Wednesday, February 29, 2012


Members of the house have introduced a number (we've seen 8 so far) of bills designed to reform small business contracting.  The proposed legislation covers a broad range of changes including raising the small business contracting goals to reformation of the size standard rules. 

The Government Efficiency Through Small Business Contracting Act (H.R. 3850) seeks to boost the annual government small business contracting goal from 23 to 25 percent, enlarge government wide subcontracting goals and withhold bonuses of top level agency officials if the goals are not met.  Since the present goals are not being met, we wonder whether this will go any good.  The Small Business Advocate Act (H.R. 3851) would require that the director of each agency's OSDBU be elevated to s senior executive position.  The Small Business Growth and Federal Accountability Act (H.R. 3779) seeks to cut an agency's procurement budget by 10 percent for missing its small business contracting goal.  We really don't seek how more budget cutting helps small businesses.

The Subcontracting Transparency and Reliability Act (H.R. 3893) would add visibility to insourcing  and ensure that small businesses are receiving federal contracting opportunities even through subcontracting.  We've said over and over again that insourcing is often bad business, bait and switch is just plain illegal, and we need better rules on when it is appropriate to "insource".  The Small Business Opportunity Act (H.R. 3980) really looks great to us.  Small Business advocates in all agencies would have stronger roles in the procurement planning process and always have access to plans before RFP's are released.

The Small Business Protection Act of 2012 (H.R. 3997) seeks to prevent SBA from tying NAICS codes together under common size standards where the data do not support the creation of a common size standards.  The Building Better Business Partnership Act (H.R. 3985 would combine small businesses with civilian agency mentor programs so as to help small businesses win contracts and subcontracts.  Finally, the Contractor Opportunity Protection Act of 2012 (H.R. 4081) would redefine various contract bundling terms in order to broaden the coverage of those procurement actions requiring scrutiny as improper bundling.

Missing again is reformation of the Equal Access to Justice Act.  See our blog "The Almost Equal Access to Justice Act" at  Reformation of the small business procurement process will never be complete until we afford small businesses equal access to the judicial system.

Tuesday, February 28, 2012


Earlier this year, FAR was amended to ensure that time-and-materials and labor-hour contracts are used to acquire commercial services only when no other contract type is suitable and to instill discipline in the determination of contract type with a view toward managing the risk to the government.  Read: emphasize fixed priced contracts over all other types.

Of particular interest is the amendment to FAR 8.405-3.  "The contracting officer should establish firm-fixed priced orders to the maximum extent practicable."  Specifically, contracting officers "should place these orders on a firm-fixed price basis to the maximum extent practicable.  All orders under the BPA shall specify a price for the performance of the tasks identified in the statement of work." 

FAR 16.201 is amended to instruct that ceiling prices are "subject to adjustment only by operation of contract clauses providing for equitable adjustment [read, changes clause] or other revision of the contract price under stated circumstances [read, special clauses]."  And just to be clear: "Time-and-materials contracts and labor-hour contracts are not fixed-price contracts." 

Prior to issuing a T & M order, the contracting officer must execute a determination and findings (D & F) that fixed pricing is not suitable with "sufficient facts and rationale to justify that a fixed-price order is not suitable."  The contracting officer must state that it is not possible to accurately estimate the extent or duration of the work or anticipate the costs with any reasonable degree of confidence in order to justify T & M.  The agency must also try to use the fixed priced approach as much as possible and take action to be sure future work is ordered only on a fixed priced basis.

We raise this subject because we are aware that agencies have muffed the switch from T and M to fixed priced orders.  They have announced the switch and tried to write contracts as fixed priced when in the administration of them, they treat them as T & M.  The new regulations make it clear.  Fixed priced contracts come first.  T & M can be used only when absolutely necessary.  This, of course shifts greater risk to the contractor, but that's what the changes clause is all about.

Friday, February 24, 2012


In the 17th Annual Government Contractor Industry Survey released Monday by Grant Thornton LLP, the"failure to seek compensation for out-of-scope work contributes to low profit rates."  The vast majority of respondents to the survey said their procedures for identifying possible claims were either somewhat effective or not effective at all.  Eighty-one percent of the surveyed companies said they received requests for extra work without a contract modification.  As Grant Thornton says:  "Such requests by government personnel are not consistent with the government's own procurement regulations, and the frequency of such requests should be a matter of serious concern among government officials."

Grant Thornton also reported that the relationship between contractors and government officials had deteriorated during the past year and only 22% of those surveyed said contract administration issues had been resolved efficiently.

This is not good news but it is consistent with our experience over the years.  As the government contract management workforce is reduced (as it has been), contract management efficiency and effectiveness deteriorates.  Moreover, as experienced contract people move on and are replaced with the less experienced, contractors find the workforce becomes undereducated on the complex rules governing government procurement.

As we have often said before, the antidote is available if the contractors will just use it.  Contractors may not have much if any control over the depth and knowledge of the federal procurement workforce but they can control their own behavior.  Contractors need to increase their knowledge of the rules and exercise their rights to enforce them.  Pure and simple.  Know the rules and have the guts to enforce them.  "The failure to seek compensation for out-of-scope work contributes to low profit rates."  There is a changes clause in these contracts and it is meant to be used.  Don't do extra work without a modification or if you do, submit your claim and insist that a modification be negotiated.

There are efficient and economical ways to resolve claims for additional compensation.  One way, short of litigation, is described in detail at our consulting services web site,  We also have strategies and formulas for moving your claims through the appeals process smoothly and quickly.  To learn more, contact us at

Saturday, February 18, 2012


We've written about the rules of contract interpretation for a reason.  If the contractual language is patently ambiguous, you must seek clarification or be barred from recovery on a claim based on ambiguous contract language.  Hence, we warn you to scour the solicitation for obvious clarity issues.  Perhaps it is time to review the rules of contract interpretation in this light.  And the best instructor is Judge Park-Conroy of the Armed Services Board of Contract Appeals who writes in States Roofing Corporation, ASBCA No. 54854, (July 10, 2008), the following:

The rules of contract interpretation are settled.  We are to read the contract as a whole and give it meaning that makes sense.  A contract is unambiguous if there is only one reasonable interpretation.  It is not enough to demonstrate that there are two different interpretations; rather, both must be within the 'zone of reasonableness.'  Ambiguities will be construed against the government as the drafter under the doctrine of contra proferentem, so long as the contractor relied upon its interpretation during bid preparation.  An ambiguity is patent if it contains glaring errors or patently obvious conflicts.  A party must seek clarification of a patent ambiguity or be barred from recovery.  (Citations omitted.)

Further, extrinsic evidence (outside the four corners of the contract) can only be considered if a document is ambiguous (subject to two reasonable interpretations), says ASBCA Judge Grant.

If you see a sentence in the solicitation which appears to say one thing and another sentence appears to say something different, you must seek clarification from the contracting officer.  If the contracting officer stonewalls you, protest to GAO prior to the submission of bids (it must be done then or you lose).  Why take such drastic action?  If you intend to bid and make money, you had better clear things up before you bid.  Protesting to GAO will get the contracting officer's attention and force clarification.

If you have a claim based on contract interpretation, remember the rules.  The contracting officer's interpretation must be within the "zone of reasonableness", but so must yours.  The fact you differ means nothing.  You both may be wrong.  But if your interpretation is reasonable and the government's is not, you win.  But you may win even if both interpretations are reasonable.  In the end, the contract will be construed against its drafter.


The Government Accountability Office (GAO) has sustained some protests this month which reinforce the importance of the source selection rules the federal government workforce is obliged to follow scrupulously.  First, a protest that the government engaged in discussions with the awardee but not with the protester was sustained in a case where the awardee was permitted to make material changes to its proposal.  The changes allowed the awardee to make its unacceptable proposal acceptable.  The agency, however, did not afford the protester the opportunity to revise its offer.  The rule is that once the agency undertakes discussion with one offeror, it is obliged to offer all offerors in the competitive range the opportunity to revise their proposals.

Next, GAO sustained a protest where the agency used unstated evaluation factors in its evaluation of proposals.  The agency gave the awardee, but not the protester, evaluation credit for proposing to achieve full operating capability on an accelerated basis. However, the solicitation neither defined the standard nor included a schedule for achieving it.  Moreover, the agency used service desk quantity estimates for price evaluation purposes which differed from the maximum quantities stated in the solicitation.  GAO said the agency must provide sufficient information in the solicitation for offerors to compete intelligently and on an equal basis.

Finally, GAO also sustained a protest challenging a cost realism evaluation where the evaluation was unreasonable.  GAO also came down hard on the government for not explaining how the technical evaluation was conducted, how it evaluated the relevance of the offerors' past performance and whether proposed subcontractors merited consideration.  Also, in that case, GAO determined that the award was not tainted by organizational conflicts of interest since the agency reasonably concluded the potential areas of concern were adequately mitigated.

The lessons from these cases is straightforward.  Insist on a proper debriefing.  If you don't get it, protest to find out what happened.  If, after your lawyer sees the record he or she advises you to continue the protest, do it.  FAR Part 15 rules on source selection are sacrosanct.  GAO is there to enforce them.  Protesting is a small price to pay for the maintenance of the integrity of the procurement system.

Tuesday, February 14, 2012


We've written often about the rules of contract interpretation.  Recently, the Armed Services Board of Contract Appeals (ASBCA) addressed again these important rules.  See Space Gateway Support, LLC, ASBCA No. 56592, January 30, 2012.  In a cost allowability case, Judge Ting was asked to look at the word "use" in the context of a contractual provision providing that use of accrued sick leave encompasses any permissible use of regular sick leave or reserve sick leave.  (The opinion also reminds us that the government bears the burden of establishing that a cost is unallowable by operation of a specific contract provision.) 

In the interpretation of contractual language, the Court of Appeals for the Federal Circuit (COFC) begins with the plain meaning of the language.  The COFC will "give the words of the agreement their ordinary meaning unless the parties mutually intended and agreed to an alternate meaning."  This rule essentially says look it up in the dictionary unless the parties reached an agreement to change that meaning.  The COFC also says it must interpret the contract so as to give meaning to all provisions.  The court tries to make sense of the language in the complete context of the entire contract.

Moreover, the COFC has said "interpretative tools such as dictionaries are frequently used by courts to determine the meaning of a document's phrase or provision."  In Space Gateway Support, LLC, Judge Ting used the dictionary to define the word "use".

In our experience, we have seen the government often take words and phrases out of context, sometimes ignoring the plain meaning and frequently forcing an interpretation which does not make sense when the contract is viewed as a whole.  This is just another clarion call for sticking to the rules.  Begin with the plain meaning and interpret the contract in a manner that gives meaning to all of the contract provisions and makes sense.

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Sunday, February 12, 2012


Judge Christine Miller of the Court of Federal Claims (COFC) has issued an injunction stopping performance on a Marine Corps Systems Command (MCSC) best value contract for tactical fuel and water systems.  She agree with the protester's argument the awardee made a material misrepresentation in its proposal that a certain firm was a subcontractor and that MCSC relied on this misrepresentation in its evaluation of past performance.  Under the facts in this case, Judge Miller determined the interests of national defense and national security did not prevail over upholding the integrity of the procurement process to redress a material misrepresentation.

After carefully reviewing the evidence, Judge Miller found that the successful awardee made a material misrepresentation listing a supplier, with which it had teamed, as a subcontractor and listed that supplier as part of its past performance presentation.  The court also found that MCSC's evaluation showed MCSC relied on the misrepresentation in evaluating the successful awardee's past performance.  All of this, said the court, was prejudicial to the protester.  The court relied on precedent establishing the rule that any misstatement which materially influences how a proposal is evaluated should disqualify the proposal.  "The integrity of the system demands no less.  Any further consideration of the proposal in these circumstances would provoke suspicion and mistrust and reduce confidence in the competitive procurement system."

Judge Miller ordered the Marine Corps Systems Command, its officers, agents, employees and all other connected persons not to proceed with the performance of the contract and she ordered the contracting officer to direct the contractor to cease performance under the contract.

There are a number of lessons here.  You can get relief in bid protest cases.  There are consequences for misrepresenting your intentions in a proposal.  Bait and switch by contractors can be found out and punished.  Courts can order the government to stop performance on an awarded contact and to redo a procurement.

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In a recent case, GAO decided the rejection of a contractor's small business plan was improper because the requirement for an acceptable small business plan really was a matter of the contractor's  responsibility which is to be determined from information received up to the time of award.  The Navy had rejected the contractor's offer based on the inadequacy of the plan.  GAO sustained the protest and recommended the contractor's proposal be evaluated for award and that the plan be used only to determine the contractor's responsibility.  As is always the case in a sustained protest, GAO went on to find that the contractor is entitled to the costs of pursuing the protest, including reasonable attorney fees.  See MANCON, B-405663, February 9, 2012.

MANCON argued that the small business subcontracting plan evaluation factor was pass/fail and therefore a matter of responsibility and not for evaluation of its technical acceptability.  GAO agreed.  The rule is the requirement for an acceptable plan is applicable to the "apparently successful offeror".   This rule applies even where the RFP requires submission of the plan with the offer.  Moreover, in this case, the plans were evaluated on a pass/fail basis and therefore, says GAO, "the agency's evaluation of those plans concern an offeror's responsibility."

Responsibility is to be determined based on information received by the agency up to the time award is to be made.  It is axiomatic that the contracting officer has broad discretion in determining a contractor's responsibility.  Accordingly, GAO generally will not question the determination unless it is made unreasonably.

GAO also determined that the Navy erred in its belief that further exchanges with MANCON concerning its subcontracting plan would constitute discussions requiring that discussions be opened with all offerors.  "We have found that where acceptability of a small business subcontracting plan is a responsibility issue, exchanges between the agency and an offeror concerning such plans are not discussions."  This makes sense.  And while we are at it, this rule is not rocket science.  The case illustrates the Navy contracting officer's lack of fundamental understanding of the regulations to say nothing of the failure to communicate with the contractor.

This case is just another poignant reminder to study the regulations and read the cases.  It also is another example of how protests protect the integrity of the procurement process and can cost you nothing if you are right.

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Small, veteran owned government contract management firm, Spriggs Consulting Services, announces the formation of the Spriggs Law Group to emphasize its service to clients in the practice of law before federal agencies and tribunals.  Bill Spriggs, the firm's Principal, says "our business model is to serve government contractors by solving their procurement related problems and help them be sure they comply with all federal procurement laws so as to avoid problems.  We specialize in problem solving and dispute avoidance.  However, not all disputes can be avoided, so we are creating the Spriggs Law Group to handle federal procurement litigation."

Spriggs has practiced law in DC since 1972.  After law school, he joined the Marine Corps where he defended Marines in Courts Martial.  He then joined The Boeing Company followed by Martin Marietta (now Lockheed Martin) as staff counsel handling federal government procurement disputes.  Through the years he has handled numerous cases before the Court of Federal Claims, the Armed Services Board of Contract Appeals and the Government Accountability Office.  Based on his extensive litigation experience and knowledge of the contract management function, he established Spriggs Consulting Services in January 2011 emphasizing dispute avoidance, contract and regulatory compliance and resolution of disputes through negotiation and mediation.

However, Spriggs found litigation is in his blood and try as he might, he could not resolve all problems, such as claims and protests, short of litigation.  "Contractors need an experienced attorney on their side when encountering problems such as losing money on a contract or subcontract or losing a bid they feel they should have won."  Bill knows the federal government contract litigation tribunals as well as anyone and he has been appearing before them since 1968.  "You can't beat that kind of experience," he says.  "Moreover, I'm now positioned to offer services to small and medium sized clients with flexible pricing consistent with their budgets."

Spriggs Consulting services continues, emphasizing government contract and subcontract compliance reviews and audits, claim preparation, solicitation and proposal reviews and dispute avoidance and resolution.  The Spriggs Law Group handles claims, protests, disputes and appeals before all federal tribunals.  See and

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