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Hello. Company sells commercial software solutions to the VA via value added reseller primes that hold GSA Schedules and VA IDIQs. Their software is based in the cloud and transmits PII and PHI. We are trying to define any restrictions to offshoring software developers. Seems like this should be a straightforward inquiry, but we are not finding anything on point. Wondering if anyone here could point us in the right direction. Thanks

Also, in the SF1443 is 14a the total amount eligible for progress payments or what we've actually paid? It almost seems like 14a and 14b are requesting the same information to my non-financial brain. (luckily I'm not responsible for completing the form) but I'm just wanting to understand.

Thanks all. We have been talking to/still awaiting clarification from the contracting officer. We have flowed down 52.232-16 to our subcontractor and are paying them progress payments. and withholding 10% from their payments. We have requested payments from the government at 90% of our costs incurred which include the payments to the subcontractor at 90% of their invoiced amount. With our next progress payment request to the government, can we request the government give us the balance of the subcontractors invoiced amount since they have completed deliveries to us or do we have to wait until we complete our portion of the work and make final delivery to the customer? There's no disagreement on what we owe the supplier. They've completed their work and we will pay them in full. Only on whether we can get that $$ from the government sooner than later.

@C Culham I assumed that "costs" was meant to describe CLIN prices for items delivered by supplier or progress payment milestones completed. Like you say, there are many open items about this post re what is really going on. I hoped there would be a response to the question I asked that would clarify, The post states that the supplier terms are the same as the contractor's. I did not assume that the Government is paying the Contractor incurred costs, In any events,the post seems to be focusing on the 10% withhold, not payments already billed and received by contractor or supplier.

I think the OP is asking if he can fund the over and above work before it has been identified. I also question when over and above work--as defined at DFARS 252.217-7028--would be considered severable.

@Neil Roberts So you are saying this- The prime has been invoicing the government for 90% of the costs that they have paid to the subcontractor - is okay? Pursuant to the clause paragraph (a)(4)(ii) I am not sure one can say so without more info. The clause differentiates between sub "costs", "payments" and "financing progress payments" does it not?

The terms of your contract with your customer and your supplier determine the answer to your question. I did not see anything in your post that leads me to believe there that your company holds an OTA subcontract, but my answer is still the same. In the event that you are unsure, you may decide to flow the information to your customer because generally, that usually isn't harmful. However you should be prepared for a potential question from your customer as to what contract clause is leading you to believe it is required to be flowed up to your customer.

Seems pretty clear to me that if your company flowed 52.232-16 to the supplier properly modified as to parties, the supplier is entitled to payment because your work progressed by the supplier delivery and by the way, is therefore eligible for progress payments from the government. My view is that work that progresses does not have to be delivered in order for progress to have taken place. But, what is the debate within your company and what are you confused about? Your company may still be liable to pay the supplier depending on the language in your contract with them. Your company could pay out of its own money and put the payment in a special account to be included in progress payment requests to the government when you deliver the end item to the government that contains the supplier product, if the internal squabble can't be resolved, where your company agrees it owes the supplier now.

Too many questions left unanswered in your post. By example are the progress payments to the sub considered financing payments? I do not need an answer because my overall suggestion is get the answer from your contracting officer. Afterall he/she is the one that will approve the progress payment to you.

My company has a government contract with FFP line items for labor as well as materials. We are receiving Progress Payments with a 10% withholding. Our subcontractor has substantially the same terms. We have been invoicing the government for 90% of the costs that we have paid to our subcontractor. The subcontractor has completed delivery to our company for several line items and are requesting the full payment for those CLINs at 100%. Those line items aren't complete with my company and the government so there's no DD250. We are debating whether or not we can include in our invoice the full subcontract CLIN amount versus 90%. I'm trying to understand FAR 52.232-16 and I'm getting confused. Any help you can provide would be appreciated. Trying to figure out 14a vs. 14b on the SF1443. The instructions aren't clear.

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Recommend reviewing FAR 32.703-3. Your agency most likely has guidance in its supplement at paragraph (b).

Has the over and above work been defined? Or do you obligate a lump-sum and reconcile after ordering the over and above work?

@KevinC What do you mean by “new start requirement”?

If you are in the DoD, new start may be reference to a new start program for RTD&E. Reference DOD FMR Vol 3, Chapter 6, paragraph 4.1.5.

They changed it becasue the current FAR did not make sense (bold added)! "43.000 This part prescribes policies and procedures for preparing and processing contract modifications for all types of contracts including construction and architect-engineer contracts. It does not apply to- (a)Orders for supplies or services not otherwise changing the terms of contracts or agreements (e.g., delivery orders under indefinite-delivery contracts);..."

In Part 43, they deleted 43.000(a), writing "FAR part 43 now applies to contract modifications for orders for supplies or services not otherwise changing the terms of contracts or agreements (e.g., delivery orders under indefinite delivery contracts). This aligns the FAR to practice." That explanation doesn't make sense to me. A delivery order is not a modification. The revised text makes sense, because I always sort of read it as "well, of course that doesn't apply because a delivery order is not a modification." Thoughts?

Another work week in the books. Hope you had a great one. Happy Father’s Day to all the dads out there and hope they have a relaxing weekend! This week in federal government contracting included stories about DoD fraud, DOGE cost-savings, and GSA centralizing additional work. USDA ended contract for food assistance ‘clearinghouse’ required by law, lawsuit claims Trump’s pick for VA watchdog role promises independence, impartiality VA employees raise concerns over short-staffing, looming cuts at rally DoD fraud detection efforts at ‘starting line,’ watchdog says Two more centralization, cost savings initiatives from GSA GSA Announces Transactional Data Reporting Expansion for Increased Procurement Transparency SBA sticks to DOGE cost-savings claims, though details — and math — remain fuzzy Hearing Wrap Up: Government Procurement Process Must Modernize to Boost Defense Innovation Veterans Affairs Contractor Agrees to Pay $4.3 Million to Resolve Claims of Overbilling for Products Hunger Free America files lawsuit after cancellation of USDA contract Timmons Opens Hearing on Accelerating Defense Innovation The post SmallGovCon Week in Review: June 9-13, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Published today - FAR 18 Emergency, 39 IT, 43 Modifications FAR Overhaul - FAR Part Deviation Guidance | Acquisition.GOV

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@Retreadfed I have a pretty good grasp on where the SOL may not apply. A subject for a different discussion. And, a reason an agency may have an approach different than the general unless 6 year retention. This said I will stick to my statement that you quoted unless I am misinformed and the general 6 years retention has another basis.

The six year SOL may not resolve the problem. Remember the SOL only begins to run when a claim accrues. A claim may accrue much later than six years after contract closeout. Example, look at the WWII environmental clean up cases where the government is being forced to pay contractors for environmental damage through indemnification clauses in those contracts.

A couple FAR notices have removed proposed SBA rules relating to orders on multiple award contracts. This withdrawal seems to have the affect of decreasing the overall application of the small business Rule of Two, as discussed here. However, it only impacts the application of the rule of two to orders under multiple award contracts that were not restricted to small businesses. So, it’s impact is relatively narrow. Protests of Orders Under Certain Multiple-Award Contracts In this notice, the government is withdrawing a proposed rule dealing with Protests of Orders Under Certain Multiple-Award Contracts. That proposed rule stated: “DoD, GSA, and NASA agree with, and adopts, GAO’s conclusion that ‘the statutory grant of discretion does not require application of the Rule of Two prior to issuing an order, unless the multiple-award contract or task order solicitation expressly anticipated the use of the Rule of Two.’” ITility, LLC, B-419167 (Dec. 23, 2020), 2020 CPD ¶ 412. That proposed rule would have included the following language in FAR 16.505: (iv) In accordance with 15 U.S.C. 644(r), a contracting officer’s decision to set aside or not set aside an order, for small business concerns, is an exercise of discretion granted to agencies and not a basis for protest. However, this does not preclude the filing of a protest of such an order if such a protest would otherwise be authorized on a separate basis recognized in accordance with paragraph (a)(10)(i) of this section. The proposed rule was “expected to deter contractors from submitting protests of decisions to set aside or not set aside orders placed against multiple-award contracts, thereby saving contractors and the Government time and resources.” Interestingly, this rule was designed to reduce protests, but it has now been rescinded. Small Business Participation on Certain Multiple-Award Contracts The proposed rule from January 2025 was designed to “expand the use of small business set-asides for orders against multiple-award contracts.” The “proposed rule would require contracting officers to exercise their discretion to set aside an order for small business if the contracting officer determines that, under an applicable multiple-award contract, there is a reasonable expectation of obtaining offers from two or more responsible small business contract awardees that are competitive in terms of fair market price, quality, capability, ability to comply with the delivery or performance schedule, and past performance.” It would have allowed for exceptions for GSA schedules and for “agencies to establish procedures for contracting officers to exercise agency-specific exceptions.” Withdrawal In withdrawing both rules, the FAR Council said: “E.O. 14148, Initial Rescission of Harmful Executive Orders and Actions, repealed E.O. 14091 on January 20, 2025. As a result, the FAR Council is withdrawing the proposed rules. The FAR Council will focus on reducing the regulatory burden for all small businesses with the goal of increasing small business participation in Federal procurement.” The corresponding SBA proposed rule has not yet been withdrawn, but that is likely to occur. That “proposed rule would clarify the applicability of the Rule of Two to multiple-award contracts by directing that an agency set aside an order under a multiple-award contract for small business contract holders when the contracting officer determines there is a reasonable expectation of obtaining offers from two or more small business contract holders under the multiple-award contract that are competitive in terms of market prices, quality, and delivery.” So, the proposed rule would have required setting aside of certain orders under the Small Business Rule of Two. But now that has been rescinded. While the FAR Council still has the goal of “increasing small business participation,” that will not be done through applying the rule of two to orders. This withdrawal does not impact the basic rule of two regulation, found at FAR 19.502-2. Stay tuned to SmallGovCon to see if that rule may be affected by future changes to the FAR. Questions about this post? Email us Need legal assistance for a federal government contracting matter, give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post FAR Council Removes Rule on Small Business Orders first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Imagine you’ve submitted a bid for a procurement that you believe your company is a shoo-in for. Nobody comes close to the experience and skills your company brings to the table. A while later, you learn that the new company down the street was awarded the contract. There clearly must be a mistake. The awardee doesn’t have half the experience your company has in this industry. Feeling wronged, you decide to file a bid protest questioning the award at the Government Accountability Office (GAO). Your lawyer informs you that a bid protest may be dismissed if the protester doesn’t qualify as an interested party. But you were an actual bidder who should have been awarded the contract. Of course you’re an interested party—right? It’s common to assume an unsuccessful offeror automatically qualifies as an interested party. However, not just any unsuccessful offeror is an interested party in the eyes of GAO. An “interested party” is “an actual or prospective offeror whose direct economic interests would be affected by the award of a contract or the failure to award a contract.” 4 C.F.R. § 21.0(a)(1). For a protest challenging the terms of a solicitation, GAO has stated, “an interested party is generally a potential bidder for the contract.” This is a pretty easy standard to meet. Alternatively, when challenging a contract award, “an interested party is generally an actual bidder that did not win the contract.” Other important factors could include the bidder’s standing in the competition, or the nature of the issues being raised. For the basics, we’ll focus on an interested party in a solicitation-terms protest versus a post-award protest. Protest of Solicitation Terms A solicitation-terms protest is also called a pre-award protest. To challenge solicitation terms, a prospective bidder is an interested party if the bidder has expressed interest in competing and has a direct economic interest. Typically, the prospective or actual bidder must be eligible for award. The most common reason for filing a pre-award protest is to challenge the solicitation’s terms. (learn more here Why File: A GAO Pre-Award Protest). When filing a GAO bid protest, “a protester is not an interested party to challenge the terms of a solicitation, even if the protest is sustained, if it is clear that the protester will be ineligible for award under the remaining terms of the solicitation.” DGCI Corp., B-418494 (Comp. Gen. Apr. 27, 2020). The protester must be eligible to compete for the award. This doesn’t mean the protester must be eligible on the terms they are protesting. Rather, the protester must be eligible under the remaining solicitation terms. Scenario One: ABC Company is bidding on a procurement. The solicitation calls for a specific license that is not normally required under this type of contract. ABC Company does not have the specific license required in the solicitation but is eligible under all the other requirements. Believing the licensing terms are overly restrictive and outside of industry norms, ABC Company files a pre-award protest. Here, the terms being protested are the reason ABC Company is not eligible for award. If ABC Company is successful and the licensing is no longer required, then ABC Company is eligible for award under the remaining terms. Scenario Two: Alternatively, the same ABC Company files a pre-award protest on different grounds, failing to include in its argument that the licensing terms are restrictive. GAO will likely find that ABC Company is not an interested party because even if the protest is sustained, ABC Company does not have the required license to be eligible for award. A Post-Award Protest There’s the saying that “If you’re not first, you’re last.” But when filing a post-award protest, your place in line matters. For a post-award protest, an interested party is an actual bidder or offeror with a direct economic interest. This is typically a bidder that was not awarded the contract or was eliminated from the competition. GAO has “generally found that a protester is an interested party to challenge an agency’s evaluation of proposals only where there is a reasonable possibility that the protester would be next in line for award if its protest were sustained.” Even if the protester was an unsuccessful offeror under a specific procurement, GAO will not view the unsuccessful offeror as an interested party unless there is a reasonable chance the protester will be the awardee if the protest is sustained. When there are higher-ranked intervening offerors, the protester will have to attempt to demonstrate to GAO that they qualify as an interested party. Scenario: ABC Company was the unsuccessful offeror of a procurement and believes the agency deviated from the stated evaluation criteria when making the award. If ABC Company was the “next-in-line” for award, then ABC Company is likely an interested party. ABC Company has a direct economic interest if the protest is sustained because there is a reasonably chance that ABC Company will receive the award. If ABC Company was a high-priced bidder that was not next-in-line for award, ABC Company must demonstrate that all the lower-priced bidders are ineligible for award for ABC Company to qualify as an interested party. Or it must demonstrate that the overall evaluation criteria, if applied correctly, could have resulted in award. For instance, if it was a lowest-price technically acceptable procurement, then a protester likely has to show that its price evaluation was incorrect, and correcting the price evaluation would have vaulted the protester to the first place in line in terms of pricing. Another factor GAO will consider is the remedy the protester is seeking. For example, if an actual bidder files a protest on the grounds that the agency improperly removed the bidder from competition, GAO may find the bidder is an interested party if the bidder would have the opportunity to compete again were the protest sustained. Note that interested party status is often determined at the front end of a protest. So, the initial protest must contain information or allegations sufficient to demonstrate that the protester is an interested party. Knowing who qualifies as an interested party in a GAO bid protest is an important consideration to keep in mind when deciding whether filing a bid protest is for you. Questions about this post? Email us. Need legal assistance? Call us at 785-200-8919. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Back to Basics: Interested Parties first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Yes. Many agency policies say files can be sent to storage immediately after closeout. When that happens, the transmittal information to NARS must indicate when the files can be destroyed.