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Centre Law & Consulting

Just in time for the consummate workaholic acquisition professional to read while lying on the beach this summer, and for those who never want to get too far away from the Federal Acquisition Regulation (FAR), the General Services Administration (GSA) Office of Government-wide Policy, in conjunction with the FAR Council announced June 20, 2017, the release of the FAR in the Kindle Bookstore.

The FAR is now available in eBook format for free in the Amazon Kindle bookstore.  Users can highlight text, bookmark sections, even send quotes via e-mail.  According to Acquisition.Gov, the eBook format is proving very popular with procurement professionals with thousands of downloads in the Apple iBooks Store.

Information on how to download the FAR on Amazon Kindle and Apple iBooks is available at:  https://www.acquisition.gov/mobileaccess.

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Yes, Congress is doing more than learning “nyet” and other basic Russian.   The House of Representatives passed the Modernizing Government Technology Act of 2017 (the “MGT Act”) in record time.  The legislation is now in the Senate.  If enacted into law it would create funds for agencies to invest in new, innovative information technology solutions and replace aging legacy systems.  The bill establishes a $500 million central fund to support rapid IT modernization across 24 agencies. Better yet, this innovative legislation moves agencies away from the “spend it or lose it” budget mentality and actually rewards savers with leftover cash to spend in future years.  This is great legislation would create dependable funding for agencies to be able to prioritize IT modernization and move into the cloud and away from the previous century.

The legislation was introduced by Reps. Will Hurd (R-Texas), Gerry Connolly (D-Va.) and Robin Kelly (D-Ill.) in the House, and Sens. Tom  Udall (D-N.M.), Jerry Moran (R-Kan.) and Mark Warner (D-Va.) in the Senate.

https://www.congress.gov/bill/115th-congress/house-bill/2227/related-bills

From the Washington Post.  Proposed legislation to allow the Veterans Administration (VA) to more easily terminate VA employees could be a sign of things to come at all federal agencies. The Accountability and Whistleblower Protection Act, may be signed into law soon.

https://www.washingtonpost.com/news/powerpost/wp/2017/06/21/new-va-law-sets-stage-for-government-wide-cut-in-civil-service-protections/?utm_term=.74988474fdf4

Tell your Congressman/woman to support HR 3019 – Promoting Value Based Procurement Act of 2017. It prevents the use of lowest price technically acceptable contract awards (LPTA) for the acquisition of certain services in civilian agencies. It’s a giant step in the right direction. The bill is jointly sponsored by Rep Meadows (R NC) and Rep Beyer (D VA). You can track it on the link below.  https://www.congress.gov/bill/115th-congress/house-bill/3019

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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The System for Award Management (SAM) is a system in which contractors must register in order to do business with the federal government. SAM was created to consolidate and eliminate some of the legacy systems. SAM’s goal is to consolidate a majority of the federal procurement systems into one user friendly system. The next phase for SAM modernization is due to be released in September 2017. The new beta.SAM.gov being released is the Office of the Integrated Award Environment’s (IAE) effort to consolidate the following ten IAE systems, listed here by functionality:

Entity Information: System for Award Management (SAM.gov) – Registrations and Exclusions

Contract Opportunities: Federal Business Opportunities (fbo.gov)

Contract Data: Federal Procurement Data System (fpds.gov)

Sub-Award Data: Electronic Subcontracting Reporting System (eSRS.gov), Federal Funding Accountability and Transparency Act Subaward Reporting System (fsrs.gov)

Wage Determinations: Wage Determinations OnLine (wdol.gov)

Past Performance: Contractor Performance Assessment Reporting System (cpars.gov), Past Performance Information Retrieval System (ppirs.gov),  Federal Awardee Performance and Integrity Information System (fapiis.gov)

Assistance Listings: Catalog of Federal Domestic Assistance (cfda.gov)

IAE’s ultimate goal is to bring together the personnel who award, receive, and manage federal awards and assistance under one web site. The enhanced beta.SAM.gov will reduce reporting burdens, increase accountability and transparency in the award process, and improve data quality for both government and industry personnel. The new beta.SAM.gov will feature a Google-like search tool able to query data simultaneously from all ten combined systems or by filtering by the seven functionalities listed above. The new site will also feature a help desk as well as a cross mapping of the ten legacy systems to their new beta.SAM.gov functional area to better direct transitioning users to the information they need.

Migration of the ten systems to beta.SAM.gov will be incremental to allow incorporation of user feedback. The new beta.SAM.gov will run in parallel with the ten legacy systems, which will remain the authoritative sources, until testing is fully complete and the previous systems are decommissioned. Beta.SAM.gov will eventually inherit the SAM.gov domain. The following timeline presented by IAE reflects completion in late Fiscal Year 2020:

SAM-timeline.png

 

There can be multiple accounts affiliated with an entity in the new beta.SAM.gov. Users will need to create a new account and migrate their roles which will control privileges on the new site. Entities will be able to assign one or more administrators to manage site users’ associations with their entity and delegate roles on the new site.

Over 200 users, many of which are federal employees, are currently testing the alpha version of the new SAM.gov which began in December 2016. Focus groups will be held in July and August to provide input on the new beta.SAM.gov. If you are interested in participating in the focus groups, sign up information can be found on the Integrated Award Environment (IAE) Industry Community on GSA Interact at https://interact.gsa.gov/group/integrated-award-environment-iae-industry-community.

 

About the Author:

J. Moore
Consultant
J. 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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Bill Seeks to Limit Improper LPTA Use

Although Lowest-Price, Technically Acceptable (LPTA) procurements are conducted as part of the “best value” continuum, nothing seems to get the ire of industry up more than LPTA procurements, and the government’s seemingly ever-increasing use of the LPTA method.  Help may be on the way to curb the use of improper LPTA procurements in civilian departments.  The National Defense Authorization Act of 2017 already placed restrictions on use of LPTA procurements by the Department of Defense for procuring knowledge-based services.

Representative Mark Meadows introduced the “Promoting Value Based Procurement Act of 2017,” June 22, 2017.  The Bill, H.R. 3019, currently has three co-sponsors, all representatives from the Federal contractor-saturated Congressional Districts in Northern Virginia.

H.R. 3019 would amend the Federal Acquisition Regulation (FAR) requiring Federal civilian departments and agencies to take additional steps when conducting LPTA procurements.

If enacted, H.R. 3019 will require Federal civilian departments and agencies, when it comes to an LPTA procurement, civilian agencies must:

  1. Describe the agency’s minimum requirements in terms of performance objectives, measures and standards to determine acceptability of LPTA offers.
  1. Articulate in solicitations there is no value in offering items/services which will exceed the technical and performance requirements.
  1. Require solicitation language stating technical approaches will require no subjective judgment by the source selection authority for one LPTA proposal over another.
  1. Require source selection authorities reviewing technical proposals have high confidence offers other than the lowest-priced offer would not result in the identifying factors which provide value or benefit to the contracting agency.
  1. Contracting officers must also document the contract file with a justification for use of the LPTA evaluation methodology.
  1. Determine use of LPTA reflects full life-cycle costs, to include costs for operation and support.

H.R. 3019 restricts use of LPTA for IT services, cybersecurity services, advanced electronic testing, systems engineering and technical assistance services, and other similar “knowledge-based” professional services.  Restrictions also apply to the use of LPTA procurement strategies for acquiring personal protective equipment, and knowledge-based training or logistics services in support of overseas contingency operations.

H.R. 3019 was referred to the Committee on Oversight and Government Reform.  There is no related bill in the Senate at this time.

 

By Wayne Simpson

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In a first for the federal government, Veterans Affairs Secretary David Shulkin has announced that the VA will now publicly post all major disciplinary actions taken against its employees.  This includes all terminations, demotions, and suspensions of more than fourteen days. While the adverse action report does not include employees’ names, the list does and will continue to include the employee’s component, position, specific adverse action taken, date it took effect, and the employee’s region.

In explaining his decision, Shulkin stated: “Under this administration, VA is committed to becoming the most transparent organization in government.” He further added, “Together with the accountability bill the president signed into law recently, this additional step will continue to shine a light on the actions we’re taking to reform the culture at VA.”

The initial adverse action report was posted on the VA website on July 3, 2017 and dates back to January 20, 2017, the day Trump took office.  The report cites 743 disciplinary cases, of which 526 were removals. Interestingly, this would put the VA on pace to only fire 1,169 employees during Trump’s first year in office while the VA fired 2,575 workers in fiscal year 2016. The adverse action report will continue to be updated weekly.

In other federal government news, the Department of Homeland Security inspector general found that DHS has recently spent millions of dollars on a contract that did not meet its needs. In an OIG report released June 30, 2017, the IG found that, despite DHS spending $24.2 million as of February 2017, the performance and learning management system does not “achieve the intended benefits or address the Department’s needs.” The IG further specified that DHS spend more than $5.7 million for subscriptions to the system that either were unused or expired before the system became operational.

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.

The post VA to Publicly List all Disciplined or Fired Employees Plus How DHS Spent $24.2 Million on a System it Did Not Need appeared first on Centre Law & Consulting.


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Centre Law & Consulting

In September of 2016, Aurotech Inc. won an award for a blanket purchase agreement with Health and Human Services, FDA. Discover Tech made a persuasive protest of that award, resulting in the FDA taking corrective action, and to reevaluate Aurotech’s and Discover Tech’s quotations. After the FDA revised its initial award, now choosing Discover Tech in the award determination, Aurotech filed an unsuccessful protest.

Aurotech challenged the Agency’s evaluation of how Discover Tech’s reductions to its quoted price would affect the technical and management approaches, and therefore its ratings. It also alleged Discover Tech did not explain in full how it had reduced its price from the first award determination. The GAO found the agency had reasonably evaluated the vendor’s explanation for the price reduction.  Specifically, that Discovery Tech’s new understanding of initial deadlines for the contract, allowed them to reduce labor costs without hurt quality.

Which brings us to the more interesting bid protest topic; when does a clarification become a discussion? Aurotech next alleged that the FDA held unequal exchanges with the two vendors.  Similar to Aurotech’s accusation Discovery Tech failed to explain its price reduction, the Agency was also curious of the price drop during its evaluation. The Agency contract specialist contacted Discovery Tech asking how the reduction in staffing could happen, without adjusting the technical quotation/management approach. Discover Tech explained its initial mistake evaluating deadlines which had caused the previous higher staff prediction.

The GAO considered this a clarification, or limited exchange used to resolve clerical mistakes. Aurotech obviously disagreed, calling this exchange an opportunity for Discovery Tech to cure a crucial failure in its proposal. The GAO was most persuaded by the fact no change to the proposal occurred.  Had the vender been allowed to modify its technical and management approach, the GAO would have considered this a discussion, requiring both parties to be involved. Given Aurotech was also asked for a clarification on a different subject, the GAO denied the bid on the ground the FDA treated the vendors unequally.

About the Author:

Tyler Freiberger Headshot | Centre Law & Consulting in Tysons, VA Tyler Freiberger
Associate Attorney

Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia.

The post GAO Threads The Needle With Clarifications Versus Discussions appeared first on Centre Law & Consulting.


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Centre Law & Consulting will be at NCMA World Congress in Chicago from July 23-26, 2017. A number of Centre’s staff have been invited to speak about various federal contracting topics (see below for the topics and times). Centre will also be exhibiting at booth 417.


Monday July 24

Corporate Ethics: Lead from the Top or Pay Through the Nose

A07 • Managing Contracting Organizations • Room 309/311 • Intermediate

David Warner, Partner, Centre Law & Consulting

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.

The Acquisition Profession’s Essential Tools: Principles of Interpretation

C11 · Foundational Contracting Training • Room 325 · Basic

Kenneth Allen, JD, Attorney and Consultant, Semi-Retired Academic
Barbara Kinosky, Esq., Managing Partner, Centre Law and Consulting

What’s in a word? Lots. Contract interpretation is one of the most important skill sets an acquisition professional can have. Attendees will explore the application of the principles of contract interpretation through real court cases and key federal exceptions.


Tuesday, July 25

Protests Happen, so Now What?

D12 · Foundational Contracting Training · Room 326 · Intermediate

James Phillips Jr, PMP, CFCM, Fellow, Acquisition Consultant, Phillips Training and Consulting Inc.
Barbara S. Kinosky, Esq., Managing Partner, Centre Law and Consulting

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.
ACTIVITY: 8-10 short scenarios will be provided for group discussion.

Lessons Gleaned from Successful Protests at GAO

F05 · Business Acumen · Room 326 · Basic

Barbara S. Kinosky, Esq., Managing Partner, Centre Law and Consulting

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.
ACTIVITY: Small groups will discuss protest issues related to specific examples.


Wednesday, July 26

An Overview of GSA’s e-Tools – eOffer/eMod, SIP, TDR Sales Reporting

G15 · Leveraging Advancing Technology · Room 306 · Basic

Maureen Jamieson, Executive Director of Consulting, Centre Law and Consulting
Julia Coon, Consultant, Centre Law and Consulting

This session will show participants how to submit a GSA offer, modifications and other electronic forms such as the CSP-1 and Small Business Subcontracting Plan in eOffer/eMod. Walk through 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 Transactional Data Reporting (TDR)/FAS Sales Reporting and the anticipated Formatted Product Tool (FPT).

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In a decision on July 10, 2017, the GAO found that an agency reasonably canceled its solicitation after a protest where the agency’s requirements were time dependent.

Tien Walker, a small business, protested the cancelation of the solicitation issued by the Department of State for public opinion polling surveys to be conducted in South Asia. Specifically, the selected contractor was to conduct two public opinion surveys in Afghanistan, with the first survey to be completed before the start of the Muslim observance of Ramadan. Before the solicitation’s closing time, Tien Walker filed a protest with the GAO alleging that the solicitation was unduly restrictive and not properly set aside for small businesses. In response, the Department of State notified that GAO that it had canceled the solicitation and would not resolicit the polling survey. The GAO then dismissed Tien Walker’s protest as academic.

Tien Walker has now protested the cancelation of the solicitation as improper. Specifically, Tien Walker argued that the Department of State unreasonably canceled the solicitation as a pretext to avoid the GAO’s review of its protest.

In denying the protest, the GAO noted that a contracting agency has broad discretion in deciding whether to cancel a solicitation. The GAO further noted that an agency need only establish a reasonable basis to support its decision to cancel a solicitation. Where a protester argues that the agency’s rational for cancellation of a solicitation is mere pretext, the GAO will nonetheless still examine the reasonableness of the agency’s actions.

The Department of State’s rationale for canceling the solicitation relied upon the required stay of contract award and performance due to Tien Walker’s initial protest. The agency further clarified that even if Tien Walker’s first protest was denied, no contractor would have been able to complete the first survey prior to Ramadan. Therefore, the GAO found that the agency’s rationale for canceling the solicitation was reasonable and was not a pretext to avoid awarding the contract on a competitive basis. As such, the GAO denied the protest.

 

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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Interim Final Rule Adopted as Final Rule Without Change

In the July 12, 2017, edition of the Federal Register, VA published its Final Rule implementing its revisions regarding the length of the eligibility period for inclusion in the VA Vendor Information Pages Database (VIP) (www.vip.vetbiz.gov).  This Final Rule implements an Interim Final Rule published in the Federal Register on February 21, 2017, extending the length of eligibility from two years to three years.  VA invited public comments on or before April 24, 2017.

VA’s Final Rule notice discusses comments received in response to its request for public comment, including comments requesting clarification as to whether currently verified SDVOSBs/VOSBs would be automatically extended.  VA indicates all verified firms in the VIP Database automatically had their eligibility term extended by one year.

The Final Rule notice also reiterates information contained in the February 21, 2017, where VA sets forth its rationale for extending the eligibility period for re-verification from two to three years.  VA expresses high confidence in the robust examination process conducted by its Center for Verification and Eligibility, citing Fiscal Year 2016 data to support this conclusion.  Moreover, the change reduces the administrative burden on SDVOSBs/VOSBs participating in the Veterans First Contracting Program at VA.

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Any contractor is frustrated when they fail to win a solicitation award.  Getting edged out on price by a few percentage points, receiving a low technical rating due to a misread proposal, or dealing with confusing evaluation criteria; all legitimate complaints. But imagine if your protest was not even considered, despite clear proof you sent it on time, as instructed.  That’s exactly what happened to Ghazan Neft Gas, for its proposal on a fixed-priced supply and delivery contract of fuel to the US Embassy in Afghanistan.

The solicitation instructed proposals to be sent via email, and Ghazan did just that on March 13th, well before the April 3rd deadline.  On April 8th, Ghazan inquired as to the status of its application, only to learn the Agency had not received the proposal. When Ghazan discovered the contract had been rewarded to another, it filed a protest with the GAO.

Ghazan provided screenshots and declarations showing the proposal was sent to the correct email address on March 13th. The original email was also forwarded from Ghazan’s sent folder.    The Agency simply denied receiving the document and that a review of its inbox and junk folders did not find the email.

The GAO sided with the Agency, stating it was Ghazan’s responsibility to ensure the Agency received the protest and also its burden to prove the delivery occurred. Given Ghazan could show they clearly did send the proposal electronically to the correct place, but still failed to meet the burden, contractors should expect that only written confirmation by the government agency would meet the test.

 

About the Author:

Tyler Freiberger Headshot | Centre Law & Consulting in Tysons, VA Tyler Freiberger
Associate Attorney

Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia.

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On August 24, 2017, the National Aeronautics and Space Administration’s (NASA) final rule amending the NASA Federal Acquisition Supplement by adding a policy on the use of “award terms” will take effect. Award terms are an incentive for contractors to go above and beyond a satisfactory performance to obtain an additional period of performance. Each award term cannot exceed one year in length, but is in addition to the base and option years.

The difference between exercising an option and an award term is that award terms require excellent performance, while exercising an option only requires acceptable performance. This provides contractors additional incentives to perform as best as possible. Both award terms and contract options can be used under the same contract.

Award terms will most likely be found in contracts that involve long term relationships and for service contracts valued at more than $20 million dollars.  In considering whether to use an award term, the government must weigh the administrative burden and cost of more frequent procurements versus market stability, technology advances, and the need for flexibility.  Contractors may be evaluated and earn an award term for their work in the base period, option periods, and even during earned award terms.  The requirements to provide an award term is that there must be an on-going need for the service, funds available, and the contractor must not be listed in the SAM Exclusions List.  An award term plan must also be included in all contracts that include award terms and contain the following information: evaluation factors, performance standards, adjectival ratings, weighting system, the evaluation period, and decision point timeframes. This rule has the potential to incentivize greater contractor performance on large service contracts.

The full final rule can be found here:

https://www.federalregister.gov/documents/2017/07/25/2017-15520/nasa-federal-acquisition-regulation-supplement-award-term-nfs-case-2016-n027

 

About the Author

Colin Johnson | 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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Federal Contractor and Subcontractor Labor Reporting Requirements Under the Vietnam Era Veterans Readjustment Assistance Act

This is a reminder to Federal contractors and subcontractors of an important annual Federal labor reporting requirement coming due September 30, 2017.  The Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) requires Federal contractors and subcontractors with contracts valued at > $150,000 to annually report employment data for protected Veterans in their employ.

If Federal Acquisition Regulation (FAR) Clause 52.222-37, Employment Reports on Veterans (Feb 2016) (or earlier versions of this clause) is contained in your Federal contract or has been “flowed down” to your subcontract from the prime contractor, you may have a reporting obligation.

What is a VETS-4212 Report?

The report, known as “VETS-4212” (formerly known as VETS-100 or VETS-100A, and often referred to as such in contracts awarded using earlier versions of FAR Clause 52.222-37) is due for submission to the Veterans Employment Training Service (VETS) at the U.S. Department of Labor, no later than September 30, 2017.  Fiscal Year 2017 reporting opens up Tuesday, August 1, 2017.

Reporting is legislatively mandated under 38 U.S. Code, Section 4212, codified at 41 CFR Section 61-300, respectively, contractors and subcontractors who enter into, or modify a contract or subcontract with the Federal government, and whose contract meets the criteria set forth in the aforementioned legislation/regulations, are required to report annually on their affirmative action efforts in employing veterans. VETS has a legislative requirement to collect, and make available to the Office of Federal Contract Compliance Programs (OFCCP), U.S. Department of Labor, reported data contained on the VETS-4212 report for compliance enforcement.

Although the threshold for VETS-4212 reporting shown at 41 C.F.R. § 60-300.4, Coverage and waivers, shows reporting applicability for contracts and subcontracts valued at $100,000 and greater, in 2015 the amount was increased to $150,00 as a result of inflation adjustments to acquisition-related thresholds as required by the  Ronald Reagan National Defense Authorization Act of 2004.  OFCCP adopted the Federal Acquisition Regulation Council’s adjusted thresholds for determining whether a contract or subcontract is covered by VEVRAA regulatory requirements.

Accurate and timely reporting, as well as record keeping is critical to stellar contract administration.  A contractor’s affirmative action obligations in the hiring and retention of Veterans is subject to audit by the OFCCP.

A special note to U.S. Department of Veterans Affairs (VA) Federal Supply Schedule Contract holders.  VA requires submission of this report to the U.S. Department of Labor regardless of the dollar amount of sales under the contract, and failure to submit can impact processing of modifications, extension packages, and new and ensuing offers.

Just in time for VETS-4212, Centre Law & Consulting is offering an informative “VETS-4212 Reporting” Webinar on August 17, 2017.  This timely webinar is designed for contractor personnel responsible for administering Federal government contracts with values > $150,000, containing FAR Clause 52.222-37, Employment Reports on Veterans, and for subcontracts where the contractor has flowed the clause down to the subcontractor.  The webinar is an excellent refresher for seasoned contract administrators and is ideal for new contractor personnel and for those who are being trained as back-ups or support personnel for contract administrators.  Click here to learn more about the VETS-4212 Reporting Webinar.

 

By Wayne Simpson

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In its July 17, 2017, decision the GAO partially sustained a protest after an agency conducted an unreasonable past performance evaluation.

Timberline LLC’s award for the maintenance and deactivation of manufactured housing units in Louisiana was protested by MLU services after MLU noticed an oddity about Timberline LLC’s submitted past performance history. Put simply, the contracts submitted for evaluation were not Timberline LLC’s. In fact, the past contracts were not even the Timberline LLC’s proposed subcontractor’s, its sister company, Timberline Construction Group, LLC.

In its submission, Timberline LLC’s proposal provided seven completed contracts to demonstrate its “proven ability to successfully perform a diverse group of services in response to different kinds of disasters in many different geographical locations.” These submissions simply identified “Timberline” as the performing party. At first, this strategy worked. The agency considered Timberline LLC’s past experience “outstanding.” However, as alleged by the protestor, these contracts were performed by Timberline Home, Inc., a wholly separate corporate entity.

The Agency defended its decision, claiming it had confirmed “key personnel” from Timberline LLC had performed the work under Timberline Home. However the GAO held this was not nearly enough to comply with the solicitation requirements. While an agency is free to consider the experience of key individuals and predecessor companies, Timberline LLC didn’t provide this information in its proposal. As a result, the agency’s reliance on those past contracts to evaluate Timberline LLC was not reasonable, and therefore the protest was sustained.

About the Author:

Tyler Freiberger Headshot | Centre Law & Consulting in Tysons, VA Tyler Freiberger
Associate Attorney

Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia.

The post What’s In A Name? appeared first on Centre Law & Consulting.


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Just when you thought Service Contract Act compliance couldn’t get any more complicated, along comes the U.S. Department of Labor (“DOL”) to prove you wrong.

Last week, the DOL issued All Agency Memorandum No. 225 which increased the applicable Health and Welfare (“H&W”) fringe rate from $4.27 per hour to $4.41 effective today, August 1, 2017. While the adjustment to H&W was expected, the DOL’s actions with respect to federal contracts subject to Executive Order 13706 was not.

As a refresher, Executive Order 13706 established mandatory paid sick leave for federal contractors. Specifically, the Order requires covered contractors to provide employees with up to 56 hours (seven days) of paid sick leave annually, including for family care and absences resulting from domestic violence, sexual assault and stalking. The requirement applies to new contracts with the federal government that result from solicitations issued on or after January 1, 2017 (or that are awarded outside the solicitation process on or after January 1, 2017).

In an unexpected development, AAM No. 225 noted that “[e]mployer contributions that are made to satisfy the employer’s obligations under EO 13707 may not be credited toward the contractor’s [H&W] obligations under the SCA.” The Memorandum continued, “[t]o comply with EO 13706, an alternate health and welfare rate has been established that excludes the sick leave portion of the calculated health and welfare rate.” Specifically, as of August 1, 2017, the H&W rate for contracts subject to EO 13706 will be $4.13 per hour – i.e., $.28 lower than the $4.41 H&W rate applicable to contracts that do not require paid sick leave.

While reasonable minds can differ over whether this reduced rate is in fact necessary “to comply with EO 13706,” fallout from the lower alternative rate will likely be immediate. First, affected employees receiving cash in lieu of benefits will undoubtedly note the reduction in pay. In addition, affected contractors may be required to provide negative contract price adjustments in light of the H&W rate decrease. Finally, it will be necessary for contractors to monitor contracts and task orders to determine the appropriate rate particularly as the EO 13706 becomes more prevalent as legacy contracts expire and are replaced by contracts solicited after January 1, 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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NDAA Provision Requires Federal Procurement Through ‘Online Marketplaces’

A provision contained in the National Defense Authorization Act for Fiscal Year 2018 (NDAA), H.R. 2810, covers “Procurement Through Online Marketplaces.”  Section 801 of Act requires the Administrator of the General Services Administration (GSA) to establish for government-wide use a program to procure products through online marketplaces for the purposes of expediting procurements while ensuring reasonable pricing of commercial products.

The GSA Administrator is required to carry out this program by the issuance of more than one contract with more than one online marketplace provider.

Although the program will be available government-wide, the Act specifically directs the Secretary of Defense to (shall) use the online Marketplaces, as appropriate, in the purchase of commercial products.

The Act also provides criteria for use in establishing Federal online marketplaces under the program:

  • is used widely in the private sector, including in business-to-business e-commerce;
  • provides dynamic selection, in which suppliers and products may be frequently updated, and dynamic pricing, in which product prices may be frequently updated;
  • enables offers from multiple suppliers on the same or similar products to be sorted or fileted based on product and shipping price, delivery date, and reviews of suppliers or products;
  • does not feature or prioritize a product of a supplier based on any compensation or fee paid to the online marketplace by the supplier that is exclusively for such featuring or prioritization on the online marketplace;
  • provides the capability for procurement oversight controls, including spending limits, order approval, and order tracking;
  • provides consolidated invoicing, payment, and customer service functions for all transactions;
  • satisfies requirements for supplier and product screening requirements of the Act; and
  • collects information necessary to fulfil the order information requirements of the Act

The Act includes requirements for supplier and product screening.

Products procured through the Federal online marketplace will be deemed to have satisfied competitive procurement requirements if there are offers from two or more suppliers of such a product or similar product with substantially the same physical, functional, or performance characteristics on the online marketplace.  Procurements consummated using the online marketplace will be deemed an award of a prime contract for purposes of goals under the Small Business Act.  Nothing in the Act shall be construed as limiting the authority of a department or agency to restrict competition to small business concerns.

NDAA passed the U.S. House of Representatives on July 14, 2017.  The U.S. Senate agreed to a motion to proceed with action on July 25, 2017.

 

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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In its July 28, 2017 decision, the GAO denied a protest and found an agency’s decision to negotiate a sole-source contract with a Historically Underutilized Business Zone (HUBZone) to be reasonable based on the agency’s lack of progress in meeting its HUBZone goals. JRS Staffing Services, B-414630, B414630.2 (July 28, 2017).

The original solicitation process from the Department of Justice, Bureau of Prisons (BOP), underwent several rounds. The BOP originally issued a solicitation without any restriction on competition. However, following a protest from JRS, they agency canceled the solicitation in order to conduct market research to determine whether it would be feasible to set the contract aside for small businesses. Several months later, the BOP awarded a HUBZone sole-source contract to ProHill. JRS subsequently protested that award, challenging the BOP’s failure to post a notice of its intent to award a sole-source contract on the FedBizOpps website. The BOP subsequently terminated the sole-source contract in order to being the procurement process over. One month later, the BOP posted a statement of work and a sources sought notice for the requirement on the FedBizOpps website, which included a market research questionnaire. One more month later, BOP posted a notice of the agency’s intent to negotiate a sole-source contract with ProHill, a HUBZone. JRS subsequently filed its third protest regarding this BOP contract.

In challenging the BOP’s decision to negotiate a HUBZone sole-source award with ProHill, JRS argued that the award was based on flawed market research as the solicitation could have been competed as a WOSB set aside as both JRS and ProHill are WOSBs. In denying JRS’s protest, the GAO noted that the FAR expressly provides that there is no order of precedence between the WOSB and HUBZone programs and agencies may consider both the results of their market research and their progress in fulfilling their small business goals. Here, it was reasonable that the agency’s decision to use the HUBZone program was based primarily on its lack of progress in meeting its HUBZone goals whereas the agency had already exceeded its WOSB goals. Therefore, the GAO dismissed JRS’s protest.

 

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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The U.S. Government Accountability Office (GAO) recently released a report recommending several changes to the Department of Defense’s (DoD) deployable biometrics programs. Deployable biometric capabilities like fingerprint scanners, voice recognition hardware, and iris scanning devices are used as intelligence collection platforms by the DoD. According to the report, these programs are responsible for DoD capturing or killing 1,700 individuals and preventing 92,000 more from accessing DoD bases over the past decade.

While the GAO acknowledged several successful components of DoD’s biometric capabilities, it also made six recommendations to enhance biometric strategic planning. Further, GAO warned that DoD “may have missed an opportunity to leverage existing, viable, and less costly alternatives.”

A critical recommendation was GAO’s final one: DoD should stop determining which contract support to use based on the lowest price. Too often, DoD relies on lowest cost, technically-acceptable solicitations (i.e. choosing the lowest priced bid by a contractor that meets the minimum requirements.) According to the report, this absolute preference for low bidding has resulted in staffing shortages in contractor provided services. While the GAO still supports use of the lowest price solicitation structure for low skilled services, GAO expressed concern of its usefulness for highly technical/skilled tasks, such as information technology security and latent fingerprint examination. GAO recommends using tradeoff selection criteria in determining contract support; this approach could enhance the quality of contract offers and improve contractor hiring and retention through better compensation.

The advantages of using a best value solicitation for these more advanced DoD services are clear. The Department would have greater discretion to determine if a price discount is worth a reduction in quality, and what effect that sacrifice could have on the end goal – for example, quickly and properly processing a potentially hostile individual’s DNA. With the passing of the National Defense Authorization Act for Fiscal Year 2017, DOD will almost certainly follow GAO’s recommendation for a solicitation method. The Act directs the DoD to avoid using lowest price solicitations for information technology contracts, to the maximum extent practicable. (Pub. L. No. 114-328, div. A, title VIII, subtitle C, § 813(c) (Dec. 23, 2016)). Further, DoD reviewed a draft of the GAO report, and concurred with all six recommendations. DoD also cited actions it plans to take to address the recommendations. GAO believes that if DoD completes these actions, it will adequately address the concerns outlined.

About the Author:

Tyler Freiberger Headshot | Centre Law & Consulting in Tysons, VA Tyler Freiberger
Associate Attorney

Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia.

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Federal contractors often feel a great sense of relief when they are selected for an award. However, the recent GAO decision  regarding a request for quotations for supplying diesel shows just how quickly a business relationship with the federal government can sour.

Bluehorse Corporation, an Indian Small Business, successfully submitted the lowest price quote on supply and delivery of around 30,000 gallons of diesel for use in a construction project. The Request for Quotations stated; “All fuel delivery must be coordinated with the construction manager who will schedule delivery dates and quantities. Please note: that all fuel will not be delivered at one time but in stages as the project progresses.” Bluehorse submitted its quotation noting it had “the ability to 7,500 gallons of fuel per delivery.”

After choosing Bluehorse’s quote, the contracting officer (“CO”) forwarded the purchase order to Bluehorse for 4,000 gallons of fuel every three to four weeks, delivered to two 4,000 gallon capacity tanks. Things between the two quickly turned south in one day. Bluehorse responded in confusion, pointing to the solicitation, which stated the two tanks had a 5,000 gallon capacity.  The CO ignored this provision and instead pointed to language indicating 4,000 gallons would be delivered every three to four weeks.  Bluehorse insisted on clarification for the tank capacity, and receiving no response then wrote, “be aware that our offer was made on the ability to make a 7,500 (gallon) drop (into two 5,000 tanks.)”

The CO offered only an ultimatum, sign the purchase agreement or refuse. The two parties went back and forth with the CO informing Bluehorse their delivery of 7,500 gallons was unacceptable. When Bluehorse did not immediately provided the signed purchase order, the CO rescinded the offer.  Bluehorse filed a protest the very next day claiming the Agency relied upon unstated criteria.

The GAO disagreed, stating a quotation that fails to conform to a solicitation’s material terms and conditions is unacceptable. Here the solicitation explicitly stated the CO would determine delivery dates and quantities. The solicitation also suggested the Agency “typically” orders 4,000 gallons per delivery. In its email exchange, Bluehorse indicated it would only be making 7,500 gallon deliveries, which is a condition unacceptable in the GAO’s decision.

The Bluehorse decision should be takin as a serious warning that awards can quickly dissolve without a tactful hand steering the negotiations.  It is easy to imagine the protest would not have been necessary had Bluehorse approached the tank capacity confusion with more deference or humility to the CO.

About the Author:

Tyler Freiberger Headshot | Centre Law & Consulting in Tysons, VA Tyler Freiberger
Associate Attorney

Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia.

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Dec. 31, 2017 should be an important date for Department of Defense contractors, since by that date you will be expected to be following the cybersecurity requirements of the National Institute of Standards & Technology (NIST) Special Publication 800-171, “Protecting Controlled Unclassified Information in Nonfederal Information Systems and Organizations.”  Although this deadline specifically applies to the DOD, all federal contractors should be familiar with the NIST standards for Non-Federal Organizations, since every federal agency expects that its contractors will have an adequate security policy in place.

The information that is covered is not classified, but might be considered sensitive.  It is the type of business information that a company would keep confidential.  The NIST requirements, outline requirements in the following areas:

  1. Access Control
  2. Awareness And Training
  3. Audit And Accountability
  4. Configuration Management
  5. Identification And Authentication
  6. Incident Response
  7. Maintenance
  8. Media Protection
  9. Personnel Security
  10. Physical Protection
  11. Risk Assessment
  12. Security Assessment
  13. System And Communications Protection
  14. System And Information Integrity

The requirements are logical, and the NIST publication breaks down each of the categories into “Security Requirements” that every organization should be doing in any case.  For example, under category 2, Awareness Training, the Basic Security Requirements list the following:

  1. Ensure that managers, systems administrators, and users of organizational information systems are made aware of the security risks associated with their activities and of the applicable policies, standards, and procedures related to the security of organizational information systems.
  2. Ensure that organizational personnel are adequately trained to carry out their assigned information security-related duties and responsibilities.
  3. Provide security awareness training on recognizing and reporting potential indicators of insider threat.

Defense Federal Acquisition Regulation Supplement (DFARS) 252.204-7012  Safeguarding Covered Defense Information and Cyber Incident Reporting, is the source of the December 31, 2017 requirement.  While the NIST document includes incident response requirements as part of its standards, DFARS 252.204-7012 also makes explicit that security breaches (“cyber incidents”) must be rapidly reported to the Department of Defense.

DOD contractors must have their systems in place to follow these requirements by year end.  But other federal contractors should be ready as well.

 

About the Author

Theodore Banks concentrates his practice on antitrust, compliance, food law, and other corporate matters. Mr. Banks has extensive experience with corporate litigation, including responsibility for contested mergers, environmental contamination, advertising, insurance coverage, products liability, employment law, consumer protection, and packaging and recycling. He has a national reputation for work in corporate compliance and antitrust, and was an early proponent of corporate opt-out suits as plaintiff in antitrust litigation, such as Vitamin, Carbon Dioxide, Corrugated Container, Folding Carton, and Citric Acid Antitrust Litigation, recovering more than $100 million. Through his experience in all aspects of the food industry, Mr. Banks has deep familiarity with the regulatory frameworks and state and federal laws governing food manufacture, distribution, sales, and safety.

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The answer should be: very worried.  Even if you are involved in a small company or small law firm, you can be a target.  Everyone needs to take appropriate precautions.

Even though we seem to be hearing nonstop horror stories about servers being held for ransom or personal information stolen from websites, there are things that you can do to minimize the chances that you or your company will be the next victim.

You need to establish a set of security rules that will apply to everyone in the firm – and they should be rigorously enforced.  The biggest exposure does not come from hardware or software, but from your humans.  Everyone on the staff should be trained in how to compute safely.   They should never open an email – even if is from someone they know — if it seems suspicious in any way.  Never click on a link in an email unless you are sure that it is taking you someplace safe.  At worst, you’ll delete an email that was legitimate, but if it is important the sender will try to contact you again.  Users should not be able to add new programs to the network.

In order to access your network (whether you are in the cloud or have a server in the office), you should utilize two-factor authentication.  In addition to a complex and frequently changed password, the user should be required to input an additional set of numbers that are texted to a smart phone or a different email address.  These systems are not foolproof, but they reduce the chances that a someone who gets a password will be able to get into the network.  The system should automatically lock-out IDs after a certain number (3? 5?) of unsuccessful attempts to log-in.  If it is really an authorized user who keeps screwing up his or her password, they will call the system operator to straighten it out eventually.

You should make sure that each workstation has modern anti-virus/anti-malware software installed, and it is updated regularly.  The defensive programs should be installed on any device that it attached to your network, including mobile devices.  If you use Windows, you should be on the latest version. Every time an operating system update is released, it should be installed, as much of the updating is to plug security holes.

You should have a back-up system for all of your data, both at the server and workstation level.  If you use a cloud service such as those provided by Microsoft, Amazon, or other big providers, they have a built-in back-up protocol.  If you use a different vendor, check to see what their back-up protocol is.  Often, it will be a replication to a different server farm.   Back-up drives attached to each workstation, if configured properly, will protect against loss of data due to mechanical problems at the workstation.  But they may not protect again a ransomware attack, since the back-up drive may be similarly infected.  Therefore, it is somewhat more secure to use an on-line back-up system be employed since most malware attack software won’t “see” the online connection as an attached drive, and won’t be able to encrypt it.

Any device that stores business or client information should be encrypted.  For office workstations this means a program like Bitlocker.  For mobile devices, the default encryption and password may suffice, but you should supplement this with a remote ability to locate and or wipe the device.  Many of the instances of unauthorized access have been due to loss of a mobile phone or theft of a laptop.  Make sure that if this happens, the finder will be unable to do anything with the data on the device.

If your business or law firm network is going to be accessed by others, make sure that there is strong firewall protections between the various segments of the network.  The greatest vulnerability may come from access to a contractor’s system that has full access to your system.  Before allowing anyone remote access to your system, make sure that they have adequate security.

Lawyers should be aware that there are ethical rules that obligate you to make certain that you have taken “reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”  Model Rule of Professional Conduct 1.6(c).  The rules also note that competent representation requires that an attorney, “to maintain the requisite knowledge and skill, . . . keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology . . . . “  Comment 8, Rule 1.1

In spite of all of your protections, some bad guy may still be able to penetrate your system and steal or encrypt your data.   Your protection package should include cybersecurity insurance that will cover the expected costs of investigation, remediation, notification, fines, credit monitoring, litigation defense, an damages flowing from business interruption.   Yes, these premiums will add costs to your overhead, but, like every other type of insurance you are buying peace of mind with the hope that you will never need to use it.

One final note for federal contractors: there are a few formal hoops that you must just through, as defined by the National Institute of Standards and Technology (NIST).  Read more on that subject here.

 

About the Author

Theodore Banks concentrates his practice on antitrust, compliance, food law, and other corporate matters. Mr. Banks has extensive experience with corporate litigation, including responsibility for contested mergers, environmental contamination, advertising, insurance coverage, products liability, employment law, consumer protection, and packaging and recycling. He has a national reputation for work in corporate compliance and antitrust, and was an early proponent of corporate opt-out suits as plaintiff in antitrust litigation, such as Vitamin, Carbon Dioxide, Corrugated Container, Folding Carton, and Citric Acid Antitrust Litigation, recovering more than $100 million. Through his experience in all aspects of the food industry, Mr. Banks has deep familiarity with the regulatory frameworks and state and federal laws governing food manufacture, distribution, sales, and safety.

 

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Trick question, how much does the government charge contractors to register for SAM or any other government database?  The answer is zero, zip, zilch.   There is no charge to register for any government database.  And neither the Wizard of Oz nor any of these vendors can get you no bid contracts from any federal agency. Let’s start with Mr. Pirolo and his FEMA contract registration scheme.

FEMA Contract Registration.   Michael Pirolo, the owner of Government Contract Registry (GCR) was sentenced to four years and two months in federal prison for wire fraud. Pirolo served as the president of GCR doing business as FEMA Contract Registration. He employed telemarketers who, during communications with victim-companies, falsely claimed that, for a fee, GCR would “register” the companies with FEMA to enable them to receive preference in obtaining contracts from FEMA.  The telemarketers stated that for a one-time fee of $500, the customer would be registered with FEMA, and that this registration would place the customer on a list of preferred vendors. When the need for a vendor arose, the GCR telemarketer falsely stated that FEMA would bypass the contract acquisition process, contact the registered victim-company, and then offer a no-bid contract.  Mr. Pirolo netted hundreds of thousands of dollars before he was caught.

https://www.justice.gov/usao-mdfl/pr/palm-harbor-man-sentenced-prison-defrauding-more-1000-companies-over-fema-contracts

SAM Registration.   There are companies who market their services to federal contractors to handle their SAM registration renewals.  These companies require you to give them your password and user name for SAM.  Then they charge you for updating your SAM registration.  Your SAM update is always free on www.sam.gov.   I don’t even have time to tell you about all the GSA Schedule emails I get about the wonderful world of no bid contracts that I will get from GSA once I sign up with this GSA Schedule vendor.  Centre Law has its own PSS Schedule so I see what is going on in the industry.  My inbox is full of these types of emails.

Here is a screenshot from one of the many emails from vendors that I receive.  I had to input information on several different screens before I got to the one below.  In my opinion, it looks like an official government website but it is not.

It does not appear obvious at first, but the company does note on its website that it is a private company: “U.S. Contractor Administration is not a government agency. We are a third-party federal registration processing firm.

pic.png

 

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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In a recent decision on August 25, 2017, the GAO dismissed the protest of PennaGroup, LLC for failure to timely file comments on the agency reports.

On March 17, 2017, the Department of Homeland Security (DHS) issued an RFP for the design and construction of solid concrete border wall prototypes. The RFP instructed offerors to acknowledge any issued amendments by signing the accompanying form and advised offerors that failure to acknowledge all Amendments may result in an offeror’s proposal being found non-responsive. PennaGroup timely submitted proposals but only included acknowledge of the seventh and final amendment but did not include the acknowledgement form for amendments one through six. As a result, DHS found PennaGroup non-responsive and eliminated them from further competition. Upon exclusion from competition, PennaGroup filed a protest with the GAO.

Upon receipt of PennaGroup’s protest, the GAO prepared and distributed development letters to the parties, which stated that the due date for the agency to file its report was July 26th. The letter further advised that PennaGroup was required to submit written comments in response to the report and expressly stated: “[w]ritten comments must be received in our Office within 10 calendar days of your receipt of the report – otherwise, we will dismiss your protest.”

DHS timely filed its agency report on July 26th, which made PennaGroup’s comments due on August 7th. However, PennaGroup neither filed comments nor a request for an extension by the close of business on August 7th. The following day, the GAO asked PennaGroup to confirm whether it had filed comments and, in an email response, PennaGroup merely stated they had no arguments to add to their original bid protest. Unsurprisingly, the DHS filed a request for dismissal of the protest.

In dismissing the case, the GAO noted that that its Regulations provide that a protestor’s failure to file comments within ten calendar days shall result in dismissal of the protest unless an extension was granted. The GAO further noted that its Bid Protest Regulations do not allow for post-deadline extensions.

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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The Department of Labor has published its annual list of Labor Surplus Areas (LSA) for Fiscal Year 2018.  What is a LSA you ask?   A LSA is a civil jurisdiction that has a civilian average annual unemployment rate during the previous two calendar years 20 percent above the average annual civilian unemployment rates for all states & Puerto Rico during the same period.  Civil jurisdictions are defined as follows:

  1. A city of at least 25,000 population on the basis of the most recently available estimates from the Bureau of the Census; or
  2. A town or township in the States of Michigan, New Jersey, New York, or Pennsylvania of 25,000 or more population and which possess powers and functions similar to those of cities; or
  3. A county, except those counties which contain any type of civil jurisdictions defined in A or B above; or
  4. A “balance of county” consisting of a county less any component cities and townships identified in paragraphs A or B above; or
  5. A county equivalent which is a town in the States of Connecticut, Massachusetts, and Rhode Island, or a municipio in the Commonwealth of Puerto Rico.

The national unemployment rate during the past two years was 5.12 percent, so the areas included on the Department of Labor’s list have an unemployment rate of 6.1453 percent or higher. Being a LSA matters for the following reasons:

  1. The Administrator for Federal Procurement Policy uses the LSA list to identify where procurement set asides should be emphasized in order to strengthen our Nation’s economy;
  2. General Service Administration (GSA) Online Representations and Certifications Application (ORCA) system uses the LSA list as a tool to determine if a business qualifies as a Labor Surplus Area concern;
  3. The Small Business Administration uses the LSA list for bid selections for small business awards in Historically Underutilized Business Zones (HUBZones);
  4. Some state and local area governments use the LSA list to allocate employment related assistance (food stamps and training); and
  5. Private industry has used the LSA list for strategic planning and potential areas of human capita

 

The list of LSA’s can be found here: https://www.doleta.gov/programs/lsa.cfm

About the Author

Colin Johnson | 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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In the past I have written about subcontracting compliance from the Contractor Purchasing System Review (CPSR) audit prospective. The three step process of system existence, system procedure adequacy and compliance is a very effective way to meet the FAR 44.3 CPSR goal of “efficiency and effectiveness with which the contractor spends Government funds and complies with Government policy when subcontracting”. How efficient and effective the contractor procurement system performs goes beyond these three steps. Some of the factors that commonly impact on the acquisition process include planning, proper description of needs and funding. This article touches on a few aspects of these factors that if ignored can degrade the efficiency and effectiveness of your outsourcing processes.

Planning is the major factor and can encompass the other two, but each is worth discussing. Planning encompasses many things that don’t always get the attention they deserve. One thing is certain, if you don’t take the time to do a good comprehensive job up front you will pay for it later! One of the major aspects of planning is in the proposal phase make or buy decisions. The make or buy analysis is part of the process for creating a winning team.

You want to offer the client a winning team that meets their needs on time and at the right price. Do you provide the goods, components and services in-house or can you improve the “product” and pricing through partnering and subcontracting? The answer is to look for the best combination to win the contract. Is the outsourcing function within your company adequately represented on the proposal team? The subcontracting team can add value through market research identifying potential source and supporting small business plan development. Additionally, the subcontracting team can work with proposal team members on issue including flow down requirements, terms and conditions and pricing support.

Have you ever hear the complaint that the government wants you to competitively award scope that was promised to a team member? If the original proposal clearly identifies the team member as the teaming source for a specific scope, then the source selection issue is complete. In fact, you may be able to get the Contracting Officer to include the team member in clause 52.244-2(j) excluding them from the consent process. Unfortunately I have seen cases where the winning proposal used information from a subcontractor but did not clearly describe the teaming arrangement in line with FAR 9.6. If the original proposal had included a clear description of the teaming arrangement, you have a solid basis for the subcontract source selection and a solid response when the CPSR team questions the adequacy of your subcontract competition activities. The outsourcing function needs to be an active member of the proposal team to make sure the ground work is laid right up front!

A proper description of needs is not a new subject. Too often the internal customer (aka end user or requisitioner) is left to his or her own to come up with what is needed. The outsourcing function should be involved with the internal customer working with them to identify the best ways to meet their needs. If it is a recurring need, do you set up a competitively awarded catalog or blanket purchase arrangement? Or, do you set up a larger order with multiple deliveries coordinated with the internal customer’s schedule? If the internal customers’ needs are so specific that it limits competition, then you have the opportunity to work with them to do the market research to find alternatives or to substantiate the single or sole-source justification. In either case, you have a solid response when the CPSR team questions the adequacy of competition activities or basis for a commercial item determination. The outsourcing function needs to be actively involved with the internal customer right up front!

Funding is a subject that doesn’t always get the attention it deserves. Sure, you need money to support a purchase order/subcontract, and Under DFARS 252.244-7001 (c) (4), properly authorized requisitions are required.  But there are other issues around funding that can hamper efficient and effective outsourcing. One issue that can negatively impact you is adequate funding.

Inadequate funding on a requisition can lead to delays and increased costs in prime contract performance. Proper project planning and budgeting helps, but the funding source(s) and acquisition planning need to be worked together. For example, rental of heavy construction equipment should be based on the construction schedule the equipment is supporting. You would think that means a six month rental should be funded for six months. But, sometimes you see it “incrementally” funded through a series of requisitions. Here is where efficiency and effectiveness go out the window. The buyer/subcontract administrator must issue a series of monthly modification to add funds (buyer time away from other work). If the funding requisition is delayed, then invoices sit in Accounts Payable waiting for sufficient committed funds to pay the invoice (both buyer and A/P clerk have time away from other work). Late payments leads to stop work threats, complaints to the Contracting Officer, and questions/findings on accounting and purchasing audits (now management, buyers, A/P clerks and others have more time away from other work). When payment is slow, disgruntled subcontractors are less inclined to bid new work or offer better pricing (more work again and potential system audit issues related to a variety of issues such as; timely award, adequate competition, fair and reasonable pricing, subcontract closeout and file documentation).  Again, early involvement of the outsourcing function can help eliminate problems before they occur saving time and resources that would otherwise be consumed trying to patch and fix things later in the process.

I hope my point is clear. Early involvement by your subcontracting and purchasing staff pays big rewards to the overall success of your company. Beyond timely and successful prime contract performance, another benefit is improved compliance. When I see problems during compliance audits and CPSR reviews, the “root cause” is frequently the result of a “reactive procurement system” trying to fix things that could have been avoided by early, effective involvement with internal customer. With time being taken away from the primary task of procuring the goods and services needed, quality and compliance suffer. When people have the time and tools to do their jobs, they are going to give you the kind of results you need, successfully perform the prime contract and meet client audit expectations. That’s how you maintain an approved purchasing system!

About the Author

Jack Hott headshot | Centre Law & Consulting in Tysons, VA Jack Holt has more than four decades of experience as a contracts professional in Government and the private sector. A retired Air Force officer, he served multiple acquisition related assignments with The Air Force and Defense Contract Management Agency. These assignments included Assistant Professor of Acquisition Management, Air Force Institute of Technology, multiple in-plant assignments where he functioned as Principle Administrative Contracting Officer/DACO managing contract administration, pricing, government property, CAS and overhead approvals, supplier quality, and subcontract management.

After leaving the Air Force, Mr. Hott became principle consultant to a small veteran owned business developing and presenting training on a variety of government contracting subjects including cost/price analysis, contract administration and Cost Accounting Standards.

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In its August 25, 2017 decision the GAO sustained a bid protest from David Jones CPA PC (“Jones”) on the Department of Veterans Affairs’ (“VA”) refusal to establish a blanket purchase agreement following a request for quotations on Equal Employment Opportunity claims investigations. The principle issue of the decision revolved around the VA’s elimination of Jones’ proposal because of a single line item.

The solicitation advised offerors that technical approach was significantly more important than past performance and that, combined, technical approach and past performance were significantly more important than price. The solicitation also warned the VA would not establish a blanket purchase agreement with any vendor if the price submission was “questionable for reasonableness.” Jones was assigned a “good” technical rating but the VA also determined Jones had submitted an unreasonable price for a single line item. Ironically, every other line item in Jones’ proposal was lower than the mean of the other offerors. Following this initial evaluation, Jones was eliminated from consideration, with no further analysis from the VA.

The VA unsuccessfully argued that the solicitation supported exclusion based on a single high priced line item because the solicitation required not-to-exceed quantity for each line item. The GAO noted the premise of this argument was flawed because the solicitation did not provide any estimated quantities for the lines items.  Most importantly, the GAO took issue with the VA lack of evaluation on the effect of this single item’s price on the agreement as a whole. In order to justify exclusion, the VA needed to evaluate if that single line item would have created an overall unreasonably high price, or at least created an unacceptable risk that the price would be too high on a typical government order.

About the Author:

Tyler Freiberger Headshot | Centre Law & Consulting in Tysons, VA Tyler Freiberger
Associate Attorney

Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia.

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