Source: http://govtcontractsmonitor.jacksonkelly.com/contracting-opportunities/page/2/
Timestamp: 2017-03-26 11:10:48
Document Index: 18951397

Matched Legal Cases: ['§ 121', '§ 121', '§ 121', '§ 121', '§ 121', '§ 121', 'art 2016', '§ 124', '§ 124', '§ 124', '§ 124', '§ 127']

Government Contracts Monitor: Contracting Opportunities Government Contracts Monitor
Short Take: SBA Confirms Last Year’s Monetary-Based Size Standards Inflation Increases
The Small Business Administration (SBA) has published a Final Rule, effective January 25, 2016, adopting, as issued, SBA’s 2014 Interim Final Rule, previously discussed here, increasing SBA’s monetary-based size standards to account for inflation since 2008. These adjustments, which resulted in size standard increases of approximately 8.73% (rounded to the nearest $500,000), were made pursuant to 13 C.F.R. § 121.102(c), which requires SBA to examine the impact of inflation on monetary-based size standards at least once every five years, and were in addition to earlier implemented increases to SBA’s monetary-based size standards as part of SBA’s comprehensive size standards review pursuant to Section 1344 of the Small Business Jobs Act of 2010 (Pub. L. 111-240).
In responding to comments, SBA reiterates that the 8.73% increase was calculated based on changes in the Gross Domestic Product (GDP) price index since the previous inflation adjustment published in July 2008. One commentator suggested SBA should instead use the Consumer Price Index (CPI). SBA responded that the commentator did not provide a convincing justification, but SBA would consider such option in making future inflation adjustments. SBA also rejected a suggestion that SBA use a smaller $100,000 rounding increment, stating that such would overcomplicate SBA’s size standards with too many different size standards. However, SBA stated that it will consider applying an alternative rounding amount in future adjustments. SBA also stated that it considered whether inflation over the 19 months since the Interim Rule was published on June 12, 2014, warranted a further increase, but concluded that the intervening inflation “is not sufficient to warrant an additional increase at this time.” The Final Rule also confirms SBA’s application of the 8.73% inflation adjustment to (1) the Tangible Net Worth and Net Income based alternative size standards for the Small Business Investment Company (SBIC) Program (13 C.F.R. § 121.301(c)); (2) Sales or Leases of Government Property Other than Manufacturing (13 C.F.R. § 121.502); and (3) Stockpile Purchases (13 C.F.R. § 121.512), as well as SBA’s prior determination to not increase the tangible net worth and net income based alternative size standards for SBA’s 504 and 7(a) Loan Programs (13 C.F.R. § 121.301(b)).
This Final Rule removes uncertainty and makes permanent the increased monetary-based size standards that have been in place since July 14, 2014. The currently applicable size standards may be found at 13 C.F.R. § 121.201.
Hopewell Darneille is responsible for the contents of this Short Take.© Jackson Kelly PLLC 2016
Posted on 01/25/2016 in Contracting Opportunities, Contracting Rules and Regulations, Procurement News and Analysis, Regulations (FAR, DFARS and others), Small Business / Socioeconomic Issues | Permalink
FAR Proposed Rule Would Bar Contractor Confidentiality Agreements Restricting Employees and Subcontractors from Reporting Fraud, Waste & Abuse
The FAR Council has published a new Proposed Rule implementing Section 743 of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235), and anticipated successor provisions in future appropriations acts and continuing resolutions, prohibiting the use of appropriated or otherwise available funds for any contract, grant or cooperative agreement with an entity that requires its employees or subcontractors to sign internal confidentiality agreements or statements that would prohibit or otherwise restrict the lawful reporting of fraud, waste or abuse to a designated investigative or law enforcement representative of a federal department or agency authorized to receive such information.
The Proposed Rule would add new FAR Section 3.909, “Prohibition on contracting with entities that require certain internal confidentiality agreements,” and two new clauses that Contracting Officers would be required to include in all solicitations and resultant contracts, and all modifications to any existing contract, obligating FY15 or subsequent year funds, other than personal services contracts performed entirely by the contracting individual. The FAR Council has initially determined, given the subject matter, that these provisions would extend to commercial items and simplified acquisition purchases. The proposed language provides that submission of an offer would constitute a representation that the offeror is in compliance with the new requirement. An offeror not able to make the representation would be ineligible for award. Contractors also would be required to affirmatively notify their employees, through normal business communication channels, such as e-mail, that any such limitations in pre-existing confidentiality agreements are no longer in effect. Importantly, the proposed new contract clause, if adopted, would require contractors to flow down the clause to all first and lower tier subcontracts. Comments on the Proposed Rule are due no later than March 22, 2016, and should reference FAR Case 2015-012. While this is only a proposed rule at this point, given the statutory “funds use” bar driving this, as well as general ethical policy considerations, contractors would be well-advised to review their current policies and the wording of any existing internal company confidentiality agreements, and ensure that such and any new agreements are consistent with the proposed new provisions.
Posted on 01/25/2016 in Contracting Opportunities, Contracting Rules and Regulations, Fraud, Regulations (FAR, DFARS and others), Subcontracting | Permalink
Sole Source Awards to WOSBs Are Finally Here, But Certification Questions Remain
Year-end 2015 brought two important developments for Women-Owned Small Businesses (WOSBs), that provide new business opportunities, as well as some uncertainty, as we start 2016. First, the FAR Council issued its eagerly-awaited Interim Rule authorizing sole source awards to WOSBs in appropriate circumstances. This new authority, which is effective immediately, levels the playing field between WOSBs and the other socio-economic classifications, and provides government contracting officers an important new tool to increase the number of prime contract awards to WOSBs. Second, the Small Business Administration (SBA) issued an Advance Notice of Proposed Rulemaking (ANPRM), inviting comments, by February 16, 2016, on a wide range of issues related to implementing Congress’s ending WOSB self-certification and developing a new certification regime. Importantly, self-certification remains in place for now. However, changes are coming, likely in 2017, and this is your chance to comment and effect the direction of such change and promote a workable outcome.
Background: As previously discussed here, Section 825 of the National Defense Authorization Act of 2015 (FY15 NDAA) amended the Small Business Act to (1) authorize, for the first time, sole source awards to WOSBs, bringing WOSBs in line with other socio-economic programs, and (2) delete the statutory authority for WOSB status self-certification. Congress also advanced the date for a required SBA report as to WOSB participation in federal contracting.
SBA issued its Final Rule implementing the authorized sole source award authority, effective October 14, 2015 (discussed here). However, FAR implementation was still required before WOSB sole source awards could occur.
SBA deferred addressing self-certification, stating that “[t]his statutory requirement … may require substantial resources … and require a more prolonged rulemaking.” Importantly, SBA stated that “any certification process must be fair, efficient and comprehensive, but should not be burdensome or prevent new WOSBs and EDWOSBs from entering into the Federal marketplace.” SBA stated that “SBA wants to balance the need to protect the Government and other participants from fraud, with the goal of increasing WOSB and EDWOSB participation in the program.” The FAR Interim Rule: The new FAR Interim Rule finally allows Contracting Officers to make sole source awards to WOSBs. However, consistent with the overall parameters of the WOSB Program, such sole source awards may be made only when:
The proposed contract is for an industry (NAICS code) identified by SBA in which WOSBs are underrepresented or substantially underrepresented; and
Where the Contracting Officer determines, based on market research, (I) there is one responsible WOSB, but no reasonable expectation that two or more qualifying WOSBs will submit offers in the case of an industry in which WOSBs are substantially underrepresented, or two or more qualifying Economically-Disadvantaged WOSBs (EDWOSBs) where WOSBs are underrepresented (ii) the anticipated award price (including options) will not exceed $6.5M for manufacturing NAICS codes, and $4.0M for all other NAICS codes; and (iii) award can be made at a fair and reasonable price.
Importantly, while mandating that Contracting Officers “consider” a WOSB sole source award before considering a small business set-aside, new FAR 19.1506 does not actually mandate WOSB sole source awards, and the sole-source decision is left to the Contracting Officer’s discretion. However, the FAR Council stated that one of the objectives of the Interim Rule is “to provide 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.” There thus is a strong basis upon which WOSBs can encourage Contracting Officers to avail themselves of this newly-provided tool to enhance their respective agency’s performance with respect to WOSB prime contract award goals, and Contracting Officers should consider and give weight to this policy in making award decisions. Ending Self-Certification – Next Steps: SBA’s new ANPRM confirms SBA’s previously stated intent to: (1) proceed deliberately, and solicit maximum industry input, before establishing a new WOSB certification regime; and (2) continue permitting self-certification in the interim. As stated by SBA last Spring, “there is no evidence that Congress intended to halt the existing WOSB Program until such time as SBA establishes the infrastructure and issues regulations implementing the statutory certification requirement.”
The FY15 NDAA specifies four different certification alternatives: (1) a Federal Agency; (2) a State government; (3) SBA; or (4) a national certifying entity approved by SBA. SBA is now inviting comments as to the practicality of, and downsides to, each of these four alternatives in light of existing programs and experience, and as to whether each alternative should be pursued.
SBA also is inviting comments as to the length of any grace period that should be permitted for presently self-certified entities to come into compliance with the new system when implemented, and as to what should be done with, or what continuing use made of, the existing WOSB documents repository.
Comments on the ANPRM are due no later than February 16, 2016.
Conclusion: WOSBs working in eligible industries should take advantage of, and educate their Contracting Officers about, the new sole source award authority, and encourage them to award eligible contracts on this new basis. WOSBs also should consider providing comments to SBA in response to the ANPRM, particularly as to any experience (good or bad) with the various specified certification methods, including as to the time and cost of third-party certification.
Posted on 01/18/2016 in Contracting Opportunities, Contracting Rules and Regulations, Procurement News and Analysis, Regulations (FAR, DFARS and others), Small Business / Socioeconomic Issues | Permalink
2016 New Year’s Resolutions Reassess Your Size Status, Update Your DSBS and SAM Listings, Check Your Past Performance Ratings, and Update Your Employment Policies, Handbooks and Postings
1. Reassess Your (and Any Subcontractors’) Small Business Size Status: Most companies operate on a calendar year for tax reporting purposes. For such companies the start of a new tax year, and the end of the prior year, means a change and forward adjustment of the three-year period used to calculate a company’s average annual receipts (AAR) for size determination purposes. See our prior blog article on this topic here. Thus, effective January 1, 2016, companies that have been calculating their size based upon 2012-2014 receipts are required, for the first time, to start using 2013-2015 receipts. Obviously, and depending upon the company’s receipts last year (tax year 2015) vs. 2012, this change alone could change a company’s size status eligibility. Moreover, there have been significant changes in size standards over the past two years as a result of (i) SBA’s ongoing industry-by-industry review and increases to many size standards, and (ii) SBA’s Interim Final Rule issued in June 2014, adjusting all monetary-based size standards for inflation over the prior five years (previously discussed here). A size status review is particularly important this year, not only to ensure that future size certifications are correct, but also to consider whether your company might now be eligible for procurements for which you previously were too large. Please note that this review needs to consider each individual NAICS Code under which your company is listed or considering bidding. Also, check the updated status of any present or proposed subcontractors and teaming partners. While especially important for small businesses, a size status review also is important for large businesses with respect to any current or proposed small business teaming partners or subcontractors.
2. Review and Update Your Dynamic Small Business Search (DSBS) Listing: The start of a new year is also a good time for small businesses to review, and update as necessary, the company’s SBA DSBS listing. This is a primary source for government agencies, and you need to ensure that your listing is accurate, up-to-date and fully reflects any new information that might help you get new work. In addition to ensuring accuracy as to your current address, phone numbers and size and any socioeconomic status representations, be sure to update your listing to include any new performance history, and new professional and industry certifications, and make sure that your keywords are comprehensive, so as to make it easy for contracting specialists to find you. You might also want to check the listings of your key competitors to see how your listing stacks up, and whether other changes might enhance your competitive status. 3. Review and Update Your SAM Listing: Once you complete the size status reassessment, you need to review and update your listings on the Government’s System for Acquisition Management (SAM), at www.SAM.gov. This is necessary both (1) to ensure the current accuracy of the listed information, and (2) if you are a small business, to maintain and continue your company’s small business status. Please remember that information on SAM is now deemed to be a representation and certification by you as to the current accuracy of the posted information. Both the company and you individually can be held liable for any inaccurate information. Moreover, at least annual updating is required or a small business will lose and be unable to claim small business size status until updated. On a related note, if your business address has changed, be sure to update your Dun & Bradstreet DUNS number listing, and follow-up to ensure that the changes are passed through to and show up on SAM and DSBS.
4. Review and Ensure the Accuracy and Currency of Your Past Performance Information: The start of a new year also is a good time to review the accuracy and currency of your past performance information in the Contractor Performance Assessment Reporting System (CPARS), Past Performance Information Retrieval System (PPIRS) and elsewhere, so that you can initiate efforts to correct and update this information, if needed, in advance of future procurements where such information might be key to your competitive standing and award eligibility. Once a procurement comes down to the critical evaluation and award stages, it is usually too late to impact performance ratings. This is particularly true as to missing past performance evaluations, which take time to be prepared and go through the comment and review process. If you have performed well under one or more contracts over contract performance years that ended during the past year, you should ensure that CPARS evaluations have been performed and entered, documenting your good performance, so that you can claim, and agencies can give you credit, in any new procurement. This also will ensure that you have an opportunity to reply to and explain any negative comments. 5. Update Your Employment Policies, Handbooks, Postings and Subcontract Flow-Downs: While it is always good at the start of each year to review your ethics and compliance programs, it is particularly important this year that you update your employment policies, handbooks, postings and subcontract flow-down clauses, in view of the virtual flood of new Executive Orders and implementing Department of Labor and FAR regulations over the past year, including the increased $10.15 minimum wage effective January 1, 2016, prohibitions on pay secrecy and human trafficking, expansion of the Equal Opportunity Clause to include prohibitions on sexual orientation and gender identity, changes to the rules governing individuals with disabilities, and new VETS tracking and reporting requirements, just to name a few. There certainly are many other good resolutions you also should consider, including to keep current on new developments. 2016 is going to be very busy, as the Obama administration rushes to implement various initiatives before leaving office. However, taking the five actions listed above will position you well to move forward in 2016. Hopewell Darneille is responsible for the contents of this Article.© Jackson Kelly PLLC 2016
Posted on 01/04/2016 in Contracting Opportunities, Contracting Rules and Regulations, Ethics and Compliance, Labor and Employment, Past Performance, Procurement News and Analysis, Responsibility, Small Business / Socioeconomic Issues, Subcontracting | Permalink
The Small Business Administration (SBA) has issued its eagerly-awaited Final Rule implementing the new sole source award authority for Women-Owned Small Businesses (WOSBs). The Final Rule essentially adopts and follows the Proposed Rule, previously discussed here. Most importantly, the Final Rule authorizes sole source awards in industries identified by SBA in which WOSBs are underrepresented or substantially underrepresented where, based on market research, the contracting officer determines that (1) there is one responsible WOSB, but does not have a reasonable expectation that two or more qualifying WOSBs will submit offers in the case of an industry in which WOSBs are substantially underrepresented, or two or more qualifying Economically-Disadvantaged WOSBs (EDWOSBs) where WOSBs are underrepresented, (2) the anticipated award price (including options) will not exceed $6.5M for manufacturing NAICS codes, and $4.0M for all other NAICS codes, and (3) award can be made at a fair and reasonable price. SBA states that “[]the objectives of this final rule are to put the WOSB Program on a level playing field with other SBA government contracting programs with sole source authority, and to provide an additional, needed tool for agencies to meet the statutorily mandated 5% prime contracting goal for WOSBs.” The Final Rule is effective October 14, 2015. However, the FAR will need to be amended to include the new statutory sole source authority, so that there is no conflict between SBA’s new rule and the FAR. Hopefully, the FAR Council will issue its implementation in the form of an Interim Rule, so as to expedite actual implementation of the new sole source authority. There is recent precedent for this approach provided by the FAR Council’s Interim Rule two years ago eliminating the former statutory cap on WOSB awards. Moreover, this would be consistent with Congress’ purposes in authorizing sole source awards, SBA’s primacy in this area, and the fact that SBA’s proposed rule so closely tracks Congressional language.
Hopewell Darneille is responsible for the contents of this Short Take.© Jackson Kelly PLLC 2015
Mentor/Protégé Joint Venture Agreements – The Devil Is in the Details
Over the past year, the Small Business Administration (SBA) has begun to require a greater deal of specificity in proposed Joint Venture Agreements (JVAs) between Mentors and their Protégés, and in at least two instances both the cognizant SBA Area Offices and SBA’s Office of Hearings & Appeals (OHA) have rejected such Agreements and found the respective joint ventures ineligible for the Mentor/Protégé exception from SBA’s affiliation rules and thus not “small.” In a just-issued decision, the U.S. Court of Federal Claims (COFC) has affirmed OHA and rejected the Joint Venture’s challenge. IEI-Cityside JV v. U.S., COFC No. 15-673C, issued Aug. 25, 2015. SBA program participants need to be aware of these decisions and ensure that any proposed JVAs are sufficiently detailed to pass muster under this more rigorous scrutiny. This is particularly important as SBA looks to expand its Mentor-Protégé programs beyond the current 8(a) Business Development context. Moreover, SBA program participants submitting other agreements for SBA review also should heed this new SBA emphasis on greater specificity.
SBA ordinarily considers joint venturers to be affiliated and aggregates their revenues (or employees) for size purposes. However, one exception to this rule is for Mentor/Protégés entering into a joint venture where the Protégé qualifies as small for the specific procurement and the JVA meets the requirements of 13 C.F.R. §§ 124.513(c) & (d). In 8(a) procurements, the JV must submit the JVA to the cognizant SBA District Office prior to contract award for review and approval. This prior approval is not required as to non-8(a) procurements. However, the requirement to comply with 13 C.F.R §§ 124.513(c) & (d) still applies, and such compliance is reviewable if the JV’s size is protested.
In Inspection Experts, Inc. (IEI), an 8(a) program participant entered into a JVA with its SBA-approved Mentor, Cityside Management Corp. (Cityside), to compete on a non-8(a) small business set-aside for IDIQ service contracts. The JVA provided, among other things, that (i) IEI’s President would serve as the JV’s Managing Director and be responsible for negotiating the original contract, (ii) IEI and Cityside would each perform 50% of the JV’s work, and (iii) upon award the Managing Director would purchase, in the JV’s name, “facilities and equipment for the proposed operation of this contract.”
Interestingly, IEI’s SBA District Office approved this JVA. However, when the JV’s size status was protested after the JV was selected for award, the Area II Office of Government Contracting disagreed and found that the JVA lacked sufficient specificity. Specifically, the Area Office found that the JVA (i) did not include an itemization of all major equipment, facilities and other resources to be furnished by each JV partner, with a detailed schedule of cost or value of each, and (ii) did not specify the partners’ respective responsibilities with regard to contract performance, including ways that the parties would ensure meeting the performance of work requirements, as required by 13 C.F.R. §§ 124.513(c)(6) & (7). The Area Office also found that it was not clear from the JVA how the JV would meet the work requirements of 13 C.F.R. § 124.513(d). The Area Office therefore found that the affiliation exception requirements were not met, and that IEI and Cityside were affiliated and thus not small.
OHA affirmed the Area Office. See Size Appeal of IEI-Cityside, JV, SBA No. SIZ-5664, decided June 16, 2015. OHA specifically held that the JVA’s mere statements that the Managing Director would, in the future, buy facilities, equipment and other resources, and that the venturers would each perform 50%, did not suffice to meet SBA’s JVA requirements or explain how the JV would meet the performance of work requirements. OHA expressly rejected the JV’s argument that it would have been impossible here, given the IDIQ nature of the proposed contract and uncertain geographic award areas, to provide greater specificity, stating (1) that SBA’s regs do not authorize an exception for situations where a JV “may have difficulty providing detailed information,” and (2) that it was not evident from the record here that it would have been “impossible” for the JV to have complied, noting that the RFP described the type of work and that the JV could have described “the types of work each joint venture partner would perform, and the resources each partner would contribute for each region awarded ….” The COFC, noting specifically the “substantial deference” due to SBA in interpreting its own regulations, rejected the JV’s court bid protest challenge to OHA’s decision. The Court found that all aspects of OHA’s decision were reasonable, and that the JVA did not contain the specificity required by SBA’s regulations. In sustaining OHA’s determination that the JV could have provided further detail, the Court noted that the “indefiniteness” aspect of this procurement went to the specific geographic areas and number of properties an awardee would manage, and not the work that would be performed and equipment, facilities and other resources necessary to perform such work. The Court further noted that both IEI and Cityside were experienced HUD contractors and indeed touted in the JV’s proposal the JV’s readiness to perform from “day one.” The Court also cited the detail that the JV provided both in its technical proposal and in a separate document that the JV had provided to the SBA District Office, but not incorporated in the JVA. As stated at the outside above, SBA program participants need to pay careful attention to these decisions and ensure that they include sufficient detail in their future JVAs and other agreements, so as to satisfy SBA’s new, more demanding, review and avoid risking losing awarded contracts, as happened here.
Posted on 08/31/2015 in Bid Protests, Contracting Opportunities, Contracting Rules and Regulations, Joint Ventures and Teaming Agreements, Small Business / Socioeconomic Issues, Subcontracting | Permalink
Feds Fall Short on Small Business Subcontracting and Other Goals for FY14
The U.S. Small Business Administration (SBA) recently announced the federal government’s Fiscal Year 2014 (FY14) small business goaling results and Small Business Procurement Scorecard. According to SBA, the federal government awarded a total of $91.1 billion in prime contracts to small business – an $8 billion increase over FY13. SBA naturally highlighted the fact that this equaled 24.99% of contracts awarded – the highest percentage since the 23% prime contracting goal was established in 1997 – enabling the government to meet this goal for a second year in a row. This achievement was accomplished through improvement in all five categories, including a record $13.5 billion in awards to Service-Disabled Veteran-Owned Small Businesses (SDVOSBs). However, the government failed to meet its 5% goal for prime contract awards to Women-Owned Small Businesses (WOSBs) and its 3% goal for HUBZone small businesses. The government also failed to meet its 34.06% subcontracting goal, and actually showed a decline from 34% to 33%. Importantly, this data and the continuing shortfalls in various categories, both government-wide and for specific agencies, create marketing opportunities for large and small businesses alike in putting together new proposal teams and marketing to the respective agencies.
By way of background, and as you likely already know, Congress has established an annual overall small-business contracting goal of “not less than 23 percent of the total value of all prime contract awards.” Congress also has established goals of 5% for awards to each of (i) Small Disadvantaged Businesses (SDBs), including 8(a)s, and (ii) WOSBs, and 3% for each of (iii) SDVOSBs and (iv) HUBZone Small Businesses. Similar goals exist for subcontracting by large businesses, requiring 36% of eligible subcontracting to go to small businesses, with the same percentages as for prime contracting applicable to each of the same four sub-categories. All of these goals are minimums, which agencies are encouraged to exceed. Indeed, each year each individual agency negotiates with SBA individual agency-specific goals for the coming year, based upon the specific agency’s past performance in each category. Thus, a specific agency’s goals may be significantly higher if the agency has shown an ability to achieve higher percentages in the past. The FY14 prime contract goaling numbers evidence the continuing emphasis on small business contracting, which is reinforced by the fact that agencies are now required to consider success in these areas in personnel evaluations, and bonus and promotion decisions, for senior agency officials.
This means that agencies across-the-board are focusing on at least maintaining, and likely increasing, their small business prime contracting, not only in the aggregate, but also in each of the relevant subcategories. In order to understand the mindset of any particular agency, it is important to analyze that agency’s goaling scorecard, and specifically the agency’s negotiated goals and past progress. Agency scorecards are available on SBA’s website at www.sba/content/small-business-procurement-scorecards. These scorecards reflect both the agency’s past openness to and success in contracting with the various small business communities, as well as areas in which the agency is falling short and may be particularly open to appropriate small business marketing initiatives.
Similarly, the continuing overall shortfall for small business subcontracting, and particularly the continuing shortfalls in overall small business, SDVOSB and HUBZone small business subcontracting, presents marketing opportunities for large businesses in assembling their proposal teams. Large businesses have the opportunity to set themselves apart from their competitors by aggressively seeking out and including in their proposals outstanding small businesses that will help both them and their customer agencies increase and exceed the agencies’ respective small business subcontracting goals. This is particularly important in those RFPs in which subcontracting plans and/or past subcontracting performance are identified evaluation factors. For large and small businesses alike, it is worth spending time focusing on the ways in which you can use this data to enhance your agency-specific marketing efforts, and how to address counter-marketing efforts by your likely competitors, particularly as we enter into the important fourth fiscal year quarter when agencies will be looking to enhance their FY15 goaling performance. Hopewell Darneille is responsible for the contents of this Article.© Jackson Kelly PLLC 2015
Posted on 07/20/2015 in Contracting Opportunities, Small Business / Socioeconomic Issues, Subcontracting | Permalink
Get Ready Women -- WOSB Sole-Source Awards Get Closer
As previously discussed here, the National Defense Authorization Act for Fiscal Year 2015 (the Act), made two important changes for Women-Owned Small Businesses (WOSBs). First, the Act authorized certain sole source awards to WOSBs, and second, the Act deleted the prior authorization for WOSBs to self-certify their status and eligibility for award. The Small Business Administration (SBA) has now issued a Proposed Rule to implement the new sole source award authority, and to amend SBA’s definitions of "underrepresentation" and "substantial underrepresentation." New Sole Source Award Authority: The heart of the Proposed Rule is the establishment of two new Subsections which essentially track the statutory sole source award authorization in the Act. Specifically, these new Subsections authorize sole source awards in industries identified by SBA in which WOSBs are underrepresented or substantially underrepresented where, based on market research, the contracting officer determines (1) that there is one responsible WOSB, but does not have a reasonable expectation that two or more qualifying WOSBs in the case of an industry in which WOSBs are substantially underrepresented, or two or more qualifying Economically-Disadvantaged WOSBs (EDWOSBs) where WOSBs are underrepresented, will submit offers, (2) the anticipated award price (including options) will not exceed $6.5M for manufacturing NAICS codes, and $4.0M for all other NAICS codes, and (3) award can be made at a fair and reasonable price. SBA states in the NPRM that "[]the objectives of this proposed rule are to put the WOSB Program on a level playing field with other SBA government contracting programs with sole source authority and to provide an additional, needed tool for agencies to meet the statutorily mandated 5% prime contracting goal for WOSBs." WOSB Status Protests: The Proposed Rule would amend 13 C.F.R. § 127.600, dealing with WOSB/EDWOSB status protests, to provide (1) that only SBA or the contracting officer may protest the proposed awardee’s WOSB or EDWOSB status in a sole source procurement, and (2) that any interested party may protest such status in any other WOSB or EDWOSB procurement. These procedures track those applicable to service-disabled veteran-owned small businesses (SDVOSBs) and HUBZone small businesses.
New Definitions of "Underrepresentation" and "Substantial Underrepresentation": Perhaps the most intriguing aspect of the Proposed Rule is SBA’s proposed adoption of new definitions of "underrepresentation" and "substantial underrepresentation." As you may know, these terms presently are defined in terms of a "disparity ratio" between awards to WOSBs vs. the percentage of WOSBs in the particular NAICS Code. "Underrepresentation" presently is defined as being where the disparity ratio is between 0.5 and 0.8, while "substantial underrepresentation" means a disparity ratio less than 0.5. The new definitions contain no reference to this disparity ratio, and instead propose a much more generic standard, stating that these terms will be "determined by a study using a reliable and relevant methodology." According to SBA, this change would allow SBA to conduct the required study within the new accelerated timeframe imposed by Congress "by providing SBA with the flexibility to conduct the most reliable and relevant study of WOSB participation in federal contracting." SBA further states, without any explanation, that "the new definitions of these terms would align more closely than the current definitions with the statutory intent of the 2013 NDAA and the 2015 NDAA." SBA does not further explain its intent. However, if adopted, it will be interesting to see whether this change results in a new, and possibly more liberal, determination as to the industries in which WOSBs are underrepresented, thus increasing the utility and value of WOSB status.
Deferred Implementation of the Deauthorization of Self-Certification: The Proposed Rule acknowledges that Congress eliminated the authorization for WOSBs to self-certify. However, SBA states that "[t]his statutory requirement … may require substantial resources … and require a more prolonged rulemaking before SBA can establish such a program." SBA further states, however, that "there is no evidence that Congress intended to halt the existing WOSB Program until such time as SBA establishes the infrastructure and issues regulations implementing the statutory certification requirement." SBA therefore decided to implement the new sole source authority as quickly as possible, and defer implementing the new certification requirements through a separate future rulemaking.
Impact; Recommended Actions: SBA is inviting comments on the Proposed Rule on or before June 30, 2015. Given the beneficial aspects of the Proposed Rule and new sole source authority, we urge all WOSBs to strongly support prompt implementation of the Proposed Rule as issued. It is our understanding that SBA hopes to implement a final rule prior to year-end, and hopefully by the end of the FY fourth quarter. However, SBA acknowledges that the FAR also will have to be amended to include the new statutory sole source authority, so as to eliminate conflict between the existing FAR provisions and the proposed new SBA rules. At this point, the FAR Council has not established a FAR Case addressing this subject. We therefore urge that any submitted comments urge SBA to coordinate with and urge the FAR Council to issue its proposed implementation in the form of an Interim Rule, so as to expedite actual implementation of the new sole source authority. There is recent precedent for this approach provided by the FAR Council’s Interim Rule two years ago eliminating the former statutory cap on WOSB awards. Moreover, such would be consistent with Congress’ purposes in authorizing sole source awards, SBA’s primacy in this area, and the fact that SBA’s proposed rule so closely tracks the Congressional language.
WOSBs also should start informing their contracting officers as to this pending development, so that they are ready to take advantage of this new authority and flexibility once the final regulatory steps are completed later this year or early in 2016.
Posted on 06/08/2015 in Contracting Opportunities, Contracting Rules and Regulations, Procurement News and Analysis, Regulations (FAR, DFARS and others), Small Business / Socioeconomic Issues | Permalink