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Jeffrey E. Jakob is an Associate in the Firm's Federal Construction Group. Jeff assists clients in a wide range of government contracting matters, including contracts, bid protests, and small business procurement issues. He also represents government contractors in all stages of litigation, including litigating claims under the Contract Disputes Act (CDA).

The coronavirus epidemic has disrupted our world in ways we could not have imagined a few weeks ago. In the midst of the crisis, the federal government is trying to do everything possible to keep businesses afloat, and that includes the continuation of current federal projects. We recently published a blog post addressing steps contractors should consider in order to protect their rights under contracts they are currently performing, but there is also a question about whether contractors should bid new projects. That is the focus of this article.

Almost all federal construction and supply contracts are solicited on a firm fixed-price basis. This type of contract is designed to provide the greatest opportunity for reward, coupled with the attendant risk of bidding incorrectly and incurring additional costs. The cost estimates that contractors must prepare before submitting a bid or proposal require a reasonable degree of foreseeability and certainty in the marketplace. In times of significant inflation or a shortage of resources as occurred during the energy crisis of the 1970s, it is difficult to predict the cost of materials for the life of a project. What we now face is far more disruptive. We are in the midst of a pandemic that is making it impossible to predict the availability, at any price, of labor, equipment, and materials in the weeks and months ahead. Predicting prices under those circumstances has nothing to do with sound business judgment – it requires a crystal ball.
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On January 30, 2020, the Department of Defense (DOD) released Version 1.0 of its Cybersecurity Maturity Model Certification (CMMC). Under the CMMC program, every contractor who works for the DOD, including subcontractors, will need to be certified at one of five levels. All DOD solicitations will specify which certification level is required for the contract, and contractors who do not have that certification will be ineligible for the contract. In order to obtain the certification, contractors will undergo an assessment by an independent third-party organization. 
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On December 3, 2018, the Department of Defense (DoD) issued a deviation from the FAR’s self-performance requirements, which applies to subcontracting limitations on contracts set aside for small businesses. Although the changes to subcontracting limitations were mandated by the 2013 National Defense Authorization Act (yes, 2013), implementation has been slow and piecemeal. The Small Business Administration (SBA) did not implement the changes until June 2016, and although the FAR Council recently issued a proposed rule that would bring the FAR into compliance, the FAR has not officially caught up. In the meantime, the discrepancy between the FAR and the SBA regulations has caused headaches for contractors who must decide whether to comply with the FAR, the SBA regulations, or both. The DoD’s deviation will bridge the gap for all DoD contracts until the FAR catches up. 
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The Small Business Administration (SBA) and the Department of Veterans Affairs (VA) finalized new regulations, effective October 1, 2018, that govern eligibility to obtain contracts that are set aside for veteran-owned small business and service-disabled veteran-owned small business (collectively, “(SD)VOSB”). The regulatory changes are intended to improve coordination between the VA’s “Vets First” program, which covers (SD)VOSB set-asides issued by the VA, and the SBA’s program, which covers (SD)VOSB set-asides issued by all other government agencies.

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