Price realism evaluation: Only if solicitation says so

An agency awarding a fixed-price contract can only evaluate offerors’ proposals for price realism–that is, determine whether offerors’ proposed pricing is so low as to be unrealistic–if the solicitation calls for a price realism evaluation.

In a recent bid protest decision, the GAO confirmed that when a fixed-price solicitation does not advise offerors that a price realism evaluation will be conducted, the agency is not permitted to reject an offeror’s proposal because of unrealistically low pricing.

The GAO’s decision in ERIMAX, Inc., B-410682 (Jan. 22, 2015) involved a NOAA RFQ seeking the establishment of a BPA for acquisition and grant management services.  The RFQ called for vendors to submit fully-burdened hourly labor rates for labor categories provided by the agency.  Once labor rates were entered, the agency’s spreadsheet would automatically calculate total prices using the rates provided by the vendors.  The RFQ stated that proposed prices would be evaluated to determine whether they were fair and reasonable.

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5 steps for winning more federal business in 2015

Congress will increase discretionary spending beyond Budget Control Act caps in fiscal year 2016 but below the seven percent requested by President Barack Obama, Bloomberg Government (BGOV) analysts said at a symposium last month.

Also at the event, a panel of corporate executive officers said they see the federal procurement market stabilizing in FY 2016 after sharp declines in FY 2014 and 2015.

The remarks were made at a symposium on the outlook for federal contractors in FY 2016. The Fairfax County, Va., Chamber of Commerce sponsored the event.

Head of BGOV Don Baptiste said contractors are most concerned about the federal budget. “No one believes we will exceed the budget caps by seven percent in the 2016 budget, but we are optimistic on flat budgeting,” he said.

BGOV Senior Budget Analyst Cameron Leuthy agreed that Congress will not approve a seven percent rise in discretionary spending in FY 2016 as requested by President Obama.

“Republicans are unfriendly to tax increases” and “Democrats don’t want to cut entitlements,” he said. “That makes it tough to grow discretionary spending.”

Leuthy said the Ryan-Murray budget deal marginally increased spending. “We think that is most likely this year and next,” he said.

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Here are the real reasons why contract award protests are on the rise

It’s no secret that more contract awards are getting protested. But it might be a little too simplistic to chalk it up to desperation among contractors that see opportunities dwindling.

Don’t get me wrong, that is one reason why the numbers are increasing — by 5 percent in 2014, as I reported in November. But a panel of procurement experts pointed to a couple other reasons: more missteps by a more inexperienced government acquisition workforce, and the disintegration of the “protest stigma” that once existed in the industry.

In the case of the former, John Lubratich, chief financial officer at Herndon-based ViON Corp., noted one example where an award was supposed to be sole sourced to single company, only to morph into a competition among select companies that held contracts under a specific procurement vehicle. Multiple companies protested, arguing they should’ve been given an opportunity to compete, and the agency opted to take corrective action and start over.

“It was a bait-and-switch,” Lubratich said Wednesday at a panel discussion hosted by the Washington Business Journal and Baker Tilly.

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Contracting success in a changing government environment

Behind many contracting issues today is the implied topic of who is or isn’t winning contract awards. In the private sector, it’s rare to attribute lack of business success to the customer. Certainly in a commercial market, industry success and failure is usually laid at the feet of company management and its ability to understand and meet market needs. Not so in government contracting.

Along with well-structured protest procedures, industry can and does appeal to government legislative representatives, investigatory bodies, contracting managers, trade groups, and agency leaders concerning any real or perceived unfair treatment before, during, or after contract performance. One regularly hears rationale that the buyer, not the seller, was at fault for lost business and revenue. It’s common practice, if not encouraged by government, for industry to openly critique customer policy, processes, strategy, requirements, and staff. These critiques include time of awards; market conditions; workforce training; communication; sensitivity to private sector concerns; selection methodology; risk mitigation; receipt of external advice (program, technical, incumbents, business, legal, trade groups, etc.); past performance criteria; and more. That’s the nature of an open and fair process.

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Here are the Georgia companies who won federal contracts in Feb. 2015

Ever wonder who’s winning federal contracts in Georgia?

Wouldn’t this information be helpful if you are looking for subcontracting prospects?  Or when you’re trying to figure out who your competitors are?  Or when considering who might be a good partner on an upcoming bid proposal?

Federal Contract Award Winners in GeorgiaEach month, the Georgia Tech Procurement Assistance Center (GTPAC) compiles and publishes a list of federal contracts awarded to Georgia businesses.  The list comes complete with point-of-contact information on the awardees, the name of the awarding agency, the dollar value of the contract, and much more.

Download details on Georgia federal contract award winners for February 2015 right here: FEDERAL CONTRACT AWARDS IN GEORGIA – FEB. 2015

Georgia contract award winners last month are here: FEDERAL CONTRACT AWARDS IN GEORGIA – JANUARY 2015

To see award winners in calendar year 2014, see: 

GAO: ‘Mechanical’ cost realism evaluation was improper

An agency’s cost realism evaluation was improper because the agency “mechanically” compared an offeror’s proposed staffing to an undisclosed government estimate.

In a recent bid protest decision, the GAO held that it was improper for the agency to apply its own estimates for labor hours and costs without considering the protester’s unique technical approach.

The GAO’s decision in CFS-KBR Marianas Support Services, LLC; Fluor Federal Solutions LLC, B-410586 et al. (Jan. 2, 2015) involved a Navy procurement for base operations support services.  The solicitation contemplated the award of a cost-reimbursement contract, which was to be awarded on a “best value” basis.  Among the evaluation factors, the Navy was to consider offerors’ proposed staffing and resources.

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Deadline for comments is Feb. 27 on proposed rule affecting small business federal contracts

Are you a small business owner doing business with the government?  As previously reported here, the Small Business Administration (SBA) recently published a proposed rule to implement Section 1651 of the National Defense Authorization Act of 2013 (NDAA), proposing to change several key areas that could impact you:

  • The performance requirements applicable to small business and socioeconomic program set aside contracts and small business subcontracting.
  • The nonmanufacturer rule and affiliation rules.
  • The performance requirements for joint ventures.

From the SBA’s point of view, the proposed regulations should benefit small businesses by allowing small business concerns to use similarly-situated subcontractors in the performance of a set-aside contract, thereby expanding the capacity of small business prime contractors and potentially enabling small businesses to compete for and win larger contracts. SBA also believes the proposed rules will strengthen the small business subcontracting provisions, which may result in more subcontract awards to small business concerns. The proposed regulations also seek to address or clarify issues that are ambiguous or subject to dispute, thereby providing clarity to federal contracting officers as well as small business concerns.

Have comments? Visit the Federal Register online for information and to submit your comments by February 27, 2015.

Task order size status based on proposal date, not award date

A contractor was eligible for award of a small business set-aside task order because the contractor was “small” as of the date of its task order proposal–even though the contractor outgrew the size standard by the time the task order was awarded.

In a recent bid protest decision, the GAO held that a contractor may qualify for the award of a set-aside task order based on the date of its initial proposal, even in cases where the agency is prohibited from taking small business credit for the award.

The GAO’s decision in Research and Development Solutions, Inc., B-410581.2 (Jan. 14, 2015) involved a Navy task order solicitation for technical and engineering services.  The solicitation was issued as a small business set-aside under the SeaPort-e IDIQ contract vehicle.

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Incumbent’s past performance score lowered as a result of missing subcontracting goals

A large incumbent contractor was properly assigned a mere “satisfactory confidence” past performance rating because the large business failed to meet its small business subcontracting goals under four of the five contracts it submitted for evaluation.

In a recent bid protest decision, the GAO upheld the agency’s assignment of a satisfactory confidence score to the large incumbent–despite the incumbent’s strong performance in many areas–because of the incumbent’s failure to satisfy its subcontracting goals.

In Science Applications International Corp., B-408690.2, B-408690.3 (Dec. 17, 2014), the Defense Logistics Agency issued a solicitation to provide supplies and services pursuant to DLA’s tailored logistics support prime vendor program in the Southeast Region of the United States.  The solicitation provided that each contract would be awarded on a best value basis, considering three evaluation factors: past performance, technical merit, and price.

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The 4 stages of a construction dispute

In this posting, construction attorney Christopher G. Hill of Richmond, VA discuses the four stages of a construction dispute.  He writes:

What started as a kernel of thought in my mind turned into what has seemed to be a popular set of four posts that I hope were both informative and interesting.  Because of the great feedback I’ve gotten, I thought that I’d consolidate the posts into one so that my readers (thank you, by the way) will have them all in one place.  Here they are:

The Anatomy of a Construction Dispute- The Claim– This post discussed the steps for setting out a claim under your construction contract and the steps to lay the groundwork should you need to move forward with a more formal means of collection.

The Anatomy of a Construction Dispute Stage 2- Increase the Heat– This post discussed various methods to increase the heat on the party with whom you have a claim prior to litigation or arbitration.

The Anatomy of a Construction Dispute Stage 3- The Last Straw–  This post discussed what to do when your construction claim is not resolved in either of the first two stages and the steps in either litigation or arbitration.

Anatomy of a Construction Dispute- An Alternative– This post discussed my favorite form of dispute resolution, mediation, as an alternative to the cost and uncertainty of construction litigation or arbitration.

Each of these posts provides a brief overview of the construction dispute process.  Your particular construction issues and necessary actions will depend on your state’s laws and the contract between you and the other party.  I always recommend that you consult a local construction attorney to help advise you through this process.