“Fair Pay and Safe Workplaces” Final Rule and Guidance Released

Just in time for Labor Day, the Labor Department and FAR Council issued a final rule and accompanying “Guidance” to implement the Fair Pay and Safe Workplaces Executive Order.  The new regulations will take effect on October 25, 2016.  The regulations—which run to nearly 900 pages—contain a number of changes from the proposed regulations to demonstrate that the Department listened to stakeholders during the lengthy comment period.

Despite some concessions to industry comments, the final regulations still establish substantial compliance obligations.  In light of those burdens, the contracting community is well advised to invest time to understand these provisions.  In this post, we summarize key changes and examine the way ahead for contractors.  Continue Reading

Take Two: Proposed DFARS Commercial Item Rule Still Fails to Rein in Contracting Officer Discretion

On August 11, 2016, the Department of Defense (“DoD”) published a revised proposed rule to amend the Defense Federal Acquisition Regulation Supplement (“DFARS”) to implement sections of the National Defense Authorization Acts for Fiscal Years 2013 and 2016 relating to commercial item acquisitions. This proposed rule replaces the rule that DoD proposed last August and retracted last December following critical commentary from the acquisition community.  We wrote about the prior proposed rule here.  While the revised proposed rule seemingly lessens the burden on contractors selling commercial items to the DoD by, among other things, restricting the contracting officer’s discretion to conclude that an item is not commercial when a DoD component has previously determined that it is and establishing a “hierarchy” of data for contracting officers to consider when making determinations of price reasonableness, both of these provisions fall short.  Continue Reading

ISDC Reports a “Plateauing” in Suspension and Debarment Activity

Each year, the Interagency Suspension and Debarment Committee (ISDC) reports to Congress on the status of the Federal suspension and debarment system.  With its mission of assisting agencies to build and maintain efficient and effective suspension and debarment activities, the ISDC is uniquely situated to provide comments and insight on the status of suspension and debarment practices generally.  Continue Reading

Recent GAO Decision Highlights Possibility of Limited Evaluations in Best-Value Procurements

Offerors in best-value procurements are generally accustomed to a review of their complete proposals during the evaluation process.  The recent Government Accountability Office (GAO) decision in The COGAR Group, Ltd., B-413004 (July 22, 2016) highlights the ability of agencies to blend lowest-price technically-acceptable (LPTA) procurement principles into best-value procurements and thereby limit the scope of proposal evaluations.

The COGAR Group timely submitted a proposal in response to a Department of Homeland Security (DHS) solicitation seeking to award an indefinite-delivery/indefinite-quantity contract under FAR Part 12 for professional security services.  This procurement was structured as a best-value competition, but the solicitation also advised that the agency might not evaluate all technical proposals, and instead the agency might limit the competition to those proposals that were “most competitive” on price.  After receiving 19 proposals, DHS considered the mean ($42,501,995) and median ($42,752,035.66) proposal prices, and concluded that only proposals priced under $40,500,000 would proceed to technical evaluations and the ultimate best-value trade-off.

The COGAR Group’s price of $40,531,635 came in just over the threshold, excluding the company from the technical evaluations.  By comparison, the awardee’s price of $40,399,510 came in just under the threshold.  The COGAR Group protested, arguing that there was a difference of only $132,125 (0.3%) between the two offerors, and therefore it was impossible to assess which offeror presented the best value to the Government without a technical evaluation.

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HHS Seeing Stars After Recent Loss in COFC Bid Protest

In Starry Associates, Inc. v. United States, No. 16-44C (Fed. Cl. July 27, 2016), the Court of Federal Claims (“COFC”) sharply criticized a Department of Health and Human Services (“HHS”) decision to cancel a solicitation following two bid protests at the Government Accountability Office (“GAO”).  The history and outcome of the case are exceptional among bid protests — an area of the law characterized by deference to agency decisions and arbitrary-and-capricious review.

HHS’s Program Support Center (“PSC”) issued a lowest-price, technically acceptable solicitation to procure business-operations services in support of HHS’s financial management system.  Protestor Starry Associates, Inc. was the incumbent, but Intellizant, LLC won the award as the lowest-price offeror.  Starry ended up filing three protests at GAO and the instant protest at the COFC, alleging that the procurement process was “tainted” in favor of Intellizant.  Protests accusing the agency of bias rarely prevail, but the COFC’s decision laid out in detail “a series of actions which,” by the court’s description, “reflect a lack of fidelity to the procurement process.”  And while the court declined to formally determine whether the procurement was tainted by bias, it functionally ended up in the same place.

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Changes to Small Business Subcontracting On the Horizon

Last week, the Federal Acquisition Regulation (“FAR”) Council issued a Final Rule to implement regulations adopted by the Small Business Administration in 2013.  The Final Rule significantly amends FAR Parts 19 and 52 by imposing additional small business-related obligations on prime contractors and clarifying the consequences of failing to satisfy those obligations.  The Final Rule largely tracks the proposed rule, which we previously discussed.  It will be effective November 1, 2016. Continue Reading

Federal Circuit Confirms that Award Term Extension Constitutes New Contract for Purposes of Bid Protest Jurisdiction

On July 12, 2016, in Coast Professional, Inc. et. al v. United States, No. 2015-5077 (Fed. Cir. July 12, 2016), the U.S. Court of Appeals for the Federal Circuit overturned a Court of Federal Claims (“CoFC”) decision, finding that the CoFC erred in ruling that it did not have bid protest jurisdiction over the award of task orders characterized as “award-term extensions.”   The Federal Circuit’s decision provides clarity on the scope of Tucker Act’s bid protest jurisdiction, and provides a strong defense against Government arguments that attempt to limit that jurisdiction going forward.

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Post Hoc Proposal Reevaluation Exacerbates Error in Award Decision

Last Friday, the Government Accountability Office (“GAO”) released a public version of Delfasco, LLC, B-409514.3 (March 2, 2015), a decision noteworthy because of how the GAO dealt with an agency’s post hoc reevaluation of proposals.  The protestor, Delfasco, LLC (“Delfasco”), had an incumbent contract to sell dummy practice bombs to the U.S. Army, and it protested the award of a follow-on contract to GTI Systems, Inc. (“GTI”), a competitor.

While Delfasco’s protest was pending before the GAO, the Army reevaluated the offerors’ proposals, and it found errors in its evaluation. Continue Reading

SBA Considers Potential Consequences of Kingdomware Technologies

As we discussed in a recent post, the Supreme Court’s decision in Kingdomware Technologies, Inc. v. United States left a number of questions unanswered regarding the implementation of set-aside requirements for veteran-owned small businesses under Federal Supply Schedule (“FSS”) contracts.  The decision has already had repercussions outside the set-aside context, with the Court of Appeals for the Federal Circuit recently applying Kingdomware’s reasoning in Coast Professional, Inc. v United States to confirm bid protest jurisdiction under the Tucker Act for orders placed under FSS contracts.

Congressional testimony subsequent to Kingdomware also now confirms that a number of agencies are considering whether the Supreme Court’s decision has broader implications for other small business programs.  Specifically, the U.S. Small Business Administration (“SBA”) has publically recognized that the Supreme Court’s reasoning may extend beyond a relatively narrow statute governing U.S. Department of Veterans Affairs (“VA”) set asides and require significant changes to long-standing principles established under the Small Business Act.  As result, the VA’s and the SBA’s interests may no longer be aligned as the agencies attempt to reconcile currently differing implementations of related set-aside programs.

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DoD Finally Issues Proposed Rule Addressing 2012 NDAA Changes to Technical Data Rights

On June 16, 2016, the Department of Defense (DoD) issued a proposed rule to implement Section 815 of the National Defense Authorization Act for Fiscal Year 2012, which was originally enacted in December 2011.  Under the proposed rule, DoD would be given additional flexibility to release technical data or computer software to third parties (including competitors) if the data qualify as “segregation or reintegration” data.  Although the data would include limited-rights data or restricted-rights software, the recipient would be permitted to use the data or software only for segregation or reintegration, and must destroy the data or software at the “completion of authorized activities.”  The rule also permits, among other changes, the DOD to require delivery, without any time limits, of various technical data and software that either have been generated or merely “utilized” in the performance of a contract.  Four years in the making, this proposed rule attempts to implement and clarify statutory changes introduced in section 815 of the National Defense Authorization Act for Fiscal Year 2012 (the “2012 NDAA”).  Despite the attempt to clarify, the proposed regulations still leave open significant questions for contractors with respect to technical data rights.

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