Important News & Notes for Government Contractors

New 8(a) Application Process Begins November 15th

Perhaps the most exciting news this month is that the SBA’s streamlined 8(a) Business Development Program application process launches on November 15th. Firms that want to learn more about applying for 8(a) certification can click here to learn more about the new process and procedures for submitting their applications. Starting on November 15th, any applications not completed in the old system before October 15th will need to be restarted under the new system at Certify.SBA.gov.

“Hoop Jumping” to End for WOSBs?

According to a recent article on Federal News Radio, an SBA rule change may soon make it easier for certified Women Owned Small Businesses to work with federal agencies. Allowing contracting officers to use SBA’s WOSB repository instead of requiring them to search through an electronic filing cabinet will place WOSBs on par with HUBZone, Service Disabled Veteran, 8(a), and other certified disadvantaged businesses in terms of ease of use. As a result, WOSBs should have an easier time winning federal contracts.

Marijuana Legalization and Federal Contractors

Businesses with more than $100,000 in federal contracts are required to adhere to the Drug Free Workplace Act, but what does this mean for contractors in one of the 20 states (plus Washington D.C.) where marijuana has been legalized? Check out these reminders for companies that must adhere to the Drug Free Workplace Act, and get in touch with us if you have any questions.

 

Our team of attorneys is on hand to help you navigate the sometimes complicated world of government contracting. Contact us today for a consultation. 

Joint Ventures 101: What You Need to Know About Joint Ventures & Government Contracts

Last month, we hosted a “Joint Ventures 101” seminar to educate small businesses about the benefits of forming Joint Ventures in order to compete for federal contracts. I wanted to take a moment to share the same information here in the hope that it will help others who are looking for ways to take advantage of the SBA’s Joint Venture rules and regulations.
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Please click here to read through my presentation, and don’t hesitate to contact Randolph Law for more information!

Avoiding Pitfalls in the 8(a) Application Process

I was recently invited to present a webinar on pitfalls in the 8(a) application process for Jennifer Schaus and her government contracts consulting firm, Jennifer Schaus & Associates.
Here’s the full video:

 

Here’s a link to the powerpoint presentation.

Trimming out everything else, the key take away is to read, re-read, and then read again the SBA requirements for the 8(a) program, you can find them here.
While you are reading them, take notes on every specific item that is required. Here’s a very basic checklist of questions you should ask yourself:

1) Am I a member of one of the defined minority groups? How do I know?

For example, we get inquiries from folks who say “well, my grandmother was native american, does that count?” No, it does not. You must be an enrolled member of a Native American Indian Tribe to be considered Native American Indian. Each tribe has its own criteria for enrollment, and you have to match that criteria.

2) Is my annual income under $250,000?

Look at your taxes. What’s the top line. If you file taxes jointly with your spouse, does he or she contribute in some way to the business, whether working or guaranteeing a loan or name on a lease? If yes, it’s your joint income, if no, it’s yours alone.

3) Is my net worth under $250,000?

Your house doesn’t count, and your equity in the business doesn’t count. Your retirement accounts don’t count, unless you’re over 59 1/2. Everything else counts. Your bank accounts, other businesses, vacation house, car. Everything.

4) Have I been in business over two years?

This is a yes / no. When was your business registered with the state. Count two years past that. While there are waivers available to businesses that have not been in business for two years, they are very difficult to get.

5) Am I ready to collect all the documents necessary?

I’d say the average 8(a) application if printed out would run to about 1,000 pages. Be prepared, you will be asked for everything, and you must provide everything.
These are just some of the things you’ll need to be prepared for. Review the video, read the slides, go to the SBA website. When you’re ready, give us a call and we might be able to help you out.

July 2017 Government Contract Regulations Update

This month, there have been a few large regulatory updates and changes within the government contract world. Below, read up on the progress of the Regulatory Accountability Act’s journey through the House and the death of one of the final Fair Pay and Safe Workplaces provisions.

Regulatory Accountability Act

The bipartisan Regulatory Accountability Act is currently being debated in the House of Representatives. This Act would require agencies to provide members of the public with an opportunity to participate in the rulemaking process and hold a hearing before the adoption of any “high-impact” rule, which could benefit government contractors by giving them a voice in policy decisions. According to the bill, a “High Impact” rule refers to “a rule that the Office of Information and Regulatory Affairs (OIRA) determines is likely to have an annual cost on the economy of $1 billion or more.” Additionally, the bill would require federal agencies to conduct a cost/benefit analysis prior to implementing any new regulation.

Fair Pay and Safe Workplaces Final Rule

Following President Trump’s move to repeal the Fair Pay and Safe Workspaces rule earlier this year, the GSA recently issued a class deviation to prohibit FAR clause 52.222-60, which mandated paycheck transparency for government contractors. The rule, set in place by former President Obama, was the last to be prohibited, following the dismantling of FAR 52.222-57, 52.222-58, 52.222-59 and 52.222-61. However, due to a ruling by a federal judge in late 2016, the clause remained untouched, along with the notice provision for independent contractors . Moving forward, the GSA has ordered contractors to amend solicitations and remove the clause from their current contracts immediately.

Are you currently in the market for legal assistance for your government contracting practice or need assistant navigating recent regulatory changes? Contact us today to discuss your needs!

A Graceful Exit: Planning Now For 8(a) Graduation

The regulations governing the 8(a) program mandate (i) that 8(a) contracts are generally non-assignable, and (ii) if the ownership of an 8(a) contract holder, even an 8(a) graduate, changes such that the control of the company has changed, any 8(a) contracts the company holds are subject to termination.

This causes problems if your 8(a) graduation exit strategy is “graduate and sell.” Generally, the rule of thumb for business advisors advising buyers and sellers in the government contracts space is “no more than 25% of revenue from 8(a) contracts.”  This means that the value of an 8(a) company is dramatically lowered in the market, sometimes to zero. Even if your graduation strategy is “graduate and grow” or “graduate and maintain,” you can run in to problems if your nine year past focus, and your past performance and team expertise has been in winning 8(a) contracts. In fact, any post-graduate plan other than “graduate and retire someplace nice” requires careful up-front planning from day 1 of your certification in the 8(a) program. Nine years goes by a lot faster than you think.

With that in mind, here are a few strategies you can use to try to minimize the disruption your graduation will inevitably bring, and maximize your company’s value

  1. Use your first 8(a) contract wins to create a “war chest” for going after non-8(a) work

You are limited as the 8(a) owner in how much you can withdraw from the company in compensation. For successful 8(a)s, this can become a problem. By way of example, a $20M in revenue IT company could at a 10% margin generate 2M in profit. But the qualified owner can’t withdraw more than $350K per year (averaged over 3 years and considering the owner’s salary as well).[*] When searching for what to do with potentially excess profit, consider using that profit to fund development of non-8(a) business, whether full-and-open, small business, or state or commercial. You’re going to have to start sometime, why not start from day 1.

2. Look for other certifications that aren’t time-limited, such as Women-Owned Small Businesses (WOSB) or Service-Disabled Veteran-Owned Small Business (SDVOSB) without expiration.

While these certifications are, like the 8(a) certification, size and owner limited, if you’re not looking to sell, they can be a good maintenance and growth vehicle. Of course, you have to qualify for each of these programs and since they are owner limited, they may have similar difficulties for you if your exit strategy is “graduate and sell.” The WOSB federal contract program is designed to provide greater access to federal contracting opportunities for WOSBs and economically-disadvantaged women-owned small businesses (EDWOSBs) by allowing contracting officers to set aside specific contracts for certified firms in an effort to achieve their statutory goal of five percent of federal contracting dollars being awarded to women-owned small businesses. The SDVOSB procurement program helps provide acquisitions for exclusive competition among service-disabled veteran-owned small business concerns, and to make sole source awards to service-disabled veteran-owned small business concerns if certain conditions are met.

3. Pursue 8(a) Indefinite Delivery Indefinite Quantity (IDIQ) contracts.

IDIQ contacts, depending on the contract language, may allow graduated 8(a)s to remain eligible for 8(a) task orders sourced through the contract vehicle. GSA STARS II is a great example of a contract like this.[†]  This can allow you to continue to receive 8(a) set aside work – as a task order under the IDIQ – beyond your graduation date. In the end, this only delays the inevitable, but if that delay means the difference between getting a full-and-open BD team together and closing up shop and going home, any little bit helps.

These are just a couple of examples of ways in which you can begin looking for non-8(a) work. It may seem counter-intuitive to get this wonderful certification and then immediately try to get work that doesn’t require it, but remember, it’s only 9 years. As Ferris Bueller  said, in a different context, “life moves pretty fast.”

[*]It’s actually more complicated than that, but the point is as you grow you may be unable to distribute all of your company’s profits without potentially losing your 8(a) status.

[†] Mandatory disclaimer, this isn’t legal advice, but this is based on my experience assisting a STARS II holder. If your experience was different, don’t come tell me I’m wrong, and certainly don’t file a CDA claim in the CBCA or ASBCA or anywhere claiming some lawyer told you your company shouldn’t have been kicked of an IDIQ for graduating 8(a). I’m just reporting an example.

Avoiding Ambiguities in the RFP Process

Responding to an RFP is an expensive and time-consuming process. Once your organization has decided to make that investment, it’s important to make sure your proposal is just right. Ambiguities – unclear statements or demands – in the RFP process can derail your success with the following negative consequences:

  • Bids rejected for lack of compliance
  • Bids less competitive for failure to follow unknown/misunderstood specifications
  • Bids open to rejection for other reasons under the cover of ambiguities

In order to make your proposal as effective and competitive as possible, it’s critical to resolve any questionable statements in the RFP before you submit your proposal.

Identifying Ambiguities

The first step in resolving unclear statements, demands, or terminology is to identify them. There are three main types of RFP ambiguities to watch out for and resolve:

  • Specification
  • Process
  • Terms & Conditions

In order to identify unclear portions of the RFP, you may need to call upon your technical specialists, project managers, and legal counsel to review the request and identify any areas of concern.

Examples of Ambiguities:

  • Specification: An RFP for a new piece of technology tells bidders that they can recommend a product that exceeds specifications. In some cases, it’s easy to pick out things that would exceed specifications (e.g.: faster processing speeds or more memory). However, the waters get murky when you consider things like screen size. Would a smaller screen exceed specifications because it’s lighter and easier for employees to transport? Or would a larger screen be a preferred option to avoid taxing employees’ eyes?
  • Process: The RFP specifies that all submissions must be made by 5pm on a given date. But the contracting officer is based on the East Coast, the agency is headquartered in Texas, and the work is being performed in California. Which time zone applies?
  • Terms & Conditions: The language used in an RFP is the language a contractor will be beholden to once a contract is awarded. Unclear terms and conditions are subject to definition by the contracting officer, not the contractor, so it’s very important to make sure all the legal language is crystal clear before responding to an RFP.

Quick Steps to Respond to Ambiguities in an RFP

  1. Identify unclear portions of the RFP: Let the experts at your organization review each portion of the RFP and point out any areas of concern.
  2. Submit questions to the contracting officer: At this stage, it’s important to make sure that your questions are extremely clear to avoid further confusion and get the answers you need to move ahead.
  3. Follow up with more questions: If the contracting officer’s answers are unclear, you can follow up with additional questions. These may or may not receive answers depending on the timeframe remaining for submissions.
  4. No response? Consider whether a protest is appropriate.

Bid protests are time-sensitive and costly. In order to make your proposal competitive from the start, resolve ambiguities with the contracting officer as early as you can. However, if you truly aren’t able to get answers and lose an award because of ambiguities in the RFP, a protest may be the best way to obtain a satisfactory resolution. A good government contract lawyer can carefully evaluate the merits of any protest to make sure you are able to make an informed decision about your options.

Whether you’re struggling to resolve ambiguities in an RFP or considering a bid protest, Randolph Law is here to help. 

Contact us to learn more. 

Making the Most of Your Debrief

If you have responded to a FAR Part 15 RFP or to a FAR part 16 Task Order or Delivery Order RFP, you are entitled to a debrief. You should make the most of the opportunity.

If you have responded to a FAR Part 12 Commercial Items solicitation or to a FAR Part 8 GSA Schedule Task or Delivery Order RFP or RFQ, you are not entitled to a debriefing, you are only entitled to a “brief explanation” of the reasons for the decision. You may not receive as thorough of an explanation for the award decision, but you should nevertheless use this same guidelines to make the most of that explanation as well.

Asking for a Debrief

You must ask for a debrief within three days of when you receive your notice that either you have not been selected for award, of you’ve been down-selected in an initial or multi-round selection process.

Always ask for a debrief. There is almost always no downside to ask for a debrief. The only time you may not want to ask for a debrief is if you have already decided to file a bid protest, and you’re concerned that the Agency will drag their feet (sometimes for weeks or months) on giving the debrief, leaving you unable to file you protest; since once you’ve asked for a debrief you are not allowed to protest until the debrief is completed.

Preparing for Your Debriefing

If your debriefing will take place in person or via telephone, you can prepare in advance to get the best information out of the time you have.

Think about what you want to accomplish. There are two simple questions you should aim to have answered by the time you finish:

  1. Why did you lose the bid?
  2. Why does the government say you lost the bid?

Sometimes, these answers will be the same. Other times, the requesting agency will have a favored contractor, and the government may simply say that your proposal was not as good as the winner’s. An in-person or telephone debriefing can be used to determine whether or not you have grounds to protest the award.

Once you’ve given some thought to the outcome, prepare questions that will help you walk away with the information you’re after. Your questions should be directed to the specific issues identified in the award notice. In some cases, you may choose to include members of your technical team or legal counsel in the debriefing in order to address critical concerns. Be aware of the following considerations:

  • Don’t allow technical people to get mired in minutiae, and detract from your overall purpose. Make sure that anyone who attends the debriefing understands that a high-level discussion is in order.
  • Bringing your attorney has the potential to help you get accurate answers from the contracting officer and translate his or her statements into layman’s terms. However, having a lawyer present may also cause the contracting officer to clam up for fear of saying anything that might lead to a bid protest. Weigh your options.

Setting the Tone & Gathering Information

As with any business meeting, a professional tone is required. You aren’t there to convince the contracting officer to award you the contract. Be mindful of your ability to work with the contracting officer and the agency he or she represents in the future. Be firm in your request for information, but maintain a positive working relationship at the same time.

Another thing to keep in mind is how to cut through the buzzwords to ensure that you leave with the information you need. Don’t use industry-speak, and challenge any buzzwords the contracting officer is using to explain why you lost the contract. Phrases like “best value” and similar terms are non-specific and therefore, unhelpful. Acronyms, too, can be a source of confusion. Demand clear, specific language.

Concluding Your Debriefing

At the end of the meeting, you should have some sense of whether or not a bid protest is in order. If it is, start your clock and get to work; bid protests are highly time-sensitive, and in most cases, you have no more than 10 days to protest, which is effectively five days if you want a CICA stay.

If you decide that a protest isn’t warranted, take the information you received at the debriefing and apply it to future RFPs. What that looks like will depend on your business and what you discover at the debriefing, but in all cases, the information will make you more competitive in the future. Remember, usable knowledge is the ultimate goal of any debriefing.

 

Do you need assistance preparing for a debriefing or working with the federal government in another capacity? Our experienced team can provide a legal consultation for your business. Contact us today to discuss your needs!

 

 

Important News and Notes for Government Contractors

Randolph Law has put together a round-up of recent news and regulatory changes that impact government contractors today. Read on to learn more about upcoming compliance issues, changes in regulations, and opportunities for government contractors. 

The Projected Impact of the Trump Administration on Government Contractors

Government contractors no longer need to disclose potential labor violations when bidding on a contract, as per President Trump’s repeal of the Fair Pay and Safe Workplaces executive order. Federal contractors should be aware that the Trump administration is expected to preserve Executive Order 11246, which forbids discrimination on the basis of gender or sexual orientation. However, questions remain about how the administration will handle Executive Order 13706, which requires paid sick leave for workers on federal contracts.

“Buy American & Hire American” Order Could Impact Federal Contractors

While the federal government has always maintained requirements that favor buying American-made products and hiring American contractors, Trump’s April 18thBuy American & Hire American” order attempts to strengthen those requirements and increase preference for U.S. manufacturing and employment. It’s recommended that federal contractors take care to evaluate their existing compliance policies in preparation for the order’s enforcement and the similar government contract regulations that can be expected in the near future.

Digital Services Acquisition Training to Expand

In an effort to combat recent backslides in IT modernization and innovation, the federal government is preparing to increase agile acquisition efforts. The U.S. Digital Services department will be working alongside federal agencies to improve agile procurement and scale up the Digital IT Acquisition Professional Training Program for contracting officers. Ultimately, federal contractors in the IT space should have more opportunities to work with the government and influence technological innovation.

Contractors Who Use Standard Confidentiality Language May Be Disqualified

Raising a compliance issue for federal contractors, FAR 52.203-19 prohibits contractors from requiring their employees or subcontractors to sign a standard agreement that might prevent them from reporting fraud, waste, or abuse while working on a federal contract. Contractors must cease to use such confidentiality agreements and must notify all of their employees – even those not currently working on a federal contract – that the agreements no longer apply.

Do you have questions about remaining in compliance with federal regulations or expanding your opportunities with the federal government? Contact Randolph Law’s team of government contract attorneys for assistance.

The GSA Schedule is the Place to Be for Government Contractors

To the uninitiated, “getting on the GSA Schedule” sounds like being signed up for a meeting or an event. In actuality, it’s one of the best ways for a federal government contractor to capitalize on existing relationships with the government and earn business from federal agencies.

What is the GSA Schedule?

GSA, the U.S. General Services Administration, manages a set of contracts with companies that have been vetted and approved to provide services to federal agencies. A contractor with this type of contract with GSA is said to “hold a GSA Schedule contract,” or “be on the GSA Schedule.”

To understand the advantages of being on the GSA schedule, you first need to understand how the government handles purchasing.

  1. Agency employees who need work or supplies make a purchasing request to their contracting officers.
  2. Contracting officers must then submit a request for proposals (otherwise known as an RFP) allowing suppliers to submit a proposal to be considered for the job.
  3. Over a period of weeks or (more often) months, proposals are submitted by suppliers and evaluated by the contracting officer, who ultimately awards the contract to the chosen supplier.

In most cases, the RFP process is long and arduous for both government employees and government contractors. Designed to balance the needs of the government with the fairness required to ensure that tax dollars are well-spent, the purchasing process by its nature requires a lot of time and a lot of effort.

The GSA Schedule concept allows agencies to speed up and simplify the procurement process for commercial supplies and services, without sacrificing the requirements of transparency and safeguarding of taxpayer dollars. Contracting officers may pre-evaluate GSA Schedule contractors. They also have the option of posting an opportunity only to GSA Schedule contractors, making the RFP process much faster by removing some of the required vetting needed for suppliers that aren’t on the Schedule. 

What are the Advantages of the GSA Schedule for Government Contractors?

Clearly, being on the GSA Schedule is a tremendous advantage for government contractors. Being on the GSA Schedule offers the following opportunities:

  • Becoming a known entity makes it easier to sell your products or services to the federal government. Having a GSA Schedule contract demonstrates to your potential customers that you have been pre-vetted and approved for contracting with the federal government
  • There is a much shorter time-to-close on GSA Schedule task and delivery orders than in a full and open procurement. GSA Schedule tasks are typically issued two to three weeks after the RFQ is published, while typical contracts can take nine months to a year from RFP issuance to selection and work beginning.
  • Once you hold a a GSA Schedule contract, your are granted access to contracting opportunities that are exclusive to GSA Schedule holders through the GSA eBuy system, and you receive a listing in the GSA Advantage database. This listing significantly raises your visibility because procurement teams will often search this database for potential contractors in order to simplify the acquisition process.

What Do I Need to Know About Being on the GSA Schedule?

Getting on the GSA Schedule is a big advantage for businesses that want to serve the federal government, but it does require some special considerations for businesses.

In order to get on the GSA Schedule, a business must demonstrate certain eligibility criteria. Criteria includes:

  • At least two years in business or information that indicates the organization’s capabilities
  • At least $25,000 in revenue per year
  • And the ability to offer the products and services the Federal Government buys, such as building services, infrastructure, supplies, IT services, and consulting.

Once you demonstrate eligibility and your proposal is accepted and you sign a GSA Schedule contract, you’ll need to make sure that your business is protected while working with the government.

For example, GSA Schedule contractors need to be careful about the prices they set. In order to get on the Schedule, contractors are required to offer the government the same or better prices than they would offer their “most favored customer” under similar terms. What does that mean? It means should you reduce your prices to your most favored customer or customers, you may be required to update your government pricing as well. If you aren’t careful, you may inadvertently end up dropping your price to the point that it’s no longer sustainable for your business. That’s just one reason why it’s so important to plan your GSA Schedule submissions carefully.

 

If you’re ready to take the plunge and get on a GSA Schedule, Randolph Law can help. Our legal consulting services can give you the tools you need to get listed and protect and grow your business in the process. Contact us today to learn more!

December Government Contracting News Round Up

The New Year is nearly upon us, and we’ve put together a brief selection of news and links to help government contractors as they prepare for 2017.

Just the Basics:

What is a Small Business Set-Aside? – The government has various programs designed to help small businesses compete for and win federal contracts. Read more about eligibility for small business set-asides and limitations to take full advantage of these programs.

Sole Source Justification Requirements for 8(a) Contractors – At the end of November, the FAR issued a proposed rule to clarify responsibilities for justifying sole source awards exceeding $22 million through the 8(a) program.

In the News:

Do Government Contractors Need to Worry About Terminations Under the New Administration? – For some peace of mind, read about the regulations governing the termination of federal contracts and the reasons why it won’t be easy for President-elect Trump to terminate contracts without cause.

What Employers Can Expect with Trump in Office – During his campaign, Trump promised fewer regulations for employers and fewer protections for employees, but what can employers really expect once he’s in office? Lexology has some interesting predictions to help business owners prepare for Inauguration Day.

Prepare for New Insider Threat Regulations – With insider threats to security becoming an increasing problem for the US government, the DoD has established new regulations to prevent these attacks. Learn more about how these regulations may put a strain on small business contractors in 2017 and beyond.

 

If you have questions about government contracting regulations and preparing for 2017 as a small business contractor, don’t hesitate to contact Randolph Law today.