The case: INSIGHT SYSTEMS CORP., and CENTERSCOPE TECHNOLOGIES, INC. v. THE UNITED STATES
The court: The United States Court of Federal Claims
A computer glitch forced disqualified proposers to challenge a U.S. government agency. Here is an abridged version of what happened. The United States Agency for International Development (USAID) advertised a Request for Quotations (RFQ). Eventually during the process, proposers were allowed to submit their revised final quotes either in hard copy form, or electronically via email. If the proposer submitted the quote electronically, it was its proposer’s responsibility to send in the appropriate information, and to do so timely to the people designated to receive it.
The two Plaintiffs in this case submitted quotations in response, and did so electronically and in their opinion, before the deadline. The way the system was set up, emails from outside sources directed to the specified USAID email addresses pass from the outside mail server through a sequence of three (3) agency-controlled computer servers, before they are ultimately delivered to the recipients. To make a long story short, the emails were received by the first USAID server, but due to technical error, were not passed on to the ultimate recipients until after the submittal deadline. USAID notified the proposers that their proposals would not be considered because they were received after the deadline. Arguing that late is late, the USAID felt that it did not matter whether the perceived lateness was due to technological malfunctions with its own computer system.
Well, you might not be. While you might have prudently thought ahead and gotten a performance bond from an entity downstream, to protect you from its defective work, the protection afforded by a performance bond only lasts so long. After some point, if you have not filed a lawsuit against the performance bond surety, you lose your right to make a claim and it is as if the performance bond never existed. As explained below, it might be relatively easy to determine the deadline for an owner to file a lawsuit against its general contractor’s performance bond surety, but calculating the deadline for a general contractor to file a lawsuit against one of its subcontractors’ performance bond sureties might not be so easy.
A lawsuit against a performance bond must be filed within five years from the date the work at issue was completed and accepted, or the lawsuit will be...