On October 24, 2016, U.S. District Judge Marcia Crone granted a preliminary injunction to halt the implementation of the “Fair Pay and Safe Workplaces” Executive Order 13673 (EO 13673), implementing provisions of the Federal Acquisition Regulation (FAR) in the final rule, and Department of Labor (DOL) guidance that impose new reporting requirements on contractors regarding labor law violations.
Continue Reading Fair Pay and Safe Workplaces Not “Fair” to Contractors, According to Texas Judge
Event: Expansion of the SBA Mentor/Protégé Program
I will be in Knoxville today presenting at the 2016 GovCon Seminar hosted by Strategic Consulting Solutions and PDS Consulting Services. My session will be focused on the expansion of the Small Business Administration’s Mentor/ Protégé Program. Specifically, I will discuss how the recent program expansion is creating opportunities for contractors, large and small. The
A “Starry” Saga: Protester Prevails After Four Protests and an Overturned Solicitation Cancellation
On July 27, 2016, the U.S. Court of Federal Claims held that the U.S. Department of Health and Human Services (HHS) was unreasonable in cancelling its solicitation for on-site operational support for the HHS Unified Financial Managements System (UFMS). The decision, Starry Associates, Inc. v. United States, is unusual, given that the Government Accountability Office (GAO) and the Court of Federal Claims are typically reluctant to oppose an agency’s decision to cancel a solicitation. The decision serves as a useful reminder that such discretion is not unfettered and will be overturned where it is arbitrary and capricious.
Continue Reading A “Starry” Saga: Protester Prevails After Four Protests and an Overturned Solicitation Cancellation
Mentor-Protégé Expansion Creates Opportunities for all Government Contractors Large and Small
On Friday, July 22, 2016, the Small Business Administration (SBA) released a Final Rule (Final Rule) establishing a government-wide mentor-protégé program for all small business concerns, designed to increase opportunities in the federal market place and improve development for small businesses. This expansion implements the authority Congress gave SBA in the 2013 National Defense Authorization Act to create mentor-protégé programs for Service-Disabled Veteran Owned Small Businesses (SDVOSB), HUBZone small businesses, women-owned small businesses (WOSB), and small businesses.
The new program, which enables these categories of small businesses to benefit from the SBA-approved mentor-protégé arrangements previously only available to certified 8(a) small disadvantaged businesses, goes into effect on August 24, 2016, and will be implemented with the help of a newly formed unit within the SBA Office of Business Development devoted solely to processing and reviewing mentor-protégé applications and agreements. Instead of creating four new and separate programs covering each of the small business contracting programs (i.e., small business, SDVOSB, WOSB, and HUBZone), SBA chose to create a single program for all small business concerns modeled after the existing 8(a) Business Development (BD) mentor-protégé program, which will continue to operate as a separate program. Alongside these regulations, the Final Rule revises guidelines for joint venture agreements between a mentor and a protégé.
Opening the mentor-protégé program to new categories of small businesses creates significant opportunities for both large and small businesses. Because of the expected avalanche of applications from companies wishing to participate in this program, an overview of which is provided below, businesses that anticipate submitting applications for approval of mentor-protégé agreements should do so as soon as possible after the program goes into effect.Continue Reading Mentor-Protégé Expansion Creates Opportunities for all Government Contractors Large and Small
EEOC Issues Revised Equal Pay Data Rule
On July 14, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) issued a revised version of its proposal to expand pay data collection from federal contractors and other employers with more than 100 workers. The revised proposal pushes back the date of the first required employer report to allow for the use of W-2 wage and salary reports.
The EEOC initially published its proposed rule in late January. The proposed rule expands the information certain employers must report to the federal government on an EEO-1 report. The EEOC’s proposal would add data on pay ranges and hours worked to the information currently collected.
The EEOC considered and adopted specific suggestions made by commenters during the initial 60-day comment period that ended earlier this year. For example, the EEOC moved the due date for the EEO-1 survey from September 30, 2017 to March 31, 2018, to simplify employer reporting by allowing employers to use existing W-2 pay reports, which are calculated based on a calendar year. In addition, the EEOC agreed to give employers the choice of reporting either a 40-hour week for full-time exempt and 20-hour week for part-time exempt workers, or in the alternative, providing an annual report for such employees. This change is in response to employer concerns for the non-standard weekly hours for this category of workers. The updated rule comes with a fresh, 30-day comment period that runs until August 15, 2016.Continue Reading EEOC Issues Revised Equal Pay Data Rule
Set-Aside Alert Article Discusses Impact of Supreme Court’s Kingdomware Decision
I provided comments for an article outlining the U.S. Supreme Court’s decision in Kingdomware, requiring the Department of Veterans Affairs (VA) to set-aside contracts and Federal Supply Schedule orders for eligible veteran-owned businesses under the Rule of Two.
The full article, “Supreme Ct. Backs Kingdomware: Vet Preference Applies to All VA Contracts,” was
Senate Hearing: Ramifications of the Supreme Court’s Kingdomware Decision
Today, one week following the Supreme Court’s unanimous decision requiring the U.S. Department of Veterans Affairs (VA) to set-aside contracts and Federal Supply Schedule (FSS) orders for eligible veteran-owned businesses under the Rule of Two, the Senate Committee on Small Business and Entrepreneurship held a hearing on how the decision will affect VA procurement going forward. Chairman David Vitter (R-LA) orchestrated the two-panel hearing alongside Senator Jeanne Shaheen (D-NH). Chairman Vitter made clear that the Senate wanted to understand how the Kingdomware decision will affect veteran-owned businesses and how to ensure that the VA is implementing the statute’s proper interpretation.
The first panel featured Thomas J. Leney, the Executive Director for the VA, and John A. Shoraka, an Associate Administrator of Government Contracting and Business Development for the U.S. Small Business Administration (SBA). Speaking on behalf of the VA, Leney stated that the VA is committed to implementing the Supreme Court’s decision and has already started its review of current procurements. According to Leney, to enforce the decision, the VA is working on creating formal rules and new policy guidelines to regulate how veteran-owned businesses are considered under the Rule of Two. The Supreme Court clarified that the Rule of Two requires setting aside contracts for every competitive VA acquisition, including FSS orders, when two or more eligible veteran-owned concerns will submit offers and an award can be made at a fair and reasonable price. While his remarks emphasized the VA’s approach moving forward, Leney struggled to respond to Senator Vitter’s inquiry into why the VA has spent years improperly applying the Rule of Two to veteran-owned small businesses. While the VA was unable to set a hard cutoff date for when it can assure that all awards will comply with the guidelines of the decision, Senator Vitter set a July 15, 2016, deadline for the VA to issue an update to the Committee to demonstrate their improved procurement methods. According to the chairman, a delay in implementing the Rule of Two would be equivalent to resisting the decision of the Supreme Court – even a three month delay would be unwarranted.Continue Reading Senate Hearing: Ramifications of the Supreme Court’s Kingdomware Decision
SCOTUS Says: Veterans Affairs Must Prefer Veterans
In a unanimous decision issued today, the U.S. Supreme Court held that the U.S. Department of Veterans Affairs (VA) is required to set-aside contracts for every competitive acquisition, including Federal Supply Schedule (FSS) orders, when two or more eligible veteran-owned concerns will submit offers and an award can be made at a fair and reasonable price. This ruling effectively increases the number of contracts (whether standalone or FSS orders) that will be set aside exclusively for veteran-owned small businesses (VOSBs) and service disabled veteran-owned small businesses (SDVOSBs) because the VA is statutorily prohibited from competitively awarding contracts to non-VOSB concerns when that requirement can be met.
In 2006, Congress passed the Veterans Benefits, Health Care, and Information Technology Act (VA Act), which established requirements for the VA to meet VOSB contracting goals. 38 U.S.C. §§ 8127-28 (2006). The “Rule of Two,” at Section 8127(d), requires the VA to set aside competitive contracts for VOSBs if the contracting officer has a reasonable expectation that two or more VOSBs will submit offers and that the award can be made at a fair and reasonable price.
Since 2011, the U.S. Government Accountability Office (GAO) has consistently held that the VA is statutorily required to apply the Rule of Two to any competitive acquisition. However, as the GAO issues “recommendations,” the VA has publicly disagreed with and declined to follow the GAO’s interpretation of the VA Act. Accordingly, the GAO notified Congress of the VA’s declination to follow GAO recommendations.Continue Reading SCOTUS Says: Veterans Affairs Must Prefer Veterans
DEAR Department of Energy M&O Contractors: The FAR Nondisplacement of Qualified Workers Requirements Apply To You, Too
The Department of Energy (DOE) has proposed an amendment to the Department of Energy Acquisition Regulation (DEAR) that, among other changes, clarifies that FAR Subpart 22.12, Nondisplacement of Qualified Workers Under Service Contracts, and the associated Department of Labor regulations, applies to subcontracts under DOE’s management and operating (M&O) contracts. M&O contractors and their subcontractors need to be aware of these changes, particularly the impact on the requirement to hire service employees working on incumbent contracts set forth in contract clause FAR 52.222-17.
FAR Subpart 22.12 implements Executive Order 13495 (January 30, 2009), and requires a successor contractor and its subcontractors to offer “service employees,” as defined by the Service Contract Act, under the predecessor contract (of the same or similar services at the same location) and whose employment will be terminated as a result of the successor contract award, a right of first refusal of employment under the new contract. Employment openings are generally prohibited until such right of refusal has been provided, meaning an incoming contractor will have limited opportunity to staff its current employees on the contract. Importantly, each bona fide express offer of employment must have a stated time limit of not less than 10 days for an employee response, a time period that successor contractors should account for when determining how long it will take to transition the contract. The contract clause, FAR 52.222-17, has to be flowed down to service subcontracts over the simplified acquisition threshold, typically $150,000. The requirements of FAR Subpart 22.12 do not apply to service contracts performed entirely outside the United States. 77 Fed. Reg. 75768 (Dec. 21, 2012).Continue Reading DEAR Department of Energy M&O Contractors: The FAR Nondisplacement of Qualified Workers Requirements Apply To You, Too
DOJ’s “Fairyland Damages” Calculation Rejected in Prevailing Wage Rate False Claims Act Case
In a February 4, 2016, decision, United States ex rel. Wall v. Circle C. Construction, LLC, the Sixth Circuit summarily rejected the government’s assertion that the measure of damages in a False Claims Act (FCA) suit involving a violation of prevailing wage rate requirements was the total amount paid for the work. The Sixth Circuit’s rejection of the “total contract value” theory of damages in the prevailing wage rate context is a welcome development for FCA defendants who are faced with increasingly creative damages theories asserted by the government and the relator’s bar.
Circle C’s Army Contract
For a case that involved a relatively minor non-compliance with the prevailing wage rate requirements applicable to federal construction contracts, the Circle C. Construction case has a long history. Circle C entered into a contract to construct warehouses at the U.S. Army base at Fort Campbell, located in Kentucky and Tennessee. Pursuant to the Davis-Bacon Act, Circle C was required to pay electrical workers at least $19.19 per hour, plus a fringe benefit rate of $3.94 per hour. Circle C was also required to submit certified payroll for itself and its subcontractors.Continue Reading DOJ’s “Fairyland Damages” Calculation Rejected in Prevailing Wage Rate False Claims Act Case