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Federal Contracts Report™
Reproduced with permission from Federal Contracts Report, 100 FCR 100, 07/22/2013. Copyright ஽ 2013 by TheBureau of National Affairs, Inc. (800-372-1033) http://www.bna.com View From Brown Rudnick: Welcome to the 21st Century—Electronic Submissionof Proposals and the FAR’s ‘Late is Late’ Rule BY KENNETH B. WECKSTEIN AND MICHAEL D.
last century—are applied to modern computer technol-ogy.’’ Judge Allegra feigned surprise that the same agency that would encourage offerors to submit propos- How do federal agencies deal with 21st Century als electronically would turn around and spring ‘‘tech- technology when applying rules written in the last nological traps’’ on its contracting partners.
century? How do courts apply those old rules? In Insight Systems, two bidders who took up USAID What is the impact on contractors? These questions all on its offer to submit proposals electronically found too frequently arise in the context of electronic submis- themselves in the wrong century. The offerors submit- sion of proposals, as noted by at least one judge at the ted their proposals by email, and even though their emails had been sent by them and received and ac- On May 6, 2013, the Court of Federal Claims issued a cepted by USAID’s email server prior to the submission decision resolving two bid protest cases filed by con- deadline, the emails were not forwarded to the next tractors whose proposals had been rejected as late by server in USAID’s mail system before that deadline. So, the contracting officer rejected the proposals as un- (‘‘USAID’’). See Insight Systems Corp. v. U.S., Nos. 12- 863C and 12-883C (May 6, 2013). That decision by USAID’s lawyers argued that ‘‘late is late’’ and re- Judge Allegra forces federal agencies to act like it’s the fused to apply the ‘‘government control’’ exception to 21st Century when applying exceptions to the ‘‘late is that rule. USAID maintained that if a solicitation speci- late’’ rule with regard to electronic submission of pro- fied that proposals should be submitted to a particular email account, a proposal must be received in that cus- The court framed the issue as follows: ‘‘Coming be- todian’s inbox for the offer to be timely received. Judge fore this court, with disturbing frequency, are bid pro- Allegra pointed to the absurdity of USAID’s position tests that find defendant straining to defend agency de- that ‘‘a proposal is late, even if it is successfully and it- cisions to reject, as purportedly late, proposals submit- eratively processed through several agency mail serv- ted by contractors electronically.’’ The judge explained: ers, if the last of those servers delays the delivery of the ‘‘These cases somewhat painfully illustrate the thorny email to the recipient’s inbox.’’ Or, as USAID contended issues that can arise when the outmoded provisions in at oral argument, ‘‘a proposal would be late if . . . the the Federal Acquisition Regulation (FAR) governing the email was not distributed to the recipient’s inbox be- delivery of electronic proposals—which date back to the cause he or she had turned off their computer beforethe deadline and did not reboot until the deadlinepassed.’’ Under USAID’s logic, if the contracting offi- Kenneth Weckstein is a partner in Brown cer’s ‘‘email program experienced a loss of network Rudnick’s Government Contracts & Litigation connectivity, an internal programming error, a failure Group. He represents clients on matters of the associated hardware, or one of a host of other related to government contracts, complex civil problems’’ that could affect the program’s ability to re- litigation, and trade secrets law. Michael ceive email, the proposal would have to be rejected as Maloney is counsel in Brown Rudnick’s Con- tracts & Litigation Group. He has represented What about the ‘‘government control’’ exception clients in matters ranging from defense found at FAR § 52.212-1(f)(2)(i), which states the ‘‘late against multimillion dollar claims for breach is late’’ rule does not apply if ‘‘there is acceptable evi- of contract to pursuit of claims for misap- dence to establish that it was received at the govern- ment installation designated for receipt of offers andwas under the government’s control prior to the time COPYRIGHT ஽ 2013 BY THE BUREAU OF NATIONAL AFFAIRS, INC.
set for receipt of offers?’’ Judge Allegra rejected be interpreted in a way that is consistent with the prin- USAID’s argument that this exception could not apply ciples of general commercial law and model rules.’’ Judge Allegra’s decision applies common sense. If an transmissions cannot be ‘received’ at a government ‘in- agency invites offerors to submit proposals electroni- stallation’ so as to trigger the exception.’’ The court had cally, it should be prepared to receive the proposals no difficulty with the dictionary definitions of those electronically. And, if the agency puts up a roadblock to terms and concluded that ‘‘much like a mail room or receipt of the electronic submission, it bears responsi- other depository in a building, to which paper propos- bility for the submission being late. Here, it was quite als can be delivered—a server controlled by the govern- obvious that the email submission was in the control of ment most certainly can be an ‘installation’ that re- the government before the time for receipt of proposals.
Why then did USAID refuse to accept the proposal? The court also criticized USAID’s position for the im- Maybe the answer is that there was no clear direction pact its interpretation would have on the FAR, leaving in the FAR and the agency did not want competing of- the FAR’s ‘‘rules out of harmony with the commercial ferors to complain about the acceptance of a late pro- rules generally applied to electronic transmissions.’’ posal. As Judge Allegra noted, the rules concerning The court specifically pointed to the Uniform Electronic timely submission of proposals and the delivery of elec- Transactions Act, see Uniform Law Comm’n, Uniform tronic submissions ‘‘date back to the last century.’’ It Elec. Transactions Act § 15b (1999). The judge rea- looks like the time has come for a rewrite. Welcome to soned that courts have long held that the FAR ‘‘should COPYRIGHT ஽ 2013 BY THE BUREAU OF NATIONAL AFFAIRS, INC.

Source: http://brownrudnick.com/uploads/1077/doc/View_from_Brown_Rudnick-Federal_Contracts_Report.pdf

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