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https://www.gao.gov/products/b-421525 This decision only increases my concerns as we are currently working to submit a bid for an ffp/loe opportunity. How do I protect myself and my firm from falling victim to this same fate. We openly accept the risk of growing operating costs and no means to re-coup but fear being accused of wrong doing for performing to the terms of the contract. Do we just avoid FFP/LOE, FAR 16.207 RFPs?

Retread, I could not agree more with your comments! The timekeeping system requires recording the accurate time billed against the accurate time code. There is not a requirement to supplement with specific tasking as the TTO and lcats are detailed in specifying the weighty requirements expected/hoped to be delivered by each lcat. Please see the response to Vern above. How can the contractor defend themselves if agency authorities are accepting the CO's opinion of "lack of work"? The Administrative COR and the technical CORs all claim their inspection and acceptance was solely based upon making sure the FHMR and invoice matched and did not exceed the "ceiling" of loe in section B. They were not verifying the actual delivery of the LOE by the contractor. I am perplexed as to how the leadership of the CO supports her conduct. Would love any input from all of you.

Vern, the CO is accusing the contractor of falsely recording and invoicing for hours that WERE worked but claiming "the hours billed have to be false because there was "not enough work" to be performed. Going further in blaming the contractor for not informing the government CO/COR that they did not "have enough work for the hours awarded on the contract". The contractor does not waiver, there was more than sufficient amount of work for the hours billed. There is no accusation of working inefficiency. The CO has publicly acknowledged, the government received all requirements of the SOW and TTOs but that is not "proof" the contractor delivered the LOE stipulated in Section B of the contract. Further accusing the contractor that they knew the amount of work involved would not require the amount of LOE identified by the government as necessary to deliver the intended results. As a fellow contractor, my deep concerns are of having a CO come after my firm in such a manner. If the above allegations against the contractor become more than allegations and the contractor is held liable based upon the CO's post-performance opinions "there was not enough work to be completed" and "the contractor knew there was not enough work and failed to notify the government". Vern, does this answer your questions?

See response to C. Culham. This was 100% an FFP/LOE contract and up until the final 19 months of performance, the government adhered to the strict limitations of FAR 16.207. The contract is void of ambiguity. Section B states specifically: the contractor is to supply the LOE below ....

C Culham: FAR 52.232-01 Payments (Apr 1984) The Government shall pay the Contractor, upon the submission of proper invoices or vouchers, the prices stipulated in this contract for supplies delivered and accepted or services rendered and accepted, less any deductions provided in this contract. Unless otherwise specified in this contract, payment shall be made on partial deliveries accepted by the Government if- (a) The amount due on the deliveries warrants it; or (b) The Contractor requests it and the amount due on the deliveries is at least $1,000 or 50 percent of the total contract price. COR Letter: 3 Performing inspections acceptance and quality assurance functions. B. A COR shall be knowledgeable of the types of contract as defined in FAR part 16, that are to be administered. The COR shall also ensure that authorities and limitations of contract provisions about changes, inspection, rework and the provisions of the Prompt Payment Act are understood. Perform inspection and acceptance as designated by the CO. Ensure notification is provided promptly to the CO and DF2211 of any deficiencies or discrepancies in the supplies/services provided. And several other instructions pertaining to the CORs obligations for inspection prior to acceptance. There was also a surveillance plan which had inspection and acceptance criteria for the COR.

probably somewhere in between, I can only speculate, I'd guess my sustainability team will put some process together in phases where someone is going to want to see what we're buying, maybe have some incentive for products and services that use sustainability. They'll probably put together some agency goal that is X% of awards include sustainability products and services, and of those awards Y% of the products and services are lower carbon, energy efficient, etc. Operating administrations will probably get data calls to self report progress. CO's will try and get an exception for most everything. Outside of simple supply and services, I'd gather this is going to be more focused on the PM/Designer, etc. to figure out how they're going to manage project delivery and the CO will have little input since some agencies don't include CO's in the IPT's. Totally unsupported negative outlook of an opinion, but that's what i think will happen... at least where i work.

Do you think this change will be put into practice, or is the fact that it has been incorporated into the FAR mean that box has been checked and it is back to business as usual?

I wasn't briefed, but was notified via an email with a link to the federal register. I have not had any training or heard about plans to provide any. I would guess my agency's sustainability team is going to put something together, but I do not know that.

Steven Koprince, Govology Legal Analyst and retired founder of Koprince McCall Pottroff will be presenting this webinar to help you understand when a small business subcontracting plan is required for a federal prime contractor. Additionally, the course will cover common oversights and mistakes made by prime contractors in connection with establishing and implementing small business subcontracting plans. Please join Steve as he walks you through the process. Register here. The post Govology Webinar: Small Business Subcontracting Plans: What SBLOs Need to Know, May 16, 2024, 1:00pm EDT first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

If a contracting officer determines that a small business offeror is not qualified to perform under a given solicitation, that typically means the offeror’s proposal will be rejected. But when the rejection deals with responsibility, the offeror may get a second bite at the apple through the SBA’s Certificate of Competency (“COC”) program. Whether this is news to you, or something you simply wish to understand a bit better, let’s take a look at the basics of the SBA’s COC Program, rules, and procedures. Which laws establish and govern the COC program? The Small Business Act or the “Act” (specifically 15 U.S.C. § 637(b)(7)) introduces us to the COC program. Contracting officers are required to provide small business concerns with reasoning for why they are denied award of a contract. The contracting officer must also refer small business concerns to the SBA if the concern is denied award specifically due to their “capability, competency, capacity, credit, integrity, perseverance, [or] tenacity[.]” The COC process is easiest to understand by reviewing SBA’s own implementing regulations. They establish the regulatory framework for the SBA’s application of the COC program. They also cover offeror eligibility for a COC, review of a COC application, appeals of a COC determination, and effects of a COC. Don’t worry, we dive into most of these a bit deeper below. But the Act and SBA’s regulations are not the only areas of federal law that speak to COCs, so does the FAR, in a subpart titled “Responsible Prospective Contractors.” The FAR instructs contracting officers to make “an affirmative determination of responsibility” prior to any purchase or award. Other sections of this FAR subpart set forth the standards for determining responsibility–which include a review of, among other things, past performance, financial resources, and organizational skills. In the event a purchase or award involves a small business, the contracting officer and small business offeror must also comply with another FAR subpart, covering “Certificates of Competency and Determinations of Responsibility“–which largely mirrors, and in fact defers to, the SBA’s method of managing the COC program. Who is eligible for a COC review? The first requirement is that you must be an actual offeror on the solicitation at issue to be eligible for COC review. The offeror must also “qualify as a small business under the applicable size standard in accordance with” 13 C.F.R. part 121. If applicable, the offeror must also “have agreed to comply with the applicable limitations on subcontracting and the nonmanufacturer rule” for the subject contract. If these steps are satisfied, the SBA will then review the concern, and its principals, to see if any appear in the “Parties Excluded From Federal Procurement Programs” list. Inclusion on this list does not mean you are immediately ineligible for a COC review, but instead, it might be a little tougher; the SBA will make its eligibility determination “on a case-by-case basis.” How does a COC review start? Even if the second-in-line apparent successful offeror is also a small business, SBA requires a contracting officer to start the COC process under any of the following three circumstances: If the contracting officer denies award to an apparent successful small business offeror based on responsibility; If the contracting officer refuses to consider a small business concern for award after evaluating the concern’s offer on a non-comparative basis under one or more responsibility type evaluation factors; or If the contracting officer refuses to consider a small business concern for award because it failed to meet a definitive responsibility criterion in the solicitation. If one of these circumstances is present, the contracting officer must refer its nonresponsibility determination to the SBA. The referral must include the solicitation, the offer at issue, an abstract of all bids, any pre-award survey, the contracting officers written determination of nonresponsibility, the technical data package, and any other justification for its determination. With these items in hand, the SBA would then conduct the COC review. What are the offeror’s responsibilities during the COC review? When the SBA receives a COC referral from the contracting officer, it notifies the offeror and asks whether it wishes to apply for a COC. If the offeror wishes to apply for a COC, it must show the SBA that it is competent. While each case is different, the SBA generally requires the following documents from the offeror: SBA Form 1531 – Application for Certificate of Competency, SBA Form 355 – Application for Small Business Size Determination, SBA Form 74B – Monthly cash flow, and any other specific forms identified by the SBA. As part of its review, the SBA may, among other things, visit an offeror’s worksites and/or contact an offeror’s suppliers, financial institutions, or other relevant third-parties directly to verify any part of the contracting officers determination of nonresponsibility. Throughout the process, the offeror should respond to any communications from the SBA in a timely fashion. Failure to do so may result in the SBA closing its investigation and denying the COC. What if SBA approves or denies a COC? If the SBA issues a COC for the offeror, the next steps are determined based on the value of the contract at issue. For contracts valued at $100,000 or less, the SBA Area Director’s decision to approve or deny a COC is final. There are no rights to appeal. For contracts valued between $100,000 and $25 million, the Area Director’s decision to deny a COC is final. There are no rights to appeal. If the Area Director approves a COC, the contracting officer has a few options. First, the contracting officer may accept the decision to issue the COC and award the contract to the concern. Second, the contracting officer may ask the Area Director to suspend the case to allow for a review period or so the contracting officer may appeal the decision. Third, the contracting officer may appeal the decision to SBA Headquarters. For contracts valued at more than $25 million, the Area Director’s decision to deny a COC is final. There are no rights to appeal. If the Area Director wishes to approve the COC, it must first refer its recommendation to SBA Headquarters. SBA Headquarters then does its own due diligence by contacting the contracting agency at the secretary level and allowing them to review the case file or submit additional evidence. After the contracting agency responds, the SBA’s Associate Administrator for Government Contracting will make a final determination. Regardless of the outcome, the final determination is just that – final. As you can see, there are a lot of moving parts in the COC process. If you are directly or indirectly impacted by a COC determination, and have any questions, contact us via the options below. Questions about this post? Email us. Need legal assistance? 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 Back to Basics: SBA’s Certificate of Competency first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Thank you all!

Does your timekeeping system require this? Does your timekeeping system show that the required level of effort was provided? There is a timekeeping maxim that contractor employees should record what they do and do what they record. Under an LOE contract, you are paid for effort expended, not results achieved, thus, your reliance on results achieved may be misplaced if the "results achieved" were something other than providing the required LOE.

FAC 2024-05, Sustainable Procurement, 89 Fed. Reg. 30212, April 22, 2024, is one of the most complex rules I have ever read. It takes effect on May 22. It makes changes to 19 FAR parts. FAR Part 23 is being completely reorganized. The FACt takes what is now a one page of coverage in FAR Subpart 23.1, Sustainable Acquisition Policy, and turns it into what will be multiple pages of rules. A new section 23.103, Policy, will read as follows: The FAC amends FAR Part 2 to add a definition of sustainable products and services as follows. The numbers in brackets are the number of pages in each of the documents cited. Bold face added. By my tally, the bolded references in that definition add up to hundreds of pages of regulations and guidance. Question: Have any of you received either (1) a briefing or (2) comprehensive training about FAC 2024-05? If not, do you know of any plans to provide you with such a briefing or training?

@Cyber TJ Is the CO accusing the contractor of falsely recording and invoicing for hours that were not, in fact, worked? Or is the CO accusing the contractor of working inefficiently?

Most likely, this matter cannot be resolved without seeing the contract's text and understanding the context of its formation and administration. If this really is a FFP-LOE contract, isn't the contractor's obligation to provide the stipulated level of effort? Is the LOE a ceiling, or a requirement? It is possible that the contract is sloppy, and that either or both the contracting officer and contractor don't understand correct principles. If there is a claim, this sloppiness will come to light -- and I cannot predict the outcome yet. I guess my question is whether the contract is really a FFP-LOE contract, both by its own text as well as the manner of administration, or is it some sloppy mish-mash?

Thoughts.... What is the payment clause in the contract? In most systems the CO approves payments. What does the COR appointment letter say about the COR's inspection, acceptance and payment authority?

@Atlas STS I just saw here_2_help’s last post. Excellent guidance and suggestions. The company I worked for provided input to the draft of this DAU document. It should give you solid background DAU Guide

Contract awarded under FAR 16.207, FFP/LOE. Section B breaks out LOE by LCAT for each Period of Performance throughout 53 modifications during the term of the contract performance. No dispute, the intended results were received in full from the contractor to the government. Performance was evaluated annually as either "very good" or "satisfactory". Payments were made monthly based upon the LOE delivered each month. Contractor delivered all CDRLs on-time and to the satisfaction of the government. After performance of LOE, government CO makes claims, "there was not enough work for one of the lcats in order to justify the LOE billed for this lcat during some of the contract term". Therefore, the CO's opinion is the contractor inflated the billing in an lcat and now the government requires repayment of 80-90% of the LOE paid for by the government. The contractor was not required to keep a log of efforts performed by each lcat. However, the government CO questioning this particular lcat LOE is now requiring the contractor provide specific tasks completed during a 24 month POP. The contractor says, the fact that the intended results was delivered for all aspects of the contract is indisputable proof the LOE billed for was delivered. The CO argues that just because the government received all of the intended results does not correlate to the government receiving all of the intended results. How in the world would a contractor be able to defend against such accusations? What other ways could the contractor prove the LOE billed for (never exceeding the fixed price award or LOE breakout per Lcat) was lawfully delivered? The CO further claims the contractor should "have known and informed her" they did not have enough tasking to fill up the LOE required under Section B. Where in contract law/FAR, would this accusation by the CO be based? If Section B requires the delivery of the specified LOE, how would the contractor not be in breach if they did not deliver the LOE as the CO is now claiming they should not have billed for? There is NO fluctuation clause or economic adjustment clauses in the contract. The CORs all said they reviewed the contractor's monthly invoices and FHMRs for accuracy prior to accepting and approving each for payment. However, the CO again seems to contradict FAR and logic stating the COR is merely verifying the contractor does not bill LOE that exceeds what has been awarded to each in the contract and were not validating the LOE was delivered as a part of that acceptance. Would love to hear what Vern, here-2-help and other seasoned contracting gurus have to say.

The DoD has several tools/aides available to contracting officers. I don't know how much access a contractor has to them. Start with the Defense Acquisition University (DAU) site and go from there. Ultimately -- and this is why some parties are reluctant to use PBPs -- it is a matter of negotiation. Here are my thoughts but please do your own research. 1. Develop a spend plan (time-phased budget). Layer proposed profit on top of the spend plan. Note that you need to reach 90% of the estimated contract price but not more. 2. Identify key programmatic milestones. Ideally, at least one per month but you can have more than that. Some events may be stand-alone; others may be dependent on others (i.e., cumulative events). 3. Value the milestones/events based on your spend plan. 4. Present to contracting officer. Show your work. Show how you are not front-loading cash to the extent you are actually asking the government for advance payments yourself. 5. Negotiate. 6. Incorporate the final, negotiated, events into the contract.

We all do it! Me, too! It's natural. Which is why we pros in the business have to be alert.

The points made above are things all practitioners and taxpayers should think about. Thank you, Vern. I’m kinda disappointed in myself because I’ve known these things, but just kinda accepted it.

Vern, I appreciated the discussion. I did not remember the prior discussion either but found it in my research. And yes the lawyers, I guess their googling missed some important leads to help them in their quest. Unfair but maybe true the FAR councils may have already drowned?

@here_2_help I think you answered my question exactly, so thank you very much! Unfortunately, we haven't been able to negotiate payment upon receipt with all of our suppliers so it sounds like PBP is our only option if the CO wants to stick to customary contract financing. I suppose I could provide the alternative of PP with an upfront advance payment to us that we would flow down to our payment at order suppliers. Or a PBP to start with PP thereafter, but both of those sounds less appealing the straight PBP to me. I don't know how familiar our CO is with PP or PBP as initially suggested partial delivery invoice payments (e.g. no contract financing), but I explained there's no way I can capitalize a $10M order as a small business with a period of performance of 2 years. Do you know of any good, modern resources for developing PBP events and event values? I've read the 2014 DOD PBP Guide and as much FAR/DFARS on them as I can find. I did find a 2001 User's Guide to PBP which has a very similar example, but I can tell some of the info is incorrect/outdated.

My first point is that the reference to the GAO manual is still there, though effectively nonexistent. Most people don't know the things reported here about GAO authority, or discussed 7 years ago (which I had completely forgotten). Remember, Army lawyers sought clarification. My second point is that agencies are so overburdened they cannot keep their publications up to date. We are experiencing a regulatory frenzy. The FAR councils are and will be under water until well after the upcoming presidential election. They hardly have time to take a breath. I was not commenting on ratification per say. That rule is not complicated in the least. Anyone this side of an idiot can understand it. Finally, FAR does not say that GAO is the office of responsibility for a nonratifiable commitment. It misleadingly suggests that GAO could handle the matterr as a claim. @C Culham @Jamaal Valentine Thanks for responding.

I could be miss reading so disregard if so. It sounds like cash flow is part of the issue. Here 2 has offered sound advice. Another avenue that might help is accelerated payments to small businesses. There is coverage in the FAR. You might want explore with the CO.