PNWC’s Government Contracting Update - page 28

DOE (Department of Energy) contractors are subject to more audit oversight than the typical Government contractor and that includes DoD (Defense). And there is good reason for that – DOE awards massive cost-type contracts to operate its facilities and clean up its nuclear messes. To ensure that the taxpayers interests are protected, DOE has developed a “Cooperative Audit Strategy” with these guiding principles:

SOURCE: What is the Energy Department’s “Cooperative Audit Strategy”

In many circumstances, the Government will award “commercial contracts”. Usually, under commercial contracts, it is contractors’ responsibility to provide all resources necessary for contract performance including financing. However, Government regulations also recognize that in some markets, the provisions for financing by the buyer is a commercial practice.

SOURCE: Contract Financing on Commercial Contracts

If you were in the military back in the day and needed something but couldn’t get it because the item was not in stock or you weren’t authorized to have it, you could sometimes call on a crusty master sergeant to conjure it up. Indeed, one would marvel at that ability to secure something when all other avenues failed. Movies and novels have included such abilities and these master sergeants were praised for finding a way improve comforts, logistics, or save lives. Where did they develop such unique skills and abilities? Perhaps things weren’t so much on the “up and up”.

SOURCE: Navy Makes Unauthorized Purchases – Contractors Go To Prison

The Department of Justice just released its report on recoveries under the False Claims Act (FCA) for fiscal year 2017. The Department reported that it had obtained more than $3.7 billion in settlements and judgments from civil cases involving fraud and false claims against the Government.

SOURCE: Justice Department Recovered $3.7 Billion in 2017 In Fraud Cases Against the Government

This is an update to previously published postings on the importance of obtaining consent to subcontract when required by regulations and a reminder to contractors of the consequences of ignoring or shorting the requirements.

SOURCE: Consent to Subcontract – Important Reminder

Luna Innovations, a Defense contractor, appealed to the ASBCA (Armed Services Board of Contract Appeals) a final decision from the DCMA (Defense Contract Management Agency) contracting officer determining that (i) Luna had included unallowable employee stock option costs in its final indirect rate proposal and (ii) the inclusion of those stock options represented expressly unallowable costs and therefore subject to penalties.

SOURCE: Government Looses Another “Expressly Unallowable” Case

NASA (National Aeronautics and Space Administration) issued a solicitation for a variety of services including software development, data center operations, voice, imaging, and data communications, multimedia services support and other related services. Ultimately, the award was made to ASRC Federal Data Solutions (ASRC) whereupon one of the other bidders, AbacusSecure, appealed, challenging various aspects of NASA’s evaluation and source selection process including its price realism analysis.

SOURCE: Price Realism Analysis Does Not Require Detailed Review of Cost Categories

Yesterday, the President signed into law the 2018 National Defense Authorization Act (NDAA) as had been predicted. The NDAA establishes spending levels of about $626 billion for the base defense budget and an additional $66 billion for contingency operations (e.g. Afghanistan). It calls for a 20,000 member increase in the number of armed forces and a 2.4 percent salary increase for existing armed services members. And, of course, it includes all of the various provisions we’ve been discussing here on this blog over the past few weeks.

SOURCE: The 2018 National Defense Authorization Act is Now Law

The Defense Threat Reduction Agency (DTRA) issued a solicitation for help in preparing various survivability assessments. Award was to be made on a best-value basis considering mission capability, past performance, and cost. The mission capability factor included two sub-factors; management approach and technical approach. Six firms submitted bids. DTRA awarded the contract to Centra. Two of the losing bidders, PAE and Ensco appealed challenging DTRA’s evaluations of their own and Centra’s proposals. The focus of this article is on DTRA’s assessment of Centra’s (the winning bidder) proposal.

SOURCE: What’s the Big Deal With Two Extra Pages Beyond a Stated Page Limitation?

The Government’s use of LPTA (lowest price technically acceptable) as a source selection technique has been very popular. It certainly drives prices down as bidders compete only on price and contracting officers like it because its less work for them. They don’t have to consider the relative merits of benefits in excess of the basic requirements offered by competing proposals.

SOURCE: 2018 NDAA – New Prohibitions on Use of LPTA as a Basis for Contract Award