Army MATOC : Government Contracting Issues

1. Army MATOC: Government Contracting Issues August 6, 2012 Sandy Hoe ©2012 McKenna Long & Aldridge LLP 1

2. Government Contracting Issues Anticipated for Army MATOC • What is a MATOC? • How to position yourself to obtain award • What is MATOC award process? • How is a MATOC implemented once awarded? • What special status, if any, does small business have in a MATOC? • What noteworthy obligations and risks is a MATOCawardee likely to be required to accept? ©2012 McKenna Long & Aldridge LLP

3. What is a MATOC? • “Multiple award, task order contract” • “Multiple award” • Multiple awardees • Usually all “qualified” offerors receive an award • Creates “stable” of contractors available for future work • “Task Order” • Indefinite delivery, indefinite quantity (“IDIQ”) contract • Award itself does not produce anything other than a bare minimum of guaranteed work • All work beyond bare minimum obtained through task orders at complete discretion of government • Once minimum met, government has no obligation to order further work ©2012 McKenna Long & Aldridge LLP

4. How to position yourself to obtain award? • Multiple “qualified” offerors receive award • MATOC RFP will establish criteria for a finding of “qualified” • Factors • Technical/Management experience • Financial capability and management approach • Past performance • Small business participation • Reasonable and realistic cost or price ©2012 McKenna Long & Aldridge LLP

5. How to position yourself to obtain award?(cont’d) • Strategies • If independently strong, go for it. • If need additional areas of expertise to demonstrate required capabilities • Joint venture • New legal entity consisting of two or more parties • Can be either a partnership or separate corporation • Established for a single business purpose • Teaming agreement leading to prime/subcontractor relationship • “Agreement to agree” if MATOC award achieved ©2012 McKenna Long & Aldridge LLP

6. What is MATOC award process? • Competitive negotiations • Request for Proposals • Exchange with industry before receipt of proposals • Submission of initial proposals • Evaluation of initial proposals • Establish competitive Range • Conduct discussions • Final Proposal Revisions (“FPRs”) • Selection for award • Debriefings ©2012 McKenna Long & Aldridge LLP

7. What is MATOC award process? (cont’d) • Competitive negotiations • Request for Proposals (“RFP”) • Major sections: • Section C: Specifications • Section L: Instructions to Offerors • Section M: Evaluation Criteria • Exchange with industry before receipt of proposals • Encourages early exchange of information among interested parties • Industry/small business conferences • Draft RFPs • Requests for information (“RFIs”) ©2012 McKenna Long & Aldridge LLP

8. What is MATOC award process? (cont’d) • Competitive negotiations • Submission of initial proposals • Agencies must give offerors at least 30 days after issuance of solicitation to submit initial proposals • Late offers excluded • Offeror may withdraw proposal at any time before award • Confidentiality: Offerors may restrict use/disclosure of information contained in proposals by marking proposal with authorized restrictive legend ©2012 McKenna Long & Aldridge LLP

9. What is MATOC award process? (cont’d) • Competitive negotiations • Establishing competitive range • Competitive range is the group of offerors with whom the Contracting Officer will conduct discussions, and from whom the agency will seek revised proposals • Conduct discussions • Contracting Officer must conduct oral/written discussions with each offeror in competitive range • Beware – RFP likely to provide that award can be made without discussions • Do not assume the opportunity to improve your initial proposal ©2012 McKenna Long & Aldridge LLP

10. What is MATOC award process? (cont’d) • Competitive negotiations • Final Proposal Revisions (“FPRs”) • Agency requests final proposal revisions from all offerors remaining in competitive range • Common date for submission • Selection for award • Agencies must evaluate final proposals using only evaluation factors in solicitation • Debriefings of unsuccessful offerors • Timeliness of request for debriefing very important • Three days after receipt of notice of award ©2012 McKenna Long & Aldridge LLP

11. How is a MATOC implemented once awarded? • Contracting officer must provide “fair opportunity” for all MATOC holders to be considered for task orders • Opportunity tailored to expertise of MATOC holder • Agency not obligated to include solar energy MATOC contractor in task order for biomass • “Allocation” or “preferred provider” methods do not constitute “fair opportunity” ©2012 McKenna Long & Aldridge LLP

12. How is a MATOC implemented once awarded? (cont’d) • A “new” competition amongst MATOC contract holders for task order work is held • Size of task order determines formality of competition • Orders in excess of $5M • Notice and clear statement of requirements • Disclosure of significant factors and subfactors, including cost or price, that agency expects to evaluate, and their relative importance • Where “best value” is standard for selection, explanation of relative importance of quality and price or cost factors • Opportunity for debriefing for unsuccessful MATOC offerors ©2012 McKenna Long & Aldridge LLP

13. How is a MATOC implemented once awarded? (cont’d) • Exceptions to fair opportunity • Urgent requirement; unacceptable delay would result from providing fair opportunity • Only one source can meet requirement • Small business set-aside ©2012 McKenna Long & Aldridge LLP

14. How is a MATOC implemented once awarded? (cont’d) • Options for unsuccessful MATOC offeror • Obtain debriefing • Protest to Government Accountability Office (“GAO”) • Only if task order over $10M or task order allegedly increases the scope, period or maximum value of the MATOC • Task order process under MATOCs intended to streamline procurement; protests, therefore, limited by law to GAO and only under the stated conditions ©2012 McKenna Long & Aldridge LLP

15. What special status, if any, does small business have in a MATOC? • Federal small business preference program has two aspects • Preferences for award of contracts to small businesses, i.e., small business set-asides • Obligations placed on large business higher-tier contractors to achieve goals of subcontracting with small businesses ©2012 McKenna Long & Aldridge LLP

16. What special status, if any, does small business have in a MATOC? (cont’d) • Small business preference for award of prime contracts not operative for MATOCs • MATOC awards made to all “qualified” offerors, whether large or small • Small businesses demonstrating the minimum capabilities to be deemed “qualified” receive award regardless of greater capabilities of large businesses • No role for small business “preference” over large business at this level ©2012 McKenna Long & Aldridge LLP

17. What special status, if any, does small business have in a MATOC? (cont’d) • Small business preference for selection of MATOC contractor for task order is operative • Contracting officers have discretion to set-aside task orders for small businesses ©2012 McKenna Long & Aldridge LLP

18. What special status, if any, does small business have in a MATOC? (cont’d) • Small business subcontracting program • Not unique to MATOCs • Prime contractors agree to attempt to meet certain small business subcontracting goals, with subcategories, e.g., small disadvantaged businesses; service disabled, veteran owned small businesses • Liability for substantial liquidated damages if good faith effort not made to achieve small business subcontracting goals ©2012 McKenna Long & Aldridge LLP

19. What noteworthy obligations and risks is a MATOCawardee likely to be required to accept? • Davis Bacon Act • Construction work • Pay on-site “laborers and mechanics” no less than locally prevailing wages and fringe benefits • Keep detailed records of wages and benefits paid until 3 years after completion of work • Submit payroll records weekly to government ©2012 McKenna Long & Aldridge LLP

20. What noteworthy obligations and risks is a MATOCawardee likely to be required to accept? (cont’d) • Contract Work Hours and Safety Standards Act • Construction work • Pay all laborers and mechanics time and a half for any hours that exceed 40 hours in a given work week. ©2012 McKenna Long & Aldridge LLP

21. What noteworthy obligations and risks is a MATOCawardee likely to be required to accept? (cont’d) • Service Contract Act • Services employees only • “Service employees” are those employees who are not executive, administrative, or professional employees, and are not employees working in various other areas exempted by the Act, such as construction • Pay service employees no less than the locally prevailing wages and benefits for their labor class • Keep detail records of wages and benefits paid until 3 years after completion of work ©2012 McKenna Long & Aldridge LLP

22. What noteworthy obligations and risks is a MATOCawardee likely to be required to accept? (cont’d) • Equal employment opportunity • Contractor may not discriminate on the basis of employees’ demographic status • Written affirmative action plan and policy required • Maintain employment/hiring records until 2 years following contract completion ©2012 McKenna Long & Aldridge LLP

23. What noteworthy obligations and risks is a MATOCawardee likely to be required to accept? (cont’d) • Most favored customer • Contractor obligated to maintain price to government that is the same or lower than the price given to any other customer with a contract containing substantially similar terms and conditions ©2012 McKenna Long & Aldridge LLP

24. What noteworthy obligations and risks is a MATOCawardee likely to be required to accept? (cont’d) • Contractor code of business ethics and conduct • Obligation to disclose to DOD Inspector General any potential criminal fraud, misconduct, conflict of interest, bribery, gratuity, or civil False Claims Act violation, if there is “credible evidence” of such • For other than small businesses, establish an ethics awareness and compliance program • Conduct ethics training sessions and periodic internal investigations and compliance reviews ©2012 McKenna Long & Aldridge LLP

25. What noteworthy obligations and risks is a MATOCawardee likely to be required to accept? (cont’d) • Truth in Negotiations Act • Subject to price reduction for submitting cost or pricing data to government in support of cost or prices that is not “current, accurate and complete” ©2012 McKenna Long & Aldridge LLP

26. What noteworthy obligations and risks is a MATOCawardee likely to be required to accept? (cont’d) • E-Verify • Awardee must enroll in E-Verify program within 30 days of award of a task order • Within 90 days of enrolling, contractor required to use E-Verify database to verify the legal immigration status of all employees working on task order, as well as all new hires, company-wide, working in the U.S. ©2012 McKenna Long & Aldridge LLP

27. Sandy Hoe shoe@mckennalong.com www.mckennalong.com Albany, Atlanta, Brussels, Denver, Los Angeles, New York, Orange County, San Diego, San Francisco, Washington DC ©2012 McKenna Long & Aldridge LLP