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GAO's Sanction Against Latvian Connection and Its Principal

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11 minutes ago, LATVIAN CONNECTION LLC said:

you just edited out Bob the words .... and other parts of what Latvian Connection LLC just wrote.   

Yes, Bob did and if you read his reasoning it was because they were apparently in violation of the terms of use.  Try abiding by the rules of the forum by which you're participating...but in order to do that you'll have to read and understand them first.

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What a rollercoaster of events this morning!

At first I was intrigued that Latvian Connection registered here and would start contributing some insight from his point of view.

Then I saw his six posts or so.  Wow.  Immense disappointment from what I had hoped to be some interesting arguments turned out to be angry, incoherent ramblings.

Finally, for the second time this week, he exacted another dismissal and sanction from a valued contracting forum.

An interesting start to the weekend, for sure!

 

 

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Wow, it seemed like I missed all the fun!    I guess once a poster is banned their old posts are deleted.  That's understandable but at the same time a shame. I would have liked to see their side of the story.

 

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4 minutes ago, Desparado said:

Wow, it seemed like I missed all the fun!    I guess once a poster is banned their old posts are deleted.  That's understandable but at the same time a shame. I would have liked to see their side of the story.

 

Don't worry, you didn't miss a thing - the company's remarks were incomprehensible.

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On August 25, 2016 at 1:33 PM, Vern Edwards said:

All:

Latvian's behavior is not the issue. The only issue is whether the GAO has authority under statute and regulation to decide as it did.

I suspect GAO made a caculated decision to take their chances with that.

Latvian Connection (LC) would have to appeal to the right place (probable), in the right way (seems unlikely) or have someone else do it on their behalf (like an ACLU type, which also seems unlikely.)

In the short term GAO can toss LC protests aside without review.  In the long term GAO might invite an intervention which might result in some negotiated bounds on protestor "time wasting".  

So yes, it is outside the rule book but the rule book never anticipated the specific LC behavior, and it is highly doubtful that the GAO budget might expand to have more resources to address LC behavior within the current rules.  

The absolute worst case for GAO seems that they are ordered to going back to processing LC protests case-by-case.  I would imagine GAO is following other slower paths to address this too, so this buys them time while other wheels turn.  

Seems a reasonable and calculated move given the extraordinary circumstances.  I'm no expert at what happens when agencies step outside the box: is there practical downside for GAO here, given the circumstance?

(Edit: traffic laws say 'no running the stop sign' yet very, very rarely there may circumstances that are not exceptions in the law, yet, when told to a judge, would result in leniency.  I'm not saying this is traffic court but...seems GAO is willing to make that bet) 

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Deleted - out of pure frustration over expanding set-asides or other programs  overseas that would encourage brokering by special status firms who would simply hire local or other subs to actually perform the work and would justify resulting  price premiums of up to 50% as fair and reasonable.

 

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Guest Jason Lent
8 hours ago, joel hoffman said:

Deleted - out of pure frustration over expanding set-asides or other programs  overseas that would encourage brokering by special status firms who would simply hire local or other subs to actually perform the work and would justify resulting  price premiums of up to 50% as fair and reasonable.

 

So far, the FAR remains rigid in that regard as FAR 19 still limits itself (minus FAR 19.6) to the United States and outlying areas. The 19 August 2016 Open FAR Cases report still lists this issue as being open.

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9 hours ago, joel hoffman said:

expanding set-asides or other programs  overseas that would encourage brokering by special status firms who would simply hire local or other subs to actually perform the work and would justify resulting  price premiums of up to 50% as fair and reasonable

joel hoffman, PepeTheFrog would really appreciate hearing your detailed thoughts on this subject. Would you mind posting your criticism of overseas application of FAR Part 19, or at least send a private message to PepeTheFrog?

1 hour ago, Jason Lent said:

So far, the FAR remains rigid in that regard as FAR 19 still limits itself (minus FAR 19.6) to the United States and outlying areas. The 19 August 2016 Open FAR Cases report still lists this issue as being open

PepeTheFrog predicts the SBA (and, surprisingly, the banned protestor) will eventually get their way-- application of FAR Part 19 overseas. Whether it will be discretionary or mandatory remains an open question.

PepeTheFrog also predicts that SBA will also (illogically) use Kingdomware to try to expand the "rule of two" back into GSA order and task/delivery order territory.

The Paul Revere of Government contracts would be riding around on an expensive vehicle with all kinds of scope creep yelling, "The set-asides are coming! The set-asides are coming!"

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Guest Jason Lent
14 minutes ago, PepeTheFrog said:

PepeTheFrog predicts the SBA (and, surprisingly, the banned protestor) will eventually get their way-- application of FAR Part 19 overseas. Whether it will be discretionary or mandatory remains an open question.

PepeTheFrog also predicts that SBA will also (illogically) use Kingdomware to try to expand the "rule of two" back into GSA order and task/delivery order territory.

The Paul Revere of Government contracts would be riding around on an expensive vehicle with all kinds of scope creep yelling, "The set-asides are coming! The set-asides are coming!"

In other readings he had made throughout the internet, the banned protestor also referred to Kingdomware, so that should give the casual reader a litmus test of the actual relevance and significance of that case to his plights.

I patiently await the day where the SBA sets up contingency offices in the mountain of Afghanistan.

On a side note, I wonder how often FAR 19.6 is invoked in an overseas contingency environment.

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The Certificate of Competency process of FAR Subpart 19.6 only covers U. S. small business concerns -- small business concern is defined in FAR 2.101 as a concern that is qualified as a small business under 13 CFR 121 -- but concern is defined in FAR 19.001 as a business entity organized for profit with a place of business in the United States and so forth.

Thus, a mom-and-pop owned by Aaseya and Behnam in Kabul with three employees and average annual revenues of $853.47 would not qualify as a small business concern under FAR Part 19 and would not qualify for consideration under the COC process of FAR Subpart 19.6.  If an acquisition for performance in Kabul was conducted as a small business set-aside, then Aaseya and Behnam's business would be ineligible because it would not meet the definition of a small business concern.

I hope the FAR Part 19 application only in the U.S. and its outlying territories remains unchanged.

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Have attempted unsuccessfully to post my reply for the past 30 minutes on my phone...  Will try another device when I get home. 

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Pepe, I was attempting to briefly respond to the now deleted LC response to my questions. 

Having worked overseas on projects in several Middle Eastern, South American and Central American countries and in Germany, I can see that expanding set-asides or sole source authority for construction or A-E contracting to various categories of SDB and/or emerging businesses would be impractical - and frankly, ill-advised (read that as amounting to stupidity), wasteful of taxpayers' money and an affront to "many" of the countries where DoD has a presence on their soil

In addition there would be possible conflicts with various country-to-country agreements or Foreign Military Sales cases which might provide for priority for local firms to compete for that work. For instance, the US Army Corps of Engineers has had a long standing presence in the Kingdom of Saudi Arabia under various forms of "Engineer Assistance Agreements", which eventually provided for preferences for Saudi firms. The Saudi firms developed over time into viable, capable companies in the construction and supply arenas. The Saudi's paid for every dollar (or every Riyal) of work as well as for our salaries, overhead, and other expenses as well as for costs of our Stateside support Division.  

Unless a US based SDB firm has a permanent presence in a country, similar to various US owned small business construction firms in Panama before the turnover of the Panama Canal to Panama, I don't see how they could successfully mobilize to or operate as a prime contractor there, let alone compete at reasonable prices with the local market. 

For gosh sakes, there are even some locations in the US that are defacto "closed market" to outside small Businesses as well as non-local SDB's.  The locals were either "told" or agreed not to cooperate with or - if providing quotes- to inflate prices to outside firms. I think that that situation would be greatly magnified in many of the overseas markets that I was familiar with.  

I saw many instances of fronts or other brokering arrangements in the various set-asides and sole source negotiated acquisitions during my career.  I also was aware of instances of collusion and bribery  between some government officials in countries that I won't name here in competition for unrestricted contracts.

I predict that there would be plenty of shady business practices in overseas countries where we would have even less control or ability to monitor.  If the US desired to control or eliminate such practices, many additional resources would be necessary .

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To be more succinct, there would be a great potential for widespread abuse and increased costs, further bloating the deficit if FAR Part 19 set-asides and programs were extended to US foreign locations. 

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2 hours ago, joel hoffman said:

To be more succinct, there would be a great potential for widespread abuse and increased costs, further bloating the deficit if FAR Part 19 set-asides and programs were extended to US foreign locations.

joel hoffman, thanks for your detailed explanation-- PepeTheFrog appreciates it.

 

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3 hours ago, PepeTheFrog said:

PepeTheFrog predicts the SBA (and, surprisingly, the banned protestor) will eventually get their way-- application of FAR Part 19 overseas. Whether it will be discretionary or mandatory remains an open question.

I don't think they'll be successful, especially when contingency environments like Iraq or Afghanistan are considered.  In those environments, I'd argue that the mission trumps concerns for US small business goals.  That is not to say that small businesses should be ignored or precluded - if a small business can offer a fair and reasonable price that meets the Government's requirement (often urgent in those cases), then great, but I can't envision an environment where they'd be the default option.

It's also worth considering the impacts of Status of Forces Agreements (SOFAs) the US has with other countries on contractors overseas - in most cases, they do not cover contractors (https://www.state.gov/documents/organization/236456.pdf pg. 1 subscript) and in other cases, the US Government agrees to purchase directly from the local economy (correct me if I'm wrong, but I recall this being the case in Qatar though quick research wasn't able to turn up the specific SOFA).  Furthermore, the local requirements and laws of other countries vary considerably as well (for some examples refer here: http://www.au.af.mil/au/awc/awcgate/awc/2006_ratton.pdf ...whether or not the author's conclusion is sound on reducing "outsourcing" to contractors is another conversation altogether, but the examples in the paper do provide some insight into the complications awaiting small businesses in any overseas environment).

I think there is more than enough work for the SBA in advising US small businesses on how to properly comply and perform contracts in compliance with US laws and the FAR before considering the difficulties/challenges awaiting those companies in an overseas (potentially contingency) environment.

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P.S.:  My opinion is aimed at mandatory preference programs overseas for set-asides or sole source under the various FAR 19 Subparts .  I'm not necessarily stating that small business can't successfully perform construction overseas. 

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4 hours ago, Jason Lent said:

I patiently await the day where the SBA sets up contingency offices in the mountain of Afghanistan.

Great comments by everyone regarding the challenges for overseas application, but PepeTheFrog thinks this one takes the cake! This is a quip worth stealing.

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Some of you seem to think that the requirement for set-asides overseas is an open issue. The SBA regulations have required set-asides overseas when the applicable conditions are met for over two years. The GAO and the COFC have consistently held that the SBA regulations trump the FAR when there is a conflict. 

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Don,

Isn't there an open FAR case that might someday give direction to contracting officers on this matter?  In the meantime, shouldn't contracting officers follow the FAR and their own agency regulations, rather than SBA regulations?

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24 minutes ago, Don Mansfield said:

Some of you seem to think that the requirement for set-asides overseas is an open issue. The SBA regulations have required set-asides overseas when the applicable conditions are met for over two years. The GAO and the COFC have consistently held that the SBA regulations trump the FAR when there is a conflict. 

Don,

Apologies in advance for being lazy, but could you point us to the requirement and the "applicable conditions" - I'd be interested to read and understand them.

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1 hour ago, ji20874 said:

Don,

Isn't there an open FAR case that might someday give direction to contracting officers on this matter?  In the meantime, shouldn't contracting officers follow the FAR and their own agency regulations, rather than SBA regulations?

Yes, it's FAR Case 2016-002. Overseas contracting officers are in a tough spot. If they follow the FAR, they risk losing a protest that they didn't conduct a set-aside. If they follow the SBA regulations, they are deviating from the FAR. They have the FAR Councils to thank for that. I think that an interim FAR rule should be issued to make the FAR consistent with the SBA regulations.

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Recieved my office's -tentative- small business goals, yesterday. So far, it appears overseas set-asides will be optional - at least for now.

DoD has many bases in foreign lands and those agreements are often long-standing. I wonder what the geopolitical ramifications of taking dollars away from the host-nation economy will be.

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