Agency Awards HUBZone Set-Aside to Federal Prison Industries

Posted on July 16, 2012 by Steven Koprince

When is a HUBZone set-aside not really a HUBZone set-aside? According to one GAO bid protest decision, when Federal Prison Industries (also known as UNICOR) submits an offer.

In Tennier Industries, Inc., B-403946.2 (June 29, 2012), the Defense Logistics Agency set-aside a procurement for HUBZone contractors, but awarded the contract to Federal Prison Industries rather than a HUBZone company. One might think that the GAO would sustain a bid protest. Instead, the GAO held that the award to FPI was A-OK.

OMB Pushes Prompt Payment To Small Subcontractors

Posted on July 13, 2012 by Steven Koprince

Small subcontractors sometimes find themselves facing a cash flow crunch when they take on new work. Under some subcontract payment clauses, a small subcontractor might not be entitled to payment until 30 days or more after the prime contractor receives payment from the government for the subcontractor’s work. Even subcontracts with more generous payment terms often require small subcontractors to make significant up-front investments in terms of employee salaries, materials, and the like before receiving payment.

The Office of Management and Budget apparently recognizes that there is a problem, because yesterday OMB issued a memorandum entitled “Providing Prompt Payment to Small Business Subcontractors,” setting forth three steps the government is taking to address the matter. One of these steps–if it comes to fruition–may even have some “teeth.”

8(a) Mentor-Protege Joint Venture Shielded From “Three-In-Two” Rule Affiliation

Posted on July 13, 2012 by Steven Koprince

According to the SBA Office of Hearings and Appeals, an 8(a) mentor-protege joint venture may be entitled to an affiliation “shield,” even if the joint venture violates the so-called “three-in-two” rule by receiving more than three contracts over a two-year period.

SBA OHA’s decision in Size Appeal of Magnum Opus Technologies, Inc., SBA No. SIZ-5372 (2012), should reassure 8(a) proteges and their mentors that if the SBA District Office has approved a contract award to an 8(a) mentor-protege joint venture, the joint venturers are very unlikely to be found affiliated as a result of that contract award.

SBA OHA: Contractors Must Be Permitted To Contest Affiliation

Posted on July 12, 2012 by Steven Koprince

If you have ever gotten a traffic ticket, you know the ticket typically presents you with two options: send in your fine (essentially admitting guilt), or appear in court and contest the ticket. The second option is available because in our democracy, a citizen accused of wrongdoing–even a minor traffic infraction–has the right to contest the charges.

The same is true when it comes to SBA size protests. According to a recent decision by the SBA Office of Hearings and Appeals, a contractor cannot be found affiliated with another company unless the contractor is given the opportunity to respond to the particular basis of affiliation at issue.

New SmallGovCon Features: Upcoming Events and Past Presentations

Posted on July 11, 2012 by Steven Koprince

Despite what you might think if you read SmallGovCon regularly, blogging is not my favorite way of communicating information about legal developments in the world of government contracting (although I do love blogging!)

Hands-down, I prefer getting out and meeting contractors and others in the industry, face-to-face. That is why I travel around the country, speaking at industry days, conferences, and conventions. In the past year alone, I have spoken at events from Annapolis to Seattle (and many places in between) and I have several more events on tap in the months to come.

To help readers keep up with my speaking schedule, I am pleased to announce that SmallGovCon now features an Upcoming Events page. On this page, you can see where, when, and on what topic I will be speaking. If I will be in your area, please do not hesitate to contact me in advance and we can arrange to get a cup of coffee, or sit down for a more formal meeting.

Now, I understand that unlike the Grateful Dead, I do not have legions of fans following me around the country. So if you will not be able to attend one of my events, you can now view slides from the event after it occurs on the SmallGovCon Past Presentations page (assuming permission is granted by the event sponsor).

Please enjoy the new SmallGovCon features, and I hope to see you at an industry event soon.

Price Realism: GAO Rejects “Incumbent Knows Best” Argument

Posted on July 11, 2012 by Steven Koprince

When an incumbent contractor loses a follow-on contract to a lower-priced competitor, the incumbent sometimes complains that after successfully performing the contract, it “knows what it takes” to get the job done, and that based on its experience, the competitor’s price is unrealistically low.

It is a perfectly logical argument, with one big problem: it can be very difficult to convince the GAO that an incumbent knows better than the procuring agency what constitutes a realistic fixed price for a contract. The difficulty in succeeding with such an “incumbent knows best” price realism protest is demonstrated in a recently released GAO bid protest decision, Resource Ltd., B-406492, B-406492.2 (June 6, 2012).

SBA OHA: SBA Cannot Belatedly Oppose Size Appeal

Posted on July 10, 2012 by Steven Koprince

No matter your political persuasion, it’s hard to forget the image of Senator John Kerry windsurfing in the famous 2004 Bush-Cheney ad. The ad attacked Kerry for supposedly changing his mind too often–“flip-flopping,” in political parlance.

It turns out that the dangers of flip-flopping are not limited to politics. In a recent SBA size appeal decision of the SBA Office of Hearings and Appeals, SBA OHA held that if the SBA’s Office of Government Contracting, or OGC elects not to formally oppose a SBA size appeal, it cannot later change its mind and ask SBA OHA to revisit the size appeal decision. Because the SBA OGC does not formally oppose most SBA size appeals, SBA OHA’s decision forces the SBA OGC to make up its mind quickly about whether it will play a role in the SBA size appeal process.