The contractor claimed the agency negligently negotiated the contract, which led the contractor into staffing problems. The ASBCA said there’s no negligent negotiations when, as part of the evaluation, the agency assigned a weakness for the contractor’s staffing and raised the issue during discussions.
Appeal of Chugach Federal Solutions, Inc., ASBCA No. 61320
- Contract – The Navy solicited a follow-on base operations support contract. Although similar to the incumbent contract, the solicitation contemplated more service calls for the eventual contractor. After reviewing solicitations, the Navy awarded the contract to Chugach Federal Services.
- The Claim – While performing the contract, Chugach realized it had not proposed sufficient staff. Chugach increased the number of staff. Nevertheless, it still experienced performance problems. The Navy assessed negative CPARS. Chugach submitted a claim for over $12 million in losses under the contract. The Navy denied the claim. Chugach appealed to the ASBCA.
- Superior Knowledge – Chugach contended the government failed to disclose important information, including historical workload and suppressed demand under the predecessor contract. But a claim for superior knowledge requires the contractor perform without vital information that affects performance. The board found Chugach had not shown the missing information was vital to performance. It had not shown how the omitted information would have influenced its bid.
- Negligent Negotiation – Chugach claimed the government engaged in negligent negotiations in violation of FAR 15.306(d). Specifically, Chugach alleged the Navy knew Chugach had not proposed enough staffing but had not raised this issue during negotiation of the contract. The board rejected this argument. During the evaluation, the government assessed Chugach a significant weakness for its staffing, and it raised this issue during discussions. This satisfied the government’s obligation to bring concerns to the bidder’s attention under FAR 15.306(d).
- Mutual Mistake – Chugach asserted the parties were mutually mistaken about whether the volume of service calls in the solicitation aligned with the volume of service call under the predecessor contract. But a mutual mistake requires the parties make a mistake of fact. Here, at most, the parties had made a mistake in judgment, that is, a mistaken assumption about future facts. This was not enough to support a mistake claim.
The contractor is represented by Richard B. O’Keefe, Jr. William A. Roberts, III, Gary S. Ward, and Cara L. Lasley of Wiley Rein LLP. The government is represented by Craig D. Jensen, David M. Marquez, Robyn L. Hamady, and Antony Hicks of the Navy.
–Case summary by Craig LaChance, Senior Editor
