Under a new FAR provision effective in February 2016, the Government typically will not enter into a contract with any corporation that has an unpaid Federal tax liability that is not being contested or timely repaid. The same new FAR provision prohibits the Government, in most cases, from awarding a contract to a company recently convicted of a Federal felony.
The new FAR provision requires a corporate offeror to represent whether it has any unpaid tax liabilities or recent felony convictions. If the answer to either question is “yes,” the Government cannot award a contract unless it has first considered suspension or debarment of the offeror, and determined that suspension or debarment is unnecessary to protect the Government’s interests.
The GAO has upheld an agency’s award of a contract to a firm owned by a current Government employee.
In a recent bid protest decision, the GAO ruled that the Contracting Officer did not “knowingly” make the award in violation of the FAR because he was not aware of the owner’s employment status. The GAO’s decision begs the question: with contractors required to submit so many representations and certifications, why is it permissible for a contractor to withhold the fact that it is owned or controlled by a current government employee?
On Friday, the Department of Justice joined a False Claims Act lawsuit against Lance Armstrong.
Among his many troubles, Lance Armstrong now has a big government contracts problem on his hands–and Lance’s problem can provide an important lesson about “representations and certifications” for the less-famous government contractors among us.
“So, are you a small business?” “Nope.” “Great. How would you like a small business set-aside contract?” “Umm, sure, okay.”
The dialogue above is fictional (and its lack of quality demonstrates why I am a government contracts lawyer, not a Hollywood screenwriter), but it could have occurred in relation to a recent Department of Veterans Affairs procurement. In that case, a company self-certified that it was not small. Despite the certification, the VA awarded the company a small business set-aside contract.
Not surprisingly, the GAO had something to say about it.