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Last night, NITAAC released Amendment 4 to the CIO-SP4 RFP. The amendment removes the language expressly restricting the use of first-tier subcontractors past performance, capabilities, and experience, which was previously added by Amendment 3. Let’s take a closer look. We have been following NITAAC’s treatment of first-tier subcontractors’ past performance, capabilities, and experience under the CIO-SP4 RFP since day one. And it has been a wild ride! Check out our prior blogs on this topic here and here. According to NITAAC, Amendment 4 “addresses the concerns pertaining to Contractor Team Arrangements (CTA).” NITAAC’s Cover Letter for Amendment 4 reiterates that “it is not NITAACs intent to remove the ability of offerors to utilize first tier subcontractors that are part of a CTA as defined in FAR 9.601.” According to NITAAC, Amendment 4 “removes language in section L.3.7, L.5.2, M.1.1, and M.4.3 that may impede an offeror from utilizing first tier subcontractors.” Specifically, it completely removed from section L.3.7.1 (Instructions for CTAs, JVs, and Mentor-Protégé Agreements) the following language: “An offeror may enter into Prime/Subcontractor arrangements as defined under FAR 9.601(2); however, in this type of arrangement, only the prime will be considered in the evaluation for award of the GWAC except as specified under M.4.3 Contract Team Arrangements (CTAs).” NITAAC removed language from section L.5.2.1 on corporate experience, completely doing away with the prior relationship requirement altogether. Now, it reads as follows: All corporate experience examples must be from the last three years prior to the date the proposals are due for this solicitation. The examples may come from members of an offeror’s CTA / JV, and/or Mentor-Protégé as identified in section L.3.7. If provided, work done by each partner or member of the contractor teaming arrangement will be considered. If the examples come from any member other than the offeror submitting a proposal , a clear relationship must be established between the offeror, their team members (as identified in section L.3.7), and the resources each expended in accomplishing the project. Each offeror’s example shall convey the offeror’s specific role in their experience example. NITAAC’s intent to remove the prior relationship requirements is echoed in Amendment 4’s changes to section L.5.2.2 (Row 9 Leading Edge Technology Experience), section L.5.2.3 (Row 10 Federal Multiple Award Experience), and section L.5.2.4 (Row 11 Executive Order 13779). It removed the following language from each of those sections: If the examples come from any member other than the offeror submitting a proposal, a clear relationship must be established between the offeror, their team members (as identified in section L.3.7), and the resources each expended in accomplishing the project. Each offeror’s example shall convey the offeror’s specific role in their experience example. Under section M.1.1 on CTAs, Amendment 4 removed additional restricting language. Now, it reads as follows: As stated in paragraph L.3.7, the Government will consider all members of a FAR 9.601(1) CTA for purposes of evaluation under the contract, provided that the Offeror submits a full and complete copy of the document establishing the CTA relationship containing at least the minimum information required by the solicitation closing date. The Government will not consider the members of a “Contract Team Arrangement” defined under FAR 9.601(2) for evaluation purposes for the contract except in the limited context of evaluating an Offeror’s proposal under paragraph L.5.6.2, Resources.” Finally, in section M.4.3 on past performance, NITAAC actually replaced some of the language that it had previously removed (via Amendment 3). Amendment 4 revised that section as follows: The government will consider and evaluate the past performance experience of members of the offeror’s 9.601(1) CTA (if applicable), subcontractors of the prime’s 9.601(2) CTA, members of the offeror’s JV (if applicable), and all members of the offeror’s mentor- protégé arrangement (if applicable). In the end, Amendment 4 did not directly reverse all of the changes imposed by Amendment 3. For one, it appears that NITAAC does still intend to restrict the use of affiliates’ past performance, capabilities, and experience. But Amendment 4 does seem to effectively remove the restrictions on the use of a first-tier subcontractor’s past performance, capabilities, and experience that had been imposed via Amendment 3. So it looks like NITAAC was pretty true to its word on this one. However, there may still be some questions as to why NITAAC had so much back and forth on this one and as to how its evaluation will actually look in this respect (given that back and forth). There, only time will tell. Notably, Amendment 4 also confirms that the proposal due date is still July 8, 2021, at 2:00pm ET. Also, be sure to review the full amendment carefully if you do plan to bid, as it also changes some of the post-submission registration requirements (in section L.3.1) and submission format requirements (in section L.5) too. Need help with CIO-SP4 or another 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 4: Undoing Amendment 3? Sort Of first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday and welcome to this week’s addition of the week in review. I recently got back from a camping trip in 100 degree weather, so I know that staying cool is crucial. Hope you are all staying cool and enjoying the summer. There were several announcements such as Robin Carnahan‘s confirmation by the Senate as Administrator of the General Services Administration Wednesday afternoon and on Tuesday Kiran Ahuja was also confirmed to be the next director of the Office of Personnel Management. The General Services Administration made awards to 426 small businesses in an effort to provide agencies with more emerging technology options, completing the first phase of its $50 billion 8(a) STARS III contract Thursday. Read on for more details and have a great weekend! The underlying process for GWACs hasn’t changed since 1994 [FedNewsNet]Senate confirms Ahuja as first permanent OPM director in more than a year [FedNewsNet]Did DHS ‘go rogue’ with FirstSource III solicitation? [FedNewsNet]GSA makes 426 awards on $50B STARS III contract with more to come [FedScoop]Robin Carnahan confirmed to lead GSA [FedScoop]House lawmakers propose $50M for Technology Modernization Fund in 2022 [FedScoop]GSA creates $2.1B contract for NOAA’s IT [FedScoop]Owner and CEO of Government Contracting Firm Pleads Guilty to Bribery Scheme [DOJ]Bipartisan Bill Would Exempt FAA From Shutdowns, Preventing Furloughs and Missed Pay [GovExec]Navy Lab Continues Fight Against Age-Old Foe [NatDefMag] The post SmallGovCon Week In Review: June 21-25, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

We finally have NITAAC’s CIO-SP4 solicitation, complete with several amendments and a Q&A. So that means the anticipated offerors have the answers to all of their questions about this long-awaited GWAC procurement, right? Well, no. In fact, for anyone planning to team-up for CIO-SP4, there seems to be more confusion now than ever before. Specifically, the draft and final CIO-SP4 RFPs have taken us on a rollercoaster ride regarding whether offerors can utilize the past performance, experience, and capabilities of their first-tier subcontractors (a.k.a. subcontractors of a prime’s FAR 9.601(2) CTA). We first blogged on this topic a few weeks ago. As we explained, the draft RFP said that NITAAC would not consider the past performance of subcontractors at all. We raised concerns with this limitation under the guidance of FAR 15.305(a)(2)(iii), which says that agencies “should” consider the past performance of “subcontractors that will perform major or critical aspects of the requirement.” We also noted that, in some cases, this limitation could conflict with SBA’s rule at 13 C.F.R. 125.2(g), which states: When an offer of a small business prime contractor includes a proposed team of small business subcontractors and specifically identifies the first-tier subcontractor(s) in the proposal, the head of the agency must consider the capabilities, past performance, and experience of each first tier subcontractor that is part of the team as the capabilities, past performance, and experience of the small business prime contractor if the capabilities, past performance, and experience of the small business prime does not independently demonstrate capabilities and past performance necessary for award. But the final RFP (first released in late May) initially cleared up those concerns (albeit, it did raise some new concerns regarding the broad utilization of affiliates’ past performance as explained in the prior blog). Section M.4.3 of that RFP said: The government will consider and evaluate the past performance experience of affiliates, members of the offeror’s 9.601(1) CTA (if applicable), subcontractors of the prime’s 9.601(2) CTA, members of the offeror’s JV (if applicable), and all members of the offeror’s mentor protégé arrangement (if applicable). Section L.5.2.1 originally said: All corporate experience examples must be from the last three years from the date the proposals are due for this solicitation. The examples may come from affiliates or members of an offeror’s CTA / JV, provided the examples establish a clear relationship between the offeror, their affiliates / CTA / JV members, the project, and the resources that were expended by each in accomplishing the project. And section L.3.7.1 said: “Although the experience and abilities of the prime’s subcontractors may be used in the offeror’s proposal, only the prime contractor will receive a contract award.” So the first release of the final CIO-SP4 RFP clarified that a subcontractor’s past performance would be considered–and a subcontractor’s corporate experience could be considered. But interestingly, it still appeared to potentially require a prior relationship for the agency to consider the corporate experience of affiliates, subcontractors and joint venture members. Then, Amendment 2 to the RFP (released June 4) changed the corporate experience criteria in section L.5.2.1 to remove the prior relationship requirement for subcontractors and joint venture members (but keeping this requirement for affiliates), stating: All corporate experience examples must be from the last three years prior to the date the proposals are due for this solicitation. The examples may come from affiliates or members of an offeror’s CTA / JV. If the examples come from affiliates, a clear relationship must be established between the offeror, their affiliates, and the resources each expended in accomplishing the project. Each offeror’s example shall convey the offeror’s specific role in their experience example. Given this deliberate change in the language, it appeared that NITAAC had intended to broaden the ability to submit subcontractor corporate experience (which was more in line with section M.4.3’s allowance of subcontractor past performance examples). But the saga doesn’t end there! Earlier this week, NITAAC released Amendment 3 to the final RFP, which included the Q&A, and essentially scrapped everything we thought we knew about this evaluation criteria. For one, it amended section M.4.3 to remove the consideration of affiliates’ and subcontractors’ past performance (only retaining the consideration of joint venture and mentor-protégé members’ past performance), as follows: The government will consider and evaluate the past performance experience of affiliates, members of the offeror’s 9.601(1) CTA (if applicable), subcontractors of the prime’s 9.601(2) CTA, members of the offeror’s JV (if applicable), and all members of the offeror’s mentor-protégé arrangement (if applicable). It also amended section L.5.2.1 on corporate experience, which now states: All corporate experience examples must be from the last three years prior to the date the proposals are due for this solicitation. The examples may come from members of an offeror’s CTA / JV, and/or Mentor-Protégé as identified in section L.3.7. If provided, work done by each partner or member of the contractor teaming arrangement will be considered. However, for mentor-protégé arrangements, large business is limited to one example for each task area. If the examples come from any member other than the offeror submitting a proposal affiliates, a clear relationship must be established between the offeror, their affiliates team members (as identified in section L.3.7), and the resources each expended in accomplishing the project. Each offeror’s example shall convey the offeror’s specific role in their experience example. Finally, it completely replaced the language quoted above from section L.3.7.1 with the following provision: An offeror may enter into Prime/Subcontractor arrangements as defined under FAR 9.601(2); however, in this type of arrangement, only the prime will be considered in the evaluation for award of the GWAC except as specified under M.4.3 Contract Team Arrangements (CTAs). Making matters worse, NITAAC’s answers in the Q&A contained some blatant contradictions on this topic. Question 21 asks if the corporate experience and certifications of team members under both FAR 9.601(1) and 9.601(2) CTAs can be used by the offeror to meet the RFP requirements. To this, NITAAC answered: “No. The solicitation will be amended to clarify that the Government will not consider the members of a CTA defined under FAR 9.601(2) for evaluation purposes except in the limited context of evaluating an Offeror’s proposal under paragraph L.5.6.2, Resources.” To the contrary, Question 28 quotes the post-Amendment 3 final RFP, section L.3.7.1, asking whether the statement that “the experience and abilities of prime subcontractors may be used in the offerors proposal” applies “to all areas of Section L that requires corporate experience support?” And NITAAC simply says, “Yes.” If your head is spinning at this point, you are not the only one! So, is there any light at the end of this tunnel? Well, there may be a glimmer of hope for clarity. Just yesterday NITAAC released a Letter to Potential Offerors. Notably, this letter was only released on one of SAM.Gov’s CIO-SP4 Contract Opportunity pages (it can be found here). This letter says that NITAAC will release a “future amendment” to the CIO-SP4 RFP that will address issues with Interested Vendor List access and errors in the J.5 Self Scoring Sheet formulas and (you guessed it) promises to provide clarification regarding CTAs. Importantly, it says: “It is not NITAACs intent to remove the ability of offerors to utilize first tier subcontractors that are part of a CTA as defined in FAR 9.601 and the future amendment will remove anything that contradicts this intent in the solicitation.” So where are we now? Back in the waiting period it appears. It seems that many FAR 9.601(2) CTAs have already changed or considered changing their entire teaming structure in light of these potential limitations. But unfortunately, there may not be time for many to do this. As you are probably aware, joint ventures (or FAR 9.601(1) CTAs) have many additional requirements to submit an offer, including the drafting and execution of a compliant joint venture agreement, being separately registered in SAM.Gov, having a separate EIN number through the IRS, and having a separate CAGE code through DLA. That is a lot of steps in very little time (given that Amendment 3 established a proposal due date of July 8, 2021, at 2:00pm ET). Additionally, if the NITAAC does not “ease up” on these restrictions as it has promised, it is running some risk of noncompliance with SBA’s regulations, the guidance in the FAR, and potentially even the Competition in Contracting Act (CICA). You can read more about all of these potentially issues here. Let’s hope for the best! Otherwise, we can likely expect an abundance of pre-award protests from offerors affected by this competition restriction. Need help with CIO-SP4 or another 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 Conflicting CIO-SP4 Updates For CTAs, And Now, A Promise to Clarify first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Avoiding affiliation with other companies can be critical to qualifying as a small business under the SBA’s rules for government contractors. But not all SBA affiliation rules are intuitive, and in my career as a government contracts attorney I have seen the same misconceptions about the affiliation rules come up time and and time again. So without further ado, here are five common misconceptions about the SBA’s affiliation rules. An Affiliate Can be in an Unrelated Industry Business owners frequently assume that another company cannot be an affiliate if that company operates under a different primary NAICS code–particularly if the industries aren’t closely related. For example, an individual who owns 100% of an an IT services company and a real estate holding company might believe that two companies are not affiliated because they are in very different lines of work. At first blush, this assumption may have some logical appeal. But think about it: what if Google–which is on track for more than $200 billion in 2021 revenues–formed a wholly-owned subsidiary operating in, say, the general construction industry? It would hardly be fair to the mom-and-pop contractors of the world to say that this new entity is a “small business” even though it is backed by the full power and resources of one of the world’s dominant companies. The bottom line: other than the SBA’s “newly organized concern” rule, 13 C.F.R. 121.103(g), the fact that a potential affiliate operates in a different line of work or different primary NAICS code is not relevant to the SBA’s analysis. 2. Affiliation Doesn’t Require Common Ownership Two companies may be affiliates where they share common ownership–but contrary to another common misconception, affiliation may exist even if the companies have no shared owners. For example, let’s assume that Sally is the Chief Executive Officer (the highest officer position) in two companies: SmallCo and BigCo. Although Sally runs each company’s day-to-day operations, she does not own an equity interest in either company. So are the companies affiliates? Almost certainly, under SBA’s “common management” rule, 13 C.F.R. 121.103(e), which says that affiliation arises where a person who controls the management of one company also controls the management of another. Several other bases of affiliation may also exist without shared ownership, such as affiliation based on economic dependence, familial relationships, or the previously-mentioned newly organized concern rule. 3. Your Affiliate Might Not Know In my experience, the so-called “economic dependence” affiliation rule is often one of the most difficult for contractors to wrap their minds around. This rule, 13 C.F.R. 121.103(f)(2), says that the SBA may presume that one company is affiliated with another “if the concern in question derived 70% or more of its receipts from another concern over the previous fiscal years.” Let’s say that Bob owns 100% of BobCorp, which has been in business for six years. Over that time, BobCorp has generated 95% of its revenues from subcontracts with Google–which reported a whopping $55.31 billion in revenues for the first quarter of 2021. The SBA will presume that BobCorp is affiliated with Google, even though Bob is almost certain to say, “but Google has no idea that they’re my only major customer!” Perhaps Bob will be able to rebut the presumption of affiliation, though in my experience I’d say the odds are slim. The economic dependence presumption applies even if the entity responsible for 70% or more of a company’s revenues doesn’t know that they’re the company’s chief customer. 4. “Putting Your Spouse in Charge” May Not Prevent Affiliation Business owners who intuitively understand that affiliation may arise if the same person controls two companies often propose what undoubtedly seems like an elegant solution: “well, I’ll just put my spouse in charge of the other company!” Seriously, I have heard this one a lot over the years. I’m no marriage counselor, so I can’t comment on the fact that plenty of spouses appear ready, willing and able to be “put” in nominal control of various contractors. But the fact that I’ve heard this one a lot means that the SBA has too–and it has developed a rule to address affiliation between companies controlled by spouses or other close family members. Under the so-called “familial relationships” affiliation rule, 13 C.F.R. 121.103(f)(1), “firms owned or controlled by married couples, parties to a civil union, parents, children and siblings are presumed to be affiliated with each other if they conduct business with each other, such as subcontracts or joint ventures or share or provide loans, resources, equipment, locations or employees with one another.” The presumption doesn’t apply when the close relatives truly aren’t involved in one another’s businesses. But, in my experience, many business owners who float the notion of putting a spouse in charge are thinking of the spouse’s role as more of a figurehead to allow the business owner to evade the affiliation rules. That’s a tough sell when it comes to the SBA that there is no affiliation. 5. Ownership Below 50% Can Create Affiliation Many business owners intuitively understand that someone who owns 50% or more of a company may control it for purposes of the SBA’s affiliation rules. (Affiliation, at its heart, is the question of common control or the power to control). But those same business owners often believe that the opposite must also be true: that an ownership interest below 50% can never create affiliation. That, unfortunately, is a mistake. Let’s return to our fictional friend Bob, the 100% owner of BobCorp (and put aside Bob’s affiliation problem with Google for the time being). Assume that Bob also owns 49% of REPRos, a real estate investment company. Two other individuals own 25% and 24% of REPros, respectively. Does Bob’s 49% interest create an affiliation with BobCorp? Yes! Under the SBA’s “common ownership” rule, 13 C.F.R. 121.103(c)(1), a person who owns “a block of voting stock which is large compared to other outstanding blocks of voting stock, controls or has the power to control the concern.” And, of course, Bob’s 100% ownership of BobCorp means that Bob controls both companies. Presto, affiliation! Bob is probably saying, “but wait! Under REPros’ bylaws, unless one of the other two owners votes with me, I don’t have the power to make REPros do anything! How can I possibly be in control?” It’s a logical response, but SBA’s reply is, essentially, “we don’t care.” The SBA believes that someone must be in control of a company at all times, and because Bob’s ownership share is the highest, Bob is a better bet than either of the other owners. Control may also exist under 13 C.F.R. 121.103(c)(2) when multiple owners all own shares that are “equal or approximately equal” in size, such as four 25% interests. In fact, in one rather shocking case, an individual was found to control a company where he owned one share out of 120 because all the other owners also owned one share! *** So there you have it: five of the most common misconceptions I see regarding the SBA’s affiliation rules. While some of these rules are intuitive, others most certainly are not. For any company intending to qualify as a small business for federal government contracts, it is very wise to fully understand these rules and proactively take any necessary remedial steps before the SBA comes calling. 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: Common Misconceptions About SBA’s Affiliation Rules first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

In order to have a bid protest sustained, a protestor must have a reasonable chance of being awarded the contract if the protest succeeded. Often, this just means that the protestor’s own proposal must be acceptable to the awarding agency in the first place. What many contractors do not know, however, is that if intervening offerors would be in line for the award even if the protest was sustained, the protestor will not be considered an interested party by the GAO. The GAO came to the above conclusion in a June 10, 2021 decision, Gulf Civilization Gen. Trading & Contracting Co., B-419754 (June 10, 2021). In this case, the Defense Logistics Agency (DLA) had issued a request for proposals (RFP) for excess property management services, among other services, on December 15, 2020. Award for the RFP was to be on a best-value tradeoff basis, with factors of past performance and price. Past performance was “significantly more important than price” for this RFP. Gulf Civilization General Trading & Contracting Company (Gulf) submitted a proposal along with 25 others on the RFP. The DLA ranked the offers by price at first, ranking Gulf’s proposed price twelfth. Another company, Asahi, submitted the second lowest price. After evaluating the offerors for past performance, the DLA determined that Asahi had a substantial confidence past performance rating, the highest possible confidence rating. As Asahi had proposed the second-lowest price as well as having a top past performance rating, the DLA decided it was unnecessary to consider the past performance of the remaining offerors and awarded the contract to Asahi. Gulf filed a protest thereafter. Gulf’s protest argued the award was improper for multiple reasons. The GAO addressed two of them: That the DLA had failed to conduct a price realism evaluation, and that the DLA’s decision to evaluate the past performance of only the two lowest-priced proposals under the RFP was improper. The GAO rejected both arguments, finding them to contradict the express terms of the solicitation and to be untimely. The GAO then dismissed the remainder of Gulf’s arguments by stating that Gulf was not an interested party, and so even if its arguments were correct, it didn’t matter. Only interested parties may protest a federal procurement, and only protestors that are “an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or the failure to award a contract” are interested parties. 4 C.F.R. § 21.0(a)(1). “Determining whether a party is interested involves consideration of a variety of factors, including the nature of the issues raised, the benefit or relief sought by the protester, and the party’s status in relation to the procurement.” “In a post-award context,” the GAO explained, “we have generally found that a protester is an interested party to challenge an agency’s evaluation of proposals only where there is a reasonable possibility that the protester would be next in line for award if its protest were sustained.” “In this regard, we have explained that where there are intervening offerors who would be in line for the award even if the protester’s challenge was sustained, the intervening offeror has a greater interest in the procurement than the protester, and we generally consider the protester’s interest to be too remote to qualify as an interested party,” the GAO continued, citing HCR Constr., Inc.; B-418070.4, May 8, 2020. In this case, the DLA had responded to Gulf’s protest arguing that two other proposals demonstrated the relevant experience for the RFP and had received favorable customer evaluations. Although the GAO normally would not consider such an argument as the agency hadn’t formally concluded those proposals would receiving the best rating, it still concluded Gulf “failed to reasonably establish that it would be next in line for award” if its protest was sustained. Recalling a then-recent Federal Circuit case , the GAO noted that “to succeed in showing that it has a direct economic interest to be an interested party, a protestor must make a sufficient showing that it had a ‘substantial chance’ of winning the contract.” To demonstrate this “substantial chance”, the protestor not only must sufficiently challenge the eligibility of the awardee, but also intervening offerors. Here, the GAO concluded that Gulf failed to show the nine other offerors with lower prices lacked proper standing for award. “Specifically, the agency provided the protester with sufficient information upon which it could–and should have–challenged its relevant standing with respect to the intervening offerors. Specifically, DLA’s agency report disclosed the identities of the nine intervening offerors, as well as produced the complete past performance proposal volumes and past performance questionnaires for at least two of the intervening offerors.” As Gulf knew there were other offerors with lower proposed prices and that two of them demonstrated substantial past performance, it failed to show it had a substantial chance at award by arguing any flaws with the evaluation of intervening offerors. While the rule held here isn’t necessarily new (A similar finding was made in Automated Power Sys., Inc., B-246795 (Feb. 20, 1992)), we do find the application of the rule a bit concerning. While Gulf wasn’t the lowest priced offeror, it wasn’t the highest priced offeror like in Automated, it was middle of the pack. Further, the GAO edged towards performing an evaluation of other offerors on the DLA’s behalf by saying the two other offerors that demonstrated relevant experience basically means they would be in line for award before Gulf. It is fair that a protest for an offeror that has no chance anyways can be dismissed, but this rule seems to suggest that a protestor must show with a high degree of confidence that it would win, not merely a reasonable possibility that it would win. This is an additional burden on protestors that could make it more difficult to challenge agency decisions, which already is quite difficult to begin with. Planning on submitting a bid protest and unsure what to do? 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: Protestors Must Show Intervening Offerors Would Not be in Line for Award to be Interested Party first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Friday marked a new federal holiday for Juneteenth. Juneteenth commemorates the end of slavery by marking the day enslaved people in Texas learned they were free. This is the first new federal holiday since first holiday to be approved since Martin Luther King Jr. Day was established in 1983. Many government agencies were closed on Friday and so we bring this week in review a little later due to the holiday. As we recognize this new national holiday, here’s some other notable news in the federal government. Requests for Nominations: Council on Underserved Communities [FedReg] SBA Announces Funding Competition to Organizations Providing Federal Procurement Training to Veteran Entrepreneurs [SBA] Government’s Contract Spending Reached Record High in Fiscal 2020 [NextGov] Former CEO Sentenced for Defrauding Multiple Federal Agencies [DOJ] GSA set to alter cloud buying landscape with new policy [FedNewsNet] Scanning military records now will improve disability claims process later [FedNewsNet] DOD says goodbye to its temporary teleworking platform used by millions [FedScooop] Cyber EO response will involve leaders from every agency [FedScoop] The post SmallGovCon Week In Review: June 14-18, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

For SDVOSBs and VOSBs, June 16, 2016 was a monumental day. That morning, the U.S. Supreme Court issued its unanimous decision in Kingdomware Technologies, Inc. v. United States, holding that the VA must follow the law by putting “veterans first” in VA contracting. Koprince Law LLC was honored to submit an amicus brief to the Supreme Court supporting Kingdomware, and my colleagues and I were thrilled with the Court’s 8-0 decision. Click here to check out my post from June 16, 2016 proclaiming “Victory!” for SDVOSBs and VOSBs in this watershed case. The Kingdomware decision didn’t (and couldn’t) solve every problem that some SDVOSBs and VOSBs have had with VA’s contracting practices, but five years later there is no doubt in my mind that the Court’s decision has been the driving force behind a large increase in VA’s SDVOSB and VOSB contracting. Happy anniversary! The post Happy Anniversary, SDVOSBs: The Supreme Court’s Kingdomware Decision Was Five Years Ago Today first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Intervening in a GAO bid protest can be an important way to protect a federal contractor’s award. But when can you and should you intervene? Here’s how this might come up. As a federal contractor, you work hard to submit the best proposal you can, and then find out you win the award. A few days after, you find out you’ve been protested as part of a GAO bid protest. What are your options for responding to such a protest? Below, I’ll discuss the five things you should know about intervening in a GAO bid protest. Intervene to monitor the bid protest and protect an award. When a protest is filed, an intervenor has the right to review all pleadings in the case, get admitted to a protective order (through an attorney), and file pleadings in the case. So, intervening is a way to monitor how the agency is defending its award to your company. In most cases, the agency will vigorously defend the award, but it can be helpful for the awardee to have its counsel involved as well. 2. Who can intervene? The awardee of a procurement has the right to intervene. The GAO rules state that an intervenor is “an awardee if the award has been made or, if no award has been made, all bidders or offerors who appear to have a substantial prospect of receiving an award if the protest is denied.” 4 CFR § 21.0. GAO will generally always allow the awardee to intervene. If you’re not the awardee, you generally cannot intervene. 3. An intervenor, through an attorney, can get access to agency documents and other protected information. Just like the protester, the intervenor can, through counsel, be admitted to the GAO protective order. Once admitted to the protective order, the intervenor’s counsel can view source selection information such as how the agency came to its evaluation and award decision and potentially to view proposal information from the protester. This allows the intervenor to submit arguments to rebut any allegations set forth in the protest. 4. An intervenor can file pleadings. An intervenor can file pleadings in the GAO bid protest. One common pleading is requesting dismissal of the protest. A request for dismissal, if granted by GAO, can result in the protest going away quickly without reaching a decision. A common ground for dismissal is that the protest is untimely, such as if the protest was filed more than 10 days after the time when the protester came to know about the basis for the arguments made in the protest. In some cases, the intervenor can file its own motion to dismiss, or join in with the agency’s motion to dismiss. In addition, the intervenor is allowed to file comments to highlight and bolster agency arguments made in the agency report. 5. The intervenor can work with agency counsel. In some cases, the intervenor can cooperate with the agency counsel to have a coordinated strategy against the protest. Even if the intervenor’s pleadings are relatively limited, the intervenor can highlight and enhance the arguments made by the agency. Working with agency counsel can also mean discussing strategy in responding to the bid protest and finding out what the agency counsel thinks about the protest. Intervening in a GAO bid protest is not required. The agency will defend the award against the protest (assuming it doesn’t take corrective action). But intervening gives the awardee a seat at the table and the ability to monitor and file pleadings in the case. If it’s an important award that is protested, seriously consider whether an intervention may be be beneficial. 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: GAO Bid Protest Interventions first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The Government Accountability Office (GAO) has offered participants in the U.S. Small Business Administration’s (SBA) 8(a) Business Development Program the opportunity to tell Congress about their views and experience in the program. Currently, GAO is working on its report regarding the 8(a) Program’s eligibility thresholds. In GAO’s own words, these reports and testimonies serve to provide “Congress, executive agencies, and the public timely, fact-based, non-partisan information that can be used to improve government and save taxpayers billions of dollars.” As such, GAO is actively seeking 8(a) business owners willing to participate in virtual discussion groups about the 8(a) Program. The National 8(a) Association‘s announcement of this opportunity says: “Understanding and reporting your perspectives on the program is essential to GAO’s ability to provide Congress with an accurate, complete and useful report.” The announcement further explains: GAO is seeking the perspectives of 8(a) business owners on the program’s eligibility thresholds. If you are an 8(a) small business owner, GAO is looking for business owners such as you to participate in virtual discussion groups to discuss your reasons for getting 8(a) certified, your experience with bidding for and winning federal contracts, your thoughts on the updated eligibility thresholds, and other concerns related to 8(a) eligibility you may have. We plan to hold these discussion groups between June 16 and July 2. The announcement also discusses the manner in which GAO will use this feedback–and assures 8(a) business owners it will be kept confidential, stating: The feedback you provide during the discussion group on your experience with the 8(a) program and lessons learned will be discussed in our report to Congress. Your feedback will be reported in aggregated form and no individual names or business names will be used. During the discussion group, we will not ask you to share any business strategies that you feel are proprietary or give your business a competitive edge. While the virtual discussion group event will be recorded, the recording will be used for transcription purposes only and will be deleted thereafter. In the unlikely event that it is requested, Congress or a court may compel GAO to provide information included in audit documentation such as the transcript. If you are an 8(a) business owner and are interested in participating in GAO’s virtual discussion group, which is currently scheduled to be held sometime between June 16 and July 2, GAO encourages you to reach out directly to 8adiscussiongroup@gao.gov or to call (202) 512-7975 to speak with Peter Kramer, a GAO Analyst assisting with this opportunity. 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 GAO Seeking Feedback from 8(a) Firms first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday! It’s been a busy week in federal government contracting news. Among the notable announcements, Federal agencies are staffing up and a new IRS web app has been announced. The Treasury Department laid out its updated vision for its financial management shared services offerings and some companies are considering opting out of working with the Defense Department because of the cost of the Cybersecurity Maturity Model Certification program. Have a great weekend. As agencies rebuild staff capacity, OPM finalizes new rehiring tool for former employee [FedNewsNet] Memorandum for the Heads of Executive Departments and Agencies [Whitehouse] Some companies may choose not to work with DoD because of CMMC [FedNewsNet] IRS procurement shop develops web app to predict contract spending [FedNewsNet] Federal Acquisition Regulation: Application of Micro-Purchase Threshold to Task and Delivery Orders [FedReg] VIEWPOINT: The Pitfalls of Factoring in Security and CMMC Costs [NatDefMag] Biden administration details its vision for agency reopening, post-pandemic telework [FedNewsNet] GovExec Daily: Staffing at the IRS and the Biden Budget [GovExec] Former Managers at Major Property Management Firm Plead Guilty to Defrauding U.S. Air Force [DOJ] The post SmallGovCon Week in Review: June 7-June 11, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Sometimes, task force meetings are held just for the sake of having meetings. However, on June 2nd and 3rd the Interagency Task Force on Veterans Small Business Development (IATF) and Advisory Committee on Veterans Business Affairs (ACVBA) met to discuss important issues facing small businesses. This shed much needed light on the issues fast approaching and what steps the SBA needs to take. The main topic of discussion was the pending CVE transfer. The transfer, as I soon found out, is deceptively complex. In a separate point, SBA noted that the Biden Administration announced it will use the purchase power of the federal government to make more awards to disadvantaged businesses, raising the target from 5% to 10%. The star of the show, however, was the CVE transfer. So, what does this mean for you? In 2020, we blogged about the plan to transfer CVE from the VA, to SBA. The 2021 National Defense Authorization Act (NDAA), whose Conference Report noted this seismic shift from the VA to the SBA. The change does make sense, as it will have the result of keeping all program certifications under one roof at the SBA. However, unlike the other SBA programs, the VA keeps extensive, confidential, and sensitive information on each of these Veterans. The NDAA mandated that the transfer occur two years after it was signed. That means the transfer will occur by January 2023. After the transfer is complete, CVE will be abolished. While seemingly a long way off, if the integration of beta.SAM is indication, there will be a lot to iron out between now and then. The main concern I found throughout both task force calls was figuring out who will be responsible for what. From payment, to oversight, to procedures, to access, task force groups are currently working through how and what responsibility to transfer. Breathing a sigh of relief for all people who confuse “certification” and “verification” between SBA and CVE, the “verification” term appears to be on the way out. Although the confusion will not be going away any time soon, as veterans will still need to verify their status with the VA until after the transfer. However, it is good to know that, when we are talking about small business programs, certification will be the operative term after transfer is finalized. The first topic of discussion is how will the SBA gain access to the information it needs to verify a veteran owns a business? What information will the SBA gain access to? Will the SBA have access to all the veterans information, including medical/mental health/service records? Veterans both in–and out of–service hand over countless amounts of sensitive information to the VA on a daily basis. Service, medical, mental health, and financial information is all held by the VA. In order for the SBA to certify a SDVOSB, the SBA needs access to relevant records for its review. The public comment section revealed keen interest in safeguarding veterans information. How will this be resolved? The VA informed the task force that it has groups running the pros and cons of each potential avenue right now. It does not appear there is a preferred method at this time. My guess is we will have direction by the end of the calendar year as to which way it intends to go. I am in the camp that the less information that is transferred, the better. That would mean allowing the SBA to request access to a specific veterans information, and then have the VA make that information available to the SBA through a login. This would limit blanket access or the risk of having veterans’ information contained on multiple servers. With all things, how the money flows is front-of-mind for those making decisions. Currently, CVE operates out of the Supply Fund authorized by 38 U.S. Code § 8121(a). Because verification is required for SDVOSB and VOSB participation in VA contracts, utilizing the supply fund is considered necessary. Once this shifts to the SBA, it is unclear whether the supply fund could still be utilized. I suspect that either a re-work of this statute, or a more expansive interpretation, including certification as a necessity, will be found. While this is a a small piece of the overall picture, it is unlikely the SBA will take on the cost without a source for the funds. The transfer specifically will not include transferring any employees, which makes funding even more critical for staff, training, and costs of certification. Suffice it to say, there are still major logistical gaps in the proposed change. Throw in a new administration and new leadership, and the project has only recently left the starting gates. We will stay tuned for additional updates and keep readers apprised. We appreciate the transparency of these agencies and SBA Administrator Guzman for taking the time to shed light on these issues. We look forward to future discussions, and will bring these to you when we receive additional details. 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 Recent Task Force Meeting Underscores Challenges Facing SDVOSB Transfer from VA to SBA first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

A recent GOA decision provides a costly lesson about the importance of having internal procedures to receive and respond to official e-mail communications when a company team member is unavailable. The stakes can be big–GAO recently dismissed a contractor’s protest challenging the Department of State’s decision to cancel a solicitation. The question in this matter revolved around when a party is deemed to have received constructive notice of an agency’s cancellation of a solicitation. The case is SAGAM Securite Senegal B-418583.2 (March 22, 2021). The matter began when the State Department issued a solicitation seeking local guard services for the U.S. Embassy in Dakar. The agency subsequently determined that the solicitation violated the Procurement Integrity Act and that the violation impacted the underlying procurement. On December 2, 2020, the Agency’s contracting officer sent an email to the director of operations for SAGAM (the Director) providing notice of its cancellation of the solicitation. The Agency received no acknowledgement of receipt of the email from the Director and sent follow-up emails on December 7th and 10th. The Director finally acknowledged receipt of the emails on December 10. On December 21, SAGAM filed a protest challenging the cancellation of the solicitation. The Agency requested that GAO dismiss the protest as untimely because it was filed more than 10 days after December 2, the date on which the Agency notified SAGAM of cancellation of the solicitation as required under GAO’s regulations. SAGAM argued that its protest was timely because it did not have actual or constructive notice of the Agency’s cancellation of solicitation until December 10. Between November 23 and December 23, the Director was on leave and could not access emails without physically going into a SAGAM office and, in following with the company’s standard business practices, the Director enabled an automatic email response providing notice that he was on leave with irregular access to email. The automatic response also identified an alternative contact for urgent matters. SAGM also argued that the Agency should have sent notice of the cancellation to the alternate contact person identified in the email auto-response. The GAO dismissed SAGAM’s protest finding that the protest was untimely. The GAO’s protest regulations require that a protest must be filed within 10 days of when the protester knew or should have known the basis of the protest. The GAO considers the receipt of an email during a firm’s regular business hours to constitute constructive notice. The GAO concluded that the date upon which the timeline for a response begins is the date that the relevant information was in fact received by the offeror. In this case, the Agency’s email notifying SAGAM of the cancellation was available to be opened during regulation business hours on December 2 and was deemed to have been received on that date. Further, the fact that SAGAM’s director was on leave during that time did not toll the protest filing deadline and that the Agency had no duty to follow up with a particular individual identified in an automatic email response. For the purposes of the GAO’s timeliness rules, the receipt of an email during a firm’s regular business hours constitutes notice and start the countdown for a timely response. This case should serve as a reminder to make sure that, if a staff member is responsible for government communications, someone should monitor the email when they are unavailable. An out of office reply is simply not enough to toll GAO bid protest deadlines. 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 GOA Considers Receipt of Email During Regular Business Hours Adequate Notice first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

We are pleased to announce that Kevin Wickliffe has joined our team of government contracts attorney-authors here at Koprince Law. Before joining our team, Kevin served as general counsel and chief compliance officer at a federally registered institutional, manager-of-managers, investment adviser. His combined regulatory compliance, business, and legal experience give him a unique perspective in providing legal assistance on transactional matters and in interpreting the government’s complex rules and regulations. Check out Kevin’s full biography to learn more about our newest attorney, and don’t miss his first SmallGovCon post concerning email notice for bid protests. The post Koprince Law Welcomes Kevin Wickliffe first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Among some contractors, it’s taken as an article of faith that even a single negative Contractor Performance Assessment Report will effectively preclude the contractor from winning new government work. While it’s undoubtedly true, in my opinion, that some Contracting Officers place too much emphasis on a single less-than-perfect CPAR, it’s also true that a contractor with multiple negative CPARs can still win government contracts, so long as the government reasonably believes that the contractor can successfully perform the new work. Case in point: a recent GAO bid protest decision upholding an award to a company with nine (count ’em!) recent, relevant and negative CPARs. GAO’s decision in Aviation Ground Equipment Corporation, B-417711.2, B-417711.3 (May 3, 2021) involved a Naval Air Systems Command solicitation seeking land-based mobile electric power plants. The solicitation was a small business set-aside and contemplated the award of a single IDIQ contract. The solicitation established a “best value” evaluation, encompassing three factors: technical approach, past performance, and price. For the past performance factor, offerors would be assigned one of five confidence ratings, ranging from the highest, Substantial Confidence, to Satisfactory Confidence, Neutral Confidence, Limited Confidence, and No Confidence. After evaluating competitive proposals, the Navy announced that it would award the contract to Essex Electro Engineers Inc. Essex received the highest possible rating, “Outstanding,” on the technical factor and a “Satisfactory Confidence” past performance rating. Essex proposal a total price of approximately $46.6 million. An unsuccessful competitor, Aviation Ground Equipment Corporation, filed a GAO bid protest. AGEC had also received an “Outstanding” technical rating. AGEC’s past performance confidence rating was “Substantial Confidence,” a higher rating than Essex’s. But AGEC proposed a total price of approximately $62.6 million, significantly higher than Essex’s. In its bid protest, AGEC contended, in part, that the agency’s evaluation of Essex’s past performance was flawed. AGEC pointed out that, of Essex’s 14 recent, relevant CPARs, “9 reflected less than satisfactory performance.” In those nine CPARs, Essex received “12 marginal ratings and 5 unsatisfactory ratings.” Additionally, “for six of the CPARs, the assessing official stated that they would not recommend Essex for similar work in the future.” GAO wrote that “the contemporary record shows the Navy considered the past performance information discussed by the protester.” While the Navy’s evaluators noted the negative CPARs, “the agency also noted that Essex assigned a new engineering team in 2016 that has significantly improved its performance on Navy contracts, including a very relevant Navy contract for similar mobile electric power plants.” The evaluators also found that Essex’s Navy CPARs since 2017 “have been uniformly satisfactory” and that Essex “proposed the same engineering team for this procurement.” GAO continued: While the agency could have reasonably come to a different conclusion on these facts, the agency did not ignore or overlook the awardee’s negative past performance. Rather the agency considered all of Essex’s past performance information and decided to give greater weight to its own recent experiences with Essex on very similar requirements. Our decisions have consistently concluded that it is reasonable for an agency to give differing weight to an offeror’s prior contracts based on their similarity or relevance to the required effort. Writing that it had “no basis to find the agency’s evaluation unreasonable,” the GAO rejected this ground of protest, and denied the remainder of AGEC’s arguments, as well. The Aviation Ground Equipment Corporation case is a good reminder that negative CPARs are not necessarily a death knell for a contractor. While some agency officials might give a negative CPAR undue weight, others–like the Navy’s evaluators here–will look beyond the scores. Corrective measures, like the new engineering team Essex assigned, may help demonstrate that the issues behind a negative CPAR are unlikely to reoccur. That said, it’s important not to read too much into GAO’s decision. It seems likely that, had the agency assigned Essex a Limited Confidence or even a No Confidence past performance score, GAO would have upheld those results as reasonable, too. Aviation Ground Equipment Corporation doesn’t mean that an agency is required to give a satisfactory past performance score to an offeror with negative CPARs–just that an agency has the discretion to do so when the facts warrant. 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 Agency Properly Awarded Contract to Company with Nine Negative CPARs first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

In the commercial world, it’s normal to buy a good customer a holiday gift. But when your customer is Uncle Sam, you might break the law by giving that same gift. The government contracting ethics rules aren’t always as cut-and-dried as “don’t give the contracting officer a briefcase full of unmarked bills” (although you shouldn’t do that, either!) and the government’s rules sometimes vary from commercial norms. On June 10, please join me and Shane McCall as we cover the key ethics and related rules contractors should know, including gift/gratuity rules, the False Claims Act, Procurement Integrity Act, anti-kickback rules, contingency fee restrictions, conflicts of interest and much more. This webinar is hosted by our friends at Govology and it’s easy to register: just click here. Shane and I hope to see you on June 10! The post Event: Government Contracting Ethics, Hosted by Govology first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday blog readers! Can you believe that it is already June? The sunshine and warmer temperatures have returned here in the Midwest and I, for one, am grateful for it. We hope you can get out and enjoy the sunshine this weekend. There has been a lot of activity in the federal government contracting arena this week. Some noteworthy items are the announcements from the Biden administration concerning agency hiring initiatives, a 5% increase in federal contracts set asides for small disadvantaged businesses, and legislation that will examine if federal agencies should relocate from Washington D.C. Read on for all the details. We hope you have a wonderful weekend! Biden Increasing Share of Federal Contracts to Small Disadvantaged Businesses [HSToday] New NGA Mentor-Protégé Program [Sam.gov] Congress Organizes to Promote Reform of Design and Construction-Related Contracting [POB] Why Government Needs More than Money to Fix Cybersecurity Issues [NextGov] CH2M Hill Plateau Remediation Company Agrees to Pay More than $3 Million to Settle Hanford Subcontract Small Business Fraud Allegations [DOD] Contracting Community Welcomes Biden’s Budget Proposal [GovExec] FSS BPAs: Back to the Future or “Déjà vu All Over Again!” [GCP] With Biden’s 2022 budget, civilian agencies are due for a hiring spree [FedNewsNet] Legislation calls for examining if agencies should relocate from DC [FedNewsNet] Army Secretary Wormuth says modernization programs remain ‘a top priority’ [FedScoop] Agency Hiring Initiatives and Other Takeaways From Biden’s First Budget [GovExec] The post SmallGovCon: Week in Review May 31-June 4, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

SBA’s Paycheck Protection Program (PPP) loans provided nearly $800 billion dollars of crucial financial support to over 8.5 million businesses and nonprofit organizations in the face of the COVID-19 pandemic. But as the proverb goes, “all good things must come to an end.” SBA closed the PPP doors to new loan guaranty applications at the end of May 2021 and released a closing statement on the program’s success. On June 1, SBA Administrator, Isabella Casillas Guzman, released a statement regarding the closure of the PPP application window at the end of May. As you probably know, the PPP was one of the first (but not the last) COVID-19 economic disaster relief programs implemented by the federal government to support the nation’s economy. Specifically, the PPP provided emergency funds to small businesses and nonprofits that were affected by the COVID-19 pandemic. In her statement, Ms. Guzman praised the program’s widespread success. She said: The Paycheck Protection Program provided over 8.5 million small businesses and nonprofits the lifeline they needed to survive during a once-in-generation economic crisis. I’ve heard story after story from small business owners across the country about how PPP funds helped them keep the lights on, pay their employees — and gave them hope[.] But Ms. Guzman also addressed some of the PPP’s shortcomings, explaining: At the same time, millions of underserved businesses – particularly our smallest businesses and those owned by women and people of color – were left out of early rounds of relief. I’m proud of the work we did to begin to rectify these inequities — in 2021, 96% of PPP loans went to small businesses with fewer than 20 employees. Moving forward, we will continue to prioritize equity in all SBA’s programs and services. According to SBA, the PPP “supported the smallest of small businesses with 32 percent of the loans going to Low-and-Moderate Income (LMI) communities.” SBA added that “PPP loans in 2021 averaged $42,000, another indicator of targeted relief to the smallest small businesses.” Finally, SBA also noted the “pivotal role” that Community Financial Institutions played in the PPP by lending crucial funds to underserved communities, “providing 1.5 million loans totaling $30 billion.” PPP’s stats are impressive to say the least. Sure, there were some issues in the eligibility vetting process–to the extent that many companies simply returned their loans. But regardless, the impact that the PPP had on the nation’s economy and well-being during a time of crisis and uncertainty is nothing short of monumental. For information on PPP loan forgiveness, check out our prior blog, 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’s Paycheck Protection Program Now Closed first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Receiving a notice that a competitor received an award can be a punch to the gut. This feeling is compounded when the requested debriefing is short on details. Offerors are normally left with more questions than answers. The DoD has proposed to amend the DFARS to enhance debriefings in certain procurements. The correct amount of information in a debriefing is an ever-moving target; hopefully, this new proposed amendment will be a step in the right direction. We posted back in 2018 when the DoD immediately implemented some measure of enhanced debriefing requirements. The latest proposed amendment tries to advance the ball a bit farther. The proposed amendments are far from finalized, only being announced on May 20, 2021. Comments are now open, and are expected to close on July 19, 2021. The proposed amendments seek to implement section 818 of the National Defense Authorization Act (NDAA) for Fiscal Year 2018. First, the new rule would allow unsuccessful offerors to submit written follow-up questions within two days of receiving the debriefing. The contracting officer will then have five business days to respond in writing to the question. The key is that the postaward debriefing will not conclude until the agency delivers its written response to the offeror. This key change from 2018, as outlined in more detail below, is the disclosure of source selection documentation through the debriefing process. Next, the DoD will require written or oral debriefings, when requested, for all contracts $10 million or more. For awards in excess of $10 million, but less than $100 million, a small business must receive an option to request the written source selection document. The agency can redact the document, but when considering a potential protest, this can contain crucial information. For awards in excess of $100 million, the written source selection document must be included with the debriefing. This applies to negotiated contracts, task orders, and delivery orders.. If the goal is transparency, I do not see the need to create an extra step for small businesses to have to request the written source selection document. This is important for small businesses, assuming this rule goes into effect, be sure to request the source selection document as part of every debriefing. The new rule also formalizes the timeframe for suspending performance or termination of a contract. Suspension will be required in the following circumstances, Within 10 days after the date of contract award or the issuance of a task or delivery order, where the value of the order exceeds $25 million. Within 5 days after the date that is offered to an unsuccessful offeror for a debriefing that is requested, and when requested is required, and the unsuccessful offeror submits no additional questions related to the debriefing. Within 5 days after the date that is offered to an unsuccessful offeror for a debriefing that is requested, and when requested is required, if the debriefing date offered is not accepted. Within 5 days, commencing on the day the Government delivers its written response to additional questions timely submitted by the unsuccessful offeror, when a requested and required debriefing is held on the date offered. The DoD does not intend for these new post-award debriefings to apply at or below the Simplified Acquisition Threshold (SAT). However, the new rules would apply to Commercial Off The Shelf (COTS) items in excess of $10 million. When doing business with DoD, debriefings are poised for an overhaul. When receiving notice of an unsuccessful offer, be sure to ask written questions, and request the written source selection document. Knowledge is power, be sure to grab it when it is available. 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 DoD Proposes DFARS Amendment to Enhance Debriefings first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

One of my major concerns with the draft solicitation for the CIO-SP4 GWAC was the limited nature of the past performance NITAAC intended to consider. Under the draft RFP, NITAAC would not have considered the past performance of subcontractors–something I believed violated 13 C.F.R. 125.2(g) in certain cases, and was contrary to the guidance of FAR 15.305(a)(2)(iii), which says that agencies “should” consider the past performance of “subcontractors that will perform major or critical aspects of the requirement.” The good news is that the final CIO-SP4 RFP fixes this problem. That’s a relief for a lot of potential offerors. But now I’m concerned that NITAAC went too far in the other direction! Section M.4.3. of the final CIO-SP4 RFP states: The government consider and evaluate the past performance experience of affiliates, members of the offeror’s 9.601(1) CTA (if applicable), subcontractors of the prime’s 9.601(2) CTA, members of the offeror’s JV (if applicable), and all members of the offeror’s mentor protégé arrangement (if applicable). Other portions of the final CIO-SP4 RFP, such as L.5.7, make similar statements. This is a broad review and solves my concern about subcontractors. So what’s my worry? “Affiliates.” Affiliates, of course, come in many flavors. They might be parent/subsidiary companies, sister companies, or two companies owned by spouses. Heck, in one case, affiliation was based on the fact that an individual owned one share of a company–out of 120! Needless to say, just because an offeror has an affiliate does not necessarily mean that the affiliate’s past performance has any logical relationship to how well the offeror will perform on the contract it is bidding–which, of course, is the entire point of submitting past performance. You don’t have to take my word for it. In a 2017 case that we discussed here, GAO explained that it is inappropriate for an agency to consider the past performance of an affiliate without evidence that the affiliate will have a meaningful role in the procurement at issue. GAO said: [w]here an agency observes apparent affiliation between companies but lacks evidence establishing the nature of the relationship in the procurement at issue, the potential for variations in the extent and nature of the relationship between two affiliated companies means that it is not reasonable for that agency simply to infer that the relationship will affect contract performance, or even to accept an offeror’s general representation that the performance of an affiliated company–positive or negative–should be attributed to that offeror. Before the agency can properly attribute the past performance of an affiliate to an offeror, it generally must have a factual basis showing the planned relationship between the companies on the contract at issue. Where, as here, the record before the agency does not indicate the involvement of the affiliate in performance of the contract, the agency cannot simply attribute the affiliate’s past performance to the offeror. I do not see anything in the final CIO-SP4 RFP requiring offerors to show the “planned relationship between the companies on the contract at issue,” that is, on CIO-SP4. Instead, at least as I read it, it seems that NITAAC intends to consider the past performance and experience of affiliates based merely on the affiliation itself (plus, of course, a showing that the affiliate was involved in the submitted past performance project). If this is NITAAC’s intent, I think NITAAC has gone too far. In my view (and, I think, GAO’s), a CIO-SP4 bidder shouldn’t be able to take advantage of an affiliate’s past performance and experience even if the affiliate won’t be meaningfully involved in CIO-SP4. I am curious to see if this issue will get raised in the upcoming Q&As. Stay tuned! 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 The CIO-SP4 RFP Allows Broad Past Performance Information–But Does It Go Too Far? first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

As we prepare for a long Memorial Day weekend, let us not forget to honor and thank all those that have served and continue to serve our country. Memorial Day is a day of reflection for those that have come before us and paved the way for our sacred freedoms that are often taken for granted. A big thank you to all of our veterans and active duty military. We see you, we honor you and we appreciate you greatly. Thank you for your service. “As we express our gratitude we must never forget that the highest appreciation is not to utter the words, but to live by them.” -John F. Kennedy We hope you a have a wonderful and reflective Memorial Day weekend. Here are a few noteworthy happenings in federal government contracting this week, including an upcoming SBA update on the pending SDVOSB governmentwide certification, the launch of the new SAM website, a timeline for CMMC assessor training, and more. SBA Veterans Small Business Advisory Committees will host public meetings June 2 and 3–and will provide an update on the pending governmentwide SDVOSB certification. [SBA] Report: Requirement for Federal Contractors to Pay $15 Minimum Wage Will Have ‘Minor’ Impact on Government Spending [Govexec] New background investigation initiative will include everyone by end of 2023 [FedTimes] CMMC accreditation chief says assessor training coming ‘mid-to-late’ summer [FedScoop] DOJ, FBI, IC reviewing supply chain threats posed by Russian companies [FedNewsNet] Navy transitioning more than 200,000 users to new online collaboration platform next week [FedNewsNet] The federal government’s procurement portal leaves beta with focus on data security [FedScoop] How users drove GSA’s design of new acquisition platform [FedNewsNet] The federal government’s procurement portal leaves beta with focus on data security [FedScoop] Solarwinds and Beyond: Improving the Cybersecurity of Software Supply Chains [ScienceHouse] Senators Hassan and Grassley Introduce Bill to Strengthen Efforts to Root Out Waste, Fraud, & Abuse in Government [Senate] Small Business Size Standards: Wholesale Trade; Retail Trade [FedReg] The post SmallGovCon Week In Review: May 24-28 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Equitus Corporation was sure it was following the right procedures when it requested a debriefing after receiving a letter stating its proposal under an Air Force Small Business Innovation Research (SBIR) solicitation had been rejected. The Air Force even provided the debriefing as requested, and Equitus filed a protest less than 10 days later. However, they made an easy-to-miss but crucial error that resulted in dismissal of their protest. In Equitus Corp., B-419701 (May 12, 2021) the Air Force issued a solicitation under the SBIR program . This program is established and governed by 15 U.S.C. § 638. The Solicitation itself consisted of two phases. Equitus had made it through the first phase, and, after submitting a proposal for the second phase, was informed that it was the “tentative selection for an award” dependent upon further review. Things were looking good for Equitus. However, on March 10, 2021, after conducting evaluations, the Air Force sent Equitus a letter informing them that it would be inappropriate to fund Equitus’ proposal because it lacked the innovativeness required to satisfy the definition of research and development (R&D). Equitus requested a debriefing, and the Air Force quickly responded with a debriefing on March 16. Nine days later, Equitus filed a protest with GAO. The Air Force responded that the protest was untimely as it was filed more than 10 days after Equitus received the letter informing them of the rejection, as that was when “Equitus knew or should have known of the basis of protest.” Equitus argued “that it did not learn its basis of protest until receiving the debriefing” and so the protest, being filed nine days later, was timely. GAO noted that, for protests not based on alleged improprieties in a solicitation, the rule is a protester must file within 10 days after the protestor knew or should have known of the basis for its protest. 4 C.F.R. § 21.2. An exception is when a protest challenges “a procurement conducted on the basis of competitive proposals under which a debriefing is requested and, when requested, is required.” In that case, the protest must be filed with 10 days of the debriefing. This means Equitus was in the clear, right? In the words of the great Lee Corso: “Not so fast, my friend!” SBIR procurements, GAO explained, are conducted pursuant to 15 U.S.C. § 638. Those procurements aren’t “competitive proposals”, and so there is no debriefing exception, as was found in a similar prior case, Global Aerospace Corp., B-414514 (July 3, 2017). This is based on FAR 6.102 , which describes “competitive proposals” separately from what are called “other competitive procedures.” As this latter group is described separately from “competitive proposals”, and the debriefing exception says it applies to “a procurement conducted on the basis of competitive proposals”, this exception must not apply to procurements using “other competitive procedures.” Equitus’s own protest stated it was addressed towards the Air Force’s “misinterpretation of what is and is not R&D” and a lack of understanding of the R&D required for the project. This issue was based on the March 10 letter, which stated that the rejection of Equitus’ proposal was over R&D considerations. As the debriefing exception did not apply, the question was when Equitus knew or should have known of the basis of protest. That day was March 10. Equitus’s protest was untimely, and it was dismissed. GAO’s decision confirms the understanding of debriefings for SBIR procurements as a whole. The debriefing exception does not apply to these procurements. GAO also noted that this rule applies all to procurements for basic and applied research conducted pursuant to a broad agency announcement under FAR part 35, Federal Supply Schedule pursuant to FAR subpart 8.4, and architecture-engineer contracts under the Brooks Act, 40 U.S.C. § 1102. The type of solicitation a government agency uses is a much bigger deal than many contractors realize. Entirely different statutes and regulations can apply or not apply on the basis of that choice alone. You should never ignore such designations. What seems like mere formalities can end up costing you severely in the long run if you’re not careful. 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 Debriefing Exception to Protest Timeliness Rule Doesn’t Apply to SBIR Procurements, Period first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Last year, SBA made joint venturing a little easier by relaxing the so-called “three-in-two” rule. But the “two-year” portion of the rule still exists–and in my view, the rule continues to unfairly elevate form over substance. SBA, it’s time to take the plunge, and get rid of the rest of the three-in-two joint venture rule. The three-in-two joint venture rule went through a few iterations in its lifetime. But in its most recent form before SBA’s 2020 amendment, the rule said that when a joint venture won its first contract, a two-year window opened. During the two-year window, the joint venture could submit additional offers, until the joint venture received its third award. If the joint venture submitted an offer after the two-year window closed, or after the joint venture received three awards (whichever came first), SBA could find that the joint venture partners were affiliated for all purposes. In its October 2020 final rule (which took effect on November 16), SBA eliminated the three-contract limit. But the “two year” limit still exists. The SBA’s 2020 change makes things a little easier for joint venturers, who now know exactly how long they have to submit proposals–two years from the award of the first contract. It’s an improvement on the three-in-two formula: contractors typically cannot predict exactly when a third award might occur, which sometimes left them scrambling to set up a new joint venture if a third award unexpectedly materialized. But, like the old three-in-two rule, the “two-year” rule applies to a joint venture entity, not to the joint venturers themselves. The two-year restriction is comically easy to circumvent–when the two-year mark arrives, simply set up a new joint venture entity, and voilà: the clock resets to zero. Consider the following examples: Companies A and B, which are both small businesses, form a joint venture. The joint venture wins its first contract on May 14, 2021. The joint venture continues submitting proposals for four years, until May 14, 2025. During that time, the joint venture wins six contracts valued at $25 million. In this example, Companies A and B have violated the two-year rule because they submitted proposals outside the two-year window. The SBA may find the companies generally affiliated–which could cause each company to lose its small business status for an indefinite amount of time. Now, let’s change the facts just slightly: Companies C and D, which are both small businesses, form a joint venture. The joint venture wins its first contract on May 14, 2021. The joint venture continues submitting proposals for two years, until May 14, 2023. Companies C and D then form a new joint venture and continue submitting proposals for two more years, until May 14, 2025. During the four-year period, the two joint ventures win six contracts valued at $25 million. In this example, Companies C and D are not affiliated because their owners apparently spend their free time poring over the Code of Federal Regulations! These regulatory mavens know about the two-year limit, so they wisely form a new joint venture when the initial two-year window closes. That, in a nutshell, is the utter illogic of the two-year rule: the same two companies, working together as joint venture partners, can win the same contracts, worth the same amount, over the same period of time, and SBA’s affiliation determination will turn on whether the companies happened to know that 13 C.F.R. 121.103(h)(4) required them to form a new unpopulated joint venture entity after two years. Heck, my examples were charitable: Companies C and D could have won more contracts, worth more money, over a longer period of time, but as long as they remembered to trot off to the Secretary of State’s office every two years and form a new joint venture entity, they likely would have been fine–just like these guys, who won 15 contracts together over a four-year period, but were savvy enough to do it using eight separate joint venture entities! SBA says its affiliation rules are about shared control, but that’s not how the two-year rule works. Instead, under the two-year rule, SBA effectively weaponizes affiliation and uses it not as the logical outgrowth of common control, but as a form-over-substance “gotcha” to penalize small businesses who don’t know about (or forget about) the arbitrary two-year limit. SBA’s mission statement says, in part, that SBA exists to “assist and protect the interests of small business concerns.” How is this purpose served by penalizing companies for bidding work with one joint venture entity after two years, but allowing the same companies to bid the same work after two years by using a second legal entity? And how, exactly, does SBA “assist and protect” small businesses by forcing them to return to a Secretary of State every two years, pay a new filing fee to form a new LLC, adopt a new joint venture agreement, and jump through several other administrative hoops (EIN, DUNS, SAM, etc.) just to keep joint venturing with the same partner? I will give credit where credit is due: last year’s regulatory change was a marked improvement over the old three-in-two rule. You’re on the right track, SBA. But now it’s time to go the rest of the way. It’s time to eliminate the rest of the illogical and unfair two-year joint venture rule. 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 The “Three-in-Two” SBA Joint Venture Rule is Partly Gone–Now It’s Time to Get Rid of the Rest first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The HUBZone Program has released updated FAQs that provide guidance on important HUBZone rules and how SBA will be interpreting them. While these don’t have the authority of a regulation, the new guidance shows how SBA will come down on certain HUBZone questions that aren’t answered in the regulations. These include the details on long-term investment in a principal office as well as a few other rules. Read on for how SBA will interpret these rules. SBA originally released guidance in February 2020 and has now updated the FAQs. It’s good to see SBA providing some clarity on these rules with the goal of making it easier to maintain HUBZone status. Without this kind of clarity, HUBZone businesses have had a hard time knowing what to do to take advantage of these new rules and flexibilities. There are quite a few details on long-term investment in a principal office, and the update touched on a few other HUBZone rules too, as described below. I didn’t include every detail here, so please review the FAQ in detail if these provisions may apply to your firm. Principal Office Long-Term Investment SBA updated the principal office rule to incentivize firms to make long-term investments in qualifying HUBZones. By purchasing a building or entering a minimum 10-year lease, the firm could maintain HUBZone principal office status even if the location lost its HUBZone designation. SBA provided additional information on how this rule will work in practice. “The 10-year clock starts on the firm’s HUBZone certification date (if the investment was made prior to the firm’s certification) or on the firm’s certification anniversary date that follows the execution of the lease or deed (if the investment was made after the firm’s certification). For example, if a firm was certified on May 1, 2020, and purchased a building on December 1, 2020, the 10-year clock would start when the firm recertifies as of May 1, 2021. The rule only works if the company “purchased a building or signed a long-term lease after December 26, 2019.” The long-term investment rule doesn’t apply if the principal office is located in “a Redesignated Area or Qualified Disaster Area at the time of the firm’s certification or certification anniversary date.” The rule only applies if the principal office was in one of the basic types of HUBZone areas (e.g. Qualified Census Tract, Qualified Non-Metropolitan County, Qualified Base Closure Area, Indian Reservation, or Governor-Designated Covered Area) at the time of certification or certification anniversary. Finally, the long-term rule doesn’t apply if the principal office location is shared with one or more other businesses or if the location is a home office. A firm must state in its annual recertification if it is going to take advantage of this long-term investment rule. The firm must provide a copy of the lease or deed showing execution after December 26, 2019 as well as the HUBZone map showing the principal office was in one of the proper category of zones. While there are some restrictions on this provision, if firms handle it right, they can ensure up to ten years of HUBZone principal office status. Shared Working Space In order to qualify, the firm must have dedicated space within the shared facility. This includes that the space have “a lockable door; and [be] available to the firm without limitations during regular business hours.” There are also requirements for the timing of the lease for the shared space, including that the “the start date must be at least 30 days prior to the date of application submission and the end date must be at least 90 days after the date of application submission.” The firm must document there is “sufficient work surface area, as well as furniture and equipment (e.g., desks and chairs) to accommodate the number of employees claimed to work from this location.” The firm must also provide proof of utility payments and may be asked to provide photos of the space. Teleworking SBA is extending this flexibility through September 30, 2021. “SBA currently considers firms that place employees on mandatory telework to be in compliance with the principal office requirement, if the firm can demonstrate that it met the principal office requirement prior to the COVID-19-related telework measures being put in place.” But the firm must submit a signed statement under penalty of perjury establishing that (1) the telework is in response to COVID-19, (2) the situation is temporary, and (3) the “firm will make its best effort to provide meaningful work to employees who are teleworking.” Legacy Employees SBA allowed firms to continue to count employees that no longer live in a HUBZone under certain conditions, what SBA called a “legacy employee.” The employee had to reside in a HUBZone for 180 days prior to the certification date or certification anniversary date occurring after December 26, 2019 and continue to live in a HUBZone for at least 180 days after certification. Note that this legacy employee concept doesn’t apply to “employees who resided in a Redesignated Area or Qualified Disaster Area during the relevant time periods and only open for businesses with a principal office not in a Redesignated Area or Qualified Disaster Area. For both components, the employee and the office must be in the one of main categories of HUBZones (e.g. Qualified Census Tract). In addition, the certification or certification anniversary date used to show the employee is a “legacy employee” must be after December 26, 2019. Firms must notify SBA if they are relying on this provision and provide supporting documentation to show where the employee lived, at what time, and continuous employment. Under certain conditions, firms may use “third-party businesses that specialize in providing HUBZone employees” to meet this requirement. HUBZone Map Freeze. Last but not least: as we wrote about, the HUBZone maps will not be changed until June 30, 2023. However, the HUBZone Map Freeze “only applies to Qualified Census Tracts, Qualified Non-Metropolitan Counties, and Redesignated Areas. During the freeze, no Qualified Census Tracts, Qualified Non-Metropolitan Counties, or Redesignated Areas will lose their HUBZone designation, and no new Qualified Census Tracts, Qualified Non-Metropolitan Counties, or Redesignated Areas are being added to the HUBZone Map. Certain new areas will still be added during this time for Qualified Disaster Areas, Qualified Base Closure Areas, Indian Reservations, and Governor-Designated Covered Areas. Good on SBA for providing additional details on how it will interpret these HUBZone rules. Be sure to review them closely if they apply to your company’s situation. 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 New HUBZone Program Guidance Sheds Light on Principal Office Long-Term Investment Rules first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

It’s been a very soggy week in the Midwest and we are looking forward to our normal sunny weather here in Lawrence, Kansas. We hope you are staying dry and the sun is shining bright in your neck of the woods. There has been a lot of activity in federal government contracting news this week including more big announcements for small businesses and federal government contractors concerning the latest executive orders on cybersecurity requirements. The SBA made an announcement about expanding HUBZone opportunities and supplements on DFARS regulations were released concerning past performance of subcontractors and joint venture partners, as well as information about post award debriefings. We hope you enjoy your weekend and catching up on the federal government contracting news in the articles listed below. This Is IT: What the Cyber Executive Order Means for Contractor [BloombergGov] SOFIC NEWS: SOCOM to Award More Than $1 Billion to Small Businesses in 2021 [NatFedMag] Contractors design strategies for dealing with the latest executive order on cybersecurity [FedNewsNet] Red River Army Depot Officials Charged in Bribery and Conspiracy Scheme [DOJ] Justice Department Launches New COVID-19 Fraud Task Force [Govexec] Defense Federal Acquisition Regulation Supplement: Past Performance of Subcontractors and Joint Venture Partners (DFARS Case 2018-D055) [FedReg] Biden’s DoD will huddle about how to replace CMO position [FedNewsNet] Defense Federal Acquisition Regulation Supplement: Postaward Debriefings (DFARS Case 2018-D009) [FedReg] MF Board braced for priority reviews of ‘pretty robust’ project proposals [FedScoop] USDA Official Admits Receiving Bribes in Exchange for Preferential Treatment in the Award of Security Contract [DOJ] Rapid Acquisition Benefits Special Operations [DOD] 37 Defense Industrial Base Companies Affected by SolarWinds Intrusion [NextGov] SBA Announces New HUBZones to Expand Federal Contracting Opportunities for Small Businesses [SBA] Owner of Company Providing Prosthetics and Orthotics Materials to Walter Reed National Military Center Pleads Guilty to Federal Charges in Maryland For Paying Gratuities [DOJ] The post SmallGovCon Week in Review: May 17-21 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

In a recent decision, GAO said that it is not the contracting agency’s job to play investigator when it comes to publicly available negative past performance information. GAO acknowledged that there may be certain situations where the agency is required to consider such information that it is aware of during its evaluation. But according to GAO, this denied protest involved no such situation. GAO’s decision in Cotton & Company, LLP, B-418380.4 (March 10, 2021), involved the National Aeronautics and Space Administration’s (NASA) issuance of a task order request for quotations for the NASA Annual Financial Statement Audit (NAFSA). NASA issued this Federal Acquisition Regulation (FAR) subpart 8.4 solicitation through a General Services Administration Federal Supply Schedule. The solicitation contemplated a best-value award of the fixed-price task order on the basis of three evaluation factors: technical, past performance, and price. It said that the technical factor would be pass/fail and past performance would be more important than price. Of relevance here, the solicitation required vendors to submit specific past performance information for up to five of their most relevant contracts. If a contract reference was deemed recent and met the minimum average annual cost requirements, the agency would then consider its degree of relevance based on content and performance. The performance aspects of the relevance evaluation would be based on customer satisfaction and contractor data regarding the vendor’s ability to meet technical, schedule, cost, and management requirements, its peer review report rating, and its quality control monitoring report. Based on its initial evaluation, the agency first awarded the solicitation to Cotton & Company. After two separate protests, a voluntary corrective action, and a reevaluation, it made a new award to Ernst & Young. But Cotton & Company protested that award, and the agency took a second corrective action. After the second reevaluation, the agency again awarded to Ernst & Young as the best value vendor. The agency found that Cotton & Company and Ernst & Young both passed the technical factor, both scored a level of confidence rating of “high” for past performance, and offered similar prices. As relevant here, Ernst & Young submitted five past performance references but two were deemed “less relevant” as they involved non-federal clients. The agency still evaluated all five references, finding that Ernst & Young’s experience covered each of the four specific relevance areas and rating it as overall high performance and very highly relevant. The agency also individually considered Ernst & Young’s Navy contract very highly relevant in the type and complexity of services, as it alone covered each of the four specific relevance areas. In its best value decision, the agency said that “Ernst & Young’s demonstrated ability to successfully perform all aspects of the NAFSA requirement under one contract warranted paying the small price premium associated with Ernst & Young’s proposal.” Cotton & Company subsequently filed the subject protest challenging several aspects of the agency’s past performance evaluation and its ultimate source selection decision. As relevant here, one allegation was “that the agency unreasonably failed to consider numerous publicly available news articles concerning Ernst & Young’s negative past performance and questionable business practices.” Specifically, the protest argued, “that the agency failed to consider past Public Company Accounting Oversight Board’s (PCAOB) investigations of Ernst & Young demonstrating audit failure rates as high as fifty percent.” Notably, the protest acknowledged that this information involved only Ernst & Young’s non-federal audits and that NAFSA was not subject to PCAOB inspection. But it also argued that “Ernst & Young itself claimed its non‑federal audits were relevant by identifying two non-Federal past performance examples.” Finally, the protest alleged that the agency should have been aware of these publicly available articles and PCAOB reports even if it was not. The agency’s response to this was that such news articles were not the “type of information” that the solicitation required it to evaluate. The agency argued both that it was not aware of these articles during the evaluation and that it should not have been expected to be aware of them either. It added that the solicitation required “a copy of the firm’s latest peer review report,” and that Ernst & Young submitted a recent copy of its AICPA peer review report, as required. GAO agreed with the agency and denied the protest on all grounds. GAO explained: An agency is not required to hunt down and investigate any and all negative news articles concerning vendors when conducting past performance evaluations. While we have recognized that, in certain limited circumstances, an agency has an obligation to consider information bearing on a vendor’s past performance when the record supports a conclusion that the agency was aware of the information and should have considered it, this is not one of those situations. Here, none of the contracts in question were identified by Ernst & Young in its proposal, and none of them involved performance for the same procuring agency as the instant procurement. As a result, there is no evidence to suggest that the agency knew or should have known of this information. In the end, GAO also found the other underlying challenges to the agency’s past performance evaluation to be without merit, and thus, found “no basis to question the reasonableness of the agency’s conclusion that Ernst & Young’s slightly higher‑priced quotation represented the best value to the government, a determination which was based on Ernst and Young’s demonstrated ability to successfully perform all aspects of the NAFSA requirement under one contract.” The takeaway here is that, while there may be situations where the agency is required to consider certain information bearing on a vendor’s past performance, it is not required to play detective. GAO’s decision implies that an agency may be required to consider such information if it is, at a minimum: (1) something the agency was in fact aware of during its evaluation; and (2) relevant to the agency’s past performance evaluation under the solicitation. But GAO did not specify any bright lines for exactly when and how this duty actually kicks in. Thus, while this decision provides some helpful guidance for offerors and protesters alike, we can only wait and see if GAO will clarify its standards down the road. Need help with filing a GAO bid protest or any other 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 Agency Not Required to Hunt Down and Investigate Bad Publicity, Says GAO first appeared on SmallGovCon - Government Contracts Law Blog.View the full article