Economic Dependence Affiliation: A One-Way Street

Under the SBA’s economic dependence affiliation rule, two companies can be deemed affiliated when one company is responsible for a large portion of the other company’s revenues over time.  But must both companies count one another as affiliates—or does the rule only apply when the recipient’s size is challenged?

A recent SBA Office of Hearings and Appeals case answers these questions: when a company is economically dependent upon another company, it is affiliated with the company on which it depends, but the opposite is not true. In other words, economic dependence affiliation is a one-way street.

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Binding Arbitration in Employment Contracts? Not in Some Federal Government Work

Asking new employees to sign arbitration agreements is common in the commercial business world. But it can be a big no-no in government contracting.

In a recent bid protest decision, GAO sustained a protest where a Reston, Virginia company required its proposed key personnel to sign binding arbitration agreements.  In other words, requiring key personnel to arbitrate employment disputes cost the original awardee a $41 million contract.

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Government Contractor Cybersecurity: Q&A with the Director of the Kansas SBDC Cybersecurity Center

Whether you are an active small business federal contractor, or an entrepreneur still getting your business off the ground, you are going to need a cybersecurity plan. Many DoD contractors, in particular, face a pending deadline to comply with NIST 800-171, as mandated by DFARS 252.204-7012.

The Kansas SBDC Cybersecurity Center for Small Business wants to help.

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GAO: Agency Corrective Action After Eight Months Was Not “Unduly Delayed”

In a GAO bid protest, recovering costs after an agency takes corrective action turns on whether or not the agency unduly delayed the corrective action.

A recent GAO case shows that, in certain circumstances, an agency may be able to fight a protester almost to the bitter end, then take corrective action without necessarily having crossed the “unduly delayed” line.

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Bankruptcy Pending, But Contractor Still Wins Award

Contracting officers have wide discretion to determine that a business can perform the work in question—even if the business is about to enter bankruptcy.

In a recent GAO protest, an unsuccessful offeror challenged just such a determination, saying that there is no way the awarded business could perform because it was nearly bankrupt. But according to the GAO, so long as the agency considered the pending bankruptcy, it was not improper to make an award.

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Contractor’s Email Leads to Lost Contract, Denied Protest

Generally speaking, government contractors know that part of the cost of doing business with the federal government is some loss of autonomy. The government writes the rules. It is the 500 lb. gorilla. What it says usually goes.

When contractors try to do things their own way–even in an relatively informal medium such as email–they can sometimes get into trouble, as evidenced by a recent GAO protest decision: Bluehorse Corp., B-414809 (Aug. 18, 2017).

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Price Realism: Agency Didn’t Compare Proposed Rates To Incumbent Rates

An incumbent contractor won a protest at GAO recently where it argued that the awardee’s labor rates were too low, because they were lower than the rates the incumbent itself was paying the same people.

GAO faulted the agency for concluding that the awardee’s price was realistic without checking the proposed rates against the incumbent rates. In other words, GAO told the agency to start at the obvious place—the compensation of the current employees.

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