In “bet the company” litigation, Pillsbury’s government contracts team, led by Los Angeles trial partner Todd J. Canni, strung together a series of critical wins at the U.S. Court of Federal Claims in a successful challenge to the Department of Education’s $2.8 billion contract for debt collection services. The work for client Continental Services Group Inc. began in March 2017 and resulted in the Department of Education’s decision to take corrective action that gave ConServe the relief it sought, including another opportunity to secure this lucrative long term contract. Canni was joined by the team of Richard Oliver, Alexander Ginsberg, J. Matthew Carter, Aaron Ralph, Meghan Doherty and Glenn Sweatt.
With Canni arguing for ConServe during the court hearings, the team first secured a Temporary Restraining Order blocking the U.S. government from beginning performance under the protested contracts and, moreover, from transferring to other contracts any work intended to be performed under the disputed procurement. Consequentially, the Department of Education was enjoined from sending any new delinquent student debt accounts for collection, which the government claimed "shut down" the student debt collection program. After obtaining an extension of the TRO multiple times in contested hearings, the court convened the crescendo of hearings and Pillsbury, despite vigorous opposition from the government, the seven awardees, and four intervenors, was successful in obtaining a Preliminary Injunction, which effectively continued the TRO. The team’s tenacious advocacy and series of victories resulted in the government voluntarily agreeing to undertake corrective action by amending the solicitation, accepting revised proposals, and conducting new evaluations.
According to Law360, the disputed contract covers the collection or administrative resolution of outstanding student loan debts issued under several federal loan programs, including the Federal Family Education Loan Program, Stafford loans, Perkins loans and the Pell Grant program. The disputed contract, which opened to bids in December 2015, may run for up to 10 years, with a spending ceiling across all vendors of $2.8 billion. The deal, Law360 added, attracted 23 bidders, with seven companies ultimately awarded slots on the contract, touching off several protests at the U.S. Government Accounting Office.