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ohnoudidnt14

Time of Bid vs. Time of Award

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For a SDVOSB or 8(a) set-asides, offerors must be so classified as of the date a bid is submitted, regardless of the resulting actual date of award. Do I understand correctly, however, that for HUBZone, WOSB, or EDWOSB set-asides the offeror must also still be so classified on the day of award of the contract (not sure where Total Small Business would fall, but I assume the former)?

An increasing number of agencies are performing solicitations for contracts prior to any funding being available. These solicitations require that the offers confirm XXX calendar days for government acceptance, but since there is no funding, rather than 30 or 60 days, agencies are inserting the number of days amounting to the end of the current FY (often more than 180 days).

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ISSUE No. 1 -- SIZE CLASSIFICATION

Have you looked in the FAR?

For example, regarding HUBZones -- see FAR 19.1303( d ): To be eligible for a HUBZone contract under this section, a HUBZone small business concern must be a HUBZone both at the time of its initial offer and at the time of contract award.

ISSUE No. 2 -- PERIOD FOR GOVERNMENT ACCEPTANCE

Is there a problem with having an offer acceptance period of 180 days?

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ISSUE No. 1 – Yes, I think I’m clear on the requirement. I guess at this point I’m just pointing out the inconsistency between the various socio-economic programs for the benefit of the readers of this forum. I’m hoping it’ll be a point of discussion as to WHY the discrepancy???

ISSUE No. 2 – Yes, there are several inherent problems with the 180 (and often more) day acceptance period.

  1. Generally, economic adjustment clauses are not included unless a large percentage of the contract price is based on the price of a highly fluctuating precious metal, fuel, etc. Therefore, the result is a higher price to the government as the contractor is absorbing all of the risk of escalation.
  2. The extended acceptance period eats up a contractors bonding capacity, possibly for multiple pending awards that may or may not ultimately be funded. Picture the poor SB contractor who is local to an agency that regularly publishes these unfunded solicitations (check out FBO 1 SOCONS-Hurlburt Field, FL for example), eats up their entire bonding capacity on successful low bids for unfunded solicitations, then waits until the end of the FY only to find that none of them are funded and he/she has no work.
  3. Worse still, there is a growing concern that some agencies might be using the “unfunded requirement” tactic to be able to decide if they “like” the contractor that is the apparent low bidder, THEN decide whether to seek funding or re-solicit or sole-source 8(a) the following year.
  4. Regarding the socio-economic categories – If, for example, a HUBZone certification is lost after time of bid (on a HUBZone set-aside), for whatever reason and possibly only the day before the intended award, the government can no longer award to the apparent low bidder. In the meantime, the government may have obtained the necessary funds…but not sufficient funds for the NOW lowest qualified bidder (the 2nd or possibly 3rd lowest bidder). The government can’t credibly go after the low bidder’s bid bond because they offered in good-faith, are (presumably) “willing” to do the work, but are no longer eligible for award based on what may be very normal business changes. A scenario like this is much more likely on a 180+ day acceptance period.

So I guess my real conclusion here is that the practice of repeatedly publishing unfunded solicitations is convenient for the government, but driving up contractors' overhead rates (increased B&P costs), increasing prices, and disproportionately punishing (by tying up bonding capacity) the smallest of the small businesses that the government claims to be attempting to help the most.

How’s that for drumming up some discussion here?

PS I didn’t mean to pick on the USAF 1 SOCONS folks, they are just one example of an agency that has recently published a lot of unfunded solicitations.

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You're right for issue no. 2 that long proposal acceptance periods might drive prices higher.

I looked at FBO for "1 SOCONS" -- I looked at three solicitations -- all RFPs requiring bid bonds, and all with the unfunded statement on the face page.

You might try to make an appointment with the 1 SOCONS commander or small business specialist -- point out the negative impact of their practices on the small business community -- make real recommendations that they might like and might be willing to accept, such as waiving the bid bond requirement for RFPs under FAR 28.101-1( c ), or asking for 90-day proposal acceptance periods and then asking for extensions (no discussions, no proposal revisions) in 30-day increments after that.

It might be that 1 SOCONS is getting good contractor participation in its competitive acquisitions, and that they won't be sympathetic to your plight.

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The real question is, why are they advertising these jobs so early if they won't know until late in the FY whether or not funds will be available? One can plan their program based upon government estimates and advertise the unfunded solicitations later than 6 months out. They are tying up the bonding capacity of small businesses unnecessarily.

To me that shows irresponsibility or complete ignorance of what limitations industry have when it comes to bonding and competing for work.

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In my experience, government people are trying to cope and will do what works for them in their world of bureaucracy, regardless of the impact on industry. And they'll keep doing that until the industry raises hell loudly and persistently.

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I would further promote Vern's comment that industry, on the small business side, does have a voice through various associations and the SBA, but only if the issue is communicated to the voices. Noting Joel's comment I would suggest that somebody ought to let the voices know.

On the question of the difference between program eligibility at submission of bid/offer and award, and without doing extensive research, my conclusion is that is because HUB, WOSB and EDWOSB have some overriding eligibility certification requirements that might change between submission and award.

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