Standardizing Past Performance Ratings

The FAR Councils have published a proposed rule that will provide Government-wide standardized past performance revaluation factors and performance ratings and to require all past performance information be entered into a centralized database (CPARS - Contractor Performance Assessment Reporting System). We've written in the past about past performance ratings and the various rating factors. Some agencies have been serious about them while others, not so much. Under the proposed rule, all federal agencies will standardize under common rating factors and their compliance with these requirements will be assessed on an annual basis. The government is getting serious about keeping the "bad guys" out of the contracting business.

Inputs into past performance ratings come from the technical office, the contracting office, and where appropriate, the end users of the product or service. Evaluations must reflect how the contractor performed. The report must include clear relevant information that accurately depicts the contractor's performance, and be based on objective facts supported by program and contract performance data. The evaluations should be tailored to the contract type, size, content, and complexity of contractual requirements.

Evaluation factors for each assessment must include, at a minimum, the following:

• Technical or quality
• Cost control
• Schedule/timeliness
• Management or business relations
• Small business subcontracting

Each of these factors must be rated on a scale of one to five; exceptional, very good, satisfactory, marginal, and unsatisfactory. Once entered into the system, it stays for three years and is available for agencies to utilize.

Comments from interested parties must be received by the FAR Council by August 29, 2011 to be considered in the final rule.

Increasing Small Business Role in the Defense Marketplace

Yesterday, we reported on SBA's small business contracting goals and fiscal year 2010 report cards. DoD, by far the largest buyer of goods and services of any agency, scored a 'B', meaning they achieved 90 to 99 percent of their overall targets. On Monday, DoD issued instructions to its acquisition community to strive harder to meet its 2011 targets.

Specifically, DoD instructed contracting officers to use market research to identify the capabilities of small businesses and new entrants into the marketplace. Additionally, contracting officers were reminded to follow specific FAR procedures to ensure that agency small business specialists and SBA procurement center representatives are fully engaged in the acquisition planning process. Reviewing future acquisition requirements at least annually with the small business specialists should assist in identifying procurement opportunities for small businesses.

Finally, contracting officers were reminded to review the small business subcontracting plans of prime contractors and incorporate those plans (i.e. goals) into prime contracts. Fee arrangements are sometimes predicated on meeting small business subcontracting targets.

All in all, with so much emphasis these days on increasing small business participation in the acquisition of goods and services, it is a good time to be a small business.

More Contracts Awarded to Small Businesses

The SBA (Small Business Administration) just released its 2010 "Goaling Report" and "Agency Scorecards" and was pleased with the results. The report found that the federal government awarded nearly $100 billion in federal contracts to small businesses in fiscal year 2010. Fiscal year 2009 also showed an increase but prior to that, there were four years of decline.

The overall small business contracting goal is 23 percent. The fiscal year 2010 awards totaled 22.7 percent of eligible contracting dollars. Within the overall small business category, there are subcategories for specific segments, including women-owned, small disadvantaged, service disabled veteran owned, and HUBZone. Except for small disadvantaged, the government did not meet its contracting goals for those sub-groups.

Overall, SBA gave the Government a 'B' meaning that it met 90-99 percent of its goal. DoD, which accounted for 60 percent of the dollars, also got a B. Thirteen agencies received 'As' (more than 100% of their goal). Two agencies received 'Ds' (70 to 79 percent of goal).

Over the past year, the SBA has been focused on a number of initiatives to help the government meet the 23 percent goal including;

1. Implementation of the Small Business Jobs Act of 2010
2. Interagency Task Force on Federal Contracting Opportunities for Small Businesses
3. Collaboration with White House and Senior Agency officials
4. Women-Owned Small Business Federal Contract Program (set-asides designated specifically for these businesses).
5. Revised the 8(a) Business Development Regulations.

IRS Increases Standard Mileage Rate to 55.5 Cents

Last week, the Internal Revenue Service announced an increase in the optional standard mileage rates for the final six months of 2011. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business and other purposes. Many Government contractors use this rate to reimburse their employees for mileage.

The rate will increase to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months of 2011, as set forth in Revenue Procedure 2010-51.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2011. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

"This year's increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices," said IRS Commissioner Doug Shulman. "We are taking this step so the reimbursement rate will be fair to taxpayers."

While gasoline is a significant factor in the mileage figure, other items enter into the calculation of mileage rates, such as depreciation and insurance and other fixed and variable costs.

The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.

Taxpayers and contractors always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Purpose	Rates 1/1 through 6/30/11	Rates 7/1 through 12/31/11
Business	51	55.5
Medical/Moving	19	23.5
Charitable	14	14

Making Sure Your Proprietary Information Stays Protected

Contractors (or prospective contractors) that include data in their proposals that they do not want disclosed to the public for any purpose, or used by the Government except for evaluation purposes, must mark the title page with the following legend (see FAR 52.215-1):

This proposal includes data that shall not be disclosed outside the Government and shall not be duplicated, used, or disclosed - in whole or in part - for any purpose other than to evaluate this proposal. If, however, a contract is awarded to this offeror as a result of - or in connection with - the submission of this data, the Government shall have the right to duplicate, use, or disclose the data to the extent provided in the resulting contract. This restriction does not limit the Government's right to use information contained in this data if it is obtained from another source without restriction. The data subject to this restriction are contained in sheets (insert numbers or other identification of sheets).

Then, following the cover page, offerors must mark each sheet of data it wishes to restrict with the following legend:

Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this proposal.

Once these markings are affixed to the title page and the pages containing proprietary data pages, no person or other entity may disclose contractor bid or proposal information to any person other than a person authorized, in accordance with applicable agency regulations or procedures.

Many times, contractors simply classify everything as proprietary when it may not be so. We have seen extreme usage of proprietary markings that include blank or separator sheets. FAR 3.104-4 contains provisions for resolving disagreements as to whether particular data is proprietary or not.

First, the contracting officer must notify the contractor in writing if the contracting officer believes that proprietary information, contractor bid or proposal information, or information marked proprietary has been inappropriately marked. The contractor that has affixed the marking must be given an opportunity to justify the marking.

If the contractor agrees that the marking is not justified, or does not respond within the time specified in the notice, the contracting officer may remove the marking and release the information.

If the contractor continues to hold firm on its positions, it must submit additional justification. The contracting officer will review the additional justification and either concur or not. If the contracting officer determines that the marking is not justified, he/she must notify the contractor in writing before releasing the information.

Justification and Approval (J&A)

Justification and Approval (J&A) is a document used to justify and obtain appropriate level approvals to contract without providing for full and open competition as required by the Federal Acquisition Regulation (FAR).  J&As are required for contracts over $550 thousand except for those awarded to 8(a) small businesses (including Native Enterprises). The threshold for 8(a) small businesses is $20 million.

Under certain conditions, the Government may contract without providing for full and open competition. This authority is found in 10 U.S.C. 2304(c) for the Department of Defense, Coast Guard, and NASA and in 41 U.S.C. 253(c) for all other executive agencies. Contracting without providing for full and open competition or full and open competition after exclusion of sources, is a violation of these statutes unless permitted by one of the seven exceptions listed in FAR 6.302. These exceptions include;

1. Only one responsible source and no other suppliers or services will satisfy agency requirements
2. Unusual and compelling urgency
3. Industrial mobilization, engineering, developmental, or research capability or expert services
4. International agreement
5. Authorized or required by statute
6. National security
7. Public interest

JUSTIFICATION FOR NON-SMALL BUSINESSES

Each justification must contain, at a minimum, the following 12 elements,

1. Identification of the agency and the contracting activity, and specific identification of the document as a “Justification for other than full and open competition.”
2. Nature and/or description of the action being approved.
3. A description of the supplies or services required to meet the agency’s needs (including the estimated value).
4. An identification of the statutory authority permitting other than full and open competition.
5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited.
6. A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable,
7. A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.
8. A description of the market research conducted and the results or a statement of the reason market research was not conducted.
9. Any other facts supporting the use of other than full and open competition,
10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.
11. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required.
12. Contracting officer certification that the justification is accurate and complete to the best of the contracting officer’s knowledge and belief.

JUSTIFICATION FOR SMALL BUSINESSES

The justification requirements for 8(a) small businesses are greatly reduced. Contracting officers need to address only five elements:

1. A description of the needs of the agency concerned for the matters covered by the contract
2. A specification of the statutory provisions providing the exception from the requirement to use competitive procedures in entering into the contract
3. A determination that the use of a sole-source contract is in the best interest of the agency concerned,
4. A determination that the anticipated cost of the contract will be fair and reasonable,
5. Such other matters as the head of the agency concerned shall specify.

The aforementioned Statutes require that J&As must be made available to the public within 14 days after contract award. If you believe that you have been inappropriately excluded from consideration, you should check with FedBizOpps to see whether a J&A has been issued.