GovCon doesn't meet cute
Happy new year, everyone! Or, as we like to say around here, happy second quarter!
There's a specific moment in every romantic comedy when the eventual couple first encounters each other. This moment, called a "meet cute", is important because the eventual couple can't meet each other in an ordinary way. Unusual, and ideally cute, circumstances bring them together and their relationship forms.
Government contracting, though, isn't really amenable to the romcom genre. There is never a meet-cute moment between vendors and government. There will be never be a scene where, like, a capture manager is out walking the dog near an agency's headquarters, the dog gets off leash, and runs into a reverse industry day event and onto the lap of a contracting officer.
No, the closest that govcon gets to romcom is an unexpected RFI on SAM.gov. Charming. Most of the time, govcon would make for boring romcom.
Still, it could be worse? Like, what if govcon were a murder mystery? For example, I submit to you Global K9 Protection Group LLC v. United States, recently decided by the Court of Federal Claims.
The opening sequence of Global K9 (GK9) begins in 2020, when, the US Postal Service issued a solicitation for "Third-Party Canine-Mail Screening with Real-Time X-ray Analysis and Interpretation." Why did USPS want dogs and x-ray machines? Because, by law, the US government required "100% screening of all air cargo on passenger airlines by 2020." In other words, the USPS needed a vendor to detect bombs. To prevent actual bombs from getting on actual passenger planes.
With a requirement like that, you might want a very tidy and orderly procurement. But, as the court begins its opening credits, this movie reveals that there's trouble ahead:
The solicitation at issue in this case is nearly four years old. Throughout more than three years of litigation, there have been multiple re-solicitations, re-awards, and remands. Despite years of scrutiny and several chances to correct course, USPS continues to falter in its award decisions.
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As the court alludes, USPS's problems date all the way back to the original award, when USPS made the award to Michael Stapleton Associates (MSA). After the award, however, GK9 and others protested on the grounds that "obvious" organizational conflicts of interest should have prevented MSA from competing.
And those conflicts would eventually prove fatal for MSA. As the court explained:
After briefing and oral argument, this Court twice remanded the case to the USPS to conduct a full OCI investigation. After the second remand, the CO found MSA had OCIs involving unequal access to information and biased ground rules.
After even more litigation, eventually the court "ordered USPS to disqualify MSA from the re-solicitation due to its failure to mitigate MSA’s OCI."
Eventually, after the court ended MSA's participation, USPS made new awards to 2 companies—American K-9 Detection Services and K2 Solutions—in February 2023.[1]
Once again, GK9 protested. And the plot thickens because, this time, GK9 had a different, salacious reason to call foul. In March 2023, GK9 produced over 200 pages of evidence that K2 lied to the USPS about its past performance. As GK9's counsel stated during oral argument:
Everybody in here knows K2 lied. We’ve proven it. There is a record ... We’ve proven there are lies of omission and express falsities. They said they met contract requirements. Everybody knows that’s not true.
That's quite the accusation!
But how, you might ask, did GK9 get the goods on K2? Simple: K2 was their subcontractor, and apparently, K2 performed quite badly on that subcontract.
For example, K2 claimed that they provided "78 teams" in six months to support GK9 on the contract. But, GK9 provided evidence that K2 only had provided 66 individuals and that, "[a]t its highest point, K2 had 40 employees working on contract."
Furthermore, GK9's Chief Operating Officer provided evidence of poor performance on the subcontract:
K2 had trouble covering shifts; K2 did not arrive at the locations until months after promised; no K2 employee reported to work for a two week period; K2 missed three consecutive shifts; and when K2's employees were unable to work, K2 would reach out to the personnel who worked at local baseball stadiums and other locations for personnel to work for a day or a few days.
In other words, K2 told the government it did a great job on the subcontract, and GK9 had the receipts that suggested otherwise.
The wildest part, though? The government acknowledged that K2 lied. Again, here's the court:
Indeed, the government at oral argument acknowledged "as to its past performance," K2 advertised a "romantic comedy" but in truth put on "a horror film."[2]
Look, folks. If the government's attorney is out here saying that it decided to Netflix and Chill with "Say Anything" and instead, the the vendor cues up "Get Out", you know you have a problem.
Still, USPS refused to drop K2 from the award, arguing that it would take several months to investigate GK9's claims. But the court was unimpressed, noting that several months was unacceptable given that it had information about the claims dating back to March 2023. So, the court disqualified K2 itself:
Despite being on notice of this protest since February 2023, K2 has not intervened. K2 is at the center of this protest, however, meaning the Court’s ruling in this case necessarily will impact K2’s status under the contract. Further, while it is not the Court’s role to micromanage an agency, the Court concludes it is appropriate to consider a limited injunction disqualifying K2 from award, given this contract potentially implicates “planes falling out of the sky.” USPS may then decide appropriate next steps and timing of transition consistent with this Order.
Them's the breaks.
In the end, GK9 has been in this fight for almost four years, and now it looks like it might finally get its chance.
There are, perhaps, many lessons that could be drawn from this case. But two stand out.
First, if you are competing for a contract based on your past performance with your competitor, and the competitor can provably demonstrate that your past performance was bad, you might want to reconsider your approach. If your competitor can prove that you're lying, that's not just bad form: it can get you eliminated from contention.
Which, fine and good. Because, again, whichever company the USPS ultimately selects will be the last line of defense to make sure that bombs stay off passenger planes.
Second, though, the way that GK9 won here wasn't to demonstrate that it was particularly good at delivering on the requirements. Instead, it won because the court offed the other competitors. GK9 literally argued that “[w]ith K2 disqualified, USPS will have to award to GK9, even as improperly rated.” And whether you like it or not, you don't always need to be the best. You just need to stay in the game.
And that, I guess, is how it goes in a murder mystery. The point of the game is to keep playing. Which doesn't make me feel particularly good. Because again again, whichever company the USPS ultimately selects will be the last line of defense to make sure that bombs stay off passenger planes.
I can empathize with USPS and the court here: You've Got Mail just hits different if the vendor doesn't do its job here. But, to my Sense and Sensibilities, this case definitely is just less Get Out, and more Knives Out.
You might want to watch Alicia Silverstone and Paul Rudd meet cute in Clueless. But, if you're in this govcon game, expect to find yourself watching Tim Curry in Clue.[4]
[1] I'm actually sparing some of the gory details here. In between the first protest and the February 2023 awards, there were other protests and MSA even won again before the Court kicked them out of consideration. Messy stuff.
[2] Was my set up about romcoms a stretch? Maybe? Guess you'll have to wait to the end.
[3] To be fair, there is a weird nuance to the case: K2 isn't actually a party to the litigation (they opted not to intervene)!
[4] And... Scene. Takes a bow.