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Centre Law & Consulting

 
The Environmental Protection Agency (EPA) has issued a final rule regarding self-certification for Disadvantaged Business Enterprises (DBE) in procurements under EPA financial assistance agreements, which will be effective on October 26, 2016 if no adverse comment is received. If an adverse comment is received by the EPA, the rule will be withdrawn. However, the EPA expects to receive no adverse comments.

Current Major Components of the EPA’s DBE Program

EPA’s DBE Program was first implemented through 40 CFR part 33 on March 26, 2008 with four major components program: DBE Certification, Negotiating Fair Share Goals, Good Faith Efforts, and Reporting Accomplishments. Currently, the DBE Certification process requires a Minority Business Enterprise (MBE) or Woman Business Enterprise (WBE) to be certified as such by an appropriate agency (federal, state, locality, Indian Tribe, or qualifying independent private organization). The other current components of the program require that goals are established with the EPA, that there is an opportunity to compete for procurements, and that a report is sent to the EPA on the success of the program with respect to MBEs & WBEs.

Key Changes

This final rule makes three key changes to the EPA’s DBE program. The first is the creation of a self-certification platform. The second is the increase to the threshold to be exempted from negotiating fair share objectives from $250,000 to $1,000,000. The third and final change is that the frequency of reporting to the EPA has been revised to annually and the threshold of $150,000 is now codified. There are additional minor changes in the Final Rule, but the three above will have the most impact on an organization.

Self-Certification Impact on Affected Organizations

If your firm wishes to take advantage of this revision and is a qualifying organization, you will be able to self-certify through the Small Business Vendor Profile System at www.epa.gov. You will be required to provide the appropriate information and confirm that the eligibility requirements have been met. After certifying that you have met the eligibility requirements, no EPA review will be required. This change will significantly decrease the time it takes for organizations to be certified as MBEs or WBEs, as organizations will no longer be required to obtain other qualifying certification from the government. However, self-certification through the EPA’s DBE Program under the new rule will not be recognized by other organizations and such certification will remain valid only 3 years. Therefore, qualified organizations will continue to have an obligation to re-register to maintain their status as an MBE or WBE. Firms that choose to certify through this option will be published on the Office of Small Business Program’s web site, and you should always review the final rule for additional impacts it may have on your organization.

About the Author

Colin Johnson
Contracts Manager

Colin Johnson is a Contracts Manager who focuses on business development and federal contracts management. His expertise is in preparing quotes and responses for both government and commercial entities for training and legal support services.

The post EPA Issues Final Rule on Self-Certification for Disadvantaged Business Enterprises appeared first on Centre Law & Consulting.


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Centre Law & Consulting

 
Journalist Michael Kinsley once said, “A gaffe is when a politician tells the truth – some obvious truth he isn’t supposed to say.” The same can now be said of unions talking about Executive Order 13673 regarding “Fair Pay and Safe Workplaces.”

Now, who could possibly object to fair pay and safe workplaces? Well, let’s let the Teamsters for a Democratic Union explain the obvious truth (that they aren’t supposed to say) about how the reporting and “blacklisting” aspects of that that innocuous sounding executive order will work in practice. In an August 22 blog post entitled Obama ‘Blacklisting’ Rule – New Leverage for Unions, the union posits the following scenario (complete with colorful dialogue):

Consider a union that strikes an auto plant for a new contract. Soon after workers hit the bricks, the union president has the following conversation with the general manager.

Morris, we are two weeks into this goddam strike and the company shows no sign of accepting a fair labor agreement. That is your prerogative, but I think you need to take a fresh look. For one thing, we have filed six ULP charges over the company’s failure to provide information, illegal surveillance, and intimidation on the picket line – and are getting ready to file three more. The NLRB investigator has indicated that he will be recommending complaints on at least four of our charges.

You say that the NLRB is toothless but you are apparently unaware that the rules of the game have drastically changed. Under a new Order issued by the President, a federal contractor that incurs NLRB or other labor law complaints must report them to federal contracting agencies and face the prospect of losing existing and future contracts. Putting it plainly: unless you settle this strike within the next few days and the union withdraws its charges, you are likely to be marked as a “repeat labor law offender,” one of the highest categories of wrongdoing under the President’s Order. Check this out with your hotshot legal team.

Counting all of its divisions, this corporation has federal contracts in the hundreds of millions. Do you really want to jeopardize this pot of gold to save a few hundred thousand dollars in the union contact?

“Fair” indeed. And welcome, contractors, to the “obvious truth” that the Fair Pay and Safe Workplaces executive order will be a powerful new tool for union organizing campaigns.

About the Author:

David Warner | Centre Law & Consulting David Warner
Partner

David Warner is a seasoned counselor in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David has extensive experience representing contractors in affirmative action, Davis-Bacon Act, and Service Contract Act compliance audits. He also represents businesses with regard to wage and hour compliance, DOL audits, and litigation.

 

The post “Kinsley Gaffes” and Safe Workplaces appeared first on Centre Law & Consulting.


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Centre Law & Consulting

 
It’s been a bit chaotic around here recently and I’m surrounded by boxes everywhere I look. More on that below. But I did have a few minutes to catch up on some big developments that have been going on in the federal contracting world. These are a few things that caught my attention, and we’ll see what kind of impact they have for us on the road ahead.

Acquisition Reform Once More

Holy guacamole. It’s 2007 all over again. Does anyone remember the Services Acquisition Reform Act of 2003 (SARA)? Under SARA a panel was formed to review acquisition laws and regulations and to recommend any necessary changes. I testified before the panel and got a lovely 2007 Report in return that I keep on my bookshelf. It reminds me how hard it is to implement change because not much has changed. Now the Department of Defense (DoD) has announced the creation of a new Advisory Panel on Streamlining and Codifying Acquisition Regulations, with the goal of finding ways to streamline the Pentagon acquisition process.

The panel will be headed by Deidre Lee, former Director of Defense Procurement and Acquisition Policy and former Office of Federal Procurement Policy Administrator. Interestingly enough, Dee was also instrumental in creating the 2007 SARA Panel report. I am going to email her and ask her if it is Groundhog Day again. Read more at Defense News.

Protests and a Win Against Low Price

CACI-Federal and Booz Allen Hamilton protested the Defense Information Systems Agency’s (DISA) Encore III solicitation for IT services. These multiple award contracts have a maximum value of $17.5 billion. The GAO held that DISA conducted a flawed cost/price evaluation.

The GAO held that the evaluation scheme precluded meaningful evaluation of proposals’ costs to the government. The solicitation terms were flawed, according to the GAO, because they anticipated the award of both fixed-price and cost-reimbursement contract line item numbers, but they didn’t require offerors to propose cost-reimbursable labor rates or contemplate the evaluation of those rates. This is more of a win against low price “evaluations”. The GAO website has more information.

Counterfeit Part Protection

DoD issued a final rule on August 30 amending the Defense Federal Acquisition Regulation Supplement (DFARS) to protect contractors from costs incurred when they accidentally use counterfeit electronic parts. The protections only apply if the contractors have an active structure in place to detect and avoid counterfeit parts. Read the details on the Federal Register.

Boxes Upon Boxes

It’s amazing how much “stuff” an office can accumulate! The best way to know for sure is when you have to pack it all up to move. The Centre Law & Consulting office moved earlier this week into a brand new space. And while the move was only a mile down the road, we still had to take on all the joys and headaches that come with such a relocation. I think the paint is finally dry, but the boxes are still being unpacked.

One space that is unpacked – and perhaps one of the best parts of the new office – is our large, light-filled training room. There’s something about the wall of windows that makes it so inviting. Our first course in the new space kicks off tomorrow and we can’t wait to hear what the attendees think of it. We’d love to welcome you to our new training room too. See our training calendar for all our upcoming courses.

Centre Law & Consulting Training Room in Tysons, VA
 
About the Author

Barbara Kinosky Barbara Kinosky
Managing Partner

Barbara Kinosky has more than twenty-five years of experience in all aspects of federal government contracting and is a nationally known expert on GSA and VA Schedules and the Service Contract Act. She has a proven track record of solving complex issues for clients by providing strategic and business savvy advice. Barbara was named a top attorney for federal contracting by Smart CEO magazine in 2010, 2012, and 2015.

 

The post Groundhog Day Again, Counterfeit Parts, Too Many Boxes appeared first on Centre Law & Consulting.


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Centre Law & Consulting

 
Have you been hacked yet? Has your personal information been exposed by foreign hackers? Worried this year’s election results might be tampered with foreign cyber attacks? Well, you are not the only one worried about future cyber attacks. The U.S. Government is worried too, and to combat that, the General Services Administration (GSA) will release four Cybersecurity Special Item Numbers (SINs) for its GSA Schedule 70 for Information Technology procurement.

A refresh of the Schedule 70 solicitation is expected to be released in September that will include these new Cybersecurity SINs. GSA is referring to these new SINs as Highly Adaptive Cybersecurity Services (HACS) SINs. The HACS SINs were mandated by the Obama Administration’s Cybersecurity National Action Plan. This is no small initiative, but rather a plan to invest $19 billion in an attempt to ensure “Americans have the security tools to protect their identities online, that companies can protect and defend their operations and information from hackers, and that the U.S. Government protects the private information citizens provide for federal benefits and services” (Source).

The HACS SINs will be divided into four distinct SINs:

  • Penetration Testing under SIN 132-45A
  • Incident Response under SIN 132-45B
  • Cyber Hunt under SIN 132-45C
  • Risk and Vulnerability Assessment under SIN 132-45D

The vetting process for vendors will be the most thorough and detailed of any SIN on Schedule 70. While vendors will have requirements similar to those for services SINs such as SIN 132-51, the HACS SINs will also require vendors to pass an oral technical evaluation. These oral technical evaluations will be scenario-based in an attempt by GSA to ascertain the knowledge level of the prospective vendor. Vendors will be given a pass/fail grade after an undetermined time (target is seven days) from the completion of the oral evaluation. Vendors who are not able to pass this oral evaluation will not be allowed to submit an offer or modification for any HACS SIN for at least six months from the date of their previous evaluation. Oral evaluations will be conducted virtually and each SIN will have its own scenario that vendors will have to address and complete. GSA will allow up to five key personnel to attend these oral evaluations from the vendor, but no recording devices of any kind will be allowed during the evaluation. These evaluations could take anywhere between forty minutes to three hours by GSA’s estimates, depending on how many HACS SINs the vendor is proposing in their offer/modification.

There will be no limit to the number of awardees of the HACS SINs, but GSA is targeting to have an initial fifteen vendors awarded once the HACS SINs are officially rolled out. The turnaround time for GSA will be dependent on the number of vendors who propose the HACS SINs, but GSA is creating a dedicated tiger team to evaluate new offers and modifications that include the HACS SINs. GSA’s target for evaluation is seven days for modifications and forty five days for new offers.

While there is still more to be revealed about these new HACS SINs, it is clear GSA is making a concerted effort to put these new SINs at the top of their priority list. If you want to be in the front of the line to get these new SINs awarded on your contract, be sure to check the GSA Interact site and submit your modifications/offers through the eMod/eOffer site.

For more information regarding GSA and the HACS SINs, be sure to register to attend Centre Law and Consulting’s next Boot Camp for GSA Schedules training course on November 9-10, 2016.

About the Author

Michael Glazer
Contracts Manager

Michael Glazer focuses primarily on GSA/VA Schedule consulting. He regularly assists clients in all aspects of FSS contract management including contract negotiations, modifications, IFF reporting, subcontracting plans and reporting, IOA assessments, and other contract compliance issues. Michael also provides experience with GSA Alliant 1 & 2, ITES 3H and 3S, CIO-CS and SP3, and other large IDIQ contracts on an as needed basis to clients.

The post GSA Ushers in New Era with Release of Cybersecurity SINs for IT 70 appeared first on Centre Law & Consulting.


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Centre Law & Consulting
 
For those of you enjoying these last few days of summer, here is a quick hit guide to recent employment developments to be aware of before you rush back into the full swing of things:
Fair Pay and Safe Workplaces Executive Order
The Department of Labor (DOL) announced yesterday that the final regulations implementing the Fair Pay and Safe Workplaces Executive Order will be published today. The regulations (which cover contractor self-reporting of labor law violations) will become effective October 25, 2016 and will be implemented in phases. Stay tuned for more on these important new regulations!
Severance Agreements
The Securities and Exchange Commission (SEC) has taken the position that severance agreements that require employees to forfeit subsequent monetary awards for whistleblowing violate Federal securities laws. In 2011, the SEC adopted a rule prohibiting any action that impedes communication with the SEC about potential securities law violations. The SEC has increasingly been reviewing severance agreements and potential violations of this rule. This culminated in two six-figure settlements announced earlier this month with companies that required employees to waive their right to any individual recovery arising from communicating with a government agency. This is language that is permitted by other Federal agencies, so companies should review their standard severance agreements to ensure that they are not running afoul of the SEC’s rules.
DOL Settles Overtime Lawsuit
It is being reported that the DOL recently settled its own decade-long lawsuit with a union for $7 million in back overtime wages owed to various white-collar employees at the DOL. Keep in mind this is the DOL, the Agency responsible for enforcing the Fair Labor Standards Act (FLSA) along with other wage and hour laws. A quick take away is that the overtime regulations and classification of employees are complicated – even for the DOL! Perhaps this is a good time to remind you that the salary thresholds for Federal overtime exemptions are changing effective December 1, 2016. Is your company ready?
Updated Workplace Posters
The DOL has updated the mandatory workplace posters covering the FLSA and the Employee Polygraph Protection Act (EPPA) effective August 1, 2016. The revised FSLA poster and EPPA poster are available from the DOL’s website. The Federal Family and Medical Leave Act poster was also recently updated in April. This may be a good time to review your workplace posters to ensure you have all the required and up to date postings.
EEO-1 Due
For employers with 100 or more employees or Federal Government contractors with 50 or more employees and covered contracts, don’t forget to complete your EEO-1 by September 30. The survey is now open.
About the Author
Marina Blickley
Associate Attorney
Marina Blickley is primarily focused in the Government Contracting and Non-Profit industries. She regularly assists clients in all aspects of employment and labor law including representation and defense of employers against claims of employment discrimination, harassment, retaliation/whistleblower, and wage and hour violations before administrative agencies and state and federal courts.  
The post End of Summer Employment Law Developments appeared first on Centre Law & Consulting.

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Centre Law & Consulting
 
So later today I am hosting a lunch at my house. And unless Desoto (the Spanish explorer who looked for the Fountain of Youth in Florida) has been visiting my family room, I have a major water leak. There is water everywhere. I just lost a small business set-aside contract to an unfathomably low, low, low price bidder, and the cat barfed all over my new carpet. It’s not even noon yet! So in an attempt to turn my day around, I hopped online to see what others are up to in hopes of finding something more interesting and uplifting!
Here is a round up of trending Government Contracting news I found that caught my eye.
SBA Expands Mentor-Protégé to All Small Businesses
Kudos to the Small Business Administration for great rule drafting. The SBA just expanded the mentor-protégé program to include all small businesses. The program is government wide. The primary incentive for large businesses to participate as mentors is the ability to form a joint venture (JV) with their protégé to pursue small business set-aside contracts without worrying about affiliation issues. And that sticky wicket, past performance is addressed in the rule. Agencies must evaluate the past performance of each member of the JV as opposed to just the JV. NextWin posted a great white paper on this. Applications must be submitted through the www.certify.sba.gov.portal. The new rule allows mentors to own up to 40% of their protégé’s. SBA has confirmed that they will be receiving applications starting October 1. And for those of you who suffer from insomnia, here is the complete rule for your late night reading pleasure.
Key Person Departs and So Does URS Contract
URS Federal Services protested the loss of a Navy contract. The solicitation required offerors to propose eight key personnel. After proposal submission one of the key staff left URS. As a result, the URS proposal was given a deficiency which cost it the award. URS protested. The GAO held that when an agency has notice of the withdrawal of key personnel during the proposal evaluation process it can either evaluate the proposal as submitted or reopen discussions. Here the Navy evaluated the proposal as having only seven key people instead of the required eight. Read more in the GAO decision.
Update on GSA Transactional Data
GSA just issued an update on the schedule for implementing the transactional data pilot program. This link shows what schedules will be impacted and the roll out date.
Open Source Code
GSA published a good comprehensive blog on open source code. It’s part of the federal government’s big push toward open source development. GSA has a CIO policy that supports releasing GSA software as open source, but this is a very controversial issue with industry.
P.S. – With all the changes that happen in the world of federal contracting, you need a dependable resource to keep you advised on best practices. So keep us in mind for meeting your small business WOSB goals when it comes to acquisition support and training.
About the Author
Barbara Kinosky
Managing Partner
Barbara Kinosky has more than twenty-five years of experience in all aspects of federal government contracting and is a nationally known expert on GSA and VA Schedules and the Service Contract Act. She has a proven track record of solving complex issues for clients by providing strategic and business savvy advice. Barbara was named a top attorney for federal contracting by Smart CEO magazine in 2010, 2012, and 2015.  
The post Trending Government Contracting News appeared first on Centre Law & Consulting.

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Centre Law & Consulting
Reproduced with permission from Federal Contracts Report, 105 FCR (July 27, 2016). Copyright 2016 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
HHS Couldn’t Justify IT Competition Cancellation, COFC Says
The Department of Health and Human Services couldn’t justify its cancellation of an IT competition that a protester claimed was tainted by bias, the U.S. Court of Federal Claims said (Starry Assocs. Inc. v. United States, 2016 BL 241279, Fed. Cl., No. 16-44C, 7/27/16).
Judge Eric G. Bruggink set aside the cancellation because there was no evidence the agency meaningfully reviewed its IT needs before making that decision. The court also barred several agency employees from participating in any subsequent competition actions.
The case “shows the recent trend that courts will hold federal agencies accountable for arbitrarily canceling solicitations or failing to take meaningful corrective actions. In this case, we have both,” Wojciech Z. Kornacki of Centre Law & Consulting LLC told Bloomberg BNA.
It was noteworthy that the court granted injunctive relief, Kornacki said. “The court felt that the public interest favored the injunction because the public had an interest in the integrity of the federal procurement,” he said. “The court found that the agency actions reflected ‘a lack of fidelity to the procurement process.’”
This action was necessary for Starry to get access to discovery tools, like depositions, that aren’t available at the Government Accountability Office, said Sandy Hoe, senior of counsel at Covington & Burling LLP. “But that discovery tool in a bid protest is limited to extraordinary situations such as here,” he said. “I would expect to see that tool being used in very few other circumstances.”
Prohibiting the government from canceling a solicitation is unusual, he added.
“The reasoning makes sense given the bias here, but that relief is only a few steps short of the court directing an award to a party, which is virtually never done,” he said. “Another option the court might have exercised was to order the agency to pay Starry’s bid and proposal costs and allow the solicitation to be canceled.
“Apparently, the court was not willing to let the agency off the hook so easily given the agency’s bad conduct,” Hoe said.
Award Affirmed
Incumbent protester Starry Assocs. Inc. filed a protest with the Government Accountability Office (GAO) after the agency awarded a task order to Intellizant LLC. The agency took corrective action by re-evaluating quotations, but then affirmed the award.
Starry filed a second protest that the GAO partially sustained, recommending that the agency re-evaluate Intellizant’s quotation. Shortly thereafter, the agency canceled the solicitation.
Starry protested the cancellation as pretextual and biased because it argued the agency was trying to steer the award toward Intellizant. The GAO rejected the protest, so Starry pursued the matter with the court (105 FCR 22, 1/12/16).
In April, the court granted Starry’s request to depose agency officials because Starry made a strong bias case against an agency official who previously worked for Intellizant (105 FCR 306, 4/12/16).
Reevaluation Not Serious
The court concluded that it didn’t have to reach a decision on the bias claim because the cancellation was clearly arbitrary.
Once agency officials selected Intellizant, any other result was unwelcome and not seriously considered, the court said. Officials told the GAO and Starry they would undertake a serious re-evaluation of Intellizant’s proposal, but the record didn’t reflect such an effort, the court found.
The agency official charged with the cancellation decision said the cancellation was reasonable because other contract vehicles could meet the agency’s needs. However, the record didn’t show that he compared those vehicles, and his supervisor and colleagues didn’t double-check his assertion.
Agency officials also said Starry would have received the award had the GAO’s recommendation been followed. Therefore, the court set aside the cancellation decision, and said the agency should again re-evaluate Intellizant’s proposal, as the GAO said in its second decision.
In addition, the court enjoined certain officials from participating in any subsequent agency actions in this competition.
Depositions with those officials “provide an illuminating, if depressing, window” into how they misrepresented the quality of their evaluation, the court said.
Specifically, one official rated Intellizant as technically acceptable despite having insufficient knowledge of the agency’s software, the court said.
 
The post Wojciech Kornacki Quoted in Bloomberg BNA Article on HHS IT Competition Cancellation appeared first on Centre Law & Consulting.

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Centre Law & Consulting
If you have been working on GSA Schedules for the past few years, you may remember that in May 2012, GSA’s initiative was the end of the Schedule Input Program (SIP) and the mandatory use of the new Formatted Price List (FPL) for the Financial and Business Solutions (FABS) Schedule. There was much excitement generated by this news as we were all ready for the end of SIP. In January 2014, GSA announced that FABS would no longer utilize the FPL and all vendors were to return to SIP. As we look into the years ahead, I am optimistic that eventually the Formatted Product Tool (FPT) will truly be the end of SIP.
What is the FPT?
FPT is a systems upgrade that will be activated within the existing eOffer and eMod platforms and NOT in a separate application. There will be an automatic upload of products and prices to GSA Advantage!
The General Services Administration (GSA) Federal Acquisition Service (FAS) is planning to implement the FPT across the Multiple Award Schedules (MAS) program beginning with select pilot Schedules in late July 2016.
The order of the FPT rollout, with approximately two week intervals, is as follows:
Schedule 58 I – Professional Audio/Video Schedule 72 – Furnishings & Floor Coverings (to be released with Schedule 58 I) Schedule 75 – Office Products/Supplies Schedule 73 – Food Service, Hospitality & Cleaning Equipment Schedule 51 V – Hardware Superstore Schedule 70 – Information Technology Products, Software & Services
What Do I Have to Do?
If you accept the FPT, you will be required to complete the one-time “rebaselining” of price list data as well as other data fields for proper display of these items. GSA can then ensure all of your currently awarded products are uploaded to GSA Advantage! For baselining, the contractor will utilize a provided template in eMod to submit all awarded products and associated product data, to include Manufacturer Part Number (MPN) and Universal Product Code Type A data, when applicable. All descriptive information required by SIP will be captured in one submission via eMod and uploaded to GSA Advantage!. This will become your FSS Price List upon execution of the modification.
If you accept the FPT bilateral modification, you will have 60 days to complete the rebaseline process. Please note that with the FPT, Contracting Officers will now have additional data analytics and transparency in helping them determine that pricing is fair and reasonable. Phase I of FPT is focused on collecting standard part numbers for items on Schedule.
Is Participation Mandatory?
No. At this time, acceptance of the upcoming Schedule Refresh/Mass Modification is optional if you are on one of the pilot Schedules. However, FPT will soon be mandatory for all new offers on product Schedules.
Does FPT Include Products and Services?
No. Phase 1 of this pilot program only includes products. If you have both products and services on the pilot schedule (such as IT 70), you are to enter the product information in the FPT pricing template and enter the services information in a text file. Both documents are to be uploaded via FPT, but in different file formats.
Recommendations
My recommendation is to completely understand the FPT process prior to accepting the upcoming Refresh Solicitation/Mass Modification for one of the pilot schedules. Continue to follow GSA Interact for updates on the Formatted Product Tool and for notice of the Refresh Solicitation/Mass Mod release.
I highly recommend attending the next GSA FPT training by registering for the next webinar on July 27, 2016 from 1:00pm – 3:00pm ET.
 
 
About the Author:
Maureen Jamieson
Executive Director of Contracts and Consulting
Maureen Jamieson has more than twenty-five years of experience managing federal contracts. She is highly experienced in solving client pricing problems and implementing effective pricing strategies for placing products and services on GSA Schedule contracts.  
The post The Exit of SIP and Entrance of the Formatted Product Tool appeared first on Centre Law & Consulting.

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Centre Law & Consulting
The Federal Marketplace can be challenging and risky for the uninitiated, and even for seasoned contractors. The Federal Acquisition Regulation (FAR) alone contains 53 parts over 1,903 pages, including nearly 590 provisions and clauses (some with alternates), and many of which will ultimately find their way into your contracts. And this doesn’t even include Agency-specific acquisition regulations which supplement and implement the FAR.
As if securing and administering government contracts were not challenging enough, how about trying to figure out the puzzle of who buys your supplies and services, where and how they buy them, and who do they buy from?
Unfortunately, some folks still rely exclusively on agencies’ Forecasts of Contracting Opportunities (FCO) thinking this is all they need for identifying upcoming procurement opportunities. While Federal Law (P.L. 100-656) requires all Federal agencies with procurement budgets of $50+ Million (almost all of them these days) to publish an FCO, the FCOs from most agencies are unfortunately not robust, are hardly all-inclusive with their information, and only tell part of the story.
Fortunately putting together the Who—What—When—Where and How puzzle pieces is much easier than securing and administering a contract thanks to the Federal Procurement Data System — Next Generation, commonly known as FPDS-NG or FPDS.
A Better Solution
A great way to know where procurements are going is to see where they’ve been. That’s where Federal Procurement Data System comes in. It is the real-time relational database serving the government acquisition community as the authoritative source of contract information, which contains summary level data and is used at all levels of the Federal government for policy and trend analysis. The numbers and data in FPDS change every hour of every workday. The system contains millions of transactions, and there are millions of permeations for extracting various combinations of data elements to suit your unique needs.
Unlike FPDS, the USAspending.gov website uses a static approach to capturing and reporting data, meaning the data is presented and simple charts and graphs which do not change until the next update, which is required every 30 days under the Federal Funding Accountability and Transparency Act. This makes access to current and real-time data through FPDS is invaluable, and knowing how to put the pieces of this puzzle together can help competitively position your company and help boost your federal sales.
Hands-On Learning
Don’t be overwhelmed by the idea of learning a system that might new to you though! On August 16, 2016, learn the intricacies of FPDS in one-day course, “Introduction to the Federal Procurement Data System”.
This hands-on, dynamic course unlocks the mysteries and power of FPDS for your company’s competitive benefit and includes content such as:
Providing an overview and requirements of FPDS reporting by Federal agencies Detailing what transactions are required to be reported along with what is available and what is not available through FPDS Learning who buys what, how they buy, and whether these procurements are conducted through the Federal Supply Schedules Program, Other Government Agency Contracts, or on the open market Identifying when your competitors’ contracts will expire or when other contracts in your commercial line of endeavor are due to expire and be re-competed Discovering if set-asides are used in acquiring the products and services you offer and how you may qualify Explaining the distinct advantages of using FPDS vs. USAspending.gov This course will use a combination of both lecture and hands-on laboratory, whereby participants will create individual FPDS accounts and actually create and run reports using standard reporting as well as the system’s invaluable and powerful ad hoc reporting capabilities. The critical knowledge, skills, and abilities gained from this intense one-day training class can be taken back to the workplace, along with reports ready to be run and re-run to meet your company’s needs.
What’s In It for You?
Enhance your company’s competitive position in the Federal market place by harnessing the power of procurement data. Stop wasting scarce marketing resources targeting agencies where opportunities do not exist. Instead, use data from FPDS to focus, target, and hone your marketing efforts in areas which will offer the best potential returns on your marketing investment. You’ll also save time by eliminating the need for time-consuming and often costly Freedom of Information Act (FOIA) requests for data.
Your competitors have this information and use it to their competitive benefit and advantage, why shouldn’t you? If you want to be the “go-to-person” at your company for this type of data and you want your company to be more competitive, then this course is for you.
We look forward to seeing you on August 16, so we can put the puzzle pieces together!
About the Author
Wayne Simpson, CSCM
Wayne Simpson is a seasoned former Federal executive and acquisition professional who is also a highly-motivated and demonstrative small business advocate, with nearly 38 years of Federal Civilian Service with the U.S. Department of Veterans Affairs (VA), and its predecessor organization, the Veterans Administration.  
The post The Procurement Puzzle: Putting the Pieces Together to Boost Federal Sales appeared first on Centre Law & Consulting.

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On June 23, 2016, the General Services Administration (GSA) amended the General Services Administration Acquisition Regulation (GSAR) to include clauses that require vendors to report transactional data from orders placed against certain Federal Supply Schedule (FSS) contracts, Governmentwide Acquisition Contracts (GWACs), and Governmentwide Indefinite-Delivery, Indefinite-Quantity (IDIQ) contracts.
What does this mean and what do you need to know?
First, it’s important to clarify what Transactional Data is. Transactional data refers to the information generated when the Government purchases goods or services from a vendor. It includes specific details such as descriptions, part numbers, quantities, and prices paid for the items purchased.
With this final rule, key points to note are:
The TDR clause is being implemented under the GSA Schedules program on a pilot basis. TDR implementation for several Schedules and Special Item Numbers (SINs) will begin in August 2016 and extend through Q1 FY2017. Currently, GSA plans for a 3-year pilot affecting specific SINS at which point the pilot will be reassessed. The following Schedules/SINs are impacted by the pilot: 03FAC 51V 58 I 72 73 75 Professional Services Schedule (only for the Engineering SINs) 70 (only for the following SINs: 132 8, 132 32, 132 33, 132 34, 132 54, and 132 55) The new TDR requirements will be mandatory only for new Schedule contracts awarded after the Schedule becomes subject to the pilot and at the time to extend the term of the Schedule contract. Please note that vendors holding existing contracts under pilot Schedules will be encouraged to accept the new clause via a bilateral contract modification. Once accepted, vendors will not need to comply with the Commercial Sales Practices (CSP) and Price Reductions Clause (PRC). Contractors in the pilot program will have ninety (90) days to accept the Mass Mod incorporating TDR. TDR data is reported monthly, and there is a 30-day window to report after the end of the month. GSA is amending its pricing instructions in the General Services Administration Acquisition Manual (GSAM) to place greater emphasis on price analysis when negotiating prices with Schedule vendors. IFF must still be paid quarterly. However, Contractors may choose to remit IFF on a monthly basis when they report their sales, but they must do so through the TDR system. The impact of this new rule remains to be seen, so Centre Law and Consulting will continue to report on TDR news as it develops.
About the Author
Maureen Jamieson
Executive Director of Contracts & Consulting
Maureen Jamieson has more than twenty-five years of experience managing federal contracts. She is highly experienced in solving client pricing problems and implementing effective pricing strategies for placing products and services on GSA Schedule contracts. Maureen also frequently works with clients on effective selling and marketing strategies in the federal market space.  
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Reproduced with permission from Federal Contracts Report, 105 FCR (June 21, 2016). Copyright 2016 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
Effective Trade Agreements Act and Pricing Compliance Programs for Federal Supply Schedules
Recent scrutiny by Sen. Charles Schumer (D-N.Y.) and a $75.5 million settlement stemming from allegations of overcharging the U.S. government send a clear message: Vendors must be compliant with their Trade Agreements Act (TAA) and pricing obligations on their Federal Supply Schedules (FSS). This article describes some of the most common TAA and pricing issues and points out some of the best practices.
The U.S. government created the FSS to streamline its acquisition process through volume buying from pre-approved vendors known as schedule contractors. Pursuant to the Federal Property and Administrative Services Act of 1949, 40 U.S.C. 101 et seq., the Government Services Administration (GSA) administers the FSS. This is why the FSS is also known as GSA Schedules or Multiple Award Schedules. In the past 67 years, the FSS have grown into a multibillion-dollar industry of vendors specializing in providing products and services to the U.S. government.
The Federal Acquisition Regulation (FAR) Parts 8, 12 and 38 govern the FSS. In accordance with FAR Part 12, FSS contracts are “commercial item contracts.” This means they may be awarded with less than full and open competition. When placing an order through the FSS, each agency is exempt from the small-business set-aside programs under FAR Part 19.
Compliance Issue 1: Buy American Statute and Trade Agreement Act
The U.S. government requires that products sold on the FSS are Buy American Statute (formerly the Buy American Act) and Trade Agreements Act compliant. In 1933, Congress passed the Buy American Act, 41 U.S.C. §§ 10a-10d (BAA), which required the U.S. government to give a preference to U.S. made goods over foreign-made goods in federal procurements to protect American workers and businesses.
Congress subsequently passed the Trade Agreements Act, 19 U.S.C. § 2512 (TAA) which allows the president to waive the BAA requirements for eligible products from countries that have signed an international trade agreement with the U.S. The TAA waiver applies only once certain dollar thresholds are met. The GSA has determined that since the estimated dollar value of each schedule it administers exceeds the established TAA thresholds, the TAA is applicable to all schedules. Both acts are discussed in detail in FAR Part 25, Foreign Acquisition.
Schedule contractors must comply with the BAA and TAA requirements. Specifically, the FAR states that schedule contractors must certify that each end product offered to the U.S. government is a U.S.made or designated country end product as defined in the “Trade Agreements” solicitation clause. Many schedule contractors purchase products from European or Asian suppliers or manufacturers and resell them to the U.S. government. Thus, it is critical to ensure that each product sold to the U.S. government has adequate compliance documentation.
The GSA has recently contacted schedule contractors to verify that their products are TAA and BAA compliant. This comes, in part, in response to the recent push from Schumer, who said several schedule contractors were listing products as “Made in America” when they were actually made overseas. So far, the GSA has removed 11 vendors. In addition to being removed from the FSS, schedule contractors risk debarment, financial liability and criminal penalties.
Compliance Issue 2: Pricing Issues and Requirements
The regulation controlling the GSA schedules requires schedule contractors to provide the U.S. government with the most favorable price. General Services Administration Acquisition Regulation (GSAR) Section 552.238-75 Price Reduction Clause, states, in part, that schedule contractors and the contracting officer must agree upon “(1) the customer (or category of customers) which will be basis of award and (2) the Government’s price or discount relationship to the identified customer (or category of customers). This relationship shall be maintained throughout the contract period.”
The GSAR requires schedule contractors to provide current, accurate and complete pricing policies and practices to the U.S. government during negotiation. Schedule contractors must also notify the U.S. government when they deviate from their standard written pricing policies.
Compliance with the Price Reduction Clause (PRC) is an ongoing obligation. However, many schedule contractors often change their business partners; their business partners change their points of production; and market prices fluctuate. Thus, it is important to monitor all of the changes affecting pricing — not only from the perspective of profitability, but also compliance.
Failure to comply with the PRC may result in substantially overcharging the U.S. government. This, in turn, could trigger a qui tam action against a schedule contractor and the involvement of the Department of Justice. According to the Justice Department, in 2015, two companies agreed to pay $75.5 million to settle claims that they misrepresented their commercial pricing practices and overcharged the U.S. government. Another company agreed to pay $44.5 million to resolve allegations that it overcharged the U.S. government for storage services. In 2016, the first major PRC noncompliance matter involved a company that agreed to pay $11 million to settle alleged false claims relating to overbilling the U.S. government on a GSA contract for six years.
Compliance Issue 3: Mandatory Disclosures of Violations
The Mandatory Disclosure Rule applies to the FSS and schedule contractors. It requires that schedule contractors report fraud and significant overpayments related to the contracts awarded by the U.S. government to the agency Office of Inspector General when a violation relates to ‘…an order against a Governmentwide acquisition contract, a multi-agency contract, a multiple-award schedule contract such as the Federal Supply Schedule, or any other procurement instrument intended for use by multiple agencies…” and to also copy the contracting officer.
This may often place schedule contractors in a difficult position of notifying all of the ordering U.S. government agencies. Failure to comply with the Mandatory Disclosure Rule is considered a cause for debarment. The GSA Office of Inspector General semiannual reports show TAA violations continue to be reported every year.
Best Practices for FSS Compliance
Detail one or two individuals who are directly responsible for BAA and TAA compliance. Establish clear and easy to follow standards and policies. Automation prevents human errors. Invest in comprehensive compliance IT safeguards and internal checks early on. Proper preventive training and decision flowcharts will ensure that your compliance program is responsive to market changes and fluctuating prices. Conduct a third-party review of your policies and compliance practices. For close questions, seek legal advice. Report TAA and pricing noncompliance issues with your FSS. This includes notifying the ordering agency, the agency responsible for the contract, and your contracting officer. It may be best to hire an experienced outside counsel or consultant to handle this.  
Conclusion
According to the GSA, the FSS are “fast, easy, and effective contracting vehicles for both customers and vendors” and are designed to mirror commercial business practices. Schedule contractors are automatically connected to multiple procurement opportunities across a wide array of U.S. government agencies. In the past six decades, the FSS have become more complex and require greater compliance. While the FSS offer many benefits, recent congressional and Justice Department scrutiny shows that compliance is paramount.
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On June 7, 2016, the U.S. Department of State announced that it is implementing “catch-up” adjustments to the maximum amounts of the monetary penalties it assesses for regulatory violations. Under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, federal agencies must make a one time “catch-up” adjustment to their civil monetary penalties in order to account for inflation. Federal agencies are required to publish interim final rules with the initial penalty adjustment amounts by July 1, 2016, and the new penalty levels must take effect not later than August 1, 2016.
The Penalties
The U.S. Department of State Directorate of Defense Trade Controls assesses penalties for violations of the Arms Export Control Act and International Traffic in Arms Regulations. The following amounts will be assessed for certain violations after August 1, 2016, regardless of when the actual violation occurred:
Each violation of The Arms Export Control Act, 22 U.S.C. §2778. This Act imposes export and import controls on certain defense articles and defense services. This includes registration, reporting, record keeping, and due diligence requirements, among many others. Previously, the maximum penalty was $500,000. The new maximum penalty will not exceed $1,094,010 per one violation.
Each violation of the The Arms Export Control Act, 22 U.S.C. §2779a. This section of the Act prohibits incentive payments to satisfy any offset agreements under certain circumstances. Generally, any U.S. supplier of defense articles or services sold, licensed, or exported, among others, is prohibited from making any incentive payments for the purpose of satisfying, in whole or in part, any offset agreement with a foreign country. Defense offset agreements are understood as side agreements that provide additional incentives to the purchaser. Previously, the maximum penalty was $500,000. The new maximum penalty will not exceed $795,445 per one violation.
Each violation of The Arms Export Control Act, 22 U.S.C. §2780. This section of the Act prohibits transactions with countries supporting acts of international terrorism. Transactions include exporting (directly or indirectly) or otherwise providing (by sale, lease, loan, grant, or other means) of any munitions items, providing credit guarantees, or otherwise facilitating the acquisition of any munitions. Previously, the maximum penalty was $500,000. The new maximum penalty will not exceed $946,805 per one violation.
What Can I Do Before August 1, 2016?
Have no fear and double-check whether you are compliant. The U.S. Department of State Directorate of Defense Trade Controls expects each U.S. exporter of defense articles and services to have comprehensive operational compliance programs. This may include policies and procedures on:
Corporate commitment to the International Traffic in Arms Regulations (ITAR) compliance Tracking of controlled items and technical data Due diligence and internal monitoring Training and awareness Penalties for violations Reporting non-compliance issues The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 allows the U.S. Department of State to exercise its discretion to determine whether it should assess civil monetary penalties lower than the maximum amount. If your compliance program identifies at least one ITAR violation, it may be beneficial to consider whether mandatory reporting is required and whether to report it before the maximum penalties increase on August 1, 2016.
You can learn more about the U.S. export controls and compliance requirements on June 23, 2016 during our webinar on New Opportunities for Small Businesses and U.S. Exporters.

Note that is post is for educational use only and does not constitute legal advice.

About the Author:
Wojciech Kornacki
Government Contract and Compliance Counsel
Wojciech Kornacki focuses on federal Government contract compliance, bid protests, and federal litigation. He represents clients in matters involving Government Accountability Office bid protests, federal agency debarments, Boards of Contract Appeals litigation, and Export Controls (ITAR and EAR) and Trade Agreements Act compliance.  
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My granddaughter recently lost a baby tooth in the ‘usual way.’ One morning, she felt the tooth begin to move the slightest bit. She wiggled it back and forth throughout the day and by dinner…Voile! Only one day later, she lost two more courtesy of her dentist to make room for the incoming ‘permanent’ ones. The Tooth Fairy kept the commitment of retrieving the lost teeth from under her pillow in a timely fashion – in this case staying up late on two consecutive nights – and rewarded her for pain and suffering with a selfie stick. (Wow, times have changed!)
This made me wonder, does the Tooth Fairy earn overtime for work performed in excess of a statutory number of ceiling hours or is that position salaried? (I’ve had a long term and continuing relationship with the Tooth Fairy, so I want to proceed carefully.) The question of overtime relates to the Fair Labor Standards Act (FLSA). The FLSA provides for a federal minimum wage, a standard 40-hour workweek, and pay at time-and-a-half rate for all overtime hours. The Act also includes several exemptions under which certain employees are not entitled to overtime pay. Currently to meet most exemptions, in addition to meeting a duties test, an employee must be paid on a salary basis at least $455 per week ($23,600 annually). There is a belief that payment of a salary is the only requirement to avoid overtime pay obligations. This is not correct. Also, a new regulation will more than double this minimum salary threshold later this year, but these are topics for tomorrow!
If the Tooth Fairy is not FLSA-exempt, there is a federal entitlement for a time-and-a-half rate for any hours worked in excess of 40 hours. Conversely, if the Tooth Fairy is FLSA-exempt, hours worked in excess of 40 hours weekly are considered Uncompensated Overtime (UCOT).
I’ve always had nagging concerns about UCOT – that it’s somehow a ‘bad’ thing – so I researched UCOT. The Regulation requires the solicitation provision at FAR 52.237-10 (Identification of Uncompensated Overtime) in requirements for technical or professional services which will be acquired on an hourly basis:
Uncompensated overtime means the hours worked without additional compensation in excess of an average of 40 hours per week by direct charge employees who are exempt from the Fair Labor Standards Act. Compensated personal absences such as holidays, vacations, and sick leave shall be included in the normal work week for purposes of computing uncompensated overtime hours.
FAR goes on to provide this example:
Uncompensated overtime rate is the rate that results from multiplying the hourly rate for a 40-hour work week by 40, and then dividing by the proposed hours per week. For example, 45 hours proposed on a 40-hour work week basis at $20 per hour would be converted to an uncompensated overtime rate of $17.78 per hour ($20.00 × 40 divided by 45 = $17.78)
The key to both the provision and the example might be the term ‘proposal’. If an offeror proposes UCOT, then it is part of its technical and pricing plan that should be evaluated during cost realism. What if a contractor does not propose UCOT yet incurs UCOT? Unforeseen situations requiring additional labor hours or surge efforts are not uncommon in professional service industries. In this situation, can the contractor invoice for these uncompensated hours? Invoicing – always a significant issue – becomes more important when fee is linked to achieving a level of effort. Can the contractor profit on UCOT hours?
UCOT is not illegal. How a contractor motivates its employees, both FLSA and FLSA-exempt, to satisfy employee and customer seems a matter for industry not Government. If you are pondering the loss of revenue on the part of the employee, consider that there may be other opportunities and means to compensate employees, such as additional benefits, compensatory time, or bonuses. As in so many other federal procurement matters, competition will affect retention rates of those who propose intentionally to overwork their employees. UCOT is discussed as a subtopic in Centre’s Federal Contract Basics Course.
As for the Tooth Fairy, there are an increasing number of ‘clients’ for whom Tooth Fairy must provide services. I know from experience that each ‘client’ has at least one parent and probably others (grandparents, for example!) standing by to ensure success. Tooth Fairy and I aren’t so close these days that we can discuss FLSA status, but I’d like to think with all those hours and all those satisfied ‘clients’ Tooth Fairy has earned many overtime hours as a non-exempt worker.
And Tooth Fairy, what’s a selfie stick anyhow?
About the Author:
Rich Zimmerman
Project Manager
Richard E. Zimmerman has more than 25 years of experience as a contracts professional both in Government and the private sector. His excellent background in FAR, Agency supplements, and their application over the procurement life cycle make him a critical resource for PMs, prime contractors, and subcontractors. The post Uncompensated Overtime and the Tooth Fairy appeared first on Centre Law & Consulting.

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Many “small” businesses listed in Federal Procurement Data Systems find themselves in a paradox—they’re at once too small to compete with large contractors, but also too large to benefit from small business set-asides. These growing firms have achieved what every small business owner hopes for—start small, gain market traction, and grow. But when a firm graduates from the benefits of small business set-asides, they enter the “mid-tier” — a murky limbo that can leave them vulnerable and, potentially, unable to compete.
The government should, as a matter of policy, continue to support and foster the growth of firms that enter the mid-tier. Research suggests maturing small businesses produce more jobs than established companies or startups. But today, these mid-tier firms have nowhere to “grow” in the federal marketplace. It’s a double-edged sword that’s not good for the economy or the federal agencies that rely on relationships with maturing small businesses.
Size Does Matter…
When it comes to professional services, mid-tier contractors simply cannot compete with the large contractors that dominate the space. Larger firms have several competitive advantages that make true competition between mid-tier firms and the largest firms illusory.
Multi-billion dollar companies have the resources to commit the talents of well-paid business development and marketing staffers solely to proposal development across multiple industries. This increases the competitiveness of the largest companies in the bidding process — potentially freezing out emergent smaller companies. In contrast, mid-size companies have limited bid and proposal budgets and typically do not have teams of individuals solely dedicated to business development and marketing. This lack of infrastructure at mid-size companies constrains their ability to compete successfully against larger actors.
What can a mid-size firm do? Often, they’re forced to sell. Competition is stifled when multi-billion dollar companies force these businesses into their supply chain through acquisition once these companies have become ineligible for small business awards. If not acquired, an advanced small or mid-size company may have to modify its business model to focus on subcontractor relationships with other large or small companies. Being limited to subcontractor roles impairs the mid-tier firm’s ability to gain project management experience essential for further growth.
…Especially in a Shrinking Market
Over the last decade, the competitive dynamics of the federal procurement market – and in particular the federal professional services industry – have changed drastically. The federal market continues to shrink in the short-term, along with the diversity of companies that supply government customers. Industry consolidation appears to have run its course in terms of efficiency, and now it simply means fewer choices for government managers.
Uncertain procurement strategies by government agencies — owed partially to congressional gridlock — challenge agencies and industry to see and prepare for future requirements. This uncertainty has adverse effects on competition and deprives the federal government of the opportunity to realize a return on its initial investment in emergent small businesses.
As in any market, there are winners and losers. But for today’s small contractors, winning might just be what sets them up to be losers. Finding opportunities to help mid-tier companies mature into strong businesses is essential — both for the competitiveness of the market and the ability of agencies to meet their mission with the most innovative solutions.
Advanced small firms have done what we all want to do. They began small, became seasoned, and grew. The government should as a matter of policy, support and foster such growth since previous data from Christopher Yukins and other researchers suggest that maturing small businesses produce more jobs than either very large or new companies. Presently, these advanced small firms have nowhere to “grow” in the federal marketplace. That is not good for the economy or federal agencies that have derived benefits from their relationships with growing small contractors.
Sizing Up the Competition
Increased concentration of Federal Professional Services Industry contract awards being performed by large companies stifles competition because advanced small companies simply cannot successfully compete with the largest players. Larger firms have several advantages that make competition between advanced small and the largest firms illusory. Multi-billion dollar companies leverage the talent of well-paid business development and marketing staff as well as teams of professional technical writers and graphic artists that can dedicate their efforts solely to proposal development. Additionally, large size companies can use their expertise to operate in multiple industries. This increases the relative competitiveness of the largest companies in the bidding process. In contrast, mid-size companies have limited bid and proposal budgets and typically do not have teams of individuals solely dedicated to business development and marketing. This lack of infrastructure at mid-size companies constrains their ability to compete successfully against larger actors.
Competition is stifled when multi-billion dollar companies force these businesses into their supply chain through acquisition after these companies have become ineligible for small business awards. If not acquired, an advanced small or mid-size company may have to modify its business model to focus on subcontractor relationships with other large or small companies. Being limited to subcontractor roles impairs the advanced small firm’s ability to gain project management experience essential for further growth.
The Government Market is Shrinking
The federal market continues to shrink in the short-term, along with the diversity of industry choices that supplies those customers. Industry consolidation appears to have run its course in terms of efficiency, and now simply means fewer choices for government managers. Uncertain strategies by government agencies — owed partially to congressional gridlock -challenges agencies and industry to see and prepare for future requirements. This uncertainty, however, has an adverse impact that shuts down competition and deprives the Federal Government from realizing any return on its initial investment in advanced small companies during their early growth.
While significant policy change will occur next year regardless of who takes control of various levels of government is an easy prediction to make, those working within today’s contracting community can expect to be asked to get things done faster and more effectively. Within federal contracting, all its many constituencies define success differently (whether you are a small, advanced small, mid-sized, or large business) and almost never achieving a consensus. As in all business, there are winners and losers. “Where you stand depends on where you sit.” In the worst-case scenario, an Advanced Small firm will fail.
To learn even more, plan to attend “Federal Procurement Opportunities for Small Businesses and Middle Market Contractors“, a breakfast seminar hosted in partnership with Mid-Tier Advocacy on June 23 in Tysons Corner, VA.


Mid-Tier Advocacy, Inc. (MTA) is a 501(c) 3 non-profit organization was established to work toward the elimination of the competitive disadvantage facing mid-tier government support service companies. A nonpartisan organization, MTA provides resources and public awareness through issue forums and structured branded events. As such, we leverage the collective voice for mid-tier firms in response to federal policies that impact their growth and sustainability. MTA hosts scheduled business events “MTA Business Focused Breakfast” in the DMV area where industry meets policy.
About the Author:
Tonya M. Saunders
Founder of Mid-Tier Advocacy, Inc.
Tonya Saunders is the founder and principal for Washington Premier Consulting and Washington Premier Group. Among her accomplishments is founding and directing Mid-Tier Advocacy, a national coalition of small, emerging, and medium-sized businesses.  
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The GSA FAS Office of Acquisition Management is planning to refresh all Multiple Award Schedules to incorporate provision and clause updates. For Schedules that offer services, both professional and nonprofessional, the solicitation refresh and corresponding mass modification will also update the application of the Service Contract Labor Standards (SCLS) to align with the U.S. Department of Labor’s SCLS compliance procedures.
They recently issued a presentation that outlines the planned changes and updates in the modification. GSA Overview of Planned MAS Changes, courtesy of the GSA to learn more.
 
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The Federal Government continues to issue more and more cybersecurity rules, Executive Orders and guidance for federal contractors, and the latest addition is the Federal Acquisition Regulation Part 52.204-21 – Basic Safeguarding of Covered Contractor Information Systems, published in June 2016. This new rule establishes new definitions of “Covered Contractor Information System”, “Federal Contract Information”, and outlines 15 new safeguarding requirements and procedures for federal contractors. FAR Part 52.204-21 supplements many other existing cybersecurity rules that Federal contractors have to already comply with.
When it comes to meeting cybersecurity requirements, the first question is whether the new rule applies. For example, vendors of commercial items may not be affected by the rule in the same way as contractors storing and managing government information containing non-public and sensitive data. The new rule applies to “Covered Contractor Information System” which is defined as an information system that is owned or operated by a contractor that processes, stores, or transmit Federal Contract Information. Thus, it is important to understand your specific contract requirements relating to such information, and to check whether your contract includes FAR Part 52.204-21. Most experts agree that this rule could have a very broad application.
What is “Federal Contract Information”?
It is information that is not intended for public release, that is provided by or generated for the Government under a contract to develop or deliver a product or service to the Government, but not including information provided by the Government to the public (such as on public websites) or simple transactional information, such as necessary to process payments.
What is “Safeguarding”?
The new rule defines “safeguarding” as measures or controls that are prescribed to protect information systems, and it lists 15 different security controls. Essentially, the security controls can be divided into (1) user controls, (2) use controls, and (3) information system controls. User controls involve limiting access to authorized users. Use controls refer to limiting the types of transactions and functions that authorized users are permitted to execute. Finally, information system controls refer to periodic scans of the information systems and real-time scans of files from external sources as they are being downloaded, opened or executed. Read the details of all the 15 requirements.
What Are Other Cybersecurity Requirements?
There are many. Probably, one of the most important ones is the new publication setting out the minimum standards on protecting controlled unclassified information.
The National Institute of Standards and Technology Special Publication 800-171 “Protecting Controlled Unclassified Information in Nonfederal Information Systems and Organizations” is designed to help federal agencies in protecting the confidentiality of controlled unclassified information when it is stored on nonfederal information systems and organizations. This in turn means that federal contractors have to comply with the recommended requirements. This publication has been developed pursuant to the Federal Information Security Modernization Act of 2014.
What Are Some of the Best Ways to Satisfy the New 15 Cybersecurity Safeguarding Requirements and Procedures?
It all starts with appropriate policies and internal procedures, proper training, contingency planning, periodic assessments and remedial actions, and constant risk monitoring.
If you have further questions about the new cybersecurity rules, or require training, feel free to contact us.
About the Author:
Wojciech Kornacki
Government Contract and Compliance Counsel
Wojciech Kornacki focuses on federal Government contract compliance, bid protests, and federal litigation. He represents clients in matters involving Government Accountability Office bid protests, federal agency debarments, Boards of Contract Appeals litigation, and Export Controls (ITAR and EAR) and Trade Agreements Act compliance.  
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Effective July 1, 2016, the Office of Federal Contract Compliance Programs (OFCCP) began using its new scheduling letter for compliance evaluations.
One of the most significant changes in the form document relates to the agency’s use of data and information submitted by contractors. The “old” letter stated:
“Rest assured that OFCCP considers the information you provide in response to this Scheduling Letter as sensitive and confidential. Therefore, any disclosures we may make will be consistent with the provisions of the Freedom of Information Act.”
In contrast, the new letter states:
“Please also be aware that OFCCP may use the information you provide during a compliance evaluation in an enforcement action. We may also share that information with other enforcement agencies within DOL, as well as with other federal civil rights enforcement agencies with which we have information sharing agreements.”
The National Labor Relations Board’s (NLRB) issuance of its memorandum on July 1, 2016 concerning the collection of information regarding labor law violations per the “Fair Pay and Safe Workplaces” Executive Order must be purely coincidental, no? (OM 16-23)
“Interesting times ahead,” contractors.
About the Author:
David Warner
Partner
David Warner is a seasoned counselor in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David has extensive experience representing contractors in affirmative action, Davis-Bacon Act, and Service Contract Act compliance audits. He also represents businesses with regard to wage and hour compliance, DOL audits, and litigation.  
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This guide pinpoints some of the major government contracts-related developments that occurred over the last six months. These developments create new opportunities and compliance requirements that people who conduct business with the Federal Government need to know about.
Major Regulatory Developments
Compliance: False Claims Act Penalties Almost Double
The U.S. Department of Justice issued an interim rule increasing monetary penalties for contractors. Civil monetary penalties under certain sections of the False Claims Act are increased from $5,500 to $10,781 (minimum penalty), and from $11,000 to $21,563 (maximum penalty). Considering that each transaction or invoice could be considered as a separate violation, compliance is paramount. You can read the entire rule, and it will be effective on August 1, 2016.
Compliance: New Cybersecurity Requirements For Federal Contractors
The U.S. Department of Defense, NASA and GSA issued a final rule amending the Federal Acquisition Regulation by adding a new subpart for the basic safeguarding of contractor information systems that process, store, or transmit Federal contracting information (FCI). (FAR 52.204-21) FCI means “information, not intended for public release, that is provided by or generated for the Government under a contract to develop or deliver a product or service to the Government, but not including information provided by the Government to the public (such as on public Web sites) or simple transactional information, such as necessary to process payments.” This rule is expected to be applicable to most, if not all, of the new contracts. It is effective as of June 15, 2016.
Opportunity: Small Business Mentor-Protégé Program
The SBA is amending its regulations to establish a Government-wide mentor protégé program for all small business concerns. The new rule also makes changes to the current joint-venture provisions. This development is expected to create many new opportunities for small and not so small businesses. This rule will be effective on August 24, 2016.
Compliance: No Discrimination on the Basis of Sex
The U.S. Department of Labor’s Office of Federal Contract Compliance Programs created new nondiscrimination obligations that affect certain Federal Government contractors and subcontractors. The new obligations relate to the Executive Order 11246 – Equal Employment Opportunity. This order prohibits discrimination in employment on the basis of sex and requires employers to take affirmative action to ensure that applicants and employees are treated without regard to their sex. You can read our article on this major development or read the final rule, which will be effective on August 14, 2016.
Opportunity: Export Control Reform Revisions
As part of the Export Control Reform initiative, the Department of State updated the definitions of “export”, and “reexport or retransfer” in the International Traffic in Arms Regulations (ITAR). This is seen as a positive development by many because now the new ITAR definitions will be better synchronized with the Export Administration Regulations definitions. This rule will be effective on September 1, 2016.
Opportunity: GSA Transactional Data Reporting
GSA amended its rules to now require Federal Supply Schedule (FSS) contractors to report transactional data from orders placed against certain FSS contracts, Government-wide Acquisition Contracts and Government-wide Indefinite-Delivery, Indefinite-Quantity (IDIQ) contracts. Some experts believe that this rule could potentially result in significant savings to federal contractors because it may eliminate other reporting requirements. You can read our article on this development or review the rule, which became effective as of June 23, 2016.
Opportunity: The Freedom of Information Improvement Act of 2016
This law is designed to make major changes to the current Federal Government record disclosure practices. Among others, federal agencies are expected to post more records online and make records available to requesters in an electronic format. You can read a good summary on the White House website. This act became Public Law No. 114-185 on June 30, 2016.
Compliance: The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015
This law requires federal agencies to adjust the level of civil monetary penalties with an initial “catch-up” adjustment through an interim final rulemaking, and make subsequent annual adjustments for inflation. This act became Public Law 114-74 on November 2, 2015. Now, federal agencies are required to publish interim final rules with the initial penalty adjustment amounts by July 1, 2016, and the new penalty levels will be legally binding on August 1, 2016. You can read our article on this development.
Significant Legal Decisions
Compliance: Universal Health Services, Inc. v. United States Et Al. Ex Rel. Escobar Et Al. (2016)
In this case, the U.S. Supreme Court considered whether a defendant should face False Claims Act (FCA) liability only if it failed to disclose the violation of a contractual, statutory, or regulatory provision that the Federal Government expressly designated a condition of payment. The Court answered this question by stating that defendants could be liable for violating certain requirements even if the requirements were not designated as conditions of payment. Any misrepresentation about compliance with a statutory, regulatory, or contractual requirement had to be material to the Federal Government’s payment decision in order to be actionable under the FCA. This case was decided on June 16, 2016.
Opportunity: Kingdomware Technologies, Inc. V. United States (2016)
In this case, the U.S. Supreme Court considered whether the Department of Veterans Affairs had to award contracts to veteran-owned small business concerns when there was a reasonable expectation that 2 or more such concerns would bid for the contract at a fair and reasonable price that offered best value to the U.S. Government. The Court answered this question with a unanimous yes! This decision creates many new opportunities for veteran-owned small business concerns. This case was decided on June 16, 2016.
Compliance: Remington Arms Co., LLC, v. The United States, and Colt Defense, LLC, and FN America, LLC (2016)
In this post-award bid protest, the U.S. Court of Federal Claims examined whether the contracting officer’s (“CO”) decision to award a contract to Colt while Colt was still in bankruptcy and labeled “high risk” by the Defense Contract Management Agency was arbitrary, capricious, and an abuse of discretion. The Court concluded that the CO’s decision was arbitrary and capricious because it was not supported by the record which showed that Colt was undergoing bankruptcy proceedings. This case was decided on March 30, 2016.
Opportunity: B-411466.3, Fluor Energy Technology Services, LLC
In this matter, the Government Accountability Office (“GAO”) recommended full reimbursement of costs for filing and pursuing protest where the agency unduly delayed taking corrective action in the face of a clearly meritorious protest. The protester was able to show that a reasonable agency inquiry into initial protest allegations would have revealed prejudicial errors in the agency’s cost realism evaluation. This matter was decided on June 7, 2016.
Note that is post is for educational use only and does not constitute legal advice.
About the Author:
Wojciech Kornacki
Government Contract and Compliance Counsel
Wojciech Kornacki focuses on federal Government contract compliance, bid protests, and federal litigation. He represents clients in matters involving Government Accountability Office bid protests, federal agency debarments, Boards of Contract Appeals litigation, and Export Controls (ITAR and EAR) and Trade Agreements Act compliance.  
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The Payment of Subcontractors proposed rule, which appeared in the Federal Register in January 2016, is the latest in a series of efforts to hold the Prime accountable for timely payments to its Subs.
Those who follow these blogs know that ‘payment’ is a hot button topic for me whether it is payment to the Prime by the Government or payment to the Subcontractor by the Prime. We’ve previously highlighted the “Accelerating Payments to Small Businesses” rule whose aim is to enable small businesses subcontractors to receive payments within 15 days of receipt of a proper invoice. And not quite a year ago, I reviewed the finer points of the “Paid to Cost” rule, which requires payment to Subs thirty days after the Prime submits its invoice to the Government.
This Payment of Subcontractors proposed rule has made a long trip. It originated as Section 1334 of the Small Business Jobs Act of 2010! This statute requires the Prime to self-report to the Contracting Officer (CO) when the Prime makes late or reduced payments to small business subcontractors. In addition, the CO is required to record the identity of contractors with a history of three or more unjustified reduced payments to small business subcontractors within a 12-month period [FAR 42.1502(g)(2)] in the Federal Awardee Performance and Integrity Information System (FAPIIS).
What Does It Mean?
That’s a lot to take in, but essentially:
In an era of mandatory disclosure, the contractor must turn itself in to the CO along with the reason(s) for the reduced payment. The CO will add the contractor’s identity to FAPIIS, the database that has been established to track contractor misconduct and performance. The FAPIIS database also contains Federal contractor criminal, civil, and administrative proceedings in connection with federal awards, suspensions and debarments, administrative agreements issued in lieu of suspension or debarment, non-responsibility determinations, contracts terminated for fault, and defective pricing determinations – truly a tough neighborhood!
What Are the Points to Consider in This Rule?
First, what does a reduced payment mean? FAR 19.701 defines it as a payment that is less than the amount agreed upon in a subcontract in accordance with its terms and conditions for supplies and services for which the Government has paid the prime contractor.
Second, are any other processes affected? FAR 42.1502 is revised to include reports of reduced payments in the past performance evaluation in each of the ratings definitions found at Table 42-2. A new clause, FAR 52.242-XX, implements the rule.
Finally, to which contracts does this apply? This statute defines a ‘covered contract’ as a contract under which a prime contractor is required to develop a subcontracting plan. I was almost through an initial reading of this rule before that point was made clear. That narrows the scope of affected Prime contracts but only a little. FAR 19.702 [The Small Business Subcontracting Program] instructs that in negotiated acquisitions, each solicitation of offers to perform a contract or contract modification, that individually is expected to exceed $700,000 and that has subcontracting opportunities, shall require the apparently successful offeror to submit an acceptable subcontracting plan.
As of last week the Councils were comparing notes with the objective of issuing a final rule. Payment rules are typically welcomed by one party and dreaded by the other, but the dynamics are universally interesting.
Contact me if you have questions about this, but I’ll also review – probably the final rule – in my Federal Contract Basics or Subcontracting Under the FAR courses this fall.
About the Author:
Rich Zimmerman
Project Manager
Richard E. Zimmerman has more than 25 years of experience as a contracts professional both in Government and the private sector. His excellent background in FAR, Agency supplements, and their application over the procurement life cycle make him a critical resource for PMs, prime contractors, and subcontractors. The post Subcontracting Payment Rules: Make the Payment or Incur the Penalty appeared first on Centre Law & Consulting.

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By now you have probably heard that the Department of Labor’s regulations for the white-collar exemptions to overtime compensation were finalized and will be effective December 1, 2016. You are probably also aware that your company should be analyzing how its employees are classified to ensure it is prepared to comply with the regulations come December 1. What you may not have thought about is how your analysis (and any changes to employee exemption status) may impact your federal government contracts covered by the Service Contract Labor Standards (formerly the Service Contract Act).
The final overtime regulations implement significant changes to the salary threshold required for employees in order to be considered exempt. Specifically, the salary level for the executive, administrative, and professional exemptions will become $913 per week or $47,476 annually. Although this is only half of the exemption analysis (which also requires employees meet a duties test), the DOL estimates that roughly 4 million workers will be affected by the change.
How Does the Service Contract Labor Standards Come Into Play?
The Service Contract Labor Standards (SCLS) generally requires contractors with covered service contracts pay their “service employees” a minimum wage and fringe benefits that have been determined by the Secretary of Labor as prevailing in the locality where the employee is working. These wages and fringe benefits are reflected in one or more wage determinations attached to the SCLS contract. However, only “service employees” are subject to the wage and fringe benefit requirements of the wage determination. Thus, properly classifying a worker as a service employee is extremely important for determining compliance with the SCLS.
“Service employees” are in turn defined as any employee that is not exempt from overtime under the administrative, executive, or professional exemptions. Thus, for government contractors, one very likely result of reclassifying employees from exempt to non-exempt under the new FLSA regulations is that these now non-exempt employees will also become subject to SCLS wage and fringe benefit obligations. The difficulty will be in aligning or mapping these now non-exempt “service employees” to the positions on the wage determination (or directory of occupations). Assuming these employees otherwise meet the duties test for the white-collar exemptions (which typically require higher level responsibility and decision-making), the directory of occupations and wage determinations likely do not currently contain positions of a similar nature. Thus, absent proactive action by the DOL, contractors may need to make conformance requests for covered contracts for these newly exempt positions.
What Should Contractors Be Doing Now?
It is important that contractors assess proper classification of its employees over the next few months to determine which positions may need to be reclassified as non-exempt from overtime starting December 1. In addition, contractors should assess the resulting increase in SCLS applicability for those employees that will now be considered “service employees” and ensure proposals and existing contracts account for any increased costs as a result.
The DOL has jurisdiction to pursue claims against contractors that fail to classify workers appropriately. For example, last week the DOL announced a $1.5 million settlement in back wages and fringe benefits with a contractor that allegedly misclassified workers subject to SCLS. Notably, the settlement also covers workers with 10 subcontractors.
While the consent findings reflect that the contractor will seek an equitable adjustment to account for its increased costs based on the applicability of SCLS to additional employees, being in the position of paying seven figures worth of back pay while waiting for the government to decide whether an equitable adjustment will be provided is certainly less than ideal. Contractors can be far better positioned when engaged in proactive analysis of proper employee classification along with ensuring that subcontractors are also aware of the applicability of SCLS.
About the Author
Marina Blickley
Associate Attorney
Marina Blickley is primarily focused in the Government Contracting and Non-Profit industries. She regularly assists clients in all aspects of employment and labor law including representation and defense of employers against claims of employment discrimination, harassment, retaliation/whistleblower, and wage and hour violations before administrative agencies and state and federal courts.  
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How is your relationship with the government going? Have you heard about the “transformational changes” that are being made to the GSA’s Federal Supply Schedules Program? And do you really know how many moons the Earth has?
Below is a round up of recently trending Federal Contracting issues you should know about.

Overly Restrictive Solicitations.
Nexagen Networks of Aberdeen, Maryland, challenged the terms of a task order request issued by the Army for information technology services. Nexagen argued that the solicitation’s requirements for experience with Oracle Endeca Information Discovery (OEID) was unduly restrictive of competition and created bias in favor of the incumbent contractor. GAO denied the protest. From the decision: “Moreover, to the extent Nexagen’s premise is that there is no equivalent software available, that alone would not demonstrate that the TOR’s requirement is unduly restrictive. Again, the issue is not whether the specification restricts competition, but whether the specification is reasonably necessary to meet the agency’s actual needs. Even where specifications are based on a particular product – or, as Nexagen alleges here, a particular firm’s capabilities or experience – we have found that this type of requirement is not improper in and of itself; nor will an assertion that a specification was “written around” features offered by a particular firm provide a sustainable basis for protest if the record establishes that the specification is reasonably related to the agency’s minimum needs”.
And so it goes.

Gov Con Marketplace Musings
Elvis lives. The theme song for incumbents this year is “Heartbreak Hotel”. I am seeing fewer incumbent wins as the government cares less about the relationship and more about the cost. I am also seeing agencies take single-award contracts and, instead of the usual recompete for the follow on contract, they are awarding the work as a task or delivery order off a multiple-award contract vehicle. (Side note – usually the one you are not on.) Multiple requirements are also being bundled into single winner-take-all order awards. What are you seeing in the marketplace? Share your thoughts and observations in the comments below.
VA Privatization
Veterans Affairs privatization is moving along on several fronts. Sen. John McCain introduced a bill that will allow veterans to opt out of the VA healthcare system and use local healthcare providers. The VA Commission on Care is expected to issue a final report any day now. The draft report shifted health care to for veterans to more private providers. Most veterans groups oppose privatization.
Old News and the Creation of Mass Hysteria by Law, Accounting, and Consulting Firms
The Supreme Court issued a decision on Escobar holding that the implied false certification theory can be a basis for liability under the False Claims Act (for government contractors) when a defendant submitting a claim makes specific representations about the goods or services provided, but it fails to disclose non-compliance with material statutory, regulatory, or contractual requirements that make those representations misleading with respect to those goods or services; and liability under the FCA for failing to disclose violations of legal requirements does not turn upon whether those requirements were expressly designated as conditions of payment. Key word is material.
Final Rule Released on GSA Transactional Data
According to the U.S. General Services Administration (GSA) website, a final Transactional Data Reporting (TDR) rule will publish in the Federal Register on June 23, 2016. The rule “will reduce unnecessary burdens on contractors and small businesses and potentially save millions of dollars for the American taxpayer…and will be implemented through a pilot program across GSA contract vehicles.” It is seen as one of the most transformational changes to GSA’s Federal Supply Schedules Program in more than two decades.
A Trick Question
Use this when you don’t want to pick up the check. How many moons orbit the earth? Answer: 1.5 moons. NASA has just located a mini moon in our orbit. About the Author
Barbara Kinosky
Managing Parnter
Barbara Kinosky has more than twenty-five years of experience in all aspects of federal government contracting and is a nationally known expert on GSA and VA Schedules and the Service Contract Act. She has a proven track record of solving complex issues for clients by providing strategic and business savvy advice. Barbara was named a top attorney for federal contracting by Smart CEO magazine in 2010, 2012, and 2015.  
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The U.S. Department of Labor issued a final rule revising its sex discrimination guidelines for federal contractors found at 41 CFR Part 60-20. The final rule is effective August 15, 2016, is the first significant change to the guidelines since 1970, and it clarifies DOL positions with respect to issues of compensation, pregnancy, and harassment among others. Unsurprisingly given recent amendments to EO 11246, the Rule also provides specific guidance with respect to issues regarding sexual orientation and gender identity.
While it will take time for contractors and counsel to digest all 195 pages of the final Rule notice, one section of immediately accessible interest is the Rule’s appendix concerning “Best Practices,” which, while technically voluntary, provide insight into the DOL’s perspective and priorities with respect to sex discrimination. Specifically, the Rule states the following as best practices for contractors:
Avoiding the use of gender-specific job titles such as “foreman” or “lineman” where gender-neutral alternatives are available Designating single-user restrooms, changing rooms, showers, or similar single-user facilities as sex-neutral Providing, as part of the broader accommodations policies, light duty, modified job duties or assignments, or other reasonable accommodations to employees who are unable to perform some of their job duties because of pregnancy, childbirth, or related medical conditions Providing appropriate time off and flexible workplace policies for men and women Encouraging men and women equally to engage in caregiving-related activities Fostering a climate in which women are not assumed to be more likely to provide family care than men Fostering an environment in which all employees feel safe, welcome, and treated fairly by developing and implementing procedures to ensure that employees are not harassed because of sex. Examples of such procedures include: Communicating to all personnel that harassing conduct will not be tolerated Providing anti-harassment training to all personnel Establishing and implementing procedures for handling and resolving complaints about harassment and intimidation based on sex. While certain of the prescriptions fall squarely within the realm of “Personnel Management 101,” the recommendation regarding gender neutral restrooms and similarly facilities furthers the theme of 2016 as the “Year of The Restroom Wars”.
Although the guidance is not intended to substantively change contractors’ legal obligations, contractors would be well counseled to take the opportunity to review their leave and benefit policies and practices to ensure that they are in line with the DOL’s regulations and its emphasis on gender neutrality with respect to all employment practices.
About the Author:
David Warner
Partner
David Warner is a seasoned counselor in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David has extensive experience representing contractors in affirmative action, Davis-Bacon Act, and Service Contract Act compliance audits. He also represents businesses with regard to wage and hour compliance, DOL audits, and litigation.  
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Are you selling your products or services to the U.S. Government? If so, what does your compliance program look like?
There are seven different elements that you should have in place in order to be confident that your compliance program can be effective. The Buy American Statute (BAS) requires the U.S. Government to give a preference to U.S.-made goods over foreign-made goods in federal procurements. The Trade Agreements Act (TAA) prohibits the U.S. Government from buying products and services from non TAA-eligible countries such as China. The TAA is applicable to all federal supply schedules. Both acts are discussed in detail in the Federal Acquisition Regulation (FAR) Part 25, Foreign Acquisition.
Accountability:
Accountability must permeate your entire organization. It must reside within upper management and each employee alike. Accountability consists of committing sufficient resources for compliance and designating appropriate senior business representatives to ensure overall responsibility. Accountability also means that your business will correct errors, conduct internal investigations, report certain violations, and recognize your employees who ensure that your business stays TAA and BAS compliant every day of the year.
Due Diligence:
Due diligence is always required to ensure all sales are TAA and BAS compliant. Each federal contractor who sells to the U.S. Government must comply with the federal law and FAR. When determining whether a particular product is compliant, each contractor should be able to answer the following questions: • What is the country of origin for this product?
• How do I know this and what are my records?
• How current is the information?
• Who do I contact when I am not sure?
While vendor-provided letters of supply show due diligence, it is always important to ensure that such letters are current. Another way to ensure due diligence is to conduct an annual review of all the letters of supply and to sample individual transactions for compliance. In close-call situations, federal contractors may submit a request to the U.S. Government for a country of origin determination.
Internal Policies:
Your business operations will be more efficient and predictable if your employees can understand and follow updated written policies and internal checks. Your policies will allow your employees to quickly make right decisions and seek assistance when necessary. It is generally a good idea to have internal policies on compliance monitoring, due diligence, recordkeeping, training, reporting of TAA and BAS violations, and code of business ethics. Other policies may be applicable based on your specific risks.
Training and Awareness:
There are always new developments in the areas of BAS and TAA. Recently, Montenegro and New Zealand became the newest “designated countries” under the World Trade Organization Government Procurement Agreement. In May 2016, U.S. Congressman Pete Visclosky included certain Buy American Statute requirements in the Fiscal Year 2017 National Defense Appropriations Act. This may require the U.S. Department of Defense to purchase U.S.-made armor plate, mooring chains, ball bearings, and certain engine components among others. Another bill seeks to redefine “U.S.-made” altogether. Staying current with the new developments is a critical part of your compliance program.
Track and Automate:
It is difficult to accurately track hundreds of individual transactions in a program like MS Excel all the time. This is why it is important to automate as much as possible. Automation also means preventing employee over-rides and having a reliable backup. You will know that your tracking system is working, for example, when it reflects the latest update from one of your vendors reporting that its products are made in Morocco this month and now your sales department will be able to sell more to the U.S. Government.
Communicate and Cooperate:
Communication with vendors and across your business is a must. Your vendors must understand the importance of letting you know that their products that were made in Japan last month are made in China this month. Your compliance department must notify your sales department whether the products you sell to the U.S. Government must be TAA and BAS compliant or not. At the same time, the U.S. Government requires federal contractors to make mandatory disclosures regarding selling TAA non-compliant products. When such disclosures are made, the U.S. Government expects full cooperation. This requirement has been recently highlighted by the U.S. Department of Justice September 2015 Memorandum commonly known as the “Yates Memorandum”.
Revise and Update:
Since there are always new changes and requirements, it is important to revise and update your policies and internal checks. This should be done immediately or at least on a monthly basis. Currently, the General Services Administration requires all vendors to verify that their products are TAA compliant. If they are not, they must be removed from their GSA/Federal Supply Schedule. Federal contractors with effective compliance policies will ensure having only compliant products on their schedules.
Effective Trade Agreements Act and Buy American Statute compliance allows large and small businesses to sell more to the U.S. Government and to seize on new opportunities.
If you have questions or would like to learn more about compliance and the latest Trade Agreements Act and Buy American Statute developments, contact Mr. Kornacki at 703-288-2800 or info@centrelawgroup.com.
Note that is post is for educational use only and does not constitute legal advice.

About the Author:
Wojciech Kornacki
Government Contract and Compliance Counsel
Wojciech Kornacki focuses on federal Government contract compliance, bid protests, and federal litigation. He represents clients in matters involving Government Accountability Office bid protests, federal agency debarments, Boards of Contract Appeals litigation, and Export Controls (ITAR and EAR) and Trade Agreements Act compliance.  
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On May 11, Centre Law & Consulting’s attorneys Barbara Kinosky and Marina Blickley were featured guests on Give Me 5, a webinar hosted by Women in Public Policy (WIPP). The online series is designed to educate women business owners on how to apply for and secure federal procurement opportunities.
Give Me 5: Where Human Resources and Government Contracts Intersect
Webinar Summary: Federal contractors are subject to a unique set of rules, laws and regulations. Many of these laws and regulations also apply to subcontractors. This session covers the more complicated areas where HR and government contracts intersect, including:
OFCCP – latest news on increased HR compliance requirements Executive Order actions and recent regulatory changes Common challenges to complying with the Service Contract Labor Standards/Service Contract Act Tips for handling whistleblower and relator complaints Handling mandatory disclosures Changes to implement now  
Listen to the Podcast  |  View the Presentation
In addition, Marina also wrote a post for Women in Biz Blog discussing new regulations that came out after the webinar and are planned to go into effect on December 1, 2016.
 
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Reproduced with permission from Federal Contracts Report, 105 FCR (May 11, 2016). Copyright 2016 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
GSA Sends Warning Letters to Contractors Over Origins of Products
The General Services Administration (GSA) is clamping down on thousands of federal contractors to ensure that products sold to government agencies are made in the U.S. or are otherwise in compliance with the Trade Agreement Act (TAA), Bloombery BNA has learned.
Regional GSA offices in Fort Worth, Texas, and Kansas City, Missouri, emailed letters dated May 5 to more than 2,800 schedule contract holders that directed vendors to “review their total offering of product” by submitting a spreadsheet that verified the countries of origin of each schedule contract product, as well as copies of a Certificate of Origin or other certification from the manufacturer on its letterhead for products made in the U.S. or in a TAA-designated country.
“The continued reoccurrence of non-compliant product threatens the integrity of the [Multiple Aware Schedule] contracts and GSA Advantage! website which federal customers rely on to make daily purchases that are compliant with the Federal Acquisition Regular (FAR),” the GSA letter said. “This threat cannot be tolerated for the good for the federal procurement community, MAS business line, and continued success of a primary system you rely on to serve federal customers.”
The letter provided to Bloomberg BNA was unsigned but included the name of a Fort Worth-based GSA contracting officer at the bottom.
The letter, addressed to “Dear GSA Partner,” noted that over the past year, the Multiple Award Schedule program had responded to “numerous” congressional inquiries and Freedom of Information Act requests regarding allegations of failed compliance with the TAA and the Buy American Act.
Made In America
In January, Sen. Charles Schumer (D-N.Y.) said the GSA Advantage! website had listed products that were described as “made in America” but in fact were produced overseas. He said the GSA should review its website labels and excise products that are falsely listed.
The Buy American Act, in place since 1933, and the regulation that stems from it significantly restricts the federal government from purchasing non-American-made products. The TAA stretches the law by allowing the purchase of end products from the U.S. or designated countries, which, according to GSA’s website, includes World Trade Organization government procurement agreement countries; free-trade agreement countries; least-developed countries; and Caribbean Basin countries. The designated country list, which includes 124 nations, excludes prominent U.S. trading partners China and India.
The letter from the Great Southwest Region in Fort Worth ordered companies that have found products manufactured in non-TAA designated countries to remove all such products from their TAA contract; upload a new and revised catalog to GSA’s Schedule Input Program; and send an updated price list and terms and conditions to the National Schedules Information Center.
The GSA gave companies that received the letter five days, until the close of business May 10, to respond. Businesses that didn’t reply in time face severe penalties, according to the letter, including, typed in bold letters, “the removal of your entire GSAdvantage file.”
In a statement, a GSA spokesperson told Bloomberg BNA: “Once learning of products being offered on a Schedule contract that are potentially non-compliant with the Trade Agreements Act (TAA), or when the country of manufacture is otherwise misrepresented, GSA will conduct an immediate review an take swift action to ensure that vendors remove non-compliant products from Schedule contracts and GSA Advantage!.”
Unmanned Vehicles
According to the GSA spokesperson, 2,872 letters were emailed to contractors from the agency’s offices in Fort Worth and Kansas City. That included 308 emails sent to Schedule 51V Hardware Superstore contractors; 1,184 to Schedule 84 providers of security, facilities management, marine craft and emergency/disaster response-related goods; 641 to Schedule 56 makers of building materials and supplies and alternative energy solutions; 361 to Schedule 66 producers of test and measurement equipment, unmanned scientific vehicles and geographic environmental analysis equipment; and 378 emails to Schedule 7 makers of hospitality and cleaning equipment, sanitizers and toiletries.
The spokesperson confirmed the GSA was targeting those specific schedules and products because of congressional and other complaints. “Those schedules are among the first group of targeted schedules with identified risk that GSA is reviewing,” the spokesperson said.
Attorneys who represent contractors that received the emailed letter told Bloomberg BNA they are asking GSA for extensions to conduct necessary research into their product lines, and to complete all the needed paperwork.
Maureen Jamieson, executive director of contracts and consulting at Centre Law & Consulting in Tysons Corner, Va., said she has heard from several clients concerned about the letter, including some based in Fort Worth and another that was contacted by GSA’s Kansas City office. She said GSA had not yet responded to her requests for an extension.
“I’ve been hearing from clients of many years. They’re coming out of the woodwork,” Jamieson told Bloomberg BNA, adding that she was concerned about the tight turnaround time the GSA’s directive gave contractors. “If you’re going to do it right, it just requires more time, ” she said.
Day One
“It’s definitely been a scramble, I guess you could say,” Gunjan Talati, a Washington-based partner with Thompson Hine, told Bloomberg BNA.
Talati said companies have been responsible for complying with the underlying requirements – that they adhere to the rules put forth in the TAA and Buy American Act – “since Day One.” But regardless of how diligent companies have been in fully adhering to those laws in the past, he said, “I look at this as a wake-up call.”
Compliance with the TAA is often a complicated affair that can require “a detailed examination of the product’s manufacturing process,” Talati and fellow Thompson Hine Partner Lawrence Prosen wrote in a client advisory issued a day after GSA emails were sent. This includes a determination as to whether articles from one country have been “substantially transformed” into a new and different article of commerce that is distinctly different from the original item, they wrote.
 
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