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Until now, the Federal Aviation Administration (FAA) did not participate in the SBA’s Historically Underutilized Business Zones (HUBZone) Contracting Program. But as of January 2021, it looks like that may be changing! Historically, the FAA did not incorporate any HUBZone goals into its Acquisition Management System (AMS) Contract Clauses. In fact, the FAA website’s FAQ sheet still states, “[t]he FAA has not established a HUBZone goal and is exempt from the SBA Goal Setting Guidelines including the establishment of HUBZone goals.” But as of January 2021, the FAA has added Clause #3.6.1-18, Notice of HUBZone Set-Aside, to its existing AMS contract clauses. As set forth in the updated AMS, Clause #3.6.1-18: Must be used in SIRs and contracts set aside, either competitive or noncompetitive, for HUBZone small business. This includes multiple-award contracts when orders may be set aside for HUBZone small business concerns, issued either competitively or noncompetitively. As for the contents of Clause #3.6.1-18, they are nearly identical to the corresponding Federal Acquisition Regulation (FAR) clause, FAR 52.219-3, Notice of HUBZone Set-Aside or Sole Source Award. Just like the FAR provision, section (a) of Clause #3.6.1-18, cites to 13 C.F.R. § 126.103 for SBA’s standard HUBZone contracting definitions. And section (b) sets forth the clause’s applicability to: (1) Contracts that have been set aside for HUBZone small business concerns, awarded either competitively or noncompetitively; (2) Part or parts of a multiple-award contract that have been set aside for HUBZone small business concerns; (3) Orders set-aside for HUBZone small business concerns, issued on a competitive basis, under multiple-award contracts; and (4) Orders issued on a noncompetitive basis to HUBZone small business concerns under multiple-award contracts. Section (d) sets forth the general requirements that offers will only be solicited from–and award will only be made to–qualified HUBZone small business concerns. Section (e) establishes the applicable limitations on subcontracting for HUBZone small business awardees. Section (f) establishes the HUBZone joint venture performance of work requirements–and unfortunately, contains the same language from the FAR that, as we explained in a prior blog, is simply wrong. But it’s in there nonetheless. The final section requires that the “HUBZone awardee must be a HUBZone small business concern at the time of award,” and it requires a HUBZone small business offeror to give SBA notice of any change in eligibility prior to award. Additionally, in this same January 2021 update of the AMS, the FAA has also updated its subcontracting plan, via Clause #3.6.1-4, Small, Small Disadvantaged, Women-Owned, Service-Disabled Veteran Owned, and HUBZone Small Business Subcontracting Plan, to now include HUBZone. And this updated subcontracting plan at Clause #3.6.1-4: Must be used in solicitations and contracts that offer subcontracting possibilities, are expected to exceed $750,000 ($1.5 million for construction of any public facility), and are required to include the clause 3.6.1-3 Utilization of Small, Small Disadvantaged, Women-Owned, Service-Disabled Veteran-Owned, and HUBZone Small Business Concerns, unless the acquisition is set aside. Again, these clauses provide some pretty familiar HUBZone contracting requirements. But for all the HUBZone concerns out there looking to pursue FAA work, this could be some really big news–as FAA has not included HUBZone contracting language in the AMS in the past! Though we are not sure yet what, when, or how exactly the FAA will establish its HUBZone contracting goals moving forward–based on these updated clauses–we are optimistic that HUBZone goals are coming! And if and when they do, it will dramatically increase the chance of FAA awards going to HUBZone small business concerns. Questions about this post? Or need help with a government contracting legal issue? 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 FAA Updates Its Rules to Embrace HUBZone Program first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

A company that is nonresponsive to an Invitation for Bid (IFB), or any solicitation for that matter, will usually be rejected for consideration for award. All too often, when a nonresponsive finding is made, there is no coming back. A recent decision from GAO shines light on what it means to be “nonresponsive” and “not responsible.” GAO confirmed that SAM registration submitting annual certifications are matters of responsibility, not responsiveness. What is the difference? Let’s look at the two terms and their practical effect on a company’s ability to cure deficiencies. The GAO’s decision in Master Pavement Line Corporation, B-419111 (December 16, 2020), involved the Department of Transportation, and a Federal Highway Administration IFB for repair services in Puerto Rico. The IFB anticipated an award to the lowest-priced bidder who conformed to the solicitation requirements. The IFB came with a checklist for submission which included the following statement, “THE FOLLOWING THREE ITEMS IF NOT SUBMITTED WITH THE BID; MUST BE COMPLETED ELECTRONICALLY PRIOR TO CONTRACT AWARD.” One of these items was SAM registration. The IFB also included reference to FAR 52.204-7, which requires bidders to be registered in SAM at the time an offer is submitted. This requirement in FAR 52.204-7 continues until time of award, during performance, and through final payment from the solicitation. Master Pavement submitted its timely proposal to the agency. Master Pavement was the apparent low bidder for the solicitation. However, its SAM registration expired on June 28, 2013. The agency determined the proposal to be nonresponsive, as Master Pavement was not registered in SAM as required by FAR 52.204-7. Two days after bid opening, Master Pavement submitted its SAM registration for processing. Despite the now-current SAM registration, the contracting officer notified Master Pavement that its proposal was rejected as nonresponsive. Master Pavement requested reconsideration, providing evidence that it was now registered, but the agency declined to change its determination. This protest followed The agency contended the SAM certification was required, and failure to submit current SAM certifications rendered the proposal nonresponsive. GAO quickly rejected this argument, finding the agency could not make a requirement a matter of responsiveness just by saying it. Generally, responsiveness is limited to the material obligations of a bidder. GAO found material obligations to be: price, quantity, quality, or delivery terms of the bid. GAO found, “matters concerning contractor representations and certifications generally pertain to a bidder’s responsibility, not the responsiveness of a bid.” Although the solicitation specifically required the certifications to be correct at the time of bidding, failure to provide these in an IFB setting does not render a proposal nonresponsive. In making this finding, GAO determined the SAM registration a matter of responsibility. Citing to a list of cases, GAO found an agency cannot convert a matter of eligibility or responsibility into one of responsiveness. GAO noted, “Our decision in this case is distinguishable from our recent decision in Acon Traders, LLC, B-417558, June 26, 2019, 2019 CPD ¶ 226 where we denied a protest challenging the agency’s rejection of a quotation when the firm submitting the quotation was not registered in SAM at the time it submitted its quotation as required by FAR provision 52.204-7. Unlike the case here, in Acon, the procurement was conducted using the simplified acquisition procedures of FAR part 13, which do not have the same mandatory cure or waiver provisions as set forth in FAR 14.405, and the protester was otherwise ineligible for award because it was technically unacceptable.” Basically, this might not be the case for procurements without the a mandatory cure or waiver provisions as set forth in FAR 14.405. So, this holding won’t apply in all situations. To give an example, if the agency had reached out and given Master Pavement an opportunity to cure its SAM registration prior to award, and they could not do so, then the agency could refuse to award the contract. The key takeaway from this case is first to ensure all of your representations and certifications are up to date prior to submission of any proposal. As well, it underscores at least in an IFB setting, items which do not pertain directly to performance of the solicitation are matters of responsibility, not responsiveness. Think of it this way, responsibility is akin to having the degree and experience required by a job when you apply. Whereas responsiveness, is submitting your documents and showing how you are going to perform that job well enough to get an interview and have the employer consider making a job offer. Hitting send on a proposal is a huge moment in the contracting process, and it freezes a lot of items in place. Luckily for this protester, it found one of the instances where a proposal can be fixed after the fact. Questions about this post? Or need help with a government contracting legal issue? 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 GAO Concludes Expired SAM Registration in Invitation for Bid Cannot be Rejected as Nonresponsive first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

This weekend will get into the 60s, so I’ll be spending some time outdoors soaking up the nice weather. Hope everyone is able to enjoy some nice weather too. As you prepare for your weekend, stay up to date with some of these key government contracting updates. This week’s stories include continued use of LPTA, increased enforcement of wage regulations, and SBA’s audit plans. Something federal contractors thought they’d gotten rid of is popping up [FedNewsNet] Small Number of States Dominate Defense Spending [NatDefMag] Biden DOL Targeting Government Contractors for Wage Enforcement [BloomLaw] Audits Division 2021 Oversight Plan [SBA] Microsoft President Calls for Bid Protest Reforms [NextGov] Postal Service Finally Awards Contract to Replace Decades-Old Vehicle Fleet [GovExec] GSA’s Second-Generation IT (2GIT) Governmentwide BPA Streamlines Process for Buying IT Products [GSA] Challenge accepted [DCMA] Former Air Force Contractor Pleads Guilty to Illegally Taking 2,500 Pages of Classified Information [DOJ] O’Fallon Building Co. Settles Fraud Claims [DOJ] Louisiana Man Charged With Conspiracy to Defraud the Government and Violate the Procurement Integrity Act and Lying To Federal Agents [DOJ] GSA Drops 5 Vendors, Adds 9 to $5.5B 2GIT Contract [NextGov] DOJ could start looking closer at cybersecurity fraud on government technology providers [FedNewsNet] The post SmallGovCon Week in Review: Feb. 22 – Feb. 26, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

When it comes to “best value” evaluations, agencies ordinarily have broad discretion to accept higher-rated, higher-priced proposals. How broad is that discretion? Well, in one recent case, the GAO held that an agency reasonably accepted the awardee’s higher-rated proposal, despite a whopping 91% price premium. The GAO’s decision in Deloitte Consulting LLP, B-419336.2 et al. (2021) involved a DHS Request for Quotations seeking the establishment of a Blanket Purchase Agreement under which the awardee would provide program analysis and strategic support services. The RFQ was issued to holders of the GSA’s Professional Services Schedule with particular Special Line Item Numbers, as well as certain other GSA Schedule holders, and contemplated the award of a single BPA against which orders would be issued. The RFQ provided for award on a best value basis, using a two-phase process. Only phase 2 was at issue in the GAO’s decision. In phase 2, the evaluation was to be based on five factors, listed in descending order of importance: management approach, technical approach, prior experience, socio-economic considerations, and price. Because the ultimate scope of work under the BPA was indefinite, price was to be evaluated based on a sample task. DHS received quotations from four vendors, including Deloitte Consulting LLP and Grant Thornton. The evaluators assigned Grant Thornton a rating of “High Confidence” on the two most important factors: management approach and technical approach. Grant Thornton received “Some Confidence” scores on the other two non-price factors. Deloitte also received “Some Confidence” scores for these two factors, and a High Confidence score for technical approach. But unlike Grant Thornton, Deloitte’s management approach score was “Some Confidence.” Deloitte’s total evaluated price was $867,064. Grant Thornton’s was $1,653,118–a price premium of approximately 91%. DHS concluded that the advantages of Grant Thornton’s quotation outweighed its higher proposed price, and made award to Grant Thornton. Deloitte then filed a bid protest with the GAO, challenging various aspects of the award. Among those challenges, Deloitte contended that DHS had unreasonably deemed Grant Thornton’s price to be reasonable, and that DHS had conducted an improper best value tradeoff. With respect to reasonableness (that is, the question of whether Grant Thornton’s price was impermissibly high), the GAO wrote that “the manner and depth of an agency’s price analysis is a matter committed to the discretion of the agency, which we will not disturb provided that it is reasonable and consistent with the solicitation’s evaluation criteria and applicable procurement statutes and regulations.” In this case, the GAO found that the agency had compared Grant Thornton’s pricing to the mean proposed by all four offerors and the agency’s independent government cost estimate, both of which supported the reasonableness of the price. The agency also noted that Grant Thornton’s proposed labor rates were “significantly discounted” from the rates in its underlying GSA Schedule contract, which “have already been determined to be fair and reasonable.” The GAO held that “[o]n this record, the agency’s price reasonableness evaluation, and its conclusion that Grant Thornton’s price was reasonable, is unobjectionable.” Turning to the best-value tradeoff, the GAO reached a similar conclusion, holding, “the record shows that [HHS] provided a well-reasoned basis for a tradeoff that identified discriminators between the quotations and justified paying Grant Thornton’s higher price.” The GAO denied Deloitte’s protest. The Deloitte case is a good example of the broad discretion agencies have to pay more for a higher-rated proposal in a best-value procurement. But in this case, price was the least important evaluation factor. Would the outcome have changed if, say, price had been equal in weight to all four non-price factors combined? There’s no way to know for sure, but in my experience, the answer is almost certainly “no.” Where, as here, the offeror’s price is reasonable, and the agency provides a reasonable, contemporaneous written justification for paying the higher price, the GAO is very likely to defer to the agency’s discretion–even if the price premium is more than 90%. Questions about this post? Or need help with a government contracting legal issue? 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 Agency Reasonably Accepted Awardee’s 91% Price Premium, GAO Says first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The last few months have seen a whirlwind of changes in the government contracting rules for small businesses–everything from rules governing joint ventures to WOSB certification to the requirement for government-wide SDVOSB verification, and much more. If your head is spinning trying to keep up with all the recent changes, I’m here to help! On March 11, I’ll present a plain-English overview of some of the most important small business changes as part of the Alliance Northwest Conference. Alliance is one of my favorite annual events, and it’s all-virtual this year–so even if you aren’t located in the Pacific Northwest, you should check it out. Hope to “see” you there! The post Event: Small Business Updates at the Alliance Northwest Conference first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Well folks, the wait is finally over! The Second Edition of our popular GovCon Handbook on the SBA’s 8(a) Program is live, and it’s available here. In this revised, updated, and expanded Handbook, Steven Koprince and I give you the run-down on all things 8(a) (and as always, we do so in plain English). Whether you are considering applying to the 8(a) Program, in the midst of the application process, already years into your 8(a) Program term, or a recent graduate/non-8(a) entity hoping to team with an 8(a) company one of these days–this book is for you. It covers everything under the 8(a) sun, including: Social disadvantage Economic disadvantage Net worth Income Good character Potential for success Unconditional ownership Direct ownership Unconditional control Special rules for Indian tribes, ANCs and NHOs The 8(a) application process Excessive withdrawals Contingent fees “Once 8(a), always 8(a)” 8(a) contract eligibility Limitations on subcontracting Joint ventures What’s even better, this Handbook is just $9.99 in print form and $6.99 for the Kindle version! Questions about this post? Or need help with a government contracting legal issue? 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 Koprince Law LLC’s New 8(a) Program GovCon Handbook is Live! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Lowest price technically acceptable (LPTA) source selection has been on the decline lately. A recent final rule from the FAR Council, effective February 16, 2021, continues this trend. In the rule, the FAR Council implemented additional restrictions on the use of LPTA for non-DoD contracts. The 2019 National Defense Authorization Act (NDAA) included a number of criteria that must be met for non-defense agencies to utilize LPTA procurements. DoD finalized implementation of related restrictions back in October 2019. Around the same time, the FAR council followed the trend by issuing a proposed rule to implement various restrictions on the use of LPTA. The difference in timeline stems from the fact that Congress added the LPTA criteria for DoD procurements in the 2017 and 2018 NDAA, but didn’t add the civilian restrictions until the 2019 NDAA. The FAR Council’s commentary made clear that the rule does not “prohibit the use of the LPTA source selection process” but rather identifies “circumstances that must exist for an acquisition to use the LPTA source selection process and certain types of requirements that will regularly benefit from the use of tradeoff source selection procedures.” In other words, the goal is to keep LPTA evaluations away from procurements that aren’t suited for it. Avoiding use of LPTA Here are some of the main restrictions for civilian agencies using LPTA acquisitions. LPTA “shall only be used” in certain circumstances. These circumstances include: Where there are minimum requirements with clear “performance objectives, measures, and standards.” Where exceeding the minimum would provide no or limited value to an agency. Where an agency will use minimum “subjective judgment” to compare proposals. Reviewing all proposals would not help the agency identify “characteristics that could provide value.” The lowest price will reveal “the total cost, including operation and support.” The agency must document its justification for using LPTA. Contracting officers should also avoid LPTA for certain types of acquisitions, at least “to the maximum extent practicable”: (1) Information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, audit or audit readiness services, health care services and records, telecommunications devices and services, or other knowledge-based professional services; (2) Personal protective equipment; or (3) Knowledge-based training or logistics services in contingency operations or other operations outside the United States, including in Afghanistan or Iraq. There are some differences between the recently enacted civilian rule and the one for DoD agencies. Two requirements for DoD use of LPTA are not found in the civilian rule: No, or minimal, additional innovation or future technological advantage will be realized by using a different source selection process. Goods to be procured are predominantly expendable in nature, are nontechnical, or have a short life expectancy or short shelf life. There is one other distinction compared to the DOD rule. The civilian rule includes a restriction on health care services and records, but the DOD rule does not. The new rule from the FAR Council will limit use of LPTA procurements for civilian agencies, similar to the rules for DoD procurements. While there are a number of differences, the overall result should be to limit use of LPTA evaluation for more complicated procurements. 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 Update: FAR Final Rule Puts Limits on LPTA Procurements first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The 8(a) Program is tremendously powerful and can be a springboard to massive success in the government contracts marketplace. But the many (many!) rules surrounding the 8(a) Program are complex, and even savvy 8(a) contractors–not to mention first-time applicants–easily can become confused. I am pleased to announce that next week, Koprince Law LLC will publish a Second Edition of our popular GovCon Handbook on the 8(a) Program. In this revised, updated and expanded Handbook, my colleague Nicole Pottroff and I will cover the 8(a) Program’s rules in detail, including: Social disadvantage Economic disadvantage Net worth Income Good character Potential for success Unconditional ownership Direct ownership Unconditional control Special rules for Indian tribes, ANCs and NHOs The 8(a) application process Excessive withdrawals Contingent fees “Once 8(a), always 8(a)” 8(a) contract eligibility Limitations on subcontracting Joint ventures And, if you can believe it, much more! Like all of our GovCon Handbooks, our 8(a) Handbook is written in plain English (not legalese) and packed with examples to illustrate key concepts. And at just $9.99 in print form and $6.99 for the Kindle version, the 8(a) Handbook is a great deal (though not quite as great a deal as that time a Shell station accidentally priced gas at one cent per gallon). Keep an eye on SmallGovCon and our social media channels starting on Monday, February 22. We’ll let you know as soon as the 8(a) Handbook goes live! Questions about this post? Or need help with a government contracting legal issue? 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 Coming Next Week: Koprince Law LLC’s New 8(a) Program GovCon Handbook! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

It looks like the cold snap over most of the country has finally thawed and spring is right around the corner. Hope everyone is recovering from the effects of the cold. The recent Mars rover landing reminded me of the important and exciting work that the government and contractors are doing for the country. This week saw important updates about CMMC integration by GSA, a reminder that the feds are still looking into procurement fraud, and threats to GSA cyber security. GSA Could Be Vulnerable to Security Threats From ‘Trusted Insiders’ [GovExec] Census Bureau Opts for Small Business to Support Digital Communication Strategy [NextGov] Japanese CEO and Employees Charged in Scheme to Defraud U.S. Navy and Dump Wastewater in Ocean [DOJ] DOD Secured Fair Prices Despite Rapid Shift to Mass Telework, Audit Finds [NextGov] GAO finds flaw in VA’s community care contracts [FedNewsNet] GSA preps guidance for using CMMC in civilian contracts [FCW] Senator: Pandemic Makes Anti-Fraud Law More Important Than Ever [GovExec] U.S. Navy Concrete Contractor in Djibouti Admits Fraudulent Conduct and Will Pay More than $12.5 Million [DOJ] Restructuring of the Certification Program for the Contracting Functional Area [DOD] Former Subcontractor Sentenced for Obstruction of Justice [DOJ] The post SmallGovCon Week in Review: Feb. 15 – Feb. 19, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The VA Rule of Two, while a powerful motivator for setting procurements aside for service-disabled veteran-owned small businesses, does have its limits. One of those exceptions was discussed in a recent ruling from the United States Court of Appeals for the Federal Circuit. The court confirmed that the VA may convert a service-disabled veteran-owned small business set-aside solicitation to a small business set-aside if the SDVOSB bids it receives are too high in price. The VA Rule of Two, described in 38 U.S.C. 8127(d), requires the VA to set aside an acquisition for SDVOSBs when two or more verified and capable SDVOSBs are identified, provided the contracting officer has a reasonable expectation that two or more of those SDVSOBs will submit offers and that the award can be made at a fair and reasonable price that provides best value to the United States. We’ve discussed the Rule of Two a lot over the years. In the Kingdomware Techs., Inc. v. United States case, the U.S. Supreme Court confirmed that this rule is mandatory, not discretionary, as we’ve discussed. The VA Rule of Two even trumps the Javits-Wagner-O-Day Act (AbilityOne) in most cases. And just last month we wrote about the limitations of the Rule of Two recognized in the Land Shark Shredding case, including the Contracting Officer’s ability to determine whether an award can be made at “fair and reasonable prices” and whether GSA’s FSS acceptance of prices affects this determination. Unlike the tiered evaluation from the Land Shark Shredding case, here, the VA was simply determining whether the re-issued solicitation would be an SDVOSB set-aside at all. The Veteran Shredding decision looked at protests of two solicitations for essentially the same work. The VA issued an original solicitation for shredding services at the Minneapolis Veterans Affairs Healthcare System (named the “181” solicitation) as an SDVOSB set-aside under the Rule of Two. But the VA cancelled this solicitation after determining no reasonable SDVOSB bids came in, and issued a new solicitation that was nearly identical, named the “276” solicitation. 276 was set aside for competition among all small businesses, veteran-owned or not, as allowed by regulations found here and here. We blogged previously about Veteran Shredding’s protest of the original solicitation, and its denial based upon lack of standing. So, on appeal, Veteran Shredding was only able to challenge the dismissal of its bid protest on the solicitation’s re-issuance; the Federal Circuit Court noted Veteran Shredding was precluded from challenging the prior solicitation. The Court of Federal Claims’ dismissal of Veteran Shredding’s protest had been based upon its finding that cancellation of the 181 solicitation was proper and did not violate the Rule of Two because all the bids vastly exceeded the cost estimate and funding for the contract, and the cost estimate and reasonableness analysis were not irrational or contrary to law. That same reasoning provided the basis for approval of the VA’s re-issuance of the solicitation as a set-aside for small businesses instead of solely for SDVOSB’s. The Court of Appeals affirmed the decision of the Federal Claims court, recognizing VA had a compelling reason to cancel the initial solicitation initially set aside under the Rule of Two, as all the bids from SDVOSBs vastly exceeded the cost estimate and funding for the contract, which themselves were in effect reasonable. Likewise, the appellate court found the VA’s decision not to re-issue the solicitation as an SDVOSB set-aside was reasonable, as the VA’s market research and sources-sought notices revealed only high bid prices and a lack of offers from capable SDVOSBs. The Federal Circuit Court then reiterated the limitations of the VA Rule of Two, which “simply requires that competition be restricted if certain conditions are met.” The Federal Circuit Court concluded by finding the twin conditions of the Rule of Two were not met here, a reminder that although the VA Rule of Two is a very beneficial tool for SDVOSB’s, it does have its limitations, chief among them reasonable pricing. Questions about this post? Or need help with a government contracting legal issue? 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 Reminder: If Pricing is Too High, VA Rule of Two Might Not Apply first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The SBA’s mentor-protégé program offers powerful benefits. To help ensure that only legitimate small businesses take advantage of the program, the SBA asks applicants a series of questions about potential affiliation between the prospective mentor and protégé. But once the SBA signs off on a mentor-protégé agreement, that’s that. As the SBA Office of Hearings and Appeals recently confirmed, competitors cannot use the size protest process to challenge whether an SBA mentor-protégé agreement should have been approved in the first place. OHA’s decision in Size Appeal of Sevenson Environmental Services, Inc., SBA No. SIZ-6087 (2021) involved a mentor-protégé agreement between HydroGeoLogic, Inc., a small business, as protégé, and APTIM Federal Services, a large business, as mentor. The mentor-protégé agreement specified that HGL’s primary NAICS code was 562910 (Environmental Remediation Services). However, the agreement stated that HGL sought mentoring under a secondary NAICS code, 541715 (Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)). The SBA approved the mentor-protégé agreement on May 29, 2019. HGL and APTIM subsequently formed a joint venture, HGL-APTIM JV, LLC. In July 2020, the Corps of Engineers issued a solicitation seeking environmental remediation services at the Welsbach/General Gas Mantle Superfund Site in New Jersey. The solicitation was issued a small business set-aside under NAICS code 562910, with a corresponding 750-employee size standard. HGL-APTIM JV submitted a proposal, and the Corps subsequently identified the joint venture as the apparent successful offeror. A competitor, Sevenson Environmental Services, Inc., then filed a size protest. Sevenson contended, in part, that the SBA should not have approved the mentor-protégé agreement between HGL and APTIM. Sevenson noted that APTIM was the incumbent contractor for the remediation work, but was ineligible to bid as a prime because it was not a small business. Sevenson contended that HGL did not require the assistance of a mentor under NAICS code 562910 because HGL had “equal if not more” experience than APTIM under that NAICS code. In fact, Sevenson pointed out, “HGL has engaged APTIM as a subcontractor for other projects with NAICS code 562910.” Sevenson argued that HGL and APTIM chose NAICS code 541715 for their mentor-protégé agreement to “circumvent SBA regulations.” In other words, Sevenson suggested, the SBA never would have approved the mentor-protégé agreement under NAICS code 562910, and should not be able to use the mentor-protégé agreement to pursue contracts under that NAICS code. The SBA Area Office held that it did not have the authority to review the approval of a mentor-protégé agreement. The Area Office issued a size determination finding HGL-APTIM to be an eligible small business. Sevenson then appealed to OHA. OHA wrote that the SBA Area Office cannot review “a charge that the [SBA Mentor-Protégé Office] should not have approved the MPA in the first place, or that the MPA itself is improper.” Such allegations “are not valid grounds for a size protest, as SBA regulations prohibit any finding of affiliation or control based on a [MPA].” It is “beyond the scope of an Area Office’s review” to inquire into the motives of a mentor and protégé in entering into a mentor-protégé agreement, and in any event, in this case, Sevenson’s arguments were merely “speculative.” OHA denied Sevenson’s size appeal and affirmed the size determination holding HGL-APTIM to be an eligible small business. If a competitor has concerns about whether a mentor-protégé agreement should have been approved, the competitor can raise those concerns informally with the SBA’s Mentor-Protégé Office. But as the Sevenson Environmental Services case demonstrates, a size protest is not a vehicle to challenge a competitor’s MPA. One more note. There seems to be a relatively common misconception that once a mentor-protégé agreement is approved, the parties can only form joint ventures to pursue contracts designated with the same NAICS code set forth in the joint venture agreement. As Sevenson Environmental Services shows, however, that’s not the case. Once a mentor-protégé agreement is approved, the parties can avail themselves of the special joint venturing benefit to pursue contracts in any NAICS code–as long, of course, as the protégé qualifies for those contracts by size and socioeconomic status. Questions about this post? Or need help with a government contracting legal issue? 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 No Protests of SBA Mentor-Protégé Agreements, Says OHA first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Hello SmallGovCon readers. Here at HQ, we’ve been hit with both a Super Bowl loss from the Chiefs, as well as temperatures topping out in the single digits this week. We’re really looking forward to spring! But in the meantime, enjoy some of these hot federal contracting updates to warm you up. This week saw stories including myths about CMMC, increase in federal AI spending, and bias affecting growth in the 8(a) program. CMMC: ‘Changing culture one company at a time’ [Fed NewsNet] Why systemic bias exists in government contracting programs [FedNewsNet] GSA credits success of record IT revenue savings to transparency, more trust [FedNewsNet] Government and Government Contractor Calls Under the Telephone Consumer Protection Act of 1991 [FedReg] DoD’s JAIC rolling out new contracts to speed up AI acquisition [FedNewsNet] Biden Names a Czar for Federal Workforce and Agency Performance Issues [GovExec] Delaware Manufacturing Company Executive Sentenced to 1 ½ Years for Bribing Amtrak Official [DOJ] CMMC: ‘Changing culture one company at a time’ [FedNewsNet] Cabinet leaders are in, now for the sub-cabinet appointments [FedNewsNet] Federal AI Spending to Top $6 Billion [NatDefMag] The post SmallGovCon Week in Review: Feb. 8 – Feb. 12, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

A new FAR final rule recently went into effect that has increased the percentage for the domestic component requirement under the Buy American Act, a percentage that had been in place for nearly 70 years before this recent change. Originally passed in 1933, in simple terms, the Buy American Act (BAA) encourages Federal agencies to procure domestic materials and products which are intended for domestic use, so long as the procured items or the materials thereof are present in sufficient and reasonably available commercial quantities and of a satisfactory quality, with some waivers that may apply. In the past, we have written about the many exceptions and waivers that may apply to the BAA. And recently, we discussed the new executive order from President Biden and its possible effects on the BAA, as well as Government procurement as a whole. Along with knowing these exceptions, and the potential future changes to the BAA, it’s also crucial that government contractors stay up to date on manufacturing thresholds under the BAA. A FAR rule altering some BAA compliance requirements became effective just before the new President was inaugurated (it may have been a bit overshadowed by the bustle that was the transition of power). Under the new rule, a number of thresholds were increased in an effort to strengthen domestic preferences under the BAA. The overall goals were decreasing the amount of foreign-sourced content in a U.S. manufactured product in order to promote economic and national security, stimulating economic growth, and creating jobs. To do that, price evaluation preferences for both large and small businesses as well as domestic content requirements for iron and steel were increased. The price evaluation preferences increased from 6 percent to 20 percent for large business and from 12 percent to 30 percent for small business. Note that this change does not impact the price preference for end products for DoD procurements, which was already 50 percent for both large and small businesses. In addition, the longstanding 50 percent threshold in FAR 25.101(a)(2)(i) which is required to meet the domestic component test was increased to 55 percent. This was the first increase in domestic component requirements under the BAA since the 1950’s, when the “substantially all” language in the statute was interpreted to mean at least 50%. As a reminder, the BAA does apply to small business set-asides, so small business manufacturers should pay close attention to the increased domestic component requirement. While the rule may change again under the new administration, as it stands today, the current rule is a component test of 55% made in America. Questions about this post? Or need help with a government contracting legal issue? 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 Buy American Act Domestic Component Threshold Gets A Raise first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Ask many government contractors, and they’ll tell you that even a single negative report in the Contractor Performance Assessment Reporting System can have a powerful adverse impact on winning future prime contracts. Given the importance of these performance reports, it’s little wonder that a contractor on the receiving end of a negative CPAR may want to ask a judge to review the matter. But as one recent case demonstrates, a contractor cannot challenge a CPAR with a judge until the contractor has followed the FAR’s claims process. The decision of the Armed Services Board of Contract Appeals in SkyQuest Aviation LLC, ASBCA No. 62586 (2021), involved a contract between the Air Force and SkyQuest Aviation LLC. Under the contract, SkyQuest was to provide “functional check flight pilot, flight engineer, and related services in exchange for $429,000.” After performance began, a dispute arose as to whether the contract required that pilots possess a certain certification. The parties were unable to resolve the dispute and the Air Force terminated the contract for cause. After termination, the Air Force apparently issued a negative CPAR to SkyQuest. SkyQuest then filed an appeal with the ASBCA. In its appeal, SkyQuest requested, in addition to monetary relief, that the ASBCA: (1) remove the termination for cause; and (2) direct that the CPAR be removed, corrected, and resubmitted. The ASBCA wrote that, under the Contract Disputes Act, “we only possess jurisdiction over an appeal of a claim if a contractor presented that claim to the [Contracting Officer].” A claim, in turn, is defined in FAR 52.233-1 as a “demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to [the] contract.” When a contractor seeks to overturn a termination for default or cause, the contractor need not first file a claim with the Contracting Officer because a termination for default or cause “is a government claim not subject to CO presentment under the CDA.” Accordingly, the ASBCA held, SkyQuest “did not need to present” its argument to the Contracting Officer before seeking to overturn the termination for cause. But the challenge to the CPAR was a different story. Unlike a termination for cause or default, a CPAR is not a “government claim.” Therefore, the ASBCA wrote, “[w]e only possess jurisdiction over a CPAR claim if the contractor presented to the CO a valid claim–i.e., a written demand or assertion seeking, as a matter of right, an adjustment to the CPARS rating.” The ASBCA wrote that there was no “evidence in the record that [SkyQuest] presented a written demand or assertion seeking, as a matter of right an adjustment to the CPAR.” Therefore, the ASBCA held, it did not have jurisdiction over SkyQuest’s CPARS claim. The ASBCA dismissed that portion of SkyQuest’s appeal. After receiving a negative CPAR, it might seem a little silly to present a formal claim to the same Contracting Officer who just wrote (or agreed with) that CPAR. Strange as it may seem, though, it’s what the FAR requires–first a claim to the Contracting Officer, and only then (if the claim is denied or deemed denied), an appeal to a judge. Questions about this post? Or need help with a government contracting legal issue? 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 CPARS Challenges: No Appeals Without Contracting Officer Claim first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Generally, the small business Rule of Two requires an agency to set aside contracts for small business, assuming that there are at least two small businesses with competitive prices who will bid on the contract. But does the small business Rule of Two apply to orders under a multiple award contract? In a recent decision, GAO affirmed the answer is no–application of the small business Rule of Two for orders under a multiple-award contract is discretionary. In ITility, LLC, B-419167 (Dec 23, 2020), GAO reviewed the issuance of a task order by the Department of Homeland Security for program management and information technology support for the Financial Systems Modernization (FSM) office. The FSM office has a mission to “execute key financial management requirements” and “identifying, implementing, and overseeing modern and compliant financial management systems and business processes across DHS.” In 2018, DHS had awarded a service-disabled veteran-owned small business set-aside task order to ITility under a DHS indefinite-delivery, indefinite-quantity (IDIQ) contract. Under the task order, ITility performs program and technical support services for DHS travel management programs for the DHS Financial Systems Modernization (FSM) Joint Program Management Office (JPMO). However, DHS decided it would reorganize the JPMO as “more IT-centric technical support services were needed due to evolving requirements”. And, “ITility’s current task order did not provide sufficient levels of expertise and support capacity to adequately support JPMO’s projected requirements.” In addition, “DHS concluded that several additional labor categories that were not included on ITility’s task order, will be needed[.]” DHS reviewed six multiple-award IDIQ contracts to potentially meet its identified needs for the JPMO, noting that DHS policy prioritizes “using strategic sourcing contract vehicles.” DHS chose GSA’s Alliant 2 contract “because it believed the contract provided both the depth and breadth of program management and information technology services needed by JPMO, a suitable performance period, and a wide vendor pool with experience in large implementation efforts.” It could not do a small business set-aside because the Court of Federal Claims had invalidated the Alliant 2 small business contract awards. So, only Alliant 2 large business contract holders could bid on the DHS task order. ITility alleged that DHS did not properly conduct market research to determine whether the procurement should have been set aside for small business concerns. GAO invited comment from the parties, as well as SBA, on whether DHS “was required to conduct such a set-aside analysis prior to issuing the task order RFQ.” GAO provided some context for its ruling. GAO noted that it had in the past construed the small business Rule of Two as applicable to any task order delivery order solicitation, but that in 2010 Congress amended the Small Business Act to require rules allowing federal agencies to “set aside orders placed against multiple award contracts for small business concerns” “at their discretion.” Both the FAR and SBA rules echoed the language allowing agencies to have discretion in setting aside orders for small business. In various decisions, GAO had consistently ruled that “set-aside determinations under multiple-award contracts are discretionary, not mandatory.” In keeping with that tradition, GAO reiterated that agencies do not have to use small business set-asides for orders solicited against multiple award contracts. This decision seems to be at odds with the Court of Federal Claims recent decision (discussed here) that said agencies cannot simply move a requirement to a multiple award contract and get around the Rule of Two. But GAO considered the COFC case and was not persuaded by it, rejecting the parties’ request for GAO to overturn its earlier precedent and “adopt the parties’ position that the grant of discretion in the Jobs Act only provided an exception to the applicable fair opportunity requirements.” Having what appears to be inconsistent guidance at GAO and COFC is a real headache, but companies considering a Rule of Two challenge should be aware of the apparent divergence between COFC and GAO precedent in deciding where to bring a small business Rule of Two protest. 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 Doesn’t Require Set-Aside for Task Order first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

8(a) joint ventures are a powerful tool–both for non-8(a)s to participate in 8(a) contract opportunities and for 8(a) companies to gain valuable experience in their industries. But it is crucial that 8(a) joint ventures follow all of SBA’s requirements if they want to get (and keep) 8(a) awards. Some of those requirements underwent significant revisions this past year. Join Shane McCall and me on February 9 for the SBA Training Webinar: 8(a) Joint Ventures, where we will discuss the ins and outs of 8(a) joint ventures and keep you up-to-date on all of SBA’s requirements. Please register here. Hope to see you there! The post Event: SBA Training Webinar on 8(a) Joint Ventures first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

We here at SmallGovCon have something on our minds this week, and it’s not only a roundup of the most important federal contracting news. A little game called the Super Bowl features our hometown Kansas City Chiefs, hoping to repeat as champions! This Chiefs-themed anthem has been my pump-up jam for the last several weeks. Some of the key alerts for this week include an updated timeline for CIO-SP4, increased OTA use at Pentagon, and the CMMC rollout progresses. Updated Timeline for CIO-SP4 Solicitation Now Available [HHS] Defense Industry Could See Another Wave of Mergers, Acquisitions [NatDefMag] Enthusiasm Growing at Pentagon for OTAs [NatDefMag] General Management Advisory SBA’s Use of Vendors Without a Contract [SBA] Industry Group Gives Defense Contractors ‘C’ Health Grade in Annual Report [NextGov] DOD to Try Out Its Vulnerability Disclosure Program with Contractors [NextGov] CMMC update: Pilots, 3PAOs and more of what vendors need to know [FedNewsNet] Guilty plea after government contracts for masks go unfilled [AP] Information Collection; Novation and Change-of-Name Agreements [FedReg] Labor secretary nominee comes with a long record on union issues, contracting oversight [FCW] The post SmallGovCon Week in Review: Feb. 1 – Feb. 5, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The White House has released the final language of the Buy America Act. Our recent post looked forward to what we could expect from the final rule. Now the rule has been released, so what is in it? The executive order promises quite a bit, and a lot of what is promised we will likely not see until 6 to 12 months down the road. Here is what to expect now, in 6 months, and then down the road. First, the final order was signed by President Biden on January 25, 2021. The order promises to keep federal dollars in America. The order sets forth ambitious timelines for accomplishing what amounts to an overhaul of how small and medium manufacturing is conducted in the United States. The most convenient way to break down and digest this order is to look at what the immediate, 6-month, and 12-month timelines look like. The most immediate change is the creation of the Made in America Director. This new Director will apparently reside within the Office of Management and Budget. When will this director be appointed, it is unclear. What is clear is that 45 days after the appointment of the new–let’s call them the “MiAD Director”–we will get our first glimpse of the new landscape. 45 days after appointment, the MiAD will publish a list of information granting agencies shall include when submitting waiver requests and justifications. Publish where, you might ask? Probably on a new public website designed to promote transparency, but as we all well know, this could also take the form of a memo. The MiAD will also publish a deadline, not to exceed 15 days, to waive review of a proposed waiver, or will notify the agency head in writing of its decision. The decision must include a consultation as to whether the cost savings are in line with public interest. The language directly references manipulated prices for raw and manufactured materials. I suspect, as with the previous administration, this is a thinly-veiled provision meant to reference China. Here is where things get spicy, and by spicy, I mean a regulatory nightmare. If the agency disagrees with the MiAD, and they are unable to resolve this dispute through writing, the Order calls for the dispute to be decided by the procedures laid out in Executive Order 12866, section 7. This order from back in 1993 calls for the Vice President and President to review the dispute, and issue a decision within 60 days of the request for review. Given the President’s agenda, I am not certain resolving a dispute regarding granting a waiver for a widget will be high up on the priority list. Time will tell, but I am keenly interested to see if we will find out whether this process is used, and how often. My guess is that, before this is invoked, the agency head will be kindly asked…to rethink things. This order also proposes each agency submit new FAR rules for FAR 48. Specifically, the component test in part 25 will be replaced with a “value added” test, which we don’t have specifics on yet. The numerical threshold for domestic content will be raised, which basically means how much of something has to be from the United States for it to be labeled “Made in America.” As well, price preferences will be increased. These final totals will be determined later. These new proposed rules will be up for public comment in 180 days, we will keep an eye out for final rule language. At the 180 day mark, each agency is required to submit a report outlining three main things; implementation and compliance with “Made in America” laws, consistency of existing waivers with “Made in America” laws, and recommendations on how to effectuate this policy better. After the initial reports are due, every 6 months, each agency will submit a similar report to the MiAD. GSA gets a special requirement to ensure all products on Federal property comply with this order. We should look for the first final rules to be off the presses approximately a year following the signing of this order. Besides the regulatory overhaul, this order also establishes a task force to seek out small and medium size American manufacturers and suppliers who can fulfill procurements. Market research and supplier scouting must be conducted by each agency, before a waiver can be granted. For we attorneys, this means another trove of information to pore over when analyzing a solicitation. For suppliers and manufacturers, there will hopefully be a uniform process enabled to give these firms the ability to be discovered and utilized. We talked above about a new public website. While the details are scarce, the website is meant as a portal for federal contractors and suppliers to meet. The stated goal is to improve transparency, giving access to approved and denied waivers, as well as information on manufacturers. Taking everything into account, the order promises a whole heck of a lot. Will it deliver? Likely not completely, but it does give us a look at the priorities of this administration. The sections regarding publishing granted and denied waivers can bring uniformity across agencies, which is promising. This also provides attorneys a place to go to hold agencies accountable. I expect some form of revamping to this order in about 6 months, as the reports start rolling in. As always, we will keep our eyes out, and keep you up to date with what we find. Questions about this post? Or need help with a government contracting legal issue? 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 Buy American Act Executive Order Promises Much, Will it Deliver? first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

I’m so excited to announce that a new Koprince Law LLC GovCon Handbook entitled, The 8(a) Program, is coming soon! This handbook–complete with all the SBA’s important changes from the past couple years–was co-authored by myself and Steven Koprince. It will be published through Amazon in the coming weeks. And don’t worry, we will keep you updated on the publication date and how to reserve an advance copy. If you are thinking about applying to the 8(a) Program, currently going through the application process, or have already been admitted–this is the book for you. This book provides guidance on every step of the process, in plain English. It can help you navigate the ins and outs of the 8(a) Program, and even assist you in utilizing the full extent of your 8(a) Program opportunities. Stay tuned for more details! The post New GovCon Handbook Arriving Soon! The 8(a) Program 2021 Edition first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Small businesses will see several major multiple-award solicitations in 2021, including CIO-SP4 and Polaris. As contractors develop their capture strategies for important procurements like these, one frequently-asked question is, “can I be on multiple teams?” While there is no simple one-size-fits-all, yes/no answer to the “multiple teams” question, an often-overlooked FAR provision provides some important guidance. Let’s take a look at five things you should know about the FAR’s Certificate of Independent Price Determination. 1. It’s Probably in Your Solicitation. The FAR’s Certificate of Independent Price Determination clause, FAR 52.203-2, appears in most federal solicitations. According to FAR 3.103-1, the clause must be included unless the solicitation contemplates a simplified acquisition, is a request for proposals under two-step bidding procedures, or seeks utility services for which rates are set by law or regulation. Even if you’re bidding on a regular ol’ single-award contract instead of a massive multiple-award vehicle like CIO-SP4, you’re probably subject to the independent pricing requirements. FAR 52.203-2 is one of those FAR clauses that is typically “incorporated by reference.” Instead of the full text, your solicitation may just contain the clause’s name and number. That doesn’t make the clause any less potent. Whether it’s incorporated by reference or full text, if it’s in the solicitation, you’re bound by it. 2. FAR 52.203-2 is a Certification–So Be Extra Careful. It’s important to respect the “Certification” portion of the FAR’s Certification of Independent Price Determination. By submitting an offer in response to a solicitation containing FAR 52.203-2, you certify to the government that certain things are true. Certify incorrectly, and you could find yourself in some serious trouble. For example, the government (or a so-called “qui tam” whistleblower) can use the False Claims Act to pursue civil and criminal penalties for almost any untrue certification, including under the Certificate of Independent Price Determination. In one notable case, a federal court imposed a $24 million penalty for a violation of the Certificate of Independent Price Determination. The government is ramping up its efforts to identify and penalize contractors who violate FAR 52.203-2. The Department of Justice has established a “Procurement Collusion Strike Force,” intended to root out “bid-rigging conspiracies and related fraudulent schemes, which undermine competition in government procurement.” (No word yet on whether the “Strike Force” will send an elite SEAL team to raid the offices of suspected violators). Offerors who inadvertently violate the Certificate of Independent Price Determination probably don’t think of their actions as collusive, but FAR 52.203-19 is rooted in the FAR’s anti-collusion provisions. Silly name aside, the establishment of the Strike Force shows that the government is taking enforcement of the clause seriously. 3. FAR 52.203-2 Requires Independent Development of Pricing. Okay, so you’re probably bound by the FAR’s Certificate of Independent Price Determination and can get in serious hot water for violating it. But what, exactly, does the clause require? FAR 52.203-2 first requires the offeror to certify that: The prices in this offer have been arrived at independently, without, for the purpose of restricting competition, any consultation, communication, or agreement with any other offeror or competitor relating to – (i) Those prices; (ii) The intention to submit an offer; or (iii) The methods or factors used to calculate the prices offered. The clause essentially imposes a communication ban–no “consultation, communication or agreement” with another offeror regarding pricing or the intent to submit an offer. It’s easy to see how a contractor participating on multiple teams could inadvertently violate this requirement, or at least be in the uncomfortable position of trying to argue that a particular communication was not made “for the purpose of restricting competition.” 4. FAR 52.203-2 Prohibits Disclosure of Pricing. The Certificate of Independent Price Determination doesn’t stop with the communication ban. It also requires the offeror to certify that: The prices in this offer have not been and will not be knowingly disclosed by the offeror, directly or indirectly, to any other offeror before bid opening (in the case of a sealed bid solicitation) or contract award (in the case of a negotiated solicitation) unless otherwise required by law[.] For contractors considering working on multiple teams, this may be the most difficult piece of FAR 52.203-2 to successfully address. Consider, for example, a company bidding on a contract in its own name, and also participating in a joint venture bidding the same contract. What are the chances that the company can avoid knowing the pricing of both bidders–its own pricing, and the joint venture’s? And unlike the communication ban, there is no requirement here that the purpose of the disclosure be to restrict competition. Fortunately, there are a few commonsense exceptions to the disclosure limit. FAR 3.103-2(a)(1) says that none of the following, by themselves, constitute an impermissible disclosure: (i) The fact that a firm has published price lists, rates or tariffs covering items being acquired by the Government. (ii) The fact that a firm has informed prospective customers of proposed or pending publication of new or revised price lists for items being acquired by the Government. (iii) The fact that a firm has sold the same items to commercial customers at the same prices being offered to the government. 5. FAR 52.203-2 Prohibits Inducements to Submit/Not Submit Offers. We’re not quite done! The Certificate of Independent Price Determination requires one more certification. The offeror must certify that: No attempt has been made or will be made by the offeror to induce any other concern to submit or not to submit an offer for the purpose of restricting competition. Again, it’s easy to see how a contractor participating in multiple teams could violate this provision, or at least be put in the position of trying to explain why there is no intent to restrict competition. For instance, let’s say that a company wins a spot on an IDIQ under its own name, and also wins a spot with a joint venture. It would be natural for the company to decide to bid one order under its own name, and the next with the JV. (And, in a bit of a Catch-22, deciding to have both companies pursue the order could create a problem under the communication ban and/or pricing disclosure limit). The Bottom Line: Tread Carefully. So there you have it: five things you should know about FAR 52.203-2, the FAR’s Certificate of Independent Price Determination. Whether you’re bidding on a major multiple-award vehicle or a more traditional single-award contract, it is very important that your acquisition strategy take into account these important limits. Questions about this post? Or need help with a government contracting legal issue? 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 Five Things You Should Know: the FAR’s Independent Pricing Certification first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

If a teacher has told you once, they’ve told you a thousand times, show your work. That was GAO’s reminder to GSA in its decision in Hoover Properties, B-418844 (Sept. 28, 2020). In the case, GAO sustained a protest from property management company Hoover Properties, the non-awardee of a GSA request for lease proposal (RLP), in which Hoover argued that GSA failed to provide adequate documentation for its evaluation. GSA was deciding between Hoover and another property management company, MSDG Frankfort, LLC on an RLP for office space it issued using the Automated Advanced Acquisition Program (AAAP). Per the solicitation, lowest price was to be determined by conducting a net present value (NPV) price evaluation, and GSA would add certain costs to the offerors’ tenant improvement allowance (TIA), and gross present value cost, including “[t]he cost of relocation of furniture, telecommunications, replications costs, and other move-related costs, if applicable.” MSDG was given the award as the lowest-priced proposal of $19.39 per square foot. Hoover was notified of the award, and informed its evaluated NPV price was $21.12 per square foot. Hoover was not satisfied that its NPV price was found to be higher than MSDG’s, so it alleged in an agency-level protest that GSA had used an incorrect NPV calculation resulting in a higher than intended present value calculation of its offer. In response, GSA sent Hoover a collection of emails between the two parties and stated, “we have provided the sufficient amount of information and detail in regards to your questions below.” Shortly after, GSA put this same response into a legal brief to the decision-maker for the agency-level protest, explaining that, the agency’s award decision had been made to the lowest-priced technically acceptable offeror as determined by the AAAP, since it was an automated procurement. GSA denied Hoover’s agency-level protest, advising that the costs used to calculate Hoover’s NPV “f[e]ll well within” the terms of the RLP. Unconvinced, Hoover filed a protest with GAO. Hoover asserted in its protest that GSA’s NPV evaluation of its offered price was unreasonable for a few reasons. Two of Hoover’s arguments failed, but it only takes one, and GAO agreed with Hoover’s third argument, that GSA had failed to adequately document or explain how the TIA costs and relocation and move-related costs worked together to approximate the actual cost of moving from the incumbent building to Hoover’s offered building. At issue with regard to whether GSA reasonably performed its evaluation was its net present value (NPV) price evaluation, which Hoover argued was unreasonable and inadequately documented. GAO agreed, a boost of reassurance not only to Hoover, but to contractors every where, that an often-raised, but not always validated argument–the reasonableness of an agency’s evaluation–is not raised in vain. The solicitation for the RLP advised offerors that GSA would determine the lowest price by conducting the NPV evaluation. GAO recognized that its role is not to reevaluate submissions of the offerors, but to examine the supporting record and ensure an agency’s determination has the following three attributes: it is reasonable, consistent with the stated evaluation criteria, and adequately documented. Here, the emphasis was on the third factor, adequate documentation. Citing a previous decision, GAO explained that where an agency fails to document or retain evaluation materials, it bears the risk that there may not be adequate supporting rationale in the record for GAO to conclude the agency had a reasonable basis for its evaluation conclusions. GAO takes a broad look at information provided in its review of an agency’s evaluation, including a party’s arguments and explanations. But an agency’s post-protest defense of its evaluation that is not supported by the contemporaneous record, or inconsistent with it, will be afforded little weight. Here, GSA’s defense fell victim to that flaw. The gist of Hoover’s argument was that GAO could not discern whether GSA added reasonable costs to its proposal during the price evaluation. Hoover pointed out three main factors in support. First, GSA’s evaluation used relocation and move-related costs that were unreasonably high based upon bids from local movers presented by Hoover. Second, GSA did not adequately document or explain the actual cost of moving derived from what were unclear TIA costs and relocation and move-related costs. And relatedly, additional build-out costs could not be added as relocation and move-related costs, when they were already included as TIA costs. GAO agreed, finding the agency had failed to provide adequate documentation to support the reasonableness of the relocation and move-related costs that it added to Hoover’s NPV price. As a result of the lack of documentation and analysis in the record, GAO found they were unable to determine that the agency reasonably evaluated Hoover’s NPV price. In its argument, GSA had invited GAO to simply accept the figures they had put into the AAAP system regarding relocation and move-related costs which were used by the system to calculate Hoover’s evaluated NPV price. Even though GSA described in detail how they formulate estimates of relocation and move-related costs, documentary support showing how estimates in this particular procurement were derived was lacking. GAO denied GSA’s answer, employing (like a 7th grade math teacher) the age-old adage “no work, no credit “–as without the underlying basis for the estimates GSA used, GAO could not conclude that the relocation and move-related costs added to Hoover’s NPV price were not unreasonably high. Since GAO found that the record was inadequate to support a finding that the agency’s NPV price evaluation was reasonable, it sustained the protest. This finding was a win for the protester Hoover and a word of encouragement for contractors not to lose faith in the protest process–the government has to be reasonable in both its evaluations and its decisions regarding potential awards, and GAO reminds us here it will hold them to that standard. Questions about this post? Or need help with a government contracting legal issue? 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 GAO Sustains Protest, Reminds Government It Must Show Its Work first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Hope our SmallGovCon readers had a great week! I want to give a shout out to the fine people at PubK, who did a great job hosting the Government Contracts Annual Review! It was a well-run and informative event. This week saw some intriguing breaking news, such as an SBA summary of one year 8(a) Program extension, FedRAMP application to CMMC, and a push to negotiate prices at task order level. Draft RFP for Polaris IT contract nears end of comment period for small businesses [FedScoop] Official: Reciprocity Memos on DOD’s Cybersecurity Certification Program Are Ready [NextGov] Hit the ground running: Three acquisition ideas for 2021 [FedNewsNet] FY 2020 Procurement Management Review “Year in Review” Newsletter [USECDEF] Can the SolarWinds incident spur more action, less talk about supply chain security? [FedNewsNet] Biden Signs ‘Buy American’ Executive Order—Here’s What It Means For Businesses [Forbes] DPA will help Biden lead a more federal-centric response to COVID [FedNewsNet] Purity Tested, Senators Confirm General Austin for Secretary of Defense [GovExec] SBA to Provide One Year 8(a) Program Extension to Participants Due to COVID-19 [SBA] The post SmallGovCon Week in Review: Jan. 25 – Jan. 29, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

We already blogged on the COFC’s landmark Rule of Two decision in Tolliver Grp., Inc. v. United States. But the court’s two-part holding (in favor of the plaintiffs on both counts) was just too impactful for a single blog. Not only did the court fault the agency for failing to do a Rule of Two analysis before using an IDIQ, it also said that the agency failed to justify the decision to cancel the solicitations and switch contract vehicles under the Administrative Procedure Act (APA) standard of review, which the court called a “highly deferential”–but not “toothless”–review. The Court of Federal Claims decision in Tolliver Grp., Inc. v. United States, No. 20-1108C, 2020 WL 7022493 (Fed. Cl. Nov. 30, 2020), arose out of the Department of the Army’s decision to cancel two General Services Administration (GSA) Federal Supply Schedule (FSS) support staffing solicitations, which were 100% set aside for service-disabled veteran owned small businesses (SDVOSB). The solicitations sought fire support specialist training services for the Fires Center of Excellence field artillery school at Fort Sill. The Army had previously procured these services through a long-term omnibus MAIDIQ (multiple-award indefinite-delivery, indefinite-quantity) contract. Once that expired, the Army used a series of short-term contracts to procure the services. Then, in early 2020, the Army (through the GSA) issued the two relevant FAR Part 8 solicitations and awarded to two SDVOSBs. But as part of a corrective action in response to a GAO protest, the Army canceled the solicitations (and the awards) and transferred the work to an existing MAIDIQ. According to the Army, this Training Management Support (TMS) MAIDIQ would “provide a potentially better procurement vehicle for this requirement” than the GSA FSS contract. The Army did not issue a formal cancellation decision. So its only “rationale” for the cancellation was set forth in the contracting officer’s four-page internal agency memorandum, which described the solicitations’ requirements and history and outlined the features of the TMS MAIDIQ that the Army could use as a replacement. Regarding the previous solicitations, the contracting officer merely said, “[a]fter extensive use of the GSA [] MAIDIQ and GSA Multiple Award Schedule, it was determined the contract vehicles did not meet [the] mission needs as world events unfolded.” The contracting officer explained: I believe the Government’s best interest can be met by competing the [solicitations’] requirements under the [] recently awarded TMS MAIDIQ. Both time and money can be saved by the Government in pursuit of this avenue. Time and money are expended on soliciting and awarding interim short term contract actions to support on-going requirements. Contract periods can be adjusted to support a Base and Four Option periods on most requirements thus saving manpower and costs tied to phase-in and certification of new contractor employees. Longer periods of performance also support the Government’s ability to successfully recruit and retain qualified personnel on existing requirements, thereby ensuring continuity of the training mission. Two SDVOSBs brought this lawsuit under the Tucker Act, arguing that the Army’s actions violated two laws: (1) the APA (the subject of this blog); and (2) the Rule of Two (the subject of our first blog on this case). The plaintiffs argued that the Army’s decision to cancel the two GSA FSS support staffing solicitations failed the APA’s standard of review for actions brought under the Tucker Act, “which requires that an agency action must not be arbitrary, capricious, or otherwise contrary to law.” Specifically, the plaintiffs argued that the cancellation decision was arbitrary and capricious based on “the extreme brevity of the analysis underlying the agency’s decision and . . . there is no documented cancellation decision for either procurement” and even if there were, “the record materials do not justify cancellation.” The Army argued that it had acted reasonably under the APA’s review standard, or, alternatively, that its “power to cancel a FAR Part 8 solicitation is virtually plenary,” and as such, that its “decision should be reviewed only for ‘bad faith,'” which the Army said was not supported by the record. In reaching its decision, the court acknowledged that FAR Part 8 does not include the same type of “substantive yardstick for limiting an agency decision to cancel a procurement” that FAR Part 14 does (for the cancellation of sealed bid procurements after opening). But the court also did not agree with the Army’s ultimate position regarding the applicable standard of review. It said, “[w]hile a finding of bad faith may be sufficient, it is not necessary for the Court to determine that an agency decision is arbitrary and capricious.” Regarding the APA’s review standard for actions brought under the Tucker Act, the court said [W]e determine whether (1) the procurement official’s decision lacked a rational basis; or (2) the procurement procedure involved a violation of regulation or procedure. When a challenge is brought on the first ground, the test is whether the contracting agency provided a coherent and reasonable explanation of its exercise of discretion, and the disappointed bidder bears a heavy burden of showing that the award decision had no rational basis. The court applied this standard to the contracting officer’s internal memorandum and did not find the Army’s justification for the cancellation sufficient. It said: [C]oncluding that the prior MAIDIQ and GSA MAS vehicles were not sufficient for the entire breadth of work contemplated by the new TMS MAIDIQ is not the same thing as concluding that the latter vehicle is somehow superior to the GSA MAS vehicles for the purposes of the statements of work at issue. According to the court, the Army essentially said that it moved the procurements at issue to the TMS MAIDIQ, so that it “would get a more flexible and longer term of performance while saving time and money.” But this explanation did “not satisfy the agency’s burden.” According to the court, it was bereft of any specific context or factual details that would support its generalized assertions and naked conclusions about the GSA MAS solicitations not meeting agency needs or how the agency would be better served by transferring the solicitations[.] The court explained: If the Court were to accept this rationale at face value without asking for supporting details, the government could always include this attractive catch-all at the end of its decision document to justify almost any solicitation cancellation. Meaningful judicial review requires more than just accepting such a bald assertion. And the court held: In sum, this Court concludes that although it is not irrational per se for an agency to prefer one contractual vehicle over another or even for the TMS MAIDIQ to be more suitable for the Army’s needs in this case, the government here did not provide a sufficiently documented rationale or meaningful analysis for cancelling the original [] Solicitations for the purpose of transitioning the work to the TMS MAIDIQ. Finally, the court provided a brief analysis of the policy driving its decision, stating: The agency should not be permitted to conduct a procurement, inducing would-be contractors to expend time and money preparing and submitting proposals, only to have the rug pulled out from underneath them when an offeror points out putative flaws in the agency’s process. This is not a case where the agency has shown that its substantive needs have changed, and a different vehicle is more capable of meeting those changed needs. The court’s lengthy discussion of the applicable standard of review and requirements under FAR Part 8 procurements here may not jump out as breaking news. But we have seen more and more agencies attempt to use existing contract vehicles to procure products or services when issues arise in soliciting the work as a new requirement. And at the COFC (as well as at GAO), it often does feel like many agencies’ procurement decisions face a somewhat toothless review. So, this decision has the potential to add some serious bite to reviews of agency decisions. 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 Agency’s Decision to Cancel FAR Part 8 Solicitations and Move the Work to Existing Multiple Award Contract Was Flawed, Says COFC first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

SBA’s All Small Mentor-Protégé Program isn’t a baby anymore—in fact, it isn’t even a toddler! But it remains a “game-changer” for large and small contractors alike. Now, it is effectively absorbing its 8(a) Mentor Protégé Program counterpart. On February 11, please join me and Steven Koprince in an online session hosted by Govology where we cover the details of the recent mentor protégé program consolidation, along with all the other big changes to the program we’ve seen this last year. Please click here for the registration information. Hope to see you there! The post Event: Still a Game Changer: The SBA’s All Small Mentor-Protégé Program (2021 Update) first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

America’s criminal justice system is founded on the principle that a defendant is innocent until proven guilty. And when it comes to compliance with the limitations on subcontracting, a similar principle applies. In a recent bid protest decision, the GAO confirmed that a small business’s proposal does not need to affirmatively demonstrate compliance with the “LoS.” Instead, compliance is presumed, unless the proposal “on its face” should lead the procuring agency to conclude that the small business will not comply. GAO’s decision in D&G Support Services, LLC, B-419245, B-419245.3 (Jan. 6, 2021) involved a DHS RFQ seeking advisory and assistance services. The solicitation was issued under the GSA’s Professional Services Schedule as a small business set-aside. The solicitation contemplated award of a single task order on a best value basis considering technical merit, management approach, past performance and price. D&G Support Services, LLC submitted a quotation, as did the incumbent, Mayvin, Inc. In its evaluation, DHS assigned Mayvin “High Confidence” scores on all three non-price factors. D&G, in contrast, earned a “High Confidence” for technical merit, but only “Some Confidence” for the other two non-price factors. DHS elected to award the order to Mayvin. D&G filed a bid protest with GAO, challenging numerous aspects of the agency’s award decision. Among its bases of protest, D&G alleged that DHS “failed to consider that Mayvin’s quotation would not comply with the solicitation’s stated limitation on subcontracting provision.” D&G argued that Mayvin’s large subcontractor, SAIC would “likely” perform more than 50 percent of the requirement. The GAO wrote that a vendor “need not affirmatively demonstrate compliance with the subcontracting limitations in its proposal.” GAO continued: Rather, such compliance is presumed, unless specifically negated by other language in the quotation. Accordingly, when a vendor submits a quotation in response to an RFQ that incorporates FAR clause 52.219-14, the vendor agrees to comply with the limitation, and in the absence of any contradictory language, the agency may presume that the vendor agrees to comply with the subcontracting limitations. Instead, it is the protester who bears the burden of demonstrating that the quotation should have led the agency to conclude that the vendor did not comply with this limitation. In this case, the GAO determined, “there is nothing on the face of Mayvin’s quotation affirmatively taking exception to the subcontracting limitations or demonstrating that the firm has no intention to comply with the limitations.” The GAO rejected D&G’s argument, and ultimately denied the entire protest. Compliance with the limitations on subcontracting is a critical piece component of most small business set-aside contracts. And occasionally, my colleagues and I have seen solicitations requiring offerors to affirmatively state how they will comply. In such a case, of course, offerors must respond to the agency’s requirement. But as the D&G Support Services case demonstrates, in the absence of such a solicitation requirement, an offeror’s intent to comply is presumed. Unless the proposal, on its face, takes exception to the LoS, a protester is likely out of luck. One final note: the “innocent until guilty” rule applies at the bid stage. But once a contractor has won an award and begun performance, the presumption of compliance no longer applies. During performance, the Contracting Officer and, to some extent, SBA each have authority to audit or review compliance with the limitations on subcontracting. If that happens, the contractor should be prepared to provide hard evidence of actual compliance. 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 Limitations on Subcontracting: Compliance Presumed Unless Proposal Clearly Shows Otherwise first appeared on SmallGovCon - Government Contracts Law Blog.View the full article