Adequate Time for Proposal Preparation After Receipt of Q&As.

A lot of readers of this blog prepare and submit proposals in response to various types of Government solicitations. All solicitations contain evaluation factors ranked in order of importance and all solicitations give prospective offerors the opportunity to ask clarifying questions and receive responses from the Government. The Q&As are often valuable in assisting prospective contractors to better understand some of the nuances of the Government's requirements and to prepare their best offer possible.

What would you think then if three days before the solicitation's closing date, the Government provided you (and all offerors) the answers to 359 offeror questions? Would you have time to read, digest, and consider them in your proposal submission? Would there be adequate time to prepare your proposal?

That was the subject of a recently issued bid protest decision. The protestor argued that the Government was required to extend the closing date for the receipt of proposals in order to afford offerors adequate time to prepare their proposals, but failed to do so. The protestor argued that the type and quantity of questions that were answered required additional proposal preparation time.

The Comptroller General (CG) noted that the protestor did not identify the specific questions or answers that required additional proposal response time nor did it identify and changes to the solicitation's terms effected by the amendment. Neither did the CG find, on its own, that the sheer number of questions and answers alone to be persuasive proof of a need for more than three days of proposal preparation time, especially where, as here, the answers

• did not revise solicitation terms and
• several questions were repetitious (e.g. number of contracts to be awarded, the procurement timeline, the calculation of inventory, and contracting with small businesses).

The protest was denied.

Identification of Subcontracted Effort in Offers

Presently, FAR 52.215-22 requires offerors who intend to subcontract more than 70 percent of the work to be performed under the contract, task order, or delivery order to identify in its proposal the amount of the offeror's indirect cost and profit/fee applicable to the work to be performed by the subcontractor and a description of the added value provided by the offeror as related to the work to be performed by the subcontractor(s).

Until now, this information wasn't really used in any meaningful way. Today, the FAR Council's published a final rule (effective June 8, 2015) that will require contracting officers to do something with the information. Specifically in those instances where an offeror for a contract, task order, or delivery order informs the agency pursuant to FAR 52.215-22 of its intention to award subcontracts for more than 70 percent of the total cost of work to be performed under the contract, task order, or delivery order, the contracting officer must:

1. Consider the availability of alternative contract vehicles and the feasibility of contracting directly with a subcontractor or subcontractors that will perform the bulk of the work; 
2. Make a written determination that the contracting approach selected is in the best interest of the Government; and 
3. Document the basis for such determination. 

This requirement comes from the 2013 NDAA (National Defense Authorization Act) so it applies statutorily to Defense and State Departments but for consistency, the FAR Councils extended the requirement to all agencies.

Wonder how many offerors will come in over the 70 percent subcontracted threshold now? Contracting officer just got a whole lot more work dumped on them if thy try to award contracts to firms with 70 percent or more subcontracted effort. 

Relax DCAA, You Can't be Sued for Defective Auditing

Last September, KBR (Kellog Brown & Root Services, Inc.) created quite a stir in the Government contracting community when it filed a suit against the Government to recover $12 million in legal fees incurred in defending against Government claims based on what it considered to be defective auditing by DCAA (Defense Contract Audit Agency). KBR claimed that DCAA was negligent in performing its audit work and did not follow a number of Generally Accepted Auditing Standards (GAGAS). Click here for a recap of the initial filing.

Late last month, a Federal Judge for the US District Court (Delaware), granted a motion by the Government to dismiss the suit because DCAA was acting within the Government's discretionary authority and therefore immune from prosecution.

Sovereign immunity not only protects the US from liability, it deprives a court of subject matter jurisdiction over claims against the US. While the FTCA (Federal Tort Claims Act) waives the federal government's sovereign immunity with respect to tort claims for money damages, the "discretionary function" exception limits that waiver, eliminating jurisdiction for claims based on the exercise of a discretionary function on the part of the employee of the government.

The Supreme Court has established a two-part test to determine whether the discretionary function exception applies. First, the court must consider whether the action involves an element of judgement or choice. Second the court must determine whether the judgment exercised is of the kind that the discretionary function exception was designed to shield. In other words, the discretionary function exception protects only governmental actions and decisions based on considerations of public policy. If a regulation allows the employee discretion, the very existence of the regulation creates a strong presumption that a discretionary act authorized by the regulation involves consideration of the same policies which led to the promulgation of the regulations. The focus of the inquiry is not on the agent's subjective intent in exercising the discretion conferred by statute or regulation, but on the nature of the actions taken on whether they are susceptible to policy analysis.

In this case, the Judge ruled that DCAA performed functions with significant discretionary elements. KBR argued that DCAA's audit did not involve discretionary judgment because the Agency failed to comply with mandatory auditing standards and procedures such as the Contract Audit Manual (CAM) and Generally Accepted Government Auditing Standards (GAGAS). However, the Judge sided with the Government in its contention that CAM and GAGAS both require auditors to exercise professional judgment when conducting audits. Regardless, DCAA's alleged failure to meet certain standards set by CAM and GAGAS does not eliminate the discretionary nature of DCAA's audits. Government auditing standards leave ample room for the exercise of professional judgment. Therefore, as the Judge explained, DCAA audits involve professional judgment and constitutes a discretionary action.

You can read the entire decision by clicking here.

Why Does it Take so Long to Change the FAR?

 The FAR (Federal Acquisition Regulation) Operating Guide details the process for issuing revisions to the FAR. The Guide states that the standard timeline for FAR cases is 16 months from the time a report is submitted with a draft proposed or interim rule until the final rule is published. If 16 months seems like a long time, it is. However, be advised that the FAR Council often fails to even achieve a 16 month turn-around.

The FAR rule-making process is somewhat unique in that it does not follow the typical "Office of Information and Regulatory Affairs (OIRA) process. FAR rule-making begins by going through the FAR Council process, which includes several layers of approval that include (i) the Defense Acquisition Regulatory Council (DARC), (ii) the Civilian Agancy Acquisition Council (CAAC), (iii) General Services Administration (GSA), and (iv) the Office of Federal Procurement Policy (OFPP) before it even gets to the OIRA.

After the FAR Coucil process, rules are then sent for a final check through the OIRA clearance process before publication as a final rule. The FAR Council, CAAC, and DARC all have members representing various agencies and are all expected to reach consensus on these rules, which are often very complex.

There have been many complaints about the process by various stakeholders and these complaints have reached Congress. The version of the 2016 NDAA (National Defense Authorization Act) passed by the House includes a provision that requires a study to determine how the process can be expedited.

Specifically, the NDAA directs the OFPP (Office of Federal Procurement Policy) to conduct a review of the FAR rule-making process with the goals of improving the timeliness of this process and identifying inefficiencies that contribute to the slowness. Congress expects a briefing on the OFPP study later this year on the findings of the review. It also expects to hear "... recommendations for improving the FAR rule-making process."

Don't expect anything to change significantly.

Attendance by Government Employees at Professional and Technical Conferences

After the GSA conference scandal a couple of years ago (remember the guy who organized an $800,000 junket for 300 GSA employees to Las Vegas, then took a selfie of himself sitting in a spa tub overlooking Las Vegas, sipping wine and eating cheese?) many Governmental agencies significantly curtailed their conference spending - so much so that even where there was solid justification for attending professional conferences, no one in the organization was willing to approve (and fund) such attendance out of a fear of a next big scandal. Many view conferences as boondoggles - taking away from time that could be better spent at a desk.

There is a provision in the 2016 NDAA (National Defense Authorization Act) that attempts to reverse the trend. The NDAA which has now passed the House, includes a provision that will require the Department of Defense to look into its policies and procedures related to professional travel and report back to Congress its findings and recommendations necessary to further enable professional development of its workforce.

The House Armed Services Committee expressed concern that many organizations organizations within the Department of Defense have either eliminated or severely restricted temporary duty travel for professional and technical conferences. While the committee supported efforts to reduce non-essential costs, it believed such conferences provide value by enabling Department of Defense engineers, scientists, and other technical personnel to share research, learn about cutting-edge innovations, and interact with their peers from across the country and the world.

While the committee acknowledged DoD's recent show of support for attendance at conferences when appropriately justified (and when funds were available), it expressed concern that the lengthy and complex approval processes to enable conference attendance by Federal employees is unduly hampering the ability of academic and scientific personnel in the Department of Defense to perform their jobs, may inhibit career progression, and could discourage personnel with highly technical skills and competencies from entering the workforce.

To ensure that the process of approving conference attendance is not unduly bureaucratic, the NDAA contains a provision that requires the DOD to examine its policies and procedures related to professional travel and to brief the House Committee on Armed Services not later than October 1, 2015, on findings and recommendations necessary to further enable professional development of the workforce.

New Authority to Award Sole-Source Contracts to Women-Owned Businesses

In last year's NDAA (National Defense Authorization Act), in a move designed to increase participation by Women-Owned businesses in Federal contracting, Congress added a provision to allow contracting officers to award sole-source contracts to Women-Owned Small Businesses (WSOB) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) under certain circumstances. The SBA (Small Business Administration) has just released proposed regulations for implementing that statutory authority.

The first requirement is a set-aside contract. The SBA must first determine that WOSBs are underrepresented or substantially underrepresented in Federal procurement in the particular industry. Once that determination has been made, a contracting officer may restrict competition or make a sole source award.

Under the statutory authority, if a contracting officer cannot identify two or more WOSBs or EDWOSBs that can perform at a fair and reasonable price, but identifies one WOSB or EDWOSB that can perform at a fair and reasonable price, the contracting officer can award the contract on a sole source basis, if the value of the contract, including options, does not exceed $6.5 million for manufacturing contracts and $4 million for all other contracts.

This sole source authority can only be used where a contracting officer conducts market research in an industry where a WOSB or EDWOSB set-aside is authorized, and the contracting officer cannot identify two or more WOSBs or EDWOSBs that can perform at a fair and reasonable price, but identifies one that can perform.

Note here the provision that the contracting officer must ensure that the award is made at a fair and reasonable price. This provision is not a license to award contracts on a sole-source basis at any cost.