RULES FOR SET-ASIDES FOR SMALL BUSINESS, INCLUDING WOMEN OWNED SMALL BUSINESS

The Government Accountability Office (“GAO”) recently considered a protest challenging a Department of Energy (“DOE”) decision not to set aside a solicitation for women-owned small business (“WOSB”) concerns. EDWOSB Transformer Servs, LLC, B-416683, Oct. 15, 2018. The GAO denied the protest because the decision to set aside for WOSB’s was discretionary. However, the decision is an excellent review of when agencies are required to set aside procurements for small business of varying types. Determining Small Business Set Asides-Depends on the likely value of the procurement: Micropurchase (under $10,000, see FAR 2.101 and recent amendments in the National Defense Authorization Act for 2018): competitive procedures are not required if contracting officer considers the price to be reasonable. FAR 13.203(a)(2). Under Simplified Acquisition Threshold (“SAT”)(between $10,001 and … Continue reading

WHEN WILL THE SBA GIVE “PRESENT EFFECT” TO STOCK SALES OR AGREEMENTS TO MERGE?

In a recent case at the Small Business Administration (“SBA”) Office of Hearings and Appeals, (“OHA”), the OHA clearly explained when “present effect” will be given to stock options, convertible securities and agreements to merge. This is important because such agreements deal with the power to control a concern, and hence impact affiliation of companies. Telecommunications Support Services, Inc., SBA No. SIZ-5953, August 17, 2018. The case involves a letter of intent (“LOI”) dated May 12, 2017 under which Acorn Growth Companies, LLC entered into with CIS Secure Computing, Inc. In the size protest, the issue was whether the LOI constituted an “agreement in principle” that was given present effect by the area SBA office, and which therefore found the two companies to be affiliated … Continue reading

ARMED SERVICES BOARD MERITORIOUS DISPOSITIONS INCREASE IN 2018

In its annual report for fiscal year 2018, the Armed Services Board of Contract Appeals (“ASBCA” or “Board”) noted an increase in the number of sustained (meritorious) contract appeals, and a decline in the total number of contract appeals. The two year comparison is shown below: FY 2017 FY 2018 Percent Increase or Decrease Appeals sustained on merits 80 96 20% increase Appeals denied on merits 59 43 27% decrease Dismissed 539 420 22% decrease Appeals pending, end of period 770 901 7.7% decrease The news was actually good for contractors. The number of appeals sustained on the merits rose by 20 percent. There was a 27 percent decrease in appeals denied on the merits, a 7.7 percent decrease in the number of appeals pending, … Continue reading

“DEFECTIVE” CLAIM CERTIFICATION OR “NO CLAIM CERTIFICATION”

In a recent Civilian Board of Contract Appeals case, Development Alternatives, Inc. v. Agency for Int’l Dev., CBCA 5942 et. al, September 27, 2018, the Board considered an appeal of a claim for $1.9 million for security services in Afghanistan. Holding that it had no jurisdiction of the claim because of lack of certification, the Board dismissed the case. The problem was a simple one, where the contractor never certified its initial claim to the contracting officer, even though it submitted a certification after the appeal was filed at the Board. Here’s the basis for this decision, and some recommendations on how to avoid the problem. The Contract Disputes Act of 1978, codified at 41 U.S.C. § 7103 requires that all claims of more than … Continue reading

CAN A RUBBER STAMPED SIGNATURE BIND A CONTRACTOR?

Is a rubber stamped signature of the President of a company on a release of claims valid? The Civilian Board of Contract Appeals, under the facts in Penna Group, LLC v. Dept of Justice, CBCA 6155, Sept. 27, 2018, held that it was a valid release after completion of a roofing contract. The Federal Bureau of Prisons (part of the Department of Justice) awarded a roofing contract to Penna Group. Upon completion of the work, the agency provided Penna with a completed release of claims form that released the United States from any and all claims arising under the contract or any modification or change, with the word “NONE” to identify the claims excluded by the contractor. Penna returned the document with the stamped signature … Continue reading

FEDERAL CIRCUIT WARNS CONTRACTING OFFICERS: MEET YOUR NEEDS WITH COMMERCIAL ITEMS FIRST

In 1994, Congress passed the Federal Acquisition Streamlining Act (“FASA”), Pub. L. No. 103-355, and included, codified as amended at 10 U.S.C. § 2377, a requirement that federal agencies, to the maximum extent practical, procure commercially available items and technology to meet their needs. A recent case, Palantir USG, Inc. v. United States, No. 2017-1465 (Fed. Cir. 2018), 2018 WL 4356686 emphasizes the importance of agency adherence to this strong preference for the consideration of commercial items, if they are available. Palantir concludes that even though the Army was on notice that Palantir’s product might be a commercial item that could satisfy its requirements for software for a “Distributed Common Ground System,” the Army did not use its market research results rationally, and excluded commercial … Continue reading

SIZE PROTEST DEADLINES DO NOT APPLY IF AGENCY FLOUTS SEALED BIDDING PROCEDURES

Agencies must strictly adhere to the procurement method as set forth in the Federal Acquisition Regulation (“FAR”). Failure to do so may result in a sustained protest. The FAR provides two principal methods of procurement, sealed bidding (Part 14 of the FAR) and contracting by negotiation (Part 15 of the FAR). Although the majority of the contract dollars awarded by the government are through negotiated procurement, sealed bidding is still quite important. The elements of sealed bidding leave very little room for discretion on the part of a contracting officer making an award, and are as follows: Agency prepares the solicitation, an Invitation for Bids (“IFB”), that describes the requirements clearly, accurately and completely Agency publicizes the IFB Offerors submit sealed bids to the agency … Continue reading

GAO JURISDICTION EXTENDS TO PROCUREMENT LAWS AND REGULATIONS BUT NOT QUESTIONS OF FISCAL LAW OR THE ANTI-DEFICIENCY ACT

In an Army procurement for web-based postage, Pitney Bowes, Inc., B-416220, July 11, 2018, the Government Accountability Office (“GAO”) recently made clear that its bid protest jurisdiction extends to violations of procurement laws and regulations, and does not generally extend to questions of fiscal law or regulation. Indeed, 31 U.S.C. § 3552, which provides GAO with its authority to consider and make recommendations on bid protests, states as follows: “A protest concerning an alleged violation of a procurement statute or regulation shall be decided by the Comptroller General [GAO] if filed in accordance with this subchapter.” (Emphasis added). In its protest, Pitney-Bowes had argued that the proposal submitted by the awardee of the contract, Stamps.com, violated fiscal law and regulation by proposing to purchase postage … Continue reading

AGENCY VIOLATIONS OF THE COVENANT OF GOOD FAITH AND FAIR DEALING

Two recent cases at the Armed Services Board of Contract Appeals (“Board”) demonstrate the importance and reach of the covenant (implied duty) of good faith and fair dealing.” This duty has been described by the Court of Appeals for the Federal Circuit as follows: “The covenant prevents parties from “act[ing] so as to destroy the reasonable expectations of the other party regarding the fruits of the contract.” Centex Corp. v. United States, 395 F.3d 1283, 1304 (Fed. Cir. 2005). The covenant “‘imposes on a party … the duty … to do everything that the contract presupposes should be done by a party to accomplish the contract’s purpose.’” Stockton E. Water Dist. v. United States, 583 F.3d 1344, 1365 (Fed. Cir. 2009) The Restatement (Second) of … Continue reading

GAO: AGENCY MISTAKES IN BID PROTESTS

For nearly a century, the Government Accountability Office (“GAO”) and its predecessor, the General Accounting Office, have provided an independent, impartial, and objective forum for bid protests on federal government solicitations and contracts. A bid protest is a written objection by an interested party to: A solicitation or other request by a Federal agency for offers for a contract for the procurement of property or services; The cancellation of such a solicitation or other request; An award or proposed award of a contract; A termination or cancellation of an award of a contract, if the written objection contains an allegation that the termination or cancellation is based in whole or in part on improprieties concerning the award of the contract; or Conversion of a function … Continue reading