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Recent Cases

1. Bid Protests of Superior Helicopter LLC, B-299909.2, June 29, 2007 and of Rainier Heli-Lift, Inc, B-299909.3, June 29, 2007

Professor Ginsburg, with his counsel, Tim Sullivan and Kym Nucci of Thompson Coburn LLP, on June 29, 2007 filed bid protests with the Government Accountability Office (GAO) against the rejection by the U.S. Forest Service (USFS) of the bids of Superior Helicopter LLC (“Superior”) and Rainier Heli-Lift, Inc. (“Rainier”) for helicopter fire fighting services, as being technically unacceptable. The reason given for the rejection was that in doing the calculations of gross payload of the helicopters, neither company had used certain charts (the “USFS Supp.” charts) which the two companies and other companies flying similar model helicopters had developed with the manufacturer three years earlier. The purported requirement to use the charts in questions had not been announced in the solicitation. The USFS then awarded contracts for 35 helicopters to other firms. Following the filing of the protests, the automatic stay of the procurement went into effect to ban performance of 34 of the 35 contracts awarded until GAO resolved the protests. The reason performance of the 34 contracts was stayed was because Superior and Rainier had bid their helicopters for the 34 bid items and the USFS had reserved the right to award contracts for Superior and Rainier’s helicopters at any of the locations USFS chose. Rainier and Superior were low bidders and “best value” under the solicitation’s evaluation criteria for virtually all of the bid items.

The USFS then made a determination to override the stay, finding that public health and safety required the contracts to go forward. Professor Ginsburg on behalf of Superior and Rainier then filed suit in the U.S. Court of Federal Claims (the “Claims Court”) to restrain the USFS from proceeding with performance of the contracts until GAO could resolve the protests and seeking to dissolve the override. See the discussion in Section 2, below. Following the Claims Court judgment ordering the override dissolved, Professor Ginsburg negotiated a settlement of the protests with the USFS. The settlement included the cancellation of the awarded contracts after the 2007 fire season, a USFS commitment to rebid the requirements for 2008 and 2009, utilization of Superior’s and Rainier’s helicopters during the balance of the 2007 fire season sufficient to generate the revenue the companies would have earned under the contracts for the balance of the 2007 fire season if the contracts had been awarded to Superior and Rainier, and sufficient sums to cover the attornies’ fees expended by both companies in pursuing the litigation. 

2. When Superior and Rainier learned that the USFS intended to override the automatic stay following the protests to GAO discussed in Paragraph 1 above, they engaged Professor Ginsburg to file suit in the Claims Court to restrain the USFS from overriding the stay. The lawsuit was denominated Superior Helicopter, LLC and Rainier Heli-Lift, Inc. V The United States of America, Case No 1:07-cv-518C.Professor Ginsburg and his counsel, Tim Sullivan and Kym Nucci of Thompson Coburn LLP, sought a temporary restraining order (“TRO”) and a preliminary and permanent injunction to restrain the USFS from proceeding with the 34 contracts until GAO would rule on the protest. In addition to the other legal papers which were filed electronically, Professor Ginsburg put on live testimony at the TRO hearing. The testimony was to the effect that the USFS already had all of the available helicopters under contract, although the contracts were “call when needed” (“CWN”) contracts rather than the “exclusive use” contracts which had been awarded for the 34 helicopters.

The Claims Court judge who heard the case, Judge Lettow, said the case for a TRO was a very close one, but the government had not yet filed the administrative record and he did not want to grant a TRO without having the administrative record to review. He also said that if he had the administrative record, and the evidence was the same as at the TRO hearing, and the proceeding before him was for a preliminary injunction, he would probably have granted the injunction to Superior and Rainier.

Judge Lettow then consolidated the preliminary and permanent injunction proceedings into a single proceeding for injunctive and declaratory relief. The hearing on the injunction/declaratory relief took an entire day, with live witnesses from both the helicopter operators and the USFS. At the conclusion of the hearing, Judge Lettow noted that the administrative record did not include a copy of one or more call-when-needed contracts, and he wanted to review CWN contracts before ruling. Thereafter, the Government supplemented the record to add several CWN contracts (including Superior’s and Rainier’s), and all the parties filed post-hearing briefs.

A short while later, Judge Lettow ruled, issuing a 26 page opinion which, among other things, set aside and dissolved the USFS override of the automatic stay and granted judgment for the plaintiffs (Superior and Rainier) on the administrative record.

Following the Court’s ruling, counsel for the USFS approached Professor Ginsburg about a settlement of the two protests. Professor Ginsburg and his clients negotiated with the USFS and then settled with the USFS, as set forth in Section 1, above.

In closing, we note that overturning an agency override of an automatic stay in the Claims Court is a very rare occurrence, even more so in this case where the agency was asserting correctly that there was high fire danger throughout the Western United States and based its override on public safety and the need to protect life and property.
The Court’s opinion was written and analyzed in a Federal Contracts Report (FCR) lead article in Volume 88, No. 10, September 18, 2007. That article can be accessed by clicking on the screen.

3. Defense Services Corp. (“DSC”) ASBCA 50918, 00-2 BCA ¶ 30,991. 

Following a decision by the Armed Services Board of Contract Appeals (“ASBCA”) which granted DSC an equitable adjustment in the contract prices for undisclosed Foreign Military Sales (“FMS”) quantities, Prof. Ginsburg was retained to file a motion for reconsideration and/or appeal to obtain further relief for the Government’s failure to disclose FMS quantities in the solicitation.  Prof. Ginsburg filed a motion for reconsideration and obtained a judgment from the ASBCA granting equitable reformation of the contract prices for undisclosed FMS quantities.  Defense Systems Company, Inc., ASBCA 50918, 01-1 BCA ¶ 31,152.

Following this favorable decision, the parties embarked on an extensive ADR with Judge Peter Ting of the ASBCA.  With Judge Ting’s assistance, the parties settled the case for $6,000,000.

4. GAO Protest No. B-289214, REEP, Inc.

On October 26, 2001, Prof. Ginsburg filed a protest on behalf of REEP, Inc. against an award of a contract by the Defense Intelligence Agency (“DIA”) to another company.  Following the filing of the protest, DIA agreed that REEP’s protest should be sustained.  On November 2, 2001, DIA notified Prof. Ginsburg and the GAO that corrective action will be taken, i.e., to re-evaluate REEP’s proposal along with the awardee’s.

5. GAO Protest No. B-290665.1, REEP, Inc.

In a landmark GAO decision, the Comptroller General ruled that the Army could not order language training from the only company listed on a GSA Federal Supply Schedule (“FSS”) where the contracting officer (“CO”) knew that other qualified companies with lower prices were listed on a different FSS schedule.  The Army had previously promised to take corrective action, but had instead continued to make sole source awards to the single source.  In its decision, the GAO awarded REEP its costs of preparing, filing and prosecuting the protest.  The case is regarded by GAO as an important precedent in that it determined that there are indeed limitations on the use of Federal Supply Schedules and clarified what those limitations are.

6. GAO Protest No. B-295663.4, S.M. Stoller

Professor Ginsburg, along with another law firm, defended against the protest of a contract in excess of $140 million  awarded for cleanup and remediation of the Portsmouth, Ohio Department of Energy site.  Professor Ginsburg brokered an agreement with the Department of Energy and arranged a meeting between the awardee (LATA Parallax Portsmouth, LLC) and the Protestor (Stoller).  After hard bargaining, an agreement was reached, Stoller joined the LATA/Parallax team and the protest was dismissed.

7. IBV Ltd.,GAO Protest No. B-296428, May 24, 2005

Professor Ginsburg filed a protest on behalf of IBV, Ltd., a small disadvantaged service disabled veteran owned business, against award of a contract for janitorial services to a higher-priced offeror, where IBV had been found to be in the competitive range.  Shortly after Professor Ginsburg filed the protest, the contracting officer withdrew the award and agreed to revise the specifications to better express the Government’s needs.  Following the agency’s corrective action, GAO dismissed the protest as moot.

8. Qui Tam Case

Professor Ginsburg was engaged by the law firm, Blank Rome, as an expert witness in a qui tam case brought under the False Claims Act in the Federal District Court for the Southern District of California.  The day before Professor Ginsburg was to leave for California for the trial, the case settled.

9. Richlin Security Service Company v. Rooney, U.S. Court of Appeals for the Federal Circuit 00-1134 Slip. Op. (Fed. Cir. July 2, 2001)

The Department of Transportation Board of Contract Appeals (“DOTBCA”) refused to complete the reformation of two contracts for guard services where Richlin and INS thought the contracts called for Guard I services, but the contracts in fact called for Guard II services. The DOTBCA had refused to complete the reformation until Richlin first paid the affected employees –  - an impossible condition, since Richlin had no funds to make such payments.  Prof. Ginsburg entered into an agreement with the Department of Labor and Richlin, which insured that the employees would be paid in full before any of the funds received from INS would be distributed.  Prof. Ginsburg appealed the decision of the DOTBCA to the Court of Appeals for the Federal Circuit (the “Federal Circuit”).  The Federal Circuit reversed the DOTBCA’s decision and remanded the case to the DOTBCA directing the DOTBCA to complete the reformation and to make payment in accordance with the procedures set forth in the DOL-Richlin-Ginsburg agreement.

10. Freedom NY, Inc., ASBCA 43965, 96-2 BCA ¶ 28,502;
Freedom NY, Inc., ASBCA 43965, 98-1 BCA ¶ 29,382;

Freedom, NY, Inc. (“Freedom”) had a contract with the Defense Logistics Agency (“DLA”) to supply meals ready to eat (“MRE”) for use by troops in the field.  From the beginning of the contract, DLA officials sabotaged Freedom’s performance by, among other things, refusing to pay progress payments in accordance with the parties’ agreement and misrepresenting to potential sources of financing and of automated manufacturing equipment, as to Freedom’s entitlement to progress payments under the contract.  The Government also interfered with Freedom’s suppliers and failed to furnish to Freedom Government-furnished food components, which directly resulted in Freedom’s being unable to complete performance of the contract.  Freedom filed a claim for additional compensation and then negotiated with the Government.  The parties agreed to settle the outstanding claims in return for promises from DLA, among other things, that Freedom would be given additional MRE contracts.  The DLA promises were in a “side letter” which was attached to the modification settling the claim.  Thereafter, DLA extorted from Freedom a signature on another modification by not releasing an approved progress payment until Freedom signed the modification.  The Government then default terminated the contract.  Thereafter, Freedom was removed from the MRE program.  Freedom filed an appeal from the default termination and from DLA’s denial of Freedom’s breach of contract claim with the Armed Services Board of Contract Appeals (“ASBCA”).  The case was litigated by other attorneys. 

By a decision dated May 1996, the ASBCA overturned the default termination by DLA.  However, in that same decision, the ASBCA also dismissed Freedom’s breach claim which also wiped out its claim for equitable adjustments as well as damages for wrongful Government actions.  Professor Ginsburg filed a motion for reconsideration with the ASBCA, arguing that the breach of contract claim was not properly before the Board in that phase of the litigation.  As a result of Professor Ginsburg’s efforts, along with Shlomo Katz, Esq., the Board reversed itself and undid the dismissal of the damages claim.  Freedom NY, Inc., ASBCA Nos. 35671, 43965, 96-2 BCA ¶ 28,502 (August 15, 1996).

The Government then moved for summary judgment on the basis that the salient issues in Freedom’s breach case, i.e., the effect of Mod. 25 on the side agreement and the binding effect of Mod. 29 (containing the extorted release), had been decided by the Board in the default termination case and were res judicata on Freedom in the breach case.  Professor Ginsburg and Mr. Katz  defended against the Government’s summary judgment motion.  The Board agreed with Professor Ginsburg and denied the Government’s motion, holding that the Board’s decision overturning the default termination “did not depend on those determinations [with regard to Mods 25 and 29]” and that “relitigation of those issues in a subsequent action is not precluded.”  Freedom NY, Inc., ASBCA No. 43965, 98-1 BCA ¶ 29,382.

© Professor Gilbert J. Ginsburg