Federal Acquisition Regulations (FAR)

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Information technology (IT) and consulting businesses have continued to attract private equity attention and dollars.  For IT businesses contracting with the federal government, there are additional attractions for private equity investors.

Benefits of Federal Businesses

For starters, federal government business is not as exposed to the vagaries of the U.S. consumer economy as pure B2B or B2C businesses. It is true that the federal sales cycles can be much longer than in the commercial sector.  However, this cuts both ways as once a contract is awarded, it tends to be relatively long-term (up to five years in most cases) and the Federal Acquisition Regulations (FAR) procurement requirements disincentivize the government from terminating a contract for convenience, thus protecting the business from cost-undercutting, at least until a re-compete.

There are also high barriers to entry into the federal marketplace, including regulatory compliance programs and requirements to demonstrate experience. Finally, the size and creditworthiness of the customer, coupled with the relative “stickiness” of contracts awarded, make these investments financeable by lenders knowledgeable about the sector.  Given these attributes, it is little wonder that more and more private equity sponsors are expanding into the federal market space.

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Continue Reading Revisiting Private Equity Investment in Federal IT Contractors

On November 5, 2018, the Federal Circuit held in a precedential decision that bonding requirements in FAR 52.228-15, “Performance and Payment Bonds—Construction,” were read into all construction contracts by operation of law at the time of award, pursuant to the Christian doctrine.  FAR 52.228-15 requires an offeror in any construction contract valued over $150,000 to furnish performance and payment bonds:

Performance and Payment Bonds—Construction (OCT 2010)
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(b) Amount of required bonds. Unless the resulting contract price is $150,000 or less, the successful offeror shall furnish performance and payment bonds to the Contracting Officer as follows:

(1) Performance bonds (Standard Form 25). The penal amount of performance bonds at the time of contract award shall be 100 percent of the original contract price.
(2) Payment Bonds (Standard Form 25-A). The penal amount of payment bonds at the time of contract award shall be 100 percent of the original contract price.

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Continue Reading The Christian Doctrine Strikes Again … To Require Performance and Payment Bonds in all Construction Contracts

The level of devastation caused by Hurricanes Harvey and Irma in Texas and Florida, respectively, is estimated to have caused $150-200 billion in damages. With this devastation comes a multibillion-dollar recovery effort that will bring federal money and procurement into the affected areas. With past natural disasters as a guide, much of the work needed for short and long-term cleanup and rebuilding will be contracted to government contractors. The Robert T.  Stafford Disaster Relief and Emergency Assistance Act of 1988 (Stafford Act) will help facilitate these contracts but come with unique preference requirements aimed to favor the affected communities.
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Continue Reading Hurricane Recovery Contractors Beware

I commented on an article published in RealClearDefense, on the impact of the April executive order highlighting the Trump administration’s intention to renew the focus on sourcing domestic resources and employees for government contracts. The order requires increased enforcement of current “Buy American” laws, which date back to the Depression-era statutes Congress passed in 1933. The Office of Management and Budget (OMB) and the Commerce Department released follow-up guidance in late June requiring all federal agencies to prepare a compliance plan by September 15, 2017.
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Continue Reading “Buy American” Rules Have Major Implications for Defense

The GAO recently denied Leidos Innovations Corporation’s protest of a determination that Leidos was ineligible to receive a $272 million award by the U.S. Army despite Leidos having both the highest-rated technical proposal and the lowest evaluated cost.  The GAO decision, which affirmed the agency’s determination that Leidos was non-responsible because one of Leidos’ subcontractors did not have the necessary base access, is an important reminder that prime contractors should thoroughly vet their subcontractors to ensure, to the extent possible, all necessary qualifications are satisfied for the associated contract.
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Continue Reading Proposals are Only as Strong as their Weakest Link: GAO Affirms Non-responsibility Determination Based on Subcontractor’s Lack of Base Access

In an article published by Law360, I provided expanded insight on a U.S. Government Accountability Office (GAO) jurisdiction gap that occurred between October 1 and December 14, 2016, due to a legislative oversight. During this lapse, there was no venue with jurisdiction to hear protests of civilian agency task order awards. Congress has now given…

As we previously reported, Congress has taken its final steps in repealing Obama’s Fair Pay & Safe Workplaces rule, one of the most controversial rules enacted by the Federal Acquisition Regulatory (FAR) Council under President Obama. On February 6, the Senate gave the final vote of approval of the House Resolution overturning the rule, and on March 27, President Trump, unsurprisingly, signed the Resolution into law. At the same time, he also signed legislation overturning three other rules, including the U.S. Bureau of Land Management’s land use planning rule and two rules issued by the U.S. Department of Education.  Though much of the Fair Pay rule had never been implemented due to a court injunction, this legislation formally revokes the rule and ensures that the FAR Council cannot enact a similar rule without Congressional approval.
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Continue Reading Ding Dong the Regulation’s Dead! – Trump Finalizes Statutory Repeal of the Fair Pay and Safe Workplaces Rule

As we previously reported, following the start of the Trump Administration, Congress has moved aggressively to overturn regulations passed in the final days of the Obama Administration through the rarely-used powers in the Congressional Review Act (CRA). This focus on CRA actions, which is in keeping with the Trump Administration’s broader goal of eliminating costly regulations, has taken time and attention in the early days of the 115th Congress because the CRA gives Congress a limited amount of time to reverse regulations.  One of the rules that has been targeted for elimination is the Fair Pay & Safe Workplaces rule, a rule subject to much debate and controversy since its enactment in August 2016. Recent Senate action makes it likely that the rule, which would have imposed billions of dollars in costs on taxpayers over the next decade, will be eliminated next week.
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Continue Reading Last Straw for the Fair Pay & Safe Workplaces Rule – Congress to Take Final Vote on Repeal

In an article published by Law360, I provided insight examining the Government Accountability Office’s (GAO) rejection of bid protests questioning an unusual contracting model based on point-scoring that emphasized technical factors over cost. In this case, the General Services Administration (GSA) awarded a $65 billion IDIQ contract for IT services, Alliant II, to 60 of…

In an article published by BNA’s Federal Contracts Report, I discussed three of the most costly of President Obama’s 2016 Executive Orders impacting government contractors, orders that are likely to be overturned by President-elect Trump. In the article, I argue that, while the Executive Orders – Fair Pay and Safe Workplaces, Minimum Wage, and Sick…