The duty of good faith and fair dealing in contract law is, admittedly, a bit poorly named. It does not require that a party act in bad faith to breach it. You do not need to act nefariously to run afoul of it. But then the question arises: What is it? How does one breach it? This was (among other things) a question explored in a recent Court of Federal Claims decision regarding an Small Business Innovative Research (SBIR) contract. We will look at that decision’s review of the duty of good faith and fair dealing here in a 2-part series.
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Confusion About the Nonmanufacturer Rule: When Does it Apply?
One of the rules we get asked about the most as government contracts attorneys is what’s known as the nonmanufacturer rule, 13 C.F.R. § 121.406 (So much so that we felt it wise to go over the rule in one of our “Back to Basics” posts to help clear some things up). It’s pretty understandable why: It has numerous provisions, exceptions, and requirements that can make it pretty difficult to follow. It also shows up in two different regulations: 13 C.F.R. § 121.406 as mentioned above, as well as FAR 19.505. Unfortunately, this often leads to contractors getting tripped up by the rule, either not realizing it applies where it does or, as we’ll explore here, thinking it applies where it doesn’t. Recently, SBA addressed a size protest that asserted the awardee didn’t meet the requirements of the nonmanufacturer rule, and noted to the unfortunate protestor that the rule didn’t apply for the procurement anyways.
Continue readingMaking Unsuccessful Protesters Pay? Enhanced Pleading Standards? A Look at Proposed Changes to GAO Protest Rules Under the 2025 NDAA
Back in 2017, in the 2018 National Defense Authorization Act (NDAA), Congress passed a limited program for GAO protests of Department of Defense contracts where certain large contractors would have to reimburse the DoD for the cost of processing unsuccessful GAO protests. We reviewed that rule here. Congress repealed that provision with the 2021 NDAA. Now, the “losing protester pays” system is back with a vengeance. The 2025 NDAA creates a similar provision, but now the language appears to apply to all businesses that bring an unsuccessful GAO protest on a DoD contract. Coupled with enhanced pleading standards and an increase to the task order value jurisdiction requirement, this will make GAO protests of DoD contracts more burdensome on federal contractors. With that said, it is important to note: The 2025 NDAA only orders that the GAO and DoD produce a proposal that addresses the above for review by Congress. It does not absolutely mandate that the government then adopt said proposal. We look at these changes in this post.
Continue readingA Glitch In Time? GAO Denies Late Proposal Protest for Lack of Systemic Outages with Agency System
Both GAO and the federal agencies take proposal deadlines with the utmost seriousness. We have discussed a few other examples of late proposals being denied by GAO before. Now, we have another one. This time, the protester put forth the argument that its lateness was not its fault. Rather, it was caused by issues with the agency’s proposal receipt system. Unfortunately for the protester, GAO did not accept this argument. Here, we will go into how it arrived at that decision.
Continue readingProposed Increases to Micro-Purchase, Simplified Acquisition, and Other Thresholds
Every five years, the government is required by 41 U.S.C. § 1908 to adjust the statutory acquisition thresholds for inflation, such as the Micro-Purchase Threshold, Simplified Acquisition Threshold, and others. It just so happens that the last such adjustment occurred back in 2020. As such, the government is once again looking to increase these thresholds in light of the inflation that has occurred over the past five years. In this post, we will look at the proposed increases.
Continue readingCompensation for Professional Employees and You: GAO Sustains Where Agency Doesn’t Explain Why Proposed Decreased Compensation is Reasonable
While the federal government uses wage determinations for many occupations that contractors must abide by, things are different with professional occupations such as physicians, accountants, engineers, and (yours truly) attorneys. Contractors generally have more leeway with regard to how they pay their professional employees on a given contract. But it’s not unlimited. This is something that the National Oceanic and Atmospheric Administration (NOAA) didn’t address in its evaluation for a procurement, resulting in a successful GAO protest. In this post, we’ll look at the rules here and what went wrong.
Continue readingAgency Discretion Recertified: GAO Affirms Agency Discretion to Request Size Recertification for Task Orders
When it comes to meeting the size standards, the normal rule for a set-aside contract is simple: If you’re small at the time you submitted your initial offer for the contract, you’re small for the life of the contract. So says 13 C.F.R. § 121.404–although this could be changing in the future based on a proposed SBA rule. Furthermore, this is the general rule with set-aside IDIQs as well: If you’re small at the time of initial offer for the IDIQ, you’re small for all orders under that IDIQ. (Not so with set-aside task orders under otherwise unrestricted IDIQs, there it very much is time of offer for the task order rather than the IDIQ for the date to determine size). However, there are a couple of exceptions. The biggest one is where the contracting officer explicitly requests size recertification for the given task order. In that case, an offeror must show it is still a small business as of when it submits its offer for that task order. One contractor recently protested when the contracting officer did just that. Here, we’ll explore that GAO decision.
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