The FAR’s Limitations on Subcontracting and IDIQ Contracts

Posted on May 16, 2012 by Steven Koprince

Here’s a question I get with some frequency: “do I have to comply with the FAR’s subcontracting limitations for every task or delivery order?” You will be happy to learn that the GAO, at least, has answered this question “no.”

Although the FAR Limitations on Subcontracting clause, FAR 52.219-14, does not address IDIQs, task or delivery orders, the GAO has held that the subcontracting limitation FAR clause “applies to the contract as a whole and does not require that each delivery order placed under the contract satisfy the requirements of the clause.” Spectrum Security Servs., Inc., B-297320.2 (Dec. 29, 2005). According to the GAO in the Spectrum Security Services bid protest, the “contract as a whole” means that where a solicitation provides for the price evaluation of base and option years, the entire contract—both base and all priced options—will be reviewed to determine whether the offer complies with the subcontracting limits.

Ohio Firm Pays $500,000 to Settle DBE Fraud Claim–Is Subcontracting Plan Abuse Next?

Posted on May 8, 2012 by Steven Koprince

An Ohio-based construction company has paid $500,000 to settle federal False Claims Act allegations related to the Department of Transportation’s Disadvantaged Business Enterprise program, according to a statement published by the U.S. Department of Justice.

This case is particularly interesting because the allegations made by the government sound an awful lot like circumstances that, I have heard, may occur on many government projects requiring small business subcontracting plans. Some in the industry have complained that sometimes, a small and/or socioeconomically disadvantaged business is named as a subcontractor under a large prime’s subcontracting plan, but the small business is expected to pass all or most of the work through to a large, second-tier sub.

It’s not that different from what happened in Ohio, and now the prime contractor in question is half a million dollars poorer. The settlement begs the question: will the government use the False Claims Act to root out this type of subcontracting plan abuse in the near future?

SBA Size Appeals and Confidential Information

Posted on May 6, 2012 by Steven Koprince

Clients thinking about filing a SBA size appeal with the SBA Office of Hearings and Appeals are sometimes nervous when they find out that SBA size appeal decisions are publicly published. “What if the judge publishes our confidential information?” they ask.

As a small business in a competitive market, it is always wise to think about protecting your proprietary and confidential business information, including by having employees and teaming partners sign non-disclosure agreements. But what do you do when the person with your confidential information is an administrative judge, like the ones at SBA OHA?
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The Aldevra Saga Continues–and the GAO Throws the VA Some Lifelines

Posted on April 23, 2012 by Steven Koprince

The VA has gotten beaten up pretty badly at the GAO lately. The governmental watchdog agency continues to sustain protests (the most notable being filed by a company named Aldevra) on the basis that the VA’s practice of obtaining goods and services on the Federal Supply Schedule without first determining whether the procurements can be set aside for service-disabled veteran-owned small businesses or veteran-owned small businesses is illegal.

However, in a recent bid protest decision regarding the same issue, the GAO ruled in the VA’s favor—and its ruling could bring an end to the Aldevra saga (an end many SDVOSBs and VOSBs are likely to find very unsatisfactory), if the VA accepts the GAO’s lifeline.

Is it Groundhog Day? Aldevra Strikes Again

Posted on April 20, 2012 by Steven Koprince

In the kitschy but rather enjoyable 1993 movie Groundhog Day, a still young-looking Bill Murray plays a weatherman who finds himself repeating the same day over and over. For those following the battle between Aldevra, a service-disabled veteran-owned small business (and others in Aldevra’s corner), and the U.S. Department of Veterans Affairs, a Groundhog Day-style repetition seems to have emerged.

First, the VA issues an unrestricted solicitation under the Federal Supply Schedule. Second, Aldevra (or someone else), files a bid protest with the GAO, alleging that the VA’s use of the FSS violates its “Veterans First” obligations. Third, the GAO sustains the protest. And fourth, the VA keeps on doing it.

So here’s another Aldevra protest–any guesses what happens next?

Beware of Boilerplate: Unnecessary Certification Sinks Bid

Posted on April 2, 2012 by Steven Koprince

It probably seemed like a good idea at the time. When 4Granite, Inc. submitted a bid in response to a Corps of Engineers IFB, 4Granite included a document not required by the government, titled “Company Information and F.A.R. and D.F.A.R. compliance statements.” In the compliance statement, 4Granite pledged to comply with the clause at FAR 52.212-1 and the clauses at FAR 52.212-3 through 5.

The problem? Those clauses weren’t in the IFB.

GAO: Agencies Cannot Ignore SBA OHA’s NAICS Code Designations

Posted on March 25, 2012 by Steven Koprince

My daughter isn’t even eight months old yet, but she has developed a case of selective hearing. If she’s doing something she shouldn’t (like tugging on the blinds), and I tell her to stop, she often pretends not to hear and keeps right on going. By the time she’s two, she’ll probably be sticking her fingers in her ears and chanting, “la la la, I can’t hear you,” when she doesn’t want to acknowledge me.

Selective hearing isn’t limited to children. In one case, the Department of Veterans Affairs ignored the SBA’s designation of a new NAICS code for the solicitation. But, like my daughter, the VA didn’t get away with it for long.