http://www.oles.com/ en blanche@oles.com Copyright 2011 2011-03-01T18:33:10+00:00 http://www.oles.com/blog/entries/efforts-to-standardize-past-performance-evaluation-factors-and-ratings-may- http://www.oles.com/blog/entries/efforts-to-standardize-past-performance-evaluation-factors-and-ratings-may-#When:19:33:10Z For many years now (including just last week), I have heard from clients and contractors that the Government's various systems and methods for collecting, reporting, and assessing contractors' past performance is, to put it kindly, less than adequate.  Such concerns have included, for instance, that the Government refuses to consider past performance that is similar and undeniably relevant to a scope of work in a solicitation, that Contracting Officers (even with the same agency, such as the Army Corps of Engineers and NAVFAC) apply very different standards for the evaluation of past performance, and that the ratings themselves are not a fair reflection of the contractors' performance.Yesterday, an article by Robert Brodsky in the Government Executive echoed these concerns, in which he reported that "Federal agencies are inconsistently entering mandatory reports on contractors' past performance in a government wide database, limiting the information available to procurement officials issuing multimillion-dollar wartime awards."  This was based on recent testimony before the congressionally chartered Commission on Wartime Contracting.  Data collected by the Commission indicated that past performance information is not being entered by agencies into the CPARS and PPIRS databases as required by federal law.  In response, it appears the Government intends to issue a proposed rule in the FAR that will standardize evaluation factors and performance ratings, and establish government-wide training on how best to report past performance.Despite this much needed attention to a serious problem, I am not confident that any proposed changes will bring about the uniformity and fairness that is clearly needed. For instance, FAR 15.305, which is utilized for negotiated procurements, already instructs Contracting Officers to consider:  "[past] efforts similar to the Government requirement;" performance by "predecessor companies;" "subcontractors that will perform major or critical aspects" of the work, and; how offerors with little or no relevant performance history can be evaluated.  Thus, the problem is not so much in the substance of the rules, but, rather, how to ensure that the Government officials evaluating proposals consistently and fairly apply those rules. We will report on the proposed changes to the FAR if and when they appear in the Federal Register.  We welcome your questions or comments, which can be sent to Jonathan DeMella at 206.623.3427 or email: demella@oles.comThe Government Contracts Practice Group at Oles Morrison has an established history of assisting contractors with claims against federal and state agencies, bid protests and providing advice and counseling on all issues involving public procurement. 2011-03-01T19:33:10+00:00 http://www.oles.com/blog/entries/eg-solutions-and-multimaxarray-lose-dhs-contract http://www.oles.com/blog/entries/eg-solutions-and-multimaxarray-lose-dhs-contract#When:16:03:37Z On February 10, 2011, the Department of Homeland Security announced EG Solutions and Multimax Array have been dropped from the $3 billion FirstSource contract.  Both firms were suspended by the Small Business Administration in November 2010, following an investigation that found the firms misrepresented the amount of work they would be performing on the contracts, choosing instead to subcontract nearly all of the work to large businesses.  The FirstSource contract was a small business set aside contract for IT hardware, software and services.  DHS stated that the suspension rendered the firms ineligible for further work under the contract.  Prior to their suspensions, EG Solutions and MultimaxxArray had received more than $270 million worth of work under the contract.  Neither company has publically responded to the SBA’s suspension.   2011-02-15T16:03:37+00:00 http://www.oles.com/blog/entries/high-level-conclusory-allegations-unsupported-by-any-concrete-facts-are-ins http://www.oles.com/blog/entries/high-level-conclusory-allegations-unsupported-by-any-concrete-facts-are-ins#When:16:11:00Z On December 9, 2010, the United States Court of Federal Claims held that contractor Delhur Industries, Inc. (“Delhur”) was not entitled to an equitable adjustment of $2,115,525 for fourteen claim items on a road construction contract (the “Project”) with the Federal Highway Administration (“FHWA”) due to its failure of proof. The Court agreed with the government that the contractor’s certified claim was deficient in several respects. This decision highlights the importance of proper project documentation to support a contractor’s claim and that the contractor bears the burden of proving the elements of its claim by a preponderance of the evidence. Although the burden imposed on a contractor is not one of exact precision, it does require a contractor to furnish the court with evidence of at least a reasonable basis for the computation of the amounts that it claims is due and owing it. The Court of Federal Claims evaluated Delhur’s claim for an equitable adjustment under the elements set forth in SAB Constr. Inc. v. United States, 66 Fed. Cl. 77, 85 (2005).  To prove an equitable adjustment, Delhur, like any other contractor in its situation, must be able to show “liability, causation, and injury, and it must prove that the government somehow delayed, accelerated, augmented, or complicated the work, and thereby caused it to incur specific additional costs, and that those costs were reasonable, allowable, and allocable to the contract.”  When applying these principles to Delhur’s claim, it was clear to the Court that Delhur had failed to prove the necessary elements which would entitle it to a claim for an equitable adjustment. The Court found that Delhur presented high-level conclusory allegations which were unsupported by any concrete facts. Delhur claimed extra costs due to excess excavation but failed to demonstrate that it reasonably relied on all the contract documents when formulating its bid. The only evidence of Delhur’s bid preparation for the work consisted of “fifteen pages of cryptic handwritten notes” that could not be adequately explained by anyone who represented Delhur at trial. There was also no evidence that Delhur reviewed any of the geotechnical reports in preparing its bids. The Court’s analysis certainly suggests that a lack of contemporaneous note-taking during the bid formulation state can be fatal to a contractor’s right to recover an equitable adjustment caused by a differing site condition later encountered on the Project. The Court also concluded that “Delhur did not provide the Court with sufficient evidence to show that its damages were caused by errors in the plans or government direction, and not by Delhur’s own mistakes.” Thus, Delhur could not prove the elements of liability and causation required for a claim of equitable adjustment. Delhur’s bare assertion that it suffered damages because it had to haul extra excavation from the Project was not enough. Delhur claimed 25,500 cubic meters of excess excavation on the Project but failed to show the Court how it came to this figure. Thus, the Court concluded that it had no way of knowing if Delhur’s estimate was reliable or how it was determined, and consequently denied Delhur’s claim for the same. Similarly, Delhur was not entitled to recover any field or home office overhead costs because the evidence it submitted was insufficient.  Delhur could not show that the FHWA was solely responsible for any delay that occurred on the Project. Delhur failed to present a project schedule analysis to assess which party may have caused the delay, and again, relied on a bare assertion that the government caused the delay and should be responsible. Yet again, the Court’s analysis shows the importance of proper project documentation and that it is the contractor’s burden to prove the elements of its claim by a preponderance of the evidence submitted. Adding insult to injury, Delhur could not recover its last claim for a reimbursement of $45,000 in liquidated damages. Because Delhur could not provide any competent evidence to show that its project delays were excusable, it was similarly not entitled to a reimbursement. 2010-12-15T16:11:00+00:00 http://www.oles.com/blog/entries/government-contracts-update-sba-suspends-eg-solutions-and-multimaxarray http://www.oles.com/blog/entries/government-contracts-update-sba-suspends-eg-solutions-and-multimaxarray#When:02:04:54Z The Small Business Administration (SBA) announced on November 18, 2010 that it has suspended two more firms in its investigation into small business contracts that are being illegally passed through to larger companies. EG Solutions and MultimaxArray were both suspended from federal contracting based on allegations that the firms misrepresented themselves on a large Homeland Security (DHS) Department information technology contract. Both EG Solutions and MultimaxArray won multi-million dollar task orders, set-aside for small businesses, on DHS’ $3 billion FirstSource contract for IT hardware, software and services. But, according to suspension letters, most if not all of the work required to be performed in connection with the contracts were performed by subcontractors. The suspension letters also allege that both EG Solutions and MultimaxArray actively tried to conceal the nature of their relationship with the subcontractor after concerns were raised early on about their potentially wrongful conduct in regards to the contracts at issue. The suspension letters do not name the subcontractor, but the suspension of EG Solutions and MultimaxArray comes just weeks after the SBA suspended GTSI Corp., based on allegations that it was performing virtually all the work on a $165 million delivery order that was awarded to MultimaxArray. GTSI also served as a subcontractor to EG Solutions on the FirstSource contract. GTSI’s suspension was lifted after two weeks, following the resignation of its top two executives and the indefinite suspension of three other executives. EG Solutions and Multimax Array have 30 days to formally respond to the SBA’s suspension. Anne Marie Tavella; The Government Contracts Practice Group at Oles Morrison has an established history of assisting contractors with claims against federal and state agencies, bid protests and providing advice and counseling on all issues involving public procurement   2010-11-23T02:04:54+00:00 http://www.oles.com/blog/entries/legislation-introduced-to-eliminate-contracting-preferences-for-alaska-nati http://www.oles.com/blog/entries/legislation-introduced-to-eliminate-contracting-preferences-for-alaska-nati#When:18:37:40Z On Wednesday Senator Claire McCaskill (D-Mo.) introduced legislation aimed at diminishing the federal contracting preferences for Alaska Native Corporations (ANCs) under the Small Business Administration's 8(a) program.  McCaskill, a long-time critic of the ANC contracting program, stated that the purpose of the legislation is to close currently existing loopholes that have led to waste and abuse, while providing little benefit for Alaska Native communities.  The legislation would eliminate the ANCs ability to be awarded sole-source contracts above the caps ($3.5 million for services and $5.5 million for goods) that apply to other 8(a) businesses.  It would also require ANC companies to demonstrate they are socially and economically disadvantaged.  Currently, ANC companies are not considered affiliated with related companies and subsidiaries for size determinations, this exemption would also be eliminated.  The bill has been anticipated for some time, as studies in recent years have shown the program has led to situations where the true beneficiaries are large non-Native companies that use loopholes in the program to obtain valuable federal contracts without competition.  McCaskill held a hearing in July 2009 where she harshly criticized the program and argued that only a small percentage of federal contracting dollars trickle down to Native communities.  Alaska Senators Lisa Murkowski and Mark Begich, as well as several ANCs have admitted the need for reform of the program.  However, they maintain that McCaskill’s bill is misguided, untenable and fails to adequately address the problems with the program.  They argue that rather than working with the ANCs to develop reforms that will increase the benefit to Native peoples while reducing abuse by non-Native companies, McCaskill’s legislation essentially seeks to strip the ANCs of any benefit the program was meant to provide.  Begich stated to The Washington Post that the ANCs provide hundreds of jobs for Alaskans and provide assistance to Alaska’s remote, high-cost communities.  One direct benefit provided by ANCs are dividends paid to their shareholders.  For example, on November 12, 2010, the Anchorage Daily News reported that NANA Regional Corp. distributed about $20 million in dividends to its 12,000 shareholders.  In 2009, the company paid out $17.2 million in dividends.  For more details on the legislation click here 2010-11-18T18:37:40+00:00 http://www.oles.com/blog/entries/government-contracts-law-update-top-gtsi-executives-resign-sba-lifts-suspen http://www.oles.com/blog/entries/government-contracts-law-update-top-gtsi-executives-resign-sba-lifts-suspen#When:18:33:08Z Two and a half weeks after the Small Business Administration suspended GTSI Corp., a top federal contractor, from contracting with the federal government, the SBA lifted the suspension as the company's CEO and vice president resigned.  Three other executives have been suspended for three years or until the SBA completes its investigation, whichever comes first.  GTSI has also agreed to immediately stop working as a subcontractor to small businesses serving as prime contractors, stop joint venturing with small businesses, and end its participation in the SBA's mentor-protégé program.    GTSI's suspension came in the wake of allegations that the company had abused the small business contracting rules, particularly with regard to contracts with Alaska Native Corporations.  The suspension also marked one of the first major actions by the SBA against a top federal contractor in recent years.  Although the suspension has been lifted, the investigation continues and GTSI may still face civil and criminal penalties as well as debarment from federal contracting. 2010-10-20T18:33:08+00:00 http://www.oles.com/blog/entries/government-contracts-law-update-senator-mccaskill-continues-campaign-agains http://www.oles.com/blog/entries/government-contracts-law-update-senator-mccaskill-continues-campaign-agains#When:21:09:00Z Today's Washington Post featured a story indicating that Senator Claire McCaskill (D-Mo.) intends to introduce a bill next month that will eliminate the contracting preferences currently afforded to Alaska Native Corporations.  Also this week, Senator McCaskill, requested that the Small Business Administration ("SBA") initiate an investigation into violation of federal statutes and regulations applicable to ANCs, and expressed her discouragement by "the SBA's continued failure to adequately manage and oversee ANC participation in the 8(a) program."  This story follows a September 29 Washington Post article indicating that Government officials have long known about abuses of large-scale contracts given to ANCs without competition, starting with an August 2004 article in the LA Times that questioned the Army's award of $1 billion in contracts to Chenega Integrated Systems  and Alutiiq Security and Technology, and ending with last year's report by the Senate Subcommittee on Contracting Oversight (which is chaired by McCaskill) that found "Alaska Native Corporations are multi-million or billion dollar corporations that are now among the largest federal contractors.  Although ANCs provide some benefits to their shareholders, those benefits may not be in proportion to the potential for waste, fraud and abuse created by the ANCs' contracting preferences." Senator McCaskill has been an outspoken critic of the ANC's participation in the 8(a) program for several years.  In 2009, McCaskill, as chairwoman of the Senate Homeland Security and Governmental Affairs Ad Hoc Subcommittee on Contracting Oversight, held a hearing to discuss the increased participation of ANCs in the 8(a) program.  According to the Office of Inspector General, federal contract dollars awarded to ANC's have increased from $1.1 billion in FY 2004 to $3.9 billion in FY 2008.   In response to the concerns raised by McCaskill, and others, on October 28, 2009  the SBA released several proposed rules aimed at addressing the concerns of abuse of the 8(a) program.  These rules have not yet been finalized.  Oles Morrison will monitor and post developments relating to Senator McCaskill's legislation and related efforts as they unfold. We welcome your questions or comments, which can be sent to Jonathan DeMella at 206.623.3427 or email: demella@oles.com The Government Contracts Practice Group at Oles Morrison has an established history of assisting contractors with claims against federal and state agencies, bid protests and providing advice and counseling on all issues involving public procurementToday's story can be found here:http://www.washingtonpost.com/wp-dyn/content/article/2010/10/07/AR2010100704859.html?hpid=moreheadlinesThe September 29 story can be found here:http://www.washingtonpost.com/wp-dyn/content/article/2010/09/29/AR2010092906342.html 2010-10-08T21:09:00+00:00 http://www.oles.com/blog/entries/sba-finalizes-women-owned-small-business-rule-to-expand-federal-contracting http://www.oles.com/blog/entries/sba-finalizes-women-owned-small-business-rule-to-expand-federal-contracting#When:17:47:16Z On October 4, 2010, with its publication of a final rule in the Federal Register, the U.S. Small Business Administration ("SBA") will begin implementation of its women-owned small business ("WOSB") federal contract procurement program.  The program, which will focus on 83 industries in which women are under- or substantially-under represented in the federal contract marketplace, is part of the Obama Administration's overall commitment to expanding opportunities for small businesses owned by women to compete for federal contracts.  In addition to opening up more opportunities for WOSBs, the rule is another tool to help achieve the statutory goal that five (5) percent of contracting dollars go to women-owned small businesses."Women-owned businesses are one of the fastest growing sectors of our nation's economy, and even during the economic downtown of the last few years, have been one of the key job creation engines in communities across the country," SBA Administrator Karen Mills said.  "Despite their growth and the fact that women lead some of the strongest most innovative companies, women-owned firms continue to be underrepresented in the federal contracting marketplace.  This rule will be a platform for changing that by providing greater opportunities for women-owned small businesses to compete for and win federal contracts."  The creation of a rule to increase federal contracting opportunities for WOSBs was approved by Congress back in 2000.  Since that time, SBA has taken a number of steps to analyze the market, including a study of WOSB participation in a number of industries.  The proposed rule was published for comment on March 2, 2010.  After receiving over 1,000 comments, the SBA published the final rule early this month, which is very similar to a rule the Obama Administration proposed back in March 2010, with minor changes.  Some of the essential elements of the program include the following:To be eligible, a firm must be 51 percent owned and controlled by one or more women, and primarily managed by one or more women.  The women must be U.S. citizens.  The firm must classify as "small" within its primary industry in accordance with SBA standards for that industry.  The final rule authorizes a set-aside of federal contracts for WOSBs where the anticipated contract price does not exceed $5 million in the case of manufacturing and $3 million in the case of other contracts.  Contracts with values in excess of these limits are not subject to set-aside under the program.The rule allows WOSBs to self-certify as "WOSBs" or to be certified by third-party certifiers, including government entities and private certification groups.  For those who self-certify, the rule requires the WOSB to submit a certification verification, to complete the certifications at the federal Online Representation and Certification Application ("ORCA") website, and also to submit a set of eligibility-related documents to an online "document repository" to be maintained by the SBA.  The SBA intends to conduct a significant amount of certification verification to confirm eligibility of WOSBs.  In the event of a contract protest or program review, the SBA has the authority to request additional documentation from the WOSB, and to initiate punitive action against ineligible firms which seek to take advantage of the program.The SBA has 120 days to implement the program; a time period in which the agency expects to educate and train federal contracting officers on the rule's new requirements and to finalize a database of eligible firms.  SBA expects the program to be up and running for WOSBs by early February 2011.  We welcome your questions or comments, which can be sent to Meredith Thielbahr at 206.623.3427 or email: Thielbahr@oles.com The Government Contracts Practice Group at Oles Morrison has an established history of assisting contractors with claims against federal and state agencies, bid protests and providing advice and counseling on all issues involving public procurement 2010-10-07T17:47:16+00:00 http://www.oles.com/blog/entries/federal-government-suspends-major-contractor-with-ties-to-alaska-native-cor http://www.oles.com/blog/entries/federal-government-suspends-major-contractor-with-ties-to-alaska-native-cor#When:17:41:42Z On October 1, 2010, the Small Business Administration suspended GTSI Corp. from contracting with the federal government, following an investigation into GTSI’s involvement in subcontracting with small businesses.  The main allegation is that GTSI, one of the top 50 federal contractors, acted as a subcontractor to small businesses –Alaska Native Corporations (“ANCs”) in particular – in order to gain access to government small business set-aside contracts.  Though GTSI acted as a subcontractor, the SBA has found evidence that GTSI essentially performed all of the work under the contracts, while the prime contractors (the actual small businesses) had little to no involvement in the contract work.  Small businesses and ANCs have enjoyed long-standing contracting preferences and privileges with the federal government.   ANCs also receive additional benefits, including the right to receive contracts of any size without competition.  In recent years, concerns regarding abuse of these programs by large businesses have increased.  In October 2009, the SBA issued proposed revisions to the small business contracting rules in an effort to curb these abuses, while maintaining the purpose of the contracting programs to boost small businesses.   The SBA’s actions against GTSI are significant, as the contractor relies on the federal government for 90 percent of its sales, according to The Washington Post.  It is also the first time in many years, if not decades, that the government has taken such serious action against a top-tier contractor.  The SBA’s investigation is ongoing and it may decide to suspend GTSI for a specific period of time or, if the alleged misconduct is determined to be serious enough, GTSI could be permanently debarred from federal contracting.  We welcome your questions or comments, which can be sent to Anne Marie Tavella at 206.623.3427 or email: tavella@oles.com The Government Contracts Practice Group at Oles Morrison has an established history of assisting contractors with claims against federal and state agencies, bid protests and providing advice and counseling on all issues involving public procurement 2010-10-05T17:41:42+00:00 http://www.oles.com/blog/entries/dod-guidance-aimed-at-obtaining-greater-efficiency-and-productivity-in-def http://www.oles.com/blog/entries/dod-guidance-aimed-at-obtaining-greater-efficiency-and-productivity-in-def#When:15:35:16Z Current and prospective Government contractors will soon be facing a less experienced acquisition workforce guided by a mandate to keep Government expense to a minimum:   “To put it bluntly:  we have a continuing responsibility to procure the critical goods and services our forces need in the years ahead but we will not have ever increasing budgets to pay for them.  We must therefore strive to achieve what economists call productivity growth:  in simple terms, DO MORE WITHOUT MORE.”  This introductory language sets forth the theme of a 17 page letter recently sent to all DOD acquisition professionals by Ashton B. Carter, Under Secretary of Defense for Acquisition, Technology & Logistics.  The guidance in the letter affects approximately $400 billion of the $700 billion defense budget spent annually on contracts for goods and services and seeks to redirect approximately $100 billion defense budget dollars from “unproductive to more productive purposes” over the next five years.   The letter also acknowledges that “[w]hile Secretary Gates has directed a scrub of the oversight staff in OSD and military commands, he has also determined that acquisition workforce increases planned last year should proceed.” Twenty three principal actions to improve efficiency are organized into five major areas:1.    Target Affordability and Cost Growth2.    Incentivize Productivity and Innovation in Industry3.    Promote Real Competition4.    Improve Tradecraft in Services Acquisition5.    Reduce Non-productive Processes and Bureaucracy Among the more noteworthy actions we can expect to see: “affordability” mandated as a program requirement; shorter program timelines; increased use of fixed price incentive firm target contracts that emphasize the tie between profit and performance; expansion of the Navy’s “Preferred Supplier Program” to a DoD-wide pilot program; price negotiations with all single bid offerors based on cost or price analysis using non-certified data; increased emphasis on small business utilization; limitation of single-award contract actions to three years; clarification of the roles of DCMA and DCAA to reduce overlap, and; increased use of forward pricing rate agreements.Current and prospective Government contractors should read this significant guidance closely, as it is most certainly a harbinger of things to come.  Indeed, Mr. Carter advises that the letter is “not the end of a process, but the beginning of vigorous implementation and further refinement.”   We welcome your questions or comments, which can be sent to Jonathan DeMella at 206.623.3427 or email: demella@oles.com  The Government Contracts Practice Group at Oles Morrison has an established history of assisting contractors with claims against federal and state agencies, bid protests and providing advice and counseling on all issues involving public procurement 2010-09-28T15:35:16+00:00