Georgia Tech Procurement Assistance Center

Are verbal agreements good enough for government contractors?

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Long gone are the days of verbal agreements over a friendly handshake.  Now a contractor needs a written contract to ensure payment for services rendered.  However, what if no paperwork exists proving the client authorized additional work?  Can a contractor still get paid?  The answer is maybe.  If the contractor can find enough non-documentary evidence to show the person who verbally requested the work has actual authority to enter into contracts on behalf of the client, a contractor may be able to recover payment under an implied-in-fact contract.

What is an implied-in-fact contract?  Implied-in-fact contracts are based on the situation’s facts, circumstances or conduct of the parties involved, which creates an obligation between the two parties.  For example, if a contractor is paid for something each week but it is not in writing, the contractor may be able to claim they have a contract with the other party and a reasonable expectation that they will be paid for their service going forward.

In the below motion against the contractor’s appeal, the Marine Expeditionary Force Training and Experimentation Group within the U.S. Marines’ Advisor Training Cell (Client) motioned the Armed Services Board of Contract Appeals (ASBCA) for a summary judgment, essentially requesting the contractor’s appeal be thrown out.

Continue reading at: JD Supra

CMMC 2.0 simplifies requirements but raises risks for government contractors

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With the announcement of a revamped Cybersecurity Maturity Model Certification (known as CMMC 2.0), for the third time in five years, the U.S. Department of Defense (DOD) announced new, comprehensive cybersecurity standards for government contractors and subcontractors to ensure the protection of sensitive unclassified information, that is, Federal Contract Information (FCI) and Controlled Unclassified Information (CUI).  By referring to the new cybersecurity standard as CMMC 2.0, the DOD implicitly recognizes the likelihood of future versions at an unknown cost to the Defense Industrial Base (DIB).

Nevertheless, version 2.0, which was released after a seven-month review by the Biden Administration, reflects the DOD’s assessment of the DIB’s concerns and reflects the DOD’s efforts to streamline and improve upon its earlier version after criticisms aimed at its cost and complexity.  Specifically, CMMC 2.0 collapses CMMC 1.0’s five tiers to three simplified tiers that are based on the cybersecurity framework implemented and that are devoid of additional CMMC-unique practices and processes.  CMMC 2.0 also will allow “annual self-assessment with an annual affirmation by DIB company leadership” for Level 1 and part of the new bifurcated Level 2 (formerly Level 3).  Otherwise, an independent third-party assessment or government-led assessment will be required.

Besides CMMC 2.0, contractors with CUI are also required to comply with Defense Federal Acquisition Regulation Supplement (DFARS) 252.204-7019 and 252.204-7020.  Collectively, these clauses require contractors to enter their compliance with the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171 into DOD’s Supplier Performance Risk System (SPRS).  DOD will identify medium- and high-risk contracts and perform independent assessments of contractor compliance with NIST SP 800-171 and whether a contractor’s compliance matches what it inputted into SPRS.  Contractors should also be mindful as to whether these disclosures match their prior acceptance of contracts with DFARS 252.204-7012, which required full compliance with NIST SP 800-171.

The return of self-assessment, which was the bedrock of the first DOD cybersecurity standards set out in DFARS 252.204-7012 and whose failure led to the development of CMMC 1.0., creates substantial risks to DIB companies and their leadership.  The U.S. Department of Justice (DOJ) recently announced a new Civil Cyber-Fraud Initiative that emphasized the use of the False Claims Act (FCA), 31 U.S.C. § 3729 et. seq., to bring civil action against government contractors who knowingly misrepresented their cybersecurity practices and protocols.  The FCA allows the government to recover treble damages and permits qui tam suits, which allow whistleblowers to receive a portion of the monies recovered by the government.  In addition, other regulatory agencies have brought enforcement actions for alleged false certifications concerning compliance with agency-required cybersecurity standards.  Thus, the risk of a DOJ investigation or a qui tam suit connected with a DIB company’s self-assessment affirmation is very real, and this announcement – coupled with self-certification options in CMMC 2.0 – should not been seen as a coincidence. Nevertheless, companies can reduce such risks with appropriate cybersecurity policies and a culture of compliance.

Continue reading at:  JD Supra

OFCCP launches contractor portal initiating AAP verification program

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On December 2, 2021, OFCCP announced the launch of its new “Contractor Portal,” which “[c]overed federal contractors and subcontractors (“contractors”) must use … to certify, on an annual basis, whether they have developed and maintained an affirmative action program for each establishment and/or functional unit, as applicable.”

The Contractor Portal will also serve as a “secure portal for scheduled contractors to submit to OFCCP their Affirmative Action Program(s) during compliance evaluations.”

This development has been years in the making, initiated by a 2016 GAO report criticizing OFCCP for having no process for ensuring contractors were preparing their affirmative action programs (“AAPs”) annually, and comes over three years after former Director Craig Leen announced OFCCP’s intention to create an AAP verification program.

Continue reading at:  JD Supra

GAO rules that DoD may not require small business Joint Venture itself hold facility security clearance

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In an August 27, 2021 decision, GAO sided with protester InfoPoint LLC (“InfoPoint”), and the Small Business Administration (“SBA”) which was invited to submit comments, in finding that a Department of Defense (“DoD”) solicitation provision requiring a small business joint venture offeror to itself hold a facility clearance was inconsistent with the National Defense Authorization Act for Fiscal Year 2020 (“2020 NDAA”) and SBA’s regulation at 13 C.F.R. §121.103.

GAO ruled that the 2020 NDAA “clearly and unambiguously prohibits DoD agencies, like the Air Force here, from issuing solicitations that require a joint venture, rather than the members of the joint venture, hold the required facility clearance.”

Continue reading at: Crowell & Moring

Terminations for convenience clauses vs. mutual termination clauses

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Imagine as a supplier of medical oxygen cylinders and tanks in your region, you enter into an arrangement with HHS or DHS to provide oxygen to nearby hospital facilities dealing with surges in the COVID-19 pandemic.  However, due to the recent dramatic surge in your area and the significant demand for oxygen, the government moved quickly to award you a contract that appears very different from other federal contracts you have previously signed.

For example, instead of containing a standard FAR clause for Terminations for Convenience, your contract has a clause that states “this contract may be terminated in whole or in part by either party upon thirty (30) days notice in writing to the other party.”  Is this mutual termination clause treated any differently under the law? Would you still get the same protection if the government decided to cancel your contract to obtain better prices a week later from your competitor across town?

Unfortunately, the answers to these questions are murky at best.  But contractors should be aware that there could be a difference between these two types of clauses and to not instantly assume that they will be treated similarly should a claim arise.

Continue reading at:  The Contractor’s Perspective

Five things you should know about past performance when teaming

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The government’s hard shift away from lowest-price, technically acceptable evaluations has magnified the importance of past performance in many competitive acquisitions.  For start-ups and other companies new to the federal marketplace, past performance requirements can present a significant barrier to success.

Oftentimes, companies with little or no past performance of their own can offer the past performance of another entity, such as a subcontractor or joint venture partner.  But the rules surrounding the use of another entity’s past performance are often misunderstood–and recently, the rules have evolved quickly.

Here are five things you should know about using the past performance of a subcontractor, joint venture partner, or affiliate.

Continue reading at:  SmallGovCon

5 things you should know: SBA’s recent 8(a) program updates

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SBA has been hard at work this past year updating its 8(a) Business Development Program rules and policies.  And we have been doing our best to keep you posted.  Many of our blog posts focused on SBA’s monumental November 2020 “rule overhaul,” which implemented several 8(a) rule changes.  But given the sheer magnitude of information in that final rule, it is pretty easy to lose track of which updates might affect you, as a potential 8(a) applicant or current 8(a) participant.  There were also some pretty important changes to the 8(a) Program just prior to and subsequent to SBA’s November 2020 final rule.

Suffice it to say, there is a lot to process!  So, we thought a quick summary blog on some of the most significant changes to the 8(a) Program of late might help you in that endeavor.  Without further ado, here are five things you should know about SBA’s recent 8(a) Program updates.

As an initial matter, please keep in mind that this blog does not provide an exhaustive list of the rule changes in SBA’s November 2020 final rule that may affect 8(a) Program admission or participation.  It is merely a simplified discussion of some of the big picture changes that have already received a lot of attention in the government contracting community.

Continue reading at:  SmallGovCon

SBA OHA: Ownership and control are not the same in the WOSB program

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A company learned the hard way that just because their business is majority-owned by a woman, it doesn’t mean they are a Women-Owned Small Business (WOSB) in the eyes of the SBA.  The question is one of both ownership and control.

The case is SBA No. WOSB-113.  In December 2016, Joint Information Network (JIN) submitted an offer for a contract to provide software engineering and database services in support of the U.S. Navy Naval Information Warfare Center (NIWC).  The contract was to be awarded directly to a WOSB on a sole-source basis.  The contracting officer (CO) awarded JIN the $30 million contract in January 2017.  The contract period for performance ended April 17, 2020, but, as of this decision, the contract was not closed.  When JIN submitted the offer, it was a partnership owned 60% by Ms. Jihong Jin and 40% by her father, Dr. Yahne Jin, per a partnership agreement from April 2016.  The partnership agreement also stated that no partner could enter into a contract for JIN without the approval of the other partner.  In other words, while Jihong was the majority owner, she and Yahne had to agree in order to have JIN sign any agreements.

Continue reading at:  SmallGovCon

Five things you should know about responding to size protests

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There are many things to know about responding to size protests.  One could probably fill a book with the information.  But if you need to know just the basics, here are five things you should know about size protests that can help you be prepared if your company is facing a size protest.

1. The response time is short.

Normally, your company only gets three business days to respond.  So, be sure to work quickly to put together as much information as possible in that short amount of time to respond to the size protest allegations and any additional questions from SBA, while also completing the Form 355.  It’s also a good idea to have these records (such as tax returns or employee count documents) handy so that you can respond quickly.

2. But you can ask for an extension.

The SBA Area Office will often grant an extension and allow you to submit your response electronically.  Indeed, the SBA’s rules state that SBA may grant an extension.  It used to be that the SBA Area Office would require a paper copy of the response, but many Area Offices will accept submission by electronic means.  Regardless, be sure to reach out to the Area office as soon as possible to request a specific extension and to confirm that electronic submission is allowed.  While not required, the Area Office will often grant these short extension requests.

Continue reading at:  SmallGovCon

SBA extends the HUBZone map freeze to June 30, 2023

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Recently, the Small Business Administration (SBA) issued a direct final rule extending the HUBZone map freeze from December 31, 2021, to June 30, 2023.  The direct final rule (available here) takes effect on June 21, 2021.  This is the latest in a series of developments for the HUBZone Program in 2021; read PilieroMazza’s previous coverage on the developments impacting the HUBZone Program here and here.

Several years ago, SBA froze the HUBZone maps until December 31, 2021, to ensure that firms would have enough time to plan after seeing how the results of the 2020 Census would impact the HUBZone maps.  However, due to the pandemic, the 2020 Census results are behind schedule and SBA does not expect to have the data it needs until December 2022.  Therefore, to ensure HUBZone firms have enough time to plan around the new HUBZone maps based on the 2020 Census data, SBA’s direct final rule will keep the HUBZone maps “on ice” until June 30, 2023.  Pushing back the anticipated “thaw” for another 1.5 years will give SBA time to incorporate the 2020 Census data into the HUBZone maps and then provide adequate notice to the HUBZone small business community.

Continue reading at:  PilieroMazza

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