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  1. One of the things the Small Business Administration may be best known for is its small business loan programs, such as the section 7(a) and 504 Loan Programs. These programs have been a staple of the small business landscape for quite some time. Unsurprisingly though, there are multiple rules associated with them. Among these myriad rules and requirements, is the determination as to whether a loan applicant is a small business. One of the things that can affect whether a business is small is affiliation with other businesses push that company over the size limit. In a new proposed rule, it appears the SBA plans to dramatically scale back the ways that a business may be seen as affiliated, by practically getting rid of affiliation through “control”–only for for loan purposes, not procurement purposes. As this presents quite a shift in operations, all of us here at SmallGovCon wanted to make sure we have provided you, our readers, a breakdown of these proposed changes to a cornerstone of the SBA. First, it may be good to think about how the SBA got to this point. As you may recall, during the early periods of the COVID-19 Pandemic, the SBA launched the Paycheck Protection Program. That loan program was geared towards helping small businesses through the COVID-19 Pandemic, and eventually the SBA granted ways for businesses to request forgiveness of those PPP loans. As was noted in a previous blog post, here at SmallGovCon, SBA’s affiliation rules related to loan programs, were applied to the PPP and generally were found to be a point of confusion for many working through that program. Well, through a proposed rule, published by the SBA on October 26, 2022, the SBA admits that based on its experiences with the PPP and over time with their other loan programs, SBA may gain some efficiencies by streamlining its process related to loan approval and affiliation rules. Before getting into the meat of the loan program rules related to affiliation, it is important to note that any changes to affiliation regulations for SBA loans DO NOT change affiliation rules related to procurements. For information about that form of affiliation, check out our two part series on affiliation here, and here. Now, let’s get back to our chat about the SBA’s new proposed changes to its loan programs’ affiliation rules. SBA’s loan programs look at affiliation based on 13 C.F.R. § 121.301, to determine if a business is “small” for 7(a) and 504 loans (as well as other loans such as PPP). These rules historically would determine if there were shared ownership, or “control” between businesses (such as shared management). If there was shared ownership or control, meeting the standards of 13 C.F.R. § 121.301, the applicant business would be combined in SBA’s eyes with the affiliate business as one business, and SBA’s determination of whether the business was “small” would be based on the combined receipts or employees of the businesses. Well, with the newly published proposed rule, the SBA is stating that they plan to basically do away with “control” between two businesses as an affiliation factor, seemingly focusing on ownership as the determining factor. SBA states in its proposed rule that determining affiliation based on “control” was burdensome for applicants as well as lenders to understand the requirements, and focusing on affiliation, based mainly on ownership, pretty much captures the aim of the “control” component of affiliation. So, separate “control” factors are no longer necessary. In order to achieve this aim, the SBA is revising multiple sections of 13 C.F.R. § 121.301. 13 C.F.R. 121.301 currently states that a “small business” is one that is independently owned and operated, which is not dominant in its field of operating. As alluded to earlier, when determining if a business fits this definition, any “affiliate” of the company is included with the applicant business to determine the size of the applicant company. So, how affiliation is determined may truly mean the difference between a business being seen as small and receiving a loan, or not. The proposed rule would update the definition of “ownership” in the regulations to remove the principle of control of one entity over another. Additionally, the SBA would clarify in the rules that certain affiliation by ownership will only arise if the applicant business and another business are operating in the same 3-digit NAICS subsector. SBA hopes that this will restrict affiliates to businesses in the same field. Finally, the SBA wants to further update the ownership definition to state that businesses in which the applicant business (or its owners) is a majority owner, are affiliates of the applicant business. If the other business does not have any majority owner (i.e. 51% owner), then SBA will review to see if the applicant business (or its owners) has 20% ownership in a business within the same 3-digit NAICS. If SBA finds this, then ownership affiliation would likely be found between the applicant business and the other business. Additionally, SBA wanted to make it clear, that with its focus on ownership going forward, if there are family members with ownership in companies, the ownership interests of spouses, and minor children will all be combined with the the applicant to determine ownership affiliation. For the SBA loan program affiliation regulations related to Stock Options, Securities and Merger Agreements, SBA states they will be examining businesses with those categories for current effects on ownership, but not control. Also, the affiliation determination based on management will be removed from the regulations, as the SBA believes the decision to hire a management company is a decision best left to the business itself. Additionally, SBA proposes to remove affiliation based on identity of interest, because the SBA states “it is inherently unfair and impractical to require close relatives to provide multiple years’ worth of financial statements for review by a lender and by the SBA when the close relative is not a principal of the applicant business.” Of note, this does not affect the requirement to combine ownership interests of spouses and minor children when determining ownership affiliation. Finally, SBA has stated that they propose to remove affiliation based on franchise and license agreements and will no longer publish the SBA’s Franchise Directory. However, SBA will still request the franchise identifier number and other items from applicants that have franchise and license agreements, when applying for loans under the SBA. Also, the SBA will still look into franchised businesses for affiliation based on ownership like any other applicant. The SBA states in this proposed rule that they hope these changes will help lenders utilize technology and lessen the burden on applicants. It is also important to point out that these affiliation rule changes are not the only things SBA is proposing to change related to its loan programs. For example, the proposed rule also contains a myriad of other changes, including but not limited to, possibly eliminating hazard insurance requirements for 7(a) and 504 loans under $150,000, and allowing the Director, Office of Financial Assistance, to delegate reconsideration requests to a designee. So, even if you are not interested in the changes to the affiliation rules related SBA’s loan programs, it may be worth your time to give this proposed rule a read over your lunch or morning coffee. The SBA is requesting comments by December 27, 2022, regarding this rule, and a link to submitting comments can be found on the Federal Register page for this proposed rule. So, while that may have felt like a whirlwind of information, legalese, and changes, it does truly represent quite a change in how the SBA may look at businesses’ sizes when applying for loans. That being said, this is only a proposed rule at this time, and has quite the way to go through the rule-making process still. So, until the rule is finalized, affiliation based on “control” is still present when applying for loans through the SBA and should be kept in mind when applying for any SBA loan at this time. Here at SmallGovCon, we will of course keep you updated on any other changes proposed by the SBA, as well as other Federal Government Contracting news, and we encourage you to check our blog regularly. Questions about this post? Email us. Needing legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post SBA’s 7(a) and 504 Loans Proposed Rule: Affiliation Based on “Control” Soon to be a Thing of the Past first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  2. Hello, Readers. We hope you had a great week and are all stocked up on candy for Halloween. Every year, during this time, our city has a Zombie Walk downtown and let me tell you, some of them are pretty scary! It’s quite a sight to see a hundred Zombies, big and small, walking around! It’s become a very fun Halloween tradition for many local families. Today’s treat is the week in review. Enjoy your weekend! Update Regarding Executive Order 14042 for Federal Contractors [SafeFedWork]Final Defendant in Conspiracy to Manufacture, Import, and Sell Counterfeit Military Clothing and Gear Sentenced to Federal Prison [DoJ]Navy Officials Say Contractors Outsource Work on Aircraft Carriers, Submarines [ExecGov]Treasury, OMB Report 50% Drop in FY 2022 Deficit; Janet Yellen, Shalanda Young Quoted [ExecGov]Army Solicits Proposals for $975M Follow-On Mission Training Support Contract [GovConWire]DOD Solicits Proposals for $499M Anti-Tamper Tech Development Contract [GovConWire]DARPA Plans Follow-On Technical, Analytical Support Services IDIQ [GovConWire]GSA may have sunk the prospects for its brand new governmentwide contract [FedNewsNet]GSA Eyes 2023 Competition for Alliant 3, OASIS-Plus Contract Vehicles [GocConWire]Navy to break up some big contracts to increase small business participation [FedNewsNet]Maximizing Your MAC, or How to Get Paid: Go-To-Guy Timberlake [BGov]Honeywell to Pay $3.35 Million for Alleged False Claims for Zylon Bullet Proof Vest [DoJ]Former Tribal Official Pleads Guilty to Bribery Scheme [DoJ] The post Week in Review: October 24-28, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  3. One of the key criteria for being a Service-Disabled Veteran-Owned Small Business (SDVOSB) is, as you might expect, that a service-disabled veteran control the company. Under Small Business Administration rules, an agreement similar to a franchise agreement can render an SDVOSB applicant ineligible, because the franchisor restrictions on the actions of the company are too strong. A recent case reminds us of the control imposed by these types of arrangements. The case, Holistic Serendipity LLC, SBA No. CVE-242 (2022), looked at a business that had sought SDVOSB verification from VA. (Note that, as of October 24, 2022, the VA is no longer accepting applications for SDVOSBs–those must go through SBA starting January 1, 2023.) The company (Holistic) sought to “address mental and physical health symptoms with organic hemp products.” Holistic had an Affiliate Agreement, somewhat similar to a franchise agreement, with another company called Native Ceuticals. Based on this agreement, VA’s Center for Verification and Evaluation (CVE) found that Holistic had “restrictions on operational decision making and requires a specific business model.” Some of the items CVE had problems with included the following sections: Control over Holistic’s website and “ability to operate outside a designated location or to set prices higher than the ‘established maximum'” Requiring Holistic “to exclusively sell products created or approved by Native Ceuticals.”Native Ceuticals’ approval for things like “marketing materials”; “product inventory”; “interior design for a store” and “an employee handbook that contains policies and procedures set by Native Ceuticals.” Under SDVOSB rules, veteran “control” means control over both daily business operations, and its long-term decision-making, are conducted by service-disabled veterans. 13 C.F.R. § 125.14. The regulations define “daily business operations” as including, but not limited to, “the marketing, production, sales, and administrative functions of the firm, as well as the supervision of the executive team, and the implementation of policies.” 13 C.F.R. § 125.12. On appeal, SBA Office of Hearings and Appeals (OHA) agreed with CVE, noting that a number of provisions in the Affiliate Agreement restricted actions by Holistic. For instance, Holistic “must ‘not promote, market, offer, or sell any other brand of CBD products in the Store Location or any other location, including without limitation any website or e-commerce, unless approved by [Native Ceuticals] in writing, in its sole discretion.’” This is in addition to the various other restrictions noted above. OHA concluded that these provisions gave Native Ceuticals power to control aspects of Holistic’s “daily business operations”, including “provisions related specifically to Appellant’s marketing, production, sales, and administrative functions and to the implementation of business policies.” The SDVOSB rules, as interpreted by VA and OHA, have long had a problem with franchise and similar agreements like distributor agreements. We’ve discussed those types of agreements before, but it continues to be an issue, as this case demonstrates. SBA’s proposed SDVOSB certification rule is poised to potentially change how SBA interprets the franchise agreements. SBA’s commentary states: “[a]s proposed, SBA control regulations do not address franchise, license, or distributor agreements. SBA is seeking comment as to whether these types of agreements should be addressed” in the SDVOSB rules. “For example, should SBA take a similar approach to the agency’s loan assistance regulations in § 121.301(f)(5)?” That provision states: (5) Affiliation based on franchise and license agreements. The restraints imposed on a franchisee or licensee by its franchise or license agreement generally will not be considered in determining whether the franchisor or licensor is affiliated with an applicant franchisee or licensee provided the applicant franchisee or licensee has the right to profit from its efforts and bears the risk of loss commensurate with ownership. SBA will only consider the franchise or license agreements of the applicant concern. It will be interesting to see if SBA addresses franchise type agreements in the final rule for SDVOSB certification. If not, then SDVOSB applicants must continue to be wary of franchise agreements, distributor agreements, and the like. Questions about this post? Email us. Needing legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Franchise-Type Agreement Sinks SDVOSB Application first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  4. We are pleased to announce that our updated Koprince McCall Pottroff LLC GovCon Handbook, on Joint Ventures, is now available! This handbook–complete with all of the SBA’s important changes from the past couple years–was co-authored by me and Nicole Pottroff as well as firm founder Steven Koprince. It is now available through Amazon at this link. The Joint Venture Handbook is one of our most popular. Joint ventures are a great way for small businesses to partner with other companies and get a competitive edge on federal contracts. But there are many SBA-required components, and SBA is strict in reviewing those compenents. That’s why the Joint Venture Handbook provides a step-by-step, easy-to-understand method for working through the SBA joint venture process. We hope you find it informative. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Koprince McCall Pottroff LLC’s New Joint Venture Handbook Is Now Available! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  5. Happy Friday, Readers! The fall leaves are absolutely beautiful here in Lawrence, Kansas right now. We’ve had our first freeze and the mornings have been quite chilly. As the seasons change in Kansas, our temperatures can fluctuate drastically. One day it’s 80 degrees and the next it’s 20. Those weather apps sure do come in handy to help decide which coat to wear. We hope you had a great week and are enjoying the fall beauty in your area of the world. An announcement was made from the Safer Federal Workforce task force and the Office of Management and Budget releasing guidance to agencies on how to handle vaccine protocols moving forward. You can read more about this and other articles that we found informative below. Enjoy and have a great weekend! White House prepares for partial lift on federal contractor vaccine mandate ban [FedNewsNet]Virginia Man Pleads Guilty to His Role in Government Contract Fraud [DoJ]Administrator Guzman Advances New Small Business Investment Company Reforms to Expand Access, Strengthen and Diversify SBA’s Public-Private Investment Partnership Program [SBA]Pentagon Seeks Information on Updated AI Talent Procurement Contract [ExecGov]Intelligence agencies must transform acquisition [FedNewsNet]The Nationwide Injunction on Contractors Vaccine Mandate is Lifted, But Agencies Told Not to Enforce It – Yet [GovExec]Exceed Federal Cyber Rules for an Edge: Rey Martinez de Andino [BGov]United States Resolves Construction and Procurement Investigation into Route 6/10 Project; Former Superintendent to Plead Guilty; Massachusetts Construction Company to Pay $1.5 Million in Connection with False Statements [DoJ]As White House Releases $60 Billion to States, SBA Commits to Breaking Down ‘Systemic Barriers’ to Win Federal Contracts [Inc]A New Law Aims to Stop Human Trafficking by Federal Contractors [GovExec]White House leaders see ‘momentum’ in ambitious federal cybersecurity overhaul [FedNewsNet]HHS Office for Civil Rights probes ‘hacking/IT incident’ at Defense Health Headquarters [FedScoop] The post SmallGovCon Week in Review: October 17-21, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  6. Being familiar with the structure of a solicitation is imperative if you hope to be a successful federal government contractor. However, the solicitations that accompany competitive procurements, in the form of a “request for quote,” “invitation for bid,” or “request for proposal,” are often lengthy, making it easy for contractors that are new to federal government contracting to get lost in the legalese, and unable to pinpoint the vital information. Does that mean that parts of the solicitation are not important? Not at all. Contractors should be familiar with all parts of the solicitation. But knowing what to expect, and how to quickly find information that may make or break your decision to submit an offer will increase your efficiency and effectiveness when drafting proposals, saving you precious time for other important things. A federal government solicitation is generally divided into 13 sections, labeled A through M. These are as follows: A. Information to Offerors or Quoters; B. Supplies or Services and Price/Costs; C. Statement of Work; D. Packages and Marketing; E. Inspection and Acceptance; F. Deliveries or Performance; G. Contract Administrative Data; H. Special Contract Requirements; I. Contract Clauses/General Provisions; J. Attachments and Exhibits; K. Representations, Certifications, and Statements of Offerors; L. Proposal Preparation Instructions; and M. Evaluation Criteria. Phew! That’s a lot of information in one place! Let’s break them down one by one. Section A: Information to Offerors or Quoters includes the basics of the solicitation. Information such as procurement information, whether the solicitation is set aside for participants of a specific SBA program, and the agency contact information are all found here. This is almost always only one page, the very front page of the solicitation, though we occasionally see multiple pages when there have been numerous amendments to the solicitation. Not only does Section A include the very important basic information, it is also the page that is signed by the contractor and the contracting officer, which makes the contract a binding agreement. Section B: Supplies or Services and Price/Costs is where pricing information is found. This section identifies contract line items, often referred to as CLINs, and other billable information. It also lets you know what type of contract is being solicited (firm-fixed price, anyone?). If there are possibilities of options, that will be included here as well. Essentially, if it has to do with finances, there is a good chance you will find it here. Section C: Statement of Work (sometimes called performance work statement or something similar) is the meat and potatoes of the contract. This is where the agency is telling you what they want you to do. You will refer back to it frequently when drafting your proposal to respond to the various services or supplies needed for successful contract performance. Section D: Packages and Marking tells you how you will be expected to deliver, mark, label, store, and handle the products and services. Classified? Storing equipment on a construction site? Want products packaged with purple packing peanuts? Find that, and more, in Section D. Usually. In certain circumstances, you may not know this information until you receive a specific task order. Section E: Inspection and Acceptance discusses how deliverables are to be presented, as well as the inspection process. It also lets the contractor know what repercussions the contractor will face if deliverables are not accepted or if they are delivered late—something no contractor wants to do. Section F: Deliveries or Performance also discusses deliverables, but this time the focus is on timing. Provisions in Section F often incorporate many provisions of the FAR by reference. If you are looking for the period of performance on any particular phase of a contract (hello, transition in and out periods), you will find that here. Section G: Contract Administrative Data informs the contractor of the agency personnel the contractor will be working and communicating with. While the Statement of Work tells the contractor what they will be doing, Section G tells the contractor how it will be compensated. Vital information including invoicing and payments, including the information that an invoice must contain, how it should be submitted, and the method by which you will be paid, are found within this section. Section H: Special Contract Requirements includes a wide variety of contract-specific terms. Information relating to key personnel, employee compensation and benefits, steps contractors must take to protect sensitive information, workforce transition (including hiring preferences), whether background investigations shall be performed, and more show up in this section. Section I: Contract Clauses/General Provisions incorporates all relevant parts of the FAR and any clauses that are expected to be in the resulting contract. You will also find reporting requirements and the types of various audits that the government has the right to do. Section J: Attachments and Exhibits simply contains the title, date, and number of pages for each document, exhibit, or attachment. Also, if there is a specific term you are looking for, you can often find an appendix with all mentions of that term. Section K: Representations, Certifications, and Statements of Offerors includes the elements that the contractor must certify to bid on the contract. Taxpayer identification, firm ownership, whether you qualify as a small business, woman-owned business, etc. Any information an offeror gives in response to Section K of the solicitation is legally binding, so it is important to make sure that what is stated here, is correct. Section L: Proposal Preparation Instructions gives information that details how your proposal must be presented. This includes page limits, various volumes of the proposal, formatting documents, and the way in which the proposal will be submitted. Currently, most proposals are submitted via online submission, often through email. Another important tidbit of information found here is the deadline for submitting questions. Section M: Evaluation Criteria lays out exactly how the selection process should occur. Generally, evaluations look at key personnel qualifications, organizational structure and management approaches, technical management approach, relevant experience, past performance, transition plans, and cost and fees. This section will also let you know the method by which proposals will be evaluated. The most common in negotiated procurements being best value—meaning generally that the government will compare offers on various factors such as technical, management, and past performance, as well as price —and lowest price technically acceptable—meaning price is the most important factor. While the list of required information seems long, it is important to know your way around a solicitation. As mentioned, some agencies may not organize their solicitations in accordance with the uniform contract format. But, even if an agency you regularly contract with does not, there is likely another method to the madness that is solicitation drafting, and knowing how they are organized will help you to efficiently evaluate a solicitation to determine whether it is something that would be a good fit for your business. To see the Uniform Contract Format in its entirety, look no further than FAR 15.204-1, et seq. Questions about this post? Email us. Needing legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post The Anatomy of a Solicitation: How to Read the Standard Sections of a Federal Solicitation first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  7. When it comes to effective communication, the government and industry often get it wrong. Misconceptions and misunderstandings abound and can prove very costly for contractors. In this webinar, Nicole Pottroff and I will debunk some of the most common myths and misunderstandings held by contractors, including when and how you can communicate one-on-one with a contracting officer, who has authority to modify your contract, what to do when an unauthorized official gives you instructions, how the government gratuities rules differ from standard commercial practice, and much more. I hope you will join us! Registration link is here. The post Govology Webinar Event: Communicating with Government Contracting Officials: What Can (and Should) Contractors Really Say and Do? October 20, 2022, 1:00pm EDT first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  8. In our line of work, we regularly litigate protests, claims, appeals, etc., against the Government. But often, procuring and contracting issues can be resolved without the need for litigation–via a little-known method we like to call “talking things out with your CO.” There are also some important things to keep in mind regarding communications with your contracting officer during the proposal submission process. This article is the second of three articles aimed at providing helpful tips for communicating with your contracting officer. Part 1, which focused on pre-solicitation and solicitation communications, can be found here. This article will focus on proposal submission communications. And the third will focus on contract performance communications. Be proactive about communicating with the contracting officer about your proposal once submitted–making sure it is received, complete, and compliant is on you! Despite some misconception, it is not the procuring agency’s responsibility to unilaterally inform you if your proposal is incomplete, late, or otherwise non-compliant. It is on you! Don’t hesitate to reach out for confirmation of receipt, completeness, or compliance–ever! Now, you may not always get an answer. But what a consistent collection of GAO cases looking at many divergent scenarios have taught us is that you–as the offeror–must exercise your due diligence in making sure the agency receives your proposal on time, that the proposal is complete, and that the proposal is compliant. Simply saying “I sent it on time” or “it looked compliant on my computer screen” has repeatedly failed to elicit GAO’s compassion. In one case, JV Derichebourg-BMAR & Assocs., LLC, B-408777 (2013), GAO upheld the agency’s decision to reject a proposal as late where the offeror submitted the proposal via email, but accidentally left off the price proposal as an attachment. And it was after the designated closing time for receipt of proposals that the agency finally received the offeror’s prices. Indeed, GAO found the protester’s assertion that the agency should have let it know that the attachment was missing to be without merit. GAO said: [T]he protester bore the burden of ensuring the timely receipt of its proposal, not the agency, and where [protester’s] proposal was received late, it could not be considered except under limited circumstances specifically set forth in the Federal Acquisition Regulation (FAR), none of which apply in this case. To the extent the protester suggests that the lateness of its proposal should be excused because the agency’s procedures for receipt of proposals were deficient, we disagree. GAO went on to explain that the agency has no duty to unilaterally inform offerors of the receipt, completeness, or accuracy of their proposals. In GAO’s words: [Protester] has cited no law, regulation, or decision by this office–nor are we aware of any–in support of the proposition that agency personnel have a duty to review e-mailed offers for completeness prior to the proposal closing date and to notify offerors of any missing sections. Ultimately, the primary cause of JVDB’s late proposal submission was the protester’s failure to attach its price proposal when it e-mailed its proposal to the agency, not the agency’s failure to alert the protester to this error on the date proposals were due. Now, if the offeror had reached out to the contracting officer right away to ask about its proposal submission, it’s possible that the offeror may have discovered the missing attachment in plenty of time to get that part submitted to the agency. But without that proactive step on behalf of the offeror, the world will never know. And this could cost you an entire award, as it did the protester here. Similarly, the procuring agency is also not required to inform an offeror if its proposal contains errors, such as exceeding the page limit, etc. In JJ Global Servs., Inc., B-418318 (2020), the offeror submitted a proposal that exceeded the page limit set forth in the solicitation–and there was crucial proposal information on those extra pages that the agency refused to consider in its evaluation. Again, GAO found no sympathy for the protester there, agreeing that the agency’s decision to ignore the information was reasonable. GAO said: As a general matter, offerors must prepare their proposals within the format limitations set out in an agency’s solicitation, including any applicable page limits . . . the RFP in this case set forth clear, unambiguous page limitations for each of these narrative sections, and provided that the agency would not consider any excess pages. It also clearly provided that deficiencies would be assessed where required information was lacking and such deficiencies would render a proposal ineligible for award. Clearly stated solicitation technical requirements are considered material to the needs of the government, and a proposal that fails to conform to such material terms is technically unacceptable and may not form the basis for award. In this case, the protester argued that the agency should simply have allowed it to clarify the missing information–especially because the protester claimed it was present elsewhere in the proposal. But again, GAO said that burden was not on the agency–it was within agency discretion. Specifically, GAO said it is up to the agency whether or not to seek clarifications or corrections from offerors . . . In those instances where a solicitation has established clear page limitations, we have held that an agency is not obligated to sort through an offeror’s proposal to decide which pages should or should not be counted toward that limitation. By choosing to format its proposal as it did, [the protester] assumed the risk that portions of its proposal would be rejected for noncompliance with the limits. Again, who is to say how easily this issue could have been fixed had the offeror proactively sought out confirmation that the proposal was received and all information was present. You simply cannot rely on the agency to alert you to these issues. Picking up your phone or sending a follow-up email asking the contracting officer to confirm receipt and that there are no transmission or formatting issues is always worth a shot–especially if you submit your proposal in enough time to make some quick corrections to your submission in time for the deadline if needed. This brings up another important point, however. It is also crucial to ensure you are available if the agency kindly decides to reach out to you regarding such issues! Make sure you carefully select your point of contact (POC) for your proposal–and make sure that POC is ready and willing to respond to the government at all times! In one GAO case, Ortho-Clinical Diagnostics, Inc., B-418946 (2020), the offeror identified a single POC in its proposal. But that POC went on an extended leave during the procurement process. And importantly, no one notified the procuring agency. There was also no backup POC listed on the proposal. Then, when the agency emailed the offeror’s POC to conduct discussions, it said it did not even receive an out-of-office email. So with no response from the offeror, the agency eliminated the offeror from competition. Thus, when the protester went to GAO challenging this as an “unreasonable agency decision” and arguing there was lack of meaningful discussions–GAO essentially said, that’s on you! Despite the protester’s argument that the agency should have confirmed receipt–according to GAO, it was not the agency’s fault that the letter was not received and the protester never responded to it. GAO also said that it was on the protester to inform the agency of the unavailability of its listed POC. In GAO’s own words: Because there is nothing in the record showing that the agency received an out-of-office notification or any other indication that the agency should have known that the email containing the discussions letter failed to reach [the protester], there was no reason for the agency to confirm that [protester] received the email or to further contact additional Ortho employees. Accordingly, the record establishes that the agency was not the cause of Ortho’s failure to receive or respond to the discussions letter, and therefore we cannot conclude that the agency violated any procurement law or regulation by finding that Ortho had removed itself from the competition So, your best bet is to make sure your listed POC is a carefully selected, responsible and responsive individual–who will not be traveling any time soon. But of course, things happen; so, alternatively, make sure you are talking openly with the contracting officer for anything you have bid on about your contacts, your availability, your back-up contacts, and making sure you are in the loop on all communications. Or it could cost you an award! Finally, as all of these cases have indicated, it is also helpful to be aware of the different types of communications that can occur during proposal evaluations–so you are ready and available if the agency does reach out to you. Take advantage of any offered clarifications or discussions during proposal evaluations! Clarifications, as set forth in FAR 15.306, are “Limited exchanges” between an offeror and the agency. The purpose is to allow clarification of certain aspects of proposals; but there is no opportunity to substantively revise your proposal during clarifications. And again, as we just learned about from GAO, the agency has broad discretion whether to seek clarifications from offerors. Notably, in a Court of Federal Claims case, the Court did say there is an outer limit to that discretion. In BCPeabody Constr. Servs., Inc., No. 13-378C (Fed. Cl. 2013), the Court found that the factual circumstances of that case left the contracting officer with “no reasonable choice but to clarify the clerical error” in the offeror’s proposal. We won’t go too far into the details of that one, but keep in mind that, at some point, the agency could be seen to act unreasonably by not clarifying proposal errors–but what that point is has not been clearly defined–and thus, that is not something offerors should rely on. Safest bet is to ensure your proposal is received in as complete and compliant shape as possible–and to reach out on your end to the contracting officer to make sure (rather than relying on any agency duty to do so). In addition to clarifications, the same section of the FAR explains the process of discussions–the more substantive proposal communications. Unlike clarifications, the purpose of discussions is to allow contractors to address problems in their proposals. The agency’s discussions must be tailored to each offeror’s specific proposal, and at a minimum, must address deficiencies, significant weaknesses, and any adverse past performance information to which offeror has not yet been able to respond. And discussions must also be equal–thus, if they are opened with one offeror, they must be opened with all offerors in the competitive range. The solicitation you bid on will typically tell you whether the agency plans to–or reserves the right to–conduct either of these communications. But if you are unsure, who’ you gonna’ call? Yup, you guessed it: your contracting officer. * * * So, the takeaway here is that communications during proposal submissions and evaluation are, obviously, vital to making sure you give your company the best chance for success–but it is also important as a contractor that you know the rules, rights, and obligations of the agency and the offerors under each solicitation, and generally. Again, it is almost always going to be “on you” to make sure your proposal is received, complete, and compliant. So be proactive about talking to your contracting officer for anything you bid or even plan to bid to make sure. Questions about this blog? email us at info@koprince.com Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Who You Gonna Call? Your Contracting Officer (Part 2) first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  9. Happy Friday, Readers. I don’t know about you, but it feels like fall brings with it a flurry of activity! There are so many community events going on this weekend, it’s hard to decide what to attend. We’re certainly very fortunate to have so many options. I hope you can get out and enjoy the fall activities in your neck of the woods and get in a bit of relaxation, as well. Here are some articles that we found particularly informative concerning federal government contracting this week, including GSA schedule pricing, CIO-SP4, and Polaris updates. Enjoy your weekend! GSA leadership, IG continue to butt heads over schedule price reasonableness [FedNewsNet]Biden Pitches New Gig Worker Rules; Senate Starts NDAA Debate [BGov]Construction Inclusion Week 2022 [GSA]Multiple Award Schedule Doesn’t Guarantee Best Prices, Says Audit [FedWeek]Leveraging Women-Owned Businesses Can Maximize Meeting New SEC Climate Rules [Forbes]Federal judge declines to grant DOJ interim injunction in Booz Allen antitrust case [FedScoop]General Services Administration hit with 2 new Polaris pre-award protests [FedScoop]GSA, DOE look to the private sector for green building tech [FCW]Unhappy bidders claim CIO-SP4 unfairly favors small firms with big business partners [WashTech]SBA Announces Over $4 million in New Funding to Expand Veterans Business Owner Outreach, In Advance of National Veterans Small Business Week 2022 [SBA]US Department of Labor Recovers $17K For Eight Workers After Investigation Finds Guam Federal Subcontractor Shortchanged Workers’ Wages, Benefits [DoL]How to Win Government Contracts on the Top 20 Contract Vehicles [BGov]Stricter Buy America content rules for procurement set to take effect [FedTimes] The post SmallGovCon Week in Review: October 10-14, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  10. In a recent notice for Tribal consultation and request for comments, as well as a published proposed rule, the SBA seems to be signaling an increase in oversight of Native or Tribally-owned entities who are 8(a) Participants. SBA has an apparent goal of enforcing more stringent repercussions for not fully adhering to some stipulations that exclusively pertain to Native or Tribally-Owned participants in the 8(a) Business Development Program. While not final yet, the SBA has placed these potential consequences, the reasoning behind them, and the proposed rule out in the public for discussion. As these actions may present some rather drastic changes for some 8(a) Participants, I have done a quick breakdown of them here. As many of our readers may well know, an 8(a) Program participating business that is owned and operated by Tribes, NHOs (Native Hawaiian Organizations), or ANCs (Alaskan Native Corporations), typically has some requirements for participation that will differ from other 8(a) Participants, as well as some additional benefits that other 8(a) Participants don’t receive. One of these requirements is that any 8(a) company that is owned by a Tribe, NHO, or ANC, must in its annual report to the SBA show how it “has provided benefits to the Tribal or Native members and/or the Tribal, Native or other community” through its participation in the 8(a) Program. 13 C.F.R. § 124.604. It is the actions taken by 8(a) Participants related to this requirement that the SBA seems to be focusing in on in its recent publications. Before reading on, if you would like a refresher on the SBA’s 8(a) Business Development Program, I highly recommend you check out our Back to Basics posts on the 8(a) Program, and 8(a) Program eligibility. And if you want an even deeper dive after reading this blog, check out our 8(a) Program Handbook. On August 26, 2022, the SBA released a Notice of tribal consultation meeting; request for comments, that, once fully read, operates as a sort-of “heads-up” to any 8(a) Participants who are owned and operated by Tribal entities, NHOs, or ANCs. Through this notice, it appears the SBA is voicing its displeasure with what they have received from 8(a) Participants related to the “community benefits” requirement. In the August 26, 2022 notice, the SBA first announces that it will be conducting Tribal consultation meetings from September through October, releasing a proposed rule, and requesting comments, laying the groundwork for changes to the 8(a) Program regulations. The SBA appears to be concerned that Tribally-owned 8(a) Participants are not properly ensuring that the proceeds from 8(a) contracts are truly going back to the Tribal community or underserved communities as required. To address this, the SBA hints in this document that it will propose: Any entity that is owned by a NHO, ANC, or Tribal organization, who applies for 8(a) participation will need to establish a community benefits plan laying out its commitments to give back to the Native Community in several specific identified ways. Some form of programmatic consequence for when estimated revenues from 8(a) contracts were obtained, but committed benefits were not given to the community. Requiring more precise cash benefit distribution plans to standardize SBA’s report reviewsRequiring a certain percentage of cash benefits to be given back to the community (possibly adjusted based on amount of receipts, length of time in business, and how many other businesses are owned by the ANC, NHO, or Tribal Entity). The SBA also writes that it believes there should be some consequence if an entity simply doesn’t make good faith efforts to give back to their community (as stated in their annual reports). But SBA also seeks feedback from industry participants and Native organizations for what consequences may be best. The SBA has previewed the severity and breadth of contemplated consequences, by providing some potential ideas, such as: Disallowing a Tribal or Native entity from admitting any new business to the 8(a) Program until that entity meets its previous commitments with businesses it owns already in the 8(a) Program. Restricting award of additional sole source 8(a) contracts to any 8(a) Participant owned by the Native or Tribal entity if SBA determines that the entity did not make good faith efforts to meet the commitments set forth in its community benefits plan. The SBA’s justifications for these potential consequences and contemplated regulatory changes are that the legislative purpose of Tribally-owned entity participation in the 8(a) Program is to benefit Native and underserved communities through revenues derived from the Program. Thus, entities participating in the 8(a) Program should better contribute a portion of their receipts to the communities they serve. As promised by the SBA in their notice of consultation, on September 9, 2022, the SBA released a proposed rule to update the 8(a) regulations, that among many other revisions, proposed changes to 13 C.F.R. §§ 124.108, and 124.604. The SBA through this proposed rule is stating that they would change the subject regulations to require: Each Tribal entity having one or more participant in the 8(a) Program must establish a Community Benefits Plan that outlines the anticipated approach it expects to deliver and strengthen its Native or underserved community over the next three or five years. Each entity would decide how to best serve and meet the needs of its community, though SBA expects commitments related to health, education, housing, infrastructure, cultural preservation, and economic development, as much as is possible. Each 8(a) Participant owned by a NHO, ANC, or Tribal organization must submit to the SBA information showing how the Tribe, ANC, NHO or CDC has provided benefits to the Tribal community or other community, whether the benefits provided meet the goals set forth in the “Community Benefits Plan”, and how the benefits directly impacted the Native or underserved community. The SBA is requesting comments on whether this “Community Benefits Plan” referenced in the proposed rule should be its own stand-alone plan, or included in the business plan submission and updates required in the annual 8(a) review process. The SBA is also requesting comments on if there should be monetary targets established for the support provided to Native or disadvantaged communities, whether there should be consequences for 8(a) Participants that do not meet or do not exercise good faith efforts to met the benefits plan, and how to best implement the proposed changes to benefits reporting. The Tribal consultation and listening sessions should already be underway at the time of this blog post, and comments are open until November 8, 2022, with the SBA providing a link to the comments, in the Federal Register publication of the proposed rule. The SBA, through its notice of consultation, and then the proposed rule, seems to be quite intent on issuing a clear change to the 8(a) rules for Tribally-owned entities. These changes will likely affect how current and future entity-owned 8(a) Participants, and the Tribes or organizations that own them, allocate monies, budget, and craft reports, presenting potentially quite a shift in operation. Consequently, Contractors should, if time allows, read these publications thoroughly, and if so compelled, provide comments to the SBA on these changes. Of course, we at SmallGovCon will keep an eye on this ever developing situation, and as always if you are wanting help on entering the 8(a) Program, or any Federal Contracting issues, please contact us. Questions about this post? Email us. Needing legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Pay it Forward, or Pay the Price, Says SBA in Proposed Rules for 8(a) Tribal Entities first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  11. Koprince McCall Pottroff LLC, a boutique federal government contracts firm in Lawrence, Kansas, is pleased to announce that John Holtz has has been promoted to the role of Senior Associate Attorney. Since his time with the firm began, John has excelled at providing the highest quality service and counsel as a federal government contracting attorney. “I am both deeply appreciative and excited to work with this firm in an elevated capacity. I look forward to this new role and providing even greater services for our clients,” John says. John has been practicing since 2016, and his previous experience lent itself well to working in federal contracting legal matters. With Koprince McCall Pottroff LLC, John has been part of numerous successful bid protests, size appeals, and government contract disputes. He is passionate about getting clients the best results and always goes above and beyond for each one–be it for a minor drafting question or a Court of Federal Claims case. John has also been a regular contributor to the firm’s well-known blog, SmallGovCon.com, and has participated in numerous webinars and presentations sharing his knowledge and passion with others. Koprince McCall Pottroff LLC is excited to announce this news and to see all that the future holds for John in his new role. John Holtz can be reached at: jholtz@koprince.com The post Koprince McCall Pottroff LLC Names John Holtz New Senior Associate Attorney! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  12. Please join Jackie Lopez, President of Premier Enterprise Solutions, LLC, and me as we discuss both the operational and legal perspective of teaming strategies, the importance of teaming, limitations of subcontracting, why you should use a teaming agreement and much more in part 1 of this 2 part webinar series. We’re pleased to offer both Event information and registration can be found at this link. I hope you will join us! The post U.S. Department of Veteran’s Affairs Webinar Event: Tuesday, October 25 1:00pm EDT first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  13. As many of you likely already know, back in late 2020, Congress made two changes to the SDVOSB program when it passed the 2021 National Defense Authorization Act. First, all SDVOSBs will be required to certify with the government starting on January 1, 2023. Second, the responsibility for conducting SDVOSB certification will transfer from the VA’s Center for Verification and Evaluation (CVE) to the SBA. Seems simply enough, but, obviously, this raises some questions: What if a SDVOSB is already certified with CVE? How much time do self-certified SDVOSBs have to act? Will the CVE still be accepting applications in the meantime? Helpfully, the VA has produced some guidance, and in this post we’re going to expand on it. First, a quick reminder: Self-certification, for now, is enough for SDVOSB set-asides for non-VA SDVOSB set asides. SDVOSB set asides from the VA can only go to SDVOSBs certified with the VA. But as mentioned above, the 2021 National Defense Authorization Act changes this starting January 1, 2023. What if I’m already certified through the government? First things first: If your SDVOSB is already certified through the CVE, you do not need to worry about SBA certification until the end of your 3-year eligibility term per the SBA’s proposed rule from July. So, all of you that have already gotten certified through the VA, just mark your calendars for when you need to renew your eligibility. Now, this is officially just a proposed rule, but we see no reason why the SBA would change its mind on this. My SDVOSB is self-certified, is the CVE still accepting applications? Now, for the self-certified SDVOSBs or those planning on seeking certification, the CVE is still accepting certification applications. However, it will stop doing so soon per the guidance the VA released: “VA’s Center for Verification and Evaluation (CVE) will cease accepting new applications for verification at 5:00 p.m., Eastern Daylight Time, on October 24, 2022. A firm must submit its completed application package prior to that deadline.” So, the CVE will stop accepting new applications on October 24, 2022. I can’t get my application into CVE by then! Will I lose my SDVOSB status on January 1? Fear Not. As we have discussed before (and VA’s guidance echoes), there is going to be a grace period for self-certified SDVOSBs when the change occurs on January 1, 2023. As the guidance states: “Because of the large number of self-certified SDVOSBs and the need to ensure an orderly transition to the new certification program, the law provides a grace period to permit self-certified SDVOSBs to continue to compete for Federal contracts. Self-certified SDVOSBs may continue to rely on their self-certified status for 1 year after the transfer date.” So, there’s no need to panic if your SDVOSB is self-certified, it will remain certified for all non-VA contracts eyes for the entire calendar year of 2023. However, this self-certification does not qualify a company for VA set-asides, as that would still require a company to be certified per VA regulations. So, when do I actually have to certify my SDVOSB with the SBA? The answer is by the end of the grace period, so January 1, 2024. As the guidance notes: “If a self-certified SDVOSB applies to SBA for certification during the 1-year grace period, the SDVOSB may continue to apply its self-certified status until SBA has acted upon the certification application. Otherwise, the firm’s status as a self-certified SDVOSB terminates on the 1-year anniversary of the transfer date, or January 1, 2024.” Again, this likely doesn’t apply to VA set-asides; for that self-certification won’t cut it. What if I my application with SBA is still processing as of January 1, 2024? Do I lose my SDVOSB status if I’m self-certified? I’m sure everyone reading this is well-aware that the government can experience tremendous backlogs, especially when it asks for thousands of applications to be made by various businesses. Thankfully, as long as you merely submit your application to the SBA prior to January 1, 2024, you can continue to rely on your self-certified status until the SBA informs you of its decision. If I submit my application for my SDVOSB and get denied before January 1, 2024, can I still rely on my self-certification until January 1, 2024? This is a good question. The guidance from the VA states that if the SDVOSB applies during the grace period, “the SDVOSB may continue to apply its self-certified status until SBA has acted upon the certification application.” The language doesn’t expressly state what happens if the application is denied, but we believe the phrase “until SBA has acted upon the certification application” is the key here. At that point, whether the SDVOSB is considered certified depends upon the SBA’s decision. Interestingly, this creates an incentive for self-certified SDVOSBs to wait until just before January 1, 2024, to apply with the SBA. After all, if the self-certification will be considered valid until then, why risk submitting an application that is denied any earlier than is necessary? Another effect of this is that the SBA will likely face a sudden avalanche of applications at the end of 2023, which will further delay the processing of applications. Don’t be surprised if SBA issues a rule addressing this when it inevitably realizes these considerations. Can I submit my application to the SBA before January 1, 2023? No, the guidance from the VA makes it clear that SBA will not accept any SDVOSB certification applications prior to January 1, 2023. My SDVOSB is new and neither certified with the VA nor self-certified, what should I do? In the VA’s opinion, you should act quickly. If you want certification with the VA so you’ll be eligible for VA contracts, you have until October 24, 2022. After that, you’ll have to wait until January 1, 2023, to apply. As for contracts with other agencies, the VA’s guidance states that if you achieve self-certified status prior to January 1, 2023, you should be covered by the grace period. So, act fast! Questions about this post? Email us. Needing legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post A Helpful Guide: The VA’s Memorandum on the New Certification System first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  14. Happy Friday and happy October, Readers. There were a lot of announcements this week in Federal Government Contracting, including new guidance from the White House for federal agencies to increase the share of government contracting dollars to small, disadvantaged businesses (SDBs) in fiscal year 2023. It is part of the administration’s effort to steer $100 billion in new contracting opportunities to minority-owned businesses over the next five years. The SBA’s Administrator Isabella Casillas Guzman , announced the awarding of $300,000 to deliver existing training programs through the SBA’s Service-Disabled Veteran Entrepreneurship Training Program, as well as announcing over $5.4 million in funding through the Federal and State Technology (FAST) Partnership Program. FAST provides small businesses and startups, particularly those in underserved communities, with specialized training, mentoring, and technical assistance for research and development. Grant selectees can qualify for award amounts of up to $125,000 each. You can read more announcements and other federal government contracting news in the articles below. Have a great weekend. SBA Awards Over $5.4 Million in Grants to Strengthen Research Funding Opportunities Across the U.S. [SBA]White House sets target for small, disadvantaged businesses to receive 12% of federal contracting dollars [FedScoop]SBA Awards Funding to Organizations to Deliver Service-Disabled Veteran Entrepreneurship Training Program [SBA]White House raises contract spending goals for small, disadvantaged businesses [FCW]Navy’s innovation hub preps three new ideas to attract, fund small innovators [FedNewsNet]Administrator Guzman Applauds Passage of Small Business Innovation Research (SBIR) Program Reauthorization, Committing to Scientific and Technology Innovation [SBA]Biden Contractor Vaccine Mandate Meets Tough Fifth Circuit Panel [BLaw]Watchdog Again Pushes GSA to End Contracting Pilot Program [NextGov]President Biden OKs 11-Week Government Funding Extension [GovConWire]Goal Raised for Contracts to Small Disadvantaged Businesses [FedWeek]GSA Seeks Industry Input on Clean Construction Materials [GSA]US Department of Labor, Loomis Armored US Enter Agreement Resolving Alleged Race- and Gender-Based Hiring Discrimination at Houston Facility [DoL]Former Contractor Pleads Guilty to Bid Rigging and Bribery [DoJ]The Buy American Act and Other Federal Procurement Domestic Content Restrictions [CRS] The post SmallGovCon Week in Review: October 3-7, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  15. Congress recently approved reauthorization of both the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The law, known as the ‘‘SBIR and STTR Extension Act of 2022’’, was ratified by the House on September 29 and became law on October 3, 2022. While the big takeaway is that the SBIR and STTR programs will continue, this post will highlight a few additional restrictions that were put into place for these important programs. Included among these are some additional reporting and oversight for companies with a lot of awards and foreign influence over companies. Here are some of the big takeaways from the new law. Reauthorization There was some concern that Congress would not reauthorize funding, as some senators had expressed concerns about so called SBIR mills and other matters. Despite these concerns, both SBIR and the complementary STTR programs would see a three-year extension. Along with six related pilot programs, the two programs are extended through September 30, 2025. This program in the past has funded research projects to the tune of about $3 billion a year for SBIR and $450 million for STTR. The DoD estimated that the programs meet the needs of approximately 1200 defense tasks. This reauthorization will allow federal federal funds to continue assisting a ton of small businesses in expanding their business and funding innovative new research. Other Changes SBIR Mills Senator Rand Paul had stated: “According to SBA’s public data, 196 businesses received more than 100 awards each. Some businesses received more than 900 awards. Sounds like somebody has figured out the system here.” In response to this and other comments, the final legislation includes some programs to review and combat the problem of certain companies getting what is perceived to be an unfair number of awards. One program is additional reporting by GAO, to examine number of awards progressing to Phase II and III, as well as number of awards going to “first-time applicants and first-time awardees”; non-traditional small businesses; and “the ratio, and an assessment, of the amount of funding allocated towards open topics as compared to conventional topics at each Federal agency that is required to establish an SBIR or STTR program and offers open topics.” The law also increases performance standards for companies that receive many awards. For instance, for “a small business concern that received or receives more than 50 Phase I awards during a covered period, each minimum performance standard . . . shall be doubled for such covered period.” If the standards are not met, then the company is limited to 20 awards per year maximum. There are also increased standards for sales and investments during Phase II. For instance, for “a small business concern that received or receives more than 50 Phase II awards during a covered period, require an average of $250,000 of aggregate sales and investments per Phase II award received during such covered period.” These increased minimum performance standards must be in place by April 1, 2023. There is another specific requirement regarding solicitation topics designed to decrease influence by companies: A Federal agency required to establish an SBIR or STTR program shall implement a multi-level review and approval process within the Federal agency for solicitation topics to ensure adequate competition and that no private individual or entity is shaping the requirements for eligibility for the solicitation topic after the selection of the solicitation topic, except that the Federal agency may amend the requirements to clarify the solicitation topic. In addition, GAO must conduct a study on multiple award winners for those companies that received more than 50 Phase II awards under the SBIR or STTR programs during a 10-year period, looking at things like “ability of the small business concerns to commercialize and meet the tenets of the SBIR and STTR programs.” A separate report will look at subcontracting for SBIR and STTR awardees, including subcontracting to large businesses. Foreign Ties Not to be confused with family ties, some had raised concerns that SBIR awards may be benefiting other countries. In response, the legislation requires all agencies to “establish and implement a due diligence program to assess security risks presented by small business concerns seeking a federally funded award.” This program would examine risks such as “cybersecurity practices, patent analysis, employee analysis, and foreign ownership of a small business concern.” In addition, companies seeking awards will have to disclose ties to China and certain other countries of concern like Korea, Russia, and Iran. The areas of inquiry include disclosing as individuals “who are a party to any foreign talent recruitment program”; “joint venture or subsidiary of the small business concern that is based in, funded by, or has a foreign affiliation with any foreign country of concern”; “technology licensing or intellectual property sales”; and “pending contractual or financial obligation” involving those countries. An agency may deny award if it determines there are too strong of ties to a country of concern. Good on Congress for reauthorizing this important program. SBIR and STTR companies would be wise to stay aware of these new requirements as they pursue these awards. We will see some additional guidance coming out from SBA to implement these additional requirements, so keep your eyes peeled for that. Questions about the Mentor Protégé Program? Or need help with another government contracting legal issue? Email us. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Congress Reauthorizes SBIR/STTR, Adds a Few Wrinkles first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  16. Happy Friday! It’s football season and we couldn’t be more excited about how our Kansas teams are starting the season. This weekend’s match-ups are set to be exciting ones and our fall weather is proving to be perfect for getting out there and cheering on our favorite teams. We hope you can get out and enjoy a game or two this weekend. Here are some noteworthy happenings in federal government contracting to peruse, this weekend, as well, including some updates on a potential government shutdown. Enjoy! Maryland couple plead guilty in submarine secrets sale case [FedNewsNet]US Navy moves ships and aircraft out of the path of Hurricane Ian [FedNewsNet]Contractors nervous as Congress hints at a government shutdown [FedNewsNet]Bill to consolidate federal agency software contracts expected to progress in Senate [FedScoop]Senate reaches a deal to avoid a shutdown, punts threat for 10 weeks [FCW]GSA to study demographic equity in remote identity tech [FCW]DOT, SBA and others team up to attract new entrants to the federal market [FCW]Small Business Size Standards: Adoption of 2022 North American Industry Classification System for Size Standards [FedReg]Veteran records bill advances in Senate, but panel deadlocks on NARA nominee [FedNewsNet]VA ‘not confident’ EHR issues preventing future rollouts are resolved following Oracle fix [FedNewsNet]Former Government Contractor Executive Pleads Guilty to Unlawful Campaign Contributions [DoJ]VA Selects 17 Contractors for $650M Health Care Tech Development Contract [GovConWire] The post SmallGovCon Week In Review: September 26-30, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  17. The SBA’s Mentor-Protégé Program offers a myriad of benefits to both Mentors and Protégés who participate in the Program. Small business Protégés benefit from the assistance provided by their SBA approved Mentor, which can include anything from guidance on how to find solicitations and make offers, to financial support in the form of loans or bonding. Mentors benefit because participation allows them to compete for and be awarded contracts in which they may not otherwise qualify for. In fact, SBA even provides a bare bones template for Mentor-Protégé Agreements, complete with 21 yes or no questions that every Mentor-Protégé Agreement must include. A “yes” answer to any of those questions requires the applicant to provide additional information demonstrating why this should not disqualify the Mentor and Protégé from working together. But have you ever stopped to consider the reasoning behind these questions? Likely not, if you have never had to check a “yes” answer. However, knowing the “why” behind these questions is information that every small business federal contractor could benefit from. I’m going to take you through these questions to demystify their application, which will allow you to quickly identify potential problems in the future. When SBA reviews proposed Mentor-Protégé Agreements (MPA), it is always on the lookout for a few potential problems that could disqualify the Mentor and Protégé from the Program. In fact, some of the issues could even result in the Protégé no longer being considered small, and therefore ineligible for SBA’s small business contracting programs entirely. These “problems” are control, ownership, and affiliation. In addition, there are requirements that limit the number of Agreements both the Mentor and the Protégé are permitted to participate in, both concurrently and over time. Questions A Though D The first four questions ask whether the Mentor or the Protégé have another SBA approved MPA or an MPA through another program governed by another agency, but why? Well, first, Mentors and Protégés are limited in the number of Mentor-Protégé relationships that they may participate in. Mentors may participate in up to three Protégés at a time as long as the Mentor can prove that the additional relationships with Protégé(s) will not adversely affect the development of the other firm(s). 13 C.F.R. § 125.9(b)(3). This prohibits any of the Mentor’s Protégés from being competitors with each other. Protégés’ participation, on the other hand, is limited to formally working with only two Mentors in total for the lifetime of the business, and generally only one at a time. 13 C.F.R. § 125.9(c)(2). SBA will consider a Protégé’s request for a second simultaneous Mentor-Protégé relationship if the businesses can demonstrate that the second relationship will not compete or conflict with the first relationship. Question E Question E states, “Protégé and Mentor do ( ) agree to the assistance being provided through the agreement will help the protégé firm advance its goals as defined in its business plan.” SBA rules require Mentors to demonstrate that it is “capable of carrying out its responsibilities to assist the protégé firm under the proposed [MPA],” and that it “[c]an impart value to a protégé firm.” 13 C.F.R. § 125.9(b)(1). Essentially, Question E requires the Mentor and Protégé to confirm that the Mentor has the means and capability required to benefit the Protégé as laid out in the MPA. Note that you can’t say no on this one, so I don’t suggest trying to write in a “no” answer. Questions F Through N and P The largest portion of these questions, nine to be exact, focus on affiliation. I won’t go through the entire catalogue of the ways that affiliation may be found because that was recently done. (To learn more on affiliation, see our recent post about the basics of affiliation both in general and in depth.) For today’s purpose, it’s important to know that affiliation generally looks at control over the Protégé. It is a requirement of the Mentor Protégé Program that the small business Protégé not be controlled by the Mentor. This principle is based on the affiliation rules that apply to small business requirements. While an affirmative response to any of the questions in the Mentor-Protégé Agreement must include an explanation, the affiliation-related requirements are the ones that we see causing an issue most often. SBA wants to know that the Protégé not affiliated with the Mentor, thus making it vital to include satisfactory explanations. Question O Question O is not exactly a question, but rather a duty that the Mentor must agree to. One of the requirements of a Mentor is that it must possess good character and a favorable financial position. Therefore, if the initial term of the Mentor-Protégé Agreement is less than the six years permitted by SBA rules, the Mentor and Protégé may extend the term of the Agreement up to a cumulative total of six years. The MPA simply requires the Mentor to agree that, if extended, it will re-certify on an annual basis that it continues to possess good character and a favorable financial position. Conclusion SBA’s Mentor-Protégé Program is a popular and successful program that assists small business owners in a multitude of ways. Accordingly, SBA reported 1632 active Mentor-Protégé Agreements as of September 1, 2022, and that number is likely to continue growing. Understanding the questions discussed above will help you identify potential hurdles to participation in the Mentor-Protégé Program, and help to either avoid mistakes that could affect eligibility, or be prepared with knowledge of how to fight the negative presumptions of a “yes,” by knowing SBA’s intent behind the questions. SBA’s Mentor Protégé Program Agreement can be found here. Questions about the Mentor Protégé Program? Or need help with another government contracting legal issue? Email us. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Yes, No, Maybe? Understanding the Reason Behind SBA-Required Mentor-Protégé Agreement Questions first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  18. In our line of work, we regularly litigate protests, appeals, claims, etc., against the Government. But often, procuring and contracting issues can be resolved without the need for litigation–via a little-known method we like to call “talking things out with your CO.” There are also opportunities to communicate with your contracting officers for networking and marketing purposes that many contractors (often unnecessarily) shy away from. This article is the first of two articles that will provide you with some tips for when and how to communicate with your contracting officer. This article will focus on pre-solicitation and solicitation communications, and the next will focus on contract administration. Don’t be Afraid to Ask Questions–Even Unsolicited Ones! Most of us are familiar with formal Q&As during the Government’s solicitation procedures. When offered, formal Q&As give offerors the opportunity to: (1) clarify ambiguities or uncertainties in the solicitation; (2) encourage amendments or changes to the solicitation; and/or (3) resolve potential protest issues. So, without a doubt, you should always take full advantage of Q&As when they are an option for you. Many times, the agency is simply unaware of inconsistencies or errors in its own solicitation–typically it wasn’t even the one who wrote it. As a responsible offeror, carefully reading the solicitation and identifying those issues to the agency in a non-adversarial manner can lead directly to their resolution–via an amendment or other change to the solicitation’s terms. A formal Q&A can provide the perfect avenue to address these issues in an amicable setting and, again, even potentially get them resolved. And one pro tip for formal Q&As is to ask targeted questions to resolve your uncertainties. But a formal Q&A is not always offered. So, many think, “no formal Q&A means no questions!” Even if one is offered, the Q&A is almost always limited to a specific window of time. So, another thing we hear a lot is, “if the Q&A period has expired, I cannot ask my questions!” Well, generally speaking, neither one of these have to be the case! Don’t be afraid to contact your contracting officer before or after a formal Q&A for any questions your have that don’t conveniently fit into the formal Q&A window. Worst case, the Government ignores you or says “no” to giving you an answer. Best case, the Government gives you the answer you need or realizes it must resolve an issue on its own end. As long as the Government is giving all offerors the same information and the same opportunities to revise or fix their proposals, it is fine to reach out with questions or concerns on your own, outside the formal Q&A. Of course, your mileage may vary with whether and how fast the Government responds. But it never hurts to ask. The FAR explains: After release of the solicitation, the contracting officer must be the focal point of any exchange with potential offerors. When specific information about a proposed acquisition that would be necessary for the preparation of proposals is disclosed to one or more potential offerors, that information must be made available to the public as soon as practicable, but no later than the next general release of information, in order to avoid creating an unfair competitive advantage. . . When conducting a presolicitation or preproposal conference, materials distributed at the conference should be made available to all potential offerors, upon request. So, basically, as long as information clarifying the solicitation or its requirements is provide fairly and evenly, the Government should be able to do so (again, provided all the FAR’s improper business practices rules are followed in the process)! Now, there are, of course, situations where the agency is unresponsive or being a bit difficult when it comes to getting answers or pointing out issues in the solicitation. In which case, the pre-award protest avenue may be the best option. But the point is, you may be able to avoid such litigation by simply asking your questions first! You May Be Able to Meet One-on-One with the CO for a Solicitation you are Pursuing. We see a lot of hesitation in our line of work when it comes to contractors marketing themselves to the Government. And don’t get me wrong, there is good reason for such caution–given the bevy of procurement integrity rules out there for federal contracting, of which you should be very familiar in all your endeavors (with conflicts of interest and undue influence, to name a few). But generally, such concerns may not prohibit quite as many communications as many believe they do. From market research to more general pre-solicitation and solicitation discussions with offerors, the Government has policies in place that actually foster open communication! The Government’s communication policy is set forth in the FAR: The Government must not hesitate to communicate with the commercial sector as early as possible in the acquisition cycle to help the Government determine the capabilities available in the commercial marketplace. So, the million dollar question is, when is it ok, and when is it not? Now, that is always going to come down to a fact specific analysis–and one that is often very wise to have counsel guide you through. But there are some great resources out there, that many are unaware of, wherein the Government gives us some guidance on this matter. In a 2011 Memorandum by the Office of Management and Budget’s Office of Federal Procurement Policy (OMB OFPP), the agency explained that, generally, Government officials can meet one-on-one with potential offerors, provided that none of the offerors receive preferential treatment. The agency noted that many offerors fear that such pre-solicitation discussions could exclude them from participating in the competition. But that is not necessarily the case. The OMB OFPP explained an important distinction between a vendor working on a solicitation for the Government and other pre-solicitation communications, stating, “a vendor who, as part of contract performance, drafts the specification for a future procurement will almost certainly be barred by OCI rules from competing for that future procurement[.]” But “pre-solicitation communications are generally less structured, less binding, and much less problematic.” Where a contractor is drafting the specifications for an upcoming acquisition, it is crucial that the vendor provides impartial advice regarding the requirements used to meet the Government’s needs. To do so, the vendor should not be motivated by a desire to win that contract. But as the OMB OFPP explained: This differs dramatically from the pre-solicitation context, [wherein] the Government is not looking for impartial advice from one source, but is instead looking for a variety of options from a variety of sources, each one understandably, and reasonably, attempting to demonstrate the value of its own approach. These marketing efforts, in themselves, do not raise OCI concerns. Sure, this memorandum is over a decade old. But it is absolutely worth a read. It is full of helpful nuggets of information just like this one. So, marketing your company to the government may not be a bad thing–and in fact, can be extremely beneficial for both your company and the Government, as it tries to determine what is out there in structuring its acquisitions. Promoting your Company to Your Contracting Officer Can Actually Benefit Everyone! In accordance with the FAR, the Government must conduct “appropriate” market research for its acquisitions. Now, this can take the form of Requests for Information (RFIs), Industry Day, etc.; but the agency has very broad discretion. In a nutshell, market research is used to determine whether (among other things): (i) there are capable sources out there; (ii) commercial items will meet the Government’s needs; (iii) a set-aside will be required, and if so, which one; and (iv) bundling is appropriate. We could definitely talk about market research all day, and won’t do so here, but the point is, when you communicate with the Government about your company’s capabilities, as we have discussed throughout this article, it gives the Government valuable information in structuring its acquisitions. * * * So, the takeaway here is that talking with your contracting officer can be hugely beneficial for you, for other offerors, for the industry at large, and even for the Government itself–as long as you aware of and careful to abide by the rules for doing so properly and fairly. Questions about this blog? email us at info@koprince.com Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Who You Gonna Call? Your Contracting Officer first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  19. Happy Friday, Readers. We have had some contrasting weather conditions here in Kansas, this week. One day we are at 100 degrees and the next day we are in the 60’s. You know what they say in Kansas? If you don’t like the weather, just wait a minute and it will change. That has certainly been true this week. I think I speak for all of us, when I say that the cooler temperatures of fall are a welcome change from the hot and dry conditions we have experienced throughout the summer. We hope you are able to get out an enjoy the weather in your neck of the woods this weekend. Here are a few articles we thought were particularly interesting concerning federal government contracting this week, including extension for the SBIR program, more Polaris solicitation drops, and inflation’s effects on contractors. Have a wonderful weekend! GSA’s Polaris Contract Continues to Support Equity in Federal Procurement [GSA]GSA opens second round of bid submissions for multibillion-dollar Polaris solicitation [FedScoop]Federal agencies racing to spend billions by Sept. 30 [FedTimes]DARPA launches new program to let small innovators behind the classified curtain [FedNesNet]Pentagon Urges Defense Contractors to Wean Themselves Off China-Made Chips, Raw Materials [GovConWire]Biden-Harris Administration Announces Groundbreaking Partnerships to Connect Small and Disadvantaged Businesses to Infrastructure Programs [SBA]A Nonprofit Business Accelerator Is Offering Grants to Veteran Small Business Owners [Military]Union organizers gain access to contractors working on government projects [FedNewsNet]Former U.S. Department of Housing and Urban Development Assistant Inspector General Convicted of Falsifying Financial Disclosure Forms [DoJ]General Services Administration backs inflation contract adjustments [FedTimes]Commerce Department’s Minority Business Development Agency Awards $4.7 Million in Funding to Strengthen Business Centers Across U.S [DoC]The SBA Announces Expansion of Ascent Online Digital Platform Programming [SBA]SBA Announces Inaugural Small Business Cyber Summit to Take Place During National Cybersecurity Month [SBA]GSA reveals 28 members of new acquisition policy advisory committee [FedScoop]Why the US government will require software vendors to certify the security of their products [FedScoop]Senate pulls SBIR back from brink of sunsetting [FedNewsNet]How inflation has hit federal contractors [FedNewsNet] The post SmallGovCon Week in Review: September 19-23, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  20. One of the common questions small business contractors ask themselves when planning performance of a contract is “how much of this work are we allowed to subcontract?” Trying to answer this question inevitably leads contractors to one of the most commonly used and frequently misunderstood rules in federal contracting, the Limitations on Subcontracting. In this post, we will break down some of the basics of this rule, and hopefully clear up any basic misunderstandings regarding it. What is the Limitations on Subcontracting rule? The Limitations on Subcontracting rule is found at 13 C.F.R. § 125.6 and FAR 52.219-14. The rule sets limits on how much work assigned to a prime contractor may be subcontracted by the prime contractor to subcontractors that are not similarly situated. Why does the Limitations on Subcontracting rule exist? The Limitations on Subcontracting rule was created to help balance two policy goals: 1) ensuring small businesses don’t serve as “pass-throughs” for large entities; and 2) allowing small businesses the resources needed to complete set-aside and sole source contracts. By allowing subcontracting by small businesses who were awarded contracts, it gives small businesses a better chance to adequately perform contracts and gain experience they may not be able to do on their own. Meanwhile, by placing limits on the amount that can be subcontracted, it ensures that the small business has to perform some amount of meaningful work, so they don’t simply serve as pass-throughs. When does the Limitations on Subcontracting rule apply? This rule is applied in two situations: When a contract is set-aside for small business that has a value above the simplified acquisition threshold; orWhen a contract is set aside or sole-sourced for 8(a) BD Program, SDVOSB/VOSB, WOSB/EDWOSB, or HUBZone participants. Does the anticipated performance provided under the contract effect the Limitations on Subcontracting rule? The Limitations on Subcontracting rule dictates how much a prime contractor may subcontract, based on what category of contract was awarded. The rule places contracts in four categories: Services contractsSupplies contractsGeneral Construction contractsSpecialty Trade Construction contracts What category a contract falls into is determined by the NAICS code assigned to it. For example: if the NAICS code description states it is for services, it is likely that it would fall under the services contract category. What are the limitations on subcontracting? Service contracts allow for 50% of the work to be subcontracted outSupply contracts allow for 50% of the work to be subcontracted outIMPORTANT NOTE: This does not apply when the nonmanufacturer rule is being utilized, as it has its own rules around subcontracting. For more information on the nonmanufacturer rule, check out our Back to Basics post on the nonmanufacturer rule. General Construction contracts allow for 85% of the work to be subcontractedSpecialty Construction contracts allow for 75% of the work to be subcontracted How are the limitations on subcontracting applied? To determine how much can be subcontracted and apply the designated percentage, contractors should look at the overall dollar value amount of the contract itself. Then, the designated percentage is applied to the dollar value amount of the contract. This should give contractors the amount of the contract that may be subcontracted. For example, if there is a service contract for $500,000, 50% of $500,000 (or $250,000) would be the maximum that could be subcontracted. Are there any exceptions to the Limitations on Subcontracting rule? Depending on the category of the contract, there are certain designated items in the rule that could have their dollar value subtracted from the total contract dollar value amount prior to applying the subcontracting percentage. The most common exception is that the cost of materials is excluded from the calculation for all construction contracts and for supply contracts as well. Additionally, if the small business prime contractor subcontracts to a “similarly situated entity,” it can actually count towards the prime contractor’s required performance and is considered not to be subcontracted for purposes of the rule. What is a “Similarly Situated Entity”? A similarly situated entity is a subcontractor that has the same socioeconomic designation required by the prime contract (i.e., SDVOSB, 8(a) etc.). It is important to remember that being a similarly situated entity is not something that is set in stone for the life of a contract, but rather is something that could change at any time based on the subcontractor’s business growth, certification status, or other changes in circumstance. So, any prime contractors looking to use this portion of the Limitation on Subcontracting, should be in regular contact with their subcontractor regarding its size and/or certification status. What happens if I don’t follow the Limitations on Subcontracting rule? The consequences for not following the Limitations on Subcontracting rule can be quite varied. The regulation itself states that there could be substantial fines placed on contractors, and possibly even debarment. The Limitations on Subcontracting rule can feel quite complicated, and its application is always very contract specific. Hopefully this blog post will help clear up the basics of the rule, and some of the rationale behind it. If you find yourself grappling with the Limitations on Subcontracting rule, give us a call and we would be happy to help analyze your situation. Questions about this blog? email us at info@koprince.com Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Back to Basics: Limitations on Subcontracting first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  21. Please join us for a very informative webinar hosted by The Catalyst Center for Business & Entrepreneurship. Joint ventures can be a powerful tool for multiple businesses to compete for proposals and combine the best capabilities they have to offer. But how do businesses keep their agreements in order? This presentation will address the benefits of a joint venture, including use of past performance and capabilities such as facility clearances. Recent changes to how federal agencies must view past performance from a joint venture are important for contractors to understand. But it will also describe how to make sure a joint venture agreement is compliant with the latest rules and the ones that can trip up offerors. Companies will learn how to advise on the best uses of joint ventures, how to set them up, and how to avoid some traps when creating them. Register here. Hope to see you there! The post Webinar Event: Catalyst Joint Ventures/Legislative Updates Virtual Workshop, Thursday, September 22, 2:00-4:00pm CDT first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  22. The SBA has issued new proposed rules relating to the 8(a) Program. The rules clarify some aspects of ownership and control requirements for the 8(a) Program, including making change of ownership a little easier and cleaning up some 8(a) set-aside processes. The rule would also allow for populated joint ventures between similarly situated joint venture members. Here are some of the key changes from the proposed regulation. This doesn’t cover everything, so please review the regulations closely if you are in the 8(a) Program. There are a number of tweaks throughout the regulations. Comments are due November 8, 2022. 8(a) Ownership Under the proposed changed, SBA includes “a process for allowing a change of ownership for a former Participant.” The current rule provides that “any Participant that was awarded one or more 8(a) contracts may substitute one disadvantaged individual for another disadvantaged individual without requiring the termination of those contracts or a request for waiver under § 124.515.” The change would specify that a change of ownership could apply to a former Participant as well as to a current Participant under 13 C.F.R. § 124.105(i). This is most likely to benefit “an entity (tribe, ANC), Native Hawaiian Organization (NHO), or Community Development Corporation (CDC)) [that] seeks to replace the principal of a former 8(a) Participant.” In addition, the proposed rule clarifies that an SBA-approved mentor can own up to 40 percent of its protégé. This would apply to an 8(a) protégé, even where the mentor is in in the same or similar line of business. This would allow a mentor in the same line of business as its 8(a) protégé to own up to 40% of the 8(a) protégé. Under the ownership rules, an 8(a) Participant can change its ownership “where all non-disadvantaged individual owners involved in the change of ownership own no more than a 20 percent interest in the concern both before and after the transaction.” To avoid issues where two or more immediate family members try to purchase ownership and get around the 20% cap, “the proposed rule would provide that SBA will aggregate the interests of all immediate family members in determining whether a non-disadvantaged individual involved in a change of ownership has more than a 20 percent interest in the concern.” 8(a) Contracting and other Rules There are a number of proposed changes to clean up the 8(a) regulations. For potential for success, the proposed rule would clarify that a company “that has performed no private sector work but has demonstrated successful performance of state, local or federal government contracts is eligible to participate in the 8(a) BD program.” No private sector contracts are needed.Where a company had federal debts, it may still qualify if it can “demonstrate that the financial obligations have been settled and discharged/forgiven by the Federal Government.”Because some tribes don’t file tax returns, the proposed rule would state that a tribally-owned applicant can submit financial statements.“The proposed rule would merely add a sentence to § 124.501(b) to clarify SBA’s current position that would prohibit a contracting activity from restricting an 8(a) competition to Participants that are also certified HUBZone small businesses, certified WOSBs or eligible SDVO small businesses.”Also, “an agency may award an 8(a) sole source order against a multiple award contract that was not set aside for competition only among 8(a) Participants.” Joint Venture Rules Populated Joint Ventures. The proposed rule essentially revives populated joint ventures in limited circumstances. SBA had years ago decided that a joint venture must be unpopulated, meaning that if a joint venture exists as a formal separate legal entity, it may not be populated with individuals intended to perform contracts awarded to the joint venture. “The proposed rule would clarify, however, that a populated joint venture could be awarded a contract set aside or reserved for small business where each of the partners to the joint venture were similarly situated ( e.g., both partners to a joint venture seeking a HUBZone contract were certified HUBZone small business concerns).” In other words, two small businesses with the same socioeconomic designation as the set-aside designation for the solicitation could do a populated joint venture. Dissimilar joint venture partners, such as those commonly in a mentor-protégé relationship, could not have a populated joint venture. For populated joint ventures, the rule would also state that revenues must be divided according to the same percentage as the joint venture partner ownership share in the joint venture. Contracts versus Orders. Finally, SBA has cleared up the age old question about orders versus contracts. “SBA’s current policy is to allow orders to be issued under previously awarded contracts beyond the two-year period.” But SBA was fed up with getting this same question over and over. (Government contracts attorneys also receive the question frequently). As SBA put it: “Although SBA’s current policy is to allow orders to be issued under previously awarded contracts beyond the two-year period (since the restriction is on additional contracts, not continued performance on contracts already awarded), SBA continues to receive questions as to whether orders beyond the two-year period are permissible.” So, the rule will now clearly state that “a joint venture may be issued an order under a previously awarded contract beyond the two-year period.” Ostensible Subcontractor. The proposed rule would specify what counts as the primary and vital parts of a contract for construction contracts for purposes of ostensible subcontractor affiliation. As SBA explains: The primary role of a prime contractor in a general construction project is to superintend, manage, and schedule the work, including coordinating the work of various subcontractors. Those are the functions that are the primary and vital requirements of a general construction contract and ones that a prime contractor must perform. . . . SBA believes that the ostensible subcontractor rule for general construction contracts should be applied to the management and oversight of the project, not to the actual construction or specialty trade construction work performed. The prime contractor must retain management of the contract but may delegate a large portion of the actual construction work to its subcontractors. In addition, for unusual reliance on an ostensible subcontractor, SBA will specifically mention two risk factors when affiliation is more likely: reliance on incumbent contractor’s management personnel and the reliance on the subcontractor’s experience. These would just be part of the overall consideration in a size determination. *** This rule clarifies a number of aspects of rules relating to 8(a) Program ownership and contracting issues. It also addresses some joint venture rules to clear those up. Good on SBA for continuing to sharpen the clarity of its rules. Those in the 8(a) Program or working with joint venture would do well to review it in full. Questions about this blog? email us at info@koprince.com Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post SBA Proposed Rule Relaxes Change of 8(a) Program Ownership, Allows Limited Populated Joint Ventures first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  23. Happy Friday, Readers! Our weather here in Kansas has decided it’s not quite ready to be cooler for Fall just yet. You can bet though, when it does, it will decide abruptly. I’m taking my family on a camping trip this weekend to extend summer just a bit longer. Hope you are able to enjoy a great weekend with your family and friends. Along the way, enjoy this roundup of the latest federal contracting news, including the new DoD deviations on flexibility in the face of inflation and SAM registration delays. Have a great weekend. Federal contract workers call for wages to keep pace with inflation [FedTimes]DOD’s Updated Guidance Suggests Ways to Manage Inflation-Related Cost Increases Under FFP Contracts [GovConWire]Updated Guidance on Managing the Effects of Inflation With Existing Contracts [DoD]The Keys to Becoming a Strong Government Contractor with Tiffany Bailey, OSC Edge [MyABSN]Contractors race for year-end business, while agencies rush to spend [FedNewsNet]DoD issues deviation after continued UEI transition delays [FedNewsNet]The White House is releasing important cybersecurity guidance today [WashPost]Multiple Award Contracts Ain’t All That: Go-To-Guy Timberlake [BGov]Companies and Owner Sentenced in Federal Court for Defrauding Government Agencies [DoJ]Class Deviation—System for Award Management [DoD]White House publishes final President’s Management Agenda learning roadmap [FedScoop]CISA to develop ‘self-attestation’ cybersecurity standards for federal software vendors [FedScoop] The post SmallGovCon Week in Review: September 12-16, 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  24. Many SBA programs and offerings have their origins in other agencies or parts of the federal government. Contractors who do not work with the DoD might be surprised to learn that the DoD’s own Mentor-Protégé Program is in fact the oldest continuously operating mentor-protégé program, dating back to the First Gulf War. Recently, this program received some updates, one of which will greatly expand the pool of eligible proteges. Let’s take a look at these changes in more detail. Back in February 2022, the DoD proposed a number of changes to its Mentor-Protégé Program (DoD MPP) in order to implement section 872 of the National Defense Authorization Act for Fiscal Year 2020. That part of the act reauthorized the DoD MPP, but as part of that authorization wanted to see some changes made to how it operates. The goal of these changes is to make the program more expansive. The most impactful change that the rule will bring about concerns eligibility for proteges. Prior to this rule coming into effect, the DoD MPP limited protégé eligibility to small business concerns whose size was less than half the SBA’s size standard for the applicable primary NAICS code. This unusual requirement severely limited the pool of potential protégés under the program. The rule removes this oddity: So long as a company meets the SBA’s applicable size standard, it is eligible to be a protégé if it meets the other eligibility requirements. Some of the changes are fairly straightforward. For starters, the program is reauthorized so that eligible companies can enter into a mentor-protégé agreement under the program until September 30, 2024. Another change is that the program participation term will change when this rule becomes effective. Previously, the program participation term for a mentor-protégé agreement was three years, although the parties could request an extension of up to two additional years for five years in total if they showed justification for such an extension. Now, the program participation term is two years, and the parties may request an extension of up to three years for a maximum term of five years provided they can justify it. Some other rules are more peculiar to the program itself. For example, the DoD MPP provides for mentors to apply for such reimbursement for developmental assistance costs, or at least it did, but that part of the program had expired on September 30, 2021. The new rule extends the date for mentor reimbursement for developmental assistance costs incurred under the program to September 30, 2026. Similarly, the rule extends the date for the mentor to use developmental assistance costs as credit towards subcontracting goals in its small business subcontracting plan from September 30, 2021, to September 30, 2026. We think these changes will be greatly helpful to all parties with an interest in the DoD MPP. Particularly, the old “half the size standard” rule was a very arbitrary and needless limitation that held the DoD MPP back without any real benefit to small companies. The SBA size standards exist for the reason of determining what is and is not a small business to the government, and it was odd to simply apply an absolute standard of “half the SBA standard” regardless of industry, considering that each industry is unique in its makeup. This is good news for the government contractor. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post The DoD Mentor-Protégé Program’s New Look: Expanded Protégé Eligibility first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  25. Government contracting law is complex, and the rules aren’t always intuitive. As a result, many contractors make the same legal mistakes, involving everything from completing SAM profiles to calculating small business size to communicating with government contracting officers. In this webinar, I will unveil the top 21 most common legal mistakes I see contractors make time and time again and how to avoid them. I hope you will join me! Register here. The post Govology Webinar Event: Top 21 Legal Mistakes in Government Contracting, September 15, 2022, 1:00pm EDT first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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