Georgia Tech Procurement Assistance Center

Appeals board: Contractor wasn’t exempt from state tax

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They say that two things in life are guaranteed – death and taxes – and status as a federal contractor may not exempt one from the latter, according to a recent Armed Services Board of Contract Appeals (ASBCA) decision.

In Presentation Products, Inc. dba Spinitar, ASBCA No. 61066 (2017), the ASBCA held the contractor was liable to pay a state tax, and the government had no duty to reimburse the contractor. The problem arose from the fact that the contractor did not incorporate state tax costs into its proposed price, despite being required to pay the taxes under the terms of the contract and applicable state law.

Under the terms of the firm fixed-price contract, Presentation Products Inc. (doing business as Spinitar) was to provide the Army with installation of a video conferencing system in Fort Shafter Flats, Hawaii. The solicitation included FAR 52.212-4 (Instructions to Offerors–Commercial Items), which provides, in paragraph (k): “Taxes. The contract price includes all applicable Federal, State, and local taxes and duties.”

Hawaii places a general excise tax (or GET) on businesses rather than a sales tax on customers, which is not automatically waived when the customer is the federal government. The GET is an excise tax imposed on the gross revenues of businesses “derived from the privilege of doing business in Hawaii.” Under Hawaii’s GET, businesses are not required to collect GET from their customers, but may pass it on to customers upon agreement by the customer.

Keep reading this article at: http://smallgovcon.com/claims-and-appeals/asbca-says-contractor-wasnt-exempt-from-state-tax/

Lawmakers aim to restrict use of lowest-price contracts

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A contractors group has welcomed a bipartisan House bill placed in the hopper last month aimed at curbing agency use of lowest price technically acceptable contracts.

The Promoting Value Based Procurement Act (H.R. 3019), introduced by Reps. Mark Meadows, R-N.C., and Don Beyer, D-Va., would amend the Federal Acquisition Regulation to require civilian agencies to align themselves with the Defense Department and stiffen their rationales for resorting to lowest price technically acceptable (LPTA) contracts, which have grown in use in recent years but are controversial.

“Price should not be the sole deciding factor when the federal government is purchasing complex, innovative information technology and engineering systems, where the least expensive option often may not lead to the best long-term value,” Beyer said in a statement to Government Executive. “We can help spur innovation by allowing contractors for certain high-tech procurements to compete on the strengths of their products, not the cost.”

Keep reading this article at: http://www.govexec.com/contracting/2017/07/lawmakers-aim-restrict-use-lowest-price-contracts/139306

How to approach best value RFPs and protest improper award decisions

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Government contractors responding to RFPs understand the need to read the fine print.

Mostly commonly, we discuss this topic in terms of pure proposal acceptability. Protest decisions from the Government Accountability Office GAO and Court of Federal Claims (COFC) make it abundantly clear that the burden falls on the contractor to follow directions and include all of the required information in all of the right places. It is for that reason (among others) that we always recommend having an outsider (be it a consultant, a lawyer, or even just another person from your company not involved in preparing the proposal) do a quality check before a proposal is submitted.

A more nuanced issue – but just as important – is understanding the RFP’s evaluation scheme. That is, not only what information must be submitted, but how that information will be weighed and measured by the Agency.

For example, in the past, we’ve looked at low-price technically acceptable (LPTA) RFPs. The basic idea on an LPTA procurement is that a contractor need only achieve a minimum passing score on its technical proposal – the Agency will not give bonus points for added bells and whistles. The much more important part of an LPTA proposal is price. Among those offerors found to be technically acceptable, the award goes to the offeror with the lowest submitted price. So, the focus on an LPTA proposal should be on getting lean (while maintaining technical acceptability) so that you can get as low as possible (or practical) on price.

Keep reading this article at: http://www.mondaq.com/unitedstates/x/563830/Government+Contracts+Procurement+PPP/How+To+Approach+Best+Value+RFPs+And+Protest+Improper+Award+Decisions

GSA answers vendors concerns about transactional data rule

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GSA Schedule ContractThe General Services Administration (GSA) is trying to bring some light to a new acquisition requirement that has industry on edge.

Under the transactional data reporting rule, GSA is accepting volunteers from the contracting community to take part in a one-to-two year pilot to submit sales information back to the agency in exchange for relief of the price reduction clause and the commercial sales disclosures — two requirements vendors have long haexted.

Kevin Youel Page, the deputy commissioner of the Federal Acquisition Service at GSA, said the agency is trying to be more transparent about the Transactional Data Reporting initiative and respond to industry concerns, including more than 60 questions from the Coalition for Government Procurement.

Keep reading this article at: http://federalnewsradio.com/acquisition-policy/2016/09/gsa-answers-vendors-concerns-transactional-data-rule/

A future where price is no longer a factor for many RFPs

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The General Services Administration first brought up the concept of having an “unpriced” schedule a year or so ago.

GSA logoThe idea is to evaluate vendors for their capabilities, past performance and overall skillsets, and not on their prices. And then let the price competition happen at the task order level.

This concept would be a huge change in the federal market where price has always been a factor in the evaluations of bids.

But the recent success of governmentwide multiple award contracts such as OASIS, and the acceptance of a similar approach for the recent $11.5 billion Human Capital and Training Solutions (HCaTS) procurement and the soon-to-be released solicitation for Alliant 2, there is a growing recognition that this may be the future of federal contracting for multiple award, indefinite delivery, indefinite quantity vehicles.

Keep reading this article at: http://federalnewsradio.com/reporters-notebook-jason-miller/2016/06/future-price-no-longer-factor-many-rfps/

Deloitte Consulting agrees to pay $11 million for alleged false claims on GSA contract

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GSA logoThe Department of Justice (DOJ) has announced that Deloitte Consulting LLP (Deloitte) has agreed to pay $11.38 million to resolve allegations under the False Claims Act that it submitted false claims under a General Services Administration (GSA) contract.  Deloitte is a nationwide consulting company headquartered in New York City.

In 2000, GSA awarded Deloitte a contract for the provision of information technology services.  The contract required Deloitte to reduce the prices it charged the government if it offered lower prices to specific commercial customers during the course of the contract.  GSA refers to this as “best customer” pricing, a requirement of GSA Schedule contracts.

The settlement resolves allegations that between 2006 and 2012, Deloitte failed to comply with the price reductions clause in its contract, resulting in government customers paying more for Deloitte’s services than comparable commercial customers.

Justice Dept. seal - CopyThis case was handled by the DOJ’s Civil Division’s Commercial Litigation Branch and the GSA Office of Inspector General.

The claims resolved by the settlement are allegations only; there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/deloitte-consulting-llp-agrees-pay-11-million-alleged-false-claims-related-general-services

As GSA’s FAS struggles to reinvent itself, contractors suffer

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The last year has been a tough one for the General Services Administration’s Multiple Award Schedules (MAS) program.  The Federal Acquisition Service (FAS) – the GSA agency charged with administering the MAS program – has struggled to re-invent itself and its contracting vehicles in order to ensure they both stay relevant in an increasingly competitive federal marketplace.  The byproduct of this struggle has been mostly negative for Schedule vendors.

GSA Schedule ContractIn an effort to demonstrate the value its contracts bring to federal customers, FAS has pursued an unrelenting crusade aimed at reducing prices at all costs.  It is no longer enough for a vendor to give the Government a great deal vis-à-vis its commercial customers (a determination historically made through a “vertical pricing” analysis).  Now vendors also must charge less than their competitors – a determination made through a “horizontal pricing” analysis.  While FAS contracting officers are supposed to consider factors that may explain a price differential as part of their price evaluation, in practice, COs pay little heed to such “trifles.”  The concept of value rarely enters into the equation any more.

Time and again, vendors are told to lower prices or remove products from their Schedule because another vendor offers the same product at a lower price.  So what that the other vendor offers no customer service, no phone support, no warranty, and is run by two guys out of a garage in Glenwood.  Price is king, and that’s all FAS seems to care about nowadays.  (We mean no disrespect to the good people of Glenwood by the way.  We just couldn’t resist the alliteration.)

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=417332

The procurement method that actually puts the incumbent at a disadvantage

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Over the last year, particularly on federal contracts, I’ve been seeing the rise of a very disturbing procurement process. It’s “Brooks Act” compatible. It is a safe method for procurement professionals to use. And it actually puts the incumbent at a disadvantage. What is it?

The Air Force describes appropriate use of the LPTA acquisition method in this training slide.
The Air Force describes appropriate use of the LPTA acquisition method in this training slide.

It is called Lowest Price Technically Acceptable (LPTA for short).

Wait a minute, hasn’t this been around forever? Yes, it has. But, based on what I’m seeing, reading and hearing, the use of this procurement method has dramatically increased since 2013. And it’s now being used to procure everything from construction management, design, consulting, and even training services.

Keep reading this article at: http://www.helpeverybodyeveryday.com/proposal-development/2724-lowest-price-technically-acceptable

Read the Dept. of Defense memorandum on appropriate use of LPTA at: http://bbp.dau.mil/docs/Appropriate_Use_of_Lowest_Priced_Technically_Acceptable_Source_Selec_Process_Assoc_Con_Type.pdf

GAO: Agency need not raise offeror’s high price in discussions

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When an agency decides to hold discussions with offerors, must it discuss with an offeror the price proposed for the contract? Not unless that offeror’s proposed price is so high as to be unreasonable.

GAO-GovernmentAccountabilityOffice-SealAs the GAO held in a recent bid protest decision, unless an offeror’s price is so high as to make its proposal unacceptable, the offeror is not entitled to be informed during discussions that its price is too high–even if the price is significantly higher than competitors.

The GAO helped shed light on this issue in Joint Logistics Managers, Inc., B-410465.2, B-410465.3 (May 5, 2015). There, the United States Marine Corps issued a task order RFP seeking “Care of Supplies in Storage” services in Albany Georgia, for one base year and one option year. The award was to be made on a best-value basis, considering technical approach, past performance, and price. Price was considered significantly less important than the combined non-price factors; but, price would become increasingly more important if proposals were considered technically equal or if an offeror’s price was so high as to diminish the value of any technical superiority.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/when-too-high-isnt-high-enough/

Price realism evaluation: Only if solicitation says so

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An agency awarding a fixed-price contract can only evaluate offerors’ proposals for price realism–that is, determine whether offerors’ proposed pricing is so low as to be unrealistic–if the solicitation calls for a price realism evaluation.

In a recent bid protest decision, the GAO confirmed that when a fixed-price solicitation does not advise offerors that a price realism evaluation will be conducted, the agency is not permitted to reject an offeror’s proposal because of unrealistically low pricing.

The GAO’s decision in ERIMAX, Inc., B-410682 (Jan. 22, 2015) involved a NOAA RFQ seeking the establishment of a BPA for acquisition and grant management services.  The RFQ called for vendors to submit fully-burdened hourly labor rates for labor categories provided by the agency.  Once labor rates were entered, the agency’s spreadsheet would automatically calculate total prices using the rates provided by the vendors.  The RFQ stated that proposed prices would be evaluated to determine whether they were fair and reasonable.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/price-realism-evaluation-only-if-solicitation-says-so/

 

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