In last week’s FAR & Beyond blog, we honored the career of Jon Etherton by announcing him as a recipient of the Coalition’s highest distinction, the Common Sense in Government Procurement Award. Readers may remember that we also teased the revelation of a second recipient of the Common Sense in Government Procurement Award, marking the first year since 2011 in which two individuals have been selected as honorees. We are thrilled to announce a longtime contributing member of the Coalition and recognized industry leader, Ted Buford and congratulate him on his very deserving selection to receive the Common Sense in Government Procurement Award.
This award, introduced in 1984, is presented to dedicated individuals who have demonstrated a professional lifetime of leading exceptional “common sense” contributions to improving the operation and management of the Federal acquisition process. In addition to Jon, past honorees include Vice President Al Gore Jr., Congressman Tom Davis, and Office of Federal Procurement Policy Administrator Dr. Steven Kelman. We are pleased to add Ted’s name to this prestigious list.
Ted recently retired from his position as Vice President and GSA/GWAC/IDIQ Program Manager at CACI. During his 33-year career with CACI, he led many initiatives that made a lasting impact on both the organization and the acquisition community as a whole. Ted is responsible for standing up CACI’s GSA Program Management Office, where he led a staff that guided clients through contract processes and the effective implementation of solutions. Under the guidance and leadership of Ted, CACI saw its sales skyrocket, becoming a top vendor within the GSA Schedule Program. Throughout his illustrious career, Ted also served in many positions within the Coalition, including as a member of the Board of Advisors and a Co-Chair for both the GWAC and IT/Services Committees. In these roles, he advised Coalition members on the best approaches regarding contract procedures and regulations. Ted was always active at Coalition conferences and committee meetings, posing thoughtful questions and collaborating with government officials to help find the best value solutions that met their needs. Prior to his time in the private sector, Ted served in the Army for 30 years, holding multiple leadership positions before retiring as Colonel in 1989.
Ted is no stranger to receiving prestigious awards, not only for his accomplishments, but also his outstanding character. While serving in the Army, Ted earned numerous honors, including the Legion of Merit with Oak Leaf Cluster (OLC), the Bronze Star Medal with 2 OLC, the Meritorious Service Medal with 5 OLC, the Army Service Medal, and the Republic of Vietnam Gallantry Cross. As an acquisition leader, he earned CACI’s Pinnacle Award, Wing Award, and Aces Club Award for sales and proposal excellence, along with CACI’s Character and Ethics Award. In addition, he was a recipient of the Coalition’s Lifetime Achievement Award, which recognizes outstanding individuals who demonstrate a commitment to advancing common sense in government procurement.
Although Ted is certainly honored for his significant contributions to the acquisition system, his mentorship to acquisition professionals is equally as important. Ted was always willing to use his extensive knowledge to educate others on the process, procurement history, and the latest issues impacting government contractors. His commitment to teaching and strengthening the procurement workforce truly was invaluable. Characteristics that define recipients of the Common Sense in Government Procurement Award include integrity, thoughtfulness, commitment, and transparency, all of which are embodied by Ted. Ted often says, “We are better when we all do better!” We are better for having Ted in our professional and personal lives.
We are thankful for the opportunity to present Ted with this honor to celebrate his accomplished and inspiring career. He is an example for all in our community to follow.
Celebrate the Holidays with Off the Shelf: Live and In-Person!
Celebrate the holiday season with the Coalition for Government Procurement! The Coalition cordially invites you to join us on the evening of December 15 at the Tower Club in Tysons Corner for a complimentary holiday gathering to commemorate the past year and toast to the new one ahead! Enjoy food, beverages, and the company of friends and colleagues during this cheerful event. Not only will there be great conversation, but also a special live and in-person episode of President Roger Waldron’s Off the Shelf podcast! Off the Shelf, aired on Federal News Network, covers the latest and most pressing issues in federal procurement with guests from both government and industry. Roger will be joined by Bill Gormley, President of the Gormley Group, and Tim Cook, Executive Director of the Center for Procurement Advocacy, for a live discussion on the state of governmentwide contracting and key legislative developments affecting procurement policy. Don’t miss out on the chance to hear from these recognized experts and join in on the discussion with your questions. We hope that you will join us for this special holiday occasion that will be equally educational and lively!
To register for the event, click here. Registration is complimentary to all attendees!
The 2022 Fall Training Conference – Expectations for Fiscal Year 2023 is less than two weeks away! Register now to learn about what contractors should know regarding Federal procurement programs and policies in the new fiscal year. The Fall Training Conference provides an excellent opportunity for cross-cutting dialogue between industry partners and government officials. This hybrid two-day conference will be held on November 16-17 at the Fairview Park Marriott in Falls Church, Virginia, with virtual attendance available, as well. We are excited to share additional updates to the agenda below.
November 16 – Governmentwide Focus
The first day of the conference has a governmentwide focus. Officials from the Department of Defense (DoD), Department of Homeland Security (DHS), Defense Logistics Agency (DLA), General Services Administration (GSA), National Aeronautics and Space Administration (NASA), National Institutes of Health (NIH), Small Business Administration (SBA), and Department of Veterans Affairs (VA) will be participating on numerous panels. This year’s conference will begin with a Keynote Address from the knowledgeable Tom Davis, former Congressman and current Holland & Knight Partner, who will provide analysis of the election results, detailing what happened and what these results mean for the Federal government.
Following Congressman Davis’ remarks, the morning panels will begin with the return of the popular “Rogers Awards,” which will cover recent procurement-related legal matters. Next up is the Acquisition Policy Expectations session, which features an interagency panel of Procurement Executives, including Angela Billups, Executive Director, Office of Acquisition and Logistics, VA; Paul Courtney, Chief Procurement Officer, DHS; Jeff Koses, Senior Procurement Executive, GSA; and John Tenaglia, Director, Defense Pricing and Contracting (DPC), DoD. During the Lunch Keynote Address, we are excited to share that GSA Federal Acquisition Service (FAS) Commissioner Sonny Hashmi will be joined by Katie Miller, GSA Climate Senior Leader, for a ‘fireside chat’ session discussing sustainability and procurement.
After lunch, attendees can choose to attend the Expectations for FAS Procurement Programs Panel consisting of GSA FAS Assistant Commissioners Laura Stanton, Office of IT Category; Charlotte Phelan, Office of Enterprise Strategy Management; Tiffany Hixson, Office of Professional Services and Human Capital Categories; and Erv Koehler, Office of General Supplies and Services, or the Cyber Expectations Panel with industry experts Townsend Bourne, Partner, Sheppard Mullin; Michael Gruden, Associate, Crowell & Moring; and Leo Alvarez, Principal, Baker Tilly, covering the latest cybersecurity requirements impacting contractors such as CMMC. We will then move into the afternoon Business Intelligence Panels, where participants will have several sessions to choose from. Attendees can expect to be informed on GSA systems, the cloud marketplace, e-commerce, legislative updates from the Hill, policies impacting small businesses, the latest developments on contract vehicles such as SEWP, OASIS+, Alliant, and CIO-SP, and more. The full day one draft agenda can be viewed here.
November 17 – Healthcare Focus
Officials from the Defense Health Agency (DHA), Defense Logistics Agency (DLA), Department of Health and Human Services (HHS), and VA are invited to participate in the second day, which focuses on healthcare procurement. We are excited to announce that Michael Parrish, VA Principal Executive and Chief Acquisition Officer, is confirmed to deliver the Keynote Address. Mr. Parrish will provide his priorities and initiatives for fiscal year 2023, as well as outline next steps for VA supply chain modernization.
Phil Christy, OALC Deputy Executive Director, VA and Andrew Centineo, Executive Director, Procurement and Logistics, VHA will share insights on VA programs and policies during the first panel, the Expectations for VA Logistics and Procurement. Participants can then look forward to learning about the latest legal developments and policies impacting the federal healthcare sector during the Healthcare Legal Panel. We are fortunate to have Moshe Schwartz, President of Etherton and Associates, wrap up the networking lunch by providing his insights on the healthcare supply chain and legislation. Following Schwartz’s remarks, we will continue the conversation and dive deeper into how to support healthcare supply chain resiliency during the Expectations for the Medical Supply Chain and Domestic Capabilities Panel. The afternoon Business Intelligent Panels will touch on a number of topics, such as the DLA MSPV and ECAT programs, VA MSPV-Gen Z and T2, DHA pharmacy operations, and more. View the full agenda for day two here.
Ask the PMO – Stop by to ask your questions in person!
We are thrilled to share that the very popular ‘Ask the PMO’ table will return at the Fall Training Conference. Ask the PMO, which debuted at the 2022 Spring Training Conference, gives attendees the opportunity to engage in dialogue with Program Managers from GSA’s Multiple Award Schedule Program Management Office and the VA’s Federal Supply Schedule (FSS). Attendees can schedule one-on-one meetings throughout the day to ask questions and have their concerns addressed. On November 16, Stephanie Shutt, MAS PMO Director, Steve Sizemore, MAS PMO Deputy Director, and Stacy Lowe, IT Schedule 70 Contracting Officer will be available at the table. On November 17, the VA FSS program will be available to answer member questions. Bob Satterfield, Chief of Services, and Deborah Zuckswerth, Chief of Med Surg B of VA FSS will be present. We hope that everyone takes the opportunity to get their GSA and VA Schedules questions answered and to say hello to their government colleagues who are participating.
Registration and Sponsorship Opportunities
Many great sponsorship opportunities remain available at a wide range of prices. Each sponsorship opportunity comes with brand exposure and many extraordinary benefits for your organization, such as complimentary registrations, logo placement on signage, advertisement space in the event programs, and special shout-outs during the conference from Coalition President Roger Waldron.
If you are interested in becoming a sponsor or want to learn more about the available opportunities, please reach out to Matt Cahill, Vice President of Membership & Marketing, at email@example.com.
Thank you to our current sponsors for Day 1: Raytheon, Gold Sponsor; GDIT, Gold Sponsor; Sheppard Mullin, Silver Sponsor; The Gormley Group, Silver Sponsor, and The Center for Procurement Advocacy, Lunch Sponsor. Thank you also to our Day 2 sponsors: AvKARE, Title Sponsor; McKesson, Gold and Lunch Sponsor; and The Center for Procurement Advocacy, Breakfast Sponsor.
If you need assistance with event registration or have sponsorship questions or commitments, please contact Matt Cahill, Vice President of Membership & Marketing, at firstname.lastname@example.org or 202-315-1054.
FAR Policy on Joint Ventures Comes into Effect
The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration’s (NASA) update to their policy on Joint Ventures came into effect on October 28, 2022. The update allows a joint venture composed of a protégé and its mentor to qualify as a small business or participate in a socioeconomic program for which the protégé would be eligible by itself. For example, in a joint venture of a large contractor and a woman-owned small business, the venture would be considered a woman-owned small business for eligibility purposes. Additionally, the regulation was updated to clarify that approval from the Small Business Administration (SBA) is no longer necessary for Joint Venture programs. These changes bring the Federal Acquisition Regulation (FAR) in line with existing policies from the SBA.
Join the Coalition’s OASIS+ Working Group
As GSA works towards the release of a draft Request for Proposals (RFP) for the OASIS+ Multi Agency Contract, the Coalition is forming an OASIS+ Working Group to respond to the RFP and engage with GSA on the procurement vehicle. In addition, the Coalition plans to schedule a meeting with GSA on OASIS+ after the Fall Training Conference. (The Fall Training Conference will take place on November 16-17.) If you are interested in joining the OASIS+ Working Group, please contact Joseph Snyderwine at email@example.com.
DoD Ends Fixed Price Preference, Makes Other DFARS Changes
On October 28, DoD issued five new rules amending the Defense Federal Acquisition Regulation Supplement (DFARS), including one rule that would give DoD contracting officers more freedom to select among different types of contracts. The DFARS is the DoD’s supplement to the governmentwide FAR and governs how contractors do business with all branches of DoD. The current tranche of new rules includes provisions that change tax withholding for procurements from foreign sources, eliminate an expired acquisitions pilot program, and end a requirement for radio frequency identification labeling of shipments.
Perhaps the most consequential, however, is a provision that repeals DoD’s recent preference for fixed-price contracts. In the 2017 National Defense Authorization Act (NDAA), Congress required DoD to change the DFARS to include a preference for fixed-price contracts to address concerns about cost growth. The final DFARS rule, implemented in 2018, required contracting officers to consider fixed-price contracts for all contracts exceeding $25 million before offering alternative contract types, such as cost-reimbursement vehicles.
The rule allowed blanket exceptions for certain kinds of contracts intended for R&D purposes where cost-reimbursement contracts are widely preferred. Contracting officers, however, still had to document their decision to offer a cost-based contract, and for non-R&D contracts, they were required to receive executive approval. The new rule, required by the 2022 NDAA, eliminates the documentation requirement and lowers the level of approval needed to offer cost-based contracts. According to a House Armed Services Committee on the 2022 NDAA, eliminating the fixed-price preference will address procedural delays in some DoD weapons systems programs.
For further analysis of the effect of the repeal of the fixed-price preference, see today’s Legal Corner from Mayer Brown, “US DOD Repeals Preference for Fixed-Price Contracts.”
DoD Releases 2022 National Defense Strategy
Breaking Defense reports that DoD has released an unclassified version of the 2022 National Defense Strategy (NDS) that places greater emphasis on countering China. Last released in 2018 under the Trump Administration, the NDS is a congressionally mandated review of U.S. defense policy conducted every four years. A classified version of the document was sent to Congress early this year as part of the president’s 2023 defense budget request.
Compared with the 2018 strategy, which designated “inter-state strategic competition” as the key challenge for U.S. defense, the 2022 strategy more clearly focuses on China, deeming it a “pacing challenge” and “the most comprehensive and serious challenge to U.S. national security,” while referring to Russia as an “acute threat.” It also notes other threats, including non-kinetic threats to the U.S. homeland and industrial base, North Korea, Iran, violent extremist groups, and “climate change and other transboundary challenges.”
The strategy then prescribes three overarching means to mitigate these threats. The first is integrated deterrence, which focuses on integrating abilities across DoD’s services to ensure that threats are met with a “holistic response.” Second, DoD will focus on “campaigning.” This term refers to conducting activities to obtain strategic advantage, but not necessarily employing force: the strategy considers building and exercising joint forces campaigning and endorses using non-military means, like diplomacy and economic aid to counter adversaries. The focus on campaigning also means that “day-to-day force employment” will be more narrowly tailored. Finally, DoD will build “enduring advantages” by changing requirements planning, increasing speed and flexibility in acquisitions, improving resiliency, and investing in its workforce and the defense industrial base.
Although the final section of the strategy emphasizes collaboration with the private sector, experts have already raised questions about whether DoD and the industrial base will be able to define and take the necessary steps to meet its goals. Speaking to a group of reporters, Seth Jones, a defense policy expert and senior vice president at the Center for Strategic and International Studies, noted a range of challenges facing the U.S. industrial base. Jones pointed to lag time to produce munitions, supply chain vulnerabilities, and funding uncertainty created by a lack of long-term contracts as reasons that, in his view, the U.S. industrial base “is in no way fully prepared to fight, let alone deter the Chinese.”
NIH to Reassess CIO-SP4 Assessment Process
FCW reports that the National Institutes of Health (NIH) informed the Government Accountability Office (GAO) that they plan to take corrective action regarding the first round of eliminations from phase one of CIO-SP4 contract bidding. Specifically, NIH is going to review the self-scoring assessment “cut-off line” used in the phase one process. This cut-off line prompted 10 companies to file protests with GAO. In a letter viewed by FCW, NITAAC notified GAO that the agency planned to reassess the cut-off line and make new determinations on which offerors will move to the next phase of the contract process. They also plan to address any other issues they find during the reassessment. NIH has asked GAO to dismiss the protests in the meantime.
Issues with SAM Registration, UEI Affect 50,000 Organizations
Federal News Network reports that, as of this Tuesday, as many as 50,000 firms are in the manual review queue for the System for Award Management (SAM) and still waiting to receive a Unique Entity Identifier (UEI) from GSA. UEIs are 12-character alphanumeric identifiers assigned to government contractors by GSA when they register on SAM, and they replace the DUNS numbers previously used for these purposes. Without a SAM registration and valid UEI, entities generally cannot bid on government contracts or receive payments for their work.
Since the transition to UEIs began in April, GSA’s system for validating entities and assigning them a UEI has experienced serious problems. According to GSA, 20 percent of the more than 373,000 entities validated so far required manual review to complete validation. Contractors report that they have failed validation and needed manual assistance due to minor discrepancies, such as an extra punctuation mark, between the information they submitted and existing public records. Contractors also report issues with GSA’s service. One source stated that GSA advised contractors that they must log in every five days to check the status of their support request, or they will be moved to the back of the validation queue.
SAM’s woes have attracted the attention of Rep. Gerry Conolly (D-VA), Chairman of the House Oversight and Reform Committee on Government Operations, who, in July, demanded answers regarding the delay. In a statement to the press, he referred to the current backlog as “unacceptable.” Federal agencies have also taken individual measures to cope with the problem. DoD, for instance, issued a class deviation in September that, until it expired this week, allowed contractors without a current SAM registration and UEI to begin contracts and receive payments.
In response to requests for comment, GSA stated that the 50,000 figure represented a “snapshot in time,” and that only a fraction of the companies in the queue have been there for more than two months. GSA also noted that it had improved the validation process, increasing the number of entities who needed only one manual review by 30 percent, and that GSA was taking measures to address the backlog, including surging support, prioritizing entities at greatest risk of financial harm, and extending the expiration date for existing registrations.
Senator Chuck Schumer Submits Amendment to Expand Scope of Section 889 Prohibitions
In a press release, Senate Majority Leader Chuck Schumer (D-NY) announced an amendment to the FY 2023 NDAA that would expand significantly the scope of Section 889 of the 2019 NDAA, which prohibits the Federal Government from both (a) procuring telecommunications and video surveillance equipment or services from certain companies connected to the People’s Republic of China and (b) from working with contractors who use such equipment or services in any of their commercial or Federal systems.
Majority Leader Schumer’s amendment would add semiconductor products, like microchips, transistors and any equipment containing them, from Semiconductor Manufacturing International Corporation (SMIC), ChangXin Memory Technologies (CXMT), or Yangtze Memory Technologies Corp. (YMTC) to the list of prohibited technology under the law. The amendment would not take effect until three years after the NDAA passes, most likely forestalling implementation until 2025 at the earliest, and the Director of National Intelligence would retain the authority to grant compliance waivers. (In the past, agency heads could grant Section 889 compliance waivers for their contractors, but that authority expired in August of this year).
The Majority Leader’s amendment is just one of more than 900 to the NDAA that senators will have to consider when they return to the chamber on November 14 after the recess for midterm elections. Speaking with reporters after opening debate on the bill in October, Senator Jack Reed (D-RI), the Chairman of the Senate Armed Services Committee, stated that he expects that a consensus bill will pass by the end of the calendar year, as such bills have done for the past 61 years.
US DOD Repeals Preference for Fixed-Price Contracts
The Legal Corner provides the legal community with an opportunity to share insights and comments on legal issues of the day. The comments herein do not necessarily reflect the views of The Coalition for Government Procurement.
By Marcia G. Madsen, Cameron R. Edlefsen and Evan C. Williams, Mayer Brown
On October 28, 2022, the Department of Defense (“DoD”) issued a final rule, DFARS Case 2022-D007, to repeal its prior (2019) requirement that contracting officers must first consider fixed-price contracts and obtain approval from the head of the contracting activity for use of certain cost-reimbursement contracts. The final rule implements section 817 of the National Defense Authorization Act (“NDAA”) for Fiscal Year (FY) 2022 and is effective immediately.
In 2019, the DoD implemented the fixed-price contract preference in the determination of contract type as required by section 829 of the FY 2017 NDAA (Pub. L. 114-328)(DFARS 216.102(1)). Section 829 also mandated that the head of the contracting activity approve awarding cost-reimbursement contracts in excess of $25 million (DFARS 216.301-3(2)). The final rule revises these DFARS sections and removes the fixed-price contract preference and approval requirements.
According to a Senate Armed Services Committee report on the FY 2022 NDAA, “the preference for fixed-price contracts was originally established as an effort to control cost growth on large acquisition programs and to incentivize contractors to actively manage costs,” but the committee “recognize[d] that the fixed-price contract type may not be suitable for all acquisitions.” (1) Furthermore, “the committee expects the Department of Defense to select contract types and negotiate contract terms that are appropriate for the product or service being acquired and that effectively account for an acquisition program’s risks, requirements, and cost and schedule goals.” And the House Armed Services Committee’s summary of the 2022 NDAA explained that the repeal will also “relieve procedural delays that hinder innovative advances in weapon system programs.”
As a result of this repeal of the fixed-price preference, DoD contracting officials will have discretion to select contract types that are appropriate to the needs of the particular buyer and its particular requirements. Agencies select fixed-price contract types for commercial products or services and for products and services where the specifications are reasonably defined (2). Importantly, fixed-price contracts generally place the risk of cost overruns (e.g., cost increases for materials or supplies) on contractors while also allowing contractors to maximize their profits by controlling their costs and through efficient performance. Alternatively, agencies may only use cost-reimbursement type contracts when either circumstances do not allow an agency to sufficiently define its requirements or uncertainties with contract performance do not permit costs to be estimated with sufficient accuracy to use a fixed-price contract type (3). For example, the design, development, and initial production of a major weapon system may be under a cost-reimbursement contract. A cost-reimbursement contract allocates cost or performance risk between the parties depending on a number of potential considerations, including the nature of the work, the stage of development, the pressure to field the technology, and available budgetary resources. Cost-reimbursement contracts also impose administrative oversight burdens on the government and contractors that are generally absent in fixed-price contract types.
Moving forward, contractors may notice that in light of the additional discretion provided to the government, work previously sought under fixed-price contracts may be shifted toward cost-reimbursement in future competitions. In this regard, contractors should be mindful of the differences between the two contract types, most notably the allocation of cost and performance risk as discussed above. Properly accounting for these risks in developing a proposal is especially important as contractors continue to face challenges caused by supply chain delays and growing inflation.
As it is very difficult to challenge an agency’s choice of contract type via bid protest (4), prudent contractors will attempt to shape the procurement in their favor by communicating with the agency. To this end, contractors should express concerns or questions about an agency’s chosen contract type, as appropriate, at various stages in the procurement (e.g., market research, presolicitation conferences, solicitation Q&As). (See FAR 15.201).
(1) S. Rept. No. 117-39, at 203 (2021).
(2) FAR 16.202-2.
(3) FAR 16.301-2.
(4) The Government Accountability Office takes the view that “[i]t is within the administrative discretion of an agency to offer for competition a proposed contract that imposes maximum risks on the contractor and minimum burdens on the agency, and an offeror should account for this in formulating its proposal.” See, e.g., CWTSatoTravel, B-404479.2, Apr. 22, 2011, 2011 CPD ¶ 87 at 9.
Effectiveness Rate of GAO Protests Above 50 Percent for Fiscal Year 2022, While Overall Number of Protests Continues to Decrease
The Legal Corner provides the legal community with an opportunity to share insights and comments on legal issues of the day. The comments herein do not necessarily reflect the views of The Coalition for Government Procurement.
By Alex L. Sarria, Jason N. Workmaster & Sarah Barney, Miller & Chevalier
On November 1, 2022, the U.S. Government Accountability Office (GAO) released its annual report detailing bid protests statistics for fiscal year (FY) 2022, showing that protesters had a greater than 50 percent chance of obtaining relief if they protested, either through voluntary corrective action or through a GAO decision on the merits. The report is notable in a number of respects:
- The protest effectiveness rate (the percentage of all closed protests in which the agency took voluntary corrective action or GAO sustained the protest) came in at 51 percent, up from 48 percent in FY 2021.
- The protest sustain rate (the percentage of protests that GAO sustained out of all protests decided on the merits) fell slightly to 13 percent from 15 percent in FY 2021.
- The overall number of protests filed continued to decrease, with a 12 percent drop from FY 2021 (which follows a 12 percent decrease from FY 2020).
Additionally, the report identified the top three grounds for protest:
- Unreasonable technical evaluation
- Flawed selection decision
- Flawed solicitation
If you have questions about the trends in the GAO annual report or how these trends may change litigating at the GAO, please contact contact any of the authors of this alert.
A View From Main Street
This week’s A View From Main Street features guest author Ken Dodds of Live Oak Bank. The comments herein do not necessarily reflect the views of The Coalition for Government Procurement.
Is it Time to Rethink Joint Ventures and Multiple Award Contracts?
There are reports that most of the awards under CIO-SP4 small business went to mentor protégé joint ventures involving large businesses. There are also reports about protests involving Polaris small business, alleging the solicitation is too restrictive with respect to mentor protégé joint ventures. There are stories involving joint ventures with 30+ firms that come and go, each paying an access fee to the joint venture to individually perform their own orders under the joint venture. There are also stories about firms that specialize in submitting joint venture offers for small business multiple award contracts (MACs), with no intention of performing any work under the contract, but instead with the intent of selling the contract as an asset to unsuccessful offerors.
Perhaps it is time to consider legislation prohibiting joint ventures in connection with small business MACs. Under SBA’s rules, joint ventures do not jointly perform the contract. Joint ventures are unpopulated. The joint venture is a pass-through entity subcontracting work to the joint venture partners. At the time of offer and award of these MACs, offerors do not know what skills or capabilities they will need to perform individual orders that will be competed and awarded over a span of ten years into the future. Perhaps it would be better to evaluate the individual small businesses for purposes of contract award, and then evaluate the prime and its selected subcontractors at the time of each order. Procuring agencies using point systems for contract evaluation purposes would have to set point total requirements at levels that actual small businesses could attain.
Mentors could still participate in these contracts as subcontractors to the protégé, and while agencies have discretion to decide how to evaluate subcontractor past performance and experience, the law could require that contracting officers consider the mentor subcontractor’s past performance and experience in connection with an order competition. The protégé prime would benefit by receiving prime contract past performance in its own name and unquestioned control of the contract and the relationship with the Government. If necessary, the law could allow for a 40/60 split of work between the small prime and large business mentor subcontractor on orders under MAC small business contracts.
GSA Looks to Support SBIR Program, End So-Called “Valley of Death”
Speaking at an acquisition event this past Tuesday, Jim Ghiloni, a group manager at GSA’s FedSIM program, discussed early plans at GSA for a new contract vehicle to rectify the “valley of death” affecting companies who complete the Small Business Innovation (SBIR) program, Federal News Network reports. Recently reauthorized for another five years by Congress, the SBIR program requires Federal agencies to set aside funding from their R&D budgets for small businesses. Program participants receive program funds in two stages. If they have created a viable product by the end of the second stage, they advance to an unfunded commercialization stage where they attempt to sell it to government customers and the commercial market.
Unfortunately, many businesses encounter the “valley of death” during Phase III when they fail to find government or commercial customers, and their products never make it to market. Per Ghiloni’s remarks, GSA plans to tackle the issue through the Research, Innovation, and Outcomes (RIO) vehicle, which would create a GSA indefinite-delivery indefinite-quantity (IDIQ) contract for SBIR companies. The vehicle would allow contracting officers to create task orders for SBIR products more easily, increasing the amount of procurement dollars directed towards SBIR participants. The program would come in addition to a pilot program through GSA’s Assisted Acquisition Services that works to connect SBIR companies and contracting officers.
Planning for RIO is currently in its market research stage. Ghiloni said that GSA aims to publish a draft solicitation for the program available by early 2023 to obtain industry feedback.
RFI released on Use of Software Bills of Materials by Army
The Office of the Deputy Assistant Secretary of the Army has released a request for information (RFI) on the use of Software Bills of Materials (SBOMs). The office is seeking feedback on how to improve software supply chain security through the collection and utilization of SBOMs, which are lists of the components that make up a given piece of software. Information is requested on SBOM requirements, relevant contract recommendations, examples of productive assurance in software contracts, barriers in contracting due to software security, and any innovative ideas for secure software development solutions. Feedback can come from both traditional and non-traditional commercial partners and will contribute to efforts to comply with Executive Order 14028 and OMB Memo 22-18. Submissions are to be sent to firstname.lastname@example.org by November 10, 2022.
The RFI comes as discussion continues on the 2023 NDAA, which includes a requirement for SBOMs in Section 1627. The proposed requirement would mandate all non-commercial software created for, or acquired by, DoD to provide a SBOM. The content of the SBOM will be determined by a consensus of the Chief Information Officer, the Under Secretary of Defense for Acquisition and Sustainment, and the Under Secretary of Defense for Research and Engineering. In conjunction with this content determination, the Secretary of Defense will be required to conduct a feasibility study on acquiring SBOMs for software already used by the department. Finally, within a year of passage, the Secretary will work in conjunction with industry to develop a plan for future acquisitions that will maximize the use of SBOMs to provide understanding of cybersecurity risks within commercial and open-source software.
Three Cybersecurity Bills Introduced by House Energy and Commerce Committee
On October 25, three bills were introduced by leaders of the House Energy and Commerce Committee regarding the oversight of Federal agency’s cybersecurity. H.R.9228, the “Ensuring Cybersecurity at the NIH Act of 2022,” was sponsored by Rep. Morgan Griffith (R-VA) and would amend the Public Health Service Act to require the NIH’s director to establish and implement cybersecurity policies for the agency and identify and mitigate risks to the various information systems storing private data.
H.R.9229, the “Department of Health and Human Services Cybersecurity Coordination Act,” was sponsored by Rep. Brett Guthrie (R-KY) and is also an amendment to the Public Health Services Act. The bill would mandate greater oversight from the Secretary of the Department of Health and Human Services (HHS). The HHS Cybersecurity Working Group would facilitate collaboration with the HHS Chief Information Security Officer Council, Continuous Monitoring and Risk Scoring Working Group, and Cloud Security Working Group.
Finally, H.R.9234, the “Critical Electric Infrastructure Cybersecurity Incident Reporting Act,” introduced by Rep. Cathy McMorris Rodgers (R-WA), would direct the Secretary of Energy to ensure timely reporting for cybersecurity incidents regarding critical electric infrastructure. In addition to requiring reports to be filed within 24 hours of an incident, the bill also requires an annual report to be submitted on the number of notifications filed because of these incidents. The bills represent ongoing efforts to clarify cybersecurity reporting requirements, as well as establish which authorities are responsible for reporting.
DoD Issues Letter Responding to Questions on Inflation Policy
Bill LaPlante, Under Secretary of Defense for Acquisition and Sustainment, responded to a letter from Senator Elizabeth Warren (D-MA) which raised questions regarding DoD inflation policy. In his response, LaPlante reiterated DoD’s May 25 guidance on inflation, which states that firm fixed-price contracts put the burden of inflation on contractors and Economic Price Adjustment clauses are already included as a tool to balance the risk of inflation. LaPlante also noted the September 9 guidance on the ability of procurement officials within DoD to offer Extraordinary Contractual Relief under the authority in Public Law 85-804. This relief, however, can be issued only under stringent conditions. LaPlante said that there are no further policies being considered to respond to inflation.
NASA SEWP VI Reverse Industry Day to Be Held November 15
The NASA Solutions for Enterprise-Wide Procurement (SEWP) Program Management Office (PMO) will be hosting its East Coast industry day for the upcoming SEWP VI contract vehicle. The event will take place on November 15 at the Falls Church Marriott Fairview Park, one day before the Coalition’s Fall Training Conference at the same location in Falls Church, Virginia. At the Industry Day, there will be an overview of the proposed changes for the new vehicle, along with the ability to schedule a one-on-one session with the SEWP PMO. Registration is limited to two attendees per contractor. To register, click here.
Expectations Discussed for New Agency ARPA-H
Experts speaking at an ACT-IAC event shared expectations for the Advanced Research Projects Agency for Health (ARPA-H), emphasizing the importance of social determinants of health and data science, reports Meritalk. ARPA-H was created by the fiscal year 2022 omnibus appropriations bill and is modeled after the Defense Advanced Research Projects Agency. While discussing the group, Dr. Bill Kassler, chief medical officer at Palantir Technologies, expressed the need for research to incorporate the impact of social determinants on health: “If ARPA[-H] only focuses on the biomedical, it will be addressing 20 percent of the contribution to healthcare. So, ARPA-H must take a broader view.” Dr. Kassler also emphasized the need for ARPA-H to use a data infrastructure that makes research more accessible to the public.