How to win contracts when lowest price is the highest measure

May 31, 2013 by

The lowest price technically acceptable (LPTA) acquisition strategy, which focuses on price over value, has become the dominant approach that agencies are applying to federal contracting. The accelerated transition to this strategy has been fueled by sequestration and the growing need for government to do business at a reduced cost. Contractors are still learning how to operate in this new environment, but many fear that the emphasis on lower cost labor will reduce the expertise of the work force and result in lower levels of effort.

The LPTA strategy is a step down from best value, admits Tony Constable, president, CAI/SISCo, a company that provides business development support services to industry. In a best value contract, the winning proposal is chosen based on an aggregate view about the perceived value, and that value is tempered somewhat by price. Even if the underlying contract switches from one contractor to another one, the new company could still retain much of the trained labor force. In an LPTA contract, the price—not the solution—is the primary decision criterion, and this affects labor pricing much more so than it does product pricing.

Being an incumbent contractor is the worst place to be on an LPTA bid, because the needed flexibility in labor prices requires huge salary and benefit cuts. Constable calls it the race to the bottom as it relates to labor, but he also acknowledges that the LPTA strategy is reasonable to a point depending on the work.

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DBE bid protests: One contractor’s loss is another’s gain

May 29, 2013 by

Lately, competition for public works projects is fierce, and bidders, using every possible advantage to obtain contracting opportunities, seem resigned to combing through a low bid to determine if “all I’s are dotted and T’s are crossed.”

As part of this process, the Disadvantaged Business Enterprise (“DBE”) compliance requirements have turned out to be a fertile ground for bid protests, particularly on federally funded state highway projects.  The DBE program provides a vehicle for woman and minority-owned, small businesses to participate in public projects.  As part of this program, contractors on federal public contracts are required to meet certain DBE subcontracting goals (for example, 12% of the total bid amount must be subcontracted to certified woman or minority-owned firms).

The requirements for demonstrating DBE participation, however, can be complicated and fraught with pitfalls for both DBEs and contractors alike.  Failure to comply with the DBE bidding requirements to the letter is a common basis for finding a bid non-responsive, and, thus, provides numerous bidders with a basis to protest, including (i) questioning a prime contractor’s achievement of the project’s DBE goal or good faith efforts to meet that goal, (ii) the legitimacy or certification of a listed DBE entity, or (iii) a DBE’s ability to perform a Commercially Useful Function on a project.

For example, a general contractor who submitted a bid which came in “second,” may challenge award of the project to the apparent low bidder on the basis that the DBE firm that the low bidder proposes to use is either not properly certified to perform the work proposed or is not a legitimate DBE firm.  Such protests provide a lucrative opportunity for the second low bidder who may ultimately be awarded the project.

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Comments on veteran-owned small business rules sought by July 12

May 14, 2013 by

The Office of Small and Disadvantaged Business Utilization (OSDBU) of the Dept. of Veterans Affairs (VA) has published an Advanced Notice of Proposed Rulemaking (ANPR) seeking comments to “improve the regulations to provide greater clarity, to streamline the program, and to encourage more VOSBs to apply for verification.”

VOSBs are veteran-owned small businesses, including service-disabled veteran-owned small businesses (SDVOSBs).

According to the ANPR, the VA is seeking to “find an appropriate balance between preventing fraud in the Veterans First Contracting Program and providing a process that would make it easier for more VOSBs to become verified.”

The VA’s initiatives on behalf of VOSBs have been both lauded and criticized.  Early in the VOSB program, critics charged that the standards were lax, resulting in fraudulent misrepresentations by firms not truly owned or controlled by veterans.  In separate investigations, both the Government Accountability Office (GAO) and the VA’s Office of Inspector General (IG) found numerous instances of fraud.   In seeking to take corrective action however, the VA currently is subjected to much criticism by veterans themselves who complain that the verification procedures are onerous and hard to understand.  Under current rules, legitimate VOSB who have been rejected by the VA must wait six months before reapplying for verification.

In response, the VA is now considering ways to improve the VOSB Verification Guidelines.  The VA has already collected suggestions from a wide range of sources for changes to the regulations, and has compiled them into a single document. This compilation document and the existing regulations can both be found at

The VA invites public comments on the ideas offered in the compilation document as well as on eight specific questions posed in the ANPR.

The Georgia Tech Procurement Assistance Center (GTPAC) encourages all VOSBs and SDVOSBs to read the ANPR and submit comments, ideas and suggestions.  You can download the two-page ANPR here: Advanced Notice of Proposed Rulemaking – VOSB Verification Guidelines – 38CFR Part 74.

Comments are due by July 12, 2013.

Video on how to migrate CCR files to SAM now available

April 3, 2013 by

Still struggling with moving your Central Contractor Registration (CCR) records to the new System for Award Management (SAM)?

Last year, SAM replaced CCR as the federal government’s vendor database, and it’s extremely important for every business that wants to do business with the government to be properly registered in SAM.

The SAM system has proven to be a formidable challenge for many vendors, but now there’s a video that walks you through the steps of migrating your records from CCR to SAM.

You can view the instructional video at

If your business was never registered in CCR, your starting point is

Who’s winning federal contracts in Georgia?

April 1, 2013 by

Ever wondered what Georgia companies are succesful in winning federal contracts?

Now, it’s easy to find out.   The Georgia Tech Procurement Assistance Center (GTPAC) produces monthly reports on federal contracts awarded to firms located in Georgia.  The reports contain hyperlinks to complete award details as posted on FedBizOpps and other website databases.

Reviewing the details of these awards can provide insights into government spending, how contracts are structured, the dollar value of awards, who your competitors may be, and the identity of firms you may wish to partner or subcontract with in the future.

Download recent federal contract award reports here:

SAM registrations and updates suspended until Mar. 25th

March 21, 2013 by

The federal government’s on-line vendor database, the System for Award Management (SAM), is temporarily shut down for purposes of accepting new registrations and updating existing vendor registrations.

The General Services Administration (GSA), SAM’s administrator, says that vendor registration in SAM will again be available on Monday morning, March 25, 2013.

GSA gave notice of this temporary suspension of access to vendor records on SAM’s home page at  In a notice posted there, GSA said:

  • “Some components of are temporarily unavailable. Users will not be able to register a new entity or update an entity record until Entity Management is available at 9:00 a.m. on Monday, March 25. GSA currently is strengthening security measures to protect user information. The security of SAM registrants’ information is a top priority for the agency and we will continue to ensure the system remains secure.”

On March 15, 2013, GSA notified, via email entitled “SAM Security Incident,” all existing SAM registrants of a potential security breach.  In that notice, GSA told vendors:

  • “The General Services Administration (GSA) recently has identified a security vulnerability in the System for Award Management (SAM), which is part of the cross-government Integrated Award Environment (IAE) managed by GSA.
  • “Registered SAM users with entity administrator rights and delegated entity registration rights had the ability to view any entity’s registration information, including both public and non-public data at all sensitivity levels.
  • “Immediately after the vulnerability was identified, GSA implemented a software patch to close this exposure.  As a precaution, GSA is taking proactive steps to protect and inform SAM users.
  • “The data contained identifying information including names, taxpayer identification numbers (TINs), marketing partner information numbers and bank account information. As a result, information identifiable with your entity registered in SAM was potentially viewable to others.
  • “Registrants using their social security numbers instead of a TIN for purposes of doing business with the federal government may be at greater risk for potential identity theft. These registrants will receive a separate email communication regarding credit monitoring resources available to them at no charge.
  • “In the meantime, we wanted you to be aware of certain steps that all SAM users may want to take to protect against identity theft and financial loss.
  • “Specific information is available at  If you would like additional background or have questions, you may call 1-800-FED-INFO (1-800-333-4636), from 8 a.m. to 8 p.m. (ET), Monday-Friday starting Monday, March 18. We recommend that you monitor your bank accounts and notify your financial institution immediately if you find any discrepancies.
  • “We apologize for any inconvenience or concern this situation may cause. We believe it is important for you to be fully informed of any potential risk resulting from this situation. The security of your information is a critical priority to this agency and we are working to ensure the system remains secure. We will keep you apprised of any further developments.”

GSA’s March 15th email to vendors was signed by Amanda Fredriksen, Acting Assistant Commissioner, Integrated Award Environment.

There have been system implementation issues associated with SAM ever since its launch in July 2012.  Counselors with the Georgia Tech Procurement Assistance Center (GTPAC) continue to make themselves available to vendors encountering SAM registration problems.  We have identified a number of remedies to assist Georgia businesses in the registration pr0cess.  For vendors located outside the state of Georgia, please be advised that there are procurement technical assistance centers (PTACs) located across the country who stand ready to assist businesses with SAM and other government contracting issues.  To find the PTAC nearest you, please visit:

For more background on SAM implementation, please visit:


Waivers to non-manufacturer rule available to small businesses

March 11, 2013 by

Small businesses participating in Federal procurements may not always be aware of non-manufacturer waivers and how a waiver may assist them in pursuing Federal contracts.

This article explains non-manufacturer waivers and what Federal agency contracting officers are responsible for.   In addition, it explains the Small Business Administration’s non-manufacturer rule (NMR).

What is the Non-manufacturer Rule?

The Small Business Act and SBA’s regulations impose performance requirements (limitations on subcontracting) on firms that are awarded Federal set-aside contracts.

Applicable regulations are:

  • 15 USC §§ 637(a)(14), 644(o);
  • 13 CFR § 125.6;
  • Federal Acquisition Regulation (FAR) §§ 52.219-14, 52.219-27

On a supply contract, a firm must perform at least 50% of the cost of manufacturing the supplies (not including the cost of materials).

The NMR is an exception to the performance requirements, and provides that a firm that is not a manufacturer may qualify as a small business on a supply contract set aside for small business if, among other things, it supplies the product of a small business made in the United States (15 USC § 637(a)(17); 13 CFR § 121.406).

What is the difference between a Manufacturer and a Non-manufacturer?

  • A manufacturer is a concern which, with its own facilities, performs the primary activities in transforming inorganic or organic substances, including the assembly of parts and components, into the end item being acquired (13 CFR § 121.406(b)(2); FAR § 19.102(f)(1)).
  • A concern may qualify a non-manufacturer if it:
    • Does not exceed 500 employees;
    • Is primarily engaged in the retail or wholesale trade and normally sells the type of item being supplied; and
    • Will supply the end item of a small business manufacturer or processor made in the United States, or obtains a waiver of such requirement (13 CFR § 121.406(b)).

Non-manufacturer Rule Reminders

Federal contracting officers applying the Nonmanufacturer Rule are to abide by the following guidelines:

  • The NMR does not apply to service contracts. The NMR is an exception to the manufacturing performance requirements (limitations on subcontracting) applicable to supply contracts. Service and construction contracts have different performance requirements. See 13 CFR § 125.6; FAR §§ 19.102(f), 19.502-2(c).
  • Contracting officers are to designate the proper NAICS code and size standard in the solicitation, selecting the NAICS code which best describes the principal purpose of the product or service being acquired. Primary consideration is given to the industry description in the NAICS, the product or service description in the solicitation and any attachments to it, the relative value and importance of the components of the procurement making up the end item being procured, and the function of the goods or services being purchased.
  • Wholesale or retail trade NAICS code are not be applied to a procurement for supplies.
  • Non-manufacturer waivers are not granted for HUBZone procurements.
  • Non-manufacturer waivers cannot be granted after bids on a solicitation have been received.

Non-Manufacturer Waiver Information

In order to qualify as a small business on a small business set-aside, Service-Disabled Veteran-Owned set-aside or 8(a) Business Development procurement (sole source or competitive) for the acquisition of supplies, an offeror must either manufacture the item in accordance with the Limitations on Subcontracting (see FAR section 52.219-14, 52.219-27 and 13 C.F.R. section 125.6) or supply the product of a small business made in the United States. The requirement that a non-manufacturer supply the product of a small business concern is commonly referred to as the Non-Manufacturer Rule (NMR) (13 C.F.R. section 121.406). The Small Business Act also contains provisions that allow the Administrator of the SBA to waive this requirement when there are no small business manufacturers or processors available to supply the product to the Federal Government. The Administrator has delegated the authority to make decisions on waivers of the Non-Manufacturer Rule to the Associate Administrator for Government Contracting in the following cases:

  • Individual waiver. After reviewing a determination by a contracting officer that no small business manufacturer or processor can reasonably be expected to offer a product meeting the specifications (including period of performance) required of an offeror or by the solicitation; or
  • Class waiver. For a product or class of products after determining that no small business is available to participate in the Federal procurement market.

For the purpose of waivers, a class of products is defined based on the Office of Management and Budget’s North American Industry Classification (NAICS) Manual and the General Services Administration’s Product and Service Code (PSC) Directory. Within each NAICS code and PSC are subdivisions of products that can be considered for waiver. A request for a waiver of a class of products should refer to a specific subdivision, or statement of product, within the NAICS and PSC.

Any individual or organization (government agency, business, association, etc.) may request a waiver for a class of products. The request should be in writing addressed to the Associate Administrator for Government Contracting and should specifically state the class (or classes) of products for which the waiver is sought.

Requesting the Individual Waiver

Contracting officers are the only ones who can request an individual waiver for a specific solicitation.  At a minimum, waiver requests from contracting officers must include:

  • A definite statement identifying the specific products for which a waiver is being requested, including market research documentation supporting the contracting officer’s determination that there are no known small business manufacturers or processors for the requested items.
  • The solicitation number for the procurement on which the item(s) is required, the NAICS code, estimated dollar amount of the procurement, and a brief statement of the procurement history.
  • For contracts expected to exceed $500,000, a copy of the Statement of Work.
  • A determination by the procuring agency’s contracting officer that there are no known small business manufacturers for the requested items. The determination must contain a clear, narrative statement of the contracting officer’s efforts to search for small business manufacturers or processors of the item(s) and the results of those efforts. The information should include the findings of a search on the SBA’s Central Contractor Registration (CCR) “Dynamic Small Business Search” ; other market surveys performed; the results of discussions with small business representatives to find manufacturers (i.e., Office of Small Disadvantaged Business Utilization (OSDBU) Representative or Procurement Center Representative (PCR)); and, a statement by the contracting officer that there are no known small business manufacturers for the items and that no small business can reasonably be expected to offer the required supplies.
  • A contracting officer may request an individual waiver for more than one item on a solicitation. The required information indicated above must be included for each item.

Requests for waivers of the Non-Manufacturer Rule should be sent to the Director for Government Contracting at: U. S. Small Business Administration, Office of Government Contracting, Mail Code 6700, 409 3rd Street, SW, Washington, DC 20416.

Class Waivers

Anyone can request a class waiver. The requester should supply SBA with the relevant NAICS code and other identifying information concerning the item. The requester should also supply SBA with market research and other data to support a determination that no small business manufacturer is participating in the Federal procurement market.

Use the following format for submitting class waivers:

Dear Director:

In accordance with 13 Code of Federal Regulations (Reference 12l.1204(a)(2)), the (your name and/or the name of your organization) hereby requests a class waiver of the Non-manufacturer Rule (NMR) for name of product(s)_______, under the North American Industry Classification (NAICS) code _______, Product Service Code (PSC) _____.

(Describe any background information relative to the product(s) you are requesting to be waived. Include detailed information on the efforts made to identify small business manufacturers or processors for the class.)

I can be reached at ( ) ______, fax number ( ) _______, and mailing address_______.




Send to: Director, Office of Government Contracting, U.S. Small Business Administration, 409 3rd Street, SW, MC 6700, Washington, DC 20416.

Timeframes for Handling

  • A request for an individual waiver will take about 15 working days to process if the contracting officer provides complete information.
  • Requests for waivers of classes of products take an average of 45 – 60 working days for processing.

This period of time allows SBA staff to publish Waivers of the Non-manufacturer Rule in the Federal Register, a required notice of an intent to grant a waiver for the class of products, a notice on the FedBizOpps web site of potential sources sought, and a final notice in the Federal Register of any decision to grant the waiver if no small business manufacturers or processors have been identified.

For questions about the Nonmanufacturer Rule, or questions on how to submit a waiver request, please contact SBA’s Edward Halstead  at vog.absnull@daetslah.drawde

Sequestration’s impact on state and local government procurement explained

March 8, 2013 by

Govpro has offered opinions and views on the impact of sequestration from  several officials, including AmyClaire Brusch, vice president in O’Neill and  Associates’ federal relations practice, and Mattea Kramer, director of research at the National  Priorities Project.

Here are the views on sequestration’s impact on government budgets from  Michael McGill, a partner, and Peter Dungan, an associate, at the  Washington-based Hogan  Lovells law firm.

Govpro: Will state and local governments be  affected by sequestration?

Michael McGill and Peter Dungan: Certainly. Unless averted again,  sequestration will mean automatic, across-the-board cuts in federal civilian and  military discretionary and mandatory funds starting soon after March 1. The most  unique aspect of sequestration under the Budget Control Act of 2011 is not the  magnitude of the spending cuts but the indiscriminate nature of them.

This so-called “meat cleaver” approach threatens funding under several major  programs that benefit the states, from education and child nutrition to  transportation infrastructure and public health to military readiness and law  enforcement. Very few programs are exempt from the automatic cuts (Medicaid and  food stamps are among them, while Medicare cuts cannot exceed 2 percent).

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Small business certification is a thorny issue

March 5, 2013 by

The ever-evolving small business government contracting landscape presents myriad ethical quandaries for small businesses seeking set-aside and sole source contracts.

Rules governing eligibility for various small business programs are becoming more complex with amendments and case law interpretation.  Hence, whether a firm is eligible for a particular small business program or procurement often presents a thorny question.

Small business government contracting programs generally rely upon a contractor’s self-certification. To
compete, a company usually only needs to certify — with no government verification — that it meets a small business program’s requirements.

Notable exceptions include the Small Business Administration’s 8(a) business development program and Historically Underutilized Business Zone (HUBZone) program and the Department of Veterans Affairs’ Veterans First contracting program for Veteran-Owned and Service-Disabled Veteran-Owned Small

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New Defense legislation is a mixed bag for small business

February 27, 2013 by

The 2013 National Defense Authorization Act included several provisions related to small businesses, which include expanded opportunities as well as potentially harsher penalties for failure to follow regulations.

Although other agencies have created similar programs, the Small Business Administration (SBA) mentor-protégé program provides firms of all sizes with a number of benefits.  The new legislation helps small businesses that are part of this program and subcontractors to large firms.

The current arrangement is, however, limited to businesses that are accepted into the 8(a) program — a subset of small business set-asides that are limited to firms which are owned by economically or socially disadvantaged individuals who go through an SBA certification process.

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