Monthly Archives: July 2018

TIME FOR A TEAMING AGREEMENT CHECK-UP

Contractors need to carefully review Contractor Teaming Agreements (CTA’s) to ensure that they are specific and enforceable.  While a general CTA may be easier and faster to execute, such agreements tend not to hold up in court – precisely when you need it.  According to a client alert recently issued by Steptoe and Johnson, the Virginia Supreme Court recently ruled in CGI Fed, Inc. v. FCi Fed, Inc. that a teaming agreement entered into by the two companies for State Department Visa processing did not create an enforceable obligation to enter into a subcontract with specific terms.  Further, the Court found that CGI could not recover damages on its fraudulent inducement claim because it was not entitled to lost profits under a subcontract in which the final terms were uncertain and unenforceable. While the Steptoe article used hyperbole to make its point (saying that CTA’s are, in essence, doomed), the fact is that companies don’t always put enough time and thought into their teaming agreements.  Indeed, it is difficult to tell in this case, where words such as “subcontractor” are used, whether this is a classical GSA-based CTA or not.  Getting terms right is a frequent short-coming of CTA’s.  CTA’s can be valuable tools that enable contractors to pursue business they otherwise might not have a chance to compete for.  While it is tempting, especially at year end, to wantonly team with another firm, this case underscores the need to ensure that CTA terms are specific and provide your company with the protections you think you are getting.

ARE YOU FACING A PRE OR POST AWARD AUDIT?:

Government contract audits are no fun.  They take away time, distract key personnel and cost money even under the best of circumstances. What’s more, if you’re a GSA Schedule contract holder that suddenly gets a post-award audit notice, you can assume that this, indeed, is not the best of circumstances.  Regardless, your company needs to be prepared.  Allen Federal has worked with numerous companies, as well as their Schedule consultants and counsel, to ensure that your audit goes as smoothly as possible.  We work with the team to identify potential issues before an auditor, recommend remedial action, and help prepare an audit response that puts your company in the best possible position.  Our services are pennies on the dollar compared with the fines and penalties and auditor could recommend. In fact, we’ve ended up saving clients’ money more times than not.  See what we can do for you and your contract management team today.  Contact us at info@allenfederal.com.

 

GSA PROVIDES FURTHER GUIDANCE ON E-COMMERCE PORTAL PROJECT

GSA really does want to hear from you, whether you’re a portal provider or supplier, via its RFI’s that are now out for comment.  The agency issued a further indication of what, precisely, it is hoping to obtain in this process via a blog post last week.  Specifically, GSA would like to know what contract clauses could be exempt from this project based on the following criteria:

  • Does the FAR clause/provision come from appropriation law?
  • Does the FAR Clause/provision contain criminal or civil penalties?
  • Does the specific statute explicitly state it applies?
  • Is the FAR clauses/provision consistent with current standard commercial practice for the e-commerce industry?
  • Is it required to implement Section 15 of the Small Business Act?
  • Is it needed to implement a bid protest procedure?
  • Is it consistent with the current commercial practice for the e-commerce industry?

GSA believes that there are no applicable clauses where a statute specifically says the provision should apply to commercial item or COTS acquisitions.  Interestingly, however, the agency may include False Claims Act provisions in any e-portal provider contract as the FCA clearly contains criminal and civil penalties.  How the FCA would be applied to portal providers, who may serve as both a direct biller, or billing conduit for a third party, should be a question providers ask back to GSA now.  Potential FCA, or other civil liabilities, is something a portal provider should be well aware of when considering participating in the 846 project.

Comments on the RFI are due to GSA on July 20th and a public meeting may follow in August or September.  The agencies ultimate goal is to launch a limited e-commerce pilot in early 2019.

CLAIMS COURT RULING IN TAA CASE COULD MAKE COMPLIANCE EASIER FOR CONTRACTORS

A recent US Court of Federal Claims ruling provides important clarity to the application of the Trade Agreements Act and may help level the playing field between products made in the US from foreign components vs. foreign made products sold straight to federal agencies.  As reported by Donna Yesner and Stephen Ruscus of Morgan Lewis, the Claims Court ruling in Acetris Health invalidated a VA and DOD interpretation that had resulted in the agencies previously prohibiting US government purchases of pharmaceuticals classified as domestic end products under the Buy American Act if they were determined to be products of India, China, or other non-favored countries under the Trade Agreements Act.  The Court found that products “manufactured in the United States” can be purchased under the clause without regard to the source of the underlying components and ingredients.  According to Yesner and Ruscus, “Although the ruling was specifically on pharmaceuticals, the decision is important to all suppliers of product to the government because it interprets the interplay of the BAA and TAA in all contracts subject to the TAA—currently those greater than $180,000—and confirms that the TAA “substantial transformation” test only controls if the product is not ‘manufactured’ in the United States.”  The implications of this ruling are potentially far-reaching.  The precedent could make TAA compliance easier for many contractors.  Allen Federal recommends reviewing this ruling and its potential impact on your company with competent counsel.

DOD EXPANDS ITS INNOVATIVE COMMERCIAL ITEM ACQUISITION PROGRAMS

DOD is expanding the use of Commercial Solutions Opening (CSO) use per a June 26th memo issued by Director of Defense Procurement Shay Assad.  The move comes as GSA and DHS also expand their own CSO capabilities.  The new DOD authority allows CO’s in any part of DOD to acquire, “any technology, process or method, including research and development, that is new as of the date of submission of a proposal of a technology, process, or method.”  This is a Read more