Federal Court: False Claims Act Covers Deliberate Underbidding

Posted on August 13, 2012 by Steven Koprince

Deliberate underbidding on federal government contracts–known in industry parlance as “buying in”–is not a terribly unusual practice. Contractors may buy in for several reasons, such as an effort to gain a toehold in the federal marketplace or the belief that modifications to the contract will result in a higher actual price.

However, contractors thinking of underbidding, for whatever reason, should proceed with caution in light of a new federal court case. In United States ex rel. Hooper v. Lockheed Martin Corp., No. 11-55278 (9th. Cir. 2012), the U.S. Court of Appeals for the Ninth Circuit held that underbidding and/or giving false estimates, at least in the context of a cost reimbursement contract, may be violations of the False Claims Act.

VA CVE: Reconsideration Decisions Will Take 90 Days, Not 60

Posted on August 10, 2012 by Steven Koprince

A decision on a request for reconsideration of a denied SDVOSB verification application will take approximately 90 days instead of 60 days, according to the VA Center for Veterans Enterprise. In a letter emailed recently to one service-disabled veteran, who authorized me to publish an excerpt on SmallGovCon, the VA CVE stated:

The regulation, 38 CFR 74, states that CVE has 60 days, when practicable, to make a final decision associated with the request for reconsideration. Unfortunately we have received an exceptionally large number of requests for reconsideration, and currently almost 600 applications are in the reconsideration process. As a result, it is no longer practicable to process these within 60 days. Historically, 20% of companies receiving an initial denial are requesting reconsideration. We have shifted and added resources in an effort to speed up the process. In order to be fair to all applicants, we continue to process all requests for reconsideration on a first come, first served basis. We currently estimate that we will be able to provide a decision within 90 days of receiving the request for reconsideration, so you can expect a decision no later than [date redacted]. As soon as we can give you a better estimate of the timeframe for decision, we will do so.

It is little wonder that the VA CVE is experiencing reconsideration overload, because the VA CVE is denying 60% of initial SDVOSB verification applications. I am sympathetic to the VA CVE’s overworked employees, but I have much more sympathy for the eligible service-disabled veterans who will suffer from the reconsideration delays.

Ostensible Subcontractor Rule: A Look At A Compliant Team

Posted on August 10, 2012 by Steven Koprince

The ostensible subcontractor rule can be challenging, because there is no magic formula for compliance. When a protester raises an ostensible subcontractor rule allegation, the SBA evaluates all aspects of the prime/subcontractor relationship to see whether the ostensible subcontractor rule was violated. If the SBA concludes that the small prime contractor is unduly reliant on it subcontractor, and/or the subcontractor will perform the primary and vital portions of the contract, it will find the prime affiliated with its subcontractor.

Although there is no single recipe for ostensible subcontractor rule success, it can be useful to examine SBA Office of Hearings and Appeals cases to see exactly what sort of prime/sub relationships SBA OHA deems problematic–and which pass muster. Today’s post is in the latter category: a recent SBA OHA decision finding that the ostensible subcontractor rule had not been violated.

What did the prime and subcontractor in that case do right?

No Conflict: GAO Holds Contractor’s Former Employee May Evaluate Proposals

Posted on August 9, 2012 by Steven Koprince

Is it a conflict of interest for a contractor’s former employee to evaluate his old firm’s competitive proposal? Not necessarily, according to the GAO.

In a recent GAO bid protest decision, the agency’s technical evaluation board included a member who had previously worked for the winning offeror. As one might expect, this did not sit particularly well with one of the awardee’s competitors, which filed a GAO bid protest. The GAO’s ruling: there was no conflict of interest.

How Low Can You Go? GAO Denies Price Realism Protest

Posted on August 8, 2012 by Steven Koprince

When is a competitor’s low price simply too low to be realistic? Maybe never, at least when it comes to challenging the low price in a GAO bid protest.

As seen in a recent GAO bid protest decision, when a fixed-price solicitation does not call for a price realism analysis, the procuring agency is not required to conduct one–and a competitor will not succeed in challenging the award on the basis of a supposedly unrealistically low price.

NAICS Code Appeals: Deadline Is Ten Calendar Days, Not Ten Business Days

Posted on August 7, 2012 by Steven Koprince

A federal regulation states that NAICS code appeals are timely if filed within ten business days. So why was one small business’s NAICS code appeal dismissed even though it filed the appeal within the time period called for by the regulation?

According to SBA OHA, the regulation was erroneous, and the actual NAICS code appeal deadline is ten calendar days. I don’t know about you, but to me, the result doesn’t seem particularly fair to the contractor.

NAICS Code Appeals: Sometimes, Filing Is All It Takes

Posted on August 6, 2012 by Steven Koprince

NAICS code appeals can be powerful competitive weapons–either shrinking or expanding the competitive playing field if they are successful. Sometimes, simply filing a NAICS code appeal can convince the procuring agency that the wrong NAICS code was assigned, leading to a successful outcome before the SBA Office of Hearings and Appeals even has the opportunity to rule on the merits.