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  1. It’s back to school week here in Lawrence. Kind of like parents doing a back to school shopping spree, the federal government’s spending calendar is also seeing more activity. The fourth quarter of the government’s fiscal year regularly sees a big spike in government spending. Here is a roundup of some interesting happenings in government contracting world, including the draft STARS III IT solicitation for small businesses and new IRS procurement methods. GSA announces STARS III IT contract for small businesses. [fedscoop] Wilbraham business owner agrees to pay $1.3 million to federal government to settle false-claims case. [Masslive] DOJ not joining whistleblower’s False Claims Act case against companies with Navy contracts. [legalnewsline] IRS tries agile acquisition for data tools. [FCW] Department of Defense develops plan to correct contracting practices. [HomelandPrepNews] New tool to help contractors comply with federal workplace discrimination rules. [federalnewsnetwork] Guilty pleas in government contract furniture bid scheme. [woodworkingnetwork] Labor Unveils New Resources to Boost Contractor Hiring Compliance. [NextGov] View the full article
  2. GAO recently dismissed several bid protests to an $82 billion procurement because of the actions of a company that had already lost its protest. In AECOM Management Services, four different companies protested the U.S. Army’s logistics civil augmentation program procurement for various “Setting the Theater” services for the Army’s Northern Command, Southern Command, African Command, European Command, Central Command, Pacific Command, and Afghanistan. The services included, but were not limited to, supply, transportation, engineering, base camp support, and other logistics for the seven different theaters. The solicitation’s work breakdown included more than 200 jobs. This was the fifth time the Army has held a competition for these services. The Army released the request for proposals on November 20, 2017. It sought to award four to six indefinite-delivery, indefinite-quantity (IDIQ) contracts and dole out the first seven task orders. The maximum value of the contracts is $82 billion. Six companies responded to the request: DynCorp International, LLC, AECOM Management Services, Inc. (then called URS Federal Services, Inc.), Fluor Intercontinental, Inc., PAE-Parsons Global Logistics Services, LLC, Kellogg, Brown & Root Services, Inc. (KBR), and Vectrus Systems Corp. On April 9, the Army announced it was giving four total IDIQ contracts and it was awarding the seven task orders as follows: three to KBR, two to Vectrus, and one each to Fluor and PAE. DynCorp and AECOM did not receive IDIQs or task orders. DynCorp filed the first protest on April 22. AECOM, Fluor, and PAE filed protests on May 1 — the latter two arguing that, even though they got IDIQs, the doling out of task orders was improper. GAO denied DynCorp’s protest on July 31. But DynCorp wasn’t finished. It took its grievances to the Court of Federal Claims, which led to the immediate dismissal of the AECOM, Fluor, and PAE protests. Wait, what? Yes, that’s correct. A competitor’s unilateral decision to take its protest to a different venue led to the dismissal of three other protests despite the fact that those protesters had nothing to do with DynCorp’s court proceeding. The reason GAO dismissed the case is because its regulation requires it to dismiss any case “where the matter involved is the subject of litigation before, or has been decided on the merits by, a court of competent jurisdiction.” Said GAO: “we will not consider the protest if the court’s disposition of the matter would render a decision by our Office academic.” Because the matter of whether the agency conducted its procurement correctly is currently before the Court of Federal Claims, and AECOM’s, Fluor’s, and PAE’s protests concern the same subject matter, GAO had to dismiss their protests. It doesn’t matter that those parties have no control over DynCorp’s actions and what DynCorp argues before the court. It doesn’t matter that they’ve spent countless hours (and legal fees) arguing their points before GAO. Through no fault of their own, their shot at a GAO ruling on the $82 billion pie was obliterated by the actions of a competitor. View the full article
  3. SBA regulations say that size is determined as of the date an offeror submits its initial proposal, with price. On its face, this rule seems pretty straight forward. But what happens if the initial proposal was filed six years ago? And what if the joint venture that submitted the proposal has since expired? Following OHA’s recent logic, the proposal-date rule stands even in these unique circumstances. The case at issue is Global Dynamics, LLC, SBA No. SIZ-6012 (June 18, 2019). Global Dynamics is OHA’s ruling on an appeal of an SBA area office finding that, based on information as of October 16, 2012, GiaMed is a small business. To fully understand OHA’s ruling, we need to walk through a timeline with plenty of twists and turns. Here is a bulleted list with the important dates and events: August 7, 2012 – GiaCare and MedTrust enter into a mentor-protégé agreement (“MPA”) under SBA’s 8(a) Program. August 15, 2012 – SBA approves the MPA for one year (SBA granted a one-year extension on May 7, 2013). September 14, 2012 – the Army issued the RFP (the “RFP”) at issue for registered nursing services. September 25, 2012 – GiaCare and MedTrust, under their MPA, formed a joint venture named GiaMed to compete for the RFP. October 16, 2012 – GiaMed submitted a proposal which included its price proposal. January 24, 2013 – Army names GiaMed awardee. May 6, 2013 – GAO sustained a protest and recommended the Army re-evaluate all proposals and make a new competitive range determination (see B-407966). May 6, 2014 – the GiaCare and MedTrust MPA expired. January 29, 2015 – Army informed GiaMed that the appellant (Global Dynamics, LLC) is the awardee of the contract at issue. June 29, 2015 – GiaMed filed a GAO protest of Global Dynamics’ award (see B-407966.4). June 2016 – Agency concluded corrective action under the June 29 GAO protest and reaffirmed award to Global Dynamics. November 2017 through August 2018 – Army cancelled the RFP and sole-sourced the award, a decision which was appealed to the Court of Federal Claims after which the Army rescinded the cancellation, amended the RFP, reopened discussions, and requested revised proposals. August 23, 2018 – GiaMed was announced as awardee. August 29, 2018 – Global Dynamics filed a protest alleging GiaMed is not a small business. October 2, 2018 – The Area Office dismissed the size protest as untimely. December 17, 2018 – OHA granted the appeal and remanded for a new size termination (see SBA No. SIZ-5979). February 25, 2019 – The Area Office concluded GiaMed is a small business. March 12, 2019 – Global Dynamics files the size appeal at issue here. If you struggled to follow that, here is a short version. GiaCare and MedTrust formed GiaMed as an MPA joint venture in September 25, 2012 and submitted a proposal for the RFP at issue on October 16, 2012. Through a series of protests the Army ended up amending the RFP, reopening discussions, and requesting revised proposals. While the Army did at one time cancel the RFP, that decision was rescinded. In other words, the RFP never fully died, so neither did GiaMed’s October 16, 2012 proposal. Global Dynamics’ appeal argued that GiaMed is not small because (1) it is affiliated with MedTrust and other entities; (2) it is not an eligible mentor-protégé joint venture (JV); (3) GiaMed’s JV lacks specificity such that the exception to joint venture affiliation does not apply; and (4) GiaMed is affiliated with a firm named GiaSpace (a d/b/a of GiaMed for a short period of time). Now is the time to answer the question of the day – does the extended time between initial proposal (October 16, 2012) and the post-award size decision (February 25, 2019) have any role in OHA’s ruling? Simply put – no. Despite the many intervening years and procedural events and litigation, OHA still looked back to the initial proposal date for its ruling. OHA reminds us that “SBA regulations provide that SBA will determine ‘the size status of a concern, including its affiliates’ as of the date the concern self-certifies as small with its initial offer including price.” (citing 13 C.F.R. 121.404(a)). “In the instant case, the Area office twice stated in the size determination . . . that GiaMed’s size must be determined as of October 16, 2012, the date of GiaMed’s initial proposal including price.” This finding is key as the rest of OHA’s analysis relies on this date. Possibly the most pivotal aspect from the timeline is that in May 2014, the GiaMed MPA expired. Surely this is the nail in the coffin for GiaMed, right? Nope! “[T]he crucial flaw in [Global Dynamics’ argument] involves the date to determine size.” “Even assuming . . . the MPA did expire in 2014, there is no dispute that GiaCare and MedTrust were an SBA-approved mentor and protégé on October 16, 2012, the date to determine size.” OHA similarly found that GiaCare and MedTrust were not generally affiliated due to extensive joint venture agreements because as of October 16, 2012, these other joint ventures did not yet exist. “nder OHA precedent, events occurring after the date to determine size are not relevant in a size determination.” OHA reiterated what each 8(a) joint venture agreement should contain. Specifically, provisions (1) itemizing all major equipment, facilities, and other resources, (2) specifying contract negotiation, source of labor, and contract performance roles, and (3) noting that the 8(a) will perform at least 40% of the work. The Area Office and OHA found these provisions in GiaMed’s joint venture agreement. The only unique aspect of these is that the joint venture agreement stated that GiaCare and MedTrust “will not bring any major equipment or facilities . . . because the Joint Venture will utilize Army equipment and facilities.” OHA found this to be a valid provision because the RFP was for nursing services performed at military treatment facilities and “t is therefore reasonable that there would have been no major equipment, facilities or other resources for GiaMed to have detailed in the JVA.” Through OHA’s repeated stance that the most important date is “the date the concern self-certifies as small with its initial offer including price,” it should come as no surprise that OHA denied the appeal and affirmed the Area Office’s determination that GiaMed was a small business. While the facts of this case are very unique, they show that the rollercoaster that is government contracting can sometimes lead to head-scratching results. Whether your RFP was issued 6 years ago and you think there is a valid protest ground or you have questions about what is required in a joint venture agreement, please do not hesitate to reach out with your questions. View the full article
  4. Cybersecurity is a key concern of the federal government, which means that it should be a key concern for federal contractors, too. To address a perceived cybersecurity risk, the 2019 NDAA prohibited the government from buying telecommunications devices produced by certain companies—namely, Huawei Technologies, ZTE Corporation, or any of their subsidiaries. In a proposed rule announced this week, this ban will be effective beginning August 13, 2019. According to the interim rule, the FAR will be amended to give effect to Section 889 of the 2019 NDAA. As amended, the FAR will prohibit agencies “from procuring or obtaining, or extending or renewing a contract to procure or obtain, any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as a critical technology as part of any system[.]” Such covered telecommunications equipment or services includes: Telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any of their affiliates); Video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any of their affiliates); Any telecommunications or video surveillance services provided by any of these entities using any such equipment; and Any telecommunications or video surveillance equipment or services produced or provided by a company that the intelligence community reasonably believes is controlled or owned by the Chinese government. The 2019 NDAA (and this follow-on rule) make clear that the federal government is concerned with the security risks of using Chinese-linked telecommunications companies. And though this prohibition seems comprehensive, there are exceptions: the FAR will not prohibit contractors from providing a service that connects to the facilities of a third party (such as backhaul, roaming, or interconnection arrangements) or telecommunications that cannot route or redirect user data or permit visibility into any user data or packets that such equipment transmits or otherwise handles. Moreover, the head of an agency or the Director of National Intelligence can provide a waiver for the use of a prohibited item. This rule has significant ramifications for federal contractors—it prohibits, in most cases, a contractor from providing any of the covered equipment to the federal government. As part of this ban, moreover, there are detailed reporting requirements for contractors on related procurements. Given the implications—both on particular contracts and to national security—it’s important for contractors to understand and comply with this new FAR rule. If you have any questions, please give me a call. View the full article
  5. Ignorance is bliss, right? Not always. In the world of government contracting, GAO recently dismissed a protest because its initial agency protest was not timely filed, reminding the protester that ignorance of the law is no excuse. In Best Practices Group, B-417768 (July 30, 2019), the VA had issued a solicitation for a contractor to maintain a VA Medical Center’s cancer registry database, with proposals due on May 13, 2019. The protester, BPG, submitted a timely proposal, but on June 13, the VA awarded the contract to another competitor. Opposing the award, BPG filed an agency-level protest with the VA on July 1, more than two weeks after the award date. BPG made two primary arguments in its agency protest, but the VA dismissed both arguments as untimely under FAR 33.103(e) (the agency protest timing rules that are similar to GAO timing rules). First, BPG argued that the solicitation was defective. The VA promptly dismissed this argument, as protests regarding the contents of a solicitation are generally due before the bid due date. Second, BPG argued that the VA improperly evaluated proposals. Again, the VA dismissed this ground because the protest had not been filed within 10 days of the award notice, as required under the applicable regulations. Despite the VA’s complete dismissal of its protest, BPG filed a similar protest with GAO on July 17, more than a month after award was made. After the VA submitted a dismissal request, BPG argued that “it was unfamiliar with the procedures for filing a protest; it was awaiting receipt of an award notice from the VA that would include its appeal rights; and that it promptly filed its protest once it determined that no information was forthcoming.” Similar to the first go-around, GAO pointed out that both BPG’s protest grounds were untimely. 4 C.F.R. § 21.2(a)(1) requires that a “a protest based on alleged improprieties in a solicitation must be filed prior to bid opening or the time established for receipt of proposals,” while 4 C.F.R. § 21.2(a)(2) requires that “all other protests must be filed no later than 10 calendar days after the protester knew, or should have known, of the basis for protest, whichever is earlier.” In response to BPG’s argument that it did not know the timing rules and was awaiting information from the VA, GAO reminded everyone that “neither a protester’s unfamiliarity with our regulations, nor its decision to wait for the agency to inform it of its protest rights, provides a basis for suspending our timeliness regulations.” Because all regulations governing cases before GAO are published and publicly available through the Code of Federal Regulations, “protesters are charged with constructive notice of their contents” and any “protester’s professed lack of knowledge of these published regulations is not a basis for waiving their requirements.” Don’t get caught not knowing the rules, like these unfortunate protesters did! The CFR is freely accessible online in a number of places (including here, here, and here). When in doubt, don’t wait to call us either! View the full article
  6. Thanks to my colleague Matthew Schoonover for handling week in review duties last week. After a week spent camping in the mountains of Colorado, I returned rested and with a newfound respect for bears, moose, and other wildlife. Please enjoy this week’s roundup of federal government contracting news. There are some interesting stories in here about new IT contracting initiatives from GSA schedules, NASA, and the IRS; an increase in federal tech contracts; and DOD acquisition reform. FOIA council seeks level playing field for ‘overwhelming’ IT acquisition process. [FederalNewsNetwork] Congress is Accepting Price Gouging By Defense Contractors. [Forbes] The Road to Acquisition Reform ‘Nirvana. [NationalDefense] Federal Tech Contracting Spending Rose $8B in FY2018. [Meritalk] IRS Doesn’t Have An R&D Shop, So It Built A $7M Procurement Vehicle Instead. [Nextgov] NASA looks to AI, cloud for next iteration of administrative IT contract. [fedscoop] Our view: Local jobs on the line. [WSJournal] Spending transparency tools are now available to agencies under IT Schedule 70. [fedscoop] Cisco to Pay $8.6 Million in Whistleblower Case for Flawed Software. [ChannelFutures] View the full article
  7. Agencies often find unanticipated, innovative content in offerors’ proposals. And unsurprisingly, those proposals are often the ones selected for award. But a recent GAO decision reminds us that all strengths an agency assigns must be supported by the stated evaluation criteria. In other words, the solicitation must thoroughly inform offerors of these evaluation criteria, and the agency must equally evaluate offerors under them. An offeror’s proposal should not get extra credit for proposing things that are not anticipated by or logically encompassed in the solicitation. GAO’s decision in Info. Int’l Assocs., Inc., B-416826.2 (2019), surrounded the Homeland Defense and Security Information Analysis Center Basic Center Operations contract for the collection, analysis, synthesizing/processing, and dissemination of scientific and technical information. The Department of the Air Force issued a solicitation seeking proposals for the award of a single cost-plus-fixed-fee contract to the proposal offering the best value to the government, considering past performance, technical, and cost. The Air Force found the awardee’s proposal to represent the best value as it was “slightly superior technically” and slightly cheaper than the protester’s. The protester challenged the Air Force’s technical and ultimate source selection decision. With regards to the technical evaluation, in part, challenged the awardee’s assigned strength for its proposed “cloud-compatible HDIAC website.” GAO first reviewed the strength assigned to the awardee’s technical proposal “for a cloud compatible HDIAC website running on the first day of the contract, which would provide added benefit to the government as it executes its strategy of moving all public-facing websites to a cloud environment.” Essentially, the Air Force found a strength in the awardee’s proposed approach to this one HDIAC website because it utilized cloud-based technology, and the government hopes to apply cloud-based technology to all of its public websites at some point in the future. But there was nothing in the solicitation anticipating or favoring cloud-based technology for this website. And the protester asserted that the “nature of the website hosting is completely irrelevant to HDAIC users and equally irrelevant to the content maintained on the website,” and the solicitation “gave no indication that the contractor would be evaluated on where the website was hosted.” In reaching its decision on the first protest ground, GAO set forth the following standard: Agencies are required to evaluate proposals based solely on the factors identified in the solicitation, and must adequately document the bases for their evaluation conclusions. While agencies properly may apply evaluation considerations that are not expressly outlined in the RFP where those considerations are reasonably and logically encompassed within the stated evaluation criteria, there must be a clear nexus between the stated criteria and the unstated consideration. GAO further explained: The reasonableness of the award of any strength is whether the benefit identified by the agency is reasonably and logically encompassed by the announced evaluation criteria. In other words, would an offeror–knowing that the agency required a website on which to publish information–reasonably have anticipated that the government would reward offerors for proposing to assist with moving other public-facing websites to a cloud environment. GAO then reviewed the assigned strength under the solicitation’s stated criteria, finding that “[t]he agency requirement here was for a contractor-provided website to disseminate journals and other publications, calendar of events, databases, and the like to the HDIAC user community.” GAO acknowledged the reasonableness of “the agency’s assertion that there is a benefit to the agency from having the HDIAC website be cloud compatible.” But GAO explained: We find little relationship, however, between the RFP’s stated requirement for a website and the agency’s contention that it could also receive a benefit by leveraging [the awardee]’s expertise to gain efficiencies in moving other BCO websites to a Cloud environment. . . [T]he RFP cannot reasonably be read as soliciting expertise in cloud migration. In our view, the skills and experience required to assist with the transfer of other websites to the cloud is materially different from what is required here-for the contractor to develop and maintain an agency website with useful professional material. As such, we find the agency’s reliance on this perceived benefit to be unreasonable. Further, the Air Force also based this assigned strength on the awardee’s assertion that it would have the required HDIAC website running by day one. But as GAO pointed out, the “requirement was not for a preliminary website with basic functionality”; it was for a “fully functioning website.” As such, GAO found that the awardee had actually been assigned “a strength for providing less than the minimum RFP requirement,” which was found to be further unreasonable. GAO sustained the protest on this basis. GAO has long relied on the standards that require agency evaluations, and any strengths and weaknesses assigned in those evaluations, to be based on the solicitation’s requirements or logically encompassed within them. But GAO also affords agencies wide discretion in establishing their contracting needs and in determining the best ways to meet those needs. This sometimes results in a blurry line between those strengths supported by the solicitation and those that the agency merely finds beneficial to government business and strategy. This GAO decision helps to more clearly define that line for contractors and agencies alike. View the full article
  8. Contract changes, particularly in the construction context, can be flash points for the Government and a contractor. In some cases, the Government will assert that the contract requires the contractor to perform certain work; the contractor, pointing to the same (or another) contractual provision, will argue that the contract does not require it. These diverging positions can often lead to contentious litigation. If you’ve ever found yourself in this position (or perhaps find yourself there currently), you’ll probably find a recent decision from the ASBCA, GSC Constr., Inc., ASBCA No. 59046 (July 11, 2019), illuminating. There, the board addressed various changes that the Government allegedly made to the contract, but for which it did not compensate the contractor. In some cases, it agreed with the contractor that compensation was owed; in one instance, it did not. The task order, issued by the Army, required the contractor to “construct a combined Central Issue Facility . . . for permanent party troops and soldiers in Advanced Individual Training” at Ft. Sill, Oklahoma. The task order amount was $11,951,460 and the task order incorporated the contractor’s proposal and twelve amendments. The contractor alleged that during construction the Government required it to perform additional work beyond the contractual requirements in four different areas: a potable (domestic) water line, a fire protection loop, a sanitary sewer main, and a truck turnaround. Let’s see how ASBCA analyzed each issue, focusing on key contract language for each. Potable (Domestic) Water Line. On this issue, contractor contended that the Government owed it for relocating a main waterline. The ASBCA looked at the contractual language, which noted that the “the Government will provide the primary or main water pipe distribution.” ASBCA held that this specification “does not say that [the contractor] would relocate the water main; indeed, to the extent it addresses a water main at all, it points to the government as the responsible party.” Thus, ASBCA awarded the contractor $97,000 for relocation of the water main. Fire Protection Loop. Here, the contractor argued that the contract required the Government to route the fire water line to 5 feet from the building. The Government pointed to a contract drawing stating that the “contractor . . . will route fire waterline.” ASBCA held that both the contract and the contractor’s proposal obligated the contractor to furnish the fire protection loop. It thus denied this part of the contractor’s appeal. Sanitary Sewer Main. With respect to the sewer main, the contractor argued that the Government improperly required it to install a sewer main. The contractor argued that the contract only required it “design and construct the sanitary sewer service line between the sanitary sewer main to 5 feet from the building, including cleanout or manhole.” The Government, on the other hand, regarded construction of the sewer main as part of the contractor’s obligation as the “infrastructure” and “design/build contractor” and pointed to a drawing depicting the sewer main (but which did not state who would install it). ASBCA looked at the clear language of the specification and agreed with the contractor that the contract did not oblige the contractor to install a sewer main. It thus awarded the contractor $80,000 for the installation of the sewer main. Truck Turnaround. During performance, the Government ordered the contractor to redesign and reconstruct a truck turnaround because it alleged that a 53-foot shipping container was unable to maneuver to the loading dock. In its analysis, ASBCA didn’t even reach the contractual terms because the Government did not provide any first hand evidence that the truck turnaround, as constructed by the contractor, did not meet the contract’s specifications. As a result, ASBCA awarded the contractor approximately $93,000 for this additional work. This is a good decision for contractors, especially ones involved in construction. The contract specifications are your friend, as long as they are clear. If the contract doesn’t require you to perform work, the Government cannot obligate you to perform additional work without compensation. Conversely, if the contract makes you responsible for certain work, you won’t get extra money for doing what you already promised to do. View the full article
  9. The government can find many reasons to try and reject a claim. Don’t give them any easy reasons to reject if you can help it. One of those reasons to try and avoid–sending invoices late. In PROTEC GmbH, ASBCA No. 61185, 19-1 B.C.A. ¶ 37351 (2019), the ASBCA considered the appeal of a claim by PROTEC to have the Army pay invoices for equipment maintenance and repair at an Army garrison. The contract “required PROTEC to submit an electronic on-call emergency report within two days of performing an emergency repair, and an electronic condition report (collectively, reports) within seven days of performing maintenance.” Electronic invoices for the prior month were due by “the 10th working [day] of the next month.” The record showed that “PROTEC did not submit electronic emergency repair reports within two days of emergency services, or electronic condition reports within seven days of maintenance. Rather, PROTEC documented its work by completing paper work certificates.” But it did not submit the paper certificates on time either. PROTEC also missed the submission deadline for invoices by months and years. PROTEC argued that the late submissions were due to government delays in “receiving signed work certificates from the government.” But the board noted that PROTEC could not identify the specific invoices that were late because of this reason, nor how long the delay was because of the government’s inaction. The Army refused to pay the invoices not because PROTEC didn’t do the work, but because the electronic invoices and reports were submitted late. PROTEC argued that “the government suffered no prejudice from the late electronic reports and invoices because timely paper reports, the maintenance schedule, and the contracting officer representative’s (COR’s) role in arranging emergency repairs allowed the government to verify performance.” The ASBCA agreed with the Army because for “repairs in particular, timely reports and invoices were necessary to verify the time and material charges.” ASBCA’s ruling was short and sweet: “Because PROTEC submitted electronic reports and invoices late, the government properly refused to pay the unpaid invoices.” PROTEC’s arguments to the contrary were not well supported. This decision is a reminder that, in government contracting, submitting invoices and records is just as important as doing the work if a contractor wants to be paid. The ASBCA will not be sympathetic to a claim that seeks payment of late invoices, absent unusual circumstances such as government delay. View the full article
  10. No, the government isn’t trying to figure out how it can bundle home and auto coverage to save on its insurance premiums. Instead, “consolidation” in the federal government contract context refers to the action of collecting requirements being performed under discrete small business set-aside contracts into a single procurement. Before an agency may consolidate contracts, it must consider the impacts the proposed consolidation will have on small business participation. Recently, however, GAO was asked to determine whether consolidation analyses are required for Blanket Purchase Order (“BPA”) procurements, and its decision did not adopt the SBA’s position. Coast to Coast Computer Products, Inc., B-417500 et al.(Comp. Gen. July 29, 2019), involved a General Services Administration (“GSA”) procurement for information technology equipment, software, and associated services. Competition was restricted to holders of GSA Schedule 70 contract holders. The procurement was structured as a BPA, which GSA referred to as the “second generation information technology (“2GIT”)” BPA. The goal of the 2GIT BPA was to provide a “one-stop-shop in the Information Technology market to meet the needs of the Air Force, Department of Defense (DOD) agencies, and other federal, state, local, regional, and tribal governments.” Given the broad scope of services GSA sought, the 2GIT procurement was not set-aside for small businesses. Instead, small business participation was incorporated as an evaluation factor, and individual orders could be set-aside exclusively for small businesses. The estimated value of the BPAs was $5.5 billion. As a prospective small business offeror, Coast to Coast filed a protest challenging the terms of the 2GIT BPA solicitation. Among other things, Coast to Coast alleged that the GSA had improperly consolidated contracts without first determining the impact on small businesses. As alluded to above, bundling is technically defined as “consolidating 2 or more procurement requirements for goods or services previously performed under separate smaller contracts into a solicitation of offers for a single contract that is likely to be unsuitable for award to a small business.” 15 U.S.C. § 632(o). While consolidation means “[the] use of a solicitation to obtain offers for a single contract or a multiple award contract . . . to satisfy 2 or more requirements of the Federal agency for goods or services that have been provided to or performed for the Federal agency under 2 or more separate contracts lower in cost than the total cost of the contract for which the offers are solicited[.]” 15 U.S.C. § 657q(a)(2). Those are pretty wordy definitions. Stated more succinctly, consolidation is the action of consolidating two or more individual procurement into a single procurement that may make it hard for small businesses to compete for the procurement. While related, consolidation is sightly different from another procurement integration action, “bundling.” The concern with consolidation is that it will freeze small business contractors out of federal contracting opportunities because it will both reduce the number of awardees and require the awardee to have greater qualifications than small businesses may otherwise be able to muster. To address this issue, before a procurement exceeding $2 million may be consolidated, the contracting agency must first conduct market research to evaluate the impact on small businesses and investigate potential alternatives to consolidation. 15 U.S.C. § 657q(c)(1). Even if consolidation is found to be necessary, the acquisition strategy must still find ways to incorporate small business participation. It was undisputed that GSA did not conduct any type of consolidation analysis before issuing the BPA solicitation. Despite this, GSA defended the structure of its procurement by arguing that a subtle technicality built into the wording of the consolidation statute exempted this procurement from the consolidation analysis. Specifically, GSA argued that because the consolidation statutes referred to contracts, it was not required to conduct a consolidation analysis because, as a legal matter, a BPA is not a “contract.” As resolution of the protest would impact small businesses, GAO solicited the input of the SBA before issuing its decision. The SBA responded that it supported the position advanced by Coast to Coast that GSA’s failure to conduct any type of consolidation analysis was improper. GAO summarized the SBA’s position as follows: [T]he Small Business Administration (SBA) echoes the protester’s arguments, stating that the BPA improperly consolidates orders for which many schedule 70 contract holders would be able to compete, and that the proposed strategy “subverts congressionally mandated competition by setting aside $5.5 billion in IT orders for nine other-than-small business[es] and teams that receive spots on the BPA.” Despite receiving support from the SBA, Coast to Coast failed to convince GAO that GSA failed to conduct a consolidation analysis. The basis for GAO was the same as that advanced by the agency. As GAO explained, “Our review of applicable statutory and regulatory authority reveals that a consolidation analysis is not required prior to establishment of a BPA—which is not a contract, according to the SBA’s definition of a contract—but rather, that the required consolidation analysis is to be performed at the task order level.” While GAO acknowledged this may be administratively burdensome, it nevertheless concluded that BPAs are not subject to consolidation requirements. GAO’s decision in Coast to Coastwas a matter of first impression, which is to say that GAO had not previously considered the question of how BPAs would impact consolidation analyses. Now, GAO has spoken, and its decision paves the way for agencies to consolidate more services under BPAs without needing to conduct a consolidation analysis. View the full article
  11. Can you believe it’s already August? Pretty soon, kids will be heading back to school . . . and agencies will begin their fiscal year-end buying spree. In the meantime, we hope you’re enjoying some summer serenity. Let’s ease into the weekend with the SmallGovCon Week In Review. In this week’s edition, we’ll explore the government’s growing contracting spend, the government’s planned move away from SAM.gov, an IT procurement fraud ring, and more. KC-area contractors looking for cybersecurity training might consider this free workshop. [MO PTAC] Federal Contract Spending Grew 9% in 2018, Increasing for the Third Straight Year. [GovExec] New data shows the soaring cost of government contracts. [FederalTimes] Move away from WORST WEBSITE IN GOVERNMENT delayed for fourth time. [FederalNewsNetwork] IT procurement fraud ring targets federal agencies. [FCW] View the full article
  12. Sole-source awards can make many contractors feel left out of the loop of the procurement process. GAO in the past has upheld that sole-source contracts are allowable so long as the agency has a reasonable justification for the sole-source contract. Recently GAO re-examined what constitutes a reasonable “justification and award” for a sole-source contract.  In Wamore, Inc., B-417450 et al. (July 9, 2019), GAO examined a sole source contract issued by the Army requesting precision aerial drop systems—called “JPADS 2K”—to be supplied for the countries of Norway and Jordan. These aerial drop systems would use GPS linked to an on-board computer and steerable parachutes to guide loads of up to 2,000 pounds to landing points where soldiers would be waiting. Wamore, and eventual awardee, Airborne, previously worked on these systems as a subcontractor to Airborne. After posting notice that they were searching for firms able to produce JPADS 2K units, the Army only received responses from Airborne and Wamore. Through multiple rounds of conversation with the two parties, the Army concluded that Wamore’s response was insufficient and a sole-source award was appropriate. The Army drafted a Justification and Award (“J&A”) statement to award a sole-source contract to Airborne. Wamore protested, arguing they had the ability to supply JPADS 2K as well as the legal rights to JPADS 2K.  When examining the protest of a sole-source contract or award, GAO determines whether the J&A for the sole-source award was reasonable. J&As must contain “sufficient facts and explanation” to support the use of a sole-source award. If the J&A sets forth “reasonable justifications for the agency’s actions” GAO will not fault the non-competitive sole-source award. Alleging that it actually owns the data rights to the JPADS 2K system (and pointing to a pending lawsuit relating to that challenge), Wamore asserted that the Army did not have sufficient facts to reasonably justify what party deserves the sole-source award. GAO disagreed. GAO found that the Army conducted a reasonable inquiry into whether Airborne had the rights to JPADS 2K for procurements. GAO will not adjudicate private parties’ rights, nor will they disturb “an ongoing procurement or an award because of an allegation that data rights are being violated incident to a procurement.”  GAO also found that the Army conducted a reasonable inquiry to determine if a sole-source award itself was justified. There were multiple documents sent by Wamore to the Army and these documents were considered by the Contracting Officer. The CO investigated the data rights of JPADS 2K for procurement purposes, funding of the previous JPADS projects, and subsequent updates to the JPADS systems. Although the determination of who has the data rights to JPADS systems remained unresolved, GAO found the CO did enough to determine which party could reasonably supply the rights to the system, therefore meeting the specifications of the request. The CO also looked into the specifications of the JPADS 2K units and alternatives that other parties could provide. GAO found that when put together, these actions taken by the CO were reasonable enough for the J&A of a sole-source award to Airborne.   This case presents multiple take-aways for government contractors looking at the possibility of protesting a sole-source award. First, GAO will defer to the agency’s technical determinations, so long as they are reasonable. Wamore is a highly technical case, and GAO relied on the technical analysis and inquiry of the agency for guidance as to the facts of the protest. Second, even if there is an ongoing private dispute that may affect part of the analysis, GAO will generally refrain from interrupting or postponing a procurement based on that dispute. The CO simply needs to conduct an investigation into the dispute to determine whether it may impact the procurement. Finally, GAO will find a J&A reasonable when the CO has conducted a wide array of probing investigative tasks surrounding the procurement and the businesses involved before completing the J&A.  If you have any questions about sole-source awards, please give us a call. View the full article
  13. One of the most frequent questions we get is “How do I know the size of my business?” Well, if you’re in an annual receipts-based NAICS code, the SBA regulation has the formula. We made a handy-dandy YouTube video to run you through it. Enjoy! To see more videos from Koprince Law, click here. View the full article
  14. As seasoned government contractors know, an impropriety in a solicitation’s terms must be protested before the deadline to submit an offer. If the protest is submitted after the solicitation’s response deadline, the protest will be dismissed as untimely. GAO recently held that this rule holds true when an agency converts a sealed bid (under FAR part 14) to a negotiated procurement (under FAR part 15). In Cashman Dredging & Marine Contracting Company, LLC, B-417213.3 et al. (July 19, 2019), Cashman filed a pre-award protest challenging the adequacy of information provided under the solicitation. The Army Corps of Engineers sought a contractor to dredge approximately 11 million cubic yards of material from the Charleston Lower Harbor Channel and the Wando River, in South Carolina. As originally issued in September 2018, the solicitation sought the submission of sealed bids under FAR part 14. The Corps included in the solicitation certain geotechnical information relating to the material to be dredged. But during the course of bidding, one offeror asked the Corps for permission to conduct its own dredging samples to help inform its bid; the Corps assented to this request, provided that all appropriate permissions and permit were received. Five offerors, including Cashman, submitted bids prior to the solicitation’s November 1, 2018 bid opening. Each bid, however, exceeded the government’s independent estimate. After further discussions with offerors and revisions to the government’s estimate, however, the contracting officer determined that all bids remained unreasonably high. So on December 11, the contracting officer converted the solicitation from an invitation for bids (under FAR part 14) to a negotiated procurement (under FAR part 15). After a brief lull in the acquisition due to a separate GAO protest, the Corps set April 17, 2019 as the deadline for the submission of proposals. It then responded to a request from Cashman—made a couple of weeks prior—to provide additional information about how to receive permission from the local Charleston office to perform test digs. On April 10, the Charleston office informed Cashman that permits could take months to approve, so Cashman asked for additional time to submit its bid. When this request was denied, Cashman filed a pre-award protest, on April 12, challenging the solicitation’s terms. Specifically, Cashman alleged that the solicitation did not provide sufficient geotechnical data, and that the Corps did not accommodate Cashman’s request to perform a test dig. In response, the Corps moved to dismiss Cashman’s argument as untimely. According to the Corps, the supposed lack of geotechnical data was apparent under the original solicitation (issued under FAR part 14, in 2018); thus, Cashman should have protested this flaw in the solicitation prior to the November 1, 2018 bid opening. GAO agreed with the Corps. Doing so, GAO restated a familiar requirement: protests challenging the terms of a solicitation must be filed prior to the solicitation’s response deadline. Moreover, GAO noted that “where a subsequent amendment to a solicitation does not alter the basis of protest, a protester is required to challenge that solicitation impropriety prior to the time set for receipt of initial proposals.” In other words, a solicitation amendment doesn’t change the proposal deadline unless the amendment affects the protest arguments. Under this framework, GAO rejected Cashman’s assertion that the conversion of the solicitation from an invitation for bid to a negotiated procurement altered the nature of the protest. The supposed flaw in the solicitation—the lack of sufficient geotechnical data—existed prior to the initial response deadline (the November 1, 2018 bid opening). Cashman did not protest the solicitation prior to that date, and nothing that occurred after it materially changed the nature or type of work in any way. The conversion of the solicitation from FAR part 14 to FAR part 15 did not change the deadline to protest the supposed flaw. GAO dismissed Cashman’s April 12, 2019 protest as untimely. Instead, Cashman should have filed its protest no later than November 1, 2018. *** Protests challenging the terms of a solicitation can be an effective acquisition tool, as they might clarify requirements or even result in solicitation changes that are favorable to bidders. But these protests have unique filing deadlines. And as Cashman demonstrates, a late protest will be dismissed as untimely—and might prevent a company from being competitive. If you have questions about pre-award bid protests, please give me a call. View the full article
  15. The Senate Committee on Small Business & Entrepreneurship recently held a hearing focusing on the role small businesses will play in NASA’s renewed focus on going back to the Moon and then on to Mars. We have recently touched on the growing impact space exploration is having on small businesses, and vice versa, but this dedicated hearing prompts a closer look at the opportunities small businesses will have for working on space exploration. Two NASA representatives spoke at the hearing. Jenn Gustetic represented NASA’s Small Business Technology Transfer program (“STTR”). Robert Cabana represented NASA’s Kennedy Space Center. Both highlighted the roles small business will play in NASA’s upcoming directives. At the outset, Ms. Gustetic’s prepared testimony recognized the push to “return American astronauts to the moon within five years.” This effort will be a launching pad to send astronauts to Mars. Mr. Cabana’s prepared testimony highlighted that while the Apollo program’s moon mission “was a government operation” the upcoming missions will see “NASA and a growing host of partners” working together. Both Ms. Gustetic and Mr. Cabana highlighted the role of the Small Business Innovation Research (“SBIR”) and STTR programs in NASA’s Moon and Mars missions. While the core SBIR/STTR programs are government-wide, agencies are responsible for managing their own SBIR/STTR programs. For a quick background on the larger SBIR/STTR programs, check out my colleague John Mattox’s blog. NASA’s SBIR/STTR programs allow it to act as a venture capitalist to “invest in concepts and technologies that have potential beyond a sketch or shelf.” Each program operates in a three phase system which takes a concept from idea to commercialization. Each phase is described in NASA’s interactive guide. In Phase I, a small business establishes the scientific, technical, and commercial feasibility of a product or service. If a product demonstrates its feasibility then it may be awarded a Phase II contract, which is the research and development (“R&D”) phase. Here, prototypes are made, concepts are fleshed out, and small businesses demonstrate the functionality of their idea. “Phase III is the commercialization of innovative technologies, products, and services” coming out of Phase I or Phase II. Phase III contracts may come from within NASA, or the specific agency administering the SBIR/STTR program, or they may also come from other agencies or businesses wishing to utilize the developed product or service. Each Phase has its own value and duration. For NASA, the breakdown is as follows: Program Value Duration Phase I SBIR Up to $125,000 Up to 6 months Phase I STTR Up to $125,000 Up to 13 months Phase II SBIR/STTR Up to $750,000 Up to 24 months Phase III SBIR/STTR Unlimited Unlimited Ms. Gustetic and Mr. Cabana’s prepared testimonies focused on the impact NASA’s SBIR/STTR programs have had, and will have, on NASA’s success. Ms. Gustetic mentioned that NASA has awarded an average of $139 million in Phase I and Phase II contracts annually since 2011. Mr. Cabana mentioned that through his role at the Kennedy Space Center he has seen “total spend to small business [of] more than $159 million.” All to “fund the research, development, and demonstration of innovative technologies that both fulfill NASA needs and have significant potential for successful commercialization.” Looking at the values of each Phase, it is evident that NASA has a lot of research projects in the hopper. Ms. Gustetic noted that “n the early 2000s, an average of four funded space 4 companies were started per year; in the last six years, the number of funded new companies have averaged 21 per year.” NASA’s SBIR/STTR programs help facilitate this growth by “seeding the growing, emerging commercial space ecosystem, while also bearing responsibility in providing the patient capital for small businesses to succeed in bringing their innovative technologies to market in a high-cost industry.” If you have the next game-changing idea I imagine you are already wondering how you can take part of NASA’s SBIR/STTR programs. As with traditional small business set-asides, only certain business are able to participate in the SBIR/STTR programs. Under NASA’s programs, a “small business” is one that: Has 500 employees or less, including any affiliates. Is legally established and organized as a for-profit located in the U.S. Operates primarily in the U.S. or makes a significant contribution to the U.S. economy. Is majority owned and controlled by U.S. citizens or permanent resident aliens Assuming your business qualifies as “small” under these definitions and you are ready to jump into the mix, we recommend you reach out to NASA’s SBIR/STTR program team and get the ball rolling. While the 2019 SBIR/STTR solicitation periods have closed, you can always get your ducks in a row and keep an eye out next year. In the meantime, do not forget that other agencies also have their own programs with different solicitation timelines. The possibility of extended space travel seems to have caught the nation’s eye. From NASA going to the Moon and Mars, SpaceX’s ever-cheaper (and bigger) launches, and many other advances (Blue Origin, Made In Space, and Light Sail to name a few), more and more people are thinking about the next frontier. Perhaps your new idea, fostered by NASA’s SBIR/STTR programs, could help send us closer to the stars. View the full article
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