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I recently attended the NAPEX Fall conference in DC this past week. I was able to speak on the topic of The FAR Overhaul and Legal Updates for 2025. It was a great presentation with some insightful questions. Thanks to all the wonderful Apex Accelerator folks for saying hi to me. It’s Friday and time for another week in review. This week was full of updates about the effects of the government shutdown. In other news, OPM is pushing to boost tech expertise and the DoD is looking to streamline acquisitions and hear from small businesses ahead of new cybersecurity standards (CMMC). You can read more about these stories and other federal government contracting developments in the articles below. Have a great weekend. Engaging more social scientists could help government programs work better and deliver more Trump admin begins developing new cybersecurity strategy Plans to keep the FBI headquarters in DC are moving ahead in Congress DoD to send more military lawyers to Justice Department as some begin serving as temporary immigration judges Shutdown Funding Lapse Shreds Civilian Contract Spending by 74% Pentagon looks to get pulse of small businesses as CMMC looms OPM’s Kupor wants more tech expertise in the federal workforce All 15 TSP funds post positive returns in October Draft memo reveals potentially sweeping Pentagon acquisition reforms Trump pressures GOP senators to end the government shutdown, now the longest ever VA calls for industry input on expanding cloud services provider portfolio Nominee for Pentagon CAPE director says office’s workforce is strained, needs new tech The post SmallGovCon Week in Review: Nov. 3-7, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article -
As discussed in a previous post on SmallGovCon, the Department of Transportation (DOT) recently issued a interim final rule removing certain presumptions of disadvantage from its eligibility requirements for the Disadvantaged Business Enterprise (DBE) Program. As part of that change, DBE Program participants and applicants will have to submit new narratives discussing their social disadvantage. The DOT has released further guidance on the changes felt by the interim final rule, including impacts on the disadvantage narrative and current contracts. SmallGovCon has previously discussed the interim final rule removing presumed social disadvantage from DOT’s DBE Program. Key to that change was the removal of race and gender as bases for presumed social disadvantage, and the requirement for all current DBE participants to submit an updated narrative. The interim final rule states: “Under the revised rule, any individual seeking to demonstrate that he or she is a ‘socially and economically disadvantaged individual’ will be required to make the same individualized showing of disadvantage, regardless of the individual’s race or sex.” However, additional guidance on the specifics of the implementation and impact of the interim final rule was needed. Thankfully, DOT has released some more explicit guidance on those points. The DOT’s Office of Civil Rights released a document providing further explanation of the changes from the interim final rule, and instructions on what the DOT expects going forward. (The DOT has links to this letter and the interim final rule here). The DOT lists five things it will look for in applications to the DBE program, many hitting on items expected in disadvantage narratives. Under the interim final rule, the owner of the applicant company must: “. . . demonstrate that the owner is socially and economically disadvantaged based on his or her own experiences and circumstances that occurred within American society, and without regard to race or sex”; “. . . submit to the certifier a personal narrative establishing the existence of disadvantage by a preponderance of the evidence based on individualized proof regarding specific instances of economic hardship, systemic barriers, and denied opportunities that impeded the owner’s progress or success in education, employment, or business, including obtaining financing on terms available to similarly situated, non-disadvantaged persons”; “. . . state how and to what extent the impediments caused the owner economic harm, including a full description of type and magnitude, and establish the owner is economically disadvantaged in fact relative to similarly situated non-disadvantaged individuals”; “. . . state how and to what extent the impediments caused the owner economic harm, including a full description of type and magnitude”; and ” . . . attach to the Personal Narrative a current personal net worth statement and any other financial information the owner considers relevant”. The DOT also issued a Frequently Asked Questions, which provides a good amount of information, including but not limited to: The DOT expects that “recipients will amend their [program] plans as soon as practical after the Unified Certification Program (UCP) in their jurisdiction completes the reevaluation process.” Contracts with DBE goals that have been advertised “but not yet let (i.e., bids not yet opened) must issue amendments to the advertisements removing the DBE contract goals.” For Contracts that have been “let (i.e., bids opened) but contracts not yet awarded” recipients must take action to “zero out the DBE goal.” Due to the Interim Final Rule, DOT will allow contracts to be amended without re-advertising the projects, depending on applicable state law. Finally, for Contracts with DBE goals which have been executed prior to October 3, 2025, they are not required to be modified, but DBE participation cannot be credited towards DBE goals “until the UCP in the recipient’s jurisdiction completes the reevaluation process.” Contracts awarded on or after October 3, 2025, will have the new DBE regulations apply. Generally, UCPs will reevaluate the certifications of the DBEs for which the UCP was the jurisdiction of the original certification. There is no date for the reevaluations to be complete, just that they should be done “as quickly as practicable.” UCPs cannot simply decertify all currently certified DBEs without allowing for the recertification process to play out. The Interim Final Rule requires UCPS to provide identified DBE firms with “the opportunity to submit documentation demonstrating its DBE eligibility.” If a DBE firm is decertified in the reevaluation process, it can appeal such decertification. New DBE applications will be required to provide a personal narrative statement in addition to meeting all the other certification requirements. DOT expects to produce an updated application form, but does not provide a date for such. Looking at this guidance, it would appear that the narratives now cannot reference social disadvantage felt due to race or gender. Disadvantage narratives need to focus on economic disadvantage and social disadvantage that have been experienced by the business owner, other than race or gender. Narratives also need to frame their disadvantage experiences relative to similarly situated non-disadvantaged individuals. Additionally, the DOT has not placed a deadline for completing all the requisite reevaluations. Similar to the SBA’s 8(a) Program, it seems that currently awarded contracts with DBE goaling, will need its awardees re-evaluated prior to achieving credit. So, if DOT were to follow the example of the SBA, it likely will want those DBE participants with current contracts to update their narratives and be reevaluated first to prevent prolonged disruption to the DBE goaling of those contracts. Thankfully, it appears there will not be massive de-certifications, as all DBE participants who are targeted for reevaluation will go through a reevaluation process prior to any decertification. Finally, if a DBE firm finds itself decertified after this change, it may still appeal its decertification. The DOT’s public guidance has somewhat provided additional clarity on the impacts of the interim final rule, but much will be learned in the coming days and months as DBE businesses navigate the reevaluation process. Given the continued uncertainty, contractors should also stay in contact with their federal contracting law counsel and advisers throughout the reevaluation and application process. Questions about this post? Email us. Need legal assistance? Call us at 785-200-8919. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post DOT Issues Guidance on Impact of Removal of Presumed Disadvantage first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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In this webinar, hosted by the El Paso Texas APEX Accelerators, government contracting attorneys and authors Shane McCall and John Holtz will discuss the most important legal developments for federal contractors in 2025. Specifically, they will discuss the many FAR changes, important new small business rules and processing for various SBA certifications, recent cases pertinent to federal contractors, and more. This presentation will help federal contractors stay up to date on current federal regulatory and legal changes. We hope you will join us! Please register: Here The post Webinar Announcement: Regulatory Updates in Government Contracting, Nov. 18, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Happy Halloween! We hope you have the candy purchased and are ready for the trick or treaters. And speaking of scary things, another week of the government shutdown which is creating a lot of uncertainty about when agreement can be reached. One data point: all shut downs in the past have ended. But these stories illustrate how it has created a ripple effect for federal contractors and government personnel. Our very own SmallGovCon contributor, Nicole Pottroff, was interviewed about the SBA’s 8(a) Program’s internal review and the importance of compliance. You can read that article in full below. Have a great weekend and enjoy the spooky visitors this evening. SBA sends another shot across 8(a) program bow The Trump administration’s first Unified Agenda is already reshaping federal regulation Yet another way the government shutdown is making things tough for contractors Government shutdown puts SBA loans on hold OPM bringing protections for data breach victims to an end Trump administration’s shutdown layoffs remain on hold, following court ruling How the government shutdown impacts construction contracts Air Force Issues Solicitation for Potential $400M Construction Contract for Morón Air Base PSC Supports SBA’s Proposed Size Standard Increases, Warns Against Future Reductions What a government shutdown really does to the industrial base… The post SmallGovCon Week in Review: October 27-31, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Compliance with the ostensible subcontractor rule is essential for companies seeking small business and socioeconomic set-asides. Yet many contractors learn the hard way that there is a difference between simply claiming compliance and proving it. Earlier this year, we blogged on an SBA Office of Hearings and Appeals (OHA) decision (here) that examined whether a subcontractor was an ostensible subcontractor or not. Ultimately, the awardee failed to sufficiently demonstrate that its subcontractor was not performing the primary and vital parts of the contract. In a recent OHA decision, the same parties went head-to-head again for round two, on a different procurement with a different proposal. But this time, one party brought the receipts. In reviewing the proposal, SBA found that the prime contractor had properly outlined its tasks and work in alignment with the solicitation and showed its compliance with the limitations on subcontracting. These two cases work in tandem to help show federal contractors how to demonstrate compliance with the ostensible subcontractor rule. There are several blogs where we dive deeper into the ostensible subcontractor rule, which you can read about here. For a brief overview, an ostensible subcontractor is a subcontractor that is not a similarly situated entity and performs the “primary and vital” parts of the contract or an order, or is a subcontractor that the prime contractor is unusually reliant upon. 13 C.F.R. 121.103(h)(3)(i). If the prime contractor is found to have an ostensible subcontractor, then the prime and subcontractor will be deemed affiliated. SBA will find that a small business prime contractor on a set-aside contract (other than for general construction) is not violating the rule when it can demonstrate that it and any of its similarly situated subcontractors will meet the limitations on subcontracting found in 13 C.F.R. 125.6. The limitations on subcontracting rule limits the percentage of work a non-similarly situated subcontractor is permitted to perform (read more about it here). In Winergy LLC, SBA No. VSBC-445-P, 2025 WL 2752647 (Sept. 22, 2025), the solicitation was issued by the U.S. Department of Veterans Affairs (VA) as a set aside for Service-Disabled Veteran-Owned Small Businesses (SDVOSB), seeking a contractor to perform hood certification and repairs. Atlantic First Industries Corporation (AFIC) was awarded the contract. As a result, Winergy, LLC (the Protester) protested AFIC’s SDVOSB status. The Protester alleged AFIC was unduly reliant upon its non-SDVOSB subcontractor, thus in violation of the ostensible subcontractor rule. The Protester primarily relied on OHA’s prior decision as evidence that AFIC was violating the limitations on subcontracting requirements for this procurement as well. In response, AFIC argued that under 13 C.F.R. § 125.6(a)(1), AFIC only needed to demonstrate that it would not pay more than 50% of the amount paid by the government to its non-similarly situated subcontractor. For SDVOSB, the regulations state, In the case of a contract or order for services … SBA will find that a prime VOSB or SDVOSB contractor is performing the primary and vital requirements of the contract or order, and is not unduly reliant on one or more subcontractors that are not certified VOSBs or SDVOSBs, where the prime contractor can demonstrate that it … will meet the limitations on subcontracting provisions set forth in § 125.6 of this chapter. 13 C.F.R. § 128.401(g)(2). AFIC made this exact same legal argument (and lost) in the prior status protest under a different solicitation. But this protest was under a new solicitation and a new proposal. In the current protest, AFIC supported its position with documentation demonstrating its compliance with the limitations on subcontracting. AFIC noted that its proposal sufficiently explained the subcontract relationship and detailed how the relationship adhered to the limitations on subcontracting. Additionally, AFIC provided a declaration stating the tasks AFIC would be responsible for related to contract administration, compliance, and project management. AFIC argued the company had demonstrated by a preponderance of the evidence its compliance with the limitations on subcontracting requirements. Thus, the subcontractor was not an ostensible subcontractor. Regarding the Protester’s reference to the previous OHA decision, AFIC noted that its failure to demonstrate compliance with the limitations on subcontracting in that decision was not sufficient evidence to show the subcontractor as an ostensible subcontractor to AFIC “for the purposes of this procurement.” In the prior status protest, OHA found that AFIC had failed to demonstrate that it would comply with the limitations on subcontracting. AFIC did not identify the tasks AFIC would be performing, nor did AFIC identify any of its own employees that would be involved in contract performance. While AFIC claimed that it intended to pay the subcontractor less than 50% of the contract price, AFIC provided no sworn statements, subcontracts, or other information to support this claim. For this protest, AFIC provided OHA with its proposal, a copy of the subcontract, and a declaration supporting the calculation of its compliance with the limitations on subcontracting. And ultimately, OHA found AFIC’s evidence sufficient: AFIC submitted its Proposal, a copy of its subcontract with [Subcontractor], and a sworn Declaration that clearly demonstrates its compliance with the limitations on subcontracting. These documents provide the concrete evidence that was lacking in the previous Winergy case and which Protestor has failed to provide here. By supplying this detailed and corroborated information, AFIC has shown that its division of labor and financial arrangement with its subcontractor adheres to the relevant regulations. . . . Viewing the subject procurement in the aggregate, it is clear that the prime contractor, AFIC, will have substantial responsibilities throughout the entire period of performance, as the tasks outlined in both the Proposal itself and subsequent Declaration detail. Furthermore, both documents closely align with the requirements contained within the Solicitation itself, and the tasks contained therein constitute a majority of the total work required for the subject procurement. After being unsuccessful in the first protest, AFIC took the loss as a lesson and prepared a proposal for this procurement that sufficiently demonstrated its compliance in preparation of any future challenges to the company’s status. AFIC’s comeback story emphasizes the value of ensuring your company can demonstrate its compliance with the regulations well before a protest is filed that alleges otherwise. Questions about this post? Email us . Need legal assistance 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 OHA: Contractor Learns from Earlier OHA Decision to Show Me the Money on Ostensible Subcontracting Issue first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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On September 10, 2025, the Department of Defense (As all the documents we address use the Department of Defense naming, we will go by that to prevent confusion.) (DoD) implemented the acquisition rules for the Cybersecurity Maturity Model Certification program at DFARS subpart 204.75. This follows the federal government’s institution of the CMMC program last year (We explored this a bit with a review of the proposed rules some time before that and noted that initial rules have been in place since 2020.) These rules are present at 32 C.F.R. Part 170. Despite these rules having now been in place for a little while, the scope and complexity of the CMMC program can nonetheless be daunting for contractors to deal with. In this first in a series of posts, we will explore the basics of the CMMC program and what it means for you. A Refresher on FCI and CUI As we noted in our preview on the program, the CMMC Program is about protecting two types of information that are otherwise unclassified: Federal Contract Information (FCI) and Controlled Unclassified Information (CUI). FCI is basically information provided by or for the government under a federal contract that is otherwise not intended for public release, per FAR 52.204-21. CUI is basically information that, while unclassified, agencies must or are allowed to control in terms of dissemination, per 32 C.F.R. § 2002.4. The CMMC Program seeks to makes sure both types of information are properly protected by federal contractors. The Basic CMMC Structure Initially implemented via a phase-in program starting in 2020, the final form of the CMMC Program is a tiered structure with three separate levels. Each level has different security and assessment requirements that a contractor must meet to be certified under that level. Level 1 is, naturally, the simplest level. Under Level 1, the contractor must meet 15 separate security requirements under FAR 52.204-21 to secure FCI. At this level, contractors self-assess their compliance with those requirements and self-certify with the Supplier Performance Risk System (SPRS). This must be done annually. Level 2 is split into two parts. In either case, the contractor must meet 110 Level 2 security requirements derived from NIST SP 800-171 R2 (also required by DFARS 252.204-7012) for CUI in addition to the 15 requirements of Level 1 for FCI. The contractor then can either self-assess and certify its compliance or can have its compliance assessed and certified by a CMMC Third-Party Assessment Organization (C3PAO). The C3PAO is viewed as a higher form of Level 2 (Level 2 (C3PAO)) than self-assessed and certified Level 2 (Level 2 (Self)). 32 C.F.R. § 170.17. As such, having Level 2 (Self) will not qualify a contractor for a contract that requires Level 2 (C3PAO), but having Level 2 (C3PAO) will qualify a contractor for Level 2 (Self) contracts. Both forms of Level 2 certifications last for 3 years, although the contractor must affirm their compliance every year. Level 3 is the most rigorous level. Under Level 3, the contractor must meet a further 24 security requirements provided in NIST SP 800-171 R2 along with the requirements for Levels 2 and 1. There is no option for self-assessment and certification with Level 3. The Defense Contract Management Agency (DCMA) Defense Industrial Base Cybersecurity Assessment Center (DIBCAC) will conduct the assessment. The certification will last for 3 years with the contractor affirming compliance each year, much like Level 2. Conditional Status For Level 2 (Self), Level 2 (C3PAO), and Level 3, there is a “conditional” status that the contractor can achieve if it meets a certain percentage of, but not all, of the requirements for that level. 32 C.F.R. § 170.21. For Level 2 (Self) and Level 2 (C3PAO), if the contractor meets 80% or more of the Level 2 security requirements; none of the requirements it missed have a point value greater than 1 (3 if a certain encryption requirement) in CMMC Scoring Methodology (32 C.F.R. § 120.24); and none of the requirements it missed are on the list of mandatory security requirements in 32 C.F.R. § 170.21(a)(2)(iii) that contractor will receive conditional Level 2 (Self) or (C3PAO) status, depending on which path it has taken. For Level 3, the contractor must meet all Level 2 requirements; meet 80% or more of the Level 3 security requirements; and none of the requirements it missed are on the list of mandatory security requirements in 32 C.F.R. § 170.21(a)(3)(ii) that contractor will receive conditional Level 3 status. This status lasts for 180 days, in which time the contractor will have a plan of action and must meet the remaining requirements. If it does, it will achieve the full status. If it fails to accomplish that, it will not receive the full status and lose the conditional status. Who Does It Apply To? The CMMC is a DoD-implemented system. It applies to DoD contracts, not civilian agency procurements. 32 C.F.R. § 170.3. Not every DoD contract requires CMMC certification. It is only required where the contractor and/or its subcontractors are processing, storing, or transmitting FCI or CUI. Prime contractors must flow down the CMMC requirements for the given contract to their subcontractors. 32 C.F.R. § 170.23. If only FCI is involved with a contract, then only Level 1 certification should be required. If CUI is involved, whether Level 2 (Self), Level 2 (C3PAO), or Level 3 status is required will depend on the agency’s determination. 32 C.F.R. § 170.5. Summary This is just a basic overview of the CMMC Program. In our next post in this series, we’ll dive into the acquisition policies in DFARS that were issued in September 2025 to get a further understanding of how the CMMC Program affects procurements, solicitations, and awards, along with looking at some changes made to the CMMC Program between the original proposed rule of December 2023 and the final rules from October 2024 and September 2025. Questions about this post? Email us. Need legal assistance? Call us at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Overview of Recent Updates to Cybersecurity Requirements Under the CMMC Program (Part 1) first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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October and November always seem to be a popular conference season in the federal contracting world. Last week attorney-author Greg Weber was in Oklahoma. This week saw Nicole Pottroff visit the GovCon Kansas City 2025 to present on the topic of the Top 21 Legal Mistakes in Federal Government Contracting. It was a great event with a lot of enthusiastic attendees and interesting questions. Thanks to the organizers including the Missouri APEX Accelerator for inviting us to present! While news of the shutdown is high on the list of articles this week, there were also updates on CMMC, federal hiring and workforce, and a spotlight on the 8(a) Program. Court extends restraining order to shield more feds from shutdown RIFs DOD Shutdown Guidance Limits Contract Work to Pre-Funded Efforts Trump Signs Executive Order to Restructure Federal Hiring Oversight CMMC Rollout 2025: What GovCon Leaders Need to Do Today The latest updates on congressional inaction regarding the government shutdown Shutdown impact: What it means for workers, federal programs and the economy OPM renews effort to consolidate 119 HR systems into one Building Resilience: Emotional Intelligence Lessons For Federal Contractors ‘This has never happened before’: NNSA furloughs 1,400 staff How federal contractors stay solvent and scale smart once they survive the startup phase Norton Pushes Bill to End Federal Ad Discrimination VA Secretary warns more staff to be furloughed if shutdown continues What federal buyers need to succeed with AI-enabled procurement Government Shutdown Survival Guide: Who Works, Who Doesn’t & When People Get Paid The post SmallGovCon Week in Review: October 20-24, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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The Department of Transportation (“DOT”) has administered aspects of the Disadvantaged Business Enterprise (“DBE”) program for decades for work to be performed for state and local transportation agencies. The DBE program’s eligibility requirements are quite similar to those under the Small Business Administration’s (“SBA”) 8(a) Program. As is well known, over the past few years the 8(a) Program has undergone many changes and legal challenges, altering its application and eligibility processes, especially with respect to presumed social disadvantage. Now the DOT DBE program seems to be undergoing very similar changes regarding disadvantage requirements. On October 3, 2025, the DOT issued an interim final rule with the aim of ensuring that the DBE and Airport Concession DBE are operated in “a nondiscriminatory fashion—in line with law and the U.S. Constitution.” The DOT states that the interim final rule will remove “race- and sex-based presumptions of social and economic disadvantage that violate the U.S. Constitution.” To understand this shift, a quick primer of the DBE program is in order. Historically, the DBE program was very similar to the 8(a) Program administered by the SBA. It’s aims were to help individuals who were historically disadvantaged and remove barriers to contracting with the DOT for companies controlled by such individuals. It’s eligibility standards can be found here. Prior to this interim final rule, the DOT would presume that certain groups are disadvantaged, including “women, Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian-Pacific Americans, or other minorities found to be disadvantaged by the U.S. Small Business Administration (SBA).” Being disadvantaged is critical to the other elements of eligibility for the DBE program, as majority ownership and control of the business must be held by an individual found to be disadvantaged. The DBE program often results in state level contracts, but federal contracting law does come into play as the DOT administers the program and implements the overarching rules. Consequently, changes to other federal government contracting programs, such as the 8(a) Program, can affect the DBE program. As readers of SmallGovCon will recall, the presumed disadvantage that used to be part of the 8(a) Program was a key target of litigation, eventually resulting in its removal from the 8(a) Program (see more about the 8(a) Program here). The DOT’s interim final rule appears to be very similar and influenced by the changes in the 8(a) Program, which makes sense due to the DBE’s citation to SBA social disadvantage in its eligibility standards. The Interim Final Rule makes multiple changes to social disadvantage requirements. Early on, the rule makes it clear that it is removing “race- and sex-based presumptions of social and economic disadvantage.” The rule explains that presumptions of social disadvantage could result in “two similarly situated small business owners [facing] different standards for entering the program, based solely on their race, ethnicity, or sex.” In September of 2024, similar to the 8(a) Program, there was litigation regarding this presumption (Mid-America Milling Co. v. U.S. Dep’t of Transp., No. 3:23–cv–00072, 2024 WL 4267183 (Sept. 23, 2024)), and in that case the court found that such presumptions were not allowed. This led to this interim final rule removing presumed social disadvantage. Additionally, gender is no longer emphasized, as the word “gender” will now be replaced with the word “sex.” Due to this interim final rule, all applicants to the DBE program will now have to submit “individualized evidence of social disadvantage, alongside the remaining required showing of economic disadvantage.” Also, to “ensure a level playing field” between participants and new applicants, the final rule “requires each Unified Certification Program (UCP) [at the state level] to reevaluate any currently certified DBE or ACDBE, to recertify any DBE or ACDBE that meets the new certification standards, and to decertify any DBE or ACDBE that does not meet the new certification standards.” So, similar to the 8(a) Program after the Ultima decision, all current participants and applicants will eventually need to submit new individualized disadvantage narratives and their eligibility will be scrutinized. What DOT is looking for in these narratives is not as clear as the SBA’s current guidance for its social disadvantage narratives, but it will likely be very similar. Participants in the DBE program (including Airport Concession DBE) should now expect scrutiny of their eligibility and a request to submit narratives as well as evidence of disadvantage. When this occurred in the 8(a) Program, the SBA seemed to prioritize current contract holders over applicants, to help prevent interruptions in performance. Likely, a similar approach will be taken when implementing these changes to the DBE program. Contractors should prepare for this possibility. This final rule will allow comments to be submitted on or before November 3, 2025. So, any contractors impacted by this final rule should submit comments so their voices are heard. However, the rule is already in effect as of October 3, 2025. Contractors should also stay in contact with their federal contracting law counsel and advisers throughout the process. 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 Fac The post DOT Ditching DBE Program’s Presumed Social Disadvantage first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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A few months back, we discussed a case at SBA’s Office of Hearings and Appeals that took a closer look at the actions that a Non-Managing Venturer in a small business joint venture is permitted to have negative control over—that is, those actions which the Non-Managing Venturer’s disapproval can block from happening. It also addressed what happens when a joint venture agreement does not include all of the provisions that the SBA rules require for a mentor-protégé joint venture agreement under the SBA’s Mentor-Protégé Program to avoid affiliation. Following that decision, the matter was brought to the Court of Federal Claims. Below, we discuss Multimedia Environmental Compliance Group JV v. United States, 178 Fed. Cl. 129 (2025) which covers the COFC’s review of the OHA decision. That case reaffirmed that just having required control language in a JV isn’t enough, other provisions in the JVA cannot give inordinate control to the Non-Managing Venturer. First, there are four relevant parties to get familiar with here, as each plays an important part in this decision: Nicklaus Engineering, Inc. (NEI, Protege, and Managing Venturer); Wood Environment and Infrastructure Solutions, Inc. (WEIS, Mentor, and Non-Managing Venturer); Multimedia Environmental Compliance Group, JV (Multimedia, which is a joint venture between NEI and WEIS); and Acacia7 (Protester). Prior Litigation As mentioned above, this case has gone through the gamut winding through various tribunals. I’m going to give a very brief overview of what has happened to get the case to this point. You can find more information about it in our previous blog covering the case. But, as a quick overview, the case started at one of SBA’s various Area Offices, which concluded in September 2024 that the JVA in question complied with the joint venture requirements of 13 C.F.R. § 125.8(b)(2)(ii) and the joint venture was small under the size standard for the award despite NEI having multiple other joint ventures as well. Acacia7 appealed the Area Office’s size decision at OHA. The appeal was initially only based on Acacia7’s belief that the Area Office ignored information that demonstrated that NEI participated in at least twelve different joint ventures and that it was affiliated with at least one other entity. It wasn’t until Acacia7 filed a supplemental appeal at OHA that the JVA’s contents were reviewed as part of the appeal, and with that, OHA reversed the Area Office’s size determination in January 2025. But it wasn’t because of NEI’s multiple joint ventures. No, it was because of the contents of the MECG JV JVA. Specifically, OHA found that there were two issues present in the JVA: The JVA gave a non-defaulting party the choice to complete performance when the other party defaults instead of requiring the non-defaulting party to do so pursuant to 13 C.F.R. § 125.8(b)(2)(viii); and The JVA did not designate a small business as the Managing Venturer of the joint venture nor did it designate a named employee of the small business Managing Venturer as the manager with ultimate responsibility for performance of the contract (the ““Responsible Manager”) as required by 13 C.F.R. § 125.8(b)(2)(ii). Following the first round at OHA, Multimedia filed its own protest at COFC. But when the government filed a motion for a voluntary remand to OHA to reconsider its prior decision, the COFC granted the motion and the case when back to OHA. In this second round at OHA, it upheld its prior decision that the JVA failed to establish the correct relationship between the Responsible Manager (an employee of the Managing Venturer) and the Program Manager (an employee of the non-managing venturer). In short, the Managing Venturer did not have the required control over the joint venture that is required by 13 C.F.R. § 125.8. Court of Federal Claims Decision After OHA’s second decision was issued in May 2025, Multimedia still believed that the issue was not settled, and, following the proper procedural process, Multimedia and Acacia7 submitted additional briefing at COFC to argue whether the May 2025 decision was proper. Standard of Review In reviewing an OHA decision, the COFC examines if the plaintiff has shown that, given all the disputed and undisputed facts in the administrative record, the decision was not in accordance with the law. The court must set aside an agency’s procurement decision if it lacked a rational basis or if the procedure involved a regulatory violation. A rational procurement decision is one in which the contacting agency provides a coherent and reasonable explanation of its exercise of discretion. Federal contractors must bear in mind that, confusingly, the COFC isn’t looking at whether it agrees with OHA’s final decision, rather it is looking at whether OHA reviewed the Area Office’s determination correctly. The Issues Multimedia raised multiple challenges to the OHA’s decision, all of which the COFC refused. The substantive challenges were: OHA’s decision is contrary to the plain language of 13 C.F.R. §125.8(b)(2)(ii); and OHA’s decision is arbitrary and capricious because it does not provide a sufficiently reasoned explanation and fails to address the relevant evidence. Analysis First, Multimedia argued that OHA’s decision that the JVA did not comply with 13 C.F.R. §125.8(b)(2)(ii) was contrary to the plain language of the regulation. Multimedia claimed that because its JVA contained the language that identified a small business as the Managing Venturer with the ultimate responsibility for performance of the contract, that it satisfied the requirements of 13 C.F.R. § 125.8( b)(2)(ii). Multimedia asserted that even though “the plain language of 13 C.F.R. § 125.8(b)(2)(ii) provides that the managing venturer must be responsible for controlling the day-to-day management and administration of contractual performance of the joint venture” there is “no requirement that such control must be ‘independent.’” But the COFC found that Multimedia’s rationale allowed for negative control over the decisions of the joint venture by the Non-Managing Venturer via the Executive Committee, on which each party had one vote, and all decisions made by the Executive Committee required a unanimous vote. This allowed the Non-Managing Venturer to have the same level of oversight and decision-making as the Managing Venturer. Additionally, the JVA created the position of Program Manager, which was also given “equal authority to manage the contract” as the Responsible Manager, again cutting off the Managing Venturer’s right to manage decisions of the joint venture. This also left the joint venture with no way to resolve disputes between the parties, which could lead to an impasse in the event that the Responsible Manager and Program Manager disagree. Therefore, OHA properly concluded that the non-Managing Venturer failed to give up control to the Managing Venturer, in accordance with 13 C.F.R. § 125.8(b)(2)(ii). Second, Multimedia claims that OHA failed to consider all relevant evidence with respect to the sufficiency of the JVA, and that OHA did not read the JVA as a whole. Multimedia claimed that had OHA read the agreement as a whole, it would have concluded that there were no issues with the Managing Venturer’s control of the joint venture. The three issues that Multimedia addressed here were: That the Responsible Manager and Program Manager are on equal footing and have apparently equal authority; That it provides [the] Responsible Manager’s role will be defined by the Executive Committee, rather than be the manager in charge of contract administration; That it creates the potential for conflict between NEI and WEIS, rather than leave NEI in control. Ultimately, the COFC found that OHA considered all relevant evidence provided by Multimedia, and that it provided a rational basis for its conclusion. For the first issue, Multimedia asserted that the JVA “confirms that the Responsible Manager and Program Manager are not equal.” Multimedia points to a part of the JVA that identified NEI as the Managing Venturer and identified a Responsible Manager, as required by 13 C.F.R. § 125.8(b)(2). However, the JVA gave significant control of contract performance to the non-Managing Venturer. As OHA had found, the JVA contained language that put the Responsible Manager on equal footing with the non-Managing Venturers “Program Manager,” which clearly violates small business joint venture rules. Next, Multimedia claimed that the JVA’s Executive Committee did not interfere with the Managing Venturer’s or Responsible Manager’s control of the day-to-day management or administration of contract performance. OHA concluded that the Executive Committee would define the Responsible Manager’s role based on provisions in the JVA that established the Executive Committee would “delegate[e] responsibility for execution of the contract and shall have such specific powers as the Executive Committee may, from time-to-time delegate.” The JVA also stated that “the Executive Committee is responsible for delegating specific powers to the Responsible Manager and the Program Manager.” And, the JVA gave the non-Managing Venturer negative control because “Executive Committees shall be unanimous and shall be made with each party having one vote.” Finally, Multimedia argued that OHA incorrectly that if there was an ambiguity in the JVA that leads to conflict between the Responsible Manager and Project Manager, that the Responsible Manager could not resolve the issue without going to the Executive Committee. And, if an issue was presented to the Executive Committee, the non-Managing Venturer would still have veto power due to the requirement that all decisions of the Executive Committee be unanimous. Although Multimedia pointed to the provision that states the Responsible Manager “has ultimate responsibility as between the Program Manager and herself, meaning she has the ability to assert authority to control [Multimedia’s] day-to-day operations,” and claims that language gives the Responsible Manager the ultimate authority to control the non-Managing Venturer’s day-to-day operations, the COFC sided with OHA that the JVA creates great opportunity for conflict between the parties that could lead to impermissible control of the joint venture. In the end, the COFC held that Multimedia failed to demonstrate that OHA’s findings were arbitrary or capricious and that OHA’s decision had a rational basis for each of its findings and was supported by the record evidence. So, what is the lesson to be learned from this very long and winding protest process? Even if a joint venture agreement has the required language included in it, the other language in the joint venture agreement matters as well. Here, the JVA included the required language of 13 C.F.R. § 125.8(b)(2), but other provisions in the JVA created an impermissible balance of power, giving the non-Managing Venturer negative control over day-to-day decisions of the joint venture. This case is another reminder to be very careful with JV language, something we work on frequently with our clients. 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 SBA OHA: On Second Thought, Managing Venturer Must Still be in Charge of JV first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Hello, SmallGovCon readers! It’s Friday, which means it’s time for another Week in Review. SmallGovCon attorney-author Gregory Weber recently traveled to Oklahoma City this week to attend the ICBS Conference Accelerating Success in Contracting, where he gave a presentation on one of our most requested topics—Legal Updates. A big thank you to the Oklahoma APEX for hosting this event and to everyone who stopped by to connect with Greg! In other news, SmallGovCon contributor and attorney Annie Birney was recently quoted in a Washington Technology article (see list below) discussing the risks of using AI to draft bid protests—and why that’s not the best route. As always, if you’re facing a bid protest or need legal assistance on a federal government contracting matter, our team is here to help. Below, we’ve rounded up some insightful articles on the government shutdown and other key issues in federal contracting. Have a great weekend! Army secretary tees up acquisition reforms amid ‘unprecedented’ top cover from Trump administration Think AI can write your company’s bid protest? Think again. Shutdown news for federal contractors: A new bill and a new rule Rethinking Government Procurement: Balancing Speed, Innovation, and Risk Pentagon contractor charged with unlawful retention of classified information Vendors starting to take shutdown-related austerity measures Shutdown warnings turned into partisan messaging after ethics rules failed to hold the line Whitehouse: ENSURING CONTINUED ACCOUNTABILITY IN FEDERAL HIRING Federal Small Business Support Offices Undergo Major Restructuring as Treasury OSDBU to Close Escaping pilot purgatory: 3 infrastructure essentials for operational agentic AI The post SmallGovCon Week in Review: October 13-17, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Many federal contractors have heard about the revamping of the Federal Acquisition Regulation. Variously called FAR 2.0, the Revolutionary FAR Overhaul, or simply RFO, this project has been undertaken by the Office of Federal Procurement Policy (OFPP) and the Federal Acquisition Regulatory Council (FAR Council). An executive order got the ball rolling, setting forth the mandate to create FAR 2.0 by October 12, 2025. We wrote about it in our earlier post, and described it as two parallel tracks. Track 1 involves a rewrite into “plain language” and removing non-statutory and unnecessary content. Track 2 involves the development of the non-mandatory guidelines to guide procurement officials. Our earlier posts regarding the RFO can be found here: Executive Order, Overview of FAR 2.0, FAR Part 6, FAR Part 19. Part 12 – Acquisition of Commercial Products and Commercial Services Part 12 covers streamlined procedures for “acquisition of commercial products, including commercially available off-the-shelf (COTS) items (a subset of commercial products), and commercial services.” The proposed language was issued on August 14, 2025. FAR guidance suggests that commercial procurement looks at the following distinction: “Minor modifications to products typically qualify as commercial when changes don’t significantly alter how the item normally functions or its essential characteristics outside of government use. Major customization to products typically eliminates commercial status when substantial changes fundamentally alter core functionality or essential characteristics.” This is actually based in FAR 2.101, the definitions section. This Part has been highly consolidated and reorganized. As one part of this change, the simplified procedures for commercial acquisitions have been moved from Part 13 to Part 12 to address simplified procedures for acquisitions up to $9 million. (The earlier $7.5 million cap on simplified procedures was updated to $9 million based on recent increases in FAR thresholds that went into effect October 1). In contrast, Part 13 will focus on Simplified Procedures for Noncommercial Acquisitions. Section 12.103, Small business, says to “See part 19 for small business set-aside requirements.” New section 12.201-1, Simplified Procedures, will require a a request for quotations (RFQ) followed by a purchase order. Only contractor acceptance of the purchase order will create a binding contract. “For acquisitions at or below the SAT, the contracting officer may choose to solicit quotations directly from suppliers.” This seems to allow solicitations to not be posted to SAM if below the SAT (currently at $350,000). With respect to timing, agencies must “[e]xercise good business judgment in deciding whether or not to accept a quotation or offer received after the due date or time (see 52.212-1(c)).” FAR 12.203(c). That clause in turn states, that “a late modification of an otherwise successful offer that makes its terms more favorable to the Government will be considered at any time it is received and may be accepted.” FAR 52.212-1(c). New Section 12.201-1(d), Innovation, encourages “additional innovative approaches to the maximum extent practicable when soliciting quotations” with the goals of promoting efficiency and use of small businesses. Solicitations over $9 million should incorporate Part 15 for requests for proposals (RFPs) or Part 14 for invitations for bids (IFBs). Section 12.203(c)(2) make clear that the evaluation procedures for quotations under this section are not subject to part 15 or 14. That means, for instance, that contracting officers “are not required to have evaluation plans, score quotations, or establish a competitive range before communicating with quoters or soliciting revised quotations.”Contracting officers are not required to have evaluation plans, score quotations, or establish a competitive range before communicating with quoters or soliciting revised quotations.” Here are a few other changes: The new definition clarifies that commercial services can include construction. Two so-called “master” clauses have been removed, because the majority of references are no longer required, while the remaining references were retained through other means: FAR 52.212-3, Offeror Representations and Certifications—Commercial Products and Commercial Services, and FAR 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Products and Commercial Services. Overall, there will be a 30% reduction in length, with over 40 clauses and provisions no longer required. Conclusion This updated Part 12 represents some key changes for federal contractors to both the structure and substance of the FAR. We will stay tuned to the RFO revisions as they are rolled out and summarize them on SmallGovCon. Check back here for updates. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post FAR 2.0 Update: Part 12 – Acquisition of Commercial Products and Commercial Services first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Despite various impacts to SBA’s 8(a) Business Development Program–both quite recently and over the last couple years (which you can read about here and here, and even listen to me talk about here)–this “golden child” of SBA’s socioeconomic programs remains alive and well. And it is still one of the most lucrative and sought after SBA certifications out there. So, eligible contractors may be quite happy to hear, even during this most recent government shutdown, the 8(a) application portal remains up and running. In fact, given the current “pause” to other government contracting functions and filing portals, there may never be a better time than right now to work on those 8(a) applications. That said, anecdotally, we at SmallGovCon have been hearing from some 8(a) applicants about recent updates to the 8(a) application process and submission portal that we want to share with our readers via this two part blog. Ironically, one of the updates we’ve been hearing about anecdotally is that 8(a) applicants will no longer be able to delay submission of application documents once they start their applications (the subject of this Part I). But the other (and the subject of Part II) regards delays in SBA’s final application decisions, despite its regulatory 90-day final decision timeframe. Keep an eye out for Part II to learn more about the latter update. New Application Countdown Timer Historically, 8(a) applicants could start their application at any time they wanted and just leisurely upload the required documents and provide the necessary information as such became available. And unfortunately, the flexibility in that regard was something 8(a) applicants were quite fond of in our experience. Sure, one can find 8(a) document checklists and other application information online prior to applying. But SBA generally does not update those resources consistently–even when rules, policies, and application procedures themselves are updated and changed. Additionally, there are certain questions and document requests that only apply to certain applicants (i.e., those with a spouse involved in their company, with additional owners, and/or outside employment, etc.). All this to say, knowing every single document and piece of information each specific 8(a) application will require has generally always been a challenge–making the option to start, save, and return to the 8(a) application at one’s convenience something most applicants have taken advantage of. But based on reports from recent 8(a) applicants we’ve worked with, it appears that this leisurely submission option is going away. Now, SBA’s 8(a) application portal apparently starts a 60-day countdown clock for new applicants on the day they start their 8(a) application. And it appears applicants are required to submit and upload all of their required information and documentation within that timeframe. Along with the specific number of “Days Left” for the 8(a) application, the countdown timer apparently also includes the Application ID, the stage the application is currently in, and even, the specific date of “Expiration” (to ensure there is no confusion with how the daily countdown is implemented, I suppose). It appears on the application portal once the applicant starts their application as follows: Unfortunately, we cannot confirm yet exactly what it will mean for applicants who fail to get all required information and documentation submitted by the deadline set by this new countdown timer. But (again, only anecdotally) we have heard that the consequence of not meeting this deadline is having to completely restart the application process. And the “Expiration” language displayed with the countdown certainly supports that understanding. Of course, if an applicant hasn’t done a whole lot on their application yet–having to start all over may not be too much of a threat. But it certainly should be where the applicant has put in even half the required work to apply already. For anyone who has already applied, is in the process of applying, or has done their research based on plans to apply to the 8(a) program, the gravity of this potential consequence likely goes without saying. These applications can take weeks, months, and even sometimes years to complete. Applicants have to collect all required and requested information and documents, make sure it is all accurate and current, and submit it all in SBA’s required format. In fact, this often includes requesting and collecting information and documentation from: the IRS; Secretary of State/state of formation; additional owners, members, stockholders, officers, managers; family members and spouses; etc. Suffice to say, the process can be very time consuming and tedious–and not one most applicants would be found of starting over. So, even though a “new countdown timer” might sound like a fun new technological feature of SBA’s 8(a) application portal to some, it has the potential to significantly impact tons of (and maybe even all) 8(a) applicants and the entire 8(a) application process for the foreseeable future. Importantly, we just want to reiterate that we have yet to see any guidance, input, or announcement from SBA regarding this new countdown timer and application deadline. SBA’s existing regulation, written policies, and guidance do not speak to any type of initial 8(a) application completion deadline. So, please keep in mind, the information in this Part I blog is still just anecdotal (and even makes a logical assumption or two). But given the potential significance and impacts of this update to our 8(a) applicant readers and the entire 8(a) application process–we did not want to wait for SBA confirmation (that frankly, may never come) to share the information we do have available with all of you. Almost certainly just like you, however, we too have some outstanding questions regarding this updates. Will this new application timer only apply to those starting 8(a) applications from here on out? Will it “kick-in”–or has it already “kicked in”–for any applications started prior to this point? If the latter, how will it work and where will the countdown start from–the date the application began, the date SBA applied the timer to new applications, or some other starting point? Will applications already beyond the 60-day clock automatically be “thrown out” and required to restart? And will SBA consider documentation to still be “current” if an application must restart or will updated documents be required? Again, if you are anything like us, you probably have these and many more questions about it. Unfortunately, all I can do for you there is remind you to keep an eye out for updates on the topic. As we will, of course, provide you with any confirmation, clarification, and updates as such become available to us. Questions about this post? Email us. Need legal assistance? Call us at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post 2025 8(a) Application Updates (Part I): New Application Countdown Timer first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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The GovCon Kansas City 2025 event is to foster connections and advancing knowledge in the government contracting community and business basics. This event brings together a wide array of industry leaders, government officials, and business professionals for a unique opportunity to network, share insights, and explore the latest developments in the field. This event is intended for government agencies, prime contractors and major firms to meet with small businesses to explore potential partnerships for future contract opportunities. Please say hello and plan to attend the presentation on the Top 21 Legal Mistakes in Federal Government Contracting by our very own Nicole Pottroff. Nicole will be speaking at 1:00pm CDT. For more information and registration use the link here. The post GovCon KC 2025 Conference Announcement: October 22, hosted by Missouri APEX Accelerators first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Last year, we noted that the FAR Council (DoD, GSA, and NASA) issued a proposed rule to adjust the statutory acquisition thresholds for inflation. Under 41 U.S.C. § 1908, the federal government must adjust these thresholds every five years to account for inflation. Effective October 1, 2025, the updated thresholds have gone into effect. In this post, we’ll look at the new thresholds. The finalized rule, issued on August 27, 2025, mostly matches the proposed rule from 2024, although there are some differences. The Micro-Purchase Threshold has been increased from $10,000 to $15,000. The Simplified Acquisition Threshold has been increased from $250,000 to $350,000. Both the Micro-Purchase and Simplified Acquisition Thresholds can be found in FAR 2.101. The threshold at FAR 6.204(b) for requiring a separate justification or determination when a contracting officer wants to sole source eligible 8(a) awards has been increased from $25 million to $30 million (mainly impacting entity-owned 8(a) companies). Note that the FAR Council erroneously described the threshold in the proposed rule as the threshold for limiting competition to eligible 8(a) awards in general. That is not what the threshold in question is, this threshold only speaks to the requirement that the contracting officer make a separate justification if he or she wishes to make such a sole source award. Approval thresholds for using other than full and open competition (FAR 6.304) have been increased from $750,000 to $900,000. Note, this is lower than the original proposed figure of $950,000. Apparently, the FAR Council’s calculations did not support a further increase beyond $900,000. The ceiling for simplified procedures for certain commercial products and commercial services under FAR 13.500 was increased from $7.5 million to $9 million. Again, like the approval thresholds for using other than full and open competition, this is lower than the original proposed figure, which was $9.5 million. The prime contractor subcontracting plan (FAR 19.702) floor increased from $750,000 to $900,000. The story is similar to the thresholds for other than full and open competition and the simplified procedures threshold, this is lower than the original proposed figure of $950,000. 8(a) sole source authority under FAR 19.805-1 increased from $4.5 to $5.5 million for most acquisitions and from $7 million to $8.5 million for manufacturing acquisitions. This would impact potentially many 8(a) Participants. The threshold for cost or pricing data at FAR 15.403-4, for contracts awarded before July 1, 2018, increased from $750,0000 to $950,000. This was actually an increase from the proposed rule and was based on public comment. For contracts issued after that July 1, 2018, the threshold has been increased from $2 million to $2.5 million. In discussing its basis for its decisions, the FAR Council observed that while it normally would use the March Consumer Price Index (CPI) to calculate the update, the actual March CPI was lower than initially expected, while the April CPI more accurately reflected inflation and was available to the council when it made its decision. As such, it used the April CPI. As might be expected, the FAR Council anticipates that the increases to the Micro-Purchase and Simplified Acquisition Thresholds will likely have the biggest impact on federal contracting. From FY 2022 through 2024, there were, on average, over 560,000 federal awards valued at or below the old Micro-Purchase Threshold of $10,000, issued to about 18,000 separate companies. Another 50,000 awards would have fallen into this category had the new threshold of $15,000 applied. As for awards above the old Micro-Purchase threshold but below the old Simplified Acquisition Threshold, there were about 230,000 such awards at any given time from FY 2022 through 2024. With the changes to the Simplified Acquisition Threshold, approximately 5,000 more contract awards would have fallen into that category. This is important for small businesses. Purchases “above the micro-purchase threshold, but not over the simplified acquisition threshold, shall be set aside for small businesses” if there are two or more small business offerors expected to compete. FAR 19.502-2. That’s 5,000 more awards that could have been set aside for small businesses (assuming there were two or more available to perform the work in question). Overall, the changes are nothing terribly unexpected. The thresholds are to increase based on inflation every five years, and that’s what the FAR Council has done using the CPI. But it’s still important. If you perform a lot of contracts that have values in these ranges, things might have just shifted greatly for you. Questions about this post? Email us. Need legal assistance, call 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 Finalized Increases to Micro-Purchase, Simplified Acquisition, and Other Thresholds first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Hello, SmallGovCon Readers! It’s been a busy — and bumpy — time in the world of government contracting with the ongoing government shutdown. Still, there are some bright spots: the Senate finally confirmed a new OFPP administrator for the first time since 2019, and the GSA rolled out the first OASIS+ awardees — a big deal for future contracting opportunities. At the same time, the DOJ is cracking down on cyber compliance, recently handing out a $4.6 million fine. And the federal CIO is asking vendors to lead with their best pricing to help keep things moving. Bottom line: things are shifting fast, and contractors should stay flexible. We shall see what next week brings. You can read more about these topics in the articles below. Have a great weekend. Three timely trends in government contracting: Insights from J.P. Morgan Commercial Banking White House warns of economic spillover effect of government shutdown Senate to confirm first OFPP administrator since 2019 $4.6M warning shot: DOJ ramps up cyber enforcement on defense contractors GSA Unveils Apparent OASIS+ Rolling Awardees Under Unrestricted, 5 Small Business Tracks The shutdown is hitting differently across the contractor community As shutdown lingers, agencies plan to furlough more employees US federal CIO urges vendors to offer government ‘best-and-final-first pricing’ How agency IT operations will play out during the shutdown Federal government shutdown grinds into a week two as tempers flare at the Capitol The post SmallGovCon Week in Review: October 6-10, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Please join me on October 21 at 12:00pm EDT as I discuss the important new developments for the revolutionary FAR overhaul. GSA has described the FAR overhaul as taking things down to the studs and that it will function like a wobbly bicycle at the start. This presentation will discuss the executive order outlining the FAR overhaul and the goal to “remove most non-statutory rules.” It will work through the various updates, the line out, and the change summary. Discussion Topics include: What is staying the same? What is changing? What is the base FAR versus the contractor supplements? Please register here. (Registration deadline October 20, 2025, 8:00am EDT.) The post Webinar! The FAR Overhaul: What to expect from FAR 2.0 on October 21, hosted by GT (Georgia Tech) APEX Accelerators first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Despite various impacts to SBA’s 8(a) Business Development Program–both quite recently and over the last couple years (which you can read about here and here, and even listen to me talk about here)–this “golden child” of SBA’s socioeconomic programs remains alive and well. And it is still one of the most lucrative and sought after SBA certifications out there. So, eligible contractors may be quite happy to hear, even during this most recent government shutdown, the 8(a) application portal remains up and running. In fact, given the current “pause” to other government contracting functions and filing portals, there may never be a better time than right now to work on those 8(a) applications. That said, anecdotally, we at SmallGovCon have been hearing from some 8(a) applicants about recent updates to the 8(a) application process and submission portal that we want to share with our readers via this two part blog. As we noted in Part I of this two-part blog, it is a bit ironic that the first anecdotal update we blogged on regards a new 8(a) application timing–making it so 8(a) applicants will no longer be able to delay submission of application documents once they start their applications (the subject of this Part I). Yet the second 2025 8(a) anecdotal update we have for you (the subject of the instant blog) regards some persistent delays in SBA’s final application decisions, despite its regulatory 90-day final decision timeframe. office experiencing has been experiencing issues with short staffing. Interestingly, the SBA’s own 8(a) Business Development Program website and standing 8(a) regulations still assure the public that SBA will process and render a decision on any complete 8(a) application within 90 days. But in response to recent inquiries regarding outstanding and undecided–but already deemed complete–applications well beyond this 90-day timeframe, SBA issued a surprising statement. Indeed, just earlier this month, an SBA 8(a) Office Lead Business Opportunity Specialist said the following: SBA has experienced a reduction in federal staff case workers and will address 8(a) application processing when possible. At this juncture, there is nothing I can do to move any applications forward. Again, this statement comes as quite a surprise in many ways (but also, as wholly unsurprising in other ways). What took me aback the most about this statement is its contradiction to SBA’s current standing 8(a) Program regulations, which still state the following: SBA will process an application for 8(a) BD program participation within 90 days of receipt of an application package deemed complete by the DPCE. Incomplete packages will not be processed. Where during its screening or review SBA requests clarifying, revised or other information from the applicant, SBA’s processing time for the application will be suspended pending the receipt of such information. But I will say, this isn’t the first time in the last few years that SBA’s 8(a) practices have not aligned with the standing 8(a) regulations. I am sure most of us at this point are familiar with the Ultima case and how it changed SBA’s rules for social disadvantage back in 2023–despite the 8(a) social disadvantage regulations to this day reflecting the old rules and now-prohibited presumption of social disadvantage (outside of a DoD FAR deviation). But at least for that one, it is quite easy to find SBA’s new rules, guidance, and policies online and via the application platform and procedures. In regard to this news of a current shortage of staff and inability to process applications, however, there does not appear to be any public announcement, statement, or updated guidance on the matter. In fact, just like the 8(a) regulation cited above, SBA’s own 8(a) Program website still states the following: Once SBA has determined the application is complete, SBA has 90 days to process the application and render a decision. Once certified, your profile in SAM and the Small Business Search (SBS, formerly the Dynamic Small Business Search) will show your approval date and exit date for the 8(a) program. Perhaps even more perplexing is SBA’s website titled “Updates on the 8(a) Business Development Program“–last updated July 2025–also says nothing of either staffing shortages or a pause in 8(a) application processing. Consistent with my point above, it does cover the ins-and-outs of the social disadvantage rule and policy changes. But the only thing it notes regarding application processing is the following: As of September 29, 2023, SBA has reopened the 8(a) application for new applicants. SBA has updated the application by adding a plain language fillable questionnaire for applicants to identify social disadvantage. Firms continue to have the option to prepare a social disadvantage narrative and upload it directly to Certify. Thus, SBA’s recent statement leaves many of us with more questions than answers. How short staffed is the 8(a) Program office and why? What is being done to fix the shortage? When is “when possible”–in regard to resuming the processing of 8(a) applications? And is this news related to the recent 8(a) Program contracts audit? These are all answers I wish I had. But before panic ensues, I just want to remind our readers that the 8(a) Program is a creature of statute–and therefore, requires an act of Congress to be terminated, indefinitely suspended, or defunded. Further, it was not too long ago that Ultima hit the SBA 8(a) Program office with a massive influx of social disadvantage narratives requiring review. And SBA did a pretty solid job of handling that one, dramatically increasing the number of representatives reviewing narratives not too long after the Court Order was issued. So, certainly, this statement may cause some concern for those currently awaiting an 8(a) application decision, those in the process of applying, and even those looking to apply in the near future. But just remember that SBA’s 8(a) Program office: (1) has already (fairly recently) successfully demonstrated its ability to accommodate political and judicial impacts; and (2) exists under statute, which only Congress can change. Thus, we are cautiously optimistic that this “pause” will be short-lived and promptly addressed. Make sure you keep an eye out for future blogs on the topic, as we will (of course) update you with any updates we can get! Questions about this post? Email us. Need legal assistance? Call us at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post 2025 8(a) Application Updates (Part II): SBA’s 90-Day Final Decision Timeline Delays first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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APEX Accelerators play a crucial yet often underappreciated role in the world of federal government contracting. These programs, formerly known as Procurement Technical Assistance Centers (PTACs), serve as vital connectors between small businesses and the complex landscape of government procurement. By offering free or low-cost training, one-on-one counseling, and expert guidance, APEX Accelerators empower businesses—especially small and disadvantaged firms—to navigate registrations, find contract opportunities, understand compliance requirements, and ultimately compete successfully for federal contracts. Their behind-the-scenes work directly contributes to a more diverse, competitive, and resilient federal supply chain. You can learn more about NAPEX (National Apex Accelerator Alliance) by clicking on the link. Here at SmallGovCon, we would like to recognize the APEX Accelerators for the countless hours they invest in building the capacity of small businesses to thrive in government contracting markets. We appreciate our partnership and all that you do! Please check out all the APEX events near you at this link. The post It’s National APEX Day! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Many Service-Disabled Veteran-Owned Small Businesses (SDVOSB) operate under the assumption that SDVOSB certification is only required at the time of initial offer for SDVOSB set aside contracts. But as one company recently learned the hard way, SDVOSB eligibility for VA procurements must be maintained at both the time of offer and award. In Richard Group, LLC, B-422701.2 (Sept. 18, 2025), GAO upheld the Department of Veteran Affairs’ (the VA) decision to eliminate an offeror from competition where the concern was not a certified SDVOSB at the time of award. The VA issued a request for proposals (RFP) for the construction of an outpatient clinic. Initially, the RFP was issued as a full and open competition. Following a protest of the procurement’s terms, the VA took corrective action and amended the RFP from unrestricted to a set-aside for service-disabled veteran-owned small businesses (SDVOSB). Richard Group LLC (Protester) was an eligible SDVOSB when the company submitted its initial offer by the proposal submission deadline, October 3, 2024. After several amendments were issued, the deadline for final proposal revisions was March 25, 2025. Upon reviewing the Protester’s representations and certifications in the System for Award Management (SAM), the contracting officer learned that the Protester entered 2025 as a large business. According to the VA, the Protester was not an SDVOSB at time of award, as required under the VA Acquisition Regulation (VAAR) 852.219-73. Thus, the Protester was eliminated from competition and filed a protest with GAO. The Protest Even though the Protester was a large concern in 2025, the Protester argued that SBA’s regulations only require the concern to be an eligible SDVOSB at time of proposal submission, citing the regulation: Only certified VOSBs and SDVOSBs are eligible to submit an offer on a specific VOSB or SDVOSB requirement. For a competitively awarded VOSB/SDVOSB contract . . . the concern must . . . be a certified VOSB or SDVOSB and meet the eligibility requirements of a VOSB or SDVOSB in § 128.200 at the time of initial offer or response which includes price. 13 C.F.R. § 128.401(a) (emphasis added). In response, the VA noted that SBA’s regulation was not the only regulatory requirement in the RFP. The procurement was set aside for SDVOSB concerns pursuant to the Veterans First Contracting Program, as implemented in subpart 819.70 of the VAAR. VAAR 819.7003 states the following: (b) At the time of submission of offers/quotes, and at the time of award of any contract, the offeror must represent to the contracting officer that it is a— (1) SDVOSB or VOSB eligible under this subpart; (2) Small business concern under the North American Industry Classification System (NAICS) code assigned to the acquisition; and (3) Certified SDVOSB/VOSB listed in the SBA certification database at https://veterans.certify.sba.gov/ (see 13 CFR 128). Additionally, the amended RFP included VAAR 852.219-73, VA Notice of Total Set-Aside for Certified Disabled Veteran-Owned Small Businesses (Jan 2023), which stated, [a]ny award resulting from this solicitation shall be made to a certified SDVOSB listed in the SBA certification database who is eligible at the time of submission of offer(s) and at the time of award. (VAAR) 852.219-73 (emphasis added). The Protester argued that the “plain reading of the VAAR section cited to and relied on focuses on eligibility,” and “SBA determines a company’s size as of its initial offer date.” Citing to SBA’s regulation, the Protester argued that an SDVOSB is eligible (and remains eligible) for an award if the company was an SDVOSB at the time of its submission of offer. While the VA agreed with the Protester’s assertion that SBA regulations govern a company’s qualification as an SDVOSB, the VA noted that for this procurement, the VA relied on its independent authority under the Veterans First Contracting Program. As such, the VA contended that the associated eligibility requirements under the VAAR also applied, and “go beyond the SBA’s determination of eligibility.” Decision GAO agreed with the VA’s position, concluding that VAAR 852.219-73 unambiguously demonstrated “an offeror is only eligible for award if it is a verified SDVOSB concern at the time of proposal submission and remains a verified SDVOSB concern at the time of award.” The ordinary and common meaning of the rule expressly provided for eligibility to be determined based on status both at the time of proposal submission and again at the time of award, GAO stating further, In other words, adopting the protester’ s position and interpreting the phrase to mean that an SDVOSB concern remains eligible for award based only on its status at the time of proposal submission would improperly render superfluous the regulation’s language referring to eligibility “at the time of award.” The Protester argued that the VA’s interpretation would mean that SDVOSBs “would have to stop responding to solicitations on an arbitrary date” or risk spending funds on a proposal for a procurement that may be awarded after the SDVOSB is no longer eligible. To this, GAO stated that its Office “does not weigh the burdens and benefits of a particular procurement regulation.” While not further addressed by GAO, the Protester raised legitimate concerns for how this decision could negatively affect SDVOSBs moving forward. This case serves as an important reminder for SDVOSB concerns to closely monitor their certification status throughout the entire procurement process for VA awards, not just at time of offer. Changes in ownership, control, or size could impact awards for VA procurements. Note that this decision applies only to VA procurements, as other agencies generally do not have the same language about status being determined at time of award. Of course, a contractor must be aware of both the solicitation language and any specific agency FAR deviations to determine whether eligibility depends on award date. 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: SDVOSB Eligibility Required at Time of the Award (Not just Offer) for VA Procurements first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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It’s Friday and time for another week in review. Well, as we all know, this week’s news is all about the government shut down and the impact on federal government contracting. The days ahead remain uncertain, but the impacts of the shutdown are already rippling across the federal landscape. Until this is resolved, hang in there, Contractors, and please continue to visit SmallGovCon for more information and updates. You can read more about this topic in the articles we have provided below. Have a safe weekend. United States Office of Personnel Management: Guidance for Shutdown Furloughs Federal employee RIFs can still happen in a government shutdown, OPM says White House officially makes AI a key piece of its government efficiency agenda Status of Open GAO Recommendations to the Director of National Intelligence GAO: Government Contracting: Leveraging Federal Buying Power Can Save Billions Here’s a look at federal agencies’ shutdown contingency plans Reductions in force could make bad situation worse for federal contractors during government shutdown Government shutdown begins as the nation faces a new period of uncertainty Is GSA attempting to apply price controls to the reseller market? When will the government reopen? Here’s how long past shutdowns lasted Government shutdown layoffs to occur ‘very soon,’ White House warns Federal websites, IG hotlines start to go dark under shutdown The post SmallGovCon Week in Review: September 29-October 3, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Many federal contractors have heard about the revamping of the Federal Acquisition Regulation. Variously called FAR 2.0, the Revolutionary FAR Overhaul, or simply RFO, this project has been undertaken by the Office of Federal Procurement Policy (OFPP) and the Federal Acquisition Regulatory Council (FAR Council). An executive order got the ball rolling, setting forth the mandate to create FAR 2.0 by October 12, 2025. We wrote about it in our earlier post, and described it as two parallel tracks. Track 1 involves a rewrite into “plain language” and removing non-statutory and unnecessary content. Track 2 involves the development of the non-mandatory guidelines to guide procurement officials. Our earlier posts regarding the RFO can be found here: Executive Order, Overview of FAR 2.0, FAR Part 6, FAR Part 8. The revision of the FAR sections has continued over the past few months, with additional proposed revisions being released throughout 2025. In this post, we’ll review one proposed revision that seems to make some significant changes to the language: Part 19 – Small Business. A key takeaway is the FAR will retain the small business rule of two. Part 19 – Small Business This part of the FAR covers rules designed to protect and enhance the use of small businesses in federal contracting. The language was issued on September 26, 2025 and has been adopted by the GSA so far. Per the Practitioner Album, the FAR Council says the “revision preserves most substantive requirements while reorganizing them to align with the actual workflow of a contracting professional.” As explained in further detail below, it maintains the small business rule of two above the simplified acquisition threshold as being “essential to sound procurement.” The following rules would be retained: Exclusion of Particular Source or Restriction of Solicitation to Small Business Concerns (10 U.S.C. § 3203 and 41 U.S.C. § 3303) Small Business Act (15 U.S.C. §§ 631 et seq) Small Business Concerns (41 U.S.C. § 3104) Many sections were updated to clean up or clarify language, and many clauses have been retained. For instance, most definitions have been retained. Subpart 19.1 now contains a roadmap for acquisition planning, focusing on stages such as presolicitation, small business goals, and coordination with SBA. Small Business Rule of Two As we have discussed on SmallGovCon a number of times, the small business rule of two generally requires a procurement to be restricted to accepting bids only from small businesses where there are two or more small businesses can perform the work at fair market prices FAR 19.502-2 contains the current version of the small business rule of two, requiring that an agency set aside a procurement over the simplified acquisition threshold for small businesses when there is 1) the reasonable expectation that two or more small businesses can perform the work and 2) award will be made at fair market prices. The updated rule would move to the following location: Proposed 19.104-1 Total small business set-asides. (a) A “set-aside for small business” is the limiting of an acquisition exclusively for participation by small business concerns. For contracts above the micro-purchase threshold, the contracting officer must set the contract aside for a small business if there is a reasonable expectation of obtaining offers— (1) From two or more responsible small business concerns; and (2) That are competitive in terms of fair market prices, quality, and delivery. (b)(1) The contracting officer makes the determination to do a small business set-aside under paragraph (a). The contracting officer must document the reason when a contract is not set aside for a small business as required. (2) If the contracting officer rejects a recommendation by SBA to do a small business set-aside, see 19.102(f). This rule removes the separate (but very similar) rules that currently apply to procurements (a) between the micro-purchase threshold and simplified acquisition threshold, and (b) those over the simplified acquisition threshold. Instead, the rule would be the same. However, the rule of two would not apply to orders, meaning contracting officers may, but aren’t required to, set aside orders placed under multiple-award contracts. We wrote about this change here. Other Updates For 8(a) “where an acquisition is below the competitive threshold, contracting officers must first try conducting the acquisition as a competitive 8(a) order using SBA-approved government-wide contracts that permit it before proceeding with a sole source 8(a).” This means that, under new 19.108-7, a competitive 8(a) award is favored over sole-source. In addition, a contract “is automatically released from the 8(a) program if the follow-on will be set aside under the HUBzone, SDVOSB, or WOSB programs.” Updated FAR 19.108-11. This is a new option and will change the Once-8(a) rule. It used to only allow release from the 8(a) Program upon approval of the SBA. Conclusion This updated Part 19 represents some key changes for federal contractors to both the structure and substance of the FAR. But it leaves in the small business rule of two. We will stay tuned to the RFO revisions as they are rolled out and summarize them on SmallGovCon. Check back here for updates. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post FAR 2.0 Update: Small Business Rule of Two Lives on in Part 19 – Small Business first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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The Indian Country Business Summit (ICBS) is hosting its annual ICBSSHOW in Oklahoma City next month. And our very own Gregory Weber will be attending and presenting on federal contracting legal updates. This presentation will be a great way for contractors to stay on top of all the recent updates in federal contracting. So, please stop by our table to say hello or if any questions come up after the presentation. The ICBSSHOW offers informational sessions featuring experts in government procurement, connection and networking opportunities, and a day of matchmaking to introduce you and your business to government decision makers. It also provides invaluable access to government agency buyers and policy leaders, prime contractors, and tribal procurement representatives looking to expand their vendor pools. For additional event details and registration use this link. Hope to see you there! The post Conference Announcement: ICBS Show, Oklahoma City, October 14-16, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Hello, SmallGovCon Readers! It’s Friday and time for another week in review. A potential government shutdown is prominent in this week’s headlines and poses some challenges for federal contractors. As negotiations in Congress drag on, contractors are faced with a lot of uncertainty. You can read more about this and strategies to deal with the government shutdown in articles below. Please check out the blog from our SmallGovCon contributor Nicole Pottroff for some best practices for federal contractors: Strategies for Dealing with a Government Shutdown Have a great weekend! How a government shutdown impacts federal pay and benefits Strategies for Dealing with a Government Shutdown Off The Shelf Podcast: The latest procurement news DOJ ended probe of ‘border czar’ Tom Homan for allegedly accepting $50K in FBI sting: Sources GSA, Meta Collaborate to Accelerate AI Adoption Across the Government FEDCON Analysis Predicts Significant Federal Contracting Surge Driven by Global Instability Space Force launches ‘first-of-its-kind’ acquisition training course How to use artificial intelligence to fix federal regulations without breaking the law in the process Why this fiscal year-end feels different for agency contracting shops The next steps in the Revolutionary FAR Overhaul SBA Awards $1.1 Million to Support Made in America Manufacturing SBA Waives Loan Fees for Small Manufacturers in Fiscal Year 2026 AI to the rescue of federal procurement? FAR Council Issues Model Deviation Text for Simplified Acquisition Procedures Days away from a government shutdown, agencies’ contingency plans still unclear Contractors angle for opportunities under DHS spending surge Winning Government Contracts in the Age of AI: A Guide to Smarter Proposal Management The post SmallGovCon Week in Review: September 22-26, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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It is quite common for businesses in the private sector to share control and duties among many executives or individuals. However, as many who have looked into SBA socioeconomic certifications have found out, to gain certification in a set-aside program, basically all control needs to reside with one individual. Recently, the SBA’s Office of Hearings and Appeals (OHA) reviewed a SDVOSB recertification denial, and provided a reminder to contractors interested in the SDVOSB and VOSB program that the veteran must be the sole individual in control. First, before jumping into the case, it is good to brush up on some of the requirements for being a VOSB or SDVSOB. We have published a blog about the basics of SDVOSB and VOSB eligibility, and the top five things to remember about SDVOSBs and VOSBs. These blog posts, and many others on SmallGovCon, discuss the multitude of requirements to qualify for entry into the SDVOSB and VOSB program (called “VetCert” by SBA). Of importance to this case are the regulations on control in an SDVOSB or VOSB. Specifically important are the requirements that the qualifying veteran be the highest ranking officer, the highest compensated officer, and control day-to-day operations of the VOSB or SDVOSB. Under SBA rules, “one or more qualifying veterans controls both the long-term decision-making and the day-to-day operations of the Applicant or Participant.” Additionally, the qualifying veteran “must hold the highest officer position in the concern (usually President or Chief Executive Officer)” and receive the highest compensation in the business unless the business can show the lower compensation was taken for the benefit of the company. In the recent OHA case, Display Devices, Inc., SBA No. VSBC-439-A (Aug. 11, 2025), a business applied to VetCert for recertification as a SDVOSB. In its application for recertification, the business stated that the qualifying veteran was not the highest paid individual in the business, but the lower compensation was done for the betterment of the company. The company also provided shareholder meeting minutes, and descriptions of operations that seemed to indicate in some places that, while the qualifying veteran is CEO, a non-veteran had at least some day-to-day control. The SBA denied the SDVOSB recertification, stating for its reasons: (1) the qualifying veteran was not the highest compensated; (2) the qualifying veteran was not the highest ranking officer; and (3) the qualifying veteran did not have day to day control of the business. The company then appealed this decision to OHA. OHA determined that the SBA was incorrect in finding that not being the highest compensated justified SDVOSB recertification denial. However, OHA agreed that the qualifying veteran did not hold the highest officer position and did not exercise complete day-to-day control, therefore upholding the SDVOSB recertification denial. For the compensation issue, OHA held that the regulation does allow for qualifying veterans to take a lesser salary or compensation for the betterment of the company. OHA explained “it is not at all uncommon for small business owners to take reduced or deferred compensation in order to benefit the business” and the company explained in their application that the lesser compensation was done in order to benefit the business. OHA held that enough was done to justify the lower compensation, and the SBA was erred on this one point. This is an interesting outcome for SDVOSB applicants to be aware of. However, OHA upheld the other two reasons cited by the SBA for SDVOSB recertification denial. OHA noted that business documentation provided in the application, such as meeting minutes, seemed to be contradictory. Some documents identified the qualifying veteran as President, and some listed a non-veteran as President. Also, the application stated that the veteran did not hold the highest officer position. Due to the inconsistent information presented in the application, and the business admitting the qualifying veteran does not hold the highest officer position, OHA agreed with the SBA that the recertification should be denied due to the qualifying veteran not being the highest ranking officer. Additionally, OHA explained that the application “states clearly” that a non-veteran oversees day-to-day operations of the business. The company had noted: “‘[The veteran’s son] now oversees day to day operations’ and that the Qualifying Veteran . . . has 100% ownership in another entity, D.D.I. Properties, Inc., although he does not have any outside employment.” Therefore OHA also agreed with the SBA that the qualifying veteran did not hold the exclusive control necessary to qualify as a SDVOSB. A positive takeaway for contractors in this decision is that OHA does seem to provide a clear standard to meet the exception to the highest compensation requirement for VOSB and SDVOSB eligibility. If an applicant is simply upfront about compensation being lower and explains logically that it was a decision done by the qualifying veteran to help the business, then it is likely allowable. That provides some guidance for companies in which the veteran may defer compensation to grow the business. However, this case also serves as a clear warning to keep your business documentation and your application very clear, have an established officer structure, and to ensure that no control ever slips to someone other than the qualifying veteran. The inconsistent business documentation, and fact that a non-veteran had day-to-day control, was enough to doom this application. This can be easily avoided if your company is structured properly to put all day-to-day and long term decision making in the qualifying veteran’s hands, and the officer positions and roles are clearly delineated. If you are looking at applying for the VOSB or SDVOSB program, many of these pitfalls can be avoided by reaching out to a federal government contracting attorney, such as ourselves, for a review and update of your company’s documentation, structure, and control. 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 SBA’s SDVOSB Warning: Spell Out Veteran Control in Business Documents and Minutes first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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As Federated Maritime, LLC, SBA SIZ-6360, 2025 demonstrates, an agency’s review of a size protest must be more than just a surface-level review and a rubber stamp. This size appeal started with a disappointed bidder (here, the Appellant) that questioned the relationship between Federated Maritime, LLC (or Awardee), a company that won two cargo charter contracts, and its alleged affiliates. The contracts were 100% set-aside for small businesses under NAICS Code 483111 – Deep Sea Freight Transportation. Appellant’s size protests claimed that the Awardee was ineligible for both awards because it was affiliated with four other businesses as well as each of those businesses’ affiliates, thereby exceeding the 1,050 employee size standard of the NAICS code assigned to the contracts. What evidence did the Appellant base that claim on? According to the Appellant, the following facts demonstrated that Awardee was affiliated with each of these companies and their affiliates: For the first alleged affiliate, Bold Ocean LLC (Bold Ocean), Awardee’s website stated that it was “a Bold Ocean Company.” The website also stated that Bold Ocean was Awardee’s parent company and indicated that Bold Ocean was located at the same address, although they were in different suites. Additionally, Awardee claimed that Bold Ocean was ultimately owned by the Global Transport Income Fund Master Partnership. (“GTIF” or the “Fund”), a standalone investment fund that invests in transportation assets. GTIF GP has hired JPMorgan Asset Management (Europe) Sarl (“JPMAM”) to be the Fund manager. JPAMAM and its ultimate parent, JPMorgan Chase & Co. are not affiliated with the Fund. The second alleged affiliate, NOVA Infrastructure Management, LLC (NOVA), owned and controlled Bold Ocean from 2020 until 2024, based on a press release from July 31, 2024 that stated that Nova sold Bold Ocean to “institutional investors advised by J.P. Morgan Global Alternatives’ Global Transportation Group” (GTIF GP). Therefore, the third alleged affiliate was GTIF GP. The fourth alleged affiliate was J.P. Morgan Asset Management (JPAM). Like GTIF GP, it was also alleged that JPAM purchased Bold Ocean from NOVA on July 31, 2024. For this alleged affiliate, Appellant claimed that JPAM is not a small business because publicly available information about JPAM’s assets in the shipping industry alone would be considered other than small. As stated by the Appellant, “JPAM is reported to control a portfolio of over 140 ships which means JPAM (via its affiliates) assuredly employs more than 1,050 employees.” And that was before “factoring in that JPAM is a controlled subsidiary of JP Morgan – the fifth largest bank globally by assets under management that has 309,926 employees globally.” When is size determined and other size regulations Now, a quick aside regarding when size is determined, 13 C.F.R. § 121.404(a) states that a company, “including its affiliates, must qualify as small . . . as of the date the concern submits a written self-certification that it is small to the procuring activity as part of its initial offer or response which includes price.” So, the correct date to determine Awardee’s size was February 4, 2025, the date that it had submitted its initial offer that included price. Keep this date in mind. Additionally, 13 C.F.R. § 121.106(b)(1) states that a NAICS code that has its size determined by the number of employees, size will be determined using “[t]he average number of employees of the concern … based upon numbers of employees for each of the pay periods for the preceding completed 24 calendar months.” This includes any employees of domestic and foreign affiliates. Finally, 13 C.F.R. § 121.106(b)(4)(ii) is clear that “[t]he employees of a former affiliate are not counted if affiliation ceased before the date used for determining size.” It is also clear that “[t]his exclusion of employees of a former affiliate applies during the entire period of measurement, rather than only for the period after which affiliation ceased.” Size Determination The Area Office’s size determination found the following: Awardee acknowledged it was affiliated with Bold Ocean and its affiliates. Awardee was affiliated with NOVA and its affiliates but is no longer affiliated because of the six months between when NOVA sold Bold Ocean and the February 4 date that size is determined. (Remember, former affiliates are not included in calculating size if the affiliation ceased prior to the date used to determine size.) Awardee was not affiliated with GTIF GP or its subsidiaries because Bold Ocean is owned by institutional investors advised by JPAM and “SBA has already reviewed this exact allegation in connection with a prior size protest … [and] SBA concluded that a standalone investment fund that hires a large investment firm to be its manager is a customer of the large investment firm rather than an affiliate.” However, the Area Office determined that Awardee was affiliated with the other firms in the portfolio held by JPAM. But this affiliation does not, at least according to the Area Office, flow down to any of the individual investors or other companies owned outside of the portfolio. Therefore, the Area Office determined that Awardee and its affiliates, when combined, did not exceed the 1,050 employee size standard and was small for the procurement. Appeal On appeal, Appellant argued that the Area Office failed to look at evidence or legal precedent when making its decisions. Additionally, Appellant claimed that the Area Office simply cited and quoted much of Awardee’s response to the size protest and that it “made no affirmative determination on whether an individual or entity controls [the investment fund].” Finally, Appellant asserted that the Area Office failed to even address all of its protest allegations. Regarding the Area Office’s failure to identify who or what controls the investment fund, OHA found that the Area Office simply cited the Awardee’s response with no independent analysis or evidence. There was no explanation as to “how JPAM’s ability to control the day-to-day operations, strategy, and direction of Bold Ocean – and therefore Schuyler – does not constitute control under SBA’s regulations.” SBA regulations require that there must be someone or some entity that controls a concern. Most frequently that is an individual, but “a group of minority shareholders can be deemed to control a concern if the minority holdings are approximately the same size, and the aggregate of these holdings is large compared with other stock holdings.” 13 C.F.R. § 121.103(c)(2). In the event the “voting stock is widely held and no single block of stock is large as compared with all other stock holdings, the concern’s Board of Directors and CEO or President will be deemed to have the power to control the concern in the absence of evidence to the contrary.” Appellant also raised the issue that the Area Office incorrectly calculated the total number of employees that the Awardee had. Publicly available information showed that GTIF had a fleet of at least 140 vessels operating worldwide with a crew of approximately 20 mariners each coming in with a total of roughly 2,800 employees. That alone greatly exceeded the 1,050 size standard, and did not take into account any of GTIF’s other alleged affiliates. Supplemental Appeal Appellant’s supplemental appeal was based on the Appellant’s belief that the Area Office failed to “investigate the protest allegations and establish a record” and included the following arguments. While the size determinations found that GTIF and Awardee were affiliated, the case file showed that the Area Office failed to look further than that to determine who or what controlled GTIF to determine whether they were affiliated with Awardee as well. The Area Office also relied on conclusory statements from Awardee’s counsel, failed to independently analyze Appellant’s allegations, and erred in accepting heavily redacted documentation intended to “hide the ball” of who actually controlled the Awardee. Documentation that was overlooked included a GTIF organizational chart and a limited partnership agreement that confirmed that GTIF GP has the ability to control GTIF. Instead of looking at the documentation in the case file, the Area Office relied solely on a letter from Awardee’s counsel which acknowledged that GTIF GP had the ability to control GTIF. But why is it so important, at least in the eyes of the Appellant, to know who or what controls GTIF GP? After all, it’s clear that the Awardee is affiliated with GTIF and GTIF GP. Remember how the Area Office determined that affiliation did not flow down to individual investors, aka the limited partners, in the fund? Well, that determination by the Area Office completely ignored the minority shareholder rule, that “if two or more shareholders hold equal, or approximately equal, minority interests, and those interests together are large as compared with any other stock holding, then each minority owner is presumed to control the concern based on their minority interests.” 13 C.F.R. § 121.103. If limited partners are shown to control GTIF GP via the minority shareholder rule, affiliation between Awardee and the limited partners could potentially spread the affiliation further than simply being affiliated with GTIF and GTIF GP. According to the Appellant and, later, OHA, there is no way the Area Office could have determined who controls GTIF based on the information in the letter from Awardee’s counsel, which is what the Area Office cited and appeared to base the entire size determination on. So where exactly did the Area Office err? First, the Area Office accepted a GTIF Limited Partnership Agreement that redacted 97 of the 135 total pages. Next, the case file failed to identify the identities of GTIF’s limited partners and instead took Awardee at its word. Third, the Awardee did not provide sufficient information or documentation to determine what companies were in the GTIF portfolio. Nonetheless, the Area Office found that GTIF’s portfolio companies were affiliated with Awardee despite not having enough information to determine who those portfolio companies were. The final argument noted that: [T]he Area Office also failed to fully investigate Appellant’s claims that JPAM and/or JP Morgan controls the entity (or entities) that own or control Schuyler. Appellant cited to numerous news articles that contained JPAM statements asserting control over Bold Ocean to bolster this claim. Despite this clear and specific allegation, however, the agreement between GTIF and JPAM – the Alternative Investment Fund Management (the “AIFM”) Agreement – is not included in the case file. Decision OHA found that “the Area Office cited no evidence, case law or any other legal precedent or authority in making either of its Size Determinations,” instead relying on Awardee’s size protest response with no further investigation. Next, OHA found the Area Office’s “failure to fully investigate Appellant’s claims that JPAM and/or JP Morgan control[ed] the entity (or entities) that own or control Schuyler” to be highly troubling. It also found that the Area Office failed to consider all of the allegations in the initial size protest due to both a lack of documentation and the Area Office’s failure to review all documentation in the case file. Appellant cited numerous articles that contained statements from JPAM that demonstrated JPAM had control over Bold Ocean, and Awardee had previously acknowledged affiliation with Bold Ocean. The record contained “multiple news articles and press releases from industry organizations and publications, including quotes from the acquiring entity JPAM itself, announcing the acquisition.” But the Alternative Investment Fund Management (the “AIFM”) Agreement – was not included in the case file. Without the AIFM Agreement, the Area Office was incapable of verifying the information vital to one of Appellant’s central claims. OHA summarized its finding this way: Appellant filed its initial Size Protests challenging Schuyler’s small business eligibility for the subject procurements. Appellant did so primarily on the claim that Schuyler is controlled by, or affiliated with, JP Morgan, one of the largest financial institutions in the world. Appellant bolstered its claims through evidence that appeared credible, from trade publications and press releases containing quotes from the supposed controlling entity itself. If what Appellant alleges is true, then one of the largest financial institutions in the world is using one subsidiary to establish a standalone investment fund which will use a separate subsidiary to manage that same investment fund. The Area Office’s Size Determination would imply that this fund can control the small business without a finding of affiliation between the large investor and the small business. This contradicts a core principle of SBA’s size regulations, that affiliation is based upon control or the power to control. 13 C.F.R. § 121.103(a)(1). Conclusion In the end, OHA remanded the case back to the Area Office for further review, requiring the Area Office to “obtain complete unredacted copies of all relevant documents.” Additionally, OHA warned that any information that Awardee declined to submit would justify the Area Office drawing an adverse inference against Awardee. This case is a reminder that the Area Office does not always do a thorough review on size protests. It may be worth an appeal to have OHA take a second look at this review. In addition, OHA reminds contractors that investment funds may indeed control an entity, but it depends on the specifics of the governing documents. SBA must examine those, even if is complex. 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: Size Protest Review Must be More Than a Rubber Stamp first appeared on SmallGovCon - Government Contracts Law Blog.View the full article