Agency Insists On Subcontract With OEM; GAO Agrees

Subcontracting is a way of life for many federal government contractors; however, the identification and selection of such subcontractors is usually left up to the reasonable discretion of the prime contractor. So what happens when a solicitation prescribes that a particular subcontractor be retained, but that subcontractor won’t assist in bid preparation efforts?

Well, in one recent case, the prospective prime contractor was out of luck.

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8(a) Program: Loan Must Be “Bona Fide” To Reduce Net Worth

To qualify for the 8(a) program, a disadvantaged individual must fall below certain personal net worth thresholds. Loans can reduce net worth–but not all loans are treated the same.

According to the SBA Office of Hearings and Appeals, if a disadvantaged individual intends to rely on a loan to reduce net worth, the loan better be bona fide.

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GAO: Procuring Agency Needn’t Disclose Inter-Agency Consultation

As many contractors and attorneys can attest, federal acquisitions sometimes seek items that are federally regulated, which can result in some complex compliance issues. A classic example of this interaction is the procurement of aircraft. Not only must bidders comply with the requirements of the solicitation, they must also satisfy the FAA’s airworthiness regulations.

So what happens when the FAA’s regulations and the solicitation requirements appear to be at odds? That was the question presented to GAO in Timberline Helicopters, Inc., B-414507,  (June 27, 2017), where inter-agency communications between the procuring agency and the FAA resolved the issue. And according to GAO, the procuring agency wasn’t required to disclose those communications to prospective offerors.

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8(a) Program: Will Supreme Court Take Rothe’s Constitutionality Case?

The continuing legal battle over the constitutionality of the 8(a) program’s “socially disadvantaged” criteria may be on its way to the Supreme Court of the United States.

Last September, we covered the decision of the United States Court of Appeals for the D.C. Circuit in Rothe Development, Inc. v. United States Department of Defense, 836 F.3d 57 (D.C. Cir. 2016), where a two-judge majority of the court concluded the 8(a) program did not violate Rothe’s equal protection rights under the Due Process Clause of the Fifth Amendment by establishing a racial classification.

Now, Rothe has filed a Petition for Writ of Certiorari—a formal request that the Supreme Court review (and overturn) the D.C. Circuit’s decision.

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“Government Control” Didn’t Affect Electronic Proposal Timeliness, Says GAO

One might think that when an electronic proposal is received by a government server before the solicitation’s deadline, the proposal isn’t late. A government server is under government control, so the proposal is timely, right?

Not necessarily, at least the way the GAO sees it. As one contractor recently learned, waiting until the last minute to submit a proposal electronically carries significant risk that the proposal will not be considered timely, even if the proposal reaches the government server in time.

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Evaluation Of Subcontractor Past Performance Not Required For FSS Procurements

For Federal Supply Schedule procurements, agencies are not required to evaluate past performance references of subcontractors, unless the solicitation provides otherwise.

As one offeror recently discovered in Atlantic Systems Group, Inc., B-413901 (Jan. 9, 2017), unlike negotiated procurements, where agencies “should” evaluate the past performance of subcontractors that will perform major or critical aspects of the contract, offerors bidding under FSS solicitations should not assume that a subcontractor’s past performance will be considered.

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ASBCA Applies Christian Doctrine to Payment and Performance Bonding

Federal construction contracts incorporate the FAR’s payment and performance bonding requirements as a matter of law, even if the solicitation omits these bonding provisions.

In a recent Armed Services Board of Contract Appeals decision, K-Con, Inc., ASBCA Nos. 60686, 60687 (2017), a contractor ran headlong into construction bonding issues when the Army demanded payment and performance bonding for two of its construction contracts despite there being no bonding requirements in either of the contracts. According to the ASBCA, the bonds were required anyway.

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