Strike Force vs. Collusion

The Justice Department has created a new interagency partnership to battle procurement and antitrust crimes, the Procurement Collusion Strike Force (PCSF). The PCSF is comprised of the Antitrust Division of the U.S. Department of Justice, multiple U.S. Attorneys’ Offices around the country, the Federal Bureau of Investigation (FBI), and the Inspectors General for multiple Federal agencies. (Justice.gov)

The PCSF will “deter, detect, investigate and prosecute antitrust crimes and related criminal schemes,” according to Assistant Attorney General Makan Delrahim. He feels many open investigations are related to procurement crimes. Last year alone, the federal government spent almost $500 billion on contracts for goods and services. The overcharge stemming from illegal actions can be significant not only to the government but to all taxpayers as well.  (Government Executive, November 5, 2019)

Bid-rigging is alive and real. According to the Justice Department, earlier this year five Korean oil companies were prosecuted for bid-rigging contracts to provide fuel to U.S. military bases. The PCSF uses data analytics to identify occurrences of procurement collusion. The website has a complaint form, training materials, and legal resources for anyone who believes they have witnessed suspicious activity. (ibid)

Questions about the new interagency partnership? Give us a call.

BAA TAA SBA Huh?

It appears the Buy American Act (BAA) and the Trade Agreements Act (TAA) may, under certain instances, actually reduce the federal market accessibility for US manufacturers. (Federal News Network, October 28, 2019)

In order to be considered for a small-business set-aside, end-items must be manufactured in the U.S. Or the company can qualify as a non-manufacturer (13 CFR 121.406) if:

  • The company is principally engaged in the retail or wholesale  of the product and normally sells the type of product being supplied
  • The company takes ownership of the item with its personnel, equipment or facilities consistent with industry practice and
  • The company supplies the end item of a small business manufacturer, processor or producer made in the U.S. or obtains a waiver of the requirement. (ibid)

Non-manufacturers may receive an individual waiver if the Small Business Administration (SBA) accepts the contracting officer’s determination that no small business manufacturer “reasonably can be expected to offer a product meeting the solicitation specifications.” Additionally, the SBA Administrator may provide a class waiver if she determines that no small business manufacturer “product or class of products is available to participate in the Federal procurement market.”

Of course, TAA restricts product acquisition to manufacturers in the U.S. and certain “designated countries,” (those companies that have a Free Trade Agreement with the U.S. or participate in the World Trade Organization Government Procurement Agreement (WTO GPA)). Therefore, products from non-signatory countries such as China are ineligible for award.  Per FAR 25.101(a), BAA restricts the purchase of non-domestic end-products as well. Some exceptions provide more access to foreign end-products than under the TAA; for instance, BAA makes exceptions where the domestic offer is not the low offer (FAR 25.103) as well as in certain instances of public interest for non-availability in the U.S., and at an unreasonable cost. (ibid)

TAA does not apply to small business set-asides, FAR 25.401, leaving the BAA in place. The waiver of the non-manufacturer rule for a set-aside gives a somewhat illogical result. This makes the TAA inapplicable to set-asides, and the BAA applicable to set-asides where the non-manufacturer rule has been waived. This might result in the Government purchasing an item, such as a medical/surgical product, manufactured in a non-designated country that has subsidized its price to assure the product’s selection. Therefore, the intended law restricting non-domestic products actually facilitates more access to those products. This includes products of manufacturers from non-designated countries, rather than providing controlled access over non-domestic end-products. (ibid)

Ultimately, this could harm small and non-small manufacturers producing domestically. This may also open up small business set-asides to products made in China that would otherwise be ineligible for purchase if the TAA applied. A good deal more statutory guidance and analysis are warranted. (ibid)

Do you have questions about your compliance obligations under an upcoming proposal or current contract? Give us a call.

Modernizing and Funding IT

GSA will continue IT modernization through the new fiscal year, according to Suzette Kent, Federal Chief Information Officer, and Emily Murphy, GSA Administrator. (Federal Times, October 21, 2019)

While Kent and Murphy were speaking at the American Council for Technology-Industry Advisory Imagine Nation conference, the Technology Modernization Fund (TMF), announced $8 million of funding to be made available for the Department of Agriculture and $4 million for the Equal Employment Opportunity Commission (EEOC). (TMF provides funding to agencies for IT projects.) TMF recently granted GSA $20 million for its New Pay HR system.

The EEOC will implement a Cloud-based charge and case management system while the Agriculture project will replace an outdated, manual IT system used for food inspection and certification. Both of these systems have thousands of touch points around the country. The Office of Management and Budget has said both agencies will leverage modern commercial capabilities to move their digital modifications. (ibid)

Interested in the upcoming GSA RFQ or DoA or EEOC opportunities? Give us a call.

Update on GSA’s Schedule Consolidation

Stephanie Shutt, who is spearheading the GSA Schedule consolidation, recently spoke about the effort’s three phases. On October 1, GSA completed the first phase of the consolidation and released the new single solicitation. (Nextgov, October 9, 2019)

Phase one organizes the Multiple Award Schedule Consolidation into categories that correspond to OMB’s category management approach. This allowed GSA to work with a template instead of starting from nothing. During the Schedule review, duplicates were removed as were multiple versions of specific contract clauses. (ibid)

To date, the Schedules had been divided into service and supply subcategories or Special Item Numbers (SINs). Duplicate SINs were removed, about 600 in all. The new SINs structure is based on the North American Industry Classification System (NAICS) which many agencies already use. (ibid)

Phase two, set to begin after the new year, will focus on existing contract holders completing a mass modification to update their base terms and conditions, which will ultimately moving most current holders to the new Schedule. Updates do not apply to negotiated elements of contracts, such as warranties or periods of performance. They will, however, impact the baseline terms and conditions. Vendors will also see a relocation of SINs and have the opportunity to select SINs that previously were across separate Schedules. Look for an advanced notice regarding mass modifications from GSA in early November. (ibid)

Phase three is slated to launch in July 2020. During this time, contracting officers will assist multiple Schedule holders with more than five years remaining on their contracts to consolidate into a single contract under the new Schedule. (ibid)

Shutt stressed that vendors with one contract under MAS or multiple contract holders that see completion within the next five years will have reviewed and completed the process by signing the “mass mod” during phase two. Phase three affects only contractors with multiple contracts, especially those with more than five years remaining on the contract. Those particular contractors will receive support directly from Shutt’s team to devise a plan to funnel all products and services down to one contract. (ibid)

Questions about how these phases might affect your current contract or a current bid? Give us a call.

CMMC a Plus for Small Businesses?

Katie Arrington, on staff  with the Undersecretary of Defense for Acquisition and Sustainment believes nation-states are actively targeting small businesses digitally. And, she says, we are losing the battle of cyberattacks. (Fifth Domain, October 8, 2019)

According to Arrington, rivals cost the US an estimated $600 billion per year and 5G will multiply that number exponentially by 2025. As a result, Arrington believes the cybersecurity maturity model certification (CMMC) is actually intended for small businesses. (ibid)

CMMC grades company cybersecurity on a scale of one (least secure) to five (most stringent). Small businesses must comply with a tiered rating structure. So a company offering cleaning services may need only comply with CMMC level one while an engineering firm is held to level four

Arrington says that CMMC levels the playing field. Old compliance standards allowed companies to perform their contracts while working on their plan of action to become technically acceptable. This left sensitive systems that require additional security controls vulnerable and with weak spots. Many small businesses do not have the resources to obtain a high CMMC level, ultimately limiting competition in the marketplace; others fear the costs will be so high, that small companies will be priced out of the marketplace and limit their ability to compete on government contracts. 

The most recent Navy breaches targeted contractors without classified information per se, but taken in total the data disclosed sensitive capabilities. This is exactly what the CMMC framework addresses. (ibid)

Requests for proposals are expected to include CMMC requirements, as early as fall 2020.

Questions about CMMC requirements? Give us a call.