Legality and Ethical Dilemma Regarding Positioning

Started by MarylandLawCOMAR · May 5, 2023 · 3 replies

  1. M

    MarylandLawCOMAR

    May 5, 2023 · 3y ago

    Original post

    Hey guys, 

    I'm about to take the bar in July and would like to dive into contracting when I'm sworn in. I've been studying for the past six months pouring though FAR and have been reading every piece of legible material I can find, and still feel like I'm ten steps behind. I'm a KJD and don't know anyone that owns a business or even know anyone that owns a business that could potentially fulfill obligations in any existing contract. I have an idea in mind but have no idea how common it is or if it's even legal.

    Is there an avenue where an attorney (or even non-attorney) that is eventually competent in the field could acquire contracts with their own LLC through SAM that can either subcontract or team agreement a firm to fulfill the contract? A financially small example: there is an RFQ for the purchase of three sewing machines. Could an attorney (through their OWN LLC on SAM) provide a quote for the K, and specifically indicate that the attorney will be buying the sewing machines from a SEPARATE firm, and provide those products to the buyer? Of course this would be with the prior consent of the separate firm with full authority to conduct this transaction on their behalf.  The attorney would essentially be a liaison between the government and the firm creating the products, and the attorney takes a percentage of the profit gained. If I had to guess, 99% of small business don't know that the government is required to allocate a certain percentage of its buys TO small businesses - and I want to fulfill this need. Is this practical or even possible? 

    Again, this could be a very common practice - I just have no idea. Please reply below! Thanks guys.

  2. D

    Don Mansfield

    May 5, 2023 · 3y ago

    Are you familiar with the limitation on subcontracting and the nonmanufacturer rule?

  3. C

    C Culham

    May 5, 2023 · 3y ago

    While Don has asked a question to peak your research let me lead you a little further. 

    MarylandLawCOMAR said:

    Could an attorney (through their OWN LLC on SAM) provide a quote for the K

    Yes the general principle of Federal contracting is that anyone can participate in providing a quote but then it gets complicated.  

    MarylandLawCOMAR said:

    specifically indicate that the attorney will be buying the sewing machines from a SEPARATE firm, and provide those products to the buyer?

    Maybe.  As you have mentioned RFQ and that it is 3 sewing machines my experience would suggest the total value of the procurement is less that the Simplified Acquisition Threshold (SAT)($250K).  If it is more I think you will be able to read between the lines.

    All procurements above the micro purchase threshold ( $10,000 for sewing machines as they would be a supply) and below the SAT are reserved for small businesses.  I encourage a full read of FAR part 19 but in this instant case see 19.502-2(a).  The LLC would therefore need to be a small business pursuant to the FAR principles.

    If a small business then the the decision point is whether the small business belongs to a socioeconomic small business category and application of the non-manufacturer rule (NMR).  Here is a good overview of the NMR and the applicable regulations inclusive of the FAR - https://www.sba.gov/partners/contracting-officials/small-business-procurement/nonmanufacturer-rule

    Another decision point is again with regard to whether the LLC belongs or is reasoned to be a socioeconomic  small business.   With the reminder to keep in mind whether the procurement is above or below the SAT.    See FAR 19.507(e) as well as FAR 19.505.   

    MarylandLawCOMAR said:

    If I had to guess, 99% of small business don't know that the government is required to allocate a certain percentage of its buys TO small businesses - and I want to fulfill this need. Is this practical or even possible? 

    Again, this could be a very common practice - I just have no idea.

    Actually by experience I would believe that a majority of small businesses that consider Federal government contracting know the set-aside rules.  A lesser percentage probably get confused regarding the NMR, after all I always have to go back a brush up on it as well.   So in practice yes practical and possible with acknowledgment of if the LLC is a small business, a small business that can be reasoned to be of a socioeconomic category (or not), the value of the actual procurement and thus the application of the NMR and subcontracting limitation requirements of the FAR and its associated regulations.

    And just to add.  Many small business that consider entering the Federal contracting arena get great advice from Procurement Technical Assistance Centers (PTAC).   To learn more about PTACs go here https://www.aptac-us.org/

  4. C

    COMAROAHALJ

    May 6, 2023 · 3y ago

    C Culham: 

    Thank you for getting back to me. The LLC that I would be quoting contracts from is a small business as it is just me, one individual. Moreover, I would qualify for the socio-economic and minority qualifications. Furthermore, I would only be bidding on contracts that are below the SAT. Regarding your last paragraph, I was referencing EVERY small business in America. It is of course an estimate, but taking every single small business in America that creates products that the government would buy into account, they simply don't know that they are able to fulfill contacts for the government. I am trying to connect the two. I am attempting to connect the government and small businesses together for contracts that are below the threshold that would allow me to not complete ANY of the work (aka not be restricted by the subcontracting limitation clause). Please C Culham or anyone that is knowledgable, get back to me!

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