The GAO’s decision in BC Peabody Constr. Serv., Inc., B-408023 (May 10, 2013) [pdf] illustrates the importance of establishing prejudice in a bid protest. The protester alleged that it proposed the same subcontractor (Bauer Foundation Corporation) as the awardee proposed on a dike rehabilitation project. Both offerors relied on Bauer for the “cut-off wall,” a critical element of the project. Both proposals showed that Bauer had the required experience for the cut-off wall.

Despite their use of the same subcontractor, the Corps of Engineers nevertheless assigned the awardee and the protester different scores for the cut-off wall element of their proposals. The Corps rated the awardee’s proposal acceptable for both the demonstrated experience and past performance subfactors, but it rated the protester’s proposal unacceptable.  The GAO agreed the Corps’s action was procurement error. “Where multiple proposals propose the same contractor, once the agency becomes aware of that subcontractor’s experience . . . it cannot reasonably assign one proposal a higher score than another based on that experience.” GAO nevertheless denied the protest.

The Small Business Administration is continuing the task of implementing several regulatory changes required by the National Defense Authorization Act for Fiscal Year 2013 (NDAA) [pdf]. One such change occurred on May 7th when the SBA published an interim final rule (RIN 3245-AG55) [pdf] enacting section 1697 of the NDAA and amending 13 CFR 127.503 [pdf]. The interim final rule removes  the statutory cap on set-aside contracts for Women Owned Small Businesses (WOSB) and Economically Disadvantaged Women Owned Small Businesses (EDWOSBs).

Flight delays resulting from the furloughs of air traffic controllers are certainly not the only impact of sequestration. All federal contractors and grant recipients will have to adapt to reduced federal spending. According to the OMB report to Congress on sequestration reductions for FY 2014, $109 billion will be cut from the federal budget next year with equal reductions of approximately $54.7 billion in the defense and non-defense categories. Discretionary defense spending will see a $53.9 billion reduction, while direct defense spending will be reduced by $749 million. Non-defense discretionary spending will decrease by $37.2 billion, and non-defense direct spending will shrink by $17.5 billion, $11.2 billion of which will come from reductions in Medicare spending.

As agencies struggle with these mandatory budget cuts imposed by sequestration, incrementally funded contracts are particularly vulnerable. Despite the apparent need for their goods or services and the high caliber of their work, contractors holding incrementally funded contracts may find that funds are simply not available. Here are three strategies contractors can take to limit the risk of performing without compensation:

By Hal Perloff

Energy is a national security issue. The U.S. defense industry represents one of the world’s largest markets for energy, and the cost and availability of energy directly affects military capabilities and readiness. Department of Defense leaders are revamping how DOD uses energy and determining which fuels offer the best overall investment, prices,…

Section 827 of the 2013 National Defense Authorization Act [pdf] permanently enhances whistleblower protections for employees of DoD and NASA contractors and sub-contractors. Section 828 establishes a“pilot program” to provide enhanced whistleblower protections for employees of civilian

agency contractors and subcontractors for the next four years. In plain English, here is a look at what the enhanced…

Congress continues to promote opportunities for small business contractors to do business with the federal government. It also continues to increase the penalties for those taking unfair advantage of small business opportunities. Here is a look at the most recent set of carrots and sticks, which appear in the National Defense Authorization Act for Fiscal Year 2013.

1. Subcontracts with “similarly situated” small businesses

Section 1651 of the 2013 NDAA provides a new exception to the small business subcontracting cap, which restricts small businesses from subcontracting more than 50 percent of the amount paid under a services contract. With the passage of NDAA, the amount paid under any subcontract with a small business concern that has the same small business status as the prime contractor is excluded from the small business subcontracting cap. The term “similarly situated entities” includes service-disabled veteran-owned small businesses, HUBZone small businesses, women-owned small businesses, and economically disadvantaged women-owned small businesses.

This provision also changes the method for calculating the 50-percent subcontracting cap. Previously, the subcontracting limits in FAR 52.219-14 counted only direct labor costs. Under section 1651, “amount paid” under a subcontract, including labor, material, and other direct costs, is used to determine the 50-percent subcontracting cap. This is a strong incentive for small business prime contractors to award subcontracts to similarly situated small businesses. The old formula continues to govern subcontracting limitations for construction contracts, but the NDAA directs the SBA to establish similar limitations on construction contracts.

The penalty for violating the subcontracting cap is the greater of $500,000 or the dollar amount expended over the cap. The “amount expended” clause is a new penalty.

Project Labor Agreements have become increasingly common on federal government construction projects, especially since the issuance of Executive Order 13502 [pdf] and the implementing regulations (FAR Subpart 22.5). These rules encourage the use of PLAs in connection with all “large-scale construction projects,” defined as a “project where the total cost to the Federal…

We have dedicated multiple posts to understanding the scope of jurisdiction over protests of task and delivery orders. Previous posts can be found here and here. Thanks to an amendment contained in the 2013 National Defense Authorization Act [pdf], the issue remains somewhat unsettled. Fortunately, Congress still has a few years to set the record straight.

Before the 2013 NDAA, disappointed offerors could protest the issuance of task and delivery orders valued over $10 million regardless of whether the order was issued by a civilian or Department of Defense (DoD) agency. Both of the authorizing statutes providing for task order protest jurisdiction on civilian and DoD orders over $10 million were set to expire on September 30, 2016 (the “sunset provisions”).

Section 830 of the 2013 NDAA amends 10 U.S.C. § 2304c(e) by eliminating the sunset provision, providing for permanent GAO jurisdiction over challenges to DoD task and delivery orders over $10 million. However, this amendment applies only to the statute authorizing jurisdiction over DoD task and delivery orders. The corresponding statute providing for task order protest jurisdiction over civilian agency task and delivery orders over $10 million, 41 U.S.C. § 4106(e), is still set to expire on September 16, 2016. 

The government often blames construction contractors for shortcomings in its own design and unanticipated difficulties encountered at the site. “You’re supposed to be the expert!”  “You should have known what to expect because of the magic language on page 97 of the geotechnical report.” “You’re the design-builder!”

At first glance, these arguments seem persuasive. But when they are presented to a judge at the Court of Federal Claims or a Board of Contract Appeals, their limitations become apparent. Contractors are not ordinarily expected to have the expertise of a designer or geotechnical engineer. And even when contractors have design-build responsibilities, they are entitled to rely on the design components that the government has furnished to them. And that single reference on page 97 of the geotechnical report?  It doesn’t override the interpretation that a reasonable contractor may draw from the boring logs and the geotechnical report as a whole.