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We have recently graduated from a small business to a large business and a modification was completed to our GSA schedule to include a small business subcontracting plan. For my reporting do I include previous orders under my GSA schedule contract in the subcontracting report OR do only new orders after the modification date of the incorporation of the subcontracting plan to the GSA schedule apply?

The Rule of Two is the federal contracting rule requiring agencies to set aside a solicitation for competition only between small businesses when there are at least two small businesses that could do the work for a fair price. But that rule does have some exceptions. These exceptions can make it difficult to know the situations that would justify filing a Rule of Two protest. Read on to find out. First, a primer on SBA’s Rule of Two. Note that this particular post relates solely to the SBA’s Small Business Rule of Two. The Department of Veterans Affairs has its own Rule of Two for service-disabled veteran owned businesses. For more information on the VA’s SDVOSB Rule of Two, visit our post here. FAR 19.502-2(a) requires that all acquisitions for supplies or services that have an anticipated dollar value above the micro-purchase threshold ($10,000 at the time of this post) but not over the simplified acquisition threshold or SAT ($250,000 at the time of this post) be set aside for small businesses. That is, unless the contracting officer does not have a “reasonable expectation” that it would receive offers from two or more responsible small businesses that were competitive in terms of fair market prices, quality, and delivery. The rule in FAR 19.502-2(b), which pertains to acquisitions above the simplified acquisition threshold, is worded a little differently. As noted in the prior paragraph, acquisitions between the micro-purchase threshold but below the SAT must be set aside for small businesses unless the contracting officer does not have a reasonable expectation that it would receive offers from two or more small businesses. In contrast, those over the SAT must be set-aside for small businesses when there is a reasonable expectation that offers will be obtained from at least two responsible small business concerns and award will be made at fair market prices. (In practice, both formulations should typically result in small business set-asides under the same circumstances). However, an acquisition should not be a total small business set-aside unless such a reasonable expectation exists. Otherwise, the acquisition may be partially set-aside under FAR 19.502-3. This leads us to the question of how a contracting officer will know whether there is a reasonable expectation or not? Well, that is a decision that the contracting agency must make if market research shows at least two small businesses that meet the criteria. When should you file a Rule of Two protest? Now that we have the background out of the way, what situations are appropriate to file a Rule of Two protest? Rule of Two protests are filed in situations where the protester believes that a procurement should have been set-aside for small businesses, but it was not, or those in which the protester believes the procurement was improperly set-aside for small businesses, when it should not have been. Simple, right? In nearly all GAO Rule of Two protests, no matter which way you argue it, the protest will be won if GAO determines that the agency’s basis for its decision is inadequate. Such decisions are generally based on market research. Sometimes market research will include issuing a sources-sought notice, internal meetings, conducting research (generally, online searches looking for capable potential offerors), market surveys, looking back at prior procurements for the same or similar products or services, speaking with small business analysts, and more. Though there is no specific method that must be used in market research, the basic rule is that the decision “must be based on sufficient facts so as to establish its reasonableness.” (See Mountain West Helicopters, LLC). In some capacity, the market research must examine the capabilities of the potential offerors to determine not only whether two or more small businesses will submit offers, but whether they are capable of performing the contract requirements. You can read more about that in this previous SmallGovCon blog post. Therefore, if your company is a small business that can do the work on a solicitation that is unrestricted, and you know of at least one other company that can do the work, you have the basis of a small business Rule of Two protest. Other Important Details Remember how I said that it’s up to the contracting agency to determine whether a small business set-aside is appropriate? Well, in a protest, GAO will not second guess unless there has been an abuse of discretion, which it is up to the protester to show. (See Nordic Sensor Tech., Inc.). Unfortunately, it doesn’t matter if the protester is a small business protesting because it believes that an unrestricted solicitation should have been set aside for small business competition, or whether the protester is a large business protesting the fact that a solicitation is limited to small business offerors only. The requirement that the protester prove a clear abuse of discretion when protesting a set-aside (or unrestricted) solicitation is the same. GAO has sustained a protest and held that a contracting officer should conduct additional research into the existence of additional firms that could meet the Rule of Two. In that decision, GAO held that an Agency must contact firms that meet requirements of a set-aside if it is aware of any. (See SWR, Inc.). Additionally, because a protest involving the Rule of Two is an issue with the solicitation, most Rule of Two protests must be filed before bid submissions are due. 4 C.F.R. § 21.2(a)(1). This covers situations when you believe there was a mistake in setting a contract aside, or not setting a contract aside, for a small business. This covers most Rule of Two protests. Therefore, if you think that there was a mistake in setting aside, or not setting aside, a procurement, raise the protest early! Otherwise, you may miss the opportunity. If you think you may have grounds for a protest, it’s best to act early in the solicitation process. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Why File: A Rule of Two Protest first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

I saw that ... insanity

This wifcon thread is a good supplement to this thread: So, the way I see it, there are 2 instances of price reasonableness analysis when a competitive range is formed: One for the competitive range formation, and one during trade-off documentation.

@adt110549601 No worries. Thanks for the explanation. Two things: First, verify that your use of the term ‘best value’ aligns with FAR [if that’s your goal]. Start with FAR 2.101 and then check FAR part 15. I think a search of “best value” will return 10 hits in FAR part 15. Lastly, let us know what you find.

@Jamaal Valentine, first, thx for hearing me out! With two offers, there would be a trade-off best value decision (adequate competition); with one offer, award could be made to a responsible offeror with fair and reasonable pricing (no longer best value, if one of the offers was no longer considered).

Keep reading through FAR 15.403-1(c)(1)(ii). What do you mean by “sole source award decision or a best value award decision?” What’s the difference between the two?

Can you have adequate price competition with two offerors, when one of them receives a marg/unsat/no condidence past performance rating? FAR 15.403-1(c)(1) Adequate price competition. (i) A price is based on adequate price competition when— (A) Two or more responsible offerors, competing independently, submit priced offers that satisfy the Government’s expressed requirement; So is it possible for a marg/unsat/no confidence rated offeror to submit an offer that still satisfies the Government's expressed requirement? If the answer is, no, would you remove the marg/unsat/no confidence offeror from the competition? This changes whether you would make a sole source award decision or a best value award decision.

Answers to a couple questions will help with advice. How often over the course of a year are arbitrators needed and how large is the potential pool of BPA holders?

Happy Friday, readers. Around these parts, we’ve been enjoying some nice spring weather as we try to fill the void left by the end of March Madness. But it will be heating up soon, so enjoy the spring weather while you can and have a great weekend! Here are some recent updates from the world of federal contracting, including some new congressional initiatives to streamline federal contracting processes, as well as create new cyber standards for federal procurement. SBA Recognizes 2024 Government Contractors and 8(a) Graduate of the Year Wyden bill requires new cyber standards in federal tech procurement Evaluation of DoD Financial Responsibility Reviews on Prospective DoD Contractor FACT SHEET: Vice President Kamala Harris Launches Call to Action to Bring the Benefits of Space to Communities Across America Technology Modernization Fund announces targeted investments to improve security at NASA, Department of Labor Mace sponsors bill to ban educational requirements for government contractors Senate Bill Introduced to Streamline Federal Procurement Processes How Government Contractors Can Plan for a Bright Future by Forecasting the Right Metrics Lawmakers push skills-based hiring for federal contractors Highlights from the Defense-Wide FY 2025 Unclassified IT Budget Request General Services Administration announces $23.8 million for projects to improve federal facilities and benefit local communities as part of President Biden’s Investing in America agenda Libby woman admits stealing mail while working as a contract carrier Disadvantaged Business Enterprise and Airport Concession Disadvantaged Business Enterprise Program Implementation Modifications The post SmallGovCon Week in Review: April 8-12, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

How long does the process normally take if, after the initial 15 day review, the SBA determines that the company could apply for a CoC through the submission of added information?

The SAM registration thing seems like it could be the biggest issue if the individual arbiters do not work for firms and aren't willing to register. What kind of dollar value is each requirement? Under the micro-purchase threshold (which maybe you could make the case is $10k for these services, I'm not sure what kind of training arbiters require) you could avoid SAM with a government purchase card order (or call under a set of BPAs you establish in advance). Over the MPT it seems like you would need to convince the arbiters to register in SAM (or subcontract with a vendor who is registered in SAM) if they want to be allowed in the pool.

Global K9 Protection Group LLC, vs. U. S. and American K-9 Detection Services, Nos. 23-210, 23-311, April 11, 2024. The Long and Winding Road Now, after four years, two remands with related remand extensions,1 two formal re-solicitations,2 two injunctions,3 three re-awards splitting the contract into two procurements,4 and approximately 34 total dog years,5 this case has finally reached its end. Judge Ryan T. Holte There is a companion opinion on the Home Page.

Maybe not. Possehn Consulting, B-278579.2, July 29, 1998 and other cases suggest it’s not an issue to eliminate unacceptable offers from the competitive range without any consideration of price. How would they establish themselves as an interested party in that regard?

But it's like that by default, isn't it? Even if the solicitation does not state that unacceptable offerors are not eligible for award, the definition of unacceptable (and probably marginal as well) in the solicitation likely means the same thing as if the solicitation does state that unacceptable offerors are not eligible for award, since the government cannot award to an unacceptable offeror (an offeror who cannot meet the critical requirements of the SOW, at least based on their proposal) by default, right?

Emphasis added. Right, so, the way I see it, a firm being ineligible for award CAN become eligible AFTER discussions. And you need to consider pricing when forming a competitive range, so that's why this is true: When an offeror is unacceptable (un-awardable), the government must consider their price for the green text but not the red text: 1) When determining competitive range. 2) When documenting trade-off analysis. 3) When determining price reasonableness.

Perhaps a BPA with the several arbitrators , with the proviso that the arbitration procedures would apply to selection of the arbitrator.

That can be tricky. If you decide to conduct discussions and have one or more firms with deficiencies that may be curable, You need to consider pricing and non-price aspects of the proposals in establishing the initial competitive ranges. However, technically, materially deficient proposals aren’t eligible for award unless and until the firms can clear the deficiencies during or after discussions.

Good afternoon, Looking for some knowledge and input. The situation I have is regarding arbitration services. In the VA, used to be able to pay for these services with a 1358, the facilities cannot anymore. When these services are required, it is not as simple as picking who will provide the services, the union and the facility has a pool of arbitrators that they can select from, but they both select about three, then agree to one. So anticipating who will provide the services is not allowable until almost crunch time. When 1358s were allowed to be used, those arbitrators did not have to be in SAM, so another problem with a contract moving forward. Is there some sort of BPA or other contract vehicle that would allow for multiple vendors rather than a BPA for all of the potential arbitrators? obviously, there is no competing among the BPAs or whatever is in place because it has to be mutually agreed to. Obviously, looking for the simplest method to be able to provide the facility and union arbitrators when required. Thank you

Colleagues: The agency is contemplating issuing multiple BOAs/BPAs for a routine service with a routine deliverable (a report) where the agency wishes to name the price, based on market research, such that pricing is consistent across the country and the actions are easier to administer. Do you see an issue with the approach, where the government says, “We are paying X rate per hour or X rate per action,” as opposed to requesting each potential holder to provide their firm’s rate? Thank you!

SBA’s Service-Disabled Veteran-Owned Small Business (SDVOSB) rules include one particular component dealing with the working hours of a service-disabled veteran owner of an SDVOSB business, often called the full-time devotion rule. SBA has recently reviewed its full-time devotion requirement in an SDVOSB protest, and found that the company in question did not establish that a service-disabled veteran met the requirement. In Marathon Indus. Equip., LLC, SBA No. VSBC-342-P (Mar. 14, 2024), a protester challenged the SDVOSB status of Gilk and Sons, LLC (Gilk and Sons) in connection with a DLA solicitation set aside for SDVOSBs. A competitor can challenge the SDVOSB status of a proposed awardee on SDVOSB set-aside contracts. In this case, the protester argued that the veteran owner (Mr. Gilkison) worked at a different company (PacTec) that was the supplier of the products under the Solicitation. As part of the initial SDVOSB application, Gilk and Sons explained that Mr. Gilkison “works for Gilk and Sons Monday to Friday from 8:00am to 5:00pm” and he is “finishing up some consulting work with PacTec that will be completed by the end of the year … [w]hen I consult it is outside of the business hours for Gilk and Sons … [t]his does not conflict with my normal working hours.” SBA regulations prohibit the key service-disabled veteran for SDVOSB status from being engaged “in outside employment that prevent[s] [him or her] from devoting the time and attention to the concern necessary to control its management and daily business operations.” 13 C.F.R. § 128.203(i). Normally, the service-disabled veteran “must devote full-time during the business’s normal hours of operations”. Id. As part of the protest, OHA (which processes these sort of protests) “required Gilk and Sons to clearly state Mr. Gilkison’s current working hours at both Gilk and Sons and PacTec. The Order also required Gilk and Sons to specify Mr. Gilkison’s duties at Gilk and Sons and at PacTec.” OHA then reviewed the response and determined that Gilk and Sons had not met the full-time devotion requirement. SBA OHA pointed out that Gilk and Sons did not properly respond to the request for more information. The response to OHA fails to clearly state just what Mr. Gilkerson’s working hours are both at Gilk and Sons and at PacTec. The Response fails to describe what Mr. Gilkerson’s duties are at Gilk and Sons and at PacTec. It does not describe how Mr. Gilkerson handles his duties at Gilk and Sons while also performing his duties at PacTec. Because of the failure to respond, OHA assumed “that disclosure would be contrary to the interests of the party failing to make disclosure.” 13 C.F.R. § 134.1011. So, OHA assumed that Gilk and Sons “failed to establish that Mr. Gilkison devotes himself to the concern full time during normal business hours. The big takeaway from this case is that SBA is still enforcing the full-time devotion requirement for SDVOSBs (and the rule is also present in the 8(a) Program regulations). If an SDVOSB company veteran owner works a second job, pains must be taken to explain (1) current working hours at both companies, (2) the duties at each job, and (3) how the veteran owner devotes sufficient time to the SDVOSB necessary to control its management and daily business operations. As a side note, it is always important to fully respond to questions from SBA or other federal government agencies. As we noted on the blog, SBA made some comments that it wanted to introduce more flexibility into some of these rules, including the full-time devotion requirement. However, we have yet to see a published decision where SBA has demonstrated this flexibility. Should you face a similar situation, reach out to our firm. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post SBA: Full-Time Devotion Still Matters for SDVOSBs first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

This post is funny. As in ironic. Over here, I'm pulling my hair out trying to close out aged contracts where the funding was deobligated to the point where "replacement funds" are now required. Somehow that is DFAS's responsibility rather than the contracting shop. In one case, we have been in "DMACT" status for months while DOD searches for $3,000 in replacement funds related to a multi-million-dollar contract. And don't get me started on the length of time it is taking me to get my contracts mod'd to establish final incentive fees so we can final invoice and close. It's been MONTHS since we've submitted the required proposals and supporting data. I'm getting frustrated because nobody seems to place any urgency on contract closeout where there is, you know, some actual work to be done on the government's side to get the funding straight. (No offense meant. Just venting.)

If anyone is looking for a free online resource to learn about contract changes, the 2023 Contract Attorneys Deskbook, Chapter 21 is a good place to start.

Great point! I’ll add past experiences over the life of the existing contract.

This may be an oversimplification of a key stakeholder interest (or my explanation may be an overcomplification of something really simple 😜). But this could point to the need for a leadership discussion among key stakeholders (contracting, fiscal, requiring activity, etc.) to settle on a contract structure that balances the competing interests of all parties. Contracting may want simple administration and compliance, fiscal may want a particular funding commitment/obligation profile, the requiring activity may want flexibility (i.e. to move money around); and everyone will probably be happier with the outcome in the long run if you take all these things into account in creating the contract structure...