Cybersecurity in Government Contracting – 2020 and Beyond

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Government contractors often outsource proposal writing and proposal management services, which means the company you use for your proposal support is part of your supply chain and must meet established security standards.

The folks at ProposalHelper have documented and ingrained security processes and practices in every aspect of their operations, and their information security processes have been independently audited and verified to meet ISO 27001:2013 standards.

The following is a guest post by Dr. Troy A. Tyre, Vice President U.S. Operations/Delivery Solutions, ProposalHelper, LLC.

Businesses focused on government contracts for significant amounts of the company’s revenue face unique challenges as we move into 2020 and beyond. The cybersecurity industry faces unparalleled changes, more so than other industries. The status quo will no longer meet the requirements. Key changes include:

  • Business requirements: Federal agencies are now evaluating cybersecurity preparedness and maturity of programs in awarding new contracts. Cybersecurity preparedness is now a competitive advantage.
  • Regulatory complexity: New regulations, imposed by federal and state agencies, are either already in effect or going into effect in 2020. Some of these regulations are clear while others require interpretation, making compliance difficult.
  • Liability increasing: Several new elements of liability impact Government contractors. Government contractors are now held accountable for cybersecurity deficiencies in products/services under the False Claims Act. The Government contractor may also be liable under new and existing state laws, which are more frequently being enforced.
  • Evolving threats: Cybersecurity threats are increasingly working their way down the supply chain. Vendors are often seen as the “weakest link” and the easiest way to infiltrate the government.

Understanding the changing landscape is a real requirement and can provide first adopter differentiation, at least initially. In 2019, the Department of Defense (DoD) identified cybersecurity weaknesses in supply chains as a critical threat to the economy and national intelligence. DoD’s response was the development of the Cybersecurity Maturity Model Certification (CMMC), which sets standards for cybersecurity preparedness and documents the process for all DoD contractors.

Large and small, primes and subs, all contractors are required to be third-party certified for cybersecurity preparedness in order to bid on new contracts and re-competes with the DoD. The DoD has deemed cybersecurity to be a foundational element in their procurement process. In other words; if a contractor does not meet the required level of preparedness, they cannot bid on any DoD contracts or re-competes. The DoD is the first agency to mandate third-party audits for their entire supply chain and to remove the ability to self-certify.

The military sees the importance of cybersecurity as well. In March 2018, the Marine Corps took the next step in growing cyber forces with the creation of the new officer military occupational specialty (MOS) focused on cyber operations. Senior leadership intends for the new cyber officers to lead within both the Marine Corps Cyberspace Command and across the wider Fleet Marine Forces. 

The new officers will integrate the capabilities and effects of offensive and defensive cyberspace operations at the tactical level, supporting troops on the ground; the operational level, supporting commanders at every echelon; and the strategic level, supporting policymakers across the DoD. On November 21, 2019, the Naval Academy Class of 2020 received their first cyber warfare community selections, including six highly qualified candidates who were designated as Marine Corps cyber warfare officers.

Cybersecurity is one of the most eminent requirements for companies, regardless of whether you provide services, construction, commodities or products.

Dr. Troy Tyre, Vice President of Delivery Solutions at ProposalHelper, brings over 35 years of industry experience in project and proposal management. He can be reached at troy@proposalhelper.com or 571-449-6071.


The CARES Act and Leave Guide For Employers: Deciding Which Option is Best For You and Your Employees

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This is a guest post by Nichole Atallah, Sarah Nash, and Sara Nasseri of PilieroMazza PLLC.

Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the “Act” or the “CARES Act”) on March 27, 2020 in an effort to mitigate the economic impact of COVID-19 on businesses and employees. President Trump is expected to sign the bill into law any moment (note: this post was originally published on March 27, 2020).

Once signed, the CARES Act allows businesses to apply for loans to continue paying employees and maintaining operations, which may be forgiven, expands on provisions of the Families First Coronavirus Act (FFCRA), and provides for additional flexibilities regarding unemployment insurance, among other aid and relief for employers. The CARES Act is an unprecedented piece of legislation, but many employers are struggling to determine how to make the right choice to save their business and maintain their workforce. In this blog, we are breaking down options for employers who have affected workforces and identifying resources available to them.

I.  Can I Continue Paying Salaries and Operating Expenses?

Many businesses have been hit hard by the COVID-19 crisis and have had to stop work entirely. The programs available in CARES can facilitate payment of wages and operating expenses during this time.

Paycheck Protection Program:

Good for businesses with fewer than 500 employees that would otherwise have to layoff or furlough their employees.

The Paycheck Protection Program expands upon the U.S. Small Business Administration’s (SBA) 7(a) Loan Program. The program would allow small businesses of no more than 500 employees, as well as businesses otherwise considered small under their NAICS code, to cover payroll costs and other expenses from February 15, 2020 through June 30, 2020. Eligible businesses will include nonprofit organizations, veteran organizations, Tribal businesses, sole-proprietors, independent contractors, and certain self-employed individuals. Additionally, businesses in the hospitality industry (those with a NAICS Code of 72) are eligible for a loan as long as they employ not more than 500 employees per each physical location. The Act also waives many requirements previously required to qualify for a loan, such as a personal guarantee or collateral.

The eligible loan amount will be determined based on the lesser of the following:

  • 2.5 times the average monthly payroll costs of the employer during the prior year; or
  • $10 million.

Loan recipients may use the loan to fund the following:

  • Payroll costs up to $33,000 per employee ($100,000 annually);
  • Costs related to group health care benefits during periods of sick leave, medical or family leave, and insurance premiums;
  • Employee salaries, commissions, or similar compensations;
  • Payments of interest on any mortgage obligation;
  • Rent;
  • Utilities; and
  • Interest on any other debt obligations that were incurred prior to February 15, 2020.

An eligible business will have to certify to a number requirements, including that the uncertainty of economic conditions makes the loan necessary to maintain ongoing operations.

The program provides for loan forgiveness for any amount equal to the sum of all the costs incurred and payments made during the covered period, including payroll costs, interest on any mortgage obligations, payments on rent obligation, or any covered utility payment. Please note that the amount of the forgiveness for the loans will be reduced if the employer reduces its workforce during the covered period or reduces the salary or wages paid to an employee by more than 25% during the covered period (as compared to the most recent quarter). However, an employer may avoid the loan reduction where, by June 30, 2020, the employer rehires any and all employees laid off since February 15, 2020 or increases previously reduced wages.

For a more detailed analysis of the Act’s Paycheck Protection Program and the 7(a) loan program, please visit this link for PilieroMazza’s Client Alert on the CARES Act.

Emergency Relief and Taxpayer Relief:

Good for Mid-Size Businesses over 500 Employees that would otherwise have to layoff or furlough employees.

If employers do not meet the eligibility requirements for the small business loans as described above, they may qualify for the loan programs for mid-size businesses. Those businesses with 500 to 10,000 employees could receive direct loans under the Emergency Relief and Taxpayer protections of the Act. While the details of this program are not yet clear, if a business believes they may qualify for this type of loan, they must provide a “good faith certification” that, among other things, the funds it receives will be used to retain at least 90 % of its workforce until September 30, 2020 and it will not outsource or offshore jobs for 2 years after completing repayment of the loan.

Relief for Government Contractors:

Good for federal government contractors under a stop work order or facility closure or restriction.

The Act provides a mechanism for contracting officers to modify the terms and conditions of a contract and reimburse contractors at the minimum applicable contract billing rates to keep their employees or subcontractors in a ready state, not to exceed an average of 40 hours per week. This authority extends until September 30, 2020 and only applies to a contractor whose employees or subcontractors cannot perform work on a site due to facility closures or restrictions, and whose employees cannot telework because their job duties cannot be performed remotely.

The Act is in line with the recent March 9, 2020 memorandum from the Office of Management and Budget (OMB), which provides agencies with additional flexibilities on administrative relief to an expanded scope of recipients affected by the loss of operational capacity and increased costs due to the COVID-19 crisis. For government contractors, best practice now would be to communicate with your contracting officers and provide them with the tools and knowledge of the flexibility provided to them under the Act and related guidance.

The Downside

While the relief in the Act provides a funding source for businesses that qualify, there will be a period of time from application to funding that may be difficult for some employers to sustain. Employers may have to explore interim options before funding becomes available.

II.  Can I Provide Sick or Family Leave to Employees?

Effective April 1, the FFCRA provides for new paid leave requirements as part of new Emergency Paid Sick Leave and Emergency Paid Family and Medical Leave requirements. The CARES Act makes several changes to the FFCRA, most of which are technical in nature. We previously wrote on the FFCRA signed into law by President Trump on March 18, 2020 (link).

FFCRA continues to be a good option for employers who are not shut down or facing significant layoffs, but who have employees who cannot telework (or need to telework on an intermittent basis) and are ill with COVID-19 related symptoms, are told by a physician to isolate, need to take care of a child or relative, or are subject to a federal, state, or local isolation order. If an employer takes advantage of FFCRA sick leave, any tax credit received by the employer cannot be used as a basis for loan forgiveness under the Payment Protection Program described above.

The Act adds a new provision for rehired employees under the FFCRA’s Emergency Family and Medical Leave. Specifically, the Act now provides that employees who were laid off by an employer after March 1, 2020, had worked for the employer at least 30 of the last 60 days before the layoff, and have now been rehired, can be eligible for Emergency Family and Medical Leave.

Additionally, the Act allows for refundable tax credits under the FFCRA to be advanced. The IRS is expected to release guidance on this issue and other tax implications under the FFCRA in the coming weeks.

Key Takeaways

If you do not qualify for a loan and you have been able to maintain business operations, the FFCRA provides you with a means to seek assistance and relief for employees because of one of the eligible reasons prescribed by the FFCRA.

Keep in mind that the FFCRA does not kick in until April 1 and the relief is limited in scope and duration. Also, it is important to note that FFCRA’s paid sick leave and expanded family medical leave is in addition to employees’ preexisting leave entitlements. Under the FFCRA, the employee may choose to use existing paid vacation, personal, medical, or sick leave from the company’s paid leave policy to supplement the amount your employee receives from paid sick leave or expanded family and medical leave, up to the employee’s normal earnings. However, you are not required to permit an employee to use existing paid leave to supplement any portion of the FFCRA leave that is unpaid and you cannot claim and will not receive tax credits for such supplemental amounts.

III.  Do I Layoff or Furlough Employees?

In spite of all of the relief that may be available through the CARES Act and the FFCRA, some employers have had and will have to make the decision to layoff or furlough employees, even if for a short period of time. Whether to layoff or furlough employees can depend largely on state unemployment compensation regulations and whether your benefit plans will require an employer to continue benefit payments during a period of leave without pay, such as a furlough. It is advisable to check with your benefits providers regarding the expectation of your benefit plans.

The CARES Act also expands unemployment assistance for covered individuals through December 31, 2020. It will apply to individuals who are unemployed, partially unemployed, or unable to work between January 27, 2020 and December 31, 2020. Additionally, a covered individual will receive an additional $600 per week on top of the amount determined under the state law. The Act allows for expanded assistance to continue for a maximum of 39 weeks, which is greater than the 26 weeks typically provided by most states.

Each employer is facing tough challenges unique to its business operations and circumstances. PilieroMazza will continue to monitor the rapidly developing COVID-19 crisis and will provide updates accordingly, especially as more guidance gets released by government agencies. In the meantime, the Labor & Employment Group at PilieroMazza is here to help with any of the above as need be. We also invite you to visit PilieroMazza’s Client Resource Center to access further resources that will help businesses navigate the effects of the COVID-19 pandemic.

This PilieroMazza Client Alert originally appeared at https://www.pilieromazza.com/the-cares-act-and-leave-guide-for-employers-deciding-which-option-is-best-for-you-and-your-employees and was reprinted with permission.


Contracting Officers Can Pay You Even If The Contract Is Shut Down!

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This is a guest post by Cy Alba of PilieroMazza PLLC.

Yesterday, we discussed the emergency loan programs and loan forgiveness opportunities for small businesses in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). However, it is critical to understand that there other avenues for relief that do not have to wait for SBA or private lenders to start processing such loans. Specifically, OMB Memorandum M-20-18 gave Contracting Officers (“CO”) broad authority and specifically states that all contracting personnel should “feel fully empowered to use acquisition flexibilities.” Further, Section 3610 of the Act, entitled “Federal Contractor Authority,” specifically states that COs have authority to continue paying contractors in order to maintain employment for contractor personnel, even if the contract is subject to a stop work order or other delay. Again, this is true even if no work is being performed on the contract.

More specifically, the CARES Act states that:

…funds made available to an agency by this Act or any other Act may be used by such agency to modify the terms and conditions of a contract, or other agreement, without consideration, to reimburse at the minimum applicable contract billing rates not to exceed an average of 40 hours per week any paid leave, including sick leave, a contractor provides to keep its employees or subcontractors in a ready state, including to protect the life and safety of Government and contractor personnel, but in no event beyond 9/30/2020. Such authority shall apply only to a contractor whose employees or subcontractors cannot perform work on a site that has been approved by the Federal Government due to facility closures or restrictions, and who cannot telework because their job duties cannot be performed remotely during the public health emergency for COVID-19.

While the wording of this provision is not entirely clear for every contractual circumstance, this allowance by Congress, combined with the clear guidance from OMB that all COs should feel “fully empowered” to exercise all contracting flexibilities, gives every contractor a strong argument to support continued payment on contracts which have been suspended in some way due to the COVID-19 crisis. Even if you are working on a Firm-Fixed Price (“FFP”) contract, or a contract where payments are made via deliverables or some similar method, the Act gives COs authority to modify the contract to transform any standard payment or negotiated amounts to per hour contract billing rates for all of your employees. In fact, the Act, along with the OMB guidance, gives COs near unfettered discretion to craft a fair and reasonable alternative on a contract-by-contract basis to ensure employees are working and a company’s bills are being paid throughout this crisis and without reliance upon the SBA 7(a) loans or other emergency disaster loans.

It should also be noted that the Act uses the phrase “minimum applicable contract billing rates” when describing the amount to be reimbursed to contractors. It does not state that only direct costs paid to the employee are to be reimbursed. Therefore, there is a good argument that the amounts to be reimbursed under the Act are the actual contract rates, if such rates are already in the contract, including all indirect costs and even profit. As noted above, the Act and the OMB memorandum gives COs the ability to add negotiated rates to a FFP or other deliverable-based contract that does not have hourly rates. These too should be “contract billing rates” and not merely the direct costs paid to the employee.

All this said, there is an open question about how owners—especially small business owners who rely on monthly or bi-monthly income streams to pay their bills and feed their families—are supposed to be paid if COs attempt to take a position that profits are disallowed. Again, I note that the law itself does not disallow profits, or limit reimbursements just to costs, so COs are more than capable of continuing to pay the fully loaded rates to contractors and, given the immense impact this is having on everyone (from the lowest level employee to the highest executive), it is only fair and reasonable that the phrase “minimum contract billing rates” includes the actual fully loaded rate negotiated for a contract or a fully loaded rate to be negotiated for contracts that are not Time and Materials or Labor Hour type contracts. Of course, as we know more or the details are fleshed out, we will continue to update our clients.

To that end, and in order to better assist businesses during this national emergency, PilieroMazza has created the PilieroMazza COVID-19 Client Resource Center to counsel clients on legal issues stemming from the evolving spread of COVID-19 in the United States (check this page regularly for updates). The Firm’s COVID-19 Client Response Team’s focus includes addressing questions involving all aspects of our practice, such as labor and employment concerns, workplace safety and contingency plans, business interruption, contract disputes, as well as finding the best path through this crisis for your business.

Cy Alba, the author of this Client Alert, is a Partner in the Firm’s Government Contracts and Small Business Programs & Advisory Services practice groups.

This PilieroMazza Client Alert originally appeared at https://www.pilieromazza.com/contracting-officers-can-pay-you-even-if-the-contract-is-shut-down and was reprinted with permission.


Breaking Down SBA’s COVID-19 Economic Injury Disaster Loan

A guest post by David T. Shafer, Associate, PilieroMazza PLLC.

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The unprecedented impact of the COVID-19 pandemic on small businesses has caused the Small Business Administration (SBA) to institute an Economic Injury Disaster Loan (EIDL) program aimed at aiding those affected by the pandemic. Whether you’re a government contractor or a commercial business, we’re breaking down for you the who, what, where, when, and how of the SBA’s detailed EIDL application process.

1. WHO: Eligible Businesses

a. To be eligible, in addition to other conditions, an applicant must be a small business, small agricultural cooperative, or a private non-profit organization.

b. The business’s principal office must be located in a state that has an EIDL declaration (see list below).

c. The SBA must determine the business to be creditworthy. Loans that exceed $25,000 must be secured by collateral to the extent possible and, if the business has no collateral to pledge, assets of the business’s owners may need to be pledged as collateral.

d. Applicants must show that they have the ability to repay all loans.

e. EIDL assistance is available only to a small business when SBA determines that such business is unable to obtain credit elsewhere. If you have not explored obtaining financing through other avenues (SBA or other), please contact a trusted advisor who can help align your objectives with an appropriate lender and/or investor.

2. WHAT: Economic Injury Disaster Loan

a. EIDLs are loans issued to eligible business by SBA under its own authority, following a request to the SBA from a state or territory’s governor that the businesses in their respective area have been adversely affected by the COVID-19 pandemic, as provided for in the recent Coronarvirus Preparedness and Response Supplement Appropriations Act.

b. An EIDL is a loan for a business to pay fixed debts, payroll, accounts payable and other liabilities. The actual amount of each loan is limited to the economic injury suffered by the business as determined by SBA, up to a maximum of $2 million, which maximum can be waived by SBA if the business is a major source of employment. “Economic injury” has been interpreted to mean that the business is unable to meet its obligations and to pay its ordinary and necessary operating expenses. Importantly, such loans do not replace lost sales or revenue, and such losses will not be considered an economic injury.

c. The maximum interest rate is 3.75% for small businesses.

d. The maximum term of each loan is 30 years, though the period of time to repay the loan is determined on a case-by-case basis depending on the business’s creditworthiness.

3. WHERE: Eligible States and Territories

Listed below are states that have received an EDIL declaration at the time of this alert. States in [bold/italics] have not yet received a declaration [as of March 20, 2020], though we anticipate that they will shortly. If your business’s principal office is in one of the states or a county or city that borders these states, you may be eligible for SBA assistance.

Alabama

Alaska

Arizona

Arkansas

California

Colorado

Connecticut

District of Columbia

Delaware

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

4. WHEN: SBA has already started processing applications.

5. HOW: Starting the Application Process

For additional information, please visit SBA Disaster Loan Assistance, call the SBA Disaster Assistance Customer Service Center at 1-800-659-2955 (TTY: 1-800-877-8339), or email emaildisastercustomerservice@sba.gov. If you would like to contact PilieroMazza for assistance navigating the program, please contact Dave Shafer at dshafer@pilieromazza.com.

Important Takeaways

a. Businesses should review their current insurance policies, other assistance programs, and other banking relationships currently in place to determine whether obtaining an EIDL is an “event of default” or can otherwise adversely affect their financing agreements and arrangements that are currently in place.

b. The COVID-19 pandemic is an unprecedented national crisis that will put a strain on governmental resources which, in turn, may cause delays in the processing of loan applications. Accordingly, SBA officials have repeatedly stressed that applicants should thoroughly complete their applications before submission to ensure they are able to be processed the first time they are submitted.

If you have questions about SBA’s Economic Injury Disaster Loan Program or any component of the application, please contact Dave Shafer at dshafer@pilieromazza.com or at 410.500.5551. We also invite you to visit the firm’s “COVID-19 Client Resource Center” to access resources that will help small businesses navigate the COVID-19 pandemic.

This post originally appeared on the PilieroMazza blog at https://www.pilieromazza.com/breaking-down-sbas-covid19-economic-injury-disaster-loan.


SBA Provides Updates on WOSB Certification Changes

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This is a guest post by Haley Claxton of Koprince Law LLC.

Last May, we reported on proposed changes to the SBA’s Women Owned Small Business Program Certification Process. Now, the SBA’s website includes updated information about what those changes may mean for existing and new WOSBs.

As you may recall, in 2019, the SBA (at long last) proposed updates to its WOSB/EDWOSB Program in response to Congress’ 2015 NDAA. The 2015 NDAA required the SBA to remove the option for businesses to self-certify as small businesses owned and controlled by women and replace it with a more robust certification process operated directly by the SBA. The proposed updates intend to do just that.

The SBA indicates that we can expect “that the regulations enacting the statutory requirement will be published on June 30, 2020, and will be effective 30 days later.” But what will this mean for currently certified businesses?

For current third-party certified WOSBs and EDWOSBs, SBA will require re-certification “three years after the date of their most recent re-certification as a third-party certified firm.” Re-certification may be completed through the SBA’s new certification process or again through a third-party certifier.

For WOSBs and EDWOSBs who are currently self-certified with active WOSB or EDWOSB set-aside contracts, SBA clarifies that “[a] firm that was eligible as a WOSB or EDWOSB at the time of offer for the contract is considered a WOSB or EDWOSB throughout the life of the contract.” Even so, where a contract has a duration of more than five years, including options, businesses must be recertified “by SBA or an approved third-party certifier prior to the end of the fifth year of the contract.” For those familiar with SBA’s size status rules, this requirement is similar to the rule for maintaining size status on long-term contracts.

Finally, for WOSBs and EDWOSBs who are currently self-certified with no active WOSB or EDWOSB set-aside contracts, the requirements are a little more complex. If you fall under this category and haven’t been protested or examined by the SBA in the two years prior to the effective date of the new rules, get ready to start preparing your application – you will need SBA or third-party certification before you are considered an eligible WOSB/EDWOSB. In contrast, if you have been protested or examined in the two years prior to the effective date and received a positive final decision, you “must re-certify within 30 days of [your] certification anniversary if there have been no material changes since [your] last certification.” From there, you will have to “undergo a full document review and re-certification” at the end of year 3.

New applicants will be able to start from scratch and certify through the SBA directly when the rule becomes effective, or will still have the option to certify through third-party certifiers. In addition, women-owned businesses already certified through the Department of Transportation’s Disadvantaged Business Enterprise program (DBE), or the Department of Veteran Affairs’ Center for Verification and Evaluation (CVE) are at an advantage: these kinds of certification will be considered equivalent to SBA certification.

The SBA has provided an FAQ and plans to provide more updates on its webpage here. We will also continue to cover the changes as they develop, so keep an eye on the blog. And, as always, if the new rules have you scratching your head, you can call or email us at Koprince Law LLC!

This post originally appeared at SmallGovCon at http://smallgovcon.com/women-owned-small-business-program/this-just-in-sba-provides-updates-on-wosb-certification-changes/ and was reprinted with permission.


GSA MAS Consolidation – What Current GSA Contractors Need to Know

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This is a guest post by John Abel and Haley Lawrie of Winvale.

The GSA MAS Consolidation is here, and things are changing FAST for government contractors. Not to worry, Winvale is here with all the information your company needs to help successfully navigate the new MAS solicitation updates. We’ve seen the updates and how they affect new offerors, but let’s take a look at how current contractors will be affected.

ALL GSA Schedule holders will be receiving a notice for Mass Modification A812 – MAS Consolidation over the course of the next week or so. Some of those reading this may have already received the notice, depending on Schedule number. Below is a schedule for the release dates of the mass mod across all 24 GSA legacy Schedules:

Mass Mod A812 Release DateLegacy Schedule Number
Friday, 1/3103FAC, 23V, 36, 48, 51V, 58 I, 599
Monday, 2/300CORP (PSS)
Tuesday, 2/400CORP (PSS) Cont.
Wednesday, 2/570
Thursday, 2/670 Cont.
Friday, 2/756, 66, 67, 71, 71 II K, 72, 73,
Monday, 2/10736, 738X, 75, 751
Tuesday, 2/1176, 78, 81 I B, 84

Why is the MAS Mass Mod happening?

GSA is making active efforts to modernize and simplify the federal acquisition process by consolidating the current GSA Schedules. This mass modification will be the most important to date for GSA Contractors.

24 Schedules have been consolidated into 1 Multiple Award Schedule, 12 Large Categories, 83 Subcategories, and 316 newly formatted Special Item Numbers. GSA wants to eliminate any duplicate Schedules while continuing to meet the needs of its government buyers.

When do you need to take action on Mass Mod A812?

It is imperative that you check your email regularly to ensure that you’ve received the mass modification notice. If your contract administrator has not received the email by the corresponding date for your specific schedule, contact your GSA Administrative Contracting Officer (ACO) as soon as possible. (Don’t know who your ACO is? Find them here.)

Not only is it essential for contractors to ensure acceptance of this mass modification in order to reap the benefits of the consolidation, it is also mandatory, with a 90-day window for acceptance after the initial email notification is received. Within this mass modification, contractors will be required to:

  • Review and accept 210 FAR and GSAM clauses
  • Review the updated terms and conditions for the MAS
  • Map existing SINs on your current Schedule to new SINs under the applicable Large Categories

If you have taken exception to any solicitation clauses in previous Mass Modifications, these exceptions will not carry over and that process must occur again.

How do you know what SINs you will have awarded after the Mass Mod?

It is important to note that awarded products/services, pricing, contract number, and the period of performance for your GSA Contract will NOT change. While the Contract Type and Special Item Numbers (SINs) will change, the pricing components of your contract won’t change. You don’t need to apply for a new contract and the Mass Mod will not automatically consolidate your contracts down to one contract per your DUNs number.

GSA will provide a mapping of your current SINs to the new SINs that will go into effect upon acceptance. If you are wondering what new SINs your contract will be mapped to, we can help.

Overall, changes from this MAS consolidation will be contingent on Mass Mod A812, but there are a few things on the backend that contractors must complete in order to be fully compliant and ensure proper use of the GSA Schedule to its full potential moving forward. Although accepting the mass modification will update a number of fields within GSA’s internal systems, contractors must still manually complete the updates through programs like SIP to reflect the new MAS structure on GSA eLibrary and GSA Advantage!.

After accepting the mass mod, contractors will need to perform a SIP upload to initiate a “merge” of the legacy SINs to the new SINs within 30 days acceptance. This will ensure that all records remain current with the new MAS solicitation structure and terms and conditions so that buyers will be able to conform to the new structure when seeking out contracting partners.

How will this impact your current GSA Schedule Maintenance?

To ensure there are no hiccups when accepting the Mass Mod, GSA is suspending the ability to submit requests in eMod for “Add SIN” and “Delete SIN” modifications under the legacy Schedules on Jan. 30, 2020. The ability to process “Add SIN” and “Delete SIN” modifications will be restored March 14, 2020. All other modification types will still be accepted throughout Phase II of MAS Consolidation.

With regards to sales reporting, SINS are effective immediately when you sign the Mass Mod, and you will see both legacy SINs and new MAS SINs in SRP for the first sales reporting period after the Mass Mod approval date. After that reporting period has been completed, future reporting periods will only display the new MAS SINs.

The MAS Consolidation may seem like a huge hurdle to overcome, but it is a step in the right direction for GSA and your GSA Schedule contract. To make it easier for our clients, Winvale is hosting a webinar on Tuesday, February 25 about the MAS Consolidation and how it impacts your contract.

If you can’t make the webinar, feel free to contact our consulting team today for more information on how these updates will affect your company’s GSA Schedule and a more in-depth look into the changes. Winvale offers full-service GSA Schedule support from our experienced professionals specializing in SIP, FAR compliance, GSA Advantage! and Schedule compliance.

This post originally appeared on the Winvale blog at https://info.winvale.com/blog/gsa-mas-consolidation-phase-2-current-gsa-contractors and was reprinted with permission.


Acquisition Provisions in 2020 NDAA – 852 Special Pathways for Rapid Acquisition of Software Applications and Upgrades

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This provision directs the secretary of defense to streamline and coordinate the requirements, budget, and acquisition process in order to rapidly field software applications and software upgrades to embedded systems in a period of not more than one year from the time that the process is initiated.

It will also require the collection of data through continuous engagement with the users of that software, so as to enable engineering and delivery of additional versions in periods of not more than one year each.

We’ve talked earlier about the government’s commitment to innovation, shown through changes to the SBA’s Small Business Information and Research (SBIR) and Small Business Technology Transfer (STTR) programs.

Then a few years ago, the DoD began to pick up a third method called other transaction agreements (OTAs), which allow for more flexible, commercial–like, and novel business solutions than the Federal Acquisition Regulation. OTAs have been enormously successful in delivering technology fast, with rapid development and so forth, with the Army having spent something like 3-and-a-half billion dollars in FY 2018 under OTAs.

This provision 852 directs the secretary to begin to look at all sorts of ways to accelerate fielding acquisition specifically for software purchases and new software engineering, including embedded systems like weapons and simulators. This does bring up the same problem mentioned in Section 831 and elsewhere, which is the need for cybersecurity and integrity – important any time you’re building new stuff.

Acquisition innovation is likely to be a hot topic for the next several years, as DOD and the whole Government grapples with the effects of the rules and regulations that have burdened procurement processes and made the cost of responses perilously high. This will be a continuing part of the conversation throughout the GovCon community.

Watch this space for more on this topic.


SBA’s Implementation of HUBZone Changes

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This is a guest post by Sam Finnerty of PilieroMazza PLLC, highlighting some upcoming changes to the SBA’s HUBZone program, a program that limits competition for certain contracts to businesses in historically underutilized business zones.

These changes were designed to keep investment flowing into HUBZones and make sure they don’t lose their HUBZone status just because things got better. We don’t want making things better to stop the investment train.

As always, consult an attorney about how these changes might apply to your business.

On November 12-13, 2019, the U.S. Small Business Administration (SBA) hosted its 5th Annual Mentor Protégé Conference where SBA’s John Klein, Associate General Counsel for Procurement Law, answered questions from the audience regarding various mentor-protégé issues. Mr. Klein provided some key insights regarding recent and upcoming SBA rulemakings that will have a significant impact on small business government contractors.

On November 13, 2019,SBA sent a final rule to the Federal Register for publication that will implement comprehensive revisions to the regulations governing the Historically Underutilized Business Zone (HUBZone) Program. These revisions, as proposed in October 2018, are available here. A couple of the key changes are:

(1) an individual will continue to be treated as a HUBZone resident if that individual worked for the firm and resided in a HUBZone at the time the concern was certified or recertified as a HUBZone—even if the area where the individual lives no longer qualifies as a HUBZone or the individual has moved to a non-HUBZone area; 

(2) HUBZone firms will only be required to certify on an annual basis, meaning such concerns will no longer be required to expressly qualify as a HUBZone at the time of each offer for a HUBZone contract and award.

In addition to the revisions proposed in October 2018, the final HUBZone rule will also implement a significant change to the regulations that was proposed during public comment. Specifically, the final rule will indicate that when a company buys an office located in a HUBZone or enters into a long-term, 10-year lease for such office space, intending the space to be its principal office, the concern will be able to meet the principal office HUBZone criterion for a period of at least 10 years—even if at some point after the property is purchased or leased, the office location no longer qualifies as a HUBZone. The idea behind this rule is that the HUBZone program should incentivize and reward companies that invest in HUBZones.

For more information on this and other topics impacting government contractors, please contact a member of PilieroMazza’s Government Contracts Group.

Samuel Finnerty, the author of this Client Alert, is a member of the Firm’s Government Contracts, Small Business Programs & Advisory Services, and Government Contracts Claims and Appeals practice groups.

This post originally appeared on the PilieroMazza blog at https://www.pilieromazza.com/this-just-in-sbas-implementation-of-hubzone-changes-and-small-business-runway-extension-act-coming-soon and was adapted and reprinted with permission.


SBA Adopts Five-Year Receipts Calculation

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This is a guest post by PilieroMazza Partner Megan Connor and PilieroMazza Associate Anna Wright, members of PilieroMazza’s Government Contracts and Small Business Programs & Advisory Services practice groups.

Effective January 6, 2020, SBA will change the period of measurement for receipts-based size calculations from three years to five years. This change is the result of the Small Business Runway Extension Act of 2018 and SBA’s final rulemaking on December 5, 2019. This is a long-awaited change and will have far-reaching impacts for government contractors.

Importantly, SBA is adopting a two-year transition period, until January 6, 2022, during which firms may choose to use either the current three-year calculation or the new five-year calculation. After January 6, 2022, all companies must use the five-year period of measurement in determining their size under a receipts-based calculation. PilieroMazza strongly advocated for a transition period before Congress and in its comments to SBA’s rulemaking.

This shift from using a three-year period to a five-year period for the average annual receipts calculation will affect all of SBA’s receipts-based size standards, though the change in calculation will not yet apply to the SBA Business Loan and Disaster Loan Programs, which will be handled in a separate rulemaking. SBA did not address in its rulemaking how SBA would view contractors that have been using the five-year period of measurement since the Runway Extension Act became law nearly a year ago.

If you would like to know more about these changes and their potential impact on your company, please contact a member of PilieroMazza’s Government Contracts Group.


SBA Publishes Important Proposed Rule Changes to 8(a) and Mentor-Protégé Programs

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This is a guest post by Pamela J. Mazza, Managing Partner, PilieroMazza, PLLC.

On November 8, 2019, SBA published a proposed rule to merge its mentor-protégé programs and amend many of its rules governing the 8(a) program and small businesses. The proposed rule would have significant implications for the government contracting community. Comments are due by January 17, 2020, and PilieroMazza’s highlights are below.

Mentor-Protégé Programs

The proposed rule would:

  • Merge the 8(a) Mentor-Protégé Program into the All Small Mentor-Protégé Program;
  • Clarify eligibility criteria for proposed mentors and request comments on whether mentors should be restricted to mid-sized firms;
  • Provide flexibility for mentors with protégés with principle places of business in Puerto Rico;
  • Provide relief from the two mentors over the life of a protégé rule; and
  • Provide generally that protégés should be performing work under the North American Industry Classification System (NAICS) code used to qualify for the program.

Joint Ventures

The proposed rule would:

  • Eliminate joint venture approval requirements for competitive 8(a) contracts, but not sole source awards;
  • Eliminate the “three in two” rule;
  • Disallow substitution of joint venture partners who exceed the size standard for long-term contracts prior to recertification; and
  • Allow joint ventures to be populated with FSOs and provide guidance to agencies on when to allow joint ventures to bid on contracts requiring a clearance.

Multiple-Award Contracts (MAC)

The proposed rule would:

  • Require contracting officers to assign the most appropriate single NAICS code to each order under an MAC, whether for a supply or a service to ensure compliance with the non-manufacturer rule, requiring that each NAICS code be included in the underlying MAC;
  • Require an offeror to certify as to size and status in order to qualify at the time it submits its initial offer including price for an order under an UNRESTRICTED MAC, except for orders or BPAs issued under an FSS contract;
  • Require that, where the socio-economic status is first required at the order level, firms must qualify at that time; and
  • Permit size and status protests where the underlying MAC was unrestricted, except for BPAs and orders issued under an FSS schedule.

Certification

Self-certification

  • The proposed rule would allow a prime to rely on the self-certification of its subcontractor, provided the prime does not have a reason to doubt the certification.

Recertification

The proposed rule would that:

  • If a party to a joint venture becomes acquired or merges, only that partner (and not the non-affected partner) must recertify in order to qualify the joint venture to recertify;
  • A firm that mergers between proposal submission and award does not qualify for award if it could not or did not recertify, though size protests are permitted; and
  • Tribal entities are not required to recertify where ownership changes but the firm is owned to the same extent (i.e. 51%) by the ultimate entity.

8(a) Program

The proposed rule would:

  • Define “follow on contract” for purposes of retaining requirements in the program;
  • Loosen the prohibition on immediate family members owning 8(a) firms;
  • Allow for certain changes of ownership to occur without prior SBA approval;
  • Clarify SBA policy on voluntary withdrawals and early graduations from the program; and
  • Under some circumstances, allow firms to seek and obtain a multiple contract waiver from the sole-source restrictions for failure to comply with the business activity targets where certain extenuating circumstances exist that apply to multiple contracts.

Tribally-Owned Applicants and Participants

The proposed rule would require that:

  • Where a tribe, ANC, NHO, or CDC is reorganizing but ultimate ownership does not change, no prior SBA approval is required;
  • If SBA changes the primary NAICS code of a program participant because the participant has not been operating in its designated primary code for the past three years, another tribal entity be immediately qualified to apply using that code: although the program participant stated that code as its primary NAICS code, it really was not the primary NAICS code, so that code is now available for another 8(a) applicant;
  • Appeals be authorized where SBA has changed a firm’s primary NAICS code;
  • Potential for success be satisfied by a letter from a Section 17 corporation or some other economic development corporation or tribally owned holding company, so long as it can show financial strength;
  • Tribal entities not be required to submit small business subcontracting plans, as long as they are small for the NAICS code assigned to the contract; and
  • The excessive withdrawal rule generally not be applied to entities at least 51% owned by a tribe, ANC, NHO, or CDC.

Small Business Rules

The proposed rule would:

  • Require that mixed contracts include any combination of services, supplies, or construction, though construction was inadvertently omitted from the proposed rule;
  • Require that contracting officers consider past performance of first-tier subcontractors for certain bundled or consolidated contracts and for MACs over a certain dollar threshold;
  • Clarify that affiliation may be found under the newly organized concern rule where both former and current officers, directors, principal stockholders, managing members, or key employees of one company organize a new company in the same or a related industry; and
  • Request comments on how the non-manufacturer rule should be applied to multiple item procurements where one or more of the items are subject to a class waiver.

This post was originally published on the PilieroMazza blog at https://www.pilieromazza.com/blog-sba-publishes-important-proposed-rule-changes-to-8a-and-mentorprotg-programs and was reprinted with permission.

Note from Bill: The goal here is to make the rules consistent for everybody, and this is a very good thing. As a matter of speculation, it is possible we are also heading towards some kind of consolidation between the service-disabled veteran-owned small business program and the 8(a program), which are not exactly the same but probably could be treated the same. It looks like the SBA is moving in that direction, however that is not official yet by any means.


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