The Court of Federal Claims (COFC) recently affirmed that agencies are required to apply the “Rule of Two” to all federal acquisitions in its decision of Tolliver Grp., Inc. v. United States. Further, agencies must give a reasonable explanation supported by factual evidence when canceling solicitations. The decision ensures that small businesses will continue to have robust access to federal procurement opportunities.

Army Cancels SDVOSB RFPs in Favor of Unrestricted Multiple Award Contract

The two solicitations at issue in this case were for the procurement of training staff for a field artillery school located in Fort Sill, Oklahoma. Both solicitations were set-aside for service-disabled veteran-owned small businesses (SDVOSBs). After the Army awarded the contracts to two SDVOSBs, a third SDVOSB bidder protested the awards, alleging deficiencies in the Army’s evaluation of various factors.

The Army issued Notices of Corrective Action for both contracts, stating that it would cancel both awards, “[r]e-evaluate the requirement and acquisition strategy to ensure that it accurately reflects the Army’s current need,” and either cancel or amend the solicitations. The Army’s internal memorandums indicate that part of the rationale for revisiting the solicitations was because the Army now had a new multiple award indefinite delivery indefinite quantity (MAIDIQ) contract vehicle that encompassed the scope of the two solicitations at issue.

Continue Reading COFC: “Rule of Two” Must Be Analyzed Before “Any” Acquisition

The U.S. Court of Federal Claims (COFC) decision in HWI Gear, Inc. v. United States highlights the importance of reviewing a solicitation to determine if the text of Federal Acquisition Regulation (FAR) 52.219-28 is included in it, as well as the risk of engaging in corporate transactions while a proposal to a procuring agency is pending. In this case, the COFC held that an offeror was required to recertify its size status during a procurement, and the agency’s failure to enforce this requirement invalidated the award.

In HWI Gear, Mechanix Wear, Inc. (Mechanix) and HWI Gear, Inc. (HWI) submitted proposals in response to a solicitation set aside for small businesses. After proposal submission but before award, Mechanix informed the procuring agency that it had changed its corporate structure from a corporation to a limited liability company and changed its corporate name, but that all other terms and conditions in its proposal remained unchanged. Mechanix, however, did not inform the agency that its change in corporate structure was the result of a merger with a large business and that Mechanix no longer qualified as a small business under the size standard established for the procurement. The agency ultimately selected Mechanix as the awardee, and HWI filed a bid protest challenging the agency’s evaluation.

Continue Reading Size Recertification Prior to Award – When is it Required?

I’m looking forward to participating in a panel session at the 2021 Tennessee Procurement Opportunities Conference presented by the Tennessee Procurement Technical Assistance Center (PTAC) and Tennessee Small Business Development Center. I will join other industry panelists for a discussion focusing on best practices for teaming in government contracting.

The program will also feature:

  • Judy

Last month, the U.S. Court of Appeals for the Federal Circuit’s (Federal Circuit) opinion in The Boeing Co. v. Secretary of the Air Force shed additional light on the technical data rights of contractors under defense contracts. The decision hinges on the fact that technical data provided by a contractor to the government remains the property of the contractor. Additionally, contractors retain certain rights in connection with technical data even when the government has so-called “unlimited rights” to use it.

Case Background

In this case, Boeing held two contracts with the U.S. Air Force (USAF) for work on the F-15 Eagle Passive/Active Warning Survivability System. The contracts included the requirement for delivery of technical data to the USAF with Unlimited Rights and the DFARS 252.227-7013, non-commercial technical data rights clause (Subsection 7013). The parties did not dispute that Boeing retained ownership of technical data delivered to the USAF under the contracts, but Boeing contended that its legends on the technical data were intended to protect its rights as they pertained to third parties. Namely, putting third parties on notice of the proprietary nature of the data and directing that “Non-US Government Entities May Use and Disclose Only As Permitted In Writing By Boeing Or By The US Government.” The USAF rejected the data deliverables marked in this manner, finding them nonconforming and Boeing requested a final Contracting Officer’s decision on the matter.

The Contracting Officer’s final decision confirmed that the USAF was correct in rejecting the legends and directed Boeing to correct them. Boeing appealed the decision to the Armed Services Board of Contract Appeals (ASBCA) on the ground that Boeing’s legend was “not nonconforming” under Subsection 7013(f) since its legend did not address restrictions on government rights, only third-party rights. The ASBCA, ruling on the motion for summary judgment, disagreed, siding with the USAF’s position that only the legends listed in Subsection 7013(f) are authorized and Boeing’s legend was not one of those. Boeing appealed this decision to the Federal Circuit.

Continue Reading Federal Circuit Confirms DoD Contractor’s Expanded Restrictions on Non-Government Parties Rights in Data

In October, the U.S. Small Business Administration (SBA) published a final rule entitled “Consolidation of Mentor-Protégé Programs and Other Government Contracting Amendments,” which went into effect on November 16, 2020. This final rule merges two existing mentor-protégé programs, revises SBA’s affiliation rules, and makes other technical changes to clarify SBA’s size requirements for contractors. Contractors of all sizes should review this sweeping final rule for any changes that may impact them. Here, we present some of the most significant changes this final rule implements.

Merger of SBA’s 8(a) Mentor-Protégé Program into the All-Small Mentor-Protégé Program

SBA’s first mentor-protégé program was created in 1998 solely for 8(a) small businesses. The goal of the program was to pair SBA-approved experienced businesses (mentors) with SBA-approved 8(a) small businesses (protégés) to help them develop. Mentors and protégés were able to form joint ventures to compete for contracts and, importantly, were not subject to SBA’s affiliation rules. This affiliation exception is important because SBA’s regulations require a small business to count its annual receipts or employees, plus the annual receipts or employees of each affiliate when determining its size status. Waiving this requirement for mentors and protégés allowed them to be awarded contracts they might have otherwise been ineligible for because of affiliation rules.

In October 2016, SBA created the All-Small Mentor-Protégé Program (ASMPP) to expand the mentor-protégé program beyond 8(a) small businesses to include all small businesses, including women-owned small businesses, service-disabled veteran-owned small businesses, and Historically Under-Utilized Business Zone small businesses. The ASMPP program possessed similar benefits as SBA’s 8(a) mentor-protégé program, including the ability to form joint ventures and the exception to affiliation rules. The ASMPP has been very popular, with more than 1,200 active mentor-protégé agreements currently in existence under the program. Because of ASMPP’s success and the overlap that exists between ASMPP and SBA’s 8(a) mentor-protégé program, the final rule eliminated the 8(a) mentor-protégé program and merged it into ASMPP in its latest final rule.

Continue Reading Bye Bye 8(a) MPP and Hello to New Small Business Rules!

On September 24, the Government Accountability Office (GAO) denied DynCorp International, LLC’s (DynCorp) protest of the Department of the Army’s award of a global intelligence logistics support task order to CACI Technologies, Inc. (CACI, Inc.). DynCorp alleged that the award was improper, citing the fact that CACI, Inc. no longer existed as a corporate entity. Additionally, DynCorp challenged the Department of the Army’s evaluation of the proposals submitted. The GAO rejected both of DynCorp’s arguments and found the task order’s award to CACI, Inc. proper.

Conversion to Limited Liability Company Affects Bid

While the GAO’s decision has the familiar discussion regarding the weight and comparison of proposal elements, its examination of CACI, Inc.’s corporate entity change and how that affects the bid process is particularly noteworthy as the Federal Acquisition Regulation (FAR) is silent on this issue. In this case, CACI Technologies, Inc. was awarded a GISS IDIQ contract in September 2014 under the CAGE code 8D014. On December 31, 2017, CACI Technologies, Inc. converted to CACI Technologies, LLC (CACI, LLC) while retaining the same CAGE code as the former entity.

After the conversion to a limited liability company, CACI, LLC worked with the Defense Contract Management Agency (DCMA) to effect a name change, per FAR 42.1205. CACI, LLC reached an agreement with DCMA on the terms of a conversion and name change by March 2018, but the agreement was not approved and finalized by DCMA until April 2020. In the interim between CACI, LLC’s conversion and when DCMA approved the name change and conversion, CACI, LLC bid on the Department of the Army contract at issue.

Continue Reading Now You See Me, Now You Don’t: What Happens When a Bidder’s Corporate Entity Changes during a Bid?

For over a year, we have been discussing the Department of Defense’s (DoD) eventual implementation of a Cybersecurity Maturity Model Certification (CMMC) program for Defense contractors, most recently during a webinar in September 2020 entitled CMMC is (Almost) Here! Latest Developments and Best Practices for Government Contractors.

The CMMC framework is part of DoD’s efforts to enhance the protection of controlled unclassified information (CUI) within the federal supply chain. On September 29, the Pentagon released an interim rule under the Defense Federal Acquisition Regulation Supplement (DFARS) providing details on the implementation timeline of CMMC and the requirements defense contractors will have to adhere to starting November 30, 2020.

CMMC Five-Year Rollout

The interim rule specifies that the CMMC program will be introduced in a five-year phased rollout that will be complete by September 30, 2025. After that date, all defense contractors will be required to reach some level of CMMC certification if they are to receive future DoD contracts and subcontracts, except for DoD acquisitions solely for commercially available off-the-shelf (COTS) items. During the rollout, the Under Secretary of Defense for Acquisition and Sustainment (USD (A&S)) will determine and communicate to Contracting Officers which contracts will require contractors to undergo a full third-party CMMC assessment.

Continue Reading It’s Here! DoD Issues Interim Rule Launching Two Cyber Assessment Programs

We will present a training webinar titled, “GSA Schedules – Status of Modernization & Simplification Efforts” for the Maryland Procurement Technical Assistance Center (Maryland PTAC). The interactive seminar will provide insight into GSA Schedule contracts. Through GSA Schedule contracts, also known as Federal Supply Schedules, the GSA makes available to federal, state, and local government

On January 30, the Department of Defense (DoD) released the Cybersecurity Maturity Model Certification (CMMC) outlining cybersecurity requirements that DoD contractors and subcontractors must meet to certify they adequately satisfy the DoD standards. These new requirements may go into effect for certain procurements as soon as the end of September 2020.

In this 60-minute webinar,

We recently wrote about the impacts of mergers and acquisitions (M&A) on pending bids in Bloomberg Law and our GovCon & Trade Blog. A key point discussed in both articles is that a bidding company’s buyer may not have standing to protest if the buyer is not the complete successor-in-interest to the bidding company. The U.S. Court of Federal Claims recently affirmed this principle in a decision it handed down in the case of Centerline Logistics Corp. v. United States issued in May 2020.

The case involved Centerline’s protest of the U.S. Shipping Command’s determination that Centerline’s proposal to transport bulk fuel was “unacceptable.” Prior to the determination, the agency inquired as to whether Centerline was the complete successor-in-interest to Harley Marine Services (Harley Marine), the company that originally submitted the proposal to the agency, to which Centerline chose not to respond. Despite Centerline’s assertion to the court that it was the same legal entity as Harley Marine, the court found that Centerline was incorporated in Delaware, while Harley Marine was incorporated in Washington state, and that Mr. Harley, Harley Marine’s namesake, did not have an equity stake in Centerline. Further, the court could not ascertain whether Harley Marine retained some of its assets or if Centerline had sufficient assets to perform the contract. For these reasons, the court held that Centerline was not the complete successor-in-interest to Harley Marine and, thus, lacked standing to protest the agency’s determination.

Continue Reading Recent Decision Impacts Complete Successor-In-Interest Claims