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Www.mwllegal.com GOVERNMENT CONTRACTING HOT TOPICS: COMPLIANCE, OCI, BID PROTESTS, AND NEW SBA RULES HOT TOPICS.

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Presentation on theme: "Www.mwllegal.com GOVERNMENT CONTRACTING HOT TOPICS: COMPLIANCE, OCI, BID PROTESTS, AND NEW SBA RULES HOT TOPICS."— Presentation transcript:

1 www.mwllegal.com GOVERNMENT CONTRACTING HOT TOPICS: COMPLIANCE, OCI, BID PROTESTS, AND NEW SBA RULES HOT TOPICS

2 www.mwllegal.com About MWL Law Firm 2 McMahon, Welch and Learned, PLLC represents many small and mid-sized federal services contractors in Northern Virginia, DC and Maryland, including small- disadvantaged firms, veteran-owned firms, women-owned firms and Hub Zone qualified firms. We also have a strong corporate and acquisitions-support practice which focuses on general business legal matters of significant interest to the broader business community.

3 www.mwllegal.com Presenters 3 J. Patrick McMahon, Partner Mr. McMahon has nearly thirty years of experience with a primary focus on representation of companies that offer information technology products and services to the federal government. Mr. McMahon advises corporations and other business entities in connection with all aspects of their federal procurement business including contract award and terminations, claims, contract disputes, bid protests, and prime contractor/subcontractor relationships.

4 www.mwllegal.com Presenters 4 William T. Welch, Partner Mr. Welch has twenty-two years of experience, primarily in federal Bid Protests. He also provides legal counsel for the entire lifecycle of a government contractor from contract negotiation, award, and protests to contract administration and contract claims. Mr. Welch also has experience in teaming agreements, subcontractor agreements, and related issues. In addition, Mr. Welch advises contractors who qualify for small business set-aside awards, 8(a) competitive and non- competitive contracts, and HUBZone and Service-Disabled, Veteran Owned contracts.

5 www.mwllegal.com Hot Topics In Gov’t Contracting 5  Federal Business is Closely Regulated  Audits are an example  Caps on Executive Compensation and Reporting is another  Fair Labor Standards and Service Contract Act compliance  Entire Procurement Process  Ethics  Why Bother?  DCAA v. Inspector General

6 www.mwllegal.com Hot Topics In Gov’t Contracting 6  Dealing with Inspectors General (IG)  Scope – Agency wide internal audits & Investigations  Subpoena power  Indicators of Fraud  Investigation  Criminal law enforcement

7 www.mwllegal.com Hot Topics In Gov’t Contracting 7  Common Frauds  Mischarging of Costs FFP & CPFF or T&M Marketing/Proposal activity Timecards Floor Audits  Bribery & Kickbacks  Product Substitution  Conflicts of Interest

8 www.mwllegal.com Hot Topics In Gov’t Contracting 8  Handling Organizational Conflicts of Interest  What is an Organization Conflict of Interest (OCI) and why would it matter to me?  An OCI exists where a person or contractor is unable or potentially unable to render impartial assistance to the Government or would lack objectivity in performing the contract work or might be other impaired, or a person has an unfair competitive advantage.

9 www.mwllegal.com Hot Topics In Gov’t Contracting 9  Examples of the 3 types of OCI : Where a contractor assists a federal agency in preparing specifications for a procurement and then attempts to bid on that procurement. Where a contractor possesses non-public knowledge about a procurement and could use that knowledge for its competitive advantage on a procurement. Where a contractor assists in the evaluation of proposals involving that company, another division of the company, or an affiliate of the company.

10 www.mwllegal.com Hot Topics In Gov’t Contracting 10  Contracting Officers are required to:  (1) Identify and evaluate potential organizational conflicts of interest as early in the acquisition process as possible; and  (2) Avoid, neutralize, or mitigate significant potential conflicts before contract award.

11 www.mwllegal.com Hot Topics In Gov’t Contracting 11  Why are OCIs a hot topic:  The Government is now outsourcing more of its procurement assistance in developing specifications and performing proposal evaluations;  Contractors are hiring former Government personnel who may possess non-public information to gain a competitive advantage;  Contractors now have more diverse divisions and affiliates that overlap in performance and/or work at the same federal agencies;  The acquisition of a company can create an OCI where one did not exist originally.

12 www.mwllegal.com Hot Topics In Gov’t Contracting 12  What are the current effects of the increase in OCIs?  An increase in contractors excluded from a competition by COs who believe an OCI may exist;  An increase in protests where the losing competitor believes an OCI exists and contract improperly awarded;  An increase in protests where companies are excluded from a competition based on the CO’s finding of an OCI;  Existing contracts may be terminated where the CO discovers a potential OCI;  Diminished value of an acquisition that creates an unforeseen OCI with the parent or affiliated companies;  Contractor may be required to sell off a division or affiliated company that creates an OCI.

13 www.mwllegal.com Hot Topics In Gov’t Contracting 13  How to avoid OCIs?  Executive Management must understand the business and activities of all its business units and affiliated companies with a complete understanding of the OCI issues;  The Company must perform thorough due diligence prior to any acquisition with the assistance of professionals knowledgeable in potential OCI issues;  If the OCI can be mitigated, approach the CO with a mitigation plan and get approval before you act.

14 www.mwllegal.com Hot Topics In Gov’t Contracting 14  OCIs In Bid Protest Cases  GAO has consistently held that OCIs are factually based and must be decided on a case by case basis.  GAO does not do an independent investigation but only evaluates the reasonableness of the CO’s acceptance or rejection of an OCI.  OCI findings must be based only on “hard facts” not on suspicion or innuendo.  It is enough that the hard facts support the appearance of a conflict of interest. The CO or the protester does not have to prove a real or actual OCI.

15 www.mwllegal.com Additional Hot Topics In Gov’t Contracting – New SBA Rules 15  New Small Business Laws have now made small business contracting more complicated;  The new regulations provide some advantages for small businesses in federal contracting, but they have also created new potential liabilities.

16 www.mwllegal.com Hot Topics In Gov’t Contracting 16  Small Business Advantages in the new laws and regulations:  Prime Contractors must notify the Agency if it does not use a small business used in the preparation of the proposal;  Prime Contractors must notify the Agency if the prime contractor reduces its payments to the small business subcontractor;  Prime Contractor must notify the Agency if it falls 90 days or more behind in payments to its small business subcontractor

17 www.mwllegal.com Hot Topics In Gov’t Contracting 17  Small Business Advantages in the new laws and regulations:  The Agency now has an affirmative duty to monitor and evaluate the prime’s small business subcontracting plan performance;  Subcontractor may notify the Agency directly of any violations of the use and payment provisions;  The small business prime contractor on a set-aside contract may now split its 50% performance requirement with another small business “similarly situated.” (Regulations pending)

18 www.mwllegal.com Hot Topics In Gov’t Contracting 18  Small Business potential pitfalls in the new laws and regulations:  Where a small business willfully misrepresents its size or status and receives a small business contract, there is a presumption of loss to the Government that could be recovered by a civil or criminal case;  This rule covers small business prime contracts or subcontracts;  The presumption of loss includes the entire amount spent by the Government on the contract or subcontract regardless of the value received under the contract;  Misrepresentation of size or status to obtain a subcontract could also be grounds for suspension or debarment.


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