Albert B. Krachman
A recent U.S. Government Accountability Office decision involving a Small Business Administration-approved small business joint venture, or JV, suggests that JVs between large and small firms should adjust their proposal strategies to avoid downgrades on past performance when the small business JV member, and the JV itself, lack relevant past performance.
Proposing on a set-aside contract as an SBA-approved JV between a small and large business has been an effective strategy for many years. A basic assumption of this approach—and a primary motivation for using a JV structure—has been that an agency evaluating the JV’s past performance would normally look at the combined past performance of the JV members.
In many respects, this evaluation assumption has been a main motivation for using the JV structure, in contrast to a prime-subcontractor structure.
Typically, the large business JV member will have greater and more relevant past performance than the small business. The thinking had been that the JV structure would allow both members to leverage the large JV partner’s past performance for evaluation purposes by imputing the large business’ past performance to the JV.
However, the recent GAO bid protest decision in ProSecure LLC calls this assumption into doubt, suggesting the need for adjustments to proposal strategies for large and small firms in JVs or that plan to use JVs.
To read the full article, please click here.
“Adapting JV Proposal Strategies after GAO Downgrade Ruling,” by Albert B. Krachman was first published in Law360 on June 17, 2020.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law. This massive $2.2 trillion economic package provides a host of opportunities and resources for all varieties of federal contractors—from those who need financial assistance through the coronavirus pandemic to those who can leverage their resources to assist the federal government in its response.
The five timely posts below discuss discrete portions of the CARES Act, how they might affect federal contractors, and what federal contractors can do to take advantages of the many programs and opportunities offered under the Act. Please contact us for assistance with any of these, or other components, of the Act.
1. The CARES Act Provides Much Needed Financial Relief for Small Businesses
Michael Joseph Montalbano
This article discusses the expanded $349 billion loan program set aside for small businesses under the CARES Act.
2. CARES Act § 3610: An Immediate Lifeline for Qualifying Federal Contactors Displaced by COVID-19
Michael J. Slattery
This article discusses § 3610 of the CARES Act, which provides funds that federal agencies can use to alleviate disruptions to federal contractors caused by the coronavirus pandemic.
3. CARES Act Grant Programs: Searching for Opportunity in the Coronavirus Relief Effort
Tjasse L. Fritz
This article discusses the wealth of grant programs available to federal contractors and other businesses under the CARES Act.
4. CARES Act: Significant Funds for Defense Department and Defense Contractors
This article discusses the billions of dollars in loans, loan guarantees, and other financial assistance available through the Department of Defense to defense industry contractors.
5. New Contracting Authorities and Preferences Established under the CARES Act
Albert B. Krachman
This article discusses new contracting authorities delegated under the CARES Act as well as sole source opportunities available under the Act.
As COVID-19 issues permeate virtually all aspects of commerce nationally and internationally, we stand ready to help. Blank Rome’s Coronavirus (“COVID-19”) Task Force includes interdisciplinary resources across every business sector from insurance recovery to HR.
Albert B. Krachman
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) creates several new contracting authorities that will present new business opportunities to firms offering COVID-19-related supplies and services. In some cases, the CARES Act also establishes specialized contracting priorities or preferences to contractors with particular service experience or qualifications, expertise, or ownership characteristics. The law also permits certain awards to be made without competition—in other words, sole source contracts—without the Justification and Approval normally required for such awards. This post surveys some of these new contracting authorities and award preferences.
New Contracting Authorities
The CARES Act delegates extensive new contracting authorities to the Department of Health and Human Services (“HHS”) and creates many new organizations with specific contracting authority. Here is a brief list of some of the key delegations and new organizations with contracting authority:
Blood Donor Awareness
The Act charges the Secretary of HHS with starting a national campaign about the importance of blood donation. Section 3226(b) of the Act gives the Secretary authority to contract with one or more public or private nonprofit entities to establish this campaign. These nonprofits will then engage advertising and public relations firms to execute the awareness programs. Media firms with public health communications experience will have an edge in securing this work. Continue reading “New Contracting Authorities and Preferences Established Under the CARES Act”
Albert B. Krachman and Scott Arnold
Contractors that have submitted final proposals and are awaiting award on negotiated procurements may find themselves in an unusual position these days—questioning whether they still want the award in the dramatically changed landscape created by coronavirus COVID-19. In some cases, key personnel may no longer be available or critical supply chains may have become so disrupted that the proposal would require major changes to the technical approach. Assumptions that went into proposal pricing may no longer be valid.
Contractors in this posture may face a Hobson’s choice. Should they hold firm, accept the award, and hope the government is flexible post award? If they believe that they likely cannot perform as proposed, should they withdraw their proposals or risk proposal rejection by submitting late proposal revisions?
In some cases, depending on the stage of the acquisition, there may be opportunities for proposal revisions, but the government typically notifies offerors of a time after which revisions will not be accepted. In a FAR Part 15 acquisition, before the closing date for receipt of proposals, a contractor is generally free to submit proposal revisions. If the government conducts discussions, a contractor is also generally able to revise its proposal, subject to limitations that can be imposed on the permissible scope of revisions. Offerors may withdraw proposals at any time before award. Continue reading “Pending Federal Contract Proposals and COVID-19”
Albert B. Krachman
Although firms that offer coronavirus COVID-19 solutions can use many routes to access the federal marketplace, very few of these routes can lead to a sole source contract. One such vehicle is the unsolicited proposal. An unsolicited proposal can result in a sole source contract if the firm’s proposed solution is unique enough to support a Contracting Officer’s sole source Justification and Approval. Recent case law has established that the government has a legal obligation to fairly evaluate unsolicited proposals, so in effect, submission of an unsolicited proposal creates an implied contract with the government that obligates the government to evaluate the firm’s proposal fairly (but not necessarily to award a contract to the firm). Scott v. U.S., No. 17-471C, 2017 WL 4785353 (Fed. Cl. Oct. 24, 2017).
Companies with innovative solutions that have not been the subject of procurement contracts or grants can use this vehicle to offer their goods or services to the federal government on this exclusive basis. Continue reading “Using Unsolicited Federal Contract Proposals for Sole Source COVID-19 Related Contract Awards”
Albert B. Krachman and Dominique L. Casimir
The Department of Defense’s (“DoD”) Office of Under Secretary of Defense for Acquisition and Sustainment issued Guidance on March 10, 2020, addressing internal and external communications in response to the coronavirus COVID-19 pandemic. See Planning for Potential Novel Coronavirus Contract Impacts.
The Guidance states that the Contracting Officers (as distinguished from Program personnel) hold the contractual authority to address contract performance impacts related to COVID-19. Moreover, the Guidance encourages close communication between Contracting Officers and contractors, and stresses Contracting Officer transparency, a term not normally seen in contract administration guidance. In pertinent part the Guidance states as follows:
Communication between the Government and contractors is key to total workforce safety and mission continuity. Therefore, contracting officers should be as transparent as possible as they make decisions potentially impacting contract performance or contractor personnel. Contracting officers should also encourage their contractor site leads/leadership to engage with their employees as soon as possible to share information and discuss any COVID-19 concerns they have, and ask their contractors to identify potential impacts to the welfare and safety of their workforce or contract performance, which impacts our total force. Continue reading “DoD Urges Contracting Officer Transparency in COVID-19 Impacts”
Albert B. Krachman, Scott Arnold, and Michael J. Slattery
As the coronavirus (“COVID-19”) pandemic continues its mass global disruption, federal contractors should take or accelerate steps to protect themselves. Three steps stand out in our view:
- review contracts;
- identify and document cost disruptions; and
- communicate, communicate, communicate—in writing—with your Contracting Officers.
How You May Be Impacted
How might your business be impacted? Supply chain disruptions may deprive contractors of materials required to stay on schedule and complete performance. COVID-19 exposure for employees and key personnel may deprive the contractor of needed labor. Spread of the disease among government employees may lead to a delay in approvals, or could lead to a quarantine of government facilities, which could impact the ability of service contractors to timely perform their contractual obligations—not unlike a government shutdown. (See Government Contractor Shutdown Advisory for steps to be taken if government facilities are quarantined or shut down due to the virus). Continue reading “Three Vital Steps to Prepare For COVID-19 Impacts to Contract Performance”
Luke W. Meier and Albert B. Krachman
The Government Accountability Office (“GAO”) has released its Annual Report to Congress summarizing bid protest activity for Fiscal Year 2019 (B-158766). The report shows that the number of protests has fallen, the effectiveness rate has remained high and remarkably stable, and hearings have made a bit of a comeback.
The chart below summarizes the GAO protest statistics from FY 2014 to FY 2019.
Here are four key takeaways from the latest report. Continue reading “Still Effective: Four Takeaways from the FY 2019 GAO Protest Statistics”
Justin A. Chiarodo and Albert B. Krachman
With yet another government shutdown looming, contractors face a number of uncertainties and challenges that warrant close attention—regardless of whether a shutdown takes place or how long it lasts. Among other challenges, contractors may face a lack of incremental funding; the inability to enter into new contracts or contract modifications; closed government facilities; furloughed government employees; delayed payments; increased indirect costs; and unexercised and deferred contract options. Below we offer six suggestions to help address key areas impacted by a shutdown, including contract funding, internal and external communications, recordkeeping, and deadlines. Continue reading “Government Contractor Shutdown Advisory”
Albert B. Krachman and Lyndsay A. Gorton
On June 14, 2016, the Senate passed the National Defense Authorization Act (“NDAA”) for Fiscal Year 2017, S. 2943, by a vote of 85-13. The final bill grants to the military a $602 billion budget, and includes what Senator Harry Reid has called “several needed reforms,” which include bid protest reforms. The bill, drafted by the Senate Armed Services Committee (“SASC”), includes language that would amend statutes related to bid protests at the Government Accountability Office (“GAO”) to require a “loser pays” scheme and the withholding of profits on bridge contracts. President Obama has threatened to veto the NDAA when it crosses his desk due to provisions unrelated to the proposed bid protest reforms.
The House of Representatives passed its version of the NDAA on May 18, 2016, by a vote of 277-147. The House bill, H.R. 4909, does not include similar bid protest-related provisions to those in the Senate bill, and only requires that the Secretary of Defense enter into a contract with an “independent entity with appropriate expertise to conduct a review of the bid protest process related to major defense authorization programs.” The “independent entity” would be required to submit interim findings on bid protest trends by March 1, 2017, and a final report of findings by July 1, 2017. Continue reading “Senate Seeks to Disincentivize Certain Protesters in 2017 National Defense Authorization Act”