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Koprince Law LLC

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  1. When an agency reevaluates proposals in response to a protest, the reevaluation must be thorough and reasonable. In a recent GAO bid protest decision, GAO sustained a protest because the agency’s reevaluation of proposals, undertaken after a protest was sustained, did not reasonably address “widespread discrepancies” in the awardee’s proposal. Earlier this year, we blogged on GAO’s decision in Immersion Consulting, LLC, B-415155 et al. (Dec. 4, 2017) where the SSA had unilaterally revised the SSEB’s evaluation prior to making an award decision. GAO sustained the protest, and instructed the agency to reevaluate proposals. Following the reevaluation, GAO was once again called on to review this troubled procurement, and determined the agency’s evaluation was still flawed, despite corrective action. As more fully discussed in the earlier post, Immersion Consulting involved a procurement of program management support services by the Department of Defense’s Defense Human Resources Activity. Proposals were to be evaluated on three factors: technical, past performance, and price. Technical approach was the most important factor, followed by past performance, then price. Award was to be made on a best value basis. Notably, vendors were also specifically instructed to demonstrate how their proposed staffing would support the Solicitation’s technical requirements. Immersion and NetImpact Strategies, Inc. were the only vendors to timely submit proposals in response to the Solicitation. NetImpact was subsequently named the awardee. Immersion Consulting protested, in part, because the SSA had unilaterally revised the strengths and weaknesses the SSEB had assigned to offerors. GAO sustained the protest because “the record did not meaningfully explain the SSA’s rationale for removing the weaknesses assessed by the SSEB in NetImpact’s quotation or for removing a strength assessed by the SSEB in Immersion’s quotation under the staffing plan subfactor.” GAO recommended the agency reevaluate proposals under the technical factor. Responding to GAO’s decision, the agency elected to reevaluate proposals, but limited its reevaluation to the technical factor. It also performed a new trade off analysis. During the reevaluation, the SSA performed a second independent evaluation of both Immersion and NetImpact’s proposals. This time, however, the SSA now agreed with the strengths and weaknesses SSEB had originally assigned. As relevant to Immersion’s second protest, the SSA’s reevaluation found NetImpact’s proposal contained “inconsistencies in the [vendor]’s staffing plan matrix.” As GAO later explained, the staffing inconsistencies were wide spread: For example, in one chart in NetImpact’s quotation, the [DELETED] labor category is proposed for PWS task areas 4.2 and 4.3, but in another chart, this labor category is proposed for PWS task areas 4.2, 4.3, 4.4, and 4.6. Id. Similarly, the [DELETED] and [DELETED] labor categories are proposed in one chart of NetImpact’s quotation for PWS task area 4.6 and in another chart for PWS task areas 4.1 and 4.5. Despite this pervasive issue, the SSA nevertheless concluded a weakness (nothing more) was appropriate because “[t]he [g]overnment believes these inconsistencies are minor, correctable and can be addressed at [the post award conference].” The agency’s conclusion that the inconsistencies were minor was largely based on general language in NetImpact’s proposal stating that it would work with the agency during incumbent capture and that “NetImpact’s staffing approach thoughtfully considers skills and experience, as well as a match of personality and fit with the client organizational culture, and the demands of the role.” Notwithstanding the reevaluation, the SSA concluded that both Immersion and NetImpact’s proposals were “Acceptable” under the technical factor. During its revised best value trade off, the SSA concluded that despite having two additional strengths over NetImpact, Immersion Consulting’s roughly $3.5 million price premium did not represent the best value to the government. NetImpact was again named the apparent successful offeror. Immersion Consulting again protested NetImpact’s awarded before GAO in Immersion Consulting, LLC, B-415155.4 et al. (May 18, 2018) (hereinafter Immersion Consulting 2) . Among other things, Immersion Consulting challenged the assessment of only a weakness for NetImpact’s staffing ambiguities. According to Immersion Consulting, the SSA failed to sufficiently investigate the pervasive staffing errors in NetImpact’s proposal, which should have resulted in a score even lower than a weakness. The agency, however, responded that its evaluation was proper, and Immersion Consulting was merely disagreeing with the agency’s documented findings. GAO concluded Immersion Consulting had the better of the argument. After reviewing the list of various staffing inconsistencies within the proposal, GAO explained “we agree with the protester that the agency unreasonably failed to acknowledge and meaningfully evaluate widespread discrepancies in NetImpact’s quotation with regard to staffing and sustain this protest ground.” Additionally, GAO explained “[t]he agency’s reliance on these general representations by NetImpact, however, is inconsistent with the specific terms of the solicitation[,]” which “required vendors to demonstrate how their staffing plan supported the technical approach.” As such, NetImpact’s assurances that it would provide a “flexible” approach to staffing were insufficient to overcome the blatant contradictions within its proposal. GAO’s decision in Immersion Consulting 2 highlights the need for agencies to take thorough corrective action following a sustained protest. Here, the agency elected to take the bare minimum action to correct the flaw that GAO sustained in the first protest by reinstating the strengths and weaknesses the SSA had unilaterally altered. As GAO explained, however, merely reinstating the weakness for NetImpact’s proposed staffing without more thoroughly investigating the underlying issue was nevertheless still insufficient, as the record demonstrated there were pervasive problems with its staffing approach. According to GAO, “[t]he overriding concern for our Office’s review is not whether the evaluation results are consistent with the earlier evaluation results, but whether they reasonably reflect the relative merit of the offers.” While corrective actions often do adequately address all of the issues with a particular procurement, Immersion Consulting 2 makes clear GAO will send flawed evaluations back to the agency for a second review. View the full article
  2. Koprince Law LLC

    SmallGovCon Week in Review: July 9–13, 2018

    It’s Friday, which means it’s time for the SmallGovCon Week in Review. This week’s edition includes a look at federal spending on 8(a) contracts, GAO’s response to a discussion about a much-publicized OTA decision, and the SBA’s new effort to modernize its IT systems. There’s a lot to cover, so let’s get to it! Have a great weekend! Federal spending on competitively awarded 8(a) contracts exceeds that spent on sole-source 8(a) contracts. [Bloomberg Government] GAO offers a response to critique on its protest decision concerning the Army’s use of Other Transaction Authority (OTA). [Breaking Defense] SBA OCIO looks to award $40 million to 8(a) small businesses for services supporting its IT modernization goals. [FedScoop] North American Power Group (NAPG) and its owner, Michael Ruffatto, agree to pay a $14.4 million civic settlement for fraudulent use of DOE funds. [U.S. Department of Justice] Owner and CEO of Texas construction company, HERC Solutions, convicted of conspiring to defraud $1.37 million from the U.S. Department of State. [U.S. Department of Justice] MEP Sales and Service owner pleads guilty to using business partner’s service-disabled veteran status to commit $1.6 million bidding fraud against the VA. [Chron] View the full article
  3. The SBA takes its SDVOSB joint venture requirements very seriously, and even a relatively minor deviation or omission can be enough to render a joint venture ineligible. Time and time again, the SBA’s Office of Hearing and Appeals has shown that it will strictly enforce the rules governing SDVOSB status. OHA’s stance on SDVOSB joint venture agreements is no different. A recent OHA ruling reinforces that SDVOSB joint venture agreements must abide by the letter of the regulation when it comes to required items in the agreement. In ASIRTek Federal Services, LLC, SBA No. VET-269 (2018), OHA considered a protest by Cyber Protection Technologies, LLC that challenged the size and SDVOSB status of ASIRTek Federal Services, LLC, the awardee of an Air Force contract for engineering, management, and technical support services. Proposals under the procurement, which was set aside for SDVOSBs, were due July 20, 2016. ASIRTek was a joint venture consisting of ITI Solutions, Inc. and FEDITC, LLC. The joint venture agreement (JVA) was dated April 1, 2015. It identified ITI as “Managing Venturer” and FEDITC as “Partner Venturer.” The agreement stated that it was set up to compete for a certain Air Force 8(a) procurement, and that additional awards would be added to the agreement through addendums with approval by the SBA. Section 8.2 of the JVA specified that: The performance of specific responsibilities under the Contract and task orders awarded thereunder will be allocated between the Venturers as set forth in each proposal. The Venturer primarily responsible for developing the winning proposal for an individual task order under this Contract or who has first identified, in writing to the President, an opportunity for pursuit prior to RFP release shall be the managing party of the corresponding task order award and will be responsible for contract negotiations, unless otherwise agreed upon during proposal creation by both parties, in order to satisfy 13 C.F.R. 124.513(c)(7). The JVA also stated that “The Venturers shall receive profits from the Joint Venture commensurate with the work performed by the Venturers.” After creating the joint venture to bid on an 8(a) contract in 2015, ITI and FEDITC decided to use the joint venture to pursue the Air Force SDVOSB contract a year later. ITI and FEDITC created a “First Addendum” to the joint venture, referencing the Air Force contract, but only ITI signed the First Addendum. The First Addendum did not provide specific details regarding the responsibilities of the parties, with respect to the Air Force contract, for performance, source of labor, and contract negotiations. The Air Force took a long time evaluating proposals. On December 13, 2017, the Air Force finally announced that ASIRTek was the apparent successful offeror. A competitor filed an SDVOSB status protest, which was forwarded to the SBA Office of Government Contracting for review. The SBA determined that ASIRTek was ineligible because the JVA did not meet all of the regulatory requirements. The SBA declined to consider the First Addendum because FEDITC had not signed it before the proposal was submitted. ASIRTek appealed to OHA. OHA, in reviewing the JVA, reiterated that SBA regulations contain required provisions for SDVOSB joint venture agreements between an SDVOSB business and a non-SDVOSB small business. In particular, the 2016 version of the regulation in effect on the bid date stated that a joint venture agreement must include a provision “pecifying the responsibilities of the parties with regard to contract performance, source of labor and negotiation of the SDVO contract.” The JVA did not sufficiently address how the parties would split up the responsibilities under the contract. “The principal problem for Appellant is that its JVA did not address the instant procurement at all, or indeed any SDVO SBC procurement. Rather, the JVA was dated April 1, 2015, more than a year before the instant RFP was issued.” ASIRTek argued that it was unable to provide the required level of detail because the underlying contract was indefinite in nature. OHA rejected this argument, noting that “the RFP also provided detailed appendices, including technical requirements and labor estimates, which Appellant might have utilized to describe the types of work each joint venture partner would perform, and the labor each partner would contribute. Appellant therefore has not demonstrated that it would have been impossible for Appellant’s JVA to provide the information required by 13 C.F.R. § 125.15(b)(2)(iv) (2016).” The joint venture agreement was also missing the section, as required by 13 C.F.R. § 125.15(b)(2)(iii) (as in effect for purposes of the size determination), stating that at least 51% of profits must go to the SDVOSB venturer. Instead, the JVA stated that profits would be split commensurate with contract performance–which was the requirement for some 8(a) joint ventures in July 2016 but not SDVOSB joint ventures. OHA reiterated that there were “no exceptions” to the requirement for certain terms in a joint venture agreement. The regulation, as of August 24, 2016, now includes a similar but more detailed version of the requirement concerning description of how the parties will split up contract performance. Under the current version of the regulation, found at 13 C.F.R. 125.18(b)(2)(vii), there is now additional language addressing indefinite contracts: If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, not including the ways that the parties to the joint venture will ensure that the joint venture and the SDVO small business partner(s) to the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, or in the alternative, specify how the parties to the joint venture will define such responsibilities once a definite scope of work is made publicly available. Because of the date proposals were submitted, this language was not in effect at the relevant time. The August 2016 regulatory changes also conformed the SDVOSB joint venture profit-splitting rule with the regulation for 8(a) joint ventures. Both regulations now call for profits to be split commensurate with work share. Had these changes been effective, it might have resulted in a different outcome for ASIRTek. As the opinion makes clear, the SBA strictly enforces its joint venture rules that are in effect at the relevant time. When it comes to an SDVOSB joint venture agreement, the requirements must all be met, or the SBA will find an SDVOSB joint venture ineligible for a contract. You’ve been warned! View the full article
  4. Koprince Law LLC

    GAO Rejects Innuendo-Based OCI Disqualification

    Thinking about hiring an employee of the incumbent contractor for your next bid? If so, make sure to protect yourself from disqualification based on an organizational conflict of interest (“OCI”). In a recent bid protest by Archimedes’ Global, Inc., (“Archimedes”), the GAO reversed the Government’s decision to exclude Archimedes from consideration for a bid when an alleged OCI was based on mere innuendo and supposition instead of hard facts supported by the record. Pursuant to FAR 9.505, certain businesses may be disqualified from the bid process if they have an “unequal access” OCI, which exists where an offeror obtains non-public information that may be competitively useful. In challenging an agency’s identification of a disqualifying conflict of interest, a protester must demonstrate that the agency’s determination, “did not rely on hard facts, but instead was based on mere inference or supposition of an actual conflict of interest, or is otherwise unreasonable.” Archimedes Global, Inc., B-415886.2 (June 1, 2018) concerned a request for proposal from the Department of Homeland Security to perform management and support services. Archimedes was eliminated from consideration based upon an alleged “unequal access” OCI. The GAO sustained the protest because the Government’s decision to exclude Archimedes was not based on hard facts but instead relied on mere innuendo and supposition unsupported by the record. The Department of Homeland Security, United States Citizenship and Immigration Services, issued a task order to perform management and support services. Archimedes submitted a bid and was found to be technically superior to all other offerors but was disqualified from award consideration because the agency found that Archimedes had an apparent OCI. With Archimedes out of the running, the agency issued the task order to another business. The agency determined that Archimedes’ had an OCI because it proposed to hire the senior and intermediate program managers currently working for the incumbent contractor, Ambit Group, LLC (“Ambit”). Ambit had access to procurement sensitive information, and the task order permitted the agency to disqualify Ambit for competing for any follow-on requirements. The agency found that Archimedes had an “unequal access” OCI because the proposed Ambit employees could have provided Archimedes with “unequal access to non-public, competitively useful information.” Archimedes filed a protest with the GAO arguing the agency unreasonably eliminated it from consideration based on Archimedes’ proposed inclusion of two current Ambit employees as key employees to perform the roles of senior program manager and intermediate program manager. The central question in this case concerns the Government’s basis for disqualifying a business from consideration based on a conflict of interest. In Archimedes case, the GAO found that the agency’s decision to disqualify Archimedes was not based on hard facts, but, rather, on innuendo and supposition concerning the activities of Ambit employees. Chief among the GAO’s concerns was the fact that the contracting officer, without any underlying evidence, concluded that the information was provided to Archimedes because there was a “possibility that the individuals in question may have had access to competitively useful, non-public information”. The GAO disagreed noting “the record shows that neither individual is currently employed by AGI, and there is no evidence to show that the individuals provided AGI with competitively useful, non-public information, or otherwise participated in preparing the AGI proposal.” In light of those concerns, the GAO sustained Archimedes’ protest and sent it back to the agency for reconsideration. Companies that want include employees of the incumbent contractor in their proposal must take precautions to guard against even the appearance of an OCI. In Archimedes’ case, it paid off big time. View the full article
  5. Here’s a situation my colleagues and I see with some frequency: a contractor, in the course of working on a government contract, submits a request of some sort to the agency. Then waits for a response. And waits some more. Meanwhile, the government’s delay in responding prevents the contractor from moving forward with some aspect of the project, causing the contractor to incur costs. For contractors faced with this type of government inaction, a recent decision by the Armed Services Board of Contract Appeals is welcome news. In that case, the ASBCA held that the government breached its implied duty of good faith and fair dealing by waiting more than three months to respond to the contractor’s request to amend the Statement of Work–allowing the contractor to “twist in the wind” during that period. The ASBCA’s decision in Relyant, LLC, ASBCA No. 59809 (2018) involved an Army contract for the acquisition of pre-fabricated relocatable buildings (abbreviated “RLBs” in the decision) for use at two different sites in Afghanistan. The solicitation’s Statement of Work included certain specifications for the RLBs. Among those specifications, the SOW required the installation of gypsum interior drywall to the interior of the shipping containers that would cover fiberglass insulation. But in its proposal, Relyant, LLC proposed a different configuration: the use of a “sandwich panel,” including Styrofoam as the insulator instead of separate insulation and drywall. The Army awarded the contract to Relyant, but did not adopt the SOW change Relyant had proposed. In November 2008, Relyant submitted a written request to the Contracting Officer asking for permission to substitute the sandwich panel for the walls and ceilings. However, this request was apparently lost due to government computer crashes. Relyant resubmitted its request in April 2009. Relyant then repeatedly followed up with the government about its request, while two Relyant employees in Afghanistan were on standby, awaiting the Army’s decision whether to allow the SOW change. In August 2009, the Army finally rejected the proposed change, insisting that Relyant perform in accordance with the original SOW. Relyant filed a claim with the Contracting Officer seeking damages for a variety of reasons. In its claim, Relyant sought (among other things) labor costs and unabsorbed overhead associated with the Army’s delay in responding to Relyant’s request to change the SOW. The Contracting Officer denied the claim, and Relyant appealed to the ASBCA. The ASBCA held that the Army was within its rights to reject the sandwich panel and insist that Relyant perform in accordance with the original SOW. Nevertheless, the ASBCA found that the government had breached the contract by waiting more than three months to respond to Relyant’s request. The ASBCA wrote that “every contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement.” The duty “prevents a party’s acts or omissions that, though not proscribed by the contract expressly, are inconsistent with the contract’s purpose and deprive the other party of the contemplated value.” In this case, the ASBCA wrote that the Army was “familiar” with Relyant’s proposed change, was “aware that Relyant was awaiting its answer for several months in the spring and summer of 2009, while Relyant continually prompted it to act,” and “was aware that its delay in decision-making was potentially to the detriment of Relyant in terms of its incurring additional costs during the waiting period.” Moreover, “there were no circumstances that justified an extended wait on the part of the government before deciding whether to permit the change in the SOW.” Indeed, “the government’s decision-making appears to have been accomplished within a matter of days once it turned its attention to the matter.” The ASBCA held that the Army had breached the implied duty of good faith and fair dealing by waiting more than three months to respond to Relyant’s request, allowing Relyant to “twist in the wind.” It awarded Relyant $151,816 in delay damages. The ASBCA emphasized that its holding in Relyant was “very fact-specific.” The ASBCA wrote that “we do not hold here that every unreasonable government action necessarily constitutes a breach” of the implied duty. “For example,” the ASBCA explained, “in the event that a contractor requested a change to the SOW for which it had no realistic chance of approval, we might be less likely to find a breach of the duty if the government took an extensive period of time to resolve it.” For contractors, the ASBCA’s caution is important: the holding in Relyant does not mean that every delay in the government’s response will be considered a breach. But that said, as Relyant makes clear, some government delays are breaches. For contractors who feel that an important request has disappeared into the proverbial black hole, Relyant may offer some helpful legal leverage to get things moving. View the full article
  6. While the SBA’s Office of Hearings and Appeals hears appeals for many of the SBA’s programs, there are certain decisions that remain outside of its purview. As one protester was surprised to learn, among those items outside of OHA’s jurisdiction are appeals of the HUBZone status determinations. In JEQ & Co., LLC, SBA No. SIZ-5932 (June 7, 2018), the Defense Logistics Agency issued a solicitation for castellated nuts, a type of machine part. The Solicitation was entirely set-aside for HUBZone concerns under NAICS 332722 (Bolt, Nut, Screw, Rivet and Washer Manufacturing), which had a corresponding size standard of 500 employees. After reviewing proposals, the agency awarded the contract to ATF Aerospace. The following day, JEQ filed a protest challenging ATF’s size and HUBZone status. JEQ’s protest contained one assertion: “Per the Small Business Administration’s (SBA) Dynamic Small Business Search (DSBS) [database], [ATF] is not a HUBZone Certified Concern. [ATF] is not even a small business.” JEQ did not include any other documents or details in its protest. The Area Office subsequently dismissed JEQ’s protest as non-specific. According to the Area Office, JEQ’s protest did not furnish any information to impugn ATF’s status as a small business. To the contrary, the Area Office specifically noted ATF’s DSBS profile does list that it is small under the Solicitation’s size standard. From OHA’s summary of the decision, the Area Office did not appear to address JEQ’s allegations that ATF was not a HUBZone. While not expressly explained in the decision, the Area Office’s silence on this issue is likely due to the fact that Area Offices are not responsible for investigating HUBZone status protests. Instead, HUBZone status protests are to be forwarded to SBA’s HUBZone Director, or “D/HUB”. As such, the Area Office lacked jurisdiction to even consider the HUBZone challenges JEQ raised. Nevertheless, JEQ appealed the dismissal to OHA. Interestingly, JEQ abandoned its protest of ATF’s size, and instead renewed its allegation that ATF was not an eligible HUBZone concern. Unlike status protests of woman-owned or service-disabled veteran-owned small businesses, appeals of HUBZone status determinations are heard by the SBA Associate Administrator, Office of Government Contracting & Business Development (or “AA/GC&BD” in SBA parlance). OHA has interpreted this regulation to mean HUBZone status determination appeals are outside of its authority. Citing a number of its earlier decisions on this point, OHA explained that it “lacks jurisdiction to decide HUBZone status protests or appeals of HUBZone status determinations.” Accordingly, OHA denied JEQ’s appeal. As JEQ discovered, OHA does not have jurisdiction to resolve appeals of status determinations for all of the SBA’s socioeconomic programs; HUBZone status determinations being a notable exception. Whether this exception makes sense is an open question. OHA has a well-developed set of procedures for handling appeals, and has considerable experience with various SBA programs. OHA also publishes its decisions, which offers the public considerable insight into how the SBA applies its rules, and helps ensure consistency among similar cases. It certainly stands to reason OHA would be an ideal choice for hearing HUBZone status appeals. The SBA’s regulations, however, have not taken this approach. As such, businesses interested in appealing HUBZone status determinations should not file with OHA. View the full article
  7. When an incumbent contractor’s general manager got sick and had to quit, the contractor promptly found a replacement, which the agency approved. But there was still one problem: the incumbent had already proposed to use the same general manager for the next contract. According to GAO, the agency was right to eliminate the contractor from the competition, even though the agency knew that the contractor had a new general manager and had, in fact, approved the replacement. In Chenega Healthcare Services, LLC, B-416158 (2018), The contractor, Chenega Healthcare Services, LLC, a San Antonio, Texas, 8(a) program participant small business, was the incumbent contractor on an 8(a) indefinite delivery, indefinite quantity services contract to the Department of Energy in support of the National Training Center at Kirtland Air Force Base in Albuquerque, New Mexico. Chenega, a subsidiary of Chenega Corp., an Alaska Native Corporation, was in the last year of its performance on the incumbent contract when the agency issued a request for proposals to re-compete the procurement. In August 2017, Chenega submitted a proposal, which included the resume and commitment letter of the general manager currently performing. In December 2017, while proposals were still being evaluated, the general manager informed Chenega that he could not continue work due to medical reasons. Chenega notified DOE that he left and that it had hired a replacement general manager, who DOE subsequently approved. Chenega also contacted two contracting officials working on the re-compete and told them that it would propose a substitute manager for the upcoming contract. DOE did not allow Chenega to substitute a new general manager. Instead, in January, the contract specialist emailed Chenega to ask whether the proposed general manager’s commitment letter was still valid. Chenega replied that it was not. Despite Chenega offering a less expensive proposal, the evaluators found Chenega’s proposal “unsatisfactory” because Chenega suposedly had failed “to propose a General Manager” and eliminated it from the competition. Chenega protested to GAO, arguing that the agency was obligated to consider the replacement general manager, who, after all, the agency knew about and had approved on the incumbent contract. Chenega argued that the “too close at hand” doctrine—stemming from a line of cases in which GAO has held that past performance information of which the agency is aware is too close at hand to ignore—required the agency to consider this known replacement. GAO declined to extend this doctrine beyond past performance, reiterating that “too close at hand” does not extend to “situation where the information in question relates to technical requirements of the solicitation, including the qualifications of proposed key personnel.” GAO added that the doctrine is “not intended to remedy an offeror’s failure to submit an adequate and acceptable proposal.” Chenega also argued that the agency should have held discussions and given it the opportunity to update its proposal and substitute the new general manager. GAO said “the unavailability of a key person identified in a proposal renders a proposal technically unacceptable, and the agency has the discretion whether to evaluate the technically unacceptable proposal or to conduct discussions under such circumstances.” Here, because “an agency need not conduct discussions with a technically unacceptable offeror,” the agency acted within its discretion by rejecting Chenega’s proposal instead of opening discussions. GAO denied the protest. We do not normally opine on whether GAO’s decisions are correctly decided, and we recognize that generally it is GAO’s job to apply the law, not make broader policy judgments. That said, GAO’s decision in this case (and in similar cases) puts contractors in a very tough spot. In complex procurements, the evaluation of proposals can take months. In a few cases, we’ve seen the time frame from proposal submission to award take years. During that time, a lot can happen to a key employee: the employee can become sick, as happened in Chenega Healthcare Services. The employee could die. The employee could retire. All these things are outside the offeror’s control. Chenega did the right thing and told the contracting officer that the letter of intent was no longer valid. But there is no mechanism that, after the proposal deadline, allows a contractor to pull back its proposal once submitted and change it to reflect a new reality. In such circumstances, the contractor has to rely on the procurement officials to be reasonable and use their discretion to reach a fair result. To that end, GAO did not need to necessarily extend its “too close at hand” doctrine to sustain this protest. There is a far more fundamental legal principle that it could have relied on. According to FAR 1.602-2, contracting officers have a duty to ensure “that contractors receive impartial, fair, and equitable treatment[.]” The Court of Federal Claims has cited FAR 1.602-2 in holding, for example, that an agency may abuse its discretion by refusing to allow clarification of an obvious clerical error in an offeror’s proposal. Here, the fair and equitable thing to do would have been to give Chenega the opportunity to revise its proposal to include the new general manager. That likely would have involved opening discussions with all offerors, but this need not have been unduly burdensome to DOE; agencies have reasonable discretion to limit the scope of discussions. The GAO should have applied the basic principles of justice and fair dealing, which are already encompassed by the FAR, and sustained the protest based on the unreasonable actions of the agency in failing to open discussions to allow Chenega to substitute its general manager. But that didn’t happen. Unless Chenega or another contractor can persuade the Court of Federal Claims to adopt a different position, offerors are on notice: if something happens to one of your proposed key personnel, you could be in a tough spot. View the full article
  8. Koprince Law LLC

    SmallGovCon Week in Review: July 2–6, 2018

    We hope you had a wonderful Fourth of July. Next week promises to be busy, with vacations ending and preparations for the 4th quarter rush. In the meantime, let’s dive into this week’s edition of the SmallGovCon Week in Review! This week, we highlight IT draft requests from the DOT, an update to the DHS EAGLE II program, a proposed amendment to the DFARS, and more. Have a great weekend! DOT continues to modernize its IT infrastructure by issuing two draft requests for proposals on its EITSS contract. [fedscoop.com] DHS looks into redeveloping FLASH in its successor to the EAGLE II program. [washingtontechnology.com DoD proposes an amendment to the DFARS seeking to streamline the SSR submission process. [federalregister.gov] Alaska’s Congressional Delegation, SBA chairman, and small business owners meet to highlight the importance of the 8(a) Business Development Program. [ktuu.com] David Drabkin, highlights some of the key recommendations the 809 Panel is making for DoD reorganization. [federalnewsradio.com] View the full article
  9. GAO’s outcome prediction alternative dispute resolution (“ADR”) can be a tempting option for all parties to a protest, as it provides a preview of sorts for GAO’s written decision. A recent GAO decision, however, underscores that despite its relative informality, outcome prediction ADR can have significant repercussions on future protest developments. In Will Technology, Inc; Paragon TEC, Inc., B-413139.4 et al., __ CPD ¶ __ (Comp. Gen. June 11, 2018), NASA issued a procurement for acquisition and business support services. Twenty companies submitted proposals in response to the Solicitation. After evaluating the submissions, NASA determined discussions would be necessary and endeavored to establish a competitive range comprised of 5 bidders. As relevant to this blog, Will Technology (“WTI”), Paragon, and Canvas were all included within the competitive range and received discussions. Following discussions, all three companies submitted revised proposals. NASA evaluated the revised proposals and announced Paragon as the awardee, due in part to the strengths assigned to its proposed Project Manager. NASA provided WTI with a written debriefing of its award decision on August 3, 2017. In response, WTI filed a timely GAO protest, challenging the evaluation of its past performance and proposed experience. GAO subsequently conducted outcome prediction ADR with WTI and NASA. Outcome prediction ADR is a process where, after the protest record has been developed and the parties have submitted written briefing, the GAO attorney will advise the parties of the likely outcome of the case if GAO issued a written decision. Following outcome prediction ADR, the parties are encouraged to take appropriate action to resolve the protest (i.e. the protester withdraw the protest or the agency take corrective action, as the case may be) before GAO issues a written opinion. WTI was advised during outcome prediction ADR that GAO would likely deny its protest. After ADR, WTI notified GAO and NASA of its intent to file a protest before the Court of Federal Claims. Importantly, at this time, WTI also voluntarily withdrew its GAO protest. Before filing its complaint with the Court of Federal Claims, however, WTI provided NASA with additional information regarding alleged improprieties in NASA’s evaluation of proposals. As a result, NASA suspended contract performance and reconvened the Source Evaluation Board to conduct an investigation. As NASA had concluded it was necessary to conduct a reevaluation, WTI never filed a protest before the Court of Federal Claims. During the investigation, NASA determined it had improperly credited Paragon’s project manager with experience the project manager did not actually possess. As such, NASA revised Paragon’s evaluation. This, in turn, resulted in Paragon’s proposal no longer representing the best value to NASA. Accordingly, NASA revised its source selection decision and announced award would now be made to Canvas. On March 1, 2018, Paragon, WTI, and Canvas each received debriefings explaining the basis for the revised award decision. WTI timely submitted a second protest. Among other things, WTI again challenged NASA’s evaluation of its past performance and proposed experience. These arguments essentially renewed the same allegations WTI raised in its first protest that GAO predicted it would deny during ADR. At this point, the Army and NASA became enthralled in a battle over timeliness. Accordingly, a little background on GAO’s bid protest regulations is helpful at this juncture. In order to be considered timely, a protest after award must be filed within 10 days of when the protester knew or should have known the basis for protest. 4 C.F.R. § 21.2(a)(2). The sole exception to this rule occurs for protests where a debriefing is both requested and required. Under such circumstances, a protest is timely if it is filed with GAO within 10 days of the debriefing’s conclusion. Responding to WTI’s protest, NASA argued the renewed challenges were untimely. According to NASA, since WTI’s renewed grounds concerned evaluation issues of which WTI was aware following its first debriefing on August 3, 2017, it was now untimely to challenge those same protest grounds after the second debriefing on March 1, 2018. WTI countered that its protest was timely as it was filed within 10 days of the March 1, 2018, debriefing, which also resulted in a new awardee. According to WTI, since NASA had reconvened the Source Selection Board and conducted a reevaluation, it could timely raise the same protest grounds. GAO concluded that NASA had the better of the argument. As GAO explained, “[t]he record demonstrates that WTI knew the basis for the agency’s evaluation of its proposal more than 10 days before WTI filed its March 5, 2018 protest.” As such, WTI’s protest was untimely. GAO did not stop there, however. Instead, it turned to WTI’s argument that its renewed challenges were nevertheless timely because they were filed within 10 days of the second debriefing. GAO similarly rejected this line of argument and explained as follows: [A] new source selection decision or the reevaluation of proposals does not provide a basis for reviving otherwise untimely protest allegations where the basis of the otherwise untimely protest allegations concern aspects of the agency’s evaluation that were not subsequently affected by the agency’s corrective action. GAO also made a point to note that WTI’s prior protest had been voluntarily withdrawn after GAO conducted outcome prediction ADR. According to GAO, “we see no reason to provide the protester here with a second opportunity to re-file protest allegations that it chose to withdraw from our forum after being notified that they would be denied.” Thus, GAO dismissed WTI’s renewed protest of NASA’s evaluation of its past performance and proposed experience. Will Technology serves as a cautionary tale for protesters confronted with the opportunity of conducting outcome prediction ADR. While the factual circumstances of Will Technology are unique, the fact remains that in the eye of the GAO, by voluntarily withdrawing its protest following outcome prediction ADR, WTI conceded its ability to continue challenging its past performance and proposed experience evaluations. While voluntary withdrawal of its protest seemed like a reasonable action at the time, it ultimately doomed any future attempts to raise the same issues with GAO. View the full article
  10. When companies seek to join forces under an 8(a) joint venture agreement, they often focus on meeting the SBA’s specific joint venture requirements. In doing so, however, they might overlook the threshold goal of an 8(a) joint venture: to allow an 8(a) to develop the necessary capacity to perform a contract. As a recent Court of Federal Claims decision shows, overlooking this requirement can cause an 8(a) joint venture agreement to be rejected by SBA—and lead to the joint venture being found ineligible for an award. The pertinent facts of CR/ZWS LLC v. United States, No. 18-271C (Fed. Cir. 2018) are fairly straightforward. Charitar Realty (an 8(a) participant) and Zero Waste Solutions (a graduated 8(a) participant) formed an SBA-approved joint venture under the 8(a) program in 2016. In 2017, the United States Army issued a solicitation for refuse and recycling services at Fort Riley, and the joint venture wanted to submit a proposal for this work. The companies executed a written amendment to their joint venture agreement (the fifth since that agreement’s approval) that would allow them to bid on the work at Fort Riley. The parties’ proposed effort under Amendment 5 was impacted heavily by Zero Waste Solutions’ status as the incumbent contractor. For example, ZWS pledged to provide nearly $650,000 worth of equipment to perform the work, while Charitar would provide “equipment to administer the contract valued at $50,000.” Charitar, moreover, would largely provide managerial services, while ZWS would perform much of the labor required. And for the work that Charitar would perform, its personnel would simply roll-over from ZWS’s incumbent contract. After CR/ZWS was awarded the contract, it sought approval for Amendment 5. The SBA Area Office denied this approval, saying that the amendment raised questions of control and technical requirements. In this regard, the Area Office cited SBA’s 8(a) joint venture regulations, which state: A joint venture agreement is permissible only where an 8(a) concern lacks the necessary capacity to perform the contract on its own, and the agreement is fair and equitable and will be of substantial benefit to the 8(a) concern. However, where SBA concludes that an 8(a) concern brings very little to the joint venture relationship in terms of resources and expertise other than its 8(a) status, SBA will not approve the joint venture arrangement. 13 C.F.R. § 124.513(a)(2). Quite simply, the Area Office reviewed the joint venture agreement (as amended) and concluded that Charitar was “wholly dependent on ZMS for performance” and thus brought very little to the relationship other than its 8(a) status. CR/ZWS then challenged the SBA’s decision in federal court, alleging that the denial of its joint venture agreement was arbitrary and capricious and violated SBA’s regulations. The Court of Federal Claims rejected this challenge, writing: In the end, what is ultimately at issue here is whether the amendment to the joint venture agreement between Charitar and ZWS promotes the underlying purposes of the Business Development Program[.] That regulation authorizes an 8(a) concern that would otherwise lack the capacity to perform a contract to partner with a more experienced, non-8(a) concern through a “fair and equitable” joint venture agreement, and authorizes an agency to award the contract to the joint venture. But in order for the joint venture to be eligible for a contract set aside for 8(a) concerns, the joint venture arrangement must provide a “substantial benefit” to the 8(a) concern—i.e., it must enhance the 8(a) concern’s future capacity to win and perform similar contracts on its own. At the same time, to ensure that the 8(a) concern will provide more than window dressing, which would allow the non-8(a) concern to qualify for a contract award that it would not otherwise be eligible to receive, the SBA requires the 8(a) concern to bring more to the table than its 8(a) status. Because the joint venture agreement did not adequately show that the relationship was in Charitar’s interest, it was properly denied. *** Interestingly, the justification to deny CR/ZWS’s joint venture agreement amendment sounded like an ostensible subcontractor analysis: because ZWS is the ineligible incumbent, and because Charitar was largely dependent on ZWS for the needed personnel and equipment, the SBA concluded that it would not benefit under the proposed relationship. In any event, CR/ZWS serves to remind 8(a) joint venture participants that their joint venture agreement must explain how the relationship will benefit the 8(a) participant. View the full article
  11. I hope everyone has a safe and happy 4th of July as we celebrate our nation’s independence. If you’re still struggling to think of top-notch grilling ideas for Independence Day, might I suggest this delicious recipe from the fine folks at the Big Green Egg? But before firing up the grill, let’s take a look at the latest and greatest in government contracting news. In this week’s star-spangled edition of the SmallGovCon Week in Review, a former government employee pleads guilty to criminal charges related to using her position to benefit her husband’s company, Alaska Native Corporations celebrate as three military branches agree to reinterpret a limit on high-dollar sole source 8(a) contracts, and much more. A Virginia woman pleaded guilty to using her federal employment to personally benefit herself and her husband’s company. [U.S. Department of Justice] Three military branches have agreed to reinterpret a law that limited Alaska Native corporations’ access to high-dollar sole source 8(a) contracts. [Anchorage Daily News] SAM scheduled to be fixed starting June 29, 2018. [Federal News Radio] GSA is continuing with plans to create e-commerce portal for federal procurement. [FedScoop] A New York man pleaded guilty to government contracting fraud and faces a maximum penalty of 20 years in prison. [U.S. Department of Justice] The SBA’s watchdog found that contracting officers did not comply with self-certified women-owned companies program requirements. [Government Executive] (and see my commentary here). The federal government may have met its goal of awarding prime contract dollars to small businesses, but those dollars are going to just a handful of firms. [Washington Examiner] A North Carolina man pleaded guilty to a charge of conspiracy to defraud the United States and commit wire fraud under contract awarded by the U.S. Army. [Fox45 News] View the full article
  12. At least a couple times a month, I’m asked when the FAR’s limitations on subcontracting provisions will be updated to correspond with SBA regulations adopted in 2016, and underlying statutory changes adopted way back in the 2013 National Defense Authorization Act. Well, now it seems that the FAR updates may take longer than I’d hoped. In its most recent “Open Cases” update, the FAR Council says that it’s made a switch in the procedure that will be used to implement the changes to the limitations on subcontracting–and that switch will likely delay the implementation of those changes by several months. By way of quick background, way back in January 2013, President Obama signed the 2013 National Defense Authorization Act into law. The 2013 NDAA made major changes to the limitations on subcontracting. The law changed the way that compliance with the limitations on subcontracting is calculated for service and supply contracts–from formulas based on “cost of personnel” and “cost of manufacturing,” to formulas based on the amount paid by the government. And, importantly, the 2013 NDAA allowed small primes to claim performance credit for “similarly situated entities.” Interestingly, about a year later–well before either the SBA or the FAR Council had amended the corresponding regulations–the GAO issued a decision suggesting (although not directly holding) that the similarly situated entity concept was currently effective. But most contractors and contracting officers continued to apply the “old” rules under the FAR and SBA regulations. On May 31, 2016–about three and a half years after the 2013 NDAA was signed into law–the SBA published a final rule implementing the changes. The SBA’s regulation took effect on June 30, 2016. Less than a month later, the VA issued a Class Deviation, incorporating by reference the new SBA regulations for VA SDVOSB and VOSB acquisitions. But for many other procurements, contracting officers continued to include FAR 52.219-14, which uses the old formulas and makes no mention of similarly situated entities. (FAR 52.219-14 applies to small business, 8(a) and WOSB contracts. For HUBZone and non-VA SDVOSB procurements, the subcontracting limits are implemented by other clauses, which use the old formulas but allow the use of similarly situated entities). This, of course, has led to a lot of confusion. Does a contractor comply with the SBA regulation? The FAR clause? Both? Some Contracting Officers have taken the position that the FAR clauses govern until they’re amended. But the SBA, of course, wants contractors to follow the SBA regulations. Indeed, a joint venture formed under the SBA’s regulations must pledge to comply with 13 C.F.R. 125.6. Contractors want to comply with the law, but the delay in changing the FAR makes it difficult to determine which law to follow. I’m often asked when the FAR will be amended to conform with the 2013 NDAA and SBA regulation. Unfortunately, because of a recent change in the process that the FAR Council will use to update the limitations on subcontracting rules, I’m guessing that the FAR won’t change until sometime in 2019. The good news is that the FAR Council is working on a rule to amend the FAR. Until recently, the FAR Council said that, after internal government review, it intended to publish the rule as an “interim final” rule. An interim final rule becomes effective immediately upon publication. Usually, the public is invited to comment and the agency then decides whether the interim final rule should be altered. But the rule is in effect while the public comment period plays out. In its most recent “Open Cases Report,” issued on June 22, the FAR Council says that the interim final rule was “Converted to proposed rule.” Unlike an interim final rule, a proposed rule does not take effect when it is issued. Instead, the agency accepts public comments on the proposed rule, usually for a period of 30 to 60 days, but sometimes significantly longer. Once public comments are received, the agency reviews the comments and then develops a final rule. Only after the final rule is published do the changes go into effect. The bottom line is that using a proposed rule instead of an interim final rule means that it will take significantly longer for the FAR changes to go into effect. This procedural change will probably add several months to the process. At this point, my best guess is that the FAR’s limitations on subcontracting provisions won’t take effect until sometime next year. View the full article
  13. A contractor can become entitled to costs during a delay in performance. But when is a government contractor entitled to unabsorbed overhead costs during a government-caused suspension or delay? A recent Civilian Board of Contracts Appeals case answers that question in part. In BCPeabody Construction Services, Inc., CBCA 5410 (Mar. 26, 2018), the CBCA considered a claim from BCPeabody for costs incurred under a firm fixed-price design build task order issued by the VA to renovate two kitchen areas for VA buildings in Florida. The work included all “structural, architectural, utilities, and equipment as needed to meet the design.” BCPeabody received the notice to proceed on July 9, 2012. The work was supposed to be completed by September 7, 2012, but the VA did not approve the design until May 10, 2013. In addition, the electrical and mechanical design had to be altered from the original specification after it was discovered the equipment needs and HVAC systems needed more work than previously contemplated. VA suspended work on November 3, 2013, because the kitchens were serving patients who could not be relocated to allow for the renovation to begin. The suspension lasted 179 days with work to resume on May 5, 2014. BCPeabody shifted its tradesmen and foremen to other jobs during the suspension but claimed its project leadership did not shift, given the short duration of the suspension. It also requested $49,516.20 in “unabsorbed home office overhead costs” for the 179-day suspension. The CBCA provided a summary of overhead costs during delay: Suspension or delay of contract performance results in an interruption in payment for direct costs, which in turn causes an interruption in payment for overhead; however, overhead costs continue to accrue regardless of direct contract activity. This interruption in the stream of payments causes a portion of home office overhead costs to be unabsorbed. The CBCA noted in this case that two of the three factors for award of overhead costs during a suspension were present: (1) there was a VA-caused delay and (2) the delay resulted in extended time of performance of the contract. Less clear was whether BCPeabody “was required to remain on standby during the delay.” All three factors must be present in order to be awarded overhead costs during a suspension. The CBCA ruled that, because each of the suspension letters from the VA set a date on which work would resume, the contractor knew with certainty when work would resume. In this situation, “there is no uncertain delay period and the contractor is not on standby.” In addition, BCPeabody “ultimately had one month to remobilize,” and therefore it was not required to be ready to resume work immediately. The CBCA ultimately found that BCPeabody was not entitled to so-called Eichleay damages (named after the leading decision) for overhead costs during suspension of work. This decision is a reminder that award of overhead costs during a suspension of work is only possible where, among other things, it is uncertain when work will resume and the contractor must remain on standby (ready to resume work at any time) during delay. View the full article
  14. Summer has officially started! Let’s get it started off with the SmallGovCon Week in Review. This week’s edition includes a new FAR provision relating to the Kaspersky ban, NIH’s CIO-SP3 HUBZone awards, and much more. DoD, GSA, and NASA issue an interim rule amending the FAR to ban Kaspersky products. [federalregister.gov] NIH makes more CIO-SP3 on-ramp awards. [washingtontechnology.com] House appropriators putting the Defense Department on notice that they’ll be keeping a close eye on future OTA awards. [fcw.com] Former employee of U.S. government contractor in Afghanistan sentenced to 5 months in prison after pleading guilty to accepting illegal kickbacks. [justice.gov] EPA issues direct final rule to amend EPAAR by removing Mentor-Protégé clause requirement. [federalregister.gov] After pleading guilty to government procurement fraud, a former official at Scott Air Force Base sentenced to two years of probation. [stltoday] GSA needs to recognize that contracts with good selection and reasonable access fees are preferred over high fee, limited section vehicles. [federalnewsradio.com] View the full article
  15. Nearly 90% of women-owned small business sole source contracts reviewed by the SBA Office of Inspector General were improper, according to a startling report issued yesterday. In the study, the SBA OIG concluded that because of pervasive flaws in the award of WOSB and EDWOSB sole source contracts, “there was no assurance that these contracts were awarded to firms that were eligible to receive sole-source awards under the Program.” And if that wasn’t enough, the SBA OIG reiterated its position that, as a legal matter, it is improper to award any WOSB or EDWOSB sole source contract to a self-certified company. The SBA OIG studied 56 WOSB and EDWOSB sole source contracts awarded between January 1, 2016 and April 30, 2017. This pool “represented 81 percent of the Program’s contracts awarded on a sole-source basis for this time period.” The results were startling: SBA OIG determined that “Federal agencies’ contracting officers and firms did not comply with Federal regulations for 50 of the 56 Program sole-source contracts, valued at $52.2 million.” As a result, there was no assurance that these contracts were awarded to eligible WOSBs and EDWOSBs. Before awarding a WOSB or EDWOSB contract (whether set-aside or sole source), the Contracting Officer is required to confirm that the WOSB or EDWOSB has provided certain supporting documentation to the certify.sba.gov portal. But SBA OIG found that “contracting officers awarded 18 contracts, valued at $11.7 million, on a sole-source basis” to companies with no documentation in the system. Thirty-two sole source contracts were awarded to companies with incomplete documentation in the system. “Awarding contracts to potentially ineligible firms eliminates contracting opportunities for eligible businesses,” the SBA OIG wrote. “Further, the results associated with the Federal Government’s goals for contracting with WOSBs may be overstated, and the public and Congress may not know to which the Program has addressed underrepresentation.” The SBA OIG pointed out that the 2015 National Defense Authorization Act, which allowed WOSBs to receive sole source contracts, also required the SBA to implement a formal certification program for WOSBs and EDWOSBs. However, although the SBA implemented the sole source authority in October 2015, “SBA has not issued regulations pertaining to a certification progress for the Program.” An SBA official interviewed by the SBA OIG “estimated that it will take at least another year to actually implement a certification process.” Citing the plain language of the 2015 NDAA, SBA OIG repeated an opinion it has previously expressed–that it is against the law to award WOSB or EDWOSB sole source contracts to self-certified companies. “OIG firmly contends that the enabling legislation limited eligibility for sole-source contracts to certified entities,” the SBA OIG wrote. The SBA OIG report notes that the SBA’s government contracting leadership disagrees with this conclusion, but doesn’t explain the leadership’s legal rationale for doing so. This isn’t the first time that an oversight body has questioned whether WOSB and EDWOSB self-certification may be causing ineligible companies to win set-aside and sole source contracts. Just last summer, the GAO concluded that WOSB and EDWOSB self-certification may allow “potentially ineligible businesses” to receive contracts. In a 2015 report, the SBA OIG found that 15 of 34 WOSB set-aside awards were improper. The same year, the SBA OIG pushed the SBA to quickly implement a formal certification program, stating that self-certification “exposes the program to abuse.” Two years earlier, the NASA Inspector General issued a report suggesting that incorrect WOSB self-certifications may be pervasive. The 2015 NDAA became law on December 19, 2014. We’re approaching four years since Congress eliminated WOSB self-certification. But despite repeated pushes from watchdogs like GAO and SBA OIG, the SBA has yet to even propose regulations to implement a government-wide WOSB and EDWOSB certification program. I cut the SBA some slack early on, because there’s no doubt that implementing a brand new certification program is a complex process, requiring careful thought and a thorough understanding of potential options and resources. But enough is enough. At this point, I can only conclude that despite repeated reports about pervasive problems with self-certification, implementing the WOSB certification program simply isn’t a priority for the SBA. That’s a shame because reports like the one the SBA OIG issued yesterday make clear that WOSB self-certification just isn’t working well. A cynic might wonder if the SBA is dragging its feet because requiring WOSB certification could torpedo the Government’s already-low WOSB goaling achievements. I doubt that’s the case–I bet the SBA’s hesitance is probably more about the significant time and resources and time needed to implement the certification program. I’m also not sure that the Small Business Act, as amended by the 2015 NDAA, requires the government to discontinue counting self-certified WOSBs for goaling purposes. As I read it, the statute very clearly prohibits set-aside and sole source contracts from being awarded to self-certified companies, but doesn’t necessarily preclude the government from counting self-certified companies toward its annual goals. It will be interesting to see what the SBA’s lawyers make of it. I’ve long predicted that a formal certification program ultimately will increase WOSB awards. If I were a Contracting Officer, I’d be tempted to skimp on WOSB contracts because of the added administrative burden involved in checking for supporting documents, as well as a lack of confidence that self-certified bidders truly qualify. A formal certification program will eliminate the additional administrative requirement while giving Contracting Officers much-needed assurances their WOSB awardees really are eligible. View the full article
  16. As Koprince Law attorneys have discussed in depth, GAO will in some instances award costs for a clearly meritorious protest where an agency does not take corrective action before the due date for the agency report. But what are the standards for a “clearly meritorious” protest? It’s instructive to look at a recent GAO decision that reviewed protest grounds dealing with past performance evaluation and a requirement that the Army be able to set up the proposed product within 60 seconds. In HESCO Bastion Ltd., B-415526.3, (April 3, 2018), GAO reviewed a request by HESCO Bastion Ltd. for reasonable costs after it protested an award to JSF Systems, LLC. Under the RFP, the Army sought HESCO brand name or equal earth-filled barriers conducted under FAR part 12 and part 13. The RFP sought the Lowest Price Technically Acceptable proposal. Proposals would be rated acceptable or unacceptable based on factors including prior experience and past performance. The prior experience factor required a demonstration of 2 years of experience, within the last 5 years, manufacturing earth-filled barriers for the government. For past performance, offerors had to show details about “recent and relevant contracts for the same or similar items.” The requested items had to be HESCO brand name or equal earth-filled barriers–CART and RAID configurations, as marketed by HESCO. To be an equal product, both products must be deployed in a maximum of 60 seconds, and the RAID product had to contain “uilt rails inside for easy deployment.” The Army made award to JSF, finding its proposed products met all requirements. HESCO protested award to JSF. After initially defending the protest by filing an agency report, the Army took corrective action. HESCO then requested reimbursement of its protest costs. The basic rule is that GAO can recommend that an agency reimburse protest costs where GAO decides “that the agency unduly delayed taking corrective action in the face of a clearly meritorious protest, thereby causing a protester to expend unnecessary time and resources to make further use of the protest process in order to obtain relief.” A clearly meritorious protest is one where, reasonably, the agency had no “defensible legal position.” Normally, corrective action is prompt if taken before the agency report’s due date. In this case, with respect to whether the protest was clearly meritorious, GAO looked at each of the three protest grounds in turn to see if the agency really had a leg to stand on. First, HESCO argued JSF did not have the necessary experience where the RFP required at least 2 years of experience within the last 5 years manufacturing earth-filled barriers for the government. The agency report argued that, because JSF had experience with “delivery of earth-filled barriers” and its subcontractor had manufacturing experience, JSF met the requirement. GAO was not persuaded, holding that delivery is not the same as manufacture and the subcontractor certification was expired on its face. Second, JSF’s past performance did not meet the requirement to provide “detailed information on the contracts” of subcontractors because the proposal didn’t include all required information and the subcontractor’s required certification was expired. Plus, the Army did not evaluate whether past performance for the offeror showed recent and relevant contracts. Third, with respect to JSF’s proposed products, the Army determined that both the CART and RAID or equal products, which similarly required a maximum 60 second deployment, were evaluated as “[r]apid deployment.” The Army also determined the RAID or equal product had built rails for easy deployment, because the proposal specification sheet described the offered product as “easy to deploy by pulling open, positioning and filling.” GAO held, in a less than shocking result, that “rapid” is not the same as 60 seconds, and “pulling open, positioning, and filling” is not the same as “built rails.” In sum, then, GAO held that the documents in the Army’s position “did not provide a legally defensible basis for the agency’s position.” GAO recommended the Army reimburse costs to HESCO. As the HESCO Bastion case demonstrates, “clearly meritorious” is a high (but not impossible) standard to meet. For the protester to recover costs, the agency’s position must be legally indefensible, that is, blatantly wrong. View the full article
  17. Koprince Law LLC

    SmallGovCon Welcomes Stephen Skepnek

    I am very pleased to announce that Stephen Skepnek has joined our team of attorney-authors here at SmallGovCon. Stephen is an associate attorney with Koprince Law LLC, where his practice focuses on federal government contracts law. Before joining our team, Stephen practiced civil litigation and administrative law with the Kansas Corporation Commission. Check out Stephen’s full biography to learn more about our newest author, and don’t miss his first SmallGovCon post on the GAO’s tricky timeliness rules. View the full article
  18. In honor of Father’s Day, how about a dad joke? What kind of train eats too much? A chew-chew train! . . . Now that you’ve stopped laughing, let’s dig into the SmallGovCon Week in Review. This week’s edition includes articles about the draft 2019 NDAA, an update on the SAM.gov hack, a proposed FAR amendment, and more. Happy Father’s Day, and have a great weekend! House version of the NDAA contains biggest overhaul to DoD’s commercial buying practices being debated in the Senate this week. [Federal News Radio] The GSA updated procedures for its contractor registration site due to a backlog in the SAM.gov verification process. [fedscoop] DoD, GSA, and NASA proposing to amend FAR to provide guidance to be consistent with the National Defense Authorization Act. [Federal Register] GSA STARS II vendors receiving malicious e-mail spoofs. [APTAC] Next month, regulators will ask contractors for their thoughts on ways to increase use of a federal online portal. [Bloomberg Government] New Jersey couple ordered to pay the United States for overcharging the military. [U.S. Department of Justice] Texas man sentenced to 41 months in prison for unlawfully retaining national defense information. [U.S. Department of Justice] View the full article
  19. An agency has broad discretion to terminate a contract for convenience. But sometimes, a contractor will challenge the termination for convenience by arguing that the agency acted in bad faith in terminating the contract. A recent CBCA decision looks at what type of evidence is needed to establish bad faith. Not surprisingly, the CBCA confirms that the standard of proof is quite high. In J.R. Mannes Gov’t Servs. Corp., CBCA 5911 (Mar. 29, 2018), the CBCA reviewed an appeal of J.R. Mannes Government Services Corporation, which claimed the FBI terminated a task order for convenience based on bad faith. J.R. Mannes argued the FBI wanted to “get itself a better deal by performing the work in-house” or to retaliate against J.R. Mannes for a previous appeal. In 2015, the FBI awarded a task order to J.R. Mannes to work on a project to administer user access to applications hosted on the FBI’s mainframe computer. By March 2017, the FBI planned to retire the mainframe system, so it concluded that the J.R. Mannes task order supporting the mainframe should be discontinued. Therefore, the contracting officer modified the task order so the option year was not exercised. On June 23, 2017, J.R. Mannes responded “that the modification ‘constitute[d] an improper termination for convenience’ because a bad faith termination would entitle it to its ‘anticipated profit.'” On July 21, 2017, J.R. Mannes filed a claim for $53,139 in lost profits. The contracting officer did not issue a decision, and J.R. Mannes filed an appeal of the deemed denial. The CBCA wrote that “[t]he Government can terminate a contract for convenience when it is in its best interests.” There is a “presumption that government officials act in good faith” and the appellant must submit evidence to rebut that presumption. The FBI said that it chose to terminate because “it no longer needed a contractor to support a mainframe computer system that the FBI planned to retire in 2018. Also, the FBI chose to eliminate this contract, as well as others, due to funding constraints.” J.R. Mannes argued that the termination was in bad faith because of a claim it submitted on another contract. It submitted a letter of a former J.R. Mannes employee that stated the employee had talked to an FBI contracting officer representative and “[m]y initial and enduring reaction to her question and comment is that the contract which I was performing was being targeted for termination because of legal actions J.R. Mannes initiated on an unrelated FBI contract.” In response, the FBI submitted sworn declarations that the FBI did not know about J.R. Mannes’ claim on the unrelated contract until months after the alleged conversation with the FBI COR that was discussed in the employee letter. The CBCA said that the FBI’s declarations were “more persuasive and believable” than J.R. Mannes’ evidence, and denied the appeal. As the J.R. Mannes case demonstrates, in order to have a viable claim bad faith termination by the government, a contractor must present strong evidence that the government acted in bad faith. An unsworn letter of the type J.R. Mannes submitted probably won’t cut it. View the full article
  20. GAO’s bid protest regulations provide strict timelines for filing a protest. Typically, a protest challenging an award must be filed within 10 days after the basis of the protest is known or should have been known. There is an exception to this rule for protests filed after a debriefing, but only when a debriefing was required by the FAR. As one contractor recently discovered, where a debriefing is not required, GAO’s bid protest regulations are not nearly as forgiving. ITility, LLC, B-415274.3, 2018 CPD ¶ 134 (Comp. Gen. Apr. 2, 2018) involved the establishment of blanket purchase agreements with Federal Supply Schedule contract holders for the Department of Defense, Defense Information Systems Agency for agency program support. The solicitation was a total small business set-aside under FAR subpart 8.4. The solicitation anticipated awarding contracts to the five lowest priced, technically acceptable offers with a substantial confidence past performance rating. ITility timely submitted a proposal in response to the Solicitation. On December 20, 2017, ITility learned that its proposal had lost to five lower-priced offerors with acceptable plans and past performance ratings. ITility requested a debriefing. Nearly 2 weeks later, on January 2, 2018, the agency sent ITility slides with much of the same information provided in ITility’s unsuccessful offeror notice. Two days later, on January 4, 2018, a debriefing was held in person. ITility subsequently filed a GAO protest on January 12, 2018, challenging the agency’s evaluation methods. The central question in ITility’s protest quickly became whether the protest was timely filed after a debriefing. GAO timeliness rules generally require bid protests to be filed “not later than 10 days after the basis of protest is known or should have been known[.]” There is a limited exception, however, for procurements where an agency is required to provide a debriefing when requested. When a debriefing is both required and requested, a protest may be timely filed within 10 days of the debriefing’s conclusion. Procurements conducted under FAR Part 15, for example, require debriefings. ITility’s procurement, however, was conducted under FAR subpart 8.4; a subpart specifically designated for FSS contracts with different procedural rules and, importantly, no required debriefing. The agency argued that ITility’s protest was too late because it was not filed within 10 days after ITility knew or should have known the basis of the protest. Specifically, the agency claimed ITility knew or should have known the basis of the protest when it learned the name of each selected awardee, their proposed price, and the ratings of their plans and past performance. ITility responded that the time-period to protest did not start until it was given a debriefing and it had timely filed its protest within 10 days of receiving the agency’s debriefing slides. GAO disagreed with ITility and dismissed the protest. GAO noted that “[t]he timeliness rules reflect the dual requirements of giving parties a fair opportunity to present their cases and resolving protests expeditiously without disrupting or delaying the procurement process.” In this case, GAO concluded ITility’s protest was untimely. According to GAO, the protest needed be filed not later than 10 days after ITility knew or should have known the basis for its protest and that the “debriefing exception” for procurements conducted on the basis of “competitive proposals” under FAR part 15 did not apply to this procurement conducted pursuant to FAR subpart 8.4. ITility is a stark reminder of the GAO’s strict timeliness rules. As ITility painfully discovered, these timeliness regulations can trap unsuspecting bid protesters. Here, ITility missed their deadline and with it, their chance at winning a bid. View the full article
  21. Even skilled graphic designers often struggle with creating effective proposal graphics. While the usual rules of good graphic design still apply, proposal graphics come with their own unique set of challenges and requirements. In this post, we’ll look at some quick tips that can mean the difference between missed opportunities and winning graphics. But first, let’s dispel two common myths. Proposal Graphic Myths: Myth 1: Creating proposal graphics requires expensive or difficult software. This is a common misconception. The truth is that many effective proposal graphics are made in widely available programs like Microsoft’s PowerPoint or Visio. For graphics requiring more precision, Adobe Illustrator may be quicker and easier, but it’s not an absolute necessity—use the tools with which you’re comfortable. Myth 2: Proposal graphics need to be flashy. The truth is that clarity is much more important than pizzazz. For instance, a simple organizational chart using only straight lines, rectangles, and a couple of well-chosen colors suggests the orderliness and elegance of your solution. Meanwhile, a chart with a rainbow of colors and lines zigzagging everywhere suggests that your solution is convoluted, confusing, high-risk, and so on. While that second graphic may be more visually striking, it’s not nearly as compelling as the first. Quick Tips for Improving Proposal Graphics: Quick Tip 1: Only use graphics for important points. Nearly anything in a proposal could be represented with a graphic, and since very text-heavy pages look dull, it can be tempting to fill a proposal with graphics (especially if you have a library of old graphics you can reuse). But page space is nearly always a scarce resource in proposals. When using a graphic, make sure that it’s illustrating a key point. Graphics call a lot of attention to themselves, so make sure you’re using them to highlight major win themes, discriminators, etc.—those essential points you most want the reader to remember. On the other hand, if you simply need to provide some visual interest to a block of text, consider using a callout box rather than a true graphic—callout boxes are visually appealing and let you highlight key proof points without sacrificing much page space. Quick Tip 2: Make sure the graphic stands on its own. A common mistake is to include proposal graphics that require lengthy explanations in the body text surrounding them. Whenever you include a graphic, ask yourself, “If I saw this graphic alone, with no other text, would I understand it?” Evaluators are busy, and they’re not going to spend several minutes trying to decipher a difficult graphic. Moreover, if you need a block of text to explain what the graphic is supposed to show, then the graphic is just wasting space—the text could do that work alone. Aim for self-contained graphics that can be interpreted in 10 seconds or less. Any longer and an evaluator is likely to give up and move on. The body text around the graphic should elaborate, not explain. Quick Tip 3: Carefully craft your action captions. The captions below a graphic stand out from the rest of the text—a hurried evaluator skimming the page will naturally pay more attention to them than any one sentence in the body text. For that reason, you want to make sure your action captions effectively present your key points. For example, consider these three possible captions: Company X’s Proposed Organizational Structure. Company X’s Proposed Organizational Structure. Our proposed structure allows the Government direct access to senior decision-makers and subject matter experts. Company X’s Proposed Organizational Structure. Our proposed structure allows the Government direct access to senior decision-makers and subject matter experts, allowing for rapid response to urgent or unforeseen Government requirements. The first option is a missed opportunity. Anybody looking at an organizational chart should be able to tell immediately that it is in fact an organizational chart—if not, there’s something seriously wrong with the graphic! This caption is just wasted space. The second option is better, as it calls attention to a key feature of the organizational structure. But it doesn’t explain why that feature is a benefit to the customer—it stops short and hopes that the evaluator will make the desired inference. That may or may not happen. The third option is the best of the bunch. It calls attention to a feature of the graphic, and explains why that feature is beneficial to the customer. An evaluator who skims through the body and reads only the caption will still understand the key benefit that makes your solution the right choice. Quick Tip 4: Pay close attention to fonts. Most proposals have font restrictions in place (e.g., all text must be Times New Roman 12-point). Unless the RFP specifically states otherwise, these restrictions apply to graphics as well as body text. In other words, if you reuse an old graphic and forget to convert it from Arial 10 to Times New Roman 12, your proposal is non-compliant and at risk of rejection. Quick Tip 5: Always build graphics at actual size. The most common compliance problem isn’t using the wrong font when building the graphic, but rather, accidentally making the text too small after the fact. Inexperienced proposal graphic designers will often create a graphic using the correct font size in the PowerPoint or Illustrator source file—but when they go to move the graphic into the proposal document, they find that it’s too big. So they shrink it down to fit the page—and now the font is too small, rendering the graphic non-compliant. To avoid this problem, always design your graphics at actual size. For instance, if your proposal has 8.5”x11” pages with 1-inch margins, you have a maximum of 6.5”x9” of usable space. Make sure you set your slide (PowerPoint) or artboard (Illustrator) to those dimensions before you start building the graphic. When you insert it into the proposal, it will be exactly the size you need, eliminating the compliance risk. Never shrink graphics to fit into the proposal document. If they don’t fit, go back to the source file and make the appropriate changes there. Conversely, never expand small graphics to fit the page either—this leads to blurry, distorted graphics. Instead, go back to the source file, where graphics can be resized without loss of quality. Finally, designing your graphics at actual size has the additional benefit of making it clear from the beginning how much page space the graphic will take up. In severely page-limited proposals, shaving that extra half inch off the side of the graphic can make all the difference. Just by incorporating these five quick tips, you can immediately improve your proposal graphics and, by extension, your proposals and boilerplates as a whole. For further assistance with graphics, page layout, or any other part of the proposal process, contact Global Services today! Courtney Fairchild, President Courtney Fairchild is the President and CEO of Global Services. Global Services is a niche consulting firm focused on proposal management, proposal compliance, and GSA Schedule maintenance for federal contractors. Over the past twenty years she and her team have successfully prepared, negotiated, and managed 2,500+ federal contracts for Global Services’ clients, totaling over $20 billion dollars. Ms. Fairchild has been with the company since it was founded in 1996 and headed up the Global Services GSA Schedule Programs division from its inception. Global Services – 1401 14th St. NW, 3rd Floor, Washington, DC 20005 Phone: 202-234-8933 Email: global@globalservicesinc.com LinkedIn: www.linkedin.com/in/globalservices Twitter: @globalservicedc GovCon Voices is an occasional feature dedicated to providing SmallGovCon readers with candid news, insight, and commentary from government contracting thought leaders. The opinions expressed in GovCon Voices are those of the individual authors and do not necessarily reflect the opinions of Koprince Law LLC or its attorneys. View the full article
  22. Koprince Law LLC

    SBA OHA Rejects “Chain Affiliation” Theory

    Ordinarily, a company isn’t affiliated with the affiliates of its affiliates. That sentence may sound a little silly, but it encapsulates an important principle about the breadth of the SBA’s affiliation rules. As demonstrated in a recent SBA Office of Hearings and Appeals decision, the SBA doesn’t apply its rules to create “chain affiliation.” Before we get to the case itself, a simple example might be helpful. Let’s say two companies–Company A and Company B–are affiliated under the common management rule because the same individual is the highest officer of both companies. Let’s also assume that Company B receives almost all of its revenues from Company C, creating affiliation between Companies B and C under the economic dependence rule. Companies A and C have no direct connections. Is Company A affiliated with Company C–the affiliate of its affiliate? It’s an important question. For many small businesses, adding “chain affiliates” like Company C could push them over relevant size standards. OHA’s recent decision in Size Appeal of WisEngineering, LLC, SBA No. SIZ-5908 (2018) provides some answers. The WisEngineering case involved an Army solicitation for logistics support services. The solicitation was issued as a small business set-aside. After evaluating competitive proposals, the Contracting Officer announced that Barbaricum, LLC was the apparent successful offeror. WisEngineering, LLC, an unsuccessful competitor, filed a size protest. WisEngineering alleged that Barbaricum was affiliated with various entities. The SBA Area Office determined that Barbaricum was affiliated with Woodside O’Brien, LLC, a venture capital firm, under the SBA’s common ownership and identity of interest rules. However, affiliation with Woodside did not push Barbaricum over the solicitation’s $20.5 million size standard. Woodside held an interest in several entities collectively referred to as the “Portfolio Companies.” However, Barbaricum did not have any significant relationship with the Portfolio Companies. The SBA Area Office held that Barbaricum was not affiliated with the Portfolio Companies and issued a size determination finding Barbaricum to be an eligible small business. WisEngineering filed a size appeal with OHA. WisEngineering argued, in part, that the Area Office erred by failing to find Barbaricum affiliated with the Portfolio Companies. OHA wrote that “the record does not support the conclusion that Woodside is affiliated with the Portfolio Companies.” However, “even if Woodside were affiliated with the Portfolio Companies, this would not establish that Barbaricum and the Portfolio Companies are also affiliated.” Citing previous size appeal decisions, OHA wrote that it “has repeatedly rejected such ‘chain affiliation’ allegations, and has made clear that a challenged firm is not affiliated with the affiliates of its affiliate in the absence of any common ownership or control between the challenged firm and affiliate.” Here, WisEngineering “points to no evidence that Barbaricum, or its owners, hold any interest in, or have any power to control, the Portfolio Companies, or that any of the Portfolio Companies have any such ownership or control over Barbaricum.” Thus, “the Area Office correctly found that Barbaricum is not affiliated with the Portfolio Companies.” OHA denied the size appeal. As the WisEngineering case demonstrates, a company isn’t affiliated with the affiliates of the company’s affiliates, absent common ownership or control between the firms themselves. And in my view, that’s the right policy. In many cases, chain affiliation would result in companies being affiliated with entities with whom they have no connections, and potentially no reason to believe that they are affiliated. View the full article
  23. Koprince Law LLC

    SBA May Eliminate 8(a) Joint Venture Approvals

    The SBA is considering eliminating the requirement that contractors obtain the SBA’s prior approval to joint venture for 8(a) contracts. There’s no doubt that eliminating the approval requirement would reduce burdens and expenses for 8(a) companies and their joint venture partners–but it could also lead to an uptick in sustained protests against 8(a) joint ventures. Under current regulations, “SBA must approve a joint venture agreement prior to the award of an 8(a) contract on behalf of the joint venture.” Additionally, after the joint venture is approved in connection with the first 8(a) contract, “SBA must approve addendums prior to the award of any successive 8(a) contract to the joint venture.” The approval requirements are widely misunderstood. Some contractors believe that an 8(a) company must always receive the SBA’s prior approval to pursue a contract as a joint venture, even when the joint venture will pursue non-8(a) work. That’s not the case–only 8(a) contracts require the SBA’s prior approval. Other contractors believe that once the SBA approves a joint venture to bid on one 8(a) contract, the joint venture is “8(a) certified” and doesn’t need any future SBA approvals. Again, that’s wrong, and failing to get SBA’s approval of an addendum can cost the joint venture a contract. Misunderstandings aren’t the only problem with the approval process. It also can take a heck of a lot of work to get an 8(a) joint venture approved. Not only does the SBA require a joint venture agreement fully complying with 13 C.F.R. 124.513, but SBA District Offices also tend to require a great deal of supporting documentation, such as resumes, work share breakdowns, staffing plans, and so on. Some District Offices insist on “mandatory” joint venture agreement provisions that are nowhere to be found in the regulations; others demand that limited liability company joint ventures produce LLC operating agreements–again, not a regulatory requirement. Needless to say, for small, disadvantaged businesses, meeting these requirements can be onerous, time consuming and costly. Well, these problems may one day be a thing of the past. In a Federal Register publication issued last week, the SBA said that it is considering “possibly eliminating SBA’s role in approving joint venture agreements for 8(a) competitive contracts.” The SBA says that this change may make it “easier for small business concerns to understand and comply with” the 8(a) Program requirements. There’s little doubt that eliminating the prior approval requirement would be a good thing from the standpoint of cost and burden. But there may be a downside. If SBA adopts this change, I think you’ll see more protests sustained against 8(a) joint ventures. As annoying as the prior approval requirement might be, it also serves an important purpose–the SBA validates, before award, that the joint venture agreement meets all the mandatory requirements under 13 C.F.R. 124.513. If not, the SBA District Office typically sends the joint venture agreement back to the 8(a) company for edits. In other words, if the joint venture agreement isn’t perfect, it’s usually okay; the joint venturers will likely get a second bite at the apple. If the prior approval requirement is eliminated, the first and only time the SBA will review an 8(a) joint venture agreement is after an award is announced and a protest filed. This is how it already works for joint ventures competing for small business, HUBZone, WOSB, and non-VA SDVOSB contracts. At that point, if the joint venture agreement isn’t perfect, there are no do-overs. The protest is sustained, and the contract goes to the next in line. That’s the downside of the absence of prior approval–the stakes are much higher if and when the joint venture agreement is reviewed by the SBA. There are some mighty tremendous resources out there to help 8(a) companies and others form compliant joint ventures. But not everyone will avail themselves of those resources or get the joint venture agreement exactly right. And once competitors realize that the SBA isn’t reviewing joint venture agreements up front, they may be more inclined to file protests of awards to 8(a) joint ventures, guessing that the joint venture is more likely to have missed something than would be the case had the SBA given its prior seal of approval. Would eliminating prior approval be a good thing? On balance, I think so. The amount of time and effort needed to obtain prior approval just isn’t necessary in a program supporting disadvantaged small businesses. However, if the SBA does eliminate the prior approval requirement, 8(a) companies will need to understand that the obligation now rests with them to get the joint venture agreement exactly right the first time. It’s important to note that the SBA hasn’t made or even officially proposed this change. It’s just under consideration and may never occur. We’ll see what happens, but for now, the prior approval process continues. View the full article
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    SmallGovCon Week in Review: June 4 – 8, 2018

    TGIF! Let’s get the weekend started off with a look at the latest and greatest in government contracting. In this week’s edition of the SmallGovCon Week in Review, we’ll take a look at DoD’s final rule amending DFARS to increase certain micro-purchase thresholds, more questions about the SBA’s small business participation report cards, a former background investigator’s guilty plea, and much more. Have a great weekend! DoD issues final rule amending DFARS to increase micro-purchase thresholds. [Federal Register] Did the Small Business Administration really meet their FY17 goals. [Linkedin] A former background investigator pleads guilty to making a false statement and may serve 5 years. [U.S. Department of Justice] Google not renewing its contract with Pentagon due to employee backlash. [Quartz at Work] Richmond company agrees to pay $625,000 to settle federal civil fraud lawsuit. [U.S. Department of Justice] View the full article
  25. The SBA plans to issue a proposed rule consolidating the All Small Mentor-Protégé Program and the 8(a) Mentor-Protégé Program. According to a recent SBA publication in the Federal Register, the SBA has had a change of heart about whether it is necessary to run two similar mentor-protégé programs–one for everybody, and another only for 8(a) firms. When the SBA created the All Small Mentor-Protégé Program in 2016, the SBA purposely left in place the existing 8(a) Mentor-Protégé Program. At the time, SBA explained that it had considered consolidating the two mentor-protégé programs, but rejected the idea because the 8(a) Mentor-Protégé Program “has independently operating successfully for a number of years and SBA believes that it serves important business development purposes that should continue to be coordinated through SBA’s Office of Business Development, rather than through a separate mentor-protégé office managed elsewhere within the Agency.” Additionally, in 2016, the SBA couldn’t be sure how well the All Small Mentor-Protégé Program would work in practice. The SBA was concerned that the All Small Mentor-Protégé program might be overwhelmed with applications to the point where SBA might have to institute “open and closed enrollment periods” for that program. The SBA may not have wanted its 8(a) companies to be subjected to the potential of open and closed enrollment periods–and kept the separate 8(a) Mentor-Protégé Program active to make sure that didn’t happen. Fortunately, the SBA’s concerns about the implementation of the All Small Mentor-Protégé Program proved largely unfounded. In practice, the All Small Mentor-Protégé Program Office has been, in my opinion, about as close to perfect as a new government office can get. The ASMPP Office, as it is called (everything in government needs an acronym) is efficient, speedy, and responsive. Instead of needing to establish open and closed periods, the SBA at one point was able to tell the public that the average processing time of an All Small Mentor-Protégé Program application was a mere eight days. And because the All Small Mentor-Protégé Program offers the same benefits as the 8(a) Mentor-Protégé Program, even many 8(a) companies have elected to apply to the ASMPP instead of the 8(a) Mentor-Protégé Program. Instead of providing a special benefit to 8(a) companies, the existence of two similar SBA mentor-protégé programs has caused some confusion. For example, many contractors think that an 8(a) company must go through the 8(a) Mentor-Protégé Program instead of the All Small Mentor-Protégé Program. Nope. Others believe that a mentor-protégé joint venture cannot pursue an 8(a) set-aside contract unless the joint venture was formed under the 8(a) Mentor-Protégé Program instead of the ASMPP. Again, nope. Now it seems that the SBA has changed its mind about the need for two SBA mentor-protégé programs. In the Federal Register publication, the SBA says that it “contemplates consolidating the All Small Mentor-Protégé Program and the 8(a) Mentor-Protégé Program into one program.” The SBA plans to issue a formal rule to implement this change, but hasn’t done so yet. We’ll keep you posted. View the full article