On May 11, 2016, the Defense Security Service (DSS) released a new guide on mitigating and managing affiliate operations for entities bound by a Foreign Ownership, Control, or Influence (FOCI) mitigation agreement. The guide, titled Navigating the Affiliated Operations Plan: A Guide for Industry, outlines how companies can identify whether they are engaging in affiliated operations, submit an Affiliated Operations Plan (AOP), and ensure that they are properly mitigating potential risks. In compiling an AOP, a company is expected to describe all operations and services it intends to share with affiliates, as well as the potential risks of the collaboration and how those risks will be mitigated. The guide emphasizes that, unless there are special circumstances, an AOP must be provided before a company can start leveraging any affiliated operations.

Continue Reading DSS Releases New Guide to Help Cleared Contractors Meet Requirements of FOCI Mitigation Agreements

The SBA is proposing to change the SBIR and STTR Policy Directives in a series of clarifying amendments that provide a new layer of certainty regarding the future of SBIR contractors’ data rights and potential Phase III awards.

SBIR contractors are currently entitled to an “SBIR/STTR protection period” of four years (five years for DoD SBIR contracts) from the last deliverable during which the awardee retains the rights in data. This protection period is extended upon each subsequent related award, which can leave the contractor and the government (and potential acquiring entities) unsure of the actual length of the protection period. To provide clarity around the time period, SBA is proposing an SBIR/STTR protection period of 12 years without extensions. This is a suggested minimum, and agencies would have the discretion to adopt a longer period. Under a proposed fixed period, the value of a SBIR contractor’s data is more readily determined without an ever-changing timeframe of data rights.

Continue Reading How Will Proposed Changes to SBIR Rules Impact Valuation of SBIR Contractors?

We recently authored an article outlining the details surrounding the United States’ eased trade restrictions with Cuba. Businesses must carefully analyze the new regulations before venturing into business opportunities in Cuba.

As stated in the article, “in its zeal to ease restrictions, the U.S. government has not always accounted for how to authorise certain activities that seemingly should be allowed.”

The full article, “Cuba Update: Closer but No (Celebratory) Cigar Just Yet,” was published May 2016  and is available on the WorldECR website.

Preparing a proposal in response to a government solicitation can be a daunting project. It’s not always possible to discern from the solicitation language exactly what the procuring agency wants, and so a certain amount of guessing and hoping is usually involved. However, this process is made doubly more frustrating when it seems that the agency is holding out on you. It is probably unwise for an agency to withhold important information about their procurement, if only for the sake of competition. Even so, there are certain situations where an agency holding back crucial information is a violation of the FAR, and may lead to a successful protest.

This principle was on display in a recent U.S. Government Accountability Office (GAO) bid protest decision, Crowley Logistics, Inc. GAO’s decision in Crowley hinged on the discussions between the procuring agency and the offerors, and whether those discussions were proper. In a negotiated procurement, agencies have the ability to make an award based solely on the proposals initially submitted by offerors. However, the procuring agency also has the option to use the initial proposals to establish a competitive range that includes the offers most likely to receive an award. Once the competitive range is established, the agency then holds discussions with the offerors in the competitive range, allowing those offerors to submit revised proposals in response to the discussions with the agency. If a procuring agency chooses the latter option, the discussions that it holds must be meaningful and equitable across all offerors in the competitive range.

Continue Reading Learning from Bid Protests: Procuring Agencies Cannot Hold Out on You

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

Bid protests are a ubiquitous part of government contracting, basically considered part of the normal procurement process. While bid protests can be filed at either the procuring agency level or at the U.S. Court of Federal Claims, the majority of bid protests are filed with the Government Accountability Office (GAO). Recently, on April 15, 2016, GAO released a proposed rule that will make several significant changes to their bid protest process. These proposed changes clarify some elements of the process, while at the same time raise several questions about how these new rules will affect protesters moving forward.

Continue Reading GAO Proposes Significant Changes to its Bid Protest Process

On May 4, I am headed to Nashville to take part in the Joint Venture/Team Training Panel sponsored by UT PTAC and NBIC.  The seminar will take place from 8:00 a.m. to noon at our Nashville office. Joint ventures continue to provide businesses with new opportunities in a fiercely competitive federal marketplace. Attendees will hear expert panel discussions from several perspectives on navigating the challenges of joint ventures, identifying potential pitfalls in structuring joint ventures and leveraging strategic alliances to become more effective and win government contracts. Hope to see you there!

View the PDF for more information and registration.

Contractors may be familiar with receiving a long list of flow-down provisions from their prime contractor that don’t seem to apply to them or are burdensome to comply with. This entails pushback to tailor flow-downs or even acts as a barrier for some companies to enter into the federal marketplace at all. The House Armed Services Chairman apparently agrees this may be the case, and pursuant to his proposed NDAA 2017, the Secretary of Defense would be required to enter into a contract with an independent entity to:

  1. Identify the required flow-downs in the FAR and DFARS;
  2. Identify flow-down provisions critical for national security;
  3. Examine which clauses are applied inappropriately to subcontracts;
  4. Assess applicability of flow-downs for the purchase of commodity items that are acquired in bulk for multiple acquisition programs;
  5. Determine unnecessary costs or burdens flow-downs place on the supply chain; and
  6. Determine the effect of flow-downs on the participation rate of small businesses and non-traditional defense contractors in defense procurements.

If this provision makes its way into the final version of the NDAA for 2017, we can expect a briefing on interim findings by March 1, 2017, and a final report to the congressional defense committees by August 1, 2017. So, don’t expect the flow-downs to be eliminated anytime soon!

In February, we discussed the impact easing restrictions with Cuba would have on trade. And Cuba continues to be a hot topic for U.S. companies and business people.  Yet it is vital for counsel to understand the continuing hurdles and steps necessary for compliance.  On April 12 at 1:00 pm EST, we will present a webinar, Doing Business in Cuba: Navigating the Evolving Sanctions Landscape, Leveraging New Opportunities.  During this lively panel, we will review issues such as the following:

  • Which business activities are currently permissible for U.S. companies with respect to Cuba?
  • How is the Commerce Department regulating exports and re-exports to Cuba?
  • What steps should companies take to promote OFAC and export control compliance with respect to Cuba?

We hope you can join us! To learn more or register, visit the Strafford website.

On Friday morning, I’ll be back in Oak Ridge. We’ve partnered with the East Tennessee Economic Council (ETEC), and I’ll be presenting, “How to Prepare for and Take Advantage of SBA’s Expansion of the Mentor Protégé Program.” I plan to provide an overview of SBA’s proposed rule that will dramatically reshape Mentor Protégé programs within the federal government, and provide some tips on how to get ready for final implementation and roll-out of the new program. The presentation will also highlight some of the unique changes being proposed by SBA, including the expanded affiliation exception for joint ventures, and how large and small businesses can take steps now to prepare for the expanded opportunities under the new program. The Friday ETEC meeting will begin at 7:30 a.m. EST, details here. If you’re an early bird and in the area, please join us!

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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