Gordon Rees Scully Mansukhani announces the latest update from the firm's Government Contracts practice group, bringing you an overview of recent notable decisions, rule updates, and other critical information related to contracting with federal and state governments. Our team compiled the most pertinent legal developments in the ever-evolving landscape of government contracts to keep you informed. Please contact Patrick Burns or Meredith Thielbahr for further information regarding the cases and administrative actions highlighted below.
Recent Cases/Decisions:
MVM, Inc., B-421788.3; B-421788.4 (March 5, 2024)
- This protest action before the Government Accountability Office ("GAO") concerns the Government Services Administration’s (“GSA”) Solicitation for transportation services for unaccompanied children. The contractor-protestor contested (1) the GSA’s assessment of the awardee’s proposed key personnel and (2) the GSA’s responsibility determination (i.e. the awardee could perform the contract).
- The GAO sustained the protest on both grounds in favor of the protestor. First, the awardee’s proposed project director did not possess the requisite financial experience as mandated by the solicitation. The agency’s evaluation record failed to adequately document how the individual’s work experience satisfied the solicitation terms.
- Second, the GSA did not adequately document a False Claims Act ("FCA") settlement involving the awardee’s affiliate. The GAO determined the integrity of the affiliate could have a bearing on the awardee’s responsibility. Consequently, the GAO found the agency's responsibility determination unreasonable due to its failure to document the FCA settlement.
Proposed Agency Regulations
SBA – Lender Risk Rating System
- The Small Business Administration ("SBA") announced changes to the SBA’s Lender Risk Rating System. The SBA Lender Risk Rating System assesses the risk of each 7(a) Lender and Certified Development Company. The changes aim to enhance accuracy, reliability, transparency, and usability, incorporating hundreds of predictive risk variables across economic cycles and utilizing machine learning methods for improved performance.
- Comments to these changes are due by May 6, 2024. Please contact the GRSM Government Contracts practice group for additional details of the proposed rule and comment submission.
SBA – Providing Discretion to Extend Women-Owned Small Business Program Recertification Where Appropriate
- This interim final rule amends regulations for the Women-Owned Small Business ("WOSB") program, allowing the SBA to extend WOSB recertification dates when deemed appropriate. While the requirement for firms to demonstrate ongoing eligibility remains, this change acknowledges situations where recertification may be postponed beyond the standard three-year period.
- Comments to these changes are due by May 6, 2024. Please contact the GRSM Government Contracts practice group for additional details of the proposed rule and comment submission.
Forthcoming Agency Regulations:
DoD/GSA/NASA – Establishing Federal Acquisition Regulation Part 40
- The Department of Defense ("DoD"), GSA, and NASA are introducing a new Federal Acquisition Regulation ("FAR") Part 40 to consolidate policies and procedures for managing information and supply chain security in acquiring products and services. This new part aims to provide a centralized location in the FAR for contracting officers and contractors to access and understand security requirements, covering broad security measures including cybersecurity and foreign-based risks. While security-related requirements that extend beyond information and communications technology ("ICT") will be addressed in FAR Part 40, ICT-specific requirements will continue to be covered in Part 39.
- This final rule to establish FAR Part 40 becomes effective May 1, 2024. Specific provisions within the new part have not been proposed.
DoD – Defense Industrial Base Cybersecurity Activities
- The Department of Defense is proposing to expand eligibility requirements for the Defense Industrial Base Cybersecurity Program to increase program participation and enhance bilateral information sharing, aligning it better with DoD's mandatory cyber incident reporting. There has been steady growth in program interest, with a significant increase in applications from defense contractors who do not meet current eligibility criteria, prompting the need for broader engagement beyond the cleared defense community. By revising eligibility criteria, an estimated additional 68,000 defense contractors will be eligible to participate, aiming to address vulnerabilities in the DoD supply chain and mitigate pervasive cyber threats.
- This rule is effective on April 11, 2024.
Contractor Opportunities
FAA – Office of Airports FY 2023 Supplemental Discretionary Grants
- This Federal Aviation Administration ("FAA") Fiscal Year 2023 Supplemental Discretionary Grants Notice of Funding Opportunity ("NOFO") announces a competitive grant program under the Airport Improvement Plan authority, providing approximately $268.7 million for airport projects focusing on safety, equity, climate sustainability, and workforce development. Funds are allocated to large/medium and small hub airports, with at least 50 awards anticipated, subject to project eligibility criteria and financial matching requirements. Eligible applicants include public agencies, private entities, states, Indian Tribes, and certain territories.
- Applications, adhering to guidelines and federal regulations outlined in the NOFO, are due by May 2, 2024.
GRSM Government Contracts Practice Group
GRSM's government contracts team has considerable experience defending and enforcing the rights of our contractor clients in disputes against government entities and private businesses. In addition to litigating claims in state and federal courts, we routinely handle matters before administrative tribunals, such as the Government Accountability Office, the Small Business Administration, and the Armed Services Board of Contract Appeals.
Our team of attorneys is located throughout the United States, which allows the firm to represent contractors, regardless of size, and in a wide variety of industries, including defense, information technology, construction, and aerospace, among others. Please contact the authors with any questions. GRSM would like to acknowledge the significant contributions to this update by Quyen Dang.
Contacts:
Patrick Burns – pburns@grsm.com
Meredith Thielbahr – mthielbahr@grsm.com