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Small Business and Working With Similarly Situated Entities

If you are like me and work for a small business, you have been patiently waiting for the FAR Council to implement the Small Business Administration’s final rule from June 2016 that made major changes to the way performance requirements apply to small business in set-aide contracts. For those who don’t know, this change allows for a prime small business, WOSB, SDVOSB, EDWOSB, 8A, or a HUBZone company to subcontract in service contracts to similarly situated firms and not count towards the 50% subcontracted work amount that typically cannot be exceeded. For example, if you win a WOSB set-aside contract and want to subcontract to another WOSB, the work the second firm does would not count towards the 50% subcontract amount limit. As you can imagine, this a huge boon to small businesses and provides great flexibility to compete on larger contracts. As of March 22, 2017, the Defense Acquisition Regulatory Council (DARC) agreed to draft an interim FAR rule. Remember, this change isn’t automatically included in your current contracts. Under FAR 1.108(d)(3), the Contracting Officer (CO) “may, at their discretion, include changes in any existing contract with appropriate consideration.” Therefore, if you want to get credit for your subcontractor’s work to meet your set-aside requirements, make sure you petition your CO to update your contract with the new FAR rule when it is eventually implemented. Find more information concerning this rule change in the Federal Register.
 
About the Author Colin Johnson
Contracts Manager
Colin Johnson is a Contracts Manager who focuses on business development and federal contracts management. His expertise is in preparing quotes and responses for both government and commercial entities for training and legal support services.   The post Small Business and Working With Similarly Situated Entities appeared first on Centre Law & Consulting.
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Amazon.gov?

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
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. The post Amazon.gov? appeared first on Centre Law & Consulting.
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System for Award Management (SAM) Roll Out to Consolidate Ten Affiliated Sites

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:   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.   The post System for Award Management (SAM) Roll Out to Consolidate Ten Affiliated Sites appeared first on Centre Law & Consulting.
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Uncompensated Overtime and the Tooth Fairy

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

On June 7, 2016, the U.S. Department of State announced that it is implementing “catch-up” adjustments to the maximum amounts of the monetary penalties it assesses for regulatory violations. Under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, federal agencies must make a one time “catch-up” adjustment to their civil monetary penalties in order to account for inflation. Federal agencies are required to publish interim final rules with the initial penalty adjustment amounts by July 1, 2016, and the new penalty levels must take effect not later than August 1, 2016. The Penalties The U.S. Department of State Directorate of Defense Trade Controls assesses penalties for violations of the Arms Export Control Act and International Traffic in Arms Regulations. The following amounts will be assessed for certain violations after August 1, 2016, regardless of when the actual violation occurred: Each violation of The Arms Export Control Act, 22 U.S.C. §2778. This Act imposes export and import controls on certain defense articles and defense services. This includes registration, reporting, record keeping, and due diligence requirements, among many others. Previously, the maximum penalty was $500,000. The new maximum penalty will not exceed $1,094,010 per one violation. Each violation of the The Arms Export Control Act, 22 U.S.C. §2779a. This section of the Act prohibits incentive payments to satisfy any offset agreements under certain circumstances. Generally, any U.S. supplier of defense articles or services sold, licensed, or exported, among others, is prohibited from making any incentive payments for the purpose of satisfying, in whole or in part, any offset agreement with a foreign country. Defense offset agreements are understood as side agreements that provide additional incentives to the purchaser. Previously, the maximum penalty was $500,000. The new maximum penalty will not exceed $795,445 per one violation. Each violation of The Arms Export Control Act, 22 U.S.C. §2780. This section of the Act prohibits transactions with countries supporting acts of international terrorism. Transactions include exporting (directly or indirectly) or otherwise providing (by sale, lease, loan, grant, or other means) of any munitions items, providing credit guarantees, or otherwise facilitating the acquisition of any munitions. Previously, the maximum penalty was $500,000. The new maximum penalty will not exceed $946,805 per one violation. What Can I Do Before August 1, 2016? Have no fear and double-check whether you are compliant. The U.S. Department of State Directorate of Defense Trade Controls expects each U.S. exporter of defense articles and services to have comprehensive operational compliance programs. This may include policies and procedures on: Corporate commitment to the International Traffic in Arms Regulations (ITAR) compliance Tracking of controlled items and technical data Due diligence and internal monitoring Training and awareness Penalties for violations Reporting non-compliance issues The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 allows the U.S. Department of State to exercise its discretion to determine whether it should assess civil monetary penalties lower than the maximum amount. If your compliance program identifies at least one ITAR violation, it may be beneficial to consider whether mandatory reporting is required and whether to report it before the maximum penalties increase on August 1, 2016. You can learn more about the U.S. export controls and compliance requirements on June 23, 2016 during our webinar on New Opportunities for Small Businesses and U.S. Exporters.
Note that is post is for educational use only and does not constitute legal advice.

About the Author: Wojciech Kornacki
Government Contract and Compliance Counsel
Wojciech Kornacki focuses on federal Government contract compliance, bid protests, and federal litigation. He represents clients in matters involving Government Accountability Office bid protests, federal agency debarments, Boards of Contract Appeals litigation, and Export Controls (ITAR and EAR) and Trade Agreements Act compliance.   The post Don’t Get Caught By the Federal Civil Penalties “Catch up” Adjustments appeared first on Centre Law & Consulting.
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GSA’s Streamlined Offer Process for Successful Legacy Contractors

As many contractors are approaching the end of their 20-year contract period in the FSS program, the General Services Administration (GSA) has made it possible for successful legacy contractors to follow a streamlined offer process for their new 20-year contract. Clause A-FSS-11 has been updated so that a contractor can now submit an offer for a new contract under the same Schedule at any time during the existing contract period. Process Requirements In order to follow the streamlined offer process, contractors must meet ALL of the following criteria: The contractor has an existing Schedule and is submitting a new offer for the same SINs and Schedule Sales under the existing contract have averaged a minimum of $25,000 per year for the previous five years of reported sales There is a demonstrated pattern of satisfactory past performance under the existing contract To simplify the process for successful legacy contractors, GSA added clause SCP-FSS-001-S Instructions Applicable to Successful FSS Program Contractors to all solicitations. The following requirements were eliminated from SCP-FSS-001-S: Readiness Assessment Financial Statements Corporate Experience Past Performance (Open Ratings) Relevant Project Experience The Pathway to Success training requirement is also expected to be eliminated from SCP-FSS-001-S in all solicitations via a refresh/mass mod that is due to be released shortly. The Pathway to Success training has already been removed from Schedule IT 70 via Refresh 40. Notes on Proposal Submissions The eMod system has not been updated to distinguish between successful legacy proposals and new contractor proposals, however. In order to override the eMod system, contractors will need to either add a note manually in the system on the applicable page or upload a blank document for all items that are not required by SCP-FSS-001-S. When submitting your legacy proposal, you should include a listing of all active submitted quotes, established BPAs, and awarded orders under the existing contract. For each, the contractor must include the ordering activity name and point of contact, RFQ/BPA/order number, dollar value, and period of performance (including options). This information can be uploaded in eOffer as an “Other (optional – offeror defined)” document. The new legacy contract will overlap with the existing one until the agreed upon cancellation date of the existing contract. Contractors will utilize the new legacy contract for all new business opportunities. Our Recommendation In order to ensure a smooth transition from the existing contract to the new legacy contract, Centre recommends updating your existing contract prior to submitting a new legacy proposal. Review the labor categories, pricing, and other terms and conditions. If changes need to be made, modify your existing contract now so you can move the existing contract to the new legacy contract. However, please note an updated CSP-1 is required when submitting your legacy contract. About the Author: Julia Coon
Consultant
Julia Coon is GSA and VA Contract Consultant at Centre Law & Consulting. Julia works with the GSA/VA team in preparing new schedule proposals and post-award contract administration. She has experience in producing schedule renewal packages, various modification packages, small business subcontracting plans, and updates to GSA pricelists.   The post GSA’s Streamlined Offer Process for Successful Legacy Contractors appeared first on Centre Law & Consulting.
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Centre Law & Consulting

Centre Law & Consulting

 

Timeliness of Bid Protests

By Tyler Freiberger  Untimeliness is one of the most common reasons protests of government solicitations and awards before the Government Accountability Office (“GAO”) and The Court of Federal Claims are dismissed. The accompanying chart describes the somewhat harsh and complex rules required for filing before each body. For protests on how a solicitation is written, a contractor must protest simply before the bids are made. But other protests have strict timing demands measured from when the basis for the protest “is known or should have been known.” 4 C.F.R. 21.2. The definition of this phrase has been stretched repeatedly to include situations that would likely surprise unwary contractors. Last year, the GAO decided VMD Systems. The merits of the protest are not particularly interesting, but the decision does illustrate how liberally the GAO is willing to interpret “should have known.”  In VMD Systems, the contractor was excluded from the competitive range of a NASA contract. Hoping to learn as much as possible for why the award would go to another, the contractor elected to receive a debriefing from the government agency after the award was made, rather than a debriefing only on why it was excluded. After the debriefing, VMD protested its exclusion from the process claiming it was held at a higher standard than others. No dice. The GAO ruled that because VMD could have learned the basis of their protest by electing to take the earlier debriefing option, waiting until after VMD actually knew of the basis was untimely, and therefore the protest was dismissed. More recently, the Court of Federal Claims used similar logic to that applied by the GAO in VMD Systems. In Sonoran Technology, the Court of Federal Claims considered an odd set of events where one contractor, Sonoran, won the award, faced two different protests, lost the protest and then ultimately the award to a competitor.  As the original awardee, Sonoran had the right to intervene in the original protests but chose not to. When the award was eventually given to the competitor, Sonoran filed a protest of its own through a complaint to the Court of Federal Claims.  The court dismissed the complaint as untimely under the same reasoning used in VMD Systems; had Sonoran exercised the right to intervene in the original protests, it would have learned the basis for the complaint to the Court of Federal Claims much earlier therefore that is the date where the timeliness clock starts. So, what can a contractor do to protect his or her rights? The accompanying chart provides a summary of important rules and procedures required to protest before the GAO and the Court of Federal Claims. But as shown here, the deciding bodies often interpret the rules to require contractors to aggressively seek out any information that could support a protest and act immediately.       Forum     Timeliness     Performance Stay     Task Order/IDIQ     Filing Fees     Time Frame for Decision Government Accountability Office (GAO) Protest based upon improprieties in a solicitation: Must be filed prior to the time set for submission of initial proposals.   All other protests: Must be filed not later than ten days after the basis of the protest is known or should have been known.   Debriefing exception: protests challenging a procurement conducted on the basis of competitive proposals under which a debriefing is requested and, when requested, is required. In such cases, the initial protest shall not be filed before the debriefing date offered to the protester, but shall be filed not later than ten days after the date on which the debriefing is held.     Pre-award protest: When the agency has received notice from the GAO of a protest, the Agency must delay the award.   Post-award protest: An automatic stay applies if the protest is filed within five days of a requested and required debriefing, or, if no debriefing was requested and required, within ten days of contract award provided that the GAO notifies the agency within that time frame. The GAO only has jurisdiction over civilian agency task order awards valued over $10 million.   The GAO’s jurisdictional threshold for military agency task order protests is $25 million.   Department of Defense task orders issued under civilian agency Government Wide Acquisition Contracts (GWACs) are subject to the $10 million threshold applicable to civilian task order awards.   There is no minimum value dollar threshold for Federal Supply Schedule (FSS) contracts. Currently none. GAO will be implementing a $350 filing fee in the future. GAO shall issue a decision on a protest within 100 days after it is filed. Forum Timeliness Performance Stay Task Order/IDIQ Filing Fees Time Frame for Decision Court of Federal Claims (COFC) Pre-award protest: No specific time limits but errors apparent on the face of the solicitation must be protested prior to the time set for submission of initial proposals.   Post-award protest: No specific time limits but serious delay may impact the decision. No automatic stay applies at the COFC. Instead, the protester must seek a preliminary injunction. The COFC has jurisdiction over task order protests only where the protester alleges an increase in scope, period, or maximum value of the contract under which the order is issued or where a protest of an order valued in excess of $10 million (civilian task orders)/$25 million (military task orders). $350. No set time frame for decision but the court’s practice is to expedite protest cases to the extent practicable and to conduct hearings on motions for preliminary injunctions at the earliest practicable time.   About the Author: Tyler Freiberger
Associate Attorney
Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia.     The post Timeliness of Bid Protests appeared first on Centre Law & Consulting.
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Centre Law & Consulting

Centre Law & Consulting

 

VETS-4212 Reporting Begins August 1, 2017

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 The post VETS-4212 Reporting Begins August 1, 2017 appeared first on Centre Law & Consulting.
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GSA OIG Reviews Industrial Operations Analysts: What’s in Your IOA’s Report Card?

As a consultant assisting clients prepare for their Industrial Operations Analyst (IOA) visit, I am surprised by the anxiety that precedes these “I’m here to help you” visits. I receive comments from “I didn’t sleep all night” and “I forgot my Basis of Award (BOA) customer” to “Will the IOA cancel my contract as I forgot to pay my Industrial Funding Fee for the last quarter.” The anxiety has increased over the last two years as the IOAs are now reviewing your GSA Schedule annually if you have annual sales exceeding $150,000. While the majority of IOAs are trying to help you understand compliance with your schedule requirements, there are a few that want to add to your anxiety. I witnessed the IOA who started the visit with the comment that she was there to get money back for GSA and an IOA who threatened cancellation of the schedule (and no, IOAs cannot cancel your schedule contract). In GSA’s Office of Inspector General (OIG) Semiannual Report to Congress for the period of April 1, 2016 through September 30, 2016, the tables were turned and the IOAs were reviewed. IOA Assessment Report Purpose The OIG conducted an audit of the contractor assessments program to determine if: Contractor assessments were effective to determine contractors’ compliance with schedule contract terms and conditions IOAs were conducting their assessments in accordance with FAS guidance IOAs were communicating those results in a timely fashion and in the appropriate format IOAs were developing and completing training in accordance with program requirements   IOA Assessment Report Findings As a result, the OIG concluded the following: Assessments add value as a method to monitor contractor compliance with terms and conditions of schedule contracts IOAs are generally conducting assessments in accordance with guidance OAs are effectively communicating those results in a timely fashion and in the required format   IOA Assessment Areas of Improvement The OIG also concluded that although the assessments were generally effective, they identified areas that could be improved “to enhance the consistency, completeness, and value of the assessments and reports.” For example: FAS guidance does not provide specific requirements for sampling schedule sales transactions to ensure that contractors are properly reporting and remitting Industrial Funding Fees and resumes to verify that qualified labor for services are being provided for customer agencies. IOAs are not consistently reporting on labor qualifications. As a result, FAS does not have assurance that labor qualifications were assessed. FAS has not established a formalized, national training curriculum for experienced IOAs.  
Therefore, recommendations from the OIG to the FAS Commissioner include: Revising the IOA Training Manual to include details on a risk-based sampling methodology Revising the assessment report template to include a specific section for reviewing labor qualifications to ensure consistent assessments Establishing and implementing a formal national training curriculum for experienced IOAs   What Can I Do? In summary, Contract Clause 552.215-71 (Examination of Records) allows the IOA to review contractors’ records to verify contractual compliance. Their role is to conduct contractor assessments as well as monitor sales reporting, sales adjustments, and Industrial Funding Fee remittance (previously conducted by your Administrative Contracting Officer). Remember that the results of the IOA visit are advisory to your Contracting Officer (CO). Their assessment will be included in your GSA file for review prior to your Option Renewal. If you receive a negative assessment or don’t agree with a finding, you should submit a letter of clarification to your CO. The best thing you can do to in advance of your IOA visit is to be prepared. Gather all documents requested by your IOA prior to the visit or virtual call. Review the terms and conditions of your schedule and know your Basis of Award and discounting. Ensure your GSA Schedule catalog is up to date and matches the last awarded modification. If you stay compliant with the requirements of your Schedule, then you will have a successful IOA review. Your IOA contact information can be found at https://vsc.gsa.gov/tools/aco_ioa.cfm and Centre’s GSA Consultants are available to assist you through the process as well. About the Author: Maureen Jamieson
Executive Director of Contracts and Consulting
Maureen Jamieson has more than twenty-five years of experience managing federal contracts. She is highly experienced in solving client pricing problems and implementing effective pricing strategies for placing products and services on GSA Schedule contracts.   The post GSA OIG Reviews Industrial Operations Analysts: What’s in Your IOA’s Report Card? appeared first on Centre Law & Consulting.
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Centre Law & Consulting

Centre Law & Consulting

 

GSA’s Streamlined Offer Process for Successful Legacy Contractors

As many contractors are approaching the end of their 20-year contract period in the FSS program, the General Services Administration (GSA) has made it possible for successful legacy contractors to follow a streamlined offer process for their new 20-year contract. Clause A-FSS-11 has been updated so that a contractor can now submit an offer for a new contract under the same Schedule at any time during the existing contract period. Process Requirements In order to follow the streamlined offer process, contractors must meet ALL of the following criteria: The contractor has an existing Schedule and is submitting a new offer for the same SINs and Schedule Sales under the existing contract have averaged a minimum of $25,000 per year for the previous five years of reported sales There is a demonstrated pattern of satisfactory past performance under the existing contract To simplify the process for successful legacy contractors, GSA added clause SCP-FSS-001-S Instructions Applicable to Successful FSS Program Contractors to all solicitations. The following requirements were eliminated from SCP-FSS-001-S: Readiness Assessment Financial Statements Corporate Experience Past Performance (Open Ratings) Relevant Project Experience The Pathway to Success training requirement is also expected to be eliminated from SCP-FSS-001-S in all solicitations via a refresh/mass mod that is due to be released shortly. The Pathway to Success training has already been removed from Schedule IT 70 via Refresh 40. Notes on Proposal Submissions The eMod system has not been updated to distinguish between successful legacy proposals and new contractor proposals, however. In order to override the eMod system, contractors will need to either add a note manually in the system on the applicable page or upload a blank document for all items that are not required by SCP-FSS-001-S. When submitting your legacy proposal, you should include a listing of all active submitted quotes, established BPAs, and awarded orders under the existing contract. For each, the contractor must include the ordering activity name and point of contact, RFQ/BPA/order number, dollar value, and period of performance (including options). This information can be uploaded in eOffer as an “Other (optional – offeror defined)” document. The new legacy contract will overlap with the existing one until the agreed upon cancellation date of the existing contract. Contractors will utilize the new legacy contract for all new business opportunities. Our Recommendation In order to ensure a smooth transition from the existing contract to the new legacy contract, Centre recommends updating your existing contract prior to submitting a new legacy proposal. Review the labor categories, pricing, and other terms and conditions. If changes need to be made, modify your existing contract now so you can move the existing contract to the new legacy contract. However, please note an updated CSP-1 is required when submitting your legacy contract. About the Author: Julia Coon
Consultant
Julia Coon is GSA and VA Contract Consultant at Centre Law & Consulting. Julia works with the GSA/VA team in preparing new schedule proposals and post-award contract administration. She has experience in producing schedule renewal packages, various modification packages, small business subcontracting plans, and updates to GSA pricelists.   The post GSA’s Streamlined Offer Process for Successful Legacy Contractors appeared first on Centre Law & Consulting.
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Too Small For Contractor Purchasing System Review? You’re Still at Risk!

You are still at risk of Government oversight/review even if you fall below the threshold for the Contractor Purchasing System Review (CPSR).1 While, CPSR is a total business system review, there is a series of other Government activities that will look into your procurement business processes. Some of these other activities include; proposal analysis, interim payment reviews, incurred cost submissions, and compliance reviews with DFARS business system clauses. Proposal analysis by the Government can include subcontracted effort, especially when cost analysis is performed. Your procurement procedures on solicitation, cost/price analysis, competition, flow down requirements, procurement file organization and others will form the basis for developing and documenting the information the Government will want to review. Does your current documented process produce adequate analysis and documentation to support your proposals? Interim payment reviews start in with your Accounting Department’s invoice, but can quickly move to the Procurement Department for backup on subcontract billing terms, invoice review and approval, evidence of adequate funding, basis for indirect billing rates and subcontractor hours and timesheets. What do your post-award administration procedures say about administration of payments to subcontractors, and do your records support your due diligence when approving subcontractor invoices? The annual incurred cost submission (ICS pronounced “ICE”) seems like a cost accounting exercise, but the Government auditors will find their way into procurement records! In addition to the due diligence of invoice review in the preceding paragraph, be prepared to provide closeout documentation that supports; successful completion of subcontracted work, proper subcontract final billing/payment, and deobligation of excess funds. Do you procurement procedures cover when and how these steps will be taken? Do you know where the documentation is located? The DFARS clause 252.244-2001, Contractor Purchasing System Administration, isn’t just for the big guys. The DFARS clause will be included in all defense contracts containing FAR 52.244-2, Subcontracts. This FAR clause can be found in cost-reimbursement contracts and most other contracts exceeding the simplified acquisition threshold, currently $150,000. The one break you may get is DFARS 252.242-7005, Contractor Business Systems, (this is the one that requires withholds for “significant deficiencies”) only goes in your contract if you are subject to Cost Accounting Standards.2 The DFARS 252.244-2001 clause lists 24 system criteria, covering what Defense Contract Management Agency sees as 29 major purchasing areas. These areas cover everything from make or buyer decisions, funding authorization, solicitation, competition, cost/price analysis, small business, and all other points up through and including closeout!3 Are your company policies, procedures and records up to the task of proving you meet the requirements of this business system clause? As you can see, just because you fall below the radar for a formal CPSR, you are not off the hook! You are still vulnerable for withholds, delayed payments, cost disallowance, and poor performance ratings effecting new awards. The best protection against these vulnerabilities is good procedures that adequately cover requirements, and a well trained staff that documents compliance with your procedures.   1 On October 7, 2016, DCMA executed a Class Deviation raising the CPSR threshold to $50M effective through December 31, 2017. The rationale is the current $25M threshold has not changed since 1996. 2 However, the Contracting Officer can still take measures to protect the Government’s interest if problems are thought to exist within your procurement system. 3 See DCMA CPSR Guidebook   About the Author Jack Holt
Jack R. Hott has more than four decades of experience as a contracts professional in Government and the private sector. The post Too Small For Contractor Purchasing System Review? You’re Still at Risk! appeared first on Centre Law & Consulting.
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The Promoting Value Based Procurement Act of 2017 Approved by House Oversight Committee

Last week the House Oversight and Government Reform Committee approved the Promoting Value Based Procurement Act of 2017 on a voice vote without any dissent, meaning the bill now proceeds to the House floor. The Act, which was initially introduced in June, substantially limits the number of federal contracts that may use the lowest-priced bid as the major deciding factor – this means a severe limit on lowest price technically acceptable, or LPTA, contracts. In fact, the current text of the bill requires revision of the FAR to require that LPTA source selection criteria are only used in six specified situations. Further, the bill mandates that, to the maximum extent practicable, the use of LPTA should be avoided in a procurement that is predominately for the acquisition of (1) information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, audit or audit readiness services, or other knowledge-based professional services; (2) personal protective equipment; or (3) knowledge-based training or logistics services in contingency operations or other operations outside the United States, including in Afghanistan or Iraq. Rep. Gerry Connolly, D-Va., one of the bill’s co-sponsors, said during the markup that the use of LPTA contracts has become too rigidly applied and has “started to calcify some large chunks of contracting in the federal sphere.” He continued, “When an agency seeks the assistance of a company to help it analyze and address cybersecurity needs, for example, it might not know the extent of services that will eventually be needed,” and “quality and innovation must be considered.” About the Author: Heather Mims
Associate Attorney
Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow. The post The Promoting Value Based Procurement Act of 2017 Approved by House Oversight Committee appeared first on Centre Law & Consulting.
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The Misplaced Rage Regarding Equifax’s Post Data Breach “Contract Award”

Much has been said on the security breach that exposed up to 145 million Americans’ most sensitive information. Not only had Equifax,  some say negligently, exposed half of America’s social security numbers, credit card information, and just about anything else needed to steal an identity, but the company thoroughly botched the cleanup by directing customers to a dubiously credentialed website and made a not-so-subtle attempt to induce its customers to waive any right to sue. The remarkable nature of the incident even received a 15-minute break down by HBO’s John Oliver, which is by far the most entertaining way to catch up on the breach if you have been in hiding for the last month. The IRS award of a seven million dollar contract to Equifax, made shortly after the security hack, seemed to put a cherry on top of a perfect media outrage story. And rage they did. After Politico “discovered” the “sole-source award” by the IRS to Equifax, every major media outlet from Fox News to CNN ran stories mocking the agency’s poor decision. Senators from both sides of the aisle openly scolded the IRS for handing Equifax government funds without even allowing other companies to compete for the contract. Through a grin, Mr. Oliver told his crowd of the award, made on the very same day the former CEO was being chewed up in an open Senate hearing. How could something like this happen? Simply put, because a law aimed at preventing fraud and abuse required the IRS to give Equifax the contract, without any competition. Federal contractors are well aware of what is called a “statutory stay.” When the government wants to buy goods or services, most of the time it must follow very strict and complicated rules. One such rule requires the government agency to give a debriefing to disappointed contractors when their bid was passed over in favor of another’s. For a variety of reasons, the contractor may believe the government made a mistake in its decision or perhaps something more sinister is to blame for the loss. If the contractor “protests” the decision within five days of the debriefing, the contract at issue is automatically frozen while the Government Accountability Office takes a look under 31 U.S.C. § 3553. The reason behind the law is fairly plain – i.e., to avoid a situation where a company begins performing for the government, and racking up costs, only to have that contract overturned at a much later date. So about this infamous IRS “award” to Equifax; it was made after the IRS chose a different company to perform on a contract where Equifax was the incumbent. Equifax protested, activated the automatic stay described above, and the IRS was forced to grant a short extension to Equifax’s previous contract while the protest was decided. Notably, the short extension was publicly made, because “a sole source order is required to cover the timeframe needed to resolve the protest on contract TIRNO-17-Z-00024. This is considered a critical service that cannot lapse.” The protest was quickly denied, and now a new company will take over performing services to the IRS. Notably, the IRS decision to take the contract away from Equifax was made long before the media “put pressure on the IRS,” or before both sides of the aisle joined together in decrying the purported incompetent waste of government funds. While the vagaries of government procurement procedure may not be as shocking as the story told by the major outlets, and it is certainly not nearly as funny as the John Oliver segment, it is however the real explanation to the latest chapter of the Equifax security breach. The post The Misplaced Rage Regarding Equifax’s Post Data Breach “Contract Award” appeared first on Centre Law & Consulting.
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President Trump Notwithstanding, Employment Law Compliance Should Remain A Top Concern in 2017

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
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.   The post President Trump Notwithstanding, Employment Law Compliance Should Remain A Top Concern in 2017 appeared first on Centre Law & Consulting.
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Seven Steps for an Effective Compliance Program for the Buy American Statute and Trade Agreements Act

Are you selling your products or services to the U.S. Government? If so, what does your compliance program look like? There are seven different elements that you should have in place in order to be confident that your compliance program can be effective. The Buy American Statute (BAS) requires the U.S. Government to give a preference to U.S.-made goods over foreign-made goods in federal procurements. The Trade Agreements Act (TAA) prohibits the U.S. Government from buying products and services from non TAA-eligible countries such as China. The TAA is applicable to all federal supply schedules. Both acts are discussed in detail in the Federal Acquisition Regulation (FAR) Part 25, Foreign Acquisition. Accountability:
Accountability must permeate your entire organization. It must reside within upper management and each employee alike. Accountability consists of committing sufficient resources for compliance and designating appropriate senior business representatives to ensure overall responsibility. Accountability also means that your business will correct errors, conduct internal investigations, report certain violations, and recognize your employees who ensure that your business stays TAA and BAS compliant every day of the year. Due Diligence:
Due diligence is always required to ensure all sales are TAA and BAS compliant. Each federal contractor who sells to the U.S. Government must comply with the federal law and FAR. When determining whether a particular product is compliant, each contractor should be able to answer the following questions: • What is the country of origin for this product?
• How do I know this and what are my records?
• How current is the information?
• Who do I contact when I am not sure? While vendor-provided letters of supply show due diligence, it is always important to ensure that such letters are current. Another way to ensure due diligence is to conduct an annual review of all the letters of supply and to sample individual transactions for compliance. In close-call situations, federal contractors may submit a request to the U.S. Government for a country of origin determination. Internal Policies:
Your business operations will be more efficient and predictable if your employees can understand and follow updated written policies and internal checks. Your policies will allow your employees to quickly make right decisions and seek assistance when necessary. It is generally a good idea to have internal policies on compliance monitoring, due diligence, recordkeeping, training, reporting of TAA and BAS violations, and code of business ethics. Other policies may be applicable based on your specific risks. Training and Awareness:
There are always new developments in the areas of BAS and TAA. Recently, Montenegro and New Zealand became the newest “designated countries” under the World Trade Organization Government Procurement Agreement. In May 2016, U.S. Congressman Pete Visclosky included certain Buy American Statute requirements in the Fiscal Year 2017 National Defense Appropriations Act. This may require the U.S. Department of Defense to purchase U.S.-made armor plate, mooring chains, ball bearings, and certain engine components among others. Another bill seeks to redefine “U.S.-made” altogether. Staying current with the new developments is a critical part of your compliance program. Track and Automate:
It is difficult to accurately track hundreds of individual transactions in a program like MS Excel all the time. This is why it is important to automate as much as possible. Automation also means preventing employee over-rides and having a reliable backup. You will know that your tracking system is working, for example, when it reflects the latest update from one of your vendors reporting that its products are made in Morocco this month and now your sales department will be able to sell more to the U.S. Government. Communicate and Cooperate:
Communication with vendors and across your business is a must. Your vendors must understand the importance of letting you know that their products that were made in Japan last month are made in China this month. Your compliance department must notify your sales department whether the products you sell to the U.S. Government must be TAA and BAS compliant or not. At the same time, the U.S. Government requires federal contractors to make mandatory disclosures regarding selling TAA non-compliant products. When such disclosures are made, the U.S. Government expects full cooperation. This requirement has been recently highlighted by the U.S. Department of Justice September 2015 Memorandum commonly known as the “Yates Memorandum”. Revise and Update:
Since there are always new changes and requirements, it is important to revise and update your policies and internal checks. This should be done immediately or at least on a monthly basis. Currently, the General Services Administration requires all vendors to verify that their products are TAA compliant. If they are not, they must be removed from their GSA/Federal Supply Schedule. Federal contractors with effective compliance policies will ensure having only compliant products on their schedules. Effective Trade Agreements Act and Buy American Statute compliance allows large and small businesses to sell more to the U.S. Government and to seize on new opportunities. If you have questions or would like to learn more about compliance and the latest Trade Agreements Act and Buy American Statute developments, contact Mr. Kornacki at 703-288-2800 or info@centrelawgroup.com. Note that is post is for educational use only and does not constitute legal advice.

About the Author: Wojciech Kornacki
Government Contract and Compliance Counsel
Wojciech Kornacki focuses on federal Government contract compliance, bid protests, and federal litigation. He represents clients in matters involving Government Accountability Office bid protests, federal agency debarments, Boards of Contract Appeals litigation, and Export Controls (ITAR and EAR) and Trade Agreements Act compliance.   The post Seven Steps for an Effective Compliance Program for the Buy American Statute and Trade Agreements Act appeared first on Centre Law & Consulting.
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Do You See a Link Between Maintaining Your GSA Schedule and the Movie Psycho?

By Maureen Jamieson As quoted by Norman Bates in Psycho – “She just goes a little mad sometimes. We all go a little mad sometimes. Haven’t you?” I’m not naming names, but I have worked with many clients who have gone quite mad when working to ensure compliance with their GSA Schedules. Having just celebrated Halloween, I am reminded of some frightening misconceptions surrounding GSA Schedules. Maintaining compliance with your schedule can be a grueling experience. Let’s not forget that blood-curdling stress as you prepare to meet or talk to your Industrial Operations Analyst (IOA) or that bone-chilling realization that you forgot to pay your Industrial Funding Fee (IFF) on time. Do you understand GSA’s current terms and conditions? Do you have the knowledge to ensure compliance with your GSA Schedule? Take Centre’s True or False quiz (with answer key below) beginning with our teams most frequently asked questions: The Maximum Order Threshold (MOT) established for a GSA Schedule contract serves as a limit on the dollar value of individual task orders placed under that Schedule. GSA contractors must accept the Governmentwide purchase card for orders under the micro-purchase threshold ($3,500). The 0.75% Industrial Funding Fee (IFF) is already included in the price of items on GSA Advantage!. An advantage for sellers under Federal Supply Schedule (FSS) orders is that the Government has no audit rights. Participating Dealers on a Schedule contract may bill the government directly on behalf of the Schedule holder. A digital certificate is required to report sales and pay the Industrial Funding Fee (IFF) in the new Transactional Data Reporting (TDR) FAS Sales Reporting System. GSA/VA Schedule Price Lists submitted via the Schedules Input Program (SIP) are automatically posted to GSA Advantage. Multiple modification actions such as economic price adjustments and deletion mods can be combined in one modification and submitted via the eMod system. Only authorized negotiators with signature authority and digital certificates are permitted to submit certain modifications and sign modifications in the eMod system. Digital certificates automatically renew every two years. Not maintaining compliance with the terms and conditions of your GSA Schedule can cost your company money, time and unwanted stress. If you’re feeling GSA stress or just want to learn more about GSA Schedules, consider attending our GSA Boot Camp on November 14 and 15 at Centre’s office located in Tysons, VA. See our website for details. ANSWER KEY: 1) False 2) True 3) True 4) False 5) True 6) True 7) False 8) False 9) True 10) False The post Do You See a Link Between Maintaining Your GSA Schedule and the Movie Psycho? appeared first on Centre Law & Consulting.
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NDAA Curbs Bid Protests (Somewhat) But Adds Enhanced Debriefings

By Barbara Kinosky  Yes, you read that right.  Deep in the murky depths of the $700 billion fiscal 2018 National Defense Authorization (NDAA) bill is language that puts a chill down the spine of protesters. Companies with revenue more than $250 million will have to pay the costs for filing losing protests on DoD procurements at the GAO.  Now protestors pay their own costs and attorneys’ fees with some exceptions. Section 827 of the NDAA would require DoD to launch a pilot program beginning in late 2019 and ending in late 2022 that would require those unsuccessful DoD protestors to pay DoD’s “costs incurred in processing protests.”  As in pilot programs there will be the usual report (which is where the writers of reports will make out big time) on the success of the pilot program. Why you may ask if this happening?  House-Senate conferees in a rare display of unity, agreed that contractor bid protests needed to be reduced to reduce the time of the procurement cycle, particularly with weapons systems.  This from a Congress who hasn’t done much (my editorial note). Second editorial note from me.  Most weapons systems contacts are very large.  They are larger than the national debt of Venezuela, which is very large indeed.  So, one would think that given the creep on cost on many weapons systems contracts one would want an even greater degree of scrutiny on those procurements.  Need I mention the mid-air refueling tanker cost woes? Other questions that will hopefully be addressed in the regulations.  How are costs computed?  How is revenue computed? Debriefings – NDAA Section 818 New requirements: In the case of a contract award in excess of $100,000,000, a requirement for disclosure of the agency’s written source selection award determination, redacted to protect the confidential and proprietary information of other offerors for the contract award, and, in the case of a contract award in excess of $10,000,000 and not in excess of $100,000,000with a small business or nontraditional contractor, an option for the small business or nontraditional contractor to request such disclosure (2) A requirement for a written or oral debriefing for all contract awards and task or delivery orders valued at $10,000,000 or higher. (3) Provisions ensuring that both unsuccessful and winning offerors are entitled to the disclosure above and the debriefing Plus, a chance to ask follow up questions Both the winning and losing offerors would be entitled to a debriefing – which at this time, I sparkly say, are still free Other Stuff I Read So You Don’t Have to Section 802 – DoD will establish a pool of intellectual property experts to get a handle on exactly who owns what Section 803 – new regulations on using private auditors to do incurred cost audits Section 806 – The micro purchase threshold will be increased from $3,000 to $10,000. Section 808 – another committee will be formed! This one on technology threats Section 811 – increase on submission of cost and pricing data numbers and a bit of an increase on the contracting officer’s authority to get such data Section 822 – a bit of an affirmation of using LPTA for procuring expendable goods Service Contract Act. On another note, I gave four different speeches last week all on the Service Contract Act, now referred to as the Service Contract Labor Standards.  That must be a record.  Guinness Book of Records – is there a category for the most speeches in one week on the Service Contract Act?  In any event, no one at any of the four presentations fell asleep and many even asked questions.  More I cannot ask for!   Happy Thanksgiving all! The post NDAA Curbs Bid Protests (Somewhat) But Adds Enhanced Debriefings appeared first on Centre Law & Consulting.
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GAO Won’t Reconsider Protests Dismissed During Jurisdiction Lapse

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
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 GAO Won’t Reconsider Protests Dismissed During Jurisdiction Lapse appeared first on Centre Law & Consulting.
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Increased Micropurchase and Simplified Acquisition Thresholds May be Implemented Sooner Than Later

By Wayne Simpson, Centre Consultant, CFCM, CSCM Good news for Federal contractors and buyers.  On February 16, 2018, the Civilian Agency Acquisition Council (CAAC) issued CAAC Letter No. 2018-02 to Federal agencies regarding a class deviation to the Federal Acquisition Regulation (FAR) for implementing the new increased micropurchase and simplified acquisition thresholds.  The National Defense Authorization Act (NDAA) for Fiscal Year 2018 (Public Law 115-91, December 12, 2017) (NDAA 2018), raises the micropurchase and simplified acquisition thresholds for Federal acquisitions. Section 806 of NDAA 2018 increases the micropurchase threshold for products only from $3,500 to $10,000.  The micropurchase thresholds for acquisitions involving services and construction services remain unchanged.  The micropurchase threshold for services remains $2,500 (Service Contract Labor Standards—formerly the Service Contract Act of 1965), and $2,000 for construction services (Construction Wage Rate Requirements Statute—formerly the Davis-Bacon Act). Section 805 of NDAA 2018 increases the simplified acquisition threshold from $150,000 to $250,000. FAR Case 2018-004 was established to implement these statutory changes in the FAR.  CAAC Letter No. 2018-02 indicates agencies may have a need to use the increased thresholds prior to publication of the FAR changes.  The CAAC letter constitutes the consultation required under FAR with the CAAC allowing agencies to authorize a class deviation to implement the changes effective immediately.  Some agencies may elect to implement through a FAR class deviation immediately, while others may wait for publication of the actual rule. A change to the micropurchase threshold contained in Section 217(b) of NDAA for Fiscal Year 2017 (Public Law 114-238) (NDAA 2017), not yet implemented, was overtaken by NDAA 2018.  NDAA 2017 changed a portion of the micropurchase threshold definition in FAR 2.101, to increase the micropurchase threshold for acquisitions from institutions of higher education or related or affiliated nonprofit entities, or from nonprofit research organizations or independent research institutes to $10,000.  The new micropurchase threshold of $10,000 set by NDAA 2018 makes no such distinction. There are some exceptions to the new $10,000 micropurchase threshold.  Acquisitions for supplies or services, as determined by the Agency Head, to be used to support contingency operations; to facilitate defense against, or recovery from cyber, nuclear, biological, chemical or radiological attack; to support a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate provisions of international disaster assistance or to support a response to an emergency or major disaster (except for construction) have a higher micropurchase threshold, $20,000 in the case of any contract to be awarded performed, or purchase to be made, inside the United States, and $30,000 if outside the United States. The simplified acquisition threshold increase will affect the applicability of many FAR-prescribed provisions and clauses which are tied to the simplified acquisition threshold, as well as FAR Part 13, Simplified Acquisition Procedures.  The increase will allow government contracting officers to buy more efficiently using FAR Part 13.  FAR clauses applicable at the new simplified acquisition threshold should benefit government contractors by reducing the compliance burden for those clauses and provisions. Please also note changes to FAR Part 19, Small Business Programs because of the threshold changes.  Specifically, FAR 19.203, Relationship Among Small Business Programs, requires the acquisition of supplies and services with anticipated values exceeding $10,000 (and the exceptions noted above) and $250,000 are automatically reserved for small business (see also FAR 19.502-1). There are also some exceptions to the new $250,000 simplified acquisition threshold. Acquisitions for supplies or services, as determined by the Agency Head, to be used to support contingency operations; to facilitate defense against, or recovery from cyber, nuclear, biological, chemical or radiological attack; to support a request from the Secretary of State or the Administrator U.S. Aid to facilitate provisions of international disaster assistance or to support a response to an emergency or major disaster (except for construction) is $750,000 in the case of any contract to be awarded performed, or purchase to be made, inside the United States, and $1.5 Million if outside the United States. Lastly, the simplified acquisition threshold for acquisitions for supplies or services, as determined by Agency heads, to be used to support a humanitarian or peacekeeping operation is $500,000. About the Author: Wayne Simpson
Consultant
Wayne Simpson is retired from the U.S. Department of Veterans Affairs (VA) after 38 years of federal service. He served as the Executive Assistant to VA’s Deputy Assistant Secretary for Acquisition and Logistics where he was the primary staff advisor to the Deputy Assistant Secretary, who serves concurrently as VA’s Senior Procurement Executive and Debarring Official.   The post Increased Micropurchase and Simplified Acquisition Thresholds May be Implemented Sooner Than Later appeared first on Centre Law & Consulting.
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Pentagon Issues Internal Warning Against Use of Lenovo Equipment

Uh-oh, Lenovo… On September 26, the Pentagon’s Directorate for Intelligence, J-2, reportedly issued an internal report warning against the use of equipment made by computer manufacturer Lenovo because of concerns regarding potential cyber spying against defense networks. J-2 supports the Chairman of the Joint Chiefs of Staff, the Secretary of Defense, Joint Staff, and Unified Commands, and it is the national focal point for crisis intelligence support to military operations, indications, and warning intelligence in DoD as well as Unified Command intelligence requirements. Per a report from Bill Gertz of The Washington Free Beacon, the Chinese Academy of Science, a Chinese government research institute, owns a 27 percent stake in Lenovo Group Ltd. The J-2 report purportedly states that “cyber security officials are concerned that Lenovo computers and handheld devices could introduce compromised hardware into the Defense Department supply chain, posing cyber espionage risks.” The report also purportedly contains a warning that Lenovo is seeking to purchase U.S.-based IT companies in order to gain access to classified defense networks. The cyber security concern surrounding Lenovo is evidently not a new one as Gertz’s article reports that, following the company’s 2014 purchase of IBM’s BladeCenter line of computer servers (for a cool $2.1 billion), the U.S. Navy replaced the IBM servers within the “Aegis” battle management systems deployed on guided missile destroyers and cruisers over concerns that China could hack the warships through the server. And, for those wondering, “why isn’t this a TAA issue?,” the server business Lenovo purchased is based out of North Carolina. Perhaps “country of ownership” will become as relevant as “country of origin.” About the Author: David Warner
Partner
David Warner is a seasoned legal counselor with extensive experience in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David leads Centre’s audit, investigation and litigation practices.   The post Pentagon Issues Internal Warning Against Use of Lenovo Equipment appeared first on Centre Law & Consulting.
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Ownership & Control of Service-Disabled Veteran-Owned Small Businesses

By Wayne Simpson, CFCM, CSCM SBA Issues Proposed Rule –Comments due by March 30, 2018   The U.S. Small Business Administration (SBA) published its proposed rule for Ownership and Control of Service-Disabled Veteran-Owned Small Business Concerns in the Monday, January 29, 2018, edition of the Federal Register. The proposed rule, part of a joint effort by VA and SBA to reduce the regulatory burden on the Veteran Business Community, will amend SBA’s regulations to implement the provisions in Section 1832 of the National Defense Authorization Act of 2017 (NDAA 2017), Public Law 114-328. Section 1832 amends Section 3(q) of the Small Business Act and Section 8127 of 38 United States Code, to standardize definitions of Veteran-Owned Small Businesses (VOSBs) and Service-Disabled Veteran-Owned Small Businesses (SDVOSBs). The proposed rule will consolidate ownership and control requirements in one regulation eliminating duplicative functions. This single rule will streamline the verification and certification processes saving business owners time and money according to SBA. NDAA 2017 mandates there be a single definition of ownership and control for VOSBs and VOSBs, which will apply to VA’s verification and Veterans First Contracting Program procurements, and all other government acquisitions which require self-certification. Under certain circumstances, NDAA provides a firm may qualify as a VOSB or SDVOSB where there is a surviving spouse or an employee stock ownership plan. Also, NDAA 2017 places responsibility for issuing regulations relating to ownership and control for the U.S. Department of Veterans Affairs (VA) verification of VOSBs and SDVOSBs with SBA. It also requires the Secretary of Veterans Affairs to use the regulations established by SBA for establishing ownership and control of VOSBs and SDVOSBs. The Secretary of Veterans Affairs will continue to determine whether individuals are Veterans or Service-Disabled Veterans and be responsible for verification of applicant firms. However, under the proposed new rule, challenges to the status of VOSBs and SDVOSBs based upon issues of ownership and control will be decided by the administrative judges at SBA’s Office Hearings and Appeals (OHA). According to the proposed rule, SBA consulted with VA so as to “properly understand VA’s positions and implement the statutory requirements in a way consistent with both SBA’s and VA’s interpretations.” VA issued its proposed rule in the January 29, 2018, edition of the Federal Register, to update VA’s regulations to codify the changes required under Section 1832 of NDAA 2017. The public comment period for VA’s proposed rule closes on March 12, 2018. Click Here to Comment on VA’s Proposed Rule SDVOSBs and VOSBs are strongly encouraged to review the Section-by-Section Analysis for me detailed information on the proposed rule. Below is a synopsis of the more significant parts SBA’s proposed rule. Some of the language in the proposed rule was adopted from SBA’s Section 8(a) Business Development Regulations, as SBA has always used, and will continue to use its 8(a) Program regulations for guidance on eligibility issues for SDVOSBs. SBA proposes to: Define surviving spouse and requirements for a surviving spouse-owned SDVOSB to maintain program eligibility. Add definitions for “Daily Business Operations,” “Negative Control,” “Participant,” “Unconditional Ownership,” and “Employee Stock Ownership Plan.” Add a new definition for Service-Disabled Veteran with a permanent and severe disability. Add a definition for small business concerns which requires a firm be organized for profit with a place of business in the United States or which operates primarily in the United States, or which makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor. Add a definition for “Extraordinary Circumstances” under which a Service-Disabled Veteran owner would not have full control over a firm’s decision-making process, but would not render the firm ineligible as a SDVOSB. The new definition will allow minority equity holders to have negative control under five circumstances proposed by SBA and be used by SBA to identify discrete circumstances SBA views as rare. SBA will propose five circumstances for the definition’s use and would be exclusive; SBA would not recognize any other facts or circumstances allowing negative control by individuals who are not service-disabled. Change the requirement for SDVOSB ownership of a partnership from the current requirement of 51% of each type of partnership interest whereby if a partnership had general partners and limited partners, SBA required the SDVOSB be both a general and limited partner. SBA proposes to change this requirement so SDVOSBs will need to own at least 51% of the aggregate voting interest in the partnership. Decide ownership issues without regard to community property laws, similar to SBA’s Women-Owned Small Business Regulations. Adopt language which allows SDVOSB firms owned by surviving spouses of Service-Disabled Veterans to remain eligible for the program, and provides guidelines for continued eligibility. Proposes new language which describes how to determine if a Service-Disabled Veteran controls the Board of Directors of the SDVOSB entity. Adds rebuttable presumptions that a person not working for a firm regularly during normal working hours does not control the firm. SBA notes this is not a full-time devotion requirement. Click Here to Comment on SBA’s Proposed Rule   About the Author: Wayne Simpson
Consultant
Wayne Simpson is retired from the U.S. Department of Veterans Affairs (VA) after 38 years of federal service. He served as the Executive Assistant to VA’s Deputy Assistant Secretary for Acquisition and Logistics where he was the primary staff advisor to the Deputy Assistant Secretary, who serves concurrently as VA’s Senior Procurement Executive and Debarring Official.     The post Ownership & Control of Service-Disabled Veteran-Owned Small Businesses appeared first on Centre Law & Consulting.
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A Newer Source Selection Procedure You May Not Know

In April 2016, the Department of Defense (DoD) published a memorandum expanding DoD Source Selection Procedures beyond Tradeoff and Lowest Price Technically Acceptable (LPTA) to include Value Adjusted Total Evaluated Price (VATEP) Tradeoff. This newer procedure’s intent is to help define how the government evaluates contractor capabilities that go beyond minimum requirements and reach the government’s objective. Although it’s been an option since April, we’re finding that many people still are unfamiliar with it. And we’ve certainly not seen it used in many solicitations yet either. What does VATEP do? VATEP Tradeoff monetizes a contractor’s performance and capabilities that exceed the minimum threshold and reach a maximum level. It provides a dollar amount or percentage that would then be “credited” to the contractor’s price proposal. This “credit” will not affect the amount awarded, only the government evaluated price. It is important to keep in mind that if the contractor’s price falls outside the affordability cap, this “credit” would still not bring a price below it. For example, let’s say the government wants a chair made. The government states that the chair needs a minimum of three legs so it won’t fall over, but they would prefer a chair with four legs. Being the entrepreneur that you are, you have the capability to make chairs that have both three and four legs. Making a chair with three legs is considerably cheaper than four, but you are not sure how much the government values that extra leg if a traditional Best Value Tradeoff evaluation was used. VATEP puts a dollar figure on that leg, which would then be subtracted from your proposed price to reach the government evaluated price. How does it help me? By putting a specific value on a contractor’s performance and capabilities that reach the objective level, it provides the contractor clarity on whether to pursue additional performance beyond the government’s minimum requirements. If a company know it will cost them $500 to put that extra leg on all the chairs and the government only values the leg at $250, then the company knows it should only offer the government the three-legged chair instead. This new procedure certainly won’t make sense for every requirement, but it does offer the government a way to make the process less cryptic. Could we see more agencies start to use this? Only time will tell.  
About the Author Colin Johnson
Contracts Manager
Colin Johnson is a Contracts Manager who focuses on business development and federal contracts management. His expertise is in preparing quotes and responses for both government and commercial entities for training and legal support services.   The post A Newer Source Selection Procedure You May Not Know appeared first on Centre Law & Consulting.
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Don’t be late! eSRS Submissions Due October 30, 2017

By Wayne Simpson Prime contractors with contracts containing commercial subcontracting plans are required to file a Summary Subcontract Report (SSR) (formerly Standard Form 295), reporting the accomplishments under their respective subcontracting plans in the Electronic Subcontracting Reporting System (eSRS) for the 12-month period ending September 30, 2017, no later than October 30, 2017. eSRS is the official Governmentwide System designated for small business subcontracting program reporting.  The system is web-based and is located at http://www.eSRS.gov. The eSRS website contains quick reference materials useful for reporting subcontracting accomplishments. Prime contractors with individual subcontracting plans, and higher-tier large business subcontractors, are required to file an Individual Subcontracting Report (ISR) (formerly Standard Form 294).  These same contractors are required to ensure compliance by lower-tiered subcontractors, and to accept or reject reports filed by these subcontractors.  ISRs are due within 30 calendar days of the following reporting periods: For non-Department of Defense (DOD), National Aeronautics and Space Administration (NASA), and General Services Administration (GSA) Contracts: 1st reporting period: October 1st through March 31st 2nd reporting period: October 1st through September 30th For contracts with DOD, NASA, and GSA Multiple Award Schedule Contracts 1st reporting period: October 1st through March 31st 2nd reporting period: October 1st through September 30th For GSA non-Multiple Award Schedule Contracts: 1st reporting period: October 1st through December 31st 2nd reporting period: October 1st through March 31st 3rd reporting period: October 1st through June 30th 4th reporting period: October 1st through September 30th It is important to note if an eSRS submission is rejected by the contracting agency, the contractor must submit a corrected report within 30 calendar days of the report’s rejection.  It is important to keep a signed copy of your submission on file. If your subcontracting program is becoming more labor intense and resource consuming than you desire, Centre Law & Consulting offers turn-key subcontracting program services.  These services include subcontracting plan preparation and negotiation, surveying existing subcontractors and suppliers to ascertain appropriate size status and socioeconomic procurement preference program category status for eSRS reporting purposes, preparation of justification for goaling shortfalls, and assistance with eSRS submissions.  Increasingly companies are finding outsourcing these efforts is more efficient than using internal resources, using personnel who often performing these functions as a collateral responsibility.  Internal resources are not always sufficiently trained and lack the expertise to ensure these efforts fully comply with Federal requirements and ensure these efforts can withstand the scrutiny of a small business program review by the U.S. Small Business Administration, the contracting agency, or the Defense Contract Audit Agency. About the Author: 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. The post Don’t be late! eSRS Submissions Due October 30, 2017 appeared first on Centre Law & Consulting.
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Protester Not Found to Be An Interested Party Where It Was The Awardee

Yes, you read the title correctly – a protester actually protested its own future award. In an interesting twist of fate, a company recently filed a pre-award bid protest only to find out that the agency had already evaluated the protester’s bid and intended to award the contract to the protester. Daekee Global Company, Ltd., a South Korean company, protested the terms of a solicitation issued by the Department of Navy for ship husbanding services arguing that the evaluation scheme failed to evaluate offerors’ technical capabilities or past performance. The agency subsequently requested the dismissal of the protest because Daekee had not been prejudiced by the terms of the solicitation. Specifically, the agency argued that Daekee submitted an offer that was evaluated by the agency and that the agency intended to award a contract to Daekee. In response, Daekee argued that the merits of its protest should still be addressed as, even though it would be an awardee, the issues Daekee raised would not be addressed or corrected if its protest were to be dismissed. Unsurprisingly, the GAO did not bite on Daekee’s argument. In its decision, the GAO found that Daekee was not an interested party as it did not suffer any competitive prejudice because Daekee did not suffer any competitive disadvantage or otherwise affect its ability to compete. Because the agency represents that once the protest is resolved and the stay of the award is lifted it will award a contract to Daekee, the GAO found that it does not have jurisdiction to entertain the protest. The post Protester Not Found to Be An Interested Party Where It Was The Awardee appeared first on Centre Law & Consulting.
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Proper Classification of Workers is Important for Compliance with FLSA and SCLS

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