Prime Contractor's Abuse of Subcontractors and Suppliers
Defense News is reporting the “US Air Force aims to lower F-35 sustainment costs to that of an F-16”. If this is the case the F-35 program will be financially challenged to the extent that Lockheed and Northrup Grumman will have a very difficult time maintaining their profit margins. The ultimate impact will be felt by all suppliers and subcontractor that currently support the F-35 program and any other program within Lockheed or Northrup Grumman.
Suppliers and subcontractors need to be aware that Lockheed and/or Northrup do not have the absolute right to change your costs, accounting procedures, reduce your profit, change your manufacturing processes or utilize the Federal Acquisition Regulations or other regulations as a weapon to force you to reduce your costs. These types of unsupported actions should be dealt with promptly in order to avoid abusive tactics and protect your company.
Border Wall Concerns and Issue (USA Today) - 'Not a serious process': Bidders question handling of border-wall project
M3 Federal is relied upon, by USA Today, in support of the concerns and problems impacting Trump’s border wall project. Contractors that have put forth bids are complaining about the lack of adequate competition and fair consideration of proposals as only major well know contractors are getting the work. The Government’s failure to follow regulatory procedural protocols could jeopardize the integrity of the federal procurement process. For more information go to the USA Today and read the article - https://www.usatoday.com/story/news/nation-now/2017/05/09/not-serious-process-bidders-question-handling-border-wall-project/315253001/
If you have any questions contact Patrick Malyszek via email at firstname.lastname@example.org
Defense Travel Management Office (DTMO) – Contract Award H98210-18-C-0003
With a great deal of effort and attention to detail M3 Federal has guided another client to a successful contract award. Our client Dinova will be providing management support services for the DTMO’s commercial Preferred Dining Program (PDPP) which currently manages over $1 billion annually on meal per diem. Dinova will be assisting in the management of the PDPP and will apply their extensive proprietary knowledge to produce major savings for the Department of Defense and its military and civilian personnel.
To see the services offered by M3 Federal visit our website at www.m3federal.com
Performance and Payment Bonds
It’s not uncommon for the Government to invoke a Contractor’s performance or payment bond for Government caused defects related to Government supplied defective specifications, ambiguous specifications, oral change orders, unilateral modifications, forced delays, stop work orders, failure to respond to requests for information, plus a host of other contract problems caused by the actions of the Government.
When these or other issues arise, Contractors and bonding company must be aware of the rights and obligations of the Government, Contractors, and bonding companies. In most cases the Government’s actions against the Contractor and bonding companies is unjustified and steps can be taken to reverse these deleterious actions.
So Contractors and bonding companies, such as, Chubb, U.S. Specialty Insurance Co., Colonial, Trust Brunswick, Great American, Travelers, and others have a reliable resource to protect against improper bond invocation. M3 Federal can provide you a full defense to protect the bond and your reputation.
For more information contact M3 Federal Contract Practice Group, LLC at 607-754-8100.
Ammunition Containers – M592
The Department of State has determined through the submission of a Commodity Jurisdiction that M592 ammunition containers have been classified as EAR99. For further information contact PMalyszek@m3federal.com.
Border Wall Construction – Update (Arizona Republic News Report)
The scope of the Border Wall project, which will cost tax payers over $21 billion dollars, is starting to show signs of the inherent risks associated with a project of this size and the speed of which it is currently moving. As of the date of this article there has been 7 solicitation amends, contractors have expressed concern over the procurement process, there is the potential of pre-award and post award bid protests, along with the potential of claims and disputes. You can find more information by going to the article published by the Arizona Republic.
Ammunition Can – Commodity Jurisdictions
M3 Federal has been successful removing the M19A1 and the M2A1 off the USML list. The current effort at M3 Federal is to remove the remaining ammunition cans off the USML. This is an extensive effort and therefore M3 Federal is looking for participation from ammunition can manufactures or companies that use ammunition cans during the normal course of business. M3 Federal would like to get industry participation in order to reduce some of the overall administrative burden associated with obtaining an ITAR license. If you would like to participate in this critical effort contact Patrick Malyszek, J.D. at 607-754-8100. For more information go to www.m3federal.com.
If you have other than ammunition cans that you like removed from USML you may contact me at the above phone number.
Border Wall Construction
President Trump’s border wall is a massive project that will involve a major design and installation effort. The speed at which this process is moving will lead to undefinitized specifications, defective performance expectations, and claims/disputes that will plague this contract action for an extended period of time. You can find more information by going to the article published by the Arizona Republic at http://www.azcentral.com/story/news/politics/border-issues/2017/03/30/what-we-now-know-donald-trump-border-wall/99844884/.
For more information contact M3 Federal at www.m3federal.com
Department of State Repeals Ammunition Can (Ammo Can) Determination
The Department of State, on September 12, 2016, made a determination that all ammunition storage containers (ammo cans) were subject to International Traffic in Arms Regulations (ITAR) per USML Category III(d)(3) and that a Department of State ITAR license was required. This determination had the potential of impacting all suppliers and manufacturers of ammo can in that millions of ammo can have been sold over the years and millions more were being produced and shipped all around the world without a proper ITAR license. To ship ITAR controlled items without the proper license would subject suppliers and manufactures to major fines, potential criminal prosecution, and required the development of internal import/export compliance programs. This is no longer the case.
To mitigate the millions of dollars of damage this would have upon the ammo can industry M3 Federal Contract Practice Group, LLC (www.m3federal.com) challenged the determination and filed an appeal with the Department of State. After months of hard work it has been determined, as of March 28, 2017, that ammo cans do not fall within the jurisdiction of the Department of State per USML Category III(d)(3). Ammo cans fall within the jurisdiction of the Export Administration Regulations (EAR) and controlled by EAR 99. What this means is that a ITAR license is not required and ammo cans can be sold throughout the world as they have been for years.
If you have been damaged in anyway as the result of this improper determination by the Department of State or you would like more information on this issue contact Patrick Malyszek, J.D. at 607-754-8100 or visit www.m3federal.com.
Defense Spending Substantially Increased
The House has approved a $578 billion spending bill which provides the U.S Armed Forces operating capital for the next seven (7) months. This spending bill established the path forward to substantially increase the Pentagon’s budget. The Senate is now preparing and initial $30 billion supplement, which will be one of many supplements. Military spending will continue to increase and it will be critical to get your company prepared to capture the additional procurements that will be released by U.S. Government.
The U.S. Government is in the process of increasing defense spending by nearly $100 billion dollars. In order to bid on and be awarded these contracts, as a prime or subcontractor, it is required by the Federal Acquisition Regulations subpart 4.11 that you are registered with the U.S. Government. In order to be registered you must go to www.sam.gov. This registration process contains a massive amount of regulations.
M3 Federal has been working with www.sam.gov for nearly 40 years. Our subject matter experts can get you registered and fully compliant with all the regulations. The cost to get you registered in only a couple of days is $399.00.
President Trump’s Border Protection (The Great Wall)
The Dept. of Homeland Security, Customs and Border Protection (CBP) has issued pre-solicitation notice 2017-JC-RT-0001 for the design and build of several prototype wall structures in the vicinity of the United States border with Mexico.
This pre-solicitation notice along with the soon to be posted Request for Proposals (RFP) will be a very complex multibillion dollar project that will be fraught with minor and major issues. These issues will involve bid protests, subcontract problems, performance issues, performance disputes, contract disputes, contract claims, default terminations, bond issues plus a host of other problems that will leave some contractors bankrupt and others locked in litigation for years.
It is critical that every prime and subcontractor takes steps now to protect their financial interests as a project that moves this fast will not be definitized to point that a fixed priced can be reliant enough to protect contractor’s performance and financial expectations.
After 40 years in the federal procurement industry the lack of definitization means the CBP (Government) will push a substantial amount of the known and unknown costs on to contractors. This is accomplished through unilateral changes to the contract, added scope work, change in inspection standards, refusal to pay for accepted work, delaying acceptance, and threatening termination to name just a few of the tactics implored by the Government. We know all of the substandard tactics used by the Government and we can protect you.
Contractors both large and small need protection from these types of unwarranted Government actions. In order to obtain this protection the personnel at M3 Federal Contract Practice Group, LLC (M3 Federal) (www.m3federal.com) will work directly with your company to ensure that you are protected and successful.
When M3 Federal is hired, as your consultant, and assists with the development of the proposal and project/contract management we will take all of the necessary steps to defend or submit a bid protest, be compliant with all federal regulations, manage subcontracts, resolve project disputes, resolve project claims/REAs, and bond issues. All of this work is performed at a pre-established fixed fee budget, which allows contractors/clients to minimize their risks and focus upon successful project completion.
The healthcare environment is in the process of changing. The forthcoming changes will mandate a move away from the monopolistic characteristics of the current healthcare providers. It is these providers that have plagued the healthcare industry for decades. The newly proposed healthcare regulations will reduce healthcare costs through the utilization of open market strategies requiring full and open competition.
The competition based healthcare system will be regulated and controlled allowing for vetting of healthcare providers along with having a competitive standard of which all must abide. This competitive system will reduce healthcare costs that will be passed through to the American people.
To be competitive within the new healthcare system your company will have to be compliant with all relevant federal regulations and new standards. If you are not compliant prior to the issuance of the new competitive standards there is a substantial chance that you’re bidding efforts will not produce contract awards or that you will be penalized for not meeting the regulatory standards.
M3 Federal has the knowledge to ensure you will be compliant with the current and newly published standards when submitting proposals or managing your healthcare program. The time to act is now!
For more information you may contact Patrick Malyszek, J.D. via PMalyszek@m3federal.com.
(Defense News) The CEOs for Lockheed Marin and Boeing met Wednesday with president-elect Donald Trump, with Boeing head Dennis Muilenburg offering Trump his personal promise that the Air Force One replacement program will not exceed $4 billion. “
The meeting held between president-elect Donald Trump signals that all subcontractors supporting the Air Force One and F-35 programs will be subject to assertions and unreasonable practices by Lockheed and Boeing to force cost reductions. These cost reductions will impact the subcontractors and not Lockheed or Boeing. For example on the F-35 program Lockheed has set up intermediary buying organization/companies that sells directly to Lockheed. These intermediary companies are selling F-35 products, produced by F-35 subcontractors, back to Lockheed with a 56% profit margin. These type of practices are increasing the cost of the F-35 program.
The bottom line is that you must be aware of these tactics and understand how to stop these unreasonable practices before they impact your financial viability. For assistance contact M3 Federal Contract Practice Group, LLC at 607-754-8100.