ISSUE STATEMENT NO. 3801: HOW TO USE THE WILFONG HOUR… ~ Wilfong

WHEW……

we finished The Wilfong Hour #4 a couple hours ago. And, we haven’t quite come down yet. Now that we’ve “settled” a bit we want to write this Issuance while it’s hot.

Thanks to all who participated.  It was enlightening, to say the least. We wish more of the procurement types had been “on line”. They need to hear, in real time, the things we discussed.  We talked about “standing in the other fella’s shoes”.  It’s amazing how differently folk react when they hear the “facts”.  For example, so many “complaining SDBs” are taken aback when they learned how the procurement personnel were gutted by FASA (Federal Acquisition Streamlining Act) back in 1995.

We wish some of their procurement type would drop by The “Hour” to tell their side of the story.  Absent that, we hope they go and unload the podcasts. AWESOME material. We who heard and discussed now have a better understanding and appreciation of all that is involved.

Says Annette (California) ” Thank you for another AWESOME Wilfong Hour!!!! or hour & a half… time just flies…LOVE IT! Gets you reeeeally thinking & fired up to become educated on lots of issues!   It’s really great to hear the callers and their comments, ideas, questions, issues, etc.  

Hey Hank, maybe you should think of holding a Wilfong Day!!!!  That would be worth a lot more than all the $ I’ve paid to attend ALL these small business conferences.  At least I wouldn’t hear the usual ‘We already have enough small businesses -BLAH BLAH BLAH”, etc… “

Says Rochelle (Manager, Small Business Compliance – SAIC) “I am a strong believer in small businesses using federal “Sources Sought” as an opportunity to ensure that major (or minor) procurements are set-aside for small business.  If qualified SDB, 8(a), SDVOSB firms would respond to these issuances in good numbers (more than a couple) and also think about teaming with one another to ensure they meet the technical qualifications, more procurements would be set-aside. 

I’ve heard the comments before that nothing comes of responding to sources sought – but with fewer and fewer qualified firms responding and asking questions when the procurement ISN’T set-aside, nothing is going to change.  While we SBLO’s push for change – reform – accountability from this side of the table, the small businesses also have to remain firm in following the processes that are currently in place.  When my children became of age, I told them “don’t complain if you didn’t vote”.  My personal beliefs hold true when it comes to talking to small businesses — don’t whine if you didn’t respond to the sources sought.”

THE LAWS

  • P.L. 95-507 is the grandfather of all the laws enacted to promote the competitive viability of firms owned by socially and economically disadvantaged individuals.  It formalized the 8(A) Program.  And, it legislated that all contracts over $500K ($1 million for construction) must include a plan for the maximum practicable utilization of minority-owned firms.
  • P.L. 99-661 established a goal of 5% for Department of Defense contract awards to SDBs and HBCUs.  It also provided for payment of up to 10% over fair market cost for these awards.  And, 99-661 permitted the use of less than full and open competition (i.e. SDB Setasides).
  • P.L. 100-656 revised significant portions of Section 8(a) procedure to require competition amongst 8(a) firms on awards over $3 million for services and over $5 million for products. It restated the requirement for maximum practicable utilization and authorized the assessment of “liquidated damages” for failure to make good faith efforts to meet SDB subcontracting goals.
  • P.L. 101-144 requires that NASA award a minimum of 8% of their total contract dollars to SDBs (including women).
  • P.L. 101-510 the Mentor/Protege :Program provides incentives for major DOD primes to furnish SDBs with assistance designed to enhance the SDBs’ capabilities to perform as contractors and suppliers.
  • P.L. 105-135 the HUBZone Law, provides federal contracting assistance for qualified SDBs located in historically underutilized business zones in an effort to increase employment opportunities, investment, and economic development in  such areas.
  • P.L. 106-554 Women-Owned Business Act established a Women’s Procurement Program under Section 8(m) of the Small Business Act enacted into law in 2000 as a direct means to increase the participation of women-owned businesses in the Federal procurement sector.

Below are some of the things you need to know about and use, to make sure you’re afforded all the rights and entitlements you deserve under the laws enacted by the United States Congress.

LIQUIDATED DAMAGES

P.L. 100-656 provided for the assessment of “liquidated damages” for the failure to comply in good faith with SDB subcontracting laws. The penalty is equal to the amount by which the subcontracting is deficient plus legal costs. The fact that no contractor has been assessed these damages implies one of two alternatives. Either the contractors have all been in compliance over the last four years, since the law was enacted, or the Government has been not used due diligence in the enforcement of the law. We know from extensive observance that the former is not true.

We must therefore conclude that the Government has not adequately enforced the Law.

FALSE CLAIM ACT IMPLICATIONS

“The subcontracting plan is, by statutory definition, a material term of the contract. Deliberate failure to comply with its terms, if the contractor knows or has reason to know that eligible contractors are ready, willing and able to perform, would constitute a breach of a material term of the contract, and in our opinion, a request for payment under the contract

would be a material misrepresentation to qualify for payment, and would constitute a false claim within the meaning of the FALSE CLAIMS ACT, and thus would give rise to a suit under Section 3730.” (CONGRESS OF THE UNITED STATES)

ENFORCEMENT OF THE LAW

There has been much said lately of the major primes’ failure to meet SDB subcontracting goals. As a result Governmental agencies are being reminded of a need for them to engage in more aggressive enforcement of the Laws relating to contracting with SDBs. That enforcement needs to be even more aggressive should the primes continue their failure to comply. In our opinion, the Government is obligated to use every tool at their

disposal to ensure that their primes comply with the Law. Otherwise, SDB’s are not being afforded equal protection under the Law, as guaranteed by the Constitution.

In our opinion, the Government is not adequately enforcing two of the provisions of the law that could most effectively cause the required compliance. These two are, “liquidated damages” and “false claim actions”.

Section (i) may be our strongest card to date.

Any contractor who materially breaches a contract may be guilty of violations of the False Claims Act. Section 3730, Chapter 37 of Title 31 United States Code enables individuals to bring civil actions for themselves and for the Government for violations of the False Claims Act. Any request for payment under a breached contract constitutes material misrepresentation to qualify for payment, and would constitute a false claim within the meaning of the False Claims Act, and would give rise to a suit under Section 3730. We suspect there may be numerous firms in violation. We ought use all resources at our disposal in ensuring that SDBs are afforded equal protection under the law, by aggressively monitoring and enforcing the SDB usage requirements.

What F.A.R. says after that may be quite helpful in our efforts to cause compliance. F.A.R. says, in Section (h), “Prior compliance of the offeror with other such subcontracting plans under previous contracts will be considered by the Contracting Officer in determining the responsibility of the offeror for award of the contract. F.A.R. says, in Section (i), “The failure of the Contractor or subcontractor to comply in good faith with (1) the clause of this contract entitled “Utilization of Small Business Concerns and Small Disadvantaged Business Concerns,” or (2) an approved plan required by this clause, shall be a material breach of the contract.”

SUMMARY

Congress has passed all the laws they need to pass, for now.  We need to make sure that what they’ve passed is complied with. The Wilfong Hour is your chance to hear more about the above.  And to learn how to do something about it.

EVERY MONDAY | 12 NOON CST – 1PM EST ~ Dial-in Number: 218.339.2626 (The Participant Access Code is: 408191#).

The struggle continues, until we succeed-and we shall-YES WE CAN!!!!!

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2 comments
  1. Hank Wilfong said:

    Actually….instead of “WILFONG’S THOUGHT OF THE DAY”, these email should be called “SCHOOL IS IN” because there is just so much here, I often have to go back and read them two and three times to get it all.

    It’s a good thing you deliver these in little bites. If you had turned on the fire hose, I would have drown.

    Thanks!!

    Louis

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