Focusing on Government Contracts and Corporate Law
Securing a federal government contract can be a tedious and highly competitive process rife with pitfalls and hurdles. If your business has attempted to secure a government contract or is in the midst of bidding for a government contract, it is essential to obtain as much knowledge as possible about the process so you can win the bid and grow your business.
Learn more about Government Contracting from our in-depth article below.
A significant reason to bid for a government contract is the potential to secure a long-term, highly profitable contract that can help you sustain and grow your business for years to come. In fact, many contracts with the federal government contain provisions that ensure the contract lasts for years in the future.
Depending on the contract you secure, it may also make your business attractive for other opportunities and partnerships. For example, completing one contract can lead to another contract or possibly a second contract with an ancillary company. Securing a government contract creates opportunity and growth potential.
Federal government contracts are referred to as "negotiated procurements." In the negotiated procurement process, the federal government works with a contractor to determine a fair price for work that the federal government needs performed. There are two types of federal government contracts - competitive acquisitions and sole source acquisition.
First, competitive acquisitions involve the competitive bidding by at least two contractors. While the request for proposals may be advertised, it does not have to be, and the federal government may privately contact several contractors and ask for competitive proposals. Once the government receives bids from the contractors, it will impartially and comprehensively evaluate the proposals and determine which bid to accept. Specifically, the government is searching for the “best value” contract; i.e., the contract that will provide the greatest overall benefit to the government, not simply the least expensive bid.
Second, sole source acquisitions involve request for proposals being directed toward specific contractors, rather than going through the competitive bidding process. Sole-source contracts are generally contracts aimed at filling specific and unique government needs and are either low-cost contracts or contracts that can only be filled by one business. For example, if the government is seeking to build a new class of nuclear submarine, there may only be one contractor that performs that type of project. Alternatively, for certain small-price contracts, it generally will not be worth the expense for any company to submit competitive bids due to the cost of bid preparation. In those cases, the government may simply approach a contractor to fill its low-cost need. For example, if a specific federal building in Herndon, Virginia needs repairs or renovations completed, with the repairs expected to cost a nominal sum of less than $5,000.
Regardless of the type of contract, the bidding process begins with the federal government preparing a request for proposals. The request for proposals will either be advertised or sent to one (in the sole source case) or more than one contractor. The proposal will list the job requirements and request the submission of proposals (bids).
If your company has received a request for proposals or has seen an advertised request for proposals, it is time to begin the bidding process. First, you will want to review and analyze the solicitation. Determine what would be involved in the contract and determine whether it is feasible for your company to take on the project at this time. No contractor is required to bid on any project; even one sent privately to a company; however, bidding on as many contracts as possible is a good way to establish rapport with the federal contracting authorities.
If you decide that bidding on a particular contract would be a good move for your company, you will want to begin the bid process by getting organized. Bidding for a federal contract can be quite complicated, and having an organized team can help ensure you can complete a good bid proposal on time. You should start by selecting a team leader to oversee a bid preparation and then assign other employees to prepare portions of the bid based on their expertise. Try to determine what the most critical requirements of the contract will be and allocate your best staff to complete those sections of the proposal.
Every bid proposal includes two important components - the technical specifications and the cost proposal. The technical requirements are the resource-intensive portion of preparing a bid. In developing the technical specifications portion of your bid, you will be explaining to proposal reviewers how you will complete the project. For example, if the project is for federal building construction, you will need to supply blueprints and specifications. If the project is for personnel procurement, you should provide in-depth information about your staff. The cost proposal is your company’s opportunity to demonstrate that the technical specifications are worth the cost. It is best to itemize the cost proposal and account for materials, labor, proposed profit, and any other costs.
Details are incredibly important in the bidding process. Paying careful attention to detail will help demonstrate to the bid reviewers that you understand the project and its requirements. Make sure to follow any formatting requirements included in the request for proposals. You will also want to communicate with the government’s procurement staff and technical personnel to ensure the bid is being prepared correctly. Filing an incorrect bid will cost your company time and money with no possibility of reward. Before the bid is submitted, you should have members of your staff that did not participate in the bid creation process review the bid for everything from typos to readability.
In general, the bid process is a lengthy procedure and is not accomplished merely by submitting a bid and getting either approval or disapproval. After you submit your bid proposal, the government will begin reviewing your bid. Any proposals that are unreasonable or are not within the government’s budget will likely be rejected. The remaining bids will comprise the pool of possible contracts, from which the government will select a winner through negotiation of the bids.
During the bid negotiation process, the government is required to treat each bid fairly and impartially. The reality of the negotiation process, however, is that treating a bid fairly does not mean treating each bid equally. The federal government must select the best value proposal; yet, it has free reign to ask bidders to modify their proposals to meet specific requirements such as cost or technical specifications. The government is not required to ask every bidder to make the same adjustments to their proposals, however. That said, there is a fine line between fair play negotiating and not being impartial.
In general, a company will know it has won the bid when the contract is signed. Communications indicating that a company will win the bidding process or that the process is ongoing are not reasons to celebrate, as the government can choose to award the contract to another bidder at any time. If your business wins the bid, signing the contract confirms that you were in fact the best value bidder.
In some uncommon cases, no bid will be awarded at all during the bid process. While it is unfortunate for all bidders involved, the federal government does have the right to reject any bids it receives. Non-awards can be given for several different reasons. In some cases, no award will be made because the contract is no longer needed. In others, it may be because no bidder turned in a bid for a reasonable price.
If any actual or prospective bidder who has a direct economic interest in the project believes that the bidding process failed to properly conform to the federal contracting laws, that bidder may submit a protest of the award. Bid protests are incredibly common. Over the course of a year, the Government Accountability Office resolves over 1,500 bid protests.
If you wish to file a bid protest, you must file a timely protest letter with the contracting officer. The letter should contain a detailed statement of the legal and factual grounds for the protest and should explain how your business was harmed by the contract not being awarded. If the contracting officer is unable to resolve the complaint, then the complaint should be filed with the Government Accountability Office. Due to the legal and technical nature of filing a bid protest, it is highly recommended that bidders planning to file a protest should seek legal counsel.
If your company has won a contract, you will be notified of a bid protest, and the contract will likely be put on hold until the protest can be resolved. In many cases, bid protests will be resolved very quickly. In other cases, bid protests may become tied up in the administrative courts system and take months if not years to resolve.
Under the Small Businesses Administration (“SBA”), the federal government has enacted several programs to help small businesses break into the federal contracting market. The SBA has created several programs that create a preference for businesses meeting specific eligibility criteria either based on ownership of disadvantaged people or geography. These programs are designed for set-aside contracts that do not go through the competitive contracting process. Rather, these contracts are sole-source contracts designed to fill specific federal government needs. Specifically, small contracts ranging between $3,500 and $150,000 are set aside for certain small businesses.
The SBA’s 8(a) preference category seeks to assist small businesses owned by socially and economically disadvantaged individuals successfully bid for federal contracts. To be eligible for 8(a) preference, the small business must be owned by a socially and economically disadvantaged individual. Proof of disadvantage is required for eligibility and the business owners must demonstrate good character and potential for success.
The HUBZone preference category helps small businesses located in economically disadvantaged regions mapped by the SBA. The HUBZone Maps can be found on the SBA’s website. While many of the HUBZone regions are economically depressed rural areas, some economically depressed urban areas are also included.
The Women-owned Small Business Federal Contracting Program seeks to assist women-owned small businesses acquire federal contracts. To qualify, a business must simply be owned by a woman.
If your business is run by a veteran of the armed forces, you may also qualify for special veterans’ preference contracting categories. There are two veterans’ preference programs for federal contracts - the Service-Disabled Veteran-owned Small Business Concern Program and the VA’s Veterans First Contracting Program. Both programs were enumerated with the goal of helping military veterans secure competitive federal government contracts.
The Service-Disabled Veteran-owned Small Business Concern Program is designed to help disabled veterans running small businesses bid for federal contracts where there is a specific unmet need. The Program is only applicable to sole-source contracts and requires that a minimum of 3% of sole-source contracts be awarded to small businesses owned by disabled veterans. In other words, the Program does not assist veterans’ businesses in the competitive bidding process. Rather, when the federal government has a specific unfilled need for a contractor, it will ask veterans-owned small businesses to fill that need without resorting to competitive bidding.
The Veterans First Contracting Program through the Department of Veterans Affairs helps ensure a preference in the competitive bidding process to veteran-owned small businesses when bidding on contracts for Veterans Affairs. This preference is the highest level of competitive bidding preference even above 8(a), HUBZone, and women-owned small business preferences. To be eligible, veterans must own and manage the company, holding the highest officer positions. This preferential status is only available to contracts with Veterans Affairs.
If you have any questions or are in need of legal assistance with submitting a bid for a government contract or filing a bid protest, now is the time to contact Whitcomb, Selinsky, McAuliffe, PC. Our law firm is ready to go to work for you. Call us today at 866-476-4558 (toll-free) at (303) 534-1958 or contact us by email.