Jump to content
The Wifcon Forums and Blogs

Recommended Posts

Telling COs that they are free to treat SDVOSB, HUBZone, and 8(a) as equals in the meantime is irresponsible when you know that they will lose protests and delay their procurements.

You don't "know" that they will lose until they lose all the way to the top, which is why we have an appeals process.

There's this little 1803 case that's gotten some press called Marbury v. Madison... .

Yeah, and there's this little 1847 case that's gotten some press called Dred Scott v. Sanford. Don't we know the courts are always right. In any case, Marbury v. Madison stands for the proposition that the Supreme Court has the power to judicially review the acts of the Executive and Legislative branches. We're going through that process of review in the matter at hand. Our democracy is safe at this point.

The Executive has complied with the Court of Federal Claims's ruling in the decided case. The decided case does not bind the Executive to follow the Court of Claim's interpretation in future procurements. As for my friend, the DAU professor, I'm impressed that he knows what's going to happen at the court of appeals. Rather than prognosticate, I will wait for the decision of the court. If filing an appeal in a purely administrative matter in accordance with the law constitutes "stall tactics, subversion, obfuscation and silliness," then I'm all for it.

Andy Jackson lives!

Share this post


Link to post
Share on other sites
Government agencies have opinions and policies, but they do not have rights.

I'll have to disagree. Government agencies do not have Constitutional civil rights, but that is not the entire spectrum of rights, which can arise out of constitutions, statutes, contracts, etc. The SCOTUS and Fed Circuit often refer to and enforce the Government's rights. See, for example, Caplin & Drysdale, Chartered v. U.S., 491 U.S. 617, 626 (1989), ?First, the property rights given the Government by virtue of the forfeiture statute are more substantial than petitioner acknowledges? and Gaylord v. U.S., 595 F.3d 1364, 1383 (C.A. Fed. 2010), "Whatever this agreement accomplished as between its parties, it cannot constitute a relinquishment of the government's rights under the contract or pursuant to 28 U.S.C. ? 1498(B)."

Share this post


Link to post
Share on other sites

OMB's guidance is 1) contrary to the FAR and 2) inconsistent with 2 GAO decisions and 1 COFC decision. COs who follow that guidance jeopardize the timely execution of their procurements. The folks at Eielson AFB followed OMB's guidance and the unsurprising result can be read in DGR Associates, Inc., May 14, 2010, B-402494. Until we get a decision from the CAFC, we should expect to see more cases like this.

My advice to COs is to follow the order of priority set forth below until things get sorted out.

For acquisitions exceeding the SAT:

1. HUBZone set-aside

2. 8(a) Program ("should consider" FAR 19.800(e))

3. SDVOSB Program, SB set-aside, or HUBZone sole source

For acquisitions at or below the SAT:

1. 8(a) Program ("should consider" FAR 19.800(e))

2. HUBZone set-aside, SDVOSB Program, or SB set-aside

Note that the latter priority is already reflected in the FAR.

This approach is consistent with law, regulation, and the decisions of the GAO and the COFC. If the folks at Eielson would have followed this advice, their contract would have been awarded by now.

Share this post


Link to post
Share on other sites
This approach is consistent with law, regulation, and the decisions of the GAO and the COFC. If the folks at Eielson would have followed this advice, their contract would have been awarded by now.

What do you say to Shay Assad? In his May 18 memo he says that the OMB policy on SBA parity regulations "... continues to be Executive Branch policy and components shouild follow the OMB guidance and all applicable regulations."

Share this post


Link to post
Share on other sites
OMB's guidance is 1) contrary to the FAR and 2) inconsistent with 2 GAO decisions and 1 COFC decision. COs who follow that guidance jeopardize the timely execution of their procurements. The folks at Eielson AFB followed OMB's guidance and the unsurprising result can be read in DGR Associates, Inc., May 14, 2010, B-402494. Until we get a decision from the CAFC, we should expect to see more cases like this.

My advice to COs is to follow the order of priority set forth below until things get sorted out.

For acquisitions exceeding the SAT:

1. HUBZone set-aside

2. 8(a) Program ("should consider" FAR 19.800(e))

3. SDVOSB Program, SB set-aside, or HUBZone sole source

For acquisitions at or below the SAT:

1. 8(a) Program ("should consider" FAR 19.800(e))

2. HUBZone set-aside, SDVOSB Program, or SB set-aside

Note that the latter priority is already reflected in the FAR.

This approach is consistent with law, regulation, and the decisions of the GAO and the COFC. If the folks at Eielson would have followed this advice, their contract would have been awarded by now.

In my opinion, you are out of line in telling people to ignore direction from OMB. Here is that direction:

Pending the completion of the legal review of the GAO?s decisions by the Executive Branch, the SBA?s ?parity? regulations should not be disregarded by contracting officers, and Federal agencies should not, as a result of the GAO?s decisions, be compelled to prioritize HUBZone small businesses over 8(a) BD or SDVOSBs. Instead, until the legal review is completed, Federal agencies should continue to give active consideration to each small business program pursuant to their pre-existing contracting practices and ?parity? policies.

OMB works directly for the president, and if they want agencies to take the risk of delay, that's their choice. According to the entry on OMB in the U.S. Government Manual, one of OMB's functions is to provide "overall direction of procurement policies, regulations, procedures, and forms." SBA's regulations take priority over the FAR in this matter, because SBA has the statutory authority to implement the small business statutes. GAO DECISIONS ARE NOT BINDING ON THE EXECUTIVE BRANCH, and the Source selection is a mess today because of GAO decisional law. Agencies should ignore GAO more often. As for the Court of Federal Claims, the Federal Circuit overrules them regularly. Heck, the judges on that court sometimes disagree with one another, one deciding an issue one way and another deciding the same issue a different way. Until the Federal Circuit or Supreme Court rule, a decision by the Court of Federal Claims is binding only in terms of specific contract actions. If we have more cases like this before the Federal Circuit rules, then so be it.

Share this post


Link to post
Share on other sites

Napolik,

Here is what the GAO said about Shay Assad's memo:

The DOJ opinion notwithstanding, we continue to read the plain language of the HUBZone statute as requiring an agency to set aside an acquisition for competition restricted to qualified HUBZone small business concerns where it has a reasonable expectation that not less than two qualified HUBZone small business concerns will submit offers and that the award can be made at a fair market price. See also Mission Critical Solutions v. United States, No. 09-864C (Fed. Cl. Mar. 2, 2010), appeal docketed, No. 2010-5099 (Fed. Cir. Apr. 2, 2010) (rejecting DOJ's interpretation of the HUBZone statute and concluding, consistent with our decisions in Mission Critical Solutions, B-401057, supra, that the language of the HUBZone statute is mandatory, such that a contract opportunity must be set aside for competition among qualified HUBZone small business concerns whenever the criteria set out in 15 U.S.C. sect. 657a are met). Thus, we conclude that the Air Force was required to first consider whether the conditions for setting aside a procurement for HUBZone businesses were met, and if so, to set aside the procurement for HUBZone small businesses. Because the agency did not perform this mandatory step, we conclude that it was improper for the agency to proceed with this procurement as an 8(a) set-aside, and we sustain the protest.

The GAO then goes on to recommend:

We recommend that the agency undertake reasonable efforts to ascertain whether it will receive offers from at least two HUBZone concerns and award will be made at a fair market price. If the agency's research indicates that these conditions are met, the agency should cancel the current solicitation and reissue it as a HUBZone set‑aside. We also recommend that the agency reimburse the protester its costs of filing and pursuing the protest, including reasonable attorneys' fees.[3] 4 C.F.R. sect. 21.8(d)(1) (2009).

In making our recommendation, we recognize, as the Air Force has noted and the DOJ memorandum indicates, that the recommendations in our bid protest decisions are not binding on Executive Branch agencies. Small Business Admin.--Recon., supra, at 5 (citing Bowsher v. Synar, 478 U.S. 714, 727-32 (1986)). This fact, however, does not affect our statutory obligation to decide protests concerning alleged violations of procurement statutes and regulations. See 31 U.S.C. sect. 3552 (2006). We have clearly stated our view on the proper interpretation of the HUBZone statute, and we recognize that the Executive Branch has resolved to apply its own, contrary interpretation of the HUBZone statute. Accordingly, absent some change in the statutory scheme, Executive Branch policy, or a contrary decision by the United States Court of Appeals for the Federal Circuit in connection with the Justice Department's appeal of the decision in Mission Critical Solutions v. United States, supra, we will decide future protests raising the issue here in an expedited and summary manner, in the interest of reducing the costs associated with filing and pursuing such protests.

The protest is sustained.

http://www.gao.gov/decisions/bidpro/402494.htm

The Air Force, and everyone else in the DoD Contracting organization, is in the middle of a fight they cannot resolve nor can they add to that fight. Either Shay Assad or the GAO need to square off and resolve their disagreement, or we in Contracting need to ignore the GAO, which may bite us on the tail before this is over.

It's a no win situation: the executives are failing to do their jobs and leaving us to deal with the detrius of that failure. It's shameful, and should be on the front page of the Washington Post. Perhaps I am bit idealistic for expecting them to resolve their differences in less than a year, but they all work in the same town for a Congress and White House of the same party control. Under those circumstances, they should be able to do so.

Note: yet another memo was issued on May 18, 2010 Shay Assad for the Dod which kicks the can down the road yet again "pending a DOJ notice of appeal".

Share this post


Link to post
Share on other sites

This is not shameful. This is merely one of the disputes that arise in Government from time to time and that will be worked out, one way or another. Either the Federal Circuit will rule, Congress will change the law, or both. Any contracting office that cannot figure out how to deal with this is run by idiots. Shay Assad cannot "square off" with GAO. GAO's disagreement is not with Assad, it is with OMB.

Share this post


Link to post
Share on other sites

Vern,

If we do what you say and go with the OMB guidance, and the courts find for the GAO, will we then be forced to go back and recompete all those contract actions in favor of Hubzone contractors? I fear that will be the case, which will be a huge problem for many offices.

I agree it should not be Shay Assad, but he should be pushing Peter R. Orszag into the ring since he is the one represent OMB and all of us in this dispute.

Share this post


Link to post
Share on other sites
Napolik,

Here is what the GAO said about Shay Assad's memo:

Actually, the GAO decision is dated 14 May while the Assad memo is dated 18 May. So, GAO could not have been commenting on his memo.

I am sure there is frustration in dealing with the competing OMB and GAO views on the "parity" of the three socioeconomic programs. But, we are part of the Executive Branch, and we must follow the direction of the Executive Branch leadership.

Speaking of delay and frustration, what happened to action to nullify the October 2008 GAO Delex decision that applies the rule of two to multiple award contracts?

Share this post


Link to post
Share on other sites

Keep in mind that OMB and DOJ have not said that a procurement cannot be set aside for HUBZones or that they must be set-aside for 8(a)s or SDVOSBs. They merely say that, GAO and COFC decisions notwithstanding, COs have have discretion to decide what kind of set aside they will make. COs need not go looking for trouble, but if the agency needs dollars in a non-HUBZone category in order to meet goals, they can decide what's best to do.

Share this post


Link to post
Share on other sites
Did you quote holdings or dicta?

I'd have to go back and read the cases more closely. It may well be dicta, but it isn?t always a bright line. For the purposes of an internet discussion board, I?m not sure it makes a difference. Dicta is often relied upon as persuasive authority even if it is not binding on a court. I pointed out two cases (out of hundreds) in which the appellate courts and the Supreme Court refer to and adjudicate the government?s right to do (or not do) something. I?d be surprised to find a case that stands for the position (whether as dictum or a holding) that the government has no rights.

If you?d like a reference that is more clearly a holding, how is this one?

?The right of the government to the duties accrues, in the fiscal sense of the term, when the goods have arrived at the port of entry. The debt for the duties is then due, although it may be payable afterwards according to the regulations of acts of Congress.

The debt due to the United States for duties on imported merchandise, is not extinguished by the giving of bonds, with surety, for the same. The revenue collection act of 1799, ch. 128, requires that the collector should take the bonds for the duties from all the persons who are the importers; whether they be partners, or part owners.

The government of the United States have a right to retain money in their hands belonging to a surety in a bond given for duties which is unpaid, until a suit shall be terminated for the recovery of the amount of the duties on the goods due by the importers. The government is not obliged to appropriate the money of the surety to the satisfaction of the bond, but may hold it as a security until the suit is determined.

Mr. Justice STORY delivered the opinion of the Court.?

Meredith v. U.S., 38 U.S. 486, 491 (1839).

Or how about a statute?

?Any mortgage, lien, or encumbrance created under the provisions of this section shall be subject to the rights of the Government to compel the enforcement of the terms of the lease or contract of the mortgagor, and any purchaser under a foreclosure of such encumbrance shall take subject to all the conditions assumed by the original lessee or contractor.?

16 U.S.C.A. ? 33

Share this post


Link to post
Share on other sites

Okay, so the government has rights (although "powers" seems more appropriate, but whatever), which means that the Executive Branch has the right to disagree with the GAO and reject its bid protest decisions and to appeal a decision of the COFC.

I'm happy.

Share this post


Link to post
Share on other sites

Ha ha. That was exactly the point I was making in my post about the government's right to appeal the COFC. Did you get so caught up in my use of the word "rights" that you didn't notice that I was agreeing with you? :)

An agency loss at GAO or the COFC is not the end of the process and the agency is not required to immediately abandon its position. If at the end of the appellate process MCS is successful, the Executive Branch will comply with the decision. However, there is a process for resolving different legal interpretations. Pursuing rights under that process is not wrong or evil, even when it is a federal agency pursuing those rights.

Share this post


Link to post
Share on other sites
What do you say to Shay Assad? In his May 18 memo he says that the OMB policy on SBA parity regulations "... continues to be Executive Branch policy and components shouild follow the OMB guidance and all applicable regulations."

My approach is consistent with Shay Assad's memo. Shay Assad would have no beef with a CO who follows my advice.

Share this post


Link to post
Share on other sites
In my opinion, you are out of line in telling people to ignore direction from OMB.

I didn't tell people to ignore OMB's guidance. OMB says that COs have choices in how to proceed. I'm advocating one such choice--the choice fraught with the least peril.

Share this post


Link to post
Share on other sites
I didn't tell people to ignore OMB's guidance. OMB says that COs have choices in how to proceed. I'm advocating one such choice--the choice fraught with the least peril.

Don, Here is OMB's direction:

Pending the completion of the legal review of the GAO?s decisions by the Executive Branch, the SBA?s ?parity? regulations should not be disregarded by contracting officers, and Federal agencies should not, as a result of the GAO?s decisions, be compelled to prioritize HUBZone small businesses over 8(a) BD or SDVOSBs. Instead, until the legal review is completed, Federal agencies should continue to give active consideration to each small business program pursuant to their pre-existing contracting practices and ?parity? policies.

Emphasis added. Here is what you said:

OMB's guidance is 1) contrary to the FAR and 2) inconsistent with 2 GAO decisions and 1 COFC decision. COs who follow that guidance jeopardize the timely execution of their procurements... My advice to COs is to follow the order of priority set forth below until things get sorted out.

For acquisitions exceeding the SAT:

1. HUBZone set-aside

2. 8(a) Program ("should consider" FAR 19.800(e))

3. SDVOSB Program, SB set-aside, or HUBZone sole source

Emphasis added. Now, you may want to split hairs about what you said, but I say that you advised COs to ignore OMB's memo, which tells them to adhere to the parity policy, and to apply the priorities prescribed by GAO instead. But I won't argue it with you. I will let the other readers decide for themselves what you advised. I will believe you if say that what you said is not what you meant.

I'm not quarreling with your opinion about OMB's advice. I'm quarreling with the advice your opinion prompted you to offer.

Share this post


Link to post
Share on other sites

http://www.govexec.com/story_page.cfm?arti...oref=todaysnews

Uncertainty looms over procurement parity dispute

By Robert Brodsky rbrodsky@govexec.com June 11, 2010

Obama administration officials fear that small businesses could begin losing out on millions of dollars in federal contracts unless lawmakers move quickly to restore parity to socioeconomic procurement programs.

Share this post


Link to post
Share on other sites

My friend John Krieger sent me a copy of page 789 from the Conference Report for HR 2647, the National Defense Authorization Act for Fiscal Year 2010, dated October 7, 2009. The following appears at the bottom of the page:

Small business contracting programs parity

The Senate amendment contained a provision (sec. 838) that would amend section 31(B)(2)(B) of the Small Business Act (15 U.S.C. Section 657a(B)(2)(B)), relating to the HUBZone small business program, to clarify that when a contract could be awarded pursuant to more than one small business program, the Department of Defense and other federal agencies have discretion as to which program to apply.

The House bill contained no similar provision.

The Senate recedes.

The conferees note that the Department of Justice has concluded that no change to the Small Business Act is required to ensure that contracting officers of the Department of Defense and other federal agencies have the discretion whether or not to award contracts pursuant to the HUBZone program. The conferees direct the Secretary of Defense to continue to administer the HUBZone program in a manner consistent with the Department of Justice opinion.

Share this post


Link to post
Share on other sites
My friend John Krieger sent me a copy of page 789 from the Conference Report for HR 2647, the National Defense Authorization Act for Fiscal Year 2010, dated October 7, 2009. The following appears at the bottom of the page:

I hope John found it on wifcon.com. Its been here since last October.

http://www.wifcon.com/dodauth10/dod10_lpna.htm#smallbusiness

Share this post


Link to post
Share on other sites

The latest in the saga:

http://www.govexec.com/story_page.cfm?arti...oref=todaysnews

Facing a July 15 termination of its contract, DGR took its case to the Court of Federal Claims, whose decisions are binding. In his decision, Judge Thomas C. Wheeler said the statute was unambiguous.

"The language of the Small Business Act granting priority to the HUBZone program could not be more clear," Wheeler wrote. "By using the phrases 'notwithstanding any other provision of law . . . a contract opportunity shall be awarded on the basis of competition to qualified HUBZone small business concerns,' Congress established a priority for the HUBZone program over other competing small business programs. . . . If Congress intended something different from what it stated, Congress alone must enact an appropriate amendment."

Share this post


Link to post
Share on other sites

That's conclusive proof that everyone wanted parity. Wonder what happened with the language appearing in the statue? There are lots of instances where staffers that draft legislation don't get it right and often after many renditions of bills, the wrong one slips through.

Share this post


Link to post
Share on other sites
That's conclusive proof that everyone wanted parity. Wonder what happened with the language appearing in the statue? There are lots of instances where staffers that draft legislation don't get it right and often after many renditions of bills, the wrong one slips through.

Who is this "everyone?"

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×