Acquisitions less than the simplified acquisition threshold are automatically reserved (or set-aside) for small business concerns. If the solicitation includes the clause at FAR 52.219-6, it appears you are not complying with para. (d).  

BAA and TAA are irrelevant, as the set-aside takes precedence over these.

It seems you need to be bidding on acquisitions that are not set-aside for small business concerns AND are over the TAA thresholds — then, your items may be accepted on a non-discriminatory basis.  

If you bid on supply acquisitions that are not set-aside for small business concerns AND are under the TAA thresholds, then the BAA May apply and your items may be considered on a discriminatory basis (after adding 6% or 12% (by the FAR) or 50% (by the DFARS) to price evaluation).

If you bid on acquisitions that are set-aside for small business concerns, you fail under para. (d) or the clause at FAR 52.219-6 or similar paragraphs in other set-aside clauses.

ji20874 said:

BAA and TAA are irrelevant, as the set-aside takes precedence over these.

This explains everything  Thank you . And what about the money spent on raw material? Is there any way to take it back? At least some of it..

That’s between you and your supplier.  The Government owes you nothing, unless you have a basis for action under FAR 13.302-4(b)(2).

One last question. As far as i know taa defines designated countries which are different from qualifying countries. Qualifying countries are specific to defense contracts. They have privilages within DLA solicitations including small business set asides. Does this change anything?

Agencies using the DFARS use Balance of Payments.  

The clauses in each solicitation set the rules for that solicitation.  A solicitation with FAR 52.225-1, -3, or -5 will be subject to BAA or TAA (FTA or WTO GPA) rules.  A solicitation with FAR 52.219-6 or another set-aside clause will be subject to set-aside rules.  A solicitation with the DFARS BoP clause will be subject to balance of payment rules.  

I’m not a BoP expert, so I won’t speak directly to that topic.

I’m curious as to whether you identified the country of manufacture in your proposal and if the clauses you referred to are in your two contracts with DLA.

ji20874 said:

Agencies using the DFARS use Balance of Payments.  

The clauses in each solicitation set the rules for that solicitation.  A solicitation with FAR 52.225-1, -3, or -5 will be subject to BAA or TAA (FTA or WTO GPA) rules.  A solicitation with FAR 52.219-6 or another set-aside clause will be subject to set-aside rules.  A solicitation with the DFARS BoP clause will be subject to balance of payment rules.  

I’m not a BoP expert, so I won’t speak directly to that topic.

Thanks for your reply. I checked my contracts again. Since i'm bidding for DLA contracts below $150,000 only, none of them contain the FAR rules you mentioned. They all have "DFARS 252.225-7001, BUY AMERICAN AND BALANCE OF PAYMENTS PROGRAM APPLIES TO ALL QUOTES ABOVE THE MICRO-PURCHASE THRESHOLD written. Other clauses written at the bottom of the contract are:

252.225-7001   BUY AMERICAN AND BALANCE OF PAYMENTS PROGRAM—BASIC   (DEC 2016)   DFARS

252.225-7001   BUY AMERICAN AND BALANCE OF PAYMENTS PROGRAM—BASIC   (DEC 2016),   ALT I   (DEC 2016)   DFARS

252.225-7002   QUALIFYING COUNTRY SOURCES AS SUBCONTRACTORS   (DEC 2016)   DFARS

Doesn't this contract and its clauses justify me? Am i getting it wrong?

joel hoffman said:

I’m curious as to whether you identified the country of manufacture in your proposal and if the clauses you referred to are in your two contracts with DLA.

Yes i always identify the qualifying country of manufacture in my proposals. I never tend to do anything against the law. And yes the clauses i referred exist in my cancelled contracts and even in other ones i've bid for.

Thank you , hallowed. I think you should to hire competent legal counsel.  You identified the country of manufacture.   The US Governmt appears to have accepted your proposal(s) as conforming in order to make two contract awards.  

EDIT: The government has a responsibility to reasonably evaluate the information that it required to be included in the successful contractors proposal before making an award - not wait until after award..

EDIT:You incurred cost in beginning performance, presumably after the award. 

EDIT:  You might have a possibility of a claim for cancellation costs under FAR 13.302-4, if you haven’t agreed. Can you return the materials with a cancellation fee, for instance?  

“(b) (2) If the contractor does not accept the cancellation or claims that costs were incurred as a result of beginning performance under the purchase order, the contracting officer shall process the action as a termination prescribed in paragraph (a) of this subsection.”

Repeat: Suggest hiring competent counsel.  Hope you have notified government of costs expended in beginning performance. If not, suggest you do so immediately and suggest mentioning that you complied with the requirement to identify country of manufacture - - before they accepted your quote/proposal, and that they had the responsibility to evaluate it before awarding you the contracts. 

Merry Christmas. 🙏

Thank you Joel. I appreciate your interest with my situation. Not only my awards are cancelled but also my company is precluded from competing by locking my dibbs account. I told them everything i mentioned here but nobody replied me and never had a word about laws and clauses. I’m not only trying to get my contracts back but also make them unlock my account to keep on competing.

Unfortunately i don’t have any chance to return the raw material. It’s kind of a rare type of alloy and i had a hard time finding it. I paid for it in cash and it’s now sitting in the warehouse. 

I wrote an email to DLA today and told them that the decision is inconsistent with dfars laws. What i performed was within the contract clauses. And asked them to re-review the contract clauses in detail and reconsider the decision.

DLA validation lead told me that the office of small business programs is responsible for restriction of my account because according to them my company couldn’t pass the validation due to the manufacturer’s location. My account will be unlocked if the office of SBP will confirm the validation and contact the dla validation team regarding access to my account. I wrote them about the issue with all info i’ve mentioned above. Waiting for replies from both offices. Hope they understand the mistake and allow me compete for contracts again. 

If i receive a negative feedback i’ll take your advice and hire a competent counsel. That will be my last and only chance left.

ji20874 and Joel.. Thank you very much for your help. I really appreciate your efforts. It means so much to me and changed the whole story on my behalf.

Merry Christmas 🙂

hallowed said:

Thank you Joel. I appreciate your interest with my situation. Not only my awards are cancelled but also my company is precluded from competing by locking my dibbs account. I told them everything i mentioned here but nobody replied me and never had a word about laws and clauses. I’m not only trying to get my contracts back but also make them unlock my account to keep on competing.

Unfortunately i don’t have any chance to return the raw material. It’s kind of a rare type of alloy and i had a hard time finding it. I paid for it in cash and it’s now sitting in the warehouse. 

I wrote an email to DLA today and told them that the decision is inconsistent with dfars laws. What i performed was within the contract clauses. And asked them to re-review the contract clauses in detail and reconsider the decision.

DLA validation lead told me that the office of small business programs is responsible for restriction of my account because according to them my company couldn’t pass the validation due to the manufacturer’s location. My account will be unlocked if the office of SBP will confirm the validation and contact the dla validation team regarding access to my account. I wrote them about the issue with all info i’ve mentioned above. Waiting for replies from both offices. Hope they understand the mistake and allow me compete for contracts again. 

If i receive a negative feedback i’ll take your advice and hire a competent counsel. That will be my last and only chance left.

ji20874 and Joel.. Thank you very much for your help. I really appreciate your efforts. It means so much to me and changed the whole story on my behalf.

Merry Christmas 🙂

Good luck to you in getting some reimbursement for your material costs, hallowed.  I am assuming that you are referring to two individual contracts under the simplified acquisition threshold that are single purpose (not ID/IQ or similar contracts using orders). 

To clarify, I don’t know whether or not your manufacturing sources meet the requirements of the contracts. If not, then I don’t think that your contract can be used to provide the materials. So you won’t be able to “get your contracts back”.

But if the government mistakenly awarded the contracts because they didn’t evaluate your identified source, they should not be terminated for cause or default.

Cancellation should be treated as no fault or “for convenience”. In addition, you should be able to recover your cost expended to begin performance.

@hallowed

A couple of thoughts to go along with what has been provided as advice so far.

Have you looked at what assistance an Association of Procurement Technical Assistance Center may be able to provide to you in sorting out the regulations and your rights regarding the cancelation?  If not you may want to research the assistance they can provide from the center nearest you.  An internet search on APTAC will get you started.  Much of their assistance is for free.

While you have a larger stake in the game than just the 2 purchase orders you were awarded and therefore I completely agree with seeking legal counsel however no on has mentioned the disputes clause or condition that should be in the contracts.  Suggest finding it and then follow up by reading about disputes in FAR part 33.  Doing so will give you a leg up in any further written communication you send DLAs way.

hallowed said:

I wrote an email to DLA today and told them that the decision is inconsistent with dfars laws. What i performed was within the contract clauses. And asked them to re-review the contract clauses in detail and reconsider the decision.

The problem doesn't seem to be your compliance with DFARS. Assuming these acquisitions were set aside for small business, the problem is your compliance with FAR 52.219-6. As ji pointed out, FAR 52.219-6 requires your products to be domestic (unless the nonmanufacturer rule was waived). Qualifying country end products are not domestic.

Don Mansfield said:

The problem doesn't seem to be your compliance with DFARS. Assuming these acquisitions were set aside for small business, the problem is your compliance with FAR 52.219-6. As ji pointed out, FAR 52.219-6 requires your products to be domestic (unless the nonmanufacturer rule was waived). Qualifying country end products are not domestic.

Don thank you for your reply. I’ve been following your posts for a long time and i was curious about your comment. Yes they were set aside for small business but contract clauses include qualifying country sources as subcontractors and BAA and BOP program. If qualifying country products are not allowed then why there’s a clause in the contract? And why there’s even an QCP option to specify on the online quote form? If this clause exists in the contract doesn’t it mean that you can benefit from it?

Also i guess i should benefit from BAA and BOP program too, which states: if the contractor certified in its offer that it will deliver a qcp, the contractor shall deliver a qcp or, at the contractor’s option, a domestic product. 

And as far as i know, with the final rule effective by June 30, 2016 the SBA eliminated the nonmanufacturer rule for acquisitions between $3500 and $150,000 which simply means small businesses may supply from large businesses and/or non domestic products.

If there weren’t any aforementioned clauses in the contract i would have understood the reason to be precluded. But under these conditions i don’t get it. This is what i understand from all these clauses. I don’t know maybe you’re right. Hiring a professional will be my best choice i guess.

C Culham said:

@hallowed

A couple of thoughts to go along with what has been provided as advice so far.

Have you looked at what assistance an Association of Procurement Technical Assistance Center may be able to provide to you in sorting out the regulations and your rights regarding the cancelation?  If not you may want to research the assistance they can provide from the center nearest you.  An internet search on APTAC will get you started.  Much of their assistance is for free.

While you have a larger stake in the game than just the 2 purchase orders you were awarded and therefore I completely agree with seeking legal counsel however no on has mentioned the disputes clause or condition that should be in the contracts.  Suggest finding it and then follow up by reading about disputes in FAR part 33.  Doing so will give you a leg up in any further written communication you send DLAs way.

Thanks for your reply. I’ve read about disputes and terminations. I’ve contacted the related departments to compensate my loss. I’ll wait and see.

hallowed said:

If qualifying country products are not allowed then why there’s a clause in the contract? And why there’s even an QCP option to specify on the online quote form? If this clause exists in the contract doesn’t it mean that you can benefit from it?

Good questions. I can see why you are confused.

There aren't different versions of the clause at DFARS 252.225-7001--Buy American and Balance of Payments--one for small business set-asides and one for unrestricted acquisitions. I doubt the DAR Council even considered that option when creating the clause. That's probably because the FAR/DFARS Foreign Acquisition Committee is different than the FAR/DFARS Small Business Committee and there's no committee to make sure the different parts are coordinated. It doesn't occur to them that a small business competing for a set-aside could interpret a solicitation containing DFARS 252.225-7001 as permitting the delivery of a foreign product. 

hallowed said:

And as far as i know, nonmanufacturer rule doesn’t apply for acquisitions between $3500 and $150,000 by which the SBA permits small businesses to supply from large businesses and/or non domestic products.

The nonmanufacturer rule doesn't apply between the micro-purchase threshold and the simplified acquisition threshold. However, a small business must still provide a domestic firm's product. An SBA waiver of the nonmanufacturer rule permits a small business from providing any firm's product--including a foreign product.

FAR 13.302-4(b) says that the contracting officer's notice of cancellation is supposed to request the contractor's written acceptance of the cancellation. Did the notice request this? If so, how did you respond? If you refuse the cancellation or claim that you incurred costs, the CO is supposed to handle it like a termination.

Don Mansfield said:

Good questions. I can see why you are confused.

There aren't different versions of the clause at DFARS 252.225-7001--Buy American and Balance of Payments--one for small business set-asides and one for unrestricted acquisitions. I doubt the DAR Council even considered that option when creating the clause. That's probably because the FAR/DFARS Foreign Acquisition Committee is different than the FAR/DFARS Small Business Committee and there's no committee to make sure the different parts are coordinated. It doesn't occur to them that a small business competing for a set-aside could interpret a solicitation containing DFARS 252.225-7001 as permitting the delivery of a foreign product. 

The nonmanufacturer rule doesn't apply between the micro-purchase threshold and the simplified acquisition threshold. However, a small business must still provide a domestic firm's product. An SBA waiver of the nonmanufacturer rule permits a small business from providing any firm's product--including a foreign product.

FAR 13.302-4(b) says that the contracting officer's notice of cancellation is supposed to request the contractor's written acceptance of the cancellation. Did the notice request this? If so, how did you respond? If you refuse the cancellation or claim that you incurred costs, the CO is supposed to handle it like a termination.

Don, here is what confuses me. If a solicitation is a small business set aside,  it means no entity other than a small business may participate. And if you put dfars 252.225-7001 and 252.225-7002 into a contract it means that these clauses apply to participating entities which will obviously be small businesses only. Full meaning: participating small businesses may use a qc source as subcontractor. This creates a different situation than what you’ve mentioned. 

About the cancellation notice: no it didn’t request anything. Just cancellation based on far 13.302-4(b). No other info. I’ve contacted the issuing office stating that i’m not accepting the cancellation and demanded for compensation of my loss. Waiting for their reply. If i get a negative feedback i’ll hire someone competent.

@hallowed,

When interpreting a contract under the common law, one must interpret it as a whole--not individual sections or clauses. See NVT Techs., Inc. v. United States, 370 F.3d 1153 (Fed. Cir. 2004), stating at 1159:

Quote

Contract interpretation begins with the language of the written agreement. Foley Co. v. United States, 11 F.3d 1032, 1034 (Fed. Cir. 1993). When interpreting the contract, the document must be considered as a whole and interpreted so as to harmonize and give reasonable meaning to all of its parts. McAbee Constr., Inc. v. United States, 97 F.3d 1431, 1434-35 (Fed. Cir. 1996). An interpretation that gives meaning to all parts of the contract is to be preferred over one that leaves a portion of the contract useless, inexplicable, void, or superfluous. Gould, Inc. v. United States, 935 F.2d 1271, 1274 (Fed. Cir. 1991).

The problem with your interpretation (i.e., the contract permits delivery of a foreign product) is that it renders FAR 52.219-6(d) meaningless. If we read FAR 52.219-6(d) and DFARS 252.225-7001(c) together, I think that the FAR clause is placing further restrictions on the source of the product.

Don Mansfield said:

@hallowed,

An interpretation that gives meaning to all parts of the contract is to be preferred over one that leaves a portion of the contract useless, inexplicable, void, or superfluous.

So when you say i have to comply with far 52.219-6, you are leaving both dfars 252.225-7001 and 252.225-7002 written in the contract useless/void. And that’s damaging the integrity of the contract.

What’s the purpose of putting a clause in a SMALL BUSINESS ONLY contract, if participants aren’t allowed to benefit from it or another clause already makes it void/ineffective.

Don’t you think it’s meaningless?

hallowed,

If a contract has one clause that forbids something and a second clause that forbids something else, then both things are forbidden (even though either one of the things might have been allowed under one clause operating alone).

It is well-established practice that a set-aside clause’s very stringent requirement for a domestic product takes precedence over more loosely-written clauses that might seem to allow otherwise.  That’s normal with standardized clauses that are written for routine incorporation.  But if there ever is a doubt about two seemingly contradictory clauses, a question to the contracting officer before submission of offers might clear it up.

ji20874 said:

hallowed,

If a contract has one clause that forbids something and a second clause that forbids something else, then both things are forbidden (even though either one of the things might have been allowed under one clause operating alone).

It is well-established practice that a set-aside clause’s very stringent requirement for a domestic product takes precedence over more loosely-written clauses that might seem to allow otherwise.  That’s normal with standardized clauses that are written for routine incorporation.  But if there ever is a doubt about two seemingly contradictory clauses, a question to the contracting officer before submission of offers might clear it up.

Still seems so meaningless as to why an inapplicable clause exists in a contract. I’ve received 8 awards in total. All of them must have been granted after evaluating the offer i guess, including the last two. I don’t know what made the difference to preclude me until the last ones. Would it take 6 awards to recognize that my company is not legitimate? If QC products were the problem they should have warned me before. I’ve never changed the way i quoted. They must have seen the origin of my products before. Seems like an unfair decision to me.

Maybe you were just lucky for the other six?  

I recommend being careful in raising the other six awards — an investigator might look into them and you might face a false claim matter (submitting an invoice for a product that does not conform to contract requirements) if any of those six were set-asides.

Anyway, we’re here for learning, not argument.  Happy new year!

As i’ve mentioned before i haven’t received a written acceptance request with cancellation notice. Just an SF30 form signed by the officer noticing that my purchase orders are cancelled and the award is decreased to zero. Seems like an inadequate document. Do i have any rights arise from this other than the regular dispute process?

A number of posters have already pointed you to  FAR 13.302-4(b)(2).

ji20874 said:

It is well-established practice that a set-aside clause’s very stringent requirement for a domestic product takes precedence over more loosely-written clauses that might seem to allow otherwise.  That’s normal with standardized clauses that are written for routine incorporation.

I was able to find a case that supports this. See Bulloch International, Inc, B-237369, Feb 5, 1990. The Navy rejected a bid as nonresponsive under a small business set-aside where the bidder listed a "FMS/Off set arrangement country end product", in its Buy American Act certificate. The GAO denied the protest:

Quote

A bid as submitted must represent an offer to perform, without exception, the exact thing called for in the IFB, so that upon acceptance, the contractor will be bound to perform in accordance with all the terms and conditions of the IFB. Rocco Indus. (Inc., B-227636, July 24, 1987, 87-2 CPD Para. 87. Moreover, only material available at bid opening may be considered in making a responsiveness determination. DuHadaway Tool and Die Shop, Inc., B-216082, Aug. 29, 1984, 84-2 CPD Para. 239. Accordingly, since Hulloch's bid indicated both that (1) the firm would supply an item manufactured in Australia, and that (2) it would furnish only end items manufactured or produced by small business concerns in the United States, the contracting officer reasonably concluded that Bulloch's bid was nonresponsive in that it was not clear from the bid whether Bulloch would comply with the set-aside requirement to supply a product manufactured or produced in the United States. See Jarke Corp., B-231858, July 25, 1988, 85-2 CPD Para. 82.

hallowed said:

Would it take 6 awards to recognize that my company is not legitimate?

That wouldn't surprise me.

hallowed said:

Do i have any rights arise from this other than the regular dispute process?

Maybe. I suggest you seek counsel from an attorney.

Thank you all for your help and patience.. I really appreciate it.

👍

@Don Mansfield

What does unrestricted solicitation mean? Does it indentify the ones other than set asides? Couldn’t find any info..

hallowed said:

What does unrestricted solicitation mean? Does it indentify the ones other than set asides? Couldn’t find any info..

It means that the competition is open to other than small businesses.

ji20874 said:

Maybe you were just lucky for the other six?  

I recommend being careful in raising the other six awards — an investigator might look into them and you might face a false claim matter (submitting an invoice for a product that does not conform to contract requirements) if any of those six were set-asides.

Anyway, we’re here for learning, not argument.  Happy new year!

Its not a false claim if there is no intent to deceive and the proposer thought that its offer was conforming. Even less so where the offeror identified the source in its offer and the government either didn’t evaluate it or evaluated it and the evaluator was clueless. The government must prove that the offer intended to deceive the government.

The government has the responsibility to evaluate information it requires from offerors. It also has a responsibility to know what it specified in the solicitation. 

Lets stop blaming hallowed here. 

Hallowed, if you wait to hire legal counsel or other professional assistance  for the purpose of preparing and pursuing a claim, those costs are unallowable.

However, if you hire someone NOW, for the purpose of helping resolve the matter and obtaining a settlement of termination costs, prior to it escalating to a claim, those costs might be reimbursable expenses in the termination settlement.

joel hoffman said:

Its not a false claim if there is no intent to deceive and the proposer thought that its offer was conforming. Even less so where the offeror identified the source in its offer and the government either didn’t evaluate it or evaluated it and the evaluator was clueless. The government must prove that the offer intended to deceive the government.

The government has the responsibility to evaluate information it requires from offerors. It also has a responsibility to know what it specified in the solicitation. 

Lets stop blaming hallowed here. 

Hallowed, if you wait to hire legal counsel or other professional assistance  for the purpose of preparing and pursuing a claim, those costs are unallowable.

However, if you hire someone NOW, for the purpose of helping resolve the matter and obtaining a settlement of termination costs, prior to it escalating to a claim, those costs might be reimbursable expenses in the termination settlement.

Thank you Joel. I’ll find someone a.s.a.p

Don Mansfield said:

It means that the competition is open to other than small businesses.

DLA master solicitation states as: quoting other than a domestic end product on an unrestricted solicitation doesn’t make an offer ineligible for the award. Do i have the opportunity to compete for unrestricted solicitations as a small business and offer QC products? If so, i’ll follow that way because set asides seem to be the problem here.

hallowed said:

DLA master solicitation states as: quoting other than a domestic end product on an unrestricted solicitation doesn’t make an offer ineligible for the award. Do i have the opportunity to compete for unrestricted solicitations as a small business and offer QC products? If so, i’ll follow that way because set asides seem to be the problem here.

Sure. Unrestricted means that it is free and open to competition.

No position on whether your offered products would be allowed.

joel hoffman said:

Sure. Unrestricted means that it is free and open to competition.

No position on whether your offered products would be allowed.

This is great news. The only thing left is make them unlock my account.. Thank you Joel.🙏

joel hoffman said:

The government must prove that the offer intended to deceive the government.

Under the civil false claims  act, intent is not an element.  All the government needs to prove is that a false claim (one that is not true) was made knowingly.  In this regard, 31 U.S.C. 3729 states

(1) the terms “knowing” and “knowingly”—

(A) mean that a person, with respect to information—(i)

has actual knowledge of the information;

(ii)

acts in deliberate ignorance of the truth or falsity of the information; or

(iii)

acts in reckless disregard of the truth or falsity of the information; and

(B)

require no proof of specific intent to defraud;

Quote

18 U.S. Code § 287 - False, fictitious or fraudulent claims

Whoever makes or presents to any person or officer in the civil, military, or naval service of the United States, or to any department or agency thereof, any claim upon or against the United States, or any department or agency thereof, knowing such claim to be false, fictitious, or fraudulent, shall be imprisoned not more than five years and shall be subject to a fine in the amount provided in this title.

(June 25, 1948, ch. 645, 62 Stat. 698; Pub. L. 99–562, § 7, Oct. 27, 1986, 100 Stat. 3169.)

Note that 18 USC 287 is for a criminal component of a False Claim.  

From the Department of Justice  Criminal Resource Manual, Section 922

https://www.justice.gov/jm/criminal-resource-manual-922-elements-18-usc-287

Quote

Under 18 U.S.C. § 287, the government must establish that the defendant:

1. made or presented a false, fictitious, or fraudulent claim to a department of the United States;
2. knew such claim was false, fictitious or fraudulent; and
3. did so with the specific intent to violate the law or with a consciousness that what he was doing was wrong.

United States v. Slocum, 708 F.2d 587, 596 (11th Cir. 1983)(citing United States v. Computer Sciences Corp., 511 F. Supp. 1125, 1134 (E.D. Va. 1981), rev'd on other grounds, 689 F.2d 1181 (4th Cir. 1982)).

Under Section 287, unlike 18 U.S.C. § 1001, there may not be a requirement that the statements or claims be material; the United States Courts of Appeals are split on the issue. United States v. Parsons, 967 F.2d 452, 455 (10th Cir. 1992)(no materiality component); United States v. Elkin, 731 F.2d 1005, 1009 (2d Cir.), cert. denied, 469 U.S. 822 (1984)(same);United States v. Pruitt, 702 F.2d 152, 155 (8th Cir. 1983) (materiality component); United States v. Snider, 502 F.2d 645, 652 n.12 (4th Cir. 1974) (same). The conflict was noted in United States v. White, 27 F.3d 1531, 1535 (11th Cir. 1994), which did not resolve the issue. Presumably, if a materiality component exists, it is a matter for jury resolution in light of United States v. Gaudin, 115 S.Ct. 2310 (1995).

Although it is clear from the case law that specific intent to defraud is not required for a conviction under 18 U.S.C. § 287, the United States Courts of Appeals are divided on the issue of whether willfulness is an essential element of the crime. For example, the United Stated Courts of Appeals for the Tenth, Fifth and Second Circuits have held that willfulness is not an essential element of Section 287, while the Ninth, Eighth and Fourth Circuits appear to indicate that willfulness is an essential element of Section 287.

Presentation of a claim is more than an intention to make a claim. The claim must be presented actually and physically, and thereby made to the government. The clearest case is presentation directly to the government; however, the claim may go through an intermediary. United States v. Murph, 707 F.2d 895, 896 (6th Cir.) cert. denied, 464 U.S. 844 (1983), (court rejected the argument that defendant did not cause a violation of Section 287 because the claim was submitted by an intermediary; the defendant sold a tax return, falsely claiming a refund, to the intermediary and knew that the return would be presented to the government to claim the refund). Presenting or cashing a refund check constitutes making a false claim on the United States. See United States v. Branker, 395 F.2d 881 (2d Cir. 1968), cert. denied, 393 U.S. 1029 (1969). Although Section 287 does not define the term "claim" (United States v. Barsanti, 943 F.2d 428, 432-33 (4th Cir. 1991), cert. denied, 503 U.S. 936 (1992)), in United States v. Cohn, 270 U.S. 339 (1926), the United States Supreme Court wrote:

"While the word "claim" may sometimes be used in the broad juridical sense of "a demand of some matter as of right made by one person upon another, to do or to forbear to do some act or thing as a matter of duty," it is clear, in the light of the entire context, that in the present statute, the provision relating to the payment or approval of a "claim upon or against" the government relates solely to the payment or approval of a claim for money or property to which a right is asserted against the government, based upon the government's own liability to the claimant."

270 U.S. at 345-36. The civil component of the False Claims Act, 31 U.S.C. § 3729(c), also defines the word "claim."

See also:

https://www.browntax.com/Criminal-Tax-Charges/False-Fictitious-or-Fraudulent-Claims-in-Violation-of-Title-18-U-S-C-Sections-287-and-286.shtml

Title 18, United States Code, Section 287 makes it a crime to make false, fictitious, or fraudulent claims upon the United States

Quote

Claim Against the United States

The first element the government must prove in a § 287 case is that an individual made a claim against the United States for money or property.

[...] It is not required that the government pay or otherwise fulfill the false claim, only that the claim is presented to the government. Also, the false claim does not have to be made directly to the government, it can be made to an intermediary authorized to accept the claim on behalf of the government, such as a tax return preparer, as long as the individual knows the intermediary will present the false claim to the government.

False, Fictitious, or Fraudulent Claim

The second element the government must prove is that the claim is false, fictitious, or fraudulent. Because this section utilizes the word "or," a charge under this section can be presented as either a false, fictitious, or fraudulent claim.

False - Deliberately untrue. Unlawful. An action with intent to perpetrate a betrayal of trust or fraud. Done or said to fool or deceive someone. Adjusted or made so as to deceive. 

Fictitious - false, feigned, or pretended. Not real or true. Made-up or fabricated. 

Fraudulent - Based on or tainted by fraud. Done, made, or effected with a purpose or design to carry out a fraud. Obtained, done by, or involving deception, especially criminal deception.

One can envision the multitude of ways an individual can carry out a false, fictitious, or fraudulent claim to the government. The government's burden is met when they prove the claim was one of these.

For example: An accountant prepares a tax return for a taxpayer. And instead of placing the taxpayer's banking information on the return, the accountant places their own banking information on the tax return. The false information causes the government to deposit the taxpayer's refund into the account of the return preparer.

Materiality

Although not a specific requirement of § 287, it is has been held by some courts that the materiality of a "fraudulent" claim must be proved and determined by a jury, but not so with a "false" or "fictitious" claim. So, the government may chose the wording "false" in their charging document to avoid the issue of materiality as it relates to § 287.

Knowledge

The third element the government must prove is knowledge, or criminal intent, that the claim made to the government was false, fictitious, or fraudulent. The courts vary on their interpretation of the standard the government must meet to prove this element. Generally, the government may meet its burden by showing the individual was aware of the illegality of their actions or acted specifically to break the law

For a Civil False Claim under 31 USC 3729 see, for instance this article at https://fcaexpert.com/articles/fca-faq.html

Quote

3. What are the components of an offense under the False Claims Act?

Under whatever section of the Act, the government or a qui tam plaintiff must prove the following: (1) that the defendant presented or caused to be presented to the United States government a claim for payment or approval, or a document to facilitate the payment of a false claim; (2) that the claim and/or document was false or fraudulent; and (3) that the defendant knew that the claim was false or fraudulent or acted with reckless disregard of the truth or falsity of the claim. If these elements are present, a violation of the FCA occurs even if the government never actually makes any payment or suffers a financial loss. The defendant does not have to act with a specific intent to defraud in order to be liable, as long as the submission was “knowing.”

4. What is the definition of “knowing” under the False Claims Act?

In 1986, the FCA was substantially amended to improve and enhance the government’s ability to recover federal funds lost through fraud. One important change was the clarified definition of “knowing” found at ‘ 3729(b). The amended Act now mandates that a person (including any health care provider or contractor) can be held liable if it submits or causes to be submitted1 a false or fraudulent claim or a false statement in support of a claim: a. with actual knowledge that it is false (‘ 3729(b)(1)); b. in deliberate ignorance of the truth or falsity of the information (‘ 3729(b)(2)); c. or in reckless disregard of the truth or falsity of the information (‘ 3729(b)(3)). Moreover, Congress clarified that no proof of specific intent to defraud is required. (‘ 3729(b)(3)). One of the most grievous mistakes counsel unfamiliar with the FCA make is to equate the scienter requirement of the FCA with criminal fraud statutes. Not only does the statute state on its face “no specific intent” is necessary, it offers three varying definitions of “knowing” which do determine the scienter requirement. The first definition, actual knowledge [‘3729(b)(1)], is entirely straightforward. If a false claim is submitted, or a false or fraudulent document submitted, and the submission is from a person who knows the document or claim is false or fraudulent, then a knowing submission has occurred. The next two definitions are somewhat more illusive.

A good illustration of acting in deliberate ignorance of the truth or falsity of information (section b(2)) is found where, for example, a physician practice does not properly supervise or train its billing staff, so that inappropriate claims are submitted. The practice cannot avoid liability by asserting that it relied upon the billers if it could have exercised appropriate supervision over them; the same is true of independent billing companies. This provision is sometimes said to deal with the “ostrich with its head in the sand” problem. Put simply, you cannot look the other way and thereby avoid FCA liability. The third definition, acting in “reckless disregard,” is very difficult to assess. Probably, this provision relates to negligence of a very high category. An example might be using a computer billing program for Medicare billing that has not been updated for five years to see, nonetheless, how many claims would be paid. The important point to bear in mind is that nobody quite knows what the second and third categories of “knowing” mean and how a court would interpret these provisions. Therefore, compliance officers, in particular, should act upon the assumption that careless or mistaken claims can serve as the basis for a FCA prosecution.

I did not use the term "defraud" earlier, by the way. However, there is apparently some legal distinction between "intent to deceive" and knowingly submitting a false claim or false statement. I admit that I'm not an attorney.

My point is that, if one unknowingly submits a false statement - without deliberate ignorance or reckless disregard of the truth, it likely isn't a "knowing" false claim act violation, criminal or civil.

As hallowed stated in the above posts, the various clauses in the solicitation appear to contradict each other in some cases. hallowed appears to have thought that what they were planning to do was allowed by the contract.

Moreover, hallowed has stated that the company identified the source of manufacturing to the government - - - who wrote the requirements and who should know the requirements -  and who should have evaluated the required, identified source.  If the government didn't know what was allowable - perhaps that was a reckless disregard of the requirement by the government in the award of the contract. 

The government shouldn't have awarded the two contracts if the country of origin of the identified source wasn't allowed. I don't think that a default or for cause termination/cancellation would stick, but hallowed needs professional advice ans assistance.

joel hoffman said:

As hallowed stated in the above posts, the various clauses in the solicitation appear to contradict each other in some cases. hallowed appears to have thought that what they were planning to do was allowed by the contract.

That’s exactly what i thought. Never expected to see a clause in the contract with another one voiding it. Where’s the logic here?   IMHO, the only condition that may allow far 52.219-6 and dfars 252.225-7002 exist in the same contract would be an additional phrase or clause like: “when these two clauses are cited in the same contract, qualfying country end products will be treated as domestic end products”. Otherwise nonfunctional clause should be removed. You can’t put a clause in a contract and then tell the contractor to ignore it. Everything must be clear enough to allow precise interpretation by everyone.

Quoting a domestic end product and then supplying a foreign one is a false claim/fraud. But if you’re exposing the origin of your products as foreign, where would you be expected to get them from?

joel hoffman said:

The government shouldn't have awarded the two contracts if the country of origin of the identified source wasn't allowed. I don't think that a default or for cause termination/cancellation would stick, but hallowed needs professional advice ans assistance.

I’ve contacted a specialist from aptac. Said she will work on my issue after getting back from vacation. Thanks to everyone who shared info and thoughts here. Learned lots of new stuff. I’m grateful..

@joel hoffman @Don Mansfield

I looked at my award contract again. It’s not a set aside. Doesn’t it mean that it’s an unrestricted solicitation?

joel hoffman said:

My point is that, if one unknowingly submits a false statement - without deliberate ignorance or reckless disregard of the truth, it likely isn't a "knowing" false claim act violation, criminal or civil.

That is generally a true statement.  For contractors, the government usually does not pursue criminal false claims act remedies because you cannot put a corporation in jail and the government must prove its assertions beyond a reasonable doubt.  As a result, corporate contractors are usually faced with civil false claims act complaints.  Note that a claim can be false without the contractor facing liability because the act requires a knowing submission of a false claim.  As you indicated, if a false claim is not submitted knowingly, there is no liability.

@hallowed

In thinking more about this you may want explore "improper awards of government contracts" in your research.  Like unauthorized commitments there is case law with regard to a contractor's rights when the government's award is improper.  Could help with you further conversations with APTAC folks and legal counsel.

On 12/29/2018 at 4:54 AM, hallowed said:

@joel hoffman @Don Mansfield

I looked at my award contract again. It’s not a set aside. Doesn’t it mean that it’s an unrestricted solicitation?

So it doesn't include FAR 52.219-6?

On 12/26/2018 at 2:32 PM, hallowed said:

Yes they were set aside for small business...

1

52.219-6 is a common set-aside clause (for total SB set-aside), but there are a few others for HUBZone, SDVOSB, WOSB, and other sorts of small business set-sides.  I would ask for a listing of all Part 19 clauses in both the solicitation and in the contract (or purchase order) -- everything FAR 52.219-__ or DFARS 252.219-__.

On 12/31/2018 at 8:10 PM, Don Mansfield said:

So it doesn't include FAR 52.219-6?

No it doesn’t. One of them includes both far 52.219-6 and dfars 252.225-7002 which are contradicting clauses but the other one doesn’t have the far but dfars 252.225-7001 and 7002 only.

I understand if they tell me not to quote for set asides again but don’t i have the right to compete for unrestricted ones?

On 12/31/2018 at 9:12 PM, ji20874 said:

52.219-6 is a common set-aside clause (for total SB set-aside), but there are a few others for HUBZone, SDVOSB, WOSB, and other sorts of small business set-sides.  I would ask for a listing of all Part 19 clauses in both the solicitation and in the contract (or purchase order) -- everything FAR 52.219-__ or DFARS 252.219-__.

I never quote for hub zone, 8(a), woman owned set asides. The reasons made me quote for total sb were dfars 252.225.7001 and 7002. I interpreted these as if they existed to allow me offer foreign products.

hallowed said:

No it doesn’t. One of them includes both far 52.219-6 and dfars 252.225-7002 which are contradicting clauses but the other one doesn’t have the far but dfars 252.225-7001 and 7002 only.

I understand if they tell me not to quote for set asides again but don’t i have the right to compete for unrestricted ones?

I don't know why you wouldn't, but I don't have the solicitation. Maybe there is some other reason. I think you should ask the contracting officer.

On 1/2/2019 at 8:37 PM, Don Mansfield said:

I don't know why you wouldn't, but I don't have the solicitation. Maybe there is some other reason. I think you should ask the contracting officer.

I’ve asked for the reason several times. The only reason was because i didn’t comply with dla master solicitation’s domestic product rule. That’s ok. But still they refuse to unlock my account to let me compete for unrestricted solicitations. 

Don, i appreciate if you answer these questions to make things clear for me:

1. Are all solicitations -without a set aside code- unrestricted?

2. Can a contract officer include clauses in unrestricted solicitations to exempt small businesses? Which parts should i pay attention to avoid any mistakes in the future?

Thank you..

hallowed said:

Don, i appreciate if you answer these questions to make things clear for me:

1. Are all solicitations -without a set aside code- unrestricted?

2. Can a contract officer include clauses in unrestricted solicitations to exempt small businesses? Which parts should i pay attention to avoid any mistakes in the future?

1. I don't know what you mean by set-aside "code". If the solicitation doesn't contain FAR 52.219-6, then it's not a small business set-aside. 

2. That would be a first. Pay attention to FAR clauses in a solicitation that start with "52.219-" and contain the word "set-aside" or "8(a)" in the title. Don't respond to those solicitations.

@hallowed,

Just stumbled across this at DFARS 225.872-3(a):

Quote

Except for items developed under the U.S./Canadian Development Sharing Program, use the criteria for soliciting and awarding contracts to small business concerns under FAR Part 19 without regard to whether there are potential qualifying country sources for the end product.  Do not consider an offer of a qualifying country end product if the solicitation is identified for the exclusive participation of small business concerns.

@Don Mansfield

Don,

I need a quick answer for a question if you don’t mind.

My business office is in Florida which is my residence address and my orders are being manufactured by a company located overseas.

So for unrestricted solicitations, while filling the quotation form on dibbs, does it make any difference to bid as manufacturer or dealer? I mean am i considered a manufacturer since i don’t have a facility here? Because when i select the dealer option, it asks for the cage code or the address of the actual manufacturer and none of the overseas companies have a cage code. Does a company need to have its own facility to be considered a manufacturer? How do contract officers evaluate this subject?

My advice:  Tell the truth. 

Clearly, based on what I read, you are not a manufacturer of these items.

Even if the acquisition is unrestricted (not a set-aside), there may be other clauses that care about the place of origin of the items.  Buy American, Trade Agreements, Balance of Payments, Duty Free Entry, and Restrictions on Certain Foreign Purchases come to mind, but I don't know what clauses are included in your solicitation.

@hallowed

What ji20874 said.

On ‎3‎/‎31‎/‎2019 at 9:35 AM, hallowed said:

my orders are being manufactured by a company located overseas.

Do you own the overseas company?  If not, how could you be a manufacturer under these circumstances?

Retreadfed said:

Do you own the overseas company?  If not, how could you be a manufacturer under these circumstances?

That’s what i want to know. I may be wrong but i don’t think that i’m a dealer also because i don’t buy the products from the manufacturer and then sell them. I give them the specs and they produce the items for me.

I don’t want to make a mistake and get into trouble. That’s why i’ve asked which option i should select.

Not claiming to be an expert here. One requirement of the Walsh-Healy Public Contracts Act is that the supplier certify that they are either the manufacturer or a regular dealer. 

The PCA does not apply to certain contracts, including...

Items bought on the open market (commercial items).

“Supplies manufactured outside the U.S. (including Puerto Rico) or the Virgin Islands...”

On 4/2/2019 at 3:05 AM, hallowed said:

That’s what i want to know. I may be wrong but i don’t think that i’m a dealer also because i don’t buy the products from the manufacturer and then sell them. I give them the specs and they produce the items for me.

I don’t want to make a mistake and get into trouble. That’s why i’ve asked which option i should select.

So, are you acting as a broker for the foreign manufacturer?  Are you the seller to the government or is the manufacturer? You said that the manufacturer produces the items for you.

The definition of broker can include a seller or one who acts as an agent for the manufacturer from what I’m reading in Google searches. But that doesn’t qualify it as a supply contractor to the government. 

This isn’t a set-aside, so the non-manufacturer rule or exceptions aren’t applicable - I think. At any rate, the manufacturer would have to be a small business in the US under those rules. 

None of those rules override any other restrictions, like BAA, etc. 

However, I freely admit that I am confused.🤪

joel hoffman said:

Not claiming to be an expert here. One requirement of the Walsh-Healy Public Contracts Act is that the supplier certify that they are either the manufacturer or a regular dealer. 

The PCA does not apply to certain contracts, including...

Items bought on the open market (commercial items).

“Supplies manufactured outside the U.S. (including Puerto Rico) or the Virgin Islands...”

So, are you acting as a broker for the foreign manufacturer?  Are you the seller to the government or is the manufacturer? You said that the manufacturer produces the items for you.

The definition of broker can include a seller or one who acts as an agent for the manufacturer from what I’m reading in Google searches. But that doesn’t qualify it as a supply contractor to the government. 

This isn’t a set-aside, so the non-manufacturer rule or exceptions aren’t applicable - I think. At any rate, the manufacturer would have to be a small business in the US under those rules. 

None of those rules override any other restrictions, like BAA, etc. 

However, I freely admit that I am confused.🤪

I’m confused, too I bid for dla non set-aside solicitations and if i get the award, i give the product specs to the manufacturer to produce the items and then ship the items to the destination. No problem with this part. Everything is within the scope of dla master solicitation. 

There are no pre-manufactured items to buy and sell. They’re made upon my request, based on the specs cited in the contract. The manufacturer works as a subcontractor (as stated in the contract). I may be wrong but that’s why i say i’m not a dealer.

And according to the posts above i’m not a manufacturer either because i don’t have a manufacturing facility. There’s no clear definition regarding this situation.

Are they government spec’d assemblies , govt provided designs, your designs or what? Or are they Commercially sold items ?

The distinction between manufacturer and dealer has its basis in the Walsh-Healey Public Contracts Act that Joel introduced above.  Under that Act, a contractor had to be either (a) a manufacturer of the items being supplied, or (b) a regular dealer of the items being supplied.  The purpose was to make brokers ineligible to participate in the procurement.  It looks like you are a broker.

But being a broker might be okay.  I don't know if the Walsh-Healey Public Contracts Act applies to your solicitation.  I don't think it applies to commercial items.  If Walsh-Healey does apply, I understand the law was amended somewhere along the way to change "manufacturer or regular dealer" to "supplier" in most cases.  As I understand, the only places where it makes a difference is those market sectors where the Department of Labor has issued rules for definitions.  I know DOL has issued rules defining manufacturer and regular dealer in certain petroleum sectors, and offerors there have to qualify as one or the other according to those rules -- brokers are not allowed.  I don't know what market sector you are in, and I don't know if DOL has promulgated definitions for that sector.

Remember, we're trying to be helpful to you as practitioners -- we're not lawyers -- you cannot over-rely on what we say here.

joel hoffman said:

Are they government spec’d assemblies , govt provided designs, your designs or what? Or are they Commercially sold items ?

Joel they’re all commercial items. Available on the market sold by various manufacturers or allowed to be manufactured from scratch.

ji20874 said:

The distinction between manufacturer and dealer has its basis in the Walsh-Healey Public Contracts Act that Joel introduced above.  Under that Act, a contractor had to be either (a) a manufacturer of the items being supplied, or (b) a regular dealer of the items being supplied.  The purpose was to make brokers ineligible to participate in the procurement.  It looks like you are a broker.

But being a broker might be okay.  I don't know if the Walsh-Healey Public Contracts Act applies to your solicitation.  I don't think it applies to commercial items.  If Walsh-Healey does apply, I understand the law was amended somewhere along the way to change "manufacturer or regular dealer" to "supplier" in most cases.  As I understand, the only places where it makes a difference is those market sectors where the Department of Labor has issued rules for definitions.  I know DOL has issued rules defining manufacturer and regular dealer in certain petroleum sectors, and offerors there have to qualify as one or the other according to those rules -- brokers are not allowed.  I don't know what market sector you are in, and I don't know if DOL has promulgated definitions for that sector.

Remember, we're trying to be helpful to you as practitioners -- we're not lawyers -- you cannot over-rely on what we say here.

I don’t think that PCA applies because they are all commercial items. My sector is fabricated metal products like bolts, nuts, washers etc. 

And no i don’t over-rely on your posts. Just want to get various aspects from all who wants to participate. Learning new stuff is always fun. Thank you all for spending your valuable time to reply my questions. I appreciate your help.

On 3/31/2019 at 8:35 AM, hallowed said:

@Don Mansfield

Don,

I need a quick answer for a question if you don’t mind.

My business office is in Florida which is my residence address and my orders are being manufactured by a company located overseas.

So for unrestricted solicitations, while filling the quotation form on dibbs, does it make any difference to bid as manufacturer or dealer? I mean am i considered a manufacturer since i don’t have a facility here? Because when i select the dealer option, it asks for the cage code or the address of the actual manufacturer and none of the overseas companies have a cage code. Does a company need to have its own facility to be considered a manufacturer? How do contract officers evaluate this subject?

Hallowed, I suggest contacting the procurement technical assistance center and ask them. 

The PCA is inapplicable to commercial item purchases.  So you can ask if there another reason that you would have to identify as either a dealer or manufactuter.

On ‎3‎/‎31‎/‎2019 at 9:35 AM, hallowed said:

when i select the dealer option, it asks for the cage code or the address of the actual manufacturer

hallowed, as I understand DIBBS, it does not require the manufacturer to have a CAGE code.  What it asks the dealer to provide is either the CAGE code for the actual manufacturer or if the manufacturer does not have a CAGE code you are to provide the name and address of the manufacturer.  Thus, the fact that the manufacturer does not have a CAGE code should not mean you cannot assert that you are a dealer and provide the information required by DIBBS.

Having worked at DLA several years ago, I know that this is a particularly sensitive issue in regard to industrial fasteners because of what was known as the counterfeit bolt scandal where equipment failed and there were deaths of military personnel.  In addition, the failure of such products caused deadly industrial accidents.  Not being able to identify the actual manufacturer of these products poses a risk to operational readiness and personal health and safety.

Retreadfed said:

hallowed, as I understand DIBBS, it does not require the manufacturer to have a CAGE code.  What it asks the dealer to provide is either the CAGE code for the actual manufacturer or if the manufacturer does not have a CAGE code you are to provide the name and address of the manufacturer.  Thus, the fact that the manufacturer does not have a CAGE code should not mean you cannot assert that you are a dealer and provide the information required by DIBBS.

Having worked at DLA several years ago, I know that this is a particularly sensitive issue in regard to industrial fasteners because of what was known as the counterfeit bolt scandal where equipment failed and there were deaths of military personnel.  In addition, the failure of such products caused deadly industrial accidents.  Not being able to identify the actual manufacturer of these products poses a risk to operational readiness and personal health and safety.

I think you misunderstood me. My company has a cage code. Actually i’m working as a regular viable company with all required registrations including cage, duns, ein etc. The problem is my company is working as a supplier. I find the material, buy it and then give it to the manufacturer located overseas to produce the items. The only difference between my company and a regular manufacturer is i don’t have my own facility but use other manufacturers as subcontractors (which is allowed by the contracts)

All products are %100 compatible with drawings, specs and quality required by the contract. Also, i have professional craftsmen and quality control staff working for me. 

My confusion is, can i -as a supplier- be considered a manufacturer since i buy all materials and hire a subcontractor to produce stuff. If not i must bid as a dealer but İ’m also not a dealer because i don’t buy a pre-manufactured product from a company to sell. Yes, the subcontractor is the manufacturer but there are no products readily available until i want them to make. Since there’s no option to bid as a supplier, i don’t know which of the two options are suitable for me. 

Normally my company gives manufacturing and supply service to non-government regular customers. But this is DoD and things work different i guess.

PS: I’m not asking these questions regarding small business set-asides. I know everything must be domestic if it’s a set-aside. I’m competing for non set-aside solicitations only.

Can you give us an example of the NAICS code assigned to an acquisition that you would typically submit a quote on?  Also, what NAICS code(s) have you listed for your company in SAM?

Also, is a trademark stamped on the bolt heads?  If so, whose trademark is it, yours or the manufacturers?

Automated systems don't always make sense, and they aren't always designed right.  Maybe DIBBS isn't smart enough to know that the items here are commercial items and that Walsh Healey doesn't apply to commercial items, so it asks the question for every solicitation.  The Federal Acquisition Streamlining Act of 1994 eliminated the requirement for an offeror to certify whether it was a regular dealer or manufacturer of the items being supplied, but maybe DIBBS didn't get the word.

Anyway, since the manufacturer and regular dealer distinction comes from the original Walsh Healey Public Contracts Act , it seems that you would be counted as a broker under the original Walsh Healey -- that is, neither a manufacturer nor a regular dealer.  I think old SBA 8(a) rules required 8(a) contractors to be regular dealers or manufacturers, but they renumbered their regulations a while back and I can't tell anymore.

ji20874 said:

Automated systems don't always make sense, and they aren't always designed right.

I don't doubt that this is true.  However, for the items in question and based on my experience with counterfeit bolts, I believe that DLA wants to know who the actual manufacturer of those items is.  From the choices available in DIBBS, I would choose dealer and then identify the actual manufacturer.  If hallowed claims to be the actual manufacturer, but his supplier pulls a fast one and gives him bad bolts, e.g., knockoffs from China (or Germany where the bad bolts I dealt with came from), hallowed can be in trouble for product substitution which generally involves a violation of several criminal and civil statutes.

Retreadfed said:

Can you give us an example of the NAICS code assigned to an acquisition that you would typically submit a quote on?  Also, what NAICS code(s) have you listed for your company in SAM?

Also, is a trademark stamped on the bolt heads?  If so, whose trademark is it, yours or the manufacturers?

331315 and 332722 are the two naics codes i usually quote for which are also listed for my company on SAM.

There are some solicitations where a trademark or name of the manufacturer should be stamped on products but i haven’t received that type of contract yet.

ji20874 said:

Automated systems don't always make sense, and they aren't always designed right.  Maybe DIBBS isn't smart enough to know that the items here are commercial items and that Walsh Healey doesn't apply to commercial items, so it asks the question for every solicitation.  The Federal Acquisition Streamlining Act of 1994 eliminated the requirement for an offeror to certify whether it was a regular dealer or manufacturer of the items being supplied, but maybe DIBBS didn't get the word.

Anyway, since the manufacturer and regular dealer distinction comes from the original Walsh Healey Public Contracts Act , it seems that you would be counted as a broker under the original Walsh Healey -- that is, neither a manufacturer nor a regular dealer.  I think old SBA 8(a) rules required 8(a) contractors to be regular dealers or manufacturers, but they renumbered their regulations a while back and I can't tell anymore.

If Walsh Healey doesn’t apply for commercial items and the items i’m submitting quotes for are commercial items, how am i being considered a broker? I didn’t get it.

Retreadfed said:

I don't doubt that this is true.  However, for the items in question and based on my experience with counterfeit bolts, I believe that DLA wants to know who the actual manufacturer of those items is.  From the choices available in DIBBS, I would choose dealer and then identify the actual manufacturer.  If hallowed claims to be the actual manufacturer, but his supplier pulls a fast one and gives him bad bolts, e.g., knockoffs from China (or Germany where the bad bolts I dealt with came from), hallowed can be in trouble for product substitution which generally involves a violation of several criminal and civil statutes.

This is an important point you’ve mentioned. I wouldn’t like to get involved in a situation regarding violation or faulty items. Choosing the dealer option seems to be the most reasonable way. DLA might claim that i’m not the actual manufacturer but they can’t do the same thing for being a dealer.

hallowed said:

If Walsh Healey doesn’t apply for commercial items and the items i’m submitting quotes for are commercial items, how am i being considered a broker? I didn’t get it.

I did not say you are considered a broker.  I merely allowed that under the original Walsh Healey, you would be counted as a broker.  I said that Walsh Healey has been changed since then, and I also said Walsh Healey doesn’t apply to commercial items.  I did this trying to explain where the distinction between regular dealer and manufacturer arose.  But I did not say that you are a broker under today’s rules.

ji20874 said:

I did not say you are considered a broker.  I merely allowed that under the original Walsh Healey, you would be counted as a broker.  I said that Walsh Healey has been changed since then, and I also said Walsh Healey doesn’t apply to commercial items.  I did this trying to explain where the distinction between regular dealer and manufacturer arose.  But I did not say that you are a broker under today’s rules.

My misunderstanding. Sorry 🙂