Client Alerts & Newsletters

Court Enforces 50% Labor Value Rule

October 27, 2005

Brushing aside the fact that the "Limitation on Subcontracting" clause was not checked in the solicitation and the agency's defense that it was up to the contractor to assure compliance with the 50% rule of that clause, the Court of Federal Claims in Transatlantic Lines LLC v. U.S. (Oct. 13, 2005) found the clause to be required as a matter of law in a small business set-aside procurement and that the CO had an obligation to determine whether the 50% requirement would be met. The court also found that the CO had failed to meet his obligation to determine whether the successful offeror complied with one of the technical requirements when there was ambiguity on that score.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Marc F. Efron
Retired Partner – Washington, D.C.

Crowell & Moring LLP is an international law firm with offices in the United States, Europe, MENA, and Asia that represents clients in litigation and arbitration, regulatory and policy, and transactional and corporate matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation and government-facing matters, as well as its ongoing commitment to pro bono service and diversity, equity, and inclusion.

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