Federal Construction Contracting Blog

Federal Construction Contracting Blog

Legal Information and Resources for Federal Construction Contractors

Procurement Technical Assistance Center of Delaware: Two Seminars on the Same Day, One Price

Posted in Bid Protests, Contractor Information Sources, Event

On March 9th, 2016, join Maria Panichelli and Amy Kirby for their two seminars, “The Fundamentals of the Far Part 1, 2 and 3,” and “Debriefings, Bid Protests and Size Status Eligibility,”as part of the Procurement Technical Assistance Center of Delaware‘s (PTAC) two part seminar event, Two Seminars on the Same Day, One Price.

For more information on these seminars, please click here.

1.   The Fundamentals of the FAR Part 1, 2 and 3:

The United States Government is the world’s largest buyer of products and services. However, these purchases are governed by a very special set of rules and regulations known as the FAR, and its supplementary regulations. If you want to become a successful government contractor, you have to be intimately familiar with these governing rules and regulations, and the ways in which they affect the procurement process. In this session, experienced Federal Contracting attorneys provide an overview of the FAR, with a particular focus on how the FAR impacts the source selection process. We will walk you through the procurement process, from solicitation to award, explaining the most common types of contracts used by the government (Firm-Fixed Price, Cost-Reimbursable, IDIQ, MATOC etc), the various methods of procurement (Sealed Bidding, Contracting by Negotiation, LPTA, etc), and – most importantly – how the government will evaluate your bid/offer.

2.   Debriefings, Bid Protests and Size Status Eligibility:

In today’s federal contracting market, the source selection process is extremely competitive. Understanding protests and the procedures relating to protests can make the difference between getting the contract or getting left out of the race altogether.

There are so many questions: Was a contract improperly awarded to someone else? Is there any way to fight the agency’s decision and get the award after all? What are the differences between the various types of protests (Bid Protests, Size Protests, and Status Protests) and Size/Eligibility Investigations, and which one should you use?

This seminar will cover all aspects of the protest process. Learn how to use debriefings and protests as an affirmative tool to get the contract you want. We will walk through the debriefing and protest process and explain the who, what, when, where, why & how of filing a protest. You will also learn how to defend your business against, or even avoid, protests filed by frustrated competitors.

Maria L. Panichelli is an Associate in the firm’s Federal Contracting Practice Group. Her practice includes a wide variety of federal contracting and construction matters, as well as all aspects of small business procurement.

Amy M. Kirby is an Associate in the firm’s Federal Contracting Practice Group and focuses her practice on government construction litigation. Amy’s practice includes a wide variety of federal construction matters.

In a Major Win for Women Owned Businesses, SBA Expands WOSB/EDWOSB-Eligible Industry List

Posted in Contractor Information Sources, Small Business Contracting

On March 3, 2016, the SBA announced that it has expanded the list of industries in which a contract can be set-aside for women-owned small businesses (“WOSB”) or economically disadvantaged women-owned small businesses (“EDWOSB”). This expansion was mandated last year by section 825 of the National Defense Authorization Act for Fiscal Year 2015 (“NDAA”), which required numerous changes be made to the SBA’s WOSB/EDWOSB contracting program.

By way of background, the WOSB program authorizes Federal contracting officers to set a contract aside for WOSBs if: (1) there is “a reasonable expectation” that at least two WOSBs will submit offers that meet the requirements of the acquisition “at a fair and reasonable price”; and (2) if the acquisition is for a good or service in a North American Industry Classification System (“NAICS”) industry code in which SBA has determined that WOSBs are “substantially underrepresented.”  Similarly, EDWOSBs can receive set-asides in industries where the SBA has determined that WOSBs are “underrepresented” (but not “substantially” so). In other words, federal contracts can be set aside for WOSBs only if the contract’s NAICS code relates to an industry in which WOSBs are considered “substantially underrepresented” and federal contracts can be set aside for EDWOSBs if the NAICS code relates to an industry in which WOSBs are considered “underrepresented.”

Prior to the March 3 expansion, there were 83 four-digit NAICS industry groups identified by the SBA as areas in which women were either “underrepresented” or “substantially underrepresented.”  These lists were created in 2012, based on a 2007 report  authored by the Kauffman-Rand Institute for Entrepreneurship Public Policy. In our experience, at least, these 2012 lists excluded many industries in which our WOSB/EDWOSB clients were active, despite the fact those clients were clearly operating at a disadvantage due to gender.

Perhaps recognizing this issue, Congress amended the Small Business Act in 2014. The amended version of the Act required the SBA to conduct a new study concerning WOSB/EDWOSBs, and, in particular, the industries in which these businesses were truly underrepresented. Following the enactment of these amendments, the SBA asked the department of Commerce to assist with the required study. The Department of Commerce agreed, and it issued its report late last year. The report, which is definitely worth a read, made detailed findings concerning the challenges faced by women in the federal contracting arena. In news that no woman contractor will find surprising, the report concluded that women-owned businesses were less likely to win Federal contracts in 254 of the 304 industries included in the study! 

Clearly, something needed to change. After reviewing the report, the SBA determined that an expansion of the WOSB/EDWOSB eligible industry list was required. Specifically, the SBA found that 113 industry groups –  not only the previous  83 – should be eligible for set-aside contracting under the WOSB/EDWOSB Program. This includes 21 4-digit NAICS industry groups in which WOSBs are “underrepresented” (meaning contracting officers can make EDWOSB set-aside and sole source awards in these industries) and 92 4-digit NAICS industry groups in which WOSBs are “substantially underrepresented” (meaning contracting officers can make WOSB set-aside and sole source awards in these industries).

The expansion includes many notable additions. Most important for many of our clients, the expansion includes the addition of numerous construction-related NAICS industries to the WOSB set-aside approved list, including: Residential Building Construction (2361), Nonresidential Building Construction (2362), Utility System Construction (2371), Highway, Street, and Bridge Construction (2373), and Heavy and Civil Engineering Construction (23710). Other notable changes include the addition of Services to Buildings and Dwellings (5617), as well as education-related (6113, 6114, 6116, 6117) industries and medical-related (6211, 6214, 6215, 6219, 6221, 6231) industries to the WOSB-approved list, as well as the addition of Wired Telecommunications Carriers (5171) and Waste Collection (5621) to the EDWOSB-approved list.

This is a huge win for women-owned businesses. And it comes on the heels of another victory: on March 2, 2016, the SBA announ
ced that it had, for the first time ever, surpassed its five percent contracting goal for WOSBs. With the expansion of these lists, we are hopeful that more and more contracts can be set-aside for women businesses, and that the performance of these contracts can help foster the further growth of women-owned businesses. We will keep you posted on any new developments.

Michael H. Payne is the Chairman of the firm’s Federal Contracting Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues, and dispute resolution.

Maria L. Panichelli is an Associate in the firm’s Federal Contracting Practice Group. Her practice includes a wide variety of federal contracting and construction matters, as well as all aspects of small business procurement.

 

TargetGov: REAs and CDA Claims: Key Strategies in Seeking Compensation

Posted in Contractor Information Sources, Webinar

Thank you for joining us for Ed DeLisle and Maria Panichelli‘s  TargetGov webinar, “REAs and CDA Claims: Key Strategies in Seeking Compensation” on February 16, 2016.

After you’ve secured your Federal government contract award, what comes next? As any Federal contractor will tell you, the contract award is only the beginning. The FAR and its supplementary regulations impose a host of obligations on contractors, and can impact the ways in which a contractor performs a contract. These rules and regulations also dictate the ways in which those contractors can seek compensation for unanticipated costs incurred on the job. In this webinar, Ed and Maria will explore Requests for Equitable Adjustment, Claims, and the differences between the two. As they walk you through the Contract Disputes Act process, you will also learn how to maximize your chance of success when making claims against the Federal government.

You can listen to their webinar here.

Edward T. DeLisle is Co-Chair of the Federal Contracting Practice Group. Ed frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues and dispute resolution.
Maria L. Panichelli is an Associate in the firm’s Federal Contracting Practice Group. Her practice includes a wide variety of federal contracting and construction matters, as well as all aspects of small business procurement.

The National 8(a) Association 2016 Winter Conference

Posted in Bid Protests, Events, Small Business Contracting

Ed DeLisle will present his seminar, “Navigating the Protest and Claims Processes as a Small Business,” on February 9th at the National 8(a) Association 2016 Winter Conference in Orlando, FL.

The conference is a two day event held on February 9th and 10th and will focus on federal and legal updates and how to navigate the ever-changing world of federal contracting. The nation’s top legal firms and the industry’s best consultants will be there to help 8(a) certified and non-8(a) certified businesses gain the valuable education, promotion, and federal contracting information they need to further advance their level of experience and achieve a higher degree of success.

For more information, and to register for the National 8(a) Association Winter Conference, please click here.

Edward T. DeLisle is Co-Chair of the Federal Contracting Practice Group. Ed frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues and dispute resolution.

Deciding Whether to File a GAO Bid Protest

Posted in Bid Protests, Federal Procurement Policy

The Government Accountability Office (“GAO”) issues statistics each year regarding the outcome of bid protests.  In 2015, there were 2,639 cases filed and there we 587 decisions on the merits.  Of those, only 68 protests were sustained.  According to the way the GAO presents its statistics, that would indicate that protestors prevailed approximately 12% of the time.  In reality, since many protests were withdrawn or summarily dismissed, the protesters only prevailed in 68 of the 2,639 protests filed and the true success rate was closer to 3%.  With those odds, why would anyone file a GAO bid protest?  The answer requires a little closer scrutiny since statistics can be misleading.

There are a number of protests which should not have been filed in the first place since they are not supported by the facts or case precedent.  This could have been avoided by thorough legal research of prior decisions of the GAO and the United States Court of Federal Claims.  Careful screening before filing a protest will ultimately lead to a greater number of potentially meritorious protests.  It must always be kept in mind, however, that great deference is shown to the discretion of contracting officers.  What that means is that if the source selection boils down to a judgment call, the government is going to prevail.

The GAO reported that the most prevalent reasons for sustaining protests were:

(1) unreasonable cost or price evaluation

(2) unreasonable past performance evaluation

(3) failure to follow evaluation criteria

(4) inadequate documentation of the record

(5) unreasonable technical evaluation.

It is important to note that a significant number of protests filed with the GAO do not reach a decision on the merits because agencies voluntarily take corrective action in response to the protest rather than defend the protest on the merits.  Agencies need not, and do not, report any of the myriad reasons they decide to take voluntary corrective action.  If an agency decides to take corrective action, however, it may mean that the protest has merit and the corrective action may lead to a re-evaluation of the proposals.  In many cases, this is very outcome that would have resulted from a GAO decision.  In cases where the GAO dismisses the protest because the agency decides to take corrective action, those protests are not be included in the GAO’s calculation of protests decided on the merits.

One drawback in the system, however, is that in a negotiated procurement the protester is operating at a disadvantage because the source selection decision and supporting documents are not available for review.  This puts the protester in the difficult position of having to file the protest in order to determine whether there is a sound basis for the protest.  The critical agency documents are only made available to the protester’s attorney under a protective order.  It may be that after the protester’s attorney reviews the documents, which he is not permitted to share with this client, it will become apparent that the agency made a proper source selection.  That does not mean that the protest should not have been filed, however, because the protest was essential in order to obtain the best information.  There was also a possibility that favorable documents would have been located that may have led to a successful protest.  In fact, all of the most prevalent reasons for sustaining a protest, as listed above, were dependent upon review of the agency’s documents after the protest was filed.

Michael H. Payne is the Chairman of the firm’s Federal Contracting Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues, and dispute resolution.

Amy M. Kirby is an Associate in the firm’s Federal Contracting Practice Group and focuses her practice on government construction litigation. Amy’s practice includes a wide variety of federal construction matters.

Termination for Default Held Improper

Posted in Contractor Information Sources

A contractor performed a project involving the construction of stone dike extensions and other work at four sites on the Mississippi River.  Nelson, Inc.  ASBCA No.  57201 (December 15, 2015).  One of the issues was whether the four distinct sites were separable for purposes of applying the Termination for Default clause (FAR 52.249-10).  In other words, the question was whether the contractor could be terminated for failing to diligently prosecute the work on one of the four work sites, even though the overall contract allowed 165 days for completion.  The Board stated that “Where a contract is separable (sometimes also referred to as severable, or divisible) and a contractor is delinquent only as to a separable part of the contract work, it is improper for the contracting officer to terminate for default the entire contract.”  The contractor would not be prohibited from continuing performance on any of the sites where work was being performed in a timely manner.

However, the Board ruled that the termination for default was improper as to all of the sites.  On two of the sites, “Friars Point” and “Crow Island,” no separate Notices to Proceed were issued and, consequently, the time for performance of the work at those sites never commenced and there was no completion date or “delay” in performance at either site. The Board stated that “Without a start and completion date, there is no yardstick to measure whether Nelson failed to diligently prosecute the work at those separable sites.”  As to the other two sites, “Loosahatchie” and “Robinson Crusoe,” the Board found that the Corps failed to properly consider time extensions that were due and miscalculated the required completion dates at those sites.  As a result, the Board found that the default termination was “precipitate and unjustified.”

The decision applied the well-established requirement that the government has the burden of proving that the termination for default was justified. Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 764 (Fed. Cir. 1987).  Discount Co. v. United States, 554 F.2d 435, 441, cert. denied, 434 U.S. 938 (1977), interprets the clause to require the government to demonstrate a “lack of diligence such that the government [cannot] be assured of timely completion” (emphasis added).  In Lisbon Contractors, 828 F.2d at 765, the Federal Circuit construed the clause to require “a reasonable belief on the part of the contracting officer that there was no reasonable likelihood that the [contractor] could perform the entire contract effort within the time remaining for contract performance.”  Since there has been a greater willingness on  the part of some government agencies to terminate contracts for default, contractors are well advised to do everything possible to prevent premature terminations and to be mindful of the considerable burden imposed on the government.

Michael H. Payne is the Chairman of the firm’s Federal Contracting Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues, and dispute resolution.

Small Business Contracting May Be Very Different in 2016

Posted in Contractor Information Sources, Small Business Contracting
This article was originally published by Law360 on December 16, 2015.

In the past year, the Small Business Administration has issued proposed rules that will likely result in major regulatory changes. Some of the most important changes are those relating to its mentor-protege program, and the performance of work requirements for prime contractors. The proposed rules affecting these areas have the potential to substantially alter the landscape of small business contracting in 2016.

The Actions of the Small Business Administration in 2015 Could Bring About Substantial Changes to Mentor-Protege Programs in the Coming Year

The intent of mentor-protege programs, generally, is to partner small business concerns with established businesses for the purpose of increasing the small business’ ability to win contracts and subcontracts, and otherwise succeed. Through these programs, mentor businesses provide business and technical assistance to their proteges. In February 2015, the SBA issued a proposed rule that would establish one governmentwide mentor-protege program for all small businesses, while continuing to operate the separate mentor-protege program available to participants in the 8(a) Business Development Program. The proposed rule would expand the program to small businesses other than those in the 8(a) program and would allow all entities in SBA approved mentor-protege relationships to seek opportunities, as joint venture partners, for which the protege entity is eligible. The finalization of this rule could mean big changes for small businesses in 2016.

The authority of the SBA to issue this proposed rule was granted to it by the Small Business Job Act of 2010 and the National Defense Authorization Act for Fiscal Year 2013. The 2010 Jobs Act permitted the SBA to establish mentor-protege programs for the Women-Owned Small Business Program, the HUBZone Program, and the Service-Disabled Veteran-Owned Small Business Program. It dictated that these mentor-protege programs be modeled after the mentor-protege program already available to participants in the 8(a) program.

The NDAA of 2013 further expanded the authority of the SBA relating to mentor-protege programs by empowering the SBA to create a mentor-protege program for all small business concerns, not only socioeconomically disadvantaged companies. Similar to the 2010 Jobs Act, the NDAA of 2013 required that mentor-protege programs be identical to the existing mentor-protege program for the 8(a) program, but also allowed the SBA to modify the program if necessary based on the type of small businesses participating as proteges. Furthermore, the NDAA of 2013 required approval by the SBA if any federal department or agency wished to operate, or continue to operate, its own mentor-protege program. While the 2010 Jobs Act and the NDAA of 2013 granted the SBA the power to change the structure of mentor-protege programs, the SBA failed to take any action until this year.

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Timely Documentation is Critical

Posted in Contractor Information Sources, Federal Procurement Policy, Procurement Information

In a recent decision by the Armed Services Board of Contract Appeals, Dick Pacific Construction Co., Ltd., ASBCA No. 57675 et. al., decided on December 15, 2015, the Board repeated something that has been said many times before:

We consider daily logs to be the most reliable evidence of what actually happened during construction. Technocratica, ASBCA No. 46567 et al., 99-2 BCA ¶ 30,391 (“Daily inspection reports have been held to be prima facie evidence of the daily conditions as they existed at the time of performance.”)

Boards and courts often refer to daily reports as “contemporaneous records,” because they were created at the time that the events occurred and usually well before a claim was anticipated.  It is for that reason that such records are assigned greater credibility than documents created after the fact.Inspector at construction ares

Field personnel on a construction project have many important things to do in a given day, but they are well advised to take the time to record specific events that may have an impact on the time or cost of performance.  The “remarks” section on a daily report is particularly important.  If a Quality Control Representative is asked to testify about conditions on the site that occurred several years earlier, the memory of the witness will be much more believable if his recollections are supported by contemporaneous records.

Michael H. Payne is the Chairman of the firm’s Federal Contracting Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues, and dispute resolution.

Legal Landscape: Top News in the Mentor-Protégé Program, Bond Claims & DBE Fraud

Posted in Contractor Information Sources, Small Business Contracting

WeOnviaLegalLandscapelcome to the third edition of Legal Landscape, a series we have developed with Onvia’s blog to provide government contractors with a quick, but thorough, summary of important legal developments and regulations in government contracting, as well as a plain-English explanation of how those developments may affect contractors at all levels of government. In this issue, we discuss recent trends in federal, state and local government contracting. Contractors should keep in mind that state and local agencies often look to changes in federal regulations as a guide for future changes at their respective levels. Changes recently made in the federal arena are likely to trickle down to state and local governments soon.

1) The SBA Offers Some Specifics on the Expansion of the Mentor-Protégé Program

As many government contractors may know, in February 2015, the U.S. Small Business Administration (SBA) issued a proposed rule aimed at expanding its mentor-protégé program. The proposed regulations would implement changes introduced by the Small Business Jobs Act of 2010 and the National Defense Authorization Act of 2013, and would permit a wide array of small businesses to participate in the SBA’s mentor-protégé program. Currently, only 8(a) certified firms can take advantage of the many benefits offered SBA’s mentor-protégé program, including a broad exception to affiliation for mentor-protégé joint ventures.

While this was great news for many back in February 2015, it has been nine months since this proposed rule was issued and we have yet to see an interim, or a final, rule. The delay has many government contractors asking when the SBA is actually going to put these changes into effect. Well, we now have some idea: Sometime in the first quarter of 2016.

On October 27, 2015, the U.S. House of Representatives’ Committee on Small Business Subcommittee on Contracting and the Workforce, chaired by U.S. Representative Richard Hanna, held a hearing entitled “Maximizing Mentoring: How are the SBA and DoD Mentor-Protégé Programs Serving Small Businesses?” Based on the testimony given at the hearing, and the information compiled in the Subcommittee’s related memorandum, it appears that a final rule will be issued in the first quarter of fiscal year 2016, and that the agency hopes to launch a pilot program sometime in the summer of 2016.

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Defenses to a Termination for Default

Posted in Contractor Information Sources

In a post publisConstruction Sitehed in 2013, we addressed the use of termination for default as a weapon. Unfortunately, construction contractors who fall behind schedule are automatically on the defensive and they rarely find that contracting officers are willing to concede government responsibility. The government, of course, is in a difficult position when it must explain to its customer – the end-user – that the scheduled completion date will not be met. All too often, instead of admitting that the contractor is not responsible, the threat of a termination for default is held over the contractor’s head because it is easier to blame the contractor than to admit that the government made a mistake.

The standard FAR “Default” clause (FAR 52.249-14) provides that a delay is excusable and does not provide a valid basis to terminate the contract for default if it is “beyond the control and without the fault or negligence” of the contractor. For a delay to be excusable under a construction contract, it must also be “unforeseeable.” A contractor may be excused if the delay is caused by defective government specifications, differing site conditions, constructive changes, a waiver of the contract completion date, or a failure of the government to comply with the procedural requirements that must be followed to support a termination for default. It is important for a contractor to document government-caused delays as they occur, rather than waiting to build a case after the fact.

The cases have held that a default termination is a drastic action that must not be undertaken without good cause. The FAR (49.402-3(f)) lists the factors that a CO “shall consider” in determining whether to terminate a contract for default:

  1. The terms of the contract and applicable laws and regulations.
  2. The specific failure of the contractor and the excuses for the failure.
  3. The availability of the supplies or services from other sources.
  4. The urgency of the need for the supplies or services and the period of time required to obtain them from other sources, as compared with the time delivery could be obtained from the delinquent contractor.
  5. The degree of essentiality of the contractor in the Government acquisition program and the effect of a termination for default upon the contractor’s capability as a supplier under other contracts.
  6. The effect of a termination for default on the ability of the contractor to liquidate guaranteed loans, progress payments, or advance payments.
  7. Any other pertinent facts and circumstances.

If a contractor has abandoned performance, or has clearly demonstrated an inability to complete the project in a timely manner, the decision to terminate is easy and difficult to oppose. In many cases, however, there are excusable causes of delay and it is not uncommon for defective specifications to be the culprit. Although FAR 52–233–1(i), requires a contractor to “proceed diligently with performance” while a dispute awaits resolution, there may be extenuating circumstances. For example, the Court of Federal Claims has stated that a contractor may be excused when the Government fails to provide reasonable clarification of a contract’s scope of work upon request. It has also been held that a contractor is not always obligated to continue performance if the decision to stop work is warranted by the particular facts.

We are not suggesting that a contractor should feel free to stop performance because it believes there is an excusable cause of delay. That is a dangerous strategy and should always be discussed with legal counsel. Let’s face it, it is difficult for a contractor to defend its position after it has been terminated. The interim financial hardship and impact to its performance rating is too severe. It is important, however, for a contractor to thoroughly document what has occurred and to continuously inform the government about why the delays are not its fault. A delay analysis that shows the impact of events to the critical path, with an emphasis on government-caused impacts, can be very useful. In the end, be courteous, vocal, persuasive, engaged, and never be silent.

Michael H. Payne is the Chairman of the firm’s Federal Contracting Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues, and dispute resolution.