The Court of Federal Claims, interestingly, was not concerned that the protester submitted non-identical electronic and paper copies of the bid.  The electronic copy was submitted timely, but the non-identical paper copy of the proposal (which, according to the RFP, would control in the event of inconsistency) was not in the contracting offices’ hands until after the time set for receipt of proposals.  The contractor’s courier was logged in at the security gate prior to time for receipt of proposals and had spoken to a representative in the contracting office by telephone.  The Court found the proposal to be under the government’s control prior to the deadline under the facts of this government contract bid protest case.

Government control exception calls for a fact-specific inquiry.

In applying the government control exception to late proposal rule, the Court made a fact-specific inquiry looking to the instructions in the solicitation and the nature of the agency’s facilities.    The Court noted that the government contractor did not receive an advantage by late submission, such as access to post-deadline information or having more time to prepare its proposal, and consideration of the proposal would not compromise the competitive process.

In applying the government control exception in this bid protest, the Court stated that the proposal was “under the government’s control” when the offeror relinquished control over the proposal such that the offeror could no longer modify the proposal.   Under this standard, many proposals rejected as untimely would seem to qualify.  However, the Court emphasized the fact that the contractor had timely submitted a complete copy of the proposal electronically.   (The fact that the electronic proposal was not identical to the paper copy did not trouble the Court since the RFP did not require identical proposals).

Possibility of waiver as minor informality.

The Court went even further, finding that even if the late proposal was not under government control, the late delivery of the paper copy could be waived as a minor informality in this bid protest case.  The agency should look to see if the offeror gained a competitive advantage or prejudiced competing offerors, and if not, waive the late paper proposal as a minor informality.

The Court issued a permanent injunction requiring the DIA to consider the contractor’s late proposal.  The court concluded that the contractor, a Native American Indian, service-disabled veteran owned and certified small disadvantaged business, would be irreparably injured without a permanent injunction.  Recoupment of bid preparation costs was not considered a sufficient remedy, since this large dollar value contract represented a significant business-expansion opportunity for the small business.   The bid protest decision to issue an injunction would not work a significant hardship on the agency since the agency had not yet awarded a contract.

Government control exception calls for prompt action.

It was important to the contractor’s success in this bid protest case that it acted quickly to assert its rights.  The Court of Federal Claim’s decision to issue an injunction might have been different had the agency already awarded a contract.  If your company needs assistance with your late bid or proposal issue, contact Hindson & Melton LLC as early as possible for assistance with your case.
Karen S. Hindson – July 23, 2012

If you own a portion, but not all, of the business, your partners probably do not want to be “in business” with your spouse or children upon your death. Having a buy-sell agreement could help with a smooth transition of management and control of the business if one partner dies. Funding the buy-sell agreement with life insurance provides a source of funds to purchase your share of the business from your estate or family members. It provides business continuity. The agreement can also help establish the value of the business in advance to reduce disputes and the potential for litigation.

Absent a buy-sell agreement, the business may suffer from loss of working capital in the event of death of an owner. The business may not have cash or credit available to purchase the deceased owner’s share of the business. The business might be gridlocked with no one with clear authority to make or act on business decisions.

Two types of buy-sell agreements useful in business succession planning are the cross purchase agreement and the entity purchase agreement.

In a cross purchase agreement, the business owners enter into a buy-sell agreement stating that the survivors agree to purchase the business share of the deceased owner. In order to provide a source of funds for the purchase, the owners could each purchase life insurance policies on the lives of the other owners. The deceased owner’s share would be purchased with the proceeds from the life insurance policies. The surviving business owners would then own the entire business, and the deceased owner’s estate or heirs would have the funds from the life insurance to compensate them for the deceased owner’s share.

An entity purchase agreement, on the other hand, states that if one owner dies, the business itself will purchase the deceased owner’s interest in the business. In such a case, the business entity might purchase life insurance on each of the owners lives in order to fund the buyout.

There are advantages and disadvantages to each type of buy-sell agreement. Factors that might come into play in making a choice for your situation include the number of owners, the relative age and health of the owners, the type of entity involved and tax considerations, and the financial and credit position of the business.

For assistance in developing your buy-sell agreement and overall business succession planning, contact Hindson & Melton LLC.
Karen S. Hindson – June 27, 2012

Congress has established statutory and aspirational goals designed to help small businesses compete for government contracts. Goals: 23% of all prime contracting dollars to small business, 3% participation by small businesses in HUBZones, 5% participation by small businesses owned by women, 5% so socially and economically disadvantaged individuals, and 3% to service-disabled veterans.

The task force is to provide proposals and recommendations for using innovative strategies such as teaming to increase opportunities, removing barriers by unbundling large projects, expanding outreach to match firms with contracting and subcontracting opportunities, and establishing policies to assist with the objectives. The memorandum also directs development of a web site to improve transparency and accountability.

For more information on government contracts contracting and subcontracting opportunities for small businesses, contact Karen S. Hindson of Hindson & Melton LLC.