As GSA Interact reported on their blog, several new FAR rules will impact small business.
According to the Federal Register, “DoD, GSA, and NASA have adopted as final, with a minor edit, an interim rule amending the Federal Acquisition Regulation (FAR) to implement regulatory changes made by the Small Business Administration (SBA) that provide for authority to award sole source contracts to economically disadvantaged women-owned small business concerns and to women-owned small business concerns eligible under the Women-Owned Small Business (WOSB) Program.”
The Federal Register also notes that the rule puts the WOSB Program “on a level playing field with other SBA Government contracting programs with sole source authority and provided an additional, needed tool for agencies to meet the statutorily mandated goal of 5 percent of the total value of all prime contract and subcontract awards for WOSBs.”
Of all the SBA contracting programs, the 8(a) set-aside rules were always the best for sole sourcing. Fundamentally, if a KO (contracting officer) was willing (at the program office’s behest) to accept/write a Justification and Approval (J&A), the sole source went through. As well, many times this same authority was extended to 8(a) companies on multiple-award vehicles, so that the covered programs could use the vehicle to do sole sourcing as well.
This new regulation and FAR/DFAR change creates a similar dynamic for EDWOSBs – which is huge, because there are many EDWOSB companies ready for this, and because the 8(a) sole sourcing has come under pressure, particularly after some of the issues that arose in large sole sourcing for Alaskan Native Companies (ANCs) and some less than ethical/legal behavior by companies trying to take advantage of the program. In fact, the 8(a) program seems to have largely been replaced with “small disadvantaged” status, much to the chagrin of many of my friends who have 8(a) status.
This is definitely a major change, considering the 328 EDWOSBs and 974 WOSBs who could have received sole source awards between April 1, 2011 (the implementation date of the WOSB Program) and September 1, 2015.
This is a guest post by Candace Shields of SmallGovCon.
The SBA’s Office of Hearings and Appeals will have authority to hear petitions for reconsideration of SBA size standards under a proposed rule recently issued by the SBA.
Once the proposal becomes a final rule, anyone “adversely affected” by a new, revised or modified size standard would have 30 days to ask OHA to review the SBA’s size standard determination.
By way of background, when a federal agency issues a solicitation, it ordinarily is required to designate one–and only one–NAICS code based on the primary purpose of the contract. Each NAICS code carries a corresponding size standard, which is the upper perimeter a business must fall below to be considered as small under any solicitation designated with that NAICS code.
The size standard is measure by either average annual receipts or number of employees, and varies by industry. So, for example, under current law, NAICS code 236220 (Commercial and Institutional Building Construction) carries a $36.5 million receipts-based size standard. The SBA’s size standards are codified in 13 C.F.R. 121.201 and published in an easier-to-read format in the SBA’s Size Standards Table.
Importantly, size standards are not static. The SBA regularly reviews and adjusts size standards based on the “economic characteristics of the industry,” as well as “the impact of inflation on monetary-based size standards.” In 2014, for example, the SBA upwardly adjusted many receipts-based size standards based on inflation.
The size standards selected by the SBA can have major competitive repercussions. If the SBA chooses a lower size standard for a particular industry, many businesses won’t qualify as “small.” If the SBA selects a higher size standard, some smaller businesses will have trouble effectively competing with larger (but still “small”) competitors.
Despite the importance of size standards in the competitive landscape, there is not an SBA administrative mechanism for a business to challenge or appeal a size standard selected by the SBA (although judicial review is possible). Now, that is about to change. In the 2016 National Defense Authorization Act, Congress vested OHA with jurisdiction to hear petitions challenging the SBA’s size standard selection.
In response to the authority vested in OHA by the 2016 NDAA, the SBA’s proposed rule that sets out the procedural rules for OHA’s reconsideration of size standards petitions. While adhering closely to the procedural rules for SBA size challenges, the new rules for petitions for reconsideration of size standards lay out specific procedural regulations for filing a petition of reconsideration of size standards. The proposed rule addresses the issues of standing, public notification, intervention, filing documentation, finality, and effect on solicitations. The proposed rule also includes size standard petitions as part of SBA’s process for establishing size standards.
Here are some key proposed provisions worth noting:
- Proposed Section 134.902(a) grants standing to any person “adversely affected” by a new, revised, or modified size standard. That section would also provide that the adversely affected person would have 30 calendar days from the date of the SBA’s final rule to file its petition with OHA. This section of the rule confirms that OHA’s review will be limited to cases in which the SBA actually adopts or modifies a size standard; petitioners will not have authority to challenge preexisting size standards.
- Proposed Section 134.902(b) would provide that a business entity is not “adversely affected” unless it conducts business in the industry associated with the size standard being challenged and either qualified as a small business concern before the size standard was revised or modified or would be qualified as a small business concern under the size standard as revised or modified.
- Proposed Section 134.904(a) outlines the technical requirements of filing a Petition. This includes things like including a copy of the final rule and a narrative about why SBA’s size standard is alleged to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with applicable law.
- Proposed Section 134.906 would permit interested persons with a direct stake in the outcome of the case to intervene and obtain a copy of the Petition.
- Proposed Section 134.909 sets forth the standard of review as “whether the process employed by SBA to arrive at the size standard ‘was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.” As if that language wasn’t enough, the section clarifies that the petitioner bears the burden of proof.
- Proposed Section 134.914 would require OHA to issue a decision within 45 days “as practicable.”
- Proposed Section 134.917 would require SBA to rescind the challenged size standard if OHA grants a Petition. The size standard in effect prior to the final rule would be restored until a new final rule is issued.
- Proposed Section 134.917 would state that “because Size Standard Petition proceedings are not required to be conducted by an Administrative Law Judge, attorneys’ fees are not available under the Equal Access to Justice Act.
- Proposed Section 134.918 clarifies that filing a petition with OHA is optional; an adversely affected party may, if it prefers, go directly to federal court.
Given the importance of size standards in government contracting–and given the resources it often takes to pursue legal action in federal court–an internal SBA administrative process for hearing size standard challenges will be an important benefit for contractors. It is important to note that SBA’s proposed rule is merely proposed; OHA won’t hear size standard challenges until a final rule is in place.
Public comments on the rule are due December 6, 2016. To comment, follow the instructions on the first page of the proposed rule.
This post originally appeared at http://smallgovcon.com/statutes-and-regulations/sba-proposed-rule-will-allow-sba-oha-size-standard-appeals/ – sthash.MmEI71yW.dpuf and was reprinted with permission.
When federal agencies bundle or consolidate requirements, it can exclude small businesses from qualifying for the work. A new FAR rule effective October 31, 2016 (one of many that will impact small businesses) will address this.
According to the Federal Register, consolidation or consolidated requirement means “a solicitation for a single contract, a multiple-award contract, a task order, or a delivery order to satisfy:
i. Two or more requirements of the Federal agency for supplies or services that have been provided to or performed for the Federal agency under two or more separate contracts, each of which was lower in cost than the total cost of the contract for which offers are solicited; or
ii. Requirements of the Federal agency for construction projects to be performed at two or more discrete sites.”
Bundling, they explain, is “a subset of consolidation that combines two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract, a multiple-award contract, or a task or delivery order that is likely to be unsuitable for award to a small business concern (even if it is suitable for award to a small business with a Small Business Teaming Arrangement) due to:
i. The diversity, size, or specialized nature of the elements of the performance specified;
ii. The aggregate dollar value of the anticipated award;
iii. The geographical dispersion of the contract performance sites; or
iv. Any combination of the factors described in paragraphs (i), (ii), and (iii) of this definition.”
The summary notes that, “There are currently approximately 307,846 small business registrants that can potentially benefit from the implementation of this rule. This rule does not impose any new reporting, recordkeeping or other compliance requirements.”
OK, that’s a lot of technical and legal mumbo-jumbo. The essence here is a few different things. First, in their definition of small business teaming arrangements, this provision recognizes the Mentor-Protégé JV, Contractor Teaming Arrangements (CTAs), and normal JV provisions for use in a contract bundling provision. This is important because often JVs and CTAs are considered “higher risk” in large contract actions, and this provision both defines the various potential arrangements and encourages them.
And secondly, this provides more detail and restrictions to the contract bundling and consolidation routine that so many agencies go through, and which serve as an anti-small business process because of the size of the resulting requirement. This provision explicitly recognizes the small business team types as being valid and therefore limits some of the anti-small business prejudice that becomes prevalent.
As small businesses, we’d like as little consolidation and bundling as we can get. Since this rule better defines how the government can do this, and limits who can do it and how, there will be less of it, and that’s a good thing.
This is a guest post by Octavia D. Harris of the Advisory Committee on Women Veterans.
Navy Veteran inspired by visit to San Diego VA sites
It was an absolute honor and pleasure to attend the recent Advisory Committee on Women Veterans site visit to San Diego, California. As a newly established San Antonio, Texas resident, it was also a great homecoming. In 2012, after 30 years of Naval Service my last duty station was in San Diego, and that is also where I transitioned from the DoD to the VA healthcare system. There are many new programs that weren’t in place when I enrolled; particularly in support of women Veterans.
My transition experience was fine, but this site visit gave me an inside view into how far VA has come in its women Veteran programs and advances including gynecological services, primary and specialty care, therapies and protocols for military sexual trauma, homelessness, vocational rehabilitation, claims processing, and recreational therapy. Additionally, visiting Rosecrans and Miramar National Cemeteries demonstrated there is immense effort and care to ensure the utmost respect and dignity is given to those who served and their loved ones. VA, along with private organizations, works together diligently to ensure beautification throughout the grounds. Both cemeteries were maintained well beyond my expectation.
It was evident there is “top down” engagement in supporting over 500,000 Veterans in the (southern) Pacific catchment area, specifically the 48,500 Women Veterans across four large counties.
Touring rehabilitated facilities and hearing from the various program managers and VA leaders was informative and impressive, but the highlight for me was the National Veterans Summer Sports Clinic. Various public and private organizations collaborated with the San Diego VA’s Recreational Therapy Program to bring together 130 Veterans who participated in various team building and sporting events, including surfing, kayaking, bicycling, paddle boarding, and my personal favorite, rock climbing. I even had the opportunity to experience what the other Veterans did by taking a ride on one of the adaptive bicycles and even participated in the thrill-seeking rock climb – it was fantastic!
This level of hands-on support and recreational training led to an enormous demonstration of increased self-esteem in the Veterans and gave them a renewed sense of “normalcy” as many were adapting to uses of special kayaks and surfboards, bicycles, wheelchairs, and even being around others if they were previously crippled by the invisible wounds of post-traumatic stress disorder, severe anxiety, or depression. I’d never seen so many happy faces than I witnessed that day, not only from the Veterans participating but also the volunteers, which included many active duty men and women who saw first-hand what they can expect once they too become Veterans in the VA Healthcare system.
The biggest takeaway from this impressive week was the concerted effort and dedication from VA leadership, staff, and the public/private collaborations, which I believe embodies the Secretary McDonald’s vision, goals, and mission for all VA Healthcare systems.
Octavia D. Harris is a retired U.S. Navy command master chief and a member of the VA Advisory Committee on Women Veterans. She currently resides in San Antonio, Texas, and serves on the local Community Advisory Board for Veterans.
This post originally appeared on the VAntage Point blog of the U.S. Department of Veterans Affairs at http://www.blogs.va.gov/VAntage/31595/site-visit-provides-insight-inspiration-retired-u-s-navy-command-master-chief/, and was reprinted with permission.
Note from Bill: TAPE President and CEO Louisa Long Jaffe is a proud member of the Advisory Committee on Women Veterans. We were inspired by this story and thought you would be, too.
Any company that is just trying to stay in business and “keep on, keeping on,” will not be profitable in the long run. When you really think about it, you know contracts will end and you will have to move on – what is your plan to replace those contracts?
The process for this is to have a pipeline of potential income. Think of your pipeline like a funnel. At the outer edge up at the top it’s very wide, because at first glance there are always many possibilities. That’s why the first and most important step is qualification, that is to ask:
- Does this customer have money?
- Does this customer have a problem that we can solve?
- Does the customer know that our company can solve their problem?
If you can answer those questions with yes, then you try and capture the work, which is to say shape it so that you are more qualified than other potential competitors (your OSDBU office may be able to help). Thereby (through this capture) you learn the things you need to do to bid successfully.
You always want your pipeline to be full at every level, so there is a mix of some opportunities you’re qualifying, some stuff you’re capturing, and some proposals you’ve already written and sent, that may or may not come to pass in various time frames. Flexibility is essential, as new things come along that may bump aside a well-qualified, or even well-captured opportunity.
So your pipeline will be filled not with oil or gas, but with a continuum of opportunities. Some might not become proposals for a year or even more from now, some things you might start writing in the next three or six months, some things you’re writing now, and then things you’re waiting for awards on.
The most important question is how to fill the top of the funnel. Of course we’ve talked many times about how relationships with the people you already know are the heart of your capture process. Even if a customer doesn’t have more work, they have friends in other agencies and contacts in other places they work for.
But your own contacts can only get you so far; sometimes you also need outside help. Along with proposal consultants, you can also hire people just to do the research and uncover new potential customers for you. There are always opportunities that you’re not going to hear about that these people will uncover.
Now if you’re only pursuing opportunities from these data sources, you’re probably not mining your own customers enough. You really need to determine if such a service would be worthwhile for you to have, and if the benefits outweigh the costs.
Having a full pipeline means when one contract ends, you don’t have to worry where the next job is coming from. The capture process for that one, and many others, is well under way.
This is a guest post by Jerry Miles of Deale Services, LLC.
Debriefings can be a valuable tool, whether you are the awardee or the disappointed offeror. Think of it as a time to gather information that will assist you in drafting future proposals, understanding the agency “thought process,” and determining whether grounds exist for protesting the decision. When doing so, there are a few things to keep in mind:
Know what information you are entitled to receive
The agency is not required to provide as much information in a pre-award protest as in a post award protest. In a pre-award situation, the agency must provide:
(1) an evaluation of significant elements in the offeror’s proposal;
(2) a summary of the rationale for eliminating the offeror from the competition; and
(3) reasonable responses to relevant questions about whether source selection procedures contained in the solicitation, applicable regulations, and other applicable authorities were followed in the process of eliminating the offeror from the competition. FAR 15.505.
Post-award, FAR 15.506 requires the agency to provide:
(1) an evaluation of the significant weaknesses or deficiencies in the offeror’s proposal, if applicable;
(2) the overall evaluated cost or price (including unit prices) and technical rating, if applicable, of the successful offeror and the debriefed offeror, and past performance information on the debriefed offeror;
(3) the overall ranking of all offerors, when any ranking was developed by the agency during the source selection;
(4) a summary of the rationale for award;
(5) for acquisitions of commercial items, the make and model of the item to be delivered by the successful offeror; and
(6) reasonable responses to relevant questions about whether source selection procedures contained in the solicitation, applicable regulations, and other applicable authorities were followed.
Always request a debriefing and do so immediately
It is always in a contractor’s best interest to request a debriefing. The request need not be formal – a simple email will do. The reasons include those stated above but even the awardee should consider such a request. The awardee can use the debriefing as a chance to identify issues that might be protested by disappointed offerors or as a means to support the agency should a protest be filed.
Be sure to accept the first day offered by the agency for a debriefing because this is the day that begins the running of the clock – protest must be filed within 10 days of award or five days of the first date offered for the debriefing, whichever is later in order to obtain a stay of award or performance.
Debriefings can be written, oral, or in any other method acceptable to the contracting officer. Particularly in the context of an oral debriefing, preparation is key to getting the most from a debriefing.
First, know your proposal and the source selection material. Second, consider researching the awardee. Third, be ready to ask questions about RFP source selection procedures and other applicable authorities and evaluation factors to elicit more information about the agency’s decision. Fourth, have more than one person available to take notes. Everyone hears things differently. You want to record all of the reasons for the agency’s decision, especially the most challenging ones.
Be polite; do not state counter-arguments. Your main objective is to listen and record what the stated rationale is. It is not time to make your argument or try to change agency’s mind. The time for that is when you file your protest.
Jerry Miles of Deale Services, LLC (http://www.dealeservices.com) is a government contracts attorney and business consultant with experience working as corporate counsel for a Fortune 500 government contractor and as a private practitioner for over one hundred small, midsize and large businesses. In addition to being the owner of a law firm, Mr. Miles regularly advises clients on teaming agreements, joint ventures, subcontracting, government contract disputes, bid protests, international contracting matters and corporate compliance.
This post was originally published at http://www.dealeservices.com/uncategorized/bid-protests-how-to-take-advantage-of-a-debriefing/ and was adapted and reprinted with permission.
Department of Veterans Affairs is required by law to award contracts to service-disabled veteran-owned small businesses when there is a reasonable expectation that two or more such concerns will bid for the contract. This has become known as the “Rule of Two” or “Veterans First.”
Yet there were many large-scale contracts that the VA department didn’t open up to this rule because they were traditionally things that they would not have set aside or acquired on a small business scale.
As Steven Koprince explains at SmallGovCon.com, “Despite the absence of a statutory exception for GSA Schedule orders, the VA has long taken the position that it may order off the GSA Schedule without first applying the VA Act’s Rule of Two.”
This effectively changes the rules of engagement for the VA so that they’re going to have to do a sources sought to determine whether there is a reasonable expectation that SDVOSBs can meet the requirements of the contract, and that there are qualified businesses who can do the job.
Interestingly enough, some things that are in IDIQ contracts may be exempt from this requirement – large IDIQs with both large businesses and SDVOSBs, or other small business types, may allow the VA to procure directly with the large businesses of a task order competitive basis.
But there are still going to be a lot more service-disabled sources sought directed at procurements for small businesses. It may very well be that the outcome will be the same, but we don’t know. What we do know is that SDVOSBs will have access to more work.
Let’s say there is a piece of work that traditionally would have been done full and open (not set-aside for specially certified businesses), or would have been done by an 8(a) or another small business type. Now, for that same piece of business the VA will have to determine whether two or more SDVOSBs will be qualified and will bid. There’s no guarantee, but at least it’s more likely the work could go a service-disabled vet.
This is a reprint from the PilieroMazza Weekly Report newsletter (click here to subscribe).
DOD has issued a proposed rule which will amend the DFARS to implement Section 861 of the NDAA 2016, which provides amendments to the DOD Mentor-Protégé Program. The proposed amendments will require contractors who participate in the program as mentors to report all technical or management assistance provided; any new awards of subcontracts to the protégé firm, including the value of such subcontracts; any extensions, increases in the scope of work, or additional, unreported payments to the protégé firm; the amount of any progress payments or advance payments made to the protégé firm for performance under any subcontract made under the program; any loans made to the protégé firm; all federal contracts awarded to the mentor and protégé firms as a joint venture; any assistance the mentor firm obtained for the protégé firm from small business development centers established under 15 U.S.C. § 648, entities providing procurement technical assistance under 10 U.S.C. ch. 142, or Historically Black Colleges or Universities or Minority Institutions of Higher Education; whether the terms of the mentor-protégé agreement have changed; and a narrative describing the success assistance provided under the program has had in addressing the protégé firm’s developmental needs, the impact on DOD contracts, and addressing any problems encountered. These reporting requirements apply retroactively to mentor-protégé agreements in effect on November 25, 2015, the date of enactment of the NDAA 2016.
In addition, Section 861: (1) adds new eligibility criteria; (2) limits the number of mentor-protégé agreements to which a protégé firm may be a party; (3) limits the period of time during which a protégé firm may participate in mentor-protégé agreements under the program; (4) adds new elements to mentor-protégé agreements addressing the benefits of the agreement to DOD and goals for additional awards for which the protégé firm can compete outside the program; (5) removes business development assistance using mentor firm personnel and cash in exchange for an ownership interest in the protégé firm from the types of assistance that a mentor firm may provide to a protégé firm; (6) prohibits reimbursement of any fee assessed by the mentor firm for certain services provided to the protégé firm while participating in a joint venture with the protégé firm; (7) revises the definitions of the terms “small business concern” and “disadvantaged small business concern;” (8) adds definitions for “severely disabled individual” and “affiliated;” and (9) extends the Program for three years, 81 Fed. Reg. 65610. Comments on this proposed rule are due by November 22, 2016.
Section 866 – Modifications to requirements for qualified HUBZone small business concerns located in a base closure area
This section provides an equivalency between HUBZone firms and Native Hawaiian firms, which helps the NHSBs to expand into HUBZone contracting. To date, meeting HUBZone goals is the most difficult set-aside category.
This section also does some definitional changes that make BRAC (Base Re-alignment and Closure) areas more easily designated as HUBZones, this is a good thing, as base closure areas from BRAC decisions are always particularly hard-hit.
Section 867 – Joint venturing and teaming
So this section is a big deal, and as the details emerge, we’ll address this. First, the specifics are that joint venture team members’ past performance will count when pursuing certain large contracts. And it expands the use of JVs to expand the number of areas where SBs are acceptable.
If implemented as described, this is a big change. Currently, only certain JVs inherit the past performance from their members. If this is implemented as written, we’ll be able to use JVs a lot better in the future.
Section 868 – Continued modification to scorecard program for small business contracting goals
The scorecard program is, quite frankly, somewhere between a joke and unfathomable. Agencies with major deficiencies still receive A’s, and small differences seem to generate larger effects.
Could this be because the grades affect government officials’ bonuses? We certainly don’t want those to be affected (sorry, tongue-firmly-in-cheek).
Section 869 – Establishment of an Office of Hearings and Appeals in the Small Business Administration (SBA); petitions for reconsideration of size standards
This is a technical detail, which separates a way to have size standard appeals to prevent these from going to courts instead. It also allows this office to review the size determinations. There have been a lot of complaints over the years that SBA keeps sizes smaller than really appropriate.
Section 870 – Additional duties of the Director of Small and Disadvantaged Business Utilization
If an OSDBU is a strong advocate, this helps by empowering them to help an SB work on SB set-aside status for an opportunity.
Section 871 – Including subcontracting goals in agency responsibilities
It is always a good thing to have all small business goals in the evaluation criteria for success by agency executives. This provision adds goals to agency-level responsibilities.
Section 872 – Reporting related to failure of contractors to meet goals under negotiated comprehensive small business subcontracting plans
This is essentially “tattling” on the big integrators – and requiring actual accountability. Accountability is always a good thing, but be wary because you’re complaining about your prime contractor. But when aggrieved, this may be a strong avenue.
Section 873 – Pilot program for streamlining awards for innovative technology projects
Pilots for awarding contracts to non-contractors might be good, but this can lead to abuse. As small businesses we’re always wary of “special deals.”
Section 874 – Surety bond requirements and amount of guarantee
A surety bond is a promise given to one party to pay a certain amount if the second party fails to meet the terms of a contract. Surety bonds are mostly used in construction.
At its core, the purpose of an OCI (organizational conflict of interest) clause is to prevent somebody from having an unfair competitive advantage by knowing information about an upcoming procurement or what is required to win or lose, or some other secretive information about what’s going on in that particular contract.
The dilemma is how to define organizational conflict of interest in a way that doesn’t prohibit the incumbent from bidding on the contract. Because the incumbent does know details about the customer and the contract, and already has people operational in the agency.
So when there is an incumbent in place, the RFP has to written in such a way that the evaluation requirements don’t give the incumbent an unfair advantage. In addition, we don’t want a situation where a contractor is helping to define the requirements, and therefore has advanced knowledge.
Acquisitions/support work is one of three contractor services that are most likely to get into OCI issues. Clearly, if you’re working as an acquisitions support consultant supporting a contracting office, you shouldn’t be able to bid on anything that you helped to work on, because you know the stuff that didn’t go into the RFP.
Organizational conflicts of interest are discussed in FAR Part 209.5, and there’s now a new subpart 3.11 that specifically addresses contractors in acquisition functions. It’s important to be improving these definitions because frankly lots of people have been tripped up on OCI clauses and OCI issues, particularly in these last eight years.
Ultimately we must prohibit the person who’s creating an RFP (helping the government create one) from bidding on that RFP, so they don’t have an unfair advantage over you or me.