Boeing, EADS spend $125 million lobbying for AF tanker contract; submit 8,000-page bids
July 19, 2010 by cs
In order to snatch the lucrative U.S. Air Force tanker contract, Boeing and its European rival EADS have spent nearly $125 million on lobbying in the past years.
Boeing and European Aeronautic Defense and Space Co., the parent of European plane maker Airbus, have been locked in a 9-year battle over a $40 billion contract to outfit the Air Force with 179 in-flight refueling tankers. For EADS, winning the contract could mean gaining a stronger foothold in the world’s largest military market. Naturally, Boeing wants to prevent that.
In a bid to increase chances for their respective bids, the companies have spent more than $100 million on lobbying U.S. decision makers, figures from OpenSecrets.org, which tracks lobbying in U.S. politics, indicate.
Boeing during the past four years spent $54 million on lobbying efforts. EADS and its U.S. partner Northrop Grumman in the same period spent nearly $70 million on lobbying, OpenSecrets.org says. Northrop Grumman pulled out of the bidding in March, arguing the bidding conditions clearly favor rival Boeing.
Moreover, the companies spent several millions touting their planes in ads in newspapers, magazines and broadcast outlets.
Both Boeing and EADS this week submitted their official bids for the contract, a move that is linked to even more costs. The Hill, a Washington newspaper, reports that EADS North America spent $75,000 on printing its bidding materials. The company printed 50,000 pages — six copies of its bid of more than 8,000 pages. Each set weighs around 100 pounds, the newspaper reports.
The Air Force has been eager to replace its Eisenhower-era tankers and is to announce a bid winner this fall.
The Europeans are throwing their KC-45 tanker, a large plane based on the Airbus A330, in the race. Boeing is bidding with an altered version of its 767, called New Generation Tanker.
The Generation Tanker is slightly smaller and probably cheaper than the KC-45; the European plane has logged more flight testing hours and is closer to serial production, experts say.
Both companies have argued that winning the contract would create and support thousands of U.S. jobs, in a bidding war that goes back several years.
The KC-45 won the contract in February 2008 but the decision was overturned four months later by the Government Accountability Office after Boeing challenged it. The GAO said it found problems with the bidding and the contract is up for grabs.
Moreover, both sides are accusing each other of profiting from illegal government subsidies.
– Published: July 14, 2010 at 8:45 AM © 2010 United Press International, Inc. All Rights Reserved.
Find Davis-Bacon in federal construction contracts, not in a supermarket
June 7, 2010 by cs
There is hickory bacon. There is turkey bacon. And then there is Davis Bacon.
The first two can be found in the meat department of your local supermarket.
The last one — Davis Bacon — is found in federally-funded construction contracts. If you’re bidding on a federal contract or subcontract, you’d better educate yourself about this requirement.
The federal Davis-Bacon Act (DBA) applies minimum prevailing wage classifications for all federally-funded or assisted construction projects. The U.S. Department of Labor creates wage classifications by the type of project for a specific type of worker. (Although not the case in Georgia, also be aware of the fact that some state governments have adopted “little DBAs” requiring prevailing wages on state funded works.)
The worker classifications are crafted with broad job scopes, in order to be over-inclusive. These classifications have drawn the ire of many private construction firms, who complain about what they consider over-payment for non-specialized labor (i.e., paying a wire runner as a journeyman electrician). So, as many favor the DBA’s heavy wages – it can be crippling to an unprepared private firm’s profit margin.
To prepare, a construction professional must read and absorb the federal wage classifications that apply on their project – before bidding. Wage classifications are prepared by state and by project, and are included in all federally-funded construction work.
If you are bidding a contract in the State of Georgia, you’ll need to check out the Georgia classifications. For example, if you were building a non-residential structure, such as a government building, in Bibb County, you can see the applicable wage rates here.
If your Bibb County bid needs to include ironworkers to install your structural steel, you would need to bid them per hour at $24.04, plus $9.86 in fringe benefits (insurance, fringe, or even cash). There are no real boundaries here – if a worker is involved in structural steel work, that worker is to be paid as an ironworker. If a contractor does not plan for this broad application, you’ll be facing penalties that are spelled-out under the Wage & Hour Act or Contract Work Hours and Safety Standards Act. The penalties are stiff, providing for up to two times the amount of the unpaid or underpaid wages, plus interest.
The lesson here? Like with all things involving government contracting, do your homework before jumping in with both feet. To obtain assistance, check with a representative of the Georgia Tech Procurement Assistance Center (GTPAC) nearest you. With proper preparation, you’ll be able to bid correctly, win a contract or subcontract, and then be able to bring home the real bacon.
© 2010 Georgia Tech Procurement Assistance Center – All Rights Reserved.
Contractors need to protect themselves with written work agreements
May 24, 2010 by cs
Jennifer Schaus has worked as an independent contractor for years, running her own K Street consulting firm, which helps companies navigate the federal government’s maze of opportunities. So when it’s time to sign a new agreement with a client, she takes time to make sure the contract works for herself and the other company. “I go through a couple of revisions until both parties are happy,” she said.
Working without a contract is fraught with peril. Independent contractors are not covered by most federal labor laws and protections; there’s no overtime, no discrimination protection, and, most of the time, no severance or unemployment insurance. Contractors need to put their protections into written agreements before they start work.
“Do your homework before you begin negotiations,” said Sara Horowitz, founder and executive director of the Freelancers Union, an organization that provides information and health insurance to 135,000 independent workers nationwide. Gather information from others in your field or join a professional organization to learn what the standards are for your sector and the work you’re about to undertake.
Even if you are starting with someone you trust, it’s worthwhile to sum up your agreement in an e-mail. That creates a record of some details on how you’re paid, the pay rate and more, Horowitz said.
“The most important thing is to get a real clear idea what the project is about. . . . That’s your best safeguard to not having problems,” Horowitz said. Then consider the final work product and determine whether you can retain any rights to it — whether it’s a white paper, an original illustration or a software code.
If you’re offered work as an independent contractor from your former employer, it may expect to have all rights to whatever you create, the same as it did when you worked there with benefits and vacation time. Make sure you’re not signing away rights that could prove valuable, she advised.
Schaus suggests working on-site for some, but not all, of your billable hours. Being on-site can give you a greater understanding of the organization, its processes and its plans, which could lead to more contract work. Yet you’ll want flexibility so you can work from home or a vacation cabin in Cape Cod this summer.
Two of the keys to a good contract are milestones that trigger payment and the terms of payment. Milestones will vary by the project, but they need to be clear and obtainable. Payment terms may need to include a collection provision or a clause that allows for late fees. Forty percent of independent contractors had trouble collecting their payments last year, according to a Freelancers Union survey of 3,000 people.
Many independent contractors barely eke out a living. Eighty-one percent reported they did not have enough work last year in the Freelancers Union survey.
Some contractors will ask you to sign non-compete and nondisclosure agreements before you begin. Review those carefully and limit their scope and duration. A non-compete agreement should last only until the project is over, according to “Working for Yourself,” a NOLO book aimed at freelancers and consultants.
Schaus has other suggestions:
- Choose clients carefully. Try to have two to four clients you actively work for so if one drops you, you still have income.
- Find an objective third party, such as a lawyer or veteran contractor, to review the contract before you sign.
- Don’t let work creep up. “If they throw more responsibilities on you, you need to amend the terms and scope of your contract,” she said.
- Include a renewal clause. If you build renewal into the contract, consider adding a 2 percent increase to your fee upon renewal.
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– By Vickie Elmer, Thursday, May 13, 2010; 3:20 PM – The Washington Post – Elmer is a freelance writer.
Federal Construction Contracts: What Goes in Your Contract?
May 7, 2010 by cs
As a construction contractor stuck in the down economy, you have probably began looking into federal and state public contracts. Its inevitable; we all know the government is still building, they build amazing projects, and they are certainly good for the money.
But as you ease your way into finding introductory resources, understanding public construction bidding, and looking at how wages are set by the Davis-Bacon Act or Project Labor Agreements – you can begin to foray into:
What happens when my bid is selected?
There are a lot of items that go into your federal contract. If you are a prime contractor negotiating with the public authority, you will generally be handed a lengthy AIA or ConsensusDOCS formatted agreement that follows the bidding specifications. If you are a subcontractor, you may be handed the new ConsensusDOCS federal subcontract template, or a vendor/subcontractor package created by the prime contractor’s counsel.
Both situations leave little room for negotiation and involve a wealth of provisions aimed at satisfying a number of federal guidelines, regulations and job-specific protocols.
So what are some vital principles that you should know before you look at your first federal contract?
(1) Contracts Must Meet Bidding Specifications -
For you prime contractors, do not expect to be able to alter the terms of your contract after bidding. Bidding is premised on the fact that each bidder accepts the same contract. Attempting to alter the terms of the contract after a bid has been accepted can lead to bid protests. Thus, contracting authorities are not going to bend or break your obligations.
(2) Contracts are Modeled After the Federal Acquisition Regulation -
The Federal Acquisition Regulation (FAR) is a 4 to 5 inch think manual mandating how the federal government procures work. The FAR can be located at Title 48 of the Code of Federal Regulations, Chapter 1 (48 CFR Ch. 1).
Know the FAR like the back of your hand. You do not need to know what each provision means, but know how it is indexed and how to locate relevant provisions.
The FAR is even more accessible these days thanks to new software like iFAR, an iPhone application that puts the FAR in your palm – out on the construction site. (iFAR includes the 2005 version of the FAR)
Do not be afraid of the FAR either. In many ways, it is written to be easily read and absorbed by even the greenest of contractors. You can always discuss your questions with your attorney.
(3) Contracts Might Include Terms That Are Not Written in the Contract -
Unfortunately, you cannot always base your understanding of your working relationship on the written contract. A doctrine known as the Christian Doctrine prevents just that.
The Christian Doctrine was established from the ruling in G.L. Christian & Associates v. United States, a 1963 case which found that found that if a contractual clause was required to be in a contract by the FAR, it would be incorporated into the contract by operation of law.
The Christian Doctrine has been further modified to apply (a) against the federal government in addition to against the contractor and (b) only for mandatory provisions in the FAR which “express a significant or deeply ingrained strand of public procurement policy.” See General Engineering Machine Works for more information on Part b above.
So, even though you have a contract, filed with a plethora of restrictions, regulations, obligations and codes of conduct – it can be expanded by the effect of law. This is even more reason to understand the FAR clearly.
Knowing these three principles will give you a good head start into obtaining a federal contract. The second step, for many contractors, is to find an attorney to help manage your risk and lead you through the construction process – dispute free.
– Reiser Legal LLC: The Builders Counsel Blog © 2010 – http://blog.reiserlegal.com/
Builder sues city over bid dispute
May 5, 2010 by cs
Another businessman who reached his boiling point over the city’s purchasing practices is suing Augusta’s government.
Tony Ammar filed suit in Richmond County Superior Court on April 14 on behalf of his company, Ammar Construction Co., against the city and its procurement director, Geri Sams.
The city notified Ammar on Sept. 3 that his company was the low bidder on a job to do repairs at the Henry Brigham Center.
Ammar said he started to prepare for the job, obtaining a performance bond — which cost $925 — and lining up workers.
Eight days after he was awarded the bid, Ammar received a letter from Sams that said his bid was deemed “noncompliant.”
Ammar appealed unsuccessfully to Sams, the administrative services committee and Augusta commissioners.
Several other businesses have contended in lawsuits that they’ve faced the same frustration with the city’s procurement practices, particularly over Augusta commissioners’ refusal to waive any violation of the “materiality provision.”
That provision, noted in every bid request, states that a proposal will be thrown out if any error is discovered. That includes everything from a signature in the wrong place to the inability to obtain bonding.
Ammar’s bid was thrown out because of the way he filled out a form that is supposed to be submitted by subcontractors. Ammar had no subcontractors, according to his lawsuit.
“The form, the ‘Subcontractor’s Affidavit,’ does not include any blank lines or other designated place for a general contractor to complete the information (when) there are no subcontractors,” the lawsuit contends.
The repair project was put out for bid again recently. The bid proposals are to be opened May 18; until then it won’t be known whether the city might have saved money by waiving the alleged error in Ammar’s proposal.
LATE LAST MONTH, the city won a federal court battle against three other businesses and the Association for Fair Government. In awarding the city summary judgment, U.S. District Court Judge J. Randal Hall wrote:
“The city should not interpret this decision as endorsing the quality of its procurement operations. In fact, the record in this case suggests otherwise. The court empathizes with the plaintiffs’ understandable frustration with the city’s poor administration of the procurement process.
“However, the court will not, in the words of the Supreme Court, ‘constitutionalize’ these disappointed bidder disputes when the law does not allow such action.”
Thompson Building Wrecking, CSRA Testing and Artistic Design challenged the city’s practices as inconsistent and applied unfairly. The lawsuit also alleged the city is needlessly spending millions of dollars by rejecting the lowest bids over technicalities.
Hall wrote, “The reasonable inference that may be drawn from the evidence is that the city sometimes enforces the materiality provision and sometimes does not. Sometimes the enforcement favors minority-owned companies, and sometimes it favors nonminority-owned companies. In other words, at worst, the city is inconsistent in its application of the materiality provision, regardless of race. The record does not evidence purposeful race discrimination or enforcement based upon any other impermissible purpose.”
Therefore, he found there was no constitutional violation. If there is any issue with due process, that should be decided under state law by a Georgia court, he wrote.
City officials are working on proposed changes to the procurement ordinance to address some aspects of the materiality provision, said Andrew MacKenzie, the acting city general counsel.
Details on providing a local vendor preference are being worked out by the commission’s administrative committee.
The procurement department staff has already taken steps to improve some of the required forms to simplify the paperwork, MacKenzie said. More changes are being worked on to reduce the amount of paperwork and the chance for errors, he said.
There is no question that state law allows a local government to waive technical errors, but Augusta commissioners have chosen not to do so for the sake of consistency, MacKenzie said.
“The balance is tough,” he said.
- by Sandy Hodson, Staff Writer – Wednesday, April 28, 2010 – The Augusta Chronicle – Source URL: http://chronicle.augusta.com/news/government/2010-04-28/builder-sues-city-over-bid-dispute
The 2 most important parts of a gov’t solicitation — and why you should pay attention to them
May 3, 2010 by cs
When you receive a government bid or proposal solicitation, what’s the first section you read?
If you’re like most people, you immediately focus on the “Scope of Work.” This is the section — referred to as the SOW — which describes the work that’s to be performed once the government awards an actual contract.
“What’s wrong with concentrating on the SOW first?” you might ask. “After all, it’s certainly necessary to have a thorough understanding of the government’s expectations.”
That’s logical, of course.
But have you ever thought about the dynamics of concentrating too much on the SOW?
Convincing Yourself You Can Do the Work — A Bad Approach
Most folks, as they read the SOW, not only gain an understanding of the government’s needs, but also begin to convince themselves that they can perform the work scope.
There’s a big problem with that. Convincing yourself that you can do the work is vastly different from meeting the government’s criteria for being selected to be awarded the contract.
That’s why the Georgia Tech Procurement Assistance Center (GTPAC) recommends that while you certainly should read the SOW, you initially should concentrate on the section of the solicitation that describes the proposal selection criteria.
Most government solicitations — especially those that involve the provision of professional services — will spell-out the selection criteria. Typically, this section of the solicitation will be labeled “Proposal Evaluation Criteria” or “Selection Criteria.” Basically, what this section discloses are the criteria the government will use to “score” or evaluate the proposals that are submitted. In essence, the government is telling you how they will grade your bid proposal.
Convincing the Government You Can Do the Work – The Right Approach
Believing you can perform a government contract is irrelevant to the selection process. You may, in fact, be able to perform the work (and do it well), but you won’t be awarded to contract unless and until the government is convinced you can do the work better than anyone else, and at a fair and reasonable price. How the government makes this determination is through application of the propopsal evaluation criteria.
Thus, what’s really important to being selected for a government contract award is scoring well against the government’s evaluation criteria. When selection criteria are outlined in the government’s proposal solicitation document, they not only tell you what’s important to the government but also which criteria are more important than others. In other words, selection criteria are often weighted.
For example, a solicitation might list three selection or evaluation criteria: past experience in performing similar work, adequate financial resources, and credentials of personnel assigned to perform the work. In this hypothetical example, the three criteria may not be regarded as equal in importance to the government. If that’s the case, the criteria also will indicate the order of importance or the “weight” each criteria is assigned. For instance, past experience may be assigned 35% importance, financial resources may be given 20% importance, and project personnel might be assigned a weight of 45%. This gives you clear guidance as to how the government will evaluate your proposal should you decide to submit one. Moreover, the criteria and the weights assigned to them give you clear guidance on what you should emphasize and elaborate on in your proposal.
Make a “Go-No Go” Decision
In the example just given, if your firm has plenty of past relevant work experience but you are unable to commit experienced staff to the government’s project, you won’t be able to score well against a major selection factor. If you are not able to assemble a qualified team — and commit to using them if awarded the contract — then you may want to take a pass on submitting a proposal.
On the other hand, if you can “nail” each of the selection criteria (i.e., your firm prosesses relevant past work history, you have strong financial backing, and can assign highly qualified personnel to the project), then you should, by all means, proceed with the preparation of a proposal.
Score Yourself!
Concentrating on the selection criteria early in the proposal preparation process will force you to be much more objective about evaluating your chance of winning an award. Remember, winning is all about convincing the government you can do the work, and not about convincing yourself.
Counselors with the Georgia Tech Procurement Assistance Center (GTPAC) suggest that bidders and proponents score themselves, early on, against the selection criteria. If you score high, proceed with the preparation of your proposal, emphasizing throughout your document how you match-up with the criteria. If you initially don’t score well, you may wish to take a pass. Or, if time permits, you may choose to team up with another firm who can boost your firm’s overall credentials in relationship to the selection criteria.
Whatever you do, don’t ignore the selection criteria or fail to address in your proposal how you stack-up against them. As the government evaluates the proposals submitted, each one is scored against the criteria. Proposals that don’t score well enough are eliminated from consideration. So, the most qualified firm in the world won’t be awarded a contract unless its proposal scores high in relation to the proposal evaluation criteria.
Tip: Score your firm against the criteria initially — and be sure to score your proposal throughourt the proposal preparation process – to make sure you are “speaking to” the criteria.
What Else Is Important?
The title on this article says there are two important parts of a government solicitation. We’ve just outlined the importance of a solicitation’s proposal evaluation criteria, so what is the other important section?
It’s called “Instructions to Bidders” (sometimes called “Proposal Preparation Instructions” or something similar).
The Instructions section of the solicitation is a test of your appreciation for attention-to-detail. The government’s proposal preparation instructions must be followed to the letter, and you should provide no more and no less information in your proposal than that which is specified in the solicitation.
Bidders and proponents are often influenced by their own opinions about that the government “must really mean” or what they “actually need.” Resist the temptation to think that way. If you have a suggestion regarding the scope of work or some other aspect of the work to be performed, voice it early, before the actual solicitation document is issued. If a “comment period” is provided for, submit your thoughts and suggestions within the specified time frame, and not later.
When the final solicitation document is issued or is ”on the street,” it’s usually too late to offer your opinions. At that point, you must focus on being responsive — exactly — to the Instructions to Bidders in order to be given serious consideration.
Bid proposals which do not conform to the Instructions typically are declared “non-responsive” by the government and are literally discarded.
The Instructions section of a solicitation often spells-out such things as the maximum number of pages a proposal can consist of, how the proposal is to be organized, how it is to be packaged and delivered, and even the font style of the text.
Don’t risk your otherwise-well-qualified proposal being rejected – make sure you follow all instructions to the letter and be sure to meet the delivery deadline, not a second late!
© 2010 Georgia Tech Procurement Assistance Center – All Rights Reserved.
How To Request One-On-One Assistance from GTPAC
March 26, 2010 by cs
By now you know that the Georgia Tech Procurement Assistance Center (GTPAC) offers assistance to Georgia businesses seeking information about and help with government contracting issues.
The question you are probably asking yourself is how do I arrange for some one-on-one assistance?
GTPAC Counselors addressed over 8,000 counseling requests last year. Because of the high demand for our services, we take a systematic approach to providing help.
Here’s the best way to obtain our help:
- If your need for government contracting assistance is general in nature (“How do I register?” “Who buys what I sell?”), then you should first consider attending one of GTPAC’s classes. Take a look at all the topics covered (click on the TRAINING tab at the top of this page) and pick the one most relevant to your needs. By attending a class, you’ll benefit from several hours structured instruction, plus handouts and other class resources which will be made available to you.
- Remember, in order to receive our counseling in any comprehensive way, you must become a registered client of GTPAC. You can find details on how to become a client at ABOUT US .
- If, after taking relevant classes, you feel you need individualized help, consider sending an email to one of our Procurement Counselors. If you have a question about a particular government solicitation document, be sure to give us the solicitation number and identify the government agency. Make sure the “Subject” line of your email is relevant to the topic you are addressing, as that will help us identify the category of help you need and prioritize our response. Also, be sure to identify yourself and your business name. All of these points constitute good email etiquette — something that’s very important when you begin to communicate with government contracting officials. We promise you a prompt response to your email; if you don’t hear back from us wihin a day or two, inquire again — remember, email is not foolproof.
- Going over your draft bid or proposal in response to a government solicitation is an ideal reason for meeting one-on-one with a GTPAC Counselor. Call or email the Counselor nearest you to set up an appointment. Here are some other tips to make the meeting productive: 1) Provide us with a copy of the government solicitation in advance of the meeting (email the document or provide us with the URL where it’s posted) and note your questions or the points you don’t understand; and 2) Make your best effort and us your first draft of your response (digital documents via e-mail attachment). If you follow these preparation steps, your Counselor will be prepared to meet with you and can give you the maximum amount of assistance.
Remember, mastery of government contracting comes about as a result of lots of reading as well as trial and error. The first bid proposal you prepare will be the hardest. Each one you prepare after that will become a little bit easier. Government language and requirements will become more and more familiar. GTPAC will provide you with the instruction and tools along the way. Take heart, be tenacious … and you will succeed.
© 2010 Georgia Tech Procurement Assistance Center – All Rights Reserved.