Eckland and Blando LLP

New Regulation Authorizes Federal Contract Awards Only To Those Employers Using E-Verify To Process Employee Work Authorization

Effective September 8, 2009, government contracts will be awarded only to those employers who use E-Verify to check employee work authorization.  In a press release issued today, Department of Homeland Security Secretary Janet Napolitano touted the new policy as a "smart, simple, and effective tool" that will assist in ensuring that federal contractors employ a legal workforce.

E-Verify has handled more than 6 million queries since October 2008, and is able to process over 96% of employment verifications within 24 hours.  Operated by the Dept. of Homeland Security and the Social Security Administration, E-Verify is available at no cost to businesses and may be accessed via the Internet.  The requirement to use E-Verify extends to all federal contractors and subcontractors, including those contractors who receive American Recovery and Reinvestment Act funds.  

It is important for businesses to become familiar with E-Verify before the new rule becomes effective on Sept. 8, 2009.  For more detailed information regarding E-Verify and to view the Department of Homeland Security's press release announcing the Administration's new policy, please visit: http://www.dhs.gov/ynews/releases/pr_1247063976814.shtm.  For questions or additional information, contact Dave Laidig at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

This week the United States Court of Federal Claims denied a pre-award bid protest brought by Totolo/King, a Joint Venture ("Totolo") for a Department of Veterans Affairs ("DVA") solicitation for renovation work at the Harry S. Truman Veterans Memorial Hospital in Columbia, Missouri. The solicitation was issued on an unrestricted basis rather than as a set-aside for small business. Totolo had alleged, among other things, that the DVA failed to conduct meaningful market research to determine whether veteran-owned small businesses were available for the job.

The Court carefully examined Totolo's allegations and analyzed the DVA's obligation to encourage the participation of small business contractors in DVA contracting. Under the Veteran's Benefit Act of 2003, the Court found that DVA is required to set aside contracts exclusively for competition by veteran-owned businesses if (1) the Contracting Officer has a reasonable expectation that two or more veteran-owned businesses will make offers, and (2) the contract can be made at a fair and reasonable price. To meet this obligation, the DVA must conduct reasonable market research. The Court denied the protest upon finding that, where the DVA's pre-solicitation "sources sought notice" resulted in only one response by a veteran-owned business, the DVA's search of businesses registered on www.VetBiz.gov constituted reasonable market research.

Small businesses, including veteran-owned businesses, have in the past successfully challenged the adequacy of a government agency's market research under the Small Business Act. Although the contractor in this case was unsuccessful, the case illustrates the importance for all small businesses seeking work from federal agencies to properly register with such sites as www.VetBiz.gov and the Central Contractor Registration site at www.ccr.gov. All contractors should carefully examine solicitations and contract announcements to determine whether they are required to be set aside for award to small businesses. This case also illustrates that specialized review of agency set-aside decisions is available. Courts will carefully consider granting all appropriate relief, including enjoining improper solicitations and awards..

For additional information or if you have questions on this topic, please contact Tim Connelly at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 612.236.0165.

On May 16th Minnesota Governor Pawlenty signed into law HF1122, the Agriculture and Veterans Affairs Omnibus Bill. The bill amends Minnesota law to provide a bidding preference for businesses owned by veterans and service-disabled veterans competing for government contracts. The new law specifies that the preference may be as high as six per cent but "no less than the percentage awarded to any other group", including minority-owned businesses, woman-owned businesses, and businesses owned by persons with disabilities. The purpose of the new bidding preference is "to facilitate the transition of veterans from military to civilian life, and to help compensate veterans for their sacrifices . . . to the state and nation during their military service, as well as to enhance economic development within Minnesota." A separate section of the new law authorizes the Commissioner of Transportation to set-aside construction contracts for award only to veteran-owned businesses if three veteran-owned businesses are likely to bid.

Mark Ellson, the president of the Minnesota chapter of the Elite SDVOSB Network, a networking and advocacy group comprised of service-disabled veteran-owned small businesses and their affiliates, was instrumental in getting this legislation passed. Tim Connelly of Eckland & Blando LLP testified in favor of the new legislation in the Minnesota legislature. His testimony highlighted the potential of the new law to grow veteran-owned businesses in Minnesota and the economic benefit to the state of having such businesses compete for, and win billions of dollars worth of, federal contracts and subcontracts intended for veteran-owned businesses each year.

Minnesota joins a growing number of states, including Virginia, Florida and California, that have passed similar laws to encourage the establishment and growth of veteran-owned businesses. Every veteran-owned business in Minnesota should become familiar with these new opportunities and watch for the new rules in the coming months.

For additional information or if you have questions on this topic, please contact Tim Connelly at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 612.236.0165.

DoD Revising Important Commercial Item Guidance

Under the Federal Acquisition Streamlining Act of 1994 ("FASA"), Congress required federal agencies to purchase commonly available products and services - "commercial items" - whenever possible and to use simplified procedures in doing so.  Today, the Department of Defense ("DoD") announced that it is revising its Commercial Items Handbook ("the Handbook"), originally written in 2001.  The proposed rewrite is intended to "enhance effectiveness and efficiency" in the DoD commercial item program. 

The Handbook constitutes a useful tool for businesses seeking to sell commercial products and services to the DoD because it contains the DoD's own, internal guidance for commercial item procurements.  For example, the Handbook includes guidance, including a series of helpful checklists, for those DoD procurement officials who make the crucial determination of whether a product or service is entitled to the favorable treatment afforded commercial items.  By understanding this guidance, businesses are better able to market their products and services to defense agencies and their prime contractors under Part 12 of the Federal Acquisition Regulation ("FAR") and other applicable agency rules.         

A draft of the proposed revisions is available for public review and may be accessed at: http://www.acq.osd.mil/dpap/cpic/cp/docs/draftcihandbook_06172009.doc.  The DoD welcomes industry comments on the proposed revisions.  Interested parties may submit comments through July 31, 2009.

For additional information or if you have questions on this topic, please contact Tim Connelly at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 612.236.0165.