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Encountering Innovation has quickly become one of the top US Pitch Events for Innovators/Inventors to present and showcase their technology to US Government Tech Scouts for special funding. Tech Scouts from the Department of Defense, Service Labs, Academia, and most US government agencies prioritize attending this week-long event to listen to pitches, examine poster board displays, discuss government needs, and chat with innovators from 8+ states during lunches and evening networking events. Our very own, Nicole Pottroff, will be presenting at this conference on teaming agreements, November 14. Please join her for this informative presentation. Also, DoD Tech Scouts and Prime Contractors will be looking for innovation and manufacturing capability solutions through intentional matched private pitch sessions. Register and find out more about this conference here. ​ The post Event: Encountering Innovation Conference hosted by Kansas APEX Accelerators, Nov. 13-17, 2023, Johnson County Community College first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The Small Business Administration Office of the Inspector General (OIG) recently released its report discussing the top management and performance challenges facing the SBA in 2024. The report highlights a number of issues currently plaguing the SBA and its various programs, including abuse of economic relief programs, disaster assistance programs, and loan programs, cyber security shortcomings within the agency, and oversight of grant management. The report also notes concerns with the HUBZone and small disadvantaged business programs. However, today I want to focus on the issues identified in two programs that we at Koprince McCall Pottroff work with day in and day out: the Woman-Owned Small Business Program and the 8(a) Business Development Program. Woman-Owned Small Business We have discussed contracting goals in the SBA’s various posts throughout time here at SmallGovCon.com. Year after year, federal agencies fall short of the SBA goal that 5% of all federal contracting dollars be spent on WOSBs, with the intent to create “a level playing field for women business owners.” Unfortunately, that is not always the case, and the certification process has been somewhat inconsistent in fully reviewing whether the applicant firms are, in fact, woman owned and controlled, and that they are indeed small businesses, as required by SBA rules. As the Wizard says, “pay no attention to that man behind the curtain.” The report cites to an earlier report of the WOSB Program, published in 2022. In this report, 3 of the 25 firms that the OIG audited failed to submit documentation that showed a woman owned the business. But it wasn’t necessarily SBA’s actions that caused this problem. Rather, this issue popped up when it was a third-party certifier, not SBA, that did the initial application review. In response to that, SBA took many steps to ensure this would cease to be a problem, including creating additional verification steps within the SBA. While the current report doesn’t give any updates on whether the updated policies and procedures have resulted in catching any ineligible firms that were let through by a third-party certifier, the OIG is satisfied, for now, determining that SBA has made substantial progress on the earlier identified issue. 8(a) Business Development Program The other area of improvement in this report that I want to highlight is the SBA’s 8(a) Program. The purpose of the 8(a) Program is “to assist eligible small disadvantaged business concerns compete in the American economy through business development.” 13 C.F.R. § 124.1. But what good is a program if there is no way to monitor performance to determine whether the goals of the program are being met? The OIG determined that SBA cannot consistently determine if 8(a) participants have demonstrated their abilities to compete in the open marketplace without program assistance, and that it needs to take action to ensure the 8(a) Program is not failing its participants and to prevent ineligible firms from being awarded 8(a) contracts over eligible participants. Further, a 2022 report published by the OIG found that more than one-third of firms assessed did not have an approved business plan, a requirement to be awarded an 8(a) set-aside contract. So, what has SBA done in response to the identified issues? While SBA has not fully established an information technology system to monitor performance and reporting of 8(a) participants, it did revise the Business Opportunity Specialist Annual Review Workbook to better assess how participants are progressing during the nine-year program. SBA also implemented new procedures to ensure business plans are monitored and updated annually, as required. To track progress, SBA has made it mandatory that the aforementioned workbook is used for all annual reviews of 8(a) Program participants. Finally, SBA is in the process of creating a “business proficiency matrix” that will provide a non-subjective assessment of participants’ progress. Taken as a whole, the OIG determined that the SBA has also made substantial progress on this issue as well. Other Issues and Conclusion Interestingly, the report notes that under the legacy employee aspect of the HUBZone program, “business continues to qualify as long as it has employees who lived in a HUBZone for at least 180 days leading up to the date of recertification. This means HUBZone businesses could have no employees residing in the HUBZone and still qualify.” SBA has not indicated any intent to get rid of the legacy employee rule, but we will continue to monitor it. The HUBZone program is cracking down, though, “[t]aking action to decertify firms that are no longer eligible for the program, decertifying 3,750 firms as of June 1, 2023.” Be sure that you are reviewing HUBZone requirements very closely if you are interested in that program. The report highlights that there is a process “for handling protests, requiring that program officials review entities representing themselves as a small, disadvantaged business on a federal prime contract or subcontract whenever the agency receives credible information.” This is found at 13 C.F.R. § 124.1002. I’m not sure that people are aware or would have an incentive to provide information about a SDB subcontractor, SBA noted that since “2014, SBA has not received any requests for review.” Good to see that SBA is making progress on improving many of the SBA certification programs for federal contracting, but there is always more to do. Questions about this post? Email us. Need legal assistance? Call us at 785-200-8919. 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 SBA OIG Report Shows Improvements in 8(a) and Woman-Owned Small Business Programs first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

One of our favorite fall traditions is back. No, not gorging on stuffing after a turkey trot. Rather, it’s time for GAO’s annual bid protest report. This report is GAO’s summary of bid protests for the previous fiscal year. It contains some key insights for how the protest numbers have changed from prior years. Here are some key points from this year: (1) the key effectiveness metric, showing numbers of sustains and corrective actions at GAO, was up even higher to 57% for the 2023 fiscal year and (2) total bid protest numbers are up slightly, reversing a downward trend in total protest numbers from the last few years. The annual bid protest is based on GAO’s statutory duty to report to Congress (1) each instance in which a federal agency did not fully implement a recommendation made by GAO (2) if any bid protest decision was “not rendered within 100 days after the date the protest is submitted,” and (3) “include a summary of the most prevalent grounds for sustaining protests.” It also summarizes the general statistics for bid protest decisions. One important point about the GAO bid protest process: GAO met its 100-day deadline to process a bid protest in all cases. And unlike last year, all agencies followed GAO’s recommendations in connection with bid protests. GAO Protest Numbers 2025 cases including 1,957 protests. This is up from 1658 in 2022 and 1897 in 2021. Compared to 2022, total protests are up about 22%. 608 – Number of cases decided on the merits, rather than through dismissal. 188 – Number of sustained protests 31% – Percentage of sustained protests, quite a bit higher than last year, for reasons explored below. 57% – Effectiveness rate (percentage sustained or where agency took corrective action). This is up a quite a bit from the prior year but shows over half of all protests result in a sustain or corrective action. A roughly 50% effectiveness rate has been the norm for the last few years. As explained below, this may reflect sustains in a large number of protests of one single procurement. 2% – Percentage of cases with hearings. Hearings are not common at GAO, but the rate went up a bit this past year. Protests are overall up from last year but down in number from a few years back. For instance, in 2018 there were 2,474 protests filed. However, the total number of protests filed has increased from last year. This may indicate an increased number of contractors willing to file protests, or the number of protests have plateaued. We’ll have to see how the numbers fall out next year to see if the increase in protests becomes a trend. Note that some procurements can be protested by many companies, and each is counted as a separate protest and also a separate decision (sustain, denial, or dismissal). So, a few protests joined by many protesters can increase overall numbers. The GAO report singled out the Department of Health and Human Services’ award of Chief Information Officer-Solutions and Partners 4 (referred to as “CIO-SP4”) government-wide acquisition contracts; a single procurement for the award of hundreds of information technology services contracts. That involved sustaining 93 protests in one decision and 26 protests in a related decision. GAO confirmed that this one case is responsible for a lot of the increase. As for why protests are down from years past, we have written about the enhanced debriefings implemented by DoD that provide more information about why companies lost an award. This may eliminate those protests where a company just simply wanted more information. Another possible reason for reduced protests is simply that there are less federal contractors over all and fewer contracts. As larger companies have consolidated, there are fewer small businesses. And, category management has been pegged by some as resulting in a decrease in overall contracts, as more contracts are pushed to government wide acquisition contracts (or GWACs). All of these theories may be true, but some of this may be simply random decreases in protests overall, or a multitude of other reasons. For instance, some companies prefer the more robust discovery available at the Court of Federal Claims. Why Are Cases Sustained? The report summarizes the common reasons for sustaining protests at GAO. These are helpful to know what types of issues are most likely to get traction at GAO, although GAO is not too generous on detail. The three most common grounds (and an example of each) were: Unreasonable technical evaluation, such as where “the agency’s record and responses to the protests failed to show the agency reasonably validated all proposed self-scores or reasonably established cutlines for socio-economic categories to determine advancement of proposals past phase one of competition.” Flawed selection decision, “where the agency failed to meaningfully look behind the adjectival ratings and adequately document reasons for finding the protester’s and awardee’s proposals technically equal before making award to the lowest-priced offeror.” Unreasonable cost or price evaluation, “where the agency was required to review indirect rates for realism, but the agency instead improperly relied on the awardee’s business judgments and applied fair and reasonable price analysis considerations in lieu of assessing the realism of the awardee’s indirect rates” We at SmallGovCon can help you decide if a GAO protest may be right for your company, based on what types of arguments can be successful at GAO. It will be interesting to see if protest numbers continue to go up next year. We’ll keep you updated as we follow the trends on GAO protests. Questions about this post? Email us. Need legal assistance? Call us at 785-200-8919. 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 2023 Bid Protest Report, Success Rate Up, Total Protests Up a Little Bit first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday and welcome to November! In honor of National Veterans’ Small Business Week, Administrator Isabel Guzman, head of the  SBA, hosted a roundtable with the Veteran Institute for Procurement (VIP) to discuss the Veteran Small Business Certification (VetCert) Program. The SBA has certified over 8,300 new veteran- and service-disabled veteran-owned small businesses through VetCert so far. Also, in federal government contracting news, there was an executive order released on how the government can address AI in government. You can read more about these, as well as other newsworthy articles below. Have a great weekend! Here’s a novel way for contractors to pitch ideas to the Defense Department Biden AI executive order calls for ‘talent surge’ across government to retain tech experts Performance.gov: More Movement of Contracting Officers between DoD, Other Agencies Now Possible Biden’s new AI executive order gives several agencies more responsibility Procurement Scorecard Program: Exclusion for Certain Department of Veterans Affairs Contracts Here’s what drove a 22% spike in bid protests this year Federal Contractor Agrees to Pay$402K in Back Wages, Interest to Resolve Alleged Hiring Discrimination Found in Federal Review New House Speaker. New cyber guidelines. What contractors can do to navigate it all. Changing AI Policy Landscape Puts Federal Contractors on Notice OMB Releases Implementation Guidance Following President Biden’s Executive Order on Artificial Intelligence Readout of SBA Administrator Guzman’s VetCert Roundtable in Rockville, Md. SBA-backed loans for women-owned businesses see ‘meteoric’ surge Former Air Force Contractor Pleads Guilty to Bribery Scheme XTO Agrees to Pay $16 Million to Resolve Natural Gas Royalty Underpayments to the United States IRS Contractor Pleads Guilty to Disclosing Tax Return Information to News Organizations The post SmallGovCon Week in Review: Oct. 30-Nov. 3, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Many federal contractors know of and participate in the SBA’s Mentor-Protégé Program. However, there are many agency specific Mentor-Protégé Programs, including the oldest continuous program, the Department of Defense’s Mentor-Protégé Program. The DoD’s program has been operating since around the First Gulf War, and like any good machine that is a few decades old, regularly needs some updates. Just in the past week, the DoD released the newest proposed changes to its program. Here at SmallGovCon, we have always endeavored to stay on top of all the different changes to the myriad of small business contracting programs. As such, you may remember we covered last year’s changes to the DoD’s Mentor-Protégé Program. Those updates proposed changes to the length of the Mentor-Protégé Agreements, and protégé eligibility, among other items. Well, in what appears to be a new fall tradition, the DoD on October 25 released further proposed changes to its Mentor-Protégé Program. While there are many similarities between the SBA’s Mentor-Protégé Program, and its “older cousin” at the DoD, there are quite a few unique characteristics to the DoD’s own program. While a separate blog post about all the differences is likely justified as some point, for this blog, we will just cover the unique items that DoD is planning on updating right now. Currently, the DoD’s Mentor-Protégé Program has a deadline for hopeful participants to apply for inclusion. Additionally, Mentors are able to either receive some small business contracting credit or reimbursement of costs through the DoD Mentor-Protégé Program. For Mentor-Protégé Agreements entered into after December 23, 2022, the Mentor actually has deadlines to submit data on those items. Also, to qualify as a Mentor, a business must show the ability to impart value to a Protégé. That of course can be shown in many ways, but one is having DoD contracts and subcontracts equal to or greater than $100 million during the previous fiscal year. Additionally, a Mentor-Protégé Agreement under the DoD’s Program can only last for two years currently, with the possibility of reaching five years in special circumstances. Now the DoD is proposing to change those specific items. In its proposed rule, the DoD plans to make the following adjustments: First, you may notice in DoD’s regulations, that it calls its program the “Pilot Mentor-Protégé Program.” The DoD is proposing to make their Program permanent (yes, the oldest continuously operating Mentor-Protégé Program technically is not permanent). In line with that the DoD proposes removing the word “Pilot” from all regulations, likely alleviating those among us who are sticklers for proper word usage. Also, the DoD will remove the deadline to apply to participate in the program. Logically, if something has no end, then there should be no deadline to get in. Next, to the delight of many who may be trying to determine further deadlines, the DoD proposes removing the specific dates found in the DFARS for mentors to submit for reimbursement and credit towards subcontracting goals under mentor-protégé agreements that were entered into after December 23, 2022. Also, in moves that were likely aimed to increase participation, or at least interest among potential mentors, the DoD is proposing a reduction of the dollar threshold associated with mentor eligibility, and increasing the length of a mentor protégé agreement. The DoD would adjust the amount of revenue from DoD contracts required to be a Mentor, from $100 Million during the previous fiscal year, to $25 Million. Also, a DoD Mentor-Protégé Agreement would now last three years, rather than two. Finally, the DoD proposes changes to a type of assistance that could occur under a DoD MPA. The DoD is adding “manufacturing, test and evaluation” to the list of assistance that a Mentor may provide to a Protégé, and “manufacturing innovation institutes” to the list of assistance that a Mentor may obtain for a Protégé. It is important to note that these are proposed changes, not final. So, there is still a period for comments. Therefore, if you have thoughts or comments on these proposed changes, your comments may be submitted up until December 26, 2023. The DoD will consider those comments when forming a final rule. While these are only proposed changes, it is likely that in the absence of glaring contradictory comments from the public, the DoD will march forward with these proposed changes. Upon first reading, it appears that these changes may actually help encourage more participation in the DoD’s Mentor-Protégé Program as it allows for longer relationships, and more Mentors to qualify. It also helps alleviate any concerns of those on the fence trying to decide whether they will participate due to it being a “temporary” or “Pilot” program. The stability of the Program, and longer-term relationships should do quite a lot to calm the waters of Mentors and Proteges; especially those who were afraid that assistance would not suffice, or they would have the rug pulled out from under them due to the non-permanent nature of the Program. Of course, much of how this goes could be determined by comments submitted. So, if you have thoughts on these changes or want to help leave your impact on the DoD’s Mentor Protégé Program, you have your chance to submit comments up until December 26th. Questions about this post? Email us. Need legal assistance? 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 DoD Proposes Updates to its Mentor-Protégé Program first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Nicole Pottroff and I are excited to attend the Fall APTAC conference in Washington DC and will be presenting on legal updates on November 6. The conference gives agencies and primes the opportunity to promote supplier diversity programs and learn how the APEX Accelerators can partner and assist in meeting contracting goals. The Association of Procurement Technical Assistance Centers (APTAC) is the professional organization of and for the DoD APEX Accelerators nationwide. APTAC supports the APEX Accelerators by providing important information, professional networking, comprehensive training and a voice in national government contracting assistance. They are a great resource for obtaining helpful information for federal government contractors. We certainly enjoy the opportunity to present throughout the year for this beneficial organization. If you are attending, please stop by our table to say hello. Hope to see you there! The post Event Announcement: APTAC’s 2023 Fall Training Conference first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday and happy Halloween! Nicole Pottroff enjoyed presenting at the recent ICBSSHOW this week and enjoyed talking to many of our readers. But it’s also the last weekend to prepare and to stock up on candy for those trick or treaters. Hope the federal contracting stories from this week aren’t too scary. This week in federal government contracting news, the Office of Management and Budget is setting a goal of awarding 13% of federal contract spending to “small, disadvantaged businesses” for fiscal 2024 and the SBA kicks off National Veterans Small Business Week, October 30-November 3, with lots of events taking place across the country. You can read more about these announcements and more in the articles below. Have a great weekend and have fun carving those pumpkins! US Department of Labor Implements Final Rule to Modernize Davis-Bacon Act Regulations, Better Meet Construction Workers’ Needs DISA looks to the open market for secure web browsing contract Treasury Department Releases Report Card on How President Biden’s Investing in America Agenda is Supporting Record Small Business Growth SMALL BUSINESS PLAYBOOK The next big post-affirmative action legal ruling to drop targets billions in small business contracts FACT SHEET: Vice President Harris Announces New Efforts to Expand Capital Access and Contracting Opportunities for Minority-Owned and Underserved Businesses at the Freedman’s Bank Forum Biden-Harris Administration announces agreement to supply federal facilities in three southern states with 100% carbon pollution-free electricity Biden officials set $3 bln bank deposit, procurement goals to boost minority firms State Department takes first crack at implementing supply chain risk management tools for contracts Yes, people, the House leadership failure also affects acquisition AECOM Agrees to $12 Million Settlement in Katrina Fraud Suit (2) October Celebrates the Lasting Impact of Women-Owned Businesses on the Economy Defense Federal Acquisition Regulation Supplement: DoD Mentor-Protégé Program (DFARS Case 2023-D011) Department of Energy Acquisition Regulation (DEAR) Implementation Guidance on Application of Buy America Preference in Federal Financial Assistance Programs for Infrastructure National Veterans Small Business Week DoD to release first industrial strategy by end of year The post SmallGovCon Week in Review: October 23-27, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The FAR Council has released updates that will impact a couple aspects of small business contracting. One is that contractors can now file size and socioeconomic status protests for certain types of orders, under strict timelines. Second is that agencies must notify SBA when they seek to remove certain contracts from the 8(a) Program. While these rules were present in some form in SBA rules, they are now firmly ensconced in the Federal Acquisition Regulation as well. Below, I discuss the highlights of these rules as well as any differences from the SBA rules. Order Protests Under this proposed rule, the FAR will be updated to clarify requirements for size and socioeconomic status protests in connection with orders placed under multiple-award contracts. The FAR Council notes it is implementing SBA rules stretching from 2013 to 2022. As we know, sometimes it takes a few years for the FAR to be updated, and this is no exception. If you can remember what you were doing back in 2013, more power to you! That was the year the Harlem Shake was big, for those who don’t recall. At bottom, this rule allows for size and status protests to be filed at only limited times. This type of protest can be filed at two times: At the time of award of “orders that are set aside under an unrestricted multiple-award contract.” At time of award of “orders placed under multiple-award contracts where the contracting officer requested rerepresentation.” These rules act as exceptions to the general rule for timing of size protest and status protests. As we’ve discussed with respect to status protests and size protests, the general rule is that a protest is due within 5 business days of when a contractor receives notice of award or learns of the prospective awardee. For instance, for negotiated contracts, a “protest must be received by the contracting officer prior to the close of business on the 5th day, exclusive of Saturdays, Sundays, and legal holidays, after the contracting officer has notified the protestor of the identity of the prospective awardee.” 13 CFR 121.1004. The SBA rules already contain an exception to the general rule this extended deadline for size and status protests. For instance, SBA rules stated that a protest could be filed within 5 business days of notice of awardee in connection with of either: a contract award “An order issued against a Multiple Award Contract if the contracting officer requested a size recertification in connection with that order”; or Except under GSA Schedules, an order “where the underlying Multiple Award Contract was awarded on an unrestricted basis without a reserve.” 13 CFR 121.1004. The SBA Office of Hearings and Appeals has explained that “the prime contractor of a long-term task or delivery order contract ”is small for each order’ unless a contracting officer chooses to request recertification for a particular order.” Interestingly, the FAR rule is not as clear as I would like it to be when it comes to protests where the agency requests recertification as part of the order. The SBA rule says that award of an order can be protested where the CO “requested a size recertification.” The FAR rule does not use the same language, instead mentioning “rerepresentation” in the title of the regulation, but not in the actual text. However, it does refer back to the SBA rules at 13 CFR 121.1004. It seems like if they were going to wait 10 years to implement this rule, they might make it a bit clearer when a protest was authorized. Also, while the SBA refers to it as a recertification, the FAR calls it a rerepresentation. They appear to be the same thing as recertification, but why not use the same word that SBA uses to avoid confusion? This is a proposed rule and comments close December 4, 2023. 8(a) Follow-On Contracts This final rule clarifies the notification requirements when a contracting officer decides that a requirement, previously procured under the 8(a) program, is a new requirement and not a follow-on requirement to an 8(a) contract; and when the procuring activity intends to procure a follow-on requirement using an existing limited competition contracting vehicle that is not available to all 8(a) participants and the current or previous 8(a) contract was available to all 8(a) participants. In particular, the agency must, under FAR 19.815, seek SBA’s approval to release a requirement from the 8(a) Program or if it is using a mandatory source for a procurement. The general rule is that “[o]nce a requirement has been accepted by SBA into the 8(a) program, any follow-on requirements shall remain in the 8(a) program unless there is a mandatory source (see 8.002 or 8.003) or SBA agrees to release the requirement from the 8(a) program in accordance with 13 CFR 124.504(d).” This is sometimes called the Once 8(a), Always 8(a) rule. The request must highlight the following items: (i) Whether the agency has achieved its small disadvantaged business goal; (ii) Whether the agency has achieved its HUBZone, SDVOSB, WOSB, or small business goal(s); and (iii) Whether the requirement is critical to the business development of the 8(a) contractor that is currently performing the requirement. However, there is a strict requirement for when an agency decides that a requirement is a “new” requirement. In that situation, a new procurement is not a follow-on, so it doesn’t have to stay in the 8(a) Program. To meet that standard, though, the agency must provide a written notice to SBA with a “copy of the acquisition plan, if available; performance work statement (PWS); statement of work (SOW) or statement of objectives (SOO); and the values of the existing 8(a) contract(s) and the new contract requirement.” This data is needed so SBA can check if the procurement really is new. Under SBA rules, a procurement is generally new under the following factors: (B) Procurements for construction services (e.g., the building of a specific structure) are generally deemed to be new requirements. However, recurring indefinite delivery or indefinite quantity task or delivery order construction services are not considered new (e.g., a recurring procurement requiring all construction work at base X). (C) The expansion or modification of an existing requirement may be considered a new requirement where the magnitude of change is significant enough to cause a price adjustment of at least 25 percent (adjusted for inflation) or to require significant additional or different types of capabilities or work. 13 CFR § 124.504. The FAR rule will require the agency to provide information so that SBA can check whether the agency is allowed to move a procurement out of the 8(a) Program, or whether the new procurement exception applies. This rule goes into effect on November 06, 2023. Conclusion While these rules were already present in SBA regulations, it is good to see them in the FAR. However, the rules were still valid even though they were only present in the SBA rules for quite some time. Hopefully, this won’t cause confusion for anyone where the language of the FAR and SBA rules do not directly match up. Questions about this post? Email us. Need legal assistance? 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 FAR Updates: Size Protests for Orders, Rules for 8(a) Follow-On Contracts first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The joint venture two-year rule always generates a lot of questions. But it’s an important one for small business joint venture members to understand and comply with. A recent decision from the Small Business Administration Office of Hearings and Appeals (OHA) shows why. In the case, a joint venture lost an award because it violated the two-year rule. In Federal Performance Management Solutions, LLC, SBA No. SIZ-6246, 2023 (Sept. 26, 2023), OHA reviewed an award to Federal Performance Management Solutions, LLC, a joint venture (the JV) between a small business and its approved large business mentor. The solicitation sought credentialing branch support services under NAICS code 541513, Computer Facilities Management Services, with a $32.5 million size standard at that time. A protester argued that the JV was not eligible due to violation of the SBA’s two-year rule for joint ventures. As we’ve discussed, the two-year rule is one of those deceptively simple rules that SBA has. It states: Once a joint venture receives a contract, it may submit additional offers for a period of two years from the date of that first award. An individual joint venture may be awarded one or more contracts after that two-year period as long as it is submitted an offer prior to the end of that two-year period. SBA will find joint venture partners to be affiliated, and thus will aggregate their receipts and/or employees in determining the size of the joint venture for all small business programs, where the joint venture submits an offer after two years from the date of the first award. 13 C.F.R. § 121.103(h). In other words, a small business joint venture should not submit offers more than two years after the first award to the joint venture, or the joint venture members will become affiliated. The protester argued in this case, that the JV violated this very rule–and SBA agreed. The question, then, is when was the “first award” for purposes of the two-year rule? And here is where it got a little interesting. The JV got its first award on September 15, 2018, and submitted its initial offer, including price, for the procurement at issue, more than two years later on June 7, 2022. Protester argued this was the date of the first award, but the JV disagreed. The JV attempted to argue that the September 2018 award should “not count due to the update to SBA’s regulation changing the 3-in-2 Rule to the 2-Year Rule”. Note, the Two-Year Rule, used to be the Three-in-Two Rule, which limited joint ventures to three awards within a two-year period. Since the change, joint ventures are not limited by the number of awards, only by the timing of bids. This change took effect on November 16, 2020. The Area Office determined that the intent of the change, to the Two-Year Rule, was “not that any firms already in their two-year period received an additional two years from the date of the rule change, but rather that any firms, in their two year period, could benefit from the removal of the restriction to three awards.” And OHA agreed. OHA concluded that “the rule provides that joint venturers will be deemed affiliated with one another if ‘the joint venture submits an offer after two years from the date of the first award’, irrespective of when that first award occurred. Applying the November 2020 Two-Year Rule to the JV is proper because the JV submitted its offer after November 2020–in 2022. OHA also noted that the two-year limit, in the rule, existed before the change to get rid of the 3-contract limit–that two-year part existed well before the 2020 change in the rule. Because the JV submitted its offer more than two years after its first award, the two JV members were properly found to be affiliated. Because the combined receipts of the JV members were over the applicable $32.5 million size standard, the Area Office was correct in finding the JV was not a small business. This OHA decision showcases that the Two-Year Rule can be a trap for the unwary. Unfortunately, SBA continues to keep this rule in the books. Those companies wishing to use a joint venture to go over small business contracts need to be well aware of the Two-Year Rule, and closely keep track of when a joint venture got its first award. Questions about this post? Email us. Need legal assistance? 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 OHA: JV Violates Two-Year Rule, Loses Award first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday! The Autumn trees are really showing off their colors this past week here in Lawrence, Kansas. We are grateful for some nice fall temperatures after the heat of summer. The city is bustling with activity and there seems to be some sort of fall festival every weekend. Also, our attorney-author John Holtz had a good time at the Meet the Buyers Fall 2023 Conference. Thanks to Daniel Kuchar for inviting us! If you have some down time from all that apple picking and festival going, here’s a few articles that we found very informative this week. Of note are some insights into the draft NDAA and challenges facing SBA. Have a great weekend! Pfizer Inc Agrees to Pay $2M to Resolve Alleged Compensation Discrimination at New York City Location SBA Administrator Guzman and Business Leaders Reaffirm Support for 8(a) Program If it does get passed, the Defense authorization bill has quite a few surprises Florida International University Agress to Pay $575K in Back Wages, Interest to Resolve Alleged Gender Pay Discrimination Former Navy IT Manager Sentenced to over 5 Years in Prison for Hacking a Computer Database, Stealing over 9,000 People’s Identities, and Selling the Information for $160,000 in Bitcoin US Foods Agress to Pay $721K To Resolve Gender-Based Hiring Discrimination Allegations at Fove Locations GSA to partner with vendor to bring ‘best-in-class’ facial recognition option to Login.gov Federal CISO says White House targeting AI procurement as part of conversation on looming executive order, guidance VHA more than doubles FY 2023 workforce growth target, ramps up HR hiring Improvements to the Federal Acquisition Regulation Standard Forms in the GSA Forms Library Top Management and Performance Challenges Facing the Small Business Administrationin Fiscal Year 2024 The end of the beginning phase for GSA’s OASIS+ is near Senate bill would improve death benefits for civilian feds The post SmallGovCon Week in Review: October 16-20, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

This week, the SBA published a press release affirming its continued support of its 8(a) Business Development Program in response to recent 8(a) Program attacks in the courts. In the press release, business industry leaders across the nation joined SBA Administrator, Isabella Casillas Guzman, in praising the 8(a) Program, its successful history, and its driving policy and spirit. If you are not up to speed on the recent 8(a) Program happenings, take a look through the recent 8(a) articles collected in our 8(a) Contractors’ Toolkit for more information. But in a nutshell, there was a recent federal district court decision in Ultima Servs. Corp. v. U.S. Dep’t of Agric. that enjoined the SBA from applying a rebuttable presumption of social disadvantage based on membership in a marginalized racial or ethnic group, which you can read about here. Since that decision, the 8(a) Program has been experiencing some interruptions, as well as some monumental changes. For a period of time, all new applications were paused. And many applicants and participants were nothing short of panicked as to what was going to happen to this wonderful program and their participation in it. Since then, SBA’s 8(a) Program certification portal, certify.sba.gov, has been reopened, and 8(a) Business Opportunity Specialists across the country have been working with current participants to maintain their eligibility generally and for pending 8(a) awards. SBA is now requiring all new applicants and all existing 8(a) Program participants to draft a detailed narrative to demonstrate its compliance with the social disadvantage requirement–just one of the numerous 8(a) Program eligibility rules. So, since SBA has now implemented official changes removing any type of race- or ethnicity-based presumption of social disadvantage for individuals applying to and already in the 8(a) Program, you may be thinking that should have ended the 8(a) Program attacks. And frankly, you would not be alone in that thought. But unfortunately, such is not the case. Claiming to be “still suffering from the lingering effects of defendants’ discrimination[,]” the plaintiff in Ultima has now also asked the court to enjoin the use of the 8(a) Program in the administrative and technical support industry altogether. The motion notes that the plaintiff does not agree with the SBA’s “interpretation of the existing injunction.” But it didn’t stop there. The plaintiff also asked the court: (i) to halt all 8(a) contract options and similar modifications for those who were previously presumed disadvantaged; (ii) to stop SBA from providing any kind of shortened or “less rigorous” narrative reviews at this time; (iii) to appoint someone to review SBA’s narrative reviews or to simply make public these extremely-personal and often-painful narratives, instead; and (iv) to enjoin all actions on 8(a) contracts with any participants previously presumed socially disadvantaged–whether they have an SBA-approved narrative in place now or not. All this to say, the SBA’s recent press release could not have come a more crucial time for the 8(a) Program, which it notes is “the federal government’s premier business development program helping socially and economically disadvantaged small business owners expand their footprint in the federal marketplace through training and contract support.” The press release begins with a powerful statement from SBA Administrator Guzman, noting the recent court injunction and order and reassuring the nation that the 8(a) Program is still “open for business.” Since the injunction, Guzman says, “SBA has reviewed or recertified thousands of current 8(a) participants through a process consistent with the court’s order[,]” and has now “reopened the 8(a) application portal to new participants – ensuring a vast, talented pool of vendors are available to federal agencies.” Guzman also notes the 8(a)’s successful history of fulfilling a crucial role in government contracting. In her words: The SBA’s 8(a) Program has more than a 50-year track record of making contracting with the U.S. government more accessible for thousands of small businesses who in turn provide critical products and services to advance agency missions. Leveling the playing field not only provides entrepreneurs from historically underserved communities the opportunity to grow their businesses, create jobs, and contribute to their local economies – it is also crucial to enhancing performance across our federal government. Finally, Guzman eloquently expresses her faith in the 8(a) Program’s future and driving policy, stating: As we await a final ruling, the SBA and Biden-Harris Administration remains committed to supporting the 8(a) Program and standing up for the small business owners who have helped drive America’s historic economic growth. We will not let attacks from those who seek to take us backward chill our efforts to promote equity, expand access to the American Dream, and ultimately strengthen our country’s industrial base. Guzman’s statements alone provide hope and reassurance in response to the recent judicial attacks on the 8(a) Program. But the press release also quotes several business industry leaders in support of the program. One such leader, Chris James, President and CEO of The National Center for American Indian Enterprise Development, calls the 8(a) Program “one of the federal government’s most effective tools for establishing and growing minority-owned businesses,” and says the following: I have witnessed its impact firsthand, both as a former SBA official and as the leader of an organization that has worked with countless 8(a) companies at all stages of their development. I applaud the SBA and Administrator Guzman for their unyielding support for the 8(a) Program and look forward to working with them to ensure minority-owned businesses have access to resources that will help them succeed. And another leader, Justin Nelson, Co-Founder and President of the National Gay and Lesbian Chamber of Commerce (NGLCC), exclaims his pleasure in seeing the reopening of the 8(a) Program to new applications. He says: This represents a significant opportunity for the diverse business community to thrive and succeed. The NGLCC looks forward to working closely with the Small Business Administration to ensure that LGBTQ and other diverse-owned businesses that have faced discrimination in their entrepreneurial journey can share their experiences and be a part of the program. The 8(a) Program is not just about federal contracting and training; it’s about empowering socially and economically disadvantaged small business owners to reach their full potential and contribute to a more inclusive, prosperous economy. In addition, the press release provides moving statements from leaders in the Native Hawaiian Organizations Association, the National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship, and additional groups promoting racial and ethnic diversity in industry, as well as the Board for Women Impacting Public Policy and other women leadership groups. In essence, each leader expresses what the 8(a) Program has done for them and their communities, explaining how the 8(a) Program has helped so many overcome the systematic barriers and inequalities that plague these groups of people. The leaders also seem to align on the wide-spread benefits the 8(a) Program’s promotion of diversity in the marketplace has provided for our nation as a whole. Ramiro Cavazos, President and CEO of the United States Hispanic Chamber of Commerce, says, “over five million Hispanic-owned businesses . . . contribute over $800 million to our nation’s economy every year[,]” and “[t]heir innovation and resilience drive America’s economy.” Together, through equitable access to key programs to level the economic playing field, we forge a path to brighter opportunities and shared prosperity.” Rhett Buttle, President of Public Private Strategies Institute, says, “[t]he program has and will continue to help entrepreneurs access the American dream to start small businesses which are the backbone of our economy.” Shaundell Newsome, Co-Chair of Small Business for America’s Future, says, “[s]mall businesses can face extra challenges and need a level playing field[,]” and the 8(a) Program “can help them thrive which in turn will bolster our economy[.]” And Chrystel Cornelius, President and CEO of the Oweesta Corporation, reminds us all of “the importance of Native entrepreneurs and small businesses in accessing significant federal contracting opportunities in supporting and building Native economies and economic sovereignty.” Finally, the press release concludes with the following statement, as well as the reiteration that the 8(a) Program remains “open for business”: In 2021, President Biden set an overall goal of awarding 15 percent of federal prime contracting to small disadvantaged businesses by fiscal year 2025, representing a 50 percent increase in spending on these businesses from when he first took office. The 8(a) Program has helped achieve historic progress toward this goal – under President Biden, federal agencies have achieved record levels of spending on contracts with small businesses overall, and with small disadvantaged businesses specifically. The federal government’s small business prime contracting program supported the creation of 727,800 jobs nationwide in fiscal year 2022 alone. * * * We at SmallGovCon are keeping a close eye on the current 8(a) Program legal landscape, and we will update our readers as this matter develops further. We–like Guzman and many of the leaders quoted in the press release–feel the 8(a) Program has provided crucial opportunities for our disadvantaged business owners nationwide. And we hope to see the program continue to thrive despite the recent attacks. Indeed, SBA’s 8(a) Program is “a long-time instrument of economic equity for minority business enterprises[,]” in the words of Ying McGuire, President and CEO of National Minority Supplier Development Council. Need assistance with your social disadvantage narrative or other 8(a) or federal contracting matters? Questions about this post? Email us or give us a call at 785-200-8919. 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 SBA and Industry Leaders Reaffirm Support for 8(a) Program in Light of Recent Judicial Attacks first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Partner Nicole Pottroff will be attending and presenting at the the ICBSSHOW in Oklahoma City so please stop by our table to say hello. The ICBSSHOW, offers informational sessions featuring experts in government procurement, as well as one day of matchmaking to introduce you and your business to government decision makers. Also, there is access to government agency buyers and policy leaders, prime contractors, and tribal procurement representatives looking to expand their vendor pools. The post Conference Announcement: ICBS Show, Oklahoma City, October 23-25, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

If you’re interested in winning more B2G business through the bid process, but you don’t have all the answers, join this LIVE forum and talk about this market with people who have helped hundreds of companies win BILLIONS of dollars in government contracts. The event host, Nick Bernardo, President & founder of MyGovWatch.com, has over 20 years of experience helping companies of all sizes figure out how to find, compete for, and actually win government contracts. Sign up now to join this free opportunity to speak with experts, who have actually helped people succeed in govcon, who can answer ALL your questions. Register here. The post MyGovWatch Live: The B2G Roundtable with Nicole Pottroff & Greg Weber, Federal Contracts Attorneys, October 18, 2023, 12:00pm CDT first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday the 13th! It seems very fitting to have a Friday the 13th fall in the month of October, right? The pumpkins are being gathered from the patches in preparation of carving and I see Halloween decorations everywhere I go. It’s also conference season at SmallGovCon.com. I was in Iowa last month, John Holtz is headed to Nebraska next week for the Fall Meet the Buyers Government Contracting Conference and Nicole Pottroff will be going to Oklahoma the following week for the ICBS Conference. Please come out to see them if you are in the area. Some interesting articles this week, including new cybersecurity rules, small business updates, and the continuing resolution. We hope you have a safe Friday the 13th! FAR Council updates whistleblower protection, small business rules The reason why the Air Force pulled the plug on a huge cyber contract may surprise you Credit for Lower Tier Subcontracting and Other Amendments Ownership and Control and Contractual Assistance Requirements for the 8(a) Business Development Program: Correction Diversity in government contracts still falls short of equal opportunity for disadvantaged firms Empowering Female Entrepreneurs: Tips For Success During Women’s Small Business Month Navy discourages military generative AI, LLM usage Out with the old, in with the new, as the Army tries new pilot program to off load some of its expired equipment Navy Awards 9 Companies Positions on $600M NAVFAC Construction, Repair Contract New Army chief of staff targets ‘the network’ as top modernization priority New rule sets stage for banning risky technologies from government supply chains What the continuing resolution still leaves unresolved Ownership and Control and Contractual Assistance Requirements for the 8(a) Business Development Program; Correction SDTX and RI USAOs jointly resolve False Claims Act violation The post SmallGovCon Week in Review: October 9-13, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Please join attorney John Holtz, as he heads back to his home state of Nebraska, to the Meet the Buyers Conference. This is Nebraska’s premier government contracting conference where businesses can advance their contracting knowledge, connect with other business owners, and network directly with agency representatives and buyers. John will be doing two presentations: joint ventures, as well as size and affiliation issues. Don’t miss the chance to meet directly with Federal, State, and Local government agency reps, government contracting industry people, and resource providers and please stop by the Koprince McCall Pottroff table and say hi to John. More information and registration here. The post Event: Meet the Buyers Fall 2023 Conference | October 17-19 | Scottsbluff, Nebraska first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

A joint venture agreement must closely follow Small Business Administration rules to be compliant for a small business set-aside. And SBA interprets those rules strictly. If they are not followed, a joint venture that was up for award, can see that award go up in smoke. Here, SBA said that a joint venture involving a Service-Disabled Veteran-Owned Small Business (SDVOSB) was not compliant because it was both (a) not specific enough and (b) too detailed in providing for oversight of actions of the JV partners. In Silotech-Apex JV, LLC, SBA No. VSBC-297, 2023 (Aug. 2023), the VA sought roof replacement services under 236220, Commercial and Institutional Building Construction, with a corresponding $45 million annual receipts size standard. It was set aside for SDVOSBs and VA made award to Silotech-Apex JV, LLC (Silotech), a joint venture. A protester argued that the joint venture agreement for Silotech was noncompliant for various reasons. OHA looked at the following provisions in the joint venture operating agreement and found the agreement to lack the required level of detail. But it also placed too much control in the hands of the non-SDVOSB member. Not Detailed Enough First, a JV agreement must contain a provision “[s]pecifying the responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance ….” 13 C.F.R § 128.402(c)(7). OHA noted that the purpose of the solicitation was roofing replacement and had definite details, “providing roofing specifics, details on buildings, drawings of the roof, and locations.” The JV agreement: states “[e]ither venture will have the right to visit the contract site to evaluate the contract performance … [b]oth venturers will jointly have qualified site representation onsite during construction.” Section 7.0 of the JV Agreement further states “the venture” will identify key personnel, with Silotech “taking the lead”; identifies Silotech Group as the responsible member for contract negotiations; and identifies the percentages of work to be performed by each member. OHA found this noncompliant because the agreement “does not specify the responsibilities of the parties as to contract performance” even though the solicitation included plenty of details related to contract performance areas with respect to roofing replacement. Note that the regulation does allow a lesser showing of detail for indefinite contracts under 13 C.F.R. 128.402, which states that, “If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance[.]” 13 C.F.R § 128.402(c)(7). Control by Non-SDVOSB Member Second, the JV Agreement created problems with negative control by the non-SDVOSB member. “The managing venturer must be responsible for controlling day to day management and administration of contract performance.” 13 C.F.R. § 128.402(c)(2)(i). Negative control is the ability to block actions by the SDVOSB managing venturer, such as through preventing a quorum or having a veto power. OHA determined that the JV Agreement documents gave too much control the non-SDVOSB member: Regarding new hires, job boards, terminations, badges, offer letters and other HR like responsibilities, the Operating Agreement states “[e]ach party shall be responsible for this task within their scope of work.” Thus, [non-SDVOSB company] ACS may exercise negative control by controlling the hiring and firing of employees, and other HR actions. ACS could conceivably exercise control by withholding enough employees from performance of the contract. OHA has repeatedly determined that the ability to hire and fire employees is considered day to day management and can result in negative control. Therefore, Silotech (the SDVSOSB company) did not have control of the day-to-day management and administration of contract performance. Arguably, having control over one’s own employees seems within the realm of involvement “as is commercially customary” under 13 C.F.R. § 128.402. But OHA did not agree, finding that the SDVSOB managing venturer must have control over contractual performance. Conclusion Joint venture members must be careful that their joint venture agreements include all required information under the pertinent SBA joint venture regulations. But they also must be careful not to include too much information. Conceivably, the language about each company controlling its own employees could have been left out of the joint venture agreement, perhaps avoiding some of the problems raised in this decision. Questions about this post? Email us. Need legal assistance? Call us 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 Joint Venture Agreement Fails for Lack of Detail–And Too Much Detail on Venturer Control first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

This week we had some actual fall temperatures at the SmallGovCon home offices. It’s finally pumpkin spice weather! We’ll be enjoying the fall weather and some football this weekend. Hope you enjoy the fall weather as well, along with some of top federal contracting headlines, including the continuing resolution to fund the government, new cyber rules, and the opening of the 8(a) portal. Fight over DHS consulting contracts moves to court What’s in the continuing resolution, and when does it expire? New cyber rules aim to standardize requirements for federal contractors SBA Administrator Guzman Releases Statement on the Reopening of the 8(a) Application Portal Sign On Letter to Congress for Stronger Whistleblower Protections for Government Contractors San Antonio Business Owner and Associates Arrested for Defrauding SBA Program Accredited Lenders Program Express Pilot Program Four Indicted For Defrauding Federal Program Intended For Service-Disabled Veteran-Owned Small Businesses In Connection With A Construction Contract For Cancer Treatment Center At Bay Pines VA Medical Center Less than a week in, contractors sort out the meaning of the 45-day continuing resolution Agencies Push for Federal Acquisition Regulation Amendment to Include New SBA Contract Protest Rules Treasury plots departmentwide contract to streamline cybersecurity services Senators move to financially protect contractors during government shutdowns Deputy Interior Secretary Beaudreau to step down The post SmallGovCon Week in Review: October 2-6, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

It’s the moment many have been waiting for–SBA has reopened its Certify portal to new applicants seeking admission into the 8(a) Business Development Program. SBA closed the portal to all new 8(a) Program applicants in early August 2023, following a decision from the Federal District Court of the Eastern District of Tennessee that took away applicant’s presumption of social disadvantage for certain designated groups. This resulted in all 8(a) participants being required to submit a social disadvantage narrative. To address this issue, SBA opened Certify bit by bit to current participants who had not previously submitted a social disadvantage narrative, prioritizing current 8(a) participants with pending awards followed by current 8(a) participants without pending awards. Now, SBA has opened Certify to new applicants that wish to apply for participation in the 8(a) Program who now must demonstrate their social disadvantage. This very sudden change has had a lot of effects on both current participants and applicants, and has created a plethora of questions and frustrations. At this point, all participants and applicants must prove their basis for social disadvantage prior to award of a contract or acceptance into the program. We blogged on what makes a good social disadvantage narrative back in August. SBA also has a wealth of information you can access for guidance. In the past, some 8(a) applicants had to submit a social disadvantage narrative. If you believe you have already submitted a social disadvantage narrative, you should check your information in Certify or reach out to your Business Opportunity Specialist for confirmation. SBA has been clear that participants who initially were admitted into the program with an approved social disadvantage narrative will not be required to submit a second narrative. It is always best to check if you are unsure. All narratives, whether from an applicant or participant, must be submitted through Certify. Format for SDN Going forward, every individual applicant for the 8(a) Program must prove their social disadvantage, but apparently now means there is an option to do so via a method other than submitting a narrative. SBA states that the 8(a) Program application has been updated to include “a plain language fillable questionnaire for applicants to identify social disadvantage.” Interestingly, it then states that “[f]irms continue to have the option to prepare a social disadvantage narrative and upload it directly to Certify.” At first glance, this language suggests that a narrative is not required. Thankfully, the Certify Help Desk Database does clarify. In Certify, the applicant has the option to submit a written social disadvantage narrative or complete a new section titled “Experiences that have affected your business.” Within this new section, applicants are instructed to fill in fields that describe the event that affected your business including: What happened? How did this situation affect opportunities to start of expand your business? Which of the following contributed to the discrimination in the situation? When did it happen? Where did it happen? Who contributed to the discrimination. These questions align with the guidance that SBA has given to current participants as far as what needs to be included in a narrative for it to be successful. And, if you take the option to fill out the “Experiences that have affected your business” form instead of submitting a formal narrative, you will still be required to fill this information out for two different experiences. The standard for social disadvantage—chronic, substantial, and has occurred within American society—applies to proving disadvantage whether by a narrative or form. As a side note, this process has no effect on the annual review process. If you are a current participant with a social disadvantage narrative pending review, and your annual review is due, complete the annual review. It is a requirement of continued 8(a) Program participation, and there are no extensions due to pending narratives. It will be interesting to see how this all works out in the end as there is still ongoing litigation regarding the case at the heart of this issue (the Ultima Services Corp. decision). For more information, view all of KMP’s 8(a) Program information in our 8(a) Toolkit. Questions about this post? Email us. Need legal assistance? Call us 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 UPDATE: SBA Reopens its Certify Site for all 8(a) Program Applicants first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday. It’s time to say goodbye to September and welcome in October already. Where does the time go? As I’m sure you all are aware, this week’s federal government contracting news is all about the possible government shut down and its impact on federal services and federal government contractors. Lawmakers have today and tomorrow to come to some sort of agreement. We’ve included some articles below with additional information on this situation as well as other federal government contracting news. Have a great weekend. What closes and what keeps running in a federal government shutdown Federal Real Property:Preliminary Results Show that Increased Telework and Longstanding Challenges Led to Underutilized Federal Buildings A Message to IAM Federal Employees and Federal Contract Workers Regarding a Possible Government Shutdown US Department of Labor Recovers $101K in Benefits Wages, Damages for 51 Workers Employed on Two Federally Funded Projects in California Government shutdown puts contractors in precarious position Fall 2023 Meet the Buyers Conference Provides the Opportunity for Government Contracting Success Readout of SBA Administrator Guzman’s Participation in Events with Congressional Black Caucus Foundation Minimum Wage for Federal Contracts Covered by Executive Order 13658, Notice of Rate Change in Effect as of January 1, 2024 Why the Amazon anti-trust case is important to GovCon Federal contract workers stand to lose in possible government shutdown US judge refuses to block venture capital fund’s grants for Black women US Department of Labor, LABCORP Subsidiary Enter Agreement After Compliance Review Alleged Hiring Discrimination by Federal Contractor Yale University and Its Professor Agree to Pay $1.5 Million For Failure to Share Patent Royalties with VA Here’s how many feds would stay on the job – both with and without pay – during an upcoming shutdown CISA’s next version of secure-by-design guidance expected in ‘coming weeks’ Inside the Federal Acquisition Service’s reorganization The post SmallGovCon Week in Review: September 24-29, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

One of the pillars of the SBA’s HUBZone program is the location of a company’s employees. In August of this year, SBA released an Information Notice emphasizing important points about where employees reside, and HUBZone entity’s efforts to employ the necessary amount of employees residing in HUBZone areas. While SBA’s HUBZone policies don’t have the weight of law as compared to a regulation, the HUBZone office will generally enforce this sort of guidance quite strictly. So don’t think it’s just a suggestion. As these are crucial elements of eligibility, it is important for all HUBZone businesses to be aware and reminded of SBA’s expectations. We have covered the basics of how to qualify for the HUBZone program before. I highly recommend you read that article, along with this one (and our other HUBZone articles), if you are interested in the HUBZone program. As you may notice, one of the unique aspects of the HUBZone program is the emphasis on where employees reside. To qualify to participate in the HUBZone program (among many other items) a business must have at least 35% of its employees residing within a HUBZone. Participants must also certify that they will attempt to maintain the 35% requirement throughout performance of any HUBZone contract, and those that fall below 20% during contract performance will be definitively determined to have failed to attempt to maintain the HUBZone residency requirements. SBA, in a recent Information Notice focused in on reminders to contractors about what truly qualifies as employing a HUBZone resident, and how to maintain the necessary employment percentages. Legitimate Employment of HUBZone Residents SBA reminded contractors that part of the HUBZone’s program’s goals is to “increase employment opportunities, investment, and economic development” in historically underutilized business zones. In pursuit of that SBA expects individuals to be actually working. Not simply a name on a spreadsheet or payroll to try and meet HUBZone requirements. SBA makes it clear in this information notice that simply hiring HUBZone residents but not having them conduct work will not meet program requirements. SBA warned contractors that “if they appear to be placing individuals on their payroll without providing them legitimate work” then SBA could decline or decertify firms from the HUBZone program. SBA expects that employees work “a minimum of 40 hours during the four-week period immediately prior” to the date SBA reviews a business for HUBZone status. In addition, HUBZone could request job descriptions and information that demonstrates work is being performed within that job description’s expectations for each part time employee. This could include: timesheets, progress reports, and attendance reports Be sure to keep copies of these types of documents. SBA makes specific mention of contractors utilizing third-party employment agencies. If a HUBZone contractor utilizes a third-party employment agency, they should be “prepared to submit evidence to SBA that the company providing the HUBZone employees is a legitimate leasing company that is primarily engaged in the business of leasing employees to other businesses.” Maintaining Employment Percentages SBA’s other main point in its information notice was on HUBZone contractors maintaining 35% HUBZone residency requirements. As noted above, the regulation states HUBZone contractors must “attempt to maintain” 35% of employees being residents of a HUBZone during certification. Of course, since the only guarantee in life is change, SBA notes that there may be times a contractor falls below that 35% standard. In that situation, contractors must make “substantive and documented efforts” to reach that 35% minimum. But regardless of efforts taken, if the percentage falls below 20%, then the contractor is conclusively seen as failing to meet the 35% requirement. SBA in its information notice makes it clear that 20% is not the goal, and “being above 20% alone does not demonstrate that a firm is attempting to maintain 35% HUBZone residency.” So, being above 20% does not function as a safe harbor unless the contractor takes concrete actions trying to meet the 35% requirement. SBA warned that any firm performing a HUBZone contract at the time of their HUBZone certification anniversary “must be prepared to submit evidence that the firm was making substantive and documented efforts to maintain” 35% HUBZone residency. Proof could include written offers of employment to HUBZone residents, advertisements seeking HUBZone employees, job fair attendance at or near HUBZones, and evidence that they have not dropped below 20% during contract performance. SBA closed out their information notice with a warning to contractors that if a firm drops below 20% HUBZone employee residency, then they must notify the SBA and “voluntarily decertify from the program or they will be proposed for decertification.” While these are things SBA has mentioned before, it’s clear that the HUBZone office is bringing renewed attention to them. While the two items emphasized by SBA recently are both well-known pillars of HUBZone certification, this notice is a warning to HUBZone contractors that SBA will be focusing enforcement on these items. By reiterating the parameters of expectations, SBA will likely feel little sympathy for contractors who fail to meet them. In fact, the SBA mentioned this very information notice in a press release announcing efforts to “root out abuse and fortify the integrity of the HUBZone program.” SBA plans include increased enforcement, increased debarment, increased audits, and updated regulations. So, if you are a HUBZone contractor, now would be the time to double check your employment records, and plan for any efforts you can take if you don’t meet the 35% requirement or don’t have HUBZone employees conducting work within their job descriptions. If you fail to plan ahead for these items, then you can probably expect some risks to your HUBZone certification. Questions about this post? Email us. Need legal assistance? 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 No Work No Play: SBA Reminds Contractors of HUBZone Employment Requirements first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

In Fiscal Year 2022, 1,595 bid protests were filed with GAO. While that seems like a large number, it pales in comparison to the number of federal contracts the federal government awards in a given year. On average, the government awards over 11 million contracts per year. That’s a lot of acquisitions that are not subject to any feedback from outside the agency. But things might change now with the new rule that the FAR Council enacted. Today, we’ll take a look at what this entails. Back in 2015, the Office of Federal Procurement Policy tested out a simple survey system for offerors to provide feedback on the acquisitions process. It was quickly realized that a lot of contractors were displeased with aspects of this process. But, prior to that point, there was no way for a contractor to provide feedback that would be reviewed by someone other than the contracting officer, who probably wouldn’t want to share any negative reviews with their higherups. The FAR Council (DoD, GSA, and NASA) realized what we just noted above: The vast majority of contracts are never protested, and any feedback could be kept under lock and key by the contracting officers. This is not conducive to a culture aimed towards improving the federal acquisitions process. As a result, the process then began to introduce a new survey program, called Acquisition 360, as a means of letting contractors provide feedback on the preaward and debriefing process. Fast forward to today. The FAR Council has issued a final rule to get this feedback process started. With this system, offerors can comment on their experiences with the preaward process and the debriefing process. To clarify, this system is not for feedback on contract administration matters. The rule creates a new contract clause, FAR 52.201-1, Acquisition 360: Voluntary Survey. The clause will state: (a) All actual and potential offerors are encouraged to provide feedback on the preaward and debriefing processes, as applicable. Feedback may be provided to agencies up to 45 days after award. The feedback is anonymous, unless the participant self-identifies in the survey. Actual and potential offerors can participate in the survey by selecting the following link: https://www.acquisition.gov/​360. (b) The Contracting Officer will not review the information provided until after contract award and will not consider it in the award decision. The survey is voluntary and does not convey any protections, rights, or grounds for protest. It creates a way for actual and potential offerors to provide the Government constructive feedback about the preaward and debriefing processes, as applicable, used for a specific acquisition. Unsurprisingly, the program was mostly welcomed by contractors. There is one big caveat, however: The rule itself will not be mandating that clause be included in any contracts. Commentors attempted to convince the FAR Council otherwise, and the response was: While actionable feedback is desired, it is equally important that participants understand the survey is completely voluntary and will not impact the outcome of a specific acquisition. Adding language to further encourage survey use may confuse participants or compel a response out of fear that not responding would preclude the opportunity to participate in an acquisition. We admittedly find this response puzzling. It is unclear how requiring contracting officers to provide contractors with information on how they can provide feedback in Acquisition 360 would be confusing or somehow give contractors the impression they must provide feedback. Indeed, the FAR Council’s statement seems to not even be responsive to the actual assertion: It reads as though the FAR Council believes the commentator was stating that contractors should be forced to provide feedback, rather than that contracting officers should be forced to make offerors aware of Acquisition 360 for the acquisition. It’s more likely that many agencies were not keen on the idea of telling contractors how they can critique their acquisitions. That said, there is nothing preventing agencies themselves from requiring their contracting officers to include the clause. No doubt many agencies will take this well and require it of their officers. However, we suspect that some agencies will be reluctant to implement it, and so the FAR Council may want to circle back on this after some time has passed to see how much it is being utilized. Additionally, offerors and the public should not expect access to any individual instance of feedback submitted through Acquisition 360. The information will be retained for internal government use, although the government is considering producing generalized data sets based on the combined survey responses. In any case, the FAR Council reasons that “the open-comment fields present the possibility of personal or private information being disclosed, if entered voluntarily by a participant.” As such, “review and redaction of comments would be necessary prior to publication to prevent the unintentional release of personal or private information.” This position is understandable, but at the same time, we think the government should consider balancing this out with its other aim of transparency when it reviews how this program is working. Overall, we think the feedback system idea is good, and we think it can help improve the acquisition process. That said, we are concerned that agencies and contracting officers also have a substantial incentive to not utilize it: Why make potential critics aware of how they can provide criticism? However, we expect that this will be utilized by many agencies. After all, DoD implemented its extended debriefing process on its own, and that has helped improve its acquisitions. In any case, we think this is a step in the right direction. Contractors: If you want to provide feedback on the acquisition process for a solicitation you bid on, keep in mind Acquisition 360. The newest version of the system goes into effect on September 22, 2023. Questions about this post? Email us. Need legal assistance? Call us 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 Watching the Watchman – New FAR Rule Opens Door to Further Feedback on Acquisition Process first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday, Readers. We hope you have had a great week and are looking forward to the weekend. Talk around the proverbial water cooler, this week, has been about the possible government shut down. On midnight, September 30th, fiscal year 23 will come to an end. Apparently, if certain things aren’t passed by Congress and signed by the President, the new fiscal year will start with a shutdown, and that has a lot of government contractors nervous. We have included some articles on this topic and other federal government news below. Have a great weekend. Meetings: Regional Small Business Regulatory Fairness Boards DOD Software Licenses: Better Guidance and Plans Needed to Ensure Restrictive Practices Are Mitigated Ultima Services asks court to bar SBA’s 8(a) program in the administrative, technical support industry SBA accused of sidestepping court ruling on race-conscious program FBI to Award Up to $358M in Contracts for Architectural, Engineering & Planning Services How contractors are bracing for a federal government shutdown Contractors prepare for shutdown or at least an austere October Brace for potential government shutdown, federal contractor group warns Minority and women business owners learn, compete at Opportunity Inclusive Business Summit Government Shutdown: What Government Contracting Businesses Need To Know Federal Contracting Program for Women Entrepreneurs Expands Guidelines for Reporting Bundled and Consolidated Contracts GAO union employees keep flexible work options in new contract A messy dispute caught one company for millions of dollars of government refund demands CIO-SP4 protest dismissed after NIH commits to corrective action Pentagon chooses 8 new ‘hubs’ to lead $2B effort to revitalize US microelectronics Navmar to Pay $4.4 Million to Settle False Claims Act Allegations Regarding Double-billing and Cost-Shifting The post Small GovCon Week in Review: September 18-22, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

It’s a tale as old as time, and I’m not talking about “Beauty and the Beast.” I’m talking about an offeror who failed to comply with the registration requirements in FAR 52.204-7. What’s FAR 52.204-7? It’s the FAR provision that requires, among other things, all offerors to be registered in the System for Award Management, or SAM as it is better known. And, as we have seen many times before, there is no way around this rule. Often, failure to be registered in SAM limits an offeror’s eligibility before award is made, making the offeror ineligible for award. However, this time, it affected the award that had already been made, resulting in the court entering a preliminary injunction against the government continuing with its original award. As the Court of Federal Claims (COFC) stated, COFC has repeatedly upheld an agency’s determination that an offeror is ineligible for award because the offeror did not comply with aspects of the FAR. The type of failure to comply may vary, but a common form of non-compliance, and the one subject to this protest, is the failure to register in SAM. Myriddian, LLC v. United States, No. 23-443 (Fed. Cl. May 23, 2023). Additionally, in a somewhat unique situation, the court in Myriddian not only had to inform the awardee, Cloud Harbor, that it was noncompliant and, therefore, ineligible, but also had to inform the contracting agency, the Department of Health and Human Services (DHHS). The relevant solicitation incorporated FAR 52.204-7 by reference. That rule requires that an offeror be registered in SAM at the time of offer submission, “and shall continue to be registered until time of award, during performance, and through final payment of any contract, basic agreement, basic ordering agreement, or blanket purchasing agreement” per FAR 52.204-7(b). And “registered in SAM” is more than just having a record in the system. Specifically, “registered in SAM” means: The offeror has entered all mandatory information, including its unique entity identifier, the Electronic Funds Transfer (EFT) indicator, its Commercial and Government Entity (CAGE) code, and data required by the Federal Funding Accountability and Transparency Act of 2006; The offeror has completed the Core, Assertions, and Representations and Certifications, and Points of Contact sections in SAM; The government has validated all mandatory data fields, including validating the offeror’s Taxpayer Identification Number (TIN); and The government has marked the record “Active.” FAR 52.204-7. Cloud Harbor was registered in SAM when it submitted its offer (making this protest different from protests where the offeror is not registered in SAM at time of offer submission, but gets registered by the time an award is made). And, as DHHS pointed out, Cloud Harbor was also registered at the time of award. Yet, for a 17-day period of time sometime between when Cloud Harbor submitted its proposal and when DHHS made the award, DHHS’s registration in SAM lapsed, making Cloud Harbor ineligible for an award under the solicitation. While DHHS tried to frame the SAM registration requirement as one that it had the authority to waive, the plain language of FAR 52.204-7 led COFC to disagree. The judge, citing many prior decisions, held that FAR 52.204-7 was unambiguous, and the registration requirement was mandatory. Not only that, but COFC pointed out a myriad of prior decisions in which the Government itself argued that the registration requirement was mandatory and non-waivable. (I see you, COFC, using the Government’s own words against itself.) Since DHHS didn’t get to waive the requirement, it then attempted to argue that FAR 14.405 allows agencies to correct minor irregularities in an offeror’s proposal when the irregularity is immaterial to an invitation for bids. Unfortunately, for both DHHS and Cloud Harbor, the ability to make corrections to minor irregularities only applies to procurements that are performed according to FAR Part 14, pertaining to sealed bidding with non-negotiated procurements. Here, we had a negotiated procurement that was subject to FAR Part 15, meaning DHHS had no authority to allow correction of a minor irregularity, like the lapse in SAM registration by Cloud Harbor. Following DHHS’s failure to prove that Cloud Harbor was eligible for award, the rest of the decision focused on whether an injunction was warranted. COFC went through the factors that merit an injunction—(1) likelihood of success on the merits; (2) irreparable harm absent immediate relief; (3) the balance of interests weighing in favor of relief; and (4) that the injunction serves the public interest—and determined that all the requirements for a preliminary injunction were met. Accordingly, COFC issued the preliminary injunction, and ordered the parties to continue with the protest to achieve a final resolution, demonstrating the vital importance of accurate and continual SAM registration to the federal government contracting process. Questions about this post? Email us. Need legal assistance? Call us 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 COFC: Lapsed SAM Registration During Proposal Evaluations Makes Offeror Ineligible for Award first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

There is a saying that sometimes to go forward, you have to go back first. In August, the Department of Labor (“DOL”) published a final rule that will update the Davis-Bacon Act, with some methodologies previously abandoned. Unsurprisingly, this final rule focused on enforcement of labor standards, and was quite lengthy (numbering in the hundreds of pages). Despite it’s voluminous size, there was one major change that federal contractors will find of interest, a change to the method of determining prevailing wage. That is the focus of this post. A quick primer on the Davis-Bacon Act (the Act), is likely warranted prior to discussing one of the key takeaways from the DOL’s recent final rule. In summary, the Act is a federal law that sets rates for paying staff of contractors and subcontractors when performing certain federal contracts. As such, the Act has been of great interest to contractors for quite some time (the Act first came into being in the 1930s, almost 100 years ago). The Act directs the DOL to determine the “locally prevailing wage rate,” basically functioning as a way for contractors to set minimum wages for staff when performing certain federal contracts, such as construction, alteration, or repair (including painting and decorating) of public buildings or public works. We have discussed prevailing wages and consequences of not following the Act previously, but this final rule presents some shifts to how the Act functions. According to the DOL, the Davis-Bacon Act hasn’t faced a “comprehensive regulatory review in nearly 40 years,” and this final rule aims to do just that. On August 23, 2023, the DOL published a final rule that updates the regulations under the Act and it’s related acts (these are referred to in publications as the “Davis-Bacon Related Acts” or “DBRA”). The DOL, in their FAQs for this regulatory update, state that the federal contracting landscape has changed significantly. Consequently, this final rule aims to “provide clarity to contracting agencies, contractors, and workers, and to enhance the effectiveness and consistency of the administration and enforcement” of the Act and related rules. Through this final rule, one of the items of clarity is how the “prevailing wage” is determined. Through the final rule, the Wage and Hour Division of the DOL is actually amending the methodology to determine the “prevailing wage.” Interestingly, through the final rule, the DOL is resurrecting an old method for determining prevailing wage. This methodology was colloquially known as the “three-step process” (or 30% rule) and stopped being used in 1983. Under this “three-step process,” if there is no established wage rate paid to a majority of workers within a particular classification, then a wage rate will be seen as “prevailing” if it is a rate that is paid to at least 30 percent of the workers in that classification. If there is no wage rate paid to at least 30% of workers in a certain classification, then you simply utilize a weighted average rate to determine prevailing wage. How DOL explains the original three steps for finding a prevailing wage in the final rule is as follows: Any wage rate paid to a majority of workers; and if there was none, then The wage rate paid to the greatest number of workers, provided it was paid to at least 30 percent of works, and if there was none, then The weighted average rate. The DOL will also change how it determines wages in rural and metropolitan areas, to “more accurately reflect modern labor force realities, allow more wage rates to be determined at smaller levels of geographical aggregation, and will increase the sufficiency of data at the statewide level.” All of these changes appear to be DOL attempting to make wages much more local and specified. As stated in the final rule, the DOL expects that reintroducing the “three step process” “will reduce the use of average rates roughly by half—from 63 percent to 31 percent.” The DOL also decided against using a median wage rate for “prevailing wage.” The DOL also pointed to Congressional testimony from the Solicitor of Labor in 1962 about the three step process: “An average rate ‘does not reflect a true rate which is actually being paid by any group of contractors in the community being surveyed.’ Instead, ‘it represents an artificial rate which we create ourselves, and which does not reflect that which a predominant amount of workers are paid.‘” These updates and explanations from DOL shows that the DOL believes these prevailing wage methodology changes will result in much more specific local prevailing wages being found. DOL likely thought that the more recent methodology resulted in broad rates that encompass larger areas, and thus different economic realities for the contractors present. Despite being quite a change to current methodology, DOL is simply shifting back to the way it determined prevailing wages under the Act prior to 1983. While the prevailing wage methodology change is of course one of great interest to contractors, as stated earlier, this final rule is quite lengthy and covers more than simply prevailing wage methods. Be sure to review it and check back on our site for updates. The DOL has released some good guidance on the Final Rule, including FAQs, Comparison Charts, and Compliance Guides. In addition to checking out the final rule, it is likely a good idea for contractors affected by the Act to review the DOL’s varying guidance documents, as the final rule as a whole represents a lot of changes to the Act that could impact contractors. Questions about this post? Email us. Need legal assistance? Call us 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 Davis-Bacon Act Resurrects Old Prevailing Wage Methodology first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday, Readers. We hope you had a great week. We are starting to get a little fall weather around these parts, which is exciting. Fall has also brought the prospect of a potential government shutdown and what the impact will be, as reflected in some of these articles. The budget process is complicated, so we are all waiting to see how it shakes out. We’ve also included some other articles on topics such as OASIS+ and cybersecurity, we hope will be of interest to you below. Have a great weekend. US Department of Labor, Navient Corp. Enter Into Agreement to Resolve Allegations of Hiring Discrimination PF 2023-41 Class Deviation from the Federal Acquisition Regulation provision at 52.204-7, System for Award Management Air Force needs to clarify its goals for space technology acquisition GSA’s OASIS+ sucked into the protest void US Department of Labor, Nielson Company US Reach Agreement to Resolve Alleged Race-Based Hiring Discrimination in Dallas, San Antonio Top 10 Common Legal Mistakes to Avoid in Federal Government Contracting Congress Losing Patience on Federal Workforce’s Return to Office Bootcamp held for small business owners on how to win government contracts GSA announces new political appointees New Pentagon cyber strategy emphasizes industry and global partnerships Senate confirms deputy secretary at VA IRS to remain ‘fully operational’ if Congress triggers government shutdown Subcontractor Sentenced to Pay Nearly $9 Million in a Criminal Fine and Restitution for Rigging Bids and Defrauding the U.S. Military GSA shifts Federal Acquisition Service organizational structure to align with customers The post SmallGovCon Week in Review: September 11-15, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article