"Late is Late": The Government Control Exception for Late Proposals Under FAR Part 15

Author: Irvin Gray, CPCM, CFCM

By the nature of government contracting, an array of standard contract clauses and provisions is available to agencies and contractors to apply as needed. However, these clauses and provisions are only useful if contract managers understand when and how to apply them correctly.

This month’s Clause Corner examines a case study on the “government control” exception for late proposals received after the deadline on a U.S. federal government solicitation. The article will review a case study of the FAR 52.215-11 exception to the lateness rule—its specific uses, how it has been used in practice, and a few best practices that will help selling agencies and purchasers to administer the provision during the submission and receipt of proposals on the due date.

Uses for the “Government Control” Exception to “Late is Late”

• In general, proposals received at the government office designated in the solicitation after the exact time specified for receipt of offers are “late” and will not be considered.
•  There are three exceptions to the “late is late” rule if the proposal is received before award, and if the contracting officer determines that the late offer would not unduly delay the acquisitio
  1.  If it was transmitted through an electronic commerce method authorized by the solicitation, it was received at the initial point of entry to the government infrastructure not later than 5:00 p.m. one working day prior to the date specified for receipt of proposals;
  2. There is acceptable evidence to establish that it was received at the government installation designated for receipt of offers and was under the government’s control prior to the time set for receipt of offers; or
  3. It is the only proposal received.

The first exception is helpful for those offerors who e-mail their proposal the afternoon before the due date.

The third exception is helpful for offerors who end up as the only offeror for the solicitation.

This case study focuses on offerors who submit an e-mailed proposal after 5 p.m. the prior working day.

Case Study: FAST, LLC v. U.S.2
On Monday, September 15, 2014, United States Special Operations Command (SOCOM) Contracting Officer Karen Stevens was having a difficult time with the SOCOM e-mail system. According to her request for proposals (RFP) for support services, proposals were due via e-mail at 4:30 p.m. E-mails were limited to 20 megabytes (MB).

Over that final weekend, she would receive many e-mails from six frustrated offerors, including some chief executive officers (CEOs), who had submitted proposals that were less than 20 MB but were rejected by the government e-mail servers.

One of these, Federal Acquisition Services Team, LLC (“FAST”), e-mailed its proposal to the solicitation’s designated e-mail address at 11:56 a.m. on September 15, 2014. The e-mailed FAS proposal totaled less than 18 MB. A Defense Information Systems Agency (DISA) server that screened SOCOM’s incoming e-mails received FAST’s proposal and incorrectly determined its size to be nearly 25 MB. After the screening, the DISA server e-mailed the FAST proposal to the designated e-mail address from the solicitation. The DISA e-mail failed due to “size limit exceeded.” The delivery failure notification was sent to FAST shortly after noon. FAST’s CEO was working in a secure facility without access to e-mail, which might have prevented him from noticing the notification from DISA in a timely manner.

About four hours after the deadline for proposals, FAST made several requests to the Contracting Officer to confirm receipt of its proposal. A few days later, the Contracting Officer replied that FAST’s proposal had not been received.

FAST replied with multiple e-mails. The first e-mail documented the date and time of the e-mailed proposal. The second e-mail provided the “government control” exception.

In reply, the Contracting Officer stated, “The government control exception doesn’t apply since there is no evidence that the proposal was received at the government installation. There is no exception in the FAR that would allow me to accept a late proposal from FAST.”

FAST filed a bid protest at the Government Accountability Office (GAO) on September 25, 2014. FAST argued that SOCOM improperly excluded FAST’s proposal. FAST argued that its proposal should have been accepted because it was submitted more than four hours before the deadline, and that it was rejected by the e-mail server even though it was less than the 20 MB size limit in the RFP. FAST cited two U.S. Court of Federal Claims (COFC) cases that apply the “government control” exception for e-mailed proposals—an exception that the GAO does not recognize. Due in part to the contracting officer’s statement that only three other offerors had e-mail difficulties with initial rejections and that SOCOM received 15 timely proposals, the GAO denied FAST’s protest.

FAST then filed a complaint at the COFC on January 27, 2015, arguing that under the two COFC cases the proposal should have been considered received under the “government control” exception. SOCOM filed the administrative record of the proceedings before the GAO. FAST submitted a declaration of a CEO who submitted a proposal and copies of e-mails between that CEO and the contracting officer. Soon after, SOCOM added e-mails between the contracting officer and other prospective offerors regarding e-mail difficulties. The court allowed FAST to depose the Contracting Officer by written questions.

Based on the supplemental e-mails and the deposition, the COFC determined that at least seven offerors, including FAST, informed SOCOM of problems with e-mailed proposals. Of the seven offerors, six corresponded directly with the contracting officer herself. COFC also found that, contrary to SOCOM’s statement before the GAO (three rejections, 15 received), seven e-mailed proposals were initially rejected and only 13 e-mailed proposals were received via e-mail by the deadline. The COFC also found that SOCOM’s failure to disclose to GAO the extent of e-mail problems encountered during the final days of the solicitation prejudiced FAST.

Both FAST and SOCOM agreed that the “government control” exception applies to e-mailed proposals under COFC cases. The COFC found that the DISA server was owned and operated by the Department of Defense. Therefore, the FAST proposal was under the government’s control before the deadline for proposals. The COFC found that the SOCOM must accept and evaluate the FAST proposal on the same terms as other proposals accepted as timely.

Case Study Findings 

• The Court of Federal Claims found that the proposal submitted by FAST was not delivered to the agency e-mail inbox for the procurement.
•  The government’s servers failed to accept files totaling up to 20 MB as stated in the solicitation.
•  Check the sending e-mail address for any rejection e-mails.
•  The e-mail containing FAST’s proposal was timely received by the DISA server before the time set in the solicitation.
•  The FAST proposal was under the government’s control when the DISA server performed safety checks on the e-mail.
•  The FAST proposal, sent 4.5 hours before the deadline, met its responsibility to ensure the proposal’s timely delivery and that the file was less than 20 MB. This is distinguished from other cases, where an offeror sent its proposal less than 15 minutes before the deadline and normal e-mail processing resulted in a late proposal.

Practice Points for the Agency

• Practice sending large e-mails to the destination e-mail address before issuing the solicitation and check again before the due date for proposals.
•  Provide file size limits in the RFP that are significantly lower than the technical limits of the e-mail system 
•  In advising the contracting officer, check case law in both the GAO and the COFC since the protestor can choose either venue, or both venues sequentially. In this fact pattern, the split between the two venues favors the protester at COFC.
•  When a protest is filed, have the contracting officer complete a Statement of Facts early, while the events are fresh in her mind. Likewise, gather statements from key witnesses early, before they forget details.

Practice Points for Offerors

• For e-mailed proposals, consider submitting proposals before 5 p.m. the business day before the deadline to qualify for “e-commerce” exception to the late proposal rule.
•  If the “e-commerce” exception is too early, submit e-mailed proposals two or more hours before the deadline for proposals, and earlier if possible. 
•  If sending two hours early is not possible, realize that an e-mailed proposal sent less than 15 minutes before the deadline might be rejected because e-mails normally take a few minutes to reach another inbox and are frequently delayed by normal glitches.
•  If you submit an e-mailed proposal after 5 p.m. the business day before the deadline, and more than 15 minutes before the deadline, and the agency rejects the e-mailed proposal for lateness, file the pre-award bid protest at the Court of Federal Claims, not the GAO.
•  Why? Because for bid protests, the Court of Federal Claims will apply the “government control” lateness exception to e-mailed proposals that reach a government server. The GAO will not apply the “government control” lateness exception but instead will apply the “e-commerce” exception. The “e-commerce” exception only works for e-mailed proposals sent before 5 p.m. on the prior workday.

Irvin Gray, JD, MBA, CPCM, CFCM, CCCM

• Assistant General Counsel, Honeywell Federal Manufacturing and Technologies.
•  Provides legal advice to executives, buyers, and contract managers with an emphasis on federal government contracts and commercial subcontracts.
•  LLM Candidate, Government Procurement, The George Washington Law School, anticipated graduation in May 2022.
•  President, NCMA Kansas City Chapter.

The information provided in this article is for informational purposes only and does not, and is not intended to, constitute legal advice. With respect to any particular legal matter, readers should consult with an attorney.

ENDNOTES 
1 FAR 52.215-1 Instructions to Offerors - Competitive Acquisition (January 2017)

2 Fed. Acquisition Servs. Team, LLC v. U.S., 124 Fed. Cl. 690 (2016). Unless otherwise noted, all quoted material in the remainder of this article is taken from Agredano. Facts and holdings are from the published case without additional citation.\