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.
3% Withholding on Government Payments Delayed Until 2013
On May 6, 2011, the Internal Revenue Service (IRS) released final regulations that delay the mandatory three percent (3%) withholding on certain payments made by government entities. In general, the 3% withholding, which was scheduled to go into effect beginning next year, will apply to each individual payment over $10,000 made from federal, state and local government entities to persons providing property or services. Under the final regulations, the new withholding requirements will apply to payments made after December 31, 2012. For existing contracts that are not materially modified, the new withholding requirements will not apply until payments made after. Read More.
Improving Competition Where Only One Offer Is Received
On April 27, 2011, Shay Assad, Director, Defense Procurement and Acquisition Policy, issued a memorandum entitled “Improving Competition in Defense Procurements – Amplifying Guidance”. He had previously issued the initial guidance memorandum on November 24, 2010, entitled “Improving Competition in Defense Procurements”. The focus of the new memorandum is to maximize competition in situations where only one offer is received in a procurement utilizing competitive procedures. Contracting officers are instructed to engage in cost or price analysis when only one offer is received. The guidance applies to acquisitions over the simplified acquisition threshold of $150,000 including commercial items and construction.. Read More.
CB&H GovCon Seminar: Costing and Proposal Pricing Strategies (Vienna, VA)
Join Cherry, Bekaert & Holland’s Government Contractor Services Group for Pricing to Win: Cost and Pricing Proposal Strategies . This seminar will emphasize the importance of accurate and timely product or service costing and proposal pricing and the role your indirect rate structure plays in the management decision making process, the maximization of cost recovery, the improvement of your competitive position and in regulatory compliance. We will also explore the “bid/no bid” process, how to respond to RFPs, creative approaches to pricing to win, and the impact of contract type on pricing.
Thresholds for Proposal Audits May Lead to More DCAA Scrutiny
Effective September 17, 2010, DoD procedures were amended to provide guidance on when contracting officers should seek audit support when evaluating proposals for new contracts or modifications to existing contracts. The new guidance states: (c) Audit assistance for prime contracts or subcontracts. (i) The contracting officer should consider requesting audit assistance from DCAA for— (A) Fixed-price proposals exceeding $10 million; (B) Cost-type proposals exceeding $100 million. (ii) The contracting officer should not request DCAA audit assistance for proposed contracts or modifications in an amount less than that specified in paragraph (c)(i) of this subsection unless there are exceptional circumstances explained. 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.