The National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023, signed into law on December 23, 2022, makes numerous changes to acquisition policy. Crowell & Moring’s Government Contracts Group discusses the most consequential changes for government contractors here. These include changes that provide new opportunities for contractors to recover inflation-related costs, authorize new programs for small businesses, impose new clauses or reporting requirements on government contractors, require government reporting to Congress on acquisition authorities and programs, and alter other processes and procedures to which government contractors are subject. The FY 2023 NDAA also includes the Advancing American AI Act, the Intelligence Authorization Act for FY 2023, and the Water Resources Development Act of 2022, all of which include provisions relevant for government contractors.
GAO’s 2022 Bid Protest Report to Congress for FY 2021 Shows Better than 50% Chance of Obtaining Relief
On November 1, 2022, the U.S. Government Accountability Office (GAO) released its Annual Report on Bid Protests for Fiscal Year 2022. While the number of protests GAO received dropped by 12% for the second year in a row, the overall protest “Effectiveness Rate”—meaning the percentage of cases in which the protester received some form of relief, such as voluntary corrective action by the agency or a GAO sustain—increased to 51%, tying Fiscal Year (FY) 2020 for the highest rate in the past five years.
GAO’s Annual Report also provides a helpful summary of the most common grounds for sustained protests in the prior year. In FY2022, those grounds were: (1) unreasonable technical evaluation; (2) flawed selection decision; and (3) flawed solicitation. The inclusion of “flawed solicitation” on the list is notable—it has only made the list of “most successful grounds” one other time since GAO began tracking successful protest grounds. This serves as a reminder that contractors should consider a pre-award protest as a potentially viable method of resolving solicitation flaws and ambiguities if other routes (such as the Q&A process) are unsuccessful or unavailable.
The chart below shows the top sustain grounds by year. As seen below, flawed technical evaluations continue to represent one of the most consistently successful grounds for sustains, meaning would-be protesters should consider whether they have a credible basis to make such arguments when weighing an award challenge.
Federal Acquisition Service Extends and Enhances Temporary Economic Price Adjustment Authorities for Multiple Award Schedule Contractors
Not to be outdone by the Department of Defense’s commitment to consider inflation relief, on September 12, 2022, the General Services Administration (“GSA”) Federal Acquisition Service published a Supplement to Acquisition Letter MV-22-02, extending and enhancing policies to provide inflation relief to GSA Schedule contractors. As we previously explained, the original Acquisition Letter relaxed
DoD Will Consider Contract Adjustments Addressing Inflation
On Friday September 9, 2022, the Principal Director for DoD Defense Pricing and Contracting (DPC) issued a Memorandum titled “Managing the Effects of Inflation with Existing Contracts.” The Memorandum provides guidance to Contracting Officers about the range of approaches available to address the effects of inflation on the Defense Industrial Base. Of note, it highlights two paths contractors may pursue to recover for inflation under fixed-price contracts.
First, the Memorandum notes that the ability to recognize cost increases is largely dependent on contract type, asserting that “[c]ontractors performing under firm-fixed-price contracts that were priced and negotiated before the onset of the current economic conditions generally bear the risk of cost increases.” This is similar to guidance DPC issued in May encouraging Contracting Officers to consider including economic price adjustment (EPA) clauses in new contracts but expressing skepticism about contractors’ ability to recover for inflation under existing fixed-price contracts. However, the new Memorandum allows that “there may be circumstances where an accommodation [such as schedule relief or amended contract requirements] can be reached by mutual agreement of the contracting parties, perhaps to address acute impacts on small business and other suppliers.”
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All Things Protest: When Agency Redactions Backfire
Crowell & Moring’s “All Things Protest” podcast keeps you up to date on major trends in bid protest litigation, key developments in high-profile cases, and best practices in state and federal procurement. In this episode, hosts Christian Curran and Rob Sneckenberg highlight a recent GAO decision in which an agency’s limited record production went a
GAO Finds Key Person “Unavailable” Despite Still Being Employed on Date of Award
After a recent Court of Federal Claims (“COFC”) decision limited the circumstances under which a departure of key personnel may doom an offeror’s proposal, an even more recent GAO decision might have swung the pendulum right back. In Sehlke Consulting, LLC, GAO sustained a protest because the agency failed to penalize the awardee when a proposed key person employed under the incumbent contract provided notice that he planned to resign. Even though the key person was still employed on the date of award, GAO held that the agency’s failure to consider his “prospective unavailability” for the follow-on contract undermined the contract award.
The following dates were relevant:
- Performance of the follow-on contract was scheduled to begin February 1, 2022.
- On January 11, 2022, one of the awardee’s proposed key personnel (who was then an employee of a subcontractor on the incumbent contract) announced that he planned to resign effective January 28, 2022. The awardee timely notified the Contracting Officer’s Technical Representative (“COTR”) for the incumbent contract.
- On January 25, 2022, the agency completed its evaluations and awarded the contract.
- On January 28, 2022—after award but before performance was to begin—the key person’s resignation became effective.
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DLA Issues Request for Information on Weapons Systems or Commercial Capabilities for Ukraine Security Assistance
As Russia’s assault on Ukraine continues, countries around the world are taking action. Relevant to U.S. Government contractors, on April 22, the Defense Logistics Agency (“DLA”) issued a Request for Information (“RFI”) seeking information on companies’ abilities to deliver military and commercial assistance to Ukraine. The RFI states that “the Biden Administration is working around
A Deeper Dive into the State Actions Targeting Russia that May Impact Government Contractors
As Congress considers legislation prohibiting government contractors from doing business in Russia, over 20 states have already acted. In this alert, we highlight: (i) how different states are defining Russian business operations, and the corresponding risks to differently situated government contractors; and (ii) unique aspects of certain state actions that contractors need to be aware
Updates to Federal Bill Targeting Government Contractors Operating in Russia
As we covered in a prior alert, the recently introduced Federal Contracting for Peace and Security Act (H.R. 7185) could have a profound impact on government contractors. The Act would require termination of existing contracts and prohibit awards, extensions, and renewals of prime contracts and subcontracts with companies doing business in the
Congress Takes Aim at Organizational Conflicts of Interest in Federal Acquisition
On March 23, 2022, a bipartisan group of senators introduced the Preventing Organizational Conflicts of Interest in Federal Acquisition Act. Designed to identify and address potential conflicts of interest in the federal acquisition system, current and prospective government contractors should closely monitor the Act’s progress.
The Act emphasizes the potential for conflicts of interest