Reporting Compliance with Limitations on Subcontracting

Don,

Why couldn't contractors submit this information as part of monthly status reporting?

formerfed,

Which monthly status reports are you referring to? Those required by a FAR clause? A CDRL? Something else?

A CDRL. Right now most agencies require items like costs billed for the month, cumulative totals, balance remaining, etc. I'm think it would be easy to require submission of data about subcontracting.

The contract imposes a limitation on subcontracting. It is reasonable to have the contractor report on compliance.

formerfed,

If the Data Item Description cited on the CDRL required reporting of subcontract costs, then I don't think there would be a problem with the Paperwork Reduction Act. However, I think that a policy requiring the submission of such reports whenever awarding contracts under the 8(a) program would be a FAR deviation and subject to the public notice and comment process pursuant to 41 U.S.C. 1707.

Why would any CO ask for information about subcontracting so that they could enforce the limitations on subcontracting clause? FAR does not expressly require them to enforce it. FAR does not state what is to be done if a contractor does not comply. Who wants to use precious resources to enforce the clause? Why go looking for trouble?

Don,

At least for services, DoD Contracting Officers could monitor/ensure compliance with 52.219-14 through eCMRA (electronic Contractor Manpower Reporting Application). My understanding is that subcontract labor must be accounted for separately. Not sure you could get the exact data you would need in terms of "cost incurred for personnel", but it would be easy to look at prime direct labor dollars and subcontract direct labor dollars and if the latter is more than 50% of the total, start asking questions. This may be after the fact, because I believe they only need to report once annually. See the memo here: http://www.acq.osd.mil/dpap/policy/policyvault/Enterprise-wide_Contractor_Manpower_Reporting_Application_memorandum.pdf It has a note in the text of the memo about the OMB data collection requirement.

For construction contracts it is fairly easy. The prime and subs must provide Payroll info on a weekly basis anyway. The ACO office can track compliance. The GAO didn't say that the contractor must submit compliance data or provide the calculations did it?

First I suggest all do a full read of any agency SBA agreement before making a conclusion. Sorry Don but your quote is misleading.

Also, I am surprised that anyone would provide reference to support any conclusion beyond the language of the agreement. FAR etc. doesnot matter the agreement (contract in any other venue) is what rules.

Or in other words why the heck have an agreement if one side doesnot want to adhere to it. Get real!

Joel,

I think payrolls would not provide the information necessary to ensure a contractor is abiding by 52.219-14. FAR 52.219-14( c)(3) states,

"General construction. The concern will perform at least 15 percent of the cost of the contract, not including the cost of materials, with its own employees."

Payroll data is un-burdened labor rates for employees on the project excluding certain classifications of employees. So the payrolls would not include all the costs associated with the work, including indirect costs (prime and sub), the employees exempt from payroll reporting, etc, to determine if the prime contractor is performing 15% of the effort.

I guess one could pull the cost and pricing data or other than cost and pricing data to determine the appropriate rates to apply to the direct rates presented in the payrolls.

jrt, if the contract is sole source, we would have negotiated the price. I would have determined before award what the prime intended to self-perform to meet the requirements. I would have the cost data necessary to make a rough determination of whether the contractor is in compliance.

In addition, there are always negotiated changes that provide the cost data if this were a competitively awarded contract.

Actually, I don't think that anyone gives a tinker's damn whether the prime is performing 14.8,15.2, 49.6, 50.4 etc. percent of the actual effort. If the prime is making a reasonable effort to comply and if we are making a reasonable effort to track compliance certainly beats doing NOTHING, which is apparently the norm.

I don't buy the argument that, unless there is some specific FAR or Agency policy to enforce the limitation on subcontracting, we aren't required to track compliance. That is a ridiculous argument. It is part of the contract administration office' s job to enforce the contract requirements, including limitations on subcontracting.

I generally provided the ACO office with copies of the contractors contract proposal and the records of negotiation so they would have the basic info needed to help them administer the contract.

Meeting the spirit and intent of the Limitation on Subcontracting, to me is the prime objective here. Too many government offices just look the other way. I think it would be going overboard to require a CDRL submission of exact calculations and data to prove that the contractor is complying, at least for construction contracts. If it is apparent that the prime is not complying then I feel that it would be entirely reasonable for the ACO or KO to require them to show that they are complying or to indicate how they will meet the requirement. This includes any data needed to make the determination.

Don's post leaves out important information. More than a year ago Congress changed the law, 15 USC 657s, to make the limitations clearer and easier to apply, but SBA has not yet changed its regulations to implement the new law and the FAR councils won't do anything until they do.

The law was changed because the current rules are extremely difficult to apply, impose no reporting requirement on contractors, and say nothing about what is to happen if a contractor does not comply, leaving T for D as the only contractually stipulated remedy, which is extreme and uncertain of outcome. It is not clear whether the statutory change renders the current clauses unenforceable if inserted into contracts after the date on which the statute required new rules to have been published. Moreover, it is unclear what the effect of contract modifications would be on the application of the limitations and what defenses it might provide to a contractor against a charge of noncompliance. A contract mod might entitle a contractor to an equitable adjustment of the limitations.

COs can and should do nothing about this. SBA and the FAR councils must implement the new law first. Any CO who tries to demand reporting data and then enforce the existing rules is asking for trouble. Moreover, writing a clause to require submission of such data would require publication in the Federal Register to be enforceable and might necessitate compliance with the Paperwork Reduction Act.

As a CO I would consider the current limitations to be unenforceable on both legal and practical grounds and would attempt no enforcement action.

I discussed all of this at greater length in "Limitations on Subcontracting: Are they being enforced? Will they ever be?", The Nash & Cibinic Report (August 2014).

Joel, are you looking for me? I think your post no. 11 shold be addressed to someone else.

Since I'm here, I recall a recent thread on this subject at /threads/2831-percent-of-cost-of-performance-incurred-for-personnel. I still think the clause is one for post-award administration rather than pre-award evaluation, absent some reason for a pre-award evaluation based on procurement history or so forth. And post-award, I still think the best approach is to observe generally and to inquire of the contractor only if there is some observation that the contractor might not be complying -- and in that case, a simple inquiry will likely answer the question.

I'm content to wait for the SBA and FAR Council to do their jobs.

First I suggest all do a full read of any agency SBA agreement before making a conclusion. Sorry Don but your quote is misleading.

Also, I am surprised that anyone would provide reference to support any conclusion beyond the language of the agreement. FAR etc. doesnot matter the agreement (contract in any other venue) is what rules.

Or in other words why the heck have an agreement if one side doesnot want to adhere to it. Get real!

Carl,

What did you find misleading about my quote? The GAO was assessing compliance with that specific provision of the PA.

COs can and should do nothing about this. SBA and the FAR councils must implement the new law first. Any CO who tries to demand reporting data and then enforce the existing rules is asking for trouble. Moreover, writing a clause to require submission of such data would require publication in the Federal Register to be enforceable and might necessitate compliance with the Paperwork Reduction Act.

I agree with that. However, the GAO thinks that for 8(a) contracts awarded under PAs, contracting officers are currently required to include clauses requiring reporting. They think that because that's what they were told (from p. 5 of the report):

The partnership agreements explicitly address subcontracting limitations in a few ways by requiring the agencies to

• at the time of the contract award, conduct and document an assessment of the 8(a) firm’s ability to comply with the subcontracting limitations;

• include monitoring and oversight provisions in all 8(a) contracts to ensure that the contractors comply with the subcontracting limitations; and

• ensure that 8(a) contractors comply with the subcontracting limitations.

SBA, DOD, DHS, and HHS officials responsible for administering the 8(a) program stated that contracting officers are responsible for implementing these requirements.

When the contracting officers interviewed for the report stated that they didn't think they could compel subcontract reporting, the GAO report implied that they were wrong. From p. 10 of the report:

Further, six contracting officers also expressed confusion about their ability to monitor subcontracted work performed under 8(a) contracts, stating that they did not have access to the costs of the subcontracted work. These contracting officers generally stated it was their understanding that only large businesses could be compelled to report on subcontracted work. Large businesses awarded contracts that are expected to exceed a certain amount are required to develop a plan detailing the extent to which they will subcontract work to small businesses, which is evaluated by contracting officers prior to awarding a contract. These businesses are then required to report on the amount of work subcontracted to those small businesses on a federal government website. While the FAR exempts small businesses from the requirement to submit a subcontracting plan, it does not prohibit contracting officers from requiring that small businesses report on subcontracting for the purposes of demonstrating compliance with the subcontracting limitations.

I think that agencies are going to read this report and believe that their contracting officers should have been imposing subcontract reporting requirements in 8(a) contracts awarded under PAs. As a result, I think we may see more contracting officers imposing these requirements before the rulemaking process has run its course.

Don,

Some contracting officers are already doing it...

Don:

The GAO thinks a lot of things. So what. Who cares? Thinking something does not make it correct.

As for contractor reporting, the GAO is wrong if it thinks that individual COs can legally impose new ad hoc reporting requirements on contractors at their own initiative. You know that from your own research and writing. They can try it, and unsophisticated contractors might comply, but if a contractor refused to provide such information what could the CO do? What contract term would the contractor have breached? What remedy could the CO impose?

What GAO really wants is for OFPP, SBA and the FAR councils to develop policies and procedures. GAO did not recommend that COs act on their own initiative. It recommended that OFPP initiate policy development.

Stop worrying. There is no crisis and no need for any immediate action by COs or individual agencies.

Any CO who acts on his or her own based on the GAO's report is a dummy.

Joel, are you looking for me? I think your post no. 11 shold be addressed to someone else.

Since I'm here, I recall a recent thread on this subject at /threads/2831-percent-of-cost-of-performance-incurred-for-personnel. I still think the clause is one for post-award administration rather than pre-award evaluation, absent some reason for a pre-award evaluation based on procurement history or so forth. And post-award, I still think the best approach is to observe generally and to inquire of the contractor only if there is some observation that the contractor might not be complying -- and in that case, a simple inquiry will likely answer the question.

I'm content to wait for the SBA and FAR Council to do their jobs.

Ji, you were correct. I should have addressed "jrt132" in post 11. However, I disagree that evaluation to ensure compliance is solely a post award duty. When I negotiated and supervised the negotiation of sole source construction contract we always made sure that the prime was intending to self-perform it's required share of the contract work. We had agreements with the SBA on what constituted self-performance for 8(a ) contracts.

Joel,

I figured you were talking to me. I think may post may have insinuated a position that I didn't not intend. Don't disagree with anything you said. I have worked with with Business Prime contractors (at a large business) who will not subcontract any further work to large businesses to the determent of the project.

I was just point out that one would have a hard time with payrolls only determining compliance with the clause.

JRT

Joel,

I think payrolls would not provide the information necessary to ensure a contractor is abiding by 52.219-14. FAR 52.219-14( c)(3) states,

"General construction. The concern will perform at least 15 percent of the cost of the contract, not including the cost of materials, with its own employees."

Payroll data is un-burdened labor rates for employees on the project excluding certain classifications of employees. So the payrolls would not include all the costs associated with the work, including indirect costs (prime and sub), the employees exempt from payroll reporting, etc, to determine if the prime contractor is performing 15% of the effort.

I guess one could pull the cost and pricing data or other than cost and pricing data to determine the appropriate rates to apply to the direct rates presented in the payrolls.

As a government employee, I urge readers here to not bury your head in the sand and use the information already available to enforce the contract requirements. As I was told on the first day of my civil service career, this is a fundamental duty of our employment as servants of the taxpayers.

My initial military experience in the Air Force was as a civil engineer at an Air Base where, with the exception of two contracts, I never saw nor met the prime contractor during performance... That left an impression that I sought to change during my subsequent civil service career.

Jrt, for construction contracts, as part of the progress payment application, the contractor must submit data concerning any subcontracts that are part of the requested payment . This includes the amount of each subcontract as well as the amounts performed by each subcontractor. With the original negotiation information, the progress payment info and payrolls as well as data we get with change proposals, it's not rocket science to determine if it appears that the contractor is or isn't complying with the requirements. Payrolls also identify who each employee actually works for. It's not exact, although our analysis would yield approximate results - which are close enough in my opinion. Certainly beats doing nothing as an alternative.

Over 22 years ago, I developed guidelines for what was considered to be self- performed work in coordination with the Regional SBA office. For our District's field offices and for negotiating new contracts. I also developed guidelines for full and open contracts which use a different clause, which we used for competitive RFPs and for after award purposes.

As for 8 ( a ) sole source contracts, as well as on SDB set-asides during a short-lived DOD program, we saw all sorts of machinations and schemes to hide front type arrangements during the pre-award phases. We took whatever action needed to require a compliant contract award. We did the same for full and open RFP's, when we needed price breakdowns for price evaluations.

When necessary, we rejected proposers during the competition. We sometimes rejected the nominated sole source 8( a ) subcontractor with SBA's concurrence and found a replacement who could comply. We disqualified the lowest priced proposer as well as two other front arrangements in one SDB competitive set-aside and prevailed in the Agency protest by the low (front) proposer team.

jrt, I just noticed that you mentioned "15 percent of the effort" above when referring to construction contracts. The current clause Limitation of Subcontracting clause at 52.219-14 requires self-performance of 15% of the cost of the contract, not including materials. This involves more than just labor costs. Even so, it is possible to estimate or to determine the prime's self-performance share. The HUBZone and SDVOSB set-asides and sole source programs apparently measure labor only to meet the required percentages.

P.S., there are other clauses in 8( a ) contracts which require both the SBA's and the Contracting Ageny's approval before the firm can subcontract work...

Don

Sorry for the delayed response....traveling.

Honestly I did not read the GAO report. My comments were/are based on this.....

The PAa I have seen carry multiple reference to limitation matter. Ref. Most current DoD PA and paragraphs B4, B5, B8, and B9.

As I have stated in previous threads on the limitation matter remember compliance for an 8a awarded contract effects eligibility for the program as such I believe through a PA the SBA is transferring their responsibility on monitoring which could be concluded to be different than monitoring non 8a contracts where compliance goes to matters of responsibility.

Most important to ne is who cares what the FAR says an agency signed an AGREEMENT to do something and should do it and if they don't then it is breach of the agreement.

Don

Sorry for the delayed response....traveling.

Honestly I did not read the GAO report. My comments were/are based on this.....

The PAa I have seen carry multiple reference to limitation matter. Ref. Most current DoD PA and paragraphs B4, B5, B8, and B9.

As I have stated in previous threads on the limitation matter remember compliance for an 8a awarded contract effects eligibility for the program as such I believe through a PA the SBA is transferring their responsibility on monitoring which could be concluded to be different than monitoring non 8a contracts where compliance goes to matters of responsibility.

Most important to ne is who cares what the FAR says an agency signed an AGREEMENT to do something and should do it and if they don't then it is breach of the agreement.

As a government employee, I urge readers here to not bury your head in the sand and use the information already available to enforce the contract requirements. As I was told on the first day of my civil service career, this is a fundamental duty of our employment as servants of the taxpayers.

* * *

Over 22 years ago, I developed guidelines for what was considered to be self- performed work in coordination with the Regional SBA office. For our District's field offices and for negotiating new contracts. I also developed guidelines for full and open contracts which use a different clause, which we used for competitive RFPs and for after award purposes.

The limitations are complex and unclear. Here is Angela Styles, a practicing attorney and former OFPP administrator, in testimony before Congress this past July:

In practice, what constitutes the “cost of contract performance” for personnel has been impossible to understand or implement. So for example, if a small business prime contractor was awarded a $100,000 contract to maintain trucks at a military base and the small business prime contractor wants to subcontract engine maintenance to a large business, the small business prime contractor would have to convert the firm fixed price into a “cost of performance” metric and compare their cost of performance for personnel to the cost of performance of the large business subcontractor. No one (the businesses or the government) really knows if they are administering the limitations on subcontracting correctly and this uncertainty has led to many disputes with the government and between prime and subcontractors.

The FAR includes absolutely no guidance about how to apply and enforce the limitations. The SBA regs do not provide adequate interpretation and application guidance, and I see no reason to believe that regional SBA offices are reliably knowledgeable. Congress simplified the statute in order to fix the problem described by Ms Styles. However, the SBA is late (as usual) in promulgating implementing regulations, and the FAR councils are far behind as a result. The current SBA regs and FAR clauses do not reflect the new statute, which was enacted more than a year ago.

Unless a breach is obvious and beyond question, COs simply must seek higher level guidance before stepping into the minefield. A mistaken interpretation or mistaken application could be very costly to the government, both in terms of performance and cost. Make sure you know (know) what the terms of the clause mean and make sure that you have legal access to the data you need to apply them before doing anything. Get advice from a knowledgeable attorney before taking any enforcement action.

COs have many things to worry about. They shouldn't take on the problem of clearing up a mess that the Congress and the regulators have created and allowed to exist for many years.

This thread referred to the GAO report that focused on enforcement of the 8( a ) contract requirements for limitations on subcontracting for contracts completed in 2012. I re-read the report this evening. Some of the contracts that GAO selected for review were construction contracts. Based upon the narrative of the report, I don't know who is more ignorant - the contracting offices or the GAO staffers.

In Table 1, page 4, the GAO stated that the existing limitations on subcontracting requirements for general construction contracts (per 52.219-14) is "15 percent of pcersonnel costs"' with 2 footnotes:

"a Personnel costs are considered direct labor costs and associated overhead and general and administrative costs."

"b This excludes the cost of any materials purchased under the contract."

While the footnotes are correct, the basic premise is incorrect. The limitations in 52.219-14 as of November 2011 are:

"(1) Services (except construction). At least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the concern.

(2) Supplies (other than procurement from a nonmanufacturer of such supplies). The concern shall perform work for at least 50 percent of the cost of manufacturing the supplies, not including the cost of materials.

(3) General construction. The concern will perform at least 15 percent of the cost of the contract, not including the cost of materials, with its own employees."

(4) Construction by special trade contractors. The concern will perform at least 25 percent of the cost of the contract, not including the cost of materials, with its own employees."

There is a difference between construction and services. There are numerous additional aspects to construction contract costs besides "personnel" and materials. Materials are the materials to be incorporated into the work. They don't include supplies, formwork, purchase or rental of formwork, as well as other consumables and support materials that aren't incorporated into the work, small tools, tools and construction equipment, construction offices, equipment shops, fabrication shops and other shops, site maintenance, testing labs, and other site support elements.

Material costs were not to be considered because some contractors were buying the materials (on paper) as their share of the self-performed work. In reality, all they were doing was writing the check after receipt of government progress payments for installation by the subs. The subs determined the material requirements, ordered the materials and installed the materials. James Hunter of SBA told me this many years ago.

The GAO said that many of the contracting offices didn't know " how to monitor the percentage of work that is subcontracted, in part, because they did not have visibility into subcontractor costs" (page 6). We don't know if this referred to construction contracts but if it did, that is false for both cost and firm fixed-price contracts. Construction contractors for FFP progress payments must provide additional support information that includes the amounts subcontracted and the amounts of each subcontract. The government may and should require the contractor to breakdown the CLIN schedule and progress schedule to identify cost of materials to be incorporated into the work so that can be subtracted.

Yet on pages 13-14, the GAO said it could not determine the amount of work subcontracted or what labor was subcontracted. The contract requires government approval to subcontract. The contract labor clauses require weekly payroll data for each employee, so that information is supposed to be available to anyone. Apparently, the GAO staffers didn't know much if anything about what should have been in FFP construction contracts or how to administer one. The contracting officers didn't appear to know either...

If this is any indication of the competence of both GAO and the government's construction contracting community, God help us.

How many of you think that contracting officers are responsible for imposing a subcontract reporting requirement on 8(a) contractors so that COs can monitor compliance with the limitations on subcontracting clause (FAR 52.219-14)?

To answer your initial question, there is no need to impose any more subcontract reporting requirements for construction contracts. CO's can monitor compliance with clause 52.219-14 with the information that should already be available to them after award and during contract administration and execution.

If the GAO said that additional reporting deliverables are needed for construction contracts, that further reinforces my belief that they know very little about the details of construction contracts or administration of them. And many of the people they interviewed apparently either knew little or didn't fully admit that they don't care as long as the work gets done by someone (see page 9 of the report). That is even a sadder.state of affairs.

Hurricane Joel has hit the Gulf Coast at Category 4 level.

Just to rekindle this a bit...a colleage of mine (contractor) on the east coast had a CO rate them as "unsatisfactory" in CPARs for failure to satisfy the limitations on subcontracting.

The problem is that they DID satisfy the applicable requirement. Worse, it was a construction contract and, like Joel mentioned, the CO had the certified payrolls that demonstrated compliance. Worse still, the CO worked this in a final revision to the CPARs rating, so the contractor didn't even get the opportunity to comment or rebut.

Happy New Year

(4.5 hrs early, central time zone)

How did your friend respond to the CPARs rating? Happy New Years to you, ohno!

She sent a strongly worded letter to the head of the contracting agency, no response yet (chalk it up to the holidays). I suggested to her that the next step is an official request for final ruling from the contracting officer, then a Court of Federal Claims or Board of Contract Appeals filing. Meanwhile, that CPARs with an UNSAT is out there possibly preventing her from getting more work and there'll likely be no recovery of legal fees...which will just about put her SB out of business.

Any other ideas?

I'm not an expert with the CPARs system but suggest reading FAR 42.15 and follow the link to the instructions for CPARs which provides for contractor rebuttal. The flow chart there seems to say that the status of the rating is supposed to be "pending" for a certain period during which the contractor can rebut or appeal the rating.

The USACE regulation that covered evaluations required the KO to provide the Contractor a rebuttal opportunity before finalizing a performance evaluation, especially any adverse elements*. Although I quickly scanned the FAR and CPARs website, I didn't see where this is clearly required before posting a rating in CPARS. It does have flow charts that mention pending and final ratings. EDIT: See the FAQ's at https://www.cpars.gov/merge-faqs/ctrComments.htm , which appear to state that the rating will be available to source selection officials in the database, within 15 days of posting it.

The contract might or might not address the rating process. I seem to remember that we had a clause but it was deleted after contractors used it as a basis for Disputes.

At any rate, there is a procedure for your friend with time frames in the CPARs instructions.

*EDIT:

1. For USACE service and supply contracts, if applicable, see ER 715-1-19 at http://www.publications.usace.army.mil/Portals/76/Publications/EngineerRegulations/ER_715-1-19.pdf

2. For USACE Construction Contracts, if applicable, see ER 415-1-17 at http://www.publications.usace.army.mil/Portals/76/Publications/EngineerRegulations/ER_415-1-17.pdf

3. See also these FAQ at the CPARS site: https://www.cpars.gov/merge-faqs/ctrComments.htm

see also 42.1503 ( d ):

"(d) Agency evaluations of contractor performance, including both negative and positive evaluations, prepared under this subpart shall be provided to the contractor as soon as practicable after completion of the evaluation. The contractor will receive a CPARS-system generated notification when an evaluation is ready for comment. Contractors shall be afforded up to 14 calendar days from the date of notification of availability of the past performance evaluation to submit comments, rebutting statements, or additional information. Agencies shall provide for review at a level above the contracting officer to consider disagreements between the parties regarding the evaluation " (Emphasis added)

EDIT: See also this Congressional Research Service Report, entitled "Evaluating the “Past Performance” of Federal Contractors: Legal Requirements and Issues", dated February 4, 2013 at: https://www.fas.org/sgp/crs/misc/R41562.pdf

It includes discussion concerning Contractors' legal rights and jurisdiction of the Boards of Contract Appeals and Federal Courts for disputes/issues concerning performance ratings. It also discusses contractors' ability to protest the use of disputed performance evaluations in source selections or in Responsibility Determinations.

She can also do a simple GOOGLE Search using the key words "contractor claims for performance evaluations" to find some great info. For instance, see this Dec 13, 2013 article:

"Contractor appeals of negative past performance evaluations"

She has seen most of this already, but I will make sure it gets another thorough review. The problem with this one is that there was an initial evaluation, 14 days contractor comments, then it was revised by the contracting officer (adding the UNSAT and not addressing any of the other disputed issues) and finalized by the "level above the contracting officer" without any chance to comment or refute the revisions.

Thanks for the tips, I'll pass them on.

She has seen most of this already, but I will make sure it gets another thorough review. The problem with this one is that there was an initial evaluation, 14 days contractor comments, then it was revised by the contracting officer (adding the UNSAT and not addressing any of the other disputed issues) and finalized by the "level above the contracting officer" without any chance to comment or refute the revisions.

Thanks for the tips, I'll pass them on.

ohno, I would guess that, by adding a new reason for an unsatisfactory rating, a reviewing tribunal would rule that the government must allow the contractor the opportunity to respond to the new accusation. However, it looks like the rating may be posted during the period of review. I didn't closely study the instructions but they might not contemplate such a situation. It only makes sense that the contractor should be entitled to due process when the government introduces or adds new bases for a rating that haven't previously been disclosed.

It appears that this is more complex than it appears from the limited information. But if I were the contractor, I would insist on the right to respond to the new government reason in addition to studying the possible courses of action available concerning each of the disputed rating elements.

If the real complaint is that the government can ruin or bankrupt a (small business in this case) contractor, I fully sympathize with your friend.