When it comes to government contracts and procurement issues, even the savviest of businesses can need help navigating the applicable laws and the often-complicated regulations. From the initial request for proposal (RFP) process to the winning or losing of those bids, and all the way through the performance of the government contract, there are pitfalls businesses need to understand. Jackson Walker Government Contracts & Procurement partners John Edwards and William Stowe discuss the common issues they see when businesses seek to procure government contracts.
Greg Lambert: Hi, everyone. I’m Greg Lambert, it’s October 16th, and this is Jackson Walker Fast Takes. When it comes to government contracts and procurement issues, even the savviest of businesses can need help navigating the applicable laws and the often-complicated regulations. I asked John Edwards and William Stowe from Jackson Walker’s Government Contracts & Procurement practice to come on the show and discuss a few of the common issues they see in this area.
John and William, thanks for talking with me.
John Edwards: It’s great to be with you, Greg.
William Stowe: Thank you, Greg.
Greg Lambert: So John, what is it that drove your interest in dealing with government contracts and procurement issues?
John Edwards: Well, I didn’t start my career with an interest in this area – it kind of arose based on a specific client need. Back in around I think it was 2005, I had a client that reached out to me to assist with a school district procurement that involved healthcare insurance coverage for employees. Things were getting really testy with some aggressive conduct by competitors, and as a litigator, I felt like I could really jump in and help resolve the issue. So, I studied the procurement regulations pretty carefully, I was able to address the school board, and we ended up obtaining a good result for the client. From that experience, I gained an interest in procurement, studied procurement law (particularly bid protests—when contract awards were challenged), and quickly became this client’s go-to lawyer for state and local procurements all over the country.
So, over the past 15 years or so, William and I have worked together on a number of procurement matters and bid protests. I think we’re up to about 17 states now that we’ve done this work in for many different companies in many different industries.
The flip side of the procurement coin is advice regarding contract performance – once you’ve actually procured a contract–where William is a little better positioned to address that area, given his experience.
William Stowe: Yeah, I would say my entry into government contracting is very similar to John’s in that I did not intend to go into it. It was something that I fell into by happenstance. I was a baby associate when one day John called me in and asked me if I wanted to help him on a bid protest. I didn’t even know what that was, but I said sure and did that one, and then worked on some more bid protests with him. And then one of our partners in our Dallas office found out that I did some government contracting work and said he had a client who had a contract with the Department of Defense and asked if I could help with that, and then that caused me to have to learn the Federal Acquisition Regulations—the FARS, as we call them, and the Defense Federal Acquisition Regulations (DFARS). I kind of became the federal government contracting go-to guy when it came to compliance with Federal Acquisition Regulations and the whole morass of issues that go along with them.
Greg Lambert: John, in the procurement area, what are some of the issues that you’ve seen that business leaders should be aware of as we begin to get back to, well, hopefully some sense of normalcy in our economic and business life?
John Edwards: Well, with government procurements, whether it’s on the federal level or state and local levels, biggest issues I’ve seen arise essentially in two main areas: one at the beginning of the procurement process, and then the other at the end of the process. At the outset, it’s very important to ensure that a bidder for a government contract submits a fully compliant and competitive response to a solicitation. Solicitations can take many forms, but typically they’re a request for proposal, or RFP is what we call it. In dealing with an RFP, clients often need guidance in interpreting the procurement statutes, the regulations that apply, and the provisions of the RFP itself, because they have to make sure that they provide exactly what is requested without under-answering or over-answering and exactly the format requested. In fact, in one instance that I came across, an agency actually penalized my client when it provided five examples of how to provide a service when the RFP only asked for three examples. Even small deviations in compliance can cause problems, so it’s really important to have legal help early on to avoid a noncompliant proposal that risks being disqualified from the process.
The other issue I see is when a client loses a bid and believes there was some type of error in the process or in the evaluation of the bids. Over the years, we’ve seen all kinds of missteps in the procurement process and problems with scoring bids, some of which can be material and actually affect the outcome of the whole process. For example, I saw one instance where two bidders provided the exact same response to an RFP question, but they were scored differently. When this happens, a company needs to be ready to file a bid protest challenged in the contract award immediately after the award is made, and the fuse can be very, very short. The regulations often require protest to be filed within a matter of days or up to 10 days or two weeks. So, there’s not much time to get gather information, analyze what happened, and then formulate grounds for filing a protest. And frankly, this is where Jackson Walker excels. We know what to look for, and we know how to frame the issues to increase the chances of a successful protest, whether that’s in an administrative setting or in court. And of course, when a business wins the contract award, you can’t immediately celebrate because a competitor to file a protest challenging that award. So, you got to be equally ready to defend what you’ve earned, which is typically in alignment with the interest of the governmental agency that awarded the contract.
Greg Lambert: William, same question to you with respect to contract performance. What are some of the big issues that you’re seeing?
William Stowe: Yeah. So, the big issues I’m seeing right now fall into a couple of categories.
One category is general compliance with the regulatory framework that applies. I spoke earlier about the Federal Acquisition Regulations; there are a lot of the FARS and the DFARS, and a lot of companies that enter into government contracts don’t quite understand how those FARS apply to them during the contract period, and so they seek guidance on that.
Another category that I’ve seen of concern is auditing-related issues. There’s a whole framework for certifying certain data to the government and the government’s right to audit your company in certain respects during the contract period, and that is obviously very concerning to some companies, as it should be. Helping companies understand what their obligations are in that regard is a major point of concern for companies.
And then also just generally companies wanting to understand how to get into the business in the first place—what they need to do in order to qualify and register to do business with the government, whether it be a state government or the federal government. The federal government has a system called the SAM site, the System for Award Management, it’s sort of a federal exchange for government contracting.
Other contract performance issues are, recently had issues relating to size classification of a company during a contract performance period. You hear about small businesses, you hear about hubs, you hear about historically disadvantaged businesses and their classifications. That’s another issue that comes up quite a bit.
So those are, I would say, some of the overarching ones, but I would just tack on to what John said that the bid protest is obviously very hot period, but once you get that business, there’s a whole host of issues that come after it as well.
Greg Lambert: So, John and William, thanks for taking the time to tell us more about the government contracts and procurement practice. It was good talking with both of you.
John Edwards: Thanks so much, Greg.
William Stowe: Thanks.
Greg Lambert: Thanks again to John Edwards and William Stowe for joining me.
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