Basics of Government Contracting

1. Basics of Government Contracting

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

3. 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)

4. Federal Procurement Background • The FAR requires full and open competition for federal contracts • Naturally, there are exceptions

5. 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

6. What is a small business set-aside?

7. 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

8. Small Business Set-Asides • “Rule of Two” – Contract must be set-aside if: • Valued at over $150K; • Reasonable expectation to receive offers from at least 2 small businesses; and • Award will be made at fair market price.

9. 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

10. How does the government procure goods and services?

11. 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

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

13. 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

14. 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

15. 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

16. 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”

17. Negotiated Procurements • After final proposals, agency makes award decision based on process identified in RFP. • Referred to as “source selection decision”

18. 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

19. 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

20. 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)

21. What are the difference between government and private contracts?

22. 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

23. 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

24. 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

25. 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”

26. 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

27. 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

28. 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

29. 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

30. 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

31. Teaming Agreementsand Subcontracts

32. 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

33. 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

34. Basics of Government Contracting Contact Info: General Counsel, P.C. 703-556-0411 info@gcpc.com