VETS 1ST CONTRACTING SLIDES FCL VA 0009 Presentation Slides

VA Acquisition Academy Putting the Law into Practice Application of Vets First per SCOTUS Decision July 2016 Administ...

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VA Acquisition Academy Putting the Law into Practice Application of Vets First per SCOTUS Decision

July 2016

Administrative Items • Please mute your microphone or telephone • Do NOT place us on hold • If you are viewing as a group in one location, chat the names of all in the room for attendance/completions • Please use the chat box for questions throughout the webinar • You can download attachments using the paperclip icon at anytime – Printer friendly version of slides – Policy Documents

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Agenda  Background and Judicial Timeline  Key Definitions  Overview of Deviations  Market Research  Overview of Road Map  Scenario-Based Application  Key Takeaways  Resources

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BACKGROUND AND JUDICIAL TIMELINE 

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Judicial Timeline

2006

2012

2014

Court of Federal Claims Suit

VA Act

Bid Protest with GAO

2016

Supreme Court Decision

Federal Circuit Appeal 5

Judicial Timeline VA Act, 2006

Veterans Benefits, Health Care, and Information Technology Act of 2006 §8127  Secretary of Veterans Affairs (VA) sets annual goals for contracting with servicedisabled (SD) and other Veteran-owned small businesses (VOSB).  Rule of Two provision restricts competition to VOSBs if two such businesses are expected to submit offers and the award can be made at a “fair and reasonable price that offers the best value to the United States.”  Exceptions: Contracting Officer may use noncompetitive and sole-source contracts for contracts below specific dollar amounts.  Eligibility and Database: Created the eligibility requirements for VOSB and SDVOSB to be verified and listed in VIP database. 6

Judicial Timeline

Bid Protest with GAO, 2012 Bid Protest to GAO (B-406507)  January 2012: VA procured an Emergency Notification Service using FSS procedures. Contract No. VA-245-12-F-0622 was awarded to Everbridge, Inc. (non-SDVOSB). – Kingdomware Technologies (SDVOSB) protested the award, asserting that VA failed to comply with the requirements of the “rule of two” IAW Veterans Benefits, Health Care, and Information Technology Act of 2006 because the requirement was not set-aside for SDVOSB (or VOSB) concerns. – VA argued that the “rule of two” did not apply to FSS procurements.

 May 2012: GAO agreed with Kingdomware and determined that VA acted unlawfully, but VA declined to follow the GAO’s nonbinding recommendation, holding that “rule of two” did not apply to FSS. 7

Judicial Timeline

Court of Federal Claims Suit, 2012 Bid Protest Claim to Court of Federal Claims (No. 12-173C)  March 2012: Kingdomware files a complaint to the Court of Federal Claims. – Kingdomware argues that GAO is correct that 2006 Act mandates VA first determine whether SDVOSB/VOSB set-asides should be used before VA can order against FSS. – VA argues that 2006 Act is a goal-setting statute that provides VA with tools to meet SDVOSB and VOSB goals, and that nothing in the Act restricts VA’s discretion to order against the FSS.

 November 2012: Court of Federal Claims disagrees with GAO’s interpretations of the 2006 Act and finds that VA’s decision not to set-aside was not arbitrary, capricious, or contrary to law.

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Judicial Timeline

Federal Circuit Appeal, 2014 Appeal to U.S. Court of Appeals for the Federal Circuit (No. 2013-5042)  January 2013: Kingdomware filed an appeal of the judgment by the Court of Federal Claims.  June 2014: Federal Circuit affirmed the Court of Federal Claims’ earlier judgment, holding that VA need not perform a VOSB Rule of Two analysis for every contract, as long as the annual goals are met.

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Judicial Timeline

Supreme Court Decision, 2016 U.S. Supreme Court Decision (No. 14-916)  January 2015: Kingdomware filed an appeal of the Circuit Court’s judgment to the U.S. Supreme Court (SCOTUS).  June 2015: SCOTUS agrees to hear Kingdomware’s case.  February 2016: SCOTUS hears arguments to examine whether the Rule of Two: – Must be applied for every award, or only to the extent necessary to meet annual minimum goals for contracting with veteran-owned small businesses. – Must be applied for orders placed using FSS.

 June 2016: SCOTUS concludes – “…the Rule of Two contracting procedures in [38 U.S.C.] §8127(d) are not limited to those contracts necessary to fulfill the Secretary’s goals under §8127(a).” – “[38 U.S.C.] §8127(d) applies to orders placed under the [Federal Supply Schedules] FSS.” 10

KEY DEFINITIONS 

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Key Definitions Program Office VA organization that will be the end user of a contracting requirement. A program office normally provides direct services to the public, or provides administrative, legal, financial, technological, or other support to offices that provide direct services to the public. A program office is staffed by one or more Federal employees, either dedicated exclusively to the program or as a collateral duty; is managed by at least one decision maker able to commit to a course of action on behalf of the office; and has a funding source that can be obligated in support of a contracting requirement. Except when it is acquiring supplies and services for its own use, a contracting office is not a program office.

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Key Definitions VA Rule of Two Process in 38 U.S.C. 8127(d) whereby a contracting officer of the Department ”shall award contracts on the basis of competition restricted to small business concerns owned and controlled by veterans, if the contracting officer has a reasonable expectation that two or more small business concerns owned and controlled by veterans will submit offers, and that the award can be made at a fair and reasonable price that offers the best value to the United States.” For purposes of this VA specific rule, a service-disabled veteran-owned small business (SDVOSB) or a veteran-owned small business (VOSB), must meet the eligibility requirements in 38 U.S.C. 8127(e), (f) and VAAR subpart 819.7003 and be listed as verified in the Vendor Information Pages (VIP) database.

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Key Definitions Vendor Information Pages (VIP) The Department of Veterans Affairs Office of Small and Disadvantaged Business Utilization (OSDBU) Vendor Information Pages (VIP) database at https://www.vip.vetbiz.gov. The site’s database lists businesses that the VA Center for Verification and Evaluation (CVE) has determined eligible for the Veterans First Contracting Program.

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Key Definitions “Veterans First Contracting Program” The program authorized by 38 U.S.C. 8127 and 8128 (Pub. L. 109-461 as amended) implemented under VAAR subpart 819.70. This program applies to all VA contracts (see FAR 2.101, Definitions) including Blanket Purchase Agreements and orders against the Federal Supply Schedules, unless otherwise excluded by law.

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Key Definitions Service Disabled Veteran Owned Small Business (SDVOSB) Has the same meaning as Service-disabled veteran-owned small business concern defined in FAR subpart 2.101, except for acquisitions authorized by 38 U.S.C. 8127 and 8128 for the Veterans First Contracting Program. These businesses must then be listed as verified in the VIP database. In addition, some of the SDVOSB businesses listed in the VIP database may be owned and controlled by a surviving spouse. See definition of surviving spouse in VAAR 802.101.

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Key Definitions Veteran Owned Small Business (VOSB) Has the same meaning as Veteran-owned small business concern (VOSB) defined in FAR 2.101, except for acquisitions authorized by 38 U.S.C. 8127 and 8128 for the Veterans First Contracting Program. These businesses must be listed as verified in the VIP database. A business whose SDVOSB status derives from ownership and control by a surviving spouse shall also be considered VOSB.

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OVERVIEW OF DEVIATIONS 

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Class Deviations The following parts of the VAAR have been updated:      

VAAR Part 802 VAAR Part 804 VAAR Part 806 VAAR Part 808 VAAR Part 810 VAAR Part 812

    

VAAR Part 813 VAAR Part 817 VAAR Part 819 VAAR Part 852 VAAR Part 873

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Market Research & Acquisition Planning Program Offices • Initial Market Research • Engage with Industry • Forecast of Contracting Opportunities

OSDBU • Collaborate early and throughout the process • VA Form 2268 • Review market research as part of recommendation

Contracting Officer • Work with Program Office on formal market research requests • Ensure compliance with Procurement Integrity • File documentation: Market Research Memo and 2268

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MARKET RESEARCH 

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Step 1: VIP Search

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Step 2: SAM Search

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Step 2: SAM Search

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Knowledge Check #1 If a firm is listed in VIP under a specific NAICS, they are capable to perform under that NAICS.  True  False

Explanation Being listed in VIP only confirms a firm is verified and eligible for award under the Veterans First Contracting Program. Searching VIP by NAICS assists in determining which firms may be eligible for a requirement, but it does not confirm they are capable. Further market research is needed to determine if a firm is capable. Remember determining capabilities includes considering requirements such as lead times, production, delivery, and cost/price. There may be other items to consider to determine capability based on the specific requirement. 25

Knowledge Check #2 What is the minimum number of times VIP must be searched for a requirement under the Veterans First Contracting Program?  1  2  3

Explanation •

VIP must be searched during market research for all requirements to determine if the Rule of Two applies.



If the Rule of Two applies and the requirement is set-aside for SDVOSB/VOSB, then VIP must be searched again before evaluation and finally before making award to determine whether offerors are eligible for award. 26

Knowledge Check #3 If a firm is verified in VIP, they are small under all NAICS listed.  True  False

Explanation Firms listed in VIP have met all of the eligibility requirements and have been considered verified in accordance with 38 U.S.C.§ 8127. However, firms may not necessarily be small business concerns under all NAICS listed in VIP. As companies grow or expand into new fields, they may exceed the NAICS size standards. Therefore, it is important that the contracting officer verify that an otherwise eligible firm meets the size standard applicable to the NAICS used for the particular procurement. Contracting officers should verify the size standard in System for Award Management (SAM). 27

OVERVIEW OF ROAD MAP 

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Road Map

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Mandatory Sources

 Acquisition Policy Flash 16-11 Class Deviation from VAAR 808,Required Sources of Supplies and Services and 808.002, Priorities for Use of Government Supply Sources, dated May 2016, is rescinded.  VAAR 808 revisions include moving VA mandatory contract vehicles to nonmandatory with a priority over other existing contract vehicles.  Additional language was added to 808.002 and 808.4 to fully implement Vets First Contracting Program to include Federal Supply Schedule awards.  Key point: The only mandatory source of supplies and services for VA is the AbilityOne Procurement List* *Note: 38 U.S.C 8128 provides VA the ability to prioritize SDVOSB/VOSB over Federal Prison Industry for supplies.

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Knowledge Check #4 VA Schedules 65 and 66 mandatory.  True  False

Explanation 1) Old Policy: VAAR 808.002-70, per class deviation dated May 5, 2016, includes VA primevendor, national and VA FSS contracts as mandatory sources. There is no VAAR 808.004 to address non-mandatory sources. There is no current VAAR subpart 808.4 language implementing the Veterans First Contracting Program to the Federal Supply Schedules. 2) New Policy: This class deviation rescinds the class deviation for VAAR 808.002-70 dated May 5, 2016, and moves VA mandatory contract vehicles to VAAR 808.004-70 as non-mandatory, while retaining priority over other existing contract vehicles. This class deviation adds VAAR 808.002, 808.004-70, 808.405-70, 808.405-2 and 808.405-70 to fully implement the Veterans First Contracting Program as it relates to VAAR part 808, Required Sources of Supplies and Services including the Federal Supply Schedules. 31

Knowledge Check #5 VA must always consider Federal Prison Industries (FPI) before the Veterans First Contracting Program.  True  False

Explanation FPI is listed as a mandatory source for supplies via FAR 8.002 and VAAR 808.002. However, the VA has been given the authority to not buy supplies from FPI that are available and set-aside for SDVOSB/VOSBs without a waiver from FPI in accordance with 38 U.S.C. 8128. This is outlined in VAAR 808.6. If a supply is available from SDVOSB or VOSB then you need to use the Veterans First Contracting Program before using FPI. 32

SCENARIO-BASED APPLICATION 

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Scenario #1 Example: Sole Source up to $5M Description of Requirement: Emergency Water Pipe Repair • Significant water usage  discovered leak in one pipe  suspect additional leaks • Need contractor to investigate fully, find cause, and correct problem before the medical center is without water • Urgent and compelling need • IGCE is $350K

Next Step: Market Research

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Scenario #1 Example: Sole Source up to $5M Market Research Known contractor: ABC Construction Group • SDVOSB verified in VIP • Small business under applicable NAICS code • Recently provided similar service via competitive contract • Capability to respond quickly.

Next Step: Acquisition Strategy

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Scenario #1 Example: Sole Source up to $5M Acquisition Strategy Emergency situation that requires response immediately as unusual and compelling urgency to verified SDVOSB.

Next Step: Non-Competitive

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Scenario #1 Example: Sole Source up to $5M Non-Competitive Yes, Sole source up to $5M 8127(c): 1. Responsible: Very successful with similar requirement 2. Over SAT, under $5M (including options): $350K 3. Fair & reasonable, best value: Current contract for similar services won competitively, expect similar pricing and solution

Decision End: Sole Source up to $5M- 8127(c)

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Scenario #2 Example: Two Or More Verified VOSBs Are NOT Capable Of Doing The Work Description of Requirement: Wireless telecommunication services

Next Step: Market Research

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Scenario #2 Example: Two or More Verified VOSBs Are NOT Capable of Doing the Work Market Research No Eligible Firms Found: • Searched VIP using full NAICS  0 results SDVOSB or VOSB • Searched VIP using first three NAICS  0 results SDVOSB or VOSB • CO documented the file accordingly

Next Step: Acquisition Strategy

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Scenario #2 Example: Two or More Verified VOSBs Are NOT Capable of Doing the Work Acquisition Strategy • Rule of Two does not apply • Further market research to determine if existing contracts can be used and if any other small businesses are capable

Next Step: Non-Competitive

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Scenario #2 Example: Two or More Verified VOSBs Are NOT Capable of Doing the Work Non-Competitive: N/A No permissible justification applies

Next Step: Two or more VOSBs in VIP

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Scenario #2 Example: Two or More Verified VOSBs Are NOT Capable of Doing the Work Two or more SDVOSBs or VOSBs in VIP There are NOT two or more VOSBs capable. 8127 and the Rule of Two does not apply.

Decision End: FSS, MAC, Open Market; Not set-aside

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Scenario #3 Example: Two or More Verified VOSBs Are NOT Capable of Doing the Work Description of Requirement: • Construction renovation of Spinal Cord Injury wing • IGCE is $2.4M

Next Step: Market Research

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Scenario #3 Example: Two or More Verified VOSBs Are NOT Capable of Doing the Work Market Research • Initial VIP search for applicable NAICS returned over 1300 verified SDVOSBs and VOSBs • Second VIP search focused on only the local area and SDVOSB returned over 100 SDVOSBs • SAM reviewed for small under applicable NAICS • The customer was familiar with the work of most of the contractors based on previous construction projects

Next Step: Acquisition Strategy 44

Scenario #3 Example: Two or More Verified VOSBs Are Capable of Doing the Work, No Existing Contracts Acquisition Strategy  Multiple contractors = Competitive  More than 2 SDVOSBs = SDVOSB set-aside  Existing contract = Further research needed

Next Step: Non-Competitive

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Scenario #3 Example: Two or More Verified VOSBs Are Capable of Doing the Work, No Existing Contracts Non-Competitive No permissible justification applies

Next Step: Two or more VOSBs in VIP

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Scenario #3 Example: Two or More Verified VOSBs Are Capable of Doing the Work, No Existing Contracts Two or More VOSBs in VIP Yes

Next Step: Existing Contracts

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Scenario #3 Example: Two or More Verified VOSBs Are Capable of Doing the Work, No Existing Contracts Existing Contracts: None found • Too much new construction to fall under FSS SIN 003 97 Ancillary Repair and Alterations • No known FSS, VA national, MAC, or other strategic contracts to fit the scope of this requirement

Decision End: Competitive SDVOSB set-aside; Open Market

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Scenario #4 Example: Two or More Verified VOSBs Are Capable of Doing the Work, Existing Contracts Description of Requirement • Strategic planning support services for new initiative • IGCE is $1.8M

Next Step: Market Research

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Scenario #4 Example: Two or More Verified VOSBs Are Capable of Doing the Work, Existing Contracts Market Research • Initial VIP search for applicable NAICS returned over 2400 verified SDVOSBs and VOSBs • A second VIP search focused on only the local area and SDVOSB returned over 1000 SDVOSBs • SAM reviewed for size status under applicable NAICS • Customer reviewed websites, brochures, and PPIRS

Next Step: Acquisition Strategy 50

Scenario #4 Example: Two or More Verified VOSBs Are Capable of Doing the Work, Existing Contracts Acquisition Strategy  Multiple contractors = Competitive  More than 2 SDVOSBs = SDVOSB set-aside  Existing contracts= Yes - VA enterprise-wide IDIQ, ADVISOR: 10 SDVOSBs - FSS MOBIS SIN 874-1 integrated consulting services: 185 self-certified SDVOSBs

Next Step: Non-competitive 51

Scenario #4 Example: Two or More Verified VOSBs Are Capable of Doing the Work, Existing Contracts Non-Competitive No permissible justification applies

Next Step: Two or More VOSBs in VIP

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Scenario #4 Example: Two or More Verified VOSBs Are Capable of Doing the Work, Existing Contracts Two or More VOSBs in VIP Yes

Next Step: Existing Contracts

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Scenario #4 Example: Two or More Verified VOSBs Are Capable of Doing the Work, Existing Contracts Existing Contracts Yes, two different options, but would choose VA enterprise IDIQ, ADVISOR for the following reasons: • VA-specific • 10 SDVOSBs vs. 100+ FSS • Previously verified in VIP and small. (Still need to double-check before award.)

Decision End: Competitive SDVOSB set-aside; Existing Contract (Other Strategic Contract) 54

KEY TAKEAWAYS 

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Outdated Policy and Procedures Rescinded  Acquisition Policy Flash 16-16, United States Supreme Court decision concerning the SDVOSB/VOSB contracting program at the Department of Veterans Affairs, June 22, 2016.  Acquisition Flash 16-11, Class Deviation from VA Acquisition Regulation Part 808, Required Sources of Supplies and Services, and 808.002, Priorities for Use of Government Supply Sources, May 10, 2016.  Procurement Policy Memorandum 2013-01, Sole Source Contracting under Title 38, U.S.C. Sections 8127 and 8128, enacted as part of the Veterans Benefits, Health Care and Information Technology Act of 2006.  Effective with the issuance of this PPM, all other VA internal policy issued at the Head of the Contracting Activity (HCA) level or lower is also rescinded if it conflicts with the Class Deviation or the PPM as reflected in Attachment 1, paragraph 7.

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Knowledge Check #6 You should always sole source to an SDVOSB when the three conditions at 8127(c) are met.  True  False

Explanation The contracting officer's determination to make a sole source award is a business decision wholly within the discretion of the contracting officer. To ensure that opportunities are available to the broadest number of verified SDVOSBs, this authority is to be used judiciously and only when in the best interest of the Government. The first choice should always be competition unless a justification for other than “authorized or required by statute” exists. Contracts awarded using this authority shall be supported by a written justification and approval described in FAR 6.303 and 6.304.

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Knowledge Check #6 The non-manufacturer rule applies to the Vets First Contracting Program.  True  False

Explanation •





Any SDVOSB or VOSB that proposes to furnish an end product it did not manufacture (a “nonmanufacturer”) must meet the requirements in FAR 19.102(f) to receive a benefit under the Veterans First Contracting Program. Contracting officers are reminded that any SDVOSB or VOSB set-aside is subject to the Limitations on Subcontracting clauses—VAAR 852.219-10, VA Notice of Total Service-Disabled Veteran-Owned Small Business Set-Aside, or VAAR 852.219-11,VA Notice of Total VeteranOwned Small Business Set-Aside, respectively. See FAR 19.102(f)(5): When market research indicates the market has a sufficient number of SDVOSB or VOSB distributors, the contracting officer is responsible for preparing a request for waiver of the non-manufacturer rule, if needed, and the expected value exceeds the simplified 58 acquisition threshold.

Knowledge Check #7 What’s the best way to show you demonstrated the required due diligence in determining whether the Rule of Two applies?  Document  Document and document  Document, document, document!  All of the above

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Key Takeaways • A procurement must be set-aside if there are two or more eligible (verified in VIP & small in SAM) and capable (provide goods and services, fair and reasonable price, best value) SDVOSBs or VOSBs.

• VA’s Prime Vendor, National Contracts (NAC & SAC), and Schedules 65 & 66 are no longer mandatory.

• Quality market research is critical. • Sole source procurements must be justified with more than “authorized or required by statute.”

• Well-written requirements and evaluation criteria are necessary to determining a source’s capability up front.

• Program offices and contracting personnel will have a learning curve with this new process, and acquisitions will take longer to award.

• Document, document, document!!! 60

Resources • Procurement Policy and Warrant Management E-mail: [email protected] Telephone: (202) 632-5288

• OSDBU

E-mail: [email protected] Telephone: (202) 632-5378

• Websites - NAICS Search: www.census.gov/cgi-bin/sssd/naics/naicsrch - VIP database: www.vip.vetbiz.gov - System for Award Management (SAM): www.sam.gov - VA Form 2268 Resources: http://vaww.va.gov/osdbu/ast/2268.asp

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Questions

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Survey

Please navigate to the link below to complete a short survey:

www.metricsthatmatter.com/vaaa/cps

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