What You Need to Know About Federal Government Contracting. What s Different?

Transcription

1 What You Need to Know About Federal Government Contracting What s Different? Smith, Currie & Hancock LLP October 28, 2010 Steven L. Reed slreed@smithcurrie.com (202) Pennsylvania Avenue, NW Suite 601 Washington, DC

2 Penetrate the Federal Market Team with Small Businesses Perform Federal Contracts Successfully Regulatory Basis Federal Acquisition Regulation (FAR) More than 2,000 Pages access.gpo.gov/nara/cfr/cfr-tablesearch.html#page1 2

3 More Regulations Agency Supplements to FAR DFARS PGI AFARS EFARS Key Contract Clauses and Considerations Fair and Balanced Contract Compensable Events Regulations Jargon Public Funds 3

4 Authority - Contracting Officer (CO) Contracting Officer s Representatives Technical Staff Construction/Program Managers No Apparent Authority Risk on the Contractor to Ascertain Actual Authority Delegation Letters 4

5 Certifications = Liability Minefield More than 15 Different Certifications I hereby certify, to the best of my knowledge and belief, that (1) The amounts requested are only for performance in accordance with the specifications, terms, and conditions of the contract. False Claims Paid Invoices - Morse Diesel Efforts to Get the Government s Attention Daewoo Product Substitution Counterfeit Products Cost or Pricing Data 5

6 Mandatory Ethics & Compliance Programs Contracts > $5 Million or 120-day performance Mandatory Flow Down to Covered Subs Limited Exemptions for Small Business Concerns No Compliance Program Post Agency Hotline Posters Contractor Suspension or Debarment: Knowing Failure to Make Timely Disclosure to Agency IG and Contracting Officer When Contractor s Principals Have Credible Evidence of Violations of Federal Law Related to Fraud and False Claims 6

7 Socio-Economic Policy Vehicle Davis Bacon Act - FAR 22.4 Buy American Act - FAR 25.2 Small Business Programs - FAR 19 and 13 CFR. FEDERAL CONTRACTING OPPORTUNITIES SMALL BUSINESS IS BIG BUSINESS Knowledgeable legal representation Disclose, Disclose, Disclose Contractors flocking to Federal contracts 7

8 FEDERAL CONTRACTING OPPORTUNITIES SMALL BUSINESS IS BIG BUSINESS Small business categories Affiliation Mentor-Protégé FEDERAL CONTRACTING OPPORTUNITIES SMALL BUSINESS IS BIG BUSINESS Teaming agreements Ostensible subcontractor Self-performance rules 8

9 Small Business Programs Small Business Program Examples Small Business Set-Aside, 13 CFR 121 Size Number of employees NAICS Code 8(a) Set-Aside, 13 CFR 124 Mentor Protégé Programs Small Business Programs Small Business Program Examples HUBZone Set-Aside, 13 CFR 126 Service Disabled Veteran Owned Set- Aside, 13 CFR 125 Veteran Owned Set-Aside, VA Only Woman Owned Set-Aside, 13 CFR 127 9

10 FEDERAL CONTRACTING OPPORTUNITIES SMALL BUSINESS IS BIG BUSINESS Registration is required CCR / DUNS SBA / DVA Small Business Programs How Do I Get Started? Step 1: Determine your size/naics Code Step 2: Determine eligibility for disadvantaged business status Step 3: Certify where required Step 4: Register with CCR 10

11 FEDERAL CONTRACTING OPPORTUNITIES SMALL BUSINESS IS BIG BUSINESS ARRA money - contracts and grants ARRA reporting Buy American requirements Award Issues Design Build Design Bid Build IFB or RFP RFP s Preferred by Gov t Fixed-Price Preferred by Gov t 11

12 Basis for Award Low Price Best Value Determination Technically Acceptable Low Price Award Disputes Bid Protests Agency Protests, FAR 33.1 Government Accountability Office (GAO) (Comptroller General of the United States), 4 CFR 21 U.S. Court of Federal Claims, Court Rules and App. C 12

13 Protest - Deadlines Solicitation Defects BeforeBid Opening or Closing Date for Receipt of Proposals Other Issues 10 Calendar Days After know or should have known of Basis of Protest CICA Stay 5 Days / 4 Days Injunctive Relief Court Only Small Business Program Protests SBA Determination See FAR 19.3 and 13 CFR 121, 124 & 126 Timing 5 Business Days after Bid Opening or Notification of Successful Offeror SBA Regulates Participation by Large Business Concerns in Restricted Procurements Totality of the Circumstances 13

14 Keys to Bid Protests Time is of the essence 20% success rate Need solid objective evidence of agency error Need to have standing Changes Unilateral Direction Duty to Proceed Written Order Within General Scope of Contract 14

15 Constructive Changes Any Other Written or Oral Order That Causes A Change Examples Impossibility or Impracticability Defective or Misleading Drawings or Specifications Ambiguity or Misinterpretation Notice Written Confirmation & Impact Date, Circumstances, Source No Notice - Prejudice Standard 15

16 Differing Site Conditions Type 1 Subsurface or Latent Conditions Differ Materially from Contract Indications Comparative Analysis Actual Conditions Contract Indications Differing Site Conditions Type 2 Unknown Physical Conditions at the Site Unusual Nature Differ Materially from Conditions Ordinarily Encountered and Generally Recognized as Inhering in Work of the Type Specified in the Contract Comparative Analysis Between Usual and Unusual 16

17 Suspension of Work Directed SOW Constructive SOW Partial SOW Suspension of Work Unreasonable Length of Time Causes Additional Cost or Delay Not Due to Contractor Fault or Negligence During Performance of Work 17

18 Suspension of Work Profit Excluded Changes v. SOW Changes Preferred (except DVA) Work Stoppage v. Work Continued But Delayed of Extended Delay Prior to Issuance of Change Order Equitable Adjustment Increase or Decrease in Costs Increase or Decrease in Time Whether or Not Changed 18

19 Delay Time Analysis Baseline As-Planned Schedule Periodically Updated CPM or Bar Chart Chronological FRAG Net for Each Compensable Event Acceleration Costs Documentation Computerized Finance and Accounting System Audit by Defense Contract Audit Agency FAR 31 Allowable Allocable Reasonable 19

20 Costs and Claims Preference for Actual Costs Restricted to Costs Incurred in Performance of the Contract Breach Damages Not Recoverable if Relief Available under the Contract Costs Reasonable Would Be Incurred By A Prudent Person in A Competitive Business Environment Allocable Can Be Assigned to A Contract or Cost Objective That Directly or Indirectly Benefits That Objective Allowable FAR 31 20

21 Requests for Equitable Adjustment Liability Facts and Contract Provisions Causation Link Liability and Extra Costs and Time Extra Costs and Time Actual Costs and Markups Delay Time Analysis Default Termination Refuse or Fail to Perform Such That Completion Will Be Timely Fail to Proceed Fail to Make Progress Fail to Complete Timely Repudiation of Contract Other Material Breach 21

22 Default Termination No Requirement for Cure Notice or Order to Show Cause Cure Notice Typical Government Burden of Proof Burden Often Minimal Default Termination Failure to Make Progress CO Required to Learn Facts and Determine Whether Time Should Be Extended CO Must Have A Reasonable Belief That There is No Reasonable Likelihood That the Contractor Could Finish Timely 22

23 Termination for Convenience Convenience of the Government Broad Authority to Terminate Limited Only By Bad Faith Abuse of Discretion Both Are Difficult to Prove Termination for Convenience Settlement Proposal is Not A Claim Contractor Entitled to Settlement Expenses Legal Counsel Financial Consultant(s) Technical Consultant(s) Must Be Submitted Within One Year Government Forms/Formats 23

24 Termination for Convenience Construction Contract Becomes A Cost-Type Contract Cost Limits FAR 31 Contract Provisions Equipment Costs Contract Price Can Be Modified Reasonable Profit on Work Performed Standard Inspection Clauses General Provision Requires Contractor Inspection System Other Provisions Spell Out Contractor Quality Control (CQC) System CQC Forms CQC Procedures CQC Personnel 24

25 CQC Documentation Use to Advantage Detail is Often Lacking Avoid Extraneous Entries Document Facts Not Feelings Inspection Government May Also Inspect at All Reasonable Times and Places Sole Benefit is to Government Contractor Not Relieved of CQC Responsibilities Contract Price Must Include Costs of Facilitating Government Inspections 25

26 Inspection Contractor Required to Replace or Correct Defective Work Government Can Accept Non- Conforming Work with A Price Reduction Inspection Contractor Failure or Refusal to Correct Government Replacement or Correction at Contractor Expense Termination for Default 26

27 Acceptance Government Required to Inspect Consistent with Contract Accept Promptly Government May Accept Separate Portions of Work Government Must Accept All Work When Substantially Complete Acceptance Final and Conclusive Except Latent Defects Fraud Gross Mistakes Amounting to Fraud Acceptance Does Not Extinguish Warranty Rights Guarantees 27

28 Claims To Contracting Officer (CO) Written Demand Sum Certain or Specific Relief CO Final Decision Submission of Claim Certification Magic Words More than $100K Good Faith Supporting Data Accurate Complete Authorized to Certify Interest 28

29 Resolution of Denied Claims Option #1 Board of Contract Appeals 90 Days from Receipt of COD Agency Counsel Rule 4 No Fraud Jurisdiction Arbitration Litigation Hybrid Small Claims Accelerated Procedures Mediation Voluntary Resolution of Denied Claims Option #2 U.S. Court of Federal Claims 12 Months from Receipt of COD DoJ Counsel Fraud Jurisdiction Process Oriented Litigation More Formal and Expensive Mediation Involuntary 29

30 Appeal from Denial at Board or Court of Federal Claims U.S. Court of Appeals for the Federal Circuit Within 120 Days from Date of BCA Decision Within 60 Days from Court of Federal Claims Decision Contractor Performance Evaluations Outstanding to Unsatisfactory Interim and Final 5 General Areas of Evaluation and 33 Specific Ratings (DD Form 2626) 30

31 Partnering Opportunities Use Evaluation Form as Agenda Obtain Feedback From Government at Periodic Meetings Document Meetings and Feedback Provide Written Responses to Unfavorable Information Do Not Wait Until the End of the Job Unsatisfactory Evaluation Contractor Responsibility Determinations FAR 9 Best Value Past Performance Factors Retained for 6 Years 31

32 FEDERAL CONTRACTING OPPORTUNITIES SMALL BUSINESS IS BIG BUSINESS Federal Government Construction Contracts, Second Edition FEDERAL CONTRACTING OPPORTUNITIES SMALL BUSINESS IS BIG BUSINESS Q & A 32