DOT’s DBE rule would heighten accountability, raise net worth limit, require reciprocity
May 10, 2010 by cs
Small businesses would benefit from a proposed rule that would help more economically and socially disadvantaged businesses participate in federal highway, transit and airport construction projects, while making the states and agencies that run the Disadvantaged Business Enterprise (DBE) Program more accountable, according to U.S. Transportation Secretary Ray LaHood in a statement on May 7th. “When we help small businesses, we’re helping get the economy going,” said Secretary LaHood. “This is an important rule that can help small businesses owned and controlled by women and minorities.”
The proposed rule would:
- Require greater accountability from state and local transportation agencies. Those that fail to meet established goals to include disadvantaged business enterprises in their spending plans must analyze the reasons for the short-fall and offer corrective actions.
- Prevent DBEs from being removed from the program prematurely. It would raise the personal net worth limit for DBE owners from the present $750,000, to an inflation-adjusted $1.3 million. This personal net worth limit was set in 1989 and has not been adjusted since.
- Add safeguards to make sure that prime contractors fulfill commitments to use DBE subcontractors. State and local agencies would have to conduct post-award monitoring of each contract for this purpose, and prime contractors could not dismiss DBE subcontractors without good cause.
- Reduce burdens on small businesses seeking DBE certification in more than one state. Any state would have to accept another’s existing certification, unless it found good reason not to. Currently DBEs must seek certification in each state in which they wish to do business.
The U.S. Department of Transportation’s DBE Program helps for-profit small businesses in which socially and economically disadvantaged individuals own at least a 51 percent interest and control management and daily business operations to compete for government contracts. It does this by requiring state and local transportation agencies to establish goals for DBE participation.
The U.S. Department of Transportation’s proposed rule to improve the DBE Program appears in the 5/10/2010 Federal Register. Public comment can be submitted through July 11, 2010.
Agencies to increase outreach to stimulus recipients
May 7, 2010 by cs
Federal agencies for the first time now must contact new recipients of Recovery Act funds to notify them of their obligations to file mandatory spending reports, according to governmentwide guidance by Office of Management and Budget Director Peter R. Orszag.
No later than 10 days before the start of each quarterly reporting cycle, agency officials must touch base with first-time recipients of stimulus contracts, grants or loans to remind them of the reporting requirements and the consequences of noncompliance, Orszag wrote in a memo on Tuesday.
Agency officials also must reach out to recipients that were noncompliant in the previous reporting cycle and continue to follow up with them throughout the period “to consistently and comprehensively pursue compliance.” Contact should be made by phone and with an accompanying letter faxed or mailed to the recipient, the guidance said.
“The vast majority of recipients have complied with the reporting obligations,” Orszag wrote. “However, where a recipient has failed to meet these obligations, agencies will be held accountable for taking appropriate actions to enforce the reporting requirements.”
The Recovery Act requires recipients to submit to FederalReporting.gov quarterly information on how they are spending the funds. But during the final three months of 2009, more than 1,000 recipients failed to file reports. More than 300 of those recipients also neglected to file during the initial reporting cycle in October 2009, according to data from the Recovery Accountability and Transparency Board. Later this month the board plans to post the list of nonfilers for the first quarter of 2010.
The agencywide guidance implements an April presidential directive to more aggressively crack down on awardees that refuse to disclose their spending.
If delinquent Recovery Act recipients continue to ignore warnings to file their spending reports, then agencies can restrict access to the awarded funds, Orszag said. Stimulus recipients that are noncompliant for two or more consecutive reporting periods could face stiffer punishments, including canceling the award, withholding funds, downgrading the company’s performance record, or initiating suspension and debarment proceedings.
An amendment to the Senate’s unemployment and tax extender bill, sponsored by Sens. Mark Warner, D-Va., and Mike Crapo, R-Idaho, would authorize the attorney general to pursue civil penalties of up to $250,000 against grant recipients who knowingly and consistently fail to report their stimulus spending. The bill is awaiting action in the House.
- by Robert Brodsky – GovExec.com – May 5, 2010 – (C) 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED.
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/
VA is exceeding veteran contracting goals, says watchdog
May 6, 2010 by cs
The Veterans Affairs Department has made impressive progress in awarding a high percentage of its contracts to veteran-owned small businesses, but needs to improve its ability to verify the status of those firms, a government watchdog testified on Thursday.
In fiscal 2009, VA awarded almost 20 percent of its contracts to veteran-owned small businesses, nearly doubling its total from fiscal 2007, according to preliminary data the Government Accountability Office released during a hearing of the House Veterans Affairs Economic Opportunity Subcommittee.
The percentage of VA contracts awarded to service-disabled veteran-owned small businesses is also on the rise, up from 7 percent in fiscal 2007 to nearly 17 percent in fiscal 2009, GAO reported.
The 2006 Veterans Benefits, Health Care and Information Technology Act contributed to the increase. The law required VA to establish a contracting set-aside program and to boost the percentage of sole-source contracts going to veteran-owned small businesses.
GAO has spent almost three years examining the effects of that provision and plans to release a formal report on the data in June, said William Shear, director of financial markets and community investments at GAO.
A closer look at the data shows reason for concern, Shear said. The report found that when VA uses another agency to execute its contracts, the agreements did not always employ the required language mandating preferences for service-disabled veteran-owned and veteran-owned small businesses.
“Without a plan or oversight activity such as monitoring, VA cannot be assured that agencies have made maximum feasible efforts to contract with SDVOSBs or VOSBs,” Shear said.
VA also is struggling to implement a provision in the 2006 law that requires the department by 2012 to verify all companies winning sole-source and set-aside contracts are properly screened and vetted, GAO found.
Companies can self-certify as veteran-owned small businesses, but an October 2009 GAO report found the governmentwide program was vulnerable to fraud and abuse.
Thus far, VA has verified roughly 2,900 companies — approximately 14 percent of businesses in its mandated database of veteran-owned and service-disabled veteran-owned small businesses, Shear said. The department is processing more than 4,700 additional applications, but interest in the program appears to be causing an administrative backlog. VA’s Center for Veterans Enterprise has received more than 10,000 applications for verification since May 2008.
Tim Foreman, executive director of VA’s Office of Small and Disadvantaged Business Utilization, said three contractors have been hired to help process and verify the applications. “A problem has been that the training [of the contractors] has not been as good as our people,” Foreman said.
The department also hired a contractor to review its contractor verification process and to recommend ways to streamline and improve the system, Shear said.
GAO conducted a random sample of the files for 112 businesses that VA had verified by the end of fiscal 2009. Nearly half the files lacked required information on how staff determined that control and ownership requirements were met. VA procedures call for site visits to investigate the ownership and control of higher-risk businesses with more than $5 million in department contracts.
“But the agency has a large and growing backlog of businesses awaiting site visits,” Shear said. “Although site visit reports indicate a high rate of misrepresentation, VA has not developed guidance for referring cases of misrepresentation for enforcement action.”
The department plans to stand up a suspension and debarment office by this summer, according to Foreman. Other cases of fraud or abuse, he said, could be referred to the VA inspector general or to the Justice Department for prosecution.
Governmentwide, agencies have fallen well short in meeting the statutory goal of awarding 3 percent of all contracts to small businesses. In fiscal 2008, service-disabled veteran-owned small businesses received 1.5 percent of all federal prime contracts.
“Procurement officers will tell you that number is negligible and no big deal,” said Joseph C. Sharpe Jr., director of the National Economic Commission at the American Legion. “But while a 2 percent shortfall may not sound like a lot, it ultimately cost entrepreneurs $10 billion in missed opportunity. Or to put it another way, it cost Americans $10 billion in lost job creation.”
Preliminary governmentwide data indicates that service-disabled veteran-owned small businesses won roughly 2 percent of all contracts in fiscal 2009, said Joseph Jordan, associate administrator for government contracting and business development at the Small Business Administration.
The increase can be attributed partly to the 2009 Recovery Act, in which veteran-owned small businesses received more than 6 percent of all prime contracting dollars, or almost $1.6 billion. During that same period, 4.3 percent, or nearly $1.1 billion, have been awarded to service-disabled veteran-owned small businesses, he said.
Many of the outreach, training and education processes that were successful in increasing stimulus contracting for veteran-owned small businesses soon will be applied to all federal procurements, Jordan said.
On Monday, President Obama established an interagency task force to improve the percentage of contracts going to veteran-owned small businesses.
- By Robert Brodsky – GovExec.com – April 29, 2010 – (C) 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED.
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
Contracting program to help the disadvantaged riddled with fraud
May 3, 2010 by cs
It’s happened again. For the third time in as many years, a watchdog found that con artists and ineligible companies gamed the government’s procurement system to fraudulently win small business contracts, this time in a program designed to assist economically disadvantaged individuals.
In a report released on Friday to the House Small Business Committee, the Government Accountability Office identified 14 firms that received set-aside or sole-source 8(a) contracts worth a combined $325 million through fraud or abuse. All together, these firms won an additional $1.2 billion in contracts since entering the 8(a) program, including $17 million in Recovery Act awards.
“The 8(a) program needs to strengthen its fraud prevention, detection, monitoring and investigative controls to minimize its vulnerability to fraud and abuse,” the report said.
Investigators found companies representing themselves as disadvantaged despite owning yachts, luxury automobiles and millions of dollars in ocean-front property. The maximum threshold for entering the 8(a) Business Development Program is $250,000 in annual net worth, excluding the applicant’s ownership interest of the company and primary residence. Other executives misrepresented their ethnicity or used a pass-through company to continue winning contracts long after graduating from the program, GAO found.
Fraud in the Small Business Administration’s contracting programs is nothing new. In 2008, GAO created bogus companies to win small business contracts in the Historically Underutilized Business Zone program. Last November, the watchdog reported on extensive fraud in the veteran-owned service-disabled small business contracting program.
“Fraud has been a persistent problem with all of the SBA’s contracting programs and it is clear from this report, as well as previous work done by the committee and GAO, that SBA needs to do a better job of ensuring these initiatives work as intended,” said Rep. Nydia Velazquez, D-N.Y., chairwoman of the House Small Business Committee, in a statement to Government Executive.
To participate in the 8(a) program, an applicant must be considered a small business, be unconditionally owned and controlled by a socially or economically disadvantaged individual, show the potential for success and be of “good character.” Companies must graduate from the program within nine years.
But GAO found the program is easy to manipulate. For example, a Toms River, N.J., construction company owner reported his adjusted net worth to be $217,000 when it was actually more than $800,000, according to the watchdog. Nonetheless, the firm won $11.2 million in 8(a) contracts from the Defense and Homeland Security departments. The company withdrew from the 8(a) program in September 2009 as a result of GAO’s investigation.
In another case, investigators found that a roofing and construction company in Hyattsville, Md., with $48.3 million in contracts was acting as a pass-through for a graduated firm. Both firms were actually run by a white father-and-son team; the 8(a) program is designed for minority-owned firms. The two businesses essentially were operating as one company, the report said, sharing top executives, staff, administrative offices and warehouse space.
The fraud became apparent to investigators during a visit to the business. “The white vice president disclosed much of the operational knowledge of the firm during the site visit, while the black president rarely spoke,” GAO said. “The white executives both work out of large suites while the black president sits in a small room located at the back of the building.”
The report identified several other instances in which companies established shell companies that would win the award, but not perform any of the work. Some executives hid their lavish lifestyle from SBA, including the president of an information technology firm in Bethesda, Md., who owns a $2.5 million house on a private island in Miami, a $450,000 yacht and a $200,000 Lamborghini, investigators found.
GAO brought three cases to SBA, but the agency failed to take action, allowing the companies to continue winning contracts. For instance, an IT firm in Fairfax, Va., should have been removed from the program after its president failed to disclose $4.2 million in personal property, the report found.
“We brought the unreported assets to the attention of SBA,” the report said. “However, once SBA learned that the firm was scheduled to graduate in eight months, it no longer wanted to investigate the firm’s actions. Eleven days later, the firm was awarded a $1.7 million contract.”
Even firms that voluntarily disclosed ineligibility remained in the program. The president of a human resources firm in Alexandria, Va., told SBA she had an annual salary of nearly $750,000– well above the threshold to remain in the program — yet officials allowed the company to stay in the program for another five years.
In response to the findings, SBA conceded that its fraud prevention systems needed improvement. “Although the 8(a) business development program has enjoyed numerous successes, we recognize that there are weaknesses and areas that require increased monitoring and oversight,” wrote Joseph Jordan, associate administrator for government contracting and business development.
The agency did have a measure of success in screening out bogus applications GAO submitted. In three cases, SBA discovered questionable assets and income with the fake companies. But in another instance, investigators obtained 8(a) certification for a phony firm using fabricated documents.
“Certification of GAO’s bogus firm shows vulnerabilities in the process such as the lack of any face-to-face contact that could allow ineligible individuals or pass-through companies to enter the program,” the report said.
According to SBA, in fiscal 2008, there were 9,462 firms certified to participate in the 8(a) program, and about half had at least one active sole-source or set-aside contract. Agencies awarded more than $16 billion in 8(a) contracts that year, allowing the government to exceed its goal of giving 5 percent of all contracts to small disadvantaged businesses.
In October, SBA recommended major changes to the eligibility and income requirements of the 8(a) program. The rule is expected to be finalized by June.
SBA spokesman Michael Stamler said Friday that the proposed regulatory changes would address “several of the recommendations made by the GAO, and will strengthen the program and maximize its benefits for eligible small businesses.” He added SBA is “taking further steps, in line with GAO recommendations, to prevent fraud, waste and abuse.”
- By Robert Brodsky – govexec.com – April 30, 2010
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.
NASA Sued for Refusing to Release Contracting Data
April 30, 2010 by cs
On Wednesday, April 28, 2010, the American Small Business League (ASBL) filed suit against NASA in Federal District Court, Northern District of California. The case was filed under the Freedom of Information Act (FOIA) after NASA refused to release subcontracting reports for contracts awarded to General Dynamics C4 Systems Incorporated. (http://www.asbl.com/documents/complaint_GD_NASA.pdf)
The ASBL requested information from NASA on a contract awarded to General Dynamics after discovering that a contracting officer reported the award as a small business contract.
Wednesday’s suit is the second lawsuit filed by the ASBL against NASA. In February of 2007, the ASBL prevailed in its first suit against NASA, forcing the agency to provide detailed information proving the agency falsified its small business contracting statistics by including contracts to a variety of Fortune 500 firms and other large businesses.
Since 2003, over a dozen federal investigations have found billions of dollars a month in federal contracts earmarked for small businesses have been diverted to Fortune 500 firms and some of the largest companies in the world. The large recipients of federal small business contracts include: Lockheed Martin, Boeing, Raytheon, Northrop Grumman, Dell Computer, British Aerospace (BAE), Rolls-Royce, French giant Thales Communications, Ssangyong Corporation headquartered in South Korea, and the Italian firm Finmeccanica SpA. (http://www.asbl.com/documents/20090825TopSmallBusinessContractors2008.pdf)
The ASBL plans to file a series of FOIA requests to NASA as a means of uncovering more federal small business contracts that were diverted to Fortune 500 firms. Specifically, the ASBL intends to uncover contracts awarded to large corporations that were coded as small business contracts by contracting officers.
Section 16(d) of the Small Business Act states, “whoever misrepresents the status of any concern or person as a ‘small business concern’…to obtain for oneself or another,” any prime contract or subcontract with the government shall be subject to penalties of $500,000, 10 years in prison and/or debarment from federal contracting programs. (http://www.sba.gov/regulations/sbaact/sbaact.html)
Attorneys for the ASBL believe federal contracting officials, and possibly even employees of prime contractors, could be held liable for penalties prescribed under section 16(d) of the Small Business Act for fraudulently misrepresenting large firms as small businesses.
“This issue has gone on unabated for over decade. I don’t think these abuses are going to stop until people start going to prison,” ASBL President Lloyd Chapman said.
To watch a clip about the ASBL’s suit click here: http://www.youtube.com/watch?v=Yx-SyChw06I
Bid protest statistics released by GAO
April 29, 2010 by cs
The US Government Accountability Office (GAO) recently released its bid protest statistics for fiscal year 2009.
The number of protests filed rose to 1,989 cases, an increase of 20 percent from the previous fiscal year. Half of this increase is attributable to the GAO’s recently expanded jurisdiction over bid protests involving task and delivery orders, OMB Circular A-76, and the Transportation Security Administration.
Of 315 decisions on the merits, the GAO sustained 57 protests, which represents a sustain rate of 18 percent. However, the reported “Effectiveness Rate” – which is based on a protester obtaining some form of relief from the contracting agency – was 45%. This indicates that agencies took voluntary corrective action in a significant number of cases.
The GAO also reported that there was one instance in which an agency did not fully implement a recommendation made by the GAO in connection with a bid protest. This case involved the sole-source award of a U.S. Army contract for information technology support for the Office of the Judge Advocate General.
The bid protest statistics are available at http://www.gao.gov/special.pubs/bidpro09.pdf.
Source: Fried Frank Government Contracts Alert ® No. 10-04-09
Georgia Tech Helps North Georgia Metal Fabricator Increase Production and Sales
April 28, 2010 by cs
Lee Adams, president of Fabritex Inc., remembers exactly how his family-owned business started. His entrepreneurial father had purchased a trampoline and realized he could make the metal frame as well as anybody else.
“We started 20 years ago in 1989, and since then, we’ve grown into a 55-employee, 110,000-square-foot facility with an emphasis on tube fabrication and sheet and plate fabrication,” Adams said. “We manufacture everything from tubular wire carriers to stem baskets to annealing process materials. Just because we haven’t built something before doesn’t mean we’re not going to quote on it. We try to think outside the box and sell ourselves as a one-stop shop.”
It was precisely this innovative mindset that brought both opportunity and challenges to Fabritex, based in Hartwell, Ga. In 2007, a customer asked Adams about producing a new product line within a specific timeframe and gradually ramping up production to cut cost. To determine the most efficient way to do so, Adams called on Georgia Tech’s Enterprise Innovation Institute.
Tara Barrett, Danny Duggar and Karen Fite, all project managers with the Enterprise Innovation Institute, led a project in value stream mapping, a technique used to analyze the flow of materials and information required to bring a product or service to a consumer. As part of a value stream mapping project, the team developed a value stream map that identified all the value-added and non-value-added steps then in use, assessed the current state to create product flow by eliminating waste, and drew and implemented a map showing what the future state could be.
“Fabritex needed to increase throughput and reduce cost. The results were that they were able to increase their production to a capacity of 500 units per month and meet their customer’s requirements,” noted Fite. “Our goal is to have Fabritex learn the concepts and continue to implement them after we’re gone.”
According to Adams, the process is now streamlined and more efficient. The company has made nearly $300,000 in capital investments, saved $100,000 and increased sales by more than $1 million. The company also created eight jobs and doubled production.
“Georgia Tech was really able to get the creative juices flowing. It gave the guys working on the floor the encouragement to make improvements and make suggestions where normally they wouldn’t have spoken up,” Adams observed. “Now there’s a craftsmanship to what they do; they’re not just here punching a clock.”
The value stream mapping project proved so successful that the company has continued to partner with Georgia Tech. Dan Trier, sales and marketing manager, has already taken several classes offered through the Georgia Tech Procurement Assistance Center (GTPAC), an organization based at the Enterprise Innovation Institute that helps Georgia businesses identify, compete for and win government contracts.
“We’ve had a Corps of Engineers project for more than 10 years, but this is an area we would like to explore more. I’ve attended classes on how to read and speak government procurement language, which is not easy, as well as learning where to find government contracts, how to read them and how to fill them out,” Trier said. “Joe Beaulieu, Steve Bettner and Chuck Schadl will answer any question we have and have really been helpful in terms of where to find the contract opportunities.”
In addition to classes, GTPAC provides its clients with coaching, mentoring and a set of tools to research and identify government contracting opportunities. Services are available at no cost to any Georgia business, large or small, that possesses the interest and potential to perform work, as a prime contractor or a subcontractor, for federal, state or local government agencies.
According to Fite, Fabritex has all the ingredients for success, especially in these challenging economic times.
“Fabritex had the right culture to accept and tackle this type of project – a strong culture that adapts to change, employees who will create solutions to unique problems, and, most importantly, leadership that promotes continuous improvement through the motivation, guidance and support of employees,” she said.