Koprince Law LLC

Today we celebrate the life and legacy of Martin Luther King Jr. After King’s death, U.S. Representative John Conyers and U.S. Senator Edward Brooke introduced a bill in Congress to make King’s birthday a national holiday. The holiday was observed for the first time on January 20, 1986. We remember Dr. King as a fierce advocate for the betterment of all people. Honor his memory by organizing, volunteering, and thinking about Dr. King’s legacy today and throughout the year. The post Celebrating the Legacy of Martin Luther King Jr. first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Greetings, Readers. We hope your 2022 is off to a great start and your new year resolutions haven’t been kicked to the curb, as of yet. We are excited about the Wild Card Playoff game this weekend between our Kansas City Chiefs and the Pittsburgh Steelers. It’s been a wild ride this season but the Chiefs are playing very well and we hope to see them return to another super bowl. There was a lot of news in federal government contracting, this week and we are excited that our very own, Kevin Wickliffe was quoted in an article about the changes from Indian Health Service that strengthen support for native Americans and Alaskan natives. You can read the full article below as well as other news in federal government contracting. Have a great weekend and go Chiefs!!! Agency Strengthens Support for American Indians and Alaska Natives in Federal Contracting [GovExec]Navy not reaching ‘full potential’ on emerging tech, says top admiral [FedScoop]Commerce launches pilot to understand vendors’ cyber capabilities [FedScoop]Acquisition Regulations: Buy Indian Act; Procedures for Contracting [FedReg]Companies Agree to Pay $1.15 Million to Resolve Allegations of Fraud in Obtaining Army Contracts Reserved for Eligible Small Businesses [DoJ]Supreme Court blocks nationwide vaccine and testing mandate for large businesses, allows health care worker vaccine mandate to take effect [CNN]How cloud migrations are accelerating research at NCI; CMMC 2.0 advice for the DIB [FedScoop]Transition of the Data Universal Numbering System Number to the Unique Entity Identifier in the System for Awards Management [DoD]OPM to create Chief Diversity Officer Council to elevate role across government [FedNewsNet]Biden administration takes new approach to gather data on federal workforce quickly [FedNewsNet]DISA to industry: Resellers, system integrators need not apply to provide cloud services [FedNewsNet]Latest FISMA reform proposals would codify federal CISO as statutory role [FedScoop]Biden administration looking to coordinate federal investment in critical tech [FedScoop]READOUT: Administrator Guzman Joins Senator Mark Kelly in Arizona to Promote SBA Efforts to Build a Better America [SBA]A new inspector general report finds some faults with how the Defense Department has managed its Project Maven initiative driven by artificial intelligence, but the lessons apply beyond one program. [WashTech]For contractors, early 2022 is starting to look a bit too much like late 2021 [FedNewsNet]Podcast: Navigating diversity, procurement [BizJ]The lessons learned from America’s reliance on military contractors in Afghanistan [WAMU]Agencies must set up new COVID testing programs for unvaccinated, on-site employees [FedNewsNet]Companies Agree to Pay $1.15 Million to Resolve Allegations of Fraud in Obtaining Army Contracts Reserved for Eligible Small Businesses [D0J]PF 2022-19 Class Deviation from the Federal Acquisition Regulation (FAR) Implement Requirements in the Made in America Office (MIAO) Memorandum, Improving the Transparency of Made in America Waivers [EGov]Supreme Court halts COVID-19 vaccine rule for US businesses [FedNewsNet] The post SmallGovCon Week in Review: January 10-14, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

As January 5, 2022, SBA will no longer use Product Service Codes (PSCs) to classify products covered by class waivers for the nonmanufacturer rule. SBA’s rationale for discontinuing PSC’s to classify class waivers is to “improve consistency in the application of class waiver.” SBA will use North American Industry Classification System codes (NAICS) as its sole classification system to identify products covered by class waivers going forward. Notification of the change of SBA’s rule was published in the Federal Register on December 6, 2021. To understand just exactly what SBA’s discontinuation of using PSC’s for class waivers means to government contractors, a review of the nonmanufacturer rule found in 13 CFR § 121.406 may be helpful. In a nutshell, when a manufacturing or supply contract is set aside for small businesses, the small business offeror must either be the manufacturer of the end item, or fall within the exceptions described in the nonmanufacturer rule. The nonmanufacturer rule states that a company may still qualify as a small business as a nonmanufacturer. To do so, the firm: (1) cannot exceed 500 employees; (2) must be primarily engaged in the retail or wholesale trade and normally sell the type of item being supplied; (3) take ownership or possession of the item(s) with its personnel, equipment or facilities in a manner consistent with industry practice, and (4) will supply the end item of a small business manufacturer or producer made in the United States, or obtain a waiver of this requirement. The SBA Administrator may waive the nonmanufacturer rule if it determines that there are no small business manufacturers that can reasonably be expected to offer a product meeting the solicitation specifications (an individual waiver), or when SBA determines that no small business manufacturer of a product or class of products is available to participate in the federal procurement market (a class waiver). Under a waiver, “[a] firm can supply the product of any size business without regard to the place of manufacture.” PSCs come into play with respect to class waivers. SBA previously identified class waivers using a combination of (1) the six-digit NAICS code, (2) the four-digit PSC, and (3) a description of the class of products. SBA’s old procedure as to how nonmanufacturer rule class waivers are supposed to work is that SBA would define “class of products” as an individual subdivision within a NAICS code and use PSCs to further identify particular products within the NAICS code to which a waiver would apply. The idea being that PSCs would provide a more granular industry-related description than NAICS codes. In practice however, the PSC often provides little more detail about the products covered than is described in the NAICS classification. For example, a class waiver for commercially available off-the-shelf laptop and tablet computers would have previously been identified under NAICS code 334111 (Electronic Computer Manufacturing) and PSC 7435 (Office Information Systems Equipment). While PSC 7435 indicates that minicomputer and microcomputer controlled systems are included in the Product Code, it does not specify that the Product Code is limited to those types of systems which would ostensibly include laptop and tablet computers. Attempting to describe products to fit into the appropriate NAICS code and PSC placed an extra burden on agencies seeking procurements for which it intended a nonmanufacturer rule class waiver to apply. Using only the NAICS code for class waivers going forward should allow government agencies flexibility in covering a wider range of products. So, it should be easier to qualify for a class waiver and allow small businesses to supply the products of a large business in more instances. Questions about this post? Email us or give us a call at 785-200-8919. 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 Eliminates Use of Product Service Codes For Nonmanufacturer Rule Class Waivers first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Equity Partner Shane McCall, will be one of three panelists presenting a joint webinar hosted by Pub K. The Pub K Annual Review is always a great event and there are many other interesting panels going on as well. Small business topics covered in the webinar include: increasing small business participation, regulatory updates, and joint venture issues. The event takes place on January 26 from 2:00 – 2:50 PM (CST) / 3:00 PM – 3:50 PM EST and registration is open here. Come join us! The post Webinar Event: Pub K Annual Review Panel – Small Business Contracting Panel first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

On Wednesday, January 5, 2022, the U.S. Court of Appeals for the Sixth Circuit issued another setback to the COVID-19 vaccine mandate for federal government contractors. In its opinion, the four-judge panel upheld the November 30, 2021 preliminary injunction and denied the Government’s request to stay the injunction “because the government has established none of the showings required to obtain a stay.” On appeal, the government asserted that the three states involved, Kentucky, Ohio, and Tennessee, and two Ohio sheriffs’ offices which brought the initial claim did not have standing to bring such a case. Additionally, the government argued that even if there was standing, the Property Act authorizes the contractor mandate. However, the Court of Appeals determined all plaintiffs established standing based on four elements and held the Property Act does not authorize the President to take such action. In determining whether the three states and two sheriff’s offices have standing based on a number of factors. First, the states and sheriffs’ offices established standing through their own proprietary capacities as federal government contractors. The states also established standing by showing the mandate threatens to damage each of the states’ economies and because “the regulation of the public health of state citizens in general and the decision whether to mandate vaccination” are traditionally left to the states and imposing such a mandate can implicate federalism issues. Next, the court moved on to the government’s argument that, even if the parties established standing, the President nevertheless has the authority to issue the mandate through the Property Act. The court held the Property Act does not authorize the vaccine mandate, but rather precludes it, stating that while the President has “statutory authority [under 40 U.S.C. 101] to implement an ‘economical and efficient’ method of contracting” nonpersonal services, there is no textual basis that he may “impose whatever medical procedure deemed ‘necessary’ on the relevant services personnel to make them more ‘economical and efficient.’” Further, the court opined on where the President’s power would end if the vaccine mandate were allowed. “[I]f the President can order medical interventions in the name of reducing absenteeism, what is the logical stopping point of that power? Even vaccinated employees may contract the flu (or COVID-19) at family gatherings, concerts, sporting events, and so on. May the President, in the name of the Property Act, mandate that covered employees also wear masks in perpetuity at each of those events to reduce the chances of contracting an airborne communicable disease and later spreading it to coworkers, thus creating absenteeism?” The court wrapped up its decision by stating, again, that such a mandate encroaches on federalism, the state’s rights to govern certain matters not set aside to the federal government. Regardless of the outcome in this case this is a constantly evolving matter in which many other cases are currently pending. Check back here at SmallGovCon where we will keep you updated with the latest. Questions about this post? Email us or give us a call at 785-200-8919. 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 Appeals Court Upholds Preliminary Injunction on COVID-19 Federal Contractor Vaccine Mandate first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Koprince McCall Pottroff LLC will be presenting a webinar hosted by Govology, Limitations on Subcontracting: A Step-by-Step Compliance Guide will be on January 20 at 1:00pm EST. In this webinar, government contracts attorneys Shane McCall and John Holtz will help you make sense of the limitations on subcontracting. Using a step-by-step process and plenty of examples to help bring the rule to life, they will help to ensure that you understand and comply with this essential rule. If you’d like to join us for this webinar you can sign up for registration here. Hope to see you there! The post Webinar Event: Limitations on Subcontracting: A Step-by-Step Compliance Guide (Update 2022) first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy new year, Readers! After a very mild start to our Winter season we are experiencing frigid temperatures here in the Midwest to start off 2022. As old man winter makes his arrival we are very grateful to live and work in a climate controlled environment. Thank goodness for heat and warm coats! There was a lot of news in federal government contracting this week, including trends and marketing info in the new year, cyber security and workforce initiative provisions from the recently signed 2022 NDAA, and a FAR clarification on the commercial item definition. Have a great weekend! GovCon marketing tactics in 2022 [FedNewsNet]OPM looks to repeal federal workforce policies impacted by Trump executive order [FedNewsNet]Advice for contractors who want to gain a little more control over their fates [FedNewsNet]GovCon Expert Kevin Plexico: Four Trends to Impact Government Contractors in 2022 [GovConWire]FAR Council Replaces Commercial Item Definition [NatDef]–for more information on this change, read our recent postLack Of Diversity In Government Contracts: A Way Forward [Forbes]Business Owner Sentenced for Fraud Scheme Construction Firms Received $346 Million for Contracts Set Aside for Veterans, Minorities [D0J]Ball State University Study Examines Ties Between Federal Contractors and Political Contributions [BSU]The ‘Mayor of SAMgov’ Leaves Government After 15 Years of Public Service [NextGov]Cyber provisions, workforce initiatives take effect as Biden signs NDAA [FedScoop]Pentagon’s ponderous budget process is next target for Congressional reform [FedNewsNet]US Department of Labor Administrative Judge Orders Federal Contractor to Turn Over Documents as Part of Federal Compliance Audit [DoL]Hunt Companies to Pay $500,000 To Resolve Fraud Allegations At Dover Air Force Base [DoJ]Connecticut and New York Companies Agree to Pay Over $900,000 for Providing Chinese-Made Containers to Department of Defense [D0J] The post SmallGovCon Week in Review: January 3-7, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Federal and state-recognized Indian tribes and members of such tribes are presumptively socially disadvantaged, and if tribal association is verified, no further information is needed to verify social disadvantage for a Small Business Association (SBA) 8(a) program application. However, in 2021, the SBA Office of Inspector General (OIG) reported that, although the process for awarding 8(a) program status involves a multi-level eligibility review, the SBA does not have a formal verification procedure for verifying the federal or state-recognized status of Indian tribes associated with tribal applications. As such, GAO was asked to evaluate the SBA’s verification of 8(a) applications claiming federal or state-recognized tribal association. The following is a summary of those findings. The GAO report provides a good summary of the 8(a) Program. As many of our readers know, the SBA 8(a) program is designed to assist eligible socially and economically disadvantaged owners of small businesses through business development opportunities. Assistance to approved participants involves management and technical assistance, business training, counseling, marketing assistance, and executive development. This assistance is designed to make the small businesses more competitive in the economy upon graduation from the program, which is generally a nine-year program. Many 8(a) program participants also benefit from federal government set asides, with roughly 10% of all federal government awards going to 8(a) participants. Between 2018 and 2020, there were 1,392 businesses admitted into the 8(a) program. Of those, 122, or approximately 9%, were owned by a federally or state-recognized Indian tribe or one of their members. As previously mentioned, federally and state-recognized Indian tribes and their members are presumed socially disadvantaged, but there is no documented verification procedure, which concerned SBA OIG because it could lead to inconsistent decisions depending on the discretion of the SBA employee that completes each review. As a result, OIG recommended the SBA document its verification procedures, and planning and implementation was to have occurred in December 2021. In addition to the recommendation to document verification procedures, GAO was asked to evaluate SBA’s verification performance. To do so, GAO looked to two areas. First, they looked at applicants that were certified based on their association with a recognized tribe in fiscal years 2018-2020 to determine accuracy of the certifications. Then GAO tested SBA’s verification of tribal recognition for fiscal year 2021 via covert testing. SBA’s Standard Operating Procedures (SOP) require documentation to support tribal recognition. For individuals, tribal membership cards are required to establish federal or state recognition of the tribe. Tribal owned businesses must submit evidence of federal or state recognition of the tribe. After all documents are submitted for the 8(a) application, an SBA Business Opportunity Specialist (BOS) reviews the application for completeness, advising applicants within 15 days completeness or whether additional information is required. Completed applications are processed within 90 days. Processing includes a review by the Office of General Counsel, the Director of Office of Certification and Eligibility, and the Associate Administrator for Business Development, with the last individual making the final decision of approval or denial. SOP refers the BOS to the Bureau of Indian Affairs list for verification of federally recognized Indian tribes, and state websites for state recognized Indian tribes. While looking at the certified applicants for 2018-2020, GAO compared the tribal name from SBA’s 8(a) online application system to the 2020 list of federally recognized Indian tribes and the state-recognized Indian tribes from a GAO report from 2012. Additionally, GAO “review[ed] relevant documentation, interview[ed] knowledgeable SBA officials, and perform[ed] electronic testing of relevant data fields.” In its review, GAO examined 133 8(a) program applications from 2018-2020 of businesses claiming to be owned by individual members of federally or state-recognized Indian tribes. Of those 133, 122 were admitted to the program. GAO found only one of the 122 admitted to the program was not federally recognized as the applicant had claimed. At the time of the report, SBA was taking steps to terminate the entity’s participation in the program. For the covert testing, GAO created four fictitious applicants who claimed to be members of fictitious tribes that are not listed on any federal or state recognition list. To assess the efficacy of SBA’s tribal status verification, GAO looked at whether the SBA took steps to verify federal or state-recognition by submitting the four applications with fictitious tribal names via SBA’s online application process. Each application included information that would clearly disqualify application based on tribal recognition status such as copies of fake tribal membership cards with fictitious tribal names. Of the four applicants, three applicants were asked for more evidence that they met the socially disadvantaged requirement for 8(a) participation. For the fourth applicant, BOS determined the fictitious Indian tribe was not federally or state recognized. In all four cases, SBA took the steps they had described during investigative stages of the study. Though GAO’s reporting showed SBA is overall accurate with its verification, not having uniform and documented procedures could result in awards being awarded to unqualified recipients over those who are well-qualified. In an industry with $19.7 billion in contract obligations which were awarded to 3,364 8(a) Participants in 2020, consistency is crucial. Hopefully those reviewing any SBA program applications will stick closely to the guidance now that they are armed with the knowledge that a fictitious application designed to test procedures could be the next to land on their desk. To view the full report, visit https://www.gao.gov/assets/gao-22-104146.pdf. Need help with a government contracting legal matter? Email us or give us a call at 785-200-8919.  Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook.  The post GAO Tested SBA on its Tribal 8(a) Verification Process and Found It Mostly Held Up first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

2021 was a big year for many reasons, among them the continued COVID-19 pandemic and the government’s responses to the pandemic, including the various vaccine mandates and lawsuits challenging those mandates. But there were also lower-profile changes and updates to the federal contracting world. Below, I’ll explore the posts that were most popular in 2021, along with the posts first published in 2021 that were popular this year. Most Popular Posts Read in 2021 The top posts from the last year were some perennial favorites. These are the posts that people read again and again. No surprise, people are interested in the basics like purchasing thresholds, SAM.gov, and sole-source awards. But there was still some interest in PPP loans and the contractor vaccine mandate. In addition, readers were interested in small business issues: veteran and HUBZone certifications, as well as joint ventures. Those are important programs for small businesses to enhance their chances of going after contracts. FAR Final Rule: Increased Micro-Purchase and Simplified Acquisition Thresholds FedBizOpps is Almost Gone DOD: Sole-Source Contracts up to $100 Million Don’t Need Justification “In Scope” vs. “Out of Scope” Modifications: GAO Explains The Difference What Happens When a Company Takes a PPP Loan it Doesn’t Need? Five Things You Should Know: Registering in SAM.gov 5 Things You Should Know: SDVOSBs and VOSBs Contractor Vaccine Mandate: What About Work-From-Home Employees? 5 Things You Should Know: HUBZone Program (The Basics) 5 Things You Should Know: Joint Ventures Most Popular Posts Published in 2021 Here are the top 5 most read posts that were published in 2021. As expected, the most popular post was about the contractor vaccine mandate. Our attorneys received a lot of questions and presented at multiple webinars on this topic. It was definitely on the minds of federal contractors in 2021. But some posts were not about the vaccine mandate. These included items about teaming arrangements and the 8(a) Program. Even with all of the ramifications from the pandemic, the federal government is still buying a lot of services, and readers want to position themselves well to go after those contracts. Contractor Vaccine Mandate: What About Work-From-Home Employees?5 Things You Should Know: Past Performance of Subcontractors, Joint Venture Partners & Affiliates5 Things to Know About an 8(a) Bona Fide Place of BusinessFive Things You Should Know: Common Misconceptions about the Contractor Vaccine MandateHouse-Passed 2022 NDAA Raises Small Business Goal to 25% and Increases SDVOSB, HUBZone, SDB and WOSB Goals We at SmallGovCon look forward to bringing you all the greatest federal contracting insights in 2022! Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Top SmallGovCon Posts of 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

We want to make something clear: simply having a former government official as an employee does not mean your company can’t bid on federal contracts or needs to let that person go. The government, while it puts certain restrictions in place, doesn’t forbid government contractors from hiring former government employees, and it can be very beneficial to have employees with such experience and still perfectly ethical. What it does forbid is when the company is or even just appears to be getting some sort of unfair advantage in acquiring contracts as a result of having former government workers as employees. For example, what if the contractor hires someone who was with the procuring agency and had access to information on competitors for an upcoming solicitation? This is the sort of thing that will result in awards being lost, as one company learned. In Serco, Inc., B-419617.2; B-419617.3; Serco was the incumbent on a task order for surface ship support for four separate Naval offices. During this time, Serco had to submit regular reports on its performance and attend meetings with the program managers of the four offices. The program managers also had access to Serco’s past performance information. The Navy planned to recompete the task order once it was completed. Learning of this, Booz Allen Hamilton (BAH) began preparing to compete for the work. BAH specifically hired two former program managers from the four offices to maximize its chances of successful award. Both program managers were program managers during Serco’s contract, meaning they had access to Serco’s reports, weekly meetings, and past performance information. BAH representatives met with one of the program managers, a Mr. Jones, to describe the type of work that the recompete would involve. During this meeting, Mr. Jones told BAH personnel that Serco was not providing consistent delivery, was understaffed, and “doesn’t do cyber well.” The other manager BAH hired, a Mr. Smith, provided input on what sort of manpower the upcoming solicitation would need. Mr. Jones, for his part, assisted in recruiting efforts to fill key personnel slots for BAH’s planned bid. In evaluating BAH and Serco’s bids on the recompee, the Navy found BAH’s proposal superior based on strengths for “data analytics” and “manpower, personnel, and training,” as well as having a lower price than Serco’s, so it awarded the task order to BAH. Serco protested that the agency did not consider that BAH had access to and used non-public, competitive useful information. The agency replied that it would investigate. After doing such, the agency informed Serco that it found no actual or apparent conflict of interest, later arguing that the information Jones and Smith had access to, such as employee labor rates and hours worked, was not competitively useful, and that the two managers had delegated much of their program manager responsibilities regarding the old task order and stated they did not provide cost or price information to BAH during the proposal preparation. GAO observed that “where an offeror chooses to hire a former government official who has had recent access to competitively useful information, and uses that official to help prepare the offeror’s proposal, the proposal may be properly disqualified based on the appearance of an unfair competitive advantage.” Where an agency determines there is or is not an unfair competitive advantage present, GAO will review the reasonableness of such a determination. As you might imagine, GAO found the agency’s determination that no unfair competitive advantage was present for BAH unreasonable. Smith and Jones, as program managers in the Navy, “had virtually unlimited access to Serco’s detailed information regarding prior costs (including burdened and unburdened labor rates), staffing, technical approach, and past performance” along with the agency’s independent government cost estimate (IGCE). This information, particularly the information on labor rates and the IGCE, was non-public, competitively useful information. Smith and Jones were hired nearly immediately after leaving the Navy and were directly involved in preparing BAH’s proposal for the solicitation. Nothing suggests that BAH placed limitations on the information either former manager provided. In fact, they even admitted they gave information on the Navy’s thoughts on Serco’s performance, specifically regarding personnel, and this is something that was found to be a strength of BAH’s proposal over Serco’s. GAO concluded “As noted above, where an offeror chooses to hire former government officials who have had recent access to competitively useful information, and uses those officials to assist in proposal preparation efforts, our Office will assume that the offeror benefited from the information; further, under such circumstances, disqualification is appropriate based on the appearance of an unfair competitive advantage alone…the record before our Office shows that BAH had access to information that was not public and was competitively useful.” GAO sustained the protest, recommending that the agency disqualify BAH’s proposal or seek revised proposals, and recommended that costs be awarded to Serco. As we noted above, within the various restrictions you can hire former government employees and officials to work for you and still bid on and obtain federal government contracts. That in itself is not an issue. The problem is when you have someone on your team who has inside information as a government employee that could give your company a leg up on the competition. In fact, as this case notes, if one of the people that worked on your company’s proposal merely had access to inside information (even if they never actually took advantage of such access) that can result in the disqualification of your proposal. However, notice that GAO also clarified that the former government employees must also have assisted in proposal preparation efforts for there to be an assumption an offeror benefited from that employee’s access to inside information. The problem isn’t simply that BAH had two employees who had access to information on Serco, it’s also that BAH directly had them work on preparing its proposal. Had BAH made significant efforts to exclude them from such work and been able to show such efforts, GAO might have found that there was no basis to assume unfair competitive advantage. Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919. 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 Loose Lips Sink Ships: Award Revoked for Relying on Inside Information from Former Navy Officials first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The final version of the 2022 National Defense Authorization Act, agreed upon by negotiators for both the House and Senate and signed by the president, will allow the SBA’s Office of Hearings and Appeals to hear appeals related to the SBA’s HUBZone status decisions. We here at Koprince McCall Pottroff LLC welcome the pending change, which will be a big step forward for the HUBZone program in terms of transparency and fairness. Among the SBA’s four major socioeconomic preference programs (8(a), WOSB/EDWOSB, SDVOSB and HUBZone), only the HUBZone Program does not allow for appeals to SBA’s administrative judges. Under current rules, if a certified HUBZone is found ineligible due to a HUBZone status protest, the applicant can appeal–but the appeal is decided by the SBA’s Associate Administrator, Office of Government Contracting & Business Development (known by the fun acronym AA/GC&BD) rather than by an independent judge. The current system is flawed, in at least two major respects. First, the lack of transparency prevents small businesses from understanding how the SBA interprets and applies its regulations. OHA’s decisions are published, giving all interested parties important insight into how the SBA’s small business, 8(a), WOSB/EDWOSB and SDVOSB regulations are applied in practice. That’s not true for the SBA’s current HUBZone decisions, meaning that HUBZone applicants and participants often have little or no guidance regarding gray areas in the law. Second, the absence of an independent appeal option can create the perception that HUBZone appeal decisions (when they are allowed) could be unfair. That’s not to say that the AA/GC&BD actually acts unfairly, but the person holding this position–and considering the appeal–is effectively the boss of the person who makes the original decision on a HUBZone protest. Some contractors are suspicious that the AA/GC&BD might–even subconsciously–circle the wagons instead of giving a truly independent review. That’s where the 2022 NDAA comes in. Section 864 of the NDAA says: Not later than 1 year after the date of enactment of this Act, the Administrator of the Small Business Administration shall issue a rule authorizing the Office of Hearings and Appeals of the Administration to decide all appeals from formal protest determinations in connection with the status of a concern as a qualified HUBZone small business concern[.] This change is very welcome news for HUBZone small businesses. That said, we wish that the NDAA had gone a little farther, and also allowed for appeals of denied initial applications to the HUBZone Program. Under the SBA’s regulation, when an applicant is denied, there is no formal way to appeal the decision. Instead, the applicant has the right to reapply after 90 days. This system works in many cases, but not if the declination decision is arguably wrong as a matter of law. If the SBA’s HUBZone Office misunderstands or misapplies its own regulations once, there is no reason to think it will reach a different outcome 90 days later. In such cases, an applicant’s only legal recourse is to file suit against the SBA–something most applicants don’t wish to do. Perhaps a future NDAA–or other legislation–will broaden the HUBZone appeal right. For now, though, the 2022 NDAA is a step in the right direction for HUBZone transparency and fairness. We will keep you posted on the SBA’s progress implementing this important change. Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919. 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 Final 2022 NDAA Draft Allows HUBZone Appeals first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Holidays, Readers! We hope you have been enjoying this holiday season with friends and family while staying safe and healthy. Since many of you (and folks in our office) are taking some time off this holiday season, we’re bringing you two weeks in review for the end the year. Thank you so much for your support of SmallGovCon and stay tuned for more informative blogs in 2022. The world of federal government contracting is continuing to be very active as we approach the end of 2021. Here are a few articles from the past two weeks with some notable news and announcements, including some roundups of what contractors faced this year and how the pandemic affected the industrial base. Enjoy and have a very happy new year! Contractors conclude a difficult year of funding uncertainty and a slew of executive orders [FedNewsNet]Government Contractor Indicted for Bribing Public Official [DoJ]State Dept expects long-awaited online passport renewal system to launch by fall 2022 [FedNewsNet]Air Force pushes automated data sharing under draft strategy [FedNewsNet]GAO: Navy should disqualify Booz Allen from $400M Navy win [WashTech]Military Air Support: DOD Has Increased Its Use of Contracts to Meet Training Requirements [GAO]Protests might be choking off the government’s most popular acquisition vehicles [FedNewsNet]Essex County Man Admits Conspiring with His Brother – a Federal Safety and Health Officer – to Extort Contractors [DoJ]Information Technology Contractor Agrees to Pay More Than $1.3 Million to Settle Federal False Claims Act Allegations of Overbilling [DoJ]Keeping the Defense Industrial Base Afloat During COVID-19 [RandCorp]Four Executives Sentenced for SBA Fraud Scheme Spanning 13 Years [DoJ]Balfour Beatty Communities to pay millions in fines after pleading guilty to defrauding military [FedNewsNet]2021 in review: Out with JEDI, in with JWCC [FedScoop]Cyber provisions, workforce initiatives take effect as Biden signs NDAA [FedScoop]Statement by the President on S. 1605, the National Defense Authorization Act for Fiscal Year 2022 [WH]US Department of Labor Recovers $33Kin Back Wages for Five Workers After Investigation Revealed APEX Company Violated Federal Wage Laws [DoL] The post SmallGovCon Week in Review: December 20-31, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

I am pleased to announce that Stephanie Ellis has joined our team of government contracts attorney-authors here at SmallGovCon. Stephanie is an associate attorney with Koprince McCall Pottroff LLC, where her practice focuses on federal government contracts law. Before joining our team, Stephanie worked for the Kansas Securities Commissioner, enforcing the Kansas Securities Act through civil, criminal, and administrative actions, and reviewing administrative compliance issues. She also worked at a Small Business and Nonprofit Transactional Clinic assisting small and non-profit businesses establish their businesses through formative documents. Check out Stephanie’s full biography to learn more about our newest author, and don’t miss her first SmallGovCon post on the importance of keeping SAM codes current for maintaining small business eligibility. The post SmallGovCon Welcomes Stephanie Ellis first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

We are so very happy to announce that Nicole Pottroff and husband, Kenny Flanders, along with big brother Robert have a new family member! Franklin Alan Flanders was born on Christmas Eve, weighing in at 7 lbs. 8 oz! Mom and baby are at home and doing well. What a wonderful gift for the holidays. Congratulations! The post A Very Joyful Announcement from Koprince McCall Pottroff LLC! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The decision in Bravo Federal Consulting, LLC, SBA No. CVE-213 (Dec. 1, 2021) is both an important reminder of the importance of keeping all database information up to date and a cautionary tale of the unfortunate consequences that can happen when you don’t. In that decision, SBA’s Office of Hearings and Appeals (OHA) denied an appeal by Bravo Federal Consulting, LLC (Bravo). Bravo submitted a request to change its name, setting off a chain of events that ended in Bravo losing its verified status as a service-disabled veteran-owned small business (SDVOSB). On July 1, 2021, Bravo submitted to the Department of Veterans Affairs Center for Verification and Evaluation (CVE) a request to change its name from Pro Gov Solutions, LLC to Bravo Federal Consulting, LLC. Unfortunately, Bravo had not registered in the System for Award Management (SAM) as Bravo Federal Consulting, LLC, so CVE was unable to verify its status as an SDVOSB. All applicants for VIP Verification must be listed in SAM prior to application submission per 38 C.F.R. § 74.2. Additionally, because Bravo had not registered under the name Bravo Federal Consulting, LLC prior to the name change, it had failed to maintain eligibility as required under 38 C.F.R. § 74.15(b) which requires participants to inform CVE of any changes that would affect eligibility within 30 days of the change. On August 5, 2021, CVE issued a Notice of Proposed Cancellation (NOPC) to Bravo for failure to maintain its eligibility as an SDVOSB in SAM. CVE has authority to remove any participants from SAM for good cause upon formal notice, under 38 C.F.R. § 74.21(d)(2). Good cause includes failure to maintain eligibility for program participation. Though CVE could confirm Bravo’s owner’s veteran status via the VIP Verification Program, it could not conclude Bravo met the regulatory requirements for inclusion in SAM because Bravo had never registered under the name Bravo Federal Consulting, LLC in SAM. With the August 5th NOPC, CVE gave Bravo 30 days to provide evidence and explain why its verified status as an SDVOSB should not be cancelled. Bravo failed to respond to the NOPC, and on September 9, 2021, CVE issued a Notice of Verified Status Cancellation due to CVE being unable to conclude that Bravo satisfied the eligibility requirements. Following the cancellation, on September 13, 2021, Bravo appealed the cancellation to OHA, stating that, although the name change application was not submitted prior to SAM and the IRS being made aware of the name change, both entities were made aware as of September 1, 2021 and Bravo was then “ready to be verified.” Ultimately, Bravo did not include a statement of why the cancellation was in error. As such, OHA determined Bravo had failed to comply with the regulation and failed to respond to the NOPC leading to the appeal being denied. OHA concluded that Bravo was not listed in SAM, which is an SDVOSB requirement, and it was proper for CVE to remove Bravo as an SDVOSB. In the end, Bravo Federal Consulting, LLC should serve as a cautionary tale for all small businesses involved in federal government contracting. Ensure that your business has the most up to date information in SAM and remain in compliance by reporting any change that may affect eligibility within the required time. While this case involved an SDVOSB, keeping the SAM registration is important for all types of federal contractors. Need help with a government contracting legal matter? Email us or give us a call at 785-200-8919.  Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook.  The post Keep Registrations in SAM Current to Avoid Loss of SDVOSB Verification first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Small businesses are often seen as the backbone of the economy. Contained within the category of small businesses are what are known as Small Disadvantaged Businesses or SDBs. Currently, the federal government has a goal to award 5% of its contracting dollars to SDBs. The White House is seeking to triple this number by 2025. The White House recently released a Fact Sheet as to how it intends to meet this goal. So, let’s dive into some of the specifics. On June 1, 2021, the White House announced its plan to increase the share of contracts going to SDBs by 50 percent by 2025. This translates to the ambitious goal of awarding an additional $100 billion to SDBs over the next five years. While the goal is lofty, as they say “the devil is in the details.” Just how will agencies meet this new goal, and how will these dollars be tracked? We will hopefully see concrete terms soon in the form of regulations implementing these goals. Federal agencies have actually been overshooting the existing statutory requirement of 5% of contracts to SDBs by nearly double over the last five years. On average, 9.8% of federal contracting dollars currently go to SDBs. A planned 50% increase would mean a new goal of nearly 15% of federal contracting dollars going to SDBs by 2025. The White House took pains to note that while nearly 20% of small businesses are owned by women, less than 5% of federal contracting dollars go to women-owned small businesses. This is a trend the White House wants to reverse. Here are some of the ways the White House intends to make these changes. Disaggregated Data. The first reform is to disaggregate the top-level data. What this means is the data will no longer simply rely on just meeting the overall percentage goal, but will instead be broken down into sub-categories. This includes Black-owned, women-owned, Asian-owned, Hispanic-owned, etc. small businesses. The hope is this data will shed light into areas where entities are either over or under-served. Beginning with the 2020 fiscal year, this data will provided across agencies in order to target specific groups. Category Management Reform. The next reform is to increase credit given to agencies for making awards to SDBs. The White House noted that an unintended consequence of having agencies seek contracts under category management (meaning buying as an organized entity instead of many smaller buyers), is that “socioeconomic firms, a group that includes SDBs, women-owned, service disabled veteran-owned, and HUBZones, have received a proportionally lower share of contracts.” The purpose of this reform is to incentivize SDB buying by the federal government; agencies will receive automatic “credit” under category management for all awards made to socioeconomic small businesses, beginning FY 2022. Encourage agencies to use “decentralized contracts and other strategies that are necessary to increase diversity within agency supplier bases.” And SBA will now be a voting member of the Category Management Leadership Council, the interagency governing body for category management activities. Organizational Changes. As far as the back-end, the White House is also seeking to give these goals some teeth. Those in the Senior Executive Service will have compliance with these new goals inserted into their evaluation criteria. This means that those in leadership roles will have a direct incentive toward ensuring each agency meets these new goals. Plus, Federal Offices of Small and Disadvantaged Business Utilization (OSBDUs) will have direct access to senior leadership. The end-goal is to increase the number of new entrants into the federal marketplace. The recent trend has seen a 60% decline in new entrants, which these goals seek to reverse. Time will tell whether these goals will meet their overarching goals. One key from our prospective is to remove barriers to new firms wishing to gain entrance into the federal marketplace. All too often, much like the job market, agencies want established entities with long track records, over options for startups. Additionally, larger firms have the ability to squeeze out small businesses, by offering targeted solutions at rates smaller firms have a hard time competing with. For some firms, it can be difficult to meet all of the highly-specific requirements agencies seek, while having little to no experience. We at SmallGovCon think the goals are admirable. Simultaneously, our hope is the powers that be are looking at how to get more people interested in the marketplace by reevaluating what it takes to get there and be successful. Need help with a government contracting legal matter? Email us or give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post White House Proposes Reforms to Increase Dollars to Underserved Small Businesses first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy eve of Christmas Eve, readers! Here’s hoping the shopping is done and the presents are all wrapped and under the tree. Even though we are living in uncertain times, there is much to be grateful for this holiday season. Thank you for all of your support this past year and thanks for letting us bring you these helpful updates and analysis about federal contracting. With Christmas two days away and 2022 right around the corner, it’s time to enjoy the holidays, reflect on the year that was, and look forward to the challenges and opportunities ahead. We will post our usual Week in Review after the holidays. Until then, best wishes for a wonderful and joyous holiday season. Stay safe and well! The post Happy Holidays from SmallGovCon! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

If, as the result of a size protest or appeal, the SBA makes a final determination that a company is not a small business, the company will be required to update SAM within two days to reflect that it is no longer small. And if the company doesn’t recertify within two days, the SBA will do the honors and update the company’s SAM profile. This tough new requirement is part of the compromise version 2022 National Defense Authorization Act, which is likely to be signed into law in the coming weeks, although it is unclear when the SBA’s regulations will be revised to implement the change. Section 863 of the 2022 NDAA amends the Small Business Act to include the following language: (4) DETERMINATIONS REGARDING STATUS OF CONCERNS. – (A) IN GENERAL. – Not later than 2 days after the date on which a final determination that a business concern does not meet the requirements of the status such concern claims to hold is made, such concern or the the Administrator, as applicable, shall update the status of such concern in the System for Award Management (or any successor system). (B) ADMINISTRATOR UPDATES. – If such concern fails to update the status of such concern as described in subparagraph (A), not later than 2 days after such failure the Administrator shall make such update. This is a significant change from existing law, which merely states that “after an adverse size determination, a concern cannot self-certify as small under the same or lower size standard unless it is first recertified as small by SBA.” Under existing law, then, a small business need only change its SAM to reflect an adverse size determination when the company is using SAM to certify its size–such as with respect to a new bid, or potentially with a required annual SAM update. Section 863 also requires notification to contracting officers for pending proposals: (C) NOTIFICATION. – A concern requires to make an update described in subparagraph (A) shall notify a contracting officer for each contract with respect to which such concern has an offer or bid pending of the determination made under subparagraph (A), if the concern finds, in good faith, that such determination affects the eligibility of the concern to perform such contract. Unlike the two-day rule, the notification provision is not a major change from existing law. Current SBA regulations state that when a company receives an adverse size determination, “[i]f the concern has already certified itself as small on a pending procurement or on an application for SBA assistance, the concern must immediately inform the officials responsible for the pending procurement or requested assistance of the adverse size determination.” As mentioned previously, Section 863 has not yet become law, but that appears very likely to happen in the near future. However, Congress has not given the SBA a specific deadline for implementing this new requirement, so it is unclear when the SBA will begin to enforce it. As always, we will keep the government contracting community posted. Need help with a government contracting legal matter? Email us or give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post 2022 NDAA Requires Prompt SAM Update If SBA Issues Adverse Size Determination first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

On Friday, a US Appeals Court overturned the temporary halt on the vaccine mandate for large businesses. This is interesting to note because some of the same analysis used in connection with whether the large business mandate is enforceable could apply to the contractor vaccine mandate. The OSHA mandate applied to employers with 100 or more employees. It required “employees be vaccinated or wear a protective face covering and take weekly tests but allows employers to choose the policy implementing those requirements that is best suited to their workplace.” The appeals court looked closely at the authority of OSHA and determined: Longstanding precedent addressing the plain language of the Act, OSHA’s interpretations of the statute, and examples of direct Congressional authorization following the enactment of the OSH Act all show that OSHA’s authority includes protection against infectious diseases that present a significant risk in the workplace, without regard to exposure to that same hazard in some form outside the workplace. The appeals court also noted that “employers may choose to comply with the standard by enforcing the mask-and-test component, which are entirely temporary in nature and do not create irreparable injuries.” This is separate from the federal contractor mandate that is currently on hold due to a Georgia federal judge ruling. It is also separate from the mandate for health care workers. For the health care mandate, a federal appeals court recently issued a ruling that the health care worker vaccine mandate can be enforced in about half of the country. The OSHA mandate allows testing OR a vaccine, so it is different in effect from the federal contractor mandate, which requires vaccination absent an accommodation or limited exceptions. It is also enforced by OSHA, which has a long history of enforcing workplace safety rules. These two facets of the OHSA mandate, and possibly more, make it a different animal than the federal contractor mandate, so it’s not certain how an appeals court will view the contractor mandate. We will keep you posted on how courts continue to interpret the federal contractor vaccine mandate, as well as other vaccine mandates. Questions about this post? Email us or give us a call at 785-200-8919. 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 Appeals Court Reinstates Large Business Vaccine Mandate first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Hello, Readers! Can you believe we’re more than halfway through December already? The holidays are upon us! Houses are decorated with twinkling lights. There’s a chill in the air (a relief after the odd 70 degree and high winds that hit the Midwest recently). Items are flying off of store shelves. Hopefully despite all that hustle and bustle, you’re getting to enjoy quality time with your loved ones. The hot topics in government contracting this week include some new vaccine mandate lawsuit updates, cybersecurity measures, and a push for the federal government toward clean energy and sustainability. We also have one festive topic for you – ICE is on the hunt for holiday scams. Read about these topics and more below, and for even more information and news related to federal government contracting, check out our blog. Best of luck with those last minute holiday preparations this weekend! Federal contractors find, sometimes you just have to outwait a problem [FedNewsNet]Air Force Releases Draft RFP for Follow-On Mission Planning Support Contract [GovConWire]Lansing-Based Research And Development Firm Pays $500,000 To Resolve Federal Contract Fraud Allegations [DOJ]OMB offers new guidance on federal contractor vaccine mandate, as compliance ticks up for feds [FedNewsNet]While the elves prepare for Christmas, ICE is on the hunt for holiday scams [FedNewsNet]DISA is ending milCloud 2.0 in June [FedScoop]Congress passes defense policy bill with boosts to R&D and cybersecurity [FedScoop]Transforming Digital Services: A Fedscoop Special Report [FedScoop]Federal agencies have until Dec. 24 to apply fixes for Log4Shell vulnerability [FedScoop]PF 2022-14 Nationwide Preliminary Injunction on Vaccine Mandate for Federal Contractor Employees [DOE]Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability [Federal Regiser}A bill codifying FedRAMP finally makes it to the Senate floor [FedScoop]Changes to make federal procurement more equitable is missing key ingredients [FedNewsNet]Deputy Defense Secretary Lauds Achievements of DOD’s Acquisition Workforce [DOD]Coronavirus Roundup: Where the Biden Administration’s Vaccine Mandates Stand; Possible Mandatory Booster Shots for the Military [GovExec] The post SmallGovCon Week in Review: December 13-17, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The Anti-Assignment Act (41 U.S.C. § 6305) prohibits the transfer of a government contract or interest in a government contract to a third party. However, government agencies recognized that contractors are on occasion bought, sold, merged, or simply encounter circumstances upon which it becomes desirable or necessary for them to assign a government contract to a third party. To address this issue, the Federal Acquisition Regulations (FAR) provide for a novation process to give contractors a method to transfer government contracts and not run afoul of the prohibitions in the Anti-Assignment Act. The ultimate goal of the novation process is to successfully transfer the contract and have the government recognize a new contractor as the successor-in-interest to the transferred contract. In practice however, contractors seeking novation of a government contract understand the uncertainty of the process. First, the government is not required to enter into a novation agreement when requested by a contractor, but may do so in the contracting officer’s discretion, if the government finds the novation to be in the government’s “best interest.” FAR 42.1204. Despite these uncertainties, contractors can successfully novate a government contract; if they follow the procedures and then communicate that process to an agency evaluating proposals. In a recent GAO decision, a contractor was successful in novating a contract and sustained a challenge to an agency recognizing the transferee as the successor-in-interest to that contract. The case is ICI Services Corporation, B-418255.5; B-418255.6 (October 13, 2021). The relevant facts of this case are as follows: The Department of the Navy originally issued an RFP to contractors holding contracts for the Navy’s SeaPort Next Generation (SeaPort-NxG). The RFP sought contractors to provide support to one of the Navy’s major program offices. Alion–specifically, its Naval Systems Business Unit (NSBU)–submitted a timely proposal responding to the RFP. Alion’s NSBU consisted of various business units, all of which supported its maritime-related customers. Prior to submitting its proposal, Alion entered into an agreement with Serco, Inc., another SeaPort-NxG contract holder, where Serco would acquire, among other things, Alion’s NSBU. In its proposal, Alion specifically informed the Navy about the agreement with Serco, that the corporate transaction contemplated by the agreement was expected to close later in the year, and that the resources identified in its proposal would remain the same after the transaction. Alion also notified the Navy that their proposal anticipated the transaction with Serco and was structured such that Serco’s acquisition of Alion’s NSBU would not impact the performance of the resulting task order. The proposal also provided that all assets and personnel of Alion’s NSBU, including all those required to perform the task order, would be transferred as part of the transaction. Upon completion of the Serco-Alion transaction, Serco did in fact acquire “all NSBU employees, including all SSBU employees proposed for the PMS 317 task order; all NSBU/SSBU facilities; other NSBU assets (e.g., proposals, leases, licenses); and other federal contracts awarded to Alion’s NSBU.” After the transaction, Alion remained in existence as a separate entity and retained its SeaPort-NxG contract. The Navy subsequently entered into discussions with all offerors regarding their PMS 317 proposals. Because the Alion NSBU was now a part of Serco, the agency’s discussions were held with Serco. In the discussions, the Navy sought, and Serco provided detailed information regarding the Serco-Alion transaction so the Navy could determine whether Serco was a complete successor-in-interest to Alion for purposes of the submitted proposal. Serco confirmed that, “with one minor exception, all assets and personnel initially proposed by Alion had been acquired by Serco and would continue to be used by Serco to perform the PMS 317 task order.” Serco also provided information showing that as a result of the Serco-Alion transaction, and contract novations, Serco “owns” or is solely performing the contracts and task orders included within the past performance section of its PMS 317 proposal. After assessing the information, the contracting officer determined that: “(1) Serco had acquired the entirety of the business entity that had submitted Alion’s proposal (including the PMS 317 proposal itself) which was proposed to perform under Alion’s proposal; and (2) Serco’s purchase of Alion’s NSBU resulted in all relevant PMS 317 proposal assets–i.e., employees, leases/subleases, ‘any and all’ other SSBU resources needed to perform the task order–being transferred from Alion to Serco.” “Based this information, the Navy concluded that Serco was not only the successor[-]in[-]interest to the Alion NSBU which was identified to perform under Alion’s initial proposal, but was also the successor[-]in[-]interest to the proposal previously submitted by Alion.” The Navy substituted Alion for Serco as an offeror under the RFP and ultimately awarded Serco the task order. After its debriefing, ICI filed a protest with the GAO raising several issues challenging the Navy’s award of the task order to Alion. Among the issues in the protest, ICI argued that the Navy failed to properly evaluate Serco’s eligibility for award as a corporate successor-in-interest to Alion. After reviewing ICI’s assertions, the GAO found no basis sustain ICI’s argument. In explaining the basis of its decision the GAO stated: As an initial matter, not only was Serco’s acquisition of that portion of Alion imminent and certain–in fact, the transaction was completed prior to the agency’s award decision–but the Navy was aware of the transaction and fully considered it as part of the agency’s evaluation. Further, the record reflects the Navy reasonably found Serco to be the complete successor-in-interest to Alion as a result of Serco’s acquisition of the entirety of the NSBU, which was the business entity that had submitted Alion’s proposal and which was (with the one noted exception) proposed to perform under the proposal. In its opinion, the GAO expressed that in reaching its decision it focused on whether or not “it was reasonable for an agency to reach conclusions that it did regarding the corporate transaction. The GAO determined that an agency’s decision on an award is not improper where an acquisition or restructuring transaction does not have a “significant impact on cost or technical impact on contract performance. In applying its analysis to this matter, GAO found that the transfer of the NSBU from Alion to Serco is the type of transaction for which GAO has permitted the assignment of proposals: “a sale that involves an ‘entire portion of a business embraced by the proposal.’” GAO also determined that once Serco was found to be the successor-in-interest to Alion’s NSBU and Alion’s proposal, the Navy’s decision to allow Serco as Alion’s substitute as an offeror under the RFP, and subsequently award of the task order to Serco, was reasonable. Key factors in the GAO’s decision was that 1) the Navy was aware of the particular transaction, 2) the Navy determined that the transaction was imminent and certain, and 3) that the transaction transferred the “entire portion of a business embraced by the proposal.” Basically, “ICI failed to demonstrate that Serco’s acquisition of the NSBU–completed before the submissions of offerors’ FPRs–would have resulted in the task order being performed in a manner materially different from what was proposed by Alion.” Also, as part of its argument ICI asserted that Serco was not a complete successor-in-interest to Alion’s proposal because Serco did not acquire Alion’s SeaPort-NxG contract, Alion did not transfer all of its assets included in its proposal. GAO disagreed with ICI on this point and stated that ICI in its argument “improperly conflates the standard required for a contract novation with the standard we have applied for determining a proper successor-in-interest to a business entity which submitted the initial proposal.” The standard for the government to novate a contract is that “the entire portion of the assets involved in performing the contract” must be transferred to a third party. [emphasis added]. With respect to determining a proper successor-in-interest to an entity submitting a proposal, GAO has found that the transfer of rights and obligations of the entity submitting the proposal is permissible in situations involving “the sale of an entire portion of a business embraced by the proposal.” In other words, GAO was not going to second-guess the decision to allow the novation. In this case, the GAO determined that the Navy was reasonable in assessment that Alion did, in fact, transfer to Serco the entire portion of assets that would be involved in performing the task order contemplated by the RFP for purposes of the novation. The GAO determined that the Navy was also reasonable in its decision that the Alion-Serco transaction resulted in a transfer of the entire portion of a business embraced by Alion’s proposal. There a couple of takeaways from this case. Although the ultimate goal of a novation is for the government to recognize a contractor as a successor-in-interest to a government contract, the FAR novation rules apply only to whether the government will allow a different contractor to perform. The government uses different criteria to then determine if a third-party buyer will be recognized as a successor-in-interest with respect to evaluating bid proposals. This case also demonstrates that, despite the difficulties in obtaining agency approval for novation of a government contract, if the procedure is performed correctly it can be successfully accomplished and withstand a bid protest. Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919. 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 GAO Confirms that Novations Work: Agency Properly Recognized Buyer of Contract as Awardee first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Good day, Readers! The holidays are quickly approaching and everything is looking festive and bright here in Lawrence, Kansas. The annual tradition of Santa being recued from the roof of one of our local department stores occurred and you will be happy to know that he is safe to circle the globe once again this Christmas. You can see photos of this fun, annual tradition here. It’s always quite a spectacle! As always, there was a lot happening in the world of federal government contracting this week. The biggest news being that a federal judge has temporarily halted the vaccine mandate for federal government contractors. You can read more about this latest development and some interesting statistics that were issued on federal government contracting, along with other announcements in the articles below, as well as our blog post. Have a great weekend! Comptroller General Bid Protest Statistics – 25 Years of Fiscal Year Data [Wifcon]U.S. court temporarily halts Biden’s vaccine mandate for federal contractors nationwide [CNBC]US Government contractor trends in 2022 [EntTimes]The Federal Government Is Making a New Investment in Women-Owned Small Businesses [GovExec]Why Government Suppliers Will Struggle to Meet CMMC Requirements [NextGov]Government Ethics Czar to Feds: Remember to Be Wary of Gifts This Holiday Season [GovExec]Former Ft. Bragg Employee Pleads Guilty to Bribery [DoJ]Guidance Issued on Biden Contracting-Procurement Order [FedWeek]USAID putting new money towards making sure developing countries have enough COVID-19 vaccines [FedNewsNet]FACT SHEET: President Biden Signs Executive Order Catalyzing America’s Clean Energy Economy Through Federal Sustainability [WhiteHouse]Pentagon to reshuffle leadership roles for AI, data, digital services [FedNewsNet]Biden sets zero-emission goals for federal buildings, vehicles in executive order [FedNewsNet]Alliedbarton Security Services LLC Agrees to Pay More Than $1.1M to Resolve Gender, Race-based Pay Discrimination Allegations at New York Location [DoL]Defense Contractor Cybersecurity: Stakeholder Communication and Performance Goals Could Improve Certification Framework [GAO] The post SmallGovCon Week in in Review: December 6-10, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Koprince McCall Pottroff LLC will be presenting a webinar hosted by the El Paso SBA that covers an important topic in federal government contracting – 8(a) Joint Ventures. In this webinar, government contracts attorneys Shane McCall and John Holtz cover the basics of joint ventures, the specifics of 8(a) joint ventures (including SBA requirements), and how the mentor-protégé program can benefit a joint venture arrangement. If you’d like to join us for the webinar, mark the date of December 16 on your calendar and here is the link for the event. The post Event: 8(a) Joint Ventures Webinar, Hosted by El Paso SBA first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

For practically the entire summer of 2021, we observed (and commented on) NIH’s numerous amendments to its long-awaited CIO-SP4 solicitation after it was finally issued in May 2021. By the time the deadline for proposals finally came, it had been amended eleven (!) times. Even with all those amendments, however, it appears that at least one offeror still had serious concerns about the final version. As it turns out, at least some of their concerns were warranted, per GAO, and has recommended the agency to amend the solicitation or revise its evaluation criteria. Computer World Services Corporation (CWS) filed a protest regarding CIO-SP4 arguing that the solicitation’s self-scoring evaluation is unduly restrictive concerning offerors who compete as a mentor-protégé joint venture where the mentor is a large business, among other contentions. Specifically, CWS noted the solicitation limited such joint ventures to using the experience of the large business mentor for no more than two of the three possible experience examples for each area of experience. When a protestor claims a provision is unduly restrictive of competition, the agency needs to show why “the provision is reasonably necessary to meet the agency’s needs,” GAO noted, “to ensure that it is rational and can withstand logical scrutiny.” Because NIH failed to provide a reasonable rationale for the limitation on using large business mentor experience, GAO agreed with CWS. GAO then explained its reasoning. “SBA’s small business mentor-protégé program allows small or large business firms to serve as mentors to small business protégé firms in order to provide ‘business development assistance’ to the protégé firms and to ‘improve the protégé firms’ ability to successfully compete for federal contracts.’” 13 C.F.R. § 125.9. After going through the various experience example requirements of CIO-SP4, GAO looked at 13 C.F.R. § 125.8(e), which prohibits agencies from requiring “the protégé firm to individually meet the same evaluation or responsibility criteria as that required of other offerors generally.” In a similar case, Ekagra Partners, LLC, B‑408685.18, the RFP stated that the large business mentor could only submit one of two required examples for one experience category and two of three required examples for the other category, meaning the protégé had to submit at least one example in each category. However, the requirement “did not specify the relative amount of experience that the mentor and protégé were required to admit.” Therefore, GAO determined it did not violate 13 C.F.R. § 125.8. Still, GAO could have found that the requirement unreasonable. However, GAO “concluded that the agency reasonably explained that the limitation was needed to ensure that the protégé demonstrated its ability to perform the solicitation requirements.” Turning back to the CWS matter, GAO considered the changes to 13 C.F.R. § 125.8(e) since the Ekagra decision. Those changes added the language “A procuring activity may not require the protégé firm to individually meet the same evaluation or responsibility criteria as that required of other offerors generally. The partners to the joint venture in the aggregate must demonstrate the past performance, experience, business systems and certifications necessary to perform the contract.” GAO decided that this did not change its reasoning since Ekagra, because the issue in this case is the relative consideration to be given to mentor and protégé members of a joint venture as opposed to the difference in requirements for the protégé versus other offerors. Yes, 13 C.F.R. § 125.8(e) means you can’t require a protégé to meet the same requirements of offerors who submit on their own or outside of a mentor-protégé agreement. But it says nothing about the balance of experience between the mentor and the protégé in the joint venture itself. However, GAO found one key difference between Ekagra and CWS’s protest. In Ekagra, the solicitation was found reasonable as the agency reasonably argued that limiting the amount of experience a large business mentor could use ensures the agency will be able to meaningfully consider the protégé’s experience. The protégé was required in Ekagra to submit at least one example for each of the two evaluation factors. For the CIO-SP4 solicitation, there were ten task areas. For each task area, the offeror must provide corporate experience examples relevant to those task areas. For all the task areas combined, the offeror must provide a minimum of three corporate task examples. The corporate experience example could be reused in multiple task areas for corporate experience, save for the minimum one required example for task area. No other task areas had a minimum. For leading edge technology experience and federal multiple award experience, offerors could submit up to three examples for each, with no minimum provided. This is confusing when looked at all together, but the key thing is this: the limit on the mentor’s experience submissions was on a per task area basis, not an overall basis. In other words, although three examples were required for corporate experience, that was for the entire corporate experience section, which had 10 different task areas. Only one experience was required per task area, but the mentor could submit up to two examples per task area. As such, the mentor could submit two examples for each task area, which means the mentor-protégé joint venture could submit 20 examples all from the mentor and still comply with the solicitation! As for the leading-edge technology and federal multiple award criteria, the issue is that while the mentor could only provide two examples, there was no minimum to the number of examples the joint venture had to submit, only a maximum of three. This results in a situation where the mentor is limited from providing a certain number of examples, but the protégé is not actually required to provide examples of its own. If the mentor that provided all 30 examples, three per task area, for corporate experience, the joint venture would violate the solicitation. But if it only submitted two per task area, resulting in a total of 20, even though the protégé still submits no examples, it would meet the requirements of the solicitation! So, the argument that the limitation made the protégé have to submit examples was simply not true and produces a result where a mentor-protégé joint venture that submitted 30 mentor examples and no protégé examples is rejected, but one that submits 20 mentor examples and no protégé examples gets evaluated. Whew! We know this is a bit confusing, but, basically, the way things shook out numerically, in Ekagra, the protégé would have to submit at least some example for each factor in order for the proposal to be acceptable, meaning the agency had a reasonable argument that the limitation would force the protégé to show at least some experience. In this case, the way things shook out, a protégé could submit nothing and still the joint venture’s proposal could be acceptable. This made the limitation on how many submissions the mentor could make completely pointless; it doesn’t actually require the protégé to show anything. As a result, the GAO sustained the protest, and has now recommended NIH go back and fix this issue. It is likely, then, that offerors will get another shot at this troublesome procurement. Need help with a government contracting legal matter? Email us or give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post GAO Finds CIO-SP4 Unduly Restrictive; Recommends Amendment first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

For government contractors, trying to predict how COVID-19 might affect a government project can be extraordinarily challenging task. One bidder recently attempted to provide some clarity by stating, in its bid, that COVID-19 was a “force majeure event” and that the bidder would be entitled to extra time if COVID-19 affected the project. Unfortunately for the bidder, its effort failed: the agency rejected the bid for improperly exceeding the scope of a relevant FAR clause. The GAO then confirmed that the agency had acted properly. The GAO’s decision in American Mine Services, LLC, B-420138 (Dec. 3, 2021) involved an Army Invitation for Bids seeking a contractor to furnish and install two new service gates at the Surry Mountain Dam in New Hampshire. The IFB was set aside for small businesses. Among other clauses, the IFB incorporated FAR 52.249-10 (Default – Rixed Price Construction). FAR 52.249-10 allows the government to terminate the contractor for default, but also specifies, in paragraph (b), that a contractor shall not be terminated for default due to a delay that arises from “unforeseeable causes beyond the control and without the fault or negligence of the Contractor.” The clause lists “Epidemics” and “Quarantine restrictions” as examples of such excusable delays, but does not directly address COVID-19. American Mine Services, LLC submitted a bid. In its bid, AMS made the following statement: For purposes of this bid, COVID-19 is considered a Force-Majeure Event along with any other similar disease, epidemic or pandemic event. If any of the aforementioned events occur and affect the project, AMS reserves its rights for additional time. The Army rejected the bid, deciding that AMS’s statement was a material change to the terms of FAR 52.249-10. AMS then filed a protest challenging the Army’s decision. AMS argued that its statement merely confirmed the pre-existing protections of FAR 52.249-10(b), rather than expanding upon or otherwise varying from those protections. The GAO wrote that all bids must be “responsive.” The GAO explained that “the test for responsiveness is whether a bid offers to perform the exact thing called for in an IFB, so that acceptance of the bid will bind a bidder to perform in accordance with all of the terms and conditions of a solicitation without exception.” If a bidder “attempts to impose conditions that would modify material requirements of an IRF, limit its liability to the government, or limit the rights of the government under any contract clause, then the bid must be rejected.” In this case, the GAO wrote, while FAR 52.249-10(b) “lists epidemics and quarantine restrictions as possible causes of excusable delay, the language of the provision inserted in the protester’s bid specifically lists “COVID-19” and “any other similar disease, epidemic, or pandemic event.” The GAO wrote that the FAR clause clearly does not include these specific terms as examples of an unforeseeable cause of delay. The GAO continued: Additionally, while the FAR clause lists epidemics and quarantine restrictions as examples, the clause, however, does not deem these events to be per se “unforeseeable causes beyond the control and without the fault or negligence of the [c]ontractor.” FAR 52.249-10(b)(1). That determination is left to the judgment of the contracting officer once the facts surrounding the delay are ascertained. FAR 52.249‑10(b)(2). In contrast, the provision added by AMS unilaterally declares, without qualification, that “COVID-19 . . . along with any other similar disease, epidemic, or pandemic event” is a “force-majeure event,” i.e., an uncontrollable and unexpected event that prevents the contractor from performing the contract. The GAO held that “because AMS’s added provision attempts to impose conditions that limits the rights of the government under FAR clause 52.249-10, on this record, we conclude that the agency reasonably found AMS’s bid to be nonresponsive and rejected it.” The GAO denied the protest. For contractors, operating in a pandemic environment–and trying to predict how future COVID variations or other diseases might affect their work–can be extraordinarily challenging. But as the American Mine Services case demonstrates, bidders must be careful when trying to guard against such risks in their bids so that those bids remain responsive. Questions about this post? Email us or give us a call at 785-200-8919. 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 Agency Properly Rejected Bidder for Listing COVID-19 as a “Force Majeure” Event first appeared on SmallGovCon - Government Contracts Law Blog.View the full article