Price Evaluation Adjustments
GAO Decision Expands Applicability of HUBZone Price Adjustment Preference
In Explo Systems, Inc. , B-404952 and B-404952.2 (July 8, 2011), the GAO decided that the HUBZone price adjustment preference applied even when the HUBZone offeror’s proposed price was lower than the price offered by a large business. In this case, the Army issued an RFP for the demilitarization of certain ammunition. The RFP was issued on an unrestricted basis and contained FAR 52.219-4 , Notice of Price Evaluation Preference for HUBZone Small Business Concerns. Pursuant to this clause, if a HUBZone small business concern submitted a proposal, the price offered by any large business was to be raised by 10% for proposal evaluation purposes. Further,. Read More.
A Look Ahead
Expect supplemental guidance to “clarify” DCAA’s June 4, 2010 Memorandum for Regional Directors, Subject: Audit Alert on Reporting on Forward Pricing Rates in Pricing Proposals. The June 4 Headquarters guidance mandates audit of proposed indirect rates in order to be compliant with generally accepted government auditing standards (GAGAS), a current DCAA concern. The guidance states that an examination of forward pricing rates includes detailed testing of a contractor’s assertion (proposal and basis of estimates) and analytical procedures such as regression or trend analysis where appropriate. Implementation has resulted in a standardized approach to indirect rates, regardless of whether cost or. Read More.
Tips for Finding, Pursuing and Winning Government Construction Contracts
With the falloff in residential and commercial construction in many markets, some construction contractors have considered expanding their revenue horizons by investigating contracts funded by the American Recovery and Reinvestment Act of 2009 . However, locating, pursuing, and meeting the requirements of government contracts is vastly different from private sector work. Construction professionals should be aware of some of the key challenges and best practices of government contracting. To get started, spend some time examining where contract dollars are spent in your area and which companies are winning contracts. The databases at www.usaspending.gov and www.fedspending.org contain a wealth of free information.
Stimulus Package Oversight — Claimed Unallowable Costs
The Departments of Transportation at both the state and federal level are slated to receive a significant share of the just passed “stimulus package” and state and federal government oversight will be intense. It’s in the best interest of all companies, whether utilizing Federal funds through FHWA contracts or not, to establish internal controls and utilize knowledgeable personnel to ensure the elimination of unallowable costs from any billing, claim or proposal applicable to such federal-aid as required by the Federal Acquisition Regulation (FAR). Specific areas of unallowable cost identified in a recent DoT OIG audit report on application of the. Read More.
An Update on 8(a) and HUBZone Programs Following the Rothe Decision
On November 4, 2008, in Rothe Development Corp. v. DoD and Department of the Air Force , the Court of Appeals for the Federal Circuit declared 10 U.S.C. §2323 unconstitutional. This statute set a goal for DoD (as well as NASA and the Coast Guard) to award 5% of their contracts to small disadvantaged businesses (SDBs). To do this, it authorized the agencies to impose a price adjustment factor upon proposals and bids received from non-SDB firms. The statute also addressed contracting with 8(a) firms and HUBZone small businesses. Although Rothe did not specifically challenge the constitutionality of the 8(a) or HUBZone programs, because the Circuit Court found the entire statute. Read More.
Court Holds SDB Price Evaluation Adjustment Factor in FAR Subpart 19.11 Unconstitutional
In a decision issued November 4, 2008, the Court of Appeals for the Federal Circuit held that 10 U.S.C. §2323 is unconstitutional because it denies equal protection to contractors who are not covered by the Small Business Act (See, Rothe Development Corp. v. Department of Defense, Docket No. 2008-1017).
Of immediate concern is the effect the Court’s decision has on the price evaluation adjustment provided for by FAR Subpart 19.11, which implements a portion of 10 U.S.C. §2323. Although the Rothe decision dealt only with DoD, the statute and Subpart 19.11 also apply to contracts to be awarded by NASA and