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

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 MATOC awardee likely to be required to accept? ©2012 McKenna Long & Aldridge LLP

What is a MATOC? “Multiple award, task order contract” 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

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

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

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

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

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

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

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

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

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

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

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

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

What special status, if any, does small business have in a MATOC 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

What special status, if any, does small business have in a MATOC 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

What special status, if any, does small business have in a MATOC 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

What noteworthy obligations and risks is a MATOC awardee 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

What noteworthy obligations and risks is a MATOC awardee 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

What noteworthy obligations and risks is a MATOC awardee 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

What noteworthy obligations and risks is a MATOC awardee 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

What noteworthy obligations and risks is a MATOC awardee 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

What noteworthy obligations and risks is a MATOC awardee 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

What noteworthy obligations and risks is a MATOC awardee 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

What noteworthy obligations and risks is a MATOC awardee 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

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