Jacques

Whatever you may think of the merits of self-certification for small business programs, I think the Inspector General's comment was directed to the wrong audience.  If you don't want Government contracting officers to be able to rely on self-certifications prepared by offerors, a rule change at the very least is needed.  Under 15 U.S.C. 637(m)(5), made applicable to the SDVOSB preference through 15 U.S.C. 657f(d), "In carrying out this subsection, the Administrator [of the SBA] shall establish procedures relating to--(i) the filing, investigation, and disposition by the [Small Business] Administration of any challenge to the eligibility of a small business concern...."  Those SBA procedures appear in 13 CFR Part 125.

If you believe government contracting officers should be protesting status more to the SBA, there is something the DAR Council or FAR Council could potentially do.  The SBA's regulation doesn't provide a standard for when the contracting officer should protest an awardee's status, beyond the following:  "A protest merely asserting that the protested concern is not an eligible SDVO SBC, without setting forth specific facts or allegations is insufficient."  13 CFR 125.28(b).  Perhaps FAR 19.307 could be changed to provide some guidance, or at least to acknowledge that contracting officers can protest.  See 13 CFR 125.27.  The change might be as simple as borrowing language from FAR 4.2103(a), which suggests the contracting officer should NOT rely on that specific representation where, as fate has it, "the contracting officer has reason to question the representation."  While this probably wouldn't amount to a substantive change to FAR 19.307, it could potentially raise awareness.  I suspect almost any competent Government contracting officer, if she had reason to question whether an offeror qualified as a SDVO SBC, would elevate the issue.  Unless some fact comes to the attention of the Government that triggers a duty of inquiry, the Government should be allowed to rely on the offeror's representation that it qualifies as a SDVO SBC.  The accuracy of that representation is first and foremost the responsibility of the offeror.

The IG report makes a couple references to the VA Center for Verification and Evaluation (CVE).  Given the IG report's repeated claims that failing to verify the accuracy of offeror representations amounts to inadequate controls, I worry the authors think DoD can do what the VA has done.  The VA has statutory authority for its database and the use of that database (codified at 38 U.S.C. 8127) that DoD does not have.  Absent other facts, a concern not being listed in the VA's database likely would not trigger a duty of inquiry.  Not every SDVO SBC does business with the VA. 

Compounding the problem of a poorly conceived and executed audit report is that not everyone sees through it.  See the letter from a Congressman to Secretary Esper linked in a press release here.

I wonder how common it is for the GAO to suspend the deadline for the agency report because of a dismissal request.  I saw that in Latvian Connection LLC--Recons., B-415043.3, Nov. 29, 2017, 2017 CPD ¶ 354 and in The Sandi-Sterling Consortium--Costs, B-296246.2, Sept. 20, 2005, 2005 CPD ¶ 173--cited in the instant decision--but my impression is that suspending the deadline for the agency report isn't all that common.

@Don Mansfield is right.

The OP is not the first person to make this mistake.  See, e.g., Congressional Research Service Report R42826, "The Federal Acquisition Regulation (FAR):  Answers to Frequently Asked Questions," Nov. 16, 2012 (repeating the error at text surrounding note 44).  However, it is a mistake nonetheless.  See also 5 U.S.C. 553(a)(2); Essex Electro Engineers, Inc. v. U.S., 960 F.2d 1576, 1581 (Fed. Cir. 1992).

Thanks for the discussion, Don. I’m glad to see you aren’t arguing that simply because the “The ball is squarely in the FAR Council’s court,” that contracting activities must or should proceed as though SBA has not changed its rules, and that everything is sure to work out great. We can agree to disagree about the rest.

Don,

(1) The FAR and the SBA regulations are not in conflict; namely, a PCO can simultaneously comply with both.

(2) Your Federal Register quote isn't even persuasive authority. There is no doubt in the case law as to how a conflict between the SBA regulations and the FAR would be resolved where the statute being interpreted or implemented is the Small Business Act (here, its section 15(j)(1)). This is a non-issue, though. See #1.

(3) To suggest there are "procedural hurdles" that warrant sitting on one's hands is to pretend ignorance on how the FAR Council works. I think we can predict with reasonable certainty what the FAR case is going to look like. All it is going to do is revise FAR 19.000( b ) and make minor tweaks to prescriptions.

(4) The contracting office wouldn't be the office making set-asides mandatory; set-asides of contracts over the micropurchase threshold and under SAT already are mandatory by virtue of SBA's change to its rule. The SBA's rule already went through the rulemaking process. I'm not suggesting that a contracting office issuing the memo discussed in an earlier post is engaged in rulemaking. In fact, I'm saying the opposite.

Is your suggestion to PCOs and their bosses who are facing with this issue today that they NOT set asides these actions, wait for the protest, and then take corrective action? If a PCO knows how to take corrective action, then the PCO already knows what to do, and doesn't have to wait for the protest. If you aren't advocating for corrective action, are you suggesting that requiring activities should just go without their requirements because the rules aren't laying as flat as you would like?

Don,

It doesn't seem like it would be very hard to get around the limitation in FAR 1.401(f) here. The contracting office's memo could simply state (or the contracting office could later argue in the face of any challenge) that the memo did not represent new policy, but represented a reminder to follow existing policy and rules, which includes complying with all applicable regulations. (To put it in the language of FAR 1.401(f), the memo does not "govern the contracting process or otherwise control contracting relationships.") Rather, the memo could simply (1) acknowledge the SBA's revision to its regulations (which is what "governs" and "controls"), (2) discuss the impact of that revision, and (3) provide useful guidance on the steps one might take to comply.

Don't get me wrong. I'm not advocating that the FAR Council do nothing. Rather, I'm saying that PCOs don't have to (and competent PCOs should not) sit on their hands waiting for the FAR Council to act. It would be a total failure of leadership by the contracting chain of command for it to rely on FAR 1.401(f) to justify why it did nothing in the face of PCOs struggling.

I know your focus is on the FAR Council, so I'm not claiming you're advocating that the contracting chain abdicate its responsibility. I would offer the Serenity Prayer might be informative here: "God, grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference." Here, PCOs and their bosses don't need serenity, they need courage.

Don, you write COs "are not required" to set aside acquisitions for small businesses overseas. I don't understand what you mean. Are you saying that failing to comply with the Small Business Act (as interpreted by the SBA) or failing to comply with SBA regulations is not a valid protest ground? Doesn't the statute and reg relate to procurement? You might want to take a look 4 CFR Part 21 and a number of GAO protests, including BGI-Fiore JV, LLC, B-409520, May 29, 2014, 2014 CPD ¶ 160, which seems to be grounded on the agency's failure to comply with SBA regulations.

While you're at it, you might want to look at Hawpe Constr., Inc. v. U.S., 46 Fed. Cl. 571, 582 (2000). Since the heart of what is at issue is what the Small Business Act means, I'm pretty sure the SBA's regulations would prevail, even if the FAR conflicted (which--I continue to maintain--it doesn't).

My point is you haven't explained very well (IMHO) the basis underlying your statement, "Overseas COs must deviate from the FAR to comply with the

Small Business Act and SBA regulations." If I have to have an affirmative point of my own, it is expressed in my prior post, which is, "A PCO can simultaneously comply with the new SBA regulation and FAR 19.000( b ), because FAR 19.000( b ) does not require a PCO do anything or refrain from doing anything."

It is not my desire to divorce this conversation from its context, which includes SBA's change to its regulation discussed in your blog post (13 CFR 125.2). You seem to believe a PCO is faced with two irreconcilably conflicting authorities--that is, two authorities with which the PCO cannot simultaneously comply (or cannot simultaneously comply without, in your words, a deviation). I do not; or at least you haven't convinced me yet why I'm wrong (understanding you're not obligated to do so).

I disagree that FAR 19.000( b ) would be "rendered meaningless" by a PCO excluding sources under FAR Subpart 6.2 in this context. The Part applies when it does. In other words, when it applies, compliance is mandatory. When it does not apply, it simply does not apply. It does not follow that because the Part does not apply, compliance with the opposite is somehow mandatory.

Put differently, a PCO can simultaneously comply with the new SBA regulation and FAR 19.000( b ), because FAR 19.000( b ) does not require a PCO do anything or refrain from doing anything.

The State Department did not need a class deviation when it revised DOSAR 619.000( b ) to provide, "Contracts awarded overseas should comply on a voluntary basis [with FAR Part 19 as supplemented], where practicable."

You write, “Using the policies and procedures of FAR subpart 19.5 outside the United States and its outlying areas would be a deviation (as defined in FAR 1.401(a)) from FAR 19.000( b )....” I couldn’t disagree more. FAR 1.401(a) requires that the use be “inconsistent with the FAR.” To be "inconsistent with the FAR" would require that the agency was doing something prohibited by the FAR or refraining from doing something required by the FAR. Again, silence isn’t enough.

I don't understand your comment on the provisions and clauses and would just as soon not go down this rabbit hole. It is perhaps sufficient for me to ask, under your reading of FAR 1.401(e), would a PCO require a deviation in order to use one of the clauses at FAR 52.217-3 through 52.217-9 in a contract for research and development, as none of them are prescribed?

Don,

By your logic, a contract for research and development can't include options (at least without a deviation). See FAR 17.200 (FAR Subpart 17.2 does not apply to contract for, e.g., research and development services). I understand FAR 17.200 includes the sentence, "However, it does not preclude the use of options in those contracts." Are you suggesting that if FAR 17.200 did not include that sentence, use of options in R&D contracts would be precluded? What does FAR 1.102(d) & 1.102-4(e) mean to you?

Let me ask my question a different way, because you haven't answered it. Put yourself in the shoes of a contracting officer awarding a contract outside the United States who wanted to award in a manner consistent with SBA regulations. What would the deviation package look like? Please include in your answer a discussion as to which part of the definition of "deviation" in FAR 1.401 is implicated and why. Surely you must be relying on something more than that Part 19 does not apply, which seems to me to equate to silence. I'm not going to infer the existence of a restriction based on silence alone. Doesn't FAR Subpart 6.2 [Edit: Forgive the mental block on simplified acquisition procedures. I don't know why I missed your point on FAR 6.001( a ) above. A potentially valid reference might be to FAR 13.003( b )] give me all the authority I need to not award on the basis of full and open competition (i.e., to award after excluding sources) [Edit: or, rather than phrasing it in Part 6 terms, to reserve the award for small business concerns]?

Bottom line: I think you're bootstrapping.

Don,

(1) You write, "Overseas COs must deviate from the FAR to comply with the Small Business Act and SBA regulations." How so? If the PCO complies with SBA regulations, from what express language of the FAR is the PCO deviating?

(2) I'm much more interested in your answer to #1 than your thoughts on #2. That said, it seems to me a PCO could, consistent with the FAR, set aside a contract action for small business concerns under FAR 6.203. The PCO could, in so doing, and in reliance on FAR 6.203( c ), follow the policies and procedures in Subpart 19.5 in doing so, despite FAR 19.000( b ). What am I missing?

Don,

Sorry for the late comment. Could it be that the Councils envisioned that offerors, rather than the Government, would provide questionnaires to potential references? Under such a theory, could it be that the Councils believed either (1) the past performance information is already covered under an existing OMB control number; or (2) that such an approach would not qualify as "sponsoring" a collection of information under 5 CFR 1320.3(d)?

Whatever the merits of the arguments, it seems clear to me that the FAR acknowledges the possibility of obtaining past performance data (e.g., FAR 13.106-2( b )(3)(ii)( B ) and obtaining it from sources outside the Federal Government (e.g., FAR 12.206). It also seems to me that a contracting officer should be allowed to take some comfort from FAR 1.106, which states in part, "The information collection and recordkeeping requirements contained in this regulation have been approved by the OMB." In other words, an individual PCO does not need to reinvent the wheel with every solicitation issued.