The Court of Federal Claims Clarifies Standards for Evaluating the Timeliness of Electronically Submitted Proposals

As the oft-quoted standard on submitting government contract bids and proposals goes, “Late is Late.” See 48 C.F.R. § 52.215-1(c)(3)(ii)(A); see also Geo-Seis Helicopters, Inc. v. United States, 2007 WL 2206855 (Fed. Cl. July 30, 2007). The U.S. Court of Federal Claims recently addressed the interesting question of how that standard applies in the context of electronically-submitted proposals. In Watterson Construction Company v. United States, No. 10-587C (March 29, 2011), the Court entered judgment in favor of a contractor after determining that its proposal, submitted by email, was wrongly rejected as late. As email is being used with increasing frequency as a method for submitting bids and proposals, this decision is highly relevant to all government contractors.

At issue in Watterson was whether the contractor timely submitted a proposal to design and construct barracks for the Army Corps of Engineers. The Army Corps’ Request for Proposals (“RFP”) required that all proposals be received by March 16, 2010 at 12:00 p.m. Watterson sent its proposal by email to the Contracting Officer’s (“CO”) e-mail address between 11:01 and 11:02 a.m. and it was received by one of the Corps’ servers at 11:29 a.m. The email proposal, however, did not arrive in the CO’s email box until 12:04 p.m. The CO determined that because he did not receive the proposal before 12:00 p.m., the proposal was late and was “ineligible for award.” Watterson filed a Complaint with the Court of Federal Claims alleging, among other things, that the rejection of its proposal violated FAR 52.215-1(c)(3), governing the submission, modification, revision, and withdrawal of proposals.

To resolve the issue, the Court asked the following questions: (1) what government office was designated in the solicitation for receipt of proposals; (2) what time was the proposal due; and (3) did the specified government office receive the proposal by the designated time. Based on a review of the RFP and its amendments, the Court determined that the designated government office was the CO’s email address. As to the second question, the parties agreed that the deadline was March 16, 12:00 p.m. Analyzing the third question, the Court noted that, although FAR 52.215-1(c)(3) uses the verbs “reach” and “received” and these words have different meanings, Watterson’s “proposal was both reached and received by the Government’s email servers before the due date.” However, the Court went further and, quoting the FAR, held that even if the email proposal was late, that defect should have been excused because there was “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 [deadline].” See FAR 52.215-1(c)(3)(ii)(A)(2). Indeed, the Court stated:

[I]n cases of non-batch delivered electronic commerce, late proposals may be excused under any of the three exceptions in FAR 52.215-1(c)(3)(ii)(A). It is particularly appropriate that the “Government Control” exception be available to offerors where there is “acceptable evidence” to establish that the offeror’s e-mail proposal “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,” as was the case here.

In sum, the Court’s decision indicates that the timeliness of an email proposal will be evaluated based upon when the proposal came under “government control.” Here, the email was received by the government’s servers by 11:29 a.m., and thus was timely. At the same time, it is important to note, as evidenced by the facts of Watterson, that the courts do not look at the time the email was sent and that there are delays in the transmission of email. Therefore, contractors should continue to take care in submitting documents electronically and avoid the literal “last minute” submission of email bids and proposals.

For more information on Watterson Construction Company v. United States, please contact Jeff Eckland at [email protected] or [nap_phone id=”LOCAL-REGULAR-NUMBER-2″].