Category Archives: Business

GSA ANNOUNCES COMMERCIAL E-COMMERCE PLATFORM AWARDS

Overstock, Amazon, and Fisher Scientific are the awardees of GSA’s commercial electronic commerce platform pilot.  The program, mandated by Congress in an effort to enable federal agencies to take advantage of the ease of use of commercial e-commerce platforms, is expected to launch as early as the first-part of July, meaning that it will compete for year-end business opportunities with the GSA Schedules and other programs.  A wide variety of commercial products will be available, including office supplies, furniture, and, apparently, lab equipment.  While orders will be limited to the micro-purchase amount, it is unclear whether that level includes the temporary $20,000 ceiling some agencies have set due to the impact of COVID-19 or will be at the standard $10,000.   Either way, significant purchase card business could be done, especially as agencies seek to obligate “use or lose” funds later this summer.  In announcing the award, GSA Administrator Emily Murphy said, “The e-commerce portals proof-of-concept is an important step in offering a solution for purchasing commercial products online that protects our federal supply chain against malicious and counterfeit goods, furthering our national security.”  Indeed, supply chain security was a key offeror evaluation point.  Another important element of the three-year pilot is the ability of agencies to gather spend analysis and other user data.  Contractors are required to capture certain elements of buying activity, something that has proven to be of high interest to agencies.  Agencies already using awardee e-commerce platforms will be expected to transition to the GSA program, with contractor help.  Success will likely depend on pricing, ease of use, security, and how effectively companies can market their solutions.

COVID-19 MAY LESSEN GEOGRAPHIC HIRING RESTRICTIONS

What if your company could hire trained workers from different parts of the country and not have to have them all move to the DC area or pay DC area wages?  That may be one benefit of the post-COVID-19 workforce according some federal and industry executives.  “… I can have remote workers, they don’t have to be in D.C., so I can bring real talented folks into work with us, they can be living in upstate New York, anywhere … rather than hire 50 people in D.C., I can hire 50 people across the country,” said  Cybersecurity and Infrastructure Security Agency (CISA) Director Christopher Krebs at a recent event.  It’s not only cyber-jobs, though, many different types of non-classified work can be performed by qualified people regardless of physical location.  We know of one firm who has an employee who literally travels the world, but is plugged into the company network during US east coast work hours.  So long as there are clear goals, expectations, and an internet connection, employees may seldom have to come to the “mother ship” or meet in-person with clients.  Contractors may want to expand their hiring horizons in anticipation of initiatives by either government agencies or other companies.  Virtual work-forces pose challenges, like ensuring your own network security, but could also give you a capability and pricing advantage

MAIL BAG: “NOT TO EXCEED” DOESN’T EQUAL “AWARD AMOUNT”

New reader J. Legend of Brentwood, CA writes, “Our company is doing work on a contract with a “not to exceed” amount of $200,000.  We will likely only incur $100,000 of time and labor.  Can we bill for the full $200K?”  Nice try, J. but a “not to exceed” contract means only that the government will spend “up to” that amount during the contract.  Contractors cannot bill for more than the time or costs they actually incur.  Submitting a bill for more is a prima facia False Claims Act violation and can cost your company more than the business was worth.  There is substantial case law on this point.  Although it might be tempting, it is ultimately not worth the risk to your company’s other business or reputation.  Contractors can only bill according to the terms and conditions of the contract and only for valid prices or costs incurred.  This is true, by the way, even if a government contracting officer says you “must” bill for the entire “not to exceed” amount.  Although CO’s should always be given respect, following advice contrary to the law can still get you in trouble

DOD MAY POSTPONE CONTRACTOR BAN ON USE OF COVERED IT/TELECOM

Pentagon leaders stated recently that they will delay the enforcement of pending restrictions on contractor use of covered telecommunications and IT equipment.  Colloquially known as “Section 889 Part B” the provision bans contractor use of Huawei, ZTE and other technology anywhere in a contractor’s enterprise.  It had been scheduled to become effective in August.  An interim rule is thought to be held up in OMB’s Office of Information and Regulatory Affairs (OIRA).  Both Pentagon leaders and contractors were increasingly concerned about the lack of regulatory guidance on such a far-reaching statute with considerable implications not only for contractors, but their supply chains as well.  In addition to a delay, perhaps of up to a year, DOD leaders are also looking at applying a risk-based approach to implementing the rule when enforcement does begin.  That essentially means that compliance resources will focus most on critical systems and supply chains that support essential, tech-heavy missions.  To be clear, though, compliance with Section 889 Part B means that a contractor, and its subcontractors, cannot use telecommunications or IT equipment from Huwai, ZTE, their affiliates and other companies that a DOD panel may designate anywhere in their company.  This extends to items such as security cameras used as part of a warehouse security system, phones, computer monitors or any other tech from the listed companies and their affiliates.  It is also important to note that while DOD may focus most of their own resources on critical systems, whistleblowers will still be free to allege non-compliance.  Contractors and their subs likely have some extra time here to remove questionable equipment from company installations.  That should not be seen, though, as an indication that covered tech can stay in place if you’re not involved in DOD mission-critical projects

DHS ORGANIZATIONS & POTENTIALLY OTHER FEE-BASED OFFICES FACE POSSIBLE FURLOUGHS, IMPACTING YOUR BUSINESS

In case government business wasn’t distracted enough already, the Customs and Border Protection (CBP) and US Citizenship and Immigration Services (USCIS) agencies are facing possible partial furloughs this summer in the wake of dramatically lower user fees brought on by the COVID-19 pandemic.  Unless Congress provides supplemental funding in July, thousands of employees in these, and possibly other fee-based organizations, could be furloughed.  The potential for a furlough is enough of a distraction.  First, agencies must, by law, conduct Continuity of Operations Planning (COOP) in case actual furloughs do happen.  Those discussions take would-be customers away from discussions with contractors and in virtual meeting rooms.  Second, the prospect of losing pay for a period of time can be distracting for any employee, DHS workers being no exception.  Add on top of that transitions from home-based work to offices re-opening and it is easy to see that the pace of business will almost surely be impacted.  There is not much contractors can do about this situation, either, other than showing empathy and patience.  Congress may well provide funds, but likely not until the last minute.  It is also important to note that while Congress may restore funding for employees, any acquisitions that were to have been funded by user fees may not be covered and are very likely on hold.  Contractors doing business with any department that operates either partly or entirely from user fees should have serious discussions now about the viability of current operations a contractor may be supporting and fund availability for planned projects.