Write Federal Proposals that also can withstand a bid protest.

As a government contractor, it is important to understand how the agency evaluates your proposal. If you are fortunate to get the award, you now have to probably withstand a bid protest to GAO or some other forum. The first step in proposal writing for federal contracts is to thoroughly read the requirements and develop a compliance matrix that outlines what you have to submit. This is a critical step that many bidders fail to accomplish. Then you want to carefully analyze the statement of work requirements with your key members. Look at your strengths and weaknesses. Figure out how you will overcome any weaknesses. If you don’t, the agency will surely see them.

The Instruction to Offerors and the evaluation criteria sections are also of equal importance when bidding on government contract. They formulate the mandatory outline in the solicitation that neither you nor the government can deviate from. If either one deviates from these instructions, then a bid protest is likely to occur.

Government proposals must also contain a road map of how you plan to meet the requirements. Simply stating that you can perform the project and giving a long list of past performances simply does not get the award. The qualifications of your key personnel are critical aspects. You must also tell the government what each person will accomplish in the project. This includes their responsibilities and the nuts and bolts of their assignments.

When it comes to delivery schedules, never just meet the required schedules. Try to be earlier that what the government is asking for. During a source selection trade-off, your proposal might get the edge over your competition. You have to give the government something to work with and give a reason for the source selection to lean to your proposal for award.

For construction proposals, always propose an earlier schedule for completion than what the government is asking for. This puts you ahead of the competition. In addition, when you as bidding on government construction projects, make sure that you elaborate on your past performances. This means stating the material used that are similar, the size and measurements of buildings or areas for which you have performed work. Also list your best practices. These little, but commonly missed, items can get you within the competitive range.

Proposal pricing is yet another pitfall for many government contractors. Many companies simply propose what it will actually cost them to perform a federal project. The correct approach to government proposal pricing is to conduct your own estimate of what similar services or products are sold for in the commercial sector. The government is generally required to conduct and independent government estimate (IGE). This is usually done (in a perfect world) by conducting inquiries to agencies or larger commercial entities that have recently bought similar items or services. To simply state what it would cost you, is a fatal deviation away from possibly getting the award. You have to conform to the market and not the other way around.

During a bid protest, sometimes protestors challenge the government’s award to another company. The agency usually gets around this by alleging that (regardless of a higher or lower price) that there was value in some other aspect of your proposal that caused them to lean in your direction. This is hard to overcome.

When applying the evaluation criteria to government proposal writing, follow the agency’s instructions. If possible, include diagrams that simplify what you are trying to say. Never leave your proposal content for government interpretation.

Teaming partners in government contract proposals is another reason that bidders fall prey to a bid protest. When you are submitting a bid to the government, and you are trying to get a larger contract, you must ensure that your teaming partner has also accomplished similar projects in size and scope in the past. Never just propose the name of your teaming partner. Give examples of its past performance and request that the government consider it. The FAR allows source selection authorities to consider a subcontractor’s past performance.

Government proposal writing also calls for a sound management approach. Many contractors simply gloss over this critical part of the proposal. Then, during a bid protest, they realize that although they submitted a management approach in their technical proposal, that the protestor may have gone more in depth. Summarized statements in government contract proposals do not get you to the finish line.

If the solicitation is vague, ask questions to the contracting officer. Accomplish this effort as early as possible. There is generally a date to submit questions.

Of importance in the proposal writing stage, is to challenge any problems in the solicitation before bid closing. If you believe the solicitation requirements are too restrictive, then you must submit a pre-award bid protest quickly. You cannot wait until after bid closing to challenge the proposal requirements. Your protest will be deemed untimely.

If you need assistance in the proposal writing stages of government contract bid, or need help filing or defending a bid protest, call us toll free at 1-866-601-5518.

GAO sustained this protest because the Department of Justice failed to conduct meaningful discussions with protester where it did not reasonably advise the protester of agency’s real concern with protester’s quotation–that evaluators considered its project schedule to be too short. Agency’s request during discussions that protester submit a new project schedule as part of its final revised quotation did not reasonably convey to the protester that the evaluators viewed its proposed schedule as too aggressive, particularly given that a period of over a year had elapsed between submission of initial quotations and submission of final revised quotations.

The bid protestor also prevailed because GAO found that the agency evaluation of quotations received in response to solicitation for establishment of a blanket purchase agreement for an automated Freedom of Information Act system and associated services failed to demonstrate that the evaluation was reasonable and even-handed.

When an agency engages in discussions with a vendor, the discussions must be “meaningful,” that is, sufficiently detailed to lead the vendor into the areas of its quotation requiring amplification or revision. Honeywell Tech. Solutions, Inc., B-400771, B-400771.2, Jan. 27, 2009, 2009 CPD ¶ 49 at 10. Click here to read entire GAO bid protest decision.

As a government contractor, you should also ensure that you ask affirmative questions. You have an obligation to seek clarification. This can help to build your record in the event of a bid protest.  However, realize that the agency is not required to spoon feed each bidder. Instead, the agency is supposed to raise critical issues regarding your proposal.

Contact Watson & Associates’ lawyers for additional questions or bid protest representation at 1-866-601-5518.

Call our size protest lawyers for immediate help – 1-866-601-5518. 

Size Appeal of Argus and Black, Inc, SBA No. SIZ-5204 (2011)(overturns Area Office’s size dtermination and finding of affiliation through economic dependence because it was based only on one, small contract and did not satisfy the conditions for such a finding).

In this case, the SBA made clear error of fact or law in concluding that the protested concern is affiliated with a large concern though economic dependence. The Area Office concluded that this convoluted chain of address demonstrates that there is no clear line of fracture between Appellant, TSI and TSII. The Area Office emphasized that the address given on Appellant’s website is the same as TSI’s registered office address.

Watson & Associates argued the common elements of OHA’s precedents on economic dependence are the length of the relationship between the firms, the substantial amount of revenues generated as a result of the relationship between the firms, and that there are usually multiple relationships between the firms.

Watson also  argued the contract here lasted for only four months, generated less than $11,000 in revenue, and that this contract is the only contract between the firms. Appellant argues that its relationship with TSI does not reach the level of economic dependence required for a finding of affiliation. Appellant further asserts that it has recently developed other sources of revenue.

On appeal, Watson further argued that a finding against it would have a “chilling effect” on start-up firms, who would be required to avoid contracting with large firms in the start-up phase of operations.

The court ruled that “Further, it is simply not true that one small contract, regardless of what proportion it represents of Appellant’s revenues at the time, actually renders one firm dependent upon the other. In order to survive and prosper, Appellant must obtain a number of other contracts. If, over time, the great majority of these are with TSI or TSII, then a finding of economic dependence might be warranted. But here, where the contract by itself is not enough to sustain business operations, a finding of economic dependence based upon it is not warranted.

 The court held that in a case such as this, where the challenged firm has only recently begun operations either initially or after a period of dormancy, and is dependent upon its alleged affiliate for only one small contract of short duration, which by itself could sustain a business, that a finding of economic dependence is not warranted. Accordingly, the court found that the Area Office erred as a matter of law in finding Appellant economically dependent upon, and thus affiliated with, TSI, based upon its contract with TSI.

The court found that Watson & Associates, on behalf of Appellant has met its burden of proving that the Area Office committed clear errors of law based upon the record before it. Accordingly, this appeal is GRANTED, and the Size Determination is REVERSED. Appellant is an eligible small business for the applicable NAICS code 611699.

See also

Size Appeal of Accent Service Co., SBA No. SIZ-5237 (May 26, 2011) (Master Subcontracting Agreement did not establish joint venture and did not establish that one firm was ostensible subcontractor of the other; the fact that contested firm often awarded subcontracts to another firm did not establish economic dependence, if anything it made the other firm dependent on contested firm).

For immediate representation or defense in an SBA size determination protest, contact Watson & Associates, LLC lawyers online or call toll free 1-866-601-5518.

By Idris Keith

The SBA is actively seeking reasons to terminate participants from the 8(a) Program. The approach is very hard to overcome when you try to handle things on their own. The most viable tool that the SBA uses in 8a termination is to allege that the participant violated the terms of the participation agreement. This is a broad net that general sweeps up many 8a certified companies. The key to successfully defending any type of 8a termination is to seek advice of qualified counsel in the initial stages. This allows for proper responses to the SBA an attorney could properly preserve your rights (and the record) for appeal.

The 8(a) program under the Small Business Administration is an opportunity for many entrepreneurs to gain access to contracts for which they would otherwise not be eligible.  Historically speaking; the intent of the United States Congress in establishing the 8(a) Program, HUBZones, WOSB, and SDB was to enable individuals who were chronically unemployed an opportunity to generate revenue for themselves.  The 8(a) application process can be an arduous and difficult task.  Be prepared to show the Government tax returns, resumes, flow charts, and other information necessary to make an informed decision regarding the likelihood of success in the 8(a) Program.

While the application process and eventual approval may be difficult, it is very easy to lose 8(a) certification.  Do not needlessly lose your 8(a) certification.  If you believe that you are different; that the SBA would not terminate your 8(a) status; or that you are too meticulous to fall into the difficulties that have befallen other 8(a) concerns.  My simple response to you is, “Not so fast, my friend.”  Termination of  8a certification is real and, regardless of your skill, it may happen to you. The walls of the SBA are paved with successful termination actions. Given the current need for accountability and transparency, the SBA is cracking down on misuse or noncompliance with the  rules and law that regulates the 8(a) Program.

First, the SBA gives entrepreneurs 9 years to graduate from the 8(a) Program.  You may lose your 8(a) certification if you are an early graduate.  This means that prior to the end of the 9-year period, the revenues generated from your business exceed the NAICS Code upon which your business may be based.  For instance, in the field of construction, businesses cannot exceed $33.5 million in revenues.  In the event that this amount is exceeded, the SBA will determine that your business is other than “small” for the purposes of the SBA guidelines. 

Early graduation is not necessarily a good thing if you wish to continue under the 8(a) program in order to have access to federal contracts that you, otherwise, would not be eligible.  Upon a determination by the Director, Office of Business Development, you will have 45 days to appeal the decision of early graduation.  Similarly, you have 45 days to appeal a notice of termination.

For Further information on 8a terminations, call attorney Idris Keith at 1-866-601-5518 or contact him online.

[1] Early graduation is not a bad thing.  It means that your business is thriving.  If the participant does not appeal, the termination or graduation becomes the SBA’s final decision, effective on the forty-fifth day.[2]

Second, the SBA may find that your business is other than “small” when it exceeds the number of employees required under the program.  This number may vary, but for most industries, the maximum number of employees is 500.  This is also grounds for early graduation.

Third, the SBA may terminate businesses if it determines that you are affiliated.  In the event that businesses are determined by the SBA to be “affiliated,” their revenues and personnel will be combined by the SBA in makings its decision of whether the affiliated entities are “small” within the context of the SBA 8(a) program.  This issue deserves special attention.

In order to avoid needless size protests based upon affiliation, it is important that each entity under a joint venture, for example, have separate corporate offices, separate office space, separate fax and phone numbers, separate officers and/or directors, separate business accounts, separate personnel and separate equipment.  This evidences 2 separate and distinct entities that serve to rebut the initial ruling of affiliation.    

The foregoing represents common errors or inconsistencies that warrant the SBA to scrutine the situation more closely.  After you have engaged in the necessary work to prevent termination, your 8(a) status may still be jeopardized if the 8(a) concern does not comply with every requirement of 13 CFR 124.513. 

Even still, the SBA may terminate 8(a) status if the 8(a) concern failed to notify the SBA of changes in the business entity.  Do not think that these “changes” must be major changes.  In fact, these “changes” sometimes can be rather minor.  The SBA wants to be made aware of any change in corporate form, membership, affiliations, partnerships, etc. 

Pay close attention.  Even in the event that the SBA is made aware of the existence of affiliations, partnerships, teaming agreements or mentor protégé relationships through means other than the 8(a) concern, the 8(a) concern must still notify the SBA of the relationships in order to maintain compliance with SBA guidelines.  If the 8(a) concern fails to do this, their 8(a) status may be terminated for failure to keep the SBA abreast of any changes with the business.

In order to avoid termination on this basis, always contact your District Office and notify them of all changes that may subsequently jeopardize 8(a) status.  You worked very hard to obtain certification.  Do not lose it in the blink of an eye.  

 Understand the Risks and Avoid Costly Mistakes

 By Theodore Watson, Esq.

A bid protest can become a concern after all of your hard work and spending valuable resources, you find out that you are not the successful bidder. Do you challenge the award by filing a bid protest to GAO or at the agency level? There certain things you should consider.

• Did the debriefing give you clues as to a viable reason to file the protest?
• How long before bid submission did you learn of the reason for the protest?
• Was your business impacted because the alleged agency error?

These are but a few considerations to think about before you file a bid protest. You may want to consider how your protest will impact any future relationships with the agency. The truth is that although you are exercising your legal rights under the law, agency personnel are human. Regardless of what the rules say, they can in fact consider you a threat because in a protest you are actually appealing their work and decisions. That is a fact.

Does the agency always play fair in bid protest litigation?

The blunt answer is NO. When you file a GAO bid protest, you are creating an adverse situation. The agency now has to get into a defensive posture and justify its decision. The answer to whether the agency plays fair should lean to the negative. As a matter of procedure, the agency counsel will try to find a way to get the case dismissed. The common tactics include:

• Failure to file a timely protest: the attempt will be to state that you knew about the reason earlier and that your protest is untimely.
• The other strategy will be to get GAO to agree that there are no legal grounds for filing the protest: Bid protest regulations have specific reasons for filing a bid protest. Case law and GAO decisions also interpret the rules. Having an attorney on your team can minimize the agency’s success.

What is involved in the bid protest process?

Careful review of the reasons for the protest is the fist and critical stage. For example, if you are claiming that the government did not evaluate your proposal according to the terms of the solicitation, you must point to each section of the RFP and what exactly the agency did incorrectly. This should be stated with particularity in the original bid protest. There must be legally sufficient facts to withstand a dismissal.

After the initial filing, the agency must respond. It will submit an agency report. However, when you decide to represent yourself, you will immediately be at a disadvantage. You have to be admitted to a protective order to actually see what the source selection authority file contains. Agencies love when protestors represent themselves because it automatically gives the agency the upper hand. You should seriously consider retaining a bid protest lawyer to overcome this significant hurdle.

If you are represented by an attorney, he or she will get to see what the agency has included in the source selection file. The attorney cannot discuss the contents of this file with the bidder. However, he or she must carefully review the file to find evidence that supports the allegations in the protest letter.  The key to prevailing is to find lack of documentation or reasonableness for the agency’s decision.

Issues related to trade-off decisions can be a viable strategy. Technical evaluations can be flawed and unsubstantiated. In addition, improper consideration for past performance can be critical.

The agency always determines that the successful bidder’s proposal was “most advantageous and best value to the government.” The key is to look for adequate justification, documentation and sufficient of the source selection record. As mentioned earlier, if you represent yourself, you generally cannot see this file and you automatically are at a disadvantage.

How can you defend your rights as the successful bidder?

Bid protest regulations allow you to intervene into litigation. It is important to realize that the protestor is actually challenging the agency’s selection decision. More importantly, the agency does not have a requirement to protect your interests. Obviously, if the protest is denied, then the successful offeror is ‘home free.’

If you have won the award, it is usually a wide decision to have an attorney to intervene and defend your interest. You will then have the opportunity to file a brief or statement that supports the award. Sometimes, this may prompt the agency to legal arguments that the agency did not itself consider. Again, if you represent yourself, then you still are at a disadvantage because only the attorneys generally have permission to be admitted under a protective order.

Avoid costly mistakes in GAO bid protests

Preparation for filing a bid protest to GAO means meeting short deadlines while gathering critical facts to support your allegations. Commonly-made mistakes include:

• Filing a protest with issues that are outside of GAO’s jurisdiction – this can include matters pertaining to contract administration, SBA 8a certiciation matters and other topics in the bid protest regulations.
• Filing a protest in the wrong forum: for example, small business size protest should go to the contracting officer who then forwards the challenge to the SBA.
• Failure to hire experienced bid protest attorneys: Some contractors mistakenly believe that their regular corporate attorney has the experience to represent them in a bid protest. Government contract law is very unique and heavily regulated. If you plan on filing a protest, never assume that your business attorney understands the rules.

For more information or representation with a GAO protest, contact Watson & Associates, LLC at 1-866-601- 5518 for a free initial consultation.

Know what to do and what not to do – avoid the most costly sins in termination.

By Theodore Watson, Government Contracts Attorney: The FAR Clauses give the government the right to terminate a contract for convenience when the contracting officer determines that the termination is in the government’s interest. There is certainly no requirement to look out for a contractor’s best interest.

The FAR does not give a laundry list of situations that would be in the government’s best interest. The termination for convenience clause leaves this topic wide open. However,  as general rule, the government should not terminate a contract, but should allow it to run to completion, when the price of the undelivered part of the contract is less than $5,000.00. FAR 49.101(c).

Contractors should always ensure that delivery of notice is by certified mail or hand delivery. FAR 49.102.

Ways to Avoid Additional Damages in a Termination for Convenience Situation

One way to certainly cause yourself additional damages is to not follow the requirements imposed upon you after you receive notice.  You must attempt to terminate all subcontractors (beware of whether or not your subcontract contains the proper clauses); promptly submit your settlement proposal; protect and preserve property in your possession and stop work immediately.

As government contract attorneys, we generally inform clients that they should immediately notify the contracting officer of special circumstances that preclude work stoppage.

What is the Contracting Officer’s Duties after the Notice of Termination?

Many businesses, especially construction contractors, fall prey to listening to the people who cannot bind the government. This includes Contracting Officer Technical Representatives (COTR or COR).  These people are cannot bind the government – the contracting office can. Always consult a contract termination lawyer before you make these types of mistakes. Watson & Associates educates its clients on what  rules government must comply with during a termination for convenience. They include:

• Direct the action required of the prime contractor;
• Examine the contractor’s settlement proposal;
• Promptly negotiate settlement agreement ( or at least get through the parts that can be agreed upon.

The government typically takes its time.  In some instances, businesses rely on damages owed by the government in order to pay its bills. These amounts can be substantial. This is why having a law firm that understands federal procurement law can be beneficial.

Improper Use of the Termination for Convenience Clause

The government has a broad right to terminate a contract for convenience. This was especially true during the world wars when their end nullified the need for continued contracts. However, the bottom line is that businesses must be careful when challenging the agency’s use of the termination for convenience clause.

Does the government abuse its discretion at times? Of course it does. The question is how to you correctly challenge the decision. The reality is the government rarely writes laws to punish itself. Courts tend to rule on the side of the government most of the times. The court decisions of the ASBCA will support this comment.

Nevertheless, there are certain ways to prove a valid breach of contract. They include:

• Show that the government abused its discretion
• Prove bad faith

Skilled government contract termination lawyers should always analyze a particular case to determine whether in fact the contracting officer unlawfully used the termination for convenience clause to escape paying lost profits under a breach of contract and whether litigation is advisable.

By terminating in bad faith or arbitrary of capriciously, the government breaches the contract. Thus, permitting the contractor to recover breach of contract damages, including lost anticipatory (lost) profits.

Avoid a Costly Mistake

Understanding when a T4C proposal becomes a claim. Here you must submit your settlement proposal after the T4C is issued. Only when the contracting officer actually denies part of you damages does become a claim under the Contract Disputes Act. Contractors should seriously consult with a T4C lawyer on this matter.

For additional assistance contact the government contract termination law firm of Watson & Associates, LLC. Call toll free 1-866-601-5518.

Did you know that:

Protests must be clear and concise? Failure to submit a coherent bid protest may be grounds for dismissal. FAR 33.102(d) (1). 

That as a protester, you must use due diligence to obtain the information necessary to pursue a bid protest? The most common mistake made by dissatisfied contractors is to not request a debriefing. GAO ruled that a protest based upon FOIA-disclosed information was not timely simply because the protester failed to request a debriefing.  Having a skilled bid protest law firm can help you to avoid some of these pitfalls.

Interested parties may request a review a level above the contracting officer of any decision by the contracting officer that allegedly violated applicable statutes or regulations and, therefore prejudiced the protestor/ offeror. FAR 33.103(d) (4).

Suspension of procurement. The contracting officer shall not make an award if an agency bid protest is filed before the award. FAR 33.103(f) (1) provides for an administrative stay of the contract award. In addition, under 31 U.S.C. § 3553(c) and (d) under a pre-award bid protest an agency may not award a contract after receiving notice of a timely protest from the GAO.

The government can override the automatic stay provision.  Many government contractors know about the general automatic stay rules. However, many businesses and even attorneys find themselves at the peril of the government when the agency overrides the stay.  For the agency to prevail, the head of the contracting activity – not the contracting officer, may, on a nondelegable basis, authorize the award of the contract: upon a written finding that urgent and compelling circumstances which significantly affect the interest of the United States will not permit waiting for the decisions of the Comptroller General AND the agency is likely to awards the contract within 30 days of the written override determination.

GAO Protests

An interested party should be next in line for award. As a bid protester, if you cannot receive award when you prevail on the merits of a GAO bid protest, then you may be deemed to be not an interested party. However, an actual bidder, not in-line for award, can be an interested party of it would regain the opportunity to compete if the GAO sustains the protest.  This can happen if GAO recommends resolicitation. Teltara, Inc., B-245806, Jan. 30, 1992, 92-1 CPD 128.

What can be protested? A bid protester must allege a violation of a procurement statute or regulation. 31 U.S.C. § 3552. In addition, GAO can review allegations of unreasonable agency actions. However, there are certain allegations that GAO will not review. This includes contract administration, Small Business Size Determinations, Small Business Certificate of Competency Determinations (COC) and 8(a) procurement decisions.

As government bid protest attorneys, we often receive calls from contractors that want to file a bid protest where the agency held extensive discussions with them but the government then decides not to issue the solicitation. In such an instance, one of GAO bid protest lawyers can help. GAO has elevated to consider such cases.  Health Servs. Mktg. & Dev. Co., B-241830, Mar. 5, 1991.

Bid protest filing deadlines.  Time limits for bid protests are set forth in 4 C.F.R. § 21.2 (2000). Pre-award protests challenging the propriety of the solicitation, must be filed prior to the bid opening or the date for receipt of proposals. In all other cases, the contractor must file its bid protest to the agency 10 days of when the protester knew or should have known of the bases for the protest.

Note: for GAO protests, they must be filed within 10 after receiving actual or constructive notice of the basis for the protest. This can include when you were thrown out of the competitive range.

Don’t get your case dismissed.  The GAO can dismiss your protest if it does not contain a valid ground for a protest. By having a bid protest attorney on your team can avoid dismissals of frivolous cases. You simply can make general allegations upon “information and belief. See Federal Computer Int’l Corp.—Recon., B-257618, July 14, 1994, 94-CPD ¶ 2.

A protest claim must also show material harm and enough information to show timeliness.

What Damages Can You Get?

GAO may award bid preparation costs when no other practical relief is feasible.

Cost is limited to that which is incurred in pursuing the claim before GAO.

Reasonable attorney fees are allowed.

Anticipatory profits are not recoverable.

Watson & Associates are GAO Bid protest lawyers seeking to avoid costly mistakes made by contractors. The above information is not intended s legal advice and should be a substitution for hiring a government contracts law firm. For addition help with GAO protests, contact us for a confidential consultation. Call toll free 1-866-601-5518.

Did you know that you should file a claim with the contracting officer before filing an appeal with the Armed Services Board of Contract Appeals?

The formal dispute resolution process commences when a contractor submits a claim to the contracting officer in accordance with the Contract Disputes Act of 1978 (the “CDA“), 41 U.S.C. section 601 et seq. The claim, in writing, must demand money, the adjustment or interpretation of contract terms, or other relief arising under or relating to the contract (see FAR Clause 52.233-1, Disputes). The claim must also request the contracting officer for a final decision. On claims exceeding $100,000, there must be a good faith certification the accuracy and completeness of the supporting data.

A voucher, invoice, or other routine request for payment is not a claim under the CDA until the Government disputes the request either as to liability or amount, or it is not acted upon in a reasonable time. Once the submission is deemed a claim, interest begins to accrue on the claim at the rate established by the Secretary of the Treasury pursuant to Pub. L. 92-41 (85 Stat. 97). See 41 U.S.C. section 611. Moreover, the clock begins to run concerning the time in which the contracting officer must issue a final decision. Once the contracting officer issues a final decision, the contractor may appeal the decision to either the U.S. Court of Federal Claims or the applicable board of contract appeals.

Do you have a right to appeal? Simply because the government agency may act adversely does not always give you the right to appeal the Armed Services Board of Contract Appeals (ASBCA).  Many attorneys, not experienced in government contracting and administrative law, forget that a contractor must fully exhaust administrative remedies before running to ASBCA to appeal a contract claim. To file a contract claim there must a final agency decision. There must be a denial of the claim by the agency to create jurisdiction for the ASBCA. The issue usually becomes: what is a final agency decision? The safest way to address this concern is to have a government contracts attorney file a claim on your behalf.

Why have a lawyer? It is not to say that a contractor cannot file a claim on its own behalf. Instead, there should be more of a focus on preserving the contractor’s rights for appeal. This is why having a contract claims attorney can be beneficial. An example of what could happen in the vent that a contract claim is not file with the agency is the recent appeal of Connectec Company, Inc., ASBCA No. 57546 . In that case the government unilaterally cancelled a purchase order.  The government won its motion to dismiss by arguing that that:

When the Government cancels a unilateral purchase order, that action is not a Government claim or final decision, thus the Appellant is required to file a claim with the contracting officer, and receive a contracting officer’s decision, 41 U.S.C. § 7103(a) or a deemed denial.. Because the Appellant failed to submit a claim, the contracting officer never had the opportunity to finally decide the matter in accordance 41

U.S.C. § 7103(c) thus no factual or statutory basis exists that is necessary for the Board to have jurisdiction to hear the matter.

Contract claims jurisdiction for ASBCA comes from the Contract Disputes Act (41 U.S.C. § 7103(a)). In this case there was no final denial of the claim from the agency. FAR Subpart 33.2 also addresses federal contract claims.

Can Subcontractors File an Appeal to ASBCA?

Generally no. Contractors that try to handle litigation on their own sometimes lose big in the court system. Even though a claim may have been filed with the contracting officer, and denied, one must ask whether the claim filed with the agency is legitimate. Generally ( with limited exceptions) a subcontractor cannot file a claim directly with the agency. If this is so, then a claims appeal to ASBCA will definitely be dismissed for lack of jurisdiction. See Appeal of Montano Electrical Contractor, ASBCA No. 56951.

When filing a government contract claim to the agency, there are sometimes disputes to what is a sufficient claim.  Generally, you are only required to submit “adequate notice of the basis and amount of the claim.” Contract Cleaning Maintenance, Inc. v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987). This should be accompanied with any supporting details to show bad faith.

The bottom line is that before you file a claims appeal to ASBCA make sure that you have a final denial of the claim from the contracting officer. Anything short of that will get the case dismissed.  Consider retaining a government contracts claims lawyer to assist you from the beginning. The goal is to protect and preserve your rights for appeal.

For further assistance, call the government contracts law firm of Watson & Associates, LLC toll free at (866) 601-5518.

 Get specific guidance on how the 8a certification changes impact you

Call 1-866-601-5518 for the help of experienced 8a certification lawyers and consultants

Release Number: 11-12

WASHINGTON – The U.S. Small Business Administration today published a package of final rules that will revise regulations to strengthen its 8(a) Business Development program to better ensure that the benefits flow to the intended recipients and help prevent waste, fraud and abuse.

The rules were published today in The Federal Register and will become effective in 30 days on March 14, 2011.

The revisions are the first comprehensive overhaul of the 8(a) program in more than 10 years. The regulations incorporate technical changes and substantive changes that mirror existing or new legislation enacted since the last revision in June 1998.

“The 8(a) Business Development Program is an effective tool for providing small businesses with support to help them compete for and win federal government contracts, and in turn put them in the best possible position to drive economic growth and create jobs,” SBA Administrator Karen Mills said. “Through public meetings held in cities throughout the country, SBA gained valuable input from members of the small business community on ways to strengthen the program to provide the best opportunities for eligible firms, while also stepping up efforts to combat waste, fraud and abuse.”

The rules cover a variety of areas of the program, ranging from clarifications on determining economic disadvantage to requirements on Joint Ventures and the Mentor-Protégé program. Some of the components of the 8(a) program that the revised regulations will affect include:

• Joint Ventures – requiring that the 8(a) firm must perform 40 percent of the work of each 8(a) joint venture contract that is awarded, including those awarded under a Mentor/Protégé agreement, to ensure that these companies are able to build capacity;
• Economic Disadvantage – providing more clarification on factors that determine economic disadvantage as it relates to total assets, gross income, retirement accounts and a spouse of an 8(a) company owner when determining the owner’s ability to access capital and credit;
• Mentor-Protégé Program – adding consequences for a mentor who does not provide assistance to their protégé, ranging from stop-work orders to debarment
• Ownership and Control Requirements – providing flexibility on whether to admit 8(a) program companies owned by individuals with immediate family members who are owners of current and former 8(a) participants;
• Tribally-Owned Firms – requiring firms owned by tribes, Alaska Native Corporations, Native Hawaiian Organizations and Community Development Corporations to report benefits flowing back to their respective communities;
• Excessive Withdrawals – amending regulations on what amount is considered excessive as a basis for termination or early graduation from the 8(a) program; and
• Business Size for Primary Industry – requiring that a firm’s size status remain small for its primary industry code during its participation in the 8a certification program.

The SBA initially published the proposed rule on Oct. 28, 2009 and provided a 60-day comment period for the public to submit their comments. Many businesses requested more time, so the SBA extended the comment period an additional 30 days, allowing the public to submit their comments by Jan. 28, 2010. In addition to requesting written comments from the public, the SBA also embarked on a “Listening Tour” and hosted public meetings between December 2009 and January 2010 in 10 cities around the country: Albuquerque, N.M., Atlanta, Ga., Boston, Mass., Chicago, Ill., Dallas, Texas, Los Angeles, Calif., Miami, Fla., New York, N.Y., Seattle, Wash. and Washington, D.C.

The SBA also conducted tribal consultations to gain further public input to the revisions in Albuquerque, Fairbanks and Anchorage, Alaska, and Seattle. In total, the SBA received more than 2,500 individual comments from the public.

The 8(a) program is a nine-year business development program for small businesses where the owner(s) fits the SBA’s criteria of being socially and economically disadvantaged and the same owners control the firm. The 8(a) program helps these firms develop their business and provides them with access to government contracting opportunities, allowing them to become solid competitors in the federal marketplace. It also provides specialized business training, counseling, marketing assistance and high-level executive development to its participants. In FY09, small businesses received $18.6 billion in 8(a) contract dollars.

For more information about the revised 8(a) regulations, a compliance guide and the 8(a) program, visit http://www.sba.gov/content/revised-8a-regulations.

Also contact the 8a certification consultants  and lawyers at Theodore Watson & Associates, LLC at -866-601-5518.

 By Idris Keith, Government 8a attorney and consultant. The SBA scrutinizes each 8a application to ensure that the applicant meets the statutory requirement for certification. The public is usually not told of the detailed requirements for certification. As a result, many 8a certification packages are denied for several reasons.

Knowing the 8(a) Program Rules Reduces Stress in the Application Process:The SBA digs deep into your answers to questions during the 8a certification process.  Very few applicants that apply on their own get an approval the first time around. If you encounter a consultant that guarantees you approval, then beware and move on. No can promise SBA approval. The key to a successful 8a application is to know how the SBA looks at each part of the application. For you to be an expert in the approval process you would simply have to know the laws and rules. This is virtually impossible. Therefore, it might be worth the investment to hire an experience 8a certification consultant.

How Do You Position Your Business Structure to Avoid Red Flags? 8a certification requires the qualifying disadvantaged applicant to demonstrate that he or she is totally in control of the business. Red flags can include operating agreements that show a disadvantaged owner actually making the final decisions on the key aspects of the business. Applicants want to ensure that voting rights and management are ultimately vested in the qualifying disadvantaged member. Any other reflections will prompt red flags and cost you disapproval.

How Do You Demonstrate the Ability to Succeed in the 8a Program? This is yet another frequent hurdle that most 8a applications end up with a disapproval. Being broke is not the way you want to go during the certification process. Instead, you want to show the SBA that you have more than one existing client (too much revenue from one client can cause problems). You also want to show profit during the past three years. If not, you want to explain the ups and downs. It is advisable to seek lines of credit to better position yourself. Adequate finances and existing business are two main factors for you to consider.

Does Buying an Existing Business Affect My 8a Certification Application? Generally not. You must be able to provide the pertinent purchase documents in your certification package, show that shares are transferred and that the buyer is totally in control of the business. Transfer of ownership between spouses are suspect to the SBA. You must ensure that the new owner shows the requisite managerial experience (resume and or certifications) to take over and run the business. If you are relying on a minority transfer only to get you through the 8a certification process, you will more than likely be denied. You must have more.

How Do I Prove My Economic Disadvantaged Status In My 8 a Application? This is usually a tough problem for new 8a certification applicants. You have to convince the SBA that you are socially and economically disadvantaged. A simple road map would be to begin you economic narrative with your early child hood background and highlighting specific examples of where access to proper education systems were part of your experience.

Experts that provide 8a certification services understand the critical aspect of the 8a certification process. Having a consultant to guide you through these experiences adds value and credibility to your package. You should consider discussing financial hardships of your parents if applicable. Did you pay your way through school while working? How did such a tough experience impact your life?

You can then describe you application and denial of loans – give specific examples. Get Affidavits from people with personal knowledge. Did your business compete for work but never succeeded? This is relevant evidence of you barrier to mainstream commercial and financial resources.

Survival After Approval: After your 8a application is approved, you are mandated to abide by strict rules. See 13 CFR 124. You must submit annual reviews and financials; you must show efforts to acquire non 8a work. Must also show that you dedicate full time efforts to the business and you must provide information or changes to your original 8a application. Failure to respond to the SBA, inadvertent mistakes can cost you a termination from the 8a program.

Many 8a applicants incorrectly believe that the SBA has to find them work. Not so. The burden is on you to market your business to the government. However, the SBA has a duty to assist and even work with the respective agencies for projects to be dedicated to the 8a Program. This is one area when having an 8a consultant can be substantially beneficial.

If you are seeking expert advice in the SBA 8a certification process, contact Watson & Associates LLC for a free initial consultation. Call Toll Free 1-866-601-5518.