Koprince Law LLC

In February 2017, the SBA announced that applications for its new All Small Mentor-Protégé Program were being processed, on average, in just eight days. Fast forward four-and-a-half years, and the SBA’s mentor-protégé application processing timeline has gotten just a wee bit longer. As in, 105 days. Unfortunately, that’s no typo. If you’re looking to establish an SBA-approved mentor-protege relationship, you better be willing to wait more than three months for your application to be approved. I recently sent an email to the SBA’s main Mentor-Protege Program email address. The automatic response I received included this nugget: The application process takes 105 days – 15 days for screening and 90 days for processing. In fairness, the SBA was never going to maintain an eight-day pace. (And, in hindsight, it probably shouldn’t have set lofty expectations by touting that initial blistering pace back in 2017). But 105 days is . . . not good. Among other problems, such a long wait makes it much more difficult for potential mentors and protégés to establish compliant joint ventures in advance of key solicitations, like the upcoming Polaris vehicle. And for 8(a) companies–who, following a November 2020 rule change, no longer have access to a separate 8(a) mentor-protégé program–the delay is especially troublesome. After all, 8(a) Program participation is strictly limited to nine years. Every extra day that an 8(a) company has to wait for its mentor-protégé agreement to be approved is one less day that the 8(a) protégé is eligible to use that mentor-protégé relationship to help it bid 8(a) contracts. I don’t have any inside knowledge as to why the application processing timeline has expanded so dramatically in just a few years. I suspect the consolidation of the 8(a) and All Small Mentor-Protege Programs has played a role, as did the addition of new screening questions regarding affiliation. Nevertheless, the application itself is not terribly lengthy or complex–certainly far less lengthy and complex than the VA’s SDVOSB/VOSB application, which the VA says is processed in an average of 34 days. If I had to guess, I’d speculate that the major culprit is likely a staffing/funding issue. Whatever the cause, I hope SBA works to address it, and soon. I don’t expect we’ll ever return to a world of eight-day application processing. But 105 days is far too long to force qualified applicants to wait to access this important program. 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 here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post From Eight Days to 105 Days: The Incredible Lengthening of the SBA’s Mentor-Protégé Program Timeline first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

You may recall a post of ours back in April 2021, where we discussed a little-known change to SBA’s size determination rules that occurred in October 2020. SBA created an exception, at 13 C.F.R. § 121.404(g)(2)(iii), to the usual “size is determined at offer date” rule. Now, prior to award, when a small business is part of a merger or acquisition after it makes an offer on a solicitation, the business has to recertify its size, and depending on when that acquisition occurred, if the business is now large, it may lose its award. However, the rule is for better or worse not that straightforward, as a small business learned in a recent GAO decision. Because a part of the rule says that task order awards in such cases may not be treated as small business awards, GAO concluded that such awards are still allowed. Here’s the necessary background. In December 2020, GSA issued a solicitation under its One Acquisition Solution for Integrated Services (OASIS) small business pool contract for a fixed-price task order for engineering, program management, and technical support services for the Rocket Systems Launch Program at the Space and Missile Systems Center at Kirtland Air Force Base, which is undoubtedly one of the coolest solicitations I’ve ever seen. In any event, GSA received 5 proposals by the closing date. One was from Millennium Engineering and Integration Company (“Millennium”), and another was from Odyssey Systems Consulting Group, Ltd. (“Odyssey”). GSA eventually awarded the task order to Millennium. The thing is, 38 days after submitting its proposal, Millennium (now “Millennium Engineering and Integration LLC”) was acquired by QuantiTech, LLC. Upon recertification, it would no longer qualify as a small business. In light of this information (and on other grounds), Odyssey protested the award. In its protest, Odyssey noted the new exception in 13 C.F.R. § 121.404(g) states: If the merger, sale or acquisition occurs after offer but prior to award, the offeror must recertify its size to the contracting officer prior to award. If the merger, sale or acquisition (including agreements in principal) occurs within 180 days of the date of an offer and the offeror is unable to recertify as small, it will not be eligible as a small business to receive the award of the contract. If the merger, sale or acquisition (including agreements in principal) occurs more than 180 days after the date of an offer, award can be made, but it will not count as an award to small business. Millennium was acquired only 38 days after it submitted its proposal. Therefore, Odyssey reasoned, Millennium must recertify and, because it would not recertify as small, Millennium would be ineligible for award. However, GSA noted that the above rule only applies to recertification under the “master contract” (in this case, the original OASIS contract). 13 C.F.R. § 121.404(g)(4) provides: The requirements in paragraphs (g)(1), (2), and (3) of this section apply to Multiple Award Contracts. However, if the Multiple Award Contract was set-aside for small businesses, . . . then in the case of a contract novation, or merger or acquisition where no novation is required, where the resulting contractor is now other than small, the agency cannot count any new orders issued pursuant to the contract, from that point forward, towards its small business goals. This, GSA argued, meant that Millennium remained eligible for award; the only effect is that GSA now couldn’t count the task order award towards meeting its small business goals. GAO invited SBA to comment on the matter. SBA stated that 121.404(g)(2)(iii) does apply to task orders as well. But SBA said this interpretation didn’t control in this case, considering the circumstances. Siding with GSA, SBA explained 121.404(g)(4) is an applicable exception, as the underlying contract is a multiple award contract set aside for small businesses. This seems like an odd finding, considering 121.404(g)(4) doesn’t say anything about the eligibility of the awardee. GAO agreed, noting: The regulation at issue here is not a model of clarity. On the one hand, the result identified by section 121.404(g)(2)(iii) could apply here just as easily as the result outlined in section 121.404(g)(4). In attempting to reconcile the applicability of these two provisions, we note that the SBA has expressly identified a rule that would result in ineligibility of an entity under section 121.404(g)(2)(iii), but has not expressly revoked that rule under section 121.404(g)(4). On the other hand, while section 121.404(g)(4) is silent on a firm’s eligibility for award, its express indication–that new orders issued under a multiple award contract to firms that are other than small cannot count against an agency’s small business contracting goals–implies (or seems to assume) that the agency is permitted to issue task orders to firms when the procurement is set aside for small businesses. In short, because 121.404(g)(4) says that new orders issued cannot count towards the agency’s small business goals, this must imply the agency can still order those issues. GAO continued: “In our view, the protester’s contention that section 124.404(g)(4) only repeats the rules already set forth in section 121.404(g)(2)(iii) would render much of the language in (g)(4) surplusage.” (Surplusage is one of those odd lawyer terms which basically means that rules should be interpreted in a way that doesn’t leave extra unused provisions lying around with no purpose, and judges and the GAO equivalent of judges don’t like surplusage). GAO empathized with Odyssey, noting it was “not convinced that SBA’s interpretation is the only reasonable interpretation of the regulation at issue.” But, it would defer to SBA as SBA’s reading is also reasonable. After rejecting the other grounds for Odyssey’s protest, GAO dismissed the protest. So, for now, it appears that even if you are acquired within that 180 day time frame after offer, if it’s a task order under a multiple award contract, you’re off the hook, at least on size grounds. However, we agree with GAO that the regulation in question could use a little supplementing for clarity’s sake. This case is also a great reminder of the power an agency’s interpretation of a regulation can have on a decision. Had SBA agreed with Odyssey, things may have been completely different. 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 Small Business Being Acquired by a Large Business? For Multiple Award Contracts, the 180-Day Rule Doesn’t Apply to Task Orders, says GAO first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Welcome to Friday, SmallGovCon readers! Now that the weather is cooling off a little, we hope you’re able to enjoy the great outdoors a little more. However, before you head outside, maybe you’d like to take a few minutes to check out some articles we’ve selected for you about federal government contracting. We’d especially like to turn your attention to our first featured article about National PTAC Day coming up next week with a special shout-out to them for all the great work they do supporting small businesses. Other interesting news includes the remaining CIO-SP4 protests and how to prepare for a continuing resolution in government funding. Enjoy the articles and have a fantastic weekend! National PTAC Day is coming up next week APTACEight bid protests over CIO-SP4 solicitation yet to be resolved FedScoopThe DOD is seeking public comments on barriers facing small businesses in working with the agency Federal RegisterNow is the time for federal contractor to prepare for a continuing resolution Federal News NetworkOf 20 Construction of Facilities projects audited by NASA’s Office of Inspector General, “6 incurred significant cost overruns ranging from $2.2 million to $36.6 million and 16 of the projects are 3 months to more than 3 years behind their initial schedules.” Oversight.govThis fiscal year will likely end with a continuing resolution. How should contractors prepare? PSCGSA names Raylene Yung director of Tech Modernization Fund FedScoop20 years after 9/11, TSA officers renew calls for higher pay Federal News NetworkFormer DOD Subcontractor Sentenced to Federal Prison for Submitting False Claims For Hours Worked United States Department of JusticeSBA Announces National Small Business Week Virtual Summit Event Schedule for September 13-15 SBA.govData Rights Relevant to Weapon Systems in Air Force Special Operations Command RAND.org The post SmallGovCon Week in Review: September 6-10, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

NAICS codes are limited in what they can challenge, but can have a powerful effect on a procurement. A NAICS code appeal can challenge the size limit attached to a specific government procurement. This can level the playing field by limiting to smaller businesses, or expand the size of businesses that are able to compete. So, it’s good to know a NAICS code appeal works. 1. What is a NAICS Code? A NAICS code is a six digit code assigned to various industries under the North American Industry Classification System (NAICS), a standard used in classifying business establishments. The codes are assigned by the US Census Bureau for “business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.” The NAICS manual lays out the system for assigning NAICS codes. For our purposes, it’s important that the SBA assigns a different size standard to each NAICS code based on dollar number of receipts or number of employees. SBA publishes a table of all the size standards. Here’s an example. NAICS code 541511 is for Custom Computer Programming Services and has a size standard of $30 million per year. The NAICS manual describes this code as follows: “This U.S. industry comprises establishments primarily engaged in writing, modifying, testing, and supporting software to meet the needs of a particular customer.” So, if an agency assigns 541511 to a solicitation, then only contractors whose average receipts are under $30 million per year can bid on the procurement. 2. How are NAICS codes assigned? A contracting officer must must assign the proper NAICS code based on what best describes the principal purpose of the product or service being acquired in light of the industry descriptions in the NAICS Manual, the description in the solicitation, the relative value and importance of the components of the procurement making up the end item being procured, and the function of the goods or services being acquired. 3. When to challenge a NAICS code. These appeals must be filed within 10 calendar days after issuance of the solicitation or amendment to the solicitation affecting the NAICS code. This, of course, differs from the ordinary rule for protesting a defect in a solicitation. At the GAO and Court of Federal Claims, protests of other solicitation defects ordinarily are timely if filed before the due date for initial proposals. 4. How to challenge a NAICS code. A NAICS code appeal can be an extraordinarily powerful tool for a business to challenge whether a contracting officer assigned the correct NAICS code in setting aside a procurement. SBA’s regulations allow “any person adversely affected by a NAICS code designation” to challenge its designation. OHA evaluates NAICS code appeals primarily by comparing the solicitation’s statement of work to the NAICS code definitions in the Census Bureau’s NAICS Manual. The review of a NAICS code assignment is procedurally different from other types of OHA appeals in that OHA is directly reviewing the contracting officer’s action. For other types of appeals, such as size determinations or SDVOSB eligibility determinations, OHA is reviewing the SBA Area Office’s initial determination. The key to having a good NAICS appeal is to show that, based on clear examples from the solicitation’s scope of work and level of effort, the NAICS code assigned doesn’t match the main purpose of what the agency is purchasing. Look at the majority of work under the solicitation, as well as past examples of similar work (or possibly even the incumbent work) being procured under a different NAICS code. OHA processes NAICS code appeals before other matters and will issue decisions as soon as practicable. As a result of this expedited treatment, the NAICS code appeal process takes an average of 18 to 30 days to complete. 5. How successful are NAICS code challenges? Not that many contractors file NAICS codes appeals. But of those that do, and avoid procedural mistakes, they are quite successful. As noted in a GAO report, most NAICS Code appeals (57%) were dismissed for various reasons. It’s noteworthy that contractors only file about 20 NAICS code appeals annually. The reasons for dismissal are: not filing before the 10-day deadlinethe contracting officer cancelled the solicitationthe appeal was withdrawnthe contracting officer amended the NAICS codethe appellant was not authorized to file an appeal Counting just those NAICS code appeals decided on the merits, about 45% were granted. This is actually a fairly high success rate, especially given the appellant’s burden of proof. Statistically, then, a NAICS code appeal is likely to succeed almost half the time, provided there are no procedural defects. Final Thoughts There you have it, five key things to remember about NAICS codes appeals. They can be a powerful tool to alter the procurement landscape by contracting or expanding the size of businesses that can bid on the contract. But there are very short timelines for filing a NAICS code appeal, so if you see a problem with the initial NAICS code assigned to a solicitation, make sure you consider filing a NAICS code appeal early. 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 Five Things You Should Know: NAICS Code Appeals first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Like any other offeror, a joint venture must be registered in the System for Award Management. And, as one joint venture recently learned the hard way, if a JV is not registered in SAM by the award date, the missing registration could prove costly. The GAO’s bid protest decision in Continuity Global Solutions-Secure Me WLL Security, JV, B-419875 (Aug. 12, 2021), involved a State Department RFP for the provision of local guard services at the United States embassy in Bahrain. The RFP was issued under the procedures of FAR Part 15 (Contracting by Negotiation) and incorporated FAR 52.204-7 (System for Award Management). Award was to be made on a lowest-price, technically acceptable basis. The version of FAR 52.204-7 included in the RFP stated that “[b]y submission of an offer, the Offeror acknowledges the requirement that a prospective awardee shall be registered in the SAM database prior to award, during performance, and through final payment” under any contract awarded from the RFP. (FAR 52.204-7 has since been updated to also require SAM registration at the time the offer is submitted). Continuity Global Solutions-Secure Me WLL Security JV submitted the lowest-priced proposal and was evaluated as technically acceptable. CGS-SM was not registered in SAM, however, so the agency contacted the joint venture to inquire whether it would be registered in SAM before award. CGS-SM explained that it had “initiated the SAM registration process and expected the registration to become active within two weeks and prior to award.” Over the next several weeks, the agency checked SAM on four occasions. Each time, CGS-SM remained unregistered. After six weeks had passed, the agency awarded the contract to another offeror. CGS-SM filed a bid protest with GAO. It argued that the requirement to be registered in SAM was a “minor informality or irregularity” that the agency should have waived pursuant to FAR 14.405. The agency responded that FAR 14.405 “only applies in the context of FAR part 14 sealed bidding procedures and therefore is not applicable to the [FAR Part 15] negotiated procurement procedures used here.” The agency further contended that even if FAR 14.405 applied, it only required the agency to give the offeror the opportunity to cure a minor informality; it did not mandate that the informality be waived. The GAO agreed with the agency. It wrote that FAR 14.405 “is not applicable here” because the solicitation was issued under FAR Part 15. The GAO continued: The facts as alleged by the protester show that the agency gave the protester an opportunity to cure its defect of not being registered in SAM when it notifed the protester, on April 14, of its unregistered status and requested verification. Therefore, the protester’s allegations fail to establish anything improper with the agency’s decision, in accordance with FAR provision 52.204-7(d), to proceed with award to the next otherwise successful registered offeror when it found that the protester was not registered in SAM on the date of contract award. The GAO dismissed CGS-SM’s bid protest. As the CGS-SM case demonstrates, a SAM profile doesn’t pop up instantaneously after the process is initiated. Instead, it can take a matter of weeks for the profile to become active. And FAR 52.204-7(a)(4) defines “registered in SAM” to mean an active profile, not just a new profile in process. JVs are often established specifically to bid a particular opportunity. Sometimes the paperwork (or, these days, the pixel-work), such as SAM registration, isn’t appropriately prioritized, or sometimes, the procurement timeline itself is short. Either circumstance can leave JVs struggling to obtain active SAM profiles by the deadline to submit proposals, which–as I noted earlier–is required under the current version of FAR 52.204-7. Joint venture members should register in SAM as soon as possible to make sure there is enough time for the JV’s profile to go “active” before the proposal is due. 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 Reminder: Joint Ventures Must Be Registered in SAM first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Labor Day weekend, Readers! Here are 5 fun facts about Labor Day according to Google: -The first Labor Day holiday was celebrated on Tuesday, September 5, 1882, in New York City, in accordance with the plans of the Central Labor Union. The Central Labor Union held its second Labor Day holiday just a year later, on September 5, 1883. -By 1894, 23 more states had adopted the holiday, and on June 28, 1894, President Grover Cleveland signed a law making the first Monday in September of each year a national holiday. -Some records show that in 1882, Peter J. McGuire, general secretary of the Brotherhood of Carpenters and Joiners and a co-founder of the American Federation of Labor, suggested setting aside a day for a “general holiday for the laboring classes” to honor those “who from rude nature have delved and carved all the grandeur we behold.” -Recent research seems to support the contention that Matthew Maguire, later the secretary of Local 344 of the International Association of Machinists in Paterson, New Jersey, proposed the holiday in 1882 while serving as secretary of the Central Labor Union in New York. -According to the New Jersey Historical Society, after President Cleveland signed the law creating a national Labor Day. Have a great, relaxing, long weekend and here are some newsworthy articles in federal government contracting this week. SBA Awards Funding for Veteran Federal Procurement Entrepreneurship Training Program [SBA]The Goldilocks principle: Getting rapid contracting ‘just right’ [DefNews]Hicks says DOD will take ‘meaningful action’ to remove barriers for small contractors [FedScoop]Strong Growth Expected in Federal IT Spending [NatDefMag]Lawmaker to Propose Bill to Incentivize Industry Cybersecurity Cooperation Within Days [NextGov]Air Force Software Chief Provides Update on DOD’s Enterprise DevSecOps Initiative [NextGov]FASC has opportunity to bring supply chain efforts under its umbrella [FedNewsNet]Businessman Sentenced to 14 Months in Prison for Paying Bribes to Federal and D.C. Employees [DoJ]General Services Administration Acquisition Regulation (GSAR); Extending Federal Supply Schedule Orders Beyond the Contract Term [FedReg]GSA awards coworking space contract in bid to rethink federal office space [FedNewsNet]Department of Defense 5G lead Evans steps down [FedScoop]New Jersey Healthcare Staffing Company Pays $263K to 46 Workers at Veterans’ Medical Centers Following US Department of Labor Investigation [DoL]Obituary: GSA’s Rob Coen [FedNewsNet] The post SmallGovCon Week in Review: August 30-September 3, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

For many contracts, large businesses must establish and have the government approve a subcontracting plan that details the goals and efforts the large prime contractor will take to award subcontracts to various types of small businesses. Well, how does the government hold large businesses accountable for these goals? The FAR will soon have a final rule addressing good faith efforts to comply with a small business subcontracting plan. Back in late 2019, SBA updated its own rules on subcontracting plans to address. The SBA rules were intended to make it easier to hold large business prime contractors accountable for meeting the goals of their small business subcontracting plans. In line with the 2017 NDAA, SBA updated its rules found at 13 C.F.R. § 125.3(d) so that it will be a material breach of a contract or subcontract if a contractor with a subcontracting plan fails to comply in good faith with the requirement to submit reports and cooperate with agencies to determine subcontracting plan compliance. Now, the FAR has followed suit in a rule effective September 10, 2021. This will eliminate the inconsistencies between the FAR and SBA rules, which is always nice so both contractors and agencies are on the same page when it comes to subcontracting plans. Here’s a little background on the changes. Small business subcontracting plans are required from large prime contractors when a contract is expected to exceed $750,000 ($1.5 million for construction) and has subcontracting possibilities. These plans are required for the acquisition of commercial items and COTS items. FAR 19.704 lists what is required in these plans. This includes goals for subcontracting efforts to provide fair opportunities to compete for subcontracts for various types of small business concerns, including small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. Failure to make a good faith effort to comply with the plan can result in liquidated damages under FAR 52.219-16. There are two main changes in the rule. First, all indirect costs, with certain exceptions, are included in commercial plans and summary subcontract report (SSRs). Second, revised FAR 19.705-7 now has examples of a good faith efforts to comply with a subcontracting plan, and examples of a failure to make a good faith effort. Here are some takeaways from the implementation of this rule. Material Breach. The comments to the rule make clear that “a failure to make a good faith effort to comply with a subcontracting plan is a material breach, sufficient for the assessment of liquidated damages, and also for other remedies the Government may have.” So, this is not something to be taken lightly by prime contractors operating under a subcontracting plan. Key Good Faith Actions. The rule provides examples of actions that indicated good faith efforts to comply with the subcontracting plan. Here are a few of those: Market research to identify small businesses “through all reasonable means, such as searching SAM, posting notices or solicitations on SBA’s SUBNet, participating in business matchmaking events, and attending preproposal conferences.”“Assisting interested small businesses in obtaining bonding, lines of credit, required insurance, necessary equipment, supplies, materials, or services.”“Participating in a formal mentor-protégé program with one or more small business protégés.” Like the SBA rule, the FAR rule now provides examples of actions that could be considered “failure to make a good faith effort to comply with a subcontracting plan” at FAR 19.705-7. Contractors should take a close look at these examples. But here are some highlights: Turning in subcontracting plan reports late.Not paying small business subcontractors “terms of the contract” with them.Not having a designated employee to monitor the subcontracting plan.Failure to maintain records or procedures to show compliance with subcontracting plan requirements.Not doing market research (such as outreach, industry days, and database searches) to identify small business subcontractors.“If a contractor does not either correct substantiated findings or participate in subcontracting plan management training offered by the Government, it could be perceived by the contracting officer as a failure to make a good faith effort.” But the rule is clear that agencies need to look at “the totality of the contractor’s actions” and, interestingly, mere failure “to meet its subcontracting goals does not, in and of itself, constitute a failure to make a good faith effort.” And there is an example of what may constitute a valid explanation: if there are no available small business sources for certain types of work. Rebuttal. Note that there is an opportunity for a contractor to respond to an accusation of failure to make good faith efforts. In the rule on liquidated damages, it states: “Before the Contracting Officer makes a final decision that the Contractor has failed to make such good faith effort, the Contracting Officer shall give the Contractor written notice specifying the failure and permitting the Contractor to demonstrate what good faith efforts have been made and to discuss the matter.” As in most things in dealing with government agencies (and other aspects of life), failure to respond can be taken as an admission of fault. This new rule is important for both large prime contractors and subcontractors. Prime contractors need to make sure they are making these good faith efforts to comply and provide actual opportunities for subcontractors. By that same token, it’s good for small business subcontractors to know about these rules as well and take advantage of these opportunities. Now that the FAR has been updated, there’s no excuse for large prime contractors not to comply and no excuse for agencies not to enforce these rules. 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 for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post FAR Update: Good Faith in Small Business Subcontracting first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Hello and happy Friday to all of our readers. It’s an exciting and busy time in Lawrence, Kansas with all of the college students flowing back into our city. It was also another busy week in federal government contracting. Enjoy the articles that we have put together for you. Have a great weekend and stay cool. GSA hits 11 years of top marks on small business procurement scorecard [FedNewsNet]Army Issues Solicitation for $10B IT Enterprise Solutions-4 Hardware Contract Vehicle [GovConWire]Death of the JEDI: Pentagon Learning from Terminated Cloud Initiative [NatDefMag]Cyber experts seek clarity on NIST supply chain framework [Fedscoop]House Bill Aims to Bridge Acquisition ‘Valley of Death’ In Race to Counter China [NextGov]Florida Man Pleads Guilty To Procurement Fraud [DoJ]With Afghan government falling, Pentagon deciding what to do with money for security forces [FedNewsNet]What another continuing resolution could mean for contractors in 2022 [FedNewsNet]Industry Groups Work to Help an Unknown Number of Contractors Get Out of Afghanistan [GovExec]FACT SHEET: The Build Back Better Agenda Will Provide Greater Tax Fairness for Small Businesses [Whitehouse]SBA Administrator Isabella Casillas Guzman Statement on meeting with President Biden, Cabinet Officials, Private Sector Leaders to Discuss Strengthening Cybersecurity for America’s Small Business Economy [SBA]GAO report identifies 10 government agencies researching facial recognition [Fedscoop]Kendall merges Air Force acquisition offices to support Space Force [FedScoop]Maryland Subcontractor Pays $531K in Back Wages to 45 Ironworkers After US Department of Labor Investigation [DoL]AFRL’s Entrepreneur Opportunity Program turns people, ideas into new private sector businesses [USAF] The post SmallGovCon Week in Review: August 23-27, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

SBA’s requirement that 8(a) participants maintain a bona fide place of business in the geographic location of any 8(a) construction contracts has been an encumbrance for many federal contractors–even prior to the global pandemic. But fortunately, SBA has recently recognized the additional challenges that COVID-19 has caused for 8(a) contractors seeking to comply with this rule. And as such, SBA has suspended this requirement in an effort to help our nation’s small disadvantaged businesses during these arduous times. Under SBA’s current 8(a) Business Development Program regulations, an 8(a) participant must have “a bona fide place of business in the applicable geographic area” to be awarded a contract “if the procurement is for construction[.]” SBA defines “bona fide place of business” as “a location where a Participant regularly maintains an office which employs at least one full-time individual within the appropriate geographical boundary.” You can read more about SBA’s bona fide place of business requirements here. On August 25, 2021, SBA “announced a moratorium on the requirement that participants in SBA’s 8(a) Business Development Program must establish a bona fide place of business in a specific geographic area in order to be awarded any construction contract through the 8(a) Program due to the ongoing challenges of COVID-19.” SBA’s suspension of this requirement is effective August 25 “and applies to all 8(a) construction contracts offered to the 8(a) Program between August 25, 2021, and September 30, 2022.” While the bona fide place of business requirement is suspended, 8(a) participants will no longer be required to establish or have a bona fide place of business in any specific geographic location in order to receive seeking 8(a) construction contracts on a sole source or competitive basis. The Associate Administrator for SBA’s Office of Government Contracting and Business Development, Bibi Hidalgo, explained: The SBA is committed to finding innovative ways to assist small businesses, particularly small disadvantaged businesses that have been historically underserved[.] This change to the SBA’s 8(a) program — our flagship contracting program born out of the Civil Rights movement — will help small businesses continue to drive our economic recovery and position themselves at the forefront of our nation’s reimagined economy. The suspension of this cumbersome requirement–even temporarily–will certainly make it easier for many 8(a) contractors to meet the eligibility requirements for 8(a) construction contracts. With increased opportunities to compete for these awards, we can only hope to see further development of our nation’s small disadvantaged businesses. SBA has also encouraged any 8(a) participants with questions about this moratorium to email or reach out to their local servicing District Office or to visit the 8(a) Business Development Program website. The post SBA Suspends Bona Fide Place of Business Requirement for 8(a) Construction Contracts first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Congress is at work on the 2022 National Defense Authorization Act–major annual legislation that often includes significant changes to the laws impacting government contractors. This year’s NDAA promises to be no different. Among potential changes: the House Subcommittee on Cyber, Innovative Technologies, and Information Systems has proposed to establish a pilot program to help transition more Phase II SBIR/STTR awardees to Phase III. The Subcommittee proposes to add a Section 822 to the upcoming 2022 NDAA. Section 822 would be named “Designating Certain SBIR and STTR Programs as Entrepreneurial Innovation Projects.” The Subcommittee explains its proposal as follows: This section would direct the Secretaries of Defense and the Secretaries of the military departments to each carry out a pilot program to more effectively transition Small Business Innovation Research programs and Small Business Technology Transfer programs into Phase III. This section would direct the Secretaries to each designate five completed Phase II programs to include in the next Future Years Defense Program as Entrepreneurial Innovation Programs, and to consider them as part of the Department of Defense’s planning, programming, budgeting and executive process. The Secretary of Defense would be responsible for submitting a report annually to the congessional defense committees on the programs selected for the duration of the 5-year pilot. Achieving a Phase III award is, of course, the goal of every SBIR and STTR awardee–but for many Phase I and II awardees, Phase III can prove elusive. If it becomes part of the final NDAA, this pilot program may help a few more awardees reach Phase III–and, as a “pilot,” could serve as the genesis of a broader initiative if it is successful. The House Armed Services Committee is scheduled to consider this proposal on September 1. We will keep you posted on this proposal and other relevant portions of the 2022 NDAA as Congress’s work progresses. 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 House Subcommittee Proposes New SBIR/STTR Phase III Transition Pilot Program first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Given the amount of competition in most solicitations, the ability of a contractor to receive feedback on its proposal can provide valuable information to help the contractor hone its response to best address the key factors sought by the agency in its solicitation. On those rare occasions when an agency reopens its solicitation and provides feedback to the individual offeror’s initial proposal, the contractor is provided such an opportunity–except when the contractor gets left out of the feedback party. In a recent decision, an agency failed to disclose a flaw it first identified in its reevaluation of a contractor’s unchanged proposal after a corrective action. When the proposals were evaluated after the corrective action, the contractor ended up losing an award for which they were previously selected. As a result, the contractor filed a protest primarily asserting that, because the agency failed to provide feedback on its proposal, the agency’s evaluation of the proposal was unreasonable. GAO sustained the protest. The case is Sunglim Engineering & Construction Company, Ltd., B-419067.3 (August 6, 2021). In March 2020, the Department of the Army, Corps of Engineers issued a request for proposals, to provide paving and related construction services at airfields in South Korea. The agency received proposals from 10 offerors, including Sunglim as well as Yibon Construction Co., Ltd. The agency determined that the management plan included in each offeror’s proposal was the most important factor to consider. In its evaluation, the agency excluded several proposals from consideration, including Yibon’s, because it failed to comply with certain solicitation requirements. In evaluating Sunglim’s proposal the agency identified several strengths and no weaknesses with respect to the key factor, the management plan. Based upon this evaluation, the agency assigned Sunglim’s proposal the highest rating, “outstanding” and ultimately selected Sunglim’s proposal for award. Yibon filed a protest of the award with GAO, challenging the agency’s exclusion of its proposal from the competition. In response to Yibon’s protest, the agency decided to take corrective action on the basis that “the solicitation’s instructions might be confusing.” The agency subsequently suspended performance of the contract awarded to Sunglim. The agency also issued a solicitation amendment that clarified the solicitation requirements and, among other items, requested revised proposals from all of the original offerors. Along with the amendment, the agency sent discussion questions to some offerors, which included weaknesses that the agency identified in evaluating their proposals. The agency’s discussion letter to Sunglim did not provide information as to any aspect of the proposal that it could strengthen because the agency’s evaluation of Sunglim’s initial proposal did not identify any such weaknesses. Both Yibon and Sunglim submitted revised proposals; Sunglim’s was not materially changed from its initial proposal. A new agency evaluation board, in reviewing Sunglim’s revised proposal, identified multiple strengths, but also identified a weakness in the management plan proposed. Because of this weakness, Sunglim received a rating of “good” instead of the “outstanding” rating the agency assigned to the initial proposal. In evaluating Yibon’s revised proposal the evaluation board identified several strengths and no weaknesses under its proposed management plan and assigned a rating of “outstanding.” Based on the evaluation of Yibon’s management plan, and because of its lower price coefficient, the agency selected Yibon’s proposal for award. In other words, Yibon had now replaced Sunglim as awardee. Sunglim subsequently filed a protest challenging the agency’s evaluation of its revised proposal. Sunglim argued that the relevant part of its proposal submitted following the agency’s corrective action had not materially changed from its initial proposal and the agency failed to conduct meaningful discussions when it issued the amendment to the solicitation. In response, the agency acknowledged that the evaluated weakness in Sunglim’s revised proposal under the most important factor, management plan, “resulted in Sunglim’s management plan rating declining from Outstanding to Good.” However, the agency asserted that it could not have identified this weakness to Sunglim in the discussion letters issued because the initial evaluation identified no significant weaknesses or deficiencies. Since the weakness did not exist in the record there were no discussion items to provide to Sunglim. GAO disagreed with the agency and sustained Sunglim’s protest. GAO in its ruling expressed that “discussions with offerors must be meaningful.” In explaining meaningful GAO wrote “[a]n agency must point out weaknesses, excesses or deficiencies in a proposal that require correction or amplification in order for the offeror to have a reasonable chance for award. At a minimum, the agency must discuss all deficiencies, significant weaknesses and adverse past performance information to which the offeror has not had an opportunity to respond.” In this regard, when an agency seeks revised proposals, its reevaluation may identify flaws in a materially-unchanged proposal that the agency would have been required to discuss with the offeror had the flaws been identified when the proposal was initially evaluated. In that situation, the agency must reopen discussions in order to disclose its concerns, thereby giving all offerors similar opportunities to revise their proposals.” GAO concluded that the weakness the agency identified in Sunglim’s final proposal was under the most important evaluation factor and the factor that ultimately led to the agency awarding the contract to Yibon. Therefore, the flaws the agency identified in Sunglim’s proposal were a significant factor in Sunglim losing the award. As a result, GAO determined that the agency was obligated to reopen discussions with Sunglim to disclose the newly-identified, pre-existing weakness. Because the agency did not reopen discussions, the agency failed to conduct meaningful discussions with Sunglim. GAO sustained Sunglim’s protest and recommended that the agency reopen the procurement, conduct appropriate discussions with all offerors whose proposals were in the competitive range, request revised proposals, and make a new source selection decision. In this matter, the agency arguably could not provide a discussion of Sunglim’s weaknesses which were not originally identified. However, as GAO agreed, the agency should have disclosed the flaws to Sunglim once they were discovered. Sunglim, in effect, was punished because it originally provided a good proposal. GAO’s decision supports a basic sense of fairness in procurements; that all offerors have the same information and same opportunities in the solicitation process. This same principle should hold true in cases where an agency reopens a solicitation, seeks revised proposals and provides discussion items to the prior offerors. The underlying purpose of an agency issuing discussion letters is to make offerors aware of weaknesses identified in their proposals with the ultimate goal of getting the best response. 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: Meaningful Discussions Must Disclose Proposal Weaknesses Discovered After a Corrective Action first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

It has been a long time coming, but the Department of Defense, in conjunction with the GSA and NASA, are finally issuing a final rule amending the FAR guidance regarding limitations on subcontracting. In this post, we are going to explore just what these changes are and what they mean for government contractors such as yourself. The hope is this brief summary and analysis will provide you some insight as to just what the new rules do. If you can believe it, this latest rule change is based on regulatory changes made by the SBA all the way back in May of 2016 to implement statutory requirements from the National Defense Authorization Act for Fiscal Year 2013! In fairness, the DoD, GSA, and NASA did propose this rule back in December 2018, although we wonder why it took another two and a half years to reach this point. In any event, this new rule will come into effect on September 10, 2021. We did discuss this rule earlier, back in December 2018. As we noted then, “The substance of the proposed FAR rule isn’t terribly surprising, nor should it be. Substantively, the rule largely conforms with the SBA’s rule codified in 13 C.F.R. 125.6. Indeed, in its commentary discussing the proposed rule, the FAR Council repeatedly mentions the intent to align the FAR with the SBA’s regulation.” With this new rule, FAR clause 52.219-14, Limitations on Subcontracting, will have the same language as the SBA rule stating that subcontracts to similarly situated entities will not count against the limit on subcontracting. No longer will that clause simply state, for example, that for services, “[a]t least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the concern.” Now it will state, for services, that the prime “will not pay more than 50 percent of the amount paid by the Government for contract performance to subcontractors that are not similarly situated entities.” In other words, the calculation language for the FAR limitation on subcontracting will now match the SBA rule. Additionally, FAR 19.001 is changing. The rule finally provides a definition for “similarly situated entities.” Although there was a general understanding of what made an entity “similarly situated”, it lacked an actual definition. The rule will state: “Similarly situated entity means a first-tier subcontractor, including an independent contractor, that— (1) Has the same small business program status as that which qualified the prime contractor for the award (e.g., for a small business set-aside contract, any small business concern, without regard to socioeconomic status); and (2) Is considered small for the size standard under the NAICS code the prime contractor assigned to the subcontract.” In summary, an entity is similarly situated if it has the same sort of SBA classification as the prime contractor and is a small business under the NAICS code of the subcontract. If the prime contractor is an 8(a) certified company and the subcontract is for, let’s say, roofing contractor services, then the subcontractor will have to be an 8(a)-certified company with average annual receipts of less than $16.5 million (assuming that is the size standard applicable to the subcontract). If the contractor is simply a small business with no further statuses, then the subcontractor only needs to be a small business with less than $16.5 million in average annual receipts (or whatever “NAICS code the prime contractor assigned to the subcontract”). In other words, it is unlikely much will be changed in terms of how SBA will treat these matters, but it cements the long-existing standards into the FAR, which provides some clarity. For FAR 19.505, on limitations on subcontracting alone, we now have clarification that the 50 percent limitation only applies to the services part of a mixed contract if the contract has a services NAICS code, and only applies to the supplies part of a mixed contract if the contract has a supplies NAICS code. Additionally, the regulation now makes it clear that if similarly situated subcontractors use their own subcontractors, the work the latter is counted towards the limitation on subcontractors, without exception. In addition, for both the limitations on subcontracting and the nonmanufacturer rule, they are being extended to apply to contracts awarded using the HUBZone price evaluation preference. Additionally, the rules in this regulation are extended to cover set-asides for federal supply schedules for small businesses under FAR 8.405-5 and indefinite-delivery contract orders outside of the fair opportunity process under FAR 16.505. The final rule reflects the clarification that the nonmanufacturer rule and the limitations on subcontracting apply to set-asides and sole source awards made pursuant to subparts 19.8, 19.13, 19.14, and 19.15 of FAR, as well as awards using the HUBZone price evaluation preference pursuant to subpart 19.13, regardless of dollar value. In any event, we hope this information gives you some sense of what these changes mean. That said, as always, this doesn’t constitute legal advice. If you have any specific concerns regarding compliance with these new rules or how they specifically might apply in a given situation, you should consult an attorney. 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 FAR Final Rule on Limitations on Subcontracting first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

A quick update on CIO-SP4. NITAAC has issued amendment number 11 to CIO-SP4. It moves the deadline to August 27, and takes out some confusing language about small business teams. Specifically, it has removed the language saying: “The small business prime must demonstrate how they will comply with the LOS by including in their Small Business Teaming Agreement the specific level of effort and how each will ensure compliance with 52.219-14.” That is now deleted. That is the only change of note from Amendment 11. As it was a confusing provision and had been vexing many small business teams, it’s good that NITAAC took it out. But did they have to wait until the last possible moment? 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 CIO-SP4 Amendment 11 Removes a Small Business Requirement first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday to all of our SmallGovCon readers and we hope you had a great week! This week saw some interesting federal contracting developments, such as several announcements from the SBA including an announcement to increase the amount of federal contracting dollars that go to small, disadvantaged businesses as well as the appointment of key Small Business Administration staff. Jay Bonci was also sworn in as the Air Force CTO, this week. Read on for other news in federal government contracting. SBA sees Biden executive orders as opportunity to increase equity in small business contracts [FedNewsNet]GSA seeks fresh expertise to help improve transparency around IT spending [FedScoop]GSA MAS Refresh #7 Scheduled to Drop in August 2021 [Linkedin]US Department of Labor Recovers $1.7M in Back Wages, Fringe Benefits For 81 Employees Wrongly Classified by Defense Contractor in 21 States [DoL]$1M bribery scheme paid for Fort Bragg employee’s BMW, feds say. Now he faces prison. [CharlotteObserver]U.S. Small Business Administration Announces Key Staff [SBA]Jay Bonci sworn in as Air Force CTO [FedScoop]In Less Than Two Weeks, Paycheck Protection Program Direct Borrower Forgiveness Portal Surpasses Expectations, Accepts More Than 340K Submissions [SBA]U.S. Defense Contractor and Employees Sentenced for Procurement Fraud Scheme [DoJ]SBA Administrator Guzman Celebrates Startup Day Across America [SBA] The post SmallGovCon Week in Review: August 15-20, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The number of small businesses receiving government contracts dropped yet again in Fiscal Year 2020–and the four-year decline is 12.7%. In its FY 2020 goaling scorecard, the SBA reported that 45,661 distinct small businesses received contracts in the top 100 NAICS codes. The previous fiscal year, 46,661 distinct small businesses received contracts. Four years ago, when SBA first started including this statistic in its annual reports, the number stood at 51,866. Clearly, the numbers are going in the wrong direction. The latest data is just the latest bad news in a troubling downward trend in the number of small primes being awarded government contracts. In 2019, for instance, a Senate Committee reported that the number of small prime awardees had declined 32 percent between Fiscal Years 2009 and 2018. And in an 2018 report, the blue-ribbon Section 809 Panel wrote that at DoD, the number of small awardees had dropped a shocking 70% since 2011. (After identifying this major problem, the Section 809 Panel then proposed to do away with small business set-asides, which wouldn’t exactly have helped matters). To me, this continued decline in the number of small business awardees is a crisis. But the government keeps receiving “A” grades for its small business contracting achievements, including in SBA’s most recent scorecard report! How can this be? Simply put: it’s the rules of the game. The SBA’s grades are based on a formula, and that formula is tilted very strongly toward dollars awarded to small businesses, with much less emphasis placed on the number of small businesses receiving those dollars. The formula calls for 50% of SBA’s grade to be based on the prime contract dollars awarded to small businesses, with 20% of the grade based on subcontracting dollars. In contrast, only about 10% of the government’s grade is related to the number of small businesses receiving prime contract awards. In other words, under the SBA’s formula, dollars are seven times more important than the number of distinct small businesses awarded contracts. (The remaining 20% of the formula involves requirements for the agencies’ Offices of Small and Disadvantaged Business Utilization). On top of that, the scoring for the “distinct number” category is extremely generous, with essentially no way for an agency to fail no matter how far the number of awardee drops. Under the formula, a year-to-year “no change” in the numbers earns a nice, round “1.” A decrease of up to five percent is scored–wait for it–“0.9.” Yep, an agency can lose 4.9% of its small business awardees and suffer only a 0.1 score drop. Even a decrease of “10% of more” generates a score of “0.7.” There is no lower score possible, even if an agency loses 100% of its small business awardees. Realistically, you can’t expect government procurement officials to care a whole heck of a lot about a metric that affects only 10% of the overall grade, particularly when a decrease in small business awardees barely moves the scoring needle anyway. These folks have a lot on their plates; many of them are going to be quite happy to take their dollars-based “A” grades and call it a day, regardless of how many distinct small businesses received contracts. Where will the small business contracting landscape be in five years? Ten? Twenty? If the SBA scorecard remains focused on dollars and initiatives like category management remain in place, I think it’s a foregone conclusion that the numbers will continue to drop. It’s not hard (though a little terrifying) to predict a future in which 10,000 or fewer companies receive almost all of the government’s small business contracts. Not everyone will think that’s a bad thing. Small businesses will still be getting contracts, after all–even if it’s the same handful of smalls over and over again. But I think that the number of small businesses receiving federal contracts is every bit as important as the dollars. The federal government didn’t create the small business preferences on a whim. The small business programs exist to help grow a broad industrial base and give mom-and-pops on every Main Street in the country the chance to sell their goods and services to Uncle Sam. By focusing almost exclusively on the dollars and awarding “A” grades in the face of sharp declines in small business participation in the federal marketplace, the SBA’s goaling scorecards seem to ensure that the downward trend continues. Don’t get me wrong–the goaling scorecard is an excellent idea in theory and can help hold federal agencies’ feet to the fire when it comes to small business contracting. But something is wrong with the SBA scorecard when the government can run around touting its “A” grades like a high school valedictorian while the number of small businesses actually selling goods and services to Uncle Sam continues to plummet precipitously. If it’s wonky to say that we need to reform the way that the SBA scorecard grades are calculated, then count me as wonky. Because if the government keeps focusing almost exclusively on the dollars, mom and pop may not have much of a future in federal government contracting. 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 here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Number of Small Businesses Awarded Federal Government Contracts Has Dropped 12.7% in Four Years first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Amendment 10 clarifies obligated dollar values, how to have subcontracted federal work counted, restrictions to contractor participation in task areas, evaluation of contractor program manager(s), establishing a static date from which to calculate the three-year look-back for corporate experience relevance, and evaluation of labor rates. Needless to say, there is a lot of things packed into Amendment 10, and here’s the kicker, proposals are still due August 20th! With little time to digest, let alone alter, proposals in line with Amendment 10, NITAAC has left little room for offerors to catch up with the changes. Catch up on my Amendment 7, Amendment 8, and Amendment 9 posts before digging in here. By the time this is over, we may issue an anthology of CIO-SP4 amendment greatest hits. Before we get to the sure-fire best-selling anthology, we have to deal with the elephant in the room. At 6:12 PM Eastern on August 16, NIH hit double-digit amendments for CIO-SP4. What makes this one different, is it was not accompanied by any proposal deadline delay. Instead, offerors are left at the brink to digest 182 total pages in less than 72 hours. Given the timeline, let’s get to the details. Obligated Funds Clarification. Finally, we have clarification. Much as we thought, obligated means “funded.” This means exercised option years, and funded orders. For example, those with a 5-year contract with a total contract value of $10 million cannot automatically pencil in $10 million. The key here, is where the contractor can only claim the exercised option years. Let’s say the agency has picked up the first option year, so total there is the base-year plus one. The total obligated value is $4 million out of the total $10 million. When calculating the obligated funds, the takeaway is to only include “funded” amounts. Subcontracted Federal Work. In Amendment 9, we saw NIH soften its stance, allowing for subcontracted experience to count toward experience metrics. However, for this experience to count, the proposal must include BOTH the subcontract and prime contract number. In our experience, most subcontracts don’t have numbers. Keep this in mind, and include both numbers, if possible, in your proposal. Contract Program Managers. “Offerors that propose a Contract Program Manager with a proven track record of managing programs similar to CIO-SP4 in scope and magnitude will be evaluated more favorably.” The plan of action for this person is likely not known at this stage. However, for businesses who can afford to engage such a person at this late stage, it appears this will score unknown brownie points with NIH. Past Experience Examples. Amendment 10 makes a welcome change to past performance examples. Previously, the three-year lookback was from the date proposals were due. We are now nearly three months from this originally envisioned due date. We can rejoice this requirement now has a static date, May 25, 2021. This is the date originally proposals were due, which makes sense. I have given NIH a lot of flak, but this is a common sense change and deserves applause. Evaluation of Labor Rates. NIH has now given itself an out when it comes to labor rates. NIH can now line-item veto unrealistic or unreasonable labor rates. This keeps such rates out of the resulting contract. It does appear this could increase the chances of losing out on an award due to perceived unrealistic pricing. This gives additional protest grounds as well. Responsibility Determinations. These determinations are made on a pass/fail basis, which seems redundant, but NIH has clarified this point. Removal of FAR 52.207-6. NIH has apparently scrubbed all mention of this FAR clause from CIO-SP4. This is odd, considering FAR 52.207-6 has been included up until now. FAR 7.107-6 requires this provision for multiple-award contracts above the substantial bundling threshold. CIO-SP4 far exceeds this threshold, but NIH may be saying that it is not engaging in bundling as part of this solicitation, as it is a re-up of CIO-SP3, not combining other procurements. It is unclear the rationale for including this FAR clause for months, only to drop it at the last second, but here we are. Seemingly, most bundling would come at the task order level, but that has yet to be seen. The lack of rationale or explanation could leave more avenues for protesting solicitation terms. The takeaway from Amendment 10, much like previous amendments, is that CIO-SP4 has some major ambiguous provisions. Unlike previous amendments, this one was not accompanied by a delay in the proposal due date. For CIO-SP4 to still be undergoing major substantive changes this late in the procurement process confirms that NITAAC did not have this solicitation ready for prime time. We are still waiting to see if NITAAC may take the drastic step of pulling back CIO-SP4 until all the major issues are ironed out. 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 CIO-SP4 Amendment 10: More Changes and No Delay first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

As federal contractors begin to become engaged in multiple programs for a particular agency, the potential for the firm to encounter a situation where it finds itself involved in an organizational conflict of interest (OCI) may increase. This is particularly true with respect to “impaired objectivity” OCI, which is when a firm’s ability to render impartial advice to the government is or might be undermined by the firm’s competing interests. These OCIs often arise in service contracts where the contractor is placed in a position of evaluating its own performance on other contracts. In a recent case, GAO found that an agency’s award of a contract created an impermissible impaired objectivity OCI for a contractor from two different perspectives for services that the contractor provided in the capacity as both a prime and subcontractor for an agency. The case is Steel Point Solutions, LLC B-419709,B-419709.2 (July 07, 2021). Steel Point Solutions, LLC, of Calverton, Maryland, protested the award of a contract to Deloitte Consulting, LLP, of Arlington, Virginia, under an RFP issued by the National Geospatial-Intelligence Agency (NGA). The RFP was for an award of a contract to design, build, and operate a corporate automation implementation center (CAIC). The agency received several proposals and, although Steel Point submitted a superior technical proposal, the agency ultimately awarded the CAIC contract to Deloitte. After being advised of the agency’s decision and receiving a debriefing from the agency, Steel Point filed a protest. Steel Point argued that Deloitte had three other contracts with the agency that created an impermissible impaired objectivity OCI when considered in light of the award of the CAIC contract. The three contracts Steel Point identified were Deloitte’s cybersecurity risk management and assessment (CRMA) contract, Deloitte’s human resource management contract and a contract performed through various task orders issued under the agency’s contracting program where Deloitte served as a subcontractor. Steel Point maintains that the OCIs created by these contracts were impermissible and should have resulted in the agency concluding that Deloitte was ineligible for award of the CAIC. In making its determination, GAO recognized that an impaired objectivity OCI may exist in two possible situations. The first situation is where a firm may be called upon to evaluate the work it has performed under another contract, and the other is a situation where a firm is called upon to perform analysis and make recommendations regarding products manufactured by it or by a competitor. The main concern to evaluate is whether a firm is in a position to make judgments or recommendations that would have the effect of directly influencing its own well-being. GAO agreed that, in this matter, Deloitte had a potential impaired objectivity OCI with respect to one of the task orders and also with the CRMA contract when either of the contracts are performed together with the CAIC contract. With respect to the task order, Deloitte served as a subcontractor and in this role was tasked with providing support to the agency’s IT Portfolio and Resources Integration Division in making investment and divestment decisions regarding the agency’s IT resources. Under the CAIC contract, Deloitte was required to recommend, design, deploy, monitor and maintain IT products that the agency would ultimately purchase from Deloitte. As a result, Deloitte had influence over decisions relating to investments in IT products under the task order and, in its role under the CAIC contract, was in a position to recommend that the NGA purchase IT products which Deloitte would in turn sell. The contracting officer for the CAIC actually considered whether performance of the task order and the CAIC contract would give rise to an impaired objectivity OCI on the part of Deloitte. The prime contractor for the task order even provided the contracting officer a mitigation strategy that would require it to implement a firewall in the event that Deloitte was faced with an OCI situation. The contracting officer also indicated that, given the structure of the contracts, Deloitte would not evaluate its work under the CAIC contract in connection with performing the task order, and conversely, it would not be evaluating its work under task order in performing the CAIC contract. On this basis, the contracting officer concluded that Deloitte did not have an impaired objectivity OCI. However, GAO found no evidence that such a firewall had, in fact, been implemented. GAO also found nothing in the record to show that the contracting officer ever considered whether Deloitte’s performance under the task order presented the second type of impaired objectivity OCI, a situation where Deloitte would be required to perform analysis and then, from that analysis, make recommendations regarding products that it might manufacture and sell to the agency. GAO determined that the confluence of the CAIC contract and the task order amounted to a textbook example of a situation where Deloitte was in a position to make judgments or recommendations that would have the effect of directly influencing its own well-being. GAO found that the agency failed to adequately consider the question of impaired objectivity OCI, especially because there was no evidence that the prime contractor implemented a firewall under the task order as it said it would. With respect to the CRMA contract, Deloitte was involved in reviewing, assessing and approving the agency’s information systems. Deloitte recognized that performance under both the CRMA contract and the CAIC contract presented a potential OCI because it could be in the position of having to review any request for the purchase of products furnished under the CAIC contract as part of its responsibilities under the CRMA contract. Although Deloitte was aware of the potential OCI in performing both contracts, it did not submit a mitigation plan with its proposal for the CAIC contract. Instead, Deloitte included only the “sample” mitigation plan that was provided to offerors with the solicitation. The agency did not perform a review of potential OCIs before awarding the CAIC contract to Deloitte and the contracting officer only decided to investigate the matter after Steel Point filed its protest. The contracting officer recognized that performance of the two contracts together could present an impaired objectivity OCI but concluded that Deloitte could recuse itself from performing under the CRMA contract in those instances where it may be called on to review its work under the CAIC contract. In reaching this conclusion, the contracting officer relied on language found in a portion of Deloitte’s prior proposal submitted in response to the CRMA solicitation that provided Deloitte would recuse itself in the event of a conflict. GAO concluded that Deloitte also had an impaired objectivity OCI from the award of both the CRMA and CAIC contracts and expressed several concerns in the agency’s review. First, GAO discovered no evidence that a mitigation plan was ever actually included in the CRMA contract awarded to Deloitte. In addition, GAO also found no evidence to show that Deloitte made a specific commitment under the CRMA contract to recuse itself from reviewing any activities that may be performed under the CAIC contract. Also, Deloitte’s CRMA proposal contained a separate commitment on the part of Deloitte not to pursue other contracting opportunities, such as the CAIC contract, involving NGA systems development activities. GAO found that Deloitte’s pursuit of the CAIC contract was inconsistent with this representation. In sustaining Steel Point’s protest with respect to two of the contracts Steel Pointe identified as causing a potential OCI, GAO determined that while the agency gave some consideration to certain aspects of potential OCIs under those relationships, there were remaining concerns that were simply never considered or addressed by the agency in its analysis of each of the situations. The takeaway from this case is that when a contractor has multiple contracts with an agency, the potential for an impaired objectivity OCI may come from analysis of different situations from the same relationships. This is important from the perspective of the firm awarded multiple contracts with a particular agency, as it should be proactive in taking steps to mitigate potential conflicts. This would include making sure that any mitigation plan is included in the award contract or would otherwise be recognized in a protest. From the standpoint of an unsuccessful bidder, this case demonstrates that when a firm suspects the award of a contract potentially causes an OCI, it may broaden its inquiry in a debriefing to possibly discover different types of OCIs from the same situation. This case demonstrates that the potential for an OCI may not occur from just the evident situation where a contractor may be called upon to review its own work. When such a firm suspects the award of a contract potentially causes an OCI for the winning bidder, the firm may broaden its inquiry in a debriefing to gain information that may reveal other aspects of the winning firm’s relationship that put it in a position to make judgments or recommendations that would have the effect of directly influencing its own well-being. 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 here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post GAO: Multiple Contracts With Single Agency May Increase Conflict Risk first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday the 13th, Readers! In doing research on the origins of why Friday the 13th became an ominous day on the calendar, I found a lot of theories. Dr. Simon Bronner, a professor of American studies and folklore at Pennsylvania State University says that Friday the 13th is just a convenient milestone for people who are looking to trace bad luck to a certain cause—but there’s nothing special about the date itself. Apparently, the number 13 is considered lucky in some countries, like Italy, he adds. I’m one who prefers to look at things optimistically so I’m gong to side with the Italians on this one. I hope your Friday the 13th is the best day ever. Here are some articles covering the happenings in federal government contracting this week. Enjoy, and have a wonderful Friday the 13th and weekend. Wishing you all “buona fortuna” (good luck in Italian). NSA Awards Secret $10 Billion Contract to Amazon [NextGov]Report: EPA Should Improve Compliance with Blanket Purchase Agreement Requirements [Oversight]Straight talk from the Marine Corps [FedNewsNet]VA, HHS expand vaccines mandate to nearly all healthcare workers [FedNewsNet]Agencies have new deadlines to secure on-premise software [FedNewsNet]Cyberspace Solarium Commission warns over slow progress on supply chain risk [FedScoop]GAO to decide WildandStormy bid protest outcome by Oct. 29 [FedScoop]Protecting Critical Software Through Enhanced Security Measures [Whitehouse]Postal Service Looks to Institute Holiday Surcharge as It Fights to Preserve Permanent Price Hike [GovExec]READOUT: SBA Administrator Isabella Casillas Guzman meets with Leaders in Women-Owned Small Business Community [SBA]SBA Awards Grants to 33 Organizations to Help Underserved Communities Succeed with the Small Business Innovation Research Program [SBA] The post SmallGovCon Week in Review: August 9-13 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

“Overpopulation crisis solved!” That’s the sort of headline I expect the SBA’s press team would write the day after a global thermonuclear war. Obviously, I’m exaggerating a wee bit to make my point, but the SBA’s press release on FY 2020 small business goaling achievement follows a pattern I’ve seen across several Presidential administrations and SBA Administrators: when it comes to reporting on the small business goals, the SBA fervently emphasizes the good news while almost entirely ignoring the bad. If you look past the headlines and examine the raw data, there is plenty of bad news to be found in the FY 2020 goaling report. So is the SBA doing a disservice to small businesses by pretending this bad news doesn’t exist? The SBA’s headline is “Federal Government Awards Record-Breaing $145.7 Billion in Contracting to Small Businesses.” The first three paragraphs of the press release focus on the total dollars awarded, an increase of about $13 billion over the previous fiscal year. The press release then says that the Government earned an “A” for its FY 2020 contracting and provides four bullet-point “highlights”. Three of these highlights are positive, such as “[i]n FY20, the federal government exceeded the service-disabled veteran-owned small business and small disadvantaged business goals of 3 percent and 5 percent, respectively. Only the fourth bullet hints that not all is perfect in Goaling World, saying, “[d]espite the overall increase in the value of small-business awards, the number of small businesses receiving prime contracts with the Federal government decreased.” If you were to read the press release, but not the underlying data, you would be forgiven for thinking that–aside from that brief and rather vague fourth bullet–everything is downright hunky-dory when it comes to the small business goals. Record-setting? “A” grades? It all sounds ideal! You would have to dive into to the data to find out: The government’s small business awards, percentage-wise, were down from FY 2019 (26.01% versus 26.50%). That recordbreaking dollar figure came about because overall government spending increased significantly in FY 2020, not because the government did any better at allocating work to small businesses. The government’s SDVOSB achievement, percentage-wise, also decreased (4.28% versus 4.39%).So did WOSB achievement (4.85% versus 5.19%). This one is especially troubling because the WOSB goal is 5%. The government met that goal in FY 2019 but not in FY 2020.HUBZone achievement, while up slightly (2.44% versus 2.28%) still failed to meet the 3% goal.Of five statutory goals (small business, SDB, SDVOSB, WOSB and HUBZone), the government met only three–or 60%. The SBA’s rosy spin is par for the course. For instance, the SBA’s press release on FY 2017 goaling similarly touted a record-breaking dollar figure–but neglected to mention that, percentage-wise, three of five categories (small business, SDB and WOSB) had seen a decline from FY 2016, or that the government had failed to meet its 5% WOSB and 3% HUBZone goals. Heck, in FY 2009, the government missed four of five goals, including the bedrock 23% small business goal. But the SBA’s press release still touted a record-breaking dollar number while omitting any mention of the government’s embarassing failure to achieve 80% of its target percentages. SBA’s mission is to “aid, counsel, assist and protect the interests of small business concerns . . ..” In my view, SBA’s year-after-year spin-doctoring of the goaling report does not assist small businesses–to the contrary, it does a tremendous disservice to the very small businesses the SBA is supposed to aid. Busy policymakers and acquisition officials may never reach the fine print–all they will see is an endless stream of record-setting and “A” grades. And if these decision-makers get the impression (from the SBA itself, no less) that everything is super-terrific when it comes to small business contracting, why would they take a hard look at how initiatives like category management harm small businesses? Why would they support policies to further boost small business contracting? Clearly, not all the news from the goaling report is bad. I don’t bregrudge the SBA for reporting the positives. But the SBA ought to stop the spin and report the not-so-positie news, too, without forcing readers to parse the data to discover it. Policymakers, acquisition officials, and the public at large deserve the whole truth about small business goaling achievement, not a carefully-curated, one-sided piece of it. 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 Does the SBA’s Rosy Spin on Goaling Achievement Hurt Small Businesses? first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The grounds for GAO protests are numerous, ranging from vague terms in a solicitation to showing that an awardee’s proposal lacked needed information. However, they are not unlimited. One protester argued that the terms of a solicitation were inconsistent with regulations concerning mortgage insurance. Unfortunately for them, that isn’t something GAO will consider. NOVAD Management Consulting, LLC (“NOVAD”) was the incumbent for a contract providing loan servicing support services for the Department of Housing and Urban Development’s (“HUD”) home equity conversion mortgage (“HECM”) program. Novad Mgmt. Consulting, LLC, B-419194.5 (July 1, 2021). On August 27, 2020, HUD issued a solicitation for a new contract for such services. After a couple protests and corrective actions over separate matters, HUD issued a final amended solicitation. The solicitation required specific procedures for contractors to use when servicing HECM loans. Among these provisions were certain property charge requirements based on language once in HUD’s regulations. NOVAD filed another protest, this time arguing, in part, that the property charge requirements in the solicitation were inconsistent with the HUD’s then-current regulations on property charges. GAO, after rejecting arguments that the solicitation was unduly restrictive and was vague with respect to transition-in provisions, turned to the argument regarding HUD regulations. GAO stated, “Concerning the protester’s argument that the solicitation is inconsistent with HUD’s regulations, we conclude that this allegation does not allege a violation of a procurement law or regulation.” The federal statute that gives GAO its authority, 31 U.S.C. § 3552(a), authorizes it only “to decide bid protests ‘concerning an alleged violation of a procurement statute or regulation.’” Still, GAO went on to note that it will hear protests for “violations of other statutes or regulations when those statutes or regulations have specific procurement-related provisions.” Addressing NOVAD’s argument that a previous decision, Merck and Company, Inc., B-295888 (May 13, 2005), was similar to the matter at hand, GAO explained: “In that decision, we concluded a statute establishing a process for an agency to make formulary decisions concerning which pharmaceutical agents to make available to beneficiaries was a procurement statute because agency decisions made under the statute would lead directly to the purchase of pharmaceutical agents using the Federal Supply Schedule…That is to say, we concluded the statute was a procurement statute because decisions made under the relevant statutory provisions would effectively decide future procurements of goods by federal agencies.” GAO found, however, that the HUD regulations were not similar. True, the regulations govern the HECM program and acceptable practices under it, which do relate to how the services are performed by contractors. But they do not affect the process for deciding how HUD will acquire such services. A review of the regulations in question, 24 C.F.R. Part 206, shows that these regulations provide for things such as how much mortgage insurance premiums are calculated under the HECM program, how sales of insured mortgages are performed, and the like. GAO noted, “[t]he protester has articulated no nexus between the HECM regulations and the process for procuring goods or services by federal agencies.” As a result, GAO dismissed the HUD regulation argument as not alleging a violation of a procurement law or regulation. GAO further rejected an argument that the property charge provisions were impermissibly vague and dismissed NOVAD’s protest as a whole. Potential protesters will not regularly run into this issue of whether their protest grounds concern a procurement law or regulation. But it is important to keep in mind. If your protest is that the solicitation itself is unreasonably restrictive or vague, or that the agency’s evaluation of your proposal was improper, your protest very likely concerns procurement law. But this is one of the grayer areas in government contracting law. This is a question of what issues GAO will consider, and it can simply come down to whether GAO thinks the law you’re arguing was violated has to do with procurement or doesn’t. While filing a bid protest on your own is usually tough, this issue of determining if your protest is based on procurement law or not can be especially vexing. In such cases, it may be worth seeking out an attorney to review your protest basis regarding this question. Planning on filing a protest or appeal? 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: Non-Procurement Regulations No Grounds for Protest first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The costs of filing a bid protest can dissuade some protesters from submitting bid protests. One silver lining for protesters is a recommendation for reimbursement of costs upon a sustained decision. However, even when GAO says a protest is “clearly meritorious”, the protest may still be dismissed prior to GAO issuing a decision. What happens when an agency takes corrective action in the face of a likely sustained GAO decision? One protester recently found out. Iron Mountain Information Management, LLC—Costs, B-418797.4, arose from a Department of Veteran’s Affairs (VA) request for quotations (RFQ) No. 36C10E20Q0090, for records management services issued on April 24, 2020. Iron Mountain was one of two offerors who submitted proposals on May 22, 2020. After reviewing the proposals, the VA awarded a task order to Sourcecorp on November 18, 2020. This is where things get interesting. On December 3, 2020, the GSA FSS schedule contract was novated (meaning another party assumed the contract responsibilities) from Sourcecorp’s parent corporation to Retrievex on December 3, 2020. Notably, in July 2020, after Sourcecorp submitted its proposal, but prior to award, nearly all of Sourcecorp’s assets were sold to Retrievex. The VA learned of the sale on December 14, 2020, after Iron Mountain submitted its protest the same day. Iron Mountain’s protest alleged nine total grounds for protest. The agency submitted an agency report, supplemental agency report, and responded to GAO’s request for additional information. Iron Mountain for its’ part, submitted the initial protest and a supplemental protest. After receiving all the filings, GAO asked the parties to participate in an alternative dispute resolution conference. During the conference, GAO advised it would likely sustain Iron Mountain’s protest on two grounds. First, Iron Mountain’s argument that in evaluating Sourcecorp’s quotation the agency failed to consider the impact of Sourcecorp’s sale to Retrievex, and that Exela or Sourcecorp should have informed the agency of this transaction. Second, Iron Mountain’s challenge to the evaluation of Sourcecorp’s proposed plan for document destruction. GAO advised it would dismiss all other grounds. Two days later, the agency advised it would take corrective action. The agency advised it would either hold discussions with offerors, solicit revised quotations, and issue a new award decision, or issue a revised RFQ. The protest was dismissed as academic six days later. This can be a tough pill to swallow for the protester. Here are all the likely steps the protester had to take: First, time and labor costs to draft its proposal; second, preparing its initial protest; third, reviewing and submitting a supplemental protest on the initial agency report; fourth, reviewing and likely commenting upon the supplemental agency report; fifth, GAO likely had issues with the agency’s explanations and requested additional information. Even after many rounds of filings, the agency was clearly not going to take voluntary corrective action. Enter GAO with a request for an alternative dispute resolution conference. The protester was likely met with a good news and bad news scenario. The good news: after rounds and rounds of argument, GAO found the protest clearly meritorious. The bad news is that the agency just got another way out of avoiding a sustained decision. Had GAO not intervened with the conference request, the agency would not have taken corrective action. This frustrates the process for protesters, and likely incentivizes agencies to draw out the bid protest process. GAO should, instead, issue sustained decisions clearly outlining the guardrails meant to ensure a more refined procurement process. GAO’s alternative dispute resolution conferences would be more meaningful if they occurred earlier in the bid protest process. Having such conferences after all filings are submitted adds more steps to the process, instead of streamlining the process. Agencies and protesters alike should be put on notice regarding what a clearly meritorious protest looks like. Establishing precedent to discourage agency actions that go outside the bounds of the regulatory framework should be GAO’s goal. Having clear GAO interpretations of regulations is invaluable to the bid protest process. This information provides contracting officers with clearly defined guideposts, and protesters with rational expectations. For attorneys, having guidance as to GAO’s interpretation of regulations allows for more meaningful client consultations, and a more focused bid protest process. GAO should consider scheduling the alternative dispute resolution stage either before or immediately after the submission of the agency report. Once the parties have submitted all expected responses, GAO should only seek clarifications and documentation necessary for drafting its decision. Because of this end-stage corrective action, Iron Mountain then had to file a request for a recommendation on reimbursement of costs. GAO’s precedent provides: “When a procuring agency takes corrective action in response to a protest, our Office may recommend reimbursement of protest costs if, based on the circumstances of the case, we determine that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest.” 4 C.F.R. § 21.8(e). A protest is clearly meritorious where a reasonable agency inquiry into the protest allegations would have shown facts disclosing the absence of a defensible legal position. GAO recommended that the agency reimburse Iron Mountain for its costs associated with the clearly meritorious portions of the protest. Within 60 days of the decision, Iron Mountain was directed to submit its certified claim on those issues only. Moving forward, I hope GAO takes into consideration the burden upon protesters when addressing flawed procurements processes. Moving up alternative dispute resolution conferences to nearer in time to the agency report phase of the bid protest process would be a good first step. Postponing the time for filing comments to allow GAO to decide if the protest is clearly meritorious at this stage would likely be welcomed by most protesters. Once comments are submitted, and any subsequent documentation is filed, the parties can then prepare for a decision on the merits. I have my fingers crossed we see GAO reevaluate this process. 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’s Alternative Dispute Resolution Conference – Too Little, Too Late first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday, All. We hope you had a productive week (or if you were on vacation, hope you were able to just tune out). Here are some highlights in federal government contracting including news on the contracting dollars in the 2020 fiscal year , a bill aimed at enhancing small business participation in the federal marketplace passing in the Senate, and an announcement to nominate former HUD appointee to lead federal procurement. Enjoy your weekend! Federal Government Awards Record-Breaking $145.7 Billion in Contracting to Small Businesses [GovConClub]Jury Convicts Former NASA Subcontractor of Fraud [DoJ]CMMC Accreditation Body hires CFO from insurance group IFG [Fedscoop]Biden to nominate former HUD appointee to lead federal procurement [FeNewsNet]Request for Information: Buy American in the National School Lunch Program and School Breakfast Program [FedReg]Observations: Fiscal Year 2020 COVID-19 Federal Contracting [Oversight]2020 Was Good Year for Contractors [NatDefMag]NASA gets the OK to continue contract related to sending humans back to the moon, a bill aimed at small business participation in the federal marketplace passed the Senate; Contractors will no longer need Dun & Bradstreet DUNS number starting April 4 [FedNewsNet]Small Business Facts: Women-Owned Employer Businesses [SBA]National Small Business Week 2021 Virtual Summit Announced September 13-15 [SBA]Georgia company and owner admit guilt in scheme to evade U.S. national security trade sanctions [DoJ]Highlights from the Buy American Proposed Rule [TheCGP]What government contractors should know about the Q4 2021 spending rush [FedTimes] The post SmallGovCon Week in Review: August 2-6 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The SBA released its annual Small Business Procurement Scorecard for fiscal year 2020 of how federal agencies are doing in meeting their small business goals. The SBA, in announcing the Scorecard, highlighted that small businesses received $145.7 billion in federal contracts , a $13 billion increase from the previous fiscal year. But looking beyond the headlines, not all of the trends are positive for small businesses. Let’s take a look at the numbers. As a reminder, Congress has set goals for federal agencies to award contracts and subcontracts to small businesses under 15 U.S.C. § 644(g). The Scorecard tracks how the federal government as whole, and individual agencies, are accomplishing those goals. First, the great news is that contracts awarded to small businesses were at $145.7 billion in fiscal year 2020, eclipsing last year’s total of $132.9 billion in prime contracts. This represented 26.02% of overall contracting and exceeded the goal of 23%. The percentage of overall contract dollars is down from 26.5% in the past year. The federal government met its goals for a number of other small business contracting programs too. Small Disadvantaged Businesses (including those in the 8(a) Program) earned 10.29% of federal contracts, or $51.6 billion, well exceeding the goal of 5%Service Disabled Veteran Owned Small Businesses exceeded the 3% goal with 4.28% of federal awards, or $23.9 billion. Unfortunately, the government did not meet its goals for the following programs: Women Owned Small Businesses earned 4.85% of federal contracts or $26 billion, just under the 5% goal. While the total dollars were up from 2019, the percentage of overall dollars was down.HUBZone businesses earned 2.44% of federal contracts or $13.6 billion, under the 3% goal. This percentage did go up from the prior year mark of 2.28%. In addition, the total number of small businesses went down, as did the total number of WOSBs. The numbers of small businesses in the Small Disadvantaged Business, SDVOSB, and HUBZone categories went up. (This calculation was based on the vendor count in the top 100 NAICS.). HUBZone remains the category with the fewest number of businesses in that category. It’s unclear if that is due to the compliance restrictions in the program, or the lack of opportunities for HUBZone set-asides, or some other reason. Looking to the specific agencies, there was some tough grades coming out. While many agencies got As and there were a few Bs, two agencies stand out for getting poor grades. We’re looking at you: Department of Education and Department of Housing and Urban Development. Education got a C and HUD got a D. As we’ve written about in the past, the SBA has been pretty easy on agencies, so it’s good to see them giving some tough grades. Still, as in years past, a number of agencies didn’t meet their goals and still go some pretty good grades. That’s something the SBA should consider changing. There is definitely some good news coming out of this Scorecard. Overall small business dollars went up. On the other hand, federal agencies missed the mark for both the WOSB program and the HUBZone program, and the overall number of small businesses went down, so there is room for improvement on those fronts. The Administration’s recent announcement that it plans to boost Small Disadvantaged Business contracting by 50% means there is a recognition that there is room for federal agencies to do better on small business contracting. 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 Issues 2020 Small Business Scorecard, Small Business Contracting Over $145 Billion! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

It is with great pleasure that we announce that the firm you have known as Koprince Law LLC has a new name: Koprince McCall Pottroff LLC The firm, a boutique federal government contracts firm in Lawrence, KS, will continue to focus on providing services to federal contractors throughout the United States and beyond, with a special focus on those issues unique to small business federal contractors. Said Shane McCall, “It is an exciting time to be serving federal contractors. The federal government continues to need goods and services, and it looks to expand the ranks of federal dollars going to small businesses. Continuing my role with Koprince McCall Pottroff LLC is a great opportunity to do exciting work and help out small businesses who are serving the federal government.” Nicole Pottroff noted, “Our federal contractors are vital to our nation’s economy and, as the last year has proven, to our nation’s ability to persevere in the face of crisis. While recent events proved challenging to many businesses, especially our small and disadvantaged businesses, they also provided new and exciting opportunities to supply goods and services to our federal government. It is an honor to continue supporting these businesses in their federal contracting endeavors with Koprince McCall Pottroff LLC.” The firm is also pleased to announce that Shane McCall and Nicole Pottroff have been elevated to equity partners at the firm. Koprince McCall Pottroff LLC will continue to provide effective and efficient legal services for federal government contractors, as it has for many years. Please reach out to us with any questions. Shane McCall can be reached at smccall@koprince.com. Nicole Pottroff can be reached at npottroff@koprince.com. The post Koprince Law is Now Koprince McCall Pottroff LLC! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

With less than 24 hours left until proposals were due, NIH released Amendment 9, staying the proposal deadline until August 20, 2021 at Noon Eastern. Amendment 9 says it changes very little, but the innocuous cover letter belies a major change to evaluations for Other Than Small and Emerging Large Businesses (OTSBs and ELBs). On July 23, 2021, NIH released Amendment 8, less than a week after Amendment 7, affirming major changes to the consideration of small business subcontractors. Now, with less than a day to go, NIH has once again delayed CIO-SP4. The Amendment 9 cover letter states it was issued in response to Amendment 3 (why this change took six amendments is not explained). Amendment 3 introduced the term “obligated value” but then did not incorporate that term into any future amendments. Therefore, in order to address this potential ambiguity, this amendment was necessary to update sections L.5.2 and L.5.7. The Amendment 9 cover letter includes a disclaimer stating, “the changes referenced above should not be considered a complete list. Offerors are encouraged to carefully review amendment 0009 and the associated documents in their entirety.” The track changes version is your friend in reviewing these amendments. I took a look at the details and uncovered some major changes. Major change #1. OTSBs and ELBs can now utilize FAR 9.601(2) (Prime/Sub) CTA members for Factor 1 (Health IT Capability). After stating repeatedly for multiple successive amendments that only the offeror will be considered under this factor, NIH has backpedaled. NIH makes clear this only applies to OTSBs and ELBs, which is a trend in each successive amendment. What is unclear to me, is why such a major change was not referenced in the cover letter. What is clear, however, is that once again OTSBs and ELBs are given the ability to rely upon CTA members for factors that small businesses are not. Speaking to small business owners, the frustration is palpable, as NIH is tightening restrictions on what small businesses can use, while allowing OTSBs and ELBs more free rein. Major change #2. Obligated values for each contract are now a consideration for the number of points allocated for past performance. NIH submitted the following note for determining how to allocate the points in Phase 1: Note: The dollar value utilized for experience in sections L.5.2.1, L.5.2.2, and L.5.2.3 is determined by the total dollars that were obligated. Experience examples can be either a collection of orders or one single order. If an experience example is a “collection of orders” placed under an IDIQ contract or BPA, the dollar value will be the sum of all orders based on the methods above being applied to each individual order. (If the maximum dollar value is achieved without submitting all the orders that have been awarded, then only submit those orders that achieve the maximum results for experience in L.5.2.1, L.5.2.2, and L.5.2.3). The last sentence in parentheses allows for maximizing points, presumably by grouping and excluding orders. Frankly if the point is to group, or not group, orders based upon some chosen formula, then NIH should stick with that formula. Allowing for grouping and ungrouping orders to maximize points, defeats the purpose of the term “collection of orders.” This seemingly allows for an offeror to award extra points for the same orders, and same performance, which certainly cannot (or at least should not) be the goal. Major change #3. The amendment also states that “Subcontracts performed in support of federal prime contracts will be considered federal experience.” Now, NIH will allow subcontracted experience on federal contracts. How will NIH evaluate this experience? I have no idea, and apparently NIH does not either. I assume they will be evaluated in the same manner as prime contractor experience, but no direction is given. What information does a subcontractor need to submit? Who knows! NIH should provide additional explanation for these sorts of changes. Major change #4. Small businesses wishing to subcontract now must submit some form of “proof” that it will comply with the limitations on subcontracting. Section L.3.7.3 now requires small business prime contractors to show how they will comply with FAR 52.219-14. “ Major change #4. Small businesses wishing to subcontract now must submit some form of “proof” that it will comply with the limitations on subcontracting. Section L.3.7.3 now requires small business prime contractors to show how they will comply with FAR 52.219-14. Each small business CTA must now submit, “a copy of their agreement specifying level of effort and how each will ensure compliance with 52.219-14.” What is exceedingly frustrating, is that any work done under CIO-SP4 will come through task orders, so it’s difficult to predict the exact level of effort, which may be months or years down the line. These small businesses can likely speak in generalities, but specific work breakdowns will be mainly a guess, so this could serve mainly as a trap for those who did not notice that NIH made this change in the solicitation. Instead, this should be a matter of contract administration, not a threshold requirement. Moving this requirement to the purview of the contracting officer after award (as SBA rules already dictate) would be the right move for small businesses. Let’s hope NIH sees the error of their ways with this addition, and removes this requirement, as it adds ambiguity to what needs to be in a CTA agreement. With each successive amendment, it seems like NIH should consider going back to the drawing board. The questions from contractors continue rolling in with each successive amendment. Stay tuned to our blog for updates, as we await potential Amendment 10. 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 CIO-SP4 Amendment 9, a Last Minute Stay first appeared on SmallGovCon - Government Contracts Law Blog.View the full article