Georgia Tech Procurement Assistance Center

Contractors charging more for construction as prices rise

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The prices contractors say they’ll charge for nonresidential construction has made the sharpest increase since 2009, when the Bureau of Labor Statistics began recording them.

In October, prices jumped 2 percent from the previous month and 5 percent from the previous year, marking both the largest monthly and yearly increase on record.

An analysis of federal data by the Associated General Contractors of America suggests that costs have increased even more quickly, rising 6.6 percent year over year.

Keep reading this article at: https://www.lmtonline.com/business/real-estate/article/Contractors-charging-more-for-construction-as-13384074.php

Are you a GSA Schedule contractor? Expect changes next year in how you report sales and pay your IFF

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The General Services Administration (GSA) has announced that Federal Supply Schedule contractors will be required to use a new system beginning in 2019 to report their sales and remit their Industrial Funding Fee (IFF).

The present 72A Reporting System will be replaced with a Sales Reporting Portal (SRP).  The goal of the transition to the SRP is to provide a single reporting system for all contractors to use for reporting sales and remitting IFF.

GSA’s overall IT modernization efforts include improving its IT enterprise by building and maintaining a more modern and secure architecture for its IT systems.

The transition to the SRP system not only supports GSA’s modernization effort, but it streamlines the overall process of reporting sales and remitting the IFF, making it more efficient for GSA and its industry partners alike.

The Federal Acquisition Service’s Sales Reporting Portal currently houses all the Transactional Data Repository (TDR) contracts as well as all new quarterly reporting MAS contractors as of July 2018. GSA wants to complete the transition by moving more than 14,000 current contracts into the FAS SRP to allow for the sun-setting of the existing 72A reporting system.

GSA has developed and implemented a three-phase implementation approach that will be carried out over the next 12 months. This phased-in approach will let contractors start reporting in the new system while GSA transitions their historical data over from the legacy 72A system.

  • In Phase One, companies will be notified via email that their Schedule contract(s) have been assigned a FAS Sales Reporting Portal transition date. This date will be the first day of a reporting quarter.  No action will be needed until the end of that reporting period, when the contractor will begin reporting sales and remitting their IFF in the new FAS SRP.

Example: A contract is assigned the Jan. 1, 2019 transition date which is the first day of a reporting quarter.  No action will be necessary until the contractor has to report sales for that quarter in April 2019. That will be the first time the contractor would be required to log into the FAS SRP and report sales there.

  • In Phase Two, contractors complete their final reporting of sales and remittal of IFF in the legacy 72A System for the current quarter.

Example: FAS SRP Report Date: January 2019 – The contractor will report sales and remit their IFF in the legacy 72A system one final time for the period covering October 2018 thru December 2018.  This reporting will be due by January 30, 2019.  The company will report sales for the quarter January 2019 through March 2019 in the new FAS SRP during April 2019.

  • In Phase Three, all contract history will transfer over from the legacy 72A System into the new FAS SRP. This process will not happen until the last sales have been reported and the IFF is paid in the 72A System. Once complete, GSA will migrate the contract sales history over into the FAS SRP . If the contract has an overall variance (i.e., an imbalance between IFF owed and IFF paid) at that time, the contractor will be notified via email prior to migrating their history into the FAS SRP.

Contractors may direct questions related to this transition via email to: MASPMO@gsa.gov.

Revolving door between Pentagon and defense contractors continues to spin

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Almost two years after Donald Trump came to Washington pledging to “drain the swamp” of special interests and clear waste from the Pentagon’s supply chain, a steady stream of retired generals, admirals and government procurement officers are still accepting lucrative positions with companies that do business with the military.

A report released Nov. 4th by the advocacy group Project on Government Oversight (POGO) found that major U.S. defense contractors have hired hundreds of former high-level government officials in recent years, including at least 50 since Trump became president. The report lends new visibility to long-standing concerns about a revolving door between the government agencies that award massive contracts for military supplies and services and the businesses that profit from those contracts.

Corporate influence in Washington was a campaign trail rallying point for Trump, who said soon after the 2016 election that there should be a “lifetime restriction” on top defense officials going to work for defense contractors. “The people that are making these deals for the government, they should never be allowed to go work for those companies,” he said on Fox News.

Keep reading this article at: https://www.stripes.com/news/us/revolving-door-between-pentagon-and-defense-contractors-continues-to-spin-1.555340

Contractor forfeits $1.7 million in assets, pleads guilty to delivery of cheap versions of products

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Jim A. Meron, owner of California-based WOW Imaging Products LLC and Time Enterprises LLC, has pled guilty to wire fraud related to a procurement fraud scheme involving the General Service Administration (GSA) Federal Supply Schedule program and a Department of Defense (DoD) electronic ordering system.

According to court documents, between May 2011 and July 2017, Meron used his two office supply businesses to defraud federal government agencies out of as much as $3.5 million — involving thousands of transactions — by substituting and delivering cheaper, generic versions of expensive, name-brand products his customers ordered, and pocketing the price difference. As part of his plea, Meron agreed to forfeit more than $1.7 million in assets seized during the investigation of his crimes.

Meron’s companies contracted to sell office supplies to federal agencies through two web-based government sales portals, GSA Advantage and DoD eMall.  After Meron received payments for the premium products his customers ordered, he obtained compatible products from his suppliers that cost him a fraction of what his customer paid for the brand-name products they ordered.  Meron then substituted and delivered those cheaper products for the more expensive products his customers ordered, and retained the difference in cost.  Over time, Meron extended his substitution scheme to nearly all orders for those name-brand products, and never intended to deliver what his customers ordered.

This case is the product of an investigation by GSA’s Office of Inspector General and the Defense Criminal Investigative Service.

Meron is scheduled to be sentenced on February 4, 2019.  Meron faces a maximum statutory penalty of 20 years in prison and a $250,000 fine on each count of conviction. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Source: https://www.justice.gov/usao-edca/pr/granite-bay-man-pleads-guilty-multi-million-dollar-product-substitution-fraud-federal

DISA only wants tailored pitches from vendors

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The Defense Information Systems Agency — the warfighter’s IT shop — is very interested in hearing what solutions and capabilities industry has to offer, but only in the context of how those technologies can be applied to the military’s specific needs.

“We tend to break capabilities that work in industry. I’ve seen it time and time again over the years,” Dave Bennett, director of DISA’s Operations Center, said last week during the annual Forecast to Industry.  “If you come in and you try to sell me on widget XYZ and you want to cite a scenario where you used it in industry … I will zero my mind out. I will be singing ‘la-la-la’ in the back of my head. Because what you did in industry, nine times out of 10 will not apply in my space.”

Instead, Bennett urged vendors to come armed with specific knowledge of the DISA environment they’re looking to support and a direct pitch on how their solution would benefit the agency and the warfighter.

Keep reading this article at: https://www.nextgov.com/cio-briefing/2018/11/disa-only-wants-tailored-pitches-vendors/152587/

TSA wants industry input on its proposed agile contract vehicle

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The Transportation Security Administration is asking industry to weigh in on its strategy for building a bullpen of tech companies the agency could call on to stand up new software applications.

The agency last week issued a special notice detailing its Fast Agile Scalable Teams procurement program, a proposed contract vehicle TSA plans to use to acquire custom software and modernize legacy systems.

Vendors selected under the blanket purchase agreement would be required to apply agile methodology—breaking large projects into smaller chunks, developed in sprints—to build and maintain a suite of enterprisewide software applications.

“In order to successfully execute [its] mission, TSA must have the capability to customize mission support systems [and] develop custom software solutions when no solution is commercially available or from government sources,” the agency wrote in a performance work statement.

Keep reading this article at: https://www.nextgov.com/it-modernization/2018/11/tsa-wants-industry-input-its-proposed-agile-contract-vehicle/152590/

SBA’s OHA clarifies negative control restrictions – But do the new SDVOSB regulations limit its impact?

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Between new regulations from the Small Business Administration (SBA) and decisions from the SBA’s Office of Hearings and Appeals (OHA), the limits of acceptable actions by small business owners set on maintaining their small business size status continues to change.

Most recently, OHA issued a noteworthy decision that clarifies restrictions on negative control of small businesses, including what actions it considers “extraordinary actions” and what actions are ordinary actions related to the daily control of a company. OHA’s decision in Size Appeal of Southern Contracting Solutions III, LLC, SBA No. SIZ-5956 (2018) is helpful in understanding the parameters of permissible negative control since OHA provided its clearest list to date of “extraordinary actions” and “ordinary” actions essential to the daily operation of the company.

However, it is important to note that the impact of the ruling, as far as service-disabled veteran-owned small businesses (SDVOSBs), will be limited in light of the new SBA and VA regulations.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=750078

Feds sue Navy contractor for environmental fraud

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The U.S. government will prosecute three whistleblower complaints against a U.S. Navy contractor accused of widespread fraud in the $1 billion cleanup of a radiation-contaminated shipyard and site of a major redevelopment project.

Seven whistleblowers have accused the contractor Tetra Tech of falsifying soil tests that were supposed to verify the decontamination of a 400-acre site where more than 10,000 homes are slated to be built in one of the largest redevelopment projects in San Francisco history.

“It was of critical importance to the United States Navy, and the public, that Tetra Tech perform accurately and fully the radiological testing and remediation at the Hunters Point site for which it was hired,” Assistant Attorney General Joseph Hunt said in a statement on Oct. 26th.  “The Department of Justice will vigorously pursue action against those who obtain federal funds based on promises they knowingly fail to keep.”

Keep reading this article at: https://www.courthousenews.com/feds-sue-navy-contractor-for-environmental-fraud/

DoD to limit use of ‘Brand Name or Equal’ contract competitions

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The Department of Defense (DoD) has proposed a new rule limiting the use of “brand name or equal” contract competitions, calling on contracting officers to publicly justify their need for a brand name-type product before issuing a solicitation.  The rule would implement Section 888(a) of the National Defense Authorization Act of 2017, which directed the Secretary of Defense to “ensure that competition in [DoD] contracts is not limited” by brand name references without a justification under 10 U.S.C. § 2304(f).

Background

Federal procurement law requires agencies to draft competitive solicitations that describe the Government’s needs generally, rather than referencing a specific type of product.  However, “under certain circumstances,” agencies may request a specific brand name product or its equal.  An off-brand product is “equal” if it shares the same the same salient characteristics as the brand name product. 

Contractors have at times challenged, through pre-award bid protests, agency decisions to reference a brand name product as unfair and unduly restrictive of competition, contrary to the Competition in Contracting Act of 1984’s (CICA) requirement for full and open competition.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2018/11/whats-in-a-brand-name-dod-to-limit-use-of-brand-name-or-equal-contract-competitions/

SBA proposes big changes to the HUBZone program

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The SBA’s Historically Underutilized Business Zone program intends well—by directing awards to contractors in regions that have been passed by economically, the federal government has tried to lift these areas up.

But the HUBZone program has exacting regulations, which (ironically) have helped cause it to be an underutilized tool for contracting officers. This could soon change.

On October 31, the SBA published a proposed rule that, if adopted, would bring clarity to the HUBZone regulations. In this post, we wanted to bring you up to speed on some of the more substantive proposed changes regarding certification requirements and the HUBZone protest process. Changes to employee definitions and requirements will be handled in another post.

Keep reading this article at: http://smallgovcon.com/hubzone-program/sba-proposes-big-changes-to-the-hubzone-program/

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