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  1. While the federal government uses wage determinations for many occupations that contractors must abide by, things are different with professional occupations such as physicians, accountants, engineers, and (yours truly) attorneys. Contractors generally have more leeway with regard to how they pay their professional employees on a given contract. But it’s not unlimited. This is something that the National Oceanic and Atmospheric Administration (NOAA) didn’t address in its evaluation for a procurement, resulting in a successful GAO protest. In this post, we’ll look at the rules here and what went wrong. Read more: Compensation for Professional Employees and You: GAO Sustains Where Agency Doesn’t Explain Why Proposed Decreased Compensation is Reasonable FAR 52.222-46 It’ll be helpful to start off by discussing the FAR provision in question in this matter. FAR 22.1103 requires, for solicitations for procurements expected to be more than $750,000 and that’ll involve “meaningful numbers of professional employers,” that the contracting officer insert FAR 52.222-46 into said solicitation. FAR 52.222-45, Evaluation of Compensation for Professional Employees, requires that offerors submit a total compensation plan for the professional employees they plan to have work the contract. The reason for this is important: “Recompetition of service contracts may in some cases result in lowering the compensation (salaries and fringe benefits) paid or furnished professional employees. This lowering can be detrimental in obtaining the quality of professional services needed for adequate contract performance.” Basically, the government wants to be sure that if the proposed compensation, if its lower than the predecessor contract, is still realistic. With that, the plan “will be considered in terms of its impact upon recruiting and retention, its realism, and its consistency with a total plan for compensation.” The Protest In November 2023, NOAA issued a solicitation seeking cybersecurity support services. The award decision would be made on a best-value tradeoff approach considering price and non-price factors. The non-price factors were evaluated for prior experience, staffing plan, technical approach, management approach, and past performance. The procurement would be in two phases. Under the first phase, NOAA would evaluate demonstrated prior experience and the staffing plan. It would then let offerors know whether they were “a viable competitor.” Offerors could continue even if they were found not to be viable competitors. Then the agency would go to phase two and evaluate the remaining factors and price. NOAA found IBSS Corporation to have a high confidence rating for demonstrated prior experience and a low confidence rating for its staffing plan. For Blue Glacier, it got high confidence ratings for both. IBSS proceeded to phase 2 despite being told they were not a viable candidate. For the remaining three non-price factors in Phase 2, IBSS and Blue Glacier received high confidence ratings across the board. IBSS Corporation’s proposed price was $52,562,766 and its overall rating was “Some Confidence.” Blue Glacier’s proposed price was $46,784,483 and its overall rating was “High Confidence.” NOAA made award to Blue Glacier, noting the difference in the staffing plan factor and price. IBSS then brought its protest on a number of grounds. We will address only the one that succeeded here. IBSS protested that NOAA didn’t properly evaluate Blue Glacier’s total compensation plan under the staffing plan factor in phase 1. Either basing its reasoning off Blue Glacier’s price, or having access to Blue Glacier’s proposed compensation levels (the GAO decision doesn’t make it clear), IBSS argued that Blue Glacier’s proposed compensation for its professional employees was a severe pay cut compared to the predecessor contract. Under FAR 52.222-46, the agency had to address how such lower pay could affect staffing. However, the documentation NOAA provided apparently said that such an issue was not worthy of further consideration. GAO noted that the purpose of FAR 52.222-46 is twofold: an evaluation of an offeror’s total compensation for professional employees in two respects: (1) whether an offeror understands the contract requirements and has proposed a compensation plan appropriate for those requirements (in effect, a price realism evaluation based on proposed compensation); and (2) for recompetitions, a comparison of an offeror’s proposed compensation to the incumbent contractor’s compensation. GAO also noted that where the compensation levels for a proposal were lower than the predecessor contract, it must evaluate it in greater depth. In this case, NOAA didn’t do any additional evaluation. It noted that the lower compensation decreased confidence but that it was a nominal difference, and that other ranges that exceeded the predecessor contract’s levels increased confidence. Beyond that, it simply stated that Blue Glacier’s compensation plan was acceptable. This was not enough for GAO. Because there were salary ranges that were lower than the predecessor contract’s for a number of labor categories, “FAR provision 52.222-46(b) required the agency to evaluate the proposed compensation ‘on the basis of maintaining program continuity, uninterrupted high-quality work, and availability of required competent professional service employees.’” NOAA’s evaluation never addressed these issues. GAO explained that “[w]hile the agency’s evaluation recognized these pay cuts, there is no explanation in the contemporaneous record as to why the agency concluded that it had confidence in Blue Glacier’s proposed compensation levels.” GAO then noted that the compensation plan evaluation could impact the staffing plan rating. That was the one area in which IBSS had a lower rating than Blue Glacier. As such, had NOAA properly evaluated Blue Glacier’s proposed compensation plan, this might have had an impact on its choice of preferred offeror. The agency planned to conduct exchanges with the preferred offeror. So, had it been IBSS, IBSS could have possibly fixed its own compensation plan issues. As such, GAO sustained the protest on these grounds. Summary GAO’s decision here is interesting in that the price difference probably still would have supported award to Blue Glacier, but all the same, it provides good guidance for contractors. If you provide professional services, your compensation plan should address maintaining program continuity, uninterrupted high-quality work, and availability of required competent professional service employees. It also is worth noting that just because the agency writes something down for the evaluation does not mean it has done its full duty on the same. A good case for contractors to think on going forward. 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 Compensation for Professional Employees and You: GAO Sustains Where Agency Doesn’t Explain Why Proposed Decreased Compensation is Reasonable first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  2. Hello, blog readers! We want to extend a special thank you to all the veterans and active-duty military as we approach Veterans Day. Thank you for your service. Enjoy the weekend. It’s Friday and it’s time for another week in review. With the recent election behind us, the focus shifts to addressing major issues facing the new Congress. Also this week, SBA announced a record number of certifications for diverse-owned small businesses in FY24. SBA unveiled plans for a streamlined certification process in FY25, aimed at reducing bureaucratic barriers for small firms. SBA also issued a proposed rule to expand the small business rule of two. Audit of Cost Increases and Schedule Delays of Military Construction Projects Managed by Naval Facilities Engineering Systems Command Implementation Review of Corrective Action Plan: PBS Needs to Strengthen Its Training and Warranting Programs for Contracting Officers, Report Number A210053/P/2/R23002, December 30, 2022 Work Remains on Boosting Qualifications of GSA Contracting Officers, Says IG Six IT contractors accused of swindling Uncle Sam out of millions Exclusive: SBA Certifies Record Number of Diverse-Owned Small Businesses SBA Administrator Guzman Highlights Record Federal Contracting Certifications in FY24, Unveils Streamlined Certification Process for FY25 OpenAI further expands its generative AI work with the federal government National security will require a continuing supply of national security talent From “Beltway Bandits” to mission partners SBA initiates ‘seismic shift’ in small business contracting Now that the Election is Over, Here are Some of the Major Issues Facing the Nation and Next Congress The post SmallGovCon Week in Review: November 4-8, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  3. The Catalyst Center for Business & Entrepreneurship is hosting this helpful, virtual workshop on Legal Updates 2024. In this webinar, government contracting attorneys, Nicole Pottroff and John Holtz will discuss the most important legal developments for federal contractors in 2024. Specifically, we will discuss important new small business rules, updates to the 8(a) rules and application procedures, joint venture changes, updated SDVOSB certification requirements, key provisions of the recent National Defense Authorization Act, recent cases pertinent to federal contractors, and more. Hope you can join us! Register here. The post Webinar Event: Legal Updates 2024 hosted by the Catalyst Center for Business & Entrepreneurship, November 20, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  4. A recent appeal before the U.S. Small Business Administration’s Office of Hearings and Appeals (OHA) upheld SBA’s denial of an application for a veteran-owned small business because its operating agreement gave too much control to a non-veteran owner and failed to identify a veteran as the highest officer. The decision in Facekay LLC demonstrates the importance of strict adherence to the control requirements laid out by the various SBA programs. Facekay LLC, SBA No. VSBC-388-A (Sept. 3, 2024) looks at what it means to be “controlled by one or more veterans” as required by 13 C.F.R. § 128.203. For a more in-depth look at veteran-owned small business (VOSB) and service-disabled veteran owned small business (SDVOSB) requirements, check out this post by my colleague. As relevant to this case, a VOSB limited liability company must have one or more qualifying veterans serving as managing members, “with control over all decisions of the limited liability company.” Additionally, the veteran-owner “must hold the highest officer position.” Seems pretty straightforward, right? Control of an LLC is, in almost all circumstances, going to be established first in the operating agreement. And this is exactly where the SBA is going to be looking to determine how control is allocated between the members of the LLC. Facekay’s operating agreement reflected that there were two members: a qualifying veteran who owned 51% of the LLC, and a non-veteran who owned 49% of the LLC. The operating agreement also stated that “one or more Qualifying Veterans” must serve as the managing member. It also contained language what stated, “[a]ny member may bind the LLC in all matters in the ordinary course of LLC business.” Further, “[t]his agreement may not be amended except in writing signed by all the members. Any amendments must ensure that veteran members continue to unconditionally and directly own at least 51% of the concern and control all decisions.” The veteran owner was the Chief Operating Officer while the non-veteran owner held the titles of Chief Financial Officer and Chief Executive Officer. SBA, in its denial of the certification request through the VetCert program, stated that the veteran owner did not have sufficient control over the applicant concern. This was based on two facts. First, the operating agreement stated that it could not be amended except in writing by all the members. For this conclusion, OHA cited to a previous decision that listed “five ‘extraordinary circumstances’ which need not necessarily be controlled exclusively by [veterans].” Snowfensive, LLC, SBA No. VSBC-368-A (2024). The Snowfensive decision listed the following actions as those which the non-qualifying member may have control over: 1) adding new owners; 2) dissolution of the company; 3) sale of the entire company or all assets of the company; 4) a merger of the company; and 5) declaring bankruptcy. Therefore, SBA determined, the veteran owner did not fully control the LLC because it could not amend the operating agreement without the non-veteran owner’s approval. Second, the non-veteran owner was listed as the CEO. Facekay appealed the SBA’s decision to OHA, claiming that the LLC had appointed the veteran-owner as President, and the company had also appointed the non-veteran owner as President and CEO, and, therefore, the veteran owner held the highest officer position. However, the minutes offered by the LLC didn’t say anything about appointing the veteran-owner as the highest officer. Additionally, 13 C.F.R. § 134.1110 limits OHA’s review to information in the case file unless good cause is shown otherwise. The minutes presented by Facekay were not contained in the case file and the company offered no explanation as to why OHA should take them into consideration. Finally, nothing was done about the provision that required all members to approve an amendment to the operating agreement—a clear violation of the VOSB control rules. OHA noted that, in “prior decisions, OHA has recognized that a qualifying veteran’s inability to unilaterally amend an operating agreement may, by itself, be grounds to deny certification.” This one may come as a shock to minority owners in SDVOSB businesses. But the right to amend the operating agreement is not a right that a minority owner can have veto power over. Taking the above into consideration, OHA upheld the SBA’s denial of Facekay’s VOSB application. Neither the operating agreement nor the meeting minutes established that the veteran-owner was in control of the company. *** There are a couple of lessons to learn from this short decision. First, make sure that your operating agreement clearly identifies the qualifying individual as the highest officer—whether in the original operating agreement or by a properly-executed amendment. Second, requiring unanimous approval of any operating agreement amendment is an impermissible restriction on the qualifying individual’s control of the company. 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 SBA OHA: Operating Agreements Must Clearly Demonstrate Control first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  5. Hello, Blog Readers and happy November! We hope you have had a productive month and are looking forward to finishing strong this year. It’s that time of year for looking at fall colors and going to the pumpkin patch, and handing out candy to trick or treaters. We hope you have a wonderful weekend and can get out a enjoy the fall weather in your neck of the woods. This week in federal government contracting NASA has announced a $1.8 billion COSMOS contract and tech giants are pushing for legislation to streamline federal cloud procurement, aligning with the GSA’s advocacy for simpler cloud purchasing and value-based contracting. You can read more about these topics in the articles below, as well as other federal contracting news. Enjoy! NASA Soliciting Proposals for $1.8B COSMOS Spaceflight Mission Support Contract Tech Giants Back Legislation to Speed Federal Cloud Purchasing Winner Under $670 Million Navy Procurement Blocked From Protest Defense Contractor Jailed for Fraud and Illegal Export Scheme—How One Scheme Threatened National Security Texas, Virginia and California top states for defense contract spending CISA Director Informs on State of Election Cybersecurity SBA Seeks to Expand Rule of 2 Usage in Multiple-award Contracting DoD fleshes out plans to rebuild industrial base US charges 6 for conspiring to defraud agencies through IT contracting schemes GSA chief advocates for simplified cloud buying, ‘best value’ contracting as Congress considers legislation A look inside the latest White House artificial intelligence memo Defense Contractor, Former Executive Indicted for Bribing Government Employee The post SmallGovCon Week in Review: October 28-November 1, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  6. I recently returned from the 35th Annual Judicial Conference for the Court of Federal Claims. I wanted to send a hearty thanks to all of the organizers of the conference, especially Judge Tapp! It was a great opportunity presenting on the topic of Private Conflicts: How the New Private Sector OCI Rules Could Impact Federal Procurement. I also thoroughly enjoyed the other presentations at the conference. For those looking for more information on this topic, here are some resources for you: Original blog post: New OCI Law Focuses on Private Sector Contracts, More Examples, More Procedures Contracting While Impaired: Court Rejects Overbroad Finding of OCI Based on Impaired Objectivity Apparent Conflict: Appearance of Impropriety Enough to Exclude a Contractor from Federal Contract 2024 Blog Post: Predictions: Upcoming Rules on Conflicts of Interest The post Thank You, COFC Judicial Conference first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  7. A recent GAO decision considered whether an agency could reject an offeror’s proposal based on the offeror’s failure to follow document preparation instructions that were not explicitly stated in the solicitation. In Hometown Veterans Medical, LLC B-422751 (Oct. 11, 2024), the Department of Veterans Affairs (“VA”) issued a request for proposals (“RFP”) from service-disabled veteran-owned small businesses for home oxygen services for patients at the VA’s Birmingham Veterans Medical Center. The RFP stated that offerors would be evaluated on experience and price. During an initial compliance review, four out of eight proposals received were rejected for failing to include copies of representations in their proposals. Hometown Veterans Medical, LLC (“Hometown”) was one of the offerors the VA rejected and then filed this protest. The RFP contained three provisions relevant to the protest. First, the RFP included FAR provision 52.209-7. Under this provision, by submitting the proposal, the offeror certifies that information required under FAR 52.209-7 is entered into the Federal Awardee Performance and Integrity Information System (FAPIIS) database through maintaining active registration in the System for Award Management (“SAM”). Hometown completed this representation online through SAM.gov. Next, the RFP contained FAR provision 52.204-24 for Representations Regarding Certain Telecommunications and Video Surveillance Services or Equipment. This provision contains two representations. The offeror is required to mark “does not” on the representation if it does not use covered telecommunications equipment or services. If “does not” is checked, the offeror does not have to complete the second representation. Hometown checked “does not” for the first representation, and therefore did not complete the second representation. The VA rejected Hometown’s proposal for failing to submit copies of these representations in its proposal, claiming it was required because the RFP included FAR provision 52.212-1, which states: All proposals received without requested documentation will not be considered. Failure to comply with ALL criteria as set forth by the solicitation and ALL documentation requested in this basis of award will result in your proposal being rejected and therefore not evaluated. No proposal will be accepted via postal mail. In its analysis, GAO noted that an offeror’s compliance with instructions related to proposal preparation is not a basis for evaluating proposals independent of the stated criteria. Unless compliance with the instructions is specifically stated in the solicitation as a basis for evaluation, failure to comply cannot be the sole reason for rejection of the offeror’s proposal. GAO rejected the VA’s argument that the RFP required “ALL documentation” because, read in context, this provision applies to documentation pertaining to the basis of the award, which is evaluation criteria, experience and price. Further, requiring “ALL documentation” is not specific enough to properly inform offerors to include copies of these representations. The VA’s rejection of Hometown’s proposal was not based on the stated evaluation criteria, but rather on the agency’s belief that Hometown failed to follow RFP instructions. Ultimately, GAO sustained the protest, recommending the VA either amend the RFP to include initial compliance review as a stated criteria for evaluating the proposals, or reevaluate all the proposals and apply the existing evaluation criteria stated in the RFP. Additionally, GAO recommended the VA reimburse Hometown for costs of filing the bid protest, including attorneys’ fees. While it’s important for a company to always follow the instructions included in the RFP, an agency cannot use this as a sole basis for rejection if not expressly stated in the RFP as a factor for evaluation. 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 GAO Sustain: Offeror’s Failure to Follow Solicitation’s Document Preparation Instructions was Unstated Evaluation Criteria first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  8. Happy Friday! I just got back from presenting at the 35th Judicial Conference for the United States Court of Federal Claims. It was a great experience and I got to learn from some very smart folks. But the wheel of federal contracting keeps turning, and this week was no different. Important stories included updates from a recent OIG SBA report, a bill to modernize federal cloud procurement, and the Army seeks to cut contract award times to six months. Have a great weekend. OFPP pushing agencies to hone in on next generation acquisition workers Report on the Most Serious Management and Performance Challenges by Office of Inspector General for SBA Bill to modernize federal cloud procurement gets backing of leading trade group A Guide to OTA vs. FAR Based Contracts Army aims for speed in new $10B software contract Wherever contractors look, the government is looking back GSA Exploring Impact of Publicizing Contractor Performance Metrics The Pennsylvania State University Agrees to Pay $1.25M to Resolve False Claims Act Allegations Relating to Non-Compliance with Contractual Cybersecurity Requirements Former CBP IT employee pleads guilty to stealing and attempting to sell 27 government computers Army wants to cut award times to six months Excitement growing over GSA’s COMET II program Maryland woman pleads guilty to taking bribes to steer government contracts San Antonio VA Official Sentenced for Accepting Bribe as Contracting Consultant The post SmallGovCon Week in Review: October 21-25, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  9. A recent OHA decision reminds us that it’s important to show and tell the SBA how a company seeking certification is meeting the SBA’s requirements for control of a socioeconomic company. Like many of these decisions involving SBA’s programs, it comes out of the Service-Disabled Veteran-Owned Small Business (SDVOSB) VetCert program. That’s because the SDVOSB program allows appeals of denials of certifications. The other programs don’t allow such broad reasons for appeals from certifications (or at least have restrictions on them). In Precise Management, Inc., SBA No. VSBC-402-A (October 9, 2024), SBA OHA reviewed a decision to deny SDVOSB certification for Precise Management, Inc. (Precise). In reviewing the certification request, SBA observed the following red flags that led SBA to request further documentation to establish control by the service-disabled veteran owner (SDV): The business address was the address of its minority owner, about 100 miles away from the SDV’s address. The sole point of contact in SAM.gov was the non-Veteran. Each phone call from SBA was answered by the non-Veteran. The SDV had no assigned company email, but the non-Veteran did. The SDV explained the lack of email by signing that, “while not in his name, it was the assigned company email address to which he had access.” This is a good checklist for prospective SDVOSB companies to review prior to submitting a VetCert application (or have your friendly government contracts attorney go through a similar checklist with you). SBA asked Precise to provide proof of control. The requests and responses were: “Provide copies of ten most recently business checks signed by the SDV. The response was that “the business did not use checks to conduct financial transactions, and so checks could not be used to show” control Copies with signatures of five most recent contracts and/or proposals signed by the SDV. All documents provided had a typed signature, as opposed to a handwritten or electronic one, so SBA didn’t view them as showing signature authority. A detailed letter showing the roles of each owner in day-to-day operations of the company. Precise responded that the SDV controls various items such as daily schedules for technicians; approving contracts, proposals and invoices; scheduling training for technicians; scheduling training for technicians; approving payroll; scheduling company meetings and vehicles maintenance; reviewing company bank account activity. SBA asked for the ten emails or other communications showing daily activity by the SDV as outlined in the letter. Precise responded that daily communications were handled by the non-Veteran owner. SBA denied the VetCert application based on insufficient proof that the SDV controlled and managed daily business operations, as required by 13 C.F.R. § 128.203(a). On appeal, SBA OHA reaffirmed the denial, based on the SBA rules for SVOSB certification. These rules place the burden on the applicant to establish eligibility, via “the totality of circumstances, including facts set forth in the application, supporting documentation, any information received in response to any SBA request for clarification, any independent research conducted by SBA, and any changed circumstances.” 13 C.F.R. § 128.302(d). The same regulation notes: “[I]f a concern submits inconsistent information that results in SBA’s inability to determine the concern’s compliance with any of the VOSB or SDVOSB eligibility requirements, SBA will decline the concern’s application.” OHA noted some errors in SBA’s denial determination: The distance of the SDV to the place of business is not a proper factor, as the regulation has removed that former close proximity rule. Signatures on documents are valid electronic signatures, and SBA rules allow for such signatures. Paper checks are less common, so their absence is not indicative of lack of control. But the VetCert program was right on other fronts in denying the application, so any error didn’t affect the final determination. OHA pointed to a number of facts that SBA properly relied on in denying the application. [Precise] was frequently unable to produce correspondence signed by Mr. Wright [the SDV] on behalf of the business, that Mr. Wright had no email account of his own, and that he was never available on the telephone, despite SBA’s many attempts to reach him. While the record reflects [Precise] was able to provide a few examples of forms and contracts that contained a valid electronic signature from Mr. Wright in attempting to satisfy that same request, [Precise] was equally likely to provide printed-out pages of already-paid invoices, with those pages appearing to be electronically signed by Mr. Wright after the fact. Furthermore, when SBA asked Precise to provide five documents showing control over operations, that Precise “was just as likely to proffer invoice documents which showed tenuous (at best) signature authority as opposed to documents such as contracts and financial forms in which a valid signature would be required was a curious decision on the part of” Precise, and failed to show SDV control. In addition, SBA asked for documentation of the many tasks that Precise said were handled by the SDV. But Precise failed to provide any of these documents. “Given that approving documents such as contracts and proposals is apparently one of the main tasks within the qualifying veteran’s purview, it is baffling that [Precise] was not able to timely proffer even five documents with Mr. Wright’s valid signature evidencing this core function.” OHA also found the email issue to be “even more disconcerting.” During the OHA appeal, Precise provided numerous emails with SBA that showed that the “non-Veteran controlled the vast majority of correspondence from the company’s (evidently) only email account,” but there were also emails from the SDV. But none of these were provided to SBA during the SDVOSB application process. The SDV “had no email account, signed little to no correspondence, and was never available via telephone to discuss the business.” This was enough for OHA to uphold the denial of certification. This case is a good reminder of what SDVOSB applicants should review prior to submitting an application. It’s also a good reminder for those applying to one of SBA’s other programs. SBA will look at commonly available public documents (website, SAM record, place of business) and may call the applicant to see who answers. It’s not enough to describe control by an SDV, be prepared to provide recent documents showing control by the SDV. If those aren’t available, it may make sense to delay application to build up a paper trail showing control by the veteran owner. 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 OHA: Show me the Management, or Fail SDVOSB Certification first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  10. We are excited to announce that Nicole Pottroff will be attending the Fall NAPEX conference in Washington DC and will be presenting on legal updates on October 30. The conference gives agencies and primes the opportunity to promote supplier diversity programs and learn how the APEX Accelerators can partner and assist in meeting contracting goals. The Association of Procurement Technical Assistance Centers (APTAC) is the professional organization of and for the DoD APEX Accelerators nationwide. APTAC supports the APEX Accelerators by providing important information, professional networking, comprehensive training and a voice in national government contracting assistance. They are a great resource for obtaining helpful information for federal government contractors. We certainly enjoy the opportunity to present throughout the year for this beneficial organization. If you are attending, please stop by our table to say hello. Hope to see you there! The post Event Announcement: NAPEX Fall Conference 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  11. Hello, SmallGovCon readers. We hope you are enjoying some nice fall weather wherever you are, here in Kansas our temperatures are finally down in the 70s, which has been a welcome relief. Some articles we’ve highlighted this week include multiple takes on the new CMMC rule finalized by the Pentagon, and a updates on DoD spending. You can read more about these topics and news from this week in the links below. Here’s what veterans will get for a cost-of-living increase next year Pentagon releases final CMMC rule, paving way for implementation Pentagon Unveils CMMC Program Final Rule New and updated guidance for pricing and reporting on non-competitive defence contracts Couple Defrauds Government Out of Thousands of Dollars, Including Multiple Trips to Disney World GovCon Index Kept Rising Last Week The Technology Path to Human-Centered Procurement Pentagon Fiscal 2024 Procurement Lagged Prior Year Through Q3 Six Cybersecurity Trends For Defense Contractors As 2024 Concludes L3Harris protests SNC’s HADES spy plane contract win The post SmallGovCon Week in Review: October 14-18, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  12. As many in federal contracting know, the SBA had its certification portal (certify.sba.gov) closed for upgrades for a few months. The SBA is replacing it with a new portal called MySBA Certifications which as of the writing of this blog post is now live. While it hasn’t been widely published, SBA released screenshots of this new portal, which indicate SBA is making some large changes to applications, especially for applications to the 8(a) Program. We here at SmallGovCon think it is important for Federal Contractors to be aware of these changes before utilizing this new portal. As we blogged about in July of this year, SBA announced it was closing its certify website for upgrades. Initially this website closure was planned to last from August through early September. As of the publishing of this blog post, the new portal seems to have just been opened for use and certify.sba.gov will be used “to manage any active certifications until [SBA] share information about a future MySBA Certifications’ continuing eligibility module.” Prior to MySBA Certifications going live, the certify website stated: “MySBA Certifications is a new, single application for all SBA federal contracting certifications that will open to the public in October.” That announcement at the top of the page had a link to an “updates” page which has an FAQ and fact sheet. However, that is not the limit of the information out there from SBA regarding the new “MySBA Certifications” website. If contractors go to https://certification.sba.gov/, there are more resources, and even a preview of the new website, that quietly presents some changes to certification applications, especially the 8(a) Program’s application. That portal/website preview is what we believe contractors need to be aware (and wary) about. At https://certification.sba.gov/ there is an option to choose “prepare for application,” which then leads you to a page which has a link to choose “Application Preview.” If you were to select that, you are then greeted with a substantial slide deck that previews the SBA’s MySBA Certifications application portal. This portal may provide some surprises to contractors. Initially, the SBA is stating the portal will ask some quick ownership percentage questions and eligibility questions which results in a “Should I Apply” result. That will then suggest which programs a contactor may be eligible for. Contractors then claim their business by having the portal crosswalk with SAM.gov, answer specific questions dialing down on ownership and entity structure. After that, contractors mark what programs they would like to apply for. This all appears to be efficient and helpful for contractors. These fields appear to be drop downs, simple yes or no questions, etc. This makes sense for initial items, but where the potential issues arise, are in the specifics of certifications and entity or individual information that needs more nuance or deeper explanation. This is especially true with the 8(a) Program’s application. Upon review, SBA is placing text boxes for contractors to fill in information, which are character limited (looks like the default is 1000 characters not words). This includes things as fact specific as control and 8(a) Social Disadvantage. SBA has character limited text boxes for explaining connections to other businesses, financial support, control, familial involvement, and possibly most novel to those who are used to dealing with the 8(a) Program, the elements of the social disadvantage narrative itself. As you likely recall, there have been lots of changes to the 8(a) social disadvantage narrative over the past year since the Ultima decision (check out our 8(a) Toolkit for our blogs tracking the changes to 8(a) Program). One of these changes to the 8(a) Program application process was SBA seeking only two examples of discrimination in a specific “who, what, when, why, how” type format. This trimmed down on lengthy narratives, likely due to the urgent nature of program changes in the wake of Ultima. As anyone who has worked with 8(a) contractors or talked with someone who has faced discrimination knows, it can be difficult to boil down such complex, emotionally intense events throughout a life into just two instances. Now, SBA appears to be cutting back even more. SBA takes its new social disadvantage format and tries to force it into a portal form. The SBA seemingly will limit an explanation of an emotional and complex discrimination occurrence (or as SBA says “What happened”) into a 1000 character box. SBA also does this for “How did this situation affect opportunities to start or expand your business?” (For context, on average, the paragraphs in this very blog post are around 600 to 700 characters). SBA will expect contractors to distill an occurrence in a lifetime of discrimination into about a paragraph or two. SBA likely still expects specifics on the occurrence, but now also wants those specifics to not exceed a certain character limit. SBA also is utilizing a drop down box for contractors to select “Which of the following contributed to the discrimination in the situation?” Then for the following questions, it appears SBA is suggesting a one line answer as they are not full text boxes: “When did it happen?” “Who contributed to the discrimination?” “Where did it happen?” “Please provide a brief explanation for how the identified characteristic(s) contributed to the discrimination or mistreatment?” While some of these questions do make sense to have short answers, a “brief explanation for how the identified characteristic(s) contributed to the discrimination or mistreatment” is likely not something that can be fit into one sentence or line. There does not appear to be a document upload option for this page. At the end of the SBA’s slide deck it does appear there is an overall “document upload” stage of the application, but it seems to not list an option for a social disadvantage narrative. The document upload in the slide deck is focused on business documentation, tax documentation, and third party certification (for EDWOSB or WOSB applications). Looking at the website, it doesn’t look like SBA has a spot for receiving feedback or comments on its portal, despite it presenting even more changes to the 8(a) Program’s certification processes. While it is admirable and a good idea to try and be efficient in SBA applications, limiting characters in response to nuanced fact specific personal experiences will likely result in issues for contractors as well as SBA. Logically this approach will probably lead to one of two options: (1) Far less application approvals; or (2) more approvals of applications with less review of the social disadvantage felt by the contractor. The discrimination and disadvantages SBA’s programs are trying to address don’t fit into a neat box with character limits. Presumably, this proposed portal format will result in contractors being unable to fully articulate the discrimination felt, leading to contractors who have been socially disadvantaged, being rejected from the 8(a) Program simply because they couldn’t fit their life experience and occurrence into a specified character limit. As a result of that, it can be assumed that contractors will re-apply to the program after the rejection or simply not reapply despite possibly being socially disadvantaged. This could lead to an overall decline in contractors admitted to the 8(a) Program. Or, the inverse will occur. Due to the limited nature of the new portal’s application, a more detailed review will not result, and this social disadvantage factor will function more as a “check the box” in which contractors simply need to fill out the fields, and that will be enough. There is not an indication one way or the other, except that historically, SBA has taken review of social disadvantage quite seriously. Regardless, contractors looking into certification with SBA, especially the 8(a) Program, need to be aware that this new portal will feel much different than any previous applications and basically gets rid of the social disadvantage narrative in exchange for a social disadvantage form. Time will tell what kind of effect it will have on SBA socioeconomic program participation. Questions about this post? Email us or 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 Preview Shows Changes to 8(a) Application in New SBA Portal first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  13. I will be presenting at the 35th Annual Judicial Conference in Washington, D.C., on October 23. This prestigious event gathers legal professionals, judges, and scholars from across the country to discuss the latest developments in the judiciary and legal system. It’s definitely an honor to be speaking at the 35th Annual Judicial Conference for the Court of Federal Claims. My topic is: Private Conflicts: How the New Private Sector OCI Rules Could Impact Federal Procurement. Hope to see you there! You can read more about this event and the speakers giving presentations at this link. The post 35th Annual Judicial Conference – U.S. Court of Federal Claims in Washington DC first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  14. When it comes to meeting the size standards, the normal rule for a set-aside contract is simple: If you’re small at the time you submitted your initial offer for the contract, you’re small for the life of the contract. So says 13 C.F.R. § 121.404–although this could be changing in the future based on a proposed SBA rule. Furthermore, this is the general rule with set-aside IDIQs as well: If you’re small at the time of initial offer for the IDIQ, you’re small for all orders under that IDIQ. (Not so with set-aside task orders under otherwise unrestricted IDIQs, there it very much is time of offer for the task order rather than the IDIQ for the date to determine size). However, there are a couple of exceptions. The biggest one is where the contracting officer explicitly requests size recertification for the given task order. In that case, an offeror must show it is still a small business as of when it submits its offer for that task order. One contractor recently protested when the contracting officer did just that. Here, we’ll explore that GAO decision. In Radiance Techs., Inc., B-422615 (Aug. 30, 2024), the protester, Radiance Technologies, Inc. (Radiance) was an awardee under the OASIS small business IDIQ procurement in 2014, holding an OASIS small business IDIQ contract. In May 2024, GSA issued a task order under this IDIQ. GSA had further decided that it would require offerors to recertify their sizes. Radiance was a small business when GSA awarded it the OASIS IDIQ back in 2014, but, by this point, it was no longer small under the given size standard. After unsuccessfully attempting to persuade the agency to get rid of the requirement, Radiance filed a protest with GAO. Radiance’s argument against the size recertification requirement had two parts. First, it argued that the requirement was unduly restrictive of competition. Second, it argued that the requirement was not authorized by the law as the regulation giving agencies such authority did not exist in 2014, when Radiance received the OASIS contract. GAO first turned to the authorization argument and rejected it. “[T]he applicable provision here is the SBA’s regulation at 13 C.F.R. § 121.404(g)(3), which was promulgated in 2006 and became effective in 2007, well before the award of Radiance’s OASIS contract.” Radiance responded with an interesting argument. It asserted that, back in 2013, 13 C.F.R. § 121.404 simply “contemplated situations where the contracting officer might require recertification,” but “it never granted the contracting officer ‘the right to require recertification generally.’” Although SBA pointed out that its then-existing comments on the rule expressly stated that agencies had the discretion to ask for recertification, Radiance took its boldest move. It argued that SBA shouldn’t be granted deference in interpreting its own regulations in light of the striking down of Chevron deference in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024) earlier this year. As we noted in our own post on Loper Bright, Chevron was about agency interpretation of federal statutes, not its own regulations. A different case, Auer v. Robbins, addresses that. That case holds that courts will defer to agencies’ reasonable interpretations of their own regulations, and that case is still good law. (In fairness to Radiance, it did attempt to address this). All the same, GAO decided it was pretty clear: The agency had the discretion to require size recertification for the task order. It also noted that “under FAR section 1.102(d), an agency’s chosen procurement procedure that is not prohibited by law or regulation is assumed to be permissible.” Turning then to the argument that the requirement was unduly restrictive on competition, GAO also rejected that argument. Radiance argued that it was unduly restrictive as it was an unnecessary restriction on who could compete for the task order that was already set aside anyways. Furthermore, award to a company like Radiance would still count as a small business award. As such, Radiance argued, the size certification requirement did nothing for the agency’s own interests. GAO didn’t buy this argument. It noted that “the contracting officer’s decision to require a size recertification is part and parcel of the decision to set aside the task order to small businesses.” The law gave the contracting officer the authority to do the same. Furthermore, it did further the agency’s interest, an interest in ensuring that small businesses get small business awards. GAO explained: “As we have previously noted, a solicitation recertification requirement is consistent with the purpose of the Small Business Act, according to which procurements intended for small businesses should be awarded to small businesses… this basis–awarding the work to a firm that is small at the time of task order issuance–was reasonable and within the discretion of the contracting officer.” Thoughts This was an unusual GAO case, as the law is fairly well-settled on this matter. Looking at GAO’s analysis, it appears clear that GAO considered the law to be well settled in this area too. All the same, this serves as a good reminder to contractors to pay close attention to task orders for small business set-aside IDIQs. Your business may have been small at the time you got the IDIQ, and that usually means you’ll qualify for any task order under the same. But, pay attention. If a contracting officer wants to require size recertification under a task order, they can, and there’s no real room for argument otherwise. Furthermore, this also shows that agencies are going to hold onto that Auer deference we discussed in our review of the Loper Bright decision, and understandably so: Agencies still hold a lot of power when it comes to their own regulations. 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 Agency Discretion Recertified: GAO Affirms Agency Discretion to Request Size Recertification for Task Orders first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  15. Check out my podcast recording with Eric Coffie of Govcon Giants. In this podcast, we talk about about key strategies that can help small businesses succeed. From the importance of understanding the Small Business Administration (SBA) rules to forming effective joint ventures and teaming agreements. Check out this recording and a lot of other great recordings from Govcon Giants. Thanks to Eric for the opportunity to chat and to be part of his great podcast! The post New Podcast out now with Govcon Giants first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  16. Hello, SmallGovCon readers. Our thoughts go out to those effected by the hurricane, this week. We hope you are safe. Some articles we’ve highlighted this week include current trends in the GovCon market and DoD considering a faster acquisition pathway for AI. You can read more about these topics and news from this week in the links below. GSA Unveils List of 100 Apparent Awardees on Polaris IT GWAC Small Business Pool Lawmakers want more time off for service members GovCon Index Registered Consecutive Winning Weeks as Defense Stocks Advanced A new tool to help startups get a foot in the door at the Pentagon While things aren’t as busy, contractors can take this time to get out there for some face time Biden-Harris Administration Announces 6 Contracts to Spur America’s Domestic HALEU Supply Chain as Part of Investing in America Agenda Current trends in the GovCon market A Profile of the Nation’s Hispanic-Owned Businesses DHS issues Hatch Act reminder to federal workers GSA’s emerging tech radar keeping tabs on future needs DoD considers faster acquisition pathway for AI The post SmallGovCon Week in Review: October 7-11, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  17. SBA recently issued a proposed rule purportedly concerning the HUBZone Program and its regulations–but actually, covering a bevy of other discussions and proposed changes relating to size, SBA’s other small business socioeconomic programs, and even teaming. Specifically, regarding teaming, SBA revealed that it has apparently decided to take a deeper look into the immense success of mentor-protégé joint venture teaming. It is also requesting comments on this concern, as well as potential policy changes for joint venturing in SBA programs, more generally. The proposed rule’s commentary says: Specifically, SBA is seeking input on the perception that mentor-protégé joint ventures are winning an inordinate number of orders issued under small business multiple award contracts and seeks suggestions on how to incentivize a more equitable marketplace for individual small businesses who compete against mentor-protégé joint ventures for multiple award, small business contracts. SBA is not off-base, by any means, with its concern that it can be difficult for small businesses to compete with large and small business mentor-protégé teams. But it is a bit surprising to hear this concern posited as an issue with the mentor-protégé teams–rather than the standard encouragement for more small businesses to take advantage of the mentor-protégé program and its joint venture opportunities themselves, which is what we are more used to. SBA did elaborate a bit more on its concerns and why it has directed industry attention to potential policy changes in that regard. It said, “[t]here is also a perception that small businesses often enter joint ventures to seek multiple award contract awards because procuring agency past performance and experience requirements make it difficult for many small businesses to qualify for the awards individually.” SBA also had some potential policy changes to propose for consideration, including whether or not it should eliminate the exception to affiliation for SBA-approved mentors and protégés for multiple award contract vehicles. SBA said: Such a change would continue to allow joint ventures to seek and be awarded single award small business contracts, but would make joint ventures ineligible for multiple award contracts. If that would occur, SBA would expect the past performance and experience required for award of future multiple award contracts to be adjusted to allow individual small businesses to more easily qualify for award. Another potential policy change SBA proposed for consideration would be to more strictly limit the term for which mentor-protégé joint ventures can receive the exception from affiliation–specifically, only allowing the affiliation exception “for contracts or orders that do not exceed five years.” In that regard, SBA said: As SBA has previously stated, SBA believes that a joint venture should not be an on-going entity, but something with limited scope and limited duration. Thus, SBA has limited the duration that a joint venture can submit offers for the award of contracts to two years from the date of its first contract award. SBA is questioning whether a joint venture performing a contract or order that exceeds five years is truly a limited duration entity. Now, because this is technically a HUBZone proposed rule, SBA did bring the HUBZone Program into the conversation a little bit. For qualified HUBZone mentor-protégé joint ventures, SBA is considering how to “clarify the applicability of the HUBZone price evaluation preference to” HUBZone mentor-protégé joint ventures. SBA reiterated what the HUBZone price preference does, stating: Under the HUBZone price evaluation preference, where a procuring agency will award a contract on an unrestricted basis (i.e., full and open competition), the agency must deem the price offered by a certified HUBZone small business concern (including a HUBZone joint venture that complies with the requirements of § 126.616) to be lower than the price offered by an apparent successful large business offeror if the price offered by the certified HUBZone small business concern is not more than 10% higher than the price offered by the large business. SBA then brought up its concern that it may not be “appropriate for a HUBZone mentor-protégé joint venture to benefit from the HUBZone price evaluation preference when the joint venture is already benefitting from its large business mentor’s lower cost structures and pricing.” And yet again, SBA doesn’t just come with a problem, it suggests a solution, stating: SBA is considering whether to propose eliminating the HUBZone price evaluation preference’s applicability to all joint ventures formed under the Mentor-Protégé Program or, alternatively, to offers submitting by a HUBZone joint venture where the mentor exceeds the applicable size standard corresponding to the North American Industry Classification System (NAICS) code assigned to the contract. SBA is also requesting comments and input in that regard. Again, since this was a HUBZone proposed rule, some of these concerns and possible policy changes might sneak up on the unsuspecting government contractor reader (like it did me). So, please make sure to give any input to SBA if you feel strongly about any of these concerns, proposed options for solutions, or maybe other solutions SBA hasn’t thought of yet. SBA says that any of the policy changes described above are to be addressed in a separate proposed rulemaking after it has a chance to address and consider industry input, as well as any testimony from the tribal consultation meeting in that regard. Finally, make sure you keep your eyes open for any subsequent blogs on these topics, as they develop–because you know we will keep you posted on something this significant. Questions about this post? Email us or 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 Are Mentor-Protégé Joint Ventures Just Too Successful, Asks SBA first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  18. One of the perks of being certified in any of the SBA’s small business socioeconomic contracting programs is the fact that there is potential for a sole source award. What is a sole source award? Well, it’s a non-competitive award used when there is no expectation that two or more offerors will submit proposals, or using a dollar cap in the 8(a) program. (In this post we’re not talking about other exceptions to competition, such as only one responsible source). We most frequently see them used for contracts made to participants in the 8(a) Small Business Development Program, but the other programs (WOSB, SDVOSB, and HUBZone) have the ability to make sole source awards as well. So, let’s take a look and see what the FAR and SBA rules have to say about sole source awards in each of these programs. 8(a) Sole Source Awards Since the majority of sole source awards are made to 8(a) Program participants, let’s start there. While the 8(a) Program is generally the most difficult SBA socioeconomic program to get into, the standard for giving sole source awards to 8(a) companies is the least restrictive of all the categories. As you will see below, it is easier for contracting officers to give sole source awards to 8(a) Program participants. In fact, the 8(a) regulation in question is written as though sole source awards are the rule, not the exception. 13 C.F.R. § 124.506 states that a solicitation must be competed among 8(a) Program participants if there is a reasonable expectation that at least two eligible 8(a) Program participants will submit offers at a fair market price, the anticipated award price will exceed $7 million for manufacturing NAICS and $4.5 million or less for non-manufacturing NAICS, and the work has not been accepted by SBA as a sole source 8(a) procurement on behalf of a tribally-owned or ANC-owned concern. By looking at the situations in which an 8(a) Program set aside must be competed, we can then determine when a sole source award is permitted. Contracting officers may give 8(a) work to an 8(a) Program participant on a sole source basis if they determine that the 8(a) business is responsible, will do the work at a fair market price, and the estimated cost is $7 million or less for manufacturing NAICS and $4.5 million or less for all others. If the contract is likely to have a greater value, the contracting officer can still give a sole source award if they have no reasonable expectations that two participants will bid and the award can be made at a fair price. WOSB Sole Source Awards WOSB sole source awards are used far less frequently than 8(a) sole source awards. Contracting officers are required to consider sole source awards to WOSBs (or EDWOSBs) before competing a solicitation as a small business set-aside if: The NAICS code assigned to the solicitation is one in which SBA has determined WOSB concerns are underrepresented in federal procurements; There is no reasonable expectation that two or more WOSB/EDWOSB concerns will make offers; The acquisition’s price will not exceed the $7 million/$4.5 million threshold mentioned before; The WOSB/EDWOSB is a responsible contractor; and Award can be made at a fair and reasonable price. Notice how FAR 19.1506 states that they must merely consider doing a WOSB/EDWOSB set aside, and that it is not a requirement. Additionally, the WOSB/EDWOSB must be certified pursuant to 13 C.F.R. § 127.300. This rule does not apply to acquisitions currently being performed under the 8(a) Program, orders under indefinite-delivery contracts, or orders from the Federal Supply Schedules. SDVOSB Sole Source Awards Under FAR § 19.1406, SDVOSB/VOSB sole source awards are similar to WOSB sole source awards in that the contracting officer should consider, but is not required to use, a sole source award when they do not have a reasonable expectation that offers will be received from two or more eligible SDVOSB/VOSBs, the price of the contract does not exceed $7 million/$4 million, the SDVOSB/VOSB is responsible, and the award can be made at a fair and reasonable price. However, the Department of Veteran Affairs has slightly different rules. VAAR 819.7008 states that contracting officers can award SDVOSB sole source awards for VA contracts when: The anticipated award price of the contract (including options) will not exceed $5 million; The requirement is synopsized and the required justification pursuant to FAR 6.302-5(c)(2)(ii) is posted in accordance with FAR part 5; The SDVOSB has been determined to be a responsible contractor with respect to performance; and In the estimation of the contracting officer contract award can be made at a fair and reasonable price that offers best value to the Government. As with 8(a) and WOSB, the SDVOSB/VOSB must be certified as an eligible SDVOSB/VOSB . Additionally, SDVOSB/VOSB sole source awards are subject to the same exclusions described in the WOSB section (acquisitions currently being performed under the 8(a) Program, orders under indefinite-delivery contracts, or orders of the Federal Supply Schedules). HUBZone Sole Source Awards Just like WOSB/EDWOSB and SDVOSB/VOSB sole source awards, FAR 19.1306 states that a contracting officer shall consider a HUBZone sole source award prior to soliciting work as a small business set aside if they have no reasonable expectation of receiving two or more competitive offers from HUBZone concerns, the price will not exceed the $4.5 million/$7 million threshold, the awarded concern is responsible, and award can be made at a fair and reasonable price. Once more, the rule only requires the contracting officer to consider a HUBZone sole source award. There is no requirement that there must be a sole source award. Again, this rule does not apply to acquisitions currently being performed under the 8(a) Program, orders under indefinite-delivery contracts, or orders of the Federal Supply Schedules. The Takeaway So, what is the main difference between 8(a) sole source awards and other socioeconomic set aside sole source awards? It’s the requirement that the contracting officer must have no “reasonable expectation that offers will be received from two or more” concerns for a sole source WOSB/EDWOSB, SDVOSB/VOSB or HUBZone procurement. That’s not a hard barrier to surpass and the presumption thereafter is that the contract will be competed. The 8(a) program does not have similar language. In fact, that language is only found where a procurement is above the $4.5 million line that takes sole sourcing off the board for the other socioeconomic set aside programs. In short, the 8(a) program presumes sole sourcing will be used frequently, while the other programs presume that competition will be the rule. Questions about this post? Email us or 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: Small Business Sole Source Awards first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  19. When it comes to effective communication, the government and industry often get it wrong. Misconceptions and misunderstandings abound and can prove very costly for contractors. In this webinar, government contracts attorneys Nicole Pottroff and John Holtz debunk some of the most common myths and misunderstandings held by contractors, including when and how you can communicate one-on-one with a contracting officer, who has authority to modify your contract, what to do when an unauthorized official gives you instructions, how the government gratuities rules differ from standard commercial practice, and much more. Register here. The post Govology Webinar: October 10, 2024 – Communicating with Government Contracting Officials: What Can (and Should) Contractors Really Say and Do? (2024 Update) first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  20. Happy Friday and happy October! Please enjoy the Week in Review and read up on some recent updates across government contracting. Some highlights include GSA starting the COMET II contracting process, and new guidelines on AI tool procurement for federal agencies. You can read more about these topics and news from this week in the articles below. Have a great weekend! Carahsoft raid may be a wake up call for the reseller market U.S. Small Business Administration to Host 11th Annual National Veterans Small Business Week Nov. 11-15 Biden-Harris Administration Finalizes Rule to Lower Costs for Small Businesses Labor Department Issues Federal Contractor Minimum Wages for 2025 DoD begins first long-distance moves under contentious multibillion dollar GHC contract New Guides Detail Secure Software Requirements The FAR Council drops a long awaited rule proposal for conflicts of interest How the micro-purchase threshold might get a little less micro Report Calls on GSA to Strengthen Price Analyses in MAS Contracts GSA begins COMET II contracting process White House issues guidance for purchasing AI tools to US agencies The post SmallGovCon Week in Review: Sept. 30-Oct. 4, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  21. The small business rule of two requires agencies to restrict procurements for small businesses when there is a “a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery.” FAR 19.502-2. Agencies often use market research to assess whether the small business rule of two is met. But what happens when an agency amends its solicitation terms after conducting market research? Can the new terms render the agency’s market research, and therefore its set-aside decision, unreasonable? In a recent decision, GAO concluded that yes, market research may be insufficient to establish a set-aside if an agency amends the solicitation’s terms. In Knudsen Systems, Inc., B-422433.2 (Comp. Gen. Aug. 9, 2024), GAO considered a protester’s challenge to the Navy’s set-aside decision. The protester argued the Navy failed to perform new market research following an amendment to the terms of the solicitation, making the old market research insufficient to establish that at least two small business concerns could meet the amended solicitation’s requirements. The initial solicitation sought proposals for SONAR equipment. The market research report found that two or more small businesses had been identified as being capable of meeting the requirements and issued the initial request for proposals (RFP) as a total small business set-aside under NAICS code 334511. The RFP did not include FAR clause 52.219-33 Nonmanufacturer Rule (read more about this rule here). Rather, the RFP stated that SBA had issued a nonmanufacturer rule class waiver for NAICS code 334511. Knudsen Systems Inc. (KSI), a woman-owned small business, submitted a proposal that explained its intention to use SONAR equipment manufactured in Canada. A few months later, the Navy discovered that the class waiver rule in the RFP did not apply to the SONAR sounding sets being procured, and the solicitation should have included the nonmanufacturer rule. Since KSI did not comply with the nonmanufacturer rule, it was no longer eligible for award. KSI filed a GAO protest stating that its ineligibility based on the FAR nonmanufacturer rule clause was inconsistent with the terms of the solicitation. The Navy then amended solicitation to remove the class waiver and include the FAR nonmanufacturer rule clause. No further market research was conducted, and the solicitation remained a total small business set-aside. KSI protested, arguing the market research previously conducted did not establish that at least two small businesses could satisfy the amended terms of the solicitation. Therefore, the solicitation should have been listed as full and open competition. In response, the Navy argued it was “under no obligation to revisit its market research in light of the addition of the nonmanufacturing rule through amendment” and further argued that “it is not necessary for an agency to redo its market research regarding the ‘rule of two’ should the agency later become aware that ‘only one responsible small business offer will be received in response to amended solicitation.’” GAO disagreed because the Navy “did not properly comply with the rule of two analysis in making the initial set-aside decision because its market research failed to consider whether prospective small business offerors could comply with the nonmanufacturing rule.” In other words, the earlier market research was flawed as it didn’t look at an important aspect of a small business set-aside under the nonmanufacturer rule. GAO sustained the protest and ultimately concluded, We find that the Navy’s market research was insufficient to conclude that the agency would receive offers from at least two responsible small business concerns that could meet the requirements of the solicitation at a fair market price. For this reason, the agency’s decision to restrict the solicitation to small businesses was unreasonable. Contractors should be aware of this ruling in reviewing an agency’s set-aside decision. Was the market research based on a proper review of small business rules? Did the small business situation change due to an amendment to the solicitation? In such a case, a protest may well be in order. Questions about this post? Email us or 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: Small Business Rule of Two Must be based on Accurate Market Research first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  22. The Indian Country Business Summit (ICBS) is hosting its annual “Diversity in Government Contracting” ICBSSHOW in Oklahoma City this month. And our very own Gregory Weber will be attending and presenting on federal contracting legal updates. Legal updates is always a great presentation. So, please stop by our table to say hello or if any questions come up after the presentation. The ICBSSHOW offers informational sessions featuring experts in government procurement, connection and networking opportunities, and a day of matchmaking to introduce you and your business to government decision makers. It also provides invaluable access to government agency buyers and policy leaders, prime contractors, and tribal procurement representatives looking to expand their vendor pools. If you are attending, please stop by our table and say hello. The post Conference Announcement: ICBS Show, Oklahoma City, October 7-9, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  23. We are excited to announce that Annie Birney has joined the firm and will also be a regular SmallGovCon contributor! She is a recent graduate of the University of Kansas School of Law. You can read her full biography here. Annie was very accomplished during her law school days, including plenty of practical experience. This included assisting with tax preparation services for the Volunteer Income Tax Assistance program. Additionally, Annie participated in the Elder Law Field Placement Program where she assisted with document preparation for estate planning. Prior to law school, Annie attended the University of Arkansas in Fayetteville, Arkansas, where she received her B.A. in Journalism. In her spare time, Annie can be found spending time with her family, friends and her dog, Sir Bruiser and is an avid fan of the KU Jayhawks, especially during basketball season. We are excited to have Annie join our team here at SmallGovCon and Koprince McCall Pottroff LLC! The post Annie Birney Joins Koprince McCall Pottroff LLC as Associate Attorney and SmallGovCon Contributor! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  24. Happy Friday and happy fall! We hope you had a productive week and are looking forward to the weekend. The federal government contractors have been quite busy wrapping things up at the end of this fiscal year and preparing for a new one to begin. We hope everything is “falling” into place. Have a great weekend! This week in federal government contracting news looked at a new CR, cloud procurement requirements, and another push towards category management. OPM asks agencies to review 2024 special salary rates Army’s demand for GenAI surging, with focus on integration GAO Looks Into Agencies’ Compliance With OMB’s Cloud Procurement Requirements Congress has a 3-month CR, but it’s not all good news for contractors State Dept transforming procurement with category management, streamlined processes FBI raids government IT and cyber contractor Carahsoft SAP faces probe in the US over alleged price fixing in government contracts Western Global Airlines to pay $84K to resolve gender wage discrimination alleged in federal review GAO pushes forward on intelligent automation to improve cybersecurity, CX Federal Contractors: Actions Needed to Improve Quality of Performance and Integrity Data Virginia-Based Defense Contractor To Pay $2.25 Million Fine for Bribery Conspiracy Highway Contractor to Pay $950,000 to Settle False Claims Act Allegations The post SmallGovCon Week in Review: September 23-27, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  25. In a proposed rule in August of 2024, SBA has unveiled a brand new regulation related specifically to recertification of size and status. A frequent question of federal contractors is whether they can continue to be small, or maintain a specific socio-economic status (i.e., WOSB, SDVOSB etc.) after a change in ownership or business structure. The SBA’s size and status recertification standards are currently found in multiple places: the size determination timing regulations, each socio-economic status regulation, and of course in case law. But this would presumably create a one stop shop for size recertification questions, while also changing some of the long relied-upon standards. This SBA proposed rule has created quite a buzz among federal contracting. In fact, we alone have blogged about it multiple times in the past few weeks: Overview of HUBZone changes and SBA Changes (including the regulation discussed further here); Joint Venture Past Performance; 8(a) Program Changes; Mentor-Protégé Program Changes; and a two part examination of HUBZone Changes (Part 1 and Part 2). Now we will examine in more detail the new proposed size and status recertification regulation. As explained in our first blog on this proposed rule, the SBA is proposing a new regulation that will contain both size recertification and small business program status recertification standards. Currently, contractors must look at each specific socioeconomic program’s regulations to determine standards around status recertification. And, for size recertification, contractors would have to wade through the SBA regulation regarding when size of a business is determined, and its accompanying case law (such as this case we blogged on regarding size under a GSA schedule). SBA now wants to change this as well as some of the recertification standards themselves. SBA, in the proposed rule, notes the widespread confusion, and frankly frustration, with its current piecemeal size and status recertification standards. SBA also has taken issue with the applicable case law, (such as the one mentioned above that we blogged on). SBA in response states “the rules regarding recertification should be the same for size and status, across all SBA small business government contracting and business development programs.” Through this new regulation, SBA is trying to create that kind of uniformity, but may actually produce more issues for small businesses. New 13 C.F.R. § 125.12 The new proposed regulation, 13 C.F.R. § 125.12, sets forth disqualifying size events, which would render a business “ineligible for future set-aside or reserved awards, including awards of set-aside or reserved orders against pre-existing unrestricted or set-aside multiple award contracts” if it causes the business to be other than small. Right off the bat, when reading the proposed regulation, in section (a) the SBA would require a size and status recertification “within 30 calendar days of an approved novation, merger, acquisition, or sale, including agreements in principle, of or by a concern or an affiliate of the concern, which results in a change in controlling interest.” As you may note, there is not an exception to this for GSA schedule contracts or other contracts, which is in contrast to many SBA OHA cases. This recertification applies to recipients of small business contracts, and if in a JV, “from any partner to the joint venture that has merged or is party to the sale or acquisition” Next, the regulation at section (b) re-affirms the need to recertify size and status on long-term contracts within 120 days of the end of the fifth year of the contract (the so-called five year required recertification). The contracting officer however may “request size and/or status” as they deem appropriate “prior to the 120-day point in the fifth year of a long-term contract or order.” So, a Contracting Officer could trigger this required recertification outside of the 120 day window, so long as it is the fifth year of the contract. The regulation then further confirms that the other commonly known required recertification that could effect the ability to bid as a small business (or a certain status) is when the solicitation for an order or agreement (such as a BPA) explicitly asks for such re-certification. The regulation additionally carves out an exception to these required recertifications if a company that is “at least 51% owned by an Indian Tribe, Alaska Native Corporation, or Community Development Corporation changes to or from a wholly-owned business concern of the same entity, as long as the ultimate owner remains that entity.” These recertifications in sections (a) and (b) sort of set up the new standard of required recertifications which can affect whether a business can bid as small business or not (referred to as “disqualifying recertifications” in the proposed regulation). The regulation then includes a section about the effects of a disqualifying recertification, which contains what to do if an event in (a) and/or (b) occurs within 180 days of a bid. The proposed regulation then states that if a business is disqualified from bidding as a small business due to a CO’s explicit request for recertification, the business is then unable to bid on that specific order, but “remains eligible for other set aside or reserved awards and unrestricted awards.” So generally, a specific CO requested recertification would have a limited negative effect. However, any other required recertification would have much deeper impact. If a business is found as other than small as part of a required recertification, or no longer the applicable socio-economic status, that business will be “ineligible to submit an offer for a set aside or reserved award under a multiple award contract after the triggering event occurs.” SBA also summarized this update as follows: “when the requirement for recertification is triggered, the date to determine size shifts to a date that coincides with either the triggering event or the date of initial offer for a particular award.” So a contractor would not be able to bid on any set-aside after that event. For a single award contract, if a disqualifying recertification occurs, that contractor can still receive options for that contract, the agency simply can’t count that option towards its small business goals. However, the proposed regulation makes it clear that such options would not be given to disqualified contractors on a multiple award small business contracts. Finally, the regulation specifically addresses a question many contractors face, how does a joint venture recertify? The SBA’s proposed regulation states that for a joint venture, it can recertify as small if “all parties to the joint venture qualify as small at the time of recertification, or the protégé small business in a still active mentor-protege joint venture qualifies as small at the time of recertification” and that recertifications of size can still occur more than two years after the joint venture’s first award. Of note, the SBA proposes that to recertify as small, the joint venture formed under an MPA must still have an active MPA, even though there are likely situations in which a mentor-protege joint venture is performing under a contract and the MPA expires while the joint venture is performing. The SBA appears to be trying to make a proverbial one stop shop for size and status recertifications, but this attempt may create more confusion. The SBA’s displeasure with the SBA OHA and GAO decisions related to when size is determined is well noted in the long line of cases, but through this regulation SBA upends lines of cases and practice that contractors have come to rely on. SBA, through this proposed regulation does of course confirm some already existing size and status recertification events (i.e., the five year recertification and explicit CO request), but in updating the effect also risks small business participation by seemingly punishing small businesses for their success during contracts, especially when that success comes with an acquisition by another company. This proposed rule seems to especially impact mentor-protégé joint ventures, who would under the proposed rule have to seemingly time their MPA approval and duration with any sort of contract award. For example, if a mentor-protégé joint venture is finally awarded its first multiple award contract towards the end of its MPA, it could have very limited small business opportunities on that contract as the MPA is soon to expire, which would now be a requirement for the joint venture to be seen as small. This proposed rule also hampers the ability for many small businesses on GSA schedule contracts to conduct any sort of novation, or structure change. While well-intentioned, this proposed rule seems to provide more confusion in an effort to be efficient. This is simply a proposed rule, so it is not final yet, and comments are open until October 7, 2024. If you have questions about your business’ size, or status, please reach out to a federal contracting attorney, such as ourselves. 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 SBA Proposed Rule: New Size and Status Recertification Standard first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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