Question from a recent Government Contracting Vehicles Workshop:

“We just got on the GSA Schedule 70 Contract. We were told that our negotiated rates  were only good for CONUS. Now we have to negotiate OCONUS rates through an emod.  They want us to identify each country separately  to see what hardship rates, hazardous living conditions and COLAs are applicable. Can you explain about this process a bit please?  Am a bit confused as to how develop those rates.”

Thank you for your very interesting question.  We asked the Vice President Operations of our company to lend us a hand in finding the answer. The answer came from the Schedule 70 Solicitation. We hope this helps you with your eMod..

26. DANGER PAY. Contractor personnel may be required to perform services in areas designated by the Department of State as Danger Pay or Hardship Posts for a variety of reasons, including contingency operations, humanitarian or peacekeeping operations, military exercises and/or operations, or diplomatic missions. The Department of State Standardized Regulations (DSSR) provides for additional compensation for service in foreign locations where conditions of environment differ substantially from conditions of environment in the continental U.S. that additional compensation is warranted and necessary as a recruitment or retention incentive. Danger Pay and Hardship Post differential rates must be negotiated at the MAS contract level. The Contractor may request these rates upon award or via contract modification any time after award. Applicable SINs under Schedule contracts may include a Danger Pay or Hardship Post differential. If it is included, it is a rate differential. The Ordering Agency Contracting Officer has the authority to determine whether or not it is appropriate for an individual order. For more information on Danger Pay, please see the Department of State’s website:  http://www.state.gov.

We are assuming that rates will need to be increased to cover the additional expense of Danger Pay.  We don’t have direct experience with this, but would suggest you work through the State Dept Customer Service.  Each country will have a different Danger Pay increment based on current conditions assessed by DOS.

Wishing you much success.

–Donna Gaillard & Jim Dickensheets

Question:  If a Request for Quote (RFQ) is NOT a set-aside, that means there are no size restrictions, correct? In this non-set-aside scenario, would there be self-performance requirements?

For solicitations where Block 10 of the SF 1449 indicates “Unrestricted” the competition is full and open, so any business of any size can compete for the work.  In this scenario, there are no limitations on the amount of work that can be subbed out to other companies, regardless of their size.   As a small business prime there would not be a requirement for a subcontracting plan.  If other than small business prime, then a subcontracting plan would be required if procurement exceeds $650,000.00. ($1.5m for construction)  See FAR Part 19.7.

Though a solicitation states full and open (F&OC – no set aside restrictions) there may be a preference cited in the evaluation criteria that may incentivize other than small businesses to team up with a small.

–Donna Gaillard

Q:  May a company new to Federal Procurement hire W2 employees that have worked on government contracts and assume that past performance? If so, does that approach work?

A:  There are limitations on the hiring and use of former federal employees on federal contracts. See the following summary and “Revolving Door” laws and Federal Employees. Federal personnel may be subject to certain conflict of interest restrictions on private employment activities even after they leave service for the United States government. These restrictions—applicable when one enters private employment after having left federal government service—are often referred to as “revolving door” laws. For the most part, other than the narrow restrictions specific to procurement officials or bank examiners, these laws restrict only certain representational types of activities for private employers, such as lobbying or advocacy directed to, and which attempt to influence, current federal officials. While you certainly can use the newly employed individual’s experience you need to develop a narrative that ties him/her to your company’s ability to perform the task. You will also need to address this in any survey/questionnaire that may be required. You will need to inform the recipient of the questionnaire that you are using the employees experience during execution of the referenced contract even though your company didn’t execute the contract.

Q.  Where do we find the FAR site?

A.  www.acquisition.gov/far/, or farsite.hill.af.mil

Q. How do you secure the surveys as mentioned by instructor?

A.  The past performance survey/questionnaire will be unique to the solicitation you are bidding. The survey will be included and addressed in either Section L “Instructions to offerors” or as an attachment to past performance requirements.

Q.  My company is an advertising and PR firm. Considering financial risk and profit margins, media buying (TV Commercials, Billboards, etc…) fluctuate greatly, so are you saying Fixed Cost is best for us?

A.  A bulk of the solicitations that you will consider will be fixed price of some variation of Fixed Price. I don’t see a great deal of technical risk associated with your niche area.

Q.  Is there no allowance for a subcontractor’s poor performance?

A.  The government has no “privity of contract” with regard to the prime – subcontractor relationship. The government is usually “hands off” when it comes to managing the sub. They will step in in cases of fraud etc but generally responsibility for subcontractor performance lies with the prime. Additionally the government’s “performance based” acquisition procedures allow the prime contractor to identify how they will address the government’s requirements.

Q.  Since the government has sovereign power to change a contract, can they cancel at will or give to another contractor?

A.  The government may choose to terminate the contract or some element of the contract at its convenience. (T for C) Usually this is done for the government’s best interest. The affected contractor will generally recoup costs and profit incurred up to the point of the governments “stop work”. In a termination for default scenario (T for D) the government may cancel the contract and opt to award to another contractor. The contractor in default will pay the delta between what the original contract value was and the value of the new contract awarded to complete the work. See FAR Part 49.

Q.  Can you say what profit amount is typically allowable, 10%, ?

A.  Allowable profit is a function of the work to be accomplished, the risks, type of contract. There really isn’t a typical amount. There are limits on “fees” tied to certain Fixed price and Cost Plus type contracts.

Q.  When looking up FBOs, will IDIQs be easily identifiable in the solicitation?

A.  Yes, the solicitation will identify in the solicitation section L and/or M whether it is an IDIQ type contract to be awarded. There also may be an introduction section in the solicitation that will specify what type of contract is to be awarded.

Q.. Is there a website or web page that lists industry events of all agencies out there? Or industry events sorted by state?

A.  Try FBO.gov, SBA.gov or try individual professional industry organizations web sites

— Frank Lane

These questions were asked during a recent session of “How to Qualify for the GSA Schedule”

Question: “I’ve heard a lot of “noise” about MOBIS.  Is it always open for application like the other schedules?”

Answer:  There is no open season on MOBIS. It’s always open.  Here is a link to article related to the MOBIS Schedule.

http://fcw.com/Articles/1998/08/16/Industry-cautious-about-MOBIS-changes.aspx?m=1

Question: “Do you have to complete “Pathways to Success” training each time you apply?”

Answer:  We could not find a definitive answer, but suspect it’s a one-time requirement.  We would suggest if you have already taken the course, keep some documentation/proof of completion.

Question:  “Is there a formula to build your billing rate?”

Answer:  Our Government Contract Negotiations workshop focuses on identifying overhead expenses that you must factor into your selling price to ensure the costs are covered.  Overhead expenses are all of the costs you incur, except direct labor cost, direct materials cost and subcontracting costs that can be billed directly to a customer’s account.  We address overhead, profit and walk through a formula to build your fully loaded rate.  We are offering that workshop on Monday, September 22, 2014 at 1 – 5 PM (EST).  You can register to attend at:  https://stoverteam.adobeconnect.com/admin/show-event-catalog?folder-id=1233023668

Question:  “How do you defend your pricing?”

Answer:  In regard to defending your pricing, what that means is that when you put together Section III, Price Proposal you pricing must be consistent with commercial practices and you must provide supporting documentation on how and where you derived at that specific price.  Remembering that GSA’s pricing goals is to obtain equal to or better than the most favored customer (MFC) pricing you need to provide sufficient information to allow the contracting officer to determine that your prices are fair and reasonable.  It’s always a smart business decision to build an Excel spreadsheet with your numbers and the supporting narrative to be used when negotiating price.

Question from a recent workshop:  I have a written business development plan.  Would you consider that to be the same as having a Strategic Plan?

Frank Lane:   I believe the Strategic Plan and the Business Development Plan share the same goal; to assess the business vision mission and core values and transition them into opportunities for growth.  I think Business Development focuses on taking the current niche and expanding through new products/services, building alliances, establishing partnering relationships..etc.  Strategic growth expands this by adding “outside the box” thinking and addressing changing environments with growth strategies that may be outside the current niche areas.  The two could overlap in many ways.

Thanks for a great question!

How many times can the Government extend a four year 8(a) set aside FFP contract before re- solicitation?

Your 8(a) contract lasts nine years, but you remain “grandfathered” if you receive a multi-year contract prior to the end of that nine-year period that extends beyond the nine years.    In most cases,  you should be able to have it extended at least once.  Keep in mind that “grandfathering” applies only to that contract.

Thanks for a great question.

— Jim Dickensheets

Can you perform a GSA contract as an 8(a) entity?

Yes. FAR 8.405-5(a)(1) expressly states that agencies may set aside orders and BPAs for any of the small business concerns identified in 19.000(a)(3). Under the Interim rule, an agency set aside Schedule order and/or Blanket Purchases Agreements (BPA) for any of the socioeconomic programs, (e.g., service disabled veteran owned, women-owned, and Historically Underutilized Business Zone (HUBZone) small business concerns is allowed.

Stover & Associates, Inc. offers a GSA Contracting Online Workshop as part of the SBA Small business Series.  Please check our Event Catalog for additional information.

What does CICA stand for?

The Competition in Contracting Act (CICA) generally governs competition in federal procurement contracting.  Full and open competition under CICA also encompasses full and open competition after exclusion of sources, such as results when agencies engage in dual sourcing or set aside acquisitions for small businesses.

Does a subcontractor need to be aware of your 8(a) status?

Generally speaking, if you are considering entering into a teaming arrangement, full disclosure of your status would be recommended.  This would be a subject that you would discuss while vetting any potential partner.

Is there a website that would indicate a contractor’s performance on a government contract?

Please reference FAR Part 42 – Contract Administration and Auditing Services. This part provides directions and guidance to Federal contracting Officers on the procedures to prepare, collect and validate past performance.

The Contractor Performance Assessment Reporting System is a web-enabled system with electronic workflow that reports Contractor performance. CPARS reports are transmitted to the Past Performance Information Retrieval System (PPIRS) which provides timely and relevant information on Contractor performance for use in source selection. CPARS includes the Federal Awardee Performance and Integrity Information System (FAPIIS) which is a database reporting on terminations for cause or default, defective cost and pricing data, and determinations of non-responsibility. FAPIIS records are created using the FAPIIS module located in CPARS and completed records are then transmitted to PPIRS where they are used to support future acquisitions.

If you have been awarded a federal contract, you have two ways of reviewing your past performance.  You may use your Marketing Partner Identification Number (MPIN) which is a personal code that your company selects and is registered into the System for Award Management (SAM). Using that number, you may login into PPIRS and read what was written about your performance. The second option is that you will receive a notification from the contracting officer stating that you may review the required Contractor Performance Report.

 –Donna Gaillard, Phyllis Embree

These questions were asked during a recent “Developing and Managing Contractor Teams” Workshop.

Can you explain the use of “unpopulated” and “populated” Joint Ventures?

Please reference http://www.law.cornell.edu/cfr/text/13/124.513 for additional details.

Excerpts from the reference.

“Contents of joint venture agreement.” Every joint venture agreement to perform an 8(a) contract, including those between mentors and protégés authorized by § 124.520, must contain a provision:

(2) Designating an 8(a) Participant as the managing venturer of the joint venture. In an unpopulated joint venture or a joint venture populated only with administrative personnel, the joint venture must designate an employee of the 8(a) managing venturer as the project manager responsible for performance of the contract. In a joint venture populated with individuals intended to perform any contracts awarded to the joint venture, the joint venture must otherwise demonstrate that performance of the contract is controlled by the 8(a) managing venturer.

(3) Stating that with respect to a separate legal entity joint venture the 8(a) Participant(s) must own at least 51% of the joint venture entity.

(4) Stating that the 8(a) Participant(s) must receive profits from the joint venture commensurate with the work performed by the 8(a) Participant(s), or in the case of a populated separate legal entity joint venture commensurate with their ownership interests in the joint venture.

(d) Performance of work.

(1) For any 8(a) contract, including those between mentors and protégés authorized by § 124.520, the joint venture must perform the applicable percentage of work required by § 124.510. For an unpopulated joint venture or a joint venture populated only with one or more administrative personnel, the 8(a) partner(s) to the joint venture must perform at least 40% of the work performed by the joint venture. The work performed by 8(a) partners to a joint venture must be more than administrative or ministerial functions so that they gain substantive experience. For a joint venture populated with individuals intended to perform contracts awarded to the joint venture, each 8(a) Participant to the joint venture must demonstrate what it will gain from performance of the contract and how such performance will assist in its business development.

(2)

(i) In an unpopulated joint venture, where both the 8(a) and non-8(a) partners are technically subcontractors, the amount of work done by the partners will be aggregated and the work done by the 8(a) partner(s) must be at least 40% of the total done by all partners. In determining the amount of work done by a non-8(a) partner, all work done by the non-8(a) partner and any of its affiliates at any subcontracting tier will be counted.

(ii) In a populated joint venture, a non-8(a) joint venture partner, or any of its affiliates, may not act as a subcontractor to the joint venture awardee, or to any other subcontractor of the joint venture, unless the AA/BD determines that other potential subcontractors are not available, or the joint venture is populated only with administrative personnel.

(A)    If a non-8(a) joint venture partner seeks to do more work, the additional work must generally be done through the joint venture, which would require the 8(a) partner(s) to the joint venture to also do additional work to meet the 40% requirement set forth in paragraph (d)(1) of this section.

(B)    If a joint venture is populated only with administrative personnel, the joint venture may subcontract performance to a non-8(a) joint venture partner provided it also subcontracts work to the 8(a) partner(s) in an amount sufficient to meet the 40% requirement. The amount of work done by the partners will be aggregated and the work done by the 8(a) partner(s) must be at least 40% of the total done by all partners. In determining the amount of work done by a non-8(a) partner, all work done by the non-8(a) partner and any of its affiliates at any subcontracting tier will be counted.

— Donna Gaillard/Phyllis Embree