MDJohn

There is a lot of introductory and continuing education/training for FAR-based contracting. There does not seem to much available for contractors that work under the USAID contracts and cooperative agreements. It would be greatly appreciated if someone could recommend/point out such training/education. Thanks! John

A small company is in a situation where it was fairly new when it submitted its offer 2+ years ago under a solicitation in which it was competing against multiple, more established bidders. The CO has continued to extend out the decision date, asking the offerors to confirm that their offers are still available. In that time, the client has improved its corporate capabilities, management capabilities, and has more/better past performance reports. The "snapshot" of the company encapsulated in its offer 2+ years ago does not reflect the company's current capabilities. The agency, at this point, cannot make a rational decision regarding the company's abilitity to perform. The small company does not want to annoy its potential client, so it is cooperating for now. At some point, when the absurdity becomes too obvious to ignore, can the small company file a pre-award protest on grounds that any evaluation and selection, at this point, will be arbitrary and capricious? If not, any other grounds?

What obligations, liabilities, or penalties under US government contracting law might there be for a US contractor whose overseas personnel may have committed fraud (but not bribery) on a foreign government's customs? Company A is a US company that makes and sells supplies (clothing) to both commercial buyers and governments. Company A sells to the USG both directly and via a reseller with a GSA schedule. Company A also sells in overseas markets. Company A has just begun an internal investigation whether one of its lower managers has instructed his people to do a "bait and switch" to minimize a foreign country's import customs duties. Basically, the suspicion is that the manager told his people to submit one set of goods to the foreign customs, as a sample of the goods being imported, to get a lower customs duty, with the plan of importing similar but different, higher-vlaue goods. Apparently, this is common in the foreign country but not consistent with Company A's way of doing business. Company A's foreign lawyers are confident that the matter is not very serious and will not result in any foreign penalties. Company A just wants to make sure that it doesn't have any problems with its USG contracts or subcontracts from this foreign problem.

Thanks. Very helpful. My apologies for lack of details. The letter contract references DFARS 252.217-7027.

Client is a transport company. DOD sent a lettter contract by e-mail to client seeking to hire client to move equipment to NYC immediately. By its terms, DOD letter contract is an "undefinatized contract action" that contemplates the parties negotiate a definitive contract action. Letter contract contains a NTE of $X million. DOD wants client to sign and return letter contract and commence performance immediately. Client is happy to provide the services, but wants to make sure the acquisition is properly documented. Is this the proper paperwork? Does the letter contract pose risks to the contractor of nonpayment or unlimited liability? The letter contract provides that if the DOD and contractor cannot agree on defiinitive terms, then the CO may determine a reaonable price or fee under FAR 15.4 and FAR 31, subject to contractor appeals under the Disputes clause. Is there a risk that the CO's determination of a reasonable price or fee will be unreasonably below market? Would it be better for DOD to use SF 26 and check in box 13 the box for 10 USC 2304© and attach a short schedule? Can client use its standard shipping terms and conditions? Client does not have a GSA schedule or any other current multiple award contract. Thanks, J

Thanks. Contractor will notify the CO, but in these cases it's often good to be able to educate the CO, because COs know many things but often don't know the specifics of corporate law. In that way, we and the CO can work together on accomplishing the right result. For example, in this case, corporate law is very clear that the change from an LLC to a corporation is much more than just a change of name. It is the extinguishment of one entity (the LLC) and the creation of a new enitty (the Inc.). However, the Inc is the successor-in-interest of the LLC and, by operation of law, all the assets, liabilities, rights and obligations of the LLC become those of the Inc. It seems to me that in this case, because the contract is assigned to the new corporation by operation of law, then no novation is required. A search of the WIFCON archives uncovered a spirited dicussion in 2002 about novations by operation of law in a bankruptcy setting (See http://www.wifcon.com/arc/forum406.htm) . My goal is to determine if there is clear guidance - 10 years later - on whether or not a novation is required in connection with an ordinary entity conversion. If the CO intreprets the Anti-Assignment Act and the FAR in the same way as I do, then the contractor can make all its notifications to make sure the records are up to date and that it gets paid, but can avoid the cost and paperwork of a novation. Thanks, John

Newly formed ABC, LLC just won a government contract as a prime contractor. LLC is planning to convert its entity form to a corporation by the name of ABC, Inc. No other changes. All will take place Delaware, which allows an LLC to convert to the corporate form by filing a certificate of conversion and certificate of incorporation. There will be no distinct assignment agreement. The assets and liabilities of the LLC will become the assets and liablities of the corporation by operation of law. Does ABC, LLC need to get a novation of the government contract?

Thanks. Very useful.

Thanks. My impression is that the client's accountant knows S corps very well and LLCs less well, so he wants his clients to be S corps.

I have multiple small clients that perform services or provide products under USG programs, either as primes or subs. Many of them are corporations, treated for federal tax purposes as "S" corporations. Some of them are single-member or multiple member LLCs that are treated, for federal tax purposes, as disregarded entities or parternships, as applicable. In ten + years, no LLC client has reported any problems working in US government contracting because of its status as an LLC. Recently, a co-owner of a small LLC advised that he needed to convert from an LLC to an S-corp, because of the nature of government accounting. He said that most accountants he has talked to who specialize in government contracting do not want to do work for his LLC, because it is too complicated under USG government accounting rules. Apparently, he was told that the same flexibility of LLCs that makes it useful for some businesses makes it more complicated for accounting purposes when doing Government contracting. To those who work in the nuts and bolts of government contract accounting, is there any validity to this concern? Is there a disadvantage, from a government accounting viewpoint, to doing work for the USG as an LLC rather than a corporation? Do the government accounting principles and rules apply more clearly/better/advatageously to corporations than to LLCs? Thanks, John

Agency report contains a table showing the protester's and awardees' relative scores on subfactors. It is very instructive and its disclosure to protester will certainly educate the protester, give it a clearer understanding of the strengths and weaknesses of its protest, and make the response to the agency report more efficient and intelligent. Agency has indicated that the information in the table - even that awardee's score on subfactor 5 was higher than protester's - is covered by the protective order because the information could reveal competitive information, and thus cannot be disclosed to client. My experience is that scores on subfactors vary from solicitation to solicitation and a high score on a subfactor (e.g., organizational capability) for one solicitation does not necessarily carry over to the next solicitation. Is the content of the table showing the comparative scores on subfactors nondisclosable under the protective order?

XYZ, Inc. has had a federal supply schedule with GSA. Company B bought the shares of XYZ, Inc. The name of XYZ, Inc. is staying the same. XYZ, Inc. is now a wholly owned subsidiary of Company B. XYZ inc was a small business but Company B is large. Thus, XYZ Inc.is now no longer small and must update its information at SAM (formerly CCR/ORCA). XYZ, Inc. will do that. Here are the GSA-related Qs: 1. Does the change of ownership of XYZ Inc. terminate the GSA contract/FSS of XYZ, Inc? In other words, now that XYZ, Inc. is a wholly owned subsidiary of Company B, does XYZ, Inc.'s existing FSS remain in place or does Company B need to establish a brand new GSA contract (in Company B's name)? 2. Does Company B's acquisition of XYZ require any filings/notices directly with GSA? 3. Does the fact that Company B is a foreign company create any additional requirements/obligations as to the GSA schedule of XYZ, Inc? Thanks, J

I apologize for only asking and rarely giving answers since joining. One day, soon, i hope to know enough to help others rather than only ask. That said, Company A was one of 9 bidders on an RFQ. 3 bidders (including Company A) made the competetive range and gave final proposals. Terms of RFQ said that agency would make "up to two awards." Agency made two awards. Company A came in 3rd. Company A got debrief and is considering protest. If Company A protests and the agency sees the grounds and realizes that it made mistakes and wants to resolve the protest w/o a decision, using a settlement or ADR, is it possible that the agency could say "OK, Company A, we'll make a 3rd award and give it to you"? Or, would do so be an impermissible change of the terms of the solicitation? Much thanks, John

SmallCo bid on a total small business set aside multiple award IQC. Agency issued award to 2 small business concerns. SmallCo was 3rd and did not win an award. Agency did not send out a pre-award notice to the offerors re: the pending award to the prospective awardee, pursuant to FAR § 15.503(a)(2). SmallCo has requested a debriefing. It is considering a size protest to the SBA and, depending on what is learned at the debriefing, perhaps a protest on the merits. I have researched but didn't see anywhere that filing a size protest with SBA has any impact on the 10 day period for protesting with GAO or the agency. Filing a size protest with SBA will stop the procurement process until the SBA makes its decision, but, as far as I can tell, it does not toll the 10 day GAO/agency protest period. An unsuccessful bidder must still file a protest within the protest period. Is this correct? if not, what is the source/cite? Does the fact that no pre-award notice was provided have any impact on smallco's rights and options? Thanks, John

To outsidelegalguy: understood. XYZ has been in compliance. It's the short list of thing, such as you mentioned, that it needs to focus on. Thanks.