1 Basics of Government Contracting

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? 6

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 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. 8

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? 10

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? 21

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