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Michael H. Payne

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As Chair of the firm’s growing Government Contracting Group, Michael represents contractors, subcontractors, and suppliers on a wide range of federal contracting issues, including the interpretation of solicitation and contract provisions, the filing of bid protests, resolution of disputes, and the preparation of contract claims and the litigation of appeals. Michael has vast experience in federal government contracting, stemming from his time as Chief Trial Attorney for the North Atlantic Division of the Army Corps of Engineers, and is recognized in the federal construction contracting industry as an attorney who enjoys a good working relationship with government agencies.

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A new regulation announced by the Small Business Administration on November 15, 2006, to be effective on June 30, 2007, requires small businesses to recertify their size when they are purchased by or merged with a larger business, or at the end of the five-year point of a contract.  The rules are intended to help small businesses obtain more federal contracts and to assure that contracts set aside for small businesses are not going to larger companies.  As reported in the Thompson West publication, the Government Contractor Online Update, “According to SBA Administrator Steven Preston, the changes “will go a long way toward ensuring that contract awards get in the hands of small business owners, federal agencies get the proper credit toward their small business contracting goals and small business contracts are fairly and accurately reported..’”

There are critics of the new policy, however, who contend that the SBA has not gone far enough to prevent larges businesses from intruding into the small business marketplace.  The American Small Business League has commented that “A new policy proposed by the Small Business Administration (SBA) and the Office of Federal Procurement Policy (OFPP) will allow the government to continue reporting awards to large companies as federal small business contracts.” (See the full article).

Pertinent parts of the new regulation are as follows:Continue Reading New SBA Regulations Require Small Businesses to Recertify After Five Years

Federal construction contractors need to be aware that an unbalanced bid can be rejected as nonresponsive. FAR 52.214-10(e) provides that:

“The Government may reject a bid as nonresponsive if the prices bid are materially unbalanced between line items or subline items.  A bid is materially unbalanced when it is based on prices significantly less than cost for some work and prices which are significantly overstated in relation to cost for other work, and if there is a reasonable doubt that the bid will result in the lowest overall cost to the Government even though it may be the low evaluated bid, or if it is so unbalanced as to be tantamount to allowing an advance payment.”

Unbalanced bidding becomes a problem if the government believes that the bidder who submitted the apparent low bid according to the method by which the low bid was to be determined for evaluation purposes, in all probability will ultimately perform the project at a higher cost than the second bidder. In other words, the idea is that the low bidder has managed to “trick” the system by managing to be evaluated as low at bid opening, but through an unbalancing strategy has made it likely that he will be paid more than it appears. For example, if a solicitation requests bids on both an underrun and an overrun quantity for the same item (i.e. a unit price price for over 10,000 cubic yards and a unit price for under 10,000 cubic yards), with both bid item prices to be counted for bid evaluation purposes, an unbalanced bid would insert a very high price for the item likely to overrrun, and a very low price for the item likely to underrun. The bidder thereby would be planning to be paid a lot more than reflected by its bid because of its “educated guess” that there will be a windfall occasioned by an overrun.Continue Reading The Hazards of Unbalanced Bidding

The GAO issued a decision today reiterating a familiar theme: Where a protester’s proposal failed to provide information specifically requested by the solicitation and necessary for evaluation purposes, the agency’s evaluation of the proposal as “poor” was reasonable.

The solicitation required the submission of a proposal with sections addressing the offeror’s past performance, technical approach…

The purpose of this blog is to give the construction industry the benefit of our insights about the latest developments in federal construction contracting. We closely monitor the decisions of the courts and the administrative boards of contract appeals and we will explain the practical meaning of those decisions in terms that will make sense to a…