By Wayne Simpson, CFCM, CSCM
Federal Contractor and Subcontractor Labor Reporting Requirements Under the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA)
VEVRAA requires Federal contractors and subcontractors covered by the Act’s affirmative action provisions to report annually to the Secretary of Labor the number of employees in their workforces, by job category and hiring location, who are qualified covered veterans. VEVRAA also requires Federal contractors and subcontractors to report the number of new hires during the reporting period who are qualified covered veterans.
This important annual Federal labor reporting requirement is coming due for Federal contractors and subcontractors. If Federal Acquisition Regulation (FAR) Clause 52.222-37, Employment Reports on Veterans, is contained in your Federal prime contract, or has been “flowed-down” in your subcontract by the prime contractor, you may have a reporting obligation. VEVRAA prohibits prime contractors and subcontractors from discriminating against qualified protected veterans and requires affirmative action by contractors to employ and advance in employment qualified protected veterans.
The report, known as “VETS-4212—Federal Contractor Veterans’ Employment Report”” (formerly known as VETS-100 or VETS-100A, and often referred to as such in contracts awarded using earlier versions of FAR Clause 52.222-37) is due for submission to the Veterans Employment Training Service (VETS) at the U.S. Department of Labor, no later than September 30, 2018. The filing cycle for Fiscal Year 2018 reporting opens up August 1, 2018. Additionally, contractors and subcontractors receiving an award meeting the reporting requirements under FAR Clause 52.222-37, must report within 120 days of contract award.
FAR Clause 52.222-37, Employment Reports on Veterans, as well as FAR Clause 52.222-35, Equal Opportunity for Veterans, have flow-down requirements to subcontractors.
Accurate and timely reporting, as well as record keeping, is critical to stellar contract administration. A contractor’s affirmative action obligations in the hiring and retention of Veterans is subject to audit by the U.S. Department of Labor’s Office of Federal Contractor Compliance Programs (OFCCP). Prime contractors which are State or Local Government Agencies are exempt from this requirement.
Failure to report has consequences. Federal Contracting Officers are prohibited from expending or obligating funds or entering into a contract with a contractor that was subject to reporting requirements under VEVRAA but did not submit a Report for the previous fiscal year. Reporting under covered contracts continues until the contract expires.
The VETS-4212 reflects the contractor’s/subcontractor’s employment activity report and shall reflect total new hires, and maximum and minimum number of employees, during the most recent 12–month period preceding the ending date selected for the report. Contractors may select an ending date—(1) As of the end of any pay period between July 1 and August 31 of the year the report is due; or (2) As of December 31, if the Contractor has prior written approval from the Equal Employment Opportunity Commission to do so for purposes of submitting the Employer Information Report EEO-1 (Standard Form 100).
A special note to U.S. Department of Veterans Affairs (VA) Federal Supply Schedule Contract holders. VA requires submission of this report to the U.S. Department of Labor regardless of the dollar amount of sales under the contract, and failure to submit can impact the processing of modifications, extension packages, and new and ensuing offers.
Just in time for the annual VEVRAA reporting, on Thursday, August 2, 2018, from 1:00 PM – 2:30 PM EDST, Centre is conducting a 90-minute VETS-4212 Reporting webinar to introduce VEVRAA, FAR Clauses 52.222-37, 52.222-35, to participants and teach them how to successfully prepare and submit a VETS-4212 Report to the Veterans Employment Training Service at the U.S. Department of Labor.
Your Federal contract(s) administrator(s) and human resources management officer(s) (HR plays an important role in providing information for the VETS-4212 Report) will benefit by joining us at the webinar. The webinar is both a great introduction and refresher for this important annual labor reporting.
For more information on and to register for the VETS-4212 Reporting Webinar, please click here.
About the Author:
Wayne Simpson Consultant
Wayne Simpson is retired from the U.S. Department of Veterans Affairs (VA) after 38 years of federal service. He served as the Executive Assistant to VA’s Deputy Assistant Secretary for Acquisition and Logistics where he was the primary staff advisor to the Deputy Assistant Secretary, who serves concurrently as VA’s Senior Procurement Executive and Debarring Official.
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By David Warner,
I have been fascinated with the political theater around U.S. Supreme Court nominees ever since the contentious Clarence Thomas confirmation hearings gave rise to one of the greatest Saturday Night Live cold openings of all time. (Viewer beware, 2018 “sensitivities” might conflict with 1991 standards of humor. It’s still a classic.)
Given our current President and the fact that the incoming justice will replace the “swing vote” of retiring Justice Anthony Kennedy, it is widely expected that the political rhetoric will be ratcheted up to eleventy and stay there until the final vote is cast. Indeed, we’ve already seen breathless reports that Justice Kennedy and The White House purportedly coordinated his resignation with Kavanaugh’s selection; a report that was walked back as entirely unsourced within a few hours. Even the relatively staid USA Today seems to be picking up on the fact that some (all?) of the overheated rhetoric may be based more on grinding existing political axes as opposed to a principled objection to the individual nominee. And to think, we’re only in day three of the process!
And what of the nominee himself? Well, a little over a year ago I wrote a blog about Trump’s first “100 Days,” the central thesis of which was that – ill-conceived tweets notwithstanding – Trump was governing relatively conservatively and consistent with his campaign promises. Nominating Judge Kavanaugh, a true “DC Insider” is effectively more of the same. His resume before joining the federal bench in 2006 is straight out of central casting – i.e., Yale undergrad, Yale law school, clerkships with the Third and Ninth Circuit Courts of Appeal, a clerkship with the Supreme Court (Justice Kennedy’s chambers, notably), time with the Office of the Solicitor, time with the White House legal staff, etc.
While Kavanaugh’s jurisprudence is likely to be to the right of Kennedy, he is generally not viewed as a Scalia-esque firebrand. One possible exception may be in the area of administrative law and “Chevron deference,” which is the deference courts have given to administrative agency’s interpretations of their own regulations. Kavanaugh has spoken critically and at length regarding the doctrine, and his fealty to statutory authority in the face of potential agency overreach underlaid his decision against the U.S. Department of Labor in the high profile “CityCenter” case cabining the scope of the Davis-Bacon Act.
Despite the sturm und drang we’re about to experience, Kavanaugh – like Justice Neil Gorsuch before him – is a textualist that has consistently demonstrated conservative legal reasoning during his time on the bench. In other words, he’s pretty much exactly what Trump said he would nominate during his successful presidential campaign.
Obviously, that’s not going to be viewed as a good thing in all corners; and I am certain my partner and good friend Barbara Kinosky will be doubling her deliveries of kale and vitamin supplements to Justice Ginsburg’s chambers. But fear not, Barb, I understand measures are being taken to ensure that RBG will be around next session!
About the Author:
David Warner
Partner
David Warner is a seasoned legal counselor with extensive experience in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David leads Centre’s audit, investigation, and litigation practices.
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Centre Law & Consulting will be at NCMA World Congress in Cleveland from July 22-24, 2018. Barbara Kinosky, Centre’s Managing Partner, has been invited to speak about federal contracting topics (see below for the topics and times). Centre will also be exhibiting at booth 208.
E08 – Lessons Learned from Successful GAO Protests
Room 10, 2:00 PM – 3:15 PM
Management/Business Competencies Track
What makes a protest successful? What can you do to avoid one? This session gives clear guidance on practices to avoid that lead to protests, as well as winning grounds for a protest.
Speaker: Barbara Kinosky
F15 – News from Capitol Hill
Room 10, 3:30 PM – 4:45 PM
Our Changing Environment Track
Get the latest news from Capitol Hill. Learn what’s new, what’s old, and what’s new again. Hear the latest on new legislation and regulations and emerging trends, and stay current with this legislative and regulatory update.
Speaker: Barbara Kinosky
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By Barbara Kinosky,
For exactly three years Daniel Horowitz was paid his full GS-15 salary of $161,000 to do – well – exactly nothing. That delicious gravy train finally ended. We can now say that Dr. Horowitz was employed (past tense) by the Chemical Safety Board (CSB), a small independent agency that I never heard of. He had been charged with misconduct over a kerfuffle on how he handled certain leadership roles but his case went into limbo. One day Dr. Horowitz was busy doing whatever PhD GS-15 Managing Directors do at the Chemical Safety Board, when armed police wearing protective armor escorted him out of his office. I do not know Dr. Horowitz but that does seem like a bit of an overkill when his only weapon may have been the periodic table.
The Public Employees for Environmental Research (another group I did not know about) is representing him at the Merit Systems Protection Board. They argue that he was terminated because congressional Republicans put pressure on the new chair of the CSB to say adieu to the chemist. They say the charges against him are vague and the onus was on CSB to make a decision about his extended leave but instead, they left him in paid limbo for three years. Dr. Horowitz, in an interview with Government Executive, said he offered many times to take on tasks and work from home but was rebuffed by the agency.
Sen. Chuck Grassley, R-Iowa, attached a bill to the 2016 Defense Authorization Bill that limits the maximum administrative leave in these types of cases to 10 days. I note with some irony that 18 months later the Office of Personnel Mangement (OPM) is still working out the details. OPM better hustle, because under the Trump government reorganization plan its role is being reduced. But that will probably take at least three years to do.
A thank you to Charles S. Clark for letting me crib from his breaking news story at Government Executive.
About the Author:
Barbara Kinosky
Managing Partner
Barbara Kinosky is the Managing Partner of Centre Law and Consulting and has more than twenty-five years of experience in all aspects of federal government contracting. Barbara is a nationally known expert on GSA and VA Schedules and the Service Contract Act, and she has served as an expert witness for federal government contracting cases.
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By Heather Mims
Currently, an unsuccessful offeror may file a protest with the Government Accountability Office (“GAO”) and, if the protest is denied, file suit at the United States Court of Federal Claims (“COFC”). However, the Department of Defense (“DOD”) sought to change that.
On April 3, 2018, the DOD submitted its Fourth Package of Legislative Proposals Sent to Congress for Inclusion in the National Defense Authorization Act for Fiscal Year 2019. Of particular interest to contractors, DOD sought to amend the Tucker Act to impose timeliness rules at the COFC (“COFC”) where no specifical timeliness rules have existed. Specifically, DOD sought to impose timeliness rules that mirror those of the GAO, which would mean that a contractor would have to file a protest at the COFC within ten days of when it knew or should have known of its protest ground.
Therefore, a contractor would be forced to choose its venue and file its bid protest within these initial ten days. In fact, DOD’s proposal specifically modifies the Tucker Act to state that under no circumstances will the COFC consider a protest that is untimely because it was first filed at the GAO. However, the DOD’s proposal does not limit agency-level protests. As such, a contractor could still submit a protest to the agency and, if denied, either file a protest at the GAO or submit a claim at the COFC within ten days of the agency’s denial.
While the Senate’s proposed National Defense Authorization Act for Fiscal Year 2019 did not include this suggested change, it does require the Secretary of Defense to carry out a study of the frequency and effects of bid protests involving the same DOD contract award or proposed award that have been filed at both the GAO and the COFC. It also requires the Secretary to establish a data collection system to better track and analyze bid protest trends in the future.
This decision comes after Fiscal Year 2017’s NDAA required “a comprehensive study on the prevalence and impact of bid protests on Department of Defense acquisitions, including protests filed with contracting agencies, the Government Accountability Office, and the Court of Federal Claims.” The RAND Corporation was commissioned to provide this study; its report, provided to Congress in December 2017, found that the number of COFC cases that previously appeared at the GAO may be increasing but “this potential trend needs further research.”
Thus, it appears that Congress is seriously considering DOD’s proposal as it has requested further research on this topic. Don’t be surprised if you see DOD propose this legislative change again next year!
About the Author:
Heather Mims
Associate Attorney
Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow.
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By Julia Coon,
The General Services Administration (GSA) started the mass modification roll-out of the Commercial Supplier Agreement (CSA) final rule into all Federal Supply Schedules this week. Mass modification roll-out for Order-Level Materials (OLMs) eligible Schedules will begin following acceptance of the CSA mass modification.
Following is a summary of the steps for accepting these mass modifications. Please note that this will be a multi-step process for the OLM authorized Schedules and the CSA mass modification must be accepted before the OLM mass modification will be issued.
Step #1:
All Schedule contractors must accept the mass modification adding GSAR clause 5552.212-4 Contract Terms and Conditions Commercial Items (JAN 2017)(DEVIATION – FEB 2018)(ALTERNATE I – JAN 2017)(DEVIATION – FEB 2007) incorporating the CSA rule into the contract. This mass modification will also include updated Service Contract Labor Standards (SCLS) Wage Determinations for all solicitations.
Step #2:
Following acceptance of the CSA mass modification, another mass modification will be issued to contractors with the seven OLM authorized Schedules currently identified as 03FAC, 56, IT70, 71, 84, PSS, and 738X. Please note that GSA may authorize additional Schedules in the future. If you wish to participate, Schedule contractors must accept the mass modification that automatically adds the OLM Special Item Number (SIN) and GSAR clause 552.538-82 Special Ordering Procedures for the Acquisition of Order-Level Materials to the existing contract.
Once the mass modification has been accepted, the new OLM SIN will populate across the GSA eTools including GSA eLibrary. Contractors can then start to propose OLMs in response to customer requirements.
What are the CSA and OLM Rules?
The CSA final rule defines unenforceable obligations and clauses in addition to outlining the order of precedence Contracting Officers and industry must follow. The intent of the rule is to streamline CSA negotiations.
The OLM final rule provides Contracting Officers the authority to acquire OLMs when placing task or delivery orders against a Federal Supply Schedule (FSS) or FSS Blanket Purchase Agreement (BPA). OLMs are supplies and/or services acquired in direct support of an individual task or delivery order placed against an FSS Schedule or BPA when the supplies and/or services are not known at the time of Schedule or BPA award.
Your GSA Schedule contract administrator should be on the lookout for the email from GSA with the PIN number to accept the mass modification. After the CSA mass modification is accepted, be on the lookout for the next PIN number to accept the OLM mass modification.
About the Author:
Julia Coon Consultant
Julia Coon is GSA and VA Contract Consultant at Centre Law & Consulting. Julia works with the GSA/VA team in preparing new schedule proposals and post-award contract administration. She has experience in producing schedule renewal packages, various modification packages, small business subcontracting plans, and updates to GSA pricelists.
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By Wayne Simpson, CFCM, CSCM
House Moves to Prevent Abuse and Misuse of SmartPay Program’s Largest User
On May 21, 2018, after 40 minutes of floor debate, the U.S. House of Representatives considered under the suspension of the rules, and passed H.R. 5215, the “Veterans Affairs Purchase Card Misuse Mitigation Act” by voice vote. The bill was sent to the Senate May 22, 2018, for consideration.
H.R. 5215 amends Title 38 of the United States Code to direct the Secretary of Veterans Affairs to prohibit U.S. Department of Veterans Affairs (VA) personnel found to have knowingly misused VA purchase cards from serving as purchase card holders or purchase card approving officials. This prohibition is in addition to any other applicable penalties.
For purposes of the Act, “misuse” means (1) splitting purchases; (2) exceeding applicable purchase card limits or purchase thresholds; (3) purchasing an unauthorized item; (4) using a purchase card without being an authorized purchase card holder; or (5) violating ethics standards.
Purchase card spending will undoubtedly increase in the current and subsequent fiscal years due to recent changes in Federal law. On March 22, 2018, VA issued a Class Deviation to the Federal Acquisition Regulation (FAR) implementing and increasing the new micro-purchase threshold (MPT) and the new simplified acquisition threshold (SAT) effective immediately. The MPT increased from $3,5001 to $10,000 for products, while the SAT increased from $150,000 to $250,000. MPT and SAT increases were authorized by Sections 805 and 806 of the National Defense Authorization Act (Public Law 115-91) signed by President Trump December 12, 2017.
In Fiscal Year 2017, the most recent data available for the 24 Federal departments and agencies covered by the Chief Financial Officers Act2, VA was the largest user of the General Services Administration (GSA) SmartPay3 (Governmentwide purchase card) Program, in terms of total transactions and total dollars spent, even outspending the Department of Defense and its independent agencies.
VA spent over $14.2 Billion using SmartPay in 7,385,210 transactions (665,395 with VA’s Prime Vendor Programs, and 6,719,815 with ordinary vendors). VA accounts for a significant portion of the total SmartPay purchasing spend of the 24 CFO Act departments and agencies for Fiscal Year 2017. The total spend/transactions of the 24 CFO Act departments and agencies totaled $18.114 Billion, with 18,549,144 transactions. VA’s SmartPay spend accounts for approximately 39.7% of all SmartPay Transactions and approximately 56.5% of total SmartPay dollars for the 24 CFO Act departments and agencies.
VA Use of SmartPay Fiscal Year 20174
NUMBERED NOTES
1The micro-purchase threshold remains at $2,500 for services; $2,000 for construction; and there are higher thresholds for certain other acquisitions in support of peacekeeping missions and disaster recovery when authorized by agency heads. 2Chief Financial Officers Act of 1990, Public Law 101-576 3The GSA SmartPay Program is the world’s largest government charge card and commercial payment solutions program, providing services to more than 560 Federal agencies, organizations, and Native American tribal governments. GSA SmartPay payment solutions enable authorized government employees to make purchases on behalf of the Federal Government in support of their agency/organization’s mission. Administrative savings using SmartPay are estimated at $1.7 Billion annually, with Federal agencies earning over $3 Billion in rebates using the Program. 4Source: Federal Procurement Data System-Next Generation (FPDS-NG)
About the Author:
Wayne Simpson Consultant
Wayne Simpson is retired from the U.S. Department of Veterans Affairs (VA) after 38 years of federal service. He served as the Executive Assistant to VA’s Deputy Assistant Secretary for Acquisition and Logistics where he was the primary staff advisor to the Deputy Assistant Secretary, who serves concurrently as VA’s Senior Procurement Executive and Debarring Official.
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By Tyler Freiberger
You’ve likely noticed a flurry of notifications and emails from companies warning you of updated terms and services. The updates were made to comply with Europe’s new General Data Protection Regulations (GDPR), which has been approved since 2016 and went into effect on May 25, 2018. The relevant portion here generally makes it much harder for a website to throw a 200-page legal document at you with vague terms that allow tracking your personal information and selling to the highest bidder. Those companies that previously used such tactics (seems almost all of them) now are required to be far more transparent with their policies for their EU customers and Americans are getting some residual benefits. It is a little ironic that at roughly the same time this protection goes into effect the United States Supreme Court issued a decision making similar, often hidden, legal waivers in employment handbooks/agreements much stronger.
In Epic Systems Corp. v. Lewis, the Court ruled 5-4 that employers can include a clause in their employment contracts that require employees to arbitrate their disputes individually and to waive the right to resolve those disputes through class actions. This shows the dramatic shift from the judicial system’s view of arbitration 60 years ago. See, e.g., Bernhardt v Polygraphic Co. of Am., 350 U.S. 198, 203 (1956) As made clear in the decision, Congress purposely wanted to dispel American courts’ distaste for arbitrations by passing the Federal Arbitration Act (FAA). While some see Europe’s GDPR as a move forward for the little guy and this ruling as a knockback, the worries are likely overstated.
The National Labor Relations Board (NLRB) has long held that agreements that require employees to resolve their disputes by arbitration on an individual basis are invalid. In fact, the NLRB advocated these agreements as unfair labor practices under Section 8 of the NLRA. The Court in Epic Systems expressly rejected that argument with a harsh dissent from Justice Ginsburg warning that such a ruling greatly undermines employees’ ability to fight back against large companies. Even the majority opinion seemed skeptical of arbitration systems but reluctantly respecting Congressional intent; “this court is not free to substitute its preferred economic policies for those chosen by the people’s representatives.”
It’s certainly understandable to question an employment clause that is estimated to cover about 25 million workers in America. Especially when the Consumer Financial Protection Bureau (CFPB) studied the arbitration agreement clauses, then banned companies from using them with consumers last year, on the belief they stifled legitimate complaints of wrongdoing. That belief is difficult to justify given empirical studies show arbitrations are cheaper for all parties and more available for lower income employees than the courts, more likely to result in a win than if the employee went to court, and presented ease of access to a dispute forum on par with the employee covered by powerful unions.
So while the world collectively laughs at the scramble to update terms of service agreements, now may be a good time to update those employment agreements with the blessing of mighty SCOTUS.
About the Author:
Tyler Freiberger
Associate Attorney
Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia.
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By Wayne Simpson, CFCM, CSCM
Discretionary Use by VA Contracting Officers Authorized; Must Be Approved First
In what many will see as VA’s continued assault on its Veterans First Contracting Program post-Kingdomware, VA recently implemented “Cascading” set-asides. VA refers to these set-asides as “Tiered Evaluations,” noting they are also known as “Cascading” set-asides.
VA issued Acquisition Policy Flash (No. 18-15), transmitting Procurement Policy Memorandum (PPM) No. 2018-04, dated and effective February 8, 2018. VA issued the PPM in response to requests from VA contracting officers requesting guidance and procedures for the use of tiered evaluations within a single synopsized solicitation when applying the “VA Rule of Two.”
The “goal” of the PPM is to minimize delays in the re-solicitation process incurred subsequent to the application of the “VA Rule of Two” at either the Service-Disabled Veteran-Owned Small Business (SDVOSB) and the Veteran-Owned Small Business (VOSB) priority tiers within a single-synopsized solicitation
According to VA, this change will also streamline the process of satisfying VA’s obligation under Section 8127 of Title 38 United States Code when “viable” offers are not received at the SDVOSB or VOSB priority tiers within a single synopsized procurement.
There are three types of tiered evaluations which VA will use. The first is “Tiered Evaluations Limited to SDVOSB or VOSB.” The second, “Tiered Evaluations Including Small Business Concerns. The third is “Tiered Evaluations Including Large Business Concerns.” The type tiered evaluation used will be based on the results of market research which must be conducted and documented in advance of the solicitation’s issuance. VA must include a notice in all solicitations issued using tiered evaluation.
VA issued a Class Deviation to the Federal Acquisition Regulation (FAR) on March 22, 2018, which was also effective immediately. The FAR Class Deviation was required to allow VA contracting officers to follow tiered evaluation procedures in PPM No. 2018-004. The language at FAR 19.502, prior to issuance of the Class Deviation limited the effectiveness of VA’s PPM No. 2018-04, as the FAR required contracting officers to withdraw the set-aside and resolicit the requirement if no acceptable offers are received from responsible small business concerns.
PPM No. 2018-04 applies to all competitive procurements using tiered evaluations. The use of tiered evaluations for procurements of supplies, products, and services (including commercial items) is at the discretion of the contracting officer. When using tiered evaluations, the solicitation must be approved by a contracting official at least one level above the contracting officer who issues and prepares the solicitation. The approving official will validate the supporting market research has been thoroughly documented in advance of issuing the solicitation.
About the Author:
Wayne Simpson Consultant
Wayne Simpson is retired from the U.S. Department of Veterans Affairs (VA) after 38 years of federal service. He served as the Executive Assistant to VA’s Deputy Assistant Secretary for Acquisition and Logistics where he was the primary staff advisor to the Deputy Assistant Secretary, who serves concurrently as VA’s Senior Procurement Executive and Debarring Official.
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By Heather Mims
Ordinarily, the GAO will decline to review the termination of contracts for convenience because such actions are matters of contract interpretation and are more properly brought within the context of a CDA claim. However, in the recent decision of AutoFlex, Inc., B-415926 (Apr. 19, 2018), the GAO noted that it will review the propriety of a termination for convenience where the termination flows from a defect the contracting agency perceived in the award process.
AutoFlex, Inc. was one such case. There, the RFQ was issued as a small business set-aside for a fixed-price contract for the lease of four 2018 Chevrolet Suburbans. The RFQ stated award would be made on a lowest-price, technically acceptable basis.
The agency received five quotes in response to the solicitation, including, as relevant here, quotes from AutoFlex and District Fleet. District Fleet filed the lowest-price quotation, which the agency originally found technically unacceptable. The agency then subsequently made the award to AutoFlex, the incumbent, and the second lowest-price offeror.
District Fleet then filed an agency-level protest. The agency ultimately found that its evaluation of District Fleet’s quotation was erroneous and found that District Fleet’s quote was technically acceptable. Thus, the agency terminated AutoFlex’s contract and awarded the contract to District Fleet. AutoFlex’s protest to the GAO followed.
Specifically, AutoFlex argued that the agency unreasonably terminated its contract. The GAO first noted that generally, it will not review the termination of contracts for convenience. However, the GAO will review the propriety of a termination where it flows from a defect the agency perceived in the award process. In such cases, the GAO will review the award procedures that underlie the termination decision for the limited purpose of determining whether the initial award was improper and, if so, whether the corrective action taken was proper. However, the GAO will not object to the corrective action taken so long as the action taken is appropriate to remedy the impropriety in the award process.
While the GAO ultimately denied AutoFlex’s protest, this protest serves as a good reminder that, under the right circumstances, the GAO will occasionally review a termination for convenience decision.
About the Author:
Heather Mims
Associate Attorney
Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow.
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By David Warner,
As most federal contractors are aware, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) is the agency responsible for ensuring that contractors and subcontractors doing business with the U.S. government comply with affirmative action and non-discrimination obligations under federal laws, executive orders, and regulations. In September 2016, the Government Accounting Office (“GAO”) issued a report recommending that OFCCP review its compliance assistance efforts to identify opportunities for enhancing contractors’ understanding of their obligations.
To provide the opportunity for contractors to offer their perspectives while implementing the GAO’s recommendation, in 2017 the OFCCP conducted three “Compliance Assistance Town Halls,” followed by three “stakeholder meetings” in Washington DC, in January of this year. Last month, the agency issued its resulting “Town Hall Action Plan,” which identified three over-arching areas of focus – training, communication, and trust – as well as three responsive initiatives:
Review and enhance contractor compliance assistance materials
Assess and improve the quality of contractor and compliance officer training and education
Increase transparency and communication with agency stakeholders.
Of most interest (at least to this author), is the “transparency and communication” initiative, which the OFCCP expects to include a “Bill of Rights” styled, What Can Contractors Can Expect, document that will “outline certain OFCCP principles that contractors can expect to exist during an engagement with OFCCP.” They identified these principles as including, but not limited to, “such things as timeliness, accuracy, communication, confidentiality, and professionalism.”
Perhaps more important than the aspirational bromides, however, is the effort to “achieve consistency across regional and district offices” through the use of a Predetermination Notice (PDN) in those instances where the agency believes it finds evidence of potential discrimination. The use of PDNs prior to the issuance of a Notice of Violations (NOV) is intended to encourage communication between contractor and OFCCP and to allow the opportunity to respond with supplemental information. Also, per the Action Plan, “regional discretion is no longer permitted and the national office will review all PDNs to ensure appropriate consistency and uniformity.”
Time will – of course – tell; but, for those of us interacting regularly with the agency, an effort to achieve “consistency and uniformity” as to the investigative approach across the nation’s various regions and districts would be a welcome development. Similarly, promised updates to long outdated Technical Assistance Guides should help contractors who might be relatively unfamiliar with the OFCCP and its processes to stay clear of compliance challenges.
About the Author:
David Warner
Partner
David Warner is a seasoned legal counselor with extensive experience in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David leads Centre’s audit, investigation, and litigation practices.
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By Wayne Simpson, CFCM, CSCM
On May 1, 2018, the General Services Administration (GSA) published FAC 2005-98 in the Federal Register, covering a number of FAR Cases with Final Rules effective May 31, 2018. The online version of the FAR (www.acquisition.gov) will not be updated until May 31, 2018.
FAR Case 2017-007, Task-and-Delivery Order Protest; Final Rule, effective May 31, 2018. This Final Rule amends FAR Part 16 and implements § 835 of the National Defense Authorization Act (NDAA) for Fiscal Year 2017 (P.L. 114-328), which raises the protest threshold for task and delivery orders from $10 million to $25 million. According to GAO, there are fewer than 10 protests per year of procurements between $10 million and $25 million, the higher threshold for protests of task or delivery orders for DoD, NASA, and the Coast Guard will result in savings for GAO and the affected Executive branch agencies, because there will no longer be protests of orders valued between $10 million and $25 million based on dollar value.
FAR Case 2017-004, Liquidated Damages Rate Adjustment, Final Rule, effective May 31, 2018. This Final Rule amends FAR Parts 22 and 52 and implements the U.S. Department of Labor (DOL) interim final rule published in the Federal Register July 1, 2016, and the final rule published in the Federal Register on January 18, 2017, and subsequent adjustments for inflation pursuant to the Federal Civil Penalties Inflation Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act of 2015. The final rule specifically addresses violations and liability for unpaid wages (overtime) under the Contract Work Hours and Safety Standards Statute.
FAR Case 2015-039, Audit of Settlement Proposals, Final Rule, effective May 31, 2018. This final rule to amends FAR Part 49 to raise the dollar threshold requirement for the audit of prime contract settlement proposals and subcontract settlements from $100,000 to align with the threshold for obtaining certified cost or pricing data, which is $750,000. This final rule impacts contractors subject to audits of their termination settlement proposals and eliminates termination settlements audits between $100,000 and the threshold for obtaining certified cost or pricing data, currently $750,000. Contractors will save costs associated with the preparation and support for the termination settlement audits. This will also enable faster final settlement payments to contractors, thereby improving contractor cash flow.
FAR Case 2017-008 (Item II), Duties of the Office of Small and Disadvantaged Business Utilization (OSDBU), Final Rule, effective May 31, 2018. This final rule amends FAR Part 19 to reflect sections of NDAA 2017, P.L. 114-238, amends § 15(k) of the Small Business Act to provide additional duties for OSDBUs. These additional duties also apply to DOD Offices of Small Business Programs. NDAA § 1812, § 1813, § 1821 of the NDAA for FY 2017 amend section 15(k) of the Small Business Act to add duties for OSDBUs and OSBPs.
Section 1812 of the NDAA for FY 2017 amends the Small Business Act to specifically reference the existing duties of OSDBUs and OSBPs with respect to the various small business programs and consolidation of contract requirements. Section 1812 also requires OSDBUs and OSBPs review summary purchase card data for acquisitions above the micro-purchase threshold (e.g., $3,500)*, but below the simplified acquisition threshold (e.g., $150,000)*, to ensure these acquisitions are compliant with the Small Business Act and have been properly recorded in the Federal Procurement Data System (FPDS). The revision to the FAR reflecting section 1812 of the NDAA includes flexibility for each OSDBU or OSBP to identify the best purchase card data available to their agency when implementing the statutory requirement. *Note: The micro-purchase and simplified acquisition thresholds were raised by NDAA 2018 to $10,000 and $250,000, respectively. A final rule has not been implemented (FAR Case 2018-004), but agencies have been authorized to implement Class Deviations to begin using the new thresholds before the Final Rule is promulgated (see Civilian Agency Acquisition Council Letter No 2018-03, dated February 16, 2018)
Paragraph (a) of section 1813 requires OSDBUs and OSBPs to provide assistance to a small business prime contractor or subcontractor in finding resources for education and training on compliance with the FAR after award of their contract or subcontract.
Paragraph (b) of section 1821 requires OSDBUs and OSBPs to review all required small business subcontracting plans to ensure that they provide maximum practicable opportunity for small business concerns to participate as subcontractors.
Currently, acquisition-related duties of OSDBUs and OSBPs are found in FAR 19.201, General policy. The duties found in FAR 19.201 are based on the duties found in section 15(k) of the Small Business Act (15 U.S.C. 644(k)). Additional OSDBU and OSBP acquisition-related duties enacted before the NDAA for FY 2017 listed at 15 U.S.C. 644(k), which were not previously updated in the FAR, are also included in this rule.
Additionally, this rule revises the OSDBU and OSBP duty at FAR 19.201(c)(5), which relates to increasing small business participation in solicitations that involve bundling. This revision reflects that OSDBUs and OSBPs perform much broader functions under those scenarios than what is currently listed in the FAR.
FAC 2005-98 contains GSA’s introduction to the FAC, as well as the Small Entity Compliance Guide required by § 212 of the Small Business Regulatory Enforcement Fairness Act of 1996.
About the Author:
Wayne Simpson Consultant
Wayne Simpson is retired from the U.S. Department of Veterans Affairs (VA) after 38 years of federal service. He served as the Executive Assistant to VA’s Deputy Assistant Secretary for Acquisition and Logistics where he was the primary staff advisor to the Deputy Assistant Secretary, who serves concurrently as VA’s Senior Procurement Executive and Debarring Official.
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By Barbara Kinosky
General Dynamics Information Technology (GDIT) has been accused of underpaying about 10,000 workers allegedly covered by the Service Contract Act (SCA). These workers run help hotlines for public insurance programs. Four complaints were filed Monday at the Department of Labor by the Communication Workers of America. It’s interesting that this union does not represent any of the workers. There is no private right of action under the SCA so I am a bit perplexed over how this union can bring a complaint.
The complaint alleges that most of the call center workers are paid $10.52 an hour which is below the service contract act rate for such jobs in Kentucky. It doesn’t matter what side you are on in this case, one thing I think we can all agree upon is that the service contract act is a very complicated act indeed.
Ways to avoid this issue is to ask the contracting officer in writing, during the solicitation process, if the SCA applies to the contract, if you think it might, and to definitely ask when the SCA FAR clause is in the solicitation but no wage determinations are attached to the RFP.
Click to read Washington Post article
The big question in Washington is whether Navy Rear Adm. Ronny Jackson, appointed by Pres. Trump to lead Veterans Affairs, will continue to have White House support. New allegations have come out from former military staff who allege that Jackson was drunk while on duty. The concern over Jackson’s nomination is bipartisan. Currently his confirmation hearing, which was supposed to occur this week, has been postponed indefinitely in light of the new information presented to the committee. I think his confirmation is doubtful.
Thanks to Fran and Chris Craig of Unanet for hosting a dinner with Bloomberg’s Kevin Brancato. Kevin is predicting a big spend in the last quarter of this fiscal year. Money has been dribbling out in small contracts in the first two quarters so he says the burn will be higher than usual at the end of this fiscal year. Bloomberg thinks the winners will be small businesses particularly WOSB and SDVOSB. Bloomberg also spoke highly of NASA SEWP, for how well managed it is (congrats to Joanne Wojtek, Darleen Cohen and the rest of the awesome SEWP team). That’s all the news.
I hope to see you at our Mid-Year Update: Hot Issues in Federal Contracting, on June 13th. Mid-Year provides everything you need to stay current on the developments that have come out over the first half of the year in the ever-changing field of government contracts.
About the Author:
Barbara Kinosky
Managing Partner
Barbara Kinosky is the Managing Partner of Centre Law and Consulting and has more than twenty-five years of experience in all aspects of federal government contracting. Barbara is a nationally known expert on GSA and VA Schedules and the Service Contract Act, and she has served as an expert witness for federal government contracting cases.
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By Maureen Jamieson, Executive Director of Consulting
Hopefully, you have been following the breaking news regarding the final rule on Order-Level Materials (OLMs). After many years of discussion on this subject, the General Services Administration (GSA) is amending the General Services Administration Acquisition Regulation (GSAR) providing the authority to acquire OLMs when placing task or delivery orders against a Federal Supply Schedule (FSS) or FSS Blanket Purchase Agreement (BPA).
And exactly what is the definition of OLMs? OLMs are supplies and/or services acquired in direct support of an individual task or delivery order placed against an FSS Schedule or BPA when the supplies and/or services are not known at the time of schedule or BPA award. Please note that Other Direct Costs, which are known at the time of schedule award, will remain as an option. Examples of these types of Other Direct Costs can be found on the Professional Services Schedule (PSS) under the Ancillary and Other Direct Cost SIN descriptions.
Key points of the OLM final rule:
The total value of all OLMs cannot be greater than one-third the volume of the total order. (Note that travel is excluded from this calculation).
Fair and reasonable pricing, defined as a minimum of three (3) quotes for each OLM exceeding the Simplified Acquisition Threshold, will be required. However, contractors with approved purchasing systems are exempt.
Indirect Costs on OLMs are allowed. GSA training is being updated to address indirect cost application.
Industrial Funding Fee (IFF) will be incorporated into pricing at the Task Order level.
What are the next steps?
Advanced notice of the OLM final rule will be provided this month on interact.gsa.gov. Be sure to review and provide comments back to GSA.
Next month, look for OLM webinars hosted by GSA. The month of May will also kick off GSA wide internal training including training for Industrial Operations Analysts.
GSA expects to issue Mass Modifications for the addition of OLMs by June or July 2018. You will have ninety (90) days to accept or decline this OLM mod. When and if you accept the forthcoming OLM Mass Modification, a new OLM SIN will be created. This new SIN will automatically be uploaded into e-library on GSA Advantage.
Centre Law & Consulting will keep you updated on OLM developments via our LinkedIn group GSA Schedule News, Updates, & Discussions.
We hope to see you at Boot Camp for GSA Schedules on May 8-9. You can bring your colleague for free*! You’ll gain the necessary skills to understand and negotiate your own GSA Schedule and/or make modifications to an existing schedule, as well as keep up with the changes that affect your contract administration and compliance efforts.
*Promotion expires May 1.
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By Tyler Freiberger
If you represent government contractors, or if you are one, it seems eventually you will develop a love-hate relationship with The Freedom of Information Act (FOIA). The purpose and goal of FOIA is somewhat remarkable; quick access to any government information not specifically confidential or otherwise classified. But in practice, this rarely seems to be the case. Some days you need a simple piece of information; you know the Agency wrote a report, you know nothing in it is confidential, and you know it’s going to take six months for them to hand it over anyway. Other times you get an email from a FOIA officer along the lines of this: “Hi, three years ago your competitor requested your contract proposal including your technical and pricing breakdown. If you don’t want us to hand it over, please submit a redacted version of the three-hundred-page document in seven days (December 26th) with your argument for redacting each line.” I thought at first it was just me. Every FOIA Officer or liaison I spoke with when trying to get compliance seemed hardworking and helpful. That hasn’t changed. But a quick look at the numbers told me I was far from alone. How is such a well-intentioned law so frustrating to contractors and agency’s alike? Well, because so far frustrating is cheaper than compliance, but that may be changing.
Under 5 U.S. Code § 552, the requirements placed on a federal agency are fairly simple. Once your FOIA request gets in the right agency hands, they have twenty days to grant or deny it. The agency can stall the clock for a few days here and there but in general the deadline would not go over a month. Of course, some requests involve very sensitive material and the agencies can employ legitimate exceptions. For a few thousand examples enjoy the CIA’s answer to frequent FOIA requests about UFOs. See page after page of heavily redacted notes and reports on UFOs since the 1940’s, all published online for a convenient “go fish” response to any request. But that’s not what this post is about. It’s about the simple, non-controversial and short requests that happen every day and are not answered within the statutory deadline.
Looking at Homeland Security alone, of the approximate 340,000 FOIA requests that were processed in 2017, about 180,000 of them took longer than twenty days to process. This handy tool can give you a FOIA compliance report on any agency you work with so you can see how they stack up. While Homeland Security is particularly backlogged, no agency really stands out as compliant. The American Battle Monuments Commission, for example, had only 31 FOIA requests in 2017, and half were processed within 20 days. Keep in mind these compliance responses include, “here is the website with that information already publicly available” like the CIA example above.
This may all seem obvious; government agencies have an old reputation for being slow and bureaucratic. But what is surprising here is the federal courts seem very unsympathetic. When an agency misses its response deadline without applying a rare exception, courts consider the FOIA request denied. Oglesby v. U.S. Dep’t of Army, 920 F.2d 57, 65 (D.C. Cir. 1990). In practice, most “deemed denials” are just ignored. The requesting party ignores the delay and waits patiently. But why? Here is the fascinating aspect about federal agencies’ overwhelming failure to comply with the mandate clearly described by Congress; if an Agency improperly denies your FOIA request, you have a right to sue, and the Agency pays for your lawyer (well, a “reasonable” fee at least).
Clearly, this is rarely done. Look at the Homeland Security numbers again. Of the 180,000 FOIA requests that took more than 20 days to comply within 2017, if even half of them filed complaints to enforce the clear deadlines, then federal courts across the country would immediately clog. Even the massive Homeland Security would suffocate under the legal bills of 90,000 successful complainants. Sure, no one really wants that, but Congress has been very clear on the goals of FOIA and courts are very willing to bring down the gavels for agencies not meeting them. So, what gives? It appears agencies are just underfunding these programs and relying on the laziness of most requesters. Sure, that’s speculation. But how else do you explain a 50% fail rate on compliance when doing so could result in $20,000 in legal fees a pop? But that game seems to be getting more dangerous by the day. After looking at the numbers and seeing how waiting patiently is just the norm, rather than the exception, I know I’m done waiting patiently.
About the Author:
Tyler Freiberger
Associate Attorney
Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia.
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By Wayne Simpson, CFCM, CSCM, Centre Consultant
Some U.S. Department of Veterans Affairs (VA) Federal Supply Schedule Contractors, and prospective contractors are questioning the value of the VA FSS Program. Changes to VA’s Acquisition Regulations (VAAR) since the unanimous U.S. Supreme Court (SCOTUS) decision in the matter of Kingdomware Technologies, Inc. vs. the United States (Kingdomware) and the VA Strategic Acquisition Center’s (SAC) use of open market procurement strategies in its failed attempts at establishing VA’s Med/Surg Prime Vendor Program is causing some to re-think the value of continuing or participating in VA’s FSS Program.
Below is a synopsis of the reported VA FSS Sales for each of the nine VA schedules, shown in descending order by dollar value. Charts for each schedule which also show the totals amounts for “Other Government Agency Sales” (OGA) and Sales of “State and Local Governments”, in addition to VA’s Sales, are available for review and download by clicking here.
VA’s Total Reported FSS Sales in Fiscal Year (FY) 2017 are in excess of $14 Billion, up from over $13.9 Billion in FY 2016.
VA FSS 65 I B—Drugs, Pharmaceuticals, and Hematology Related Products
By far the VA’s largest schedule by dollar value, accounting for nearly 79% of all reported sales.
Reported sales increased from $10.865 Billion in FY 2016 to nearly $11.070 Billion in FY 2017. Sales for VA, OGA, and State and Local Governments all experienced increases.
VA FSS 65 II A—Medical Equipment and Supplies
Has experienced decreased sales every year since FY 2015, and the trend continued in FY 2017.
Total sales decreased from $1.672 Billion in FY 2016 to $1.633 Billion in FY 2017.
Notwithstanding the VA SAC’s open market procurements, VA spending under FSS 65 II A increased from $1.337 Billion in FY 2016 to $1.356 Billion in FY 2017.
This is VA’s second largest schedule by sales volume and the one most impacted by VA’s Med/Surg Prime Vendor Program.
VA FSS 621 I—Professional and Allied Healthcare Staffing Services
Sales decreased in FY 2017 to $433.3 Million, down from $445.1 Million in FY 2016.
VA FSS 66 III—Cost-Per-Test Medical Analyzer
Sales increased in FY 2017 to $304.1 Million; an increase from $298.1 Million in FY 2016.
VA FSS 65 II F—Patient Mobility Services
Sales increased in FY 2017 to $204 Million, an increase from $184.2 Million in FY 2016.
VA FSS 65 V II—Invitro Diagnostics, Reagents, Test Kits and Test Sets
Sales increased to $141.9 Million, up from $137.8 Million in FY 2016.
VA FSS 621 II—Medical Laboratory Testing and Analysis Services
Sales Increased to $132.2 Million, up from $125.7 Million in FY 2016.
VA FSS 65 II C—Dental Equipment and Supplies
Sales decreased to $101.4 Million, down from $128.1 Million in FY 2016.
VA FSS 65 V A—X-Ray Equipment and Supplies
Sales increased in FY 2017 to $5.01 Million, up from $4.4 in FY 2016
So are VA FSS contracts still a viable option for contractors in the VA marketplace? The answer will likely depend on which VA FSS is applicable to your company’s products or services, and the vagaries of VA’s SAC and its quest for a new and ensuring solution to the Next Generation Med/Surg Prime Vendor Program—“Med/Surg Prime Vendor 2.0.”
Centre Law & Consulting has seasoned acquisition professionals ready to assist you in applying for or administering a VA FSS Contract, including Subcontracting Plans/Programs. Best wishes to you for every continued success in the Federal Marketplace!
CLICK HERE TO DOWNLOAD FSS TREND CHARTS
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By Wayne Simpson, CFCM, CSCM
Thousands of Registrants Potential Fraud Victims—Check Your Info!!
Once again, the Federal Government’s System for Award Management (SAM) (www.sam.gov) was the target of fraudulent activity. SAM is the official website of the United States Government for entities to register to do business with the Federal Government.
The U.S. General Services Administration (GSA), the Federal agency responsible for administering the SAM System, began notifying registrants on March 22, 2018, after discovering a third-party changed financial information in SAM for registrants. GSA’s Inspector General is investigating the cybersecurity breach.
GSA advises “entities should contact their federal agency awarding official if they find that payments, which were due to their entity from a Federal agency, have been paid to a bank account other than the entity’s bank account.”
As part of the steps GSA is taking to limit further fraud, GSA is now requiring an original, signed notarized letter identifying the authorized entity administrator for the entity associated with the DUNS number before a new SAM.gov entity will be activated. Most assuredly this will be administratively burdensome for new registrants, as well as GSA.
It is unclear how many SAM registrants may be impacted by the most recent fraud perpetrated on them. Press accounts indicate GSA states only “a limited number” of contractors registered in SAM had their financial information changed.
SAM registrants who have not been notified by GSA of fraudulent activity should log into their respective SAM accounts to review their financial information in SAM to ensure it is correct.
Enjoy your freedom? Thank a Veteran! Please consider donating to a Veterans Service Organization
About the Author:
Wayne Simpson Consultant
Wayne Simpson is retired from the U.S. Department of Veterans Affairs (VA) after 38 years of federal service. He served as the Executive Assistant to VA’s Deputy Assistant Secretary for Acquisition and Logistics where he was the primary staff advisor to the Deputy Assistant Secretary, who serves concurrently as VA’s Senior Procurement Executive and Debarring Official.
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By David Warner
In August 2017, the U.S. Equal Employment Opportunity Commission (“EEOC”) brought a class action lawsuit against cosmetics giant Estée Lauder alleging that the company violated federal law when it implemented and administered a paid parental leave program that automatically provides male employees who are new fathers lesser parental leave benefits than are provided to female employees who are new mothers. The suit alleged that, under the company’s parental leave program, in addition to paid leave already provided to new mothers to recover from childbirth, new mothers were provided an additional six weeks of paid child bonding leave for child bonding. In contrast, the plan only provided new fathers with two weeks of paid child bonding leave.
Recently, the EEOC and Estée Lauder reached a settlement in the matter. While the terms of the settlement remain confidential, it is highly likely that the resolution required the company to equalize child binding leave as between mothers and fathers. This would be consistent with the EEOC’s guidance that, given the prohibition against gender-based discrimination under Title VII, if bonding leave is offered to employees men and women must be able to take equal amounts of that leave.
While some commentators have suggested that parental leave policies should no longer have varying levels of benefits for “primary” and “secondary” caregivers, such distinctions would not appear to conflict with Title VII or the EEOC’s guidance so long as they are administered without regard to an employee’s gender. Further, greater leave for “disability” arising out of childbirth is similarly seen as legitimate and non-discriminatory even if it has the practical effect of providing greater leave benefits to bother as opposed to fathers.
Parental leave policies are an attractive benefit for employees; but, given the EEOC’s recent success with Estée Lauder, employers are well counseled to review their policies to ensure that disability or maternity-related leave is clearly distinguished from bonding leave and that bonding leave, if provided, is equally available to both mothers and fathers.
About the Author:
David Warner
Partner
David Warner is a seasoned legal counselor with extensive experience in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David leads Centre’s audit, investigation, and litigation practices.
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By Barbara Kinosky:
Congress’s Section 809 Panel has made their first move on DoD acquisition system reform. The committee is made up of 18 experts in government contracts and is “charged with making recommendations that will shape DoD’s acquisition system into one that is bold, simple, and effective.” Yours truly testified before them. Section 809 Panel has the difficult job of thoroughly reviewing every DoD acquisition regulation ever written, and then conclude which regulations should remain active and which should be eliminated.
After a year of study, the panel has released its first report, containing 73 recommendations for procurement reform. This first volume focuses on commercial buying, contracts audits from DCAA, small business policy, and more. One of the top recommendations is to create a “mission driven” acquisition system to replace the current “process-oriented” system. The idea proposed by the panel is to grant DoD officials the ability to choose from various contracting procedures, so they may choose one that produces the best results for their mission.
A major takeaway from the report is the segmentation of the current acquisition process. The report defines these four “lanes” of procurement:
Lane 1 – “Readily Available: This lane encompasses existing products and services that require no vendor customization to meet DoD’s needs.”
Lane 2 – “Minor Customization: The second lane includes products and services that are primarily sold in the private sector, and for which DoD may be one of many potential buyers.”
Lane 3 – “Major Customization: This lane includes products and services for which DoD may be one of few potential buyers, and for which there may be little or no private‐sector applicability.”
Lane 4 – “Defense‐Specific Development: In this lane there is no private‐sector applicability, as the products and services are developed exclusively for defense‐related use.”
Major missions outlined by the report:
Commercial Buying – “Streamline and simplify DoD’s access to the commercial market.”
Contract Compliance and Audit – “Improve the contract compliance and audit processes by focusing on the needs of contracting officers and acquisition team members.”
Small Business – “Refocus DoD’s small business policies and programs to prioritize mission and advance warfighting capabilities and capacities.”
The report outlines various other missions as well, and is only the first volume out of three – which will all cover the panels comprehensive examination of acquisition reform.
Source: https://section809panel.org/wp-content/uploads/2018/01/Sec809Panel_Vol1-Report_Jan18_FINAL.pdf
About the Author:
Barbara Kinosky
Managing Partner
Barbara Kinosky is the Managing Partner of Centre Law and Consulting and has more than twenty-five years of experience in all aspects of federal government contracting. Barbara is a nationally known expert on GSA and VA Schedules and the Service Contract Act, and she has served as an expert witness for federal government contracting cases.
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On September 15, 2015, President Obama signed the Executive Order requiring federal contractors and subcontractors to provide one hour of paid sick leave for every 30 hours worked, up to at least seven days per year. It presents both a cost and an administrative burden. David Warner, partner at Centre Law and Consulting joined Federal Drive with Tom Temin to explain what this means to contractors.
Hear the interview.
David Warner and Tom Temin. Photo credit: Eric White, Federal News Radio
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By Wayne Simpson, Centre Consultant, CFCM, CSCM
Good news for Federal contractors and buyers. On February 16, 2018, the Civilian Agency Acquisition Council (CAAC) issued CAAC Letter No. 2018-02 to Federal agencies regarding a class deviation to the Federal Acquisition Regulation (FAR) for implementing the new increased micropurchase and simplified acquisition thresholds. The National Defense Authorization Act (NDAA) for Fiscal Year 2018 (Public Law 115-91, December 12, 2017) (NDAA 2018), raises the micropurchase and simplified acquisition thresholds for Federal acquisitions.
Section 806 of NDAA 2018 increases the micropurchase threshold for products only from $3,500 to $10,000. The micropurchase thresholds for acquisitions involving services and construction services remain unchanged. The micropurchase threshold for services remains $2,500 (Service Contract Labor Standards—formerly the Service Contract Act of 1965), and $2,000 for construction services (Construction Wage Rate Requirements Statute—formerly the Davis-Bacon Act).
Section 805 of NDAA 2018 increases the simplified acquisition threshold from $150,000 to $250,000.
FAR Case 2018-004 was established to implement these statutory changes in the FAR. CAAC Letter No. 2018-02 indicates agencies may have a need to use the increased thresholds prior to publication of the FAR changes. The CAAC letter constitutes the consultation required under FAR with the CAAC allowing agencies to authorize a class deviation to implement the changes effective immediately. Some agencies may elect to implement through a FAR class deviation immediately, while others may wait for publication of the actual rule.
A change to the micropurchase threshold contained in Section 217(b) of NDAA for Fiscal Year 2017 (Public Law 114-238) (NDAA 2017), not yet implemented, was overtaken by NDAA 2018. NDAA 2017 changed a portion of the micropurchase threshold definition in FAR 2.101, to increase the micropurchase threshold for acquisitions from institutions of higher education or related or affiliated nonprofit entities, or from nonprofit research organizations or independent research institutes to $10,000. The new micropurchase threshold of $10,000 set by NDAA 2018 makes no such distinction.
There are some exceptions to the new $10,000 micropurchase threshold. Acquisitions for supplies or services, as determined by the Agency Head, to be used to support contingency operations; to facilitate defense against, or recovery from cyber, nuclear, biological, chemical or radiological attack; to support a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate provisions of international disaster assistance or to support a response to an emergency or major disaster (except for construction) have a higher micropurchase threshold, $20,000 in the case of any contract to be awarded performed, or purchase to be made, inside the United States, and $30,000 if outside the United States.
The simplified acquisition threshold increase will affect the applicability of many FAR-prescribed provisions and clauses which are tied to the simplified acquisition threshold, as well as FAR Part 13, Simplified Acquisition Procedures. The increase will allow government contracting officers to buy more efficiently using FAR Part 13. FAR clauses applicable at the new simplified acquisition threshold should benefit government contractors by reducing the compliance burden for those clauses and provisions.
Please also note changes to FAR Part 19, Small Business Programs because of the threshold changes. Specifically, FAR 19.203, Relationship Among Small Business Programs, requires the acquisition of supplies and services with anticipated values exceeding $10,000 (and the exceptions noted above) and $250,000 are automatically reserved for small business (see also FAR 19.502-1).
There are also some exceptions to the new $250,000 simplified acquisition threshold.
Acquisitions for supplies or services, as determined by the Agency Head, to be used to support contingency operations; to facilitate defense against, or recovery from cyber, nuclear, biological, chemical or radiological attack; to support a request from the Secretary of State or the Administrator U.S. Aid to facilitate provisions of international disaster assistance or to support a response to an emergency or major disaster (except for construction) is $750,000 in the case of any contract to be awarded performed, or purchase to be made, inside the United States, and $1.5 Million if outside the United States.
Lastly, the simplified acquisition threshold for acquisitions for supplies or services, as determined by Agency heads, to be used to support a humanitarian or peacekeeping operation is $500,000.
About the Author:
Wayne Simpson Consultant
Wayne Simpson is retired from the U.S. Department of Veterans Affairs (VA) after 38 years of federal service. He served as the Executive Assistant to VA’s Deputy Assistant Secretary for Acquisition and Logistics where he was the primary staff advisor to the Deputy Assistant Secretary, who serves concurrently as VA’s Senior Procurement Executive and Debarring Official.
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By Heather Mims
The protest saga of the Department of Education’s contracts for collection services for defaulted student loans has now been going on for over a year – and the contracts are worth fighting for as it is for a roughly $2.8 billion debt collection procurement.
As a refresher, forty-seven companies originally submitted bids in response to the Department of Education’s RFP but only seven companies originally received contract awards back in December 2016. The unsuccessful offerors successfully protested that award at GAO on March 27, 2017. At that time, the GAO recommended that the agency conduct a new evaluation of proposals, potentially amend the solicitation and receive revised proposals, and subsequently document a new source selection decision. The GAO also took the fairly unusual step in awarding costs to several of the protesters.
A subsequent bid protest was filed at the Court of Federal Claims on March 28, 2017, the day after the GAO decision was entered (docket number 1:17-cv-00449-TCW). On December 12, 2017, the Court of Federal Claims ordered the Department of Education to complete its corrective action, which the Department of Education completed on January 16, 2018. This corrective action resulted in an $800 million contract award to only two contractors – Windham Professionals Inc. and Performant Recovery Inc. The Court subsequently dismissed the bid protest on February 14, 2018.
However, the action did not stop there. A new bid protest was filed February 9, 2018, alleging that the Department of Education’s corrective action and new awards didn’t fix material procurement errors (docket number 1:18-cv-00204-TCW). That matter currently has seventeen plaintiffs arguing against the allegedly improper award. To keep the matter even more interesting, one of the awardees is alleged to have financial ties to Education Secretary Betsy DeVos.
As the fight over this large value procurement does not appear to be winding down, Judge Thomas Wheeler of the Court of Federal Claims has remarked that the Court may see a large uptick in the number of bid protest cases filed in 2018, due in part to this Department of Education procurement. Judge Wheeler stated that the Court is on track to receive 200 bid protests this calendar year, which is a large increase over the 129 protests that were filed in 2017, which is an average number of bid protests for the Court.
About the Author:
Heather Mims
Associate Attorney
Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow.
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By Tyler Freiberger
To much international acclaim, earlier this year Iceland introduced a new equal pay act to fight discrimination against protected classes, particularly historically underpaid women. The introduction of the Act made the cover of Time magazine and garnered wide-spread attention on the 24-hour news networks’ cycles. While the historic Act may warrant such coverage, for domestic industry insiders the celebration of Iceland’s legislative prioritization of gender equality may ring a bit hollow, as the United States’ passed the Equal Pay Act over half a century ago. And, as Centre has discussed in the past, pay discrimination has been illegal ever since.
Earlier this month, the U.S. Department of Labor (“DOL”) made a related show of force on the issue through its Office of Federal Contract Compliance Programs (“OFCCP”), issuing a thousand letters to government contractors advising that it may audit contractors for compliance with non-discrimination/affirmative action obligations, including matters of pay equity. Clearly, the global march towards gender equality moves forward, but before we rush toward an “Icelandic model,” there are complicated issues to address.
First, there are clear conceptual differences between Iceland’s new model and the United States’ system. The “big move” of the Icelandic law is to demand that employers prove they are not paying women less than men; in contrast, the American system places that burden on the employee attempting to prove their case. Despite that variance in burden of proof, U.S. contractors reading these audit letters from DOL are likely not celebrating an easy road to compliance. In fact, with a recent groundbreaking study out of Stanford, it is clear employers can have a very thin rope to walk when attempting to eliminate a purported “pay gap.”
American anti-discrimination laws are based upon the principle that, assuming an absence of discrimination all people will be equally represented and compensated in the workforce. Therefore, if a class of people are underrepresented/under-compensated in a workforce, something is wrong in the employer’s process. Yet, the law is clear that employers cannot make employment decisions based on gender, even if that decision is directly made to further affirmative action goals – i.e., “reverse” discrimination remains illegal even in an affirmative action context. Instead, the employer is meant to study its workforce, identify inequalities, and identify what gaps exist in its process that lead to inequality. Perhaps it is where the employer is recruiting, how it qualifies candidates, who it chooses to make hiring decisions, or what criteria the employer uses to advance current employees. The hundreds of government contractors recently receiving the OFCCP letters will be performing exactly these analyses.
Imagine then, if a hard look at your workforce reflected men earning 7% more an hour than women for doing the exact same job; how do you react? It is expressly unlawful to purposely increase women’s pay 7% more an hour, so necessarily employers must identify what in their processes has caused the inequality. For context, this is the scenario Uber finds itself in after the aforementioned Stanford study. Upon examining over a million Uber rides in the Chicago area, researchers noted a substantial pay gap between male and female drivers, while “the average of rider ratings of drivers is statistically indistinguishable between genders.” In sum, women are making less money, while performing the same job, with equal customer satisfaction, and being paid through a computer algorithm where driving X distance at Y time results in a computer-generated rate.
Discrimination, right? Well, maybe not. What makes the results so interesting is that under the Uber model, riders and drivers are assigned without gender preference; and, simultaneously riders are fined if they reject the driver pre-pickup. This essentially creates a double-blind system of assigning work. Preference for a male driver over a female driver – i.e. canceling a female driver’s pickup – awards the driver and punishes the rider. And, the study shows no (or at most very little) such driver selecting preference. Rather, the data revealed that the largest cause of the pay gap to be arising from the specific (and varying) times men and women decide to drive.
Other than amending its scale to pay women more per ride than men, how might we (or Iceland) assert that Uber solve this problem? And is there even a “problem” to solve?
If you are an American company sweating over a similar gap in your workforce, we can offer some relief. While American employers should always be exploring these questions, and considering solutions, the “unknown” currently goes in the employer’s favor. In the United States, employees still must present evidence isolating and identifying the discrete element in the hiring or compensation processes that allegedly produces the discriminatory outcome. See EEOC v. Freeman, 961 F. Supp. 2d 783 (D. Md. 2013), aff’d in part sub nom. E.E.O.C. v. Freeman, 778 F.3d 463 (4th Cir. 2015). Still, under either the U.S. or Iceland model, you do not want to be the last to know.
About the Author:
Tyler Freiberger
Associate Attorney
Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia.
The post Count Your Blessings- A Thousand DOL Audit Letters Never Looked So Good appeared first on Centre Law & Consulting.
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By Wayne Simpson, CFCM, CSCM
New Thresholds for 2018 and 2019
The United States Trade Representative (USTR) has determined and announced new U.S. Dollar Procurement Thresholds implementing U.S. Trade Agreement obligations, effective January 1, 2018, for calendar years 2018 and 2019.
The Trade Agreements Act of 1979 (TAA) implements international trade agreements and guarantees non-discriminatory treatment in government procurement.
TAA provides the President of the United States authority to waive the Buy American Act and other discriminatory provisions for countries having signed international trade agreements with the United States, and those meeting other criteria such as “Least Developed Countries.” The President delegates waiver authority to the USTR.
The USTR waived the Buy American Act and other discriminatory provisions for acquisitions of eligible products covered by the World Trade Organization Government Procurement Agreement, Free Trade Agreement Acts, and the Israeli Trade Act.
Offerors of eligible products receive equal consideration with domestic offers.
Perhaps the most significant of the Trade Agreements is the World Trade Organization Government Procurement Agreement. Free Trade Agreement Acts (FTA) include: The North American Free Trade Agreement (NAFTA), Chile FTA, Singapore FTA, Australia FTA, Morocco FTA, Dominican Republic-Central American FTA, Bahrain FTA, Oman FTA, Peru FTA, Korea FTA, Columbia FTA, and the Panama FTA.
Other Trade Agreements include least developed countries designated by the USTR, The Caribbean Basin Trade Initiative, the Israeli Trade Agreement Act, and the Agreement on Trade in Civil Aircraft.
Specific thresholds for the respective Trade Agreements is found at Federal Acquisition Regulation (FAR) 25.402.
Centre Law and Consulting offers webinars and classroom instruction for the Trade Agreements Act and other contract compliance and administration issues to assist your company. Centre also offers a wide array of classes taught by attorneys and acquisition professionals to assist you in the Federal Marketplace.
CLICK HERE TO SEE/DOWNLOAD A CHART CONTAINING THE NEW TAA THRESHOLDS
About the Author:
Wayne Simpson Consultant
Wayne Simpson is retired from the U.S. Department of Veterans Affairs (VA) after 38 years of federal service. He served as the Executive Assistant to VA’s Deputy Assistant Secretary for Acquisition and Logistics where he was the primary staff advisor to the Deputy Assistant Secretary, who serves concurrently as VA’s Senior Procurement Executive and Debarring Official.
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By David Warner
On September 15, 2015, President Obama signed the Executive Order requiring federal contractors and subcontractors to provide one hour of paid sick leave for every 30 hours worked, up to at least seven days per year. Both the EO and its implementing regulations, finalized on September 30, 2016, made clear that the EO only applied to “new contracts,” defined as contracts with the Federal Government that result from solicitations issued on or after January 1, 2017, or that are awarded outside the solicitation process on or after January 1, 2017. With that date a year in the rearview mirror, the “bill” is beginning to come due.
As previously reported, one unexpected wrinkle with the EO’s implementation was the DOL’s establishment of an “alternate health and welfare rate” that purports to exclude the sick leave portion of the calculated health and welfare rate. Specifically, as of August 1, 2017, the H&W rate for contracts subject to the sick leave EO is $4.13 per hour – $.28 lower than the $4.41 H&W rate applicable to contracts that do not require paid sick leave. While the higher H&W rate will effectively be phased out as contracts expire and are replaced with “new contracts,” for the next several years contractors will be required to closely monitor their contracts to ensure the correct H&W rate is applied.
In addition, a common question contractors pose as more and more contracts require paid sick leave is whether they can combine sick and vacation entitlements into a single paid time off or “PTO” bucket. Per the DOL’s sick leave FAQ, “Sure, why not?” But while the “single bucket of leave” structure may seem simpler to administer, there are several hidden compliance challenges, particularly for contracts subject to the Service Contract Labor Standards (“SCLS”).
First, under the SCLS vacation does not accrue over time but instead “cliff vests” in a single lump on a given employee’s anniversary date. Thus, an immediate challenge is coordinating the vesting of the two types of leave within the bucket – i.e., sick leave accruing annually over a calendar year while vacation cliff vesting on a single date. In addition, SCLS has actual cash value for the employee – i.e., once vested the employee must either take or be paid for the leave at the earliest of his or her next anniversary date, the end of their employment or the end of the contract. In contrast, sick leave has no cash value – i.e., it is only paid if taken. Finally, per the above, SCLS vacation cannot be carried forward from year to year. In contrast, EO sick leave must be permitted to be carried forward from year to year (though the carry-over can be capped at fifty-six (56) hours.
So, while the combined PTO structure remains a theoretical possibility, it is not at all clear that it can be administered compliantly, or at least done so as efficiently as administering sick and vacation leave separately.
About the Author:
David Warner
Partner
David Warner is a seasoned legal counselor with extensive experience in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David leads Centre’s audit, investigation, and litigation practices.
The post Mandatory Sick Leave Giving Service Contractors A Headache appeared first on Centre Law & Consulting.
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