The Supreme Court’s landmark ruling in Kingdomware Technologies, Inc. v. United States does not require SDVOSBs to recertify their eligibility in connection with individual GSA Schedule task orders.
In a recent decision, the SBA Office of Hearings and Appeals held that Kingdomware doesn’t affect the SBA’s SDVOSB eligibility regulation for multiple-award contracts, which specifies that if a company qualifies as an SDVOSB at the time of the initial offer for a multiple-award contract, it ordinarily qualifies as an SDVOSB for all orders issued under the contract.
We previously have written about the trending preference toward fixed-price contracts, and away from cost reimbursement contracts, in defense procurements. The Defense Department’s supplement to the FAR (known as DFARS), in fact, already includes restrictions on using cost-reimbursement or time and materials contracts.
Now the President has come out in favor of fixed-price defense contracting. In a Time Magazine article published today, President Trump signaled strong support for the fixed-price contracting preference, going so far as to “talk of his plans to renegotiate any future military contracts to make sure they have fixed prices.”
The Service Contract Act requires contractors to pay certain provide no less than certain prevailing wages and fringe benefits (including vacation) to its service employees. The amount of vacation ordinarily is based on an employee’s years of service—and service with a predecessor contractor counts. The FAR’s Nondisplacement of Qualified Workers provision, in turn, requires follow-on contractors to offer a “right of first refusal” to many of those same incumbent employees.
A follow-on contractor is to be given a list of incumbent service personnel, but that information ordinarily isn’t available at the proposal stage. So what happens when a follow-on contractor unknowingly underbids because it isn’t aware how much vacation is owed to incumbent service personnel? The answer, at least in a fixed-price contract, is “too bad for the contractor.”
So it was in SecTek, Inc., CBCA 5036 (May 3, 2017)—there, the Civilian Board of Contract appeals held that a contractor must pay employees retained from the incumbent nearly $170,000 in wage and benefit costs based on its underestimate of those costs in its proposal.
I am back in Lawrence after a great trip to Omaha, where I spoke at the SAME Omaha Post Industry Day. My talk focused on recent legal changes in federal contracting, including pieces of the 2017 National Defense Authorization Act and the SBA’s implementation of the All Small Mentor-Protege Program.
Thank you very much to Anita Larson and the rest of the Planning Committee for organizing this great event and inviting me to speak. Thank you also to all of the clients, contractors, and government representatives who stopped by my “booth” in the Exhibit Hall to ask questions and chat about the nuances of government contracts law. As much as I enjoy speaking to large groups, it’s these one-on-one discussions that make for a truly outstanding conference.
Next up for me: the Department of Energy Small Business Conference, which will be right in my backyard (Kansas City) next week. Hope to see you there!
An Alaska Native Corporation subsidiary was not affiliated with its parent company and two sister companies under the ostensible subcontractor affiliation rule, even though the company in question would rely on the parent and sister companies for managerial personnel, financial assistance and bonding.
A recent decision of the SBA Office of Hearings and Appeals highlights the breadth of the exemption from affiliation enjoyed by ANC companies.
Feliz Cinco de Mayo! Whether you are celebrating the Mexican Army’s “unlikely victory over French forces at the Battle of Puebla” back in 1862 or just looking for an excuse to grab a cold margarita on the patio, I hope you have a wonderful May 5.
Even though it’s not an official holiday here in the U.S., it’s still Friday–and that means it’s time for our weekly roundup of government contracts news. This edition of SmallGovCon Week In Review includes a defense contractor heading to prison in connection with a $53 million fraud and gratuity scheme, the GAO provides six recommendations to reduce fraud, waste, and abuse, California lawmakers debate “blacklisting” contractors who work on the President’s proposed border wall, and more.
A NAICS code appeal can be a powerful vehicle for influencing the competitive landscape of an acquisition. A successful NAICS code appeal can dramatically alter a solicitation’s size standard, causing major changes in the number (and sizes) of potential competitors.
But a NAICS code appeal cannot be filed until the solicitation is issued. As the SBA Office of Hearings and Appeals recently confirmed, a NAICS code appeal cannot be filed with respect to a presolicitation.