Government-furnished property: fair treatment does not mean the same treatment

Army Lawyer, Jan-Feb, 2003

Fair Treatment Does Not Mean the Same Treatment

In Bath Iron Works Corp., (1) two industry teams, the Blue Team and the Gold Team, were competing in the final phase of the Navy's DD(X) surface combatant program. The request for proposals (RFP) required each team to conduct at-sea tests of their design models. (2) The RFP stated that it was the responsibility of each offeror to acquire appropriate test platforms and, in response to a pre-solicitation question, the Navy advised the offerors that "It]he government does not intend to provide the platform for at-sea testing." (3) At the protest hearing, the contracting officer testified that he did not intend to preclude the use of a government-owned platform, but wanted to advise the offerors that the program office would not provide test resources as government-furnished property (GFP). (4) The Blue Team asked the Navy to provide a decommissioned DD-963-Class destroyer that it could use as its test platform due to its similarity to the proposed hull, but the Navy advised the Blue Team that no DD 963 was available. (5) The Gold Team, however, was able to obtain a DD 963, which it used to conduct its at-sea tests. (6)

After award to the Gold Team, the Blue Team filed a General Accounting Office (GAO) protest alleging that "the Navy failed to conduct the competition on a common basis when it denied the Blue Team the use of a decommissioned DD 963 ... for at-sea testing while at the same time accepting for purposes of the evaluation the Gold Team's proposed use of a decommissioned DD-963-Class destroyer." (7) The GAO denied the protest for lack of prejudice. (8) Specifically, the GAO found that the use of a decommissioned DD-963 did not result in a strength for the Gold Team and would not have changed the evaluation of the Blue Team. (9) The GAO also concluded that the "Blue Team's failure to pursue [the] denial of the use of a decommissioned DD 963" as evidence that the Blue Team did not view its use as a "significant consideration." (10)

Recovery Denied for Contractor's Failure to Notify Agency of GFP Shortage

Government-furnished property claims are rarely denied because a contractor failed to notify the government of defects or shortages in the GFP. This is because of the difficulty of proving that the government suffered prejudice. In Franklin Pavkov Construction Co., (11) however, the Court of Appeals for the Federal Circuit (CAFC) affirmed the decision of the Armed Services Board of Contract Appeals, (12) denying Pavkov's appeal on this basis. In Pavkov, the Air Force agreed to provide various items of GFP, including eighty-seven stair nosings that the contractor would use to install several staircases. The Air Force kept the GFP in a fenced location that it maintained. Although representatives of the Air Force and the contractor met to inventory the GFP, the contractor's representative had to depart before inventorying the stair nosings. Six months later, the contractor notified the Air Force that only ten stair nosings were in the fenced area. To avoid delaying the project, Pavkov purchased substitute materials and later submitted a claim for the additional costs. (13)

The CAFC applied the delivery standard of the Uniform Commercial Code and held that the Air Force met its obligation by tendering delivery to Pavkov. This tender imposed a duty on Pavkov to inspect the property and either promptly reject or accept it. Since Pavkov did not promptly reject the GFP, it was deemed to have accepted it at the time of the inventory. (14) Noting that the applicable GFP clause required the contractor to provide notice "within a reasonable time," (15) the court found that the six-month delay was not reasonable and denied the appeal. (16) Lieutenant Colonel Tomanelli.

(1.) Comp. Gen. B-290470, B-290470.2, Aug. 19, 2002, 2002 CPD [paragraph] 133.

(2.) Id. at 2.

(3.) Id. at 7.

(4.) Id.

(5.) Id. at 8-9.

(6.) Id. at 10.

(7.) Id. at 11.

(8.) Id.

(9.) Id. at 11-12.

(10.) Id. at 19.

(11.) 279 F.3d 989 (2002).

(12.) See Franklin Pavkov Constr. Co., ASBCA No. 50828, 00-2 BCA [paragraph] 31,000, at 153,597.

(13.) Franklin Pavkov Constr., 279 F.3d at 992.

(14.) Id. at 998.

(15.) See GENERAL SERVS. ADMIN. ET AL., FEDERAL ACQUISITION REG. 52.245-4(a)(1) (July 2002).

(16.) Franklin Pavkov Constr., 279 F.3d at 998.