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  1. The SBA took over certification of service-disabled veteran-owned small businesses and veteran-owned small businesses on January 1, 2023. Soon, all companies will require an SBA certification to qualify as an SDVOSB or VOSB.

    In this course, Govology Faculty Instructor, Legal Analyst & retired founder of Koprince McCall Pottroff LLC, Steven Koprince offers a plain-English look at eligibility under the new SBA certification program. The webinar will cover the SBA’s often-misunderstood “unconditional” ownership requirements, the unique control requirements, and much more. Steven will also debunk some common SDVOSB/VOSB eligibility myths. Register here.

    The post Govology Webinar: Eligibility Criteria and New Rules for SBA Veterans Certification Program, February 21, 1:00pm EST first appeared on SmallGovCon - Government Contracts Law Blog.

    View the full article

  2. In the middle of July 2023, Wifcon.com will begin its 25th year online, if I'm still alive and functioning.  I'm Bob Antonio, I'm Wifcon.com, I'm 73 years old now, and I started Wifcon.com in 1998, before many of you were born.  I'm well but I am mortal.   

    Over the years, I've met a handful of you in person including Vern Edwards, Ralph Nash and Joel Hoffman.  Others I've met by accident include a Procurement Executive at the Department of Commerce when I was a member of the workaday world.  That's it.  I've simply been the man behind the curtain.   I'm writing this because I want to share some of my thoughts about the changes in contracting that I've noticed.     

    Wifcon.com started when Steve Kelman was the Administrator of the Office of Federal Procurement Policy (OFPP).  He was a vibrant leader who tried to make changes in procurement policy and tried to connect directly with contract specialists.  One of the ways he connected with contract specialists was through a discussion board.  When that discussion board died in 1998, Wifcon.com started its own Discussion Forum immediately.  Many, if not all, of OFPP's users moved to Wifcon.com's Discussion Forum.  Yes, if you look at Wifcon.com's Discussion Archives, you will notice that some discussions are over 20 years old.  It seems to me that in the early years of the Wifcon Forum there were more seasoned contract specialists participating.  I'm really not sure.  On the other hand, there are many more industry members using the Wifcon Forum.  Although the Wifcon Forum is viewed about 250,000 times a month, the users are mostly quiet with only a handful participating regularly.  As the regular posters age and disappear, I don't know who will replace them.  Participation is the lifeblood of discussion forums.  Without active participation, discussion boards die.  To try to enhance the Wifcon Forum, I have started adding specialized blogs that can provide feeds to Wifcon.com.  In that way, I can provide them with silent and unpaid advertising while providing information to you.

    Wifcon.com's Home Page and its daily update preceded the Discussion Forum by a few days in 1998.  When I began the Home Page my goal was to provide important information faster to you than was available from other sources.  In many cases, I have done that for most of Wifcon.com's life.  At first, there was a good deal of information to publish.  However, over the years, agencies published less and less useful information.  Where OFPP was once vibrant in 1998 it is now comatose.  It hasn't had an Administrator for years and I don't even check it anymore.  Contracting information has always taken a back-seat to most anything else but the goveernment seems to have forgotten what it is altogether.   Why pay attention to contracting with only hundreds of billions of dollars spent annually, with the defense of the nation depending on it, with the pandemic defeated by it?  Forget us at your own risk.  With the exception of the Departments of Defense and Energy, information from agancy sites is hard to find.  To counter this lack of information, I have had to search for more and more sources to find contracting information.  Since Wifcon.com is a one-person show, that additional time to find sources takes more and more of my time and I only have so much time in a day.

    In 2008, Wifcon.com stopped for a week.  I decided to quit.  Instead, I converted it to a commercial site and accepted advertising.  Until then, I paid all costs myself.  The advertising increased until the pandemic and the business slowdown reduced advertising throughout the economy.   I've lost advertisers as have some of the largest companies in the United States.  I'm still covering my costs to maintain the site and now pay myself about $.10 (ten cents) an hour for my effort.  That's down from a high of about $.25 (25 cents) an hour.  Someone once told me that Wifcon.com was a labor of love.  Maybe it's just a bad habit.

    Over the next couple of months and before Wifcon.com's 25th anniversary, I hope to convert the outdated--non-discussion board--software to a current software that looks attractive.  At that time, I will reduce the number of site pages from the current hundreds of pages to something manageable.  Currently, the advertising on the Discussion Forum conflicts with the software used to operate the Forum.  I also hope to hire someone to fix the flaws in the Disscussion Board software and to correct its conficts with my advertising.

    Before I end, I want to thank my former and current advertisers, especially Vern Edwards, who also contributes articles for publication on the Discussion Forum and has written wonderful Articles over the years for Wifcon.com's main site.  If you see something posted from him, read it, study it!  Also, I would be remiss if I didn't thank the regular posters on the Disscussion Forum.  Without them and all posters, the Discussion Forum would die.  I cannot keep it alive, only you can.  I just wish some of the thousands of lurkers would participate before it is gone. 

    There are times when I think of myself as a dinosaur from another era.  I can neither explain to you nor to myself why I maintain this site.  There are others you will find more interesting and knowledgeable on the Discussion Forums.  However, I know they are aging as I am and they are mortal too.  Take advantage of them while you can.  Myself and the regular posters that you see on the Discussion Forum have one thing in common.  We are all here to share our knowledge with those who ask and we do it for free.  We have done that from the start of Wifcon.com.  Quite often, I see a poster thanking those that respond to their question on the Discussion Forum.  I like that and appreciate that.  

  3. On January 20, 2021, President Joe Biden signed his first Executive Order (EO), EO 13985, which called for “a comprehensive approach to advancing equity for all, including people of color and others who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality.” At NITAAC, we are committed to advancing equity across the Federal Government and strongly believe that by leveling the playing field for all socioeconomic groups, we create a federal contracting experience that benefits everyone.

    That was the spirit behind our CIO-SP3 ramp on. In support of EO 13985, the CIO-SP3 ramp on increased the number of Service-Disabled Veteran Businesses (SDVB), 8(a) and Historically Underutilized Business Zones (HUBZone) small businesses to ensure equal access to contracting opportunities. The ramp on added over 200 Small Business Contract Holders to the vehicle, including 40 SDVB, 20 HUBZone and 81 8(a) contractors.

    In fact, in FY22, of the top ten performing CIO-SP3 Small Business contract holders, seven were ramp on contractors. The top 10 contractors contributed to $1.7 billion of the dollars obligated. $1.2 billion of the obligated dollars came from ramp on contractors.

    Tale of the top contractors on the CIO-SP3 Small Business GWAC

    As a result of the CIO-SP3 Small Business ramp on, the percentage of NITAAC Small Disadvantaged Businesses increased by 75%, with over 70% of our awarded contracts being spread out over small business/socioeconomic categories.

    • 8(a) – 131
    • Historically Underutilized Business Zone (HUBZone) - 22
    • Service-Disabled Veteran-Owned Small Business (SDVOSB) - 53
    • Small Business (SB) - 311
    • Women-Owned Small Business (WOSB) – 21

    But our efforts have not stopped there.  In support of EO 13779, which was designed to strengthen the capacity of Historically Black Colleges and Universities (HBCU’s) to participate in federal programs, access federal resources, including grants and procurement opportunities, as well as available partnership opportunities with federal agencies, the Chief Information Officer-Solutions and Partners 4 (CIO-SP4) Government-Wide Acquisition Contract (GWAC) solicitation allowed offerors to provide up to three examples of Information Technology projects that directly supported HBCU’s. Each example was worth 100 points with a maximum total of 300 points possible.

    The federal government’s goal in advancing equity provides everyone with the opportunity to reach their full potential. We are proud of the strides we have made to promote equity in federal contracting and take the President's orders to remove systemic barriers to opportunities and benefits for people of color and other underserved groups, quite seriously.

  4. This week’s episode covers the designation of agency labor advisors, a proposed rule implementing the data rights portions of Small Business Innovation Research Program and Small Business Technology Transfer Program Policy Directive, the dismissal of a challenge to the recent Executive Order and implementing regulation raising the minimum wage for contractors, and the Strengthening VA Cybersecurity Act of 2022, and is hosted by Peter Eyre and Yuan Zhou. Crowell & Moring’s “Fastest 5 Minutes” is a biweekly podcast that provides a brief summary of significant government contracts legal and regulatory developments that no government contracts lawyer or executive should be without.

    ListenCrowell.com | PodBean | SoundCloudApple Podcasts

    The post Fastest 5 Minutes: SBIR and Contractor Minimum Wage appeared first on Government Contracts Legal Forum.

    View the full article

  5. Section 822 of the 2023 National Defense Authorization Act, Public Law No. 117-7776 (Dec. 23, 2022) provides new authority for some defense contractors and subcontractors to obtain price increases that address the impacts of inflation. The new authority is welcome relief for contractors and subcontractors holding fixed-price defense contracts, which typically do not allow a price increase due solely to inflation.

    Here are the highlights of the new law:

    1. Effective Dates. The Secretary of Defense’s authority to make inflation adjustments under section 822 begins on December 23, 2022, and ends on December 31, 2023. Guidance implementing the authority granted by section 822 is due by March 23, 2023.
    • Eligible contracts. Inflation adjustments under section 822 are limited to fixed-price contracts and subcontracts with Defense Department agencies. On cost-reimbursement contracts, the Government bears the risk of inflation because they provide that the Government will pay the actual allowable and reasonable costs that the contractor incurs in performance. 
    • Eligible parties. Inflation adjustments under section 822 are available to prime contractors and subcontractors. Prime contractors may seek adjustments on behalf of subcontractors. If a prime contractor declines to request an adjustment on behalf of a subcontractor, the subcontractor may seek the adjustment directly from the government.
    • Proof of entitlement. A party seeking an inflation adjustment under section 822 must be able to show that the cost of performing an eligible contract or subcontract is greater than the price of the eligible contract or subcontract “due solely to economic inflation.”
    • Amount of adjustment. The amount of inflation adjustment under section 822 must “account only for the actual cost of performing . . . but may account for indirect costs of performance, as the Secretary of Defense determines appropriate.” Apart from the ambiguity arising from the language itself, meeting this requirement may be a challenge for contractors and subcontractors not accustomed to accounting for incurred costs. Hopefully the guidance documents provide clarification on this question.
    • Prohibition on consideration. Section 822 specifically prohibits requests for consideration in exchange for an inflation adjustment. The Government may not request “consideration” from prime contractors and prime contractors may not request “additional consideration or fees” from subcontractors. Presumably, this language is intended to ensure that contractors and subcontractors receive the benefit of the inflation adjustment and are not held up in negotiations on collateral terms and conditions or presented with offsetting demands, such as scope changes or accelerated completion deadlines.
    • Requirement for continued performance. Section 822 authorizes inflation adjustments only for those contractors and subcontractors who continue performance. A contractor that stops performance to avoid sustaining economic losses caused by inflation will not be eligible for an adjustment under section 822.

    Contractors and subcontractors currently performing fixed-price defense contractors should look carefully at whether they may seek relief from the impact of inflation under section 822. If they have not already done so, contractors and subcontractors that may be eligible for an adjustment under section 822 should begin documenting the impact of inflation on their performance costs. While it may make sense to delay the submission of a formal request until after the Defense Department’s guidance is published, the timeline for action is short. 

    View the full article

  6. Consider the following exchange between two people:

    Speaker 1 (asking Speaker 2): What type of car do you drive, foreign or domestic?

    Speaker 2: I drive a red car.

    Obviously, Speaker 2's answer is not responsive to Speaker 1's question. Speaker 1 wanted to know about a particular aspect of Speaker 2's car:  its origin. Speaker 2 described a different aspect of his car:  its color. While Speaker 2's statement about the color of his car may be true, it doesn't tell us anything about the origin of his car.

    Easy enough, right? Ok, let's try another one. Consider the following exchange between two contract specialists:

    Contract Specialist 1: Is Contract X a fixed-price or cost-reimbursement contract?

    Contract Specialist 2: Contract X is an indefinite delivery contract.

    Is Contract Specialist 2's answer responsive to Contract Specialist 1's question? No, the answer is no more responsive to the question than Speaker 2's answer was to the question of whether his car was foreign or domestic. Why? In this exchange, Contract Specialist 1 wanted to know about a particular aspect of Contract X:  ts compensation arrangement. Contract Specialist 2 described a different aspect of Contract X:  its delivery arrangement. While Contract Specialist 2's statement about the delivery arrangement of Contract X may be true, it doesn't tell us anything about the compensation arrangement of Contract X.

    Make sense? If so, see if you can spot anything wrong with the following passage of an article on contract types that recently appeared in the December 2010 issue of Contract Management (see Government Contract Types: The U.S. Government?s Use of Different Contract Vehicles to Acquire Goods, Services, and Construction by Brian A. Darst and Mark K. Roberts):

    FAR Subparts 16.2 through 16.6 describe 11 different permissible contract vehicles. These vehicles can be subdivided into three different families:
    • Fixed-price contracts,
    • Cost-reimbursement contracts, and
    • Other contract vehicles that can be used when the quantity of supplies or services cannot be determined at the time of award (i.e., indefinite delivery, time-and-materials (T&M), labor-hour (LH), and level-of-effort contracts) or where it is necessary for the contractor to begin performance before the terms and conditions of the contracts can be negotiated (i.e., letter contracts).

    Do you see anything wrong?  Notice that the first two "families" are categorized by compensation arrangement. However, the third family contains a mix of terms used to describe compensation arrangement (T&M/LH), delivery arrangement (indefinite delivery), the extent of contractor commitment (level-of-effort), and a unique term used to describe a contract that is not definitive (letter contract). The way this passage is written implies that an indefinite delivery contract, a level-of-effort contract, and a letter contract are necessarily different (belong to a different "family") from a fixed-price or cost reimbursement contract. However, an indefinite delivery contract or a level-of-effort contract will have a compensation arrangement. The compensation arrangement can be fixed-price, cost-reimbursement, T&M/LH, or some combination thereof. A letter contract may or may not have a compensation arrangement when it is issued. You could conceivably have a letter contract that had a cost-reimbursement compensation arrangement, an indefinite delivery arrangement, and that provided for level-of-effort orders. As such, the authors? categorization of contract types makes as much sense as categorizing cars into three families?foreign, domestic, and red.

    Incentive Contracts? Not What You Think They Are

    Consider the following simplified description of a compensation arrangement:

    The buyer agrees to pay the seller $100,000 to provide a specified quantity of medical transcription services. If the accuracy of the transcriptions exceeds 99%, the buyer agrees to pay the seller an additional $5,000.

    Does the preceding describe an incentive contract? Many would say yes, because the arrangement provides for an incentive--specifically, a performance incentive. However, that would be incorrect. Just because a contract contains an incentive does not mean that it is an incentive contract. FAR 16.202-1 contains the following statements in a description of firm-fixed-price contracts (similar statements pertaining to fixed-price contracts with economic price adjustment can be found at FAR 16.203-1.

    The contracting officer may use a firm-fixed-price contract in conjunction with an award-fee incentive (see 16.404) and performance or delivery incentives (see 16.402-2 and 16.402-3) when the award fee or incentive is based solely on factors other than cost. The contract type remains firm-fixed-price when used with these incentives.

    [bold added].

    Further, FAR 16.402-1(a) states:

    Most incentive contracts include only cost incentives, which take the form of a profit or fee adjustment formula and are intended to motivate the contractor to effectively manage costs. No incentive contract may provide for other incentives without also providing a cost incentive (or constraint).

    Thus, it's not enough for a contract to contain an incentive to be an incentive contract. It must contain a cost incentive (or constraint).

    In the aforementioned Contract Management article, an endnote references FAR 37.601(3) and misinterprets this paragraph as--encouraging the use of incentive-type contracts where appropriate.  Here's what FAR 37.601(3) actually says:

    Performance-based contracts for services shall include-

    (3) Performance incentives where appropriate. When used, the performance incentives shall correspond to the performance standards set forth in the contract (see 16.402-2).

    The authors have made the mistake of assuming that a contract that contained a performance incentive was necessarily an incentive contract. In fact, when acquiring services FAR 37.102(a)(2) states the following order of precedence:

    (i) A firm-fixed price performance-based contract or task order.

    (ii) A performance-based contract or task order that is not firm-fixed price.

    (iii) A contract or task order that is not performance-based.

    As shown above, a firm-fixed-price contract would take precedence over an incentive contract.

    A Genuine Misunderstanding

    In a discussion of additional contract types and agreements, the Contract Management article contained the following statement (which caused me to stop reading and start writing):

    T&M and LH contracts are varieties of indefinite-delivery contracts and provide procuring agencies with the flexibility to acquire recurring services or when the amount of the effort required to deliver an end-item is uncertain.

    Huh? T&M/LH is a type of indefinite delivery contract? I'll let you readers ponder that one.

    The article concludes with a plug for the authors-two-day course in, you guessed it, types of contracts. I will pass.

  7. At the beginning of Fiscal Year 2008 John Krieger and John Pritchard, two professors at the Defense Systems Management College, Defense Acquisition University, were kicking around the topic of Acquisition Reform. They reflected on what Jim Nagle wrote in the Epilogue to A History of Government Contracting, "If someone were asked to devise a contracting system for the federal government, it is inconceivable that one reasonable person or a committee of reasonable people could come up with our current system.  That system is the result of thousands of decisions made by thousands of individuals, both in and out of government.  It reflects the collision and collaboration of special interests, the impact of innumerable scandals and successes, and the tensions imposed by conflicting ideologies and personalities."

    They reflected that those thousands of decisions were like putting bandages on the acquisition, contracting and procurement processes.  Every time a piece of legislation is passed to “fix” the acquisition process, it’s another bandage.  Every time a change is made to the Federal Acquisition Regulation (FAR), it’s another bandage.  Every time a change is made to the Defense Federal Acquisition Regulation Supplement (DFARS), it’s another bandage.  Every time a procurement or contracting policy memorandum is issued, it’s another bandage. 

    They joked about that being a great visual aid for the classroom. (Remember classrooms, the places you went to learn before COVID-19?) And the joking became reality. They started with a golf ball, and added a bandage for each new law, executive order, regulation, guide handbook, etc. And it would grow, and grow, and grow. “Acquisition Reform and the Golf Ball” was born that day.

    The story of the golf ball was chronicled each fiscal year, and reported in the National Contract Management Association’s Contract Management (CM) after the end of each fiscal year. That is each year up until the report on the results for Fiscal Year 2020, when CM declined the latest installment in the series. Although John and John sought publication elsewhere, there didn’t appear to be a good fit, which brings the latest iteration, “Acquisition Reform and the Golf Ball—A Baker’s Dozen,” to Wifcon.com. (See attachment.)


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