The Procurement Playbook

The Procurement Playbook

Legal Insight for Government Contractors

“Sunset” Date Draws Closer on GAO’s Jurisdiction to Review Bid Protests of Civilian Agency Task Order Procurements

Posted in Bid Protests, Procurement Issues

5327892367_454a17f409_oWhile we hate to be the bearer of bad news, disappointed bidders may soon face a significant obstacle to protest an agency’s award decision of a task or delivery order.  Barring prompt Congressional action (a phrase that is rarely a good thing), the Government Accountability Office’s (“GAO”) jurisdiction over most civilian agency task or deliver order protests conducted will expire on September 30, 2016, leaving contractors little chance to challenge civilian agency award decisions.

Current Task or Delivery Order Bid Protest Jurisdiction

Jurisdiction for bid protests of task or delivery orders has endured a tumultuous history.  Over the past 20 years, Congress has limited and expanded the task or delivery order bid protest jurisdiction numerous times.

Currently, a contractor’s ability to protest the “issuance or proposed issuance of a task or delivery order” is governed by two separate, but similar, statutes: (i) 41 U.S.C. § 4106 (applicable to civilian agencies); and (ii) 10 U.S.C. § 2304c (applicable to the Department of Defense).  Both statutes contain identical language generally prohibiting bid protests of task or delivery order procurements, except under the following circumstances: Continue Reading

Department of Defense Rescinds 2015 Commercial Items Guidance

Posted in Legislative and Regulatory Developments, Procurement Issues

CV-22 Osprey | US Air ForceOn September 2, 2016, the Department of Defense (the “DoD”) issued a memorandum entitled “Guidance on Commercial Item Determinations and the Determination of Price Reasonableness for Commercial Items.”  This new guidance effectively rescinds prior guidance issued by the DoD in February 2015 regarding commercial item determinations, and to preview guidance required by Section 831 of the FY 2013 National Defense Authorization Act (“NDAA”).  The latest memorandum provides DoD’s guidance while awaiting the finalization of a proposed rule on commercial items (81 Federal Register 53101) implementing Sections 851-853 and 855-857 of FY 2016 NDAA and Section 831 of the FY 2013 NDAA.

DoD’s recently released guidance aims to highlight the underlying tenets of the FY 2016 NDAA legislation to improve the consistency and timeliness of commercial item determinations, and the price reasonableness determination for those items. Continue Reading

Washington PTAC’s Tri-City Region “Small Business Contracting and Legal Issues” Workshop

Posted in Bid Protests, Small Business, Uncategorized

03f0e71Join attorney Shaun C. Kennedy on Sept. 13 for a Tri-County Regional Chamber of Commerce and Washington PTAC seminar on “Small Business Contracting & Legal Issues.”  In this interactive workshop, Shaun will provide information about recent updates in federal government contracting as well as other essential subjects small businesses need to know to protect their business including the SBA’s updates to the Mentor-Protégé Program, affiliation rules, and teaming/Joint Venturing. This workshop is a great opportunity for eastern Washington businesses to get government contracting legal questions answered. RSVP for the event here.

Join James Nagle at the 23rd Annual Washington Construction Law Conference on September 15th

Posted in Bid Protests, Claims and Disputes, False Claims Act, Small Business, Uncategorized

James F. NagleJames F. Nagle will give a special presentation at The Seminar Group’s upcoming 23rd Annual Washington Construction Law conference on September 15 at the Hilton Seattle. In Jim’s federal construction law presentation, he will provide an update on the False Claims Act, new programs  from the Small Business Administration and other new developments affecting construction law. Guests of Jim are eligible for a $100 discount with the promo code “FAC100.” Continue Reading

Adam Lasky to present “Avoiding Cost and Price Analysis Pitfalls in Source Selection” in NCMA Webinar

Posted in Bid Protests, Uncategorized

ncma-header-logoOn September 15, join Adam Lasky, partner in Oles Morrison’s Government Contracts Practice Group, along with Laurie Davis, senior contracting officer of Naval Sea Systems Command, as they discuss lessons learned from bid protests concerning cost or price realism analysis. In this webinar, Adam and Laurie will show procurement officers and contractors how they can avoid these same pitfalls and will focus on the following topics: Continue Reading

ASBCA Appeals Proceed Despite Parallel False Claims Act Case

Posted in Claims and Disputes, False Claims Act

5856856317_994b86725b_oThe Armed Services Board of Contract Appeal’s (ASBCA) decision in BAE Systems Tactical Vehicle Systems LP, ASBCA Nos. 59491, 60433 (July 25, 2016), denying the government’s motion to stay appeals due to a parallel False Claims Act (FCA) case in federal district court is an important reminder that the agency boards of contract appeals do not have jurisdiction over fraud.  The decision underlines the CDA jurisdictional mandate and required statutory government contracts expertise of board judges to decide federal contractor claims, and the right of the contractor to have such claims decided by the board even when a fraud case is pending in federal court. Therefore, determination of a Contract Disputes Act (CDA) claim due to alleged defective pricing under the Truth in Negotiations Act (TINA) may proceed to a decision even if there is a district court FCA case concerning the same defective pricing allegation.  This decision also highlights the benefit to a contractor of electing the agency boards over the Court of Federal Claims (COFC), as the government cannot assert a fraud counterclaim as may be done in a CDA claim action at the COFC.

The appeals concern a $56M CDA government claim that BAE provided defective cost or pricing data in connection with award of the Army’s Family of Medium Tactical Vehicles and BAE’s CDA TINA offset claim of $65M.  The government moved to stay the appeals due to a civil defective pricing FCA case in federal district court.  The ASBCA denied the motion to stay and lifted a temporary stay.

Four Factors Considered In Parallel Proceedings

In denying the motion the ASBCA considered four factors: (1) whether the facts, issues, and witnesses in both proceedings were substantially similar; (2) whether the on-going investigation or litigation would be compromised by going forward with the appeal; (3) the extent to which the proposed stay could harm the non-moving party; and (4) whether the duration of the requested stay is reasonable. Continue Reading

Dissecting the Changes to SBA’s Mentor-Protégé Program: Will Former 8(a) Proteges be Eligible to Become Proteges Once Again?

Posted in Legislative and Regulatory Developments, Small Business

10740309163_71573d800b_oIn the U.S. Small Business Administration (SBA) Office of Business Development’s most recent report to Congress, SBA’s statistics reflect that approximately 23 percent of companies that complete the 8(a) program either cease to exist, substantially curtail operations, or have no available information within three years of graduation from the program.  Some of these recent graduates were previously protégés in the 8(a) mentor-protégé program, and many could certainly benefit from becoming protégés again under SBA’s new small business mentor-protégé program.  But will former protégés be eligible to become protégés again under the new program?  In theory, the answer is yes.  However, there are restrictions in the new program that former 8(a) protégés will need to keep in mind when applying to be protégés in SBA’s new small business mentor-protégé program.

Restrictions on the Number and Duration of Mentor-Protégé Relationships

One of the challenges for SBA in crafting the new regulations was creating a maximum duration and number of mentor-protégé relationships under the new program, as well as making corresponding changes to the 8(a) program.  This was not an issue in the past under SBA’s 8(a) mentor-protégé program because mentor-protégé relationships would terminate as a result of the protégé graduating from the 8(a) program (except for on already awarded contracts).  But, since contractors do not “graduate” after a set time from the other small business and socio-economic programs, SBA felt it was necessary to set term-limits on mentor-protégé relationships. Continue Reading

Dissecting the Changes to SBA’s Mentor-Protégé Program: Do the New Past Performance/Experience Rules for Joint Ventures Actually Benefit Mentor-Protégés?

Posted in Legislative and Regulatory Developments, Past Performance, Small Business

Yesterday, we provided an overview of eleven of the biggest changes coming as a result of SBA’s release of its final rule expanding the mentor-protégé program to all small business.  One of the changes we noted was that, in small business set-asides procurements, agencies will be required to consider projects performed by the individual members of a mentor-protégé joint venture offeror when evaluating experience/past performance.

Today we dissect this specific change, and examine whether it actually benefits mentor-protégé joint ventures.  Arguably, this change does more harm than good to mentor-protégé joint ventures.

The Good

One thing the new rule solves is that it prohibits agencies from limiting consideration to projects performed by the joint venture itself when evaluating the experience/past performance of a joint venture offeror in a small business set-aside.  While such restrictions (as ridiculous they were) were sometimes upheld by GAO when protested, these restrictions were not common, and when an agency lacked a legitimate reason for these restrictions they were often found unduly restrictive of competition and improper by GAO.  So, since these restrictions were not common place, and often an agency voluntarily lifted such restrictions if protested, the benefit to mentor-protégé joint ventures from this new rule may be rather limited.

The Bad

On the other hand, the new rule does not solve, and possibly worsens, a related and more pressing problem for mentor-protégé joint ventures in experience evaluations — where the agency considers the experience of both the mentor and protégé, but then downgrades the joint venture’s experience rating on account of the protégé’s lack of experience (despite the fact that the mentor has plenty of experience).   Continue Reading

Eleven Major Changes Coming to SBA’s Mentor-Protégé Program

Posted in Legislative and Regulatory Developments, Small Business

SBAlogoThis week, the U.S. Small Business Administration (SBA) published its long awaited final rule providing for a major expansion of its mentor-protégé program.  These regulations, which represent monumental changes to the federal contracting landscape (for small and large businesses), will go into effect August 24, 2016.  In the coming days and weeks we will publishing a number of posts breaking down the impact of these changes in greater detail.

Today, we begin by highlighting eleven of the most important changes coming next month as a result of these new regulations:

  1. SBA has created a second mentor-protégé program, which will be open to all small businesses, with benefits similar to those available under SBA’s existing 8(a) mentor-protégé program

SBA will be starting a second mentor-protégé program open to all small business, with benefits and requirements similar to those in SBA’s existing 8(a) Mentor-Protégé Program.  Mentor-protégé joint ventures approved under the new small business program will be considered a small business for any procurement that the protégé, on its own, would be considered small.  For example, an approved mentor-protégé joint venture under the small business program, with the protégé being a WOSB, will qualify as small for any small business set-aside or WOSB set-aside that the protégé would qualify for on its own, but would not qualify for 8(a) or SDVO or HUBZone set-asides.  SBA will continue running the 8(a) mentor-protégé program separately (with some revisions), and SBA has tailored the 8(a) and small business mentor-protégé programs to be as similar as possible.  An 8(a) firm will be eligible to submit a mentor-protégé application under either program.

  1. Protégés no longer have to be quite as small to qualify for SBA’s mentor-protégé programs

Previously, to be a protégé under the 8(a) mentor-protégé program, a firm had to be less than half the size of the size standard applicable to its primary NAICS code, or being in the developmental stage of the 8(a) program, or have never received an 8(a) contract.  Under the new regulations, a firm will only need be smaller than the size standard of its primary NAICS code.  This new rule will apply to both the 8(a) and small business mentor-protégé programs.

  1. Mentor-Protégé joint ventures will be tracked through SAM.gov

In order to facilitate the tracking of awards to mentor-protégé joint ventures, all mentor-protégé joint ventures in either SBA program will be required to register the joint venture as a separate entity in SAM.gov, with its own unique DUNS number and CAGE code.  The firm’s SAM.gov registration must also be identify the firm as a joint venture, and must identify the members of the joint venture.

  1. There will be no open/closed enrollment periods (for now)

Because of the expansion of the mentor-protégé program to all small businesses, SBA anticipates an influx in applications to the program.  As a result of this expected influx, SBA had considered utilizing open and closed enrollment periods.  Instead, for now, SBA will accept applications to the new mentor-protégé program at any time.  However, SBA has left open the possibility of switching to open/closed enrollment periods in the future if the need arises.  To help facilitate the review and approval of applications, a separate unit will be created within SBA’s Office of Business Development whose sole function will be to process mentor-protégé applications.  In addition, contrary to previous statements by SBA, the new program is not being launched merely on pilot basis.

  1. The end of “populated” mentor-protégé joint ventures

Until now, 8(a) mentor-protégé joint ventures could be “populated” (persons performing the contract work would be employed directly by the joint venture) or “unpopulated” (persons performing the contract would be employed by the partners to the joint venture).  Because of the difficulties in tracking the benefits gained by the protégé in a populated joint venture, SBA will required all mentor-protégé’s in either of its program to be unpopulated (though they may still be populated with administrative personnel). Continue Reading

Supreme Court: Implied Certification Theory Can Create Falsity under the False Claims Act…But Only Sometimes

Posted in False Claims Act

6071512063_8dc286774e_oLast week, the Supreme Court issued its much anticipated opinion in Universal Health Services, Inc. v. U.S. ex rel. Escobar.  As we discussed in a prior blog, the Universal Healthcare case presented two important questions regarding the scope and breadth of the False Claims Act (31 U.S.C. §§ 3729 et seq.) (the “FCA”): (1) whether the implied certification theory of liability is appropriate under the FCA; and (2) if so, whether the implied certification theory should be limited to statutes, regulations, and/or contract provisions that expressly condition payment upon compliance.

In a unanimous decision authored by Justice Thomas, the Court approved the implied certification theory of liability under the FCA, but held that its application should be limited.  Specifically, the Court explained that FCA liability may attach under the implied certification theory when the following two conditions are satisfied:

  1. The claim does not merely request payment, but also makes specific representations about the goods or services provided; and
  1. The failure to disclose noncompliance with material statutory, regulatory, or contractual requirements makes those representations misleading half-truths.

The Court’s decision emphasized that the FCA is not “a vehicle for punishing garden-variety breaches of contract or regulatory violations.”  To curb the expansive reach of the FCA, the Court turned its attention to the impact of the materiality requirement as it relates to the implied certification theory.  Explaining that a noncompliance with a statute, regulation, or contractual requirement “must be material to the Government’s payment decision to be actionable [under the FCA],” the Court cautioned that the materiality standard is “demanding.” Continue Reading

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