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Thank you, Cross Timbers!

It was a great honor to be a speaker at the 2018 Government Procurement Conference in Arlington, Texas. The event was organized by the Cross Timbers Procurement Technical Assistance Center from the University of Texas at Arlington. My talk ranged from basic bid protest matters, to cybersecurity, to threats facing small businesses (including Amazon), and the 2019 NDAA. I hope those in attendance learned something. I know I learned from you (you know who you are). Special thanks to Gregory James and Loren L. Hitchcock for organizing the event and everyone who worked so hard to make it happen. It was great to connect with clients and make new friends. Hope to see you all again soon.
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Thank you, Boise!

Last week I had the fantastic opportunity to travel to Boise to speak at the Idaho Small Business Contracting Symposium.  My talk focused on recent updates in the law relating to contracting with the Federal government. It was a broad topic I hope was valuable to all who attended. The symposium provided a wonderful opportunity to meet some clients face-to-face after having established a relationship over email and the phone and also to make some great new contacts. Huge thanks to Gary Moore and Lee Velton and the Idaho PTAC for organizing and inviting Koprince Law LLC to speak. Thanks to all who stopped by the table (and if you asked me where to get a copy of the Joint Ventures handbook, here’s a handy dandy link.) Next stop: Kansas SBDC Cybersecurity Forum in Manhattan, Kan., April 25, where I’ll be on the Identify, Protect, Detect, Respond, Recover panel. The event is sponsored by the Washburn Kansas Small Business Development Center. Registration is open. Hope to see you there.
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Thank You, APTAC!

I am on my way home from San Diego, where I spent yesterday at the APTAC Spring Conference.  My presentation focused on recent major legal updates in government contracting, including key provisions of the 2017 National Defense Authorization Act, implementation of the All Small Mentor-Protege Program, and more. APTAC is a wonderful organization and it is always such an honor to speak at an APTAC national conference.  Thank you to Becky Peterson, Teri Bennett, Tiffany Scroggs, and all of the APTAC leadership for inviting me to be part of this spring’s event.  And thank you to all the PTAC counselors who asked great questions and had kind words about the presentation (and a few lighthearted jests about KU’s tournament woes, too). I say it all the time, but it’s worth saying again: if you are a small business in government contracting, you owe it to yourself to see what your local PTAC can do for you.  Visit the ATPAC website to get started.
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Koprince Law LLC

Koprince Law LLC

 

Thank You, Alliance NW & National RES!

I am back in Lawrence after two fantastic trips to the West Coast, in very rapid succession. Last Thursday, I was in Puyallup, Washington for the annual Alliance Northwest conference.  As always, the conference was one of the best events of its type nationwide.  Thank you to Tiffany Scroggs and her colleagues at the Washington PTAC for sponsoring this great event and inviting me to participate.  If you missed Alliance Northwest (and my presentation on the SBA’s All Small Mentor-Protege Program), the presentations are all posted on the conference website.  Check it out, and circle your calendar for next year’s Alliance NW. Yesterday, I was in Las Vegas for the National Reservation Economic Summit conference.  It was my first time at National RES, and I was very impressed with this outstanding event.  If it weren’t for a very lengthy to-do list back here at the office, I’d happily be enjoying the remaining days of the conference.  A big “thank you” to the National Center for American Indian Enterprise Development for sponsoring National RES and inviting me to speak. After logging quite a few frequent flyer miles, I’m happy to be closer to home for the next several weeks.  But just because I’ll be in Kansas doesn’t mean that I won’t be engaging in one of my favorite pastimes: speaking at length about government contracting legal issues.  Join me on Thursday for “Obtaining and Maintaining the SBA’s HUBZone Certification,” an online seminar sponsored by my good friends at GOVOLOGY.
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Koprince Law LLC

Koprince Law LLC

 

Thank You, 8(a)s!

I am back in Kansas, where it is a balmy 39 degrees, after a great trip to Orlando for the National 8(a) Association Small Business Conference. The weather in Florida was “for real” balmy, as my kids might say–but as tempting as the sunny outdoors was, the convention hall was packed with representatives from 8(a) companies, large primes, government agencies, and others.  You know a conference has great content–and great networking–when attendees voluntarily choose the lecture hall over a nearby sun-drenched pool. At the Small Business Conference, I was part of a panel focusing on joint venturing and teaming issues.  Thank you to my fellow panelists, Shawn Ralston of AECOM and Jesse Binnall of Harvey & Binnall PLLC, for offering some great information and perspectives.  Thank you, also, to Ron Perry and the National 8(a) Association leadership for putting together this incredible event and inviting me to participate.  And thank you most of all to all those who attended the panel or stopped by the Koprince Law LLC booth.  It was wonderful to see so many familiar faces and make so many new connections. Next on my travel calendar: the Alliance Northwest conference on March 9, where I’ll be speaking in-depth about the legal aspects of the SBA’s new All Small Mentor-Protege Program.  If you’re in the Pacific Northwest (or just love a fantastic government contracts conference), I hope to see you there!
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Koprince Law LLC

Koprince Law LLC

 

Thank You, 8(a)s!

I am back in Lawrence after a wonderful three days at the National 8(a) Association 2018 Small Business Conference in Nashville.  I was part of a great panel on Wednesday on the SBA’s All Small Mentor-Protege Program, and spent a lot of time on the trade show floor talking about government contracts with 8(a)s, government leaders, and large businesses. A big “thank you” to Ron Perry, Paula Arevalo, and the rest of the National 8(a) Association for inviting me to participate in this fantastic event.  Thank you, also, to everyone who attended my panel or stopped by the Koprince Law LLC booth to say hello.  It was great to see so many familiar faces and make many new connections. I’ll be sticking close to home in February, but head to sunny Florida in early March for the APTAC Spring Conference.  PTAC counselors, I look forward to seeing you there!
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Thank You, APTAC!

I am back in Kansas after a fantastic trip to Jacksonville, Florida, where I spent yesterday at the Association of Procurement Technical Assistance Centers Spring Conference. My morning general session focused on important recent developments in government contracting–everything from key provisions of the 2018 National Defense Authorization Act to the impact of the RAND Corporation’s bid protest report. It was great to see so many familiar faces.  Thank you to all of the wonderful PTAC counselors who attended the session and asked great questions during the presentation and after.  A big thanks to Scott Knapp of our local Kansas PTAC, who provided a warm introduction.  And a special thank you to the attendees who took my advice and really did “live Tweet” about the great pink tie my daughter gave me last Father’s Day! Spending time with the PTACers is always one of the highlights of my professional year.  If you’re a government contractor who hasn’t yet connected with your local PTAC, you’re missing out.  Visit the APTAC homepage to find out more.
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Termination For Default: The “No Reasonable Likelihood” Standard

Sometimes you may find yourself running late. It happens to the best of us for a multitude of reasons. But what happens to federal contractors when they are running late in performing under a contract and there is “no reasonable likelihood” of timely performance? Unfortunately for contractors in this position, as illustrated by a recent Civilian Board of Contract Appeals (CBCA) decision, the result may be a default termination. In Affiliated Western, Inc. v. Department of Veterans Affairs, CBCA No. 4078 (2017), the VA awarded AWI a contract to renovate the surgical unit at a VA Medical Center in Iron Mountain, Michigan. Following mounting issues in contractual performance, the Contracting Officer issued a default termination. The contractual issues giving rise to the default termination began early on in contract performance. Specifically, the Solicitation “warned potential bidders, that the schedule for the project ‘is very aggressive’ and involves ‘a very important department to the facility.’” AWI, as the awardee, was to provide renovations in five phases within a 400-day deadline. Contract performance started off strained due to architecture and engineering errors and omissions in the contract specifications for which the VA required AWI to perform several changes. All the while the VA and AWI continued debate over schedule submissions, which the VA found inadequate and refused to approve. The relationship between the parties became further strained. Six months into contract performance, the VA issued its first cure notice. After, AWI failed to complete phase 1 on time, and the VA denied AWI’s requests for contract modification for compensation and time extensions. Performance issues came to a head when AWI’s subcontractor, one of only two contractors in the remote area of contract performance that held the medical gas certification necessary to perform the project, reported AWI’s failure to make prompt payment despite AWI receiving payment from the VA. Afterwards, the subcontractor walked off the job. Then, less than a year into contract performance, the contracting officer issued a show cause notice citing AWI’s failure to complete phases 1 and 2 within the time required by the modified contract and ultimately issued a default termination in accordance with FAR 52.249-10, Default (Fixed-Price Construction). AWI appealed the VA’s default termination to the CBCA and sought conversion to a termination for convenience. The CBCA sustained the VA’s default termination finding and denied AWI’s appeal. In making its decision, the CBCA noted that default termination is “a drastic sanction which should be imposed (or sustained) only for good grounds and on solid evidence.” When a default is based on the contractor’s failure to prosecute the work, the contracting officer must have a reasonable belief that there was “no reasonable likelihood” that the contractor could perform the entire contract effort within the time remaining for contract performance. A termination for failure to make progress “usually occurs where the contractor has fallen so far behind schedule that timely completion becomes unlikely.” In this case, since the VA established reasonable grounds to believe that AWI may not be able to perform the contract on a timely basis in issuing a cure notice as a precursor to possible default termination, and since AWI had failed to respond to the cure notice with adequate assurances, the VA had met its initial burden of proving that there were good grounds and solid evidence to support the termination. The burden then shifted to AWI to prove that “there were excusable delays under the terms of the default provision of the contract that render[ed] the termination inappropriate, or that it was making sufficient progress on the contract such that timely contract completion was not endangered.” To recover under this theory of excusable delay, AWI also needed to show: “(1) the delay is of an ‘unreasonable length of time,’ (2) the delay was proximately caused by the Government’s actions, and (3) the delay resulted in some injury to the contractor.” Applying a critical path schedule analysis to these requirements, the CBCA rejected AWI’s argument that extension of time for part of the project should automatically extend the total performance date. Thus, AWI could not rely on the VA contract modifications to excuse its delay where AWI could not prove it affected AWI’s critical path schedule. Accordingly, the CBCA found that “AWI failed to provide any evidence that it had fulfilled the contract requirement to provide the contracting officer with a schedule identifying the critical path and demonstrating how the schedule would be impacted by the VA’s alleged actions.” The CBCA concluded the VA to have properly terminated AWI for default, and denied AWI’s appeal. Undoubtedly, federal contractors seek to perform contracts on time and within budget. However, the facts present in AWI demonstrate that when there is “no reasonable likelihood” that the contractor could perform the entire contract effort within the time remaining for contract performance, the end result may be a default termination.
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Koprince Law LLC

Koprince Law LLC

 

Tax Extensions Don’t Impact Small Business Size, SBA OHA Confirms

Contrary to common misconception, a contractor’s small business status under a receipts-based size standard ordinarily is based on the contractor’s last three completed fiscal years–not the last three completed fiscal years for which the contractor has filed a tax return. In a recent size appeal decision, the SBA Office of Hearings and Appeals confirmed that a contractor cannot change the relevant three-year period by delaying filing a tax return for the most recently completed fiscal year. OHA’s decision in Teracore, Inc., SBA No. SIZ-5830 (2017) involved the major DHS PACTS II solicitation for IT support services.  The solicitation was set aside for SDVOSBs and contemplated the award of numerous IDIQ contracts.  Functional Category 1, which pertained to program management and technical services, was assigned NAICS code 541611 (Administrative Management and General Management Consulting Services), with a corresponding $14 million size standard. On July 11, 2014, Teracore, Inc. submitted a proposal, self-certifying as an SDVOSB.  At that time, Teracore’s 2013 fiscal year had ended, but Teracore had not yet filed its 2013 tax return. In February 2017–about two-and-a-half years after Teracore submitted its proposal–the DHS announced that Teracore would be awarded a contract under Functional Category 1. Two competitors subsequently filed protests challenging Teracore’s size under the $14 million size standard. The SBA Area Office asked Teracore to produce its 2013 tax return, even though that tax return had not yet been filed on July 11, 2014.  The SBA Area Office then calculated Teracore’s size using Teracore’s 2011, 2012, and 2013 tax returns.  The SBA Area Office determined that Teracore exceeded the $14 million size standard, and was ineligible for award. Teracore filed a size appeal with OHA.  Teracore argued that the 2013 tax return was not available until October 2014, several months after Teracore self-certified as small for the PACTS II solicitation.  Teracore argued that the SBA Area Office should have calculated Teracore’s receipts using the company’s 2010, 2011, and 2012 tax returns. Under the SBA’s regulations at 13 C.F.R. 121.104(b)(1), “[a]nnual receipts of a concern that has been in business for three or more completed fiscal years means the total receipts of the concern over its most recently completed three fiscal years divided by three.”  Further, 13 C.F.R. 121.104(a)(2) specifies that where a company has not yet filed a tax return for a particular year, “SBA will calculate the concern’s annual receipts for that year using any other available information,” such as books of account, financial statements, or even “information contained in an affidavit by a person with knowledge of the facts.” In this case, OHA wrote that because Teracore self-certified as small in July 2014, “the proper period of measurement for computing [Teracore’s] receipts is from 2011 to 2013–‘the most recently completed three fiscal years’ immediately preceding self-certification.”  Although Teracore’s 2013 tax return had not yet been filed when Teracore submitted its proposal, “the unavailability of a tax return does not alter the period of measurement, but instead requires the consideration of ‘other available information.'” Of course, by the time the SBA evaluated Teracore’s size in 2017, Teracore had filed its 2013 tax return.  OHA held that it was appropriate for the SBA Area Office to consider the tax return, even though it had been filed after the July 2014 self-certification.  “At a minimum,” OHA wrote, “the Area Office could properly consider a tax return filed after the date of self-certification to be ‘other available information’ which can be used to calculate size.” OHA denied Teracore’s size appeal, and affirmed the SBA Area Office’s size determination. In my experience, contractors who are approaching a size standard ceiling often think–like Teracore–that they can affect the relevant three-year period by delaying filing a tax return.  Nope.  As the Teracore size appeal demonstrates, the SBA doesn’t decide which three-year period to use based on whether tax returns have been filed, but rather based on whether the fiscal year has been completed.
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Koprince Law LLC

Koprince Law LLC

 

Supreme Court Declines to Hear Case: 8(a) Program Survives Constitutional Challenge

In a big victory for proponents of the 8(a) program, the Supreme Court of the United States has denied the Petition for Certiorari filed by Rothe Development, Inc. Consequently, the decision of the Court of Appeals for the D.C. Circuit finding the statutes establishing 8(a) program to be constitutional will be allowed to stand. For those of you who are new to the Rothe Development case, it is a long-running constitutional challenge to the SBA’s 8(a) Business Development program. Rothe argued that the statutes implementing the 8(a) program establish a racial classification in violation of the equal protect rights afforded by the Due Process clause of the Fifth Amendment. Rothe contended the statute should be struck down as unconstitutional, which would mean the end of the 8(a) program–or at least the 8(a) program as we know it. Rothe Development has been making its way through the federal court system since 2015. In an earlier decision, the District Court for the District of Columbia upheld the 8(a) program despite subjecting the statutes to the Supreme Court’s most intense level of legal scrutiny. Rothe subsequently appealed the decision of the Court of Appeals for the D.C. Circuit. As we covered, the D.C. Circuit concluded that a less demanding level of scrutiny applied, which the 8(a) statutes comfortably passed. Accordingly, the 8(a) statutes were allowed to stand. After its loss at the D.C. Circuit, Rothe development filed a petition for Certiorari, which we also covered. A Petition for Certiorari is the formal process by which a party not entitled to an appeal as a matter of right may nevertheless request the Supreme Court decide its case. The Supreme Court, however, grants a very limited number of petitions each year. Rothe Development’s Petition for Certiorari was not granted by the Supreme Court. As a result, the decision reached by the D.C. Circuit finding the 8(a) program to be constitutional will stand. While Rothe Development ends with the 8(a) program’s survival, the decisions do leave the program open to further legal challenge. Most notably, the difference in legal scrutiny applied between the District Court and the Court of Appeals indicates that there may be more than one reasonable interpretation of the 8(a) programs statutes, which could result in further litigation down the road. Additionally, Rothe (apparently for strategic reasons), challenged only the underlying statutes–not the SBA’s regulations implementing them. A separate constitutional challenge to the regulations remains a possibility. For now, however, the 8(a) program stands unscathed–and 8(a) supporters can breathe a big sigh of relief.
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Koprince Law LLC

Koprince Law LLC

 

Successful NAICS Code Appeal Dramatically Alters Size Standard

NAICS code appeals, while little known, can be an extraordinarily powerful tool when it comes to affecting the competitive landscape of government acquisitions. Case in point: in a recent NAICS code appeal decision issued by the SBA Office of Hearings and Appeals, the appellant prevailed–and obtained an order requiring the contracting officer to change the solicitation’s size standard from 500 employees to $15 million. OHA’s decision in NAICS Appeal of Hendall Inc., SBA No. NAICS-5762 (2016) involved an HHS solicitation for support for its public engineering platform.  HHS issued the solicitation as a small business set-aside under NAICS code 511199 (All Other Publishers), with a corresponding 500 employee size standard. Here’s where many small businesses would throw in the towel: “500 employees?  I can’t compete with that.  I’m moving on to the next solicitation.” But Hendall Inc. understood that a prospective small business offeror has the right to file a NAICS code appeal directly with OHA.  So Hendall filed a NAICS code appeal, arguing that the HHS had assigned an incorrect NAICS code.  Hendall made the case that the appropriate NAICS code was 561422 (Telemarketing Bureaus and Other Contact Centers), with a corresponding $15 million size standard. The incumbent contractor–which presumably was small under the 500-employee size standard, but not under the $15 million size standard–intervened in the case.  The incumbent argued that HHS’s original NAICS code designation was correct. OHA evaluates NAICS code appeals primarily by comparing the solicitation’s statement of work to the NAICS code definitions in the Census Bureau’s NAICS Manual.  In this case, OHA noted that the NAICS Manual defines NAICS code 511199 as establishments “generally known as publishers,” who “may publish works in print or electronic form.”  NAICS code 561422, in contrast, comprises “establishments engaged in operating call centers that initiate or receive communications for others via telephone, facsimile, email, or other communication modes . . ..” After examining the statement of work, OHA wrote that “the Contractor will not be writing, editing, or in any other way producing publications for [HHS].”  Because “the Contractor will not be engaged in activities which constitute publishing . . . the CO’s designation of a publishing NAICS code for this procurement is clear error.” Having found the original NAICS code to be erroneous, OHA then turned to the question of what NAICS code was appropriate.  This second part of the analysis is as important as the first; OHA is under no obligation to accept the appellant’s proffered NAICS code even when OHA agrees that the original NAICS code was incorrect.  In many cases, OHA has assigned a third code–one that neither the appellant nor the agency wanted. In this case, however, OHA wrote that “the operating of the Contact Center appears to be the major part of this procurement.”  The Contact Center, in turn, “responds to inquiries by telephone, email, fax and postal mail.”  Thus, while Hendall’s suggested NAICS code might not be the “perfect fit,” OHA concluded that NAICS code 561422 “best describes the principal purpose of the instant acquisition . . ..” OHA granted Hendall’s NAICS code appeal.  OHA issued an order requiring HHS to “amend the solicitation to change the NAICS code designation from 511199 to 561422.”  And just like that, the solicitation’s size standard changed from 500 employees to $15 million. The Hendall NAICS code appeal, on its surface, is a fact-specific case about a particular HHS solicitation.  But beyond that, the Hendall case is an example of the potential power of a NAICS code appeal.  By successfully appealing the solicitation’s NAICS code, Hendall dramatically affected the competitive pool for the solicitation–including, potentially, excluding the incumbent as an eligible offeror.
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Koprince Law LLC

Koprince Law LLC

 

Strict GAO Timeliness Rules Apply to Supplemental Protests

GAO interprets its bid protest timeliness rules very strictly, as readers of this blog will know. These timeliness rules typically pertain to the initial protest, but are equally important when a protester files a supplemental protest. Often, supplemental protests are filed after the protester receives the agency’s response and comes to learn new information that wasn’t previously available. If a supplemental protest raises allegations independent of those set forth in the initial protest, the supplemental protest must independently satisfy GAO’s strict timeliness rules. A recent GAO decision shows how easy it can be to slip up on these deadlines when considering a supplemental protest. In Medical Staffing Solutions USA, B-415571 (Dec. 13, 2017), the protester (MSS) objected to the award of a contract to WJM Professional Services, LLC for emergency physician services at an Army fort.  MSS timely filed its initial protest on October 16, 2017. The four initial protest grounds were: Failure to evaluate WJM’s lack of past performance. That if WJM had been assigned a neutral past performance rating, it would not have been eligible for award. Improper evaluation of WJM’s technical proposal. An “unreasonable best-value tradeoff evaluation because MSS’s better past performance rating and lower price should have outweighed WJM’s superior technical rating and lack of past performance.” In a GAO bid protest, when an agency intends to respond to a protest on its merits, the agency is required to submit an agency report, which contains the agency’s legal opposition and all relevant documentation. On November 3, the Army submitted a partial agency report containing all relevant documents except for the legal memorandum and contracting officer’s statement of facts. The partial agency report included a Price Negotiation Memorandum, a technical evaluation document, and the relevant portions of WJM’s proposal. On November 15, the due date, the Army submitted the remainder of its agency report. After an agency report is filed, the ball is back in the protester’s court. If the protester wants to continue the process and obtain a GAO decision, the protester must file comments on the agency report within 10 days of receipt. On November 27, MSS filed its comments on the agency report. The comments were filed within the 10-day deadline after receipt of the complete agency report, that is, 10 days after November 15. (If you’re scratching your head wondering how November 27 can be 10 days after November 15, don’t worry, you’re not going crazy. Under GAO’s rules, if the 10th day falls on a weekend or federal holiday, the protester has until the next working day to file its comments. November 25, 2017, was a Saturday). In its comments, MSS seemed to make new allegations based on the information MSS had learned in the November 3 partial agency report. For example, MSS contended that the agency had not properly evaluated the realism of WJM’s price. GAO wrote that any independent protest grounds raised by MSS in its comments on the agency report were untimely. Under the GAO’s timeliness rules, a protest ordinarily must be filed within 10 days of the date the protester knew or should have known of the basis of protest. There’s no exception when the protester learns of the basis of protest as part of a partial agency report. Here, the submission of the partial agency report on November 3 triggered the knew-or-should-have-known date, and the supplemental protest grounds were raised on November 27, well after the 10-day period had ended on November 13. While the calendar math is pretty easy, deciding what constitutes an “independent” protest ground seems much more difficult. GAO does not provide a definition for what makes for an independent protest ground, but it did a comparison of the initial and supplemental protest grounds that sheds a little light on the definition. In MSS’s case, GAO wrote: GAO dismissed the protest. The price realism distinction seems clear to me. The protestor did not attack the price-realism evaluation in the initial protest but raised it in the supplemental protest. In contrast, the distinction between (a) WJM lacking “relevant past performance” (raised in the initial protest) versus (b) the agency “should have rated WJM’s past performance less favorably” (supplemental protest) is a pretty fine one. It’s hard to think MSS argued in its initial protest that the awardee had no past performance without also arguing that the evaluation of the past performance was flawed. But that was what GAO held. Agencies often produce the entire agency report at the same time, meaning that the comments deadline and supplemental protest deadline are the same. But not always. My take home lesson is: get a supplemental protest on file within 10 days of the first documents received from the agency, rather than having to rely on a comparison of the allegations raised in the initial and supplemental protest to determine if the supplemental grounds are “independent.” And if there’s any doubt as to whether a particular allegation is new, err on the side of caution and consider it a supplemental protest. That way, you potentially avoid losing a protest on such fine distinctions.
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SSA vs. SSEB: Protest Sustained Where Ratings Changes Weren’t Reasonable

In a best value acquisition, the final decision is typically made by a Source Selection Authority. But what happens when the SSA disagrees with the ratings assigned by the evaluators, such as a Source Selection Evaluation Board? The SSA has a good deal of discretion, but that discretion isn’t unlimited. In a recent decision, GAO sustained a protest where the SSA’s disagreements with the SSEB didn’t appear to be reasonable.  Immersion Consulting, LLC, B-415155 et al. (Dec. 4, 2017) involved the procurement of program management support services by the Department of Defense’s Defense Human Resources Activity. Proposals were to be evaluated on three factors: technical, past performance, and price. Technical approach was the most important factor, followed by past performance, then price. Award was to be made on a best value basis. Immersion and NetImpact Strategies, Inc. were the only offerors to timely submit proposals in response to the Solicitation. In accordance with the Solicitation’s evaluation plan, each company’s proposal was first evaluated by an SSEB. The SSEB awarded Immersion’s proposal three strengths, resulting in an overall technical score of Outstanding. NetImpact’s proposal received two strengths and one weakness, resulting in an overall rating of Acceptable under the technical factor. Immersion and NetImpact’s proposals were evaluated as equal under the past performance factor, and NetImpact offered a lower price. The SSEB’s report was then passed off to the SSA, who was to make the final award decision. After reviewing the SSEB’s findings, the SSA determined strengths and weaknesses should be allocated differently. With respect to Immersion’s Proposal, the SSA agreed with only one of the SSEB’s three assessed strengths. He removed the other two. Similarly, with regard to NetImpact’s proposal, the SSA did not agree with one of the strengths or the weakness identified by the SSEB. These scores were also eliminated. After the SSA’s reevalation, both proposals were scored as Acceptable under the technical factor. Since both Immersion and NetImpact’s proposals were determined to be equal with regard to the technical and past performance factors, price became the determining factor. Because NetImpact proposed a lower price, it was named the awardee. Following the award announcement, Immersion filed a protest with GAO, arguing that the SSA’s independent analysis was flawed. The DoD countered that the SSA had properly documented his revaluation and that the award was proper. In resolving the protest, GAO noted that “[a]lthough source selection officials may reasonably disagree with the ratings and recommendations of lower-level evaluators, they are nonetheless bound by the fundamental requirement that their independent judgments must be reasonable, consistent with the provisions of the solicitation, and adequately documented.” According to GAO, the SSA did not meet that burden. GAO first concluded that the record didn’t support the SSA’s removal of the weakness from NetImpact’s evaluation. The SSA removed the weakness because he “was not convinced” the errors in the NetImpact’s proposal would negatively impact its performance. GAO was unable to determine what the SSA relied on in making this determination. Indeed, GAO found “[t]here is nothing in the contemporaneous record or the agency’s filings documenting what, if anything, the SSA reviewed to support the SSA’s conclusion[.]” Further, there was no evidence that “the SSA discussed the SSEB’s concern with the SSEB.” Without any contemporaneous justification, it was unreasonable for the SSA to remove the weakness. GAO similarly found the SSA’s removal of one of Immersion’s strengths to be unreasonable. According to the SSA, it felt the SSEB’s comments awarding the strength to Immersion were “too general and did not specify how the approach exceeded the [solicitation] requirements.” In GAO’s opinion, however, “the SSEB’s comments were specific and identified the impact of the approach on the quotation, as well as how the approach benefited the government.” As such, GAO found the removal of the strength from Immersion’s proposal to be unreasonable. Finally, since the SSA’s changes to each company’s technical ratings had technically leveled proposals leaving only price to be the determining factor, GAO concluded that the underlying best value source selection decision was flawed. Accordingly, GAO recommended the agency reevaluate proposals and make a new award decision. As GAO’s decision in Immersion Consulting demonstrates, SSA officials may not unilaterally take it upon themselves to rewrite evaluations without appropriate justification. While GAO’s decision does not alter the fact that SSAs enjoy considerable discretion, it does demonstrate that the SSA’s discretion isn’t unlimited.
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Sorry: No GAO Protests of U.S. Mint Procurements

As a branch of the Treasury Department, the United States Mint would usually be subject to federal procurement laws, like bid protests. As one contractor recently discovered, however, certain activities at the Mint have been exempted from many federal procurement laws, including GAO protest review. Simply put, the GAO can’t decide a bid protest of Mint procurements. A-Z Cleaning Solutions, B-415228 (Nov. 6, 2017), involved a procurement for janitorial services at the Mint facility in San Francisco, California. A-Z Cleaning was named an unsuccessful offeror. Following notification, A-Z Cleaning filed a protest before GAO, challenging the Mint’s best-value trade-off decision. The Mint moved to dismiss the protest, arguing that GAO lacked jurisdiction to hear the case. The Mint’s argument was based on the interaction between the Competition in Contracting Act (the “CICA”) and specific statutes addressing Mint activities. Under the CICA, GAO has the authority to decide “a protest submitted . . . by an interested party.” See 31 U.S.C. § 3553(a). Protests are a “written objection by an interested party to . . . [a] solicitation or other request by a Federal agency for offers for a contract for the procurement of property or services.” 31 U.S.C. § 3551(1)(A). Federal agency is defined as “an executive agency[.]” 40 U.S.C. § 102(5). What this collection of statutes means is that GAO generally has jurisdiction to decide protests of procurements conducted by executive branch agencies. The Mint, as a branch of the Treasury Department, is an executive agency. Accordingly, its procurement decisions should be subject to protest before GAO. A separate statute, however, complicates matters. In 1996, Congress expressly exempted Mint procurements for operations and programs from the CICA. Pursuant to 31 U.S.C. § 5136, “provisions of law governing procurement or public contracts shall not be applicable to the procurement of goods or services necessary for carrying out Mint programs and operations.” The statute also defined Mint operations and programs as follows: (1) [T]he activities concerning, and assets utilized in, the production, administration, distribution, marketing, purchase, sale, and management of coinage, numismatic items, the protection and safeguarding of Mint assets and those non-Mint assets in the custody of the Mint, and the [Mint Public Enterprise Fund]; and (2) includes capital, personnel salaries and compensation, functions relating to operations, marketing, distribution, promotion, advertising, official reception and representation, the acquisition or replacement of equipment, the renovation or modernization of facilities, and the construction or acquisition of new buildings[.] In A-Z Cleaning, the Mint argued that the janitorial services it ordered were “functions relating to operations” of the Mint; therefore, the procurement of such services was excepted from procurement laws—including the CICA—and thus outside of GAO’s jurisdiction. GAO agreed with the Mint’s argument. After walking through the statutes laid out above, GAO said: Because the establishing legislation provides that federal procurement laws and regulations do not apply to the procurement of goods or services necessary for carrying out the Mint’s operations and programs, and those operations and programs are defined broadly enough to encompass substantially all of the Mint’s activities, we conclude that the Mint is not subject to the terms of CICA. Furthermore, because the bid protest jurisdiction of our Office derives from CICA, we must conclude that the Mint is not subject to that jurisdiction. GAO further explained that its conclusion regarding the Mint was consistent with prior decisions regarding the Presidio Trust and United States Postal Service, which are subject to similar exemptions. Accordingly, GAO dismissed the protest. What does GAO’s decision in A-Z Cleaning mean for Mint bidders? Clearly, GAO believes that it lacks authority to decide pretty much any bid protest of a Mint procurement. (As noted above, while the statutes may not be 100% clear on the extent of the prohibition, the GAO believes that the jurisdictional ban applies to “substantially all” of the Mint’s activities).  The Court of Federal Claims may still be an option; however, not all contractors are interested in full-blown courtroom litigation against the government. Simply put, for contractors bidding on Mint jobs, the potential protest options are considerably narrower than normal.
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Koprince Law LLC

Koprince Law LLC

 

SmallGovCon’s 2017 NDAA Government Contracting Roundup

President Obama signed the 2017 National Defense Authorization Act into law on December 23, 2016.  As is often the case, the NDAA included many changes affecting government contractors. Here at SmallGovCon, my colleagues and I have been following the 2017 NDAA closely.  Here’s a roundup of all 16 posts we’ve written about the government contracting provisions of the 2017 NDAA. SDVOSB Programs: 2017 NDAA Sharply Curtails VA’s Authority. (Dec. 5, 2016). 2017 NDAA Restricts DoD’s Use of LPTA Procedures. (Dec. 7, 2016). 2017 NDAA Extends SBIR & STTR Programs For Five Years. (Dec. 8, 2016). 2017 NDAA Authorizes $250 Million For New Small Business Prototyping Program. (Dec. 8, 2016). 2017 NDAA Increases DoD’s Micro-Purchase Threshold To $5,000. (Dec. 9, 2016). SDVOSB Programs: 2017 NDAA Modifies Ownership & Control Criteria. (Dec. 12, 2016). 2017 NDAA Strengthens Subcontracting Plan Enforcement. (Dec. 13, 2016). 2017 NDAA Requires GAO Report On Minority And WOSB Contract Awards. (Dec. 13, 2016). 2017 NDAA Requires Report On Bid Protest Impact At DoD. (Dec. 14, 2016). 2017 NDAA Restores GAO’s Task Order Jurisdiction – But Ups DoD Threshold. (Dec. 14, 2016). 2017 NDAA Requires “Brand Name Or Equivalent” Justifications. (Dec. 19, 2016). 2017 NDAA Establishes Preference For DoD Fixed-Price Contracts. (Dec. 21, 2016). 2017 NDAA Creates Pilot Program For Subcontractors To Receive Past Performance Ratings. (Dec. 21, 2016). 2017 NDAA Reiterates GAO Bid Protest Reporting Requirements. (Dec. 30, 2016). 2017 NDAA Requires Report on Indefinite Delivery Contracts. (Jan. 4, 2017). That’s a wrap of our coverage for now, but we’ll keep you posted as various provisions of the 2017 NDAA begin to be implemented.  And of course, it won’t be long until we start covering the upcoming 2018 NDAA. Happy New Year!
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Koprince Law LLC

Koprince Law LLC

 

SmallGovCon’s 1000th Post Is Coming Soon – Help Us Celebrate

When I started writing SmallGovCon back in 2012, I worried that there might not be enough happening in government contracts law to support a robust blog.  Needless to say, I’m not worried anymore. We’re rapidly approaching SmallGovCon‘s 1000th post (this one is No. 990).  To celebrate, we’re offering one lucky reader the chance to win a free webinar on the government contracting legal topic of your choice.  For details (and to enter) just click here. What do you like about SmallGovCon?  We want to hear from you!  Contact us and let us know, and check back here regularly in the coming weeks for much more on the SmallGovCon 1000th post celebration.
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Koprince Law LLC

Koprince Law LLC

 

SmallGovCon: Proud To Be Part Of WIFCON.com

I am pleased to announce that SmallGovCon is now being republished on what I think is the nation’s best and most venerable government contracting legal website: WIFCON.com.  You can find us on WIFCON.com’s blogs page from now on (and, of course, right here at SmallGovCon.com). I was probably less than a month into my first government contracts job (summer associate at a law firm based in Tysons Corner) when a more senior attorney recommended that I check out WIFCON.com. I’ve been following it religiously ever since. Packed with information about statutes, regulations, bid protests, audits, enforcement actions, and more, WIFCON.com is a government contracting lawyer’s dream come true.  And best of all, it’s updated almost daily, so the information is always up-to-date. It’s an honor to be able to contribute to such an incredible resource.  If you’re not familiar with WIFCON.com, I encourage you to check it out.  And of course, keep checking back here at SmallGovCon for more legal news and notes for small government contractors.
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Koprince Law LLC

Koprince Law LLC

 

SmallGovCon Welcomes Stephen Skepnek

I am very pleased to announce that Stephen Skepnek has joined our team of attorney-authors here at SmallGovCon.  Stephen is an associate attorney with Koprince Law LLC, where his practice focuses on federal government contracts law. Before joining our team, Stephen practiced civil litigation and administrative law with the Kansas Corporation Commission.  Check out Stephen’s full biography to learn more about our newest author, and don’t miss his first SmallGovCon post on the GAO’s tricky timeliness rules.
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SmallGovCon Welcomes Shane McCall

I am pleased to announce that Shane McCall has joined our team of government contracts attorney-authors here at SmallGovCon.  Shane is an associate attorney with Koprince Law LLC, where his practice focuses on federal government contracts law. Before joining our team,  Shane was an attorney with Lentz Clark Deines PA, where he advised individuals and small businesses alike on complex legal matters.  Check out Shane’s full biography to learn more about our newest author, and don’t miss his first SmallGovCon post on how “fair and reasonable pricing” is evaluated under solicitations requiring line-item prices.
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Koprince Law LLC

Koprince Law LLC

 

SmallGovCon Welcomes Nicole Pottroff

I am pleased to announce that Nicole Pottroff  has joined our team of government contracts attorney-authors here at SmallGovCon.  Nicole is an associate attorney with Koprince Law LLC, where her practice focuses on federal government contracts law. Before joining our team, Nicole practiced law in the Kansas City area, where she worked on a variety of complex civil litigation matters.  Check out Nicole’s full biography to learn more about our newest author, and don’t miss her first SmallGovCon post on when the government must include a company in a limited simplified acquisition procurement.
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SmallGovCon Welcomes John Mattox

I am very pleased to announce that John Mattox has joined our team of attorney-authors here at SmallGovCon.  John is an associate attorney with Koprince Law LLC, where his practice focuses on federal government contracts law. Before joining our team, John practiced business litigation with a national law firm in Kansas City.  Check out John’s full biography to learn more about our newest author, and don’t miss his first SmallGovCon post on NAICS code changes.
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SmallGovCon Welcomes Jennifer Tucker

I am very pleased to announce that Jennifer Tucker has joined our team of authors here at SmallGovCon.  Jennifer is an associate attorney at Koprince Law LLC, where her practice focuses on federal government contracts law.  Before joining Koprince Law LLC, Jennifer practiced contracts law with the Kansas Department of Transportation and the University of Kansas.  Jennifer also had the fortune (or is that misfortune?) of being classmates with a certain other government contracts attorney in the 2015 Leadership Lawrence program. You can check out Jennifer’s biography on the Koprince Law LLC website, and her first SmallGovCon post (about the GAO’s very strict rules for electronic proposals) right here.  Be sure to check back regularly for more legal news and notes from Jennifer and our other great SmallGovCon authors.
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Koprince Law LLC

Koprince Law LLC

 

SmallGovCon Welcomes Ian Patterson

If you’ve been reading SmallGovCon regularly (and I certainly hope that you have!), the name Ian Patterson may ring a bell.  Ian has been a law clerk at Koprince Law LLC since May 2015, and has been credited as the primary author of many SmallGovCon blog posts during that time, including an important recent post on the Rothe Development 8(a) case. I am pleased to announce that Ian has been admitted to the Bar and is now an Associate Attorney at Koprince Law.  Please feel free to browse Ian’s biography for more information about the latest addition to our growing team, and check back here soon for more of Ian’s writings on government contracts law.
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Koprince Law LLC

Koprince Law LLC

 

SmallGovCon Welcomes Haley Claxton!

I am very pleased to announce that Haley Claxton has joined our team of attorney-authors here at SmallGovCon.  Haley is an associate attorney with Koprince Law LLC, where her practice focuses on federal government contracts law. Haley is a recent graduate of the University of Kansas Law School, and has served as a law clerk to the Library of Congress Office of the General Counsel in Washington, DC.  Check out Haley’s full biography to learn more about our newest author, and don’t miss her first SmallGovCon post on new rules recently implemented at the Civilian Board of Contract Appeals.
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Koprince Law LLC

Koprince Law LLC

 

SmallGovCon Welcomes Candace Shields

I am very pleased to announce that Candace Shields is joining our team of government contracts bloggers here at SmallGovCon. Candace comes to us from the Social Security Administration, where she was an Attorney Advisor for several years.  As an associate attorney at Koprince Law LLC, Candace’s practice focuses on federal government contracts law. Please check out Candace’s online biography and great first blog post, and be sure to visit SmallGovCon regularly for the latest legal news and notes for small government contractors.
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Koprince Law LLC

Koprince Law LLC

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