Pending Federal Contract Proposals and COVID-19

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”

Three Vital Steps to Prepare For COVID-19 Impacts to Contract Performance

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:

    1. review contracts;
    2. identify and document cost disruptions; and
    3. 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”

Federal Circuit Maintains That Contractors Must Read between the Lines to Determine Expressly Unallowable Costs

Scott Arnold and Carolyn Cody-Jones

A recent Federal Circuit decision has sustained an expansive judicial reading of what constitutes an expressly unallowable cost under FAR Part 31. This decision, reached in the context of lobbying expenses, provides the potential for expansive precedent for future disputes regarding what expenses constitute expressly unallowable costs. Including expressly unallowable costs in submissions to the government can result in penalties up to two times the amount of the disallowed cost. Taking into account this decision as well as the Defense Contract Audit Agency’s (“DCAA”) expressly unallowable cost guidance released earlier this year, contractors should review their policies and procedures for identifying and excluding unallowable costs from invoices and proposals on government contracts, and consider whether to broaden their policies. Continue reading “Federal Circuit Maintains That Contractors Must Read between the Lines to Determine Expressly Unallowable Costs”

Technical Data Rights Protections Eroded by FY19 NDAA

Scott Arnold and Carolyn Cody-Jones

The Fiscal Year (“FY”) 2019 National Defense Authorization Act (“NDAA”), H.R. 5515, 115th Cong., 2d Sess. (2018), passed both chambers of Congress at breakneck speed this year, the fastest pace in approximately 20 years, and was presented to President Trump on August 3, 2018. The bill enjoyed substantial bipartisan support in both the Senate and the House. It authorizes a $717 billion national defense budget and also reforms certain practices. Continue reading “Technical Data Rights Protections Eroded by FY19 NDAA”

Certified Cost and Pricing Data Thresholds to Increase July 1, 2018

Scott Arnold and Sara N. Gerber

On July 1, 2018, the threshold for obtaining certified cost and pricing data increases substantially from $750,000 to two million dollars. The change was authorized by the Department of Defense pursuant to a class deviation, pending official rulemaking and publication in the Federal Acquisition Regulation (“FAR”). The class deviation implements Section 811 of the National Defense Authorization Act (“NDAA”) for Fiscal Year 2018, which raised the certified pricing threshold contained in the Truthful Cost or Pricing Data Act (still commonly referred to as “TINA” based on the former name of the relevant statute, the Truth in Negotiations Act). The Civilian Agency Acquisition Council recently followed suit, advising other federal agencies that they “may authorize a class deviation to implement the threshold change.” In addition to the increase under the NDAA, the TINA threshold is also subject to adjustment every five years to keep pace with inflation. See 41 U.S.C. § 1908. The last adjustment for inflation, made in 2015, raised the threshold by $50,000. Continue reading “Certified Cost and Pricing Data Thresholds to Increase July 1, 2018”

GAO’s New Bid Protest Regulations in Effect Now

Scott Arnold

Many of you are aware of the Government Accountability Office’s (“GAO’s”) new bid protest regulations; this is a reminder that they went into effect today, May 1, and include several significant changes. You can see the April 2, 2018, Federal Register text of the revisions here, and in addition to the changes themselves, the background and discussion of comments received in response to GAO’s earlier proposed changes are worth reading to fully understand the new rules and where GAO is coming from.

A quick summary of the most important changes: Continue reading “GAO’s New Bid Protest Regulations in Effect Now”

New DOD Class Deviation Changes Debriefing Process

Scott Arnold

The United States Department of Defense (“DOD”) has amended the process for debriefings required under Federal Acquisition Regulation (“FAR”) 15.506 to allow for offeror questions related to the debriefing. Offerors are allowed up to two business days following a debriefing to submit written questions, and the agency has up to five business days after receipt of the questions to submit written responses. The agency must hold the debriefing open until it delivers its written responses to the disappointed offeror. The new process applies to all DOD debriefings required under FAR 15.506.

The purpose of this new rule implementing section 818 of the 2018 National Defense Authorization Act (“NDAA”) is to improve the quality of debriefings and reduce the number of situations where disappointed offerors feel compelled to protest because the information they receive in debriefings is insufficiently detailed to convince them that the selection decision was fair. More fulsome debriefings should allow offerors to make more informed decisions about whether to protest. Continue reading “New DOD Class Deviation Changes Debriefing Process”