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Centre Law & Consulting

Trump Notwithstanding, Employment Law Compliance Should Remain A Top Concern in 2017 | Centre Law & Consulting in Tysons, VA
 
Over the last few years, the contractor community has braced itself to comply with a slew of new employment regulations issued as a result of Executive Orders by President Obama. These include Paid Sick Leave (up to 7 days), Minimum Wage ($10.20), Fair Pay and Safe Workplaces (reporting of labor law violations and paystub requirements, among others), and the Department of Labor’s regulations increasing the dollar threshold for overtime exemptions under the Fair Labor Standards Act (FLSA). However, several of these regulations are currently being enjoined by courts; and, with the upcoming transition to a new administration, it is likely that many of these requirements will be set aside.

It would be a mistake, though, for contractors to be lulled into complacency as a result of the recent federal election as state and local governments have been increasingly active in passing legislation governing employers. For example, many states, counties, and cities passed increased minimum wage requirements, paid sick and family leave laws, wage equality measures, limits on the use of background checks, laws related to medical and recreational use of marijuana, and gender-based restroom ordinances.

Federal contractors should continue to monitor legal requirements for the localities they operate in. For those in the D.C. Metro area, additional paid leave requirements are on the horizon. Just last week the D.C. Council passed the “Universal Paid Leave Amendment Act” providing for eight weeks of parental leave, six weeks to care for sick family member, and two weeks for your own personal illness. The leave will be funded through a payroll tax and administered through the government with limits on the benefit amounts workers would receive. The bill must still go through a second vote later this month, but is expected to pass with a veto-proof majority. For those in Maryland, Governor Hogan has announced plans to introduce legislation requiring employers with 50 or more employees provide up to five days of paid sick leave per year. Maryland’s legislature has made advancements towards enacting other paid leave laws as well.

So with the incoming new Administration and continuing legal advancements for localities, 2017 appears to be ripe for action and continued change.

About the Author

Marina Blickley | Centre Law & Consulting Marina Blickley
Senior 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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Reproduced with permission from Federal Contracts Report, 105 FCR (Dec. 6, 2016). Copyright 2016 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

Talk More, Fret Less, Proposed Rule Urges Feds, Contractors

Federal acquisition officials are encouraging increased communication between industry and government, in the hope of ensuring a more efficient process for both parties.

An updated regulation would make it clear that it’s in the government’s best interests to talk to industry during all phases of the purchasing process, according to a proposed Federal Acquisition Regulation (FAR) rule published Nov. 29 in the Federal Register. It bolsters the notion, detailed in procurement policy memos issued in 2011 and 2012, that acquisition officials need to fret less about possible negative ramifications of talking to industry, and instead open lines of communication.

Some government contracts attorneys say they approve of the renewed emphasis.

“For a long time, there has been a fear of communication between agencies and contractors, but that needs to continue to change,” Jeff Chiow, a shareholder with the law firm Rogers Joseph O’Donnell PC in Washington, told Bloomberg BNA. “I think it’s absolutely appropriate.”

‘Must Not Hesitate.’
The proposed rule would mandate that the FAR adopt a section of the 2016 National Defense Authorization Act, which made it clear that agency acquisition personnel are “permitted and encouraged to engage in responsible and constructive exchanges with industry, so long as those exchanges are consistent with existing law and regulation and do not promote an unfair competitive advantage to particular firms.”

The proposed language to the FAR takes this one step further, specifically suggesting that government officials “must not hesitate” to communicate with industry as early as possible in the acquisition cycle to help determine what exactly is available in the commercial marketplace.

The rule also would add language to the FAR ensuring that agencies maximize their use of commercial products and services in meeting their requirements.

The key is that agencies should be broadcasting their plans to all competitors, and then have “frank conversations about what’s needed” with them to help determine if their proposals might be tweaked to fit the government’s needs. “The emphasis should be at the beginning of the process, but communication should be ongoing,” he said.

Not all government contracts attorneys agree on the impact of the proposed rule. Some say it wouldn’t do anything to stop the process from tilting toward larger contractors.

“In my opinion, the proposed rule does not materially change the current government and industry procurement cycle interaction or lack thereof,” Barbara Kinosky, managing partner of Centre Law & Consulting, told Bloomberg BNA in an e-mailed statement. “The large companies and those with savvy sales people will always be on the front end of procurements. They did not get to be large businesses by finding out about procurements on eBuy for the first time.”

The rule won’t change a government culture that, as it pertains to smaller procurements, “believes in low price and minimum engagement with contractors,” Kinosky said.

Common Misconceptions.
The proposed FAR rule was spurred by a pair of detailed procurement policy memos titled “Myth-Busting” and “Myth-Busting 2” that discussed “misconceptions” about communication between industry and government during the acquisition process.

The first of the memos, issued Feb. 2, 2011, and authored by Dan Gordon, then the administrator of the Office of Federal Procurement Policy, addressed what he said were 10 common misconceptions, including ungrounded fears that contractor-government communications are often the source of bid protests, and that because contractors are akin to registered lobbyists, conversations with them should be avoided to reduce disclosure burdens.

“While agencies do not have the resources and are not required to meet with every vendor at every step of the acquisition process, information gathered from industry sources plays an invaluable role in the acquisition process,” Gordon wrote. “For this reason, agencies must develop practices that will ensure early, frequent, and constructive communication during key phases of the process.”
 

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Of Mistletoe and Employee Misclassification | Centre Law & Consulting in Tysons, VA
 
Earlier this week, a U.S. Department of Labor webpage dedicated to the issue of employee misclassification went live. Just in time for the holidays!

While much ink has been spilled in recent weeks regarding potential changes of direction at the DOL in a Trump Administration, the new webpage suggests that the agency will continue to view the abuse of independent contractor status as an enforcement priority for the foreseeable future. The new page does not provide any novel substantive content, but it does bring together at a single location a wealth of information in what the DOL self-describes (accurately, one must admit) as a “user-friendly webpage where workers, employers, and government agencies can find information and resources.”

For example, some of the substantive topics appearing on the “Pay and Misclassification” page include:

It is clear that the webpage is intended to arm individuals with the information and tools needed to understand the boundaries of independent contractor/employee status as well as the rights appurtenant to such status.

Given the widespread use (and abuse) of independent contractor arrangements in the government contracts industry, contractors would be well counseled to review their current 1099s to ensure that the status can withstand scrutiny as this issue is unlikely to move to the backburner, even with new leadership coming onto the scene in early 2017.

About the Author:

David Warner | Centre Law & Consulting David Warner
Partner

David Warner is a seasoned legal counselor with extensive experience in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David leads Centre’s audit, investigation, and litigation practices.

 

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Ten Things I Hate About Incurred Cost Proposals | Centre Law & Consulting in Tysons VA
 
If you remember the late 1990’s romantic comedy “10 Things I Hate About You” you might know that it did a lot of great things. It provided the platform for the venerable Heath Ledger’s coming out party, introduced the world to Julia Stiles, reminded us the kid from Third Rock from the Sun was, in fact, still here on Earth, and made more than $50M at the box office. Not too bad.

But as the law of unintended consequences often works, it also inspired this blog article about Incurred Cost Proposals.

With all apologies to the awful heading, the Incurred Cost Proposal does evoke some very specific emotion from those tasked with preparing, auditing, re-auditing, reading, reviewing, negotiating, or most importantly – signing them. They are a necessary evil for most services-based U.S. Government contractors. While the purpose of the Incurred Cost Proposal is a simple enough merit – to settle indirect costs under cost-type contracts between contractors and the U.S. Government – the evolution of the Incurred Cost Proposal has caused pain easily on par with that of Ms. Stiles’ loss of her Australian beau. And while Ms. Stiles was capable of some beautiful poetry to express her torment, I am not as skilled in that trade and so you will simply get an unpoetic list of 10 Things I Hate About Incurred Cost Proposals.

  1. The ICE Model – Using a model that every time you open it tells you “An error has occurred” is not a confidence inspiring event for a document that is supposed to be current, accurate, and complete.
  2. Your Name – Why did the FAR give you one name, the “Indirect Cost Rate Proposal”, but the industry and DCAA give you so many others? The Incurred Cost Proposal, the Incurred Cost Submission, the Indirect Cost Submission, The Indirect Cost Proposal, the ICS, the ICE Model, etc. We are happy to call them anything the government desires – just don’t call them delinquent.
  3. Audits Focused on Direct Costs – While I also hate that audits are untimely, I think I more dislike that the current audit environment is focused on direct costs. We had a recent experience where not a single indirect cost was sampled. For an “Indirect Cost Rate Proposal” audit, it’s a little odd that the indirect cost rate received so little attention. And, of course, forget the fact that all the direct costs have been submitted for government review already on each and every monthly invoice. This trend has found its way into the T&M labor costs specifically through MRDs, which have cost enormous sums of questioned costs to contractors who don’t have labor qualification support in the way of resumes more than 5 years ago.
  4. Unallowable cost sampling – What would this list be without mention unallowable costs. It must be done, but it sure is tedious. Now if we could just get to an agreement on which costs are expressly unallowable.
  5. Schedule J Subcontract Information – How much more information on my supply chain can I provide? Every new iteration of the ICE Model asks for more. It is becoming easier to acquire a subcontractor than monitor and report on them.
  6. Inconsistent Application of the DCAA Adequacy Checklist – The concept is great; however, the execution lacks some consistency. We’re even okay with the annual updating of the checklist to provide even greater comfort that our submissions are in fine shape for an audit. What we do hate is the inconsistent application of what meets adequacy within the checklist. DCAA is provided great liberty to accept or not accept certain elements of adequacy for purposes of commencing with an audit. Some consistency would nice. And, worst of all, the off-checklist item that leads to inadequacy determination takes the prize for most frustrating element of the process.
  7. When Total Cost Absorption reconciliation doesn’t work – Okay, not everything about the Indirect Cost Rate Proposal is a procedural flaw of our friends at the Government. Few accounting frustrations rival completing your proposal and performing the total cost reconciliation only to see that something isn’t working. You can always diagnose them, but not without a strong cup of coffee.
  8. Corporate Home Office “Incurred Cost Proposals” – If you have a corporate home office you may have been asked for one of these. Or maybe you haven’t. It’s impossible to tell since the request for these is not consistent across DCAA offices. In the event you are unfamiliar with what they are, they are a summary of those corporate home office costs allocated to the G&A pools of cost accounting segments. They’re easy to hate since all of this information is already included in the segment-level indirect cost rate proposal. It’s duplicative and with all the work done to be compliant, duplication of effort is not something we like to deal with (or clients like to pay for). However, it has been our experience that if you don’t submit it, you risk being deemed inadequate – even though this isn’t on the adequacy checklist, see # 7 above. They are a particular quagmire for entities with overseas parents where certification of G&A costs for U.S. Government accounting is an unfamiliar task.
  9. Executive Compensation – Figuring out the award dates of contracts in the middle of the year, determining which agencies each contract belongs to, then evaluating which employees the executive compensation applies to. Determining executive compensation limits in the current environment is a game of labyrinth. Once you figure this rubix cube out, you have to get an Advance Agreement with your customer to use blended rates in order to comply. Then once you have the maximum allowable amount determined, you need to evaluate if the labor costs beneath that are “reasonable” through market data searches, surveying, and a host of similar corroborative evidence.
  10. IR&D and B&P costs – These are everyone’s favorite bouncing ball. They’re in the overhead base, but also the G&A pool. This topic dominates almost all new contractors’ first FAR lesson. And when they’re not specifically identified in the project ledger they can become quite tricky. Forget if you’re a major contractor with heavy IR&D expenses and have to now both report on them and get pre-approval from your Contracting Officer or risk them being deemed unallowable.

 
But wait, there’s more!
If you’d like to share your own stories of Incurred Cost Proposals, or – even better – learn more about best practices for handling them, then join us for the “Incurred Cost Proposals: A Year In Review” webinar on January 12. Just one hour of your time now might save you many more if you’re up to speed on these current insights!

AUTHOR’S NOTE: As consultants, we routinely assist clients with the preparation of their Indirect Cost Rate Proposals. Please do not take our poor attempt at humor in this article as a lack of enthusiasm in any way for these services. We just liked the article heading as a forum to illustrate some of the contracting community’s frustrations.

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Cooperating with DOL Investigation Does Not Protect You From Debarment | Centre Law & Consulting in Tysons VA
 
On December 28, 2016, the Department of Labor (DOL) filed a complaint with the DOL Office of Administrative Law Judges seeking debarment of a contractor for violation of the Service Contract Labor Standards (formerly the Service Contract Act). The contractor, Restaurant Associates LLC, runs the cafeteria in the Dirksen Senate Office Building. Even though Restaurant Associates won a seven year contract extension in December 2015 to continue operating the cafeteria, the company would be prohibited from bidding on future government contracts but would be permitted to retain that contract through the extension.

The DOL’s investigation began in July when they first alleged that Restaurant Associates violated the SCA by misclassifying hundreds of workers. However, what makes this case particularly interesting is that the company had no history of previous SCA violations and fully cooperated with the DOL investigation. In complying with the DOL investigation, the company agreed to and did pay $1,008,302 in back wages for 674 cafeteria workers. Despite paying the back wages, the DOL is now seeking to debar the contractor.

Perhaps the DOL is seeking debarment based on the circumstances surrounding the DOL investigation. The investigation first began after a complaint was submitted to the DOL alleging that Restaurant Associates unlawfully changed worker job classifications to avoid giving raises that were contained in the December 2015 contract renewal. After the investigation, the DOL found that the company had improperly classified workers both by paying them for lower-paying jobs than they actually performed and by requiring employees to work prior to their scheduled starting times without compensation.

This will be an interesting case to follow as it develops.

In the meantime, you can read the DOL Complaint and the DOL news release from the July investigation.

About the Author:

Heather Mims | Centre Law & Consulting in Tysons VA Heather Mims
Associate Attorney

Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow.

 

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You've Accepted Transactional Data Reporting (TDR), Now What? | Centre Law & Consulting in Tysons, VA
 
The Transactional Data Reporting (TDR) Rule requires vendors to electronically report the price that the federal government paid for an item or service purchased through GSA acquisition vehicles and other data elements. The rollout of TDR across all pilot schedules is now complete. If you accepted TDR willingly or unwillingly, it’s time to understand the reporting requirements.

When are the TDR Requirements Effective?

Upon acceptance of the TDR pilot bilateral mass modification, the requirement for providing a Commercial Sales Practice (CSP) disclosure to accompany modification requests will be eliminated. In addition, vendors will no longer be required to track price reductions granted to their Basis of Award (BOA) customer or category of customers. Price Reduction Clause liability for current contractors ends with acceptance of the TDR mass modification, which will be effective on the first day of the business quarter following acceptance of the modification.

In order to ease the transition from the current 72A reporting database to the TDR reporting module, the requirement for commencement of reporting will not begin on the date the modification is signed; rather, reporting will begin at the beginning of the next full business quarter as shown below:

Modification Accepted Requirements Effective
 July 1 – September 30  October 1
 October 1 – December 31   January 1
 January 1 – March 31  April 1
 April 1 – June 30  July 1

 
If a current contractor accepts the modification during the last 15 days of a standard business quarter, reporting begins on the first day of the second business quarter following modification acceptance.

What Data Am I Required to Report?

The clause requires contractors to submit the following data elements:

  1. Contract Number
  2. Order Number or Procurement Instrument Identifier (PIID)
  3. Non Federal Entity, if applicable
  4. Description of Deliverable
  5. Manufacturer Name
  6. Manufacturer Part Number
  7. Unit of Measure (each, hour, case, lot, etc.)
  8. Quantity of Item Sold
  9. Universal Product Code (UPC), if applicable
  10. Price Paid per Unit
  11. Total Price Sold

Contractors should report Firm Fixed Price (FFP) orders as single line item representing the lump sum total for the order. For services time-and-materials (T&M) or labor hour orders, reporting should be done by labor categories and rates.

Manufacturer Name is not a mandatory field for service contractors in TDR, but Description of Deliverable is a mandatory field for both products and services. Service providers would place a brief description of the project or service offered in the Description of Deliverable field.

How Can I Complete the Reporting?

FAS Sales Reporting  (Contracts must have a digital certificate to gain access to the reporting system)
Reporting Tutorial

Contractors have multiple options to submit their sales data such as:

  • Form entry – where you fill out a form in your web browser
  • File upload – where you upload an excel or .csv template populated with your sales data
  • Electronic Data Interchange / EDI
  • Web Services / API

In summary, TDR data is reported monthly and there is a 30-day window to report after the end of the month. Your Industrial Funding Fee (IFF) must be paid quarterly. Contractors may, however, choose to remit IFF on a monthly basis when they report their sales if they prefer and must do so through the TDR system. For TDR Pilot contractors under Schedules 70 and the Professional Services Schedule, if TDR SINs are included on a contract alongside non-TDR SINs, the entire contract is subject to TDR terms and conditions, and CSP and PRC requirements are removed for the entire contract. Remember that participation in the TDR Pilot does not exempt the contractor from existing reporting requirements found elsewhere in the contract.

About the Author:

Julia Coon | Centre Law & Consulting in Tysons VA Julia Coon
Consultant

Julia Coon is GSA and VA Contract Consultant at Centre Law & Consulting. Julia works with the GSA/VA team in preparing new schedule proposals and post-award contract administration. She has experience in producing schedule renewal packages, various modification packages, small business subcontracting plans, and updates to GSA pricelists.

 

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This Blog is Subject to Change in a Twitter Moment | Centre Law & Consulting in Tysons VA
 
How many of you now go to bed wondering, “What presidential tweet am I going to wake up to next?” The federal contracting space has been shaken, not stirred.

In the old news department, President Trump instituted an immediate hiring freeze this Monday, signing a presidential memorandum that would affect a large swath of the executive branch. There are exemptions, of course, for those working in the military, national security, and public safety.

In my discussions with officials at several federal agencies, it appears that the language is vague enough that different agencies are interpreting this in different ways. If your entire team is on the airplane that has the “water landing” does this mean that no one can be hired to do the work? Maybe it will become more clear in the next couple of months. The executive order directs the Director of OMB, in consultation with the Director of OPM, to recommend a long-term plan to reduce the size of the Federal Government’s workforce through attrition. The order does say that contractors cannot be hired to circumvent the intent of the order.

However, a big problem is that the federal workforce has not been growing. Federal News Radio is reporting that the size of the federal workforce has been decreasing, not increasing. The size of the federal workforce has steadily declined over the past 50 years. Approximately 2 million people worked for civilian agencies in 2015—nearly a 10 percent decline since 1967.

Regarding the workforce, and in specific the federal contracting workforce, the Obama Executive Orders are in the twilight zone. Executive Order 13673, Fair Pay and Safe Workplaces, was stopped cold by a Texas federal district court in 2016. Since this was a unilateral act by the President, it will most likely be undone along with the Executive Order on Sick Leave.

On the minor but still need to know information, a final rule came out on Privacy Act training. At a minimum, contractors must educate employees about:

  • The provisions of the Privacy Act of 1974, including penalties for violations
  • The appropriate handling and safeguarding of personally identifiable information
  • The authorized and official use of a system of records or any other personally identifiable information
  • The restriction on the use of unauthorized equipment to create, collect, use, process, store, maintain, disseminate, disclose, dispose, or otherwise access personally identifiable information
  • The prohibition against the unauthorized use of a system of records or unauthorized disclosure, access, handling, or use of personally identifiable information
  • Procedures to be followed in the event of a suspected or confirmed breach of a system of records or unauthorized disclosure, access, handling, or use of personally identifiable information

Those are today’s latest updates, but we’ll see what Twitter has to say about it in the coming days.
 
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.

 

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Trump’s 2-for-1 Reducing Regulation Order – What Does It Mean? | Centre Law & Consulting in Tysons VA
 
On January 30, 2017, President Trump issued an executive order (EO) entitled Reducing Regulation and Controlling Regulatory Costs. The aim of the EO is to reduce the number of regulations in order to “manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulations.”

Specifically, the EO requires that whenever an executive department or agency publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed. The EO further dictates that the total incremental costs of all new regulations, including repealed regulations, shall be no greater than zero. The EO defines “regulation” or “rule” as an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency but specifically excludes regulations issued with respect to the military, national security, or foreign affairs function of the United States.

Moving forward, the EO also imposes a regulatory budget for fiscal year 2018, which would limit the amount of new regulatory costs agencies can impose on individuals and businesses each year.

While the regulation seems straightforward, its implementation is likely going to be subject to inherent difficulties. For example, some of the challenges include:

  • The EO does not define what constitutes an “executive department or agency”.
  • It is not entirely clear if independent establishments or government corporations within the executive agency are intended to be included.
  • The definition of regulation contained in the EO is rather vague. If interpreted narrowly, it may only involve a minor set of regulations each year.

In a notable – and rather bold – claim, President Trump stated, “We think we can cut regulations by 75 percent. Maybe more, but by 75 percent.” According to Politico, there are more than 171,000 pages of regulations. So even with Trump’s 2-for-1 regulation, the administration would need to issue 85,000 pages just to cut that number in half. NPR has written that even conservative economists say that cutting regulations by 75% is not believable.

See Politico for the full text of the executive order.

About the Author:

Heather Mims | Centre Law & Consulting in Tysons VA Heather Mims
Associate Attorney

Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow.

 

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FAR Updates That May Impact Your Small Business | Centre Law & Consulting in Tysons VA
 
On January 13, 2017, several Federal Acquisition Regulation (FAR) updates went into effect that you should be aware of if you have a small business. The highlights of each rule include:

  • Uniform Use of Line Items – A revised policy statement that requires the use of line items and, as necessary, subline items to improve accuracy, traceability, and usability of procurement data.

Acquisition Threshold for Special Emergency Procurement Authority – The simplified acquisition threshold for special emergency procurement authority has been raised from $300,000 to $750,000 within the United States and from $1,000,000 to $1,500,000 outside the United States for acquisitions that, as determined by the head of agency, are used to support a contingency operation or facilitate defenses against or recovery form nuclear, biological, chemical, or radiological attack.

Contractor Employee Internal Confidentiality Agreements – This change prohibits the use of appropriated funds to entities that require employees to sign confidentiality agreements that prevent the lawful reporting of fraud, waste, or abuse.

Contracts Under the Small Business Administration 8(a) Program – Offers and acceptances are required for individual orders under multiple award contracts that were not set aside for competition among 8(a) contractors.

Prohibition on Reimbursement for Congressional Investigations and Inquiries – No new requirements on small businesses, but records will need to be maintained.

 
About the Author

Michael Glazer | Centre Law & Consulting in Tysons VA 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.

 

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Pre-Award Audit: Is It Time To Panic? | Centre Law & Consulting in Tysons, VA
 
Are you prepared for a letter from the U.S. General Services Administration Office of Inspector General (GSA OIG) stating that your company has been selected for a pre-award audit of the Commercial Sales Practice (CSP) pricing information that will become the basis for the pricing on your contract option extension?

The Primary purpose of a Pre-Award Audit

The purpose of the pre-award audit pursuant to Clause 52.215-21 Alternate IV (GSAM 515.408(a) (4) of the contract is to ensure that the CSP information is an accurate, current, and complete description of your practices and pricing. Keep in mind that the advisory nature of the pre-award audit is different from most other audits. The results of the pre-award audit will be passed on to your Contracting Officer to provide additional information for negotiation purposes. In addition, you should expect to be granted authority to review the results of the audit.

What Happens During a Pre-Award Audit?

  • The auditor will seek to verify the accuracy of the latest CSP information submitted.
  • The auditor will want to know the methodology used to develop the CSP information in addition to the source sales data reviewed in preparing the CSP information.
  • You will be asked to explain why any sales information, such as specific classes of customers or discounting, were excluded and the reasons for the exclusion.
  • The auditor will review your company’s billing and information systems to verify the completeness and accuracy of the information submitted.
  • The auditor will review the terms and conditions with major commercial customer’s master agreements (as applicable).

 

What Are the Time Constraints and Consequences of Not Complying?

  • Information will be required approximately one (1) month from the receipt of a letter of notification.
  • Contact your assigned auditor within seven (7) days of receipt of the letter and be prepared to discuss specific data requirements.
  • Your Contracting Officer can elect not to extend your contract if there is failure to respond to your auditor.
  • Failure to cooperate with the GSA OIG could result in contract cancellation in accordance with GSAR Clause 552.238-73, Cancellation.

 

What are the results of GSA OIG pre-award audits?

During the reporting period of April 1, 2016 – September 30, 2016, the IG auditors performed pre-award audits of 37 contracts with an estimated value of almost $9.5 billion and recommended that more than $324 million of funds be put to better use. Significant findings included that contractors had supplied commercial sales practices information that was not current, accurate, and complete; had proposed overstated labor rates and used unqualified labor; and that Price Reductions Clause compliance monitoring was ineffective.

In summary, the answer to my original question is NO; it is not time to panic. It’s time to ensure your CSP is accurate, current, and complete and provides all required disclosures and that all requested documentation/data is provided to your auditor within the required time frames.

If you need assistance in responding to your Contracting Officer/GSA OIG auditor, contact our GSA team.
 
About the Author:

Maureen Jamieson | Centre Law & Consulting 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.

 

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Preparing For A Successful CPSR Audit - training course for federal contractors | Centre Law & Consulting in Tysons VA
 
Let’s face it. We’d all rather be out selling and growing our businesses than having to deal with paperwork and audits, right? So when you hear that you have a Contractor Purchasing System Review (CPSR) coming up, it may cause a little anxiety and leave you wondering if it is really time well spent.

Now the government will tell you that the purpose of a CPSR is to evaluate the efficiency and effectiveness of the way a contractor spends federal funds and complies with federal policy. It provides the Administrative Contracting Officer (ACO) a basis for granting, withholding, or withdrawing approval of the contractor’s purchasing system.

So what does that really mean to you? Here are the Top 5 reasons that having an approved contractor purchasing system is important:

  1. Advance Notification and Consent: The first reason that usually comes to mind is the FAR Part 44 requirement for advance notification and consent to subcontract. If the purchasing system hasn’t been approved or the approval has been withdrawn, then the ACO will be required to perform consent reviews under flexibly price contracts and unpriced contractual actions to insure the Government’s interests are protected. The down side of that is these reviews take time, and while the ACO is performing the review, the subcontract award is delayed. In other words, nobody is happy about it! The client’s program manager and the company program manager want the award made to meet schedule, but the ACO has other things to do and may not put your subcontract award at the top of the list. The result is that you (the buyer/subcontract administrator) are under pressure to somehow make it happen and tensions can rise on all sides.

Consent Doesn’t Mean Approval: Okay, you’ve gone through the gauntlet and the ACO has issued the consent to subcontract notice. But, the notice will have a disclaimer that reserves the Government’s rights to second guess all aspects (i.e. adequate competition, price reasonableness, audit disallowance) of your subcontract award. You feel like you have gained nothing, and the program manager is still upset with you because of the delay in award. You want an approved system, not just a consent to subcontract. So without that approval, you’re just sitting in limbo.

Business System Clause: The Department of Defense added clauses to their contracts – 252.242-7005, Contractor Business Systems and 252.244-7001, Contractor Purchasing System Administration – that have become key components of the CPSR process. In addition, should a “significant deficiency” be identified in your purchasing system, the ACO is obliged to reduce your interim payments (i.e. progress payments, cost-reimbursement vouchers, monthly Time and Materials invoices) by as much as 5% to protect the government’s interests until the deficiency has been corrected and re-audited. The impact for you is that not only is the program manager upset with you, but so is the CFO!

Impact on Other Major Proposals: With subcontracting being a large part of major contracts, the impact of your purchasing system on proposals for new work can be critical. First, having a government approved purchasing system gets you a better rating on the management portion of your major proposals. Second, with subcontracts often accounting for as much as 60% or more of major proposal costs, the ability of an approved purchasing system to provide good quality pricing support can make the difference between winning or losing.

Documentation: Securing approval of your purchasing system relies largely on your documentation. In my earlier article, CPSR Easy As 1-2-3?, all three steps rely on clear and complete documentation. Think of it this way: an approved system by its nature should produce good documentation. So when the government reviews your work product for proposal support, business system adequacy, incurred cost, small business plan efforts, sustainability initiatives, or anything else, you can be confident that your procurement files will clearly demonstrate how efficiently and effectively your purchasing system is spending government funds and implementing government policy.

 
Take the Next Step
If you’d like to dive more in depth to the details of CPSR, learn best practices, and set yourself up for successful CPSR audits, then join us for our upcoming course on March 28-29 at our national training center in Tysons, VA.

 
About the Author

Jack Hott headshot | Centre Law & Consulting in Tysons, VA Jack Hott
Instructor

Jack Hott is an Instructor for Centre Law & Consulting. He has more than two decades of experience as a contracts professional in Government and the private sector. A retired Air Force officer, he served multiple acquisition related assignments where he managed administration, pricing, CAS and overhead approvals, supplier quality, and subcontract management.

 

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Awardee’s Below Market Employee Compensation Not a Win for Protester | Centre Law & Consulting in Tysons, VA
 
Warning! This post contains explicit (and depressing) news about low bidders using below market salaries and benefits to win contracts. The Air Force issued a solicitation for information technology services at Joint Base San Antonio. The RFP provided for award to the offeror that submitted a technically-acceptable proposal with the lowest price and a realistic employee compensation plan (ECP). For the ECP evaluation, the solicitation stated that the plans “will be evaluated for realism” and directed offerors to submit their ECPs in accordance with FAR provision 52.222-46.

The purpose of that FAR provision is to evaluate whether offerors will obtain and keep the quality of professional services needed for adequate contract performance. The Air Force compared the awardee, BTAS, Inc.’s proposed compensation for its professional labor categories to that of three other offerors and salary data on salary.com. The Air Force found that on average BTAS’s labor rates and fringe were below that on salary.com but, despite that, the total package was realistic. The short story is that BTAS won with a below market wage and benefit package and Microtechnology protested – and lost.

The GAO held that nothing in FAR 52.222-46 required the Air Force to find that both an offeror’s proposed fringe benefits and salary are, independently, realistic. Instead, the provision requires agencies to assess whether an offeror’s proposed “total compensation” is realistic. They found no basis to conclude that the Air Force’s evaluation of the offeror’s total compensation was unreasonable.

The quick take away is that if an agency follows the evaluation criteria and that the evaluation was not unreasonable, it will be sustained.

Read more on the GAO website.
 
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.

 

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VA Reduces Administrative Burden on SDVOSBs and VOSBs | Centre Law & Consulting in Tysons, VA
 
The Department of Veterans Affairs (VA) published an Interim Final Rule in the February 21, 2017, edition of the Federal Register, increasing the period for re-verification examination by VA’s Center for Verification and Evaluation (CVE) of Service-Disabled Veteran-Owned Small Business (SDVOSB) and Veteran-Owned Small Business (VOSB) program participants from two years to three years.

Purpose

The purpose of this change, effective February 21, 2017, is to reduce the administrative burden on SDVOSBs and VOSBs participating in VA acquisition set-aside for these types of firms pursuant to the authorities of Public Law 109-461, the Veterans Benefits, Health Care and Information Technology Act of 2006 (the Act), implemented by the VA as the “Veterans First Contracting Program.”

The Act requires VA to verify ownership and control of SDVOSBs and VOSBs in order for those firms to participate in acquisitions VA sets aside for SDVOSBs and VOSBs. VA has continuously administered the verification program since February 2010, at which time re-verification was required annually. In June 2012, the re-examination period was extended to two years.

In changing from a biennial re-examination eligibility period to three years, VA believes it adequately balances maintaining program integrity while reducing the administrative burden on SDVOSBs and VOSBs. In reaching this determination, VA cited statistical data from Fiscal Year 2016, which showed out of 1,109 reverification applications, only ten were denied, ergo, only 0.9 percent of reverification applications were found to be ineligible after two years.

VA relies very heavily on its initial eligibility examination of firms, which it describes as robust, and as such believes the integrity of the program will not be compromised by extending the period for reverification.

Process

As part of its initial examination, VA CVE reviews personal and company documentation to verify ownership and control by Veterans of the business applying for verification. Documents include personal and company financial statements; Federal personal and business income tax returns; personal history statements; articles of incorporation/organization; corporate by-laws or operating agreements; organizational, annual, and board/member meeting records; stock ledgers and certificates; State-issued certificates of good standing; contract, lease, and loan agreements; payroll records; bank account signature cards; and various licenses.

Additionally, VA conducts random, unannounced site examinations of participants in order to examine or further examine a participant’s eligibility, including upon VA’s receipt of specific or credible information that the participant is no longer eligible. Additionally, VA contracting officers and competing SDVOSBs and VOSBs have the right to raise a SDVOSB/VOSB status protest to VA’s Office of Small and Disadvantaged Business Utilization should either have a reasonable basis upon which to challenge the SDVOSB/VOSB status of a VA CVE-verified firm.

VA regulations mandate program participants maintain eligibility during its tenure, and if ownership or control changes occur, participants are required to notify VA’s CVE of any changes which would adversely affect the participant’s eligibility as a VA CVE-verified SDVOSB/VOSB.

VA maintains the Vendor Information Pages (VIP) Database, a database of firms verified by CVE and eligible to receive awards under the Veterans First Contracting Program. As of February 24, 2017, the VIP Database list 9,287 firms (6,917 SDVOSBs and 2,370 VOSBs).

VA’s current Veteran Small Business Regulations are codified at 38 C.F.R. Part 74.

Comments

Written comments on the Interim Final Rule must be submitted on or before April 24, 2017. Comments may be submitted directly to VA at the address shown in the Federal Register Notice or at www.regulations.gov. Comments should indicate they are submitted in response to “RIN 2900-AP93—VA Veteran-Owned Small Business Verification Guidelines.” Note that all comments received will be available for public inspection at VA’s Central Office in Washington, DC.

About the Author:

Wayne Simpson | Centre Law & Consulting Wayne Simpson
Consultant

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.

 

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GSA's Horizontal Pricing Analysis Tool and Three Things to Know | Centre Law & Consulting in Tysons, VA
 

It’s A Slant Downward

When you negotiate a GSA Schedule or renewal, the GSA contracting officer reviews your pricing against, well, your past pricing. But when GSA buyers buy, they will now have tools to compare your pricing with the competition. It started with transactional data reporting, and now GSA is openly moving to a horizontal pricing model at least for products. Your carefully prepared sales data to get a product or service on schedule is becoming meaningless as GSA implements more tools for buyers to compare prices for what may or may not be similar items.

Tom Sharpe, FAS Commissioner, has unveiled the latest buying tool, the Horizontal Pricing Analysis Tool. Its purpose is to “analyze price variability for identical Schedule items”. It shows the competitive range of pricing for a specific item and whether or not a vendor is proposing an offer within that range.

Now that the Horizontal Pricing Analysis Tool is in use, COs are reaching out to vendors whose prices exceed a competitive range, notifying them of comparative pricing with identical items on Schedule, and engaging them in a dialogue about both pricing and non-price factors.

Buyers and sellers, please make sure apples are applies and not avocados. Is delivery FOB origin or destination? What are the warranties? What is the delivery time? We all have stories about the deep discount competitor whose delivery time is in dog years, yet their price is low. That may be okay if you don’t need it soon, as defined in your lifetime.

Now on to other news…

Protests

Jacobs Technology is hanging on to its $132 million Army award. ManTech TSG-1 JV protested that it was unreasonably assigned a weakness in its proposal. GAO held that ManTech couldn’t establish that the Army was unreasonable in assigning a weakness to its proposal based upon unstated evaluation criteria. Champagne flows at Jacobs.

That Wall

The Department of Homeland Security does not have enough loose change in its sofa cushions to fund THE wall, so President Trump is preparing a supplemental budget request for at least $6.6 billion. And for those of you wall builders, here is the link to the presolicitation notice.

Growth Areas 2017

A new study by Onvia lists the top 10 fastest-growing areas in government contracting for 2017 that include technology, telecommunications, healthcare, and construction.
 
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.

 

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Are You A Federal Acquisition Service GSA MAS Contract Holder? | Centre Law & Consulting in Tysons, VA
 
The General Services Administration (GSA) Federal Acquisition Service (FAS) is planning to refresh all GSA Multiple Award Schedules (MAS) to incorporate provision and clause updates in April 2017. This update will align MAS solicitations and contracts with recent policy changes, including small business subcontracting improvements and updates to Non-Federal Entity access to Schedules, including under the Disaster Purchasing Program. These regulatory changes further codify the Non-Federal entity access authorized under law and previously implemented via policy in GSA Order 4800.2H (now 4800.2I) in June 2013.

GSA FAS will host a public webinar to provide interested parties an opportunity to learn about the planned changes and ask related questions. The webinar will be in a listen-only format with the ability for participants to type questions via an online chat function. Webinar information is provided below.

Date: Wednesday, March 22, 2017
Time: 2:00pm – 3:00pm Eastern Time
Web Meeting Registration Link

GSA FAS will issue a bilateral modification to incorporate the planned changes into existing contracts. MAS contractors will have 90 days to accept the mass modification.

Learn more at GSA Interact.

Information reposted from the General Services Administration.

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GAO Won’t Reconsider Protests Dismissed During Jurisdiction Lapse | Centre Law & Consulting in Tysons VA
 
Back on November 28, 2016, both Analytic Strategies LLC and Gemini Industries, Inc.’s protests were dismissed by the GAO for lack of jurisdiction. The firms initially protested the General Services Administration’s (GSA) exclusion of their proposals under a task order to provide mission support services for the Joint Improvised-Threat Defeat Agency (JIDA). The protests were subsequently dismissed by the GAO as its statutory grant of jurisdiction to consider such protests had expired. Congress subsequently reinstated the GAO’s jurisdiction and, as such, the contractors requested that their initial protests be reinstated.

By way of background, in 1994, Congress enacted the Federal Acquisition Streamlining Act (FASA) which, in part, established a general bar against protests filed in connection with military and civilian agency task and delivery orders issued under multiple award IDIQ contracts, with limited exceptions. However, the National Defense Authorization Act (NDAA) for Fiscal Year 2008 amended FASA to grant GAO jurisdiction to hear protests in connection with orders placed under IDIQ contracts where the order exceeded $10 million. The Fiscal Year 2012 NDAA amended the GAO’s jurisdiction and established a sunset date whereby the grant of jurisdiction to hear protests in connection with orders placed under IDIQs valued in excess of $10 million expired after September 30, 2016. On December 14, 2016, the Protest Authority Act was signed into law, which removed the sunset provision and reinstated GAO’s jurisdiction over protests of task orders placed under civilian agency IDIQ contracts valued in excess of $10 million.

With specific relevance to this protest, on April 20, 2016, GSA issued a task order request (TOR) to contractors under a specific IDIQ, including Analytic Strategies and Gemini Industries. The solicitation estimated the total value of the cost-plus-award-fee portion of the task order to be between $126,081,247 and $132,717,104. On September 21 and October 18, 2016, GSA informed Analytic Strategies and Gemini Industries, respectively, that it would no longer consider their responses to the TOR for award. Analytic Strategies filed its protest on October 3, and Gemini Industries filed its protest on October 28. Approximately one month later, GSA dismissed the protests as its jurisdiction to consider these protests had expired on September 30. The contractors subsequently filed requests for reconsideration once the GAO’s jurisdiction was reinstated.

In denying the reconsideration request, the GAO noted that it has repeatedly determined that its authority to hear a protest, including its jurisdiction to hear task and delivery order protests, is based on the filing date of the protest. The GAO, in finding that it did not possess jurisdiction at the time the protests were filed, noted that merely because the Protest Authority Act removed the sunset provision did not change the fact that the sunset provision did previously exist. The Act contained no statement as to its effective date, thus it is deemed to take effect on the date of its enactment. Furthermore, the GAO noted that retroactive application of a law is disfavored and should not be done in this case.

For more information, read the GAO decision in Analytic Strategies LLC; Gemini Industries, Inc. – Reconsideration; B-413758.4; B-413758.5 (Mar. 8, 2017).

About the Author:

Heather Mims | Centre Law & Consulting in Tysons VA Heather Mims
Associate Attorney

Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow.

 

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One DOE Procurement Produced 24 Protests and a Request for Reconsideration | Centre Law & Consulting in Tysons, VA
 
On March 31, 2017, the Government Accountability Office (GAO) released a press release concerning a bid protest decision that resolved seventeen protests, which challenged the award of contracts by the Department of Education (DOE) for student loan debt collection services.

On March 27, 2017, the GAO sustained several of the protests in part, finding that DOE made several prejudicial errors in evaluating the proposals, which led it to making unreasonable source selection decisions. The GAO recommended that the DOE reevaluate proposals and make new source selection decisions. The decision itself was issued under a protective order – hence the press release – because the decision may contain proprietary or source selection sensitive information.

While the decision regarding the seventeen protests discussed above is still not publicly available, on April 6, 2017, the GAO issued a decision in which it declined to reconsider the protests decision. Two intervenors who had received awards in the original procurement filed “motions to vacate” asking that the GAO reconsider and rescind its decision issued on March 27, 2017.

This denial of reconsideration gives us a little bit more background into the procurement. The GAO notes in its decision that between December 19, 2016 and January 9, 2017, it received twenty-four protests relating to the DOE procurement. The GAO dismissed five for various procedural or pleading deficiencies. Of the remaining nineteen, seventeen of those were consolidated as they raised several common challenges to the agency’s evaluation of proposals and ultimate award decisions. Those seventeen were decided in the above referenced protected decision. The remaining protests were withdrawn and are currently being pursued at the Court of Federal Claims. Notice of intent to file at the Court was filed by the protestor at the Court of Federal Claims on March 24, and the GAO was notified on March 28 that the protestor was withdrawing its protest.

In their request for reconsideration, the two intervenors sought to nullify the GAO’s decision sustaining the protests based on the March 24 pre-filing notice arguing that the notice had the immediate and automatic effect of divesting the GAO of jurisdiction under 4 C.F.R. § 21.11(b). In denying the request, the GAO noted that it was not actually provided notice until March 28 when the protester withdrew its protest, which was one day after it issued its decision on March 27. Furthermore, this particular protest was not among the seventeen consolidated protests that the GAO decided in the March 27 decision. Finally, the GAO noted that the mere fact that a notice of intent to file a complaint was filed does not automatically divest the GAO of jurisdiction but rather triggers the requirement for it to consider whether dismissal is required under 4 C.F.R. § 21.11(b). Specifically, (b) only requires dismissal where the GAO determines that the subject matter of the protest is before a court of competent jurisdiction. Therefore, all things considered, the GAO dismissed the requests for reconsideration.

About the Author:

Heather Mims | Centre Law & Consulting in Tysons VA Heather Mims
Associate Attorney

Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow.

 

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This July, several of the Centre staff were chosen from a competitive field to lead multiple breakout sessions at the 2017 World Congress in Chicago, IL. World Congress is the National Contract Management Association’s largest education event for contract management, procurement, and acquisition professionals. Individuals from government, industry, and commercial business come together for networking and training for all career levels.

From pressing legal matters to the latest in GSA Schedule updates, come learn the information you’ll need to stay up-to-date in the federal contracting industry. Make sure these three breakout sessions are added to your “must-see” events on your conference schedule:

MONDAY, JULY 24 (11:15am – 12:30pm)
Corporate Ethics: Lead from the Top or Pay Through the Nose
David Warner, Partner

This session will review recent enforcement actions—including whistleblower, qui tam, and debarment processes— with respect to federal contractors. Hear about the current state of the law concerning “hidden” ethical traps for import/export, ITAR/EAR, and TAA, in addition to the more common traps of the False Claims Act and Foreign Corrupt Practices. Corporate ethics are expected to remain a significant concern for contractors even under the new administration. Leave with guidance to understand the current legal landscape and to identify and mitigate such risk.

TUESDAY, JULY 25 (11:15am – 12:30pm)
Protests Happen, so Now What?
Barbara S. Kinosky, Esq., Managing Partner
James Phillips Jr, PMP, CFCM, Fellow, Acquisition Consultant

When the word protest is used often, both buyer and seller bristle. This presenter speculates on the thinking that the government buyer goes through that ultimately results in a decision that is sustained. Hear key decision points of actual sustained protests.

TUESDAY, JULY 25 (4:00pm – 5:15pm)
Lessons Gleaned from Successful Protests at GAO
Barbara S. Kinosky, Esq., Managing Partner

What makes a protest successful and what can you do to avoid stalling your acquisition due to a protest? With the number of protests increasing, this session gives attendees clear guidance on practices to avoid that will lead to protest.

WEDNESDAY, JULY 26 (9:45am – 11:00am)
SIP vs FPT, TDR/FAS Sales Reporting vs 72A, eOffer/eMod
Maureen Jamieson, Executive Director of Consulting
Julia Coon, Consultant

eOffer/eMod is GSA’s online tool to submit GSA offers and modifications that is only accessible to authorized negotiators with digital certificates. This session will show participants how to submit a GSA offer and modifications and other electronic forms. Hear about the SIP program and step-by-step instructions for the import/upload process for both products and services. Discussion will focus on GSA’s new TDR/FAS Sales Reporting and Formatted Product Tool.
 
2017 NCMA World Congress Breakout Sessions | Centre Law & Consulting in Tysons, VA
 

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Earning Only 78% of What a Similarly Situated Male Employee Is Paid? | Centre Law & Consulting in Tysons VA
 
Alas, I am not expecting my phone to start ringing off the hook. But the week of “Equal Pay Day” is as good a time as any for contractors to kick the tires on their pay practices to ensure observed pay disparities are supported by legitimate differentiators.

Perhaps no employment statistic is bandied about so frequently in politics and the press than the “gender pay gap” whereby women are purported to earn only 78 cents for every dollar earned by men. With April 4 having been “Equal Pay Day,” much digital ink was getting spilled concerning female workers allegedly earning less than their male “counterparts.” Alas (again), most but not all of the click-bait tends to be hopelessly innumerate, failing to capture or account for legitimate non-discriminatory reasons for observed differences in the aggregate data from which the 78% figure is derived.

Despite the political hand-wringing, the law surrounding individual pay discrimination is robust and well delineated. Indeed, in addition to pay discrimination being actionable under Title VII, since 1963 the federal Equal Pay Act (“EPA”) has required that men and women in the same workplace be given equal pay for equal work. All forms of pay are covered including salary, overtime pay, bonuses, stock options, profit sharing, life insurance, vacation and holiday pay, allowances and reimbursement for travel expenses, and benefits. The jobs need not be identical in every respect, but they must be “substantially equal.” Rather than relying upon particular job titles, a claimant must show that she and her male counterpart performed substantially equal work in terms of skill, effort, and responsibility. A job will be considered unequal, despite having the same general core responsibilities, if the more highly paid job involves additional tasks which (1) require extra effort, (2) consume a significant amount of the time, and (3) are of an economic value commensurate with the pay differential.

Federal contractors subject to EO 11246 are expected to routinely evaluate their compensation systems to ensure that they are not resulting in discriminatory outcomes. The applicable regulations require that such “self-audits” assess whether race or gender-based compensation disparities exist, that the audits occur periodically, and that results be reported internally to management. While the OFCCP does not require a particular methodology, its own compliance officers are generally directed to review individual data, group data into pay grades or job groups, and conduct summary analyses. The CO is also to assess quantitative factors such as the size of any overall average pay differences based on race (minority vs. non-minority) and gender (female vs. male), the number of job groups where average pay differences exceed a certain threshold, or the number of employees negatively affected within job groups.

In addition to the individualized EPA factors mentioned above, data such as particular skill or certifications; education; work experience; the position, level, or function; tenure in a position; performance ratings; and other compensation-related inputs should be considered. For smaller contractors, simple Excel “table and sort” analyses may be sufficient. For more complex employers, more sophisticated statistical analyses, such as multiple regression, may be appropriate and more valuable.

If contractors are not already routinely performing these sorts of analyses (preferably in conjunction with counsel for privilege purposes), they should. Again, it’s required by EO 11246; and innumeracy around the “wage gap” notwithstanding, pay discrimination can and does occur. It is far cheaper to identify and remedy unexplained disparities without the involvement of the DOL or the courts.

About the Author:

David Warner | Centre Law & Consulting David Warner
Partner

David Warner is a seasoned legal counselor with extensive experience in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David leads Centre’s audit, investigation, and litigation practices.

 

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If you are in the Northern Virginia area, grab some lunch with Centre’s Managing Partner, Barbara Kinosky, on May 23 at the Tower Club in Tysons, VA.

Barbara will be the featured speaker presenting on “Hot Topics for Federal Contractors: A Look at What’s In and What’s Out in 2017” at the Tower Club’s Lunch and Learn series. Attendees will get up to date on all the latest hot topics in the federal contracting industry. What will a Trump presidency continue to look like? Will there be more emphasis on defense spending? How will federal regulations be impacted? Executive orders, compliance, audits – what’s in, what’s out?

Come learn about all this and more!

What:   Hot Topics for Federal Contractors: A Look at What’s In and What’s Out in 2017
Date:    May 23, 2017
Time:    12:30pm – 1:30pm
Where: Tower Club in Tysons, VA

Find out more and register via the Calendar page on the Tower Club’s website.

 

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Bid Protests: Failure to Submit Signed JV Agreement Rendered Proposal Technically Unacceptable | Centre Law & Consulting in Tysons, VA
 
In a decision publicly released on Friday, March 31, in CJW-Desbuild JV, LLC, B-414219 (Mar. 17, 2017), the Government Accountability Office (GAO) denied a protest challenging the rejection of a proposal where the contractor had failed to provide a signed joint venture agreement with its proposal.

In issuing the RFP, the Department of the Navy, Naval Facilities Engineering Command (NAVFAC) stated that award of the construction and repair contract would be made on a best value basis, with price and non-price factors considered. The non-price evaluation factors were construction experience, safety, and past performance. With regards to the construction experience factor, the RFP instructed Joint Venture (JV) offerors to submit relevant project experience completed by the JV entity. If none existed, the RFP instructed JV members to submit individual project experience but to also submit a signed copy of the JV agreement indicating the proposed participation of each JV member. The RFP stated that failure to submit the agreement would be considered unacceptable.

CJW-Desbuild JV was subsequently rated “unacceptable” under the construction experience factor for failure to provide the signed copy of its JV agreement. CJW Desbuild argued that its failure to submit a signed copy was a “minor oversight” and that it was “unreasonable” for the agency to downgrade its proposal. CJW Desbuild further argued that NAVFAC should have used clarifications in order to permit the JV to submit its signed agreement.

The GAO disagreed and found that because the requirement for a signed JV agreement was specifically linked to technical acceptability, it could not be considered an informality. The GAO also concluded that the JV’s failure to provide its signed agreement could not have been remedied through clarifications, as clarifications cannot be used to cure deficiencies or material omissions in a proposal. Furthermore, the GAO noted that even if the protestor’s failure to submit the signed agreement had been a minor clerical error, the agency is permitted, but not required, to give it the opportunity to correct it via clarifications.

About the Author:

Heather Mims | Centre Law & Consulting in Tysons VA Heather Mims
Associate Attorney

Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow.

 

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If you are in the Baltimore area, join David Warner at the next NCMA Greater Baltimore Chapter meeting.

On May 11, David will be the featured speaker presenting the “Annual Update on Federal Contracting and Legislation” where he’ll look back at the first 100+ days of the Trump Administration and review the latest legislation on the Hill, Executive Order and FAR updates, changes in the small business rules, employment regulations, bid protests, and news on the GSA Schedules.

What:   NCMA Greater Baltimore Chapter meeting
Date:    May 11, 2017
Time:    11:30am – 1:00pm (lunch included)
Where: National Electronics Museum in Linthicum, MD

Find out more and register at Events page of the chapter’s website. Register before April 24 to receive early bird discounted rates.

Attendees at this event earns 1 CPE/CPU to include certificate.

NCMA Greater Baltimore Chapter logo
 

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No April Fools Joke: GSA Refresh/Mass Mods Are Coming | Centre Law & Consulting in Tysons, VA
 
The General Services Administration (GSA) Federal Acquisition Service (FAS) is planning to refresh ALL Multiple Award Schedules (MAS). The purpose of the refresh is to incorporate provision and clause changes into MAS solicitations and contracts. Be on the lookout for updates tentatively planned for April 2017.

Major changes to the Small Business Subcontracting Plan will be included in these Refreshes/Mass Mods that will impact both large and small businesses. Look for changes in the Model Subcontracting Plan that reflect additional requirements. These changes were effective November 1, 2016 when DoD, GSA, and NASA issued a final rule amending the Federal Acquisition Regulation (FAR) to implement changes made by the Small Business Administration.

Key changes of the refresh and mass modifications are as follows:

Small Business Subcontracting Plans:

Large Business Prime Contractors Must:

  • Make good faith efforts to utilize their small business subcontractors during the contract term to the same degree the prime contractor relied on the small business in preparing and submitting its bid or proposal
  • Resubmit a revised subcontracting report within 30 days of receipt of a notice of report rejection
  • Assign North American Industry Classification System (NAICS) codes to subcontracts
  • Not prohibit discussion of payment or utilization matters between a subcontractor and the contracting officer
  • Report order level subcontracting information if prime has a subcontracting plan on task and delivery order contracts after November 2017*

Contracting Officers May:

  • Require a subcontracting plan after a small business re-represents its size as other than small
  • Necessitate subcontracting goal calculation in terms of total contract dollars** as well as in terms of total subcontracted dollars

Updates to Non-Federal Entities Purchasing off Federal Supply Schedules (FSS):

  • The State/Local Disaster Purchasing Program*** extends to cover disaster preparation and response as well as recovery from major disasters
  • Access extends to certain qualifying organizations including the American National Red Cross and National Voluntary Organizations Active in Disaster

Revisions to I-FSS-600 Contract Price Lists:

  • Requirement for submission of contractor’s electronic files is updated to no later than 30 days after award

Other Changes:

  • Removal of Pathway to Success training requirement for streamlined (Successful Legacy) offers
  • Updated Service Contract Labor Standards Act (SCLS) Wage Determinations (WDs) to be added to all schedules
    • Contractors to ensure pricing and WD references are updated and included in SCA matrix

 
For the latest proposed draft updates, see more on GSA Interact.
 

* Requirement date may be extended as updates to the Electronic Subcontracting Reporting System (eSRS) are ongoing.
** Offeror may include a proportional amount of products and services that are ordinarily allocated as indirect costs.
*** Disaster Purchasing Program participation is voluntary and vendors may opt in or out at any time during their contract term.

About the Author:

Johanna Moore
Consultant

Johanna Moore is a GSA and VA Contract Consultant at Centre Law & Consulting. She collaborates with the consulting team to provide proposal and contract management assistance to clients, focusing on various modification packages, market analysis, and catalog/pricing updates.

 

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Mark your calendars to join Barbara Kinosky at the upcoming Section 809 Panel meeting on April 27 at 11:30am where she will be an invited featured speaker.

Section 809 Panel stakeholder meetings provide a forum for external experts in the defense acquisition community to provide input to representatives of the panel for consideration in the panel’s work. The Section 809 Panel is looking at reforming and streamlining acquisition regulations with a view toward improving the efficiency and effectiveness of the defense acquisition process and maintaining a defense technology advantage. The panel is charged with making recommendations for the amendment or repeal of such regulations that the panel considers necessary, as a result of such review, to:

  • Establish and administer appropriate buyer and seller relationships in the procurement system
  • Improve the functioning of the acquisition system
  • Ensure the continuing financial and ethical integrity of defense procurement programs
  • Protect the best interests of the Department of Defense
  • Eliminate any regulations that are unnecessary for the purposes described

All Section 809 Panel meetings are open to the general public and details are posted to the panel’s website.
 
Section 809 Panel logo
 

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Bid Protests: No Completed PPQs? No Contract. | Centre Law & Consulting in Tysons, VA
 
Last month, in Genesis Design and Development, Inc., B-414254 (Feb. 28, 2017), the Government Accountability Office (GAO) denied a protest challenging the rejection of a proposal where the contractor had failed to provide three past performance questionnaires (PPQs) completed by previous customers.

In its proposal, Genesis provided PPQs that provided customer contact information but which did not contain substantive responses from the previous customers. The company argued that it submitted PPQs containing information identifying its past clients and that it reasonably anticipated that the agency would seek the required information directly from its clients. Genesis also suggested that it can be difficult to obtain such information from its clients because they often are too busy to respond in the absence of an inquiry directly from the acquiring activity, and the company noted that, in previous cases, agencies had sought out such information.

The GAO was unmoved, holding that the RFP specifically required offerors to submit completed PPQs and that Genesis’s submission did not comply with the express requirements. Given that the RFP also provided that failure to supply required documentation – including PPQs – could result in a proposal’s elimination from consideration, the agency’s rejection of Genesis’s proposal was reasonable.

While PPQs can often place offerors in the uncomfortable position of needing to rely on prior COs who are under no obligation to respond or respond in a timely manner, the Genesis decision makes clear that failure to submit completed PPQs can preclude consideration for contract award.

About the Author:

David Warner | Centre Law & Consulting David Warner
Partner

David Warner is a seasoned legal counselor with extensive experience in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David leads Centre’s audit, investigation, and litigation practices.

 

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