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In a recent decision, SBA’s Office of Hearings and Appeals (OHA) emphasized the importance of a careful reading and complete understanding of the control and ownership requirements for Service-Disabled Veteran Owned Small Businesses (SDVOSBs). This decision provides contractors with an excellent opportunity to brush up on SBA’s control rules regarding qualifying and non-qualifying owners. As the appellant found out in this case, while it may seem to some at first glance that simple majority ownership by the service-disabled veteran is enough to meet SDVOSB requirements, voting provisions matter as well. Failure to keep in mind all aspects of SDVOSB requirements could lead to a denial of SDVOSB status. Let’s take a look at the language of the regulation in question, and how this case illustrates the potential consequences of overlooking a critical item in an otherwise-compliant application for SDVOSB certification. Before hopping into the case, a refresher on relevant SDVOSB requirements is in order (For even more refreshers on the SDVOSB program, check out our back to basics SDVOSB post here). SDVOSB Basics 13 C.F.R. § 128.203 governs SBA’s consideration of who controls an SDVOSB. Generally, to be eligible for certification as an SDVOSB, the business “must be controlled by one or more service-disabled veterans” and control by one or more qualifying veterans means that “one or more qualifying veterans controls both the long-term decision-making and the day-to-day operations of the Applicant or Participant.” Additionally, a qualifying veteran must hold the highest officer position in the firm, and while they do not necessarily have to have the technical expertise or licensure that would automatically confer control of the company, they do have to demonstrate that they have “ultimate managerial and supervisory control over those who possess the required licenses or technical expertise.” Most importantly for our purposes here, when the business in question is a corporation, one qualifying veteran must own at least 51% of all voting stock, be on the Board of Directors, and there can be no supermajority voting requirements for shareholders to approve corporate actions. All votes must be simple, greater than 50%, majority votes. If a firm’s governing structure does for some reason include supermajority requirements, one or more qualifying veterans must meet all those supermajority voting requirements regarding the management and daily business operations of the firm. Logically, there are also limitations on control by non-qualifying individuals. They may not have the power to exercise actual control over the firm, have business relationships that cause such economic dependance that the qualifying veteran cannot truly exercise independent business judgment, or receive compensation that exceeds that received by the qualifying veteran who holds the highest officer position (amongst a few other restrictions and limitations). This last limitation can be overcome by showing that the compensation received by the non-qualifying veteran is “commercially reasonable” or that the qualifying veteran has chosen to take the lower compensation to benefit the firm. Id. With that in mind, let’s jump into this case. The Case In Borek’s Concrete Company, SBA No. VSBC-457-A (Jan. 6, 2026), the applicant firm was initially denied by the SBA due to perceived errors with effectively all of the above requirements. Borek’s was 51% owned by a qualifying service-disabled veteran, with the other 49% owned by the service-disabled veteran’s non-qualifying husband. While this appears at first glance to satisfy the requirements of SBA’s SDVSOB regulations, it was the details of the company’s corporate voting structure that ultimately doomed its SDVOSB application. The initial denial was based on a determination that the qualifying veteran, who handled all of the administrative and office functions of the firm, did not have control of the management and business operations or control all decisions. The denial asserted the non-qualifying veteran, had impermissible control, because he was responsible for the firm’s construction projects and supervised the day-to-day onsite operations. The original rejection also asserted that the qualifying veteran was impermissibly dependent on the non-qualifying individual’s expertise in the construction industry, arguing that the service-disabled veteran could not contradict the non-qualifying individual’s decisions without great economic risk. Finally, the service-disabled veteran did not receive the highest salary, and initial review found the explanation of this unsatisfactory. Upon appeal, OHA actually sided with the applicant firm on each of these issues, but another new issue was found which doomed the appeal. OHA pointed out that the qualifying service-disabled veteran was the majority shareholder and president, and that, while she did not have the technical expertise to be found to control the company, she did have ultimate managerial and supervisory control over the person who did. OHA also noted that the qualifying service-disabled veteran had sufficiently explained the lower salary based on leaving more working capital in the company, and that they received a higher draw of new profits during distributions as majority shareholder, actually making them the highest compensated shareholder. OHA emphasized that SBA must consider all compensation and stated that, if they had been able to find that the service-disabled veteran controlled the company, they would have remanded the case to assess the actual compensation amount and whether it benefits the company. However, OHA could not find that service-disabled veteran controlled the firm, and it was for reasons that were not mentioned in the initial denial. OHA noted the company’s own application and bylaws showed that 60% of shareholders were necessary for a quorum, and 75% of shareholders were necessary to amend the bylaws. These constitute supermajority requirements which the qualifying service-disabled veteran could not meet with their 51% ownership. As a result, impermissible negative control was held by a non-qualifying individual, as that person’s ability to refuse to vote alongside the service-disabled veteran gave them the ability to essentially veto a decision, that the service-disabled veteran must have the control to make. Therefore, OHA sustained the decision and denied the appeal. Bottom Line In the end, what doomed this applicant was the supermajority provision in their bylaws. Despite otherwise meeting the SDVOSB control requirements, and ownership of the majority of the firm, the non-qualifying individual had negative control through supermajority quorum and amendment requirements, which is not allowed by SBA regulations. This seemingly minor aspect of their bylaws was enough to derail their application, and it serves as an important reminder to take special care in structuring an applicant firm prior to applying to the SDVOSB program. Interestingly, even the ability to amend the bylaws has to be done by a majority vote without veto power by a minority owner. Had the firm’s owners restructured their bylaws prior to their application, they could have retained their ownership percentages and roles and successfully applied for SDVOSB certification. It is important to remember that ownership percentage alone will not decide who controls a business. Supermajority provisions, while not uncommon in corporate documents, are a dangerous pitfall for potential SDVOSB applicants who may not realize that this one provision can be so problematic. When considering a potential application for SDVOSB status, it is crucial that the firm’s governing documents are reviewed to ensure that there are no negative control concerns. If there are, these must be revised so that SBA cannot possibly find that a non-qualifying veteran improperly controls the company. As always, stay tuned here for continuing analysis of OHA decisions as they come. We’ll keep looking into what SBA is doing and what it means for those in the small business federal contracting space, and as always, if you have questions on federal government contracting law or the SDVOSB program, reach out to a federal government contracting lawyer, such as our firm. Editor’s Note: Special thanks to our wonderful legal clerk Will Orlowski for putting together this blog post. 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 OHA SDVOSB Appeal: Voting Provisions Scuttle Veteran Control first appeared on SmallGovCon - Government Contracts Law Blog.View the full article -
Happy Friday! We are already halfway through January and 2026 is off to a quick start. This week’s federal contracting headlines point to a busy year ahead, but we hope you have time for some rest and relaxation this weekend after a productive week. In this week’s federal government contracting news, look for updates on how agencies are using AI in all aspects of acquisition and their missions and an emphasis on using different tools to fight fraud. DLA’s foundation to use AI is built on training, platforms Senate bill will require DoD to review cyber workforce gaps Lawmakers call for more federal workforce details in latest spending ‘minibus’ Whitehouse: PRIORITIZING THE WARFIGHTER IN DEFENSE CONTRACTING Government needs more agency buy-in to fight fraud with tech, officials say ‘One chance to get it right’: VA secretary pledges VHA improvements The National Reconnaissance Office has a new top official White House creates new assistant attorney general focused on fraud GAO: Combating Fraud: Approaches to Evaluate Effectiveness and Demonstrate Integrity GAO: How Can Federal Government Agencies Stop Fraudsters from Stealing Billions? Supreme Court lets stand ruling that blocks subcontractors from protesting SBA Finalizes SBIC Reforms to Fuel Private Investment in Critical Industries After a Strong FY 2025, Defense and Aerospace Contracting is Poised for Future Growth Running Government Like a Small Business: Cut Waste, Crush Fraud, Hearing Before the United States Senate Committee on Small Business and Entrepreneurship The post SmallGovCon Week in Review: January 12-16, 2026 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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In the procurement process, agencies are afforded a significant amount of discretion when selecting an awardee. When an agency’s decision is protested, the Government Accountability Office (GAO) focuses primarily on the reasonableness of the agency’s conclusions. But when an agency fails to show its rationale behind a decision, GAO is unable to conclude that the agency’s decision was reasonable. In a recent GAO decision, Castro & Company, B-423689 (Comp. Gen. Nov. 13, 2025), GAO sustained a protest on three grounds, all of which involved an agency’s lack of documentation. The Federal Election Commission’s (Agency) issued a Blanket Purchase Agreement (BPA) for financial management and accounting support services under Solicitation No. 9531BP25Q0010 (Solicitation). The Solicitation stated the award would be on a best-value tradeoff basis, considering three factors: (1) technical approach; (2) price; and (3) past performance. Castro & Company, LLC (Protester) was one of the seven offerors and received a “Marginal” rating in technical approach but offered the lowest price of all seven quotations. After conducting a tradeoff analysis, the Agency determined that Contracts Management Enterprises, LLC (Awardee) represented the best value to the government, despite Protester offering the lowest price. Following the award, Protester filed this protest on three grounds: apparent organizational conflict of interest (OCI), unreasonable technical evaluation, and inadequate best-value tradeoff decision. Impaired Objectivity OCI Protester alleged that the Agency failed to meaningfully consider Awardee’s unmitigated impaired objectivity OCI. Contracting officers are required to identify and evaluate OCIs as early as possible, and to avoid, neutralize, or mitigate significant potential conflicts to prevent an unfair competitive advantage or the existence of conflicting roles that might impair a contractor’s objectivity. FAR 9.504(a). An impaired objectivity OCI arises where a firm’s ability to render impartial advice to the government would be undermined by the firm’s competing interests. The Awardee was performing under a separate task order, providing acquisition support to the Agency. As part of the task order, the Awardee’s employees served as contract specialists, working directly with the Agency’s procurement officials – including the contracting officer serving as the source selection authority for this BPA. We suspect the protester must have known about the work of the awardee based on personal knowledge of the setup. The Awardee simultaneously provided support to the Agency on procurement matters, while simultaneously competing for the contract to be awarded. Thus, Protester asserted that this proximity created the appearance of an impaired objectivity OCI. In response, the Agency noted that the contracting officer had acknowledged that the Awardee’s support “may create a conflict of interest or the appearance of a conflict of interest.” The contracting officer noted that she took steps to mitigate this by: (1) creating a “firewall” to ensure that the CME contractor was “not involved in this procurement and had no access to proprietary or source selection information”; (2) directing all quotation materials to be sent and secured only in the contracting officer’s own email account to create a “data silo”; and (3) ensuring that no solicitation materials were uploaded to any shared drives before award. GAO ultimately found that the contracting officer had failed to sufficiently investigate, consider, or mitigate the impaired objectivity OCI, noting instead, [T]he entirety of the agency’s record of its OCI analysis consists of the contracting officer’s bare statement that she “considered whether prior contracts with CME created a conflict of interest” and “determined that CME’s prior contract with FEC may create a conflict of interest or the appearance of conflict of interest.” The agency offers no further explanation, however, about what the contracting officer considered in her analysis (e.g., SOWs for the instant BPA and for CME’s acquisition support task order), what factors formed the basis of her OCI determination, or how it even related to the alleged impaired objectivity OCI. Technical Approach Evaluation Protester alleged that the Agency failed to evaluate the company’s technical approach in accordance with the Solicitation’s terms, applying unstated evaluation criteria instead. For technical approach, the Solicitation required offerors to “address all aspects of the technical requirements” and to “provide sufficient detail to enable the Government to thoroughly evaluate the [o]fferor’s ability to satisfy the requirement specified” in the SOW.” Protester’s technical approach was “Marginal,” based on the Agency’s findings of one strength, one weakness, and two deficiencies. The Agency provided only the following statement for its reasoning behind the “Marginal” rating: The [quotation] fails to provide the specific details, including timeline details, and lacks a structured response that aligns with the task outlined in the [SOW] section 3.0 requirements, which made it difficult to verify full compliance. Key personnel are lacking some important key skills as identified above. There was no further explanation for the weakness, nor did the Agency point to specific details that were missing from Protester’s quotation. Protester argued that the Solicitation did not include any requirements for timelines. While the Solicitation did list “timeliness” as part of the vendor’s technical approach, the Solicitation never mentioned specific “timelines.” Protester noted that the Agency failed to offer any explanation for the finding of a lack of timeline details. GAO has held that “an agency that fails to adequately document its evaluation of quotations bears the risk that its determinations will be considered unsupported, and absent such support, our Office may be unable to determine whether the agency had a reasonable basis for its determinations.” Here, GAO concluded that the Agency’s evaluation was conclusory and failed to identify any substantive support for its findings. The Agency could not demonstrate a direct tie between the “Marginal” rating and specific solicitation requirements, nor was the Agency able to explain how Protester’s quote failed to meet these requirements. Best-Value Tradeoff Analysis Protester’s final assertion was that the Agency’s tradeoff decision was unreasonable because it was based on a flawed and undocumented evaluation. Even though the contracting officer claimed that a “trade-off analysis was performed among all offerors considered for award,” the documented trade-off decision demonstrated that the analysis was only conducted among three highly rated quotations, which notably did not include Protester’s. For a best-value procurement, “it is the function of the source selection authority to perform a tradeoff between price and non-price factors, that is, to determine whether one quotation’s superiority under the non-price factor is worth a higher price.” Even when a solicitation states that price is of less importance than the non-price factors, an agency is still required to meaningfully consider the cost or price to the government when making the selection. If the Agency selects the higher-priced offer with a rating technically superior to a lower-priced acceptable offer, then the Agency is required to provide a rational explanation that supports its decision for selecting a higher-rated offer that warrants a higher payment. Here, GAO concluded that because the Agency’s tradeoff excluded Protester’s technically acceptable and lower-priced quotation without any explanation, the tradeoff decision was unreasonable and inadequately documented. There’s a valuable lesson that contractors can take away from this case. When an agency fails to show its work, GAO cannot adequately decide that the agency’s evaluation was conducted reasonably. Here, GAO never made any conclusions regarding the qualifications of the Awardee, or whether Protester should have received the award. GAO sustained the protest on grounds of the Agency’s inadequate documentation. 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 GAO Checks the Math: An Agency’s Failure to Document OCI and Best-Value Decision Results in Sustained Protest first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Please join federal government contracts attorney, Nicole Pottroff, as she breaks down the key elements of the SBA Mentor-Protégé Program. You’ll learn how this program can help small businesses enhance their capabilities and compete for larger contracts—with the support of an experienced mentor. The session will also cover how mentor-protégé joint ventures can create new contracting opportunities and expand your footprint in the federal marketplace. Topics will include: Who is eligible and how to qualify The benefits of participating as a mentor or protégé How to form compliant mentor-protégé joint ventures Key steps in the application process Common myths, misconceptions, and pitfalls to avoid Register here. The post Webinar Announcement: Understanding the SBA Mentor-Protégé Program, January 22, 2026 hosted by Idaho APEX Accelerators first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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We hope you had a wonderful holiday season filled with time well spent with friends and family, moments of rest, and opportunities to recharge. As we step into a brand new year, we’re excited about what’s ahead and grateful to be back into the swing of sharing insights and updates with you. We took a short pause from our Friday Week in Review over the past few weeks to enjoy the holidays and as a result, today’s edition features more articles than usual. There’s plenty to catch up on, so grab a cup of coffee and take your time exploring the stories and insights we’ve gathered for you. Have a great weekend! Stories from this week include cybersecurity and AI updates, and what to expect in 2026. Five things to watch in cybersecurity for 2026 CMMC Phase 1 Is Here: What Defense Contractors Must Do Now AI-Assisted Acquisitions Demand Data Sharing NDAA: Massive expansion of commercial solutions openings and other key takeaways for defense contractors How Do New GovCons Stay Compliant From Day One? Bipartisan bill seeks to create joint DoD–VA credentialing system Congress Reorganizes Key Federal Contracting Laws Under Positive Law Codification Overhauling acquisition, production and procurement processes to rebuild the industrial base Federal agencies look to performance contracts as energy efficiency aid shrinks DISA’s push for acquisition accelerators buoyed by FAR update Air Traffic Control Overhaul Heats Up as US Government Awards Contracts No slow rolling for defense contractors as 2026 gets started Concerns persist over self-reported cyber readiness as DoD overhauls workforce management Defense Department unable to pass its annual audit, again OPM to hire critic of HR consolidation plan FAR: New Procedures for FOIA Requests Acquisition more than IT drove the news in 2025 Agencies Cancel 55 Contracts Worth $863M in Cost-Cutting Effort The post SmallGovCon Week in Review: December 22, 2025 – January 9, 2026 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Many federal contractors have heard about the revamping of the Federal Acquisition Regulation. Variously called FAR 2.0, the Revolutionary FAR Overhaul, and most commonly simply RFO, this project has been undertaken by the Office of Federal Procurement Policy (OFPP) and the Federal Acquisition Regulatory Council (FAR Council). Initiated by Executive Order in April 2025, the new RFO process has been going quickly, with lots of proposed revisions. Our earlier posts regarding various aspects of the RFO can be found here: Executive Order, Overview of FAR 2.0, FAR Part 6, FAR Part 19, FAR Part 12, FAR Part 15. In this post, we’ll review one proposed revision that seems to make some slight changes to the language: Part 33 Protests, Disputes, and Appeals. In particular, this part incentivizes the use of agency level protests over other types of protests. Purpose Per the Practitioner Album, FAR Part 33 has been updated to “to reduce protests and resolve protests at the lowest level possible.” There is a new definition of the purpose of the protest system in section 33.100. One of the goals is to “[d]eter and discourage abuse of the bid protest process by requiring clear and substantiated allegations of procurement impropriety.” Other goals include correcting procurement errors quickly, protecting independent review of procurement concerns, and promoting “integrity, competition, accountability, and public confidence in the federal acquisition system.” The additional policies surrounding this Part encourage different methods to reduce protests. For instance: “Complex evaluation schemes with multiple factors, subfactors, and unclear evaluation criteria carry higher protest risk. When determining your evaluation method, consider how you can be fair and reasonable while maintaining appropriate flexibility to select the best vendor to support your mission requirement.” “When debriefings are requested, consider sharing redacted decision and evaluation documents—already discoverable in protests—to improve transparency. “For required “brief explanations” (e.g., FSS orders or FAR 12 RFQs), include the explanation in the award notice to help manage protest timelines.” Agency Protests The agency protest process has been revamped to encourage it to be used more often. Based on our experience, contractors are hesitant to use the agency protest process because it is basically asking the same agency procurement folks to review the procurement decision they just made–expecting a different result is unlikely. In particular, the following sections have been updated: FAR 33.104-4(a)(4)(ii): “Contracting officers are required to report protests to the head of contracting activity (HCAs) as soon as practicable after filing.” FAR 33.104-4(a)(5)(ii) has been added so that “Protesters electing independent review at a level above the CO must be provided a redacted copy of the source selection decision, and be provided an opportunity to submit a supplemental statement to the independent review official.” This is a new feature of the agency protest process. Under current FAR language, there is no opportunity to respond to the agency after the initial protest. The agency just files its decision and that is generally the end of the agency protest process. The current version of the regulation says that “the parties may exchange relevant information,” but this is rare in my experience. FAR 33.103. Other procedural aspects of the agency protest process, such as timing, are similar to the prior iteration. Other Language Retained Much of the other provisions of FAR part 33 remain the same, with some wording changes. For instance, the description of “Protests to GAO” now points to the GAO’s regulations at 4 CFR Part 21, instead of repeating this language. The claim dispute process has been streamlined into one section in FAR 33.205, with the goal to provide “more intuitive, step-by-step guide to the post-award claims process.” All clauses for this Part are retained, including 52.233-1 Disputes, revised to now describe what a defective certification means; 52.233-2 Service of Protest, revised to require protests to be shared with the contracting office within one day of filing with the GAO; 52.233-3 Protest After Award, revised to describe steps for protests post award, such as stop work orders; 52.233-4 Applicable Law for Breach of Contract Claim, remains the same that U.S. law will be applied to address breach. Other changes include wording changes to remove duplicative language or to make things more readable. For instance, this language has been deleted: “No person may file a protest at GAO for a procurement integrity violation unless that person reported to the contracting officer the information constituting evidence of the violation within 14 days after the person first discovered the possible violation (41 U.S.C. 2106).” FAR 33.102. Takeaways With the changes, the agency level protest process is more robust and allows for supplementation of the arguments. It will be interesting to see if more contractors take advantage of this process, and how agencies deal with a potential increase in protests at that level. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post FAR 2.0 Update: Part 33 Protests, Disputes, and Appeals first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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We wanted to wish our readers a very happy holiday season! Whether you’re celebrating at home or traveling to see loved ones, we hope the season is merry and bright, safe and warm. We are grateful that we were able to help so many people with our insights, updates, and commentary on the changing federal contracting landscape. We are thankful for all the feedback and insights from our readers as well. Thanks for a wonderful year! The post Happy Holidays! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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The GSA instituted a program that would allow 8(a) Program participants to enter into an 8(a) pool for GSA schedules (AKA, GSA Multiple Award Schedule) called the MAS 8(a) Pool. This program would allow 8(a) GSA schedule holders to maintain their 8(a) eligibility for a limited time even after they had graduated from the 8(a) Program. GSA described it this way in 2023: “MAS 8(a) pool contractors will be eligible for sole source awards for as long as they remain active in the 8(a) Program, and continue to qualify as small for the size standard corresponding to the NAICS code assigned to the sole source order, at the time of award. 8(a) pool contractors will continue to remain eligible for competitive set aside awards for up to five (5) years from the date of award, or until rerepresentation in accordance with FAR 19.301-2(b) (whichever is first), even after the contractor has exited the 8(a) Program.” In this case, the agency requested a check on 8(a) eligibility, despite the existence of the MAS 8(a) Pool, and GAO was asked to decide if an agency had the discretion to check 8(a) eligibility, even if regulations did not require it. As another point, The Government Accountability Office (GAO) and the U.S. Small Business Administration (SBA) both provide oversight for federal procurements but over different areas. Generally, GAO reviews protests of agency compliance with federal procurement regulations and statutes and solicitation criteria, and SBA hears protests regarding the size and status of federal contractors for set-aside procurements. This can create, however, some confusion where their activities overlap. This is something that we have, over the years, addressed in other blog posts. Today, we look at a GAO protest where GAO and SBA crossed paths again and this MAS 8(a) Pool issue arose. On April 30, 2025, the Department of Energy (DOE) issued a request for quotations (RFQ) under a GSA Multiple Award Schedule contract for technical support services. The procurement was set aside for participants in the 8(a) Program. As part of this process, DOE submitted an 8(a) offering letter to the SBA to get the procurement accepted as an 8(a) procurement. SBA accepted the procurement as an 8(a) procurement in a letter to DOE on June 27, 2025, stating that the agency could “announce the acquisition as 8(a) Competitive utilized [sic] the GSA MAS 8(a) pool and issue a solicitation.” This letter also stated that, upon awarding the contract, DOE needed to notify SBA of the offeror’s identity so that SBA could assess the offeror’s eligibility for award. SBA would then let DOE know whether the offeror was eligible or ineligible for award. On July 30, 2025, DOE awarded the contract to The Building People, LLC (TBP) and notified SBA of the same. However, on August 13, SBA responded and informed DOE that TBP was ineligible for award. After multiple requests for clarification from DOE, SBA sent two further notices stating that TBP was ineligible for award. As such, DOE retracted the award from TBP and gave it to the next highest rated offeror. TBP then protested this decision to GAO. Although TBP described its protest in a number of ways, GAO observed that the majority of its challenges were challenging the propriety of the SBA’s determination of ineligibility. GAO has no power to review such determinations under 4 C.F.R. § 21.5(b). However, GAO was less certain about a couple arguments which, at first glance, appear to attack DOE’s conduct rather than SBA’s. The first argument was that neither the FAR nor SBA regulations required DOE to submit the order to SBA for review. The second argument was that, as the solicitation provided that offerors didn’t need to recertify their 8(a) status at the time of award, the fact the agency conditioned the award on SBA’s determination of eligibility was the application of unstated evaluation criteria. GAO found that both arguments were unfounded. With regards to the first argument, it’s true that nothing required DOE to seek SBA’s acceptance of individual orders where the multiple-award contract was itself set aside under the 8(a) Program. But, nothing forbid DOE from seeking such acceptance either. As GAO put it, “while 13 C.F.R. § 124.503 provides that an agency is not required to seek SBA’s acceptance of individual orders when a multiple award contract was set-aside exclusively for 8(a) small businesses, partially set aside for 8(a) small businesses or reserved solely for 8(a) small businesses, and the individual order is to be competed among all 8(a) contract holders, nothing in that provision–or any other authority identified by the protester– prohibits the agency from seeking the SBA’s acceptance.” Additionally, SBA itself ordered DOE to obtain an eligibility determination from SBA prior to making the award as part of SBA’s acceptance of the procurement into the 8(a) Program. As noted previously, under the MAS 8(a) Pool. “8(a) pool contractors will continue to remain eligible for competitive set aside awards for up to five (5) years from the date of award, or until rerepresentation in accordance with FAR 19.301-2(b) (whichever is first), even after the contractor has exited the 8(a) Program.” As for the second argument, GAO noted that the solicitation did not limit SBA’s involvement in the procurement. In fact, the RFQ expressly stated that the procurement had been submitted to SBA for review and that SBA had accepted it into the 8(a) Program. In any case, the agency did not require or request that TBP recertify. It just notified SBA of the award to TBP in accordance with SBA’s acceptance instructions. Thus, the agency itself did not apply an unstated evaluation criteria as it was following the acceptance instructions and vendors were on notice that SBA had accepted the procurement. Summary It bears repeating that any time SBA makes a conclusive determination, GAO is not the route to challenge that determination. While here, it did make sense to attack the agency’s decision to abide by SBA’s determination, this case makes it clear that even there, the issue is SBA, not the agency. However, it’s not clear that this decision could be challenged at SBA either, at least formally. After all, a “Participant cannot appeal SBA’s determination not to award it a specific 8(a) contract because the concern lacks an element of responsibility or is ineligible for the contract, other than the right set forth in § 124.501(h) to request a formal size determination where SBA cannot verify it to be small.” 13 C.F.R. § 124.517. Perhaps the Court of Federal Claims would have been more hospitable to such a challenge, or a challenge could have been raised informally through SBA. Another takeaway is that, because the GSA MAS 8(a) pool concept is not required by regulation, an agency has discretion to question 8(a) eligibility even under this program. While the GSA MAS 8(a) pool specifically applies to this situation, SBA and the procuring agency was allowed to do an end run around the pool concept. This case is a good reminder that it’s not just the arguments you want to make that matter; where you bring the arguments (and whether you can even bring such arguments) matters just as much, if not more so, in many cases. 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 Wrong Place: GAO Weighs in on 8(a) Program GSA Schedule Eligibility under MAS 8(a) Pool and Finds that SBA Eligibility Finding had to be Challenged at SBA first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Happy Friday, readers! We know this time of year gets hectic, with all the preparations and lists to check. One thing you don’t have to check is the updates on federal government contracting for the past week. We’ve done that in our Week in Review! Enjoy the latest updates while you do some last-minute shopping and decorating. This week in federal government contracting saw important updates on use of AI, predictions for 2026, and a deadline to submit feedback on the Revolutionary FAR Overhaul. FAR: Federal Management Regulation: Aligning the Federal Management Regulation with the Administration’s Deregulatory Priorities OMB sets procurement guardrails for buying AI tools The Revolutionary FAR Overhaul: What Happens Next? Emily Murphy is here with her insights on how federal acquisition changed in 2025 and what’s coming in 2026 US Department of Labor announces availability of resources to assist contractors with Davis-Bacon Act payroll reporting requirements GAO: Bid Protests Dropped 6% in FY 2025 Industry flags DoD’s lack of standardized software attestation processes FAA head details air traffic control modernization progress, next steps Outgoing GAO chief warns of ‘taking our foot off the gas’ at CISA OPM launches Tech Force to recruit technologists to government Nondisplacement of Qualified Workers under Service Contracts; Rescission of Regulations The post SmallGovCon Week in Review: December 15-19, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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If you got an aggressive email from the SBA earlier this month requesting an awful lot of documentation and information in relation to your 8(a) Business Development Program participation—you far from alone. SBA actually sent this December 5th email to about 4300 current and past 8(a) Program participants. And if you too found yourself reading and rereading SBA’s specific requests trying to determine exactly what the SBA is looking for—but to no avail—you are again far from alone. Now, we at SmallGovCon don’ t have all the answers or any insider knowledge. But we offer you these five tips for surviving the 8(a) audit—based on our vast experience with the fundamentals of legal language interpretation and our expertise with the 8(a) Program regulations and standard operating procedures. This unfortunate holiday season surprise (as you can read about in our initial blog on this most recent 8(a) audit) really seems to be just another link in the chain of challenges faced by 8(a) Program Participants of late. These 8(a) challenges date (at least) all the way back to the Federal Court Decision in Ultima. They’ve continued through numerous direct 8(a) and general DEI attacks from the current administration (resulting in a substantial dip in small disadvantaged business goaling and many 8(a) contract terminations already). And they’ve most recently presented through SBA’s announcement of a 15-year lookback audit of all 8(a) contracts by the SBA OIG and DoJ. So, was the December 5th email truly a surprise? For those keeping up with recent 8(a) events, likely not. But SBA apparently felt the need to keep things exciting here, nonetheless. From what we’ve been seeing, there are two main aspects of this audit that have reasonably surprised, well, almost everyone, it seems. First, the timing of this 8(a) audit compounded by the very short deadline for compliance (i.e., allowing only a month–and a month including two federal holidays–for contractors to gather and submit all requested documents and information). And second, the level of ambiguity and/or lack of clarity in essentially all 13 of SBA’s requests for the 8(a) audit. So, those two main issues will be the focus of these five tips. TIP ONE: If you got SBA’s December 5th 8(a) audit request email–no matter where you are at in your 8(a) Program Term or even in your process of 8(a) Program withdrawal, termination, or early or standard graduation–comply! So, we have yet to hear of any 8(a) Program applicants–awaiting SBA’s application decision–receiving the 8(a) audit email request.1 But we have heard numerous reports of graduated/graduating, terminated or proposed for termination, and withdrawn/withdrawing 8(a) Program firms receiving the request. And as such, we’ve had a lot of questions as to whether or not the firm is still required to comply with the request. The answer, unfortunately, is yes. SBA’s rule at 13 C.F.R. § 124.603 says the following: If requested by the SBA, former Participants must provide such information as SBA may request concerning the former Participant’s continued business operations, contracts, and financial condition for a period of three years following the date on which the concern leaves the 8(a) BD program (either through the expiration of the firm’s program term, graduation, or termination). Failure to provide such information when requested will constitute a violation of the regulations set forth in this part, and may result in the nonexercise of options on or termination of contracts awarded through the 8(a) BD program, debarment, or other legal recourse. As you can see, this rule clearly requires any former 8(a) participant that has left the program (for whatever reason) within the last three years to comply with the 8(a) audit requests. It even includes some terrifyingly broad assertions of possible consequences for anyone thinking, “well, I have no 8(a) Program participation or 8(a) contracts or options left to lose.” So, if you got the email, comply with it. TIP TWO: Submit each and every document you believe in good faith is responsive to SBA’s requests–and withhold nothing. One thing we say across the board for all 8(a) Program rules and procedures, and all 8(a) Program applicants, participants, and even former participants, is full disclosure is always best. When there is even a question as to an 8(a) applicant’s or firm’s duty to notify SBA of something, we always suggest erring on the side of caution and fully disclosing the information in question. And naturally, there is no exception here. We will talk more in the subsequent tips about ways to handle documents that are unavailable or delayed and ways to handle different interpretations of the SBA’s requests. But for this crucial tip number two, I want to refer you back to and reiterate the language in 13 C.F.R. § 124.603, which states: Failure to provide such information when requested will constitute a violation of the regulations set forth in this part, and may result in the nonexercise of options on or termination of contracts awarded through the 8(a) BD program, debarment, or other legal recourse. This part of the rule does not say “failure to provide such information without a valid excuse . . .”–nor does it provide any safe harbors or options for explaining why something is missing to SBA after the fact. It says, failure to provide the requested information by the requested date will constitute a violation–not “may,” “will.” So, don’t leave anything out in hopes that SBA will understand or take the time to ask you why. And if you must leave something out for a valid reason, pay close attention to tips number four and five before you do so. TIP THREE: Submit everything as soon as physically possible prior to the January 5, 2026 deadline. So, I see no need to reiterate the same regulatory language or threats from the 8(a) audit email here. The deadline is clear in the email; and the regulations clearly require compliance with whatever deadline SBA sets. So, get everything in by that January 5, 2026, deadline at all costs. But in doing so, please don’t forget that at least 4300 or so companies are going to be frantically uploading hundreds if not thousands of documents over the next two and half weeks. Please also consider the fact that they all had just a month to do so–making it quite reasonable to assume that many if not most of them will be submitting all those documents on or incredibly close to that January 5th deadline. As such, I would highly recommend you not rely heavily on SBA’s uploading portal’s (https://certifications.sba.gov) ability to handle these mass logins and uploads without a hiccup or two. If you have your documents ready to go early, get them in. We have yet to hear confirmation from anyone of SBA granting any extensions. And the SBA’s email included the loaded and infinitely broad threat that any contractor failing to provide the requested documentation and information by January 5, 2026, “may lose their eligibility to participate in the 8(a) Program and could face further investigative or remedial actions.” So, our best advice is to assume you cannot and will not be given any extension or deadline leniency. But we also understand that some of the requested documents may not be immediately accessible, despite your best efforts. And if that is the case for you, please pay close attention to Tip Four below. TIP FOUR: Immediately & diligently communicate your need for any extension to your BOS, the 8(a) Program Office, your local SBA Area Office, and anyone SBA or 8(a) that will listen. If you physically cannot meet the deadline for anything for a real and valid reason–or if you will be physically unable to get certain documents or information uploaded by that time–we strongly suggest you don’t wait another minute to put your situation and request into writing and submit it everywhere and to everyone possible. Of course, having a “paper trail” of some kind in this scenario is strongly recommended. But that does not mean we discourage you from picking up the phone and trying to get through to your own 8(a) Business Opportunity Specialist (BOS), the 8(a) Program Office (or any 8(a) Program representatives), your general local SBA Area Office, and/or any of your own contacts within the SBA or the 8(a) Program willing to listen. But–and I cannot stress this part enough–if you are granted some kind of extension over the phone, Zoom, or any other verbal communication means, follow-up in writing! That can be a simple email like, “I just wanted to follow-up via email to thank you and confirm the 10-day extension you granted me today.” But it would be wise to copy as many of the recipients I listed above as possible. Regardless of whether you start with a call and follow-up in writing, or simply start mass emailing those listed above, we would recommend your request include all of the following: (a) your need for an extension; (b) how long you believe that extension will need to be; (c) the specific reason why you need that extension, why you need it for that length of time, and a specific explanation for each and every document you cannot submit on time (I would strongly advise against any generalities here, such as, “Because its Christmas, dude!”–no matter how fair and reasonable that may be); and finally, (d) an offer to provide some kind of substitute document, information, or declaration covering the subject matter of the delayed submission document in the meantime (i.e., “though I am still waiting on that specific financial document, I am happy to provide a signed SBA form or declaration covering those same financial aspects of my company in the meantime.”) Finally, if you have any questions as to whether someone agreeing to grant you an extension has the authority to do so–that touches on specific legal advice territory that I would highly recommend you confirm with a government contracting attorney prior to relying on the extension granted. TIP FIVE: With basically all 13 requests containing ambiguity, unclear or undefined language, or all of the above, go with the safest “interpretation” and explain yourself. While none of the 13 requests from SBA are crystal clear, I will focus on a few of the most common questions here, as well as our general tips on handling all the unclear and ambiguous requests. Many of the requests refer to “fiscal year” without defining who’s fiscal year SBA means (the 8(a) firm’s or the government’s) and to “last three full fiscal years” without establishing which date should be used to determine the same. Whose Fiscal Year Are We Talking? For some guidance on whose fiscal year SBA is referring to here, we looked to the 8(a) regulations at 13 C.F.R. § 124.112(d) and (e) (on continued eligibility criteria) and 13 C.F.R. § 124.602(a) through (g) (on annual financial statements). Those regulations nearly always refer to the 8(a) firm’s fiscal year. So, our best guess is that SBA intends for its 8(a) audit request to match its general 8(a) annual financial statement requirements, and thus, means the 8(a) firm’s fiscal year. But we, of course, cannot be sure. As for “the last three full fiscal years,” there are really two reasonable ways to interpret this: (a) 2022, 2023, and 2024–based on the SBA’s 8(a) audit email being dated December 5, 2025; or (b) 2023, 2024, and 2025–based on the required submission deadline being January 5, 2026. But we have generally been leaning toward interpretation (a), suggesting that the date of the letter is the most likely date SBA intended recipients to go off. So, we think SBA is most likely looking for 2022, 2023, and 2024 as the last three full fiscal years for the requests containing that language. But again, we have no way of knowing for sure. One note here, if you do decide to go with interpretation (b) instead, just make sure you do in fact upload your submissions in the new year, in 2026, otherwise, that interpretation seems to become a lot less reasonable. What On Earth Is Request Number Nine Asking For? Finally, the infamous request number nine from SBA’s 8(a) audit email asks for, “Copy [sic] of all 8(a) Contracts on which the firm is currently working for the last three full fiscal years[.]” Oh yeah, oh boy–is what we said too. Unfortunately, not even our standard–typically helpful–cannons of construction can provide any relief from the blatant ambiguity with this one. For example, its a widely accepted cannon of construction that no words intentionally included in a sentence/term/rule/etc. should be interpreted to have no meaning. But there is no way around it here due to the pure contradiction of the language; either you have to assume: (a) “currently” is meaningless (or just the plain ol’ wrong word), or (b) “for the last three full fiscal years” is meaningless or was wrongfully included at the end of the request (or was at least severely misstated). So, it is possible SBA meant something in line with the latter assumption (b) (i.e., that SBA meant to request either: “Copies of all 8(a) Contracts on which the firm is currently working” (period); or maybe “. . . currently working that were awarded over the past three full fiscal years.”). But our best guess here–and what we feel is the safest interpretation, nonetheless–is that SBA’s intent was more likely aligned with assumption (a) above (i.e., intending to request “Copies of all 8(a) Contracts on which the firm is currently or was actively working over the past three full fiscal years.” But indeed, we fully understand that SBA’s actual request doesn’t match any of our reasonable interpretations here. That said, we would recommend providing all the 8(a) contracts (including any modifications, extensions, amendments, etc., thereof or thereto) that the firm was actively performing over the past three full fiscal years. We find this option safest because it may provide SBA with more contracts than it was seeking–but the other options have the more concerning risk of not providing SBA with all the contracts it was seeking. What is “Safest” and What All Should We “Explain”? Well that last one–the doozy that it was–still provides us a nice Segway into what we believe are some of the most important general takeaways for handling the plethora of ambiguities and undefined or unclear terms in SBA’s 8(a) audit requests. Just as we stressed the safer option for responding to SBA request number nine is whatever option potentially gives SBA more but not less than it meant to ask for–generally, the same goes for any of SBA’s 13 requests subject to multiple interpretations. But we also understand that each 8(a) firm is different; which documents may be available, unavailable, delayed, etc., could all impact what is truly the “safest” option for a given 8(a) firm. And with major questions to this end, it is certainly best to seek specific and specialized legal advice with your submissions here. And regardless of how you chose to interpret and respond to any of SBA’s 13 8(a) audit requests, we strongly suggest one thing across the board: explain yourself! In fact, we’d go so far as to say that a cover letter for each submission could be a really good idea. That cover letter, we suggest, should include (at least): A brief explanation of how you interpreted the request at issue; Why your interpretation is reasonable under 8(a) law, the express language used in the request, (if applicable) the guidance and advice of counsel or an SBA/8(a) representative, etc.; Assertions as to how your submission is directly responsive to the request as you interpreted it; and A request that SBA simply let you know if you misread SBA’s intent. And with that, depending on which way you went with your submission, it would be wise to include: (a) a sincere offer to promptly provide any additional information or documentation that may be necessary to meet SBA’s intended request; or (b) an index of your submissions for the request at hand indicating which documents SBA should focus on if you misinterpreted SBA’s intent (i.e., “SBA can focus on Contracts No. 1 and 2, and ignore Contracts Nos. 3-10 if SBA indeed meant only to request 8(a) contracts “currently” being performed by my firm.”) * * * By now, I am sure you can tell, our biggest concern here is with 8(a) firms inadvertently failing to provide the documents SBA intended to request–without an explanation as to why things appear to be “missing.” We are not saying a mismatched interpretation with an explanation is risk free, by any means. But we do note the language of 13 C.F.R. § 124.603 we repeatedly cited and referred to throughout this blog seems most concerned with outright “failure[s] to provide such information when requested[.]” As SBA’s 8(a) audit email asks for everything to be submitted in either PDF or CSV2 format–it is probably safe to say that at least the initial review of the vast amount of information and documentation SBA will receive by January 5 will be fed through some type of A.I. or other advanced data processing system. And potentially, only the legal compliance concerns initially identified in the provided documents and the apparently missing or withheld documents will get “flagged” for deeper SBA review. If that is the case, and of course we have no way of knowing for sure, it would confirm our stance that the most risk likely lies in unexplained missing or non-responsive documents. Essentially, anything that could even look like an intentional failure to provide responsive documentation by the deadline may be subject to punishment–and may not include any opportunity to further explain things to SBA. 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. Based on this, we assume SBA may only be requesting compliance from 8(a) applicants once they have actually entered the 8(a) Program and executed all agreements with SBA to do so. But this is in no way our advice to not respond if you are an 8(a) applicant in receipt of the 8(a) audit email. To the contrary, the safest bet is for anyone who gets the email to comply with it. While the regulations are much clearer on the legal duties for current and past 8(a) participants to comply with the 8(a) audit requests, there are still regulations regarding broader duties for 8(a) applicants to provide additional requested documents to SBA and keep its application documentation current and complete. And we are not comfortable enough to say those regulations would not or could not be applied here to require compliance with the 8(a) audit request. ︎According to Adobe, “CSV files are a simple, widely compatible format for storing and sharing data. They are easy to use across various software tools, making them ideal for organizing and managing structured information. CSV files are primarily used for simple data exchange rather than elaborate presentations.” Accessed on 12/18/2025 at: https://www.adobe.com/acrobat/resources/document-files/what-is-a-csv-file.html ︎ The post Five Tips: For Surviving the End-of-Year 8(a) Audit first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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In just a few days the ball will drop on 2025 and we will officially usher in the new year. It’s always a good time for reflecting on the past year and what lies ahead for the new year. And that same sort of review is important when thinking about federal contract bid protests. With that in mind, we are going to take a look at the GAO’s Bid Protest Annual Report. This report is GAO’s summary of bid protests for the previous fiscal year. It contains some important insights for how GAO bid protest numbers have changed from prior years. But as our readers know, many bid protests are filed at the Court of Federal Claims, so this is only one part of the overall bid protest picture. Here are some key points from this year: The key effectiveness metric, showing numbers of sustains and corrective actions at GAO, was similar to prior years, and exactly the same as 2024, at 52% for the 2025 fiscal year. Total bid protest numbers were down for the second year in a row, coming in at 1688 new cases filed (a 6% decrease from the prior fiscal year). Below, we dive into the GAO numbers while comparing to the data we have on COFC protests. The annual bid protest report 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. As with 2024, GAO met its 100-day deadline to process a bid protest in all cases. And similarly, there one was decision (ATP Gov, LLC, B-422938, Dec. 12, 2024) where the Department of the Air Force did not follow GAO’s recommendations in connection with a bid protest. That case concerned “whether the Air Force made an award to a firm whose product did not meet the material requirements of the solicitation.” This case was interesting because GAO recommended the agency either reevaluate proposals in line with the solicitation, or amend the solicitation and resolicit. But the agency refused to do either, stating that because there was no automatic stay of performance, the initial awardee had been performing the contract and implementing GAO’s recommendation that would lead to “unspecified costs and unacceptable delays.” GAO Protest Numbers 1688 cases (1617 bid protests with the rest being other filings such as requests for costs), down from 1803 in FY 2024, a decrease of 6%. 380 – Number of cases decided on the merits, rather than through dismissal. 53 – Number of sustained protests (roughly 14%) 14% – Percentage of sustained protests out of those decided on the merits, similar to 3 out of the last 4 years. 52% – Effectiveness rate (percentage sustained or where agency took corrective action). This shows that over half of all GAO bid protests continue to result in a sustain or corrective action. A roughly 50% effectiveness rate has been the norm for the last few years, with FY 2021 being the last time that number fell below 50%. 0.5% – Percentage of cases with hearings—which amounts to 3 cases. This is routine for GAO since hearings are not a common occurrence here. 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 “finding the agency’s technical evaluation of the awardee’s proposal unreasonable, in part, where under the management and staffing approach element, the agency credited the awardee as proposing staff for the required 11-month period, but the awardee only proposed staffing for 9 months.” emissary LLC, B-422388.3, July 29, 2025. Unreasonable cost or price evaluation, such as “finding the agency’s cost/price evaluation unreasonable where the awardee’s proposal failed to include its subcontractor’s cost/price information, as required by the solicitation, and the agency improperly attempted to cure the awardee’s proposal by creating the information that the awardee failed to provide by developing a risk-adjusted price using other information in the awardee’s proposal.” KBR Servs., LLC, B-422697, Oct. 4, 2024. Unreasonable rejection of proposal, such as “finding the agency’s decision to reject the protester’s quotation for providing labor categories (LCATs) under special item numbers (SINs) other than the SIN under which the solicitation was issued unreasonable where the solicitation did not expressly limit vendors from quoting LCATs under a specific SIN.” SynergisT JV, LLC, B-422384.2, Mar. 11, 2025. COFC Bid Protest Report The Court of Federal Claims (COFC) last released its annual report for FY 2024. It’s useful to compare the GAO bid protest report to that of the other main bid protest forum, the COFC. That report showed that there were 266 bid protest cases filed at COFC in FY 2024. That is an increase of almost 100 cases (an over 50% increase) from the 169 cases filed in FY 2023, per the 2023 report. There are fewer cases filed at the COFC than at GAO, but the bid protest numbers are rapidly growing at COFC. For instance, the FY 2024 number of 266 is over twice as many bid protests filed at the COFC in FY 2022, which was 123, which explains in part the ongoing trend of lower number of protests being filed at GAO. Unfortunately, the COFC report provides no details on sustain rate, corrective action rate, or reasons for sustaining protests. Other potential explanations for the decreased case load at GAO include (1) enhanced debriefings implemented by DoD that provide more information about why companies lost an award. (2) Fewer federal contractors overall and fewer contracts. As larger companies have consolidated, there are fewer small businesses. And (3) 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). This latter trend is likely to continue as the Revolutionary Far Overhaul (with its “required use” contracts) and Executive Orders (Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement) call for increased consolidation. We at SmallGovCon can help you decide if a GAO or COFC protest may be right for your company, based on what types of arguments can be successful at GAO versus COFC and the process at each tribunal. It will be interesting to see if GAO protest numbers continue to go down next year, with COFC numbers increasing. We’ll keep you updated as we follow the trends on federal bid 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 2025 GAO Bid Protest Report: Numbers Down, Effectiveness Still Even Odds–COFC Shows Increase in Bid Protests first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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It’s time for another edition of the SmallGovCon week in review. We hope that all of our readers had a productive week. For many (myself included), this week is the time for holiday concerts and performances, including the fabled Nutcracker performance. The Lawrence Arts Center does a Kansas-themed performance that is well-loved by all who watch. There is a grand holiday party and then a dream sequence that takes up the latter part of the ballet. I imagine some 8(a) contractors are wishing the current actions taken against were also part of a dream sequence. Alas, they are not and those businesses should do their best to respond to all 8(a) inquiries as much as they can. This week saw some big updates on the 8(a) front, with both SBA and Congress putting pressure on 8(a) contractors, as well as additional calls for centralization and shared services. FAR: Agency Information Collection Activities; Proposals, Submissions, and Approvals: Buy American, Trade Agreements, and Duty-Free Entry GSA’s next-generation contract vehicle is expanding and small businesses need to pay attention SBA audit, lawsuit puts 8(a) program deeper in cross-hairs Centralization is back in vogue, but is it the right model for government shared services? Trump’s government management vision centers on elimination, accountability Ernst Calls for Complete Halt and Full Audit of Fraud-Filled Contracting Program He Spent Funds Meant for Native Hawaiians on Polo and Porsches. The Federal Government Failed to Stop Him GAO: Financial Management Shared Services: Progress and Identified Challenges Here are key acquisition reforms dropped from the 2026 NDAA Senior Manager for Government Contractor Charged in Cybersecurity Fraud Scheme Unpacking the Pentagon’s New Requirements Memo CISA looks for ‘deep engagement’ with innovators via new platform Elon Musk says DOGE was only ‘somewhat successful’ and he wouldn’t do it again The post SmallGovCon Week in Review: December 8-12, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Federal contractors are generally familiar with the many FAR provisions listed in a solicitation or contract. So, it can be tempting to simply gloss over these pages of the solicitation, absentmindedly checking off the right box or signing off on the required representations without familiarizing yourself with each provision–or the consequences that come if each is violated. But naturally, we don’t recommend a cursory review. And one important FAR provision contractors should definitely familiarize themselves with is the Covenant Against Contingent Fees (FAR 52.203-5)–as the consequences of violating that one can be rather grave. The Covenant Against Contingent Fees is a representation made to the government by a contractor, stating that the contractor has not retained any person or agency to solicit or obtain the government contract for a contingent fee. A contingent fee is defined under the clause as “any commission, percentage, brokerage, or other fee that is contingent upon the success that a person or concern has in securing a Government contract.” In accordance with FAR Part 3, the Covenant Against Contingent Fees implements the Government’s longstanding belief that “Contractors’ arrangements to pay contingent fees for soliciting or obtaining Government contracts have long been considered contrary to public policy because such arrangements may lead to attempted or actual exercise of improper influence.” FAR 3.402. Improper influence is “any influence that induces or tends to induce a Government employee or officer to give consideration or to act regarding a Government contract on any basis other than the merits of the matter.” FAR 52.203-5. FAR 52.203-5, Covenant Against Contingent Fees. The Contractor warrants that no person or agency has been employed or retained to solicit or obtain this contract upon an agreement or understanding for a contingent fee, except a bona fide employee or agency. For breach or violation of this warranty, the Government shall have the right to annul this contract without liability or, to deduct from the contract price or consideration, or otherwise recover, the full amount of the contingent fee. When is the Clause Required? A contracting officer is required to include the warranty in solicitations and contracts that exceed the simplified acquisition threshold, excluding those for commercial products or services under FAR Part 12. FAR 3.404. The Bona Fide Employee and/or Agency Exception. The clause grants an exception for “contingent fee arrangements between contractors and bona fide employees or bona fide agencies.” FAR 3.402(b). A bona fide employee is “a person, employed by a contractor and subject to the contractor’s supervision and control as to time, place, and manner of performance, who neither exerts nor proposes to exert improper influence to solicit or obtain Government contracts nor holds out as being able to obtain any Government contract or contracts through improper influence.” A bona fide employee may resemble the following scenario: A contractor hires a full-time, salaried employee to assist with the company’s overall business development. The employee’s duties include attending networking events, identifying federal contracting opportunities, and assisting the contractor with preparing proposals. This would constitute as a bona fide employee. The individual is under the company’s supervision and control as a salaried employee and was not hired solely to obtain a specific government contract. A bona fide agency is “an established commercial or selling agency, maintained by a contractor for the purpose of securing business, that neither exerts nor proposes to exert improper influence to solicit or obtain Government contracts nor holds itself out as being able to obtain any Government contract or contracts through improper influence.” An older version of the FAR (FAR 3.408-2(c) (1995) provided a list of factors as additional guidance for determining whether an entity constitutes as a bona fide agency: Proportional Fee. The agent’s fee “should not be inequitable or exorbitant when compared to services performed or to customary fees for similar services related to commercial business.” Knowledge of Business. The entity “should have adequate knowledge of the contractor’s products and business, and other qualifications necessary to sell the products or services on their merits.” Continuing Relationship. “The contractor and the entity should have a continuing relationship or, in newly established relationships, should contemplate future continuity.” Established/Ongoing Concern. The entity “should be an established concern that has existed for a considerable period, or be a newly established going concern likely to continue in the future.” General Representation. An entity that “represents the contractor in Government and commercial sales should receive favorable consideration,” although an entity “that confines its selling activities to Government contracts is not disqualified.” While the FAR no longer includes this guidance, courts have long recognized these factors as relevant in determining whether an entity is a bona fide agency. What are the Consequences for Violating the Provision? Again, a breach or violation of the warranty allows the Government to “annul the contract without liability or to deduct from the contract price or consideration, or otherwise recover, the full amount of the contingent fee.” Further, if the provision is knowingly violated, a contractor could face liability under the False Claims Act. While agreeing to comply with all the FAR provisions incorporated in a federal contract can seem like an administrative hassle at times, there is significant value in understanding what is required from each provision to ensure regulatory compliance. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Back to Basics: Covenant Against Contingent Fees first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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8(a) Program participants received an early holiday surprise from the SBA’s 8(a) Program this past week. A mass request was sent out to 8(a) Program participants and some graduates requesting extensive (mostly financial) internal documentation so that the SBA could audit the program for any potential fraud, waste, or abuse. While the need to protect taxpayer funds and the 8(a) Program are fundamentally important, such a sudden wide ranging document request came as a surprise to many across federal contracting. The SBA’s explanation provided some insight for this broad request. The 8(a) Program has been in the spotlight for the past few years due to the Ultima decision and the changes to the social disadvantage portion of 8(a) Program eligibility. So, it wasn’t unexpected when in June of this year, Administrator Kelly Loeffler called for the 8(a) Program to be audited. That announcement stated that the SBA’s Office of General Contracting and Business Development in collaboration with other agencies would lead the audit. The audit was also supposed to be focused on “high-dollar and limited competition contracts” and look back about fifteen years. Once that initial review was complete, the SBA’s Office of Inspector General and the Department of Justice would investigate any concerning findings. Since then, SBA had not said much on this topic, until late last week when contractors received an emailed request for documentation. 8(a) Program contractors received a request from the 8(a) Program last week which required them “to provide financial documents for the last three fiscal years, including bank statements, financial statements, general ledgers, payroll registers, contracting and subcontracting agreements, and employment records.” Contrary to the June 2025 press release, this audit is actually being sent by the SBA’s Office of General Counsel and was sent to all 8(a) contractors. This does not appear limited to high dollar contracts, or limited competition contracts; nor is it led by the SBA’s Office of General Contracting and Business Development. So, this request did come as somewhat of a surprise to 8(a) Program contractors, as it casts a wider net than originally stated, and seems to take a more threatening tone as the request is coming from legal, not general contracting. In addition to this, there is a bill in the Senate, put forth by Senator Joni Ernst, which (if passed) would halt all sole-source awards with the 8(a) Program until this audit is completed and a report on such audit is given to Congress. Note that providing documentation to the SBA is something that all 8(a) Participants have agreed to do, typically in the form of annual reporting. For instance, annual reporting includes Personal financial information A record of all payments, compensation, and distributions A report for each 8(a) contract performed during the year explaining how the performance of work requirements are being met for the contract Such other information as SBA may deem necessary. 13 C.F.R. § 124.112. While the SBA always had the power to request documentation, the short deadline and the broad list of information is a big departure from how SBA has typically requested documentation in the past. So, where do we go from here? The request has a due date of January 5, 2026. That only gives contractors a short window over the holidays to comply. If that due date is missed, a contractor “may lose their eligibility to participate in the 8(a) Program and could face further investigative or remedial actions.” So, contractors should get to work quickly on getting these internal documents in order and submitted, or else face some dire consequences. What the SBA is likely trying to see is where payments went, hence the focus on internal financial documents, and the discussion of a large fraud and bribery scheme in the press release. However, that does not mean the SBA will stop there. It is very possible the SBA may want to look at operating agreement terms, control, and other eligibility factors during this process. So in addition to getting the requested documentation together, 8(a) Program contractors should likely review all their relevant operating and personal documentation to ensure it meets the eligibility requirements for control, disadvantage, ownership etc. (We have a great 8(a) Program Toolkit which links to information on many of those items). Also, the SBA is requesting teaming information, so be sure to review workshare percentages, and compliance with Limitations on Subcontracting (here is a blog we have on that topic too) in your teaming arrangements. It is not clear how the SBA will actually go about reviewing the anticipated thousands of voluminous responses from 8(a) Program contractors, and if there will be additional items requested. But it would not be surprising if there were more requests from the SBA in the future. All of this could be highly critical to a contractor’s ability to continue contracting with the 8(a) Program, so even though the deadline is rather quick, it does not mean that a contractor can rush its response. 8(a) contractors should take time to carefully check all documentation requested for any potential issues, and prepare responses on items of note which they worry may raise questions with the SBA. Unfortunately, this is something where contractors have to respond, and have to do it quickly. It’s possible the SBA will interpret a non-response as an indicator of lack of cooperation with the SBA, leading to additional scrutiny from SBA. Of course, since the consequences at play are quite stark, and the 8(a) Program can be quite complicated, it is also probably good for contractors to reach out to a federal contracting attorney, such as ourselves, for assistance with any questions or responses to the SBA where things are more complicated. This is definitely something we will continue to keep an eye on, and see if SBA releases further requests or guidance. Contractors should likewise keep an eye out in their email inboxes (always check your spam to be safe), SBA certification portal, and anywhere else the SBA may send requests, to make sure they don’t miss any further requests. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post BREAKING: SBA Launches an End of Year 8(a) Program Audit first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Happy Friday and happy December! We hope you had a nice Thanksgiving with friends and family. We all enjoyed our Thanksgiving break and it left us energized for winter and the holiday season. The holiday lights are up here in downtown Lawrence, Kansas and everything is looking very festive. As we start the final month of the year we hope you can enjoy the sights and sounds of the season. Have a great weekend! This week in federal government contracting news included updates on the federal workforce and IT and technology specific procurement actions and rules. Some DoD civilians are still waiting for back pay weeks after shutdown’s end Deep personnel cuts jeopardize Space Force’s ability to implement Hegseth’s acquisition reforms DOGE and its long-term counterpart remain, with a full slate of modernization projects underway Draft memo details DoD plans to cap most reseller fees 3 federal workforce bills to watch in House Oversight Committee markup Defense spending will continue to climb as civilian agencies brace for years of cuts, new forecast projects DISA releases first draft of comms equipment recompete GSA Announces OneGov Agreement with SAP to Accelerate Federal IT Modernization FAR: Rescinding Requirements Regarding Federal-Aid Contracts for Appalachian Contracts HHS rolls out Claude departmentwide Agency software-buying bill advances in the House OMB: Ensuring Government Use of Secure Unmanned Aircraft Systems and Supporting United States Producers The post SmallGovCon Week in Review: December 1-5, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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As most federal contractors have heard, the Federal Acquisition Regulation is undergoing a major overhaul. FAR 2.0, commonly referred to as the Revolutionary FAR Overhaul (or just the “RFO”), is the responsibility of the Office of Federal Procurement Policy (OFPP) and the Federal Acquisition Regulatory Council (FAR Council). Initiated by Executive Order 14275, the new FAR 2.0 process has been going quickly, with lots of proposed revisions. Our earlier posts regarding the RFO can be found here: Executive Order, Overview of FAR 2.0, FAR Part 6, FAR Part 19, FAR Part 12. Work continues over at the OFPP and FAR Council, and today we’re covering some of their most substantial changes yet: Part 15 – Contracting by Negotiation. Part 15 has seen some of the most substantial reorganization and redrafting yet proposed. As we’ve discussed previously, FAR 2.0 is designed to refocus the FAR on its statutory roots and simplify the procurement process. This is primarily being done by removing non-statutorily required provisions into non-binding “Practitioner Albums” designed to preserve decades of contracting experience and guidance while removing excess restrictions on COs and contractors. Consolidation and reorganization have been promised where needed, and there has been an emphasis on simplifying regulatory language for clarity. The OFPP and the FAR Council have delivered on these reorganization, consolidation, and redrafting promises in Part 15. As detailed in the practitioner album accompanying the proposed language, this is “one of the most transformative aspects of the RFO, fundamentally redefining meaningful exchanges between the government and offerors throughout the source selection process.” Many federal contractors are likely familiar with the old distinctions between “clarifications” and “discussions” in the procurement process, or more likely, the difficulty in determining what category a particular interaction might fall into. These distinctions carried real consequences, sometimes making the difference between a successful and unsuccessful bid or protest. OFPP seems to have been aware of this potentially confusing and treacherous set of definitions, and has accordingly redefined a good deal of it. Definitions and Terms First, “communications,” in the context of the establishment of competitive range, have been eliminated entirely. “Discussions” have been replaced with “negotiations.” And “clarifications” have been given robust additional language to guide application. This has all been done to facilitate interactions initiated by COs, with the intention of improving offers and thereby the quality of services received by the government. “Clarifications” in the current version of the FAR permit minor corrections, but cannot be used for material revision of a proposal. In addition, the term “proposal revision” is updated to include the phrase “material elements of a proposal”. This revision clarifies that some changes made during negotiations are not proposal revisions. Rather, the change has to be “focusing the definition on changes that are “substantive in nature.” The scope of their availability has been expanded so that COs can request additional information or documentation (so long as material elements like cost/price are not changed) at any time after receipt of proposals through contract award, regardless of whether or not a competitive range has been established. Thus, “Clarifications may be conducted at any time after receipt of proposals through contract award irrespective of whether a competitive range has been established.” “Competitive range” has also been redefined: it is now a “group of evaluated proposals that the CO determines are best suited for further negotiation,” instead of “all of the most highly rated proposals.” Whether these new definitions deliver the intended flexibility and clarity remains to be seen, but these do constitute large-scale changes to the procurement process, especially compared to some of the smaller-scale redrafting in other proposed RFO language. Process and Steps Part 15 has also undergone substantial reorganization and consolidation. What once consisted of six subparts now features only five, and the organizational principle has shifted from topic-based to a “more intuitive acquisition flow.” The old subparts, in order, were: Source Selection Processes and Technique Solicitation and Receipt of Proposals and Information Source Selection Contract Pricing Preaward, Award, and Postaward Notifications, Protests, and Mistakes Unsolicited Proposals Now, the flow is: Presolicitation and Solicitation Evaluation and Award Postaward Contract Pricing Unsolicited Proposals. The intention here is “a more cohesive framework,” with provisions being relocated throughout to fit an organizational scheme that reflects the timeline of the acquisition process. Clarifications now includes the following: –Can occur anytime during source selection process, even when doing competitive range –Can correct “Unclear proposal language” –Can be used to verify understanding of proposal contents –Can address adverse past performance info –No revisions to proposal, but COs “may request additional information or documentation.” A deficiency now means a material failure, but removes the concept of a “combination of significant weaknesses.” In addition, the RFO endorses the use of a concept called: Highest technically rated offer with reasonable price added (HTFRP). This idea is basically the reverse of LPTA, as price is less important in this type of evaluation. The guidance states: “Having further negotiations with one offeror does not require the contracting officer to have further negotiations with other offerors. The deviation text provides guidance on industry communication through early exchanges and debriefing.” Other guidance makes clear that an agency “[m]ay have further negotiations with particular offerors without obligation to have further negotiations with other offerors.” This would seem to allow for an initial negotiations stage with all offerors, and then refinements that do not have to be equal. Material aspects can be revised during negotiations, including –material aspects such as pricing and intellectual property rights. Much of the content retained is mandated by statutory language, while a fair amount has been removed to the FAR Companion (the non-binding guidance language accompanying the RFO roll out). Several provisions have been outright deleted, for example, former 52.215-5, Facsimile Proposals. The RFO has reserved this language, with the new regulation taking a more “technology-neutral” approach allowing agencies “the flexibility to authorize a range of modern electronic submission methods;” in other words, COs are allowed to request submissions through email or a website portal as opposed to through fax. Takeaways There are further reorganizations, redrafts, and removals throughout Part 15, all of which are detailed by OFPP’s practitioner album. For now, one bottom-line takeaway is that initial negotiations, if done, must be with all responsible offerors in the competitive range. Subsequent negotiations do not have to be the same for all offers (potentially undercutting unequal discussions arguments). Contracting officers must negotiate with each responsible offeror within the competitive range and may further negotiate as needed. The proposed text provided guidance on industry communication through the early exchanges and debriefing. As it stands, this new subpart is relatively streamlined and designed to give COs greater flexibility in how they request, receive, review, and clarify proposals. It remains to be seen what the full impact of this fairly significant revision will be, but as always, stay tuned here at SmallGovCon for further coverage of all RFO developments. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post FAR 2.0 Update: Part 15 – Contracting By Negotiation first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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We have talked a good deal about the Small Business Rule of Two (not to be confused with the separate VA rule of two for veteran-owned businesses) over the years. The (very) general gist of the rule is this: If the procurement is above the simplified acquisition threshold, the agency must set it aside for small businesses if two or more small businesses can perform the work at fair prices. If the agency has a reasonable expectation that two or more SDVOSB/VOSBs, EDWOSBs/WOSBs, 8(a) participants, or HUBZone participants can perform work under a procurement, the agency must consider setting aside the procurement for that particular category (i.e., if it believes two or more 8(a) participants can perform the work, it can set aside the procurement for 8(a) participants). However, it appears there remains a good deal of confusion about what the Rule of Two requires, as opposed to what it simply permits. In a recent GAO protest, a contractor learned this the hard way, and today, we’ll explore that decision. Prior to issuing the solicitation in question, the Defense Counterintelligence and Security Agency (DCSA) issued a request for information (RFI) to find out what sort of businesses are interested in performing background investigation support services. DCSA then issued the solicitation on March 18, 2025, with a tiered evaluation approach that provided an evaluation preference for SDVOSBs. Essentially, this meant while non-SDVOSBs could bid, SDVOSBs were preferred. However, not long thereafter, DCSA did away with this approach, making the solicitation a simple small business set aside with no evaluation preference for SDVOSBs. In response to a question about why DCSA changed its approach, DCSA explained that, quite simply, it didn’t have a reasonable expectation that two or more SDVOSBs would submit proposals, although it did expect that two or more small businesses would submit proposals. Protection Strategies Etc. International LLC (PSEI), an SDVOSB, protested the terms of the solicitation on several grounds. One of its arguments was that DCSA had violated the Rule of Two by both failing to set aside the solicitation for SDVOSBs and for removing the evaluation preference for SDVOSBs. PSEI asserted that, in addition to itself, there were at least two other SDVOSBs that were more than capable of performing the work in question. As such, PSEI argued that the removal of the tiered evaluation preference violated DFARS 215.203-70. DCSA moved to dismiss PSEI’s protest with regards to its Rule of Two argument that the procurement should have been set aside for SDVOSBs. DCSA argued that while it was permitted to set aside procurements for SDVOSBs, it was not required to. GAO agreed. FAR 19.502-2 requires that an agency set aside a procurement over the simplified acquisition threshold for small businesses when there is 1) the reasonable expectation that two or more small businesses can perform the work and 2) award will be made at fair market prices. However, at the same time, FAR 19.203 states that if the procurement is above the simplified acquisition threshold, the agency must “first consider an acquisition for the small business socioeconomic contracting programs (i.e., 8(a), HUBZone, SDVOSB, or WOSB programs) before considering a small business set-aside[.]” The emphasized language there is key. As GAO observed: “While both the FAR and SBA regulations require agencies to consider setting aside a procurement for certain subcategories of small businesses before setting aside for all small businesses, neither the FAR nor SBA regulations ultimately require agencies to do so, even if an agency finds that there are two or more responsible firms from a certain subcategory likely to submit fair market offers.” As for PSEI’s argument that DCSA violated DFARS 215.203-70 by removing the tiered evaluation preference for SDVOSBs, GAO also agreed with dismissal. First, the record showed that only one SDVOSB deemed capable of performance had responded to the RFI, and, regardless, DFARS 215.203-70 doesn’t mandate preference for SDVOSBs. It states in relevant part: “Consideration shall be given to the tiers of small businesses (e.g., 8(a), HUBZone small business, service-disabled veteran-owned small business, small business) before evaluating offers from other than small business concerns.” In other words, it requires a preference for types of small businesses as opposed to large businesses. It doesn’t require preference for SDVOSBs over small businesses. Quite simply, while DCSA could have chosen to favor SDVOSBs if it wished, it was not required to, and it had the discretion to remove such a preference where reasonable. In fact, as only one capable SDVOSB responded to the RFI, there’s a fair argument to be made that setting the procurement aside for SDVOSBs or to prefer SDVOSBs would have been unreasonable, as in order for an agency to set aside a procurement for a particular socioeconomic category, it has to find that there are sufficient firms capable of performing the work in question. The small business Rule of Two, then, can (generally, there are exceptions and it also depends on the size of the procurement) be looked at as follows: If sufficient businesses in a certain socioeconomic category can perform the work, the agency may (but is not required to) set aside the contract for that category. If one or no businesses in a certain socioeconomic category can perform the work, the agency should not set the contract aside for that category. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post A Refresher on How the Small Business Rule of Two Generally Works first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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As we dive into another Thanksgiving season, we wanted to say thank you to all of our wonderful readers who make SmallGovCon such a nice place to write for. We love receiving your comments and questions. Whether you’ve been here for years or just stumbled in recently, we appreciate you. We hope your day is filled with good food, good company, and good cheer. Happy Thanksgiving! The post Happy Thanksgiving from SmallGovCon! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Most federal contractors are well-aware of the potential benefits of using one of the FAR-prescribed teaming options to perform government contracts. But one question we get a lot from small business federal contractors is how to most effectively utilize those teaming options (i.e., how to maximize team participation) on larger government contracts within the bounds and limitations of the law. And luckily, we’ve got a formula for that. By way of brief background, FAR 9.601 gives federal contractors two options for teaming up to perform government contracts. Specifically, it says: Contractor team arrangement, as used in this subpart, means an arrangement in which- (1) Two or more companies form a partnership or joint venture to act as a potential prime contractor; or (2) A potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified Government contract or acquisition program. In many circumstances, federal contractors will carefully select just one of these two teaming options to bid and (if successful) perform government contracts. Because these two teaming options are subject to vastly different sets of laws and performance limitations, there are lots of considerations to take into account when deciding which team structure will best suit the needs of the parties and the government client. I wrote an extensive three-part blog on the subject a few years ago that is still highly relevant today (Part 1, Part 2, and Part 3). The subject of Part 1–most contractors’ main concern and arguably the most important consideration in picking your team–is workshare. So, please pause here and give Part 1 a quick read for a detailed explanation of the specific workshare rules and limitations applicable to the two different types of teams allowed by the FAR. Because for purposes of this GovCon FAQ blog, we are going to keep it really simple. In a nutshell, FAR 9.601(a) teams (joint ventures) are subject to SBA’s performance of work requirements applicable to the type of joint venture (i.e., small business joint venture rules, 8(a) joint venture rules, etc.). And FAR 9.601(b) teams (prime-subcontractor teams) are subject to SBA’s and the FAR’s limitations on subcontracting–which are now essentially identical. But contractors don’t have to chose one or the other teaming structure (provided they are willing to abide by both sets of rule and applicable limitations). They can actually benefit substantially by utilizing a combination of the two on each contract. And you guessed it, this is precisely how a small business federal contractor can maximize contract performance participation of its chosen team members. For one, they can diversify the capabilities, resources, personnel, and past performance experience of the contract’s performance team by simply having more team members and different types of team members. Parts 2 and 3 of the “Picking Your Teams” blogs linked above describe some of the different relationship and past performance/experience considerations for each type of team (as do some of our other blogs you can find here and here). Some solicitations even have different requirements and/or criteria for evaluating joint ventures versus prime-subcontractor teams, which can also motivate contractors to utilize one teaming structure with certain teammates and another for others on a given contract. But perhaps the most common reason for utilizing both types of teaming structures for a single government contract–and the subject of this GovCon FAQ–is to maximize the actual percentage of contract work (i.e., amount of total contract dollars) that can legally go to the eligible small business’s teammates. Sure, the eligible small business prime contractor can (generally) have as many subcontractors as it wants. But the same limitation on subcontracting applies whether there is one or 100 subcontractors. To demonstrate, one non-similarly situated subcontractor can legally perform 50% of a services contract; but 50% is also what 100 non-similarly situated subcontractors can legally collectively perform on that same services contract. And the same analysis applies to joint ventures. Except for mentor-protege joint ventures, a joint venture can ideally include as many venturers as it wants. But the qualifying venturer(s) is required to perform at least 40% of the work performed by the joint venture nonetheless. So, whether there is one or 100 non-qualifying venturers, they cannot individually or collectively perform more than 60% of the work performed by the joint venture. So, utilizing both of the FAR’s teaming options simultaneously is the best way to maximize teammate participation in light of these limitations. To demonstrate this, let’s say we have a Service-Disabled Veteran Owned Small Business (SDVOSB) set-aside services contract valued at $1,000,000.00. Let’s also say we have a very small SDVOSB company called “Link Government Services, Inc.” interested in bidding this contract. But Link is concerned with the size and complexity of the contract’s scope, as well as its own ability to perform 50% of the contract work as the prime–or even 40% of the contract work as a managing venturer. As such, Link is hoping to utilize the services of two additional government contractors, which we will call “Zelda Associates, LLC” (a large business) and “Beedle Federal, Inc.” (a small business under the contract’s size standard but a non-SDVOSB). Under these facts, Link can perform the least amount of work under the contract if it: (1) first forms an SDVOSB compliant joint venture with Beedle (which per SBA rules, is allowed without a mentor protege agreement because both Link and Beedle are small for the contract), which we will call “Hyrule JV”; and (2) then contracts with Zelda through the Hyrule JV (via a compliant teaming agreement and subsequent subcontract) to form a prime-subcontractor relationship for performance of the contract, wherein the SDVOSB Hyrule JV acts as the prime and Zelda as the subcontractor. Now, of course Link will need to ensure all other applicable SBA and FAR requirements are met (including those for joint venture agreements, subcontract agreements and FAR flow-downs, etc.). But as long as they are, through this arrangement, Link can actually legally perform as little as 20% of the total SDVOSB contract–despite being the only eligible SDVOSB on the entire team. Specifically, performance via this structure to maximize each teammate’s participation can be broken down as follows: The Hyrule JV will need to perform at least 50% of the contract work (as the JV is the prime contractor itself)–meaning at least $500,000.00 of the total contract value will have to stay with the joint venture itself; The Hyrule JV (as the prime contractor) can then subcontract out the other 50% of the contract work to the large business subcontractor, Zelda (or any subcontractor for that matter)–meaning Zelda can collect a maximum of $500,000.00 of the total contract value; Of the 50% of the contract work performed by the joint venture itself, Link must perform at least 40% of the work of the joint venture, and Beedle can perform up to 60% of the work of the joint venture–meaning Link will perform 20% of the total contract, and Beedle will perform 30% of the total contract; Beedle will collect its maximum $300,000.00 of the total contract value; and Link will need to collect at least $200,000.00 of the total contract value. As you can see, this method provides a teaming structure wherein the qualifying managing venturer of the qualifying prime contractor joint venture can minimize its own performance of work requirements while maximizing the role of its chosen teammates in performing federal set-aside contracts. Questions about this post? Email us. Legal assistance needed for a federal government contracting issue? 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 GovCon FAQs: How Can I Maximize Use of Teammates to Perform Larger Government Contracts? first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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In what has certainly become one of our most popular and anticipated annual webinars, federal government contracts attorneys, Nicole Pottroff and Shane McCall of Koprince McCall Pottroff LLC, will break down some of the most significant 2025 legal developments impacting federal government contractors. In this webinar, they will cover some of the revolutionary (as well as some not-so-revolutionary) revisions to the FAR (via the anxiously awaited FAR 2.0), noteworthy updates to SBA’s small business regulations and various socioeconomic certification policies and processes, some recent legal decisions with widespread relevance to federal contractors, and so much more. They’ve even reserved some time at the end of their presentation to answer your questions. Please join us! You can register here. The post Govology Webinar! The 2025 Government Contracting Year-End-Review, December 11, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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It’s time for the SmallGovCon Week in Review. As you head in to your weekend and look forward to Thanksgiving, it’s time to catch up on the latest in federal contracting news. Have a great weekend and enjoy some crisp fall weather. This week in federal government contracting saw the NDAA rounding into form, changes to space contracting, and updates for how AI can be used in the federal space. Space Force to finalize 15-year force design this year, with release expected in 2026 NASA advances plan to shrink Goddard campus by 25% What if we stopped fixing government at the margins and redesigned it from scratch? San Antonio man caught on wiretap takes plea deal in alleged SBA scheme Lawmakers to finalize NDAA by week’s end, bring the bill to the floor in early December How AI agents can future-proof the federal workforce Lessons from the shutdown, and what to do before funding runs out again SBA told laid-off employees they could get their jobs back. It rescinded that offer a day later Perplexity becomes second AI platform cleared for FedRAMP prioritization OPM’s HR modernization strategy sets next sight on USA Hire Pair of AI-focused SBA bills advance in the House Emil Michael’s 6 DOD Tech Priorities—What GovCons Need to Know The post SmallGovCon Week in Review: Nov. 17-21, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Both the Senate and House, as part of the draft 2026 National Defense Authorization Acts (NDAA), have proposed nearly identical ideas on overhauling the Department of Defense’s Contractor Performance Assessment Report System (CPARS) processes. While both NDAAs have passed, and therefore require reconciliation in a committee, their ideas are extremely similar and signal a coming change in CPARS processes for defense contractors. One big change is to focus on specific negative performance events using “a standardized scoring mechanism” and to remove reporting on “positive or neutral performance assessments.” As most contractors know, the CPARS is essentially a report card for how your business performed on a federal government contract. A CPARS report will discuss how well (or unwell) a contractor performed a certain contract, and provide a rating of that contractor for that specific contract. The CPARS reports can be quite impactful when pursuing contracts (in fact we have blogged on cases discussing CPARS here and here). As the CPARS ratings and reports can make or break an award, most contractors pay close attention to their CPARS and the processes for reviewing and commenting on them. Recently, the House and Senate, in separate versions of the 2026 NDAA, have proposed nearly identical changes to the CPARS processes for Department of Defense (i.e., Department of War or DoD) contracts. An initial note: the House NDAA and Senate NDAA will need to go through a reconciliation process to create one NDAA to make a final law. So, these proposed DoD CPARS changes are not final yet, and there may be even more changes to the NDAA prior to its final form. However, the House and Senate’s CPARS sections are so similar, that it is likely the general overhaul of DoD’s CPARS will survive the committee process. The goal of these changes to the DoD’s CPARS processes is for the DoD to create a more “fact-based” and simple system for contractor performance ratings. This new CPARS process is supposed to focus more on specific “negative” performance events which can be verified and objectively measured. This will hopefully lead to less subjectivity in the CPARS ratings. They also want to reduce the administrative burden on contracting officers by limiting the CPARS to basically enumerated “negative” events. With that in mind, the House NDAA lays out the following as “Negative Performance Events”: Failures related to innovation, technical development, or prototype delivery. Failures related to manufacturing, quality control, or delivery of products. Failures related to maintenance, logistics, or support services. Failures related to professional, administrative, or operational services. Failures related to software, hardware, cybersecurity, or information technology systems. The Senate NDAA (and House NDAA in very similar words) list the following events as negative performance events whose reporting on the CPARS will be mandatory for COs: Delivery of defective products Delinquent deliveries (e.g. not meeting schedules) Improper markings or rights assertions on technical data deliveries. Defective pricing. Failure to flow down required clauses to subcontractors. False claims or misrepresentations. Non-compliance with safety or regulatory requirements. Significant cybersecurity breaches or failures. The 2026 NDAA also anticipates the ability for the Secretary of Defense to set additional performance indicators, so long as they are based on verifiable data and published in the DFARS. In line with these updates focusing on “Negative Performance Events,” the 2026 NDAAs will require the DoD to create a standardized scoring mechanism. The House explains that the scoring mechanism will “normalize negative performance events of a contractor based on the number of transactions and the dollar value of contracts performed by the contractor.” These scores will be reflected alongside the different negative events discussed in the NDAAs. To prevent subjective CPARS, these scores will be automatically calculated based on data entered by contracting officers. Importantly, this does not appear to get rid of the ability for contractors to provide comments or rebuttals on CPARS. The goal is to have these CPARS changes take effect 180 days after the NDAA is made law. At that point, the DFARS will be updated to reflect these changes. Finally, the Secretary of Defense will provide a report to to the Committees on Armed Services of the Senate and the House of Representatives a year after these changes are implemented, and GAO will conduct a review of the new CPARS processes within three years. So, there will be some feedback provided from the government side on these changes as the industry adjusts to them. While this is only applicable to DoD procurements, it is still quite the shakeup. Contractors will need to keep an eye on what “Negative Performance Events” and mandatory reporting situations make it through the committee into the final NDAA, as such events will now be the primary drivers of negative CPARS on DoD procurements. Additionally, if the CPARS calculations work in such an automated fashion, it is unlikely that discussing grades or rankings with COs will be as fruitful as in the past. The goal with this proposed CPARS update is efficiency and subjectiveness, which likely would lessen any discretion COs have on CPARS. Finally, having such different CPARS standards across agencies may cause headaches for contractors in proposals, as the DoD may now view CPARS without such automated systems differently than its own CPARS and vice versa for other agencies. To avoid this, it’s possible that the civilian CPARS is also changed along these lines, in order to avoid having disparate systems. No matter what, it will be important to see how this plays out as the NDAA gets finalized. As always, contractors should stay in contact with their federal government contracting legal counsel about any CPARS concerns, as it may get more complicated because it appears the DoD will soon have a different CPARS standard than other agencies. 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 2026 NDAA: DoD CPARS Changes Coming first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Not long ago, we discussed the basics of the Cybersecurity Maturity Model Certification (CMMC) Program at DFARS subpart 204.75. Of course, with such a large new system as the CMMC Program, there is more to it than what we reviewed there. In this second set of posts, we will dive deeper into the requirements and procedures of the CMMC Program implemented by DoD back in September 2025, among other items. We will explore what the general rules on what systems are covered by the CMMC Program, when the contractor must be in compliance with the CMMC Program, and what levels will apply for contracts. Scope While the CMMC Program has many requirements, it does not apply to every single asset, record, and system a contractor has. It depends on the asset or system’s involvement with Federal Contract Information (FCI) and Controlled Unclassified Information (CUI). For example, 32 C.F.R. § 170.19 notes that for Level 1, for the contractor, (or Organization Seeking Assessment (OSA), as the regulation states) “OSA information systems which do not process, store, or transmit FCI are outside the scope for CMMC Level 1” and “only OSA information systems which process, store, or transmit FCI are in scope for CMMC Level 1 and must be self-assessed against applicable CMMC security requirements.” In other words, if the contractor’s system never touches FCI, that system need not meet the requirements of CMMC Level 1. So long as the systems that actually interact with FCI meet the CMMC Level 1 requirements, the contractor should still meet CMMC Level 1. As one might expect, Levels 2 and 3 are stricter. In addition to those assets that touch FCI, the contractor must consider the assets that process, store, or transfer CUI for the Level 2 and Level 3 assessments. In fact, even for those assets that don’t otherwise process, store, or transfer CUI, if the assets are nonetheless capable of doing such, those need to be accounted for as well. Only those assets that are incapable of processing, storing, or transferring CUI and that do not process, store, or transfer FCI are excluded from the assessment. Of course, if you are claiming an asset is incapable of holding or transferring CUI, you will need to actually explain why that is the case. Time for Compliance As we noted in our prior post, there were certain parts of DFARS that were changed as well regarding acquisition policies. One key regulation is DFARS 204.7502. That regulation notes that, if CMMC Program compliance is required, the contractor must both have the required CMMC Program level status (or higher) at the time of award as well as throughout the duration of the contract. This must be reflected by the CMMC certificate held by the company, which is going to be in the Supplier Performance Risk System. All levels are noted in the SPRS. Not only this, but as DFARS 204.7503 states, a contractor cannot receive an extension or option on their contract if that contract requires as a certain CMMC Program level and the contractor no longer meets the requirements of that level. The CMMC in Procurements Of course, the CMMC Program doesn’t just have requirements for contractors. As we noted in our prior post, there were certain parts of DFARS that were changed as well regarding when CMMC compliance will be required. Key is DFARS 204.7504. Up until November 9, 2028, this regulation states that it is entirely up to the procuring agency what CMMC level, if any, will be required of bidders. After that date, it entirely will depend on if the contract involves FCI and/or CUI. This would mean that if it is FCI only, one should expect only a Level 1 requirement. With CUI, it would seem that it would be up to the contracting officer to determine which of Level 2 and Level 3 should apply, no doubt something that DoD could address with internal guidance. In either case, until November 2028, agencies are going to have basically total discretion on whether CMMC Program requirements apply to a given procurement. After that, they will be bound to use certain levels, but even then, there may be some discretion. Summary No doubt there will be further changes for the CMMC Program down the road. Cybersecurity is one of the fastest-developing fields today. As such, we would advise not becoming too wedded to the CMMC Program as it currently exists. Be ready for further tweaks and changes. That said, hopefully these posts have helped provide some clarity on one of the newest systems in federal contracting. 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 Overview of Recent Updates to Cybersecurity Requirements Under the CMMC Program (Part 2) first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Navigating the U.S. Small Business Administration (SBA) regulations can sometimes feel like navigating through a room filled with laser tripwires. One wrong decision or misstep could result in the company’s disqualification. A company might make a decision relying on its understanding of one SBA regulation, unaware of the application of an entirely different SBA regulation. While a miscalculation in complying with the regulations doesn’t trigger the same disasters shown in an action-packed spy movie, the effects can still be costly. In Primary Health Care, LLC d/b/a Anglin Distinctive Health Care JV, LLC, SBA No. SIZ-6370 (2025), a joint venture’s misapplication of SBA’s timing rules for size determination standards resulted in the company’s ineligibility for award. The Defense Health Agency (Agency) issued a solicitation that was a 100% small business set-aside with a size standard of $14 million in annual receipts. Primary Health Care, LLC d/b/a Anglin Distinctive Health Care JV, LLC (Appellant) was a joint venture selected as one of the awardees. One of the other offerors, Compass Arora JV, LLC (CAJV) filed a size protest with SBA’s Area Office, claiming Appellant did not have an active mentor-protégé agreement (MPA) in effect at the time final proposal revisions were due. Why does it matter whether Appellant had an active MPA? When two companies have an SBA-approved MPA in place, the regulations allow the mentor and protégé to “joint venture as a small business for any Federal government prime contract or subcontract, provided the protégé qualifies as small for the standard corresponding to the NAICS code assigned to the procurement.” 13 C.F.R. § 121.103(h)(2)(ii). The MPA is often referred to as a “shield” from affiliation, permitting small business concerns to form a joint venture with a mentor without being deemed affiliated, which you can read more about here. While Appellant had an active MPA as of the date initial proposals were due (October 27, 2023), the MPA had voluntary been terminated prior to the date of the submissions for final proposal revisions (May 5, 2025). The parties disagreed as to when Appellant’s size was determined – when the MPA was still active or after the MPA’s termination at the time of final proposal revisions. CAJV argued the joint venture’s size was determined at the time of final proposal revisions after the MPA was terminated, removing the joint venture partners’ shield from affiliation and ability to form a joint venture. No longer shielded from affiliation, the receipts of the two companies combined exceeded the applicable small business size standard, making Appellant ineligible for award. The Area Office agreed with CAJV, determining Appellant’s size exceeded the small business size standard on the date of final proposal revisions. A joint venture, the Area Office noted, must be small as of the date of the initial offer and as of the date of final proposal revisions. Appellant filed an appeal, claiming the Area Office erred as a matter of law by using the date of final proposal revisions as the determining date instead of the date of the initial offer. SBA’s general size status regulation states, “A concern, including its affiliates, must qualify as small under the NAICS code assigned to a contract as of the date the concern submits a written self-certification that it is small to the procuring activity as part of its initial offer or response which includes price.” Once awarded a contract as a small business, a firm is generally considered to be a small business throughout the life of that contract. 13 C.F.R. § 121.404(a) (emphasis added). When Appellant submitted the initial offer, the MPA was in effect. Thus, Appellant argued that the Area Office ignored the standard size regulation. Additionally, Appellant noted that it never submitted a final proposal revision, so the information submitted on the date of the initial offer remained the same. The Area Office acknowledged Appellant’s active MPA as of the date of initial proposals, deeming Appellant small as part of its initial offer, as required under SBA’s standard size regulation. But the Area Office also noted that while this is the general standard, there is always the possibility of an exception applying. And here, an exception for joint ventures did in fact apply. Two firms approved by SBA to be a mentor and protégé under § 125.9 of this chapter may joint venture as a small business for any Federal government prime contract or subcontract, provided the protégé qualifies as small for the size standard corresponding to the NAICS code assigned to the procurement, and the joint venture must meet the requirements of § 124.513(c) and (d), § 125.8(b) and (c), § 125.18(b)(2) and (3), § 126.616(c) and (d), or § 127.506(c) and (d) of this chapter, as appropriate, as of the date of the final proposal revision for negotiated acquisitions and final bid for sealed bidding. 13 C.F.R. § 121.103(h)(2)(ii). The Area Office determined SBA’s regulations specifically note, that joint venture compliance is required as of the date of the final proposal revisions. On appeal, the main point of contention was whether the Area Office erred in not applying the general SBA rule that size status of a concern is determined, as of the date it submits self-certification. OHA recognized SBA’s general size standard and that generally size is determined “as part of its initial offer or response.” 13 C.F.R. § 121.404(a). But, OHA noted, the regulations also state, Compliance with the . . . joint venture agreement requirements in §§ 124.513(c) and (d), §§ 126.616(c) and (d), §§ 127.506(c) and (d), and §§ 125.8(b) and (c) of this chapter, as appropriate, is determined as of the date of the final proposal revision for negotiated acquisitions. . . . 13 C.F.R. § 121.404(f) (emphasis added). OHA held that “the date of final proposal revisions is the relevant date for determining whether a joint venture meets the size standard for solicitations set aside for small businesses and is compliant with 13 C.F.R. § 121.404(f) […]. This is true even if the challenged concern did not actually submit final proposal revisions on that date. The regulation sets this date as the time to determine size; it does not require that any final proposal revisions actually be submitted.” Ultimately, OHA found the Area Office correct in determining Appellant’s size status as of the date for final proposal revisions. SBA regulations state that “a joint venture formed under an SBA-approved mentor/protégé relationship must comply with the requirements of 13 C.F.R. § 125.8 (b) and (c) as of the date of the final proposal revisions, as stated in 13 C.F.R. § 121.103(h)(2)(ii).” The termination of Appellant’s MPA prior to final proposal revisions deemed Appellant noncompliant with the small business requirements: “Appellant cannot comply with 13 C.F.R. § 125.8(b) and (c) because neither partner is properly a “protégé” or “mentor” due to the termination of the MPA. Appellant could not possibly satisfy any of the requirements in § 125.8(b) and (c) as of that date without an authorized MPA in existence.” Appellant was no longer compliant with 13 C.F.R. § 121.103(h)(2)(ii) as of the date of final proposal revisions. As such, the mentor protégé “shield” from affiliation did not apply and the joint venture’s size exceeded the procurement’s size standard. It is critical for companies to understand SBA’s regulations and maintain compliance continuously while participating in SBA’s socioeconomic programs. As highlighted in this decision, a misapplication of one of the rules can result in the company’s future ineligibility. 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 OHA Says: Compliance with SBA Joint Venture Requirements is Determined at the Time of Final Proposal Revisions first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Happy Friday! It’s been another eventful stretch across the federal landscape, as agencies continue navigating everything from sweeping acquisition updates to the lingering aftershocks of the longest government shutdown on record. In other news, SBA has cleared its VetCert backlog for SDVOSB companies. Check out the articles below for the full rundown and enjoy your weekend! SBA Clears VetCert Program Backlog to Put Veteran Entrepreneurs First Pentagon keen to recruit fresh acquisition workforce talent as it jumpstarts procurement reforms SDA Missile Tracking Contracts Delayed as DOD Diverts Funds to Military Pay Speed is central to DoD sweeping acquisition reform, but not a ‘mandate’ Tentative Senate deal reaffirms back pay, reverses RIFs for federal employees President Trump signs government funding bill, ending shutdown after a record 43-day disruption Government to reopen after House votes to end longest-ever shutdown Agencies prepare to bring back furloughed staff, rescind layoffs as shutdown comes to an end Trump Signs Spending Bill, Ending Longest Shutdown in U.S. History Senate-approved resolution to open the government appears to halt diplomat RIFs The post SmallGovCon Week in Review: Nov. 10-14, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article