The General Services Administration estimates the size of the federal market for commercial products to be about $50 billion a year. Manufacturers and distributors of commercial products have seen GSA’s multiple award schedule contracts as a good way to way to access federal customers. But a GSA schedule contract does not guarantee sales and the process of obtaining and adhering to such a contract presents its own headaches.

Soon there will be a better way.

Section 846 of the National Defense Authorization Act for FY 2018 establishes a program that will allow federal agencies to purchase commercially available off-the-shelf (COTS) items through commercial e-commerce portals that are currently available only to the private sector. As long as the procurement is under the new $250,000 Simplified Acquisition Threshold, COTS products (not services) will be available for purchase Government-wide, presumably without additional competition and without a lengthy list of FAR clauses incorporated by reference.

Under the program, GSA will enter into “multiple contracts” with “multiple e-commerce portal providers.” To the maximum extent possible, the Government will adopt and adhere to standard terms and conditions established by the e-commerce portals themselves.

Continue Reading Will e-commerce portals replace the Federal Supply Schedules?

You read the agency’s solicitation and realize the specifications are written around a competitor’s product and your product does not qualify. You alert the government to the issue to no avail. Where do you turn?  This can be the ideal situation to lodge a pre-award protest of the specifications.

What is a pre-award protest?

Image 2012 by Thangaraj KumaravelA pre-award specification protest challenges the agency’s description of the requirements contained in a solicitation or the ground rules under which the agency intends to conduct the procurement. Under the Competition in Contracting Act, a contracting agency is generally required to specify its needs and solicit offers in a manner that will achieve full and open competition, so that all responsible sources are permitted to compete. An agency generally may include restrictive provisions or conditions in its solicitations only to the extent necessary to satisfy the agency’s needs. 10 U.S.C. § 2305(a)(1)(A); 41 U.S.C. § 3306(a)(2)(B). When an agency’s solicitation contains restrictions that prevent a potential bidder from competing, potential bidders can protest that the solicitation improperly restricts competition.

Prevailing on this type of protest can be difficult because it requires the protestor to demonstrate that an agency acted unreasonably in describing its requirements, which is an area over which agencies are granted broad discretion. But the equities of such a challenge can be in the favor of the protestor because the protest seeks to expand competition, which ultimately should benefit the agency. The GAO recently sustained a pre-award protest of a Department of Veterans Affairs procurement for sterile foam dressings because the agency was unable to provide a reasonable explanation for a restrictive absorbency specification in its solicitation. Continue Reading A primer on pre-award protests of federal procurements

The United States Defense Department has published a final cybersecurity regulation concerning unclassified “controlled technical information.” See 78 Fed. Reg. 69,273 (Nov. 18, 2013) [pdf]. The objective of the regulation is to require contractors to maintain “adequate security” on unclassified information systems on which CTI may reside or transit and to implement detailed reporting requirements for “cyber incidents.” The final rule is narrower than the proposed regulation, which sought to safeguard unclassified DoD information generally.  See 76 Fed. Reg. 38,089 (June 29, 2011) [pdf].

Definition of CTI

The final rule includes a new DFARS provision (DFARS 204.7300) and a DFARS contract clause (DFARS 252.204.7012), which impose new security measures and reporting requirements on contractors and subcontractors whose work involves unclassified “controlled technical information resident on or transiting through contractor information systems.”

The rule broadly defines CTI as “technical information with military or space application that is subject to controls on the access, use, reproduction, modification, performance, display, release, disclosure, or dissemination.”  DFARS 204.7301.

The term “technical information” is further defined to mean “recorded information, regardless of the form or method of the recording, of a scientific or technical nature . . . .” See DFARS 252.227-7013. Examples of technical information include research and engineering data, engineering drawings and associated lists, specifications, standards, process sheets, manuals, technical reports, technical orders, catalog-item identifications, data sets, studies and analyses and related information, and computer software executable code and source code.

While this is a broad definition, comments on the new rule limit its application to information requiring controls pursuant to DoD Instruction 5230.24 [pdf] and DoD Directive 5230.25 [pdf]. Contractors should not have to devote resources simply to the task of determining whether information is CTI or not.

Continue Reading DoD’s new cybersecurity rules on unclassified “controlled technical information”

On May 18, 2012, the United States House of Representatives voted 299-120 to approve HR 4310, the National Defense Authorization Act for Fiscal Year 2013 [pdf]. The House vote rejects two amendments that had been the topic of some discussion within the government contracts community. One would have restricted the definition of “commercial item” in order to reduce the DOD’s use of streamlined commercial item procurement. FAR 2.101 currently defines commercial item as an item customarily used by the general public that either has been sold to the general public or “has been offered for sale” to the general public. The amendment would have limited commercial item sales to items actually sold to the public in quantities similar to those purchased by the government. The amendment would have addressed a criticism charging that the government uses streamlined commercial item procedures for items that are either not really used by the public or are used by the public only in token amounts.

The House also rejected a proposal to limit allowable executive compensation to $400,000. Currently, allowable executive pay is capped at $763,029. See 77 Fed. Reg. 24226 (April 23, 2012). The $400,000 limit would have reduced allowable executive compensation to 2004 levels and to the salary of the President of the United States.

Allowable compensation costs for the senior executives of Government contractors is capped by statute. See 10 U.S.C. § 2324(e)(1)(p); 41 U.S.C. § 4304(a)(16). The limitation appears in the FAR Cost Principles at FAR 31.205-6(p). These caps do not actually limit the amount of compensation that an executive may receive from a government contractor. But executive compensation costs in excess of the limit are deemed unallowable costs. They must be paid from the contractor’s profit and not reimbursed by the Government as a direct or indirect cost.

Related articles—

Fatal flaws in DCAA’s challenge to contractor executive compensation (Feb. 1, 2012)

More contractor oversight in the 2012 National Defense Authorization Act (Dec. 23, 2011)

Executive compensation FAQ (June 15, 2011)