Defense Department Provides COVID-19 Guidance

Last week, John Mattox wrote of OMB’s guidance to contracting officers in dealing with the extraordinary challenges caused by COVID-19. Among other things, OMB instructed agencies to be flexible in providing extensions on performance deadline and encouraged open communication with industry partners on the response to COVID-19.

Now, the Department of Defense—the federal government’s largest purchasing unit—has issued its own guidance to constituent agencies.

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Preparing for the Worst

The hot topic of late—for good reason—is the coronavirus (or COVID-19), and its incredible impact on people and the world’s economy. It’s inescapable, and turning on the evening news can be downright scary.

We’re all concerned with how to protect our loved ones from the impact of this outbreak. But for business owners—particularly small business owners—those concerns are compounded by the fear of potential economic hardships that are almost certain to come.

In this post, we’ll discuss suggestions as to how a federal government contractor might prepare for disruptions caused by the coronavirus (or other calamities).

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5 Things You Should Know: CMMC

CMMC has been a hot topic for federal government contractors of late, for good reason: once CMMC is rolled out, contractors under a particular Defense Department procurement must meet the applicable cybersecurity level, or they’ll be considered ineligible.

But in case you’re still wondering what CMMC is and why it matters, let’s take a closer look. Here are five things you should know about the Department of Defense’s new Cybersecurity Maturity Model Certification (“CMMC”).

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GAO: If You Weren’t Prejudiced, We Won’t Sustain Your Protest

Much like schoolyard basketball, bid protests feature a “no harm, no foul” rule: unless an offeror can credibly allege that it was prejudiced by a flawed evaluation, GAO won’t sustain a protest.

Establishing prejudice can be tricky, depending on the type of evaluation at issue. Under a lowest-price technically acceptable award, a protester generally must show that it was next-in-line for the award (that is, it was technically acceptable and had the next-lowest price, after the awardee). Best value awards, on the other hand, are a bit more flexible: usually, the protester must establish that the evaluation flaw adversely affected its competitive standing.

A recent GAO decision, however, highlights that these two means of establishing prejudice aren’t always distinct.

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OHA: Sold Corporate Division Isn’t a Former Affiliate

Affiliation is a dirty word to small business federal government contractors. For good reason: it can turn a small business into a large one and destroy its eligibility for socioeconomic programs and set-aside contracts. Proactive small business contractors, therefore, routinely audit their affiliation risks and, if necessary, take actions to fracture that affiliation.

One of the ways a company might try to fracture affiliation is to sell a division or business line to a third party. Because this division is sold, the company might be tempted to assume that its corresponding revenues are not considered as part of the affiliation analysis (under the former affiliate rule).

A recent OHA decision, however, instructs that a division or line of business does not qualify under the former affiliate rule.

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OHA Reiterates that Filing Deadlines Cannot be Extended

As I’m sure most other attorneys can commiserate with, I often have a recurring nightmare that I miss a filing deadline. Doing so can lead to terrible results: dismissed cases and, in some cases, sanctions against the attorney. For this reason, we always check, double-check, and triple-check our filing deadlines, and strive to file documents early, when possible.

Given my fear, I gain no pleasure in reading about missed filing deadlines, especially when the goof is the subject of a matter outside the attorney’s control.

But as a recent decision by the SBA’s Office of Hearings and Appeals demonstrates, even the most sympathetic of excuses won’t excuse a late appeal filing.

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SBA’s Receipts Calculation Transition Period: Is It Legal?

When the SBA issued its final rule implementing the Runway Extension Act’s 5-year receipts calculation period earlier this month, it allowed for a two-year transition: until January 6, 2022, the SBA will allow businesses to choose either a 3-year or a 5-year receipts calculation period.

This transition phase is helpful, the SBA noted, to small businesses that might be adversely affected by an abrupt change to the receipts calculation period—namely, businesses with declining revenues over the preceding five years that are nonetheless close to the applicable size standard cap.

SBA’s accommodation of these companies is, by any measure, a commonsense solution to prevent inadvertent harm caused by the Runway Extension Act. But notwithstanding this laudable policy objective, is the new transition period legal?

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