Government Contracts Brief – Week of February 3, 2020

Implied-In-Fact Contracts at The COFC

A recent Court of Federal Claims case reminds us that implied-in-fact contracts (a contract formed by virtue of facts demonstrating the parties intended an agreement) must meet the same requirements as express (written) contracts. Those requirements are: 1) mutuality of intent to contract, 2) lack of ambiguity in offer and acceptance, 3) consideration, and 4) a government representative having actual authority to bind the United States. The decision also reminds us that it is imperative not to act on a government official’s representations unless you are certain that he or she has authority to bind the government or that the representation has been ratified by a representative with binding authority. The case is Panther Brands, LLC v. The United States, No. 16-1157C (December 17, 2019). 

GAO Decisions Not Binding

Agency and GAO decisions on protests are not binding on the government, meaning the government can choose to ignore the decision. The history of the VA’s Rule of Two is a good example here. In 2011, GAO ruled in favor of a protestor holding that the VA had violated the law by ordering certain supplies through the GSA Schedule without first applying the Rule of Two. The VA refused to honor GAO’s decision. Ultimately, the matter was appealed until a decision was made by the U.S. Supreme Court requiring the VA to apply the Rule of Two to FSS orders. See the next brief for an explanation of the Rule of Two.

The VA Rule of Two

The “Rule of Two” of the Veterans Benefits, Health Care, and Information Technology Act of 2006 provides that if a Contracting Officer reasonably determines two or more veteran-owned or service-disabled veteran-owned small businesses will submit offers, it must set aside the acquisition. The Rule of Two also applies to procurements made by other agencies on behalf of the VA.

 

Attorney Kristi Morgan AronicaOur government contracts briefs, reports, and articles are published by Attorney Kristi Morgan Aronica. She serves as counsel to government contractors and subcontractors throughout Texas and nationally.