This update focuses on the minimum wage for federal contracts by executive order, and a GAO case in which the Department of Defense was not required to extend the deadline on a contract for a competency review by the SBA.
Notice of Rate Change for Annual Minimum Wage for Covered Federal Contracts
On February 12, 2014, President Obama signed Executive Order (EO) 13658, which established a minimum wage paid by contractors to workers performing on covered contracts to $10.10 per hour. This minimum wage began on January 1, 2015. What this EO also did was allow annual increases in the minimum wage beginning January 1, 2016—the amount to be determined by the Secretary of Labor in accordance with the EO. The Secretary is required to provide notice to the public of the new minimum 90 days before the rate takes effect. Notice has now been given that beginning on January 1, 2016, the EO minimum wage rate for covered federal contracts is going to be $10.15 per hour and for tipped employees $5.85 per hour. Here is a link to the Federal Register regarding this subject.
GAO Holds Department of Defense is NOT Required to Extend Deadline For SBA Review
GAO Decision B-411303.2 (Sept. 2015)
A protest that the contracting officer improperly denied a request by the SBA for additional time to consider issuing a certificate of competency is denied where the protester has not shown that the contracting officer’s action was affected by fraud or bad faith (a very high burden to demonstrate, in this commentator’s opinion).
This case has a little bit of a twist. The protester did not have a final security clearance at the time of contract award (only interim) and was determined ineligible. The protester asked the contracting officer to refer the matter to the SBA because non-eligibility of a small business firm, in this case a small disabled veteran owned business, should be referred to the SBA for a Certificate of Competency (COC) determination. The SBA has 15 days to make those determinations and the contracting officer must withhold award during that time (and any extension agreed to by the contracting officer and the SBA). If the COC timeframe is not extended, the contracting officer is directed to make award to the next firm in line. FAR 19.602-4(c).
In this case, no extension was granted by the contracting officer, although asked for by the SBA, and the contracting officer awarded to the next in line. What is interesting is that the security clearance was still not issued, according to the record, and that could not have been corrected by the SBA through the COC process (maybe waiting for the final to come through during this time??). Thus, the argument was stronger that the contracting officer was not acting with bad faith or fraudulently, but within his sound discretion, when he denied the extension for the COC and awarded to the next bidder.
Even though this is a slightly odd case, be aware that there is a ticking clock on COC determinations and even if the SBA asks for an extension, the contracting officer is generally well within his/her discretion in deciding whether to award such an extension.