Georgia Tech Procurement Assistance Center

SBA OHA decides 3-year receipts calculation period still applies

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Since being passed by Congress in late 2018, the Runway Extension Act has been the source of great confusion among small business contractors: would size under receipts-based NAICS codes be calculated under the 3-year calculation period set out in the SBA’s regulations, or under the new 5-year calculation period mandated by Congress?

In a decision just publicly released, the SBA Office of Hearings and Appeals has weighed in.  As of now, the SBA will still calculate size under the 3-year calculation period.

The applicability of the Runway Extension Act was debated in Cypher Analytics, Inc. dba Crown Point Systems, SBA No. SIZ-6022 (Aug. 27, 2019).  In that case, Cypher Analytics was found to be other than small under NAICS code 541611 after the SBA applied a 3-year calculation period.

Cypher Analytics appealed to the OHA, arguing that the SBA erred by not applying the 5-year calculation period required under the Runway Extension Act.  Despite several arguments raised on appeal, OHA was unpersuaded that the 5-year calculation period should apply.

To understand the reasoning behind OHA’s decision, visit:  SmallGovCon

GSA to release consolidated MAS program schedule on first of October

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This week, GSA announced it is on track to debut its Consolidated Multiple Acquisition Schedule (MAS) Program Schedule Solicitation on October 1. GSA also gave federal contractors planning to bid on the MAS a head start on the process by releasing a final draft solicitation and an updated industry FAQs sheet. Let’s take a look at how to utilize this opportunity to prepare for the solicitation’s long-awaited debut.

GSA’s MAS Program “establishes long-term Government-wide contracts with commercial firms to provide government buyers with access to a wide variety of commercial supplies, services, and solutions.” GSA first announced its plan to modernize this Program “by consolidating its 24 Multiple Award Schedules into one single Schedule for products and services” on November 27, 2018. GSA aimed to “simplify the buying and selling experience for customers, suppliers, and acquisition professionals.” Over the past ten months, GSA conducted extensive market research and collected industry-wide feedback regarding its consolidation strategies, the new single solicitation format, and the streamlined terms and conditions.

GSA recently announced its plans to publish the Consolidated MAS Program Solicitation on FedBizOpps on October 1, so now’s the time to become familiar with the effects of the consolidation.

Continue reading at:  SmallGovCon 

Government contractor pleads guilty to fraud for paying drivers as independent contractors

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Paying workers as independent contractors instead of as employees may land a former executive in jail for criminal wire fraud.  On June 12, 2019, the former operations manager and vice president of a Florida-based mail transportation contractor pled guilty to two counts of wire fraud related to such treatment.  The Government’s case was based on pricing estimates for employee-related costs that the contractor later did not incur because it instead used independent contractors.

In the June 1, 2018 indictment of Alexei Rivero, the Government contended that Rivero purposely misclassified the drivers it hired as independent contractors.  According to the indictment, this allowed the contractor to “misappropriate” $1.5 million in USPS contract payments “designated” for fringe benefits and $1.2 million designated for payroll taxes.

Continue reading at:  Husch Blackwell’s The Contractor’s Perspective

DoD releases public draft of cybersecurity maturity model certification

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On September 4, the Office of the Assistant Secretary of Defense for Acquisition released Version 0.4 of its draft Cybersecurity Maturity Model Certification (CMMC) for public comment.  The CMMC was created in response to growing concerns by Congress and within DoD over the increased presence of cyber threats and intrusions aimed at the Defense Industrial Base (DIB) and its supply chains.  In its overview briefing for the new model, DoD describes the draft CMMC framework as a “unified cybersecurity standard” for DoD acquisitions that is intended to build upon existing regulations, policy, and memoranda by adding a verification component to cybersecurity protections for safeguarding Controlled Unclassified Information (CUI) within the DIB.  As discussed in a prior post, the model describes the requirements that contractors must meet to qualify for certain maturity certifications, ranging from Level 1 (“Basic Cyber Hygiene” practices and “Performed” processes) through Level 5 (“Advanced / Progressive” practices and “Optimized” processes), with such certification determinations to generally be made by third-party auditors.

The CMMC establishes a new framework for defense contractors to become certified as cybersecurity compliant.  DoD has stated that it intends to release Version 1.0 of the CMMC framework in January 2020 and will begin using that version in new DoD solicitations starting in Fall 2020.  Notwithstanding the pendency of these deadlines, a large number of questions remain outstanding.  DoD is seeking feedback on the current version of the model by September 25, 2019.

Continue reading at:  Covington’s Inside Government Contracts

Navy tightens cybersecurity requirements

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Almost a year after Assistant Secretary of the Navy James Geurts issued his September 28, 2018 memorandum (Geurts Memo) imposing enhanced security controls on “critical” Navy programs, the Navy has issued an update to the Navy Marine Corps Acquisition Regulations Supplement (NMCARS) to implement those changes more formally across the Navy.  Pursuant to this update, a new Annex 16 in the NMCARS provides Statement of Work (SOW) language that must be added into Navy solicitations and contracts where the Navy has determined “the risk to a critical program and/or technology warrants its inclusion.”  In addition to the technical requirements reflected in the Geurts Memo, the Navy has added Subpart 5204.73 to the NMCARS that, among other things, instructs Contracting Officers (COs) to seek equitable reductions or consider reducing or suspending progress payments for contractor non-compliance with the Annex 16 and DFARS 252.204-7012 (DFARS clause) requirements.

Continue reading at:  Covington

Retired colonel sentenced in Fort Gordon bid-rigging scheme

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A retired Army colonel involved in a $20 million bribery and bid-rigging scheme in government contracts at Fort Gordon was sentenced to five years in prison Friday.

Anthony Williams, 59, pleaded guilty to conspiracy in March for his role in the scheme that was in effect from 2008 to 2014 as the building and modernization of communications networks at Fort Gordon took place.  Williams took $1.2 million in bribes while on active duty in Washington and in charge of the billion-dollar battle command budget.

Williams conspired with retired Col. Calvin Lawyer, who left his position overseeing the fort’s building and modernization of networks to start his own business to obtain government contracts.  Col. Anthony Roper took Lawyer’s former position and steered government contracts valued at $20 million to Lawyer’s company and a second company, a subcontractor owned by Williams’ good friend, identified only as “J.D.Y.” in court documents.

It was at J.D.Y.‘s company that a no-show job was set up for Williams’ wife, who was paid $963,000.  The subcontractor was paid $13 million, a sum not included in the formal conspiracy, Senior Judge Dudley H. Bowen Jr. noted Friday.

Continue reading at:  The Augusta Chronicle

C-17 SPO, Boeing sign MOU for sustainment of C-17 fleet

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The C-17 System Program Office at Robins Air Force Base, Georgia, signed a memorandum of understanding with The Boeing Company on Aug. 21, 2019, related to the sustainment of the C-17 aircraft once the current contract expires in 2021.  The event signified high-ranking leadership’s commitment towards the aim of expeditiously awarding the follow-on contract, valued at $23.76 billion, once the current contract expires, Oct. 1, 2021.

You can read more about the agreement at the:  Robins Air Force Base website

 

Cyber Command head wants name changed

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U.S. Army Cyber Command is on its way to Augusta, but it might look a little different.

During a keynote address at AFCEA’s TechNet Augusta 2019, Lt. Gen. Stephen Fogarty, the commander of Army Cyber Command since May 2018, said he plans on proposing a name change over the next two months.  Because of the wide variety of responsibilities soldiers will have to perform in the cyber branch of the military, Fogarty said “Army Information Warfare Command” would be a more accurate descriptor.

Over the course of this year, Fogarty said the military plans to bring Army Cyber Command headquarters to Fort Gordon from Fort Belvoir, Va.  He said there are already a significant amount of soldiers and some civilians in the area, and he expects the headquarters building to be finished and operating by June 20, 2020.

Fogarty also emphasized the need for speed in cyberwarfare.  He said progress in cyberspace has been impeded by bureaucracy, and that the U.S. needs to create an information dominance.  He called on industry partners and academics for advice on the best way to train and equip soldiers for missions in cyberspace.

Continue reading at:  Augusta Chronicle

Small architect/engineering firms are encouraged to respond to GSA’s ‘sources sought’ by Sept. 5th

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On August 14, 2019 GSA posted a Sources Sought Notice was posted to FedBizOpps to award a multiple award indefinite delivery, indefinite quantity (IDIQ) contract.  This requirement is to perform architectural/engineering and related services for the facilities of customer agencies of the Special Programs Division (SPD) across the nation.  All small businesses are encouraged to respond.

Responses are due by September 5, 2019 at 4PM Central.

Details are available:  HERE

DOJ cracks down on set-aside contracting fraud

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This week, the Department of Justice (“DOJ”) issued two press releases regarding companies and individuals that agreed to settle False Claims Act cases related to government contracting fraud.  United States Attorney Maria Chapa Lopez announced that Sunrise Systems of Brevard, Inc. had agreed to pay the United States $500,000 to resolve allegations that it violated the False Claims Act by submitting claims for government funds in violations of Small Business Administration regulations.  According to the settlement agreement, from December 10, 2013, through February 9, 2016, Sunrise partnered with a minority-owned small business, V&R Enterprises of Jacksonville, Inc., but violated the SBA’s labor and work performance requirements in order to access SBA set-aside funds.  The government alleged that Sunrise performed nearly all of the work on the joint venture project and received nearly all of the profits, in violation of the law.  In another case, Luke Hillier, the majority owner and former Chief Executive Officer of Virginia-based defense contractor ADS, Inc., agreed to pay the United States $20 million to settle allegations that he violated the False Claims Act by fraudulently obtaining federal set-aside contracts reserved for small businesses that his company was ineligible to receive.

Both cases illustrate that it is critically important that companies both large and small know and understand the rules and regulations governing small business set-aside procurements.  This is especially important when it comes to performance of work requirements (limitations on subcontracting), which often require the small business on a set-aside procurement to do a requisite amount of work depending on the type of contract at issue.  On a set-aside contract that is restricted for a certain types of small business, it is often illegal for the small business to subcontract out all of the work to a large subcontractor.  Further, small businesses cannot be deemed affiliates or too closely affiliated with a large business or they could lose their small business size status.  Meaning, if your operations are so intertwined and dependent on a large business that you are essentially just a part of that large business, you could be deemed ineligible for small business set-aside work because you are too affiliated with that large business.  The intent of small business set-aside contracts is to truly help bonafide small businesses.  As a result, a substantial portion of the work and benefits of a set-aside contract need to go to small businesses.  If you need help understanding performance of work requirements, limitations on subcontracting, and the affiliation rules, please reach out to a GTPAC counselor and we would be happy to help.

Press releases:

Jacksonville Contractor Agrees to Pay $500,000 to settle False Claims Act liability

Former CEO of Virginia-Based Defense Contractor Agrees to Pay $20 Million to Settle False Claims Act Allegations Related to Fraudulent Procurement of Small Business Contracts

 

 

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