation of FAR 15.306(d). According to the contractor, the source selection panel determined that its proposal had “significantly low” staffing in four annexes of the bid but informed the contractor that its overall staffing was “within an acceptable range.” The government countered that the contractor’s claim challenged the government’s evaluation of the contractor’s bid during the procurement process and was not related to contract performance.

Not Disappointed Bidder. However, the contractor was not a disappointed bidder, but instead was awarded the contract. The contractor relied on the Court of Appeals for the Federal Circuit’s ruling in LaBarge Products, Inc. v. West (40 CCF ¶76,733), which held the contractor had stated a valid CDA claim “related” to the contract because it was a government contractor, rather than a disappointed bidder, and because it alleged a violation of FAR FAR 15.610(d) during formation of the contract. According to the court, FAR 15.610(d) was “plainly for the benefit of the contractor.” Here, the contractor was an actual government contractor asserting a claim relating to its contract. Also, FAR 15.306(d), “Exchanges with offerors after establishment of the competitive range,” which requires the contracting officer to discuss with each offeror “deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond,” was intended to benefit the contractor. (Chugach Federal Solutions, Inc., ASBCA, ¶95,814)

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