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FEDERAL CONSTRUCTION CONTRACTING: CORE CURRICULUM UNIT, WEBINAR NO. 1 THE FUNDAMENTALS OF THE FEDERAL ACQUISITION REGULATION AND THE FEDERAL PROCUREMENT Part 1: The Bidding Process Presented By: JENNIFER M. HORN &MARIA L. PANICHELLI for Women Impacting Public Policy and Give me 5

WIPP is a national nonpartisan public policy organization, advocating on behalf of nearly 4. 7 million businesses women representing 78 Coalition Partners. WIPP provides timely economic policy information and identifies important trends and opportunities to its membership. www. WIPP. org

Give Me 5 • National program from WIPP & American Express OPEN designed to educate women business owners on how to apply for and secure federal procurement opportunities. • Give Me 5 works to increase the representation of Women Business Owners that win government contracts. We provide accessible business education tools to assist both new and experienced federal contractors. • Women Business Owners could gain more than $4 billion in annual revenues if the 5% contracting goal set by Congress was reached.

FEDERAL CONSTRUCTION CONTRACTING: CORE CURRICULUM UNIT, WEBINAR NO. 1 THE FUNDAMENTALS OF THE FEDERAL ACQUISITION REGULATION AND THE FEDERAL PROCUREMENT Part 1: The Bidding Process Presented By: JENNIFER M. HORN &MARIA L. PANICHELLI for Women Impacting Public Policy and Give me 5

Procurement Process: A Primer Essentially, the federal acquisition process begins when a government agency determines its requirements and how to purchase them. If the agency’s contracting officer determines that the appropriate method for procuring the goods or services is a contract, and the contract amount is greater than $25, 000, then the agency posts a solicitation on the Federal Business Opportunities website. https: //www. fbo. gov/

Procurement Process And So It Begins… It Is All About Procurement! There is a procurement process for the acquisition of supplies, services, construction, and research and development It all begins with the establishment of a requirement. 8

Procurement Process The Genesis of a Procurement A requirement that comes from legislation A requirement that comes from an on-going agency program A requirement that comes from operation and maintenance funding (“O&M”) A requirement that comes from emergency legislation

Procurement Process Who Is “Procuring? ” Who is it that is requesting services or supplies? 10

Understanding Federal Agencies You must learn about the table of organization and the chain of command…

Do. D Organization Chart

Army Corps of Engineers • The United States Army Corps of Engineers (USACE) is a federal agency and a major Army command made up of some 38, 000 civilian and military personnel, making it the world's largest public engineering, design and construction management agency. • Although generally associated with dams, canals and flood protection in the United States, USACE is involved in a wide range of public works support to the nation and the Department of Defense throughout the world. • The Corps of Engineers provides outdoor recreation opportunities to the public, and provides 24% of U. S. hydropower capacity.

Organization of the Corps

Los Angeles District

Procurement Process How Do I Bid?

Procurement Process System for Award Management (“SAM”) Step 1 Register in SAM. The System for Award Management (SAM) is combining federal procurement systems and the Catalog of Federal Domestic Assistance into one new system. This consolidation is being done in phases. The first phase of SAM includes the functionality from the following systems: Central Contractor Registry (CCR) Federal Agency Registration (Fedreg) Online Representations and Certifications Application Excluded Parties List System (EPLS)

Procurement Process Various Certifications In addition to general SAM registration, make sure you are registered as a participant in the various small business programs for which you are eligible: • ED/WOSB • VOSB/SDVOSB • 8(a) • HUBZone • ANCs and Tribes

Procurement Process What Governs the Bidding Process?

It Is The FAR, Not The FARs! The Federal Acquisition Regulation (“FAR”) is established for the codification and publication of uniform policies and procedures for acquisition by all executive agencies. 48 CFR – Chapter 1

FAR History • The FAR is the primary regulation for use by all Federal Executive agencies in their acquisition of supplies and services with appropriated funds. • It became effective on April 1, 1984, and is issued within applicable laws under the joint authorities of the Administrator of General Services, the Secretary of Defense, and the Administrator for the National Aeronautics and Space Administration, under the broad policy guidelines of the Administrator, Office of Federal Procurement Policy, Office of Management and Budget. • ASPR DAR FAR

FAR Organization • The FAR is divided into subchapters, parts (each of which covers a separate aspect of acquisition), subparts, sections, and subsections.

FAR System • The Federal Acquisition Regulation System consists of the FAR, which is the primary document & agency acquisition regulations that implement or supplement the FAR

Agency Supplemental Regs • Defense Federal Acquisition Regulation Supplement (DFARS) • Army Federal Acquisition Regulation Supplement (AFARS) • Engineer Federal Acquisition Regulation Supplement (EFARS) • http: //farsite. hill. af. mil/ • http: //www. acquisition. gov/far/index. html

FAR Limitations • The FAR precludes agency acquisition regulations that unnecessarily repeat, paraphrase, or otherwise restate the FAR, limits agency acquisition regulations to those necessary to implement FAR policies and procedures within an agency, and provides for coordination, simplicity, and uniformity in the Federal acquisition process. It also provides for agency and public participation in developing the FAR and agency acquisition regulation.

FAR Location • The official and most current FAR resources are web-based • These sites also have archived documents and search capabilities • http: //farsite. hill. af. mil/ • http: //www. acquisition. gov/far/index. html • http: //www. gpoaccess. gov/cfr/index. html

FAR Maintenance • FAR is prepared and issued through the coordinated action of two councils: – Defense Acquisition Regulations Council (DAR Council) – Civilian Agency Acquisition Council (CAA Council). • FAR Secretariat (GSA) prints, publishes & distributes the FAR

Federal Acquisition Circular • Issued to advise of new regulations, policies and procedures • www. regulations. gov/fdmspublic/component/main • Regularly updated; check out our blog for news about changes or proposed changes to the FAR

Procurement Process FAR 1. 102 -Statement of Guiding Principles for the Federal Acquisition System. • The vision for the Federal Acquisition System is to deliver on a timely basis the best value product or service to the customer, while maintaining the public’s trust and fulfilling public policy objectives. Participants in the acquisition process should work together as a team and should be empowered to make decisions within their area of responsibility.

Procurement Process How Does the Bidding Process Work?

Significant Contracting Methods • Sealed Bidding (FAR 14) • Contracting by Negotiation (FAR 15) • IDIQ (FAR 16. 5) – SATOC – MATOC (Army) – MAC (Navy and Air Force)

Determining the Procurement Method 6. 401 -- Sealed Bidding and Competitive Proposals. • Sealed bidding and competitive proposals, as described in Parts 14 and 15, are both acceptable procedures for use under Subparts 6. 1, 6. 2; and, when appropriate, under Subpart 6. 3.

Procurement Methods (a) Sealed bids. (See Part 14 for procedures. ) Contracting officers shall solicit sealed bids if - • (1) Time permits the solicitation, submission, and evaluation of sealed bids; • (2) The award will be made on the basis of price and other pricerelated factors; • (3) It is not necessary to conduct discussions with the responding offerors about their bids; and • (4) There is a reasonable expectation of receiving more than one sealed bid.

Procurement Methods (cont. ) (b) Competitive proposals. (See Part 15 for procedures. ) • (1) Contracting officers may request competitive proposals if sealed bids are not appropriate under paragraph (a) above. • (2) Because of differences in areas such as law, regulations, and business practices, it is generally necessary to conduct discussions with offerors relative to proposed contracts to be made and performed outside the United States and its outlying areas. Competitive proposals will therefore be used for these contracts unless discussions are not required and the use of sealed bids is otherwise appropriate.

Contracting for Construction FAR 36. 103 -- Methods of Contracting. • (a) The contracting officers shall use sealed bid procedures for a construction contract if the conditions in 6. 401(a) apply, unless the contract will be performed outside the United States and its outlying areas. (See 6. 401(b)(2).

Determining the Contract Type FAR 16. 101(a) A wide selection of contract types is available to the Government and contractors in order to provide needed flexibility in acquiring the large variety and volume of supplies and services required by agencies. Contract types vary according to - • (1) The degree and timing of the responsibility assumed by the contractor for the costs of performance; and • (2) The amount and nature of the profit incentive offered to the contractor for achieving or exceeding specified standards or goals.

Type of Contracts FAR Part 16 • Firm Fixed-Price • Cost Reimbursable • Indefinite Delivery Contract (Includes IDIQ) [MATOC] • Set Asides?

Firm Fixed-Price FAR 16. 103(b) - (b) A firm-fixed-price contract, which best utilizes the basic profit motive of business enterprise, shall be used when the risk involved is minimal or can be predicted with an acceptable degree of certainty. However, when a reasonable basis for firm pricing does not exist, other contract types should be considered, and negotiations should be directed toward selecting a contract type (or combination of types) that will appropriately tie profit to contractor performance.

Small Business Set Aside? What is a Small Business? Construction – Revenue Based NAICS Code Manufacturing – Number of Employees

Small Business Types • “Regular” Non-Disadvantaged “Small” Business • Small Disadvantaged 8(a) • HUBZone • Service Disabled Veteran-Owned Small Business (“SDVOSB”) • Woman-Owned Small Business (“WOSB”)

Rule of Two In Delex Systems, Inc. (Oct. 8, 2008, http: //www. gao. gov/decisions/bidpro/400403. pdf), GAO expanded the reach of FAR 19. 502 -2(b), which requires an agency to limit competition to small businesses when it concludes it has a reasonable expectation of receiving offers from at least two responsible small businesses and award can be made at a fair and reasonable price. GAO held that the so-called "Rule of Two" applies to task and delivery order competitions among multiple-award contract holders, opening up a new class of award decisions to the small business set-aside requirements and potential bid protests.

Rule of Two Kingdomware Technologies, Inc. v. The United States COFC Case No. 12 -173 C • Interpreted the a statute known as the Veterans Benefits, Health Care, and Information Technology Act of 2006, 8 U. S. C. §§ 8127 -28. • Kingdomware Technologies and Aldevra claimed that the VA failed to conduct the required “rule of two” investigation and used Federal Supply Schedule (“FSS”) instead. • VA argued that they did not HAVE to conduct rule of two analysis. • GAO sides with Protestors

Rule of Two Kingdomware Technologies, Inc. v. The United States • COFC sides with VA – Found that the Act didn’t require the VA to consider setting aside procurements for SDVOSBs or VOSBs when the FSS could be used instead. Even though the Act uses the phrase “shall award, ” the COFC emphasized that this phrase had to be read in conjunction with other terms of the Act, which – in the COFC’s view-- demonstrated that the Act was only “goal-setting in nature. ” In other words, the rule of two investigation was not mandatory. – The COFC reasoned that “the 2006 Act must be construed in light of its goal-setting provisions and thus the statute is at best ambiguous as to whether it mandates a preference for SDVOSBs and VOSBs for all VA procurements. ” Based on this reading of the Act, the COFC held that the VA had broad discretion with regard to set-aside procurements; the VA was not required to consider setting aside the procurements at issue.

Rule of Two Kingdomware Technologies, Inc. v. The United States • COFC sides with VA – Found that the Act didn’t require the VA to consider setting aside procurements for SDVOSBs or VOSBs when the FSS could be used instead. Even though the Act uses the phrase “shall award, ” the COFC emphasized that this phrase had to be read in conjunction with other terms of the Act, which – in the COFC’s view-- demonstrated that the Act was only “goal-setting in nature. ” In other words, the rule of two investigation was not mandatory. – The COFC reasoned that “the 2006 Act must be construed in light of its goal-setting provisions and thus the statute is at best ambiguous as to whether it mandates a preference for SDVOSBs and VOSBs for all VA procurements. ” Based on this reading of the Act, the COFC held that the VA had broad discretion with regard to set-aside procurements; the VA was not required to consider setting aside the procurements at issue. • Federal Circuit Affirmed COFC.

Sealed Bidding Invitation for Bids (“IFB”) Award is Made to the Lowest Responsive and Responsible Bidder

Common Issues in Sealed Bidding • Restrictions on Competition • “Bid it as you see it” • Errors and Omissions • Timeliness • Mistake in Bid

Contracting By Negotiation Request for Proposals (“RFP”) Award is Made to the Offeror who Presents the “Best Value” Tradeoff Process Lowest Price Technically Acceptable (‘LPTA”)

Evaluation Factors The award decision is based on evaluation factors and significant subfactors that are tailored to the acquisition. Evaluation factors and significant subfactors must – (1) Represent the key areas of importance and emphasis to be considered in the source selection decision; and (2) Support meaningful comparison and discrimination between and among competing proposals.

Typical Evaluation Factors • Management Organization • Proposed Technical Approach/Solutions • Proposed Schedule • Technical Experience and Expertise • Key Personnel Qualifications • Past Performance • Experience with similar types of work • Small Business Subcontracting Plan • Price

Award on Initial Proposals There is generally no obligation for an agency to conduct discussions where…the RFP specifically instructs offerors of the agency’s intent to award a contract on the basis of initial proposals…The Contraction Officer’s discretion in deciding not to hold discussions is quite broad. Our office [the GAO] will review the exercise of that discretion only to ensure that it was reasonable based on the particular circumstances of the procurement. HDL Research Lab, Inc. , B-294959, Dec. 21, 2004 citing FAR 15. 306 (a)(3), and Colmek Sys. Eng. , B-291931. 2, July 9, 2003.

Opening Negotiations • Clarifications and award without discussions • Competitive Range • Negotiations are “discussions” with all offerors within the competitive range.

Negotiations Defined • Negotiations are discussions (“exchanges”), in either a competitive or sole source environment, between the Government and offerors, that are undertaken with the intent of allowing the offeror to revise its proposal. • “Exchanges” is a shifting definition

Purpose of Negotiations • The primary objective of discussions is to maximize the Government’s ability to obtain best value, based on the requirement and the evaluation factors set forth in the solicitation. • At a minimum, the contracting officer must indicate to, or discuss with, each offeror still being considered for award, deficiencies, significant weaknesses, and adverse past performance information to which the offeror has not yet had an opportunity to respond.

Negotiations May Include Negotiations may include bargaining. Bargaining includes persuasion, alteration of assumptions and positions, give-andtake, and may apply to price, schedule, technical requirements, type of contract, or other terms of a proposed contract.

Limits on Negotiations • Government personnel may not engage in conduct that – – Favors one offeror over another – Reveals an offeror’s technical solution, including unique technology, innovative and unique uses of commercial items, or any information that would compromise an offeror’s intellectual property to another offeror – Reveals an offeror's price without that offeror’s permission – Reveals the names of individuals providing reference information about an offeror’s past performance – Knowingly furnishes source selection information

Final Proposal Revision The contracting officer may request or allow proposal revisions to clarify and document understandings reached during negotiations. At the conclusion of discussions, each offeror still in the competitive range shall be given an opportunity to submit a final proposal revision. The contracting officer is required to establish a common cut-off date only for receipt of final proposal revisions.

Next Steps • Review of Bids/Proposals and Contract Award • Protests? • Performance • Claims

Contact Information Maria L. Panichelli, Esq. mpanichelli@cohenseglias. com @Maria. Panichelli (twitter) www. fedconblog. com www. linkedin. com/in/mariapanichelli/ Jennifer M. Horn, Esq. jhorn@cohenseglias. com @Horn. JM (twitter) www. constructionlawsignal. com/ 59

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