Georgia Tech Procurement Assistance Center

Software companies push Senate to weaken lowest price contracting rule

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Lawmakers are once again looking at ways to peel back the use of lowest price technically acceptable, or LPTA, contracting decisions to enable federal agencies to spend a little more for better products and services.

As part of the Federal Acquisition Regulation, LPTA requires agencies to choose the lowest priced option that meets the requirements set forth in a given solicitation. Abiding by the letter of the law has led to poor contracting decisions for the sake of saving some money.

“LPTA contracting is a useful source selection method for acquisitions with simple, well-defined requirements when cost is the sole objective differentiating factor,” BSA | The Software Alliance Vice President Craig Albright wrote in a letter to the Senate Armed Services Committee. “However, when it comes to more complex acquisitions involving multiple technical variable or functions … LPTA’s priority of price over value leads to acquisition outcomes that actually prevent the government from getting the most for its money.”

Keep reading this article at: https://www.nextgov.com/policy/2018/07/software-companies-push-senate-weaken-lowest-price-contracting-rule/149878/

What to expect from OTA protests and disputes

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Ready or not — federal agencies are increasingly utilizing “other transactions authority” (OTA) to craft agreements that are not subject to traditional procurement laws and therefore should, in theory, allow the government greater access to innovative solutions.

While the goal of OTA procedures may be to avoid bottlenecks inherent in procurement under the Federal Acquisition Regulation, in the end they may result in valuable contracts with the government. As with any such contracts, it is inevitable that disputes will arise during their formation and administration.

While there is very little precedent relating to protests of OTA awards or claims arising under OTA-awarded contracts, there are some fundamental principles and analogous decisions that suggest how this early history of OTA protests and claims may unfold.

This article attempts to portray the current landscape for protests of OTA awards and contract claims arising during performance of an OTA agreement.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=721778

GAO: Agency closing time is 4:30 pm, not 5:00 pm

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Unless an agency designates different business hours, the Federal Acquisition Regulation (FAR) says that a government agency is deemed to close at 4:30 p.m. local time–not 5:00 p.m., as it would be easy to assume.

In a recent case, the 4:30 p.m. closing time cost an unsuccessful offeror a chance at a GAO protest because the offeror’s debriefing request, sent to the agency at 4:59 p.m., was deemed untimely.

The GAO’s decision in Exceptional Software Strategies, Inc., B-416232 (July 12, 2018) involved an NSA solicitation seeking to award up to six IDIQ contracts for the definition, prototyping, development, and production of visualization and presentation tools.  Thirteen offerors, including Exceptional Software Strategies, Inc., submitted initial proposals.

The evaluation panel determined that ESS’s proposal was unacceptable under one of the non-price factors.  On Thursday, March 15, 2018, NSA informed ESS that its proposal had been excluded from the competitive range.  The letter explained that ESS had been found unacceptable, and the reasons why.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/gao-agency-closing-time-is-430-p-m-not-500-p-m/

Want to do business with the State of Georgia? You better know the rules!

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Click on image above to see Georgia Procurement Manual.

Every unit of government has rules about how it purchases goods and services.  As a vendor, your success in doing business with government agencies is dependent upon your knowledge of those rules.

The federal government follows the Federal Acquisition Regulation (FAR), and many federal agencies also issue FAR supplements.  Similarly, each state government has its own purchasing procedures.

In the State of Georgia, the Department of Administrative Services, through its State Purchasing Division (SPD), maintains the Georgia Procurement Manual (GPM).  The GPM governs how state government entities purchase needed goods and supplies.  It also provides information to suppliers about how to conduct business with the State of Georgia.  SPD periodically revises the GPM to incorporate legislative changes, new automated processes and best practices.

In May of this year, the GPM was updated in several important ways, including the supplier protest process as well as internal procedural updates, such as new automated processes for state procurement staff to submit certain reports and requests to SPD.  You can see a summary of the changes here.   A brief overview of the new supplier protest process follows.

What is the supplier protest process?

GPM Section 6.5 defines how suppliers may challenge certain purchasing actions by state entities, such as: solicitations, proposed sole source contracts, proposed purchases through consortia or cooperative purchasing agreements, the results of a Request for Qualified Contractors and the state’s proposed or actual award of a contract.

How has the supplier protest process changed?

SPD has updated the supplier protest process to:

  • Define general principles that govern SPD’s review of supplier protests;
  • Address review of a supplier’s protest that a system error prevented timely submission of an electronic bid or proposal;
  • Identify certain procurements that are exempt from SPD’s protest process;
  • Define how sole source protests will be reviewed, including the option for discussions between the state entity and the protesting supplier prior to SPD issuing a protest decision;
  • Require a supplier to file a protest within 10 calendar days of the date the supplier knows or should have known of the action which is being protested or the other applicable protest filing deadlines, whichever is sooner;
  • Update the submission process to remove the fax number (protests may continue to be either mailed or sent via email to the addresses noted in the GPM); and
  • Provide other clarifications.
When are these changes effective?

Changes became effective May 18, 2018.  You can listen to a recorded webinar on the changes to the Georgia Procurement Manual here: GPM changes.  (Presentation begins at the 9:55 mark.)

Waiting for the final government audit may be too late

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In a case of first impression, a Court of Appeals has held that a government subcontractor’s claim for reimbursement of its actual indirect costs was time-barred.

Fluor Fed’l Solns. LLC v. PAE Applied Techs, LLC, No. 17-1468, 2018 WL 1768233 (4th Cir. Apr. 12, 2018) (per curiam) (unpublished).  It is the first case to directly address the interplay between the Allowable Cost and Payment Clause of the Federal Acquisition Regulation (FAR), 48 C.F.R. § 52.216-7, and a statute of limitations.  It highlights the risks government subcontractors face when they choose to wait for a Government audit rather than litigate promptly after a payment dispute arises.

This case involved a long-term subcontract and a long-delayed government audit.  In 2002, Fluor and PAE entered into a federal government subcontract that ultimately spanned a 15-year performance period. The subcontract incorporated, with minor changes, the FAR Allowable Cost and Payment Clause, 48 C.F.R. § 52.216-7, found in most cost-reimbursable federal government contracts and subcontracts. That clause requires the Government (or, in this case, the prime contractor, PAE), to pay Fluor’s “anticipated final” indirect rates in accordance with the contract terms, subject to retroactive adjustments once a government audit establishes the subcontractor’s final indirect rates applicable to the contract. 48 C.F.R. § 52.216-7(e)–7(g).

Keep reading this article at: https://www.insidegovernmentcontracts.com/2018/07/waiting-final-government-audit-may-late/

Congress aims to redefine ‘subcontract’

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If an agreement qualifies as a “subcontract” under a government contract, then it may be subject to certain flow-down, compliance, and reporting requirements.  These requirements are intended to protect the government’s interests, and have significant ramifications for contractors, e.g., increasing transaction costs, expanding potential areas of exposure.

These compliance obligations and risks can even deter some companies from performing under government contracts, especially those companies offering commercial items.

Currently, there is no uniform definition of “subcontract” in the applicable procurement regulations or in the procurement chapters under Titles 10 and 41 of the U.S. Code.  Indeed, there are more than twenty varying definitions of “subcontract” in the FAR and DFARS, with many clauses failing to specify which definition applies.  Now Congress is looking to address this lack of uniformity through the FY 2019 National Defense Authorization Act (NDAA).

Keep reading this article at: https://www.insidegovernmentcontracts.com/2018/06/congress-aims-to-redefine-the-subcontract/

‘Cascading’ set-asides now authorized at the VA

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In what many will see as VA’s continued assault on its Veterans First Contracting Program post-Kingdomware, the Dept. of Veterans Affairs (VA) recently implemented “Cascading” set-asides.

The VA refers to these set-asides as “Tiered Evaluations,” noting they are also known as “Cascading” set-asides.

The VA issued Acquisition Policy Flash (No. 18-15), transmitting Procurement Policy Memorandum (PPM) No. 2018-04, dated and effective February 8, 2018.

The VA issued the PPM in response to requests from VA contracting officers requesting guidance and procedures for the use of tiered evaluations within a single synopsized solicitation when applying the “VA Rule of Two.”

Keep reading this article at: http://vetlikeme.org/its-official-cascading-set-asides-are-now-authorized-at-the-department-of-veterans-affairs/

Implications of the changing cost and pricing data thresholds for prime contractors and subcontractors

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Government contractors should explore updates to their purchasing system policies and procedures regarding subcontracts subject to Truthful Cost or Pricing Data (TCPD) and Cost Accounting Standards (CAS) requirements based on the upcoming effective date for the increased threshold for obtaining certified cost or pricing data.

Specifically, Section 811 of the National Defense Authorization Act for Fiscal Year 2018 (Pub. L. No. 115-91, 131 Stat. 1283) (FY 2018 NDAA), amends 10 USC § 2306a and 41 USC § 3502, increasing the threshold for obtaining certified cost or pricing data to US$2 million. Inevitably, this increased threshold impacts subcontracting, particularly under contractor purchasing systems that are subject to the Department of Defense (DOD) Business Systems Rule.

A recent memorandum issued by Shay D. Assad, Director of Defense Pricing/Defense Procurement and Acquisition Policy (DP/DPAP), which we addressed in a prior advisory, directs DOD contracting officers that, effective July 1, 2018, they shall use US$2 million as the threshold for obtaining certified cost and pricing data “in lieu of the threshold . . . at [FAR] 15.403-4.” Notably, while this class deviation provides direction to DOD contracting officers, it does not change the “current threshold” in FAR 15.403-4. Accordingly, absent a contract specifying a different threshold, prime contractors must wait until the threshold in FAR 15.403-4 is updated to implement the US$2 million threshold before they may safely use it for subcontracts and modifications that are not otherwise exempt.

Under FAR 52.215-12 and 52.215-13, a prime contractor’s obligation is to require a subcontractor to submit certified cst or pricing data when the expected value of the pricing action will exceed the threshold in FAR 15.403-4 and an exception does not apply. FAR 15.403-4(a)(1) states that certified cost or pricing data are required before the award or modification of subcontracts “expected to exceed the current threshold or, in the case of existing contracts, the threshold specified in the contract.” The same paragraph currently provides that “[t]he threshold for obtaining certified cost or pricing data is US$750,000,” and has not yet been updated to reflect the increased threshold.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=704542

SBA seeks public comment on proposed subcontractor past performance pilot program

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Past performance information is a key indicator of an offeror’s ability to successfully perform a contract and is required to be considered by agencies when making most types of contract awards. Many small businesses, however, get their entrance into government contracting through subcontracts to prime contractors. These first-tier small business subcontractors often have a difficult time providing verifiable past performance because they are outside of the Contractor Performance Assessment Reporting System (CPARS) process that provides that information for prime contractors.

The good news for first-tier small business subcontractors is that the 2017 National Defense Authorization Act (NDAA) amended the Small Business Act to require the Small Business Administration (SBA) to implement a pilot program to establish past performance ratings for small business subcontractors. Under this program, a small business concern without a past performance rating as a prime contractor in the Past Performance Information Retrieval System (PPIRS) may request a past performance rating in CPARS if the small business is a first-tier subcontractor under a covered Federal Government contract requiring a subcontracting plan in accordance with FAR 19.702(a). Ratings of subcontractor performance can also be requested on subcontracts that exceed the simplified acquisition threshold, or subcontracts for architecture-engineering services valued at $35,000 or more as provided in FAR 42.1502.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=697778

See the proposed rules and how to submit comments by June 19, 2018 at: https://www.federalregister.gov/documents/2018/04/20/2018-08330/information-collection-subcontractor-past-performance-pilot-program

The gatekeepers of the government’s ‘other transaction’ deals

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In the little-understood realm of other transaction authorities, there is a widely used but even more obscure contracting model: the consortium.

When federal contracting offices with OT authority — an alternative procurement method outside the Federal Acquisition Regulation — issue a contract, they sometimes will solicit a consortium, or group of traditional and nontraditional government contractors self-organized around a specific technological area.  A consortium management company — often billed as a non-profit — will then be given exclusive access to the requirements to distribute among its association’s members.

The consortium model has been used since the early days of OT contracting at the Defense Department, and is now used in civilian agencies with OT authority like the Energy Department and Transportation Security Administration.

Keep reading this article at: https://www.nextgov.com/cio-briefing/2018/04/gatekeepers-governments-other-transaction-deals/147524/

This is part of a series about ‘other transaction’ authorities. Read the first part here.

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