May 15, 2014 by cs
In a recent decision, the U.S. Court of Appeals for the Federal Circuit (“CAFC”) the supervising court for the Court of Federal Claims and the Boards of Contract Appeals, among others) clarified important legal principles concerning the federal government’s duty of good faith and fair dealing and its responsibility for differing site conditions. Metcalf Construction Company, Inc. v. United States controls disputes with the federal government and also provides authority and rationale useful to contractors in disputes with any project owner, public or private.
In October 2002, Metcalf Construction, a small business based in Hawaii, was awarded a $48 million contract to design and build 212 housing units for the U.S. Navy on a Marine Corps base in Hawaii. Saying the project did not go smoothly is an understatement. Metcalf’s performance was hindered and delayed by unanticipated soil conditions and other issues made worse by the Navy’s failure to administer the contract fairly and according to its terms. By the time the Navy finally accepted the project as complete in March 2007, almost two full years after the original completion date, Metcalf had incurred costs in excess of $76 million — leaving the contractor with losses of approximately $27 million.
May 13, 2014 by cs
While most documents generated by the government have made the transition from paper to digital, there are still a few hiccups in the process, notably contracts and other documents that require signatures.
The General Services Administration is looking for an agency-wide service that can obviate the need for pen-and-ink signatures and move the contracting process entirely online, according to documents posted on April 28, 2014. GSA now uses a variety of procedures to obtain signatures, some of which include a mix of electronic and pen-and-ink, or what the agency calls “wet” signatures. Transitioning fully to digital signatures would raise GSA’s efficiency and reduce costs, the agency said.
The document, posted on the Federal Business Opportunities Contracting site, is a sources sought notice, which means GSA wants to gather feedback from industry about possible products but isn’t seeking bids yet. The agency expects to issue a formal solicitation and award a contract before the end of 2015, the notice said.
Keep reading this article at: http://www.nextgov.com/emerging-tech/2014/04/gsa-wants-contractors-sign-digital-line/83236
May 12, 2014 by cs
A Chicago-based construction company will pay the United States and the State of Illinois $12 million to resolve allegations of fraud on government programs designed to benefit women- and minority-owned sub-contractors under the terms of a civil settlement agreement announced May 1, 2014. The contractor, James McHugh Construction Co., Inc., allegedly failed to abide by federal and state requirements for the participation of disadvantaged business enterprises (DBEs) in contracts to perform seven construction projects involving roads, highways, and transit lines, funded by the federal and state governments between 2004 and 2011.
The federal and state governments claimed that McHugh violated the federal and Illinois False Claims Acts by making false statements and claims for payment to government agencies regarding McHugh’s compliance with federal and state requirements to include DBEs in the construction projects.
As a result of the $12 million settlement, the federal government will receive $7.2 million and the state government will receive $4.8 million. In a separate administrative settlement and compliance agreement, McHugh agreed to implement a corporate compliance program, appoint a compliance officer, and be subject to an independent monitor for three years, in exchange for the federal, state, and City of Chicago transportation agencies and contracting authorities’ agreement not to bar McHugh from future government contracts. This allows McHugh to continue pursuing and performing public works projects while ensuring that it remains compliant with DBE regulations.
“It was more costly in the long run for McHugh to avoid its obligations to hire women and minority-owned businesses than it would have been simply to comply with the requirements and retain disadvantaged businesses to actually participate in these public construction projects,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “It’s important that McHugh and other companies realize that compliance with these requirements is both a good business decision and the right thing to do,” he added.
The investigation revealed that McHugh Construction falsely used subcontractors to help secure bids for major public construction projects. Specifically, the company used women-owned small businesses to submit false claims to the state and federal governments for millions of dollars when in fact, those businesses never completed the level of work required by law.
The settlement arose from a lawsuit that was filed in 2008 by Ryan Keiser, who was a project manager for Perdel Contracting Corp. and Accurate Steel Installers, Inc. (ASI), at three of the McHugh construction sites. The lawsuit was filed under the qui tam or whistleblower provisions of the federal and state False Claims Acts.
The federal and state statutes permit private individuals to sue for “false claims” on behalf of the government and to share in any recovery. Mr. Keiser will receive 17 percent of the $12 million settlement or $2,040,000 ― $1,224,000 from the United States share, and $816,000 from Illinois’ portion of the settlement.
The federal and state governments contended that in bids for these contacts, in the final contracts, and in claims for payment, McHugh falsely stated that Perdel and ASI, which were both certified as DBE firms owned by Elizabeth Perino, would perform or had performed work on the projects in satisfaction of federal and state DBE participation requirements in the contracts. The governments contended that contrary to McHugh’s statements, Perdel and ASI often functioned merely as “pass-throughs,” performing little, if any, work that would qualify for participation credit under federal and state DBE requirements. Perino, who owned Perdel and ASI in Lockport, was charged with federal mail fraud in 2011, and the case remains pending.
According to the settlement agreement, the governments also contended that Perdel and ASI’s contracted work for McHugh often exceeded the companies’ capacity and experience. Although their projects with McHugh were substantially greater in size and scope than they had previously performed, Perdel and ASI’s expertise to perform larger and more complex projects did not change correspondingly. Rather than Perdel and ASI performing, managing, or supervising the work that McHugh represented they would, McHugh frequently managed union workers they each hired. In some cases, McHugh directed Perdel and ASI as to which union crews to hire.
McHugh, not Perdel or ASI, also selected certain suppliers on each of the contracts, determined the quantity and quality of those materials, negotiated the price, and often drafted a purchase order for Perdel or ASI to put on their letterhead, the governments contended. That kind of conduct violates federal and state provisions that are designed to give a share of the actual work of government-funded construction projects to minority- and women-owned businesses.
The settlement is neither an admission of liability by McHugh nor a concession by the state and federal governments that their contentions are not well founded, and McHugh expressly denies the claims.
The settlement was reached on behalf of the U.S. Department of Transportation, the Illinois Department of Transportation, the Illinois State Toll Highway Authority, and the Regional Transportation Authority.
The separate three-year administrative monitoring settlement and compliance agreement was reached between McHugh and the Federal Transit Administration, the Federal Highway Administration, the U.S. and Illinois Transportation Departments and their procurement officers, and the City of Chicago. In exchange for the government entities’ agreement not to pursue any suspension or debarment action against McHugh for the covered conduct, McHugh agreed to implement a corporate compliance program and appoint a compliance officer who is knowledgeable about DBE programs. The company also agreed to retain an independent monitor to evaluate McHugh’s performance and submit periodic reports to the government agencies and officials, and to make six presentations to those agencies and officials to discuss and promote compliant policies and procedures for working with DBE firms.
May 9, 2014 by cs
The Air Force thinks it’s paying more for its goods and services than it should and wants to put pressure on its contractors to reduce costs in their supply chain.
Previously, when the Air Force negotiated contracts, much of it went to prime contractors, but now 60 to 70 percent of that is subcontracted, said the Air Force’s Deputy Assistant Secretary for Contracting Wendy Masiello.
“So we’re spending a lot more time understanding those supplier partnerships,” said Masiello at an April 16 Air Force Association breakfast. “It’s an area of expertise that you would hope the primes are starting to develop in order to manage those costs, but there’s often less motivation to be as stringent in those relationships. It’s often more about maintaining those suppliers as long-term partners.”
Keep reading this article at: http://www.fiercegovernment.com/story/air-force-wants-contractors-rein-supply-chain-costs/2014-04-20
May 7, 2014 by cs
A bill that would require agencies to do a better job of reporting when they combine what could be smaller contracts into a single solicitation would cost about $1 million over five years, according to the Congressional Budget Office (CBO).
The 2014 Contracting Data and Bundling Accountability Act aims to improve how agencies report their consolidated and bundled contracts. Agencies consolidate contracts by including multiple requirements in a single solicitation, and if the resulting contract becomes unsuitable for small businesses to bid on — because it’s too large or diverse, for instance – it’s considered a bundled contract. Agencies are supposed to identify and then justify the move when they’ve either consolidated or bundled a contract.
CBO said it believed agency data on consolidated and bundled contracts is already available, but the analysis conceded that the Small Business Administration would require better software to retrieve that data from the Federal Procurement Data System. The software upgrade would cost about $1 million between 2014 and 2019, CBO said.
Small business advocates argue that the real problem is federal procurement officials are not properly reporting their consolidated contracts.
Keep reading this article at: http://www.nextgov.com/cio-briefing/2014/04/cost-better-data-bundled-federal-contracts/83164
May 6, 2014 by cs
A new procurement ombudsman aims to close the communications gap between the General Services Administration (GSA) and its vendors.
The ombudsman, Millisa Gary, is one of several ways GSA is trying to be more responsive to its government and industry customers.
“Her role is to indeed be a voice for industry, make sure we are hearing their concerns and helping an industry partner in navigating our bureaucracy,” said Jeff Koses, GSA’s senior procurement executive, in an exclusive interview with Federal News Radio. “Not necessarily to resolve the issue but to get them a fair hearing and to get them in front of the right audience. Often as we are pursuing best value and pursuing savings, the value of industry conversations can’t be overstated.”
Koses, who took over as senior procurement executive in January after spending the last six years as the director of acquisition operations for the General Supplies and Services portfolio at GSA’s Federal Acquisition Service, is making changes such as naming an ombudsman part of the agency’s key initiatives to improve supplier and customer relations.
Keep reading this article at: http://www.federalnewsradio.com/445/3609830/GSA-names-ombudsman-to-give-industry-a-louder-voice-
May 5, 2014 by cs
The U.S. Court of Appeals for the Sixth Circuit recently affirmed a decision that a federal contractor violated the Federal Civil False Claims Act when its subcontractor failed to pay prevailing wages to its employees. In United States v. Circle C Construction, L.L.C., 2012 U.S. App. LEXIS 20433 (6th Cir. 2012), the United States brought a False Claim Act suit against Circle C Construction Company, a general contractor for the U.S. Army for construction of buildings at Fort Campbell.
Circle C’s contract with the Army required payment of Davis Bacon Act prevailing wages and required that Circle C and its subcontractors submit payroll records certifying that prevailing wages were paid. The prevailing wage rate for electricians was $19.19 per hour and fringe benefits of $3.94 per hour. Circle C subcontracted with Phase Tech to perform electrical work on the project. A Department of Labor investigation revealed that Phase Tech failed to pay prevailing wages. Nevertheless, Circle C’s payroll certifications to the Army stated that the certifications were complete when in fact no Phase Tech employees who worked on the project were listed and the certifications wrongly represented that the prevailing wages were paid to all subcontract employees.
Keep reading this article at: http://www.mondaq.com/unitedstates/x/308734/Building+Construction/Contractor+Found+Liable+Under+The+Federal+False+Claims+Act+For+Subcontractors+Failure+To+Pay+Davis+Bacon+Act+Prevailing+Wages&email_access=on
May 2, 2014 by cs
The sequester, the winding down of the wars in Iraq and Afghanistan, and overall budget cuts produced an 11 percent decline in federal contract spending in fiscal 2013, according to the third annual Bloomberg federal industry leaders study released on Tuesday.
With spending on defense contracts slowing by 15 percent, overall federal contracting fell from $516.3 billion in fiscal 2012 to $462.1 billion in fiscal 2013.
The companies leading Bloomberg’s list of the top 200 contractors remained defense firms, with their rankings unchanged from the previous study. The five companies that did the most business with the government in fiscal 2013 were: Lockheed Martin Corp., with $44.3 billion in contracts; Boeing Co., with $21.6 billion; General Dynamics Corp., with $14 billion; Raytheon Co., with $13.7 billion; and Northrop Grumman Corp., with $10.8 billion.
“All three companies in the top 10 that increased their contract totals — Lockheed Martin, Huntington Ingalls and McKesson Corp. (No. 10) — benefited because they worked on politically protected programs,” the analysts wrote. Those programs were the F-35 Joint Strike Fighter for Lockheed Martin, a “number of warships for Huntington Ingalls and pharmaceuticals for the Veterans Administration for McKesson.”
Keep reading this article at: http://www.govexec.com/contracting/2014/04/budget-cuts-bring-11-percent-decline-contract-spending-2013/82972
May 1, 2014 by cs
The federal government is looking for a few good ideas to improve how it does business with information technology contractors.
Using IdeaScale’s crowdsourcing platform, the Federal Chief Acquisition Officers and Federal Chief Information Officers councils are seeking an “open dialogue” to help the government “streamline, modernize and improve” the federal contracting process whether it’s through executive action or new laws. The deadline for participation – which is open to anyone – is May 5.
According to the council’s website, such steps could help “remove barriers and burdens for small and minority-owned businesses and new entrants with limited resources and expertise in federal contracting” as well as reduce costs and red tape for existing government contractors.
The government is seeking discussion and input in three specific areas in an effort to make existing rules and practices more efficient and less onerous
Keep reading this article at: http://www.fiercegovernmentit.com/story/got-idea-improve-it-contracting-government-wants-know/2014-04-28
April 30, 2014 by cs
The System for Award Management (SAM) is operational but it’s not what the future of acquisition systems should look like, said Sonny Hashmi, chief information officer at the General Services Administration (GSA).
Commonly called “SAM,” the consolidated acquisition system launched in August 2012 to bring together three previously separate systems.
“It is still inelegant and cumbersome. We have done just enough to make it operational,” said Hashmi during an April 11 chat on GitHub.
Shortly after the system went live, SAM ran into a variety of problems that required the back-end security architecture, business process management layer and database schema to be completely reconfigured.
Keep reading this article at: http://www.fiercegovernmentit.com/story/sam-inelegant-and-cumbersome-says-gsa-cio/2014-04-16
Don’t pay anyone to register your company in SAM. SAM registration is free! For details, please visit: http://gtpac.org/sam-gov-registration-is-free-and-help-with-sam-is-free-too