Georgia Tech Procurement Assistance Center

Congressional, executive, and legal developments for government contractors to consider

By

Regulatory Developments

On June 24, 2019, the U.S. Small Business Administration (“SBA”) finally issued a proposed rule in response to the 2018 Small Business Runway Extension Act, which increased the time period over which receipts are averaged for purposes of calculating a concern’s size from three years to five.  The proposed rule specifies that it will go into effect only after the effective date of a final rule, confirming SBA’s intention to continue to apply the three-year averaging period to any certification submitted prior to the effective date of the final rule.

On May 20, 2019, the U.S. Department of Veterans Affairs (“VA”) issued a class deviation from Department of Veterans Affairs Acquisition Regulation (“VAAR”) 808.002, Priorities for Use of Government Supply Sources, and VAAR Subpart 808.6, Acquisition from Federal Prison Industries, Inc., the two provisions implementing the FAR Part 8 mandatory source priority of AbilityOne Procurement List and Federal Prison Industries contractors.  The class deviation effectively gives Veterans First providers priority over AbilityOne providers in all VA contract opportunities should two or more veteran-owned small businesses (“VOSBs”) or service-disabled veteran-owned small businesses (“SDVOSBs”) be capable of performing the contract at a reasonable price.  The newly implemented class deviation preempts the AbilityOne priority in all VA procurements in favor of a Veterans First priority.  However, “if an award is not made to an eligible . . . VOSB under VAAR Subpart 819.70, the priority use of AbilityOne applies, and supplies and services on the Procurement List are mandatory sources.”  The class deviation was immediately effective and to be implemented in all VA contracts.

On June 11, 2019, the House Armed Services Committee published the draft 2020 National Defense Authorization Act (“NDAA”).  Notable potential changes include a reduction in the monetary threshold for enhanced DoD post-award debriefing rights and a grant of permanent authority for DoD’s Mentor-Protégé Program.  The 2018 NDAA implemented “Enhanced Post-Award Debriefing Rights” for certain DoD procurements.  This change required defense agencies to provide the agency’s written source selection award determination for all small business contracts valued between $10 and $100 million, and all defense contracts valued over $100 million.  Section 828 of the draft 2020 NDAA would reduce the monetary threshold for these enhanced debriefings to only $50 million, significantly increasing the number of procurements for which they must be provided.  Section 881 of the draft NDAA permanently authorizes the DoD Mentor-Protégé Program and requires that the DoD’s Office of Small Business Programs establish mentor-protégé performance goals and periodic reviews.

Continue reading at:  Venable LLP

DOE to prohibit contractors from technical collaboration with certain foreign governments

By

The US Department of Energy (DOE) issued Order No. 486.1 on June 7 prohibiting DOE employees and contractors from participating in the foreign government “talent recruitment programs” of countries designated by the DOE as a “foreign country of risk,” which apparently include China and Russia.  The order aims to balance the DOE’s broad scientific mission with national security interests by preventing the unauthorized transfer of scientific and technical information to certain foreign entities.  DOE contractors and subcontractors within the utility and nuclear sectors should be prepared to implement controls to ensure that neither they nor their employees or subcontractors participate in these foreign-sponsored programs for identified countries.

The order represents another step in federal efforts to reduce the ability of certain foreign countries to obtain sensitive technical knowledge from critical US industries.  The DOE was driven by concerns that foreign governments use talent recruitment programs to target scientists, engineers, and other technical experts to “reduce costs associated with basic research while focusing investment on military development or dominance in emerging technology sectors.”

Continue reading at:  Morgan Lewis

SBA OHA: Joint venture agreement must explain venturers’ responsibilities

By

Joint venture agreements continue to be a hot topic among small business federal contractors.  For good reason: if the agreement is properly prepared, a joint venture allows two companies (including, in the case of an approved mentor and protégé, a large business) to augment their capabilities and jointly bid on a federal project.

But to avail themselves of this benefit, the venturers must first prepare a joint venture agreement that complies with the SBA’s requirements.  Sometimes, this task can be quite tricky.  And as a recent decision of the SBA’s Office of Hearings and Appeals shows, the failure to have a compliant joint venture agreement can cost the joint venture an award.

Continue reading at:  SmallGovCon

Strict security notification and disclosure requirements for government contractors

By

Businesses that seek to obtain and preserve contracts with the United States government, or to deal in certain enumerated defense articles and services, are subject to strict privacy regulations imposed by the U.S. government.

For those under contract (or subcontract) with the U.S. Department of Defense (DoD), the Defense Federal Acquisition Regulation Supplements (DFARS) place stringent minimum security requirements and reporting obligations that must be met, otherwise a business could face financial penalties or termination of its contract.

Businesses that export and import defense articles or services and related technical data must comply with the International Traffic in Arms Regulations (ITAR), which comprise approval, registration and records maintenance requirements. If a violation of ITAR is voluntarily reported, the penalties imposed by the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) can be reduced.

Businesses subject to DFARS and ITAR should have a compliance program in place that includes an appropriate response to any security incident.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=733388

See GTPAC’s video, template and other resources designed to help contractors comply with the DoD/NIST cybersecurity rules at: http://gtpac.org/cybersecurity-training-video/

Find Davis-Bacon in federal construction contracts, not in a supermarket

By

There is hickory bacon.  There is turkey bacon.  And then there is Davis Bacon.

The first two can be found in the meat department of your local supermarket.

The last one — Davis Bacon — is found in federally-funded construction contracts.  If you’re bidding on a federal contract or subcontract, you’d better educate yourself about this requirement.

The federal Davis-Bacon Act (DBA) applies minimum prevailing wage classifications for all federally-funded or assisted construction projects.  (Note that the Federal Acquisition Regulation – the FAR – now refers to the Davis Bacon Act as “Wage Rate Requirements – Construction.”)

The U.S. Department of Labor creates wage classifications by the type of project for a specific type of worker.   (Although not the case in Georgia, also be aware of the fact that some state governments have adopted “little DBAs” requiring prevailing wages on state-funded public works projects.)

The worker classifications are crafted with broad job scopes, in order to be over-inclusive.  These classifications have drawn the ire of many private construction firms, who complain about what they consider over-payment for non-specialized labor (i.e., paying a wire runner as a journeyman electrician).  So, while many favor the DBA’s heavy wages – it can be crippling to an unprepared private firm’s profit margin.

In order to prepare, a construction professional must read and absorb the federal wage classifications that apply on their project – before bidding.  Wage classifications are prepared by state and by project, and are included in all federally-funded construction work.

If you are bidding a contract in the State of Georgia, you’ll need to check out the Georgia classifications.  For example, if you were building a non-residential structure, such as a government building, in Bibb County, you can see the applicable wage rates here.

If your Bibb County bid needs to include ironworkers to install your structural steel, you would need to bid them per hour at $24.04, plus $9.86 in fringe benefits (insurance, fringe, or even cash).  There are no real boundaries here – if a worker is involved in structural steel work, that worker is to be paid as an ironworker. If a contractor does not plan for this broad application, you’ll be facing penalties that are spelled-out under the Wage & Hour Act or Contract Work Hours and Safety Standards Act.  The penalties are stiff, providing for up to two times the amount of the unpaid or underpaid wages, plus interest.

The lesson here?  Like with all things involving government contracting, do your homework before jumping in with both feet.  To obtain assistance, check with a representative of the Georgia Tech Procurement Assistance Center (GTPAC) nearest you.  With proper preparation, you’ll be able to bid correctly, win a contract or subcontract, and then be able to bring home the real bacon.

© 2010-2017 –  Georgia Tech Procurement Assistance Center – All Rights Reserved.

Contractors object to parts of OMB’s agency reporting reductions

By

A group representing 400 services and information technology contractors has asked the Office of Management and Budget (OMB) to revamp several of the 59 changes announced on June 15 in its memo on easing the reporting burden on agencies.

The Arlington, Va.-based Professional Services Council, though supportive in general of the budget office’s bid to trim and update administrative requirements, sent a June 22 letter to OMB Director Mick Mulvaney seeking changes in the Trump administration’s handling of accelerated payments to small businesses, acquisition assessments and reporting of agency priority goals.

“If no one is asking for it, maybe it doesn’t have much value to it,” Mulvaney told reporters during the rollout of the June 15 memo to agency heads targeting a portion of what eventually could be 250 management directives that might be “duplicative, obsolete, redundant or low value.”

Keep reading this article at: http://www.govexec.com/contracting/2017/06/contractors-object-parts-ombs-agency-reporting-reductions/139023/

I think my company is a federal contractor and has regulatory obligations, but where can I look to search for that information?

By

Doing business with the United States federal government can be very lucrative, but it comes with a price.

That price arrives in the form of reporting obligations, recordkeeping, outreach, and much more.

Failure to comply with all applicable regulatory requirements can also have steep consequences, so it is very important for federal contractors to ensure they are doing all that is required.

Companies are sometimes unaware that they are a covered contractor or subcontractor and, thus, find themselves unprepared for an Office of Federal Contract Compliance Programs (OFCCP) compliance review. In an effort to better prepare for these types of situations, this article is intended to provide some practical information and resources about federal contractor thresholds and where to look for federal contracts.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=598152

New DHS acquisition rules proposal could disrupt contracts, hurt small business

By

President Donald Trump celebrated a new executive order designed to eliminate regulations on small businesses. But a series of new acquisition rules proposed weeks ago by the Department of Homeland Security (DHS) have Federal contracting experts worried about future governmentwide disruptions and a decrease in competition.

DHS’s Office of the Chief Procurement Officer on Jan. 18 issued three proposed rules that would require privacy training and security awareness training for contractors, and would add five new categories of Controlled Unclassified Information (CUI)—unclassified information that is still sensitive—that contractors will need to secure and manage.

DHS’s proposed regulations are troubling to some Federal contracting experts because they disrupt the governmentwide standards that took years to set up, and may impose costs on small businesses that make it impossible for them to compete for DHS contracts.

Alan Chvotkin, executive vice president and counsel for the Professional Services Council (PSC), said the new CUI categories “don’t square” with the governmentwide rule that took six years to create.

Keep reading this article at: https://www.meritalk.com/articles/new-dhs-acquisition-rules-proposal-could-disrupt-contracts-hurt-small-business/

DoD further clarifies its DFARS cybersecurity requirements

By

On January 27, 2017, the Department of Defense (DoD) issued an updated Frequently Asked Questions (FAQ) regarding the application and requirements of DFARS 252.204.7012, Safeguarding Covered Defense Information and Cyber Incident Reporting.

Though questions remain regarding various nuances of the rule, the FAQ is a helpful document for those contractors still working on implementation of DFARS 252.204.7012.

Divided into three sections — (1) General Application, (2) Security Requirements, and (3) Cloud Computing — the FAC provides answers to 59 commonly asked questions and provides greater clarity on a number of important points, which are discussed in greater detail here: https://www.insidegovernmentcontracts.com/2017/02/dod-clarifies-dfars-cybersecurity-requirements/

Reducing the costs of procurement regulation – A step in the right direction

By

The Code of Federal Regulations (CFR) is around 180,000 pages and is growing at about 2,000 pages a year.

In 2008, the Office of Management and Budget (OMB) and the Small Business Administration estimated the regulatory compliance costs to be approximately $1.752 trillion.

These figures were cited in 2015 testimony before the Senate Armed Services Committee by the Honorable Jacque S. Gansler, Ph.D., currently professor emeritus at the University of Maryland’s School of Public Policy. He cited these figures in making the case for reducing regulations, policies, and procedures to reduce barriers to entry to the federal market and to increase the Defense  Department’s access to commercial innovation, which is needed desperately to ensure technological superiority on the battlefield.

That is why the Jan. 30, 2017 executive order Reducing Regulation and Controlling Regulatory Costs, is a step in the right direction in reducing regulatory burdens.  The EO provides, in part, that for fiscal year 2017, the heads of agencies are directed that the total incremental cost of all new regulations to be finalized this year, including repealed regulations, shall be no greater than zero.  The EO further provides that any new incremental costs associated with the new regulations shall be offset by the elimination of existing costs of at least two prior regulations.

Keep reading this article at: http://federalnewsradio.com/commentary/2017/02/reducing-the-costs-of-procurement-regulation-a-step-in-the-right-direction/

Contracting News

Read More

Contracting Tips

Read More

GTPAC News

Read More

Georgia Tech News

Read More