Search the Community

SmallGovCon has covered the SBA’s assumption of control over certification of Service-Disabled Veteran Owned Small Businesses (“SDVOSB”) and Veteran Owned Small Businesses (“VOSB”) since it was first announced well over a year ago. Now, we are coming close to one of the final deadlines associated with SBA taking over these certification processes. It is hard to believe that it is already the end of the calendar year once again. But time flies when you are having federal contracting fun! With the end of 2023 comes a crucial deadline for certain veteran businesses to keep in mind–the date for self-certification to go away. As we discussed during the SBA’s SDVOSB certification rules rollout, self-certification of SDVOSBs was an item that SBA planned to get rid of. In the final rules and in follow up guidance, SBA stated that self-certified SDVOSB contractors would be given a one-year grace period to submit their certification application to the SBA. During that period, SDVOSBs could still self-certify as an SDVOSB. However, after that one-year grace period, SDVOSB self-certification would be eliminated. (That being said, SBA did indicate in its final rule that SDVOSB self-certification would be allowed for subcontracting purposes and goaling credit, for another five more years). As you likely know, SBA assumed control of SDVOSB certification on January 1, 2023. So, that one year grace period is coming to an end very soon. As SBA states on its site, there is “one-year grace period for self-certified SDVOSBs until January 1, 2024.” Meaning the grace period’s last day is December 31, 2023, only a few short weeks away. SDVOSB contractors who are self-certified were given the one-year grace period to file an application for SDVOSB certification. Consequently, a self-certified SDVOSB that sends in its application for SDVOSB certification to SBA prior to January 1, 2024, “will maintain their eligibility through the expiration of the grace period until SBA issues a final eligibility decision.” Meaning, a SDVOSB could self-certify through 2023 to compete for most SDVOSB set-asides (note, though, that VA does not recognized SDVOSB self-certification), but that ability will end on December 31, 2023. Therefore, if you are a self-certified SDVOSB, you have only a few weeks (as of the date of this blog) to get your application in to the SBA. Applications must be sent to the SBA through the SBA’s VetCert portal. If a self-certified SDVOSB contractor misses that deadline, it will find itself no longer SDVOSB certified and standing in line with other new applicants to regain SDVOSB status. In fact the SBA states “Self-certified SDVOSBs are encouraged to submit an application in advance to ensure the certification process is complete by January 1, 2024.” While every application is different, SBA will generally look for the same things. We highlighted many of these in our back to basics post on SDVOSBs and VOSBs. But it basically boils down to two major things: 1) ownership; and 2) control. In general, the SBA will want to make sure service-disabled veteran(s) directly and unconditionally own the majority of the business. The SBA will also want to make sure service-disabled veteran(s) control the business. Control is typically shown through control of the day-to-day affairs and long-term strategic decision-making of the applicant business. Self-certified SDVSOBs applying to SBA will need to keep these things in mind when preparing their applications. The SBA has provided a FAQ, email (vetcert@sba.gov), and toll free line (M-F, 8am-6pm ET, 800-862-8088), for any assistance they can provide. Of course, if you find yourself in the situation of needing to apply for SDVOSB certification, it may be a good idea to reach out to a federal contracting lawyer for input, to see if you meet the certification requirement, because there are many nuances to the eligibility requirements SBA places on contractors for the SDVOSB program. Questions about this blog? Email us at info@koprince.com. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Reminder: 2023 SDVOSB Deadline Looming first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Please join Greg Weber and I for this informative webinar on small business certifications. Participants will get an overview about: Woman Owned Small Business and Economically Disadvantaged Woman Owned Small Business 8(a) Business Development Program HUBZone (Historically Underutilized Business Zone) Service Disabled Veteran Owned Small Business We will discuss how to get certified, how long it may take, regulations, changes, updates, and tips and tricks on how to be prepared. We hope you will join us. Register here. The post Webinar Event: Small Business Certifications hosted by the Catalyst Center for Business & Entrepreneurship, December 14, 2023, 4:00pm EST first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

If your small business status hangs in the balance, you can’t afford mistakes in your next SBA size determination. Join us for an in-depth look at key accounting strategies and lessons from recent SBA size appeal decisions involving affiliation issues, joint ventures, and receipts calculation. Learn how to properly account for inter-affiliate transactions, raise strong arguments, and avoid missteps that could lead to an adverse size determination. Register now to demystify SBA rules and gain the knowledge needed to respond to size protests and succeed in appeals. If you are interested, please register here. The post Free Webinar Event: Mastering Size Calculations for SBA Size Determinations hosted by LeftBrain, December 12, 2023, 1:00pm EST first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy December! If you haven’t started your holiday shopping, don’t panic, you still have time! It’s hard to believe that 2023 is almost over. I don’t know about you, but here at SmallGovCon, the year seemed to fly by. We hope you have a nice weekend and can get out to enjoy all the holiday season has to offer. And now, in federal government contracting news, check out some interesting articles about how the federal government is approaching the use of AI and protecting critical supply chains. Virginia tactical gear & equipment company agrees to pay more than $2 million to settle allegations related to Buy American Act RAI Toolkit Executive Summary Defense Logistics Agency Makes Thanksgiving Meals Possible Worldwide Disparities In Government Contracting And How Leaders Can Boost The Economy Executive Order on Interagency Security Committee 10 HUBZone Companies Secure Spots on $700M Air Force Construction Services Contract Here’s who’s responsible for AI in federal agencies Is an earthquake ahead for a mainstay of federal procurement? Average security-clearance-processing speed, hits a speed bump Generative AI, Edge Computing & Modernization: Homeland Security Leaders Share Top Priorities Inspector general to probe decision on relocating FBI building New DHS supply chain center aims to head off future crises The post SmallGovCon Week in Review: Nov. 27-Dec. 1 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Updates to the SBA’s Small Business Subcontracting Plan regulations in response to the National Defense Authorization Act of 2020 Section 870 are changing the circumstances in which a prime contractor can receive credit for lower-tier subcontractors, effective November 13, 2023. Such changes make the inclusion of lower-tier subcontractors in certain situations optional and put the onus on the lower tier subcontractors to report such work to the SBA if the lower tier subcontractor wishes to receive credit. It is important to note that these changes have no effect on any first tier subcontracting requirements. For those that may be unfamiliar, small business subcontracting plans are a requirement for federal contracts that exceed $750,000, or $1.5 million for construction contracts. A small business subcontracting plan is not needed when an award is made to a small business, there are no subcontracting opportunities, or performance will occur completely outside of the United States and its outlying areas. But what is a small business subcontracting plan and why is it important? Well, as implemented by FAR 52.219-9 and 13 C.F.R. § 125.3, small business subcontracting plans describe how an other-than-small prime contractor will meet the small business subcontracting requirements of most federal contracts. And they are important to “provide the maximum practicable subcontracting opportunities for small business concerns.” Prior to the most recent change, prime contractors with individual subcontracting plans were required to include information on lower-tier subcontractors. Now, prime contractors have a choice. They can elect to have their lower-tier subcontracting plans considered with their proposal in certain circumstances. This applies only in situations when the subcontracting plan applies to a single contract with one federal agency. For other situations—including commercial plans, comprehensive contracting plans, governmentwide contracts, and multi-agency contracts—contractors are prohibited from receiving credit for lower-tier subcontractors. The rule also removes the requirement that a prime offeror submit two different sets of subcontracting goals: one for first-tier subcontractors and one for lower-tier subcontractors. However, the NDAA prohibits agencies from setting subcontracting goals at a specific tier. Therefore, SBA has updated the regulation so prime contractors are only required to submit one small business subcontracting plan regardless of the tier in which subcontractors fall. Note that if the prime contractor wants to receive credit for a lower tier subcontractor, it must incorporate the lower tier subcontractor’s own individual subcontracting plan goals. Finally, prime contractors are now required to submit, along with offers, a statement of the types of records the will maintain to substantiate subcontracting credit. However, the prime contractors are not required to make reports for their lower-tier subcontracts. Rather, the lower-tier subcontractors must submit that information on their own. Within the comments and responses, commenters hit on a couple of interesting points that come out of this rulemaking. One commenter requested that SBA define its role in holding subcontractors who fail to meet their lower-tier subcontracting goals accountable. In response, SBA said that, aside from the government sending “a ‘show cause’ letter that proposes debarment for subcontractors that repeatedly fail to meet their lower tier subcontracting goals,” prime contractors can accomplish their goals “by not subcontracting to firms that fail to meet subcontracting requirements.” With this, it seems as though SBA will be hands-off unless and until a contractor has failed to meet their subcontracting requirements repeatedly. Another commenter requested extra time before the lower tier subcontracting plan was required to be incorporated into the subcontracting plans submitted with proposals, but SBA declined to do so, stating that the plans must be in place by the time of award when required per 13 C.F.R. 125.3(a). In a response to another question, SBA recognized that contractors may not know of lower tier subcontracting opportunities when initially awarded a contract, but that any change to the subcontracting plan in place at the time of award must be submitted to the contracting officer for a contract modification. And there you have it. Prime contractors may, but are no longer required, to provide lower tier subcontracting information to agencies or the SBA. If desired, the lower tier subcontracts for single contracts with one federal agency will now be included in the prime contractor’s individual subcontracting-plan goals. Finally, if a lower tier subcontractor wants to receive credit for its work on the lower tier subcontract, the lower tier subcontractor must have its own individual subcontracting plan. Questions about this blog? Email us at info@koprince.com. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post FAR Subcontracting Plan Update: Credit for Lower Tier Subcontractors Means Lower Tier No Longer Lower Value first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

SBA’s size protest rules contain a stick to force companies to respond to SBA as part of size determination. That stick is called the adverse inference rule. The adverse inference rule says that, if SBA requests specific information and a protested company refuses to provide it, SBA may assume that the missing information would show that the company is not a small business. In a recent decision, SBA’s Office of Hearings and Appeals (OHA) upheld the use of the adverse inference. In Portacool, LLC, SBA No. SIZ-6251 (October 24, 2023), Defense Logistics Agency (DLA) conducted a small business set-aside procurement for for evaporative coolers. DLA assigned North American Industry Classification System (NAICS) code 333415, Air Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing, with a corresponding size standard of 1,250 employees. Portacool (or Appellant) was the apparent awardee and its size was protested by Portable Air Group, LLC (PAG or protester). The protest alleged that Portacool was acquired in April 2012 by a large business and is no longer small. As part of the standard response to a size protest, a protested company receives a letter from the SBA informing it that it has to provide a “response to each of the allegations in the protest”, as well as provide certain relevant documents and completed Form 355. The Form 355 provides basic information about ownership and management of the protested concern and potential affiliates. Among the items requested by SBA were: “A copy of organizational documents (i.e., Articles of Organization and Operating Agreement or Bylaws) for [Appellant] and all potential affiliates”; “If [Appellant] is not the manufacturer [of the evaporative coolers], an explanation of [Appellant’s] compliance with each of the four elements of the manufacturer rule in 13 CFR 121.406(b) is required”; “Completed employee calculation worksheet for [Appellant] and all of the potential affiliates, each affiliate will need to prepare a [worksheet].” Portacool received an extension to its response due date. After some back and forth with the SBA, the SBA wrote: Although Appellant had already indicated that it is 100% owned by [Company 1], Appellant must disclose “who owns [Company 1] and up the chain until individuals are provided.” The SBA Area Office determined that Portacool was not small. “The Area Office found that Appellant did not adequately respond to the Area Office’s requests for information posed on July 19, 2023, August 7, 2023, and August 14, 2023, and therefore drew an adverse inference that the missing information would have shown that Appellant is not small.” Among other things, the Area Office noted that “Appellant claimed that it is 100% owned by [Company 1]” but “Appellant did not disclose the owners of [Company 1] nor identify other potential affiliates.” Overall, the Area Office found that Portacool’s responses “lacked the necessary detail for the Area Office to determine ‘who ultimately owned and controlled’ Appellant” and failed to address various potential affiliates and their employee counts. Portacool appealed the size determination, arguing it had provided all relevant information to show it was small. Adverse Inference Under SBA size protest rules, protested companies must respond to SBA questions, provide a Form 355, and has the burden to establish it is small. In particular: If a concern whose size status is at issue fails to submit a completed SBA Form 355, responses to the allegations of the protest, or other requested information within the time allowed by SBA, or if it submits incomplete information, SBA may presume that disclosure of the information required by the form or other missing information would demonstrate that the concern is other than a small business. A concern whose size status is at issue must furnish information about its alleged affiliates to SBA, despite any third party claims of privacy or confidentiality, because SBA will not disclose information obtained in the course of a size determination except as permitted by Federal law. 13 C.F.R. § 121.1008(d). Under OHA’s test, SBA may impose an adverse inference based on three factors: “(1) the information sought by the area office is relevant to an issue in the size determination; (2) there is a level of connection between the entity being protested and the entity the area office is seeking information from; and (3) the area office’s request for information was specific.” In this case, OHA confirmed that the Area Office properly imposed the adverse inference penalty. First, the Protester “raised a specific and credible protest allegation, i.e., that Appellant is not small because Appellant was acquired in April 2012 by” another company–and SBA asked questions related to this protest allegation. However, Portacool did not adequately respond because it “failed to disclose specific information about other concerns that may be owned or controlled by” Portacool, its parent companies, or the individual owner of the parent companies. Portacool provided no information about the size of potential affiliates. Portacool, in its Form 355, had indicated it had an affiliate, but then tried to disclaim affiliation on appeal. OHA rejected this request. Conclusion Ultimately, OHA rejected this appeal. This case shows how important it is to fill out the Form 355 carefully upon the initial submission to SBA. It is very hard to walk back what is submitted in the initial version of documents sent to SBA. It is also very important to make responses to size protest allegations and requests for information that are both responsive and timely. Federal contractors must be careful in how they respond to an SBA size protest. Some things cannot be fixed on appeal. 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 OHA: Respond to SBA Size Determination Questions, or Risk an Adverse Inference first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

While losing a procurement is never easy, many contractors will learn some valuable lessons from a debriefing. On top of that, a debriefing can delay bid protest filing deadlines at GAO. However, recently, GAO clarified that the bid protest filing deadline delay for debriefings only applies to GAO protests. A protestor found this out the hard way after a pre-award debrief, and multiple protest actions. Given the importance that debriefings (or debriefs, for short) hold for contactors to determine areas to improve, possible bid protest grounds, and bid protest deadlines, we have written about them many times. There is our Back to Basics post on the topic, and, relevant to this case, we even have a post on pre-award debriefs affecting deadlines. If this post piques your interest, we highly recommend these and our other posts to learn more about debriefs. That being said, this case provides a great opportunity for a quick review of pre-award debriefs, and GAO’s filing rules. GAO’s bid protest filing regulations state that protests based on a solicitation’s terms must be filed “prior to bid opening or the time set for receipt of initial proposals.” For any other protests, they must be “filed not later than 10 days after the basis of the protest is known or should have been known.” However, GAO built in an exception for debriefings. The regulations state, when there is a competitive procurement in which “a debriefing is requested and, when requested, is required,” then the protest will not be filed “before the debriefing date offered to the protester” and not later than “10 days after the date on which the debriefing is held.” What this means is that in most cases, for a GAO bid protest, if a contractor is allowed a debrief under the solicitation, and if requested the agency has to give it, then the GAO bid protest deadline clock does not start until the debrief is given. Note, this is separate from the deadline to file to get a stay of award, which applies if a GAO protest is filed “within 5 days after a debriefing date offered to the protester for any debriefing that is required by 15.505 or 15.506.” FAR 33.104. That being said, there are some oddities regarding pre-award debriefs that could affect filing deadlines. If a contractor is offered a pre-award debrief after being excluded from the competitive range, there is an option to delay the debrief until after the award to get more information through a post-award debrief. This will get contractors more information about their evaluation, but critically, GAO has held that if a contractor chooses to postpone the pre-award debrief until post-award for more information, the contractor actually loses its right to protest. Also, the DoD has enhanced debriefs. which could allow for more information and push a GAO bid protest filing deadline out further, but the DoD’s enhanced debrief rules only apply to post-award debriefs. In NikSoft Systems Corporation, B-421801 (Comp. Gen. Aug. 16, 2023), GAO examined how a pre-award debrief affects (or in this case doesn’t affect) agency-level bid protest deadlines. On June 15th, 2023, NikSoft received notice that it was excluded from the competitive range for the subject procurement. NikSoft requested a pre-award debrief (debrief that occurs when excluded from competitive range before award). The debrief was received by NikSoft on June 30th, with the option of supplying questions on the debrief by July 5th. On July 6, NikSoft sent an email to the agency stating it disagreed with the weaknesses identified, and rebutted the agency’s evaluation. As this email was sent over 10 days after June 15th, the Agency treated this email as an agency-level protest, and deemed it untimely under the FAR agency level protest deadline of 10 days after notice of adverse action. On July 7th, NikSoft sent an email to the Agency that it labeled as an agency-level protest. The agency treated this second email as an appeal of the decision to treat the July 6th email as an agency-level protest. The agency’s senior procurement officer denied this appeal. NikSoft then filed a protest with GAO stating that the agency did not reasonably evaluate its proposal, and the exclusion of the proposal was improper. GAO dismissed this protest for being untimely. In its dismissal, the GAO focused on filing deadline requirements. As a general matter, GAO holds that a matter that was initially filed with an agency will be seen as timely “only if the agency protest was filed within the time limits provided by [GAO],” unless the agency places a “more stringent time for filing.” In that case, GAO will honor the agency’s filing requirements. GAO stated that the initial notice of exclusion sent to NikSoft on June 15th provided “sufficient information to inform the protester of its bases of protest” and the protester was required to file a protest within 10 days of June 15th. NikSoft in the GAO bid protest argued it waited for the debrief to be concluded before filing any protest. But GAO states in this decision “the debriefing exception established in our Bid Protest Regulations” for protest timeliness is “inapplicable to agency-level protests, which are governed by the timeliness rules in the FAR.” This is the lynchpin of GAO’s decision. The delay of a filing deadline because of a debrief is exclusive to GAO, and the agency, relying on the FAR, had a more stringent filing deadline. Thus, if a protester wants to file an agency-level protest, the FAR’s 10-day filing deadline applies, and has no exceptions for debriefs. A contractor cannot keep asking questions or delay a protest to seek more facts to fill out a protest. And if the contractor files an agency level protest before going to GAO, that protest must be timely under the agency’s rules (if those rules are more restrictive). This case has made some things clear to the contracting community: 1) contractors must be sure to start the proverbial protest deadline clock as soon as the notice of exclusion from award is received, if they plan to do an agency level protest; 2) contractors must be careful about how communications with the agency are worded, as an agency may treat it as a agency-level protest; 3) Debriefs will only effect bid protest filing deadlines, if the bid protest is filed at GAO. Given this complicated web of filing deadlines, it is important not hesitate about reaching out to federal government contracting lawyers as soon as possible if you find yourself excluded from award or a competitive range. That will allow you to fully discuss the various filing deadlines, exceptions, and forums for a potential protest. If not, you run the risk of a dismissal and missing your chance to fully state your case. 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 GAO: Debriefings Only Delay Filing Deadlines For GAO Protest first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Just as agencies have established goals to award a certain percentage of their procurements to small businesses and businesses participating in socio-economic programs like the 8(a) Program, large business contractors must establish goals to include small business subcontractors in their pool of subcontractors for unrestricted awards over the applicable threshold in FAR 19.702 ($750,000 for most contracts, $1.5 million for construction contracts). While the specific goal will vary with each contract (or in some cases may be on a company-wide basis), it is rare for a contracting officer to find a large business hasn’t met the given goal. However, an investigation by GAO indicates that large business contractors aren’t meeting their small business subcontracting goals as often as the government would hope. Let’s take a deeper look at these findings. The Gist On November 9, 2023, GAO issued its report regarding large business compliance with small business subcontracting plans. (Helpfully, it summarizes this report very quickly here, in case reviewing the whole report isn’t particularly time-effective for you). This report has proven to be quite eye-opening. GAO reviewed six separate agencies: The Air Force, the Army, Homeland Security (DHS), Health and Human Services (HHS), Veterans Affairs (VA), and NASA. For the report, GAO interviewed contracting officers to see how large businesses were reporting their compliance with these small business subcontracting requirements. Most contracting officers said their contractors were meeting the goals, and that they rarely assigned “below satisfactory” ratings to them. However, GAO noted that “[i]n contrast, according to government-wide data released by the Small Business Administration (SBA), many contractors reported not meeting their subcontracting goals in fiscal year 2022.” Indeed, for only 63% of completed contracts, large businesses met their small business subcontracting goal, meaning close to 40% failed to meet it. And that’s for the goals for small businesses in general. When it comes to goals for socio-economic programs, like the 8(a) Program and WOSB Program, compliance was even worse. It was as low as 35.9% of completed contracts for 2022 for SDVOSBs! There is a substantial discrepancy here that makes it very uncertain whether contractors are complying with these small business subcontracting goals. For its part, GAO observed that “most federal agencies GAO reviewed do not report or review data on contractors’ achievement of their subcontracting goals at the agency level, as required by statute.” In the report, GAO stated: Our selection of contracting offices was not generalizable, which may partially explain this apparent discrepancy. It is difficult to explain the differences between the contracting officers’ experiences and the government-wide data because these data generally are not broken down by agency. We have previously found that some contracting officers did not ensure that contractors submitted required ISRs and SSRs, and that some contracting officers accepted subcontracting report submissions with erroneous information on subcontracting goals. Recommendations for Agencies and SBA As it stands, GAO essentially feels there is not enough information being collected to tell what’s really going on. This problem it laid at the feet of the agencies. It noted that of the six agencies, only NASA was collecting information on small business subcontracting compliance as required by statute (15 U.S.C. § 637(d)(7)). After discussing the lack of compliance on the part of the agencies, GAO observed: By periodically collecting and reviewing agencywide data, these agencies could better understand the extent to which contractors comply in good faith with their subcontracting plans and the overall success of the agencies’ small business subcontracting program, as well as ensure they are in compliance with statutory requirements. Further, they could identify opportunities to adjust their efforts or improve oversight. At the same time, GAO also called out SBA for what it felt were insufficient numbers of “subcontracting program compliance reviews” (“SPCRs”). Apparently, for fiscal years 2021 and 2022, SBA only completed six SPCRs. It was even more concerning to GAO that despite each of the SPCRs finding that contractors generally weren’t complying with their subcontracting plans (with many companies being out of compliance both years), that further review efforts weren’t being undertaken. GAO stated “SBA has not analyzed the risk to its understanding of contractor compliance gained by conducting only six SPCRs in each fiscal year, with selection criteria that results primarily in contracts with commercial subcontracting plans.” Good Faith Standard Finally, GAO looked at the entire good faith standard for small business subcontracting compliance. Where large businesses fail to meet their goals, they will not receive unsatisfactory ratings if they can show they made good faith efforts to meet them, per FAR 19.705-7. While agencies noted the benefits of this standard (and GAO certainly did not recommend that this standard be abandoned), contracting officers did express frustration with how inherently subjective the standard is. It is worth noting, however, that FAR 19.705-7 provides examples of indicators of good faith (or lack thereof) for contracting officers to look out for. In any case, GAO recommends further training of contracting officers on evaluating large business compliance efforts. Our Thoughts Needless to say, some of the numbers from SBA’s reviews are striking. Certainly, we would not expect large businesses to always meet their subcontracting goals. That’s something that isn’t always in their control. But figures suggesting that up to two-thirds of large business contractors aren’t meeting goals for particular socio-economic programs like SDVOSBs and HUBZone businesses is concerning. We are of course aware that there may not always be businesses with those statuses available for subcontracts, which of course is why the good faith standard is needed. But we also hear of many small businesses that are eager and willing to do many types of work in the federal contracting sphere. But these numbers do raise concerns that that compliance with the small business subcontracting plans isn’t being taken seriously enough. The fact that many agencies weren’t even complying with federal statutory requirements for reporting only further solidifies this concern. Of course, we very much doubt that this was an intentional choice on the part of the agencies—it shows a marked lack of interest from the agencies, though. That is why reviews like that conducted by GAO are essential. We hope this will lead to an improvement in how agencies monitor small business subcontracting plan compliance. In turn, that will no doubt lead to more large business contractors meeting their plan goals. 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 Room for Improvement: Statistics Suggest It is Unclear if Large Businesses are Meeting Small Business Subcontracting Goals. first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Happy Friday! Next week is Thanksgiving and we want to take this opportunity to thank all of you for your support of SmallGovCon. We always strive to provide helpful content and we appreciate all the wonderful feedback that we have received from our readers. We hope you have a great Thanksgiving and are able to spend some time with friends and family. This week in federal government contracting news include a plan to fund the government (hear that one before?), AI and its effect on government, and new GSA acquisitions. The healing power of dogs for vets The misguided attacks on the 8(a) program must end Meetings: Interagency Task Force on Veterans Small Business Development Local veteran to speak at the US Senate about veteran-owned small businesses Meetings: National Small Business Development Center Advisory Board How the New AI Executive Order Will Impact Government’s AI Landscape COMET recompete, Polaris protests keep acquisition exciting in early fiscal 2024 This New Senate Bill Will Give Veterans a Break on Some SBA Loans Getting better deals for the government GovCon M&A Deals ‘Rebounding’ After Slow Period—Dispatch from 2023 Baird Conference House Approves Bill to Keep Government Funded Past Saturday Ernst Works to Meet Needs of Veteran Entrepreneurs The post SmallGovCon Week in Review: November 13-17, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

In this webinar, Nicole Pottroff and I will cover the most important legal developments for federal contractors in 2023. We will discuss some new small business rules, updates to the 8(a) rules and application procedures, joint venture changes, updated SDVOSB certification requirements, key provisions of the recent National Defense Authorization Act, and more. Hope you can join us. Register here. The post Govology Webinar Event: 2023 Government Contracting Year in Review, December 7, 2023, 1:00pm EST first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

This article was originally published by Steven Koprince on LinkedIn and is reprinted with permission. Steve is the founder of Koprince McCall Pottroff LLC but has retired from the practice of law to focus on other endeavors. His views do not necessarily represent those of the firm or its attorneys. To read more of Steve’s current government contracting writing, follow him on LinkedIn and subscribe to his LinkedIn newsletter. The U.S. Small Business Administration’s Office of Inspector General isn’t mincing words–OIG thinks that SBA has strayed from Congressional intent with its expansive definition of who qualifies as a HUBZone employee for purposes of satisfying the HUBZone Program’s eligibility requirements. In a recent report, SBA OIG points out that SBA’s broad definition could result in a company becoming HUBZone-eligible even if none of the company’s employees currently live in HUBZones. By way of background, the HUBZone Program generally requires that at least 35% of a HUBZone-certified company’s employees be residents of a HUBZone. (HUBZone companies owned by entities such as Indian tribes may elect an alternative standard, but that’s not relevant here). In 2020, as part of an effort to overcome the government’s longstanding inability to meet its 3% HUBZone prime contracting goal, the SBA expanded the definition of who qualifies as a HUBZone employee. The current definition, set forth in 13 C.F.R. 126.200(d), says, in relevant part: An employee who resides in a HUBZone at the time of certification (or time of recertification where the individual is being treated as a HUBZone resident for the first time) shall continue to count as a HUBZone resident employee if the individual continues to live in the HUBZone for at least 180 days immediately after certification (or recertification) and remains an employee of the concern, even if the employee subsequently moves to a location that is not in a HUBZone or the area in which the employee’s residence is located no longer qualifies as a HUBZone. When it adopted the revised definition, SBA explained that as employees experience increased financial success, they tend to move out of HUBZones. SBA did not want to essentially penalize success by revoking HUBZone certification when a company’s previous HUBZone residents moved out of HUBZones. That makes sense, but as the SBA OIG says, it absolutely is true that the revised definition means that a company can be HUBZone-certified even if none of its employees live in a HUBZone, or have lived in one for years. For example, consider a company with five employees, two of whom live in HUBZones. This arrangement meets the HUBZone Program criteria (40% of employees live in HUBZones, exceeding the 35% mark). Based on this, the company becomes HUBZone-certified. Seven months later, both HUBZone residents move to non-HUBZones. Under the expanded definition, the company remains HUBZone-eligible indefinitely, even though none of its employees now live in HUBZones. In its new report, SBA OIG says: In 2020, SBA changed a HUBZone requirement, allowing certified businesses to have employees who are not current HUBZone residents. Under the new requirements, the business continues to meet the requirement as long as it has employees who lived in a HUBZone for at least 180 days after the business was first certified. HUBZone businesses could have no employees residing in the HUBZone at all and still qualify because employees initially hired as HUBZone residents moved out of the HUBZone after the 180-day period. The requirements of the rule are clearly inconsistent with legislative intent. Later in the report, SBA OIG adds: The new HUBZone employee residency requirement may reduce the program’s ability to meet legislative intent. Allowing certified businesses to count employees who are not current HUBZone residents does not ensure continual employment of individuals who live in distressed areas. We question if the full economic benefits of the HUBZone program will be realized in these areas. SBA OIG’s position doesn’t seem to have swayed SBA, which remains committed to the expanded definition. HUBZone-certified firms relying on the expanded definition, however, should tread carefully. Not only could SBA OIG’s continued objections catch Congress’s eye, but the issue could someday end up in federal court. For instance, an unsuccessful offeror on a HUBZone set-aside contract might file a lawsuit alleging that the winning bidder’s reliance on the expanded definition is contrary to law. In such a case, the fact that SBA OIG agrees with the protester may be persuasive. Questions about this post? Email us. Need legal assistance? Call us at 785-200-8919. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post SBA OIG Again Challenges SBA’s Revised Definition of a HUBZone Employee first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

This workshop will focus on teaming agreements and subcontracts which can be essential to winning and successfully performing federal government contracts. Greg Weber and I will explain how to develop, negotiate and administer agreements that are both compliant and effective for both small and large contractors. The presentations will cover both the key rules (such as flow-downs and ostensible subcontractor affiliation) and best practices for agreements that go beyond the bare minimum legal requirements. Please join us! Register here. The post Event: Teaming Agreements & Subcontracts Workshop hosted by The Catalyst Center for Business & Entrepreneurship, November 16, 2023, 3:00-5:00pm CST first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

Tomorrow is Veterans Day and SmallGovCon would like to thank our veterans for their service. Here are some interesting historical facts about Veterans Day. It was on November 11, 1921, an unidentified American soldier killed in the war was buried at Arlington National Cemetery. The US Department of Veterans Affairs holds a ceremony each year in Arlington National cemetery, to honor and thank all who served in the US Armed Forces. The first celebration using the term Veterans Day occurred in Birmingham, Alabama, in 1947. You can read more about the history of Veterans Day here. If you are not a veteran, please reach out and take a moment to thank those veterans in your life. We hope you will consider attending a Veterans Day event in your area to thank them for their service and honor their sacrifice. And now, this week in federal government contracting news included a new contracting initative, increased use of AI, and cyber security updates. FAR: Small Business Development Centers Army to set up digital contracting center of excellence Contract spending is set to grow across the board in 2024 FACT SHEET: Biden-⁠Harris Administration Announces New Better Contracting Initiative to Save Billions Annually AI Adoption Transforming Government Contracting General Services Administration hosts Native American Industry Day for Native American-owned businesses and tribal government leaders Bank of America doubles support for Veteran Loan Fund to Aid Growth of Veteran-Led Small Businesses throughout Texas Honoring Our Veterans : Retired Fighter Pilot, 96 year old continues to run Business The White House launches a contractor initiative centered on better data and performance Biden wants better deals from contractors Why did bid protests to GAO rise sharply in fiscal 2023? President Biden Selects HUD’s Small Business Director for Prestigious Presidential Rank Award Former Defense Contractor in Tomah Receives 15-Month Prison Sentence & $10,000 Fine For Wire Fraud GE Aerospace Agrees to Pay $9.4 Million to Resolve Allegations of False Claims Act Violations OSTP director stresses importance of AI talent search following executive order NIST releases revised cyber requirements for controlled unclassified information Defense firms can take steps now to comply with enhanced cyber standards, industry officials say The post SmallGovCon Week in Review, November 6-10, 2023, A Salute to Our Veterans! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

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

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

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

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

Many federal contractors know of and participate in the SBA’s Mentor-Protégé Program. However, there are many agency specific Mentor-Protégé Programs, including the oldest continuous program, the Department of Defense’s Mentor-Protégé Program. The DoD’s program has been operating since around the First Gulf War, and like any good machine that is a few decades old, regularly needs some updates. Just in the past week, the DoD released the newest proposed changes to its program. Here at SmallGovCon, we have always endeavored to stay on top of all the different changes to the myriad of small business contracting programs. As such, you may remember we covered last year’s changes to the DoD’s Mentor-Protégé Program. Those updates proposed changes to the length of the Mentor-Protégé Agreements, and protégé eligibility, among other items. Well, in what appears to be a new fall tradition, the DoD on October 25 released further proposed changes to its Mentor-Protégé Program. While there are many similarities between the SBA’s Mentor-Protégé Program, and its “older cousin” at the DoD, there are quite a few unique characteristics to the DoD’s own program. While a separate blog post about all the differences is likely justified as some point, for this blog, we will just cover the unique items that DoD is planning on updating right now. Currently, the DoD’s Mentor-Protégé Program has a deadline for hopeful participants to apply for inclusion. Additionally, Mentors are able to either receive some small business contracting credit or reimbursement of costs through the DoD Mentor-Protégé Program. For Mentor-Protégé Agreements entered into after December 23, 2022, the Mentor actually has deadlines to submit data on those items. Also, to qualify as a Mentor, a business must show the ability to impart value to a Protégé. That of course can be shown in many ways, but one is having DoD contracts and subcontracts equal to or greater than $100 million during the previous fiscal year. Additionally, a Mentor-Protégé Agreement under the DoD’s Program can only last for two years currently, with the possibility of reaching five years in special circumstances. Now the DoD is proposing to change those specific items. In its proposed rule, the DoD plans to make the following adjustments: First, you may notice in DoD’s regulations, that it calls its program the “Pilot Mentor-Protégé Program.” The DoD is proposing to make their Program permanent (yes, the oldest continuously operating Mentor-Protégé Program technically is not permanent). In line with that the DoD proposes removing the word “Pilot” from all regulations, likely alleviating those among us who are sticklers for proper word usage. Also, the DoD will remove the deadline to apply to participate in the program. Logically, if something has no end, then there should be no deadline to get in. Next, to the delight of many who may be trying to determine further deadlines, the DoD proposes removing the specific dates found in the DFARS for mentors to submit for reimbursement and credit towards subcontracting goals under mentor-protégé agreements that were entered into after December 23, 2022. Also, in moves that were likely aimed to increase participation, or at least interest among potential mentors, the DoD is proposing a reduction of the dollar threshold associated with mentor eligibility, and increasing the length of a mentor protégé agreement. The DoD would adjust the amount of revenue from DoD contracts required to be a Mentor, from $100 Million during the previous fiscal year, to $25 Million. Also, a DoD Mentor-Protégé Agreement would now last three years, rather than two. Finally, the DoD proposes changes to a type of assistance that could occur under a DoD MPA. The DoD is adding “manufacturing, test and evaluation” to the list of assistance that a Mentor may provide to a Protégé, and “manufacturing innovation institutes” to the list of assistance that a Mentor may obtain for a Protégé. It is important to note that these are proposed changes, not final. So, there is still a period for comments. Therefore, if you have thoughts or comments on these proposed changes, your comments may be submitted up until December 26, 2023. The DoD will consider those comments when forming a final rule. While these are only proposed changes, it is likely that in the absence of glaring contradictory comments from the public, the DoD will march forward with these proposed changes. Upon first reading, it appears that these changes may actually help encourage more participation in the DoD’s Mentor-Protégé Program as it allows for longer relationships, and more Mentors to qualify. It also helps alleviate any concerns of those on the fence trying to decide whether they will participate due to it being a “temporary” or “Pilot” program. The stability of the Program, and longer-term relationships should do quite a lot to calm the waters of Mentors and Proteges; especially those who were afraid that assistance would not suffice, or they would have the rug pulled out from under them due to the non-permanent nature of the Program. Of course, much of how this goes could be determined by comments submitted. So, if you have thoughts on these changes or want to help leave your impact on the DoD’s Mentor Protégé Program, you have your chance to submit comments up until December 26th. Questions about this post? Email us. Need legal assistance? call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post DoD Proposes Updates to its Mentor-Protégé Program first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

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

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

The FAR Council has released updates that will impact a couple aspects of small business contracting. One is that contractors can now file size and socioeconomic status protests for certain types of orders, under strict timelines. Second is that agencies must notify SBA when they seek to remove certain contracts from the 8(a) Program. While these rules were present in some form in SBA rules, they are now firmly ensconced in the Federal Acquisition Regulation as well. Below, I discuss the highlights of these rules as well as any differences from the SBA rules. Order Protests Under this proposed rule, the FAR will be updated to clarify requirements for size and socioeconomic status protests in connection with orders placed under multiple-award contracts. The FAR Council notes it is implementing SBA rules stretching from 2013 to 2022. As we know, sometimes it takes a few years for the FAR to be updated, and this is no exception. If you can remember what you were doing back in 2013, more power to you! That was the year the Harlem Shake was big, for those who don’t recall. At bottom, this rule allows for size and status protests to be filed at only limited times. This type of protest can be filed at two times: At the time of award of “orders that are set aside under an unrestricted multiple-award contract.” At time of award of “orders placed under multiple-award contracts where the contracting officer requested rerepresentation.” These rules act as exceptions to the general rule for timing of size protest and status protests. As we’ve discussed with respect to status protests and size protests, the general rule is that a protest is due within 5 business days of when a contractor receives notice of award or learns of the prospective awardee. For instance, for negotiated contracts, a “protest must be received by the contracting officer prior to the close of business on the 5th day, exclusive of Saturdays, Sundays, and legal holidays, after the contracting officer has notified the protestor of the identity of the prospective awardee.” 13 CFR 121.1004. The SBA rules already contain an exception to the general rule this extended deadline for size and status protests. For instance, SBA rules stated that a protest could be filed within 5 business days of notice of awardee in connection with of either: a contract award “An order issued against a Multiple Award Contract if the contracting officer requested a size recertification in connection with that order”; or Except under GSA Schedules, an order “where the underlying Multiple Award Contract was awarded on an unrestricted basis without a reserve.” 13 CFR 121.1004. The SBA Office of Hearings and Appeals has explained that “the prime contractor of a long-term task or delivery order contract ”is small for each order’ unless a contracting officer chooses to request recertification for a particular order.” Interestingly, the FAR rule is not as clear as I would like it to be when it comes to protests where the agency requests recertification as part of the order. The SBA rule says that award of an order can be protested where the CO “requested a size recertification.” The FAR rule does not use the same language, instead mentioning “rerepresentation” in the title of the regulation, but not in the actual text. However, it does refer back to the SBA rules at 13 CFR 121.1004. It seems like if they were going to wait 10 years to implement this rule, they might make it a bit clearer when a protest was authorized. Also, while the SBA refers to it as a recertification, the FAR calls it a rerepresentation. They appear to be the same thing as recertification, but why not use the same word that SBA uses to avoid confusion? This is a proposed rule and comments close December 4, 2023. 8(a) Follow-On Contracts This final rule clarifies the notification requirements when a contracting officer decides that a requirement, previously procured under the 8(a) program, is a new requirement and not a follow-on requirement to an 8(a) contract; and when the procuring activity intends to procure a follow-on requirement using an existing limited competition contracting vehicle that is not available to all 8(a) participants and the current or previous 8(a) contract was available to all 8(a) participants. In particular, the agency must, under FAR 19.815, seek SBA’s approval to release a requirement from the 8(a) Program or if it is using a mandatory source for a procurement. The general rule is that “[o]nce a requirement has been accepted by SBA into the 8(a) program, any follow-on requirements shall remain in the 8(a) program unless there is a mandatory source (see 8.002 or 8.003) or SBA agrees to release the requirement from the 8(a) program in accordance with 13 CFR 124.504(d).” This is sometimes called the Once 8(a), Always 8(a) rule. The request must highlight the following items: (i) Whether the agency has achieved its small disadvantaged business goal; (ii) Whether the agency has achieved its HUBZone, SDVOSB, WOSB, or small business goal(s); and (iii) Whether the requirement is critical to the business development of the 8(a) contractor that is currently performing the requirement. However, there is a strict requirement for when an agency decides that a requirement is a “new” requirement. In that situation, a new procurement is not a follow-on, so it doesn’t have to stay in the 8(a) Program. To meet that standard, though, the agency must provide a written notice to SBA with a “copy of the acquisition plan, if available; performance work statement (PWS); statement of work (SOW) or statement of objectives (SOO); and the values of the existing 8(a) contract(s) and the new contract requirement.” This data is needed so SBA can check if the procurement really is new. Under SBA rules, a procurement is generally new under the following factors: (B) Procurements for construction services (e.g., the building of a specific structure) are generally deemed to be new requirements. However, recurring indefinite delivery or indefinite quantity task or delivery order construction services are not considered new (e.g., a recurring procurement requiring all construction work at base X). (C) The expansion or modification of an existing requirement may be considered a new requirement where the magnitude of change is significant enough to cause a price adjustment of at least 25 percent (adjusted for inflation) or to require significant additional or different types of capabilities or work. 13 CFR § 124.504. The FAR rule will require the agency to provide information so that SBA can check whether the agency is allowed to move a procurement out of the 8(a) Program, or whether the new procurement exception applies. This rule goes into effect on November 06, 2023. Conclusion While these rules were already present in SBA regulations, it is good to see them in the FAR. However, the rules were still valid even though they were only present in the SBA rules for quite some time. Hopefully, this won’t cause confusion for anyone where the language of the FAR and SBA rules do not directly match up. Questions about this post? Email us. Need legal assistance? call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post FAR Updates: Size Protests for Orders, Rules for 8(a) Follow-On Contracts first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

The joint venture two-year rule always generates a lot of questions. But it’s an important one for small business joint venture members to understand and comply with. A recent decision from the Small Business Administration Office of Hearings and Appeals (OHA) shows why. In the case, a joint venture lost an award because it violated the two-year rule. In Federal Performance Management Solutions, LLC, SBA No. SIZ-6246, 2023 (Sept. 26, 2023), OHA reviewed an award to Federal Performance Management Solutions, LLC, a joint venture (the JV) between a small business and its approved large business mentor. The solicitation sought credentialing branch support services under NAICS code 541513, Computer Facilities Management Services, with a $32.5 million size standard at that time. A protester argued that the JV was not eligible due to violation of the SBA’s two-year rule for joint ventures. As we’ve discussed, the two-year rule is one of those deceptively simple rules that SBA has. It states: Once a joint venture receives a contract, it may submit additional offers for a period of two years from the date of that first award. An individual joint venture may be awarded one or more contracts after that two-year period as long as it is submitted an offer prior to the end of that two-year period. SBA will find joint venture partners to be affiliated, and thus will aggregate their receipts and/or employees in determining the size of the joint venture for all small business programs, where the joint venture submits an offer after two years from the date of the first award. 13 C.F.R. § 121.103(h). In other words, a small business joint venture should not submit offers more than two years after the first award to the joint venture, or the joint venture members will become affiliated. The protester argued in this case, that the JV violated this very rule–and SBA agreed. The question, then, is when was the “first award” for purposes of the two-year rule? And here is where it got a little interesting. The JV got its first award on September 15, 2018, and submitted its initial offer, including price, for the procurement at issue, more than two years later on June 7, 2022. Protester argued this was the date of the first award, but the JV disagreed. The JV attempted to argue that the September 2018 award should “not count due to the update to SBA’s regulation changing the 3-in-2 Rule to the 2-Year Rule”. Note, the Two-Year Rule, used to be the Three-in-Two Rule, which limited joint ventures to three awards within a two-year period. Since the change, joint ventures are not limited by the number of awards, only by the timing of bids. This change took effect on November 16, 2020. The Area Office determined that the intent of the change, to the Two-Year Rule, was “not that any firms already in their two-year period received an additional two years from the date of the rule change, but rather that any firms, in their two year period, could benefit from the removal of the restriction to three awards.” And OHA agreed. OHA concluded that “the rule provides that joint venturers will be deemed affiliated with one another if ‘the joint venture submits an offer after two years from the date of the first award’, irrespective of when that first award occurred. Applying the November 2020 Two-Year Rule to the JV is proper because the JV submitted its offer after November 2020–in 2022. OHA also noted that the two-year limit, in the rule, existed before the change to get rid of the 3-contract limit–that two-year part existed well before the 2020 change in the rule. Because the JV submitted its offer more than two years after its first award, the two JV members were properly found to be affiliated. Because the combined receipts of the JV members were over the applicable $32.5 million size standard, the Area Office was correct in finding the JV was not a small business. This OHA decision showcases that the Two-Year Rule can be a trap for the unwary. Unfortunately, SBA continues to keep this rule in the books. Those companies wishing to use a joint venture to go over small business contracts need to be well aware of the Two-Year Rule, and closely keep track of when a joint venture got its first award. Questions about this post? Email us. Need legal assistance? call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post OHA: JV Violates Two-Year Rule, Loses Award first appeared on SmallGovCon - Government Contracts Law Blog.View the full article

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

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

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