February 8, 2023

Volume XIII, Number 39

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The Gap Widens Between COFC and GAO on Late is Late Rule

We all know that failure to submit your bid proposal on time typically results in rejection. And the list of exceptions to this “late is late” rule is very short, providing only four notable exceptions: (1) an offeror has acceptable evidence of government control of a proposal; (2) an offeror can establish a systemic failure of government procedures resulting in multiple instances of lost information; (3) if electronically submitted, a proposal was received by government infrastructure by 5:00 p.m. one working day prior to the proposal submission date; and (4) if there is only one offeror. But what if you submitted your proposal on time and the agency’s server rejects the submission without bothering to inform you? And what if the basis for rejection was an undisclosed limitation within a server on email size? Does such delay qualify as an exception to the “late is late” rule? The answer depends on which forum you ask.

According to the GAO in Ace Electronics Defense Systems, LLC, B-420863, September 2, 2022, the offeror is at fault and the proposal is properly rejected. However, according to the Court of Federal Claims in eSimplicity, Inc. v. United States, No. 22-543C, Oct 13, 2022, the government is at fault for not informing the offeror of the limitation. 

In Ace Electronics, a Department of the Navy, Naval Surface Warfare solicitation instructed offerors to submit their proposals electronically directly to the email accounts of the contracting officer and contract specialist. The protester did so for its initial proposal and the agency included the protester in the competitive range. Final Proposal Revisions (FPRs) also were required to be submitted directly to the contracting officer and contract specialist’s email accounts.

It was undisputed that the protester complied with the directions and electronically submitted its FPR to the contracting officer and contract specialist prior to the time set for receipt of FPRs. However, emails sent within the Navy’s email system first are routed to an Enterprise Email Security Gateway for screening. If the email passes screening, it then proceeds to a Navy-specific security screening gateway, and then to the Navy’s server (called FlankSpeed) specialist. The FlankSpeed server has a file size limitation of 30MB for email from external sources; blocking all emails that exceed this limit. The protester was unaware of this size limitation as it was not disclosed in the solicitation or otherwise. Because the protester’s FPR was 31.58MB, the FlankSpeed server rejected the email and thus did not deliver it to the contracting officer and contract specialist. There also was no indication that the protester was timely notified of this rejection.

The protester argued that it timely submitted its proposal in accordance with the solicitation’s instructions, the Navy thus had received the proposal in a timely manner, and an offeror cannot reasonably be held to be “responsible for the inner workings of government communications.” But the GAO disagreed.

GAO reasoned that the email, though technically within the Navy’s system in a timely manner, never made it to the email boxes designated in the solicitation, and so were not technically “received.” The GAO was unfazed by the fact that the solicitation never disclosed there was a size limitation for the email server. Rather, the GAO found the offeror was nonetheless responsible for ensuring that the email was received. As a result, the GAO held the Navy was within its rights to exclude the protester’s proposal as late.

Compare GAO’s holding with the Court of Federal Claims decision in eSimplicity. In eSimplicity, a Navy solicitation required that proposals be submitted by email and included instructions about proposal formatting, but did not include information on maximum file size. The protester emailed its proposal before the deadline in accordance with these instructions, but did not receive a confirmation of receipt or delivery failure notice. Like in Ace Electronics, a forensic investigation showed that the protester’s email timely reached a Department of Defense server, but was bounced back by the Navy server because it exceeded the maximum file size. The Navy rejected the proposal as late.

In contrast to the GAO’s ruling, the Court of Federal Claims found the Navy erroneously rejected the protester’s proposal simply because of file size. In a novel approach, the Court held the Navy ultimately applied unstated evaluation criteria in doing so, because there was nothing in the solicitation that indicated a file size limitation. 

In its analysis, the Court of Federal Claims also discussed divergent opinions on the government control exception outlined in FAR 52.215(1)(c)(3), finding that the government control exception can apply to electronically submitted proposals. The Court contemplates that reaching the initial government server may satisfy the government control exception, but remanded to the Navy to make that determination.

Conclusion

GAO’s decision leaves open some interesting questions. For example, how is an offeror supposed to confirm receipt of a proposal unless it is incumbent upon the agency to do so? If the burden is on an offeror to confirm receipt of a proposal, how much time does an offeror have to seek agency confirmation? And what if the agency fails to provide confirmation of receipt or rejection? If agencies are not obligated to disclose the full requirements and limitations for submission of electronic proposals, then from where does the obligation to confirm receipt arise? Further, is the absence of the identification of the server limitations in a solicitation calling for electronic proposal submission a solicitation defect that needs to be protested prior to the time set for receipt of proposals? The answers to these questions remain to be seen.

The moral of this story is that in submitting proposals, the devil is in the details – even when the agency does not share those details. Companies should be sure to review the proposal submission directions in the solicitation to ensure they are complete and identify any possible limitations – particularly if electronic submission is required.

Further when choosing a venue for protest challenges of alleged late electronic submissions, the Court of Federal Claims likely is a more hospitable venue.

Copyright © 2023, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 299
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About this Author

Anne Bluth Perry, Investigations & International Trade Attorney, Sheppard Mullin
Partner

Anne B. Perry is a partner and former co-chair of the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington, D.C. office. 

Areas of Practice

Ms. Perry concentrates in the areas of Government Contracts law and litigation and is a lecturer and author in the area.  Her broad experience in Government Contracts includes, for example: bid protests before the U.S. General Accounting Office, and the United States Court of Federal Claims; complex litigation in connection with the False Claims Act; claims litigation...

202-218-6875
Lauren Weiss Associate Washington D.C. Sheppard, Mullin, Richter & Hampton LLP
Associate

Lauren Weiss is an associate in the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington, D.C. office.

Areas of Practice Lauren’s practice focuses on government contracts litigation, investigations, and counseling matters including the following areas:  Cybersecurity counseling, Internal Investigations, Regulatory compliance,  Bid protests before the U.S. Government Accountability Office, Civil False Claims Act litigation defense, and Transactional due diligence.

Prior...

202-747-2678
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