We persuaded the agency that our client’s interpretation of the solicitation’s pricing instructions were correct so our client could invoice and be paid as it intended.
The U.S. Department of Homeland Security issued a solicitation for Protective Security Officer (PSO) services. The solicitation instructed offerors to use a DHS-prepared spreadsheet to develop their fully burdened labor rate for PSO services. There were numerous pre-bid questions about how supervisor hours would be paid. The answers were ambiguous but consistently directed offerors back to the spreadsheet. DHS also warned offerors that if they altered the spreadsheet in any way, the offeror needed to explain the changes in its proposal. Our client used the spreadsheet exactly as directed by DHS. DHS ultimately awarded the contract to our client.
Our client’s proposal price was based on billing the supervisor hours directly, and the client’s first invoice for services included a direct charge for supervisor hours. DHS rejected the invoice, asserting that the contract required supervisor costs to be recovered as a component of the PSO hourly rate. If our client was not allowed to invoice for supervisor hours directly, it would lose several million dollars during the life of the contract.
The spreadsheet was the key. Although the spreadsheet did not reflect DHS’s subjective intent, any offeror using the spreadsheet as written would come to only one result: supervisor hours were billed directly. It was simply a matter of applying the formula DHS built into the spreadsheet. We prepared a claim relying on the spreadsheet. DHS denied the claim, and we appealed the final decision to the Court of Federal Claims.
After reading our complaint, the DOJ requested that we extend the deadline for DHS’s answer while we engaged in settlement discussions. We negotiated a settlement pursuant to which our client recovered $1,000,000 of the $1,100,000 of damages incurred to date, as well as a contract modification permitting our client to bill supervisor hours directly from that point forward.
