Koprince Law LLC

There are many questions facing contractors during this time of change and disruption based on new initiatives from the Trump Administration and the impact on the federal government’s role buying from federal contractors. One of the biggest questions is what can be done if the government modifies a contract, cancels work, or reschedules the performance of work. In that situation, it’s important to understand both the impacts on the prime contractor and any subcontractors. Here are some steps to take to deal with this type of situation. Depending on the facts at hand, it might make sense to perform these steps in the order listed. In other situations, it may be helpful to reach out first, get the temperature of the government and subcontractors, and then review the prime contract and subcontract. Changes to how contracts are managed is something that contractors have dealt with in other situations, and we’ve had recommendations on these types of issues in the context of government shutdowns and COVID-19 over the years. Review the Prime Contract. One important step is to closely review your contract with the government. This will lay out the circumstances under which the government is entitled to modify the contract. Some common clauses to look out for include FAR 52.243–1 Changes—Fixed–Price. The version of this clause for services contracts allows a contracting officer to “make changes within the general scope of this contract” for issues such as The description of services to be performed. Time of performance (i.e., hours of the day, days of the week, etc.). Place of performance of the services. The supplies version of the clause allows similar changes to “[d]rawings, designs, or specifications” for supplies specially manufactured for the government. Other clauses with similar terms include FAR 52.243–2 Changes—Cost–Reimbursement; FAR 52.243–3 Changes—Time-and-Materials or Labor–Hours; and FAR 52.243–4 Changes. Be sure to check the specifics of the clause in the prime contract as each pertain to different types of contracts. Pay close attention to the notice provisions of these clauses. For instance, the fixed-price changes clause requires a contractor to notify the contractor within 30 days after receipt of the change order from the contracting officer to request an equitable adjustment. But the government can vary this 30-day period per contract. It’s possible the change to the scope of work might not be covered by these clauses. For instance, consider a contract for assistance setting up events. The government may simply not hold a certain event. Rather than modifying the contract, reality dictates that there is less work for the contractor to do. Taking a close look at the prime contract scope of work can reveal where the government may make these sort of alterations or opt not to request certain services. One other thing. If you think that the government’s alteration has amounted to a change under the contract’s Changes clause, be sure to provide written notice to the contracting officer as soon as possible. A contractor has a responsibility to notify the government of a change that has not been identified in writing. FAR 43.104(a); FAR 52.243-7(b). Even if the contractor thinks the government has made an unofficial change, the contractor “shall diligently continue performance of this contract to the maximum extent possible.” FAR 52.243-7(c). Some things to include in a notification to the government of a change are: Date, nature, and circumstances: Who’s involved, any communications Basis of acceleration of scheduled performance Elements to seek adjustment: Line items effected; Adjustments to price, delivery, other; Labor or material added or deleted Delay or disruption caused Estimate of how long government can take to respond without contractor incurring additional costs Review the Subcontract. Make sure you are familiar with the subcontract terms for whether it will allow modifications. For instance, some subcontracts may allow changes based on whether the government modifies the prime contract. Other subcontracts may include a schedule of performance, scope of work, task order, or similar section that sets out the work the subcontractor will perform under the subcontract. Review those sections to determine if the government’s alteration of performance impacts the work to be performed by the subcontractor. Next, review the subcontract’s modifications section. What requirements does it contain for modifying the subcontractor’s scope of work? Are there notice requirements? Can the prime contractor unilaterally modify the subcontract or does it need to be done with the agreement of the subcontractor? These are important facts to determine and can vary from subcontract to subcontract. Reach Out. Make sure lines of communication are open with both the contracting officer and the point of contact with all subcontractors whose work could be affected. Talk with the government early and often to stay informed about what the contracting officer is planning to do. Keep the subcontractor informed so that the subcontractor knows what to expect and how to plan for it. These are just some of the things to be aware of when it comes to government changes or alterations of prime contracts. Your mileage may vary because it depends on the type of work being performed (e.g. construction contracts may move forward while event planning or office work is curtailed), as well as the particulars of the prime contract and subcontract. Regardless of the specifics, reviewing the pertinent agreements and staying in communication with the government and subcontractors is paramount. Questions about this post? Email us . Need legal assistance call 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 Dealing with Contract Alterations and Modifications Due to Changes in the Administration first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday. Hope everyone had a great week. We wanted to share an announcement this week that WIFCON.com is back. Posted from the website: “Wifcon.com was created by Robert (Bob) Antonio 26 years ago. Operated and maintained solely by him and at his own expense, the website has provided a free, reliable, and invaluable source of information and means of communication and commentary to the acquisition community, both public and private for 26 years. Sadly, Bob died on November 24, 2024, after a brief illness, leaving no operational successor.” Now, “a small group of volunteers, has purchased the site from his heirs and will continue to provide the same free service under the same name, Wifcon.com.” We truly appreciated Bob’s commitment to the GovCon community. He created a great resource for us here at SmallGovCon and provided very helpful information that we used weekly in our Week in Review blogs. Thank you, Bob, for your dedicated service, and for the new operators of this very helpful site. Please visit the website at WIFCON.com. And now this week in federal government contracting news, check out stories about new changes to contracting at various agencies including possibly having GSA do more of the contracting for other agencies, as well as changes to DoD workforce and regulations. GSA considers takeover of contracting work at other agencies amid reorganization Contractors spend the week getting ready for a government shutdown DHS brings back one of its federal advisory committees White House nominates top leaders for CISA, other DHS components House passes bill to fund federal agencies through September, though prospects unclear in Senate Better data, not a review, new systems will fix acquisition Confusion, fear as changes whipsaw Defense workforce Military Readiness: Implementing GAO’s Recommendations Can Help DOD Address Persistent Challenges Across Air, Sea, Ground, and Space Domains DoD no longer requires Equal Employment Opportunity clauses in contracts How 2016 NDAA transformed OTAs into key defense contracting tool Federal News Network Letter to the editor: 46 former GSA executives say cuts to cause ‘irreversible damage’ The post SmallGovCon Week in Review: March 10-14, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

When contractors think of protests or litigation related to federal contracting, likely their thoughts go to a bid protest or a size protest. Additionally, when thinking of protesting prior to bids being due, the focus generally is on the wording and provisions of a solicitation. However, contractors should not forget how powerful a tool a NAICS code appeal could be for small business procurements. A recent brief decision in a NAICS code appeal serves as reminder of how useful a simple NAICS code appeal can be for contractors. In order to discuss the recent SBA OHA decision, a quick refresher on NAICS and NAICS code appeals is needed (for a more in depth discussion of NAICS code appeals, check out the NAICS Code Appeal entry in our Why File series). A NAICS code is a six-digit code that is assigned to various categories of industries under the North American Industry Classification System (hence, NAICS), a standard used in classifying business establishments. The SBA assigns a different size standard to each NAICS code based on dollar number of receipts or number of employees. SBA publishes and regularly updates a table of all the size standards assigned to NAICS codes. Agencies must assign a NAICS code to a procurement based on the type of work involved and to establish the business size limit for the contract (if set-aside for small business or a small business certification). Contractors can file a NAICS code appeal with SBA’s Office of Hearings and Appeals (OHA) within 10 days of a solicitation being posted (or an amendment to a solicitation affecting the NAICS code). These can be filed for a multitude of reasons, but generally, a NAICS code appeal is filed because the NAICS assigned to a solicitation simply does not make sense with the work called for in the solicitation. There are also strategic concepts behind NAICS appeals which would advantage a contractor, such as restricting the pool of offerors, or shifting the NAICS to one which a contractor can bid under as small (reminder, check out our entry on NAICS Code Appeals in the Why File series) NAICS code appeals are quite rare, but historically, NAICS code appeals can be relatively successful compared to other federal contracting protests or litigation. GAO stated in 2017 that “in calendar years 2014–2016, OHA dismissed 35, denied 15, and granted 12.” This means a good amount were straight out successes for the appealing contractor during that time, and as you will see below, not all dismissals truly mean the appellant didn’t get the desired outcome. In the recent NAICS code appeal of CueBid Technologies, SBA No. NAICS-6339, 2025 WL 754045 (March 5, 2025), contractors are reminded of just how swift and powerful a NAICS code appeal can be. The subject solicitation involved “hauling and transportation services, forklift/crane operations, fuel, and labor to move containerized and non-containerized military equipment within Fort Cavazos.” It was set aside for SDVOSBs and included NAICS code 532490 (Other Commercial and Industrial Machinery and Equipment Rental and Leasing) which had a size standard of $40 million. CueBid Technologies in its appeal argued that NAICS code 484110 (General Freight Trucking, Local) with its $30 million size standard, would be a better fit. Now, most contractors would expect a drawn out briefing process and litigation as the next step. However, the agency went ahead and changed the Solicitation’s NAICS to the one argued by CueBid Technologies. Thus, SBA OHA dismissed the appeal before it was completed, since it made the appeal moot (i.e., irrelevant). This highlights just how effective a good NAICS code appeal can be. While the SBA filing resulted in a dismissal, it is a successful dismissal from the contractor’s perspective because the agency took the action sought by the appellant contractor. Reading between the lines of this brief decision from SBA OHA, there are some great takeaways and reminders. It appears that a well formed, logical NAICS code appeal can still result in a “victory” for the contractor. Here, the agency acted before the end of the appeal to adjust the NAICS code. Presumably, the appeal filed by CueBid exhibited how its suggested NAICS code better fit the work under the Solicitation. The agency, rather than going through lengthy briefings and legal battles, simply took action after realizing CueBid’s strong position. This appeal led to an efficient, quick, and logical conclusion. This shows that a NAICS code appeal can be quite an effective tool for contractors, and efficient for the government as well. While rare, NAICS code appeals are still a powerful tool in a federal government contractor’s toolbox. If you find yourself looking at a newly posted solicitation and feel puzzled about the assigned NAICS, do not hesitate to consider a NAICS code appeal. While rare, these are often quite powerful tools for contractors, leading to effective and efficient conclusions. Of course, each case is unique and there are legal nuances to any NAICS code appeal. So, be sure to reach out to a federal contracting attorney, such as ourselves, if you feel a NAICS code appeal may be needed. 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 NAICS Code Appeal Still a Powerful Tool first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

When an SBA approved mentor and protégé create a joint venture to pursue contracts set-aside for small businesses, SBA requires the mentor-protégé joint venture agreement to contain the requirements found in 13 C.F.R. § 125.8(b)(2). But how closely does the joint venture agreement have to match the language of these required provisions in order to be found complaint? In DecisionPoint-Agile Defense JV, LLC, OHA considered whether the language in a joint venture’s operating agreement (OA) can be considered alongside the joint venture agreement (JVA) when determining if a JVA meets all the regulatory requirements. Background GSA issued a Small Business Pool Request for Proposals (RFP) for IT services and posted a pre-award notification of successful offerors. DecisionPoint-Agile Defense JV, LLC (Appellant) was one of the successful offerors. Appellant was a joint venture owned 51% by a small business and 49% by an other than small business. The two businesses were in a mentor-protégé relationship. The contracting officer filed a size protest, arguing Appellant’s JVA did not comply with the provisions required by 13 C.F.R. § 125.8(b)(2). The Area Office issued a size determination finding Appellant other than small because the JVA did not contain several of the regulatory provisions required by SBA. Even though several of the missing provisions were stated in the OA, the Area Office claimed the language of the regulation requires the JVA to contain the provisions. Appellant appealed the size determination, arguing that the Area Office erred in limiting its analysis to just the JVA and refusing to include the OA in its consideration. Discussion OHA agreed with Appellant, finding the Area Office erred in failing to consider Appellant’s OA when determining whether Appellant met the JVA regulatory requirements. OHA noted that it has “consistently considered a concern’s operating agreements together with its joint venture agreement in judging a concern’s compliance.” Further, OHA stated that whether an operating agreement is explicitly incorporated into the joint venture agreement is irrelevant. The only requirement is that the documents were executed prior to the date on which the size of the joint venture was determined. With this consideration in mind, OHA reviewed Appellant’s JVA and OA together to determine whether the regulatory requirements were satisfied. Managing Venturer and Responsible Manager Designating a small business as the managing venturer of the joint venture, and designating a named employee of the small business managing venturer as the manager with ultimate responsibility for performance of the contract (the “Responsible Manager”). See 13 C.F.R. § 125.8(b)(2)(ii). The Area Office argued that Appellant’s JVA failed to clearly designate that the manager would have ultimate responsibility for contract performance. As the small business, DPC was designated as Managing Venturer and the JVA stated that DPC’s CEO would be the Managing Director responsible for supervising the employees. Even though the JVA clearly designated someone to supervise the employees, the Area Office claimed this did not indicate ultimate responsibility over contract performance. OHA concluded that the regulation never explicitly requires the JVA contain the exact language used in the regulation. OHA said “the regulation does not mandate particular language” and “SBA has stated that no specific format is required for a joint venture agreement.” The JVA had clearly designated DPC’s CEO as the Managing Director and provided a description of his duties. Additionally, the CEO’s responsibility in matters related to contract performance was provided in the OA. Thus, the small business was designated as the Managing Venturer and an employee was designated as the Responsible Manager with ultimate responsibility over contract performance. Major Equipment, Facilities, and Other Resources Itemizing all major equipment, facilities, and other resources to be furnished by each party to the joint venture, with a detailed schedule of cost or value of each, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated major equipment, facilities, and other resources to be furnished by each party to the joint venture, without a detailed schedule of cost or value of each, or in the alternative, specify how the parties to the joint venture will furnish such resources to the joint venture once a definite scope of work is made publicly available. See 13 C.F.R. § 125.8(b)(2)(vi). The JVA only stated that the Venturers would contribute property and share responsibility. For an indefinite quantity contract, the regulation only requires a general description of the anticipated major equipment, facilities, and other resources. Even though this was an IDIQ contract, the Area Office concluded that the JVA did not provide a general description. The OA, however, did contain a description of resources that would be furnished by each Venturer, noting, The Managing Venturer was to contribute $5,100 for registration fees, legal services and other expenses, and other resources by mutual agreement, included to support specific task orders. The Partner Venturer will contribute $4,900 for registration fees, legal services and other expenses. Also $15,000 for website development and maintenance, $5,000 per annum for office supplies, and $5,000 for marketing and public relations support. Therefore, Appellant met the requirement by providing a general description of the resources in the OA. Ensured Contract Performance Obligating all parties to the joint venture to ensure performance of a contract set aside or reserved for small business and to complete performance despite the withdrawal of any member. See 13 C.F.R. § 125.8(b)(2)(viii). Appellant’s JVA provided, “all parties to the Joint Venture are required to complete contract performance.” The Area Office argued this did not include the language “despite the withdrawal of any member.” Appellant’s OA did include this language, stating, “[a]ll parties to the Joint Venture are obligated to complete contract performance despite the withdrawal of any party to the Joint Venture.” OHA found that the provision in the JVA alone satisfied the obligation, noting that the language presented “a flat, absolute requirement with no exceptions.” Further, the OA contained the exact regulatory language the Area Office wanted. Additionally, there were regulatory provisions that were not included in Appellant’s JVA but were explicitly stated in the Operating Agreement, including Original Records and Performance of Work Statements. OHA found Appellant compliant because they were included in the Operating Agreement. Key Takeaways This case provides some comfort in OHA’s flexibility, and knowing that OHA doesn’t require joint ventures agreements to follow the regulation language verbatim, at least in some cases. But this case also serves as a lesson that it might be the better choice to simply include the regulatory language in your joint venture agreement anyway. Here, the Appellant faced an adverse size determination because the required regulations were in the OA and not explicitly stated in the JVA. An easy fix to avoid this would be starting with the language used in the regulation and then adding in the specifics. For example, clearly designate the Responsible Manager “as the manager with ultimate responsibility for performance of the contract.” Then feel free to list the specific areas the Responsible Manager will oversee, “this includes reviewing documents, supervising employees, payroll, etc…” 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 Spell it Out for Me: OHA Finds Joint Venture Agreement Compliant When Reviewed with Operating Agreement first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Hello, blog readers and happy Friday. Can you believe it’s already March? In just a few short weeks, spring will (finally) be here! Hooray! With all the snow we had, we are definitely looking forward to warmer temperatures and to getting outside more. We hope that you’re gearing up for a nice weekend. But before you do, let’s take a look at the-week that was. In this edition of the Week in Review, articles discussed the continued reshuffling and closing of government agencies and offices and the importance of GSA. Whitehouse: Addressing Risks from Perkins Coie LLP 18F shutters, leaving agencies without a key partner in digital transformation; GSA tells agencies to terminate contracts with top-10 consulting firms The Big Government Contracts DOGE Hasn’t Touched As DOGE lease terminations hit Indian Country, concerns mount about vital services GSA lists agency headquarters among 440 ‘non-core’ assets for possible disposal Once again, GSA finds itself in the center of a hubbub What nearly a billion in canceled federal contracts could mean for education National Science Foundation rehires half of employees fired two weeks ago OPM tells agencies it’s not directing probationary firings Defense Pricing, Contracting, and Acquisition Policy Office Issued Class Deviation 2025-O0003 The post SmallGovCon Week in Review: March 3-7, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

A recent bid protest decision examines the effect of a novation on a pending procurement. After a complicated procedural history, GAO said that an agency must take into account a corporate transaction and novation, even if the agency wasn’t aware of the novation at time of proposal submission. In DecisionPoint Corporation- f/k/a Emesec Inc., B-422245.5 (2024), the Air Force sought cyber protection and engineering support under the GSA VETS II contract. The solicitation required proof of a level III Capability Maturity Model Integration (CMMI) certification for the “prime contractor providing the CPT support services.” DecisionPoint Corporation, known at the time of proposal submission as EmeSec Inc. (EmeSec), submitted a proposal on May 1, 2023 under the name EmeSec. EmeSec submitted its proposal saying that it was a subsidiary of DecisionPoint. Because EmeSec did not have its own CMMI certification, it included “DecisionPoint’s level III CMMI certificate, along with a meaningful relationship commitment letter (MRCL).” Before proposal submission, EmeSec merged into DecisionPoint. Then, after the proposal submission date, but before award, on June 26, 2023, “DecisionPoint entered into a novation agreement with GSA that recognized DecisionPoint as EmeSec’s successor in interest.” In December 2023, EmeSec received award, and only then did it reveal the novation agreement to the Air Force. As part of an earlier protest, GAO explained that “that the MRCL did not clearly describe how the resources of the parent would be available for performance.” As a result, the Air Force took corrective action and contacted the “entity that issues the CMMI certificates–i.e., the Information Systems Audit and Control Association (ISACA)–for information regarding how ISACA issues its certificates.” After reviewing this information and seeking clarity from DecisionPoint, the Air Force found DecisionPoint ineligible “because it failed to submit proof of any level III CMMI certification for the prime contractor providing the CPT support services as required by the solicitation.” DecisionPoint protested. DecisionPoint argued that “that the Air Force’s decision that DecisionPoint was ineligible for award because it failed to include proof of any level III CMMI certification for the prime contractor providing the CPT support services was unreasonable because the Air Force ignored EmeSec’s merger into DecisionPoint and the novation of the VETS II contract from EmeSec to DecisionPoint” prior to the proposal submission date. The agency responded that, at proposal submission, EmeSec was the prime contractor and it did not have the required CMMI certification–only the parent DecisionPoint had the certification. GAO held that “that the agency’s determination that DecisionPoint’s proposal was ineligible for award because it failed to include proof of any level III CMMI certification for the prime contractor providing the CPT support services is not consistent with the terms of the solicitation or supported by the record.” Furthermore, “as a result of the merger between DecisionPoint and EmeSec, which was effective January 1, 2023, the prime contractor is now DecisionPoint.” “While the agency did not know that DecisionPoint was the prime contractor at the time of its initial evaluation, the agency was aware of this fact when it conducted its post-corrective action evaluation.” GAO said that the agency did not properly account for the effect of the merger. This means that “the record shows that at the time the agency conducted its post-corrective action evaluation, the prime contractor (DecisionPoint) included proof of its level III CMMI certificate in its proposal as required by the solicitation” This decision is interesting for a couple reasons. First, it may encourage protesters to take another shot at protesting. While the initial decision found in favor of one protester, the later protest basically found in favor of the opposite protester. Second, on the substance, while it is always better to have a thorough explanation to provide an agency when it comes to things like mergers and corporate structure, the protest process may allow a chance to have an independent reviewer take a look at the agency’s decision and question it. And that may be enough for the protester to get another shot at the award. The decision seems to recognize that a novation is retroactive back in time to the point of the corporate transaction, even if it’s approved later. And agencies also must recognize the substance of the corporate transaction that precipitates a novation. 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 here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post GAO: Agency Must Recognize Novation as Part of Pending Offer first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The National Center for American Indian Enterprise Development (NCAIED) is going Beyond Boundaries for the 2025 Reservation Economic Summit. The event features tribal leaders, members of Congress, federal agency representatives, state and local officials, and top CEOs on a national platform. Our very own federal government contracts attorney and SmallGovCon contributor, Nicole Pottroff, is scheduled to be a panelist on the topic of Building and Maintaining a Compliant Company, at this year’s conference in Las Vegas on Monday, March 10. This panel will discuss ways organizations can identify compliance issues across business units, while standardizing and improving processes. If you are planning on attending this conference, please stop by and say hello to Nicole. Please use this link for more information about the conference and registration. The post Res 2025: Beyond Boundaries Conference, Las Vegas, Nevada, March 10-13, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday! Tomorrow is the first day of March and you know what that means if you are a college basketball fan. March Madness! Start thinking about your bracket strategy and let the games begin! Have a great weekend. This week in federal government contracting saw GSA deviations to procurement policies, canceled contracts, and a new SBA administrator. GSA Announces ‘Deviations’ in Procurement Policies Presidential Memo Calls for More Disclosure on Canceled Spending Changes to GSA Federal Acquisition & Procurement Practices on Hold White House Seeks to Promote Foreign Investment While Protecting Nat’l Security SBA Administrator Loeffler Issues Memo on Day One Priorities EPA moves to seize $20B in clean energy grants, including $1.5B for Native communities Legion, SBA team up to assist current, prospective veteran small business owners Nearly 40% of contracts canceled by Musk’s DOGE are expected to produce no savings A vague Pentagon memo has some contractors on edge OPM procurement processing fully halted following agency layoffs, internal email says GAO High-Risk Series: Heightened Attention Could Save Billions More and Improve Government Efficiency and Effectiveness Oversight of EPA and DOE Spending: Implementing Remaining GAO Recommendations Could Help Address Identified Challenges The post SmallGovCon Week in Review: February 24-28, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

One of the rules we get asked about the most as government contracts attorneys is what’s known as the nonmanufacturer rule, 13 C.F.R. § 121.406 (So much so that we felt it wise to go over the rule in one of our “Back to Basics” posts to help clear some things up). It’s pretty understandable why: It has numerous provisions, exceptions, and requirements that can make it pretty difficult to follow. It also shows up in two different regulations: 13 C.F.R. § 121.406 as mentioned above, as well as FAR 19.505. Unfortunately, this often leads to contractors getting tripped up by the rule, either not realizing it applies where it does or, as we’ll explore here, thinking it applies where it doesn’t. Recently, SBA addressed a size protest that asserted the awardee didn’t meet the requirements of the nonmanufacturer rule, and noted to the unfortunate protestor that the rule didn’t apply for the procurement anyways. Read more: Confusion About the Nonmanufacturer Rule: When Does it Apply? In Mission Analytics, LLC, SBA No. SIZ-6325, 2024 (Dec. 12, 2024), the protester filed a size protest on an award of a contract to upgrade camera systems for the Air Force. This procurement was issued under NAICS code 561621, Security Systems Services (Except Locksmiths). The protester asserted that the awardee was not a manufacturer of the products the procurement sought and thus had to meet the nonmanufacturer rule to be eligible for award. In particular, the protester asserted that FAR 19.505(a)(2) applies the nonmanufacturer rule to all awards under FAR Subpart 19.14. The protest was dismissed by the SBA area office (and we’ll get to why in just a moment here). Raising the same issues in the size appeal, the protester again asserted that the nonmanufacturer rule applied to the procurement. However, the protester was mistaken. SBA pointed out that the procurement was issued under a services NAICS code. 13 C.F.R. § 121.406(b)(3) states: “The nonmanufacturer rule applies only to procurements that have been assigned a manufacturing or supply NAICS code, or the Information Technology Value Added Resellers (ITVAR) exception to NAICS code 541519.” In other words, the nonmanufacturer rule wasn’t applicable here because this was a services contract. This was why the area office had dismissed the protest in the first place. We aren’t going to stop here, though. It’s worth exploring further what the protester argued in this case. The protester was aware of 13 C.F.R. § 121.406(b)(3). However, the protester argued that this regulation was overruled by FAR 19.505(a)(2). To be sure, that part of FAR 19.505 does give the impression that the nonmanufacturer rule applies to all awards under FAR subpart 19.14. The protester then asserted that this was a problem recognized by the government in revisions made to the FAR back in 2021. However, the protester made a few mistakes here. First, those revisions were to the limitations on subcontracting, not the nonmanufacturer rule. These rules are similar in some respects, so let’s make some clarification here. One question the nonmanufacturer rule in 13 C.F.R. § 121.406 asks is, who is the actual manufacturer of the end item? When it comes to determining whether a company is the manufacturer, one factor that is considered under the rule is how much value the company adds to the end product in question as compared to the total value of that product. The limitations on subcontracting also require a calculation of value, but not in the same way as the nonmanufacturer rule. Instead, the limitations on subcontracting limit how much a contractor for a set-aside can pay out to its subcontractors. For example, under 13 C.F.R. § 125.6 for a set-aside services contract, the contractor cannot pay more than 50% of the contract value to subcontractors (that aren’t similarly situated). We go over the limitations on subcontracting in more detail here. The protester also made another error. FAR 19.505 clearly states that the nonmanufacturer rule doesn’t apply to services contracts, just like 13 C.F.R. § 121.406: “Any concern, including a supplier, that is awarded a contract or order subject to the nonmanufacturer rule, other than a construction or service acquisition…is required to…” FAR 19.505(c)(1). As such, the area office’s decision to dismiss was correct, and SBA concluded accordingly. With all this said, we admit some sympathy for the protester in this one. FAR 19.505(c)(1) could really use some better wording, it lacks clarity. It also really doesn’t help that there’s so many different regulations that essentially include the entire nonmanufacturer rule instead of simply having one regulation with the rule and referencing that regulation where needed. SBA was correct in its decision, to be sure. After all, it doesn’t make sense to have a rule about what must be done if a company isn’t a manufacturer of the desired product when the contract is for services. But all the same, we think this case could serve as some impetus to further clean up the FAR and SBA regulations to make things clearer for everyone. 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 here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Confusion About the Nonmanufacturer Rule: When Does it Apply? first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Joint ventures pursuing a contract under any of the SBA’s socioeconomic programs (Woman-Owned Small Business Program, Service-Disabled Veteran-Owned Small Business Program, 8(a) Program, and HUBZone) all have requirements beyond the general requirements that a non-joint venture prime contractor must meet to be eligible for those types of set-asides. The joint venture must be considered small, which may take into account the size of both venturers, and the joint venture agreement itself must contain specific information. But what happens when the regulatory text isn’t exactly clear on how those two requirements fit together? And how are unsuccessful offerors, contracting officers, and the SBA itself supposed to challenge the status of those joint ventures if the regulatory text doesn’t explicitly provide for the means to do so? Read ahead to see how the decision in Chenega Base and Logistics Services, LLC to find out! In August 2024, the Army awarded DPG Services JV LLP a contract for facilities support services. The joint venture consisted of an 8(a) Program participant and a small business. Size Protest Following award, Chenega Base and Logistics Services (Chenega) protested the size of DPG. In September 2024, the SBA Area Office found that DPG was a small business for procurement. Notably, the joint venturers were found to be affiliated because the joint venture was awarded its first contract more than two years prior to proposal submission. The joint venture’s first award was in February 2019, and it submitted its final offer including price for the procurement at issue, in July 2023. This meant that the joint venture far exceeded the time limit allowed under the two-year rule at 13 C.F.R. § 121.103(h). This states, “a specific joint venture generally may not be awarded contracts beyond a two-year period, starting from the date of the award of the first contract, without the partners to the joint venture being deemed affiliated for the joint venture.” Regardless, the Area Office determined joint venture was eligible for award because the joint venture was still considered small even with the venturers sizes being combined due to their affiliation. Appeal Appellant, in October 2024, appealed to SBA’s Office of Hearings and Appeals (OHA). Appellant acknowledged that the venturers individually appeared to be small, but contended that together, and including their respective affiliates, they exceeded the procurement’s size standard. Additionally, Appellant argued that the joint venture could not be compliant with 13 C.F.R. § 124.513(c) and (d). 13 C.F.R. § 124.513(c) requires every joint venture agreement for an 8(a) set-aside to describe all major equipment, facilities, and other resources to be contributed by each member of the joint venture. Further, the joint venture agreement must identify the respective responsibilities of the members as to negotiation of the contract, source of labor, and contract performance, which Appellant asserted the joint venture agreement lacked. 13 C.F.R. § 124.513(d) requires the 8(a) partner to an 8(a) joint venture to perform at least 40% of the work performed by the joint venture and that it must bring some value to the joint venture agreement. Appellant claimed that the Area Office erred by not considering whether the joint venture met the requirements in 13 C.F.R. § 124.513(c) and (d), pointing out that 13 C.F.R. § 121.103(h)(2)(i) states: For a competitive 8(a) procurement, a joint venture between an 8(a) Participant and one or more other small business concerns (including two firms approved by SBA to be a mentor and protégé under § 125.9 of this chapter) must also meet the requirements of § 124.513(c) and (d) of this chapter as of the date of the final proposal revision for negotiated acquisitions and final bid for sealed bidding in order to be eligible for award. This requirement applies to “any 8(a) contract” and “[e]very [JVA] to perform an 8(a) contract.” Therefore, the Appellant argued that even if the joint venture is small for the procurement per 13 C.F.R.§ 125.8, it didn’t meet the requirements of 13 C.F.R. § 124.513, which applies to 8(a) joint venture requirements, including the addendum requirements that require a joint venture to “create an addendum to the joint venture agreement setting forth the performance requirements for each additional award.” And the Area Office erred in not evaluating the joint venture agreement to determine whether it met those requirements. OHA’s Decision OHA agreed with the Appellant that the Area Office improperly ignored applicable SBA joint venture rules that applied because the procurement was set-aside entirely for 8(a) Program participants. 13 C.F.R. § 121.103(h)(2)(i) states that a joint venture “must also meet the requirements of § 124.513(c) and (d) of this chapter as of the date of the final proposal revision for negotiated acquisitions … in order to be eligible for award.” Accordingly, OHA pointed out that size is not the only consideration and that the Area Office should have looked at whether the joint venture agreement met the requirements of 13 C.F.R. § 124.513(c) and (d). But there was still the issue of how a disappointed offeror, Contracting Officer, or the SBA may raise such a concern. As noted in the decision, agencies were previously required to evaluate offerors’ joint venture agreements prior to award to ensure the joint venture agreement meets the 8(a) Program joint venture requirements. But when that requirement was removed, there was no existing way to protest whether an 8(a) joint venture met the joint venture requirements in 13 C.F.R. § 124.513. The Federal Register commentary that accompanied the rulemaking of 13 C.F.R. § 121.103(h)(2)(i) noted that, even though SBA removed the requirement that SBA review 8(a) joint venture agreements prior to award, SBA did not intend to allow 8(a) joint ventures that did not meet the requirements in 13 C.F.R. § 124.513 to be awarded competitive 8(a) set-asides. SBA intended the size protest process to work to ensure compliance with formal 8(a) joint venture agreement requirements. In practice, the size protest process did not work as intended in situations where the joint venture is between an 8(a) Program participant and another small business. Such a joint venture would still be considered small under 13 C.F.R. § 125.8, which states that any joint venture between two small venturers will be considered small for the procurement. But the joint venture agreement may not meet the 8(a) joint venture rules in 13 C.F.R. § 124.513, such as the 8(a) venturer being the Managing Venturer. Thus, OHA held that the only path to protesting an 8(a) joint venture’s status, thereby ensuring the 8(a) joint venture meets the 8(a) joint venture requirements in 13 C.F.R. § 124.513, is through the size protest process. Here, OHA remanded the case back to the Area Office to review the joint venture agreement in accordance with 13 C.F.R. § 124.513, concluding that it is not only the responsibility of an 8(a) joint venture to be considered small, but to also meet the joint venture requirements for any 8(a) competitive procurement. Thus, there is a method to question the joint venture compliance of an 8(a) joint venture. Please reach out to our firm should you seek to do so. If you have questions, please email us. If you 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 SBA Reminder: Ensure all Joint Venture Requirements are Met to have a Successful JV first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Here is your Week in Review as you head into the weekend. We are still attempting to get through this second artic blast here in the Midwest this week. I think it’s safe to say we are all looking forward to those warmer temperatures that are returning next week. Enjoy the weekend! This week in federal government contracting news includes a new SBA administrator, updates on federal workforce reductions, and new guidance from GSA. Senate confirms Kelly Loeffler, former Georgia senator, to lead Small Business Administration SBA Administrator Kelly Loeffler Issues Statement Federal firings: You couldn’t make this up Hegseth directs Pentagon to find $50 billion in cuts this year to fund Trump military priorities GSA announces FAR class deviations, guidance for contracting officers Major Opportunities on the Horizon with CISA FY26 Contract Recompetes White House Memo: Radical Transparency About Wasteful Spending Federal Contracts Are Highly Coveted—What Happens When There’s a Fight Over Them? Pentagon’s $96M wearable contract sparks protest, accusations of vendor preference Black Business Leaders Call for Bigger Structural Change Amid Anti-DEI Surge Procurement List; Additions and Deletions Senate confirms Kelly Loeffler to lead Small Business Administration A comprehensive look at DOGE’s firings and layoffs so far The post SmallGovCon Week in Review: February 17-21, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Winning a government contract requires more than just submitting the best proposal—your company must also be deemed “responsible” by the federal government. Responsibility in government contracting goes beyond technical capabilities and pricing; it encompasses financial stability, past performance, ethics, compliance with laws, security clearances, and overall business integrity. Failure to meet responsibility requirements can lead to a contract award being denied, even if a company submits the most competitive bid. In this webinar, government contracts attorneys, Nicole Pottroff and Stephanie Ellis of Koprince McCall Pottroff LLC, will provide a comprehensive breakdown of responsibility determinations and what they mean for government contractors. You’ll gain insights into how contracting officers evaluate responsibility, what documentation and evidence contractors can provide to strengthen their case, and key actions businesses should take to avoid responsibility-related issues. Additionally, this session will explore the special rights that small businesses have to challenge negative responsibility determinations through the SBA’s Certificate of Competency (COC) process. Understanding how and when to leverage this option can be the difference between losing a contract and securing a valuable government opportunity. Whether you’re a new contractor or an experienced one looking to solidify your compliance and competitiveness, this webinar will equip you with the knowledge, tools, and strategies needed to meet responsibility requirements and position your company for long-term success in the federal marketplace. Register here. The post Govology Webinar Announcement! The Concept of “Responsibility” in Government Contracting (2025 Update), March 6, 1:00pm EST first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

As a federal contractor, there are many factors to consider in filing a potential bid protest. In this post, we look at the potential considerations, both pros and cons, for filing a bid protest at the Court of Federal Claims (COFC). Below are some of the main items to think about in considering a bid protest at the COFC, as opposed to a bid protest at the Government Accountability Office (GAO) or an agency level protest. The decision of whether, and where, to file a bid protest is one that should only be taken with care and, preferably, with the advice of counsel. Here are some of the key things to consider. As we noted in a recent post, the total number of GAO protests has generally gone down over the last several years, while COFC protests have been inching up over the last few years. There are fewer cases in COFC, but the bid protest numbers appear to be growing at COFC. For instance, the number of bid protests filed at COFC in FY 2022 was a mere 123 cases, but increased to 169 cases the next fiscal year. That may explain the trend of fewer cases at GAO. Complete Administrative Record COFC protests offer a more robust agency record as compared to GAO and agency level protests. The COFC rules require that the agency produce a number of documents, right out of the gate, including the following: Source selection plan; The agency’s estimates of the cost of performance; Correspondence between the agency and the protester, awardee, or other interested parties relating to the procurement; Records of any discussions, meetings, or telephone conferences between the agency and the protester, awardee, or other interested parties relating to the procurement; The protester’s, awardee’s, or other interested parties’ offers, proposals, or other responses to the solicitation; The agency’s competitive range determination, including supporting documentation; The agency’s evaluations of the protester’s, awardee’s, or other interested parties’ offers, proposals, or other responses to the solicitation, including supporting documentation; The agency’s source selection decision, including supporting documentation; The first thing to note is that this is a long list of documents. In fact, in the COFC rulebook, the list goes all the way from (a) to (u), close to the whole alphabet. The second thing is that this list of documents is not subject to debate by the agency. This means the agency must produce the whole list, and the agency cannot object to producing any of the documents. This is a contrast from the GAO protest world, where the agency will often decline to produce documents on the basis of relevance, and even fight through rounds of objections to not include agency evaluation materials. Finally, the list of documents includes the proposals and evaluation record for all offerors. This is a marked contrast from GAO, where the protester typically only receives its own evaluation record and a small portion of the evaluation record relevant to any specific arguments it makes about awardees. Timing GAO’s timing rules are notoriously strict. As we’ve discussed, GAO’s timeliness rules for protests not challenging solicitation terms have strict deadlines. These types of protest, challenging an agency’s evaluation decisions, basically give a company 10 days from either contract award or debriefing in which to file a GAO protest. GAO rules say that a protest shall be filed not later than 10 days after the basis of protest is known or should have been known (whichever is earlier). However, procurements with competitive proposals and required debriefings get an extension so that the initial protest shall not be filed before the debriefing date offered to the protester, but shall be filed not later than 10 days after the date on which the debriefing is held. At COFC, there is no strict deadline for this type of protest. So, you usually have much more time to file a protest at COFC that does not challenge solicitation terms as compared to GAO. On the other hand, protests to solicitation terms have a similar rule at both GAO and COFC. Both must be generally filed prior to the proposal deadline. More Complete Decision Take a look at some GAO decisions as compared to COFC decisions. One thing you’ll notice is that COFC decisions are simply longer than those at GAO. The judge at COFC will cover all arguments raised in the protest and give each sufficient consideration. However, GAO decisions will often include a footnote that says something along these lines: GAO has considered all other arguments of the protester and determined they have no merit. A COFC decision is unlikely to use the same tactic. Instead, the COFC judge will almost always review, consider, and rule on each independent aspect of the arguments advanced by the protester, the government, or any intervenor. The COFC also allows for direct appeals to the Court of the Appeals for the Federal Circuit, while the GAO has no direct appeal option. Potential Stay of Performance/Award GAO offers an automatic stay of performance, whereas COFC does not. COFC requires a complicated showing in order to get a preliminary injunction. However, more and more, the Department of Justice attorney assigned to the case will often allow for a voluntary stay of performance. This is especially true for larger procurements where there are multiple parties involved. So, protesting at COFC may also result in a stay of performance of the contract, if agreed to by the agency. Oral Argument The COFC judge will usually require an oral argument presentation, either in person or remotely. This can be a way for the parties to pare down their argument to its essentials. In these hearings, the judges can be equally harsh on protesters, intervenors, and the government. This can be a crucial way to really focus on the important issues in the case. Oral arguments are quite rare in GAO practice, although they do happen. Potentially Higher Cost With the much more complete administrative record, and the likely oral argument, the amount of briefing and argumentation is greater than during a GAO protest. However, it can in many cases be worth it because it allows a fuller picture of the entire evaluation process. It gives protesters a chance to dig into the evaluation of all awardees and consider if the agency made any mistakes. In that crucible, there may very well be errors. Or, in other cases, the protester can at least have the satisfaction of knowing that it put the agency’s evaluation through its paces. *** Next time you are considering a bid protest, give the COFC serious consideration. If you would like to know your options, reach out to a bid protest attorney here at SmallGovCon to answer any questions. 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 Why File: A COFC Protest first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Many federal contractors are familiar with or have heard of the Service-Disabled Veteran Owned Small Business (SDVOSB) program. It is currently run by the SBA, but previously was administered by the VA. Due to the nature of the program being around for a while, and shifting from one agency to another in the past few years, undoubtedly there are some requirements that have changed, but contractors may not realize it. One of the requirements that has experienced change is one of the most basic: how you establish that you are a Service-Disabled Veteran. In this installment of our GovCon FAQs series, we tackle, how do you show or prove your Service-Disabled Veteran Status, now that the SDVOSB program is under the SBA? As the popular saying goes, sometimes to move forwards, you have to go backwards first. So, before answering this GovCon FAQ, we need to briefly discuss how an individual used to show they were a Service-Disabled Veteran when the VA was in charge of the SDVOSB program. As readers over the past few years likely remember, originally the SDVOSB program was administered by the VA, and then shifted over to the SBA. Naturally, when that occurred, the VA’s SDVOSB eligibility regulations were phased out or replaced by other regulations, while SBA created its own. Most of the SBA’s SDVOSB regulations are very similar to what the VA had. But one that did change, and may cause issues for federal contractors, is how to show you are a service-disabled veteran. (For more information on the basics of SDVOSB eligibility, check out our Back to Basics on SDVOSBs and Top Five Things About SDVOSBs) Back when the VA administered the SDVOSB program it defined “Service-Disabled Veteran” as a “veteran who possesses either a valid disability rating letter issued by the Department of Veterans Affairs” or “a valid disability determination from the Department of Defense or is registered in the Beneficiary Identification and Records Locator Subsystem maintained by Department of Veterans Affairs’ Veterans Benefits Administration as a service-disabled veteran.” This definition was removed at the end of 2022. Pay close attention to the parts in bold as we move forward. Also note, this regulation was removed and replaced with a size recertification regulation, so you must look to the SBA’s current regulations for SDVOSB eligibility questions. With that in mind, we come to today’s GovCon FAQ: How do I show Service-Disabled Veteran Status for SBA? The current SBA SDVOSB regulations define “Service-Disabled Veteran” as “a veteran who is registered in the Beneficiary Identification and Records Locator Subsystem or successor system, maintained by Department of Veterans Affairs’ Veterans Benefits Administration as a service-disabled veteran.” Notice how much shorter this is than the previous now-defunct VA definition, and removes the parts in bold referenced earlier in this post. Previously, a Service-Disabled Veteran could submit a letter from the Department of Defense or the VA, and meet the requirements for being a “Service-Disabled Veteran.” However, now a veteran must make sure its VA information is up to date and reflects accurately whether they were a Service-Disabled Veteran. According to that regulation, the SBA will interface with the VA’s system to determine Service-Disabled Veteran status, not simply request or rely on documents from the applicant. Simply submitting a Department of Defense letter or VA letter will not suffice. This may come as a surprise to some, as accepting such letters was the typical practice for many years, and logically, there is no reason for the SBA to doubt the veracity of a Department of Defense or VA letter. However, the regulation’s silence on such letters speaks volumes. You must make sure your VA information is up to date, as even such outside information and letters will no longer be accepted for SDVOSB certification. So, be careful when prepping your SDVOSB application to the SBA and do not assume that the same documentation that was expected by the VA (or that logically should show Service-Disabled Veteran status, such as a letter from the Department of Defense) will be accepted by the SBA. Instead, make sure to check in with the VA to ensure its files show you as a service-disabled veteran, as that is exactly what the SBA will look at. Also, make sure to reach out to a federal government contracts attorney, such as ourselves, for any questions on the SDVOSB program and eligibility requirements, because as you can see, there are lots of nuances to be careful of in pursuing SDOVSB status. If you have questions, please email us. If you need legal assistance, call 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 GovCon FAQs: How do I Show Service-Disabled Veteran Status for SBA? first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Valentine’s Day! Well, our KC Chiefs just couldn’t pull off that third Super Bowl win but it sure was a fun football season, all the same. Looking forward to what might be in store for next season. Now we can start leaning into March Madness, which will be just around the corner! Hope you have a wonderful Valentine’s Day and enjoy the weekend. Now here’s what’s happening in federal government contracting, including stories about agency restructuring, impacts on federal personnel, and strategies for contractors. HUBZone Program Updates and Clarifications, and Clarifications to Other Small Business Programs; Correction How USAID employees were blocked from making payments Industry laying low as DOGE digs into agencies Congress seems frozen by the Trump administration bulldozer Valadao, Turner introduce bill to end human trafficking in federal contracting Indian Affairs chair seeks protection for tribal programs amid policy changes Why contractors are fuming at what’s going on at USAID GSA ‘losing too many people,’ as leaders pursue cuts to personnel, office space and contracts State Department Removes Tesla’s Name From Planned $400M Contract Amid Musk Scrutiny Elimination of the Federal Executive Institute – Contract Implications IMPCT Group Shares Strategy for Government Contractors & Alaska Native Corporations at National 8(a) Conference GSA looks to terminate probationary employees Federal judge orders HHS, CDC, FDA to restore webpages, datasets The post SmallGovCon Week in Review: February 10-14, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article