*** REGULATORY UPDATE: On November 12, 2024, the General Services Administration, Department of Defense, and National Aeronautics and Space Administration issued an interim rule, which went into effect the same day. The interim rule amended the Federal Acquisition Regulation to clarify System of Award Management (SAM) pre-award registration requirements. The rule revises the solicitation provision at FAR 52.204-7 to clarify that while an offeror must be registered in SAM at the time of offer submission and at the time of contract award, the offeror need not be registered in SAM at every moment in between those two points. Accordingly, parts of the Government Accountability Office and the Court of Federal Claims decisions that levy a requirement for offerors to maintain a continuous, uninterrupted, SAM registration during the entirety of the pre-award process are no longer applicable.***
The Federal Acquisition Regulation (FAR) requires procuring agencies to include various mandatory provisions in solicitations to protect the government’s contractual and policy interests. For instance, the government must include the provision at FAR 52.204-7 “System for Award Management” in all solicitations unless specific exceptions apply. In recent bid protest decisions, the Government Accountability Office (GAO) has held that when the government fails to include a mandatory provision in a solicitation, it may not then rely on that provision to exclude prospective offerors from competition. Additionally, there is no requirement that mandatory FAR provisions must be incorporated into a solicitation by operation of law when they have been omitted. Consequently, the effects of such exclusion on the government’s award decision may be somewhat unpredictable. Notably, despite the general rule that government contracts be interpreted in accordance with the included terms, conditions, and clauses, and unless a deviation has been obtained – certain mandatory clauses (e.g. termination for convenience clause) are read into federal contracts whether or not expressly included in the contract under the Christian Doctrine.
In B-422389.2, a decision issued on August 21, 2024, the GAO sustained a post-award bid protest finding that the procuring agency unreasonably excluded the protestor from a task order award citing a temporary lapse in the protestor’s System for Award Management (SAM) registration because the solicitation did not include the mandatory provision at FAR 52.204-7. The provision provides in pertinent part that “an offeror is required to be registered in SAM when submitting an offer or quotation, and shall continue to be registered until time of award, during performance, and through final payment of any contract, basic agreement, basic ordering agreement, or blanket purchasing agreement resulting from this solicitation.”
The solicitation underlying the protest in B-422389.2, was issued by the United States Immigration and Customs Enforcement (ICE), for the acquisition of on-site medical staffing services for residents and detainees at five ICE facilities in Texas. The post-award protest challenged the issuance of the FAR § 16.505 task order exceeding $10 M, competed between holders of ICE’s Health Service Corps Medical Staffing Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract. Importantly, the task order’s fair opportunity proposal request (FOPR) did not include the mandatory provision at FAR 52.204-7, which was included in the original IDIQ solicitation, but not incorporated in the eventual IDIQ contract. The FOPR stated that all IDIQ terms, conditions, and attachments were in full force and effect, as applicable.
The protestor was initially awarded the task order but that award was rescinded in response to an earlier protest. In taking corrective action and terminating the protestor’s award for the government’s convenience, the agency had concluded that the protestor was ineligible for award as its SAM registration had lapsed during the evaluation period and remained inactive at the time proposals were submitted. Subsequent to that determination, ICE conducted a new source selection based on a best-value tradeoff in accordance with the factors outlined in the FOPR by excluding the protestor. Once ICE issued the task order to another holder of the IDIQ contract, the protestor challenged ICE’s decision to exclude its proposal from the competition as unreasonable, contrary to the FOPR, and the relevant FAR requirements concerning SAM registration. Specifically, the protestor argued that since the FOPR did not include FAR clause 52.204-7, and did not otherwise notify potential offerors that an active SAM registration was a prerequisite for award, the protestor’s removal from the competition due to a lapse in its SAM registration during the evaluation period, constituted an unreasonable application of unstated eligibility criteria contrary to the stated terms of the FOPR. Additionally, the protestor argued that since the governing IDIQ contract included the FAR clause 52.204-13 (but not FAR 52.204-7 – which was only included in the IDIQ solicitation), the temporary lapse in its SAM registration was a matter of contract administration concerning noncompliance with the IDIQ’s contractual obligations.
In sustaining the protest, the GAO initially noted that while the solicitation for the governing IDIQ included the provision at FAR 52.204-7, the protestor’s IDIQ contract did not. Additionally, the FOPR also did not contain the FAR provision 52.204-7. Therefore, ICE was not justified to exclude the protestor from the competition for the FOPR based on FAR 52.204-7. The GAO noted that the government failed to provide support for its position that FAR 52.204-7 should be read into the FOPR even though the government failed to expressly include the provision in the FOPR’s solicitation. The GAO cited its relatively recent decision in VivSoft Techs., LLC, B-421561.15, B-421561.17, Apr. 11, 2024, 2024 CPD ¶ 94 at 8 n.12, in reminding the agency that there is no requirement that mandatory provisions must be incorporated into solicitation by operation of law when they have been omitted.
Furthermore, the GAO clarified that even though the protestor’s IDIQ contract included the clause at FAR 52.204-13, nothing in the contract notified the protestor that it would be ineligible to compete for task orders if its SAM registration were to lapse during the term of the IDIQ. Therefore, even though the FOPR stated that all terms and conditions of the IDIQ remained in full effect, nothing in the FOPR or its governing IDIQ, put the protestor on notice that it would be ineligible for award if its SAM registration lapsed during the evaluation period or at the time of submission of a task order proposal. Consequently, the GAO sustained the protest and recommended that ICE again terminate the most recent task order award for its convenience and this time include the protestor’s proposal in the competition before making a new award decision.
Offerors should be mindful that the mandatory nature of a FAR provision does not automatically result in its incorporation into a solicitation when the government has failed to expressly include it. Therefore, prospective contractors should generally request clarification regarding the government’s exclusion of any mandatory FAR provisions in the solicitation before proposals are due. As was demonstrated in this case, while the terms of an IDIQ contract maybe incorporated into a task order solicitation, the same may not always be true for all FAR provisions in the original IDIQ solicitation. Ultimately, the effects of the omission of a mandatory FAR provision in a solicitation may vary in accordance with the facts and circumstances surrounding a particular procurement.
This Federal Procurement Insight is provided as a general summary of the applicable law in the practice area and does not constitute legal advice. Contractors wishing to learn more are encouraged to consult the TILLIT LAW PLLC Client Portal or Contact Us to determine how the law would apply in a specific situation.
