Understanding the Liquidated Damages Provision in Government Construction Contracts

Federal contractors are being caught with submitting bids with letters of intent to hire that have no substance. Getting the proper guidance on this issue can make the difference between getting the contract or somehow getting to the point where there is a false representation. The latter can be disastrous.

When sPurpose of Contractor Procurement Letter of Intent to Hire - Bait and Switch Protestsubmitting bid proposals to the federal government, bidders often submit a contractor procurement letter of intent to hire contractor incumbent employees or other key staff members.

Your intention to bid must be sound or you could be subjected to bait and switch ( also referred to as bait and hook) allegations, even if your intentions were good. 68 % of bidders that submit unsupported promises stand a 90% chance of scrutiny in a bid protest.

Sometimes the solicitation expressly asks offerors to submit these letters to assure the contracting agency that bidders have a solid agreement with prospective employees. The letter also solidifies the fact that the bidder has actually received a commitment to work in the event that an award is made.  Government bidding with bait and switching techniques will be dealt with harshly by the court.

The Source Selection Panel can assess technical risk if there are problems. If you have questions during the solicitation stage, it is always better to inquire before bid submission or another deadline for questions and answers if provided by the contracting officer.

  • Failure to submit valid contractor letters of intent to hire could lead to violations of bid protest bait and switch laws.

Bait and Switch – Material Misrepresentation in Government Bids

The federal government now has teeth when offerors submit a procurement letter of intent to hire containing a material misrepresentation. Courts have rules that in order to establish a material misrepresentation, “plaintiff must demonstrate that (1) [the awardee] made a false statement; and (2) the [agency] relied on that false statement in selecting [the awardee]’s proposal for the contract award.” Blue & Gold Fleet, LP v. United States, 70 Fed. Cl. 487, 495 (2006) (citation omitted), aff’d, 492 F.3d 1308 (Fed. Cir. 2007); see also Sealift, Inc v. United States, 82 Fed. Cl. 527, 538 (2008).

According to the Federal Circuit Court “..the submission of a misstatement . . . which materially influences consideration of a proposal should disqualify the proposal. The integrity of the system demands no less. Any further consideration of the proposal in these circumstances would provoke suspicion and mistrust and reduce confidence in the competitive procurement system.”  See Planning Research Corp. v. United States, 971 F.2d 736, 741 (Fed. Cir. 1992) (citation omitted) (internal quotation marks omitted) (illustrating misrepresentation tactic known as “bait and switch” in which offeror submits a proposal with the intent to substitute some aspect that it had used to win the award).

  • In a bid protest, you still have to show prejudice
  • The Court may dismiss your case if you fail to meet this legal requirement.

The letter of intent purpose in bid protest rules: When government contracting agencies, in the solicitation, ask for resumes as part of the RFP submission, they expect that the proposed employment letters of intent to hire for your proposed staff are people who will actually perform under the contract after the bidding process.

The material representation helps the agency to properly evaluate your technical proposal by seeing valid commitment letter from the proposed employee. The selection board would focus more on the commitment from the intended employee via his or her signature.

What is Required to Prove Violations of Bait and Switch laws in bid protest litigation?

When litigating a bid protest under bait and switch laws, the protestor must show a material misrepresentation in the awardee’s proposal. The second step is to show that the agency relied on the material misrepresentation.

  • An offeror may not propose a contractor letter of intent to submit a proposal for key personnel where it does not expect to use the person during contract performance.
  • To prevail in a bid protest for improper “bait-and-switch,” techniques you must show that the bidder made a misrepresentation regarding resources that it did not expect to furnish during contract performance and that the misrepresentation was relied upon by the agency in the evaluation and had a material impact on the assessment results.
  • Mere allegations without proof will not win the case.

Adverse Impact of Submitting an Invalid Employment Contractor Procurement Letters of Intent to Hire

 The letter of intent purpose in a solicitation is to ask bidders for specific items in response to the solicitation’s requirements. When an employment letter of intent to hire is included in those requirements, the adverse impact of being non-responsive to the solicitation can be a problem. Furthermore, some courts have reviewed this issue as a potential contractor responsibility issue.

The failure to submit a procurement letter of intent for business proposal for your key personnel can result in your bid being tossed out as non-compliant with the solicitation requirements and ultimately technically unacceptable.

To Avoid Costly Mistakes, Get a FREE Bid Protest Checklist

For help with bid protests about disputes with your contractor procurement letter of intent to hire and bait and switch laws, or employment letters of commitment from key personnel, call our bid protest lawyers at 1-866-601-5518 for a FREE INITIAL CONSULTATION.

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