FAR 101: An Introduction to Doing Business with the Federal Government

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1 FAR 101: An Introduction to Doing Business with the Federal Government Presented By: MARIA L. PANICHELLI OF COHEN SEGLIAS PALLAS GREENHALL & FURMAN, P.C. FOR THE NATIONAL VETERANS SMALL BUSINESS ENGAGEMENT

2 The Procurement Process: A Primer Essentially, the federal acquisition process begins when a government agency determines its requirements and how to purchase them If the agency s contracting officer determines that the appropriate method for procuring the goods or services is a contract, and the contract amount is greater than $25,000, then the agency posts a solicitation on the Federal Business Opportunities website 2

3 What Law Governs the Procurement Process? Meet the FAR: The Federal Acquisition Regulation ( FAR ) was established for the codification and publication of uniform policies and procedures for acquisition by all executive agencies Supplemental Agency Regulations: E.g.: Defense Federal Acquisition Regulation Supplement (DFARS) Army Federal Acquisition Regulation Supplement (AFARS) Engineer Federal Acquisition Regulation Supplement (EFARS) SBA / VA Small Business Program Regulations 3

4 System for Award Management The System for Award Management (SAM) has combined federal procurement systems and the Catalog of Federal Domestic Assistance into one new system. SAM includes the functionality from the following systems: Central Contractor Registry (CCR) Federal Agency Registration (Fedreg) Online Representations and Certifications Application Excluded Parties List System (EPLS) 4

5 System for Award Management Federal Contractors must register and provide information, including: Characteristics and Capabilities Representations & Certifications Small Business Size & Status Responsibility Compliance Reports Affirmative Action 5

6 Small Business Programs: SBA Size Standards: What is Small? Standards Vary By Industry Based on North American Industrial Classification Codes ( NAICS Codes ) Once you know the applicable NAICS code, check the corresponding SBA Size Standard on the SBA s Website. Can Be Based on Annual Gross Receipts or Number of Employees Represents the largest size that a business may be to remain classified as small Used by SBA to Determine the Size of a Concern 6

7 Small Business Programs: Understand the Lingo: VOSB/SDVOSB Veteran Owned Small Business ( VOSB ) Service-Disabled Veteran Owned Small Business ( SDVOSB ) 7

8 Small Business Programs: Two Distinct Programs: VOSB/SDVOSB 1. VA s VOSB/SDVOSB Program (VA Contracts) 2. SBA s SDVOSB Program (All other Agency Contracts) 8

9 Small Business Programs: VOSB/SDVOSB SBA SDVOSB Program (SDVO SBC) What is a SDVOSB (SDVO SBC)? Small Business 51% unconditionally owned and unconditionally controlled by one or more Service-Disabled Veteran(s) 9

10 Small Business Programs: VOSB/SDVOSB VA VOSB/SDVOSB Program ( VetBiz and VIP) What is a VOSB? Small Business 51% unconditionally owned and unconditionally controlled by one or more Veteran(s) What is a SDVOSB? Small business 51% unconditionally owned and unconditionally controlled by one or more Service-Disabled Veteran(s) 10

11 Other Small Business Programs 8(a) Program Small Business 51% owned/controlled by socially disadvantaged AND economically disadvantaged individuals who are of good character who demonstrate potential for success, and are citizens of, and residing in, the United States HUBZone Program Small Business 51% unconditionally owned and unconditionally controlled by one or more either (1) Indian Tribal Governments (or companies owned thereby) or (2) US Citizens Principal office located in a HUBZone At least 35% of its employees reside in a HUBZone / within any Indian reservation *Different rules for Indian Tribal Governments than other citizens* 11

12 Other Small Business Programs WOSB Program Small Business 51% unconditionally owned and unconditionally controlled by one or more Women EDWOSB Program Small business 51% unconditionally owned and unconditionally controlled by one or more Economically Disadvantaged Women *NAICS Codes for Industries where Woman are Historically Under-Represented* 12

13 Common Pitfalls: Affiliation Why Does Affiliation Affect Size? Common Affiliation Issues: Ostensible Subcontractor % of Work Requirements Control on site General affiliation: Shared Space, Employees, Resources, Equipment Past Employee Relationship Familial Relationship Frequent Subcontracting Financial Reliance/Control Guarantor? LOC? Bonding? 13

14 Common Pitfalls: Unconditional Ownership Common Ownership Issues: Indirect Ownership or Conditional Ownership Specifics are different based on corporate structure Corporate Governance Docs: Restrictions on ownership / transfer Rights of first refusal Transfer upon incapacity Transfer upon bankruptcy 14

15 Remember: Common Pitfalls: Unconditional Control Unconditional Control Two Components 1. Long-Term Decision Making and 2. Day-to-Day Management and Administration of Business Operations 15

16 Common Pitfalls: Unconditional Control Common Control Issues: Definitions/Number of Managers or Members Positions of Authority, Authority to Act Given to Others Required Individual Does Not Have Highest Title Required Individual Not Experienced Enough Licenses Security Clearances Corporate Governance Docs: Quorum or Supermajority Provisions 16

17 Additional Control Concerns: Remote Control Full time Job(s)? Economic Control / Able To Exert Financial Pressure or Control Guarantor? LOC? Bonding? Common Pitfalls: Unconditional Control 17

18 Understanding the Procurement at Issue: Key Considerations Key Considerations: What Agency (different procedures)? What type of Contract (Set Aside? MATOC? GSA)? What type of Procurement (different manner of evaluating bids/offers: Sealed Bidding? Contracting by Negotiation?) 18

19 Understanding the Procurement at Issue: Who is Procuring? You must learn about the table of organization and the chain of command 19

20 Understanding the Procurement at Issue: What Type of Contract? Firm Fixed-Price Cost Reimbursable Indefinite Delivery Indefinite Quantity (IDIQ) [MATOC] GSA Schedule Set Asides Rule of Two 20

21 Understanding the Procurement at Issue: What Type of Procurement? FAR Part 14 Sealed Bidding Invitation for Bids ( IFB ) Award is Made to the Lowest Responsive and Responsible Bidder FAR Part 15 Contracting by Negotiation Request for Proposals ( RFP ) Award is made to the offeror who presents the Best Value - Tradeoff v. LPTA No public opening Increasing Importance of Non-Price Factors 21

22 Sealed Bidding What is Responsive? Only responsive bids can be considered for award To be responsive, a bid must comply with all of the requirements of the invitation to bid; price, quality, quantity, delivery DON T GET CREATIVE or QUESTION THESE REQUIREMENTS Bid invitations often come with other requirements (for example, bidders shall attend a pre-bid conference ) Noncompliance can lead to rejection by the contracting authority or a protest by another bidder on grounds of responsiveness 22

23 Sealed Bidding What is Responsible? Contractor, supplier, or vendor, qualified on the basis that it has adequate financial resources to perform a contract, is able to comply with the associated legal or regulatory requirements, is able to deliver according to the contract schedule, has a history of satisfactory performance, has good reputation regarding integrity, has or can obtain necessary data, equipment, and facilities, and is otherwise eligible and qualified to receive award if its bid is chosen Small Business SBA Certificate of Competency FAR ; 13 CFR

24 Contracting By Negotiation Typical Evaluation Factors: Past Performance Past Experience w/ Similar Work Proposed Technical Approach/Solutions Management Organization Proposed Schedule Technical Experience/Expertise Key Personnel Qualifications Small Business Subcontracting Plan Price (but remember, it s not Sealed Bidding) 24

25 Contracting By Negotiation: Award on Initial Proposals There is generally no obligation for an agency to conduct discussions where the RFP specifically instructs offerors of the agency s intent to award a contract on the basis of initial proposals The Contraction Officer s discretion in deciding not to hold discussions is quite broad. Our office [the GAO] will review the exercise of that discretion only to ensure that it was reasonable based on the particular circumstances of the procurement. HDL Research Lab, Inc., B , Dec. 21, 2004 citing FAR (a)(3), and Colmek Sys. Eng., B , July 9,

26 Contracting By Negotiation: Opening up Negotiations Phases Competitive Range Selection Negotiations are discussions with all offerors within the competitive range Undertaken with the intent of allowing the offeror to revise its proposal Exchanges is a shifting definition 26

27 Contracting By Negotiation: Purpose of Discussions The primary objective of discussions is to maximize the Government s ability to obtain best value, based on the requirement and the evaluation factors set forth in the solicitation At a minimum, the contracting officer must indicate to, or discuss with, each offeror still being considered for award, deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond 27

28 Contracting By Negotiation: Limitations on Discussions Government personnel may not engage in conduct that Favors one offeror over another Reveals an offeror s technical solution, including unique technology, innovative and unique uses of commercial items, or any information that would compromise an offeror s intellectual property to another offeror Reveals an offeror's price without that offeror s permission Reveals the names of individuals providing reference information about an offeror s past performance Knowingly furnishes source selection information Uneven Discussions Prohibited 28

29 Contracting By Negotiation: Final Proposal Revision The contracting officer may request or allow proposal revisions to clarify and document understandings reached during negotiations At the conclusion of discussions, each offeror still in the competitive range shall be given an opportunity to submit a final proposal revision The contracting officer is required to establish a common cut-off date only for receipt of final proposal revisions 29

30 Consideration for Award IFBs Lowest Price, Responsive, Responsible & (maybe) Realistic RFPs Evaluation of Price and Non Price Factors Proposal evaluation is an assessment of the proposal and the offeror s ability to perform the prospective contract successfully An agency shall evaluate competitive proposals and then assess their relative qualities solely on the factors and subfactors specified in the solicitation Evaluations may be conducted using any rating method or combination of methods, including color or adjectival ratings, numerical weights, and ordinal rankings The relative strengths, deficiencies, significant weaknesses, and risks supporting proposal evaluation shall be documented in the contract file 30

31 Consideration for Award: Source Selection Decision The source selection authority s (SSA) decision shall be based on a comparative assessment of proposals against all source selection criteria in the solicitation While the SSA may use reports and analyses prepared by others, the source selection decision shall represent the SSA s independent judgment The source selection decision shall be documented, and the documentation shall include the rationale for any business judgments and tradeoffs made or relied on by the SSA, including benefits associated with additional costs Although the rationale for the selection decision must be documented, that documentation need not quantify the tradeoffs that led to the decision 31

32 Unsuccessful Offeror Notice Pre-Award Notice (FAR (a)(1)): Preaward notices of exclusion from competitive range - The contracting officer shall notify offerors promptly in writing when their proposals are excluded from the competitive range or otherwise eliminated from the competition. The notice shall state the basis for the determination and that a proposal revision will not be considered. 32

33 Unsuccessful Offeror Notice Pre-Award Notice (FAR (a)(2)): In Small Business, HUBZone, VOSB/SDVOSB or WOSB/EDWOSB procurement, Contracting Officer must notify each offeror in writing PRIOR to award Notice must state: a) Name and Address of the Apparently Successful Offeror b) That the Government Will Not Consider Subsequent Revisions of the Offeror s Proposal c) That No Response is Required Unless a Basis Exists to Challenge the Size Status or Small Business Status of the Apparently Successful Offeror 33

34 Unsuccessful Offeror Notice Post-Award Notice (FAR (b)): Within 3 days after award, each unsuccessful offeror shall be notified of: The number of proposals received Name and address of each awardee The award price, including unit prices quantities In general terms, the reasons why the offeror s proposal was not accepted 34

35 Next Steps? Debriefing and Protest or Award and Performance Possibly REAs, Claims, Termination Issues Debriefings and Protest Session - 11/19 at 10:05am 35

36 Questions? 36

37 Contact Information Maria L. Panichelli, (twitter) 37

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