Gordon Rees Scully Mansukhani presents the latest updates and The Essential Gov Con Brief podcast (linked below) from our Government Contracts group, offering a comprehensive overview of recent significant decisions, regulatory changes, and essential updates for businesses contracting with federal and state governments. Our team has compiled the most pertinent legal developments to keep you informed in the dynamic landscape of government contracts.
Tune in to The Essential GovCon Brief podcast for an in-depth discussion of the issues highlighted here.
Agency Actions:
Rerepresentation for MACs: New FAR Update Tightens the Rules on Size and Status
Overview: Federal Acquisition Regulation (FAR) 52.219-28 titled “Post-Award Small Business Program Rerepresentation” was recently amended via a final rule effective January 17, 2025. This change clarifies when contractors must reaffirm their business size and socioeconomic status after a contract award, particularly for orders under multiple-award contracts (MACs). The goal is to ensure that businesses benefiting from small business set-asides and other socioeconomic programs continue to meet eligibility requirements at the time of each order, not just when the base contract was awarded.
Key Details:
- Applicability: The new rule applies to contractors holding MACs who seek set-aside orders. Contractors are required to re-represent their size and socioeconomic status in the following situations:
- Orders Under Unrestricted MACs: If an order is set aside under an unrestricted MAC (a contract open to all businesses regardless of size), contractors must re-represent their size and socioeconomic status prior to the award of the set-aside order, unless the order is issued under a reserve where such status was already required.
- Orders Requiring a Different Socioeconomic Status: For MACs that were partially or wholly set aside for small businesses, re-representation is required before the award of an order if that order is set aside for a specific socioeconomic category (e.g., women-owned, HUBZone, service-disabled veteran-owned) that differs from the original contract’s set-aside designation.
- Merger or Acquisition: Contractors must re-represent their size and status within 30 days of a merger, acquisition, or novation agreement that affects their status, even if the contract itself is unaffected.
- Exemptions: Orders placed under Federal Supply Schedules (FSS) are exempt from these re-representation requirements.
Proposed FAR Rule to Enhance Small Business Participation in Multiple-Award Contracts
Overview: On January 15, 2025, the government proposed an amendment to the FAR with the goal of bolstering small business involvement in multiple-award contracts. This initiative aligns with the Office of Federal Procurement Policy’s memorandum titled “Increasing Small Business Participation on Multiple-Award Contracts,” issued on January 25, 2024.
Key Provisions of the Proposed Rule:
- Expanded Use of Set-Asides: The rule encourages agencies to set aside orders under multiple-award contracts for small businesses when there is a reasonable expectation of receiving offers from two or more responsible small business contract holders that are competitive in terms of price, quality, and delivery.
- Enhanced Coordination: Agencies are required to increase collaboration with their Office of Small and Disadvantaged Business Utilization (OSDBU) or Office of Small Business Programs (OSBP) during acquisition planning. This includes providing documentation and justifications when deciding not to set aside portions of multiple-award contracts for small businesses.
- Acquisition Planning and Market Research: The proposed rule mandates thorough market research to identify capable small business contractors. Agencies must document their findings and coordinate with small business specialists to ensure that small business considerations are integral to acquisition strategies.
- Implications for Government Contractors: If implemented, this rule could significantly increase opportunities for small businesses to participate in federal contracting through multiple-award contracts. Small business contractors should stay informed about these developments and be prepared to engage in enhanced market research and acquisition planning processes.
Deadline for Comments: March 17, 2025. If interested in submitting comments, contact Patrick Burns or Meredith Thielbahr for more information.
OBM Issues RFI Seeking Public Input on Domestic Semiconductor Manufacturing
Overview: On January 15, 2025, the Office of Management and Budget (OMB) issued a Request for Information (RFI) seeking public input on strategies to enhance the resilience of domestic semiconductor manufacturing. The focus is on maintaining this critical capability through the procurement of commercial information technology (IT) products that incorporate semiconductors fabricated within the United States.
Key Objectives of the RFI:
- Strengthening Domestic Production: The OMB is exploring methods to increase the fabrication of semiconductors on U.S. soil, aiming to reduce reliance on foreign supply chains and bolster national security.
- Ensuring Supply Chain Resilience: The initiative seeks to identify procurement approaches that minimize supply chain disruptions, ensuring a steady supply of essential semiconductor components for commercial IT products.
- Gathering Stakeholder Feedback: The RFI invites insights from industry stakeholders, experts, and the public on effective strategies to achieve these goals, including potential incentives, policy measures, and collaborative efforts.
This effort aligns with broader federal initiatives to revitalize the U.S. semiconductor industry, recognizing its pivotal role in technological innovation, economic competitiveness, and national security.
Deadline for Comments: Interested stakeholders are encouraged to submit their comments by March 17, 2025 to contribute to the development of effective policies in this critical area. If interested in submitting comments, contact Patrick Burns or Meredith Thielbahr for more information.
Recent Cases/Decisions:
COFC: Agency Improperly Mandates Project Labor Agreements in Violation of CICA
Court Rules Federal PLA Mandates Violate Competition in Contracting Act
A recent decision from the U.S. Court of Federal Claims (COFC) in MVL USA, Inc. v. United States strikes a significant blow against the federal government’s mandate requiring project labor agreements (PLAs) for large-scale federal construction projects. The court ruled that agencies’ use of PLAs—based solely on presidential policy—was arbitrary, capricious, and in violation of the Competition in Contracting Act’s (CICA) full and open competition requirement. This ruling has major implications for government contractors bidding on federal construction projects exceeding $35 million.
What Are Project Labor Agreements?
PLAs are pre-hire collective bargaining agreements that require contractors to establish terms of employment, wages, and benefits with unionized labor before beginning work on a project. Historically, their use in federal procurement has fluctuated based on presidential executive orders, which ranged from bans to encouragement and, most recently, a mandate under President Biden’s Executive Order 14063.
The Legal Challenge: Do PLAs Violate CICA?
CICA requires federal procurements to be conducted with full and open competition, barring explicit statutory exceptions. In this case, large construction firms challenged federal agencies’ authority to require PLAs, arguing that:
- The PLA mandate effectively excluded non-union contractors from competing fairly.
- The agencies disregarded market research indicating that PLAs would reduce competition and increase costs.
- No statutory justification existed to override CICA’s competition requirements.
The court agreed, finding that the agencies had relied solely on executive policy without conducting the necessary competitive analysis or justifying exceptions under CICA. Specifically, it ruled that:
- The PLA mandate arbitrarily restricted competition by disqualifying non-PLA bidders.
- Agencies improperly ignored their own market research, which concluded that PLAs would lead to higher costs and fewer bids.
- The government failed to provide a statutory basis for imposing PLA requirements.
Implications for Government Contractors
This ruling casts doubt on the legality of mandatory PLAs in federal contracting and may prompt agencies to reconsider their use, especially considering the newly elected administration. President Trump has not taken action on this issue, but it is unlikely that PLAs will remain mandatory, regardless of court action, at least for the term of the current administration.
Citation: MVL USA, INC. v. U.S., — Fed.Cl. —-, 2025 WL 249561 (Jan. 21 2025).
GRSM Government Contracts Practice
GRSM’s Government Contracts team has considerable experience defending and enforcing the rights of our contractor clients in disputes against government entities and private businesses. In addition to litigating claims in state and federal courts, we routinely handle matters before administrative tribunals, such as the Government Accountability Office, the Small Business Administration, and the Armed Services Board of Contract Appeals.
Our team of attorneys is located throughout the United States, which allows the firm to represent contractors, regardless of size, in a wide variety of industries, including defense, information technology, construction, and aerospace, among others.
GRSM would like to acknowledge the significant contributions to this update by Quyen Dang. Please contact Patrick Burns or Meredith Thielbahr for further information or with any questions.