Over the past several weeks, we’ve written a few times about the activities of the Section 809 Panel whose job is to figure out how to ensure the Defense Department (and by extension, Civilian agencies) to more consistently buy what it needs in a timely and cost-effective manner (see, for example, Update on Section 809 Panel).
The General Services Administration (GSA) is leading an inter-agency working group to develop a guide to assist civilian executive agencies in selecting private firms to perform required contract audits. The inability of DCAA (Defense Contract Audit Agency) to perform timely audits has been reported here and elsewhere and the subject of several GAO (General Accountability Office) and Inspector General reports. Civilian agencies, unlike the Defense Department are not required to utilize DCAA for their contract audit services. Agencies that do utilize DCAA, reimburse DCAA for those services thus there has developed a strong consensus within civilian agencies that they can receive more timely services by contracting with commercial firms rather than relying upon DCAA. Some even contend that the cost for commercial audits are less than the cost for comparable DCAA audits. That contention is difficult to assess. The hourly rates charged by private firms are generally higher than the hourly rates charged by DCAA so the other variable is the number of hours it takes to perform the work. It might be that DCAA, unbound by a profit motive, spends too many hours while a private firm, needing to make a profit, spends too few hours. A number of years ago, the Energy Department moved away from DCAA and contracted with private firms for its contract audit services. Though we have not seen a comprehensive assessment of how that is working, we do know that in some circumstances, the Energy Department has been concerned with the cost growth of these services – especially when contracted firms are called upon to assist “extra-scope” activities such as helping to resolve audit issues that arose from their audits.
The Armed Services Board of Contract Appeals (ASBCA) recently published its annual report for fiscal year 2017. It shows that the backlog of pending cases has decreased by about 10 percent from the prior year, from 1,077 to 970 cases. During the year, 524 new cases were docketed, 47 cases were reinstated and 678 cases were dispositioned.
Source: PNWC’s Government Contracting Update: ASBCA Reduced Its Backlog During Fiscal Year 2017
The Navy leased three boats from Assessment and Training Solutions Consulting Corporation (ATSCC) for training purposes. The lease extended 18 months and required the contractor to provide routine preventative maintenance. Any repairs from damages that were the Government’s fault would be paid for separately. At lease end, the Navy returned the boats in damaged condition. ATSCC tallied the damages and submitted a claim for about $58 thousand.
Source: PNWC’s Government Contracting Update: What is the “Law of Bailment”?
We read this Justice Department Press Release from last Friday about a former Navy comptroller from the Norfolk Ship Support Activity being sentenced to 40 months in prison because he accepted $35,000 in gratuities over a four year period from a Government subcontractor. These gratuities were not paid in cash but consisted of cell phone service for he and his wife, and some other personal electronic items. We thought the punishment (3 plus years in prison plus restitution) seemed severe and certainly not typical of what we have come to expect based on similar prosecutions. That is, until we dug a little deeper than just the Justice Department’s press release.
Source: PNWC’s Government Contracting Update: 40 Months in Prison for Accepting $35,000 in Gratuities
Senate Bill 938 would require GSA (General Services Administration) in consultation with the Office of Management and Budget (OMB), to ensure that any direct communications with small businesses about providing goods and services to the Federal Government contain a notice that technical assistance from the Federal Government on the procurement process is available to small businesses at no cost.
Source: PNWC’s Government Contracting Update: Procurement Fraud Prevention Act
A jury has found the owner of Armet Armored Vehicles Inc. guilty of defrauding the U.S. Government on a contract for 32 Gurkha armored gun trucks. The company (and by extension the owner) lied about the ballistic and blast protection capabilities of their Gurkha gun trucks as well as only delivering seven of the promised 32 vehicles contracted for and delivering those seven vehicles long after the contract delivery date.
Source: PNWC’s Government Contracting Update: Company President Found Guilty of Fraud Against the Government
Late last month, we wrote about a $2 million settlement involving a DOE (Department of Energy) subcontractor who subcontracted some of its work to a third company who, it turned out, was a small woman-owned business but had no employees or equipment (see $2 Million Settlement in Small Business Subcontracting Fraud).
In 2011, the Corps of Engineers awarded a contract to Pro-Built Construction to build a police station in Afghanistan. The Corps did not issue a notice to proceed however, and in 2012 (about seven months later), issued a TforC (Termination for Convenience) due to “negative security conditions.. Pro-Built submitted a TforC claim for about $1.1 million. In a final decision, the Contracting Officer determined that Pro-Built was entitled to a mere $49 thousand. Pro-Built appealed to the ASBCA.
DFARS (DoD FAR Supplement) 252.215-7009 is the Proposal Adequacy Checklist that companies should complete whenever a proposal to DoD requires the submission of cost or pricing data. The requirement is not mandatory, its only suggested as a means of facilitating submission of a thorough, accurate, and complete proposal (see DFARS 215.408(5). Although DFARS only suggests that it be prepared, often times procurement offices will make it a requirement for proposal submission thus making it effectively a mandatory document. Its a nice tool and we usually recommend contractors complete the checklist for any proposal. Whether prospective contractors choose to submit one or not, someone in the Government probably will prepare one so its best that contractors be prepared to respond to any queries that might result from a “no” answer.