Articles Posted in Government Contracts

Yesterday, Pillsbury attorneys John Jensen published their client alert titled GSA May Abolish the Price Reduction Clause. The Alert discusses the U.S. General Services Administration (GSA) recently issued proposed rule that could abolish the long-standing price reduction clause (PRC) from the GSA Schedule program. GSA is proposing to eliminate the clause and to use, instead, the submission of “transactional data reporting” to help achieve its goal of fair and reasonable pricing on all orders. The rule would require contractors to report transactional data for orders placed against GSA Federal Supply Schedule (FSS) and other GSA contracts. The proposed rule is designed to improve GSA’s ability to conduct meaningful price analysis and more efficiently and effectively validate fair and reasonable pricing. It is also intended to reduce the burden on contractors imposed by the current GSA PRC.

Today, my colleague Alex Tomaszczuk and I published our client alert Lining Up to Protest Bid — protest dismissed as company fails to allege it was “next in line” for award. The Alert discusses the U.S. Court of Federal Claims’ February 10, 2015 decision in Universal Marine Company, K.S.C. v. United States, No. 14-1115C, dismissing the bid protest complaint filed because the protester was not “next in line” for award of the contract and, therefore, lacked standing to protest. As noted in the Alert, this decision serves as a critical reminder for bid protesters of the necessity of demonstrating, through a carefully crafted complaint, that they were “prejudiced” by the agency’s actions.

Yesterday, we published our client advisory titled A Cautionary Tale for Small and Large Businesses in a Mentor-Protégé Relationship: Size Appeal Of Kisan-Pike. The Advisory discusses the Small Business Administration (“SBA”) Office of Hearings and Appeals’ (“OHA”) November 24, 2014 finding that a mentor-protégé joint venture agreement between Kisan Engineering Company P.C., a small 8(a) business, and The Pike Company Inc., its large business mentor, caused the joint venture to lose its status as a small business. As a result, the joint venture was not qualified to receive a contract award on a procurement reserved for small businesses. OHA disqualified the mentor-protégé joint venture despite the fact that the SBA had approved the Kisan-Pike mentor-protégé agreement, through which Pike was to mentor Kisan.

Effective August 19, 2014, New Jersey Senate Bill 2363 went into effect, requiring contractors required to register under the Contractors’ Registration Act, N.J.S.A. §§ 56:8-136, et seq. — home improvement contractors — to wear a state-issued identification badge “on the upper left corner of his torso when the contractor is performing, or engaging, or attempting to engage in the business of selling home improvements” at all times on the job. The badge includes a color photograph of the employee’s face along with his/her name, and the contractor’s registration number and business name. A new badge is required every six years. Governor Chris Christie signed into law S.B. 2363 on August 19, 2013. The bill was reportedly prompted by fears of potential scams on Superstorm Sandy victims. It is believed that requiring contractors’ employees to wear these badges will add another layer of protection against fraud.

New Jersey isn’t the only state that requires certain contractors’ employees to wear badges. The Washington State Department of Labor & Industries October 2014 Electrical Currents newsletter reminds all electricians and trainees that they are required to possess, wear and visibly display their certificates. Washington’s Administrative Code WAC §§ 296-46B-940 and 296-46B-942 require all electricians and trainees to “possess, wear, and visibly display on the front of the upper body, a current valid [certificate].” WAC 296-46B-940(3) further provides that “[t]he certificate may be worn inside the outer layer of clothing when outer protective clothing (e.g., rain gear when outside in the rain, arc flash, welding gear, etc.) is required. The certificate must be worn inside the protective clothing so that when the protective clothing is removed, the certificate is visible. A cold weather jacket or similar apparel is not protective clothing. The certificate may be worn inside the outer layer of clothing when working in an attic or crawl space or when operating equipment (e.g., drill motor, conduit threading machine, etc.) where wearing the certificate may pose an unsafe condition for the individual.” “The certificate must be immediately available for examination at all times.” It is believed that requiring the visible display of the certificates while performing work “allows the public, customers, and other workers to have the knowledge that properly certified persons are the ones doing the work.” In its newsletter, electricians and trainees are encouraged to “Wear your certificate with pride – you earned it!”

In California, the Contractors State License Board issues a “pocket license” and encourages consumers to not only confirm that the contractor is properly licensed but to review the contractor’s pocket license to confirm that the name on the pocket license is the same as the name the contractor originally provided. Like New Jersey, California and other states are acutely aware that homeowners are most vulnerable to fraud by unlicensed contractors after a natural disaster. In California, these illegal operators face serious prison time if caught working or trying to get contracting work over $500 in a state-declared emergency area. California Business & Professions Code § 7028.16 provides that: “A person who engages in the business or acts in the capacity of a contractor, without having a license therefor, in connection with the offer or performance of repairs to a residential or nonresidential structure for damage caused by a natural disaster for which a state of emergency is proclaimed by the Governor pursuant to [California Government Code § 8625], or for which an emergency or major disaster is declared by the President of the United States, shall be punished by a fine up to [$10,000], or by imprisonment … for 16 months, or for two or three years, or by both that fine and imprisonment, or by a fine up to [$1,000], or by imprisonment in a county jail not exceeding one year, or by both that fine and imprisonment.”