GovCon Voices: The Good, the Bad and the Just Plain Ugly Changes That Almost Were! (Part 2)

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Having started my journey in the federal contracting community close to 30 years ago, I’ve seen quite a few changes in policy and process that have both improved and degraded the ability of small business concerns to participate as contractors and subcontractors. I’m not referring solely to changes where the language targeted small business, I’m also including those intending to change how business is done based on a specific commodity, contract cost type, procurement method, agency mission or government-wide initiative.

In this, my first contribution to GovCon Voices, I’m taking a look back at recent proposed changes that resulted in lots of conversations with my friend Steve Koprince, a slew of articles and blogs and way too many anxious moments awaiting the outcomes. This is the second of a three part series I’m calling ‘The Good, the Bad and the Just Plain Ugly Changes That Almost Were!’ 

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SmallGovCon Week In Review: May 8-12, 2017

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I have food memories of the 1990s–my Duke Blue Devils won back-to-back titles, it was the heyday of Seinfeld, and Furbies were all the rage.  (Ok, Furbies aren’t exactly a fond memory for much of anyone).  But somehow, despite soaking up all kinds of ’90s culture, I missed out on one of the biggest live acts of the decade: Garth Brooks.  But better late than never.  Tomorrow night, I’ll catch the 2017 version of Brooks’ country crooning–part of seven shows he is playing over the course of just two weekends in Kansas City (yep, KC loves some Garth).

Before I go enjoy a country music time warp–followed by a Mother’s Day celebration–it’s time for some government contracting news.  In this week’s SmallGovCon Week in Review, a former USACE program manager is accused of bid rigging, the GSA is working on translating President Trump’s priorities into acquisition policy, and more.

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Kingdomware Doesn’t Require Recertification For GSA Schedule SDVOSB Set-Aside Orders

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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.

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Trump: DoD Contracts Should Be Fixed-Price

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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.”

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Board: Contractor On Hook For Incumbent Employees’ Vacation Time

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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.

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Thank You, SAME Omaha Post!

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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!

No Ostensible Subcontractor Affiliation With ANC Parent & Sister Companies, Says SBA OHA

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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.

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