Steven Koprince [email protected] 786-843-0450 Twitter @StevenKoprince GovCon Legal Update 2014 Government Procurement Conference

Steven [email protected] 786-843-0450

www.smallgovcon.comTwitter @StevenKoprince

GovCon Legal Update 2014

Government Procurement ConferenceAugust 6, 2014

Steven J. KoprincePetefish, Immel, Heeb & Hird LLP



Overview

• Bids and Proposals• Teaming & Joint Venturing• SDVOSB Programs• HUBZone Programs• Small Business Eligibility• Interesting Cases: Strange But True• What’s On The Horizon



Bids and Proposals



Bids and Proposals

JV Derichebourg-BMAR & Associates, LLC, B-408777 (Nov. 20, 2013): • Proposals due July 8 at 3:00 pm• Offeror submits proposal by email but forgets to include the price proposal

and other attachments• Two days later, offeror resends missing attachments• Proposal excluded as untimely; GAO upholds exclusion



Bids and Proposals

AeroSage LLC, B-409627 (July 2, 2014)

• 45-minute “bid confirmation deadline” was unreasonable & contrary to FedBid terms

OASIS Systems, LLC, B-407273.54 et al. (June

19, 2014):

• Subcontracting plan discrepancy partly to blame for lost spot on EAGLE II IDIQ contract



Teaming & JVs



Teaming & JVs

Sealift, Inc., B-409001

(Jan. 6, 2014):

2013 NDAA allows small primes to meet performance requirements by subbing to other small businesses

Example:

Company A, a small business, bids on a small

business set-aside contract for services.

Company A self-performs 30%, subs 30% to

Company B, another small business, and 40% to Company C, a large

business



Teaming & JVs

BGI-Fiore JV, LLC, B-409520 (May

20, 2014)

8(a) JVs need not be approved by SBA at proposal submission

SOF Associates-JV, SBA No. VET-

234 (2013):

Supermajority provision in JV

agreement rendered JV ineligible for

SDVOSB set-aside



SDVOSB Programs



SDVOSB Programs

“Two programs” confusion continues• MJL Enterprises, LLC, SBA No. VET-240 (2013):

Verification program applicable only to VA and FAA set-asides

• Reese Services, Inc., SBA No. VET-231 (2013): Verified SDVOSB found ineligible for Navy procurement



SDVOSB Programs

Kingdomware Battle Ends?• Kingdomware Technologies, Inc. v. U.S., No. 2013-

5042 (Fed Cir. 2014):• Federal Circuit upholds COFC decision allowing VA

to use GSA schedule without “Rule of Two”• Federal Circuit scope may be broad



SDVOSB Programs

New VA appeal right (Sept. 2013)• VA, SBA unable to agree on interagency appeal• VA “reconsiders” and decides to keep appeal jurisdiction• Initial VA SDVOSB protests decided by CVE Director• Appeals decided by OSDBU Executive Director• Potential flaws: no independent judges; appeal decisions not

published



HUBZone Program



HUBZone Program

Wakan, LLC, B-408535.2 ( June 19, 2014)• HUBZone certified company bids on unrestricted procurement for supplies• Proposal states that manufacturing will be performed at facilities of a non-

HUBZone company• Procuring agency determines that subcontractor will perform more than

50% of manufacturing• Agency declines to apply HUBZone price preference clause, FAR 52.219-4• GAO upholds agency decision



Small Business



Small Business

Bell Pottinger Communications USA, LLC, SBA No. SIZ-5495

(2013):

• Management alone is not performance of “primary and vital” work under ostensible subcontractor rule

TISTA Science & Technology Corp., SBA No.

SIZ-5529 (2014):

• No automatic size recertifications for GSA task orders

TLS Contracting, Inc., SBA No. SIZ-5527 (2014):

• Small business size status measured by annual receipts, not profits



Small Business

PTAC/SBDC Advisory Size Opinions• Proposed rule issued in late June 2014• Rule allows PTACs and SBDCs to issue advisory size status determinations• Small business acting in good faith reliance on PTAC/SBDC advisory opinion

has “safe harbor” from misrepresentation penalties• PTACs & SBDCs not required to provide advisory size opinions• No new funding allotted for size opinions• Comments on proposal due August 25



New SBA Rules on Multiple Award Contracts



New SBA Rule on Multiple Award Contracts

Where “Rule of Two” is not met for a MAC, Agency must give “meaningful consideration” to other small business alternatives:

• Partial set-aside - Can be used where procurement’s requirements can be broken up into smaller, discreet requirements• Reservation of awards - Awards under a MAC solicitation can be reserved for small business even where Rule of Two

not satisfied• Order set asides - Agencies may issue unrestricted solicitations but commit in the solicitation to set-aside or reserve

some orders for small business

New Tools are encouraged but not required

On Ramp/Off Ramp: Contracting Officers have authority to allow new small businesses onto a MAC during performance and can remove contractors that are no longer small.



New SBA Rule on Multiple Award Contracts

Every MAC and every order must be assigned a single NAICS code• Prohibits agencies from assigning multiple NAICS codes and taking credit if MAC/order is

awarded to a business that is small under some, but not all, of multiple codes

Limitations on Subcontracting• For set-aside contracts, compliance with limitations on subcontracting will be determined by

each period of the contract (base and each option)• Previous rule: compliance determined as of period of performance used in evaluating the bid

(often base plus all options)• For order set aside under unrestricted contract, compliance determined based on period of the

order• If order is competed among both small and large businesses, no subcontracting limit applies



Interesting Cases: Strange But True



Strange But True

Emax Financial, B-408260(July 25. 2013)• Small business protests small business set-aside• Argues that set-aside interferes with its ability to structure its

team• GAO denies protest, finding that “Rule of Two” was satisfied• The two? The incumbent-and EMax



Strange But True

• Trailboss Enterprises, Inc., No. 13-296C (2013): Contractor protests its own award– Contract awarded in November 2012. After stop work

order, contractor directed to resume– Contractor complains that pricing is now outdated and

files a protest in effort to escape contract– Court dismisses protest and suggests that contractor

should have filed CVA claim instead



What’s On The Horizon?



On the Horizon

New SBA mentor-protégé programs for SDVOSBs, HUBZones and WOSBs

• SBA may also establish mentor-protégé programs for all small businesses

Reorganization of other agency’s mentor-protégé

programs

• Under 2013 NDAA, SBA will establish rules and approve other agencies’ M-P programs



On the Horizon

SDVOSB Program Changes• May 2014: House passes 2015 NDAA• House-passed NDAA requires:

• VA to begin using SBA SDVOSB definitions immediately• VA to transfer verification function to SBA

• Senate bill: No immediate transfer; study Government-wide verification



On the Horizon

WOSB Program Improvements• House-passed 2015 NDAA allows sole source

contracts for WOSBs• WOSB sole source thresholds: $6.5 million

(manufacturing); $4 million (other industries)



Conclusion & Questions



For More Information

Steven J. KoprincePartner(785) [email protected]

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Documents

Steven Koprince [email protected] 786-843-0450 Twitter @StevenKoprince GovCon Legal Update 2014 Government Procurement Conference