As I mentioned in a recent post, the Department of Defense (DoD) is using its “other transaction” authority with increased frequency to attract non-traditional defense contractors and to capitalize on the cutting-edge technological advancements found in the commercial marketplace. Other Transaction Agreements (OTAs) are not procurement contracts, grants, or cooperative agreements and, as such, many procurement laws and regulations do not apply, including the Competition in Contracting Act (CICA) and the Federal Acquisition Regulation (FAR). Continue Reading Bid Protests: Are Other Transaction Agreements (OTAs) Really Bulletproof?
If you gave me $17 million on the credit card, I could call Cabela’s tonight and outfit every soldier, sailor, airman and Marine, and I’d get a discount on it for a bulk buy. This is a pistol. The technology’s been around for five centuries, and arguably it’s the least important weapons system in the Department of Defense inventory.
Senior leaders within the Department of Defense (DoD) have grown increasingly frustrated with an acquisition system characterized by ever-increasing costs and significant delays in getting end items to customers. Their frustration has been heard by Congress and has resulted in recent Congressional action. The latest major acquisition reform effort started with the Fiscal Year (FY) 2016 National Defense Authorization Act (NDAA), with each subsequent NDAA containing various provisions that are meant to modernize and accelerate the antiquated and cumbersome federal acquisition system providing flexibility and allowing for the agile acquisition of next-generation technology. Continue Reading The Future of Acquisition in the Federal Government: Innovation and Rapid Procurement Through Other Transaction Authorities and Other Transaction Agreements
Earlier this month, my colleague, Michael Payne, and I attended Israel Industry Day sponsored by the Army Corps of Engineers (“USACE”) and the Israeli Ministry of Defense (“MOD”) in New York City. The purpose of the program was to present the Israel Foreign Military Sales (FMS) Construction Program and to introduce American and Israeli construction contractors and A/E firms to the upcoming construction opportunities in Israel. Information was provided on the general scope of USACE design build and design bid build projects within Israel; typical infrastructure and facilities being procured; potential repair, maintenance, and construction opportunities to support MOD facilities in Israel; as well as information on the solicitation and proposal process and various legal issues that apply to the Projects. Continue Reading Construction Opportunities in Israel for Federal Contractors
Last month, we outlined Congress’ plan to block the implementation of President Obama’s Fair Play and Safe Workplaces executive order. Today, we report that the prognosis has grown even more grim for the former President’s initiative, as both the House of Representatives and Senate have passed measures blocking the order from taking effect – now, the only remaining hurdle to a full repeal of the Fair Play and Safe Workplaces order is the signature of the President. Continue Reading The End is Near for “Fair Play and Safe Workplaces”
For the last few months, we have been following the troubled rollout of the “Fair Play and Safe Workplaces” rules, an Obama-era Executive Order that placed new requirements on contractors prohibiting certain labor practices. It is now becoming increasingly clear that the controversial act is likely to be a casualty of the new administration’s deregulatory agenda. Continue Reading Congress Strikes Blow to “Fair Play and Safe Workplaces”
- Report labor law “violations” of itself or any of its subcontractors (where the estimated value of the subcontract exceeds $500,000) under various federal employment and labor laws;
- Restrict the use of binding, pre-dispute arbitration provisions in non-collectively bargained employment contracts; and
- Establish “paycheck transparency” through the issuance of wage statements to all individuals performing work under a covered contract.
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.”)
Join partners Michael Payne and Ed DeLisle at the 2015 National 8(a) Association Winter Conference in Orlando, Florida for their presentation, “How to Effectively Team on a Federal Project.” In this discussion, Michael and Ed will explore the importance of well-crafted teaming agreements and how they are viewed by courts of various jurisdictions. They will also explore the practical implications of negotiating terms from both the prime and subcontractor perspectives, as well as cover the nuts and bolts of executing teaming arrangements on federal projects. For more information, or to register, please visit the National 8(a) Association website.
Cohen Seglias is a proud sponsor of the 2015 National 8(a) Association Winter Conference, which focuses on the federal, legal and business updates that impact the ever-changing world of federal contracting. This year’s conference will be held in conjunction with the TRIAD Winter Meeting, bringing over 85 additional Small Business Liaison Officers to the National 8(a) conference attendees.
With more than 500 companies and key government stakeholders represented, this is an event you can’t afford to miss!
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.
Edward T. DeLisle is a Partner in the firm and a member 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.
My partner, Ed DeLisle, and I recently attended two Industry Days sponsored by the Army Corps of Engineers (“USACE”). The first one was held in New York City on October 20th, and the second one was held in Tel Aviv on November 5, 2014. The purpose of the programs was to introduce American and Israeli construction contractors and A/E firms to the upcoming opportunities in Israel. Information was provided on the general scope of USACE design build and design bid build projects within Israel; typical infrastructure and facilities being procured; potential repair, maintenance and construction opportunities to support Israeli Ministry of Defense (“MoD”) facilities in Israel; as well as information on the solicitation and proposal process. The projects are funded by the Foreign Military Finance program and it is projected that hundreds of millions of dollars in military construction will be undertaken by the Corps in the near future, with significant expenditures in the next year.
The contracts, for the most part, will be solicited as Multiple Award Task Order Contracts (“MATOC”), but there will also be some stand-alone projects that will be solicited through individual Requests for Proposals. An important requirement of the program is that all of the contracts must be awarded to American companies, and those companies will generally be expected to perform at least 25% of the work with their own forces. That 25% does not necessarily involve field labor, and may be made up of activities associated with construction management. The idea is to assure that American companies benefit financially from the program and that they remain responsible for project completion. The Corps is understandably wary of companies that serve only as “brokers,” and expects the American contractors to be fully engaged in the performance of the projects.
Since most American companies will not want to incur the expense of sending their own labor forces to Israel, teaming arrangements with Israeli subcontractors will be vital. Fortunately, there are a number of very capable Israeli construction contractors interested in the work and many of them attended the Industry Day in Tel Aviv. At this point, however, there are more available Israeli subcontractors than there are American companies participating as primes, so the Corps is interested in generating more participation by American firms.
Given recent events, the first thing that many people will think about is whether it is safe to work in Israel. The answer is “yes,” not only because the extent of the turmoil is often exaggerated by the media, but because all of these projects will be performed on Israeli military bases. Even the recent rocket attacks from Gaza did virtually no damage because of the overwhelming success of the Iron Dome missile defense system. I can tell you that Ed and I were not concerned at all about our safety while in Israel and the daily life of Israeli citizens was entirely normal. That being said, American sureties are inherently risk averse and some contractors are having difficulty obtaining bonding. Although the Corps is currently requiring payment and performance bonds, there is also a possibility that some solicitations may permit Bank Letter Guarantees as the Corps has done in the past.
If you are interested in learning more about this program and the opportunities for American construction contractors, please contact us. We can put you in touch with both American and Israeli companies, as well as the knowledgeable people in the Corps of Engineers. The program is administered by the Europe District of the Corps located in Wiesbaden, Germany.
Michael H. Payne is the Chairman of the firm’s Federal 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…
By: Edward T. DeLisle, Kayleen Egan & Maria L. Panichelli
Is the Small Business Administration’s (“SBA”) minority business development program, also known as the “8(a) Program” unconstitutional? The legality of the program has been a hot topic of debate over the year, most recently due to a significant DC District Court case. That case, Rothe Development Inc. v. U.S. Department of Defense et al., C.A. 1:12-cv-00744, began in 2012 when Rothe Development, Inc. (“Rothe” or “the Company”) filed suit against the Department of Defense (“DOD”) and the SBA, claiming that the 8(a) program violates the Fifth Amendment due process clause.
The Company argued that race-based laws are constitutional only when they’re narrowly tailored to address a historic wrong. Claiming that there was not sufficient evidence of historic discrimination in federal contracting, Rothe argued that the DOD and the SBA did not have a compelling government interest justifying the racial classification of businesses. Rothe further argued that the remedial effect of the 8(a) program was speculative, and that the 8(a) program was not narrowly tailored to remediate discrimination. According to the company, the government was increasingly setting aside contracts for minority-owned or minority-controlled businesses, and the 8(a) program unfairly prevented it from competing for those contracts by giving companies owned by members of disadvantaged racial groups an unconstitutional advantage.
In May of this year, two conservative interest groups, the Pacific Legal Foundation (“PLF”) and the Mountain States Legal Foundation (“MSLF”), joined in, filing amicus briefs. These groups argued that the 8(a) program unconstitutionally deprived Rothe (and similarly situated companies) equal protection under the law, in violation of the Due Process Clause of the Fifth Amendment. Therefore, the NAACP Legal Defense and Educational Fund, Asian Americans Advancing Justice and the Leadership Conference on Civil and Human Rights fired back, filing their own amicus briefs and arguing that Congress was justified in enacting the 8(a) Program because discriminatory policies and practices have prevented the business development of minority entrepreneurs throughout our nation’s history.
The case now sits before the DC District Court on cross-motions for summary judgment, prompting small business insiders to wonder if Rothe will successfully lodge yet another challenge to minority owned businesses. That’s right, Rothe has filed numerous suits challenging the constitutionality of small business programs over the past few years, most recently Rothe Development Corp. v. U.S. Department of Defense, where Rothe successfully challenged a practice employed by DOD, NASA and U.S. Coast Guard to adjust prices by up to 10 percent to assist “small disadvantaged businesses” and to help the agencies meet the small, disadvantaged contractor goal. Rothe also previously intervened in a case filed by DynaLantic Corp., which protested the DOD’s decision to set aside a contract for military simulation and training services for minority-owned businesses. In that case, a D.C. District judge ruled that the 8(a) program was generally constitutional, but found that the DOD couldn’t use the program in the context of military simulation contracts because there was no evidence of discrimination in that industry.
Indeed, over the past few years, the federal courts have dealt two significant blows to government programs designed to increase the amount of contracts awarded to minority businesses. If the latest Rothe challenge is successful, it would be a huge blow to such programs. Considering almost 16 billion dollars in federal contracts were awarded to 8(a) contractors in 2012, this ruling could significantly change the way government contracts are awarded. We will keep you posted as this case progresses. Stay tuned for more updates.
Edward T. DeLisle is a Partner in the firm and a member of the Federal Contracting Practice Group.
Maria L. Panichelli is an Associate in the firm’s Federal Practice Group.
Kayleen Egan is a Summer Associate at Cohen Seglias.