Legislative and Regulatory Developments

Oles Morrison partner Adam Lasky will co-present with Shene Commodore, president of Commodore Consulting, LLC during National Contract Management Association’s “Maximizing Teaming Under SBA’s Joint Venture Rules” webinar.

Hear about new rules and major changes the U.S. Small Business Administration (SBA) has made to its joint venture programs.

Learn:

  • SBA’s teaming regulations,
  • Joint venture requirements,
  • Principles for establishing joint venture programs, and
  • How to draft agreements that comply with SBA regulations

Click here to register for the webinar.

As we were reviewing the regulatory agendas of various federal agencies for upcoming regulations that might impact federal contractors, we noticed that the U.S. Small Business Administration’s (“SBA”) most recent regulatory agenda included an upcoming proposed regulation entitled “Consolidation of Mentor Protégé Programs and Other Government Contracting Amendments.”  Specifically, SBA’s regulatory agenda states that:

SBA proposes to consolidate the All Small Mentor Protégé Program and the 8(a) Business Development Mentor Protégé Program into one program.  This rule will also make other revisions in the Government Contracting programs, including the process for approving management changes in entity owned concerns.

According to SBA’s regulatory agenda, this proposed rule was estimated for release in March 2018.  While that obviously did not happen, it is not uncommon for SBA (or other agencies) to issue proposed regulations months (or even years) after originally estimated.

For an 8(a) contractor, there is little (or arguably no) benefit to applying to the 8(a) Mentor-Protege Program (8(a) MPP) instead of the All-Small Mentor-Protege Program (ASMPP), and SBA reviews and approves mentor-protege agreements at a much faster rate if one applies to the ASMPP.  While the ASMPP has been around for over a year now, many 8(a) contractors are still under the misconception that they need to be in the 8(a) MPP in order to bid as a joint venture on 8(a) set-asides.  This is simply not the case, as the ASMPP provides the same advantages to an 8(a) protege as the 8(a) MPP.  Consolidation of these two program should streamline the mentor-protege approval process, and result in the elimination of duplicative and confusing regulations.  We eagerly anticipate the issuance of this proposed regulation to consolidate SBA’s two mentor-protege programs, and hopefully SBA will at the same time address some of the other problems with the mentor-protege regulations (such as eliminating the requirement for SBA to approve a joint venture agreement before award of an 8(a) contract).

 

For years bid protest filings at the Government Accountability Office (GAO) have been done by e-mail (or even fax, mail or hand delivery).  In January 2014, Congress directed GAO to establish a electronic filing and document dissemination system (not unlike the PACER system used by federal courts), and authorized GAO to charge a filing fee to those filing bid protests.  Since that time, GAO has been working on developing an electronic filing system, which GAO calls “EPDS.”  The process has taken longer than most expected, but in February 2018 GAO announced EPDS was almost ready and started handling some protests on EPDS as part of a pilot program.  Today, GAO issued the final rule for EPDS, and announced that rule would take effect on May 1, 2018.  This means that starting in May all bid protest at GAO must be filed through EPDS (protesters will no longer be able to file protests by email) and GAO will charge a $350 fee for filing a protest.

Given the short and strictly enforced time limits for filing protests at GAO, those who file bid protests should consider signing up for an account immediately at https://epds.gao.gov/, and familiarize themselves with the new rules well before they take effect May 1st.  GAO has provided handy instruction manuals and videos for EPDS at https://www.gao.gov/legal/bid-protests/file-a-bid-protest.

As we previously discussed, when Congress passed the FY 2018 NDAA it required the Department of Defense (“DoD”) to issue regulations providing for enhanced post-award debriefing rights on certain DoD procurements.  Specifically, Congress mandated enhanced content requirements, a follow-up question process, and corresponding changes to the time to file a bid protest at GAO with a suspension of performance of the protested contract (a “CICA stay“):

  • Enhanced Content Requirements:  While protecting the confidential and proprietary information of other offerors, the debriefing shall include, at a minimum, the agency’s written source selection award determination, redacted to protect the confidential and proprietary information of other offerors.  These enhanced content requirements apply to “required” debriefings if (1) the contract award exceeds $100M, or (2) the contract award exceeds $10M and the contractor requesting the debriefing is a small business or nontraditional contractor who request such disclosure.
  • Follow-up Question Process:  Disappointed offeror would be allowed the opportunity for follow-up questions within two business days of receiving a post-award debriefing to be answered in writing by the agency within five business days.
  • Time to file protest at GAO and obtain a CICA stay:  The debriefing would not be considered concluded, and the five day post-debriefing period pertaining to when a protest needs to be filed to invoke a CICA stay would not commence, until the day the agency delivers its written responses to the disappointed offeror’s follow-up questions.

The enhanced content requirements were to be implemented through DFARS regulatory changes, which DoD has until June 2018 to issue.  On the other hand, the follow-up question process, and corresponding changes to the time to file a bid protest at GAO with a CICA stay, are already reflected in statutory changes (10 U.S.C. 2305(a)(5) and 31 U.S.C. 3553(d)(4)).  Still, changes to the DFARS were expected to implement the follow-up question process.  But this week, in advance of changes to the DFARS, DoD issued Class Deviation 2018-O0011 – Enhanced Postaward Debriefing Rights, which provides for the immediate implementation of the follow-up question process (and corresponding changes to the time to file a protest at GAO and obtain a CICA stay): Continue Reading DoD Begins Implementation of Enhanced Post-Award Debriefing Rights

Since at least 1945, the U.S. Supreme Court has upheld the unique ability of government agencies to create binding, unwritten interpretations of their own regulations. What is most troubling about this is that the agency can make or amend its regulations during the course of a contractor’s performance.  This government interpretation is binding on the contractor and the contractor may not be entitled to additional compensation if its cost of performance is increased by such amended interpretation.  A bitter pill for contractors, the Supreme Court recently refused to reconsider this principle on March 19, 2018, in Garco Construction, Inc. v. Robert M. Speer.

The principle is known as the Seminole Rock deference and requires courts to give “controlling weight” to how a government agency interprets its own regulations. Significantly, the agency’s interpretation does not need to be “the best” reading of the regulation and is valid as long as it is not “plainly erroneous or inconsistent with the regulation.” Contractors must beware that in practice, the Seminole Rock deference permits agencies to “unilaterally modify a contract by issuing a new clarification with retroactive effect.”  Continue Reading Supreme Court Denial Highlights Risk to Contractors of Rule Giving Deference to Agency’s Interpretation of Regulations

Federal government contractors, grantees and those with cooperative agreements may find themselves in possession of (or handling) government information which the U.S. Department of Defense (DoD) considers to be sensitive or confidential but not considered “classified.” On Dec. 31, 2017, in accordance with DFARS 252.204-7012 the National Institute of Standards and Technology (NIST) Special Publication 800-171 “Protecting Controlled Unclassified Information (CUI) in Nonfederal Information Systems and Organizations” or the “Cyber Clause” went into effect. The purpose of the clause is to provide a uniform standard for the handling of CUI and to provide a roadmap for safeguarding CUI and covered defense information (CDI) that is a subset of CUI.  Specifically, the new regulation focuses on addressing “deficiencies in managing and protecting unclassified information” including “inconsistent markings” and “inadequate safeguarding” by “standardizing procedures” for the handling of CDI/CUI and “providing common definitions through a CUI Registry.

CDI is defined as unclassified information, as described in the CUI Registry that requires safeguarding or dissemination controls and requires, at minimum, the implementation of NIST SP 800-171 controls. Continue Reading DoD Cyber Security Rules Took Effect for Contractors Dec. 31, 2017

Earlier this year, the U.S. Senate and House of Representatives passed different versions of the National Defense Authorization Act for Fiscal Year 2018 (“FY 2018 NDAA”).  The Senate version contained dramatic bid protest reforms that, with the exception of the reforms to debriefing, were largely unpopular in the government contracting community.  The House version did not contain these reforms.  After meeting in conference over the past month to iron out the differences between the two bills, on Nov. 8, 2017, the House and Senate Armed Services Committees announced an agreement had been reached.  Contractors can breathe a sigh of relief, as most (if not all) of the protest reforms that the contracting community viewed negatively were left out of the bill agreed to in conference. Continue Reading House and Senate Strike Deal on Bid Protest Reforms in FY 2018 NDAA

Under the National Defense Authorization Acts (NDAAs), Congress provides legislation on various aspects of how the Department of Defense (DOD) defines and purchases commercial items. In July, Government Accountability Office (GAO) released a study on detailing (1) trends in the DOD’s acquisition of commercial items; and (2) recent NDAA changes from fiscal years 2013-2017 related to procurement of commercial items and actions taken by DOD in response to this legislation.

The Federal Acquisition Streamlining Act of 1994, of course, established a preference within the federal government to procure commercial items rather than items developed exclusively for the government.  “Commercial items” are generally defined as products and services readily available in the commercial marketplace. Purchasing commercial items enables the DOD to participate in the commercial marketplace (when appropriate) and to take advantage of market innovations and reduce its acquisition costs. Despite this preference, the GAO study shows the DOD has been slow to embrace the preference to buy commercial items – but why?  Continue Reading GAO Reports Decrease in Department of Defense Commercial Item Acquisitions

Oles Morrison attorney Howard W. Roth commented to the L.A. Times on proposed “Buy American” provisions in NAFTA. Howard explained that while proponents for “Buy American” cite a Government Accountability Office review stating that the U.S. has available twice as much government procurement to foreign companies, a lot of other countries just do not have the same military budget and needs as the U.S. “Denmark sells us a lot of goods and services,” he said, “but there’s not a whole lot we can sell to Denmark. Its defense budget is next to nothing.”

To read the full article, click here.

With every new administration, there is both great uncertainty and opportunity in federal government contracting. To help you navigate the rough seas of doing business with the federal government in this new administration, we have assembled nationally recognized practitioners who will cover topics relevant to government contractors large and small, novice and seasoned. Session topics include:
– Ten Things Every Contractor Needs to Know When Doing Business with the Federal Government
James F. Nagle | Oles Morrison Rinker & Baker LLP | Seattle, WA
 
– Writing a Winning Technical Proposal – From the Contracting Officer’s Perspective
Mona Carlson, Mary Jo Juarez | PTAC Kitsap Economic Dvlpmnt. Alliance – Navy Contracting Officer (retired) | Kitsap, WA
 
– Keys to Winning Bid Protests and Defending Contract Awards
Adam K. Lasky | Oles Morrison Rinker & Baker LLP | Seattle, WA
 
– Navigating the Complex Rules Governing Data Rights
Jonathan M. Baker | Crowell & Moring LLP | Washington D.C.
 
– Overlooked Risks of Being a Lower-Tier Government Contractor
Alan C. Rither | Pacific Northwest National Laboratory | Richland, WA
 
– Mistakes to Avoid in the Claims and Litigation Process
Donald G. Featherstun | Seyfarth Shaw LLP | San Francisco, CA
 
– Adapting to Buy American and Domestic Preference Rules in the Trump Administration
Howard W. Roth | Oles Morrison Rinker & Baker LLP | Seattle, WA
 
– Understanding & Managing the Risk of Suspension & Debarment
Dominique L. Casimir | Arnold & Porter Kaye Scholler LLP | Washington D.C.

Thursday, November 16th 

SEATING IS VERY LIMITED AND WILL GO QUICKLY!
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 SEATTLE AGC BUILDING
Second-floor conference room
1200 Westlake Avenue North – Seattle WA 98109
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