Government Contracts Brief – Week of March 30, 2020

Government Delay in Filing of Protest Does Not Waive Timeliness Requirement

A recent GAO decision reminds contractors that if your proposal is late then it is highly likely going to be rejected, even if part of the reason it is late lies with the government. If the offeror cannot show that the government’s actions allegedly causing the delay significantly contributed to the untimely receipt, particularly when the offeror itself waited until the last minute to initiate delivery, then it will likely not prevail on a protest for improper rejection of the proposal. Vizocom, B-418246.2 (February 14, 2020)

SDVOSB Eligibility Requirements

To qualify as a service disabled veteran owned small business (SDVOSB) an entity organized as an LLC must meet certain eligibility requirements. The service disabled veteran 1) must own at least 51% of each class of member interest, 2) control long-term decision making, 3) conduct the day-to-day operations of the business, 4) hold the highest officer position, 5) be a managing member, 6) have control over all of the decisions of the company, and 7) meet super majority requirements. The control component becomes tricky for SDVOSB’s when the LLC’s articles and operating agreements do not provide for the company to be manager-managed and there are multiple members, some of whom are not service disabled veterans. LLC’s are either member-managed or manager-managed. Member-managed means the LLC is owned by members, but managed by a manager. In order to demonstrate the requisite control, service disabled veteran owned LLC’s will want to be member managed with the qualifying veteran as the manager. As applicable, the organization will want to file its articles of incorporation as manager-managed and have an operating agreement reflecting such.

Matters Not For Consideration Via Protest

Certain issues are not matters for consideration via protest, one of which is contract administration. Neither GAO nor the Court of Federal Claims will hear a protest based on allegations related to how an agency administers a contract (i.e. performance deficiencies, not exercising an option, etc.). Generally, protests are avenues for redress when an agency allegedly commits improprieties in adhering to federal laws and regulations related to the acquisition of a supply or service (solicitations, awards, and cancellations of solicitations and awards). For contractors, ensure your protest claim is not one based on contract administration before filing so as to avoid a dismissal before even reaching the merits.

 

Attorney Kristi Morgan AronicaOur government contracts briefs, reports, and articles are published by Attorney Kristi Morgan Aronica. She serves as counsel to government contractors and subcontractors throughout Texas and nationally.