Allowing a non-governmental third party to decide whether a company can bid on a DOD contract conflicts with the “inherently governmental” function of the awarding government contracts, according to former DOD Undersecretary for Acquisition, Technology & Logistics Frank Kendall.  Writing in Forbes magazine, Kendall states, “Determining whether or not a contractor is qualified to bid on a government contract is, in my view, an inherently governmental function.  Under CMMC, however, a new bureaucracy created outside of government, takes on that role.”  Kendall goes on to point out that how third-party assessors will, themselves, be accredited is “a mystery”.  He recommends that DOD delay or cancel the CMMC program entirely.  DOD, in the meantime, still seems set on moving forward with the requirement for contractors to show certain levels of cybersecurity capabilities if they want to do business with the agency.  Draft RFP’s and RFQ’s already contain such language.  It is uncertain what companies exist now, however, to attest to a company’s ability to meet one or more of the five levels of CMMC status that will be required.  Another area of confusion on CMMC is its applicability to Commercial Off the Shelf (COTS) procurements.  Katie Arrington, who oversees CMMC, says that COTS acquisitions will be exempt, while other say that it depends on whether the nature of the work to be performed brings the contractor into contact with sensitive, but not classified, information. 

Kendall’s comments also raise questions about the validity of other third-party accreditation protocols already in use for government contracting.  Both the FedRAMP and Section 508 compliance programs use outside parties to determine a company’s ability to meet those standards.  Should Kendall’s view on using this approach for CMMC take hold, it could have an impact on these programs as well.  

Small businesses must actually be small at the time an agency places an order with them via a GSA Schedule Blanket Purchase Agreement (BPA) or Basic Ordering Agreement (BOA) according to a recent change made to the Federal Acquisition Regulations (FAR).  FAR 19.301-1, in pertinent part, now states, “To be eligible for an award of an order under a basic ordering agreement or a BPA issued pursuant to part 13 as a small business concern identified in 19.000(a)(3), the offeror must be a small business concern identified in 19.000(a)(3) at the time of award of the order.”  The change was made as part of a final rule issued in February to implement small business size changes initiated by the Small Business Administration in 2013.  This change is in conflict with a host of small business precedents, perhaps chief among them being that companies can certify their status based on a rolling 5-year period.  The SBA, though, has sometimes taken a dim view of the GSA Schedules program, despite the fact that it routinely exceeds the government’s own small business use goals.  While frustrating, it is not entirely surprising that they would single out Schedule BPA’s.  Whatever the reason, though, companies absolutely must be aware of this new rule and how it could impact their business.  No contractor should certify to something that it knows it is not or cannot do.  Being the target of a False Claims action is more expensive to your bottom line and reputation than the piece of business your company would have obtained.  Competent counsel can assist in seeing you through this maze – and at a price far less than a False Claims Act case.  Proceed accordingly.

With the return of Allen Federal Business Partners comes a new newsletter with a new name.  Each week we will seek to provide not just a summary of important contracting news, but insight and analysis on what it means to contractors.  We welcome suggestions for topics and promise to keep giving it to you straight.  Whether its budget, business, or compliance-related, the Weekly Report will provide contractors with useable information designed to help their federal business while keeping them out of the compliance ditch.  We will come to you each Monday, unless there is a field trip to far-off places in need of procurement enlightenment.  Thank you for your support.