Government Contracts Monitor

Agencies Rush to Obligate Federal Dollars Before September 30th - Sole Sources Abound

In a rush to obligate federal dollars before the end of the fiscal year, there have been a rash of solicitations issued using the simplified acquisition procedures brand name, sole or limited source authority.  FAR 13.106-1(b).

Sole Source Award: Not So Fast

On July 13, 2011, the Court of Federal Claims (CFC) granted a protester’s request and held that the method used by the Army to make a sole-source award for base shelter systems was illegal, despite the fact that the sole-source contract had been fully performed. Cal. Indus. Facilities Res. v. United States, No. 11-299C (Fed. Cl. Jul. 13, 2011) (full text available here).

Contractor Tax Withholding Provision Delayed

The Internal Revenue Service issued a final rule delaying a controversial provision requiring that the Government withhold a percentage of its payments to contractors for tax purposes.  This provision will require federal, state, and local governments with expenditures of more than $100 million to withhold 3% of each payment that is more than $10,000.

Federal Contractors May Be Required to Disclose Political Contributions

President Obama issued a draft Executive Order that will “require all entities submitting offers for federal contracts to disclose certain political contributions and expenditures that they have made within the two years prior to submission of the offer.”

Department of Defense Issues New Source Selection Procedures

The Department of Defense has issued new Source Selection Procedures.  These procedures are effective July 1, 2011 for all acquisitions conducted under FAR Part 15.

Legislation Equalizes All Small Businesses for Contract Set-Asides

The newly enacted 2010 Small Business Jobs Act, among other things, puts all small business categories on equal footing when competing for government contracts. Before the 2010 Act, the 1953 Small Business Act said that government agencies “shall” set-aside contract awards for small businesses in Historically Underutilized Business Zones (HUBZone), while statutes for other categories of small businesses used the word “may,” instead.

Proposed Legislation Could Put Alaska Native Corporations on Equal Footing with Other Small Businesses

Alaska Native Corporations (ANCs) will no longer receive preferential treatment over other small businesses under proposed legislation from Senator Claire McCaskill (D-Mo.) and Representative Bennie Thompson (D- Ms.). If passed, this legislation will make ANCs no different than other small businesses in the Small Business Administration’s 8(a) Program, such as those owned by minorities, women, and disabled veterans.

House Passes Legislation Requiring FCPA Violators to be Proposed for Debarment

Legislation approved by the House last week would require federal agencies to propose for debarment federal contractors found to have violated the Foreign Corrupt Practice Act (FCPA).  The FCPA prohibits giving or offering to give anything of value to a foreign official for the purpose of obtaining or retaining business for or with any foreign government.

Government Finalizes Rule Requiring Posting of Sole Source Justifications

As we reported previously, the Government must use “full and open competition” when it purchases goods or services unless one of seven primary exceptions is met.  When the Government decides to limit competition by using one of these exceptions, it must prepare a “Justification and Approval” (J&A) explaining its rationale.

Navy Announces Proposed Preferred Supplier Program

This October, the Navy plans to introduce a “Preferred Supplier Program” to reward contractors that have exhibited “exemplary performance” in the areas of cost, schedule, performance, quality, and business relations. Preferred Supplier Status (PSS) will provide contractors with better cash flow, profit, and contract terms. Importantly, PSS only impacts contract performance and will not be a factor in source selection.