In the latest issue of The Wright Toolbox:
- The Accidental Protest – read now
- Contractual Statutes of Limitations: Are They Enforceable? – read now
The Accidental Protest
Okay, so let’s say you are considering submitting a bid in response to an RFP from a federal agency, but you note that a solicitation amendment seems to have changed the procurement’s set aside status, which creates an ambiguity. So, you decide to send an e-mail to the contracting officer noting the perceived ambiguity and asking the agency to clarify the set aside status. You may have just unwittingly submitted an “agency-level protest.” In Matter of: Office Design Group, B-415411 (2018), the GAO ruled that e-mail communications questioning the impact of certain amendments and requesting clarification were effectively an agency level protest. To constitute an agency level protest all that is necessary is that be a written communication to the government detailing a disagreement and requesting agency action. In Office Design Group, the GAO observed that when the contracting officer later responded to the e-mail and did not take the action requested, that response became an adverse agency action. Even though there was no intent on the part of the bidder to protest, it’s communication was deemed by the GAO to constitute an agency level protest. The GAO stated “[a] letter (or email) does not have to explicitly state that is intended as a protest for it to be so considered . . .”
Accordingly, during the bidding phase, one must be careful in communicating with the government because if the communication is in written form and identifies a problem with the solicitation and there is a request for agency action, the communication could be deemed an agency level protest. Once the agency responds to the deemed protest adversely, the 10-day time period to file a protest with the GAO would begin to run. In Office Design Group, the deemed agency level protest actually benefited the bidder. Under traditional GAO protest rules if there is a patent impropriety in the RFP a protest regarding that impropriety must be filed before the time for bid opening. In the Office Design Group case the issue with the solicitation was indeed patent, but the protest was not filed until after the bids were opened. The GAO held that the protest was timely because the timely filing of an agency level protest prior to bid opening operates as an exception to the traditional patent impropriety filing requirement. Because pre-award communications can be construed as an agency level protest and trigger deadlines a bidder must be aware of the results of such communications and take the necessary steps to protect its protest rights.
Contractual Statutes of Limitations: Are They Enforceable?
by Jason Potter
Can a party contractually shorten the statute of limitations in Maryland? The Court of Appeals recently answered that question as any lawyer might: it depends. In Ceccone v. Carroll Home Servs., LLC, 454 Md, 680, the Ceccones heated their home with an oil-fueled furnace. They contracted with Carroll Home Services, LLC (“CHS”) to supply that oil, as well as to maintain and repair the furnace. The contract contained various exculpatory clauses and contained a one year period of limitations for any lawsuit against CHS, rather than the statutory three year limitations period. However, it contained no such limitation on CHS’s ability to sue a customer.
During the period of time that they were under contract with CHS, the Ceccones encountered a problem with their furnace, which ultimately caused damage to their home. Their insurance company, as well as third party experts, identified defective work by CHS as the culprit. The Ceccones, therefore, sought to have CHS pay for the repairs, but the parties were unable to agree, and the Ceccones filed suit against CHS in Maryland District Court. The court dismissed their claims, on the basis that they were filed outside the contractual one-year limitations period, and the Circuit Court, on appeal, affirmed.
The Court of Appeals reversed and remanded. In doing so, it noted that, in Maryland, contractually shorter limitations periods are enforceable if: (a) there is no statute prohibiting a shorter limitations period, (b) the provision is not subject to a defense of fraud or duress, and (c) the provision is reasonable. Although the shortened limitations period in the CHS contract was not prohibited by statute, the Court held that the lower courts failed to consider whether the provision was procured by fraud or duress and failed to consider whether it was reasonable under the circumstances. Accordingly, it reversed the dismissal of the case and remanded it to the Circuit Court to consider any defenses related to fraud, duress or unreasonableness.
This case reinforces the importance not only of reading your contracts, but also understanding that not all contract terms are enforceable in every circumstance.
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