Are SDB Preferences Now Extinct?
Contracting preferences for Small Disadvantaged Businesses (SDB’s)
may go the way of the dinosaur because of a recent decision holding
such preferences unconstitutional.
In Rothe Development Corporation v. Department of Defense, No. 2006-1017,
November 4, 2008, the United States Court of Appeals for the Federal
Circuit held the so-called Section 1207 provisions, giving preferences
to SDBs, are unconstitutional under the equal protection provisions
of the United States Constitution. As a result, the Under Secretary
of Defense on March 10, 2009 directed that the Department of Defense
immediately cease the “award of contracts and orders under contracts,
advance payments, and the award of grants or scholarships or the addition
of funds to existing grants and scholarships” that rely exclusively
on the Section 1207 provisions. See Under Secretary of Defense
Memorandum, March 10, 2009 [click
here]
The consequence is that Small Disadvantaged Businesses will no longer
receive evaluation preferences for Federal contracts under FAR 52.219-23.
This decision also could impact Section 8(a) set-asides to Small Disadvantaged
Businesses. . . [more]
Has Your Contract
Been Terminated?
In recent years, the Defense Logistics Agency awarded a number of
large, multi-year contracts. Under these contracts, contractors committed
to provide supplies at fixed prices that were negotiated years earlier
when prices were more stable. In 2007 and 2008, before the current
economic slump, commodity prices escalated at rates few could have
predicted. Many contractors found themselves under water, with fixed
prices quoted to the government that failed to cover even their out-of-pocket
costs. The options for many small businesses were bleak: either perform
at the fixed prices and lose thousands of dollars or default on their
contract obligations. Many contractors chose to default, and their
contracts were terminated.
. . . [more]
GAO
Rejects Allegation of Price Collusion
Although two competitors' technical proposals were prepared by the
same large business subcontractor, the GAO did not believe the proposals
should be rejected as being collusive. . . [more]