Basics of Government Contracting

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Federal Procurement Background • The U.S. Government is the world’s largest purchaser of goods and services 2

Federal Procurement Background • The U.S. Government is the world’s largest purchaser of goods and services • All of this procurement is highly regulated, primarily by the Federal Acquisition Regulation (FAR) 3

Federal Procurement Background • The FAR requires

full and open

competition for federal contracts – Naturally, there are exceptions 4

Federal Procurement Background • Exceptions to “full and open” competition – Sole Source Contracts – Statutory Requirement – Small Business Set-Asides • The Government has a “goal” that 23% of all Federal Contract dollars will go to small businesses 5

What is a small business set-aside?

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Small Business Set-Asides • “Set-aside” – Contract opportunity limited to small business (or certain type of small business) • Federal Agencies are encouraged, and sometimes required, to set aside a contract • Automatic set-aside if between $3K - $150K 7

Small Business Set-Asides • “Rule of Two” – Contract

must

set-aside if: be – Valued at over $150K; – Reasonable expectation to receive offers from at least 2 small businesses; and – Award will be made at fair market price.

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Small Business Set-Asides – Types of Small Business Programs: • Small business set-aside • 8(a) business development set-asides • HUBZone set-asides • Service-disabled veteran-owned, and veteran-owned small business set-asides (SDVOSB & VOSB) • Women-owned small business set-asides 9

How does the government procure goods and services?

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Simplified Procurement Process – The Government announces what it needs • Fedbizopps.gov

– Interested contractors submit offers to fill those needs – Offers are reviewed and evaluated – Contract Award  The procuring agency enters into a contract with the selected offeror 11

Simplified Procurement Process • Two Primary Procurement Methods – Sealed Bidding (FAR Part 14) – Negotiated Procurements (FAR Part 15) • More prevalent • GSA Schedules 12

Sealed Bidding • Government issues an Invitation for Bids (IFB) – Contains all necessary specs and requirements • Interested contractors submit a Bid – Must agree to all contract requirements – Really all about price 13

Sealed Bidding • All bids are opened publicly – Award made to lowest priced responsive bid – If lowest bidder determined non responsive, goes to next in line 14

Negotiated Procurements • Government issues a Request for Proposals (RFP) – Agency

must

follow terms of the RFP • Interested contractors submit a Proposal – Demonstrate how they can meet RFP requirements and at what price 15

Negotiated Procurements • Agencies can make an award based on initial proposals, or enter into “

discussions

” with offerors • Where there are many proposals, agencies may establish a “competitive range” 16

Negotiated Procurements • After final proposals, agency makes award decision based on process identified in RFP.

– Referred to as “source selection decision” 17

Negotiated Procurements • Debriefings – After award, unsuccessful offerors may request a post-award debriefing – Agency must provide the debriefing – Opportunity for contractor to pose questions to agency as to why its offer was not selected 18

GSA Schedules • Allows Federal Agencies to quickly purchase commercial items and services from listed vendors – Vendors apply to GSA Schedules – GSA awards schedule contract with set prices/rates – Contracts last up to 20 years 19

Types of Government Contracts – Firm fixed-price  All risk on the contractor – Cost Reimbursement  Risk primarily on government • Also Cost plus Fee, and Cost plus Incentive – Time and Materials • Fixed hourly rates, must have a ceiling cost – Indefinite Delivery, Indefinite Quantity (ID/IQ) 20

What are the difference between government and private contracts?

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Government vs. Private • Changes Clause – Contractor must do all additional work ordered by agency, as long as it’s within scope of the contract – Contractor can submit request for equitable adjustment 22

Government vs. Private • Termination for Convenience of the Government – Government can terminate any gov’t contract, for any reason, at any time – Contractor can recover costs associated w/ termination • No lost profits though 23

Government vs. Private • Disputes over government contracts are highly regulated and very rarely litigated in traditional courts • Generally three types of disputes in government contracting: – Pre-award – Post-award – Performance related 24

Pre-Award Disputes • Contractors can protest terms of solicitation – Too restrictive, ambiguous – Protest can be filed with either Government Accountability Office (GAO) or Court of Federal Claims • Contractors can also protest exclusion from “competitive range” 25

Post-Award Disputes • Contractors can protest the award decision – e.g., Improper evaluation • Post-award protests can be filed in 3 forums: – Agency – GAO – Court of Federal Claims 26

Post-Award Disputes • GAO Protests – Interested parties have 10 days to protest – Automatic Stay is available – Generally, the awardee is allowed to intervene – Decision due within 100 days – Generally best option 27

Performance Disputes • Disputes begin with a claim for money submitted to the contracting officer – CO has 60 days to issue Final Decision responding to claim 28

Performance Disputes • Contractors can appeal denial of claim in one of two forums: – Board of Contract Appeals – Civilian Board, Armed Services Board – Court of Federal Claims • Cannot appeal to both, must choose one or other 29

Performance Disputes • Appeals to Boards of Contract Appeals – Must file appeal within 90 days of Final Decision or deemed denial • Appeals to Court of Federal Claims – Must file within 1 year of denial • Federal Circuit hears appeals of these decisions 30

Teaming Agreements and Subcontracts 31

Teaming Agreements – Multiple companies agree to compete as a team, usually before proposal • Teaming Agreement between Prime Contractor and Subcontractor(s) – Generally, parties agree to negotiate subcontract in good faith • Joint Venture – Multiple companies agree to perform together as the Prime Contractor – Binding Contracts 32

Subcontracts • Defines the relationship between Prime and Subcontractor – Typically executed after award – Should include Sub’s scope of work – Provisions from prime contract can “flow down” to subcontract 33

Basics of Government Contracting

Contact Info: General Counsel, P.C.

703-556-0411 [email protected]

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