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THE ARMY LAWYER Headquarters, Department of the Army Department of the Army Pamphlet 27-50-338 January 2001 Contract and Fiscal Law Developments of 2000—The Year in Review Major Louis A. Chiarella, Lieutenant Colonel Timothy J. Pendolino, Lieutenant Colonel Elizabeth D. Berrigan, Major John J. Siemietkowski, Major Jonathan C. Guden, Major Kevin M. Walker, Major Karen S. White (USAF), Colonel Jonathan H. Kosarin, Lieutenant Colonel Steven N. Tomanelli (USAF), Lieutenant Colonel M. Warner Meadows (USAF), Lieutenant Colonel Mary E. Harney (USAF), Ms. Margaret K. Patterson, Major Corey L. Bradley Contents Foreword Contract Formation (Authority; Competition; Contract Types; Sealed Bidding; Negotiated Acquisitions; Simplified Acquisitions; Commercial Items; Small Business; Labor Standards; Bid Protests) Contract Performance (Contract Interpretation; Contract Changes; Inspection, Acceptance, and Warranties; Pricing of Adjustments; Termination for Default; Termination for Convenience; Contract Disputes Act (CDA) Litigation) Special Topics (Competitive Sourcing and Privatization; Construction Contracting; Cost and Cost Accounting Standards; Defective Pricing; Deployment Contracting; Environmental Contracting; Ethics in Government Contracting; Foreign Military Sales; Freedom of Information Act; Government Furnished Property; Information Technology; Payment and Collection; Performance-Based Service Contracting; Procurement Fraud; Randolph-Sheppard; Taxation) Fiscal Law (Purpose; Antideficiency Act; Construction Funding; Liability of Accountable Officers; Nonappropriated Funds; Operational and Contingency Funding) Conclusion Appendix A: Department of Defense Legislation for Fiscal Year 2001 Appendix B: Contract and Fiscal Law Websites Editor, Captain Gary P. Corn Technical Editor, Charles J. Strong The Army Lawyer (ISSN 0364-1287, USPS 490-330) is published monthly ed. 2000) and Military Citation (TJAGSA, July 1997). Manuscripts will be by The Judge Advocate General’s School, U.S. Army, Charlottesville, Virginia, returned upon specific request. No compensation can be paid for articles. for the official use of Army lawyers in the performance of their legal responsibilities. Individual paid subscriptions to The Army Lawyer are avail- The Army Lawyer articles are indexed in the Index to Legal Periodicals, the able for $29 each ($36.25 foreign) per year, periodical postage paid at Charlot- Current Law Index, the Legal Resources Index, and the Index to U.S. Govern- tesville, Virginia, and additional mailing offices (see subscription form on the ment Periodicals. The Army Lawyer is also available in the Judge Advocate inside back cover). POSTMASTER: Send any address changes to The Judge General Corps electronic reference library and can be accessed on the World Advocate General’s School, U.S. Army, 600 Massie Road, ATTN: JAGS-ADL- Wide Web by registered users at http://www.jagcnet.army.mil. P, Charlottesville, Virginia 22903-1781. The opinions expressed by the authors in the articles do not necessarily reflect the view of The Judge Advocate General Address changes for official channels distribution: Provide changes to the or the Department of the Army. Masculine or feminine pronouns appearing in Editor, The Army Lawyer, TJAGSA, 600 Massie Road, ATTN: JAGS-ADL-P, this pamphlet refer to both genders unless the context indicates another use. Charlottesville, Virginia 22903-1781, telephone 1-800-552-3978, ext. 396 or electronic mail to [email protected]. The Army Lawyer welcomes articles from all military and civilian authors on topics of interest to military lawyers. Articles should be submitted via elec- Issues may be cited as ARMY LAW. [date], at [page number]. tronic mail to [email protected] or on 3 1/2” diskettes to: Editor, The Army Lawyer, The Judge Advocate General’s School, U.S. Army, 600 Massie Road, ATTN: JAGS-ADL-P, Charlottesville, Virginia 22903- 1781. Articles should follow The Bluebook, A Uniform System of Citation (17th Contract and Fiscal Law Developments of 2000—The Year in Review Major Louis A. Chiarella, Lieutenant Colonel Timothy J. Pendolino, Lieutenant Colonel Elizabeth D. Berrigan, Major John J. Siemietkowski, Major Jonathan C. Guden, Major Kevin M. Walker, Major Karen S. White (USAF), Colonel Jonathan H. Kosarin, Lieutenant Colonel Steven N. Tomanelli (USAF), Lieutenant Colonel M. Warner Meadows (USAF), Lieutenant Colonel Mary E. Harney (USAF), Ms. Margaret K. Patterson, Major Corey L. Bradley CONTENTS I. FOREWORD.............................................................................................................................................................................. 1 II. CONTRACT FORMATION ......................................................................................................................................................1 A. Authority..................................................................................................................................................................................1 1. The Ghost of Farmer Merrill ..............................................................................................................................................1 2. No Authority at 10,000 Feet...............................................................................................................................................2 3. Not So Fast on that Actual Authority Requirement ...........................................................................................................2 4. The Contracting Officer’s “Eyes and Ears” Can Also Bind the Government....................................................................3 B. Competition .............................................................................................................................................................................4 1. In-Scope Modifications—Getting Back to Basics! ............................................................................................................4 2. Using the Public Interest Exception to Full and Open Competition ..................................................................................5 3. So, Can There Be “Fair Competitive Disadvantages”?......................................................................................................5 4. CICA Violations When Ordering off of Federal Supply Schedules?.................................................................................6 C. Contract Types .........................................................................................................................................................................6 1. COFC Denies Claim that Fixed Price Incentive Contract is Illegal...................................................................................6 2. COFC Upholds Contract Type for Construction Project at Hoover Dam ..........................................................................8 3. ASBCA Holds Navy Breached Duty to Negotiate Modification in Good Faith................................................................8 4. Revised FAR Rule for Multiple Award Indefinite Quantity Contracts ..............................................................................9 5. Air Force Not Liable For Unused Vacation Days ..............................................................................................................9 6. ASBCA Holds Original Bargain Must be Maintained in Change to Lump Sum Fixed-Priced Incentive Contract ..........9 JANUARY 2001 THE ARMY LAWYER • DA PAM 27-50-338 i D. Sealed Bidding........................................................................................................................................................................10 1. “Larry Harris” by Any Other Name is Still the Bid Bond Principal!................................................................................10 2. Oh, You Mean We Used the Wrong FAR Clause? ............................................................................................................11 3. Quick Takes .......................................................................................................................................................................12 E. Negotiated Acquisitions..........................................................................................................................................................13 1. First Things First: Start with Proper Evaluation Scheme.................................................................................................13 2. Change of Scope Requires Amended Solicitation.............................................................................................................14 3. If Late is Late—is Early Early?.........................................................................................................................................14 4. More Discussion about Discussions..................................................................................................................................15 5. Continued Discussions about the Content of Discussions ................................................................................................15 6. Court Cases on Evaluation of Proposals ...........................................................................................................................17 7. The GAO and How Not To Do Proposal Evaluation ........................................................................................................18
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