For joint ventures operating under the SBA’s regulations (including SBA-approved mentor-protege joint ventures), dealing with security clearances has been a particularly vexing issue: some contracting officers have insisted that a joint venture (an unpopulated, limited-purpose entity) separately obtain a Facility Security Clearance, even when both joint venture members hold FCLs.
Soon, though, joint venturers will be able to stop worrying about obtaining separate FCLs for their unpopulated joint ventures. A new SBA regulation taking effect next month allows a joint venture to rely on the security clearances of its members.
Forming a joint venture is an important tool to help small businesses increase their competitiveness under federal acquisitions. But for all the benefits, some headaches remain.
One common issue arises when a solicitation requires the prime contractor to hold a facility security clearance. Because a joint venture is an unpopulated legal entity formed for the purpose of bidding on a specific opportunity, the joint venture itself (as the prime contractor) often lacks the needed clearance—even though the joint venture’s members might both hold it. In these situations, a form-over-substance evaluation may leave the joint venture ineligible for award.
Fortunately, the SBA has recognized the silliness of such an exclusion and has invited feedback on a potential solution.
Facilities security clearances are a common requirement for Department of Defense procurements. While important for national security reasons, these solicitation requirements can also create confusion with respect to evaluation.
A recent GAO decision demonstrates how confusion can arise when a contractor holds multiple CAGE codes, only one of which corresponds to a cleared facility.
Happy New Year and welcome back to the SmallGovCon Week In Review. I hope that everyone had an enjoyable holiday season and is jumping full force into 2017. We bring you a double edition today, as we took a little time off from delivering you our weekly publication last week.
It may have been the holiday season, but it was still a busy two weeks of developments in the world of federal government contracting. In this week’s edition, the President has signed the 2017 National Defense Authorization Act (click here for SmallGovCon‘s complete 2017 NDAA coverage), alleged procurement fraud results in a whopping $4.5 million settlement, President-elect Trump’s administration may prioritize Buy American policies, Guy Timberlake takes a look at how FY 2016 contracting dollars were obligated, and much more.
Picture this scenario: the government hires your company to do a job; you assign one of your best employees to lead the effort. He or she does such a good job that the government hires your employee away. The government then drags its feet on approving your proposed replacement and refuses to pay you for the time when the position was not staffed–even though the contract was fixed-price.
The scenario is exactly what happened to a company called Financial & Realty Services (FRS), and according to the Civilian Board of Contract Appeals, FRS wasn’t entitled to its entire fixed-price contract amount.