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  1. Happy Fourth of July, Readers! We hope you have a fun and relaxing holiday weekend planned. Here are 3 fun facts about Independence Day: The Declaration of Independence Was Written on a Laptop. Not a modern laptop, but still. Thomas Jefferson drafted the Declaration of Independence on a writing desk that could fit over one’s lap. This device was referred to at the time as a “laptop.”There is Something Written on the Back of the Declaration of Independence. According to the History Channel, a simple message is written upside-down across the bottom of the signed document that reads, “Original Declaration of Independence dated 4th July 1776.” The Designer of the 50-Star Flag Lived in Lancaster, Ohio. In 1958, a history teacher asked students to redesign the national flag as both Alaska and Hawaii neared statehood. Robert G. Heft, who was 16 at the time, designed a new flag using the old 48-star flag and spent $2.87 on materials. His design earned him a B-minus to which he challenged by sending it to Washington D.C. to be considered by President Dwight D. Eisenhower. While you are enjoying the weekend, we have provided a few noteworthy articles pertaining to federal government contracting for your reading consideration, including Polaris timing update, category management struggles for small businesses, and predictions for the 2023 NDAA. Enjoy your 4th! Military Contractors Indicted for $7 Million Procurement Fraud Scheme [DoJ]SBA working to reform category management, reverse decline in small business contractors [FedNewsNet]SBA Administrator Releases Statement on Reversal of Roe v Wade [Small Business Trends]DHS looks to expand its Procurement Innovation Lab [FCW]Twelve senators reject VA’s plans to reshape health care real estate under AIR Commission [FedNewsNet]Six government agencies launch quantum technology research consortium [FedScoop]Biden signs VA health record modernization transparency act into law [FedScoop]Contractors start looking at what’s in the defense authorization bill for 2023 [FedNewsNet]Why the National Security Agency overpaid contractors during the height of the pandemic [FedNewsNet]GSA acquisition exec says agency will proceed with Polaris solicitation by end of June [FedScoop]CMMC early adopter program to further spur vendor cyber actions [FedNewsNet]GSA Federal Acquisition Service’s Laura Stanton on STARS III, Alliant 3 and Polaris [FedScoop] The post SmallGovCon Week in Review: June 27- July 1, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  2. Last week, the U.S. House of Representatives Small Business Committee held a hearing to discuss how the SBA will meet Small Business Contracting goals, and specifically how the SBA can meet its goals related to socioeconomic programs. The committee challenged the Office of Government Contracting & Business Development to show how they will help grow participation in SBA’s small business development programs, and small business participation in federal contracting as a whole. The Small Business Committee raised questions related to inflation, increasing socio-economic program participation, and SBA technology updates. As is customary, the Small Business Committee released a memorandum illustrating their thoughts prior to the hearing, and the written testimony of witnesses for review. The information in these documents is useful, and are repeated in the hearing itself, all of which (including a link to a vide of the hearing) can be found on the Small Business Committee’s website. The committee brought in Ms. Bibi Hidalgo, Associate Administrator for the SBA’s Office of Government Contracting & Business Development (OGCBD) to testify. If you have a chance to read the testimony, read the committee’s memorandum, and watch the hearing, I highly recommend it, as the committee and its witness had a meaningful discussion on small business federal contracting. However, as advocates for small businesses across the country, we realize your time is limited and you may not have time. So, this blog post will provide you some of the key takeaways. Certification Websites The committee repeatedly requested updates on SBA’s progress on its certification websites such as certify.sba.gov and any other IT solutions SBA have been planning on implementing. Ms. Hidalgo stated that SBA has made it a priority that all websites they utilize for certification are running smoothly so small business owners have well oiled machines to utilize when certifying their socio-economic program status. Ms. Hidalgo also informed the committee that the SBA is processing certifications faster than in previous years, and is pushing technology forward in this realm to prepare for SBA overseeing all SDVOSB certifications. Category Management Contracts The committee really drilled down on category management contracts and how their June 14th hearing on Governmentwide contracts found that these contracts may have a negative effect on small business participation in federal contracting. Consequently, the committee asked what the OGCBD and SBA are doing to mitigate the effects of these contracts decreasing small business contracting. Ms. Hidalgo stated that the SBA and the White House are aware of this effect and are focusing on how these contracts have effected small business participation. As you may know, category management contracts are government wide procurement vehicles in which businesses or products are placed on Tiers (0 through 3), with each tier having separate requirements for contracting, spending, and tracking. The SBA and White House have negotiated with Office of Management and Budget (OMB) to move all socioeconomic firms (SDVOSB, WOSB, 8(a), HUBZone) into Tier 2 of category management. This should allow 33,000 more firms to possibly compete for even more contracts than before. According to Ms. Hidalgo, the SBA is already seeing increases in small business participation due to this tier change in Category Management Contracts. Support of SBA’s Business Development Programs As noted in the hearing and in the released documents, 8(a) participation had declined over multiple years, but in 2021 data finally showed an increase in businesses participating in the program. Meanwhile, HUBZone and WOSB programs were not meeting certain goals, and it seemed to some members of the committee that contracts seemed to be going to the small businesses in a small number of geographic locations. The Committee explicitly wanted Ms. Hidalgo to describe what measures the SBA and OGCBD were doing to help promote these programs and participation in them. Ms. Hidalgo stated to help promote these programs, there have been different initiatives implemented. First, the SBA is now including HUBZone and WOSB participation goals in performance evaluations for agencies and their staff to promote usage. Additionally, the SBA is now tracking new entrants to federal contracting and socio-economic SBA program participation, as well as requiring procuring agencies to track participants in their contracts. This allows SBA and procuring agencies to know the entire pool of possible contractors, and when agencies reach out for data, SBA can provide accurate data about how many businesses are qualified to fulfill contracts in certain SBA programs. SBA is also attempting to build up its own capabilities to help small businesses. Ms. Hidalgo stated that the SBA is attempting to shift focus in their communications with small businesses from compliance with regulations, to helping develop businesses, such as focusing on guidance with businesses on how to qualify for programs. Evidencing this shift, the Committee discussed a recent $5 million dollar increase in staff funding for the SBA Business Development programs, which Ms. Hidalgo believes will give SBA the flexibility to focus more on the aim of helping small businesses, rather than focusing on compliance. The SBA also believes, along with the committee, that contract bundling is a negative factor in promoting small business participation in federal contracting. Ms. Hidalgo stated that it appears when multiple contracts or needs are bundled together, a larger contract is then created which small businesses cannot service, giving more money to large businesses and fewer growth opportunities for small business. The SBA is analyzing contracts to be un-bundled and how to prevent over-bundling from occurring. The SBA also is examining maps of where small businesses awarded contracts are located, so that the SBA can determine which locales may have small business contract awards that are disproportionate compared to other locations around the country. Also, due to the tracking discussed earlier, agencies are able to learn from the SBA what areas of the country have small business contractors, but are receiving less awards proportionately as compared to other areas in the United States. Finally, Ms. Hidalgo stated that SBA recently published a new rule qualifying more NAICS codes for WOSB set-asides, causing, in her words, “92% of all federal spend [to] qualify as a set-aside for [WOSB].” Inflation and Other Topics As is front of mind for many Americans, the Committee asked Ms. Hidalgo what the SBA is doing to combat inflation, or help contractors survive inflation. Ms. Hidalgo testified that the SBA is looking at threshold flexibility on contracts and allowing for more variable price adjustments. In line with that, the SBA is working with the White House, and the seven largest procuring agencies, to make sure any changes undertaken are consistent across federal contracting. The SBA is also looking at shifting the window for reimbursement from the federal government for project performance from every thirty days, to every fifteen days. As Chairwoman Velazquez stated in her opening remarks to the hearing, “when small contractors can thrive, our nation’s small businesses, government and the economy all benefit.” The Small Business Committee has shown in this hearing, and others recently (such as their hearing on Governmentwide Contracts) that they understand the importance of small businesses in federal government contracting, and will hopefully continue to advocate for effective small business contracting initiatives. Small business contractors should also keep an eye out for the different initiatives articulated by Ms. Hidalgo, as there may be significant gains to be achieved for small businesses. Finally, keep an eye out for further data form the SBA, as they stated that they are compiling data to share with Congress on small business contracting and its impact on certain identified groups. Questions about this post? Email us. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Small Business Committee Raises Concerns to SBA About Certification Speed, Category Management first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  3. Many bid protests we handle at Koprince McCall Pottroff are filed after the contract has been awarded to an offeror. However, sometimes there are issues that are apparent in the solicitation that require clarification or correction prior to the bidding or proposal deadline. In these situations, potential offerors can file a pre-award protest that challenges solicitation terms, but, as with most GAO matters, there are strict deadlines that must be adhered to if the protestor wants to avoid her protest being dismissed. While pre-award protest is the common term, remember that a challenge to a solicitation’s terms is due before the proposal deadline. First, what is a pre-award protest? While post-award protests address the agency’s evaluation of proposals, pre-award protests challenge the terms of the solicitation. For example, a pre-award protest may argue that the solicitation is improperly restricted for a particular socioeconomic designation or the solicitation’s technical requirements are unfairly restrict offerors from presenting a novel solution. Pre-award protests may also assert that the solicitation violates an applicable law, like the VA Rule of Two that requires a solicitation be set aside for service-disabled veteran-owned small businesses (“SDVOSB”) if two or more verified and capable SDVOSBs are identified that can do the work at a reasonable price. Timing is very important for a pre-award protest, but luckily there is a fairly simple rule to remember: a pre-award protest must be filed before the proposal (or equivalent document like a quotation) is due. 4 C.F.R. § 21.2 discusses the time for filing bid protests at GAO, with § 21.2(a)(1) discussing pre-award protests. The specific deadline depends on the type of solicitation. If a solicitation was issued prior to bid opening, and the alleged improprieties in the solicitation are apparent prior to bid opening, then the protest must be filed prior to bid opening. If a solicitation and bid opening happen concurrently, the protest must be filed at any time “prior to the time set for receipt of initial proposals.” It is important to note that “days” means calendar days, unless the deadline falls on a weekend or federal holiday. In those instances, the deadline is pushed to the next business day. Also, pre-award protests can be filed with the agency itself, GAO, or the Court of Federal Claims, though they are most frequently filed with GAO. You may now be wondering how pre-award bid protests can help a small business. Well, pre-award protests can help small business federal contractors enhance their competitiveness under a particular situation by reshaping the foundation of that procurement to make it more likely that a business will win an award. Let’s return to the VA Rule of Two once again. The VA sets a procurement aside for small businesses in general based on incomplete market research, believing there were no eligible SDVOSBs capable of performing. If an SDVOSB were to successfully protest that set-aside designation through a pre-award protest, it could lead the agency to reopen the procurement on a restricted basis solely for SDVOSBs, enhancing the SDVOSB contractor’s odds of being awarded the contract. While 4 C.F.R. § 21.2(c) states that GAO may consider untimely protests, in practice, that pretty much never happens, and we wholeheartedly advise against it. Further, if a solicitation’s terms are clearly ambiguous, but the potential offeror does not file a pre-award protest, the potential offeror will be deemed to have effectively waived any arguments challenging the solicitation. For this reason, it is important to file a pre-award protest if you believe the solicitation’s terms are unfair or unreasonable. Because you won’t get a second chance. Questions about this post? Email us. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Back to Basics: Pre-Award Bid Protests first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  4. The U.S. House of Representatives recently passed H. R. 5879, clarifying the application of the price evaluation preference for qualified HUBZone small business concerns to certain contracts. If this becomes law, the Act would make sure the HUBZone Price Evaluation Preference applies to certain orders under partially restricted multiple award contracts. H. R. 5879, cited as “The HUBZone Price Evaluation Preference Clarification Act of 2021,” was passed by the House on June 8, 2022. The Act amends Section 31(c)(3) of the Small Business Act (15 U.S.C. 657a(c)(3)) a by adding to the end the following new subparagraph: (E) APPLICATION TO CERTAIN CONTRACTS.—The requirements of subparagraph (A) shall apply to an unrestricted order issued under an unrestricted multiple award contract or the unrestricted portion of a contract that is partially set aside for competition restricted to small business concerns. The subparagraph (A) referenced in the above section, if the Act passes, would apply to unrestricted orders under unrestricted multiple award contracts, or the unrestricted portion of a contract partially set aside for small business competition. It states: 3) Price evaluation preference in full and open competitions (A) In general . . . in any case in which a contract is to be awarded on the basis of full and open competition, the price offered by a qualified HUBZone small business concern shall be deemed as being lower than the price offered by another offeror (other than another small business concern), if the price offered by the qualified HUBZone small business concern is not more than 10 percent higher than the price offered by the otherwise lowest, responsive, and responsible offeror. As you may remember from Schoolhouse Rock, to become an effective law, H. R. 5879 still must pass the Senate and be approved by the President (or, if vetoed by the president, have the veto overridden). If the Act does in fact become law, it will help procuring agencies and offerors alike in understanding exactly when the HUBZone price preference will apply to certain types of contracts, portions of those contracts, and/or orders thereunder. Questions about this post? Email us. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post House Passes HUBZone Price Evaluation Preference Clarification Act of 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  5. Happy summer, readers! We hope you have some fun plans for the season. Here at SmallGovCon we are gearing up for some nice R & R time with friends and family. But, the first few days of summer have been anything but lazy, with much activity in federal government contracting, including updates on the new OASIS (not the latest summer trend, rather the GSA services IDIQ), rumblings on the new NDAA, and how DoD is making things easier on small businesses. As usual, please enjoy the articles we have included in this week’s WIR and have a great weekend. Procurement Scorecard Program; Treatment of Deobligations [FedReg]CONGRESS: Three things to watch in the House 2023 NDAA [FedNewsNet]OASIS+ or OASIS-Plus? Either way, GSA puts the next generation services contract on the fast track [FedNewsNet]TMF Board announces $94.8M for 3 network security projects [FedScoop]Biden signs bill creating federal cybersecurity rotational program [FCW]DOD Official Talks on Easing Process to Work With Small Businesses [DoD]Government Official Pleads Guilty to Accepting Bribes [DoJ]Contractual Remedies to Ensure Contractor Compliance with Defense Federal Acquisition Regulation Supplement Clause 252.204-7012, for contracts and orders not subject to Clause 252.204-7020; and Additional Considerations Regarding National Institute of Standards and Technology Special Publication 800-171 Department of Defense Assessments [DoD]GSA Announces First Cohort of 40 U.S. Digital Corps Fellows [GSA]The General Services administration is downright spacey… it has three north stars [FedNewsNet]A new look at an old problem: the Pentagon’s weapons procurement [FedNewsNet]Defense agencies among worst ranked for disclosing contracting needs to businesses [FedTimes]Report: The slow destruction of the defense industrial base [FedNewsNet] The post SmallGovCon Week in Review: June 20-24, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  6. We are pleased to announce that Steven Koprince, Govology Legal Analyst and retired founder of Koprince McCall Pottroff LLC, will be kicking off his work with one of our favorite federal contracting partners: Govology! Join Steven in his new role as a legal analyst as he discusses various federal small business certification programs, including Small Business Self Certification, Small Disadvantaged Business (SDB) & 8(a), Service-Disabled Veteran-Owned Small Business (SDVOSB), Veteran-Owned Small Business (VOSB), Historically Underutilized Business Zones (HUBZone), Woman-Owned Small Business (WOSB), and Economic Disadvantaged Woman-Owned Small Business (EDWOSB). This one will be provide a great base of knowledge for those looking to know more about the various federal small business certification programs. For more information about this webinar please visit Govology and receive 25% off the registration fee by using discount code: gsc25. Registration link. The post Webinar: June 23, 1:00pm EDT, An Introduction to Government Small Business Certifications, by Steven Koprince, Govology Legal Analyst first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  7. SBA has issued new size standards for industries in the Wholesale Trade and Retail Trade sectors. The interesting thing about these size standards is that they don’t apply to federal procurement actions. Instead, there is a different size standard for supply contracts. So, did SBA see fit to increase the supply-contract size standard? The answer is no, in the final rule, SBA did not increase the 500-employee size standard for Federal contracts in the Wholesale and Retail Trade sectors. Now, SBA did increase size standards for 57 industries, with 22 industries in NAICS Sector 42 (Wholesale Trade) and 35 industries in NAICS Sector 44-45 (Retail Trade) going up. The reason for the increase is that the Small Business Jobs Act of 2010 requires SBA to adjust size standards every five years. It’s important to remember that size standards in Sectors 42 and 44-45 cannot be used in Federal contracts for supplies. Rather procurements for Wholesale and Retail Trade sectors use a 500-employee size standard. As SBA regulations state: Acquisitions for supplies must be classified under the appropriate manufacturing or supply NAICS code, not under a Wholesale Trade or Retail Trade NAICS code. A concern that submits an offer or quote for a contract, order, or subcontract where the NAICS code assigned to the contract, order, or subcontract is one for supplies, and furnishes a product it did not itself manufacture or produce, is categorized as a nonmanufacturer and deemed small if it has 500 or fewer employees and meets the requirements of § 121.406(b). 13 CFR § 121.402. So, the prime contractor still has to meet the 500-employee standard under the nonmanufacturer rule. The manufacturer, in turn, must be small (absent a waiver), and the actual manufacturer’s small business status is determined by the solicitation’s NAICS code and its relevant size standard. SBA is not ignoring the 500-employee standard for the nonmanufacturer rule, however. SBA foreshadows that “in an upcoming proposed rule covering the manufacturing sector and industries with employee-based size standards in other sectors (except Wholesale Trade or Retail Trade), SBA will examine whether the current 500-employee size standard for nonmanufacturers is appropriate and provide a detailed response to the Subcommittee’s comment.” We’ll be sure to keep you posted on that change. So, the increases in these size standards do not affect procurement. However, they may affect eligibility for certain businesses for things like SBA loans and other types of assistance that are only available to small businesses. As one example, 423140 Motor Vehicle Parts (Used) Merchant Wholesalers is going from 100 to 125 employees. Stay tuned for updates on future size changes. Questions about this post? Email us. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post SBA Updates Size Standards for Wholesale Trade and Retail Trade first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  8. Happy Friday and Happy Juneteenth! This year, June 19, Juneteenth, falls on a Sunday, so the federal holiday, established in 2021, will be observed on Monday, June 20. Juneteenth arose from the date of June 19, 1865, in Galveston, Texas–when African Americans in the state learned of their freedom due to the Emancipation Proclamation and Thirteenth Amendment. Juneteenth celebrations often focus on education and reflection on the path to freedom as well as the steps still needed to achieve equity in our country. We encourage you to participate in your state and local Juneteenth festivities to honor this important date in American history. Have a great weekend! ‘Grandmother of Juneteenth’ celebrates federal holiday — but there is more work to do. Here’s how you can help [CNN]New VA portals provide simplicity, transparency to vendor interactions [FedNewsNet]More reality checks could help keep DOD programs on time and on budget, GAO says [FSW]The White House just pulled its nominee to fill the still-vacant job of federal procurement chief [FCW]Four Million Hard-Hit Businesses Approved for Nearly $390 Billion in COVID Economic Injury Disaster Loans [SBA]We get the latest on how inflation is impacting government contracting [FedNewsNet]DOE Announces Contract Awards and Issues Fourth Emergency Sale of Crude Oil From the Strategic Petroleum Reserve [DoE]KBR Defendants Agree to Settle Kickback and False Claims Allegations [DoJ]CDAO sees contracting as a way to build innovation [FedNewsNet]Space Systems Command using a ‘buy first’ attitude with procurement [FedNewsNet]Congress wants more oversight over VA’s plans to implement automation [FedNewsNet]Frederick County Businessman Sentenced to Federal Prison for Conspiracy to Commit Wire Fraud in Connection with Overcharging the U.S. Postal Service Under His Company’s Contract to Perform Maintenance and Repair Services at Postal Service Facilities [DoJ]Are Governmentwide Contracts Helping or Hurting Small Contractors? [CoSB] The post SmallGovCon Week in Review: June 13-17, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  9. Representations and certifications are an integral part of the requirements for any solicitation. While each solicitation may require different representations and certifications, what precisely is required for a given representation or certification is generally governed by the FAR. One of the more common requirements is that an offeror provide information to the Federal Awardee Performance and Integrity Information System (FAPIIS) regarding its current federal awards and recent judgments against it concerning federal procurements that result in payment by the offeror, and this is governed by FAR 52.209-7. Recently, GAO addressed the question of just what recent judgments must be disclosed under that FAR rule. In this post, we will explore their decision. GAO issued the decision in question on May 26, 2022, for The Logistics Company, Inc., B-419932.3. On January 8, 2020, the Army issued a request for proposals (RFP) for logistics readiness center maintenance, supply, and transportation requirements. This RFP included FAR 52.209-7. 14 offerors submitted proposals for the award on July 30, 2020 seeking award. The Army eventually awarded Vanquish Worldwide, LLC (Vanquish) the contract. The Logistics Company, Inc. (TLC), another offeror, protested this award and alleged that Vanquish had made false certifications by failing to disclose multiple outstanding civil judgments. The Army initially took corrective action, reviewed the matter more fully, and concluded Vanquish did not make false certifications. The Army then re-awarded the contract to Vanquish, and TLC again filed a protest on the same grounds as before. GAO first recounted FAR 52.209-7, pointing out that “this FAR provision requires offerors to disclose when they (or their principals) have been the subject of a civil proceeding in the last five years in connection with a federal contract or grant in which there was a finding of fault or liability that resulted in the payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more. FAR provision 52.209-7(c)(1). Additionally, the FAR requires offerors to disclose dispositions of civil or administrative proceedings by consent or compromise that include an acknowledgement of fault.” TLC claimed in its protest that Vanquish failed to disclose three separate judgments: the Barton judgment, the Sadat arbitration award, and the Koshani judgment. GAO looked first at the Barton judgment. The Barton judgment was the result of divorce proceedings involving one of Vanquish’s principals issued July 6, 2018. After reviewing that judgment, GAO concluded that Vanquish did not need to disclose this judgment under FAR 52.209-7. The judgment involved one of Vanquish’s principals, yes. But GAO explained that FAR 52.209-7 “does not require offerors to disclose any finding of fault or liability, but rather only requires offerors to disclose certain findings of fault or liability ‘in connection with the award to or performance by the offeror of a Federal contract or grant.’” Just because it was a divorce proceeding involving a principal of Vanquish does not mean that the proceeding concerned federal contracts or grants. This was an easy issue for GAO to dispose of. The Sadat arbitration award, GAO noted, did involve a finding that Vanquish was liable for a matter related to a federal contract. However, that original judgment was made in May 2015. Vanquish made its certification for the RFP on July 30, 2020. FAR 52.209-7 only requires the disclosure of judgments or findings of fault or liability made within five years prior to the certification date and the Sadat award was entered about two months before that period began on July 30, 2015. GAO did observe there was subsequent litigation stemming from the arbitration award, but it was unclear if it had anything to do with federal contracts themselves and in any event ended in a settlement without a finding of fault or liability. Settlements without a finding of fault or liability “do not generally meet [FAR 52.209-7’s] disclosure requirements.” At last, GAO turned to the Koshani judgment. Here, the matter involved a federal contract or grant, and a judgment was made against Vanquish in 2019 that found fault and liability. While normally FAR 52.209-7 requires disclosure of such judgments, there was a catch here: The case was later settled without an admission of fault, and so the judgment was vacated. TLC argued that it did not matter, as a judgment had been made against Vanquish finding fault and liability. GAO noted that while, yes, a judgment had been made against Vanquish, the FAR is explicit that offerors must disclose a civil finding of fault or liability that “results in the payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more.” FAR provision 52.209-7(c)(1)(ii). A payment made pursuant to an out-of-court settlement admitting no fault is not a payment of a fine, penalty, reimbursement, restitution, or damages, and also cannot be said to clearly result from a civil finding of fault or liability. This is the case regardless of when such a settlement occurs. In other words, it’s not the judgment itself that matters, but if the offeror has made payment under that judgment. Here, the wording of FAR 52.209-7 is crucial. If the language was “results in the award” rather than “results in the payment,” the result could be different, as an award of damages is not the same as the payment of those damages. The award is the court ordering the liable party to pay, the payment is the party actually paying. This was the crucial part of the regulation that this case hinged on. As Vanquish never made payment under the judgment before it was vacated as a result of the no-fault settlement, the Koshani judgment was not a finding of fault and liability that results in the payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more. Further rejecting TLC’s argument that there were garnishments made against Vanquish that would suffice as “payments” of the Koshani judgment as they did not go into effect due to settlement negotiations, as well as rejecting an argument by TLC that the Army should have still taken the above judgments and awards into consideration for making responsibility determinations on the basis that the Army exercised its reasonable discretion in finding Vanquish a responsible party, GAO dismissed the protest. Two things are worth noting here: First, as always, the precise language of the FAR matters. Do not simply assume that because you see a few words like “disclose” and “judgment” that you, as an offeror, need to disclose every judgment against you in your proposal. Look at the language to determine exactly what is required. In this case, Vanquish enjoyed the good fortune of having not made any payments on its judgment before it was vacated, which meant it did not need to disclose it. As noted above, simply changing the word “payment” to “award” in “results in the payment” would change this completely. Second, this is worthwhile information for the contractor that is worried about some past judgments that never actually resulted in any payment. Per this decision, if FAR 52.209-7 applies, those judgments do not need to be disclosed. Now, whether or not voluntary disclosure may be prudent is a different story, as sometimes going above and beyond on disclosure can prevent other headaches. But, as a matter of actual requirements, this is good news for contractors who have had some rough times recently. Questions about this post? Email us. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post No Pay, No Need to Say: GAO Clarifies What Judgments and Settlements Require Disclosure under FAR 52.209-7 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  10. Happy Friday, Readers! We hope you had a very productive week and can take some time this weekend to relax and unwind. The start of June is proving to be a wet one here in the Midwest and the gardens and trees are loving it! Everything is so green and the spring flowers are beautiful. I’m sure the town will be filled with the sound of lawn mowers this weekend. Here are a few noteworthy articles this week, concerning federal government contracting issues, including some policy changes on the federal management level, reports on time and materials contracts, and small business tech opportunities. We hope you can kick back, relax and carve out some leisure time this weekend. Enjoy! Small Business Size Standards: Termination of Nonmanufacturer Rule Class Waiver [FedReg]2022 Annual Report: Additional Opportunities to Reduce Fragmentation, Overlap, and Duplication and Achieve Billions of Dollars in Financial Benefits [GAO]SBA releases hurricane season information guide [ALDIA]Survey Says “No” to Biden’s Project Labor Agreements [ConstEquip]The Government Shutdown and the Impact on Your Business [ExecBiz]Navy Rear Adm. Lorin Selby Declares the Need for a “Hedge Strategy” to Anticipate Warfare’s Technological Changes [GovConWire]A hopeful update on the President’s Management Agenda [FCW]Wage gap between CEOs and US workers jumped to 670-to-1 last year, study finds [Guardian]NASA Awards $50 Million in Funding to Small Businesses [SmlBizTrends]GAO: Agencies relying too much on time-and-material contracts [WashTech]Contractors Beset by Ransomware Threats Have Too Few Options [BlmbrgLaw]Federal Contracting: Opportunities Exist to Reduce Use of Time-And-Materials Contracts [GAO]Connecticut Companies Pay $5.2 Million to Resolve Allegations of False Claims Act Violations Concerning Fraudulently Obtained Small Business Contracts [DoJ]Pentagon recovered millions from contractors using tip line, report shows [FedTimes]DOD exploring requirements for managed service providers under CMMC [Fedscoop] The post SmallGovCon Week in Review: June 6-10, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  11. Greg Weber has recently rejoined the blog and is once again one of our attorney-authors. We’re excited to have him back! Greg spent a stint in the healthcare industry, which has given him increased experience in both regulatory and transactional matters. His recent post discusses the importance of checking your emails in connection with size protests. Email is a common way the federal government gives notice, so a lot can rest on an email sometimes. Greg’s full biography can be found here. Be on the lookout for more of Greg’s posts on SmallGovCon. The post SmallGovCon Welcomes Back Greg Weber! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  12. The SBA’s OHA administrative judges recently sent a warning to all small business contractors that they need to keep an eye on their email inboxes no matter how late in the business day it is. In a size appeal decision, OHA found that even an unread email could derail a contractor’s plans for a size appeal, depending on when it arrived in your inbox. As avid readers of SmallGovCon may recall, timeliness with emails is somewhat of a recurring topic in Federal Government Contracting. Well, in RBVETCO, LLC , SBA No. SIZ-6154 (2022), OHA added its voice to the group of recent decisions related to timeliness of emails received by contractors. In RBVETCO, OHA dismissed a size appeal as late, relying on when the email of the size determination was received in the contractor’s email inbox, not when the email was actually opened by the recipient. (For those of you pulling out your calendars and calculators in fervent anticipation of reading the rest of this post, do not fear, we here at SmallGovCon will break down the dates and times involved.) The SBA sent notification of the size determination to the company on Thursday March 24, 2022 at 3:38 p.m. CST/4:38 p.m. EST and SBA received an automated confirmation that the email was received at that same time. However, the employee whose email was listed on SBA correspondence was busy and out of the office at that time. Consequently, RBVETCO was unable to open the email until 6:41 p.m. EST on March 24, 2022. RBVETCO then sent an email confirming receipt of the size determination ruling on Friday March 25, 2022. RBVETCO prepared its size appeal, serving it to all interested parties on Friday, April 8, 2022 (15 calendar days after March 24, 2022), but due to an administrative oversight, the size appeal petition was not filed with OHA until Monday, April 11, 2022 (18 calendar days after March 24, 2022). OHA asked why the appeal should not be dismissed as untimely, as according to OHA rules of procedure, a size appeal “must be filed within 15 calendar days after receipt of the formal size determination.” 13 C.F.R. § 134.204(b)(2). RBVETCO argued that since the size determination email was not opened until after business hours on March 24th, then the email should be deemed to be received on March 25th. The company continued its argument by reminding OHA that their rules and procedures hold that 5:00 p.m. is generally recognized as the close of business, meaning that filings received after 5:00 p.m. are seen as being received on the next business day. Since 15 days after March 25th would fall on a weekend, the filing deadline for anything received on March 25th would be moved to the next business day, which is April 11, 2022, the date RBVETCO filed its size appeal with OHA. 13 C.F.R. 134.202(d). OHA did not find this argument compelling, and laid out some good reminders for contractor’s planning out a size appeal. OHA stated that they have “long held that ‘receipt’ of an email occurs when the e-mail reaches the intended recipient’s e-mail server.” To OHA, drawing a line at when an email is opened creates an “irrational, if not unworkable, precedent.” OHA declared that if they determined receipt by when an email was opened, logically, “an individual might avoid ever receiving an e-mail by, for example simply deleting the incoming message or refusing to open it,” pushing the filing deadline out almost indefinitely. This would create “a plainly absurd result.” So, since OHA received a confirmation on March 24th that the email was received by RBVETCO’s server during business hours, they ruled that the 15 day deadline fell on April 8, 2022 and the size appeal was dismissed. Finally, OHA did address the fact that RBVETCO served the interested parties within the determined 15 day deadline, but forgot to file with OHA until the 18th day simply due to an administrative error. OHA reiterated that regulations do not allow OHA to extend or modify the filing deadline, no matter how much they may sympathize with an appellant’s administrative accident. For size appeals there are complicated procedural rules, and if you fail to follow these rules they can result in your size appeal being dismissed, regardless of how strong the arguments within it may be. This case should hopefully serve as a reminder to all contractors to keep an eye on your email inbox at all times when you anticipate receiving any important emails from the Government. If you anticipate that you may be receiving some important communication from OHA (or other government official for that matter), make sure to plan out your calendar accordingly because despite your best intentions or circumstances, OHA cannot shift the filing deadline of a size appeal. Questions about this post? Email us. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Leaving OHA Email on “Unread” still Counts as Receipt For Appeal Timing Rules first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  13. Inflation. A word no one likes, but it is something that is currently impacting nearly every facet of our lives. Gas prices continue to rise, grocery costs are through the roof, and everyday living expenses are taking more hard-earned money from our country’s workers than ever before. However, consumers are not the only ones feeling the effects. Costs and expenses of running a business have increased dramatically as well, and those in the federal contracting world are no exception. Questions from both contractors and contracting officers (CO) prompted the Department of Defense (DOD) release new guidance on May 25, 2022, conveying how it plans to handle inflation through economic price adjustments (EPA) as well as when the use of EPAs is appropriate. However, the guidance also discourages flexibility for increased costs based on inflation. CONTRACT TYPES To understand the new guidance, it is important to first understand what type of contract the contractor is performing under. There are four main ways that contractors can be paid under a DOD contract: cost reimbursement, fixed-price incentive, fixed-price with economic price adjustment (EPA), and firm fixed price. Cost Reimbursement Type Contracts. The Government bears the risk of increased costs, including those due to inflation, in cost reimbursement contracts. Contractors have the responsibility to promptly notify the CO “that the costs incurred are approaching the limits specified in the applicable clause.” Federal Acquisition Regulation (FAR) clause 52.232-20, Limitation of Cost, and FAR clause 52.232-22, Limitation of Funds address the contractor’s obligations in further depth. When the Government receives such notice, it may choose to increase the contract funding for continued performance, or not. If it chooses not to, the contractor is under no obligation to work past the contract’s funded amount. Fixed-Price Incentive Contracts. The contractor’s actual, allowable, and allocable costs are recognized up to the contract ceiling in fixed-price incentive contracts. If actual cost differs from the target cost, “the target profit will be adjusted by application of the contract share ratio to the costs over or under the target cost.” Fixed-Price Contracts with Economic Price Adjustments. Under fixed-price contracts with economic price adjustment, “the EPA clause normally establishes a mechanism to mitigate specifically covered cost risks to both parties as a result of industry-wide contingencies beyond any individual contractor’s control; the Government will bear the cost risk up to the limit specified in the clause (if any).” Firm-Fixed-Price Contracts. Unlike the three previously mentioned contract types, those contracted as firm-fixed-price contracts (FFP), leave the contractors to bear the burden of any increased costs. This includes increases due to inflation and occurs because FFP contracts do not contain “authority for providing contractual relief for unanticipated inflation under an FFP contract.” Many have inquired about the possibility of using a request for equitable adjustment (REA) for this purpose, but the DOD points out that REAs are only to be utilized in the event of CO directed changes. This is a common contract type for many contractors. Unfortunately, the DOD is not encouraging flexibility for inflation: “Since cost impacts due to unanticipated inflation are not a result of a contracting officer-directed change, COs should not agree to contractor REAs submitted in response to changed economic conditions.” DEPARTMENT OF DEFENSE’S SOLUTION To fill the void created by rapidly increasing inflation, DOD has recommended that FFP contracts that are for periods of time longer than six months insert an EPA clause. EPA clauses based on established prices or on the actual cost of labor and material should only be used when delivery or performance will not be completed within six months after contract award. DFARS 216.203-4(1)(ii). EPA clauses based on cost indices of labor and material are limited to contracts with significant costs that will be incurred beyond one year after performance begins. FAR 16.203-4(d)(1)(i). DOD recommends the following factors be taken into account by COs when drafting an EPA clause: When a CO is choosing indices to be used to measure inflation for purposes of an EPA clause, the index used should be “closely related to the cost components judged to be most unstable”; The scope of the EPA clause should be limited to costs most likely to be impacted by economic fluctuations, excluding costs not likely to be affected by inflation from adjustment; Economic price adjustments often do not apply to the profit portion of the contract; CO should use independent, recognized sources as the basis for measurement of inflation in EPA clause; and The index used to measure inflation should not be too large or too small, so only relevant fluctuations are taken into account. Further, EPA clauses should: Be fair to both parties; Allow for contract price adjustments based on pre-established formulas rather than simply reopening price negotiations; Exclude contingency allowances from the base contract price; Explain the method that will be used to calculate price adjustments; and Identify when a price adjustment will be warranted. DOD points out that any clause in a contract that includes adjustments due to changed economic conditions is considered an EPA, whether the term is used or not. Unfortunately, this guidance did not include any information on how DOD plans to address inflation for currently active contracts. Questions about this post? Email us. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Department of Defense Unveils Plan to Address Effects of Inflation on Contracts first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  14. SBA has issued a final rule changing all employee size standards to a 24-month calculation. This rule is scheduled to be published in the Federal Register on June 6, 2022, and and will take effect 30 days from the date it is officially published. Let’s take a closer look. This final rule actually implements two updates to SBA’s rules that, once effective, will change the way SBA calculates a company’s size to determine whether it qualifies as small for SBA’s various assistance programs. The first one (the primary focus of this article) is that the SBA will adopt a 24-month average to calculate a company’s number of employees for eligibility purposes in all of SBA’s small business and socioeconomic programs. This change to SBA’s size rules will implement section 863 of the 2021 National Defense Authorization Act (NDAA), which amended section 3(a)(2)(C)(ii)(I) of the Small Business Act, to change SBA’s employee-based size standards from a 12-month averaging period to a 24-month averaging period. Once this change takes effect, as SBA explains: [F]or certifications following the effective date, the size of a business concern under an employee-based size standard will be calculated by averaging the concern’s number of employees for each pay period in the preceding completed 24 calendar months. In determining a concern’s number of employees, SBA counts all individuals employed on a full-time, part-time, or other basis. Part-time and temporary employees count as full-time employees, and the concern aggregates the employees of its domestic and foreign affiliates. If the concern has not been in business for 24 months, it would average its number of employees for each pay period during which it has been in business. The change will apply to all industries subject to SBA’s employee-based size standards, which predominantly apply to manufacturers (but also to certain mining, utilities, transportation, publishing, telecommunications, insurance, research and development, and environmental remediation firms). But SBA also noted that nonmanufacturers too qualify for their small business status for government supplies contracts using employee-based size standards. And as such, SBA clarified that even though the nonmanufacturers and nonmanufacturing industries are not technically covered by the 2021 NDAA’s change to its proposed size standards, SBA believes that it would be unworkable to use a 24-month average for manufacturing industries but retain a 12-month average for other industries with employee-based size standards. Firms may participate in multiple industries, and it is burdensome to use different averaging periods for different industries with employee-based size standards. Thus, once the final rule takes effect, the 24-month average will be a widespread change for SBA’s employee based size calculations moving forward. Notably, the second change this final rule implements is that SBA will now allow participants in its Business Loan, Disaster Loan, Surety Bond, and Small Business Investment Company (SBIC) Programs to use a five-year averaging period to calculate their average annual receipts (in addition to the current three-year averaging period). According to SBA, both of “[t]hese changes will allow larger small businesses to retain their small business size status for longer, and some mid-sized businesses to regain their small business status.” Questions about this post? Email us. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Upcoming SBA Rule Will Switch to 24-Month Calculation for Employee Size Standards first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  15. Happy June, Readers! Can you believe it’s the start of summer already? This year is certainly flying by. I hope you have lots of fun summer plans with family and friends. I know that I’m looking forward to it. We’ve included several articles that hopefully provide some good information concerning federal government contracting today. Enjoy the weekend! Small Business Size Standards: Notification of Two Virtual Public Forums on Size Protest [FedReg]4 Tips for Winning Government Infrastructure Contracts [ForConstPros]DoD tells industry how it will handle cost of inflation [FedNewsNet]US Military Budget 2022: How Much Does the U.S. Spend on Defense? [GovConWire]Money Matters: Three SBA programs you probably haven’t heard of and could be taking advantage of [ARentMang]NASA supports small business research to power future exploration [ASM&D]How Does the Government Assist Small Businesses? [ExecBiz]Why are too many GovGon websites so lacking in the basics? [WashTech]DTRA Seeks Proposals for $4B Tech Contract to Counter Weapons of Mass Destruction [GovConWire]How the Pentagon plans to manage inflation costs in contracts [FCW]Previously banned labor law rule for federal contractors comes back into play [FedNewsNet]Wage Compression In Government Contractors Needs To Be Addressed [Forbes]Cross-agency working group reviewing gaps in federal cybersecurity capabilities [FedNewsNet]Pentagon announces new leadership for chief digital, AI office [FedScoop] The post SmallGovCon Week in Review: May 30-June 3, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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