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  1. If you’re part of a service-disabled veteran-owned small business, you’ve probably heard of the “extraordinary circumstances” rule–but there’s a lot of confusion out there about what the rule is and how it works. So let’s get right to it. Here are five things you should know about the SDVOSB extraordinary circumstances rule. 1. The extraordinary circumstances rule allows limited negative control by non-service-disabled veterans. To qualify as an SDVOSB for federal contracts, whether under the SBA’s SDVOSB self-certification program or the VA’s SDVOSB verification program, a company must be controlled by service-disabled veterans. Control means, among other things, that individuals who are not service-disabled veterans ordinarily cannot have the power to block decisions made by the service-disabled veteran owners–a concept the SBA calls “negative control.” The extraordinary circumstances rule allows negative control in a few cases. According to the SDVOSB control regulation, “SBA will not find that a lack of control exists where a service-disabled veteran does not have the unilateral power and authority to make decisions in ‘extraordinary circumstances.'” 2. There are five–and only five–extraordinary circumstances. The SBA defines “extraordinary circumstances” to include five corporate actions: Adding a new equity stakeholder; Dissolution of the company; Sale of the company; The merger of the company; and Company declaring bankruptcy. Nothing else qualifies as an extraordinary circumstance, no matter how extraordinary it may seem. The SDVOSB control regulation is unambiguous: these five actions are the “only circumstances” in which negative control by a non-service-disabled individual is permitted. 3. Allowing negative control in extraordinary circumstances is optional, not mandatory. One of the most common misconceptions about the extraordinary circumstances rule is that SDVOSBs must offer certain non-service-disabled individuals (particularly, equity stakeholders in the company) negative control over the five extraordinary circumstances. Not so! Some SDVOSBs want to offer some measure of negative control to non-service-disabled stakeholders, believing that this will help attract investors. Others have no interest in offering their non-service-disabled stakeholders any negative control whatsoever. Under the extraordinary circumstances rule, it’s up to the SDVOSB. Allowing negative control in extraordinary circumstances is optional, not mandatory. An SDVOSB can offer a non-service-disabled veteran negative control in some, all, or none of the five extraordinary circumstances. 4. The extraordinary circumstances rule applies to VA VOSBs, too. Alone among federal agencies, the VA has the power to award set-aside and sole source contracts to verified VOSBs. In fact, VOSBs have the second-highest priority for most VA contracts, below only SDVOSBs. The extraordinary circumstances rule applies not only to SDVOSBs under the SBA and VA SDVOSB programs, but also to VOSBs seeking verification from the VA. The only difference, of course, is that in the case of a VOSB, the extraordinary circumstances rule allows non-veterans to have limited negative control over the decisions of veterans. 5. But be careful if you’re a WOSB or 8(a) Program participant. Among the major federal socioeconomic contracting programs, the extraordinary circumstances rule is unique to the SDVOSB/VOSB programs. Two other major socioeconomic contracting programs–the woman-owned small business program and the 8(a) Business Development Program–also require an eligible company to be controlled by certain individuals. While these programs’ control regulations look similar in many respects to the SDVOSB control regulations, the WOSB and 8(a) Programs do not include extraordinary circumstances provisions. SDVOSBs hoping to also qualify for these programs should be aware that allowing negative control for extraordinary circumstances may not pass muster in the WOSB or 8(a) programs. *** There you have it: five things you should know about the SDVOSB extraordinary circumstances rule. If you have questions about how the rule applies to you, please email us or give us a call at 785-200-8919. The post Five Things You Should Know: The SDVOSB "Extraordinary Circumstances" Rule first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  2. Happy Friday blog readers! Hope you are having a nice week. Kick back and relax with the latest federal contracting updates. This week saw some important federal contracting updates. SBA has increased its size standards for certain industries, among them agriculture, mining, some construction industries, as well as transportation and finance and insurance. Additional stories include a contracting officer sentenced for accepting bribes and GSA working on a new small business IT contract. Read on for the details. Small Business Size Standards: Agriculture, Forestry, Fishing and Hunting; Mining, Quarrying, and Oil and Gas Extraction; Utilities; Construction [Federal Register] Small Business Size Standards: Transportation and Warehousing; Information; Finance and Insurance; Real Estate and Rental and Leasing [Federal Register] Former Federal Government Contract Officer Sentenced to Prison for Accepting Bribes [DOJ] GSA begins work on new small business IT contract, Polaris [Fedscoop] SBA Wants to Make 50,000 More Small Businesses Eligible for Federal Contracts [Small Business Trends] DOD Acquisition Chief Praises Reform Milestone [DOD] Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds [Federal Register] The post SmallGovCon Week in Review: Oct. 5 – Oct. 9, 2020 first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  3. February of 2020 seems like a long time ago, for many reasons. But that was when the official version of the Cybersecurity Maturity Model Certification (CMMC) standards were released. Recently, the DoD issued an interim rule that will update the DFARS to implement the assessment methodology and CMMC framework for DoD procurements as well as add a new requirement for cybersecurity assessment under the NIST SP 800-171 framework. Here are some of the key points. The interim rule will be effective November 30, 2020, which is also the date that comments are due. I suspect there will be a lot of comments for this rule, so it’s interesting that the effective date and the deadline for comments are the same. I would suggest getting comments in early to have a better chance of DoD reviewing them. NIST SP 800-171 Rule This rule will implement both the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171 DoD Assessment Methodology and the CMMC Framework. But DoD asserts that the two “assessments will not duplicate efforts from each assessment.” DFARS 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting, is included in all contracts except for acquisitions solely for commercially available off-the-shelf (COTS) items. Under this clause, DoD will assess a contractor’s implementation of NIST SP 800-171 security requirements to “covered contractor information systems” within a contractor’s computer network. More information on the NIST SP 800-171 DoD Assessment Methodology is available here. Under the proposed rule, contracting officers must verify that an offeror has a current NIST SP 800-171 DoD Assessment on record, prior to contract award, for applicable solicitations. This will be implemented through two new DFARS clauses: DFARS 252.204-7019, Notice of NIST SP 800-171 DoD Assessment Requirements, and DFARS 252.204-7020, NIST SP 800-171 DoD Assessment Requirements. Under DFARS 252.204-7019, if the offeror has no NIST SP 800-171 DoD Assessment score in place, “the Offeror may conduct and submit a Basic Assessment to webptsmh@navy.mil for posting to SPRS.” This email must include a list of required information, such as details about the “system security plan.” CMMC Rule There are a number of differences between NIST SP 800-171 and CMMC assessments. Under NIST SP 800-171, for the Basic assessment–the assessment levels are Basic, Medium, and High–the contractor does a self-assessment. In contrast, CMMC has five levels of assessment going from 1 through 5, and none of them allow a self-assessment. Another difference is that the government performs the two higher levels of NIST SP 800-171 assessment, while independent auditors (not government employees) will carry out all levels of CMMC certification. Results of assessments for both frameworks will be documented in the Supplier Performance Risk System (SPRS) DoD, in this interim rule, admits that it cannot assess the cyber security levels of the approximately 220,000 DoD contractors every three years. Therefore, the government assessment of contractors will be limited to “conducting targeted assessments for a subset of DoD contractors that support prioritized programs and/or technology development efforts.” The CMMC requirements address assessment for the thousands of contractors for which DoD will never conduct a direct assessment of cyber security. The CMMC framework is designed to assure the government that a contractor is safeguarding sensitive unclassified information, such as Federal Contract Information (FCI) and Controlled Unclassified Information (CUI), all the way down to its subcontractors. Here is a summary of the five CMMC levels: Consists of the 15 basic safeguarding requirements from FAR clause 52.204-21. Consists of 65 security requirements from NIST SP 800-171 implemented via DFARS clause 252.204-7012, 7 CMMC practices, and 2 CMMC processes. Intended as an optional intermediary step for contractors as part of their progression to Level 3. Consists of all 110 security requirements from NIST SP 800-171, 20 CMMC practices, and 3 CMMC processes. Consists of all 110 security requirements from NIST SP 800-171, 46 CMMC practices, and 4 CMMC processes. Consists of all 110 security requirements from NIST SP 800-171, 61 CMMC practices, and 5 CMMC processes. This CMMC rule will be found at DFARS 252.204-7021. However, CMMC will be on a phased rollout, which means it won’t be applicable to all contracts at the outset. Until September 30, 2025, the CMMC clause will only be included in a solicitation if it is approved by the Office of the Under Secretary of Defense for Acquisition and Sustainment. Starting October 1, 2025, “CMMC will apply to all DoD solicitations and contracts, including those for the acquisition of commercial items (except those exclusively COTS items) valued at greater than the micro-purchase threshold.” At that point, contractors must have a CMMC certification at the required level that is less than three years old. The new DFARS clause (DFARS 252.204-7021) will require a contractor to do the following: Maintain the requisite CMMC level for the duration of the contract; Ensure that its subcontractors also have the appropriate CMMC level prior to awarding a subcontract or other contractual instruments (prime contractors should consider including this certification in teaming agreements or subcontracts so that subcontractors certify as to their CMMC level if required for a contract); and Include the requirements of the clause in all subcontracts or other contractual instruments. A few other things to note about the CMMC requirement. First, timing: the required certification must be in place at time of award, not at time of initial offer. Second, there is a dispute process. A contractor can dispute its CMMC assessment by a CMMC Third Party Assessment Organizations (C3PAO). [T]he contractor may submit a dispute adjudication request to the CMMC-AB along with supporting information related to claimed errors, malfeasance, or ethical lapses by the C3PAO. The CMMC-AB will follow a formal process to review the adjudication request and provide a preliminary evaluation to the contractor and C3PAO. If the contractor does not accept the CMMC-AB preliminary finding, the contractor may request an additional assessment by the CMMC-AB staff. DoD’s new rule will require DoD contractors and subcontractors to have assessments in place for both NIST SP 800-171 and CMMC. The NIST SP 800-171 requirement will be in place starting November 30, while the CMMC certification will start being included in some solicitations starting that same date. By October 1, 2025, CMMC requirements will be included in all DoD solicitations. If contractors haven’t already reviewed these requirements, time is running out. Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919 The post DoD CMMC Requirements Begin Rollout November 30 first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  4. While most of our get-togethers these days involve mask wearing, social distancing, and even virtual happy hours, spending time with friends is a great way to keep spirits light. Unfortunately for one group of friends, their weekly hangouts led GAO to conclude in its recent decision, Teledyne Brown Engineering, Inc., B-418835 (Sept. 265, 2020), that NASA had to cancel a more than $650 million deal and start the procurement process all over. Teledyne Brown Engineering, Inc. and SGT, LLC both responded to NASA’s RFP No. 80MSFC19R0033, which was issued to acquire ground systems and operations services at Marshall Space Flight Center in Huntsville, Alabama. The resulting contract was to be relatively long term, with “a base period of one year and six option periods spanning an additional 7-year interval.” Ultimately, SGT received the award, valued at over $650 Million, but this didn’t sit well with Teledyne. Teledyne protested, arguing that “a current NASA employee who participated in the acquisition had an improper personal conflict of interest that tainted the acquisition.” Ultimately, GAO agreed. Throughout its decision, GAO refers to this NASA employee as “Mr. X” (an appropriate name for a James Bond villain in my opinion). Despite the sinister sounding pseudonym, Mr. X’s potential conflict of interest arose from his passion for a nostalgic table game. No, it wasn’t blackjack or baccarat: it was foosball. As it turns out, Mr. X is heavily involved in NASA’s acquisition activities as part of NASA’s procurement development team (or PDT). He is also long-time friends with a higher-up of the incumbent contractor, COLSA Corp., which SGT also proposed as one of its major subcontractors on the current procurement. As Mr. X explained, he had even attended a social gathering with the COLSA official every week “for the past 10 years” for “camaraderie, friendship, dinner, and to engage in competitive foosball.” Mr. X, however, is not really to blame: he told agency officials about these weekly foosball forays “on multiple occasions.” The agency simply advised him to “be careful and not to have the appearance of a conflict” but “took no action, either to investigate, or to address, the possible conflict arising out of these circumstances.” Later, however, NASA’s ethics counsel advised that the ongoing relationship might lead a reasonable person to question Mr. X’s objectivity and recommended that he be removed from the procurement’s source evaluation board. Notwithstanding the recommendation, NASA decided to keep Mr. X where he was because, in part, his continuation was “deemed vital to the successful completion of this procurement.” In the face of Teledyne’s protest, NASA argued that it had taken the appropriate steps to mitigate any conflict and “eliminated the possibility of prejudice either in favor of SGT or against the other offerors.” In particular, NASA’s mitigation plan required Mr. X to adhere to the “procurement integrity regulations as well as standards of ethical conduct,” to agree not to discussion source evaluation board matters outside of board controlled access areas, and to not take part in evaluation of any proposal involving COLSA. These efforts, however, were not enough for GAO, which concluded that because “Mr. X exercised an ongoing, continuous leadership role in the development of virtually every aspect of the agency’s acquisition,” a conflict of interest likely existed. Citing FAR 3.101-1, GAO raised several of its primary concerns. First, it pointed to the agency’s decision to ignore the opinion of its own ethics attorney, which plainly asserted that NASA should remove Mr. X from the source selection board. Next, it found that “none of the agency’s ethics review activities or deliberations considered [Mr. X]’s extensive, ongoing participation in the agency’s acquisition activities.” Third, GAO determined that NASA also failed to look into another potential conflict involving Mr. X and another participant in the weekly foosball get-together. In the end, GAO held that “although the agency did adopt some mitigation measures, it is not evident how those measures could be adequate in light of the totality of the circumstances.” As a result, GAO recommended that NASA not only cancel its award to SGT, but cancel the RFP in its entirety and start over from square one in order to most effectively avoid a conflict. It also recommended that NASA reimburse Teledyne for its filing costs. In the end, this decision provides a stark warning to agencies to avoid even the appearance of a conflict of interest. If you have concerns about a potential conflict of interest, we are here to help! You can reach us here. The post Playing Games? GAO Requires NASA to Scratch 0 Million Contract Due to Foosball Snafu first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  5. Ever since the VA set up its SDVOSB verification program, critics of SDVOSB self-certification have been pushing for the government to expand SDVOSB verification government-wide. Now, it might finally happen. Section 831 of the House of Representatives’ version of the Fiscal Year 2021 National Defense Authorization Act would expand SDVOSB verification government-wide, formally rename it “certification,” and transfer certification authority from the VA to the SBA. Here are some of the most important pieces of Section 831: Government-Wide SDVOSB Verification Won’t Happen Overnight. Section 831 calls for the certification requirement to kick in “2 years after the date of enactment of this section.” What’s more, the SBA and VA can jointly extend the enactment date “an unlimited number of times by a period of not more than 6 months.” The SBA Will Be in Charge. Under Section 831, the SBA, not the VA, will run the Government-wide SDVOSB certification program. The VA’s Center for Verification will be abolished and its functions transferred to the SBA. This move makes sense, given that the SBA runs all of the other Government-wide socioeconomic programs, and that SBA judges already provide oversight over SDVOSB and VOSB applications. The VA, however, will continue to determine whether an individual qualifies as a veteran or service-disabled veteran. Self-Certified SDVOSBs Get a Grace Period. Section 831 says that once the program goes live (an event the bill calls the “transfer date”), a self-certified SDVOSB will have one year to file an application for certification. If the application is filed within the one-year period, the company can continue to rely on its self-certification for non-VA contracts until the SBA makes a decision on the application. Failing to apply within one year, however, will render the self-certification invalid. After the grace period ends, self-certified SDVOSBs will no longer be eligible for set-aside and sole source contracts, government-wide. Section 831 would add this language to the Small Business Act: A contracting officer may only award a sole source contract to a small business concern owned and controlled by service-disabled veterans or a contract on the basis of competition restricted to small business concerns owned and controlled by service-disabled veterans if such a concern is certified by the Administrator as a small business concern owned and controlled by service-disabled veterans. So there you have it–under the House’s FY 2021 NDAA, government-wide SDVOSB certification would become reality. And, in my opinion, it’s overdue: after the adoption of a WOSB certification requirement earlier this year, non-VA SDVOSB is the only remaining major socioeconomic self-certification for government contractors. I certainly understand the arguments against requiring a formal SDVOSB certification–such as the royal pain sometimes associated with certification applications. But the SDVOSB ownership and control rules are so complex, confusing and sometimes downright counterintuitive that I’ve seen many, many well-meaning self-certified SDVOSBs simply get it wrong, usually because of some flaw (or multiple flaws) in their paperwork. How many self-certified SDVOSBs get it wrong? Well, in a report earlier this year, the DoD Inspector General examined 29 self-certified SDVOSB awards, and found that 16–more than half!–didn’t meet the regulatory SDVOSB requirements. It’s a small sample size, and doesn’t mean that more than half of all self-certified SDVOSBs are ineligible, but it’s a concerning report nonetheless, and fits with my personal experience. With self-certification, the first time the government reviews a company’s paperwork and other eligibility information is when the SDVOSB has been named the awardee of a contract and an SDVOSB status protest is filed. By then, it’s too late to fix any problems: lose the protest, and the contract goes away. Far better, in my opinion, to have the government look company’s eligibility on the front end, before a contract hangs in the balance. But that’s just my two cents. We’ll see what the Senate thinks. The Senate’s version of the FY 2021 NDAA does not include a government-wide SDVOSB verification provision. The House and Senate must now resolve their differences in a conference committee and arrive at a final NDAA to send to the President. According to Representative Mac Thornberry of Texas, the Ranking Member of the House Armed Services Committee, the conference report is likely to come shortly after the November 3 election. We’ll keep you posted here at SmallGovCon. Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919 The post House-Passed 2021 NDAA Creates Government-Wide SDVOSB Certification Requirement first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  6. We’ve been having some great fall weather here in Kansas this week. From what I’ve heard from others around the country (other than the west coast), the cooler weather has definitely arrived. As you break out your sweaters and pumpkin spice . . . everything, check out the latest government contracting updates. This week’s news included record spending at the end of the fiscal year, a report on the VA’s Medical-Surgical Prime Vendor Program, and updates on the Chinese telecom ban. Federal Government to Conclude Fiscal 2020 With Record Spending [Nextgov] Wisconsin-Based Nonprofit To Pay $1.9 Million To Settle Allegations Of False Claims And Kickbacks On Federal Contracts For Blind Workers [DOJ] 10 tantalizing topics testing procurement in the new fiscal year [Federal News Network] Purge of Chinese Technologies Confusing, Rushed, Costly, Trucking Groups Say [Transport Topics] Actions Needed to Improve Management of Medical-Surgical Prime Vendor Program and Inform Future Decisions [GAO] Industry Groups Ask Lawmakers to Remove Core Cybersecurity Provisions from NDAA [Nextgov] Defense Federal Acquisition Regulation Supplement: Treatment of Certain Items as Commercial Items [Federal Register] Government’s recent track record with IDIQ contracts has been spotty [Federal News Network] The post SmallGovCon Week in Review: Sept. 28 - Oct. 2, 2020 first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  7. In my legal career representing hundreds of small businesses in government contracting, few topics have caused as much confusion as the limitations on how much work can be subcontracted on small business set-aside contracts and sole source contracts (like 8(a) Program direct awards). Earlier, working with my friends at Govology, I put together step-by-step compliance guides for service contractors, construction contractors, manufacturers, and nonmanufacturers. Each guide is written in plain English and includes examples to help demonstrate how the SBA’s limitations on subcontracting rule (13 C.F.R. 125.6) works in practice. Here’s where to find my limitations on subcontracting guides: Limitations on subcontracting guide for service contractors. Limitations on subcontracting guide for construction contractors. Limitations on subcontracting guide for manufacturers. Limitations on subcontracting guide for nonmanufacturers. While you’re on the Govology site, be sure to check out Govology’s live and on-demand training, including plenty of courses offered by the Koprince Law LLC legal team. Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919. The post Limitations on Subcontracting: Step-by-Step, Plain English Guides first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  8. I’m pleased to announce a new learning opportunity from me and my colleague Steven Koprince! There’s been some big changes for government contractors over the last year, so it’s important to sort through them all. To aid that process, we will be presenting “Government Contracts Legal Update 2020,” a virtual event hosted by the University of Texas San Antonio PTAC. The event will take place on October 22 from 1:00 PM – 2:30 PM (CDT). More information can be found here. The post University of Texas San Antonio PTAC Legal Update first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  9. We all know online marketplaces are very popular among consumers, so it’s no wonder that federal agencies would want to get in on the action too. But a federal agency is different from an ordinary consumer because the federal government is required to purchase goods and services according to a vast array of federal statutes and regulations. When an agency tried to set up an online marketplace in violation of acquisition rules, GAO didn’t let it fly. GAO’s recent decision in Mythics, Inc., B-418785 (Sept. 9, 2020) involved a Library of Congress solicitation for cloud computing services. LOC would issue one IDIQ award for the contractor to provide 13 products or services from Amazon Web Services, Google Cloud Platform and Microsoft Azure. The protester argued the Solicitation was overly restrictive of competition in large part due to the requirement for online marketplace for cloud services. The protester argued that it was impermissible for the solicitation to require an “online marketplace” for third-party software applications. Specifically, “the cloud service provider essentially is performing an inherently governmental function because the cloud service provider acts as a ‘gatekeeper’ for what third-party software is available to be purchased” and such a marketplace will eliminate many of the basic responsibilities for agencies to acquire goods and services using full and open competition, including, for example, evaluating the products being offered, determining whether the prices offered are fair and reasonable, determining whether the firms providing the products are responsible, and determining whether the third-party vendors have improper conflicts of interest. GAO noted that it was the first time it had considered this online market place concern. But GAO was persuaded by a U.S. Court of Federal Claims case, Electra-Med Corporation, v. United States, 140 Fed. Cl. 94 (2018), aff’d and remanded, 791 Fed. Appx. 179 (Fed. Cir. 2019). In that case, “the VA effectively avoided numerous legal and regulatory requirements pertaining to the federal government procuring goods or services.” GAO had the same concerns with LOC’s online marketplace: it is “populated entirely with software offerings selected by the cloud service providers”; the “selection process for these third-party software products is unknown; and it’s “not subject to any of the bedrock requirements for competition applicable to federal agencies[.]” The agency won’t be selecting software based on the best solution, reasonable prices, responsible vendors, or compliance with any legal requirements. GAO ultimately sustained the protest by Mythics. This decision highlights an important aspect of federal procurement: unless there is an exception, the government must ultimately make the decision about which supply or service is the best value or the best option for the government. That decision cannot be outsourced to a separate contractor. If faced with a similar procurement in the future, GAO may come to the same conclusion and sustain a protest to the terms of the solicitation. Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919. The post GAO Not Buying Agency's Proposed Online Marketplace Solicitation first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  10. If you’re contemplating a bid protest at the Government Accountability Office, meeting its task order jurisdiction threshold might be a box you need to check! Join me as I explain the details of GAO’s task order jurisdiction. Got questions? For more information, email us at info@koprince.com, or call (785)200-8919. The post YouTube Tuesday: GAO Task Order Jurisdiction first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  11. SBA recently issued a technical amendment to its SBIR and STTR Programs Policy Directive to clarify that successor-in-interest entities are, in fact, eligible to receive phase III awards. The amendment will take effect on October 1 of this year. SBA’s Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are competitive, award-based programs that provide federal research and research and development (R/R&D) funding to encourage small businesses to engage in scientific and technological innovation. In accordance with the Small Business Act (the Act), the SBA issues policy directives for the SBIR and STTR programs. These directives outline the manner in which participating federal agencies must generally conduct their programs. Agencies have the discretion to tailor their programs to meet their needs within the bounds of the Act and SBA’s policy directives. The SBIR and STTR programs both follow a three-phase process for the government to solicit proposals and award funding agreements for R/R&D. Section 6(a) of the Policy Directive covers the general eligibility of entities to receive SBIR/STTR awards. And paragraph (5) of that section specifically addresses the “eligibility of entities that have received a novated award, a similarly-revised award, or are successor-in-interest entities.” But SBA recently determined that section 6(a)(5) requires clarification. So it revised the language through a technical amendment to be published in the Federal Register on October 1. Through its amendment, “SBA is clarifying this paragraph in order to confirm the Agency’s long-standing interpretation that permits successor-in-interest entities to receive phase III SBIR/STTR awards.” SBA explained the policy behind its long-standing interpretation and corresponding amendment as follows: The SBIR/STTR programs are intended to economically assist SBCs performing R/R&D work by creating an advantage for those firms to receive Government funding at the early often riskiest stage, from an investment perspective, through commercialization. This intention may be hindered if the SBC’s rights and interests in SBIR/STTR data cannot be assigned through a merger or sale with another business concern, along with the attendant incentives for non-competitive phase III awards. Such a policy interpretation would create inefficiencies in the marketplace and discourage valuations and transactions among businesses that may otherwise allow for greater investment in new ideas and products. As such, Section 6(a)(5) will now state: Novated/Successor in Interested/Revised Funding Agreements. An SBIR/STTR Awardee may include, and SBIR/STTR work may be performed by, those identified via a “novated” or “successor in interest” or similarly-revised Funding Agreement. For example, a phase III Awardee may have either received a prior Phase I or Phase II award or been novated a Phase I or Phase II award (or received a revised Phase I or Phase II award if a grant or cooperative grant) or be a successor-in-interest entity. This amendment may not have any dramatic effects on the way SBA conducts its Phase III awards, as it is merely codifying SBA’s long-standing interpretations. But regardless, it will add certainty and clarification to SBA’s SBIR and STTR Programs. If you have questions about how this amendment may affect your eligibility to receive a Phase III award, give us a call at Koprince Law, LLC. The post SBA Clarifies that SBIR and STTR Programs Will Allow Successor-In-Interest Transfers of Awards first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  12. Next week, I’ll be speaking on small business federal contracting issues at for the AFCEA South Florida chapter. But if you can’t catch that talk, there’s a lot of federal contracting news to catch up on this week. Read on below. Stories from the past week include the White House release of an executive order that may have some effect on federal contractors. The executive order requires a clause in federal contracts prohibiting federal contractors from using “workplace training that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating.” ‘[R]ace or sex stereotyping’ means ascribing character traits, values, moral and ethical codes, privileges, status, or beliefs to a race or sex, or to an individual because of his or her race or sex, and the term ‘race or sex scapegoating’ means assigning fault, blame, or bias to a race or sex, or to members of a race or sex because of their race or sex.” Contractors should be aware of this new requirement, but we’ll have to see how it plays out in practice. Read on for other interesting stories. Executive Order on Combating Race and Sex Stereotyping [White House]. Proposed rule clarifying the definition of employee under the Fair Labor Standards Act (FLSA) as it relates to independent contractors [Department of Labor]. AI Commission Wants to Know How Government Can Help Industry Boost Commercial Innovation [Nextgov]. IGs on pandemic oversight board warn job well done still means billions in fraud [Federal News Network]. House Passes Stopgap Spending Bill Seeking to Avoid Shutdown Through Dec. 11 [GovExec]. Government Contracts Fraud – Brodie Thomson Sentenced to 42 Months in Prison Following Guilty Plea [MeriTalk]. The post SmallGovCon Week in Review: Sept. 21-25, 2020 first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  13. Mark your calendars for next week. I’ll be speaking at the AFCEA South Florida’s SB Lunch and Learn on September 29 from 11:30am – 12:30pm eastern time. The topic is “10 things every Small Business should know about Federal Contracting Law.” AFCEA is an organization dedicated to “exploration of issues relevant to its members in information technology, communications, and electronics for the defense, homeland security and intelligence communities.” The event is open to all and registration information can be found here. The post AFCEA Small Business Talk September 29 first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  14. If the VA Center for Verification and Evaluation denies a company’s application for verification as a service-disabled veteran-owned small business, the applicant has the right to appeal–but the appeal must be filed with the SBA, not the VA. In a recent case, an applicant tried to appeal its denial to the VA, apparently based on the erroneous advice of a VA employee. By the time the applicant realized that it had appealed to the wrong agency, it was too late. The decision of the SBA’s Office of Hearings and Appeals in CVE Appeal of Starblast, Inc., SBA No. CVE-164 (Sept. 9, 2020) is a cautionary tale about the importance of knowing where to file a CVE verification appeal. On June 3, 2020, CVE denied Starblast’s SDVOSB application. Apparently, a VA employee advised Starblast to file an appeal with the VA. So that’s what Starblast did: on June 5, it emailed an appeal to vip@va.gov and verificationfollowup@va.gov. Once upon a time, the VA did have authority to decide appeals of CVE denials. But beginning in October 2018, that authority moved to the SBA Office of Hearings and Appeals. Current VA regulations say that “an applicant may appeal CVE’s decision to deny an application by filing an appeal with the United States Small Business Administration (SBA) Office of Hearings and Appeals (OHA).” The VA no longer has authority to hear such appeals. Starblast eventually realized its mistake and filed an appeal with SBA OHA on August 31. But by then, it was too late–SBA regulations require CVE appeals to be filed within 10 business says of receipt of the denial. The OHA judge wrote, “[a]lthough I sympathize with [Starblast], the regulations afford OHA no discretion to extend, or waive, the deadline for filing an appeal.” OHA dismissed Starblast’s CVE appeal as untimely. The SDVOSB regulations and processes have changed considerably in recent years. While that’s mostly been a good thing, it’s undoubtedly created some confusion, too, especially when it comes to the roles played by CVE and the SBA in the verification process. As Starblast unfortunately learned, following the 2018 changes, the SBA Office of Hearings and Appeals has exclusive jurisdiction over CVE verification appeals. Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919. The post VA CVE Verification Appeals Must be Filed at SBA, Not VA first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  15. Every year, when the SBA releases its annual Small Business Procurement Scorecard, I hear from a few folks who mistrust the data. “I think small business awards are being over-reported,” is a pretty common theme for Scorecard skeptics. A new GSA Office of Inspector General report is a reminder that it’s not paranoia if people are really out to get you. According to the GSA OIG, the GSA’s Federal Acquisition Service over-reported small business contracts by a whopping $89 million in just two fiscal years. The GSA OIG sampled procurements that the FAS identified as small business awards in Fiscal Years 2016 and 2017. According to the audit report, the FAS’s identification of small business awards in the Federal Procurement Database System–Next Generation was severely flawed: We found that FAS’s reporting of small business procurements contained significant inaccuracies. We identified $89 million in procurements erroneously recorded as small business in FPDS-NG. The GSA OIG explained that the flawed data was the result of Contracting Officers reporting work under the wrong NAICS codes: We identified 10 procurements totaling $274 million for which the NAICS codes in FPDS-NG did not match the NAICS codes on the contract award documents. Four of those ten procurements, totaling $89 million, were large business procurements identified inaccurately in FPDS-NG as small business procurements due to the wrong NAICS code. In response to the OIG report, the FAS provided a corrective action plan. Hopefully the FAS’s efforts will eliminate these errors in the future. It’s worth noting that the GSA OIG didn’t review all FAS procurements from FYs 2016 and 2017–just a sample of 30 large small business contracts awarded in those years. Even from this limited sample, the GSA OIG found that small business awards were over-reported by nearly $90 million. The SBA gave the GSA an “A” for its small business achievement in FY 2016 and again in FY 2017, but skeptics wouldn’t be crazy to question whether those grades were deserved. Either way, let’s hope that the GSA’s corrective action plan produces trustworthy data moving forward. Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919. The post GSA's Federal Acquisition Service Over-Reported Small Business Contracts by Million first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  16. On Monday, the calendar officially moves to fall. Hopefully you have plans to enjoy the last weekend of Summer 2020, whether it’s at the beach, the lake, or just firing up the backyard grill. Before the weekend begins, it’s time as always for our Friday rundown of the latest and greatest (or not-so-greatest) in federal government contracting. In this week’s edition, an Oregon man gets jail time for his role in a DoD fraud scheme, two members of the CMMC Advisory Board are unexpectedly out, the Air Force makes a long-term commitment to telework, and much more. An Oregon man has been sentenced to 3 1/2 years behind bars for his role in a $4 million DoD bribery and contract fraud scheme. [U.S. Department of Justice]. Responding to COVID-19 strained the VA’s supply chain, while modernization issues continue. [GAO]. The JEDI bid protest saga is “far from over.” [NextGov]. Two members of the CMMC Advisory Board have unexpectedly resigned. [Federal News Radio]. The FAR Council has proposed a new rule to encourage continuous feedback from industry on improving federal acquisitions. [Federal Register]. A Virginia contractor will pay more that $37 million to settle False Claims Act contentions related to an alleged bribery scheme involving military training simulators. [U.S. Department of Justice]. The Air Force says telework is here to stay, even after COVID-19 passes. [Federal News Radio]. The post SmallGovCon Week in Review: Sept. 14-18, 2020 first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  17. I wanted to wish our readers a fine National PTAC Day! The local PTACs are an invaluable resource for many federal contractors, especially those just starting out in the federal contracting space. There are PTACs in all 50 states. And those local branches serve over 48,000 clients. Be sure to give your local PTAC some love this week! The post Happy National PTAC Day! first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  18. The SBA’s “Certify” website, certify.SBA.gov, has fallen far short of meeting its objectives, according to an eye-opening report from the SBA’s Office of Inspector General. The OIG concludes that, despite an investment of $30 million, Certify “does not have many of the essential search, analytical, and reporting tools it was supposed to have.” Additionally, Certify’s lack of functionality has forced SBA employees to use time-consuming workarounds, causing delays in screening and approving applications, among other things. SBA began development of the Certify platform in 2015. As the OIG writes, Certify “was intended to improve SBA’s contracting programs by streamlining the certification process and creating a single portal where business owners and SBA analysts could benefit from more security, ease of use, efficiency, and flexibility.” Through Certify, applicants and participants in various SBA contracting programs, like the 8(a) Program, HUBZone Program, WOSB Program and All-Small Mentor-Protege Program, were supposed to have a one-stop shop for submitting documents and information. The SBA, in turn, would be able to access all necessary information electronically, in a single place. This, the SBA believed, would increase processing times and allow the SBA to be more responsive to the small business community. It hasn’t worked as intended. In fact, the OIG says, Certify has caused delays: We found that although Certify offers some functionality, according to Certify’s project managers, it does not offer many of the key essential search, analytical, and reporting tools it was developed to provide. To compensate for Certify’s shortcomings, program analysts must use labor intensive methods external to the Certify application, which decreases analyst productivity. Certify has delayed rather than improved the time it takes for program analysts to screen and approve applications, monitor progress, and terminate agreements for noncompliant 8(a) firms. The need for extra manual work outside the system has undercut Certify’s usefulness for both SBA contracting program administrators and program applicants and participants. What kind of delays? Well, while Certify wasn’t the only culprit, the OIG found that “the average number of days to approve 8(a) participant applications increased from 91 days in FY 2017,” before Certify was introduced, “to 138 days in FY 2019,” after Certify’s introduction–an increase of more than 50 percent. The SBA OIG also found many other major problems and shortfalls with Certify, such as: Certify “is missing several analytical tools” to determine whether applicants are eligible for SBA contracting programs. Certify “lacks reporting capabilities needed for program analysts to track the detailed status of participant reviews and adverse actions.” Although it was supposed to do so, Certify does not “help program analysts monitor the technical assistance provided to [8(a)] program participants and track their progress towards realizing business development goals.” Certify does not, as intended, reliably notify 8(a) firms of upcoming annual reviews. As of August 2019, “only 20 percent of the All Small Mentor-Protégé Program’s certification process had been implemented in Certify [and] the application was missing basic functionality, including notifications, application routing, communication with applicants, and reporting.” Although HUBZone applications were supposed to be added to Certify soon after it was introduced, “to date, SBA has not implemented a HUBZone application in Certify,” instead relying on a legacy application system that “no longer met the business requirements of the HUBZone Program as far back as 2010.” Despite being touted as a replacement for the SBA’s outdated Dynamic Small Business Search system, this function has yet to be added to Certify. Given this laundry list of significant problems, the SBA apparently has thrown in the towel on Certify. The OIG says: In August 2019, the [SBA] approved plans for all new development to be migrated to Microsoft Dynamics 365-based platform as part of SBA’s new enterprise customer-relationship-management system initiative. In September 2019, SBA awarded a $3.5 million contract to develop new certification management applications on the Dynamics 365 platform an a replacement for the Dynamic Small Business Search. When the SBA announced Certify, it seemed like a great idea. And conceptually, it was. But as Steve Jobs once said, “ideas are worth nothing unless executed.” Let’s hope that the second time around, the SBA gets it right. The post Inspector General: SBA's Certify.SBA.gov Platform "Has Not Accomplished Its Objectives" first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  19. Before 2001, September 11 was just another day on the calendar. Now, nineteen years later, that date is burned into the minds of everyone old enough to remember. Today, let’s all take a moment to honor those who died, their loved ones, and the first responders who risked their lives to help others. Before we head into the weekend, it’s time for our weekly look at what’s happening in the world of federal government contracts. In this week’s SmallGovCon Week in Review, a contractor agrees to pay back wages and fringe benefits after a government investigation, supply chain problems are hampering the typical end-of-fiscal-year spending boom, and much more. An asphalt contractor will fork over $4.25 million to settle allegations that it misrepresented the materials used on a federally-funded project. [U.S. Department of Justice]. Policy and supply chain issues are hampering agencies’ end-of-fiscal-year spending. [Federal News Radio]. The GAO examines agencies’ usage of the COVID paid leave provisions under the CARES Act. [Government Accountability Office]. The Pentagon hints that the Section 889 telecommunications waiver may be extended. [NextGov]. Speaking of Section 889, the GSA has provided some clarification regarding its implementation–but hasn’t answered questions involving ambiguous terms. [NextGov]. A Louisiana company has pleaded guilty to conspiring to defraud the United States and violate the Procurement Integrity Act. [U.S. Department of Justice]. A Florida company will pay back wages and fringe benefits to 20 employees after allegedly violating the Davis-Bacon Act and other law. [U.S. Department of Labor]. The post SmallGovCon Week in Review: Sept. 7-11, 2020 first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  20. If we’ve said it once, we’ve said it a thousand times: when it comes to submitting your GAO protest, meeting GAO’s strict timeliness requirements is a must. So is watching out for notices on contract awards posted online. In Prudential Protective Services, LLC, B-418869 (Aug. 13, 2020), the protest was dismissed as untimely because it was filed more than 10 days after notice of the award was posted to beta.SAM.gov. For a little context, the Census Bureau issued an initial short-term, sole-source task order to North American Security, Inc. in early April for “protective security officer services at the National Processing Center (NPC) located in Jeffersonville, Indiana.” Prudential protested the task order, arguing that it did not meet the necessary qualifications for a sole-source award. As we’ve discussed before, receiving a sole-source award can be incredibly lucrative, but must be adequately justified by the government. In response to the initial protest, the Census Bureau moved to take corrective action by terminating the task order and re-competing it—this time under a new, competitive solicitation. As a result, the initial protest was dismissed. Between the initial protest’s dismissal and June, Prudential contacted the Census Bureau to check in on how the corrective action was going. Though the Census Bureau told Prudential that a new solicitation would be issued, in the meantime, they also prepared a limited sources justification—which would allow it to issue a short-term, sole-source task order to North American which would last through the end of 2020. This action, the Census Bureau explained, would allow it “adequate and reasonable time to implement its corrective action in response to the earlier protest” and would prevent a lapse in critical security services. After completing its justification documentation for the short-term task order, the Census Bureau issued it to North American on June 10. On June 15, a few days later, it published notice of the issuance on beta.SAM.gov. Two weeks after the notice was posted, Prudential filed a second protest. In defending its protest, Prudential raised an interesting point regarding its protest timeliness. It argued that the Census Bureau had “failed to follow the notice requirements for the limited sources justification under FAR 8.405-6(a)(2), which requires the agency not only to post the justification” on beta.SAM.gov, but also on the procuring agency’s website. Because the Census Bureau had not placed any notice on its website, Prudential argued that it had not received adequate constructive notice. Unfortunately for Prudential, GAO determined that, regardless, the protest was filed too late—after all, GAO has been clear about reminding protesters to keep an eye on sites where awards may be posted and on their e-mail inboxes to make sure their protests will be timely. Despite the FAR’s requirements, GAO confirmed that “[p]ublication on . . . beta.SAM.gov–which has been expressly designated by statute and regulation as the official public medium for providing notice of contracting actions by federal agencies–constitutes constructive notice of contracting actions.” It continued, explaining that even though the agency had previously posted notices about this procurement through GSA’s e-Buy website, posting on beta.SAM.gov was enough to give Prudential the notice required. This case provides a serious lesson for federal contractors—regardless of the type of contract sought, keep tabs on beta.SAM.gov happenings! Though there may be other sources of information on awards, beta.SAM.gov is often the most important one to check—you can even set up alerts to help you stay on your toes! In any case, if you need assistance filing a protest in time, give me a call. I’m happy to help. The post Beta.SAM.gov: Check Early & Check Often! first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  21. After the Supreme Court’s unanimous Kingdomware decision affirmed the VA’s statutory obligation to prioritize SDVOSBs in its contracting, the VA authorized the use of so-called “tiered evaluations.” In a typical VA tiered evaluation, various categories of offerors can submit proposals, but SDVOSB proposals are considered first, then VOSB proposals, and so on. Recently, a non-SDVOSB small business protested the VA’s decision to open discussions with the only SDVOSB offeror to submit a proposal–discussions that allowed the SDVOSB to win the contract. But according to the GAO, the small business couldn’t file a valid protest because the small business wasn’t in the same tier. The GAO’s decision in Bluewater Management Group, LLC, B-418831 (Sept. 2, 2020) involved a VA solicitation seeking offsite lodging for students at the VA law enforcement training center in Little Rock, Arkansas. The solicitation was issued as a tiered set-aside. SDVOSB proposals would be evaluated first, and VOSB proposals second. The third tier included all other small businesses, although 8(a) and HUBZone companies were to receive “priority” within Tier 3. The solicitation explained that each tier would be evaluated in order, and in “isolation.” According to the solicitation, there was no guarantee that the VA would evaluate proposals outside Tier 1: Tier 1 proposals will be evaluated first. After review of Tier 1 proposals, if award can be made at a fair and reasonable price that offers best valued to the United States, no additional tiers will be reviewed. If no offers are submitted at Tier 1 or if none of the Tier 1 proposals would result in award at a fair and reasonable price that offers best value to the United States, the Government will evaluate Tier 2 proposals for award. The solicitation included a similar statement regarding Tier 2 proposals. The solicitation also included FAR 52.212-1 (Instructions to Offerors–Commercial Items). FAR 52.212-1 states, in part, that that Government expects to award the contract without discussions, but “reserves the right to conduct discussions if later determined by the Contracting Officer to be necessary.” The VA received proposals from several offerors, but only one SDVOSB, Brian Hall Properties. The VA also received two VOSB proposals. Bluewater Management Group, LLC, which was a small business but was not an SDVOSB or VOSB, also submitted a proposal. As required by the solicitation, the VA first reviewed Brian Hall’s proposal, and found it technically unacceptable. Although the VA likely could have simply progressed to Tier 2, the VA elected to open discussions with Brian Hall–and only Brian Hall. After discussions, Brian Hall submitted a revised proposal, and this time the proposal passed muster. The VA announced award to Brian Hall. Bluewater filed a bid protest with the GAO. Bluewater argued that the agency improperly deviated from the solicitation’s tiered evaluation criteria and that entering into discussions only with Brian Hall amounted to an improper sole source award. The VA filed a motion to dismiss the protest. The VA contended that Bluewater, a non-SDVOSB small business, was not an interested party to challenge the VA’s conduct with respect to Tier 1 evaluations. The GAO wrote that under the Competition in Contracting Act, only an “interested party” may protest a federal procurement. To be an interested party, “a protester must be an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or the failure to award a contract.” A protester “is not an interested party where it would not be in line for contract award, were its protest to be sustained.” In this case, the GAO held, Bluewater was not an interested party: Here, Bluewater, a small business concern, eligible to compete only in tier 3, is not in line for award because there are other, intervening tiers–SDVOSBs and VOSBs–whose proposals would have to be evaluated and found ineligible for award before the agency could proceed to evaluate tier 3 proposals. Under this RFP’s evaluation scheme, only if the agency concluded that none of the tier 1 or tier 2 proposals would result in award at a fair and reasonable price could the VA proceed to evaluate tier 3 proposals, including Bluewater’s. Accordingly, the protester lacks the direct economic interest required to maintain a protest challenging the agency’s actions with regard to the tier 1 offerors. The GAO dismissed Bluewater’s protest. For SDVOSBs (and the VA), Bluewater is a welcome decision. At least on the facts in this case, the VA could open discussions with SDVOSBs without worrying about protests from small business offerors. (It’s not clear from the decision whether GAO would have dismissed a protest filed by a Tier 2 VOSB). SDVOSBs may even wish to use Bluewater to encourage Contracting Officers to consider opening Tier 1 discussions, even when there is only one SDVOSB offeror, as was the case here. But SDVOSBs shouldn’t read too much into Bluewater. The decision shows that the VA may be able to validly open discussions with the sole SDVOSB offeror, but does not say that the VA must do so. As we’ve written before, agencies generally enjoy broad discretion to open–or not to open–discussions. If the VA had elected to simply move to Tier 2 after evaluating Brian Hall’s initial proposal, it almost certainly would have been within its rights to do so. Fortunately for Brian Hall, though, the VA had other ideas. Questions about this post? Or need help with a government contracting legal issue? Email us or give us a call at 785-200-8919. The post In VA Tiered Evaluation, Small Business Couldn't Protest SDVOSB Discussions first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  22. It’s been a great (and busy) week for me and my colleagues at Koprince Law as we settle into our new roles. Along with our new roles, keeping our SmallGovCon readers apprised of the latest and greatest in government contracting remains one of our passions. As you move into a (hopefully relaxing) Labor Day weekend, let the sweet sounds of these government contracting updates be your guide. This week, we’ve had updates on some big DOD contracts, Section 889 updates, and GSA evaluating price on some contracts at order–rather than IDIQ–level. OPM Begins Recompete of $640 Million E-Learning Contract. [bloomberggovernment] Two of DoD’s Biggest Military Contracts Are Now Up for Grabs. [military.com] How the DOD is developing its AI ethics guidance. [fedsccop] GSA finally pushing price competition to where it belongs: At the task order level. [federalnewsnetwork] End of the federal fiscal year brings concerns for agencies, contractors. [federalnewsnetwork] OMB Issues Interim Rule for Banning IT Products From Federal Systems. [nextgov] The post SmallGovCon Week In Review: August 31 – September 4, 2020 first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  23. Agencies have broad discretion when it comes to evaluating potential organizational conflicts of interest–but that discretion isn’t unlimited. In a recent decision involving a fight between two telecommunications giants, the GAO sustained the protest, holding that the the agency unreasonably concluded that there was no possibility of an “impaired objectivity” OCI arising from the award. The GAO’s decision in AT&T Corporation, B-417107.4 (July 2, 2020), involved a Social Security Administration RFP for the agency’s Next Generation Technology Project. The NGTP will combine three SSA legacy telephone systems into a single requirement. The RFP contemplated the award of a single indefinite-delivery, indefinite-quantity contract, with a one-year base period, nine one-year options, and the potential for a final six-month extension. Seven offerors submitted proposals, including two household-name telecommunications giants: Verizon and AT&T Corporation. Verizon was the incumbent on a separate SSA requirement called “SSANet.” Under the SSANet contract, Verizon carries all of the agency’s data, video and voice traffic. The NGTP RFP stated that SSANet “provides the critical foundation for all information exchanges within the SSA’s enterprise network and will continue to do so for the future NGTP effort.” In the course of evaluating proposals, the SSA considered whether Verizon’s performance of the SSANet requirement could create an OCI if Verizon was awarded the NGTP contract. The Contracting Officer concluded that no OCI would be created because, in the Contracting Officer’s judgment, the NGTP contract did not require the awardee to monitor or evaluate the performance of Verizon’s SSANet requirement. After evaluating competing proposals under a three-phase system, the SSA announced award to Verizon at a price of $524,999,980. AT&T filed a GAO bid protest challenging the award. Among other things, AT&T argued that Verizon had a disqualifying OCI arising from Verizon’s performance of the SSANet requirement. AT&T specifically contended that Verizon would be required under the NGTP contract to advise the SSA of problems encountered with the services that Verizon provides under the SSANet requirement. AT&T argued that this OCI cannot be mitigated and that the SSA should have excluded Verizon from the competition. The GAO explained that the FAR “requires contracting officials to avoid, neutralize, or mitigate potential significant conflicts of interest so as to prevent an unfair competitive advantage or the existence of conflicting roles that might impair a contractor’s objectivity.” The types of OCI alleged by AT&T is called an “impaired objectivity” OCI, and arises “where a firm’s ability to render impartial advice to the government would be undermined by the firm’s competing interests.” Agencies are afforded “considerable discretion” when it comes to addressing OCIs. However, the GAO will sustain a protest of an agency’s OCI determination where there is “clear evidence that the agency’s conclusion is unreasonable.” In this case, the GAO said, SSA’s conclusion was unreasonable. Contrary to the Contracting Officer’s determination, the NGTP RFP did require the awardee to monitor and evaluate performance of the SSANet requirement. The GAO wrote: The SOW . . . expressly requires the contractor to exercise its judgment by advising the agency when the government provided resources, such as the WAN, are experiencing problems that affect the NGTP. Although the SOW does not state that the NGTP contractor must directly evaluate the contractor performing the SSANet task order, the requirement to advise the agency of “performance or quality of service issues with the Agency WAN,” in effect, will require Verizon to provide the agency advice about its own performance of the WAN requirements of the SSANet task order. Additionally, while this SOW provision does not require the contractor to monitor or evaluate the entirety of the SSANet, it unquestionably requires the contractor to assess the performance of the SSANet with regard to its effect on the NGTP contract. On this record, we conclude that the contracting officer unreasonably concluded that Verizon could not have a potential OCI in connection with its performance of the requirements of SOW section 6.3.3. The GAO sustained this basis of AT&T’s protest. For many of us, companies like AT&T and Verizon are best-known these days for their ubiquitous television ads and seemingly ever-shifting billing plans. But the AT&T Corporation case is also an important reminder that a government contractor cannot be in a position to evaluate its own products or services–and when an award allows a contractor to do so, the GAO will sustain a protest notwithstanding the agency’s broad discretion regarding OCIs. Questions about this post? Email us or give us a call at 785-200-8919. The post Ring Ring! GAO Sustains Protest of Awardee's Conflict of Interest first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  24. Did you remember to staple the cover sheet to your TPS report? And, more importantly, if you recently filed a CVE Appeal with the Small Business Administration’s Office of Hearings and Appeals, did you remember to attach a copy of your CVE denial or cancellation? In OHA’s recent, and very short, decision, Joy Corporation, SBA No. CVE-155-A (Aug. 13, 2020), it reminded appellants that failure to do so will result in almost instant dismissal. To ensure you avoid this fate, read on. Joy Corporation’s appeal started out like so many others. It had applied for inclusion as a verified Service-Disabled Veteran-Owned Small Business in the VA Center for Verification and Evaluation’s Vendor Information Pages (VIP). We’ve talked about CVE certification a few times in the past (including here) and, as many of our readers know, CVE verification is required to compete for SDVOSB or VOSB set-asides at the VA–although it’s not required for non-VA procurements. CVE denied Joy Corporation’s verification application in late July–but all was not lost! Joy Corporation filed an appeal of its denial with OHA, as permitted under regulation 13 C.F.R. 134.1002, explaining why CVE got it wrong. Unfortunately for Joy Corporation, although it filed an appeal on time, it missed another part of the regulations. 13 C.F.R. 135.1105(a) requires all CVE appeal petitions to include a “copy of the denial or cancellation and the date the appellant received it,” an explanation of why CVE’s determination was incorrect, contact information and signature of its representative or attorney, and “[a]ny other pertinent information the Judge should consider.” Importantly, the regulation also states that any “appeal petition that does not meet all the requirements of this section may be dismissed by the Judge at his/her own initiative[.]” The Judge took that initiative here and promptly dismissed Joy Corporation’s appeal because it didn’t attach CVE’s denial decision. In the end, this case serves as a quick but important reminder for government contractors seeking CVE verification: if you want to file an appeal of CVE denial or cancellation, make sure the CVE’s determination is attached! And if you want to file an appeal, but need some assistance, we can help. The post Don't Forget the Attachments: A Quick Reminder from SBA's OHA first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
  25. Hi SmallGovCon readers, this has been a busy and exciting week at Koprince Law! As we announced earlier, I’m proud to be the new managing partner and prouder still that Nicole Pottroff and Haley Claxton have been named senior associates at the firm. Keep tuning in, because we’ll be bringing you all the updates and commentary on federal contracting news that you can handle! This week also saw some news in the wider federal contracting world, including a new frictionless acquisition approach, a next phase of category management, and a global construction services recompete. JAIC wants to make smaller ’boutique’ data sets. [fedscoop] Agencies achieving frictionless acquisition in variety of ways. [federalnewsnetwork] Launch of IT vendor management office part of next phase of category management. [federalnewsnetwork] GAO: Federal Agencies Lag in Retaining Veteran Employees. [nextgov] Second Government Contracting Executive Pleads Guilty to Bribery Conspiracy Involving PBGC Contracts. [justice.gov] Navy Issues RFP for Potential $5B Global Construction Services Recompete. [govconwire] The post SmallGovCon Week In Review: August 24 – August 28, 2020 first appeared on SmallGovCon - Government Contracts Law Blog. View the full article
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