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Government Damages Contractor’s Equipment, Board Awards Costs

When a contractor leases equipment to the government, the contractor typically expects that the government will take good care of that equipment.  But a recent Armed Services Board of Contracts Appeals case reveals the government does not always take such proper care of leased goods or equipment. What happens then? Well, the contractor may be able to recover damages under the contract and common law principles. In Assessment and Training Solutions Consulting Corporation, ASBCA No. 61047 (2017), the ASBCA sustained a contractor’s claim for damages resulting from the government’s negligence in taking care of boats leased from the contractor. By way of background, ATSCC leased three of its boats to the Navy for use in maritime training. Under the contract maintenance requirements, ATSCC was responsible for performing quarterly preventative maintenance and inspection on all three boats and repairing any identified issues. The contractor was to “bear the cost of performing repairs unless it can be proven that such repairs were due to negligence or willful damages caused by the government.” During the Navy’s operation of these boats, multiple issues arose, including a boat grounding, a boat accident, using the wrong oil, filling freshwater tanks with diesel fuel, operating when engines were overheated, failing to fill out pre-operation and post-operation checklists, leaking coolant and oil, and a cracked manifold in an engine, each issue requiring repair. On December 15, 2015, ATSCC submitted a claim to the Navy contracting officer for damages due to “the negligence of U.S. Government (USG) personnel,” but took responsibility for some of the repairs. When the Navy failed to issue a final decision for over a year, ATSCC appealed the deemed denial to the Board. The Board rejected the Navy’s argument that because the contract specifically addressed negligence, common law bailment principles were inapplicable. Instead, the Board agreed with ATSCC’s common law bailment theory because both the contract and common law bailment had the same criteria for liability – negligence. Thus, the principles of common law bailment were founded upon the underlying contract and applicable to the Board’s evaluation. For those unfamiliar with the principals of common law bailment, a brief explanation is warranted. Under common law bailment, when one party, the bailee, pays another party, the bailor, to use the bailor’s goods, the bailment is for the mutual benefit of the parties (i.e., the bailor receives money and the bailee receives full use of the goods). As the Board wrote: The law of bailment imposes upon the bailee the duty to protect the property by exercising ordinary care and to return the property in substantially the same condition, ordinary wear and tear excepted. When the government receives the property in good condition and returns it in a damaged condition, a presumption arises ‘that the cause of the damage to the property was the [g]overment’s failure to exercise ordinary care or its negligence. Applying this standard, the Board disagreed with the Navy’s argument that it took ordinary care of ATSCC’s boats, noting that one boat’s “‘blown’ engine is not ‘ordinary wear and tear.’” The Board found that the Navy’s acceptance of the boats established they were in good condition when received. The Board rejected that Navy’s argument that the boats were not in its exclusive control, finding that the damage occurred during the Navy’s operating and training in which ATSCC did not participate. Thus, the Navy’s return of damaged boats established that the Navy was responsible for at least some of the damage. As demonstrated in Assessment Training, ordinary wear and tear is expected in leasing items to the government. However, Assessment Training confirms that the government cannot absolve itself of liability for its own negligence in taking care of leased goods or equipment, especially when it fails to exercise ordinary care.
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Koprince Law LLC

Koprince Law LLC

 

Government Contracts Joint Ventures: Our New Handbook is Now Available

I am excited to announce the publication of Government Contracts Joint Ventures, the first in a new series of new government contracting guides we’re calling “Koprince Law LLC GovCon Handbooks.”  Packed with easy-to-understand examples and written in plain English, Government Contracts Joint Ventures should help you maximize your understanding of this important option for pursuing federal contracts. What does the Handbook contain?  I’m glad you asked. Inside Government Contracts Joint Ventures, you’ll find: Joint Ventures 101.  A big-picture overview of government contracts joint ventures, including a comparison with prime/subcontractor teams. Joint Venture Eligibility.  Is a joint venture possible?  The Handbook covers small business size eligibility, socioeconomic eligibility, and other factors influencing whether a joint venture can bid. Joint Venture Formation.  If you’ve decided how to form a joint venture, how do you do it right?  The Handbook covers the requirements for joint venture agreements, SAM registration, SBA approval, and more. Joint Venture Performance.  Once a joint venture wins a contract, there are other rules to follow.  The Handbook discusses work share requirements, SBA certifications, and other performance-related items. Government Contracts Joint Ventures is available on Amazon, and is priced at just $9.99 in paperback and $6.99 in Kindle electronic form.  To buy a copy (or heck, several copies–they make great gifts for those special joint venturers in your life!) just visit this link for paperback or this link for Kindle. If you’re an active Koprince Law LLC client in good standing, check your inbox: we’re offering you a free copy.  Just reply to the email to let us know to send you one. On behalf of my co-author Candace Shields, and all of my colleagues here at Koprince Law, I hope you enjoy Government Contracts Joint Ventures.  And stay tuned–we’ll be publishing more GovCon Handbooks on other important contracting topics in the months to come.
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Government Contractor Cybersecurity: Q&A with the Director of the Kansas SBDC Cybersecurity Center

Whether you are an active small business federal contractor, or an entrepreneur still getting your business off the ground, you are going to need a cybersecurity plan. Many DoD contractors, in particular, face a pending deadline to comply with NIST 800-171, as mandated by DFARS 252.204-7012. The Kansas SBDC Cybersecurity Center for Small Business wants to help. Located in downtown Lawrence, Kansas—just across town from us coincidentally—the Cybersecurity Center, housed at the KU Small Business Development Center, is the only SBDC in the country with an office dedicated to helping small businesses contend with the growing threat of data breaches. According to Director Brian S. Dennis, the center can be a resource for small businesses across the country, not just those in the state of Kansas. Mr. Dennis has been the director of the Cybersecurity Center since it was founded in July. He was gracious enough to answer a few questions: Q: Don’t hackers target only huge businesses? Why does a small business need to worry about cybersecurity?  A: The International Data Corporation released a report in 2016 estimating that by 2020 over $101 billion dollars will be spent by companies trying to protect their digital footprint. America’s small businesses have not made a dedicated effort to build cybersecurity into their P&Ls [Profits and Losses]. That lack of funding on the small business side has been noticed by hackers. Small businesses are the backdoor into big business. A Fortune 500 company or the U.S. Government can throw as many dollars as they want at the threat of a cybersecurity breach, but all it takes is one small business vendor to take down the whole thing. A prime example of this is the 2013 Target data breach. The billion dollar retailer announced a huge data breach of customer information and it happened because of a third-party vendor had been granted access to the Target network.  The growing threat of a data breach is forcing the U.S. Government and corporate America to rethink how they choose their vendors. Q: What causes most cybersecurity breaches?   A: Almost any cybersecurity professional you speak to today will tell you that if there were no human users, there would be no cybersecurity threat. As end users of systems, we are flawed in our approach to internet safety. Ransomware is a prime example of this. The FBI estimates that $24 million was paid in ransoms in 2015. By 2016 that number was over $1 billion. Ransomware only works when a user on the receiving end of an exchange takes an action. We need to incorporate training across the board that enables each and every user with the knowledge of how to remain safe in the digital age. Q: It seems like things change so quickly. How can a small business find out if its practices are sufficient or if it is at risk without knowing it?  A: It all starts with planning. Creating a plan that works and can be tested is paramount to a small business surviving a cyber event. The threat of a digital interruption is looming over all of us and there is no silver bullet that will prevent every single attack or occurrence. But if a small business can build a plan that follows five steps, the likelihood of survival increases. Those steps are: Identify — What structures and practices do you have in place to identify cyber threats? Protect — What are the basic practices you have in place to protect your systems? Detect — What do you use to identify someone or something malicious? Respond — How will you deal with a breach if and when one occurs? Recover — How will you get your business back to normal after a breach? Q: What if a small business is not as secure as it could be—by its nature, a small business has to choose where to put its resources, why does it need to spend money on cyberseucrity?  A: According to Symantec, nearly half of all cyber attacks these days are targeted on small business. Small businesses are the entry point into larger operations. When your business decides to allocate resources away from cybersecurity, your opportunities will begin to diminish. The hard part is understanding where to potentially shift money and resources to ensure that this can even happen. America’s Small Business Development Center (ASBDC) has over 1,100 business consultants and advisers working across America. Find a local SBDC near you and ask them for help. A good business consultant can help you get a better grasp of your P&Ls and determine where dollars can be set aside for your cyber effort. The service is free, but the commitment is your time and effort. [Ed. Note: SBDCs are funded in part by the U.S. Small Business Administration, which helps keep consulting costs down—services are often free.] Q: Seriously though, what’s the worst that could happen? Is a business going to lose its contracts? Something worse? A: The Federal government is moving swiftly to ensure that its vendors and contractors are secure. The National Institute of Standards and Technology (NIST) has created a framework for cybersecurity that is already being rolled out by the Department of Defense. DOD contractors have to complete the framework by December 31st of this year. And this is just the start. If you make the decision to not properly protect your business and you are doing business with the government, you will lose contracts, that is a guarantee. Losing contracts is just the start. The something worse that is looming on the horizon is the legal responsibility. Several states are looking at what types of recourse clients/consumers will have against a small business that allows data to be breached. Q: What do you see coming in the future?  A: There is no crystal ball for guessing what the next cyber threat will look like, but the general consensus is that cyber criminals will continue to prey upon our inability to properly train end users. Ransomware is a direct result of poor training. Attacks that started against users demanding ransoms in the hundreds of dollars range have morphed into attacks against municipalities demanding millions of dollars. Ransomware is easy to send out and easy to collect. Unfortunately, it will be here until someone develops a dedicated way to fight it. The future will also hold the possibility for more business and industry to pick up the torch of the NIST Framework. The Framework is probably the best start to a business being protected. Banking, insurance and finance industries will be watching closely as the Framework is rolled out this year.
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Koprince Law LLC

Koprince Law LLC

 

Government “Poaches” Contractor’s Employee, Then Rejects Fixed-Price Invoices

Picture this scenario: the government hires your company to do a job; you assign one of your best employees to lead the effort. He or she does such a good job that the government hires your employee away. The government then drags its feet on approving your proposed replacement and refuses to pay you for the time when the position was not staffed–even though the contract was fixed-price. The scenario is exactly what happened to a company called Financial & Realty Services (FRS), and according to the Civilian Board of Contract Appeals, FRS wasn’t entitled to its entire fixed-price contract amount. In Financial & Realty Services, LLC, CBCA No. 5354, 16-1 BCP ¶ 36472 (Aug. 18, 2016), FRS held a GSA Schedule contract for facilities maintenance and management services. The underlying Schedule contract included FAR 52.212-4 (Instructions to Offerors–Commercial Items). In 2013, as part of that contract, GSA awarded FRS a task order to manage some federal buildings in the Dallas/Fort Worth [Texas] Service Center, Fort Worth Field Office. The task order, at its most basic, called for FRS to provide a property manager. The task order was priced in firm fixed annual amounts, and GSA agreed that FRS could invoice in fixed monthly amounts. Important to later events, the task order required that the property manager to be able to obtain a National Agency Check with Inquiries (NACI) clearance within three months of award and maintain it through the life of the contract. For the first year or so of performance, a FRS employee served in the property manager position. Then, in October 2014, the government solicited and hired the employee away, to do basically the same job he was doing for FRS. A month later, FRS submitted a potential replacement to GSA, but that candidate took another job in the intervening time before the government gave FRS word that it had approved his/her NACI clearance. FRS then offered a second and a third option in January and February 2015. Finally, in March, the third potential replacement became the property manager. FRS later submitted invoices for $49,280, seeking payment for the time between October 2014 and March 2015. GSA refused to pay, so FRS filed a claim with the contracting officer seeking payment of the disputed amount. The contracting officer denied the claim, so FRS appealed the denial to the CBCA, alleging that GSA “breached its contract with FRS by thwarting or precluding FRS' performance of the contract and by failing to pay the full contract price.” GSA moved for the case to be dismissed. In its motion to dismiss, GSA argued there was no factual basis to determine that GSA had acted improperly. FRS conceded that it did not actually provide a property manager during the relevant time frame. As one might expect, however, FRS argued that the task order was fixed-price (meaning, FRS said, that the government agreed to pay regardless of whether the position was staffed), and that the government actively prevented FRS from performing. The CBCA disagreed. It pointed out that FAR 52.212-4(i) states that “[p]ayment shall be made for items accepted by the ordering activity that have been delivered to the delivery destinations set forth in this contract.” The CBCA continued: Notwithstanding the task order’s “fixed price,” GSA was obligated to pay only for services that were delivered and accepted.  Whether GSA could “supervise” the FRS employees who performed the services is immaterial.  In light of the complaint’s allegations that FRS did not staff the task order during the months in dispute, the allegation that GSA “fail[ed] to pay the full Contract price” for that same period . . . does not state a claim on which the Board could grant relief. As for the fact that the GSA hired FRS’s property manager, the CBCA wrote that FRS “identifies no factual basis to suspect that GSA did anything inconsistent with the normal federal hiring process.” The CBCA determined, “we do not see how an otherwise lawful recruiting or hiring action that an agency was not contractually barred from taking–which is all that has been plausibly alleged–could constitute undue interference entitling a contractor to be paid for work it did not perform.” Finally, the Board held that GSA had not breached the contract by failing to timely approve a replacement property manager. The CBCA noted that the contract did not include “a contractual duty on GSA’s part to clear job candidates within a specified time . . . .” Under the circumstances, the CBCA found the delays in clearance to be reasonable. The CBCA dismissed the appeal. As an impartial observer, it is easy to have sympathy for FRS. It did nothing wrong. In fact, it seemingly did everything right. It staffed the position with someone so good that the government poached the worker away within a year. It suggested multiple replacements, at least one of which took a different job while the government was still in the process of authorizing clearance. It certainly would seem like FRS had reason to be upset, especially since the task order was fixed-price. But let’s be real here. Fixed-price or not, the government isn’t too keen to pay for something it doesn’t receive from a contractor. As Financial & Realty Services demonstrates, that policy may apply even when the government itself causes the contractor to be unable to deliver.   View the full article  

Koprince Law LLC

Koprince Law LLC

 

GovConVoices: Women-Owned Small Businesses Still Underrepresented On Government’s Biggest Contracts

Taken as a whole, the Government-wide performance metrics for small business utilization are encouraging. The Small Business Administration’s FY2015 report card shows that the Government exceeded its prime contracting goals across four of the five socioeconomic categories measured. Moreover, the amount of federal spend going to small businesses reached an all-time high of over 25%. These numbers do not tell the whole story, however. The 5% goal for WOSBs has been in place since 1994, and since at least 2008, major campaigns have aimed to bridge the gap. In 2014, WOSBs became eligible for sole-source awards, an important means of gaining a foothold in the federal marketplace. Nonetheless, FY2015 marks the first time ever that the 5% goal has been met. While the milestone is certainly a victory, significant disparities remain. A January 2016 report by the Department of Commerce found that woman-owned firms are 21% less likely to win federal work than comparable businesses owned by men—even when controlling for potentially confounding variables such as business size, age, and past performance. Such disparities are especially glaring on the Government’s most lucrative contracts. An October 2016 report from Women Impacting Public Policy (WIPP) analyzes WOSB wins on major Multiple Award Contracts (MACs), and the results are troubling. MACs go by many names—GWACs, MATOCs, IDIQs, etc.—but the idea is the same. Firms compete to win a spot on the MAC and the Government chooses multiple winners. The Government subsequently issues Task Orders, and the firms who won a spot on the MAC then compete exclusively with one another to win actual Task Order work. Winning a MAC doesn’t necessarily mean you’ll go on to win any work, but you can’t win any work without first winning the MAC. To say that MACs are important is an understatement: they have grown to represent 21% of federal spend, and 17 of FY2017’s 20 biggest opportunities are MACs. The WIPP report finds that on the most important MACs, the percentage of WOSBs winning a spot on the contract tends to be significantly lower than the percentage of WOSBs winning federal work overall. In other words, although WOSBs are winning more federal contracts than they used to, they are still largely shut out of the most lucrative contract vehicles. Once a WOSB does get a spot on a MAC, however, the results are very different. On the MACs analyzed, WOSBs won roughly 20% of Task Order dollars—compared to only 5% of federal spend overall. This suggests that MACs have the potential to be a powerful equalizing force—if the initial disparity in onboarding can be overcome. To that end, WIPP recommends that the Government: 1) Ensure parity when adding socioeconomic tracks to contract vehicles (e.g., if SDBs get a set-aside under a particular contract, so should WOSBs, SDVOSBs, etc.); 2) Create a WOSB Government-Wide Acquisition Contract for IT Services, such as those already in place for 8(a) and SDVOSB firms; 3) Add/enforce onboarding processes for major contracts (providing firms with a way onto the contract now rather than waiting many years for its eventual re-compete); and 4) Report the socioeconomic statuses of contract holders for greater transparency. Additional information about the Government’s socioeconomic goals is available here. To learn more about WIPP, visit www.wipp.org. Courtney Fairchild, President Courtney Fairchild is the co-founder and President of Global Services.  Global Services is a niche consulting firm focused on writing winning proposals and GSA Schedules for federal contractors.  Over the past nineteen years she and her team have successfully prepared, negotiated, and managed 2000+ federal contracts for Global Services’ clients totaling over $20 Billion Dollars.  Ms. Fairchild has been with the company since it was founded in 1996 and headed up the Global Services GSA Schedule Programs division from its inception. Global Services  – 1401 14th Street, NW – 3rd Floor – Washington, D.C. 20005 Phone: 202-234-8933   Email: cfairchild@globalservicesinc.com   LinkedIn: www.linkedin.com/in/globalservices   Twitter: @globalservicedc GovCon Voices is a regular feature dedicated to providing SmallGovCon readers with candid news, insight and commentary from government contracting thought leaders.  The opinions expressed in GovCon Voices are those of the individual authors, and do not necessarily reflect the opinions of Koprince Law LLC or its attorneys.
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Koprince Law LLC

Koprince Law LLC

 

GovConVoices: Prime Management Of Subcontracts: Will ASBCA Decision Affect DCAA’s “Obsession”?

The Armed Services Board of Contract Appeals recently dismissed a government claim that Lockheed Martin Integrated Systems, Inc. (LMIS), failed to comply with its prime contract terms by not adequately managing its subcontractors and therefore all subcontract costs (more than $100MM) were unallowable. Although the government claim was directed at a large contractor, some of the amount in question, presumably, included invoiced amounts by small business subcontractors.  At least by implication, had the government prevailed, it could have resulted in requirements for prime contractors to become far more demanding and intrusive in terms of subcontractor documentation and/or access to subcontractor records. At issue in Lockheed Martin Integrated Systems, Inc., ASBCA Nos. 59508, 59509 (2016) was DCAA’s assertion and the Contracting Office agreement, that a prime, in accordance with FAR 42.202(e)(2), Assignment of Contract Administration, must perform in the role of the CO, CAO and DCAA when managing subcontracts.  DCAA went on to assert that this responsibility includes, among other things, requiring subcontractors to submit Incurred Cost Proposals (ICP) to the prime and the prime performing an audit on that ICP, or requesting an assist audit by DCAA. Because LMIS had no documentation requiring its subcontractors to submit ICPs, the government asserted a breach of contract and therefore questioned all subcontract costs as unallowable.  Fortunately, the Board adamantly disagreed, stating that FAR 42.202 (the whole basis on which subcontract cost were questioned) is not a contractual clause nor a clause incorporated by reference.  The Board concluded that FAR 42.202 is a regulation pertaining only to the government’s administration of contracts and nowhere is it implied that a prime take on the role of CO, CAO or DCAA for its subcontractors. Whew, good news for contractors, right?  Some may assume the outcome of this case will force DCAA to relent on its current obsession with prime management of subcontracts.  If you have had the fortune of an ICP audit or a Paid Voucher audit recently, you understand my statement, “current obsession with prime management of subcontracts.”  These audits, in particular, place significant emphasis on the processes and procedures in place which demonstrate and document the prime’s management of subcontracts. Many small business primes have expressed concern about DCAA’s requests and expectations, during these audits, and what impact it may have on the allowability of historical subcontract cost.  In my professional opinion, I doubt DCAA is going to take a step back in its auditing approach, nor relent in its expectation of subcontractor monitoring.  But, at least now there is precedent stating that primes are not auditors and it’s not the prime’s responsibility to require subcontractor ICPs nor audit subcontractor ICPs. So, what is the prime’s responsibility for monitoring subcontractors?  First, note that the responsibility of the prime to “manage” subcontractors stems not from FAR 42.202 but rather from other regulations and at different phases of the contract process. Pre-award phase: FAR 9.104-4(a) – Subcontractor Responsibility: “Prospective prime contractors are responsible for determining the responsibility of their prospective subcontractors.” FAR 15.404-3(b) – Subcontract Pricing Considerations: “Prime contractor shall perform appropriate cost or price analysis to establish the reasonableness of subcontract prices and include the results in the price proposal.” Post-award phase: FAR 52.216-7 (d)(5) – Allowable Cost and Payment: “The prime contractor is responsible for settling subcontractor amounts and rates included in the completion invoice or voucher and providing status of subcontractor audits to the contracting officer upon request. Primes must still ensure subcontractor capability and contract compliance.  This is best achieved by implementing policies motivated towards an on-going monitoring approach and well documented subcontract files.  Best practices considerations include, but are not limited to the following: Perform and document Price Analysis or Cost Analysis. Although this documentation primarily supports cost estimates, it ultimately supports the reasonableness of subcontract costs as a component of prime ICPs. Obtain subcontractor self-certifications (accounting system, provisional rates, ICP submission); note, however, that self-certifications without any corroborating data is risky. Insert subcontract clauses with access to specified records and/or the requirement of third party verification (reasonable assurance, but not an audit). For example, a subcontract clause with rights to detailed subcontractor supporting records such as time sheets, travel expense receipts intermittently.  The purpose is to selectively document that the subcontractor can support costs invoiced. Focus on billing policies and procedures providing reasonable assurance of satisfactory subcontract performance. Define managing subcontracts in the context of review and approval of subcontractor invoices (substation of hours, rates). Avoid references to “audits” unless expressly required by a specific contract. Consider contract close-out expediencies Quick close-out and/or DCAA Low Risk (concept) Convert to FFP (FAR 16.103(c)) with support for the fixed price) Third party reviews (agreed upon procedures/limited transaction verification) Regardless of the outcome and what evolves from the ASBCA cases, primes are ultimately responsible for the allowability of subcontract costs.  There is always risk that subcontractor cost will be challenged at the prime contract level.  However, these ASBCA cases confirm that the contractual requirements imposed on primes is far less onerous than anything envisioned by DCAA. Courtney Edmonson, CPA is the VP of Small Business Consulting at Redstone Government Consulting and provides contract compliance services to small business government contractors.  Her areas of expertise include pricing and cost volume proposals, indirect rate forecasting and modelling, incurred cost proposals, and DCAA compliance. Courtney is the lead instructor for the Federal Publication Seminars course, “Government Contractor Accounting System Compliance”, and provides instruction for other compliance courses including, “Preparation of Incurred Cost Submissions”, “FAR 31, Cost Principles”, and “Cost Accounting Standards.” Courtney graduated from Jacksonville State University with a Bachelor of Science and obtained a Master of Accountancy from the University of Alabama in Huntsville.  She is also a Certified Public Accountant. Redstone Government Consulting – 4240 Balmoral Drive, SW Suite 400 Huntsville, AL 35801 www.redstonegci.com Phone: 256-704-9840                       Email: cedmonson@redstonegci.com GovCon Voices is a regular feature dedicated to providing SmallGovCon readers with candid news, insight and commentary from government contracting thought leaders.  The opinions expressed in GovCon Voices are those of the individual authors, and do not necessarily reflect the opinions of Koprince Law LLC or its attorneys.
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Koprince Law LLC

Koprince Law LLC

 

GovCon Voices: What the Government Wants, What It Really Really Wants

According to USASpending.gov, the government spent $472,158,562,285 last year through contracting for services and products with large and small companies nationwide. This was a $34 billion increase over the previous year, and 2017 is anticipating another increase, especially in Department of Defense spending. None of the noted totals include entitlements, grants or non-contract obligations. The real questions most contractors ask are what does the government really want, and how does it decide who wins what contract? As an initial requirement, most government agencies must follow the Federal Acquisition Regulation (FAR) and agency FAR supplements, such as the Defense Federal Acquisition Regulation Supplement (DFARS). These extensive legal rules are available online for anyone who is interested in learning about them as the relevant portions become part of every federal contract as stated in the contract paperwork.  Some agencies such as the Smithsonian Institution, the Federal Aviation Administration, and the U.S. Postal Service have their own rules and regulations outside of FAR and typical FAR supplements. It is wise to educate oneself regarding targeted agencies’ contracting rules. Many contractors think that lowest price is always the deciding factor. While the federal government is mandated to spend our tax dollars wisely, lowest price does not always win. Most often, the decision-makers are looking for the best deal. Often, the best deal includes a very competitive price, balanced with several other factors such as proof of abilities, clear capacity to perform and strong references. The challenge for all contractors is how to avoid the “chasing the bid” mentality and instead determine how to identify and reach decision-makers early enough in the purchase process to effectively and legally influence and educate those decision-makers in the best way to write the requirements. The answer to this conundrum is taken directly from a government source, the United States Air Force, in its industry outreach process. Other government entities have been proven to follow similar if not exactly alike guidelines. The Air Force states that these five processes must be incorporated into any company’s business development tactics: Market Research, Business and Financial Plan, Network, Communication & Relationships, Past Performance and Continuous Marketing. Market research seems to be obvious but it is surprising how many businesses fail to complete this first requirement. Instead they wait until they meet with the target and at that point ask them for opportunity recommendations. This is a huge mistake and will result in the decision-maker closing the door on future opportunities. One would be better served checking FBO.gov for sources sought notices, solicitations and records of previously-awarded contracts through the Federal Procurement Data System as well as the target agency’s business forecast and budget. The business and financial plan is a mystery to most businesses regarding federal contracting. In this case, the decision-maker is NOT asking the contractor for its entire business plan, but rather what the plan is to finance the targeted opportunity should it be awarded. This little-known step will go a long way in mitigating perceived risk for businesses of all sizes, especially for any business that may be pursuing opportunities which are larger than ever won in the past. Elements to include in the opportunity financial plan include projections of anticipated contract-oriented costs (payroll, overhead, products, legal, accounting, subcontracting, etc.), the timeline of those costs, anticipated invoicing and payment dates, and a letter from the bank of the or other financial institution stating that a line of credit is available to finance at least the first two billing cycles, until payment is received. When the Air Force states that it wants a contractor to network, communicate and build relationships, it means that no matter what it takes, one should network by attending all possible in-person events, communicate regarding sources sought notices, participate in industry days for specific opportunities and make recommendations to improve services and products used by the agency. By being consistent in these efforts the contractor will benefit by building a strong relationship with all decision-makers. This is difficult to do and requires a commitment of time, effort and money. One must determine the short list of targets with whom to make this financial and time commitment as it is impossible to perform this level of effort for every possible federal target. The fourth element, Past Performance, is a legal term as defined in FAR Part 42.15 Contractor Performance Information and elsewhere in the FAR. Essentially, the FAR states that “past performance information (including the ratings and supporting narratives) is relevant information, for future source selection purposes, regarding a contractor’s actions under previously awarded contracts or orders. It includes, for example, the contractor’s record of: (1) Conforming to requirements and to standards of good workmanship; (2) Forecasting and controlling costs; (3) Adherence to schedules, including the administrative aspects of performance; (4) Reasonable and cooperative behavior and commitment to customer satisfaction; (5) Reporting into databases (see subpart 4.14, and reporting requirements in the solicitation provisions and clauses referenced in 9.104-7); (6) Integrity and business ethics; and (7) Business-like concern for the interest of the customer. Most losing bids do not address these seven elements of past performance and instead serve only as a record of describing projects similar to the targeted opportunity. Winning contractors take into account and describe at least all seven elements and further offer proof of differentiators and the value add for the project. The final recommendation of continuous marketing is lost on most contractors. This marketing, when successful, targets all decision-makers and incorporates both a corporate messaging process performed throughout the year as well as ongoing an individual effort of the business development or capture person assigned to that target. Rarely do companies perform both processes simultaneously. And it is even more rare that this is done well, with appropriate messages crafted for each layer of decision-maker. This translates to different messaging for the program layer, other messaging for the contracting layer and yet different messaging for the small business representatives. To see success, listen to the customer and give them what they want, what they really really want and even outright ask for. Gloria Larkin, CEO and Founder Gloria Larkin, President of TargetGov, is a nationally-recognized government contracting marketing and business development expert. She has been interviewed on MSNBC, and quoted in the Wall Street Journal, Forbes, USA Today, INC Magazine, Entrepreneur Start-ups Magazine, and Government Executive magazine. Gloria Larkin serves as the Educational Foundation Chairman of the Board of Directors and is the past National Procurement Committee Co-Chair for Women Impacting Public Policy (WIPP), a non-partisan organization representing over 6,200,000 women nationwide. She is the author of the book, “The Basic Guide to Government Contracting” and “The Veterans Business Guide: How to Build a Successful Government Contracting Business” now in its fourth printing. She has spoken at international, national, regional and local conferences including recently University of Oxford Saïd Business School Power Shift Forum for Women in the World Economy 2013, the Annual National Veteran’s Conference, and the OSDBU Procurement Conference regarding practical, bottom-line focused business development best practices. She has received numerous accolades including: The U.S. Small Business Administration’s Women in Business Champion for Maryland 2010, Enterprising Women magazine’s 2010 Enterprising Women of the Year honoree, one of Maryland’s Top 100 Women in 2010, 2007 and 2004, and Maryland’s Top 100 Minority Business Enterprises in 2008 and 2006. TargetGov: www.targetgov.com            Phone: 1-866-579-1346            Email: glorialarkin@targetgov.com GovCon Voices is a regular feature dedicated to providing SmallGovCon readers with candid news, insight and commentary from government contracting thought leaders.  The opinions expressed in GovCon Voices are those of the individual authors, and do not necessarily reflect the opinions of Koprince Law LLC or its attorneys.
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GovCon Voices: The Good, the Bad and the Just Plain Ugly Changes That Almost Were! (Part 2)

Having started my journey in the federal contracting community close to 30 years ago, I’ve seen quite a few changes in policy and process that have both improved and degraded the ability of small business concerns to participate as contractors and subcontractors. I’m not referring solely to changes where the language targeted small business, I’m also including those intending to change how business is done based on a specific commodity, contract cost type, procurement method, agency mission or government-wide initiative. In this, my first contribution to GovCon Voices, I’m taking a look back at recent proposed changes that resulted in lots of conversations with my friend Steve Koprince, a slew of articles and blogs and way too many anxious moments awaiting the outcomes. This is the second of a three part series I’m calling ‘The Good, the Bad and the Just Plain Ugly Changes That Almost Were!’  The Bad (Part 2) In the final days of calendar year 2014, the Small Business Administration issued a proposed rule that would create much discussion about substantive changes to small business subcontracting. As mentioned in Steve Koprince’s January 2015 post to SmallGovCon, these proposed changes were focused on how small business subcontracting limits are calculated,and how those limits are enforced. While many of the changes would be welcomed, one provision spelled out rules that would be detrimental to small business concerns should these changes become final. The previously mentioned SmallGovCon article explains this proposed change that’s entitled: Identification of Subcontractors “The proposed rule states that if a prospective prime contractor intends to use similarly situated entities to comply with the applicable limitation on subcontracting, the prime contractor “must identify the similarly situated entities in its offer . . .” Further, the “percentage of the prime contract award that will be spent on each similarly situated entity must be identified in a written agreement” between the prime contractor and similarly situated subcontractor.  The written agreement “must identify the solicitation number at issue, be signed by each entity, and be attached to the prime contractor’s offer.”” This Could Leave a Mark! If we understand that a ‘Similarly Situated Entity’ is a small business concern participating in the same SBA program as an eligible small business offeror and awardee (the prime contractor), this proposed change was perched to place significant burdens on small business. Consider this. For companies pursuing acquisition programs such as GSA ALLIANT, NASA SEWP, CMS SPARC and any number of agency-specific and government wide contract vehicles of similar ilk, there are not defined requirements where firm partnerships and work-share can be established. At this stage relationships are based on what’s anticipated to occur and are subject to change at the task order level if the right mix of experience, capabilities and capacities are not in-hand. For these pursuits, teaming and subcontracting is dynamic, to say the least. As opposed to requirements programs tied to specific business or mission objectives, such as the MSC Shipboard Managment Infrastructure System (SMIS) or the BLS Consumer Price Index (CPI) Maintenance, where offerors have an opportunity to form partnerships based on defined needs. While it would have been interesting to see how this would have been implemented given the pervasiveness of multiple-award contract vehicles, I’m happy to speculate about what would have been. Rest In Peace (or Not!) Interestingly, the strain imposed on small federal contractors would far outweigh the burdens placed on ‘other than small business’ prime contractors, whose activities account for many more dollars and much greater impact on small business and federal contracting overall. It would have also increased the cost of doing business, specifically the cost of acquiring business (we call it C.A.B. Fare) for small business. When you factor in proposed changes referenced as ‘Notification of Changes’ and ‘Penalties’ (Penalties made it into the final rule – see 13 C.F.R. 125.6(h)), it seems Uncle Sam intended to overcompensate for its shortcomings in enforcing the small business subcontracting performance of habitual offenders (‘other than small business concerns’), at the expense of the small business community. Your comments and questions are always welcome! Stay tuned for part 3 featuring ‘The Good’ change that almost was. Peace! Guy Timberlake, The Chief Visionary
http://www.theasbc.org | @theasbcguy | @govconguy |@govconchannel “The person who says it cannot be done should not interrupt the person doing it.” Guy Timberlake, Chief Visionary Officer and Co-Founder,
The American Small Business Coalition, LLC
(410) 381-7378 x200 | founder@theasbc.org ‘Go-To’ Guy Timberlake is an accomplished veteran of federal contracting with nearly 30 years of experience, knowledge and relationships acquired in support of civilian, defense and intelligence agency programs since Operation Desert Storm. He’s called ‘Edutainer’ for his ability to make mundane discussions about business essential topics (like finding and winning federal contracts and subcontracts!) interesting, and presenting them so they are practical and sticky. Most important is that Guy is a devoted husband, a proud father and loves pizza night with his family and friends. ‘Go-To-Guy’ is the nickname given to him by his defense customers in the 1990’s. GovCon Voices is a regular feature dedicated to providing SmallGovCon readers with candid news, insight and commentary from government contracting thought leaders.  The opinions expressed in GovCon Voices are those of the individual authors, and do not necessarily reflect the opinions of Koprince Law LLC or its attorneys.
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GovCon Voices: The Good, the Bad and the Just Plain Ugly Changes That Almost Were!

Having been a part of the federal contracting community for close to 30 years, I’ve seen quite a few changes in policy and process that have both improved and degraded the ability of small business concerns to participate as contractors and subcontractors. I’m not referring solely to changes where the language targeted small business, I’m also including those intending to change how business is done based on a specific commodity, contract cost type, procurement method, agency mission or government-wide initiative. In this, my first contribution to GovCon Voices, I’m taking a look back at recent proposed changes that resulted in lots of conversations with my friend Steve Koprince, a slew of articles and blogs and way too many anxious moments awaiting the outcomes. This is the first of a three part series I’m calling ‘The Good, the Bad and the Just Plain Ugly Changes That Almost Were!’  The Just Plain Ugly The 2017 NDAA was chock full of changes that included: DoD having the option to forego price or cost evaluation for certain multiple-award contracts; GAO being mandated to provide Congress a list of the most common grounds for sustaining protests; A pilot program for certain small subcontractors to receive past performance ratings; Requiring justification for ‘Brand Name or Equivalent’ purchases, and; Strengthening small business subcontracting plan enforcement, just to name a few. One of the intended changes that died in conference was the provision introduced as Section 838 of the Senate version. Its name was “Counting of major defense acquisition program subcontracts toward small business goals.” and the very negative effects of this rule would be catastrophic to small business, if enacted. Not familiar with Major Defense Acquisition Programs or MDAP? Think of program names like Global Hawk, the Presidential Helicopter, Arleigh Burke Class Destroyer, Littoral Combat Ship and more. Each of these and numerous other MDAP programs are critical to our Nation’s security. As a result, collectively thousands of small business subcontractors capturing tens of billions of dollars in revenues are engaged. Had this provision made it into the 2017 NDAA, the Department of Defense would be able to include 1st and 2nd tier subcontract dollars, reported by MDAP prime contractors, towards the Department’s overall small business set-aside goals. In short, DoD could reduce set-aside award dollars by replacing them with dollars that may have been awarded to small businesses via subcontracts. The scenario represented potential lost dollars to small contractors starting in the area of $18,000,000,000 based on DoD’s FY16 OUSD Comptroller/CFO publication that indicated Major Defense Acquisition Programs (MDAPs) and Major Automated Information Systems (MAIS) accounted for 43% of the requested $177.7B. If we take 23% of $76B (the MDAP/MAIS portion of the OUSD FY16 request) what we end up with is the amount of set-aside obligations DoD would not have to issue in FY17 and beyond. The amount is effectively 1/3 of the dollars awarded to small business via set-aside or sole-source in FY2016. Let that sink in. In the spaghetti western movie ‘The Good, the Bad and the Ugly’ there is a line I find very relevant to this legislative near-miss. It goes like this: “In this world there’s two types of people my friend.
Those with loaded guns and those who dig. You dig.” I’m beyond overjoyed this piece of legislation had to dig and I hope it stays buried. Your comments and questions are always welcome! Stay tuned for ‘The Bad’ change that almost was. Peace! Guy Timberlake, The Chief Visionary
http://www.theasbc.org | @theasbcguy | @govconguy |@govconchannel “The person who says it cannot be done should not interrupt the person doing it.” Guy Timberlake, Chief Visionary Officer and Co-Founder,
The American Small Business Coalition, LLC
(410) 381-7378 x200 | founder@theasbc.org ‘Go-To’ Guy Timberlake is an accomplished veteran of federal contracting with nearly 30 years of experience, knowledge and relationships acquired in support of civilian, defense and intelligence agency programs since Operation Desert Storm. He’s called ‘Edutainer’ for his ability to make mundane discussions about business essential topics (like finding and winning federal contracts and subcontracts!) interesting, and presenting them so they are practical and sticky. Most important is that Guy is a devoted husband, a proud father and loves pizza night with his family and friends. ‘Go-To-Guy’ is the nickname given to him by his defense customers in the 1990’s. GovCon Voices is a regular feature dedicated to providing SmallGovCon readers with candid news, insight and commentary from government contracting thought leaders.  The opinions expressed in GovCon Voices are those of the individual authors, and do not necessarily reflect the opinions of Koprince Law LLC or its attorneys.
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GovCon Voices: Let’s Amend The HUBZone 35% Requirement

The HUBZone contracting program, while well-intended to provide economic and employment opportunities in otherwise low income, high unemployment areas, must nonetheless connect HUBZone firms with government contracts, the overwhelming majority of which are not located within a HUBZone. If HUBZone firms are to experience growth, they will need to utilize the local labor force in the area where the contract is to be performed, in addition to utilizing the labor force residing in their HUBZone to perform indirect labor functions.  As a company’s direct labor force grows, their indirect labor will also grow, producing more employment opportunities within the HUBZone, thereby fulfilling an intent of the program. The HUBZone Empowerment Act became law through the Small Business Reauthorization Act of 1997.  The Small Business Administration (SBA) regulates and implements the program, determines the businesses eligible to receive HUBZone contracts, maintains a database of qualified HUBZone businesses, and adjudicates protests of eligibility to receive HUBZone contracts.  HUBZone contracting encourages small businesses to locate in and hire employees from economically disadvantaged areas of the United States.  HUBZone entities may receive competitive advantages in winning federal contracts. The HUBZone program was designed to promote economic development and grow employment opportunities in metropolitan or rural areas with low income, high poverty rates, and/or high unemployment rates, by targeting federal contracts to small businesses in these areas.  This is a conceptual shift where contracting preference is targeted at geographic areas with specified characteristics, as opposed to targeting it to people or businesses with specified characteristics. There are five classes of HUBZones: qualified census tracts; qualified counties; Indian reservations; difficult development areas; and military bases closed under Base Realignment and Closure Act.  The program uses three mechanisms for targeting contracts to HUBZone businesses: set-asides, sole source awards, and a 10% price preference; with set-asides being the preferred method of matching HUBZone businesses with federal opportunities. The government-wide goal for most agencies is to award at least 3% of their eligible federal contracting dollars to HUBZone-certified firms [see 15 USC 644 (g)].  Almost all federal agencies participate in the HUBZone program.  Although several individual agencies often met or exceeded this goal, it has never been achieved government-wide. The following table shows the performance of HUBZone against other small business goals in fiscal year 2015. Small Business Contract Spending by Federal Agencies (FY15)
Eligible Dollars – Excludes Some Special Programs
20 Largest Spending Agencies *Millions of Dollars (rounded) Revised January 2017; Fiscal 2016 data will not be official until mid-2017

The table shows that HUBZone demonstrates tremendous potential for growth.  Peaking in 2009, the HUBZone program nearly reached its 3% goal, finishing just short at 2.7%.  Since 2011, as funding for the program has decreased, so has the use of HUBZone businesses, now averages 1.74% of procurement budget between 2013-16. ALL = All Small Businesses; SDB = Small Disadvantaged Businesses [including 8(a)]; WOSB = Women-Owned Small Businesses; SDVO = Service-Disabled Veteran-Owned Small Businesses; HUBZONE = HUBZone-Certified Small Businesses.   Source: smallbusiness.data.gov. Early program critics questioned if the program would offer enough incentive for business to choose to locate/relocate in areas they would otherwise avoid.  HUBZones are rarely located at or near Federal installations or business locations; could the failure to achieve the government’s goal be mitigated by amending the 35% requirement against all employees employed by the business, to a 35% requirement against indirect employees only?  Here is a practical example: Company “R” is a small business whose principal office is located on an Indian Reservation in South Dakota approximately 200 miles from the nearest Federal installation or location of business.  Company R has 20 employees at its principal office:  1 executive, 3 finance, 2 HR, 1 compliance, 3 business development, and 2 project managers and 8 direct employees who work in the company’s primary business line. All the employees (10 indirect; 10 direct) live on the reservation.  Meeting the all requirements to include the 35% mandate, the company certifies as a HUBZone. Implementing its growth strategy, Company R subcontracts to a prime for a contract whose place of performance is Huntsville, AL.  The subcontract is to provide 100 full time equivalent (FTE) employees.  None of the new direct employees live in the HUBZone where Company R is located, nor in any adjoining HUBZone.  As a result, of the 120 employees, only 20 (16.7%) live in the HUBZone.  Company R can no longer certify as a HUBZone company. This example, shows that as a practical matter, a company in a HUBZone is not incentivized to secure a HUBZone certification when performance on a federal contract will likely not be located near or in the HUBZone.  With 20 employees all residing in a HUBZone, Company R is capped as a 57-person labor force – in other words, either priming or subbing on a 37 FTE contract vs. the full 100 FTE.   However, if Company R were to ONLY count its indirect employees as the basis for the 35% requirement, it could continue as a HUBZone concern. Therefore, to expand the HUBZone program, legislation should be submitted to amend the Small Business Act and 13 C.F.R. 126.200 be amended to require a HUBZone small business to: Maintain a principal office located in a HUBZone and ensure that at least 35% of its indirect employees reside in a HUBZone as provided in paragraph (b)(4) of this section; or Certify that when performing a HUBZone contract, at least 35% of its indirect employees will reside within any Indian reservation governed by one or more of the Indian Tribal Government owners, or reside within any HUBZone adjoining such Indian Reservation If these changes are made, HUBZone businesses will have the potential to grow their companies and better serve the economic development needs of the areas in which they are located.  As these companies grow, their workforce from the HUBZone area will also grow to meet the company’s management and overhead needs.  Finally, these changes will better position government agencies to make their HUBZone goals. Michael Anderson, Executive Director Michael “Keawe” Anderson, is a Native Hawaiian who is passionate about advancing Native economic development. He is NACA’s principal advocate of policies and programs for the participation of Native American Tribes, Alaska Native Corporations, Native Hawaiian Organizations, and individually-owned Native businesses in the federal marketplace. NACA represents Native community-owned businesses who serve a million tribal members or shareholders by applying their earning from government contracts to the benefit of their communities. NACA recently added individually-owned Native businesses as NACA Associates. In total, these businesses provide quality goods and services to federal agencies in all 50 states and internationally. A graduate of the Air Force Academy, Mike has a master’s in business administration from the University of Northern Colorado, a master’s in strategic military studies from the Air University, and a master’s certificate in government contracting from the George Washington University. Native American Contractors Association – 750 First Street NE, Suite 950 –  Washington, DC – 20002 Phone: 202-758-2676    Email: keawe@nativecontractors.org    Website: www.nativecontractors.org GovCon Voices is a regular feature dedicated to providing SmallGovCon readers with candid news, insight and commentary from government contracting thought leaders.  The opinions expressed in GovCon Voices are those of the individual authors, and do not necessarily reflect the opinions of Koprince Law LLC or its attorneys. 
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GovCon Voices: Getting Your Joint Venture Ready In Time For The Next Big Opportunity

Joint ventures can be extremely powerful in helping small businesses capture larger government contracts. Yet, few small businesses know how they work, and even fewer understand the critical timeline and milestones required to have everything in place in time to capture those large opportunities. In this article, we will discuss why understanding the timeline is so important if you want to leverage your JV for a big win. Based on my years of working with hundreds of small businesses, I’d say that most of them don’t understand the competitive power of JVs. Seems like a no-brainer: if you lack certain assets or capabilities, find a business partner who has them. Together you’ll be a formidable competitor capable of taking on a larger project at a lower risk to the government. Needless to say, procuring agencies like that. Still, many small businesses can’t fathom how they can leverage “this JV thing.” Those small businesses who do buy into joint venturing, often face a different challenge. These businesses have the right mindset and commitment; however, when it comes to implementation, things go awry. MISTAKE: Waiting until the solicitation is out before setting up your JV. It is common for businesses to wait until they see the solicitation before seriously considering teaming and joint venturing. This may seem like a reasonable way of doing things. After all shouldn’t you first establish whether you can even compete for and perform the work? The answer is “it depends.” Yes, if you are pursuing smaller opportunities that you can perform on your own. No, if you are targeting larger opportunities where you need a teaming partner to help you win and perform on the project. Joint ventures are not formed overnight. It is a lengthy process that involves meetings, discussions, and legal work. Even though the time it takes to complete a JV may vary on a case by case basis, you should expect to spend significant amount of time… Identifying an opportunity Having multiple meetings with potential JV partners before getting the green light to proceed Engaging your legal counsel Creating a new JV entity Establishing a joint bank account for the new JV Registering the new entity with the IRS, Dun & Bradstreet and the System for Award Management Obtaining SBA or VA approval for the JV if you are planning to pursue an 8(a) or VA SDVOSB/VOSB opportunity. In addition, if you are trying to partner with a large business to pursue a set-aside opportunity, you must apply for and be accepted into the SBA’s 8(a) mentor-protege program or All Small mentor-protege program before the joint venture submits its initial proposal. Clearly, by the time the solicitation is publicized, it is already late to start gearing up for a JV. Even if you already have a JV partner in mind, the likelihood of getting everything set up and ready to go by the bid or proposal due date is very low. SOLUTION: Forecasting. Forecasting will give your firm advanced notice of upcoming opportunities and the time to plan accordingly. Here are a few tactics your firm can employ to help you in forecasting: Know your targets (i.e., the target agencies you want to do business with). This will help you focus your efforts, and get to know and connect with the buyers, small business specialist, and end users who can advise you on upcoming opportunities. You can find your target agency by doing some market research. If market research is not your forte, contact a representative at your local Procurement Technical Assistance Center. They can help you free of charge. Once you know your top target agencies, start asking the agency’s small business specialist about any big opportunities (such as IDIQ contracts) which may be coming up for competition in the next year or two. This is by far the best practice if you want to get accurate and relevant information for your forecast. You can also ask them for a copy of their agency’s procurement forecast; however, this document is usually not 100% accurate. Still, you may find it useful in helping you identify upcoming opportunities. Finally, you may have some luck in searching the Agency Recurring Forecast Site. Once you know an estimated date that the next big opportunity you’d like to pursue will be competed, give yourself plenty of time. In fact, the more the better. It is quite common for a savvy contractor to plan a year or more in advance when putting all the pieces in place for their next big opportunity. I would strongly advise that you do the same. Carroll Bernard, Govology Co-Founder Carroll Bernard brings a unique 360 degree perspective to federal contracting, coaching, and training. For over a decade, Carroll worked as a buyer for the U.S. Navy, City of Vancouver Washington, and the U.S. Department of Veterans Affairs. He has also provided mentorship, counseling, coaching, and training to hundreds of small businesses seeking government contracts as a counselor in the Procurement Technical Assistance Program as well as the U.S. Small Business Administration, where he served as a Business Development Specialist for the 8(a) program, Veterans Business Development Officer, and Primary HUBZone Liaison. Carroll is also a co-founder of Govology.com, an online community providing education to help small businesses succeed in the government marketplace. Govology offers live webinars, on-demand courses, and a podcast featuring interviews with experienced government market professionals, successful contractors, and agency representatives. Phone: 888-643-4276 Ext 1     Email: cbernard@govology.com     Website: www.govology.com GovCon Voices is a regular feature dedicated to providing SmallGovCon readers with candid news, insight and commentary from government contracting thought leaders.  The opinions expressed in GovCon Voices are those of the individual authors, and do not necessarily reflect the opinions of Koprince Law LLC or its attorneys.
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GovCon Voices: Five Quick Tips for Winning Proposal Graphics

Even skilled graphic designers often struggle with creating effective proposal graphics. While the usual rules of good graphic design still apply, proposal graphics come with their own unique set of challenges and requirements. In this post, we’ll look at some quick tips that can mean the difference between missed opportunities and winning graphics. But first, let’s dispel two common myths. Proposal Graphic Myths: Myth 1: Creating proposal graphics requires expensive or difficult software. This is a common misconception. The truth is that many effective proposal graphics are made in widely available programs like Microsoft’s PowerPoint or Visio. For graphics requiring more precision, Adobe Illustrator may be quicker and easier, but it’s not an absolute necessity—use the tools with which you’re comfortable. Myth 2: Proposal graphics need to be flashy. The truth is that clarity is much more important than pizzazz. For instance, a simple organizational chart using only straight lines, rectangles, and a couple of well-chosen colors suggests the orderliness and elegance of your solution. Meanwhile, a chart with a rainbow of colors and lines zigzagging everywhere suggests that your solution is convoluted, confusing, high-risk, and so on. While that second graphic may be more visually striking, it’s not nearly as compelling as the first. Quick Tips for Improving Proposal Graphics: Quick Tip 1: Only use graphics for important points. Nearly anything in a proposal could be represented with a graphic, and since very text-heavy pages look dull, it can be tempting to fill a proposal with graphics (especially if you have a library of old graphics you can reuse). But page space is nearly always a scarce resource in proposals. When using a graphic, make sure that it’s illustrating a key point. Graphics call a lot of attention to themselves, so make sure you’re using them to highlight major win themes, discriminators, etc.—those essential points you most want the reader to remember. On the other hand, if you simply need to provide some visual interest to a block of text, consider using a callout box rather than a true graphic—callout boxes are visually appealing and let you highlight key proof points without sacrificing much page space. Quick Tip 2: Make sure the graphic stands on its own. A common mistake is to include proposal graphics that require lengthy explanations in the body text surrounding them. Whenever you include a graphic, ask yourself, “If I saw this graphic alone, with no other text, would I understand it?” Evaluators are busy, and they’re not going to spend several minutes trying to decipher a difficult graphic. Moreover, if you need a block of text to explain what the graphic is supposed to show, then the graphic is just wasting space—the text could do that work alone. Aim for self-contained graphics that can be interpreted in 10 seconds or less. Any longer and an evaluator is likely to give up and move on. The body text around the graphic should elaborate, not explain. Quick Tip 3: Carefully craft your action captions. The captions below a graphic stand out from the rest of the text—a hurried evaluator skimming the page will naturally pay more attention to them than any one sentence in the body text. For that reason, you want to make sure your action captions effectively present your key points. For example, consider these three possible captions: Company X’s Proposed Organizational Structure. Company X’s Proposed Organizational Structure. Our proposed structure allows the Government direct access to senior decision-makers and subject matter experts. Company X’s Proposed Organizational Structure. Our proposed structure allows the Government direct access to senior decision-makers and subject matter experts, allowing for rapid response to urgent or unforeseen Government requirements. The first option is a missed opportunity. Anybody looking at an organizational chart should be able to tell immediately that it is in fact an organizational chart—if not, there’s something seriously wrong with the graphic! This caption is just wasted space. The second option is better, as it calls attention to a key feature of the organizational structure. But it doesn’t explain why that feature is a benefit to the customer—it stops short and hopes that the evaluator will make the desired inference. That may or may not happen. The third option is the best of the bunch. It calls attention to a feature of the graphic, and explains why that feature is beneficial to the customer. An evaluator who skims through the body and reads only the caption will still understand the key benefit that makes your solution the right choice. Quick Tip 4: Pay close attention to fonts. Most proposals have font restrictions in place (e.g., all text must be Times New Roman 12-point). Unless the RFP specifically states otherwise, these restrictions apply to graphics as well as body text. In other words, if you reuse an old graphic and forget to convert it from Arial 10 to Times New Roman 12, your proposal is non-compliant and at risk of rejection. Quick Tip 5: Always build graphics at actual size. The most common compliance problem isn’t using the wrong font when building the graphic, but rather, accidentally making the text too small after the fact. Inexperienced proposal graphic designers will often create a graphic using the correct font size in the PowerPoint or Illustrator source file—but when they go to move the graphic into the proposal document, they find that it’s too big. So they shrink it down to fit the page—and now the font is too small, rendering the graphic non-compliant. To avoid this problem, always design your graphics at actual size. For instance, if your proposal has 8.5”x11” pages with 1-inch margins, you have a maximum of 6.5”x9” of usable space. Make sure you set your slide (PowerPoint) or artboard (Illustrator) to those dimensions before you start building the graphic. When you insert it into the proposal, it will be exactly the size you need, eliminating the compliance risk. Never shrink graphics to fit into the proposal document. If they don’t fit, go back to the source file and make the appropriate changes there. Conversely, never expand small graphics to fit the page either—this leads to blurry, distorted graphics. Instead, go back to the source file, where graphics can be resized without loss of quality. Finally, designing your graphics at actual size has the additional benefit of making it clear from the beginning how much page space the graphic will take up. In severely page-limited proposals, shaving that extra half inch off the side of the graphic can make all the difference. Just by incorporating these five quick tips, you can immediately improve your proposal graphics and, by extension, your proposals and boilerplates as a whole. For further assistance with graphics, page layout, or any other part of the proposal process, contact Global Services today! Courtney Fairchild, President Courtney Fairchild is the President and CEO of Global Services. Global Services is a niche consulting firm focused on proposal management, proposal compliance, and GSA Schedule maintenance for federal contractors. Over the past twenty years she and her team have successfully prepared, negotiated, and managed 2,500+ federal contracts for Global Services’ clients, totaling over $20 billion dollars. Ms. Fairchild has been with the company since it was founded in 1996 and headed up the Global Services GSA Schedule Programs division from its inception. Global Services – 1401 14th St. NW, 3rd Floor, Washington, DC 20005 Phone: 202-234-8933 Email: global@globalservicesinc.com LinkedIn: www.linkedin.com/in/globalservices Twitter: @globalservicedc GovCon Voices is an occasional feature dedicated to providing SmallGovCon readers with candid news, insight, and commentary from government contracting thought leaders. The opinions expressed in GovCon Voices are those of the individual authors and do not necessarily reflect the opinions of Koprince Law LLC or its attorneys.
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GovCon Voices: A Culture of Compliance

When we talk about the federal contracting industry, one of the first things that comes to mind is compliance.  We are an overly regulated industry with a ton of laws to abide by, FAR changes to keep up with, legislation of which we need to stay on top.  None of it is particularly easy or straightforward, and it sometimes takes experts to keep your organization in compliance.  In short, no one can claim they are 100% compliant, nor can they claim to know everything with regards to this industry, especially a GovCon CEO.  That’s the bad news. The good news is that no one expects this of the CEO.  However, your attitude towards compliance goes a long way within the organization.  The example you set at the top will filter throughout the organization and will go a long way towards establishing and maintaining a company culture that follows the rules of this industry.  We all talk about making sure that the company is not on the front page of the Washington Post for getting into hot water with the law or for debarment. How can you contribute to that as a CEO?
How can you build your organization to take it seriously?
How do you keep from bogging down the wheels of progress and allow the mission goals for you and your clients to be met? Lead by example.  It sounds so easy, is in every leadership book, and is touted on every trending article on LinkedIn.  But ask yourself, who fills out your timesheet?  Do you throw 8 hours of your time into G&A and call it a day?  Do you have your admin fill out your timesheet?  Do you approve your direct reports?  Every GovCon has a timekeeping system that requires daily input and ultimately, signature submission and approval of direct reports time. Do you travel according to JTRs and/or within the per diem rates?  Do you expect your folks to abide accordingly?  As a GovCon, you just don’t travel extravagantly. Ever. Put your Money where your Mouth is.  How many emails from the Timekeeping Goon have you received?  Do you ever take the time to find out who the repeat offenders are and to speak with them about these transgressions?  Ever told your top sales person that they could have their pay docked or lose their jobs if they continue to be non-compliant?  It’s that type of discussion (and action) that shows that the company values compliance and takes it seriously. Have you had your HR folks scrub through your labor categories and the folks associated with them…proactively?  Have you righted any salary discrepancies to ensure that your workforce is fairly and consistently paid according to skill set and experience?  These suggestions all are dictated by FAR compliance and laws, but in general, they emulate good advice. Be the leader that the GovCon industry needs and keep your company on the front pages for the work you are contributing to this country; not for running afoul of the rules. Stephanie Alexander, CEO and Founder Stephanie Alexander has over 15 years’ experience providing leadership, management and problem solving to government contractors.  Stephanie has assisted businesses increase revenue, plan for manageable growth, and map successful strategies for expansion. Because government contractors often spend most of their resources on business development, but need to strengthen their back office, Stephanie founded BOOST to provide accounting, contracts, HR, and recruiting services to GovCons. She designed this unique business model to provide scalable, customized services to meet the specific needs of GovCons. In 2015, Stephanie and a partner founded govmates, a free business development tool for government contractors. Govmates is a proprietary database of government contractors seeking teaming partners to bid on opportunities. BOOST ahead: www.boostllc.net     govmates: www.govmates.com     Phone: 703-598-4595     Email: salexander@boostllc.net GovCon Voices is a regular feature dedicated to providing SmallGovCon readers with candid news, insight and commentary from government contracting thought leaders.  The opinions expressed in GovCon Voices are those of the individual authors, and do not necessarily reflect the opinions of Koprince Law LLC or its attorneys.  
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GAO’s Task Order Protest Jurisdiction Ends September 30, 2016

After September 30, 2016, unsuccessful offerors will lose the ability to challenge some task order awards issued by civilian agencies. With the House of Representatives and Senate at odds over the extent to which task orders should be subject to bid protests in the first place, it’s unclear whether that protest right will be restored. Under the Competition in Contracting Act, a protest challenging a task order award issued by a civilian agency is not permitted unless it falls under either of the following exceptions: (A) the protest alleges that the order increases the scope, period, or maximum value of the contract under which the order was issued; or (B) the protest challenges an order valued in excess of $10 million. 41 U.S.C. § 4106(f)(1). The statute, however, provides that the second exception—allowing protests challenging orders valued at greater than $10 million—expires on September 30, 2016. After that date, an offeror’s ability to protest a task order issued by a civilian agency will be limited to only those protests alleging that the order increases the scope, period, or maximum value of the underlying contract. It is important to note that this expiration applies only to task orders issued by civilian agencies; offerors can still challenge task orders issued by the Department of Defense, so long as the awards meet the same $10 million minimum. See 10 U.S.C. § 2304c(3)(1). Congress has started discussing how to address this issue. But the House and Senate remain worlds apart: the House proposes to allow civilian task order protests again, while the Senate wants to do away with task and delivery protests at GAO altogether and instead require the task and delivery order ombudsman to resolve any complaints. H.R. Rep. No. 114-537, § 1862 (p. 348); S. 2943, 114th Cong. § 819. In fiscal year 2015 (the last year for which statistics are available), GAO closed 2,647 cases; only 335 of them arose from GAO’s special task order jurisdiction. And as we have reported, 45% of protests resulted in a favorable outcome for the protester, either through a formal “sustain” decision or by way of voluntary corrective action. It would be unfortunate to permanently eliminate GAO’s ability to decide protests regarding larger task orders when the statistics indicate that such protests aren’t pervasive and are often meritorious. So what’s the bottom line? Unless Congress acts, unsuccessful offerors in civilian task order competitions will be able to protest only in very limited circumstances; these offerors must instead bring their complaints before the agency’s task order ombudsman. In the meantime, affected offerors might consider discussing the issue with their elected representatives.
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GAO’s Jurisdiction Over Most Civilian Task Order Protests Has Expired

The GAO’s jurisdiction to hear most protests in connection with task and delivery order awards under civilian multiple award IDIQs has expired. In a recent bid protest decision, the GAO confirmed that it no longer has jurisdiction to hear protests in connection with civilian task and delivery order awards valued over $10 million because the underlying statutory authority expired on September 30, 2016. The Federal Acquisition Streamlining Act of 1994 established a bar on bid protests concerning military and civilian agency task and delivery orders under multiple-award IDIQs.  FASA, as it is known, allowed exceptions only where the protester alleged that an order improperly increased the scope, period, or maximum value of the underlying IDIQ. The 2008 National Defense Authorization Act adopted another exception, which allowed the GAO to consider protests in connection with orders valued in excess of $10 million.  The 2008 authority was codified in two separate statutes–Title 10 of the U.S. Code for military agencies, and Title 41 of the U.S. Code for civilian agencies. In 2011, the provision adopted by the 2008 NDAA expired.  However, because of the way that the sunset provision was drafted, the GAO held (and correctly so, based on the statutory language), that it had authority to consider all task order protests, regardless of the value of the order. In the 2012 NDAA, Congress reinstated the GAO’s authority to hear bid protests over $10 million, and included a new sunset deadline–September 30, 2016.  This time, however, Congress changed the statutory language to ensure that if September 30 passed without reauthorization, the GAO would lose its authority to hear protests of orders valued over $10 million, rather than gaining authority to hear all task and delivery order protests. That takes us to the GAO’s recent decision in Ryan Consulting Group, Inc., B-414014 (Nov. 7, 2016).  In that case, HUD awarded a task order valued over $10 million to 22nd Century Team, LLC, an IDIQ contract holder.  Ryan Consulting Group, Inc., another IDIQ holder, filed a GAO protest on October 14, 2016 challenging the award. The GAO began its decision by walking through the statutory history, starting with FASA and ending with the  expiration of the 2012 NDAA protest authority.  GAO wrote that “our jurisdiction to resolve a protest in connection with a civilian task order, such as the one at issue, expired on September 30, 2016.” In this case, GAO wrote, “it is clear that Ryan filed its protest after our specific authority to resolve protests in connection with civilian task and delivery orders in excess of $10 million had expired.”  While GAO retains the authority to consider a protest alleging that an order increases the scope, period, or maximum value of the underlying IDIQ contract, Ryan made no such allegations.  And although Ryan asked that the GAO “consider grandfathering” its protests, GAO wrote that “we have no authority to do so.” GAO dismissed Ryan’s protest. As my colleague Matt Schoonover recently discussed in depth, the expiration of GAO’s task order authority applies only to civilian agencies like HUD, and not to military agencies.  The GAO retains jurisdiction to consider protests of military task and delivery orders valued in excess of $10 million. Matt also discussed a Congressional disagreement over whether, and to what extent, to reinstate GAO’s task and delivery order bid protest authority.  That issue will likely be resolved in the 2016 NDAA, which should be signed into law in the next couple months.  We’ll keep you posted.
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GAO’s Electronic Filing System: First Impressions

SmallGovCon readers may recall that, in 2016, the Government Accountability Office proposed an electronic filing system for bid protests. GAO released a pilot version of its new system earlier this year, and Koprince Law LLC has had the opportunity to test it on several occasions through our bid protest work. Here are some first impressions on GAO’s Electronic Protest Docketing System. EPDS is very functional and easy to use. If you’ve ever clicked a link, selected an option from a drop-down menu, and uploaded a document to a website, you’d have no problems using the system. But even if you did run into trouble, GAO has published a comprehensive user guide and videos that thoroughly explain how to use the system. Upon logging in, the user’s dashboard displays a list of each protest it has pending before GAO. This list provides basic information about the protest—GAO’s docket number (or “B-number”), identification of the protester and agency, filing date, next due date, and case status. From this page, users can also file a new protest (once that feature is active upon EPDS’s formal roll-out) or intervene in a protest that’s currently pending. Users can drill-down into each individual protest to view even more detailed information, like the solicitation number, whether there is an intervenor or if the protest is consolidated, the protester’s size status, and the identification of the GAO attorney considering the protest. Links to filed documents also appear on this page: if allowed access by GAO, users can view the protest, agency report, comments, and any other filings made. It’s from this page that users can also file documents—a pretty simple process of selecting the type of filing from a drop-down menu, then attaching a PDF document. Registered users are notified of each filing via an instantaneous email and can access filed documents right away. Overall, we are very impressed with EPDS. But there are a couple tweaks that could make the system even more useful: A messaging function. We don’t mean an instant messaging function [does anybody miss AIM?], but instead an email-esque function where parties can discuss routine matters with GAO. For example, we recently needed to request access to a document following our admission to a protective order; rather than simply sending a message within EPDS, we had to prepare and upload a letter. GAO responded immediately, but sending an internal email would have been more efficient. EPDS does have a “no objection” button, which allows users to, for example, easily state that they have no objection to a protective order application. But a broader, simple messaging function would be useful for other quick communications. Indefinite storage of protest documents. Before EPDS, it was up to the parties how they would store bid protest documents. And under the pilot program, it still is. But could a party use EPDS as its primary document storage system? This could be a great convenience for bid protest attorneys, especially if certain documents will remain accessible on EPDS even after a protest is closed. That said, we would caution against any requirement that litigants only store documents within EPDS—even in 2018, there will still be occasions where an attorney or pro se protester will need access to protest documents offline. These issues don’t detract from EPDS’s functionality or its ease of use. GAO has obviously paid significant attention to developing an easy-to-use system. As EPDS is rolled-out, we expect it will be proven a tremendous leap forward for the GAO bid protest process.
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GAO’s Civilian Task Order Jurisdiction Restored

GAO’s jurisdiction to hear protests of certain civilian task and delivery orders has been restored. On December 15, 2016, the President signed the 2016 GAO Civilian Task and Delivery Order Protest Authority Act (the “ 2016 Act”) into law.  The 2016 Act restores GAO’s recently-expired jurisdiction to hear protests of civilian task and delivery orders valued in excess of $10 million. As we recently blogged about here at SmallGovCon, the 2017 National Defense Authorization Act also restores GAO’s jurisdiction over task and delivery orders. But even while the 2017 NDAA awaits the President’s signature (or potential veto), Congress and the President have enacted separate legislation to permit GAO to resume hearing bid protests of civilian task and delivery orders. This Act makes permanent the GAO’s authority to hear protests on civilian task or delivery contracts valued in excess of $10 million. It does so by deleting the sunset provision relating to the authorized protest of a task or delivery order under 41 U.S.C. § 4106(f). While the 2016 Act permanently restores GAO’s jurisdiction over protests involving civilian task and delivery orders valued above $10 million, as noted in a prior blog, the 2017 NDAA will increase the threshold for challenging DoD task and delivery orders to $25 million. For now, however, DoD orders meeting the $10 million threshold, including those issued under civilian contract vehicles, are once again subject to GAO oversight. The enactment of the 2016 Act reinforces the importance of bid protests in the procurement process, as evidenced by the fact that 46% of protests in Fiscal Year 2016 resulted in relief for the protester (either a “sustain” decision or voluntary agency corrective action). Congress made the right call in restoring GAO’s jurisdiction, and did so even faster than the 2017 NDAA would have allowed.
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GAO: WOSB Self-Certification May Allow “Potentially Ineligible Businesses” To Get Contracts

Woman-owned small business self-certifications (which the SBA still accepts more than 2 1/2 years after Congress eliminated it) may allow “potentially ineligible businesses” to win WOSB set-aside and sole source work, according to a fascinating new GAO report. Among other things, the GAO report provides a comprehensive overview of the SBA’s progress addressing problems with the four major socioeconomic preference programs–8(a), SDVOSB, HUBZone and WOSB.  And to its credit, the SBA has fixed a number of previously-identified flaws.  But other problems remain, including the SBA’s now-longstanding failure to eliminate WOSB self-certification. The GAO Report, entitled “Small Business Administration: Government Contracting and Business Development Processes and Rule-Making Activities,” covers 45 pages.  And while it’s not the post-apocalyptic thriller I was reading on the beach last week, it’s well worth a read–covering everything from the SBA’s internal field-office and reporting structure to how long it takes SBA to publish major rules, like last year’s regulations governing the limitations on subcontracting and All Small Mentor-Protege Program. Of particular note, the GAO Report discusses oversight challenges in the four major socioeconomic programs.  The report notes that the SBA has successfully implemented corrective actions to address certain previously-identified weaknesses in its programs, including many recommendations related to the 8(a) and HUBZone programs.  But other challenges remain.  With respect to the WOSB program, in particular, the report states: The National Defense Authorization Act for Fiscal Year 2015 eliminated the self-certification process for the WOSB program and required SBA to give more authority to contracting officers to award sole-source contracts—that is, contracts that do not require competition. SBA completed a rule-making process to allow the program to award sole source contracts. Although SBA has provided an advanced notice of proposed rule making for the certification program, it has not implemented a process to eliminate self-certification as of May 2017. As a result of inadequate monitoring and controls, such as not implementing a full certification program, potentially ineligible businesses may continue to incorrectly certify themselves as WOSBs, increasing the risk that they may receive contracts for which they are not eligible. Not only is WOSB certification required by statute, I think that certification will give Contracting Officers more confidence to use WOSB set-asides and sole source vehicles.  And that, I hope, will reverse the government’s embarrassing failure to hit the 5% WOSB goal.  Perhaps the GAO Report will spur the SBA to prioritize creating the required certification program.  I’ll keep you posted.
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GAO: Where RFP Requirements Clearly Not Met, Protest Costs Reimbursable

As Koprince Law attorneys have discussed in depth, GAO will in some instances award costs for a clearly meritorious protest where an agency does not take corrective action before the due date for the agency report. But what are the standards for a “clearly meritorious” protest? It’s instructive to look at a recent GAO decision that reviewed protest grounds dealing with past performance evaluation and a requirement that the Army be able to set up the proposed product within 60 seconds. In HESCO Bastion Ltd., B-415526.3, (April 3, 2018), GAO reviewed a request by HESCO Bastion Ltd. for reasonable costs after it protested an award to JSF Systems, LLC. Under the RFP, the Army sought HESCO brand name or equal earth-filled barriers conducted under FAR part 12 and part 13. The RFP sought the Lowest Price Technically Acceptable proposal. Proposals would be rated acceptable or unacceptable based on factors including prior experience and past performance. The prior experience factor required a demonstration of 2 years of experience, within the last 5 years, manufacturing earth-filled barriers for the government. For past performance, offerors had to show details about “recent and relevant contracts for the same or similar items.” The requested items had to be HESCO brand name or equal earth-filled barriers–CART and RAID configurations, as marketed by HESCO. To be an equal product, both products must be deployed in a maximum of 60 seconds, and the RAID product had to contain “uilt rails inside for easy deployment.” The Army made award to JSF, finding its proposed products met all requirements. HESCO protested award to JSF.  After initially defending the protest by filing an agency report, the Army took corrective action. HESCO then requested reimbursement of its protest costs. The basic rule is that GAO can recommend that an agency reimburse protest costs where GAO decides “that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing a protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief.” A clearly meritorious protest is one where, reasonably, the agency had no “defensible legal position.” Normally, corrective action is prompt if taken before the agency report’s due date. In this case, with respect to whether the protest was clearly meritorious, GAO looked at each of the three protest grounds in turn to see if the agency really had a leg to stand on. First, HESCO argued JSF did not have the necessary experience where the RFP required at least 2 years of experience within the last 5 years manufacturing earth-filled barriers for the government. The agency report argued that, because JSF had experience with “delivery of earth-filled barriers” and its subcontractor had manufacturing experience, JSF met the requirement. GAO was not persuaded, holding that delivery is not the same as manufacture and the subcontractor certification was expired on its face. Second, JSF’s past performance did not meet the requirement to provide “detailed information on the contracts” of subcontractors because the proposal didn’t include all required information and the subcontractor’s required certification was expired. Plus, the Army did not evaluate whether past performance for the offeror showed recent and relevant contracts. Third, with respect to JSF’s proposed products, the Army determined that both the CART and RAID or equal products, which similarly required a maximum 60 second deployment, were evaluated as “[r]apid deployment.” The Army also determined the RAID or equal product had built rails for easy deployment, because the proposal specification sheet described the offered product as “easy to deploy by pulling open, positioning and filling.” GAO held, in a less than shocking result, that “rapid” is not the same as 60 seconds, and “pulling open, positioning, and filling” is not the same as “built rails.” In sum, then, GAO held that the documents in the Army’s position “did not provide a legally defensible basis for the agency’s position.” GAO recommended the Army reimburse costs to HESCO. As the HESCO Bastion case demonstrates, “clearly meritorious” is a high (but not impossible) standard to meet. For the protester to recover costs, the agency’s position must be legally indefensible, that is, blatantly wrong.
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GAO: Use Of CPARs Must Be Equal

Resolving a protest challenging a past performance evaluation, GAO is deferential to the agency’s determinations. It is primarily concerned with whether the evaluation was conducted fairly and in accordance with the solicitation’s evaluation criteria; if so, GAO will not second-guess the agency’s assessment of the relevance or merit of an offeror’s performance history. For protesters, therefore, challenging an agency’s past performance evaluation can be difficult. But a recent decision makes clear this task is not impossible—GAO will sustain a protest challenging a past performance evaluation if the agency treats offerors differently or unfairly, such as by more broadly reviewing the awardee’s CPARs than the CPARs of the protester. At issue in CSR, Inc., B-413973 et al. (Jan. 13, 2017) was the Department of Justice’s evaluation and award of a blanket purchase agreement to Booz Allen Hamilton. The BPA sought performance measurement tool services for the Office of Justice Programs, to assist with the Office’s award of grants to federal, state, local, and tribal agencies for criminal justice, juvenile justice, and victims’ matters. According to the solicitation, offerors were allowed to submit up to nine past performance examples. DOJ could supplement this information with “data obtained from other sources, including, but not limited to, other DOJ and OJP contracts and information from Government repositories[.]” CSR (the protester) submitted six past performance examples, three of which concerned task orders involving similar services previously performed for the agency. Booz Allen scored an exceptional rating while CSR earned only an acceptable rating. CSR filed a GAO bid protest, alleging that these ratings were caused by DOJ’s disparate treatment of the offerors. CSR contended that DOJ only considered CPARs for CSR’s submitted past performance examples (finding the quality of CSR’s prior work to be mixed) but considered Booz Allen’s CPAR ratings for past performance projects that were not identified in its proposal (finding them to be of high quality). CSR alleged that had DOJ considered CPARs for its other projects (as it had for Booz Allen), its past performance score would have been higher. GAO found the past performance evaluation to be unequal. In doing so, GAO noted that it will not normally object to an agency’s decision to limit its review of past performance information. But this discretion comes with a large caveat—as a fundamental matter of fairness, offerors must be evaluated on the same basis and the evaluation must be consistent with the solicitation’s terms. Explaining its decision, GAO wrote: [T]he agency’s evaluation of CSR’s past performance was based on only the most recent CPARs for those specific projects identified by the vendor in its quotation. However, when evaluating BAH’s past performance, the agency considered CPARs for other than the specific projects that BAH had identified in its quotation. . . . Quite simply, to the extent that the agency’s past performance evaluation of BAH considered CPARs for other than the projects specifically referenced by the awardee in its quotation, the agency was required to do the same when evaluating CSR’s past performance. As the agency was required to treat vendors equally and evaluate past performance evenhandedly, and failed to do so here, the agency’s actions were disparate and unreasonable. GAO sustained CSR’s protest. Though agencies typically enjoy discretion in evaluating past performance, CSR confirms that this discretion isn’t unlimited. Agencies must evaluate offerors fairly. This means that, if an agency considers a broad range of CPARs from one offeror, it must consider a similar range of CPARs for other offerors, too.
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GAO: Unequal Opportunity To Revise Pricing Was Improper

An agency acted improperly by inviting the ultimate contract awardee to revise its pricing, but not affording that same opportunity to a competitor–even though the awardee didn’t amend its pricing in response to the agency’s invitation. According to a recent GAO bid protest decision, merely providing the awardee the opportunity to amend its pricing was erroneous, regardless of whether the awardee took advantage of that opportunity. The GAO’s decision in Rotech Healthcare, Inc., B-413024 et al. (Aug. 17, 2016) involved a VA solicitation for home oxygen and durable medical equipment.  The solicitation contemplated award to the offeror providing the best value to the government, including consideration of four non-price factors and price. After evaluating initial proposals, the VA opened discussions with Rotech Healthcare, Inc. and Lincare, Inc. on July 28, 2015.  The VA’s discussions letter asked both offerors to submit final revised price proposals no later than July 30, 2015. Rotech responded by submitting a revised price proposal on July 29, 2015.  Lincare responded by stating that it stood by its original price. On March 7, 2016, the VA contracting specialist sent an email only to Lincare.  The VA’s email stated: The subject solicitation closed more than 6 months ago, therefore the VA would like your company to verify its offer pricing before a final award decision is made for this contract.  Attached is Lincare’s price proposal for quick reference.  Please respond either confirming the original price offer, or provide alternate price information by 6:00 pm EST on March 9th, 2016. Lincare responded to the VA’s email by stating that it (again) chose not to revise its price proposal. The VA assigned similar non-price scores to the proposals of Lincare and Rotech.  However, Lincare’s proposal was lower-priced.  The VA awarded the contract to Lincare. Rotech filed a GAO bid protest challenging the award.  Rotech argued, among other things, that the VA had improperly opened discussions only with Lintech.  Rotech contended that, had it been provided a similar opportunity, it “reasonably could have submitted lower pricing,” thereby enhancing its chances of award. In response, the VA pointed out that Lincare did not alter its price proposal.  The VA also contended that Rotech was not prejudiced by any error committed by the VA, because Lincare was already the lower-priced offeror. The GAO wrote that “the acid test of whether discussions have occurred is whether the offeror has been afforded an opportunity to revise or modify its proposal.”  And where “an agency conducts discussions with one offeror, it must conduct discussions with all offerors in the competitive range.” In this case, “ecause Lincare was given the opportunity of revising its price, we think that the agency’s invitation constituted discussions,” and “Rotech was improperly excluded” from those discussions.  Rotech’s statement that it “reasonably could have submitted lower pricing” had it been given the opportunity was sufficient to demonstrate that Rotech may have been prejudiced by the VA’s error.  The GAO sustained Rotech’s protest. Agencies have a great deal of discretion in many aspects of the procurement process, but not when it comes to discussions.  As the Rotech Healthcare case demonstrates, when an agency invites one offeror to revise its proposal, that same opportunity must be extended to every other offeror in the competitive range.     View the full article  

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GAO: Understated Pricing Alone Isn’t “Unbalanced Pricing”

Under the FAR, unbalanced pricing may increase performance risk and can result in the government paying unreasonably high prices.  But the concept of unbalanced pricing is often misunderstood in practice. As the GAO wrote in a recent bid protest decision, unbalanced pricing doesn’t exist merely because some of an offeror’s line item prices are low.  Rather, unbalanced pricing requires both understated and overstated line items–that is, some line items appear too high while others appear too low. The GAO’s decision in First Financial Associates, Inc., B-415713, B-415713.2 (Feb. 16, 2018) involved a DHS solicitation to administer the agency’s child case subsidy program.  The solicitation was issued as a small business set-aside, and contemplated the award of a contract to the offeror providing the best value considering three factors: technical merit, past performance, and price.  The solicitation apparently called for offerors’ pricing proposals to include breakdowns by contract line item numbers. After evaluating proposals, the agency awarded the contract to FEEA Childcare Services, Inc.  An unsuccessful offeror, First Financial Associates, Inc., then filed a GAO bid protest.  FFA challenged several aspects of the agency’s evaluation.  Among its challenges, FFA alleged that FEEA’s pricing was unbalanced because FEEA allegedly had priced some CLINs “extremely low.” The GAO wrote that “balanced pricing exists where the prices of one or more line items are significantly overstated or understated, despite an acceptable total evaluated price (typically achieved through underpricing of one or more other line items.)”  To prevail on an allegation of unbalanced pricing, “a protester must show that one or more prices in the allegedly unbalanced proposal are overstated; it is insufficient to show simply that some line item prices in the proposal are understated.” The GAO explained, “[w]hile both understated and overstated prices are relevant to the question of whether unbalanced pricing exists, the primary risk to be assessed in an unbalanced pricing context is the risk posed by overstatement of prices, because low prices (even below cost prices) are not improper and do not themselves establish (or create the risk inherent in) unbalanced pricing.” In this case, “FFA only claims that some of FEEA’s CLIN prices are understated; FFA does not allege that any of the awardee’s CLIN prices are overstated.”  Therefore, “FFA provides no basis for us to question the agency’s price evaluation for allegedly failing to identify unbalanced prices.” In the competitive world of government contracts, it’s not unusual for competitors to question one another’s pricing, and “unabalanced pricing” is one of those terms that is often thrown around when a competitor’s pricing appears suspect.  But as the First Financial Associates protest demonstrates, a proposal containing understated CLINs alone isn’t unbalanced–rather, unbalanced pricing requires both understated and overstated line items.
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GAO: Task Order Outside Scope of Underlying IDIQ Not Allowed

As agencies look for ways to streamline acquisitions, task and delivery order procurements are becoming increasingly popular. But an agency doesn’t have unfettered discretion to award work under a multiple-award contract; each task or delivery order must be within the scope of the awarded IDIQ. A recent GAO opinion considers what happens when an agency issues task orders that are outside the scope of the underlying multiple-award contract. In Western Pilot Service, B-415732 (March 6, 2018), Western Pilot Service and others protested the award of a task order request for proposals for single engine air tanker (SEAT) flight services to support the Bureau of Land Management’s wildfire suppression operations. The BLM issued two solicitations, in keeping with historical precedent. One was for aircraft to be available on-call when needed and would be for surge capability (the on-call solicitation). Awardees would then have the option to accept or decline work. This on-call solicitation was to be awarded based on a best-value tradeoff. The other solicitation was for 33 aircraft for dedicated BLM use for guaranteed periods of at least 100 days that would serve as the base of the fire suppression operations (the exclusive-use RFP). The exclusive-use RFP required contractors to devote their aircraft for the full 100-day task order. Again, BLM would make award based on a best-value tradeoff basis. For the 2017 wildfire season, a series of protests led the BLM to cancel the exclusive-use procurement, leaving only the on-call procurement in place for that season. After the 2017 wildfire season, instead of issuing a new exclusive-use solicitation, BLM issued the task order request for proposals, challenged here, under the on-call IDIQ contracts. The TORP called for more than 40 task orders for fixed periods at 21 locations for periods of 75, 90, and 100 days. The protesters argued that the flight services contemplated under the TORP were beyond the scope of the on-call IDIQ contracts, and the way that flight services would be furnished under the “TORP is materially different than how services are provided under the on-call contract.” GAO noted that, absent exceptions that allow for sole-source or limited competition, “[t]ask orders that are outside the scope of the underlying multiple-award contract are subject to the statutory requirement for full and open competition set forth in the Competition in Contracting Act of 1984 (CICA).” To determine if a task or delivery order is beyond the scope of an underlying contract, GAO looks at whether the order is “materially different from the original contract,” based on “the circumstances attending the original procurement; any changes in the type of work, performance period, and costs between the contract as awarded and the order as issued; and whether the original solicitation effectively advised offerors of the potential for the type of orders issued.” GAO also examines “whether the agency itself has historically procured the task order services under a separate contract, such that it appears that the agency itself has viewed the task order services as separable and essentially different in nature.” Based on this somewhat vague standard, GAO compared the on-call contracts to the TORP and found “that SEAT flight services for guaranteed periods of at least 75 days at predetermined locations are beyond the scope of the protesters’ on-call contracts.” GAO concluded that the “TORP essentially converts the on-call contracts into exclusive-use procurement vehicles.” GAO compared the specifics of the two types of services (on-call and exclusive-use), noting that the on-call services were for emergencies, for shorter periods when needed, with aircraft moving to various locations around the country. The exclusive-use TORP services, conversely, were for one location, for 75 days or more, and for BLM use for an entire period. The historical distinction between exclusive-use and on-call services also helped persuade GAO that an exclusive-use order under the on-call contract was beyond the scope of the original award. GAO noted that there was competitive prejudice because the protesters “did not anticipate that their on-call daily availability, flight hour, and mobilization rates would become ceiling prices for a task order competition for the exclusive-use services, something that had not been done previously.” If they had known, they would have structured their pricing differently. What to make of this decision, then? It certainly seems as if the agency got tired of the cycle of protests and decided to stick with its existing, on-call procurement in order to fit the acquisition needs that had been met by the exclusive-use solicitation. In other words, BLM tried to fit a round peg (the exclusive-use need) into a square hole (the on-call contract vehicle). In the world of multiple-award contracts, such a practice is not allowed.
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GAO: Subcontracting Plan Required by Solicitation Must be in Proposal

It’s a basic tenet of government contracting that a contractor must comply with the requirements of an agency solicitation. Those are the rules of the game. But in practice, there can be some tricky calls. For instance, what if a solicitation includes a requirement that appears to conflict with the FAR? Does an offeror still have to comply? A recent GAO decision explored this situation in the context of a solicitation’s requirement for subcontracting plans. The decision in Land Shark Shredding, LLC, B-415908 (March 29, 2018) concerned a solicitation from the VA for document shredding services. The RFQ was set aside for veteran-owned small businesses. The RFQ included three evaluation factors: technical, price, and past performance. As part of the technical factor, the RFQ required vendors submit a subcontracting plan.  Under the subcontracting plan, vendors were to: The RFQ advised vendors that “[f]ailure to provide the information requested in the evaluation criteria may result in being found non-responsive.” The CO, in response to an inquiry about why it did not receive the award, told Land Shark Shredding, LLC (Land Shark) that its quotation was nonresponsive, in large part because it did not provide a subcontracting plan. Land Shark argued that, because it is a small business, and small businesses are not required to submit small business subcontracting plans, it should not have been found at fault for not submitting a subcontracting plan. The Solicitation included FAR clause 52.219-9, Small Business Subcontracting Plan, which the GAO agreed by its terms states that “[t]his clause does not apply to small business concerns.” GAO held that the RFQ’s evaluation subfactor required the submission of a subcontracting plan, and the RFQ stated this would help the VA “assess the contractor’s compliance with the limitations on subcontracting or percentage of work performance requirement. Therefore, “it is clear that the RFQ required vendors to submit a subcontracting plan, not a small business subcontracting plan pursuant to the inapplicable FAR and VAAR clauses.” In addition, Land Shark argued that it had informed the agency as part of its proposal that “use of subcontractors on the contract remained undecided, which served as its subcontracting plan” or, alternatively, that it might perform the work without subcontractors. GAO was not buying that argument, holding that “Land Shark’s indecision about whether it will perform the work itself or employ a subcontractor to fulfill the requirements does not provide the information requested by the RFQ, and did not provide sufficient information to allow the VA to assess compliance with the limitations on subcontracting requirement.” GAO also noted that, to the extent Land Shark was protesting that the subcontracting plan requirement itself was unnecessary for the procurement, this was an untimely challenge to the terms of the solicitation. Viewed through the GAO’s eyes, it seems like a simple decision that when a solicitation calls for a subcontracting plan, a contractor must submit one. However, from the contractor’s perspective, (a) the solicitation was asking for something that was not required under the FAR and (b) the contractor attempted to honestly state in its proposal that it did not know if it would use subcontractors. After all, this was a paper shredding contract, probably on the less complicated end of the universe of government contracts. GAO, as usual, stuck to the rules of the game: if it’s required in the solicitation, it better be in the proposal. As GAO noted, if you don’t think the solicitation requirements are reasonable, that is a pre-award challenge.
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GAO: Solicitation Terms Trump Standard Industry Practice

An offeror’s proposal must conform to all technical requirements of an agency’s solicitation–even if the offeror believes those requirements to differ from standard industry practice. In a recent bid protest decision, the GAO held that an agency appropriately rated an offeror’s proposal as technically unacceptable because the offeror failed to conform to certain material solicitation requirements; the offeror’s insistence that those requirements varied from standard industry practice was irrelevant. In Wilson 5 Serv. Co., Inc., B-412861 (May 27, 2016), the VA issued a SDVOSB set-aside RFQ seeking facility maintenance support operations at the VA’s Capitol Region Readiness Center (CRRC). The CRRC operates on a 24-hour per day, 7-day per week, 365-days per year (24/7/365) basis and serves a mission-critical role in the VA National Data Center Network. The RFQ’s PWS required offerors to “determine the appropriate onsite staffing levels to support a 24/7/365 operations.” In written responses to vendor questions, the VA confirmed that “t is a requirement for staff to work onsite in support of the CRRC 24/7/365.” Wilson 5 Service Company, Inc. (“Wilson 5”) was one of three offerors to submit quotations. Wilson 5’s staffing plan included on-site staffing from 7am to 5pm and emergency “on-call” services after hours, with an ability to call back personnel to the facility if necessary. The VA determined that Wilson 5’s “lack of off-hours onsite support represents a material failure to meet the Government’s requirement . . ..”  The VA rated Wilson 5’s quotation as unacceptable, and excluded Wilson 5 from the competitive range. Wilson 5 filed a GAO bid protest. Wilson 5 acknowledged that its quotation did not provide for 24/7/365 onsite support. Wilson 5 argued, however, that the RFQ did not require vendors to provide onsite off-hours staffing. Wilson 5 noted that it is “standard industry practice for a contract to provide 24/7/365 coverage by calling back personnel to the facility for an emergency,” rather than staffing the facility onsite during off-hours. GAO wrote that, when a protester and agency disagree over the meaning of a solicitation, GAO will read the solicitation “as a whole and in a manner that gives effect to all of its provisions.” In this case, GAO held, “the agency’s interpretation of the RFQ, when read as a whole, is reasonable, and the protester’s interpretation is not reasonable.” The GAO noted that various portions of the solicitation “advised vendors of the responsibility to provide onsite staffing to support the 24/7/365 operation.” GAO found that there was no indication that the solicitation could be interpreted to permit call back service as an alternative to the on-site staffing requirement. GAO denied Wilson 5’s protest. This decision serves as a reminder that offerors must meet the Government’s technical requirements, even if those requirements appear to vary from standard industry practice. As Wilson 5 learned the hard way, the plain terms of a solicitation will trump standard industry practice. Megan Connor, a summer law clerk with Koprince Law LLC, was the primary author of this post.
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