GSA allows new flexibility in federal construction standards

March 26, 2014 by

The federal government’s standards for its new construction projects now simply require outcomes instead of dictating the means to achieve them.

The Public Buildings Service, part of the General Services Administration, issued the overhauled standards March 14, 2014.  As the document notes, adherence is mandatory. “It is not a guideline, textbook, handbook, training manual, nor substitute for technical competence,” it says.

An example of the increased flexibility is the HVAC system requirement, which previously had to be a type of system called variable air volume. Now, new construction must meet standards for energy efficiency, ventilation and humidity, but any system that satisfies the requirements is acceptable.

Additionally, rather than just setting minimum standards for building features, the PBS has added three tiers of performance that buildings can achieve, each more desirable than the last.

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Appeal board reminds contractors not to look the other way when an RFP is missing documents or information

March 25, 2014 by

When an RFP is missing an attachment or information, contractors simply should not look the other way.  This is the lesson of CAE USA, Inc., ASBCA No. 58006, where the Armed Services Board of Contract Appeals (ASBCA) denied a contractor’s appeal due to its failure to inquire about missing information in an RFP before preparing and submitting its bid.

Pursuant to FAR 22.1008-2 and in compliance with Service Contract Act of 1965, 41 U.S.C. § 6707 (c)(1), the contracting officer (the “CO”) provided all bidders with a copy of a collective bargaining agreement (the “CBA”) that would apply to the contract.  The CBA indicated that the contractor’s employees would participate in a corporate benefit program, but did not provide specific details.  The CBA was missing certain relevant attachments but, rather than asking for that information, CAE USA, Inc. (“CAE”) made certain general assumptions about fringe benefits when calculating its proposed rates.  After award, the CO informed CAE that the missing attachments in the CBA required the payment of additional benefits, which CAE had to pay.  CAE submitted a claim for the cost of these additional benefits, which the CO denied, and CAE appealed to the ASBCA.

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Government contractor profits continue to rise

March 24, 2014 by

While the federal contracting industry is by no means recovered, the future looks a good deal brighter than it did just a few months ago.

The two-year budget agreement has partially mitigated the impact of sequestration and greatly reduced the risk of a government shutdown. The agreement brought some stability and predictability to a market that has been starved of both for several years.

Each year, Deltek conducts a Clarity study assessing critical business metrics in the government contracting industry, such as growth rates and profit margins, plus operating metrics and trends, in areas such as business development, program management and financial operations.

The early results reflect the improved outlook resulting from the budget resolution. Yet, as one would expect, certain financial metrics — such as profits, mergers and acquisitions and win rates — reflect the difficult year that was 2013.

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Defense contractor to plead guilty

March 18, 2014 by

A civilian defense contractor accused of giving military secrets to a Chinese girlfriend half his age will be entering a guilty plea, his attorney said Tuesday.

Benjamin Bishop was expected to plead guilty in federal court on Thursday to one count of transmitting national defense information to a person not entitled to receive it and one count of unlawfully retaining national defense documents and plans.

Bishop, 60, was arrested last March at the headquarters for the U.S. Pacific Command, where he worked.

A document for the plea agreement filed Tuesday said Bishop emailed his girlfriend classified information on joint training and planning sessions between the U.S. and South Korea.

It said Bishop had classified documents at his Hawaii home, including one titled “U.S. Department of Defense China Strategy,” another on U.S. force posture in Asia and the Pacific and a U.S. Pacific Command joint intelligence operations center special report.

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House committee approves bills to increase agencies’ small biz goals and more

March 10, 2014 by

The House Small Business Committee has marked up and approved a six-pack of contracting reform bills, including legislation that would raise the current agency goals for steering work to small businesses.

The package approved Wednesday would particularly affect the construction industry, women, and disabled veterans. It includes a plan to raise agencies’ small-business prime contracting goal from 23 percent to 25 percent and establish a 40 percent goal for small-business subcontractors.

“Greater small business involvement in federal contracting benefits companies and taxpayers alike,” said panel Chairman Sam Graves, R-Mo., who sponsored the bill outlining the new contracting goals. “Small firms are innovative, and increased competition often leads to savings for the taxpayers.”

A second Grave bill would “improve transparency and accountability” by discouraging bundling of contracts to give an advantage to large companies over small businesses. Bills sponsored by Rep. Richard Hanna, R-N.Y., would restrict the government’s use of reverse auctions in awarding construction contracts and increase construction companies’ access to surety bonds for use in federal procurement work.

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$3.8 million multi-state and federal False Claims Act settlement reached

March 7, 2014 by

Kentucky Attorney General Jack Conway announced Kentucky’s participation on last Friday (Feb. 28, 2014) in a more than $3.8 million multi-state and federal settlement with a pharmacy specializing in dispensing drugs to nursing homes.

Omnicare Inc. allegedly received kickbacks from Amgen Inc. to promote the drug Aranesp, a drug used to treat anemia caused by chemotherapy or kidney failure. Between Sept. 1, 2003 and June 30, 2005, Omnicare allegedly solicited and received kickbacks in the form of discounts, grants, market share rebates, consulting services, speaker fees, travel and dinners. The alleged kickbacks were offered in exchange for Omnicare influencing healthcare providers’ selection and use of Aranesp in long-term care facilities.

Omnicare also allegedly implemented therapeutic interchange programs meant to switch patients from a competitor drug to Aranesp and allegedly caused false and/or fraudulent claims for Aranesp to be submitted to federal and state Medicaid programs.

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FDA looks to small businesses for social media monitoring of risk communications

March 6, 2014 by

The Food and Drug Administration is seeking information from small businesses on social media tools for monitoring communications about the risks of products that fall under the agency’s watch.

FDA released solicitation on Tuesday for resources to analyze its risk communication programs through social media buzz reports, dashboard and quarterly surveillance data.

Potential vendors will be required to develop a self-service social media monitoring tool with a dashboard that displays updated reports.

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Defense getting better at handling False Claims while DOJ short on staff, experts say

March 5, 2014 by

Parties on both sides of False Claims Act cases tend to agree that the number of lawsuits and amount of money they redistribute to the U.S. government has significantly increased since the statute was amended in 1986.

Walter Olson, a senior fellow at the Cato Institute’s Center for Constitutional Studies in Washington, D.C., contends that Congress has been pressured not to rein in the anti-fraud law, but instead, find ways to widen its scope.

“In recent years, you’ve seen some pushback from the business community, but given the record of congressional expansion, they’ll be doing pretty well if they can just keep Congress from expanding it further,” said Olson, who also founded and still runs the popular blog

Olson and other experts claim that excessive False Claims Act lawsuits will continue to cause trouble for businesses. They say when not interpreted properly, the law permits lawsuits that are expensive, time-consuming and often meritless.

The Department of Justice announced in December that it secured $3.8 billion in settlements and judgments from civil cases involving fraud against the government in 2013. According to the office, the amount represents the second largest annual recovery of its type in history and brings total recoveries under the False Claims Act to $17 billion since January 2009.

The DOJ also shows that its 2013 efforts recovered more than $3 billion for the fourth year in a row, surpassed only by last year’s nearly $5 billion in settlements and judgments.

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House small business committee tries again to increase small business contracting goals

March 3, 2014 by

Agencies have not met the governmentwide goal of awarding at least 23 percent of all prime contracts to small businesses since 2006.

Despite that, Rep. Sam Graves (R-Mo.), chairman of the Small Business Committee, believes it’s time to raise the goal.

Graves introduced legislation last Wednesday (Feb. 26, 2014) to increase the percentage of contracts that are mandated to go to small firms to 25 percent, which equates to about $10 billion more a year for these companies.

The Greater Opportunities for Small Business Act of 2014 would create a goal for agencies to ensure 40 percent of all subcontract awards go to small businesses, increasing from 35.9 percent. The bill also would require that only prime contract awards can count toward the prime contract goal.

Graves introduced the Contracting Data and Bundling Accountability Act of 2014 last week.

This bill will try to bring more data and transparency to how agencies bundle contracts.

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8(a) program mentor to pay $928,000 False Claims Act settlement

March 2, 2014 by

An 8(a) Program mentor has agreed to pay a False Claims Act settlement of $928,000.  The settlement stems from the government’s claims that the mentor abused the 8(a) mentor-protege program.

According to a Department of Justice (DOJ) press release, the mentor firm performed eight 8(a) prime contracts on behalf of its protege–without an SBA-approved joint venture.  The government also contended that the mentor’s extensive role resulted in the protege firm failing to meet the applicable limitation on subcontracting.

According to the DOJ, Okland Construction Co. Inc., a large business, entered into an 8(a) mentor-protege agreement with Saiz Construction Co., an 8(a) participant.  Although the SBA did not approve joint ventures between the companies, Okland allegedly prepared the bids for the 8(a) contracts and Okland’s employees served as project managers, submitted invoices, and performed payroll and other accounting functions.

The government also alleged that Okland’s extensive involvement resulted in Saiz’s inability to meet the 15% limitation on subcontracting applicable to general construction contracts.  Okland allegedly concealed its extensive involvement in the 8(a) contracts by misrepresenting to the government that its employees were employees of Saiz.

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