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In the meantime, FAR 19.800(e) needs to be fixed:

Before deciding to set aside an acquisition in accordance with Subpart 19.5, 19.13, or 19.14, the contracting officer should review the acquisition for offering under the 8(a) Program.

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The scores tonight (for those of you keeping track at home) are:

Attentive Readers 1

Royalist Bureaucrats 0

Statutory Construction 1

Just makin' stuff up because you have a high-backed chair 0

Reading words to understand meaning 1

"What those old duffers meant to say" 0

HUBZones 1

8(a) BD Program 0

Legislative Branch 1

Executive Branch 0

Poor people in areas with no jobs 1

Fancydan, overpricin' 8(a) contractors 0

Competition 1

"I know a guy" 0

"What section 657a(B)(4) makes very clear is that, if Congress wished to establish the relationship of the HUBZone program to another contracting preference program, it knew how to do so." Love it.

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On page 29 of the decision, the Court mentions that:

"The HUBZone statute was introduced as part of the Senate version of the Small Business Reauthorization Act. Def.'s Resp. 26 (citing Small Business Reauthorization Act of 1997, S. 1139, 105th Cong., tit. vi (as reported by S. Comm. on Small Bus., Aug. 19, 1997, S. Rep. No. 105-62)). Defendant notes that the original Senate version of the bill contained a "Parity Relationship" provision, which stated that the HUBZone provisions "shall not limit the discretion of a contracting officer to let any procurement contract to [sBA] under section 8(a)." Id. (quoting 143 Cong. Rec. 18,118 (1997)). Defendant also notes that after the House of Representatives removed the entire HUBZone program from the bill, the Senate reinstated the program--but without the parity provision. Id. at 27 (citing 143 Cong. Rec. 24,094-108)." No explanation for the parity provision's omission was provided in the Senate record." Id. (citing 143 Cong. Rec. 24,106). defendant then lists a number of comments by House members, expressing their concern "that the new HUBZone program not harm the existing 8(a) program." Def.'s Resp. 28.

With no explanation from the Senate as to why the parity provision was omitted, the fact that it was omitted is inconclusive."

Apparently, the bill entered what our legislature refers to as a "conference." In truth, it is a shuffling of papers by a bunch of guys and gals who may or may not have a clue about what they have before them. Anyway, it appears that what some learned members of our "legislature" wanted was trashed in conference. Why? Who knows. Maybe some old fuddy-duddy hoping for a defense plant in his state just was being ornery and hid the provision. Anyway, that is the legislative process.

In the latest major piece of "contracting legislation," the National Defense Authorization Act For Fiscal Year 2010, our "legislature," had another shot at removing a "shall" and replacing it with a "may." Maybe that would have provided clarity to this situation. Instead, "our legislature" again omitted the change. You can see it here at the bottom of this page. The provision was deleted in "conference." Why? Who knows? Again there was no explanation. Maybe the provison dropped to the floor and no one picked it up and stuck it back in the pile of paper before it was voted on. Who knows? Anyway, apparently a disappointed congressional staffer decided to try to scold the government into submission by using a Justice Department declaration. Nice try little one. It doesn't work as you can see from the Court's decsion below:

Congress's statements about the proper interpretation of a statute subsequent to the statute's passage are of little persuasive authority. (p. 31 of decision)

Now, we can all anxiously wait for the next piece of garbage contracting legislation to clear everything up.

Legislative intent reminds me of a personal story.

I had been flying around the country visiting contracting offices to review the experience gained under an OFPP contracting test. Before I got down the steps of the contracting office at Rock Island, I found out that a bill incorporating the test's provisions had been signed into law. At the end of my work, I sat down with a congressional staffer explaining our review of the test. There was a problem. One provision of the law scared everybody. I tried my weak explanation of what the legislative intent wanted. The staffer looked at me and said there was no such thing as "legisative intent" since no one knew what they were voting for. Then the staffer said "what have we done." The staffer immediately called OMB and--over the phone--it was agreed that there would be no regulation to implement the troubling provision of law. It worked. In the future, I suppose the legisation was fixed.

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Interesting read from 2002 http://www.house.gov/smbiz/democrats/Press...es/Pr032802.htm where there was insistance by Congress that there should not be parity in favor of 8(a). What a tangled web of confusion our bureaucrats have woven.

"The HUBZone Program was designed to benefit low income individuals and welfare recipients by the injection of federal contracting dollars in low income communities, or those communities suffering from high unemployment. The 8(a) Program, on the other hand, promotes individual entrepreneurship by minority business owners through the awarding of federal contracts to these businesses."

This quotation, which identifies well who the primary beneficiaries are for each program, in my view supports the notion that the HUBZone program should have a higher priority than any of the preference programs that are based on who OWNS THE COMPANY. The regulations identify that a purpose of the HUBZone program is to increase EMPLOYMENT in these areas. The program requires that a percentage of the EMPLOYEES reside in a HUBZone, thus adding to the regenerative effect of the program on these areas.

The whole idea of parity is a very bad one and would be confusing for contracting offices. The Executive Branch has really worked hard to screw this up, SBA in particular, at least in part because the 8(a) program is easier to administer than the HUBZone program. The number of SBA HUBZone program examinations (Seen 13 CFR 126.401) is not nearly sufficient, which increases the likelihood of fraud and corruption within the program. Why are there so few examinations? Too many fancydan, knownothing office types at SBA who don't like any action that involves honest work on their part.

This kind of laziness and SBA plainly not minding the store is what prompted the old joke, maybe you've heard it:

A young man advised his boss that he had accepted a job with SBA. The boss replied, "Son, you'll be lucky to work there."

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Mission Critical Solutions v. United States. http://www.uscfc.uscourts.gov/sites/defaul...S%20Opinion.pdf

Sen. Olympia Snowe introduced legislation during the last session of Congress, S.1489, that would create parity among the programs in accorndance with SBA's interpretation. The bill has been in the Senate Committee on Small Business and Entrepreneurship since last July. Nothing much has happened.

Sen. Snowe yesterday urged passage of the bill now. At the same time Sen. Landrieu plans to introduce another stand-alone bill in place of the amendment that establishes parity but was stripped off another bill. Here an article with more details:

http://www.govexec.com/story_page.cfm?arti...oref=todaysnews

The GovExec article also says "The matter also could be resolved through a regulatory change. A proposed FAR rule, filed in March 2008, would have clarified that no order of award preference exists among small business programs. That rule remains under review."

I don't see how a rule can simply "clarify" now with the Court's opinion. The article also says the Administration may appeal the decision as well.

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I don't think Congress will change anything. For one reason, Congress has so many other things to deal with which are a higher priority. For example, health care gets forced upon them again in the next couple weeks. Another reason is the issue is both complicated as well as potentially embarrassing because all the HUBZone abuses with no remedy in sight.

federalcontracts previously brought up a good point with this comment:

"The HUBZone Program was designed to benefit low income individuals and welfare recipients by the injection of federal contracting dollars in low income communities, or those communities suffering from high unemployment. The 8(a) Program, on the other hand, promotes individual entrepreneurship by minority business owners through the awarding of federal contracts to these businesses."

This quotation, which identifies well who the primary beneficiaries are for each program, in my view supports the notion that the HUBZone program should have a higher priority than any of the preference programs that are based on who OWNS THE COMPANY. The regulations identify that a purpose of the HUBZone program is to increase EMPLOYMENT in these areas. The program requires that a percentage of the EMPLOYEES reside in a HUBZone, thus adding to the regenerative effect of the program on these areas.

So one could argue HUBZone is the priority. Then you have Sen. Snowe saying it?s only fair that all small businesses have a chance and wants parity

If HUBZone remains a priority, more companies will try and get business improperly and additional stories of abuse occur for the newspapers. SBA will be expected to monitor the program but we know they can't. It's a no win situation.

So the answer for Congress is do nothing.

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The reason for parity was to give agencies a chance to meet their program goals. It let them decide which kind of set-aside to make in light of how they stood in terms of each goal.

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The reason for parity was to give agencies a chance to meet their program goals. It let them decide which kind of set-aside to make in light of how they stood in terms of each goal.

This reason, in my opinion, loses sight of the priorities that the law has already established for each of these programs in the first place. The current languishing silence from the Army OSBP and the confrontational stance from the SBA with regard to the decision constitutes an embarrassing failure of the Federal Acquisition System to support the attainment of public policy goals adopted by the Congress and the President.

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This reason, in my opinion, loses sight of the priorities that the law has already established for each of these programs in the first place. The current languishing silence from the Army OSBP and the confrontational stance from the SBA with regard to the decision constitutes an embarrassing failure of the Federal Acquisition System to support the attainment of public policy goals adopted by the Congress and the President.

Oh, nonsense. The parity policy was an attempt to come to grips with the competing demands of multiple special pleading constituencies banging on the door for a piece of the all-American procurement pie. SBA will be adding women-owned small businesses soon.

The HUBZone program is scandal-ridden. SBA has been overwhelmed by the paperwork associated with the thing and cannot manage it with the resources currently allotted to it. (The agency was created to provide financial assistance, not procurement assistance.) Contracting offices do not have the resources to enforce subcontracting limitations and wouldn't begin to know how.

My bet is that in the face of the court decision Congress will enact parity. There is bi-partisan support for it. If the Department of Justice appeals to the Federal Circuit, Congress will wait for the outcome. Changing the law is the easiest thing in the world to do. Just replace "shall" with "may."

I don't care one way or another. Parity is inevitable. Go call your lobbyist.

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The Office of Management and Budget has directed federal agencies to ignore two GAO decisions about priorities among small business programs. OMB is taking the stance, for now, that there is parity among HUBZone, 8(a), and SDVOSB. GAO had ruled that the HUBZone program takes priority.

You can find the OMB memo here: http://www.whitehouse.gov/omb/assets/memor...2009/m09-23.pdf.

This was the right thing for OMB to do. Now they need to tell agencies to ignore the GAO decision applying the rule of two to task and delivery order competitions.

Do you now agree with your earlier self that this was the "right thing" to do? Or, in retrospect, was it the wrong thing?

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Absolutely. OMB (and the Department of Justice) did absolutely the right thing in telling agencies to ignore GAO's decision. (Agencies should ignore GAO more often.) The court decision does not change my opinion in that regard.

My beef with the GAO was not over its interpretation of the statute. My beef with GAO was that it went beyond what it needed to do to sustain the protest. It could have sustained the protest based on the FAR, without reference to SBA's rule. GAO had no authority under CICA to get into the issue of SBA's implementation of the statute. (I know that Iron Man disagrees with me. He and I don't need to rehash that argument. We beat it thoroughly to death and I thought that he held his ground quite admirably.)

If Congress does not like Executive Branch rulemaking it can enact legislation to counter it. Alternatively, someone can challenge the regulation in court. I said all along that it was a decision for a Federal court. The court's interpretation of the statute does not surprise me at all. Now, Congress with change the statute or wait for the Federal Circuit if the Department of Justice appeals the Claims Court's decision.

Either way, you can kiss HUBZone priority goodbye. (I hope.) So enjoy it while it lasts.

If we're going to give priority to one of the programs, we should give it to service-disabled veteran-owned small businesses. They earned it.

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Either way, you can kiss HUBZone priority goodbye. (I hope.) So enjoy it while it lasts.

The Executive Branch has been wrongfully denying HUBZone SBCs of contract opportunities.

The following provides context to your anti-HUBZone vitriol:

a) You appear to care a great deal when HUBZone SBCs, as independent actors, short the Government a compliance here or a compliance there.

B) You appear to care little when the Executive Branch, with its enormous resources, undertakes a purposeful, coordinated multi-agency effort to refuse to give effect to a statute, even though the result of that refusal was to short HUBZone SBCs out of billions of procurement dollars intended to improve the prospects of poor areas and the unemployed people who live in them.

c) You then delight in the fact that the program the Executive Branch has been screwing over will now likely be scrapped.

Those three things indicate something about your priorities and the kind of Government you favor.

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Guest carl r culham

I find the rhetoric of this thread to be equal to that of Congress on this whole matter. I personally find the decision of both GAO and the Court to be exactly on point based on final legislative history that created HUBZone and would add that it seems the whole history of HUBZone creation has been forgotten.

My recollection is that HUBZone actually grew out the Supreme Court case of Croson v Richmond of 1989. Fearing the effect of Croson on 8(a) SBA began looking at ways to salvage a Program for identified groups. At the time neither the President nor Congress was friendly to such and idea. In 1993 with a more friendly administration the idea of HUBZone began to grow and finally hatched in the 1998/1999 time period with efforts that moved away from identified groups to those in economic distress. The hand wringing and efforts resulted in a Program that was intended not to have parity.

I have already provided one reference in support that parity was not intended and offer yet another which is from the April 2, 1998 Federal Register notice by the SBA of the proposed Program. I quote ?

?The legislative history contains many strong indications that

Congress wanted the SBA to implement the program in a manner that

builds on the President's proposed Empowerment Contracting program

(launched by Executive Order, May 21, 1996) and is consistent with the

Federal government's other existing community empowerment programs-most

notably the Empowerment Zone program. The legislative history also

contains many indications that Congress wanted SBA to implement the

HUBZone program without harming SBA's existing 8(a) program.

Furthermore, by increasing the small business contracting goal in this

title, Congress sent a strong signal to SBA that it also should avoid

harm to other Congressionally recognized programs which benefit small

business. SBA is sensitive to these indications of Congressional intent

and believes that this proposal reflects a balanced approach to HUBZone

implementation.?

I also find the implication of the HUBZone Program to be a wholesale scam to be an indictment without basis other than personal opinion. I would agree it does provide opportunity for fraud as any Federal contracting program does yet to suggest that that the major percentage of the some 9200+ firms certified as HUBZone is unfounded. To use GAO findings to support such an argument seems interesting to me when at the same time GAO?s decision regarding the original protest is questioned. I will use my own personal experience to suggest that the majority of HUBZone firms have qualified for the Program legitimately and as in any Federal contracting program are using their designation to their advantage.

Betting on Congress in this day is like playing Powerball, no odds in ones favor and no way to even determine the odds. I do agree the Program should be addressed by Congress but not with regard to parity it should be just done away with. Ten plus years from first implementation and especially in these economic times things have changed , the Program has no value under the basis that it was finally established which in part is questionable purposes based on the entire history of the idea of a program that was not based with regards to members of specific groups .

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How does that quote support the notion that parity was not intended? It does not come across that way to me.

I don't know who said "wholesale scam." Not me. I said scam-ridden, and that it is. Read the GAO report. 8(a) is scam-ridden, too. I don't know about SDVOSB. I hope not.

I am not anti-HUBZone. I am pro parity.

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Unfortunately, where there is money to be made, there are fraudsters and scams.

See GAO Report, "SERVICE-DISABLED VETERAN-OWNED SMALL BUSINESS PROGRAM Case Studies Show Fraud and Abuse Allowed Ineligible Firms to Obtain Millions of Dollars in Contracts"

http://www.gao.gov/new.items/d10108.pdf

That breaks my heart. It really does. It makes me sad. But I should not be surprised.

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The impudence of the Executive Branch is pronounced.

I'll be hand-writing a note to the Legislative Director and Legislative Assistant (who handles Small Business issues) of each and every Member of Congress.

What do these royalists in the Executive Branch have against the respect for law? What does this Administration have against economically downtrodden areas and the unemployed people who live in them? Sometimes I honestly believe some would rather take advantage of poor people than to do even the smallest thing to help them.

This matter revolves around three issues primarily:

1) In the end, newly employed people (HUBZone program beneficiaries) make very unlikely campaign contributors. Business owners who are permitted a bunch of noncompetitive Government contracts (8(a) program beneficiaries) make very likely campaign contributors.

2) The HUBZone program requires the SBA to leave its leather chair and do some honest work. The 8(a) program is very easy to desk-administer, and the SBA can continue to have its collective, lazy posterior cemented to its chair.

3) A drive by the military-industrial complex for parity in order to advantage the SDVOSB program. So long as there is an order of priority, it becomes more difficult to route money through their favorite SDVOSB front companies. The sooner they can take down the "poor area helping unemployment reduction" program, the faster they can get the "route money to your favorite SDVOSB front company" program up and operational. If you think the fraud in that program is bad now, you just wait...

In the end, I don't think this issue is any more complicated than honestly assessing these three issues.

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Hogwash. From the Congressional Record (Senate), March 26, 2010, page S2163:

S. 3190. A bill to reaffirm that the Small Business Reauthorization Act of 1997 does not limit a contracting officer's discretion regarding whether to make a contract available for award pursuant to any of the restricted competition programs authorized by the Small Business Act ; to the Committee on Small Business and Entrepreneurship.

Ms. LANDRIEU. Mr. President, I am pleased to introduce the Small Business Parity Programs Act of 2010. As the Chair of the Committee on Small Business and Entrepreneurship, I have held a number of hearings and roundtables on the issues affecting small businesses that contract with the Federal Government. The legislation I am introducing today represents the second of several steps the Committee is taking to address some of the disparities and inequalities that prevent our small businesses from receiving their fair share of government contracts.

As the largest purchaser in the world, the Federal Government is uniquely positioned to offer new and reliable business opportunities for our Main Street businesses. Government contracts are perhaps one of the easiest and most inexpensive ways the government can help immediately increase sales for America's entrepreneurs, giving them the tools they need to keep our economy strong and create jobs. When large businesses get government contracts, they can potentially absorb that new work into their workforce. When small businesses get government work they must ``staff up'' to meet the increased demand. By increasing contracts to small businesses by just 1 percent, we can create more than 100,000 new jobs--and today, we need those jobs more than ever.

But small businesses face significant challenges in competing for these contracts, including a maze of complicated regulations, contract bundling, size standards with loopholes for big businesses and a lack of protections for sub-contractors. Despite the fact that federal agencies have a statutory goal to spend 23 percent of their contract dollars on contracts to small firms, and to ensure fair participation by women-owned firms, small disadvantaged firms, service-disabled veteran firms, and HUBZone businesses, the agencies often fall short of these goals.

The Small Business Parity Programs Act of 2010 is just the second of several steps that I am undertaking to ensure that all small businesses have fair access to government contracting opportunities. This particular legislation will reaffirm Congress's intent that government contracting officers have the discretion to choose among any of the small business development and contracting programs when deciding to make a contract award. This legislation makes clear that small businesses that participate in the 8(a), service-disabled veterans, women, and HUBZone programs all have a fair opportunity to win these contracts.

Two recent decisions by the Government Accountability Office misinterpreted Congress's long-standing intent with regard to the operation of the current laws governing these programs . The decisions stated that the HUBZone program had preference over all other small business contracting programs . The decisions were also relied upon in a recent opinion issued by a judge of the Court of Federal Claims, in a case called Mission Critical Solutions v. United States.

I was disappointed by these decisions because they misinterpret the intent of Congress in passing the Small Business Reauthorization Act of 1997. For this reason, along with the Small Business Committee's Ranking Member, Senator OLYMPIA SNOWE of Maine, I filed an amendment containing the provisions included in this bill to S. 1390, the Department of Defense Authorization Act for Fiscal Year 2010 . The amendment was accepted and passed the full Senate on July 24, 2009 with overwhelming and bipartisan support. To my disappointment, it did not make it through conference Committee with the House and was left out of the final bill. The Conference Report accompanying that bill did include, however, explicit language reaffirming Congress' intent that ``contracting officers of the Department of Defense and other federal agencies have the discretion whether or not to award contracts pursuant to the HUBZone program'' or any of the other small business procurement programs .

As Chair of the Committee on Small Business and Entrepreneurship, I have focused a considerable amount of energy on promoting the interests of small businesses in the federal contracting arena. The legislation I am introducing will, quite simply, make clear that it has always been Congress' intent to allow contracting officers to accord parity to each restricted competition program authorized by the Small Business Act .

This legislation will have an immediate, positive impact for small businesses seeking fair access to federal contracts. It will reaffirm contracting officers' flexibility to award contracts to HUBZone businesses, which provide important benefits for hard-hit communities. At the same time, it also will reaffirm Congress's intent to ensure robust implementation of the 8(a), SDVO and Women-Owned small business development and procurement programs . Among other things, programs such as these are crucial to enable the government to address the significant discriminatory barriers that evidence submitted to us shows still limit the opportunities available for minority-owned businesses, women-owned businesses, and SDVO businesses to participate in the marketplace.

The language of our bill is intended to make clear that no single restricted competition program has priority over any other, contrary to the misinterpretation of Congress' intent by the GAO and one decision of the Court of Federal Claims. However, nothing in the bill is intended to change the current requirement that, where a contracting officer chooses to make an award pursuant to the HUBZone program, that award must be made on the basis of restricted competition if the contracting officer has a reasonable expectation that at least two qualified HUBZone small business concerns will submit offers and that the award can be made at a fair market price.

It is well past time to provide greater opportunities for the thousands of small business owners who wish to do business with the Federal Government. I believe that this legislation is a good step toward opening those doors.

I hope my colleagues will join me in supporting this simple yet commonsense bill and I look forward to working with them as we move this legislation forward.

Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.

There being no objection, the text of the bill was ordered to be printed in the Record, as follows:

S. 3190

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Small Business Programs Parity Act of 2010 ''.

SEC. 2. SMALL BUSINESS CONTRACTING PROGRAMS PARITY .

Section 31(B)(2)(B) of the Small Business Act (15 U.S.C. 657a(B)(2)(B)) is amended by striking ``shall'' and inserting ``may''.

Emphasis added. Gee, I wonder if the bill has anything to do with the "impudence" of the Executive Branch.

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