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  1. Today
  2. Last night, I read a Crowell & Moring LLP entry entitled: Federal Circuit Clarifies Meaning of “Full and Open,” Limits on Government Ability to Manipulate the Competitive Marketplace, and Contours of FAR Part 6. Because of the title, I searched and found the 3 decision of the Court of Appeals for the Federal Circuit, the Court of Federal Claims, and GAO. I copied a highlight from each decision and placed it in a quote box. I thought this might be of some value to you. In the Court of Appeals for the Federal Circuit. National Government Services, Inc. (“NGS”) v. United States (Reversed and Remanded to the Court of Federal Claims) (5/2/19) (p, 24) National Government Services, Inc. at Court Of Federal Claims (pps. 27, 29, 35) Denied (5/8/18) National Government Services, Inc. at GAO Denied (1/29/18)
  3. It’s no secret that the VA has tried to find ways around the statutorily-mandated rule of two–i.e. VA must set aside procurements for VOSBS if it has a reasonable expectation that it will receive fair and reasonable offers from two or more veteran-owned small businesses. Although the U.S. Supreme Court has already told VA, in Kingdomware, that it cannot circumvent the rule of two, VA apparently is still seeking ways to avoid it. Recently, VA tried to go around the rule of two by using GPO as its buying agent. This tactic was protested and GAO confirmed that the rule of two still applies. In Veterans4You, Inc., B-417340 et al. (June 3, 2019), VA wanted to buy suicide prevention gun locks for distribution through its Veterans Crisis Line. The gun locks consisted of a cable and keyed padlock that can be used on essentially any handgun, rifle, or shotgun. In addition to the device itself, the solicitation required that: 1) the padlock to be coated in vinyl and printed with the Veterans Crisis logo and contact information; 2) a wrap-around sticker be attached to the cable, also printed with the Veterans Crisis logo and contact information; and that 3) the package include a wallet card printed with the Veterans Crisis logo and contact information and information about identifying suicide risks. VA designated the procurements as a “printing requirement” instead of a acquisition of suicide prevention gun locks; so it sent a requisition to GPO requesting that it procure the gun locks on VA’s behalf. GPO issued the solicitation under 44 U.S.C. § 501-502, which provides GPO with unique authority to provide and procure printing services for the Government. Veterans4You protested the terms of the solicitation, arguing that VA was not giving priority to veteran-owned small businesses–contrary to the Rule of Two statutory mandate in 38 U.S.C. § 8127(d). VA and GPO countered that the Rule of Two did not apply because the procurement was being fulfilled under GPO’s independent acquisition authority–and GPO did not have to apply the Rule of Two. GAO agreed with Veterans4You. After discussing the rule of two generally, GAO explained that 38 U.S.C. § 8128(a) requires VA to observe the Rule of Two even where other statutes apply. It outlined a recent case from the Federal Circuit (which we’ve blogged on before) where the Court held that “the terms of 38 U.S.C. § 8128(a) required that the VA procure all goods and services from SDVOSBs or VOSBs where the VA’s research shows that the rule of two is satisfied, even where the procurement in question would otherwise be governed by the mandatory requirements of [another statute].” GAO then summarized its holding this way: As the discussion above demonstrates, the requirement for VA to determine whether there are at least two eligible concerns capable of meeting its requirements at a fair and reasonable price consistently has been interpreted by both our Office and the courts as both mandatory, and of universal application. We reach that same conclusion here with respect to the applicability of the [Rule of Two statute] to all VA printing acquisitions, especially in view of the express provisions of 38 U.S.C. § 8128(a), which states in no uncertain terms that: “In procuring goods and services pursuant to . . . any other provision of law, the Secretary shall give priority to a small business concern owned and controlled by veterans.” Simply stated, any time the VA is acquiring goods or services–without limitation–it is required to determine whether there are at least two SDVOSBs or VOSBs capable of meeting the agency’s requirements at a fair and reasonable price. As noted by GAO, this latest decision reaffirms several GAO and court decisions recognizing the rule of two’s extremely broad reach. VA simply can’t escape the rule–even if it desperately wants to. And because GAO and courts are hyper-sensitive to VA’s rule of two, any deviation from the rule in a VA procurement likely provides fertile grounds for a pre-bid protest. View the full article
  4. If the estimate was reasonable and the de-ob mod is to revise the quantity accordingly, then you are not changing the terms or conditions of the order and bilateral concurrence isn’t required. There are multiple “authorities” you could cite but I would cite FAR 1.602-1. That was a recent topic of discussion on Wifcon not long ago. If the estimate wasn’t reasonable, you could do a partial termination for the government’s convenience. Your authority would be 52.212-4(l) or one of the 52.249-x clauses. “Reasonable” depends on what you’re buying and how volatile that market normally is.
  5. Yesterday
  6. Kelly, your situation is not clear. You say you have a requirements contract and that you issue a task order to obtain services for a complete year. You say the SOW states that the quantity of services is an estimate. By this do you mean the SOW for the contract or the SOW for the task order? If it is for the TO, what is the contractor's performance obligation under the TO and what is the basis for payment? Also, I have heard of de-obligating funds, but never de-obligating services. If what you want to do is the latter, can you explain how that works?
  7. If that's what you did, that's what you did.
  8. Look for the Changes or Termination clauses. Are you a contracting officer or a contract specialist?
  9. I don't see a problem because we are talking about expressly unallowable costs that cannot be charged to the government. A credit or non-credit to an expressly unallowable cost will have no impact on the costs that are billed to the government.
  10. yes, SCA wage determination.
  11. I have a firm fixed price contract that is a requirements contract. Each year we issue a task order for services. The SOW states estimated quantities, and I need to de-obligate some of the services because of the unusual weather experienced in the midwest. The contractor is refusing to sign the modification, what authority do I have to issue a unilateral de-obligation modification?
  12. I am happy to announce that Gregory Weber has joined the great team of attorney-authors here at SmallGovCon. Greg is an associate attorney with Koprince Law LLC, where his practice focuses on federal government contracts law. Before joining the team, Greg worked on federal and state regulatory compliance as a corporate officer for the nation’s largest home health and hospice company. Check out Greg’s full biography to learn more about our newest author, and don’t miss his first SmallGovCon post on size protests of task orders. View the full article
  13. So, your company has made it past the first big hurdle and got on a GSA schedule. You see a small business task order pop up that you believe your company would be perfect for, but another company gets the award. Based on information you have heard or read, you believe something fishy may be going on and the awarded company may be a big fish that found its way into the small pond. But can you timely protest the task order award? Just last month, OHA reiterated the general rule that size protests on task orders are not timely in Tic Security, LLC, SBA No. SIZ-6007, 2019 (May 31, 2019). This matter arises from a task order issued in response to a US Navy Request for Quotations issue October 2, 2018. The contracting officer set aside a task order under GSA schedule 84 exclusively for small businesses with a size standard of $11 million in average annual receipts. It is important to note that the contracting officer did not request recertifications of size with this task order. SigNet was awarded the task order on February 25, 2019. After the award of the task order, TIC Security filed a size protest alleging that that task order awardee, SigNet, was acquired by a “nearly billion-dollar entity” in July 2017, consequently no longer meeting the size standard at the time of its quotation for the task order. On March 26, 2019, the SBA Area Office dismissed the size protest as untimely. In the Area office’s decision, they reiterated that the US Navy request for quotations sought a task order on a long-term GSA Schedule contract. In this circumstance, a protestor may only protest size at three instances: 1) Upon long-term contract award; 2) When an option is exercised; and 3) When the contracting officer requests a size rectification for an individual order. 13 C.F.R. § 121.1004. The task order at issue did not fall into one of those three categories. TIC Security then appealed this decision to OHA. OHA affirmed the area office. The contracting officer for this task order did not request a recertification of size for the task order, no contract option was exercised, and an award of a task order is not a long-term contract award. Therefore, the size protest was untimely and properly dismissed. OHA went on to address the size evidence presented by TIC Security. Regardless of how strong TIC Security’s evidence of SigNet’s size may have been, OHA would not consider the evidence of it because “the underlying protest was untimely.” If the protest doesn’t meet one of the three occasions to file a size protest on a long-term contract, none of your other arguments or evidence matter, and your size protest will be dismissed. Size protest for task orders have come before OHA repeatedly and the result is generally same, the protests are untimely. This case is a good reminder that if you believe a rival company may be violating size limits, the options for protesting size for a task order are limited to three specific instances. A protest outside outside of these three instances might be dismissed. View the full article
  14. In my position I do: 10% #1 90% #2 I should be doing more file management...but the squeaky wheel gets the grease in my fast-moving department.
  15. Last week
  16. Pepe, roger that. Do you know of any precedent of accepting claims after the 60 window? The word "may" IAW FAR 33.104 (h)(2) (also 4 CFR 21.8 (f)(1)) seems like there is some flexibility.
  17. PepeTheFrog does not know whether the GAO or the agency will recommend or agree to pay the indirect costs of the protest. There is an opportunity for the agency to accept, deny, or negotiate the costs that the successful protestor submits. There is also an "appeals" process back to the GAO if you can't come to an agreement. See below. It seems like the regulations are focused on the direct (hourly) costs of attorneys, consultants, and expert witnesses. PepeTheFrog does not know if there is any precedent on such indirect costs, but you could create or add to such precedent by "giving it the old Harvard try." https://www.gao.gov/legal/bid-protests/reference-materials From 4 CFR 21.8 (Title 4 of the Code of Federal Regulations, Section 21.8): "(d) If GAO determines that a solicitation, proposed award, or award does not comply with statute or regulation, it may recommend that the agency pay the protester the costs of: (1) Filing and pursuing the protest, including attorneys’ fees and consultant and expert witness fees; and (2) Bid and proposal preparation. (e) Recommendation for reimbursement of costs. If the agency decides to take corrective action in response to a protest, GAO may recommend that the agency pay the protester the reasonable costs of filing and pursuing the protest, including attorneys’ fees and consultant and expert witness fees. The protester shall file any request that GAO recommend that costs be paid not later than 15 days after the date on which the protester learned (or should have learned, if that is earlier) that GAO had closed the protest based on the agency’s decision to take corrective action. The agency shall file a response within 15 days after the request is filed. The protester shall file comments on the agency response within 10 days of receipt of the response. GAO shall dismiss the request unless the protester files comments within the 10-day period, except where GAO has granted an extension or established a shorter period. (f) Recommendation on the amount of costs. (1) If GAO recommends that the agency pay the protester the costs of filing and pursuing the protest and/or of bid or proposal preparation, the protester and the agency shall attempt to reach agreement on the amount of costs. The protester shall file its claim for costs, detailing and certifying the time expended and costs incurred, with the agency within 60 days after receipt of GAO’s recommendation that the agency pay the protester its costs. Failure to file the claim within that time may result in forfeiture of the protester’s right to recover its costs. (2) The agency shall issue a decision on the claim for costs as soon as practicable after the claim is filed. (3) If the protester and the agency cannot reach agreement regarding the amount of costs within a reasonable time, the protester may file a request that GAO recommend the amount of costs to be paid, but such request shall be filed within 10 days of when the agency advises the protester that the agency will not participate in further discussions regarding the amount of costs. (4) Within 15 days after receipt of the request that GAO recommend the amount of costs to be paid, the agency shall file a response. The protester shall file comments on the agency response within 10 days of receipt of the response. GAO shall dismiss the request unless the protester files comments within the 10-day period, except where GAO has granted an extension or established a shorter period. (5) In accordance with 31 U.S.C. 3554(c), GAO may recommend the amount of costs the agency should pay. In such cases, GAO may also recommend that the agency pay the protester the costs of pursuing the claim for costs before GAO. (6) Within 60 days after GAO recommends the amount of costs the agency should pay the protester, the agency shall file a notification of the action the agency took in response to the recommendation."
  18. The time contractor personnel spend with the outside attorney should be charged to the protest account. Because it relates to the protest, the cost of the time spent by contractor personnel working on the protest is unallowable. Thus, it has to be segregated from allowable G&A. It is recoverable as protest costs, not as G&A if the GAO recommends reimbursement of the cost of filing and pursuing the protest. H2H, when you are asking about timing differences, are you talking about the situation where protest costs may be incurred in one accounting period and recovered in another? If not, what did you have in mind?
  19. Retread, thank you for your input. Why would you not burden the outside attorney fees? Isn't there G&A costs associated with using an outside attorney such as time with the CEO, AR, AP, etc? Hypothetically, if the contractor made a time card with a task code for working on the project and documented their hours on it, would that be the way to get back the G&A expenses? (Assuming you bill the wrap rate for the employee.)
  20. Retread, I think you may be ignoring the timing difference between cost incurrence and receipt of the reimbursement. H2H
  21. Privacy, I have a slightly different take on this. Protest costs are a form of costs that must be allocated to contracts in accordance with FAR 31.201-1 even though they are unallowable. Many contractors accumulate protest costs in a litigation account which is an indirect cost account, usually G&A. Unallowable G&A costs are not included in the G&A pool for determining reimbursable costs. Instead, they are accumulated in an unallowable pool per FAR 31.201-6 and CAS 405. When the government reimburses a contractor for protest costs, the reimbursement is treated as a credit to the protest costs per FAR 31.201-5. This significantly reduces or eliminates the protest costs. Thus, there are little if any unallowable protest costs to be allocated to contracts. Accordingly, incurring protest costs that are reimbursed by the government should have little or no impact on indirect cost rates because unallowable protest costs are completely or nearly zeroed out due to government reimbursement. Reimbursement of protest costs is not the only instance in which the government may reimburse a contractor for unallowable costs. Some other examples are reimbursement of Contract Disputes Act costs under the Equal Access to Justice Act. Also, the government may reimburse a contractor for unallowable costs under P.L. 85-804. I am not sure what you mean by indirect costs of a protest. However, most protest costs, such as outside attorney fees, are treated as indirect costs and are not burdened with indirect costs.
  22. Recently, a member of the Senate Committee on Small Business & Entrepreneurship called for increased small business participation in federal contracts during a hearing on the SBA’s contracting programs. Senator Ben Cardin based his concern on a recent report showing that the number of small businesses with federal contracts was at a 10-year low. The report found that federal agencies had awarded contracts to 32 percent fewer small businesses in 2018 versus 2009. In contrast, the number of large contractors receiving awards fell only 4% during the same time frame. The Senator’s take on this report was that, “while contracts are getting bigger and bigger, we are creating an insular club where fewer and fewer businesses successfully compete for government contracts.” He added, “[t]hat’s contrary to what these set-asides and programs are all about, which is encouraging new small businesses that can bring innovation and job growth to our economy and help our nation.” Sen. Cardin also noted that, while federal agencies are meeting their goal of spending 23 percent of contracts on small businesses, “the data shows that we have a shrinking base of contractors rather than an expanding base of contractors.” In other words, fewer small businesses are receiving the benefit of those set asides. A few agencies stood out. “Since Fiscal Year ‘09, the number of companies working on contracts with the Department of Defense has declined by 24,000. Similarly, the General Services Administration has seen an 8,000-company decline while the Departments of Veterans Affairs and Interior have both contracted with 13,600 fewer companies.” In the hearing, the Senate asked SBA what can be done to address this issue. SBA responded with one possible solution–small businesses could be exempted from category management. The term category management, according to an executive branch memo, “refers to the business practice of buying common goods and services as an enterprise to eliminate redundancies, increase efficiency, and deliver more value and savings from the Government’s acquisition programs.” In effect, this means buying more things from fewer businesses in a coordinated manner. But increasing efficiency and centralization of purchases can shut out small businesses. The report raises an interesting question. How to measure whether the small business programs are working. While the 23% goal for total overall dollars is one way to measure progress, the number of small businesses in federal contracting also has to be examined. Using that second metric, small business participation has been going down over the last 10 years. Other government goals, such as category management, may be at odds with increasing the role of small businesses in federal contracting. Now that Congress has recognized this issue, the question becomes: What policies might change to increase the participation of small businesses in federal contracting? And can that be squared with the goal of category management? We’ll be watching and will keep you posted. View the full article
  23. @MAY-D-FAR-B-WIT-U, You've described a FFP contract. A FFP contract is not an incentive contract. See FAR 16.401(a). FAR 16.401(d) doesn't apply to FFP contracts. I used to be a CO for ship repair and we used delivery incentives on FFP contracts. This was not groundbreaking.
  24. H2H, I use the term claim because FAR 33.104 (h)(2) uses the term claim. I have never actually been involved with this process so I do not know how it actually works. But once again, thank you for taking the time to discuss this hypothetical.
  25. Having been on the periphery of some West Coast shipbuilding/repair firms, and haven spoken with their finance/accounting personnel, I believe the quote above may be an understatement. I was told that the first change order is submitted about 5 minutes after the ship hits the dock, because no ship ever looks like its drawings.
  26. ji’s approach may be more practical than an award fee where the contract is dirty enough to have other causes for delay. Then, when other impacts arise it could delay the contractually required completion date that you pick, you can effectively accelerate the contractor by paying them mor during settlement of the various modifications e not to be delayed
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