A recent Postal Service Board of Contract Appeals (PSBCA) decision provided an important reminder for everyone that even if you deliver the mail, you cannot ignore your other chores—particularly taking out the trash. In Bryant Commercial Postal, LLC v. United States Postal Service, PSBCA No. 6633, a case that sounds more like an episode of The People’s Court than a government contract claim appeal, Bryant appealed the Postal Service’s denial of Bryant’s claim for $1,700 in cleanup costs under a lease agreement between the parties. The PSCBA agreed with Bryant, and awarded Bryant its $1,700 claim plus applicable interest.
Join Oles Morrison attorney Shaun Kennedy as he explains how to “Stay Ahead of the Curve: The Art of Negotiating Subcontracts in Federal Procurements,” at the 13th Annual Bridging Partnerships Small Business Symposium on Oct. 19.
Bridging Partnerships Small Business Symposium is proudly presented by the U.S. Department of Energy and the Hanford Site Prime Contractors. Representatives from the Department of Energy and Prime Contractors collaboratively formed the Hanford Small Business Council to serve as an advocate for socioeconomic diversity at the Hanford Site.
Last month, the U.S. Court of Appeals for the D.C. Circuit handed down an opinion in Rothe Development, Inc. v. U.S. Department of Defense affirming a lower court’s 2015 decision denying a challenge to the constitutionality of Small Business Administration’s (“SBA”) 8(a) business development program (“8(a) Program”). However, reading the majority and dissenting opinion leads one to seriously question whether the book is truly closed on this case and/or other challenges to the constitutionality of the 8(a) Program.
As the D.C. Circuit put it, the 8(a) Program permits the SBA “to enter into contracts with other federal agencies, which the SBA then subcontracts to eligible small businesses that compete for the subcontracts in a sheltered market.” To be eligible to participate in the 8(a) Program, a business must be owned by “socially and economically disadvantaged” individuals, meaning persons “who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.”
In the Rothe Development case, plaintiff Rothe, who was not an 8(a) Program participant (and who claimed it was not economically and socially disadvantaged and therefore not eligible for the 8(a) Program), filed a lawsuit against the U.S. Department of Defense (“DoD”) and SBA in federal court challenging the constitutionality of the 8(a) Program. Rothe alleged that the 8(a) Program violated Rothe’s right to equal protection under the Due Process Clause of the Fifth Amendment. Importantly, Rothe’s challenge was limited to whether the statutory provisions defining “socially disadvantaged” small business owners (15 U.S.C. § 637(a)(5)) were facially unconstitutional.
In June 2015, the U.S. District Court Judge Ketanji Brown Jackson issued summary judgment in favor of DoD and SBA, ruling that the 8(a) Program was constitutional on its face. Judge Jackson ruled that because the statutory provision at issue (15 U.S.C. § 637(a)(5)) contained a racial classification, the strict scrutiny test applied. However, Judge Jackson also ruled that the statutory provision was facially constitutional under the strict scrutiny test because the government satisfied both elements of the test: (1) the government articulated an established compelling interest for the 8(a) Program—namely, remedying race-based discrimination and its effects, and (2) the 8(a) Program is narrowly tailored to achieve the established compelling interest.
Rothe appealed, and this month the D.C. Circuit denied Rothe’s appeal. Interestingly, even though the D.C. Circuit found the statute constitutional, the D.C. Circuit’s reasoning significantly departs from the reasoning in Judge Brown Jackson’s decision. A two-judge majority on the D.C. Circuit concluded that the challenged statutory provision did not contains a racial classification, Continue Reading SBA’s 8(a) Program Survives Constitutionality Challenge … For Now
While 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 “Sunset” Date Draws Closer on GAO’s Jurisdiction to Review Bid Protests of Civilian Agency Task Order Procurements
On 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 Department of Defense Rescinds 2015 Commercial Items Guidance
Join 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.
James 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 Join James Nagle at the 23rd Annual Washington Construction Law Conference on September 15th
On 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 Adam Lasky to present “Avoiding Cost and Price Analysis Pitfalls in Source Selection” in NCMA Webinar
The 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 ASBCA Appeals Proceed Despite Parallel False Claims Act Case
In 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: Will Former 8(a) Proteges be Eligible to Become Proteges Once Again?