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  1. An agency providing an opportunity to substantially revise a proposal can seem too good to be true. And sometimes, it is. It is a fundamental principle of procurement law that offerors must be treated equally. When one offeror is given an opportunity to “fix” the deficiencies in its proposal, but the other offeror is not, that is fundamentally unfair. As one offeror found out, despite submitting everything to the agency as it was asked, GAO still sustained the protest. In GAO’s decision in AECOM Management Services, Inc., B-418828.4, involved a second protest to an award by the Navy. In December 2019 the Navy issued an indefinite-delivery, indefinite quantity (IDIQ) solicitation seeking offerors for maintenance and logistics support services. The Navy anticipated releasing task orders under the IDIQ. The solicitation envisioned a multi-step approach to evaluating the proposals. The main factors were task order administration, contract experience, planned small business participation, program execution, and cost/price. On May 29, 2020, the Navy issued a task order to Vertex. On June 15, two offerors protested the award to Vertex. The Navy took corrective action to reevaluate the proposals. Following reevaluation, only Vertex and Protester (AECOM) were rated acceptable. After final evaluations, the Navy again made award to Vertex. This protest soon followed. Protester alleged, among other things, that the Navy conducted unfair exchanges with Vertex. Key to the protest, the Navy allowed Vertex to substantially revise its proposal to remedy noncompliance with the solicitation. Notably, the solicitation allowed for the Navy to conduct interchanges (discussions) with offerors during the evaluation process. The Navy noted the solicitation only said it had to treat the offerors fairly, not that the interchanges would be the same. Vertex’s initial proposal failed to fully price its labor hours for a 40-hour work week, as the solicitation required. The Navy noted that this failure meant Vertex’s proposal was noncompliant with the solicitation. The Navy notified Vertex of its non-compliance, and also conducted a phone conference to discuss the issue. As a result, Vertex changed its proposal to come into compliance with the solicitation. The protester, conversely, was just asked to clarify an unclear element of its proposal. The protester argued, while Vertex was able to revise and resubmit its proposal, protester was not. GAO, agreed with protester. GAO found the Navy did not conduct interchanges fairly. GAO cited to the fact that Vertex was afforded the opportunity to revise terms of its proposal, and raise the overall price by $20 million. The protester, was assigned one weakness, but was not allowed to revise its proposal. The final word from GAO was that the opportunity for Vertex to substantially revise its proposal should have been afforded to other offerors as well. The takeaway is to balance the scales between the offerors. Any action taken on behalf of one offeror, must be given to the other offerors. This may not look the same in every procurement, however, but equality of opportunity is the goal. GAO recommended that the Navy reopen interchanges with the offerors and, as part of that process, advise protester of the grounds upon why it was not selected and allow protester the opportunity to revise its proposal. GAO also recommended the Navy reevaluate the proposals in line with the solicitation. Protester gets another bite at the apple. What will the final result be? Will we see a third protest of this solicitation? We can be hopeful with the clear directions from GAO, unequal discussions/interchanges should not be an issue the next time around. Need help with a government contracting legal matter? Email us or 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: Unequal Exchanges With Offerors by Agency Leads to Sustained Protest first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  2. It will be a great weekend to celebrate Mother’s Day and show all those hard working moms out there some appreciation. We hope you can get out and enjoy the wonderful spring weather and make the day special for the mothers in your life. As a wise person once said: “A Mother is she who can take the place of all others but whose place no one else can take.” – Cardinal Mermillod. For those moms who are into federal contracts, and all others in the contracting world, here’s what’s happening in federal government contracting news, this week. Independent Contractor Status Under the Fair Labor Standards Act (FLSA): Withdrawal [FedReg] Small Business Administration HUBZone Program [CRSReports] What the Executive Order Requiring Federal Contractors to Pay a $15 Minimum Wage Will Mean [GovExec] Pentagon officials debut innovation steering group [DefSys] Former employee at Sandia National Laboratories pleads guilty to mail fraud and theft [DOJ] Tungsten Heavy Powder of San Diego Agrees to Pay $5.6 Million to Settle False Claims Act Allegation [DOJ] 2020 FEVS: What we learned about the federal workforce during COVID-19 [FedNewsNet] Whistleblower protection bill gives feds facing retaliation avenue for relief outside MSPB [FedNewsnet] President Biden reaches out to federal employees during Public Service Recognition Week [FedNewsnet] Watchdog Alleges ‘Turf Battles’ Over Pandemic Oversight [GovExec] Audit of SBA’S Oversight of Women’s Business Centers’ Compliance with Cooperative Agreement Financial Requirements [SBA] The post Small GovCon Week in Review: May 3-7, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  3. The government’s hard shift away from lowest-price, technically acceptable evaluations has magnified the importance of past performance in many competitive acquisitions. For start-ups and other companies new to the federal marketplace, past performance requirements can present a significant barrier to success. Oftentimes, companies with little or no past performance of their own can offer the past performance of another entity, such as a subcontractor or joint venture partner. But the rules surrounding the use of another entity’s past performance are often misunderstood–and recently, the rules have evolved quickly. Here are five things you should know about using the past performance of a subcontractor, joint venture partner, or affiliate. The FAR Doesn’t Require It I’m occasionally asked, “where in the FAR does it say that the government has to consider my subcontractor’s past performance?” The answer (which nobody who has asked wanted to hear): nowhere. For negotiated procurements, FAR 15.305 says: The evaluation should take into account past performance information regarding predecessor companies, key personnel who have relevant experience, or subcontractors that will perform major or critical aspects of the requirement when such information is relevant to the instant acquisition. The key word is “should,” which is not the same as “must.” The GAO has confirmed that FAR 15.305 “permits, but does not require, procuring agencies to consider the experience and past performance of these additional entities and personnel in evaluating an offeror’s past performance.” Agencies often do consider the past performance of predecessor companies, key personnel, and subcontractors–but don’t assume; check the solicitation to be sure! (And if the agency seems iffy about considering the past performance of a subcontractor, a new SBA rule we’ll discuss a little later could save the day). 2. For Small Business Procurements, Agencies Must Consider the Past Performance of Joint Venture Members Joint venturing is a very popular way to pursue small business set-aside contracts and contracts for the four major socioeconomic subcategories: 8(a), SDVOSB/VOSB, WOSB/EDWOSB, and HUBZone. When a joint venture pursues one of these contracts, SBA’s regulations require that the procuring agency consider the past performance of each joint venture member. For instance, for small business set-asides, 13 C.F.R. 125.8(e) says: Capabilities, past performance and experience. When evaluating the capabilities, past performance, experience, business systems and certifications of an entity submitting an offer for a contract set aside or reserved for small business as a joint venture established pursuant to this section, a procuring activity must consider work done and qualifications held individually by each partner to the joint venture as well as any work done by the joint venture itself previously. A procuring activity may not require the protégé firm to individually meet the same evaluation or responsibility criteria as that required of other offerors generally. The partners to the joint venture in the aggregate must demonstrate the past performance, experience, business systems and certifications necessary to perform the contract. The SBA has similar regulations for each of the four major socioeconomic small business programs. In my experience, because these SBA regulations are relatively recent and are not part of the FAR, some Contracting Officers are not aware of them. I have occasionally seen a solicitation indicating that the agency will not consider the past performance of joint venture members. If you come across something similar, it may be wise to raise the issue with the agency before the deadline for proposal submission–after that, a legal challenge may be untimely. 3. Coming Soon: Required Consideration of Past Performance Gained as Joint Venture Member (Sometimes) The SBA’s rule discussed in #2 helps small businesses when they bid as joint ventures. But what about when the joint venture successfully performs a contract, and the small business–now bidding on its own for a different contract–wishes to use the joint venture’s past performance? Currently, there is no requirement that a procuring agency consider past performance obtained as a member of a joint venture. Often, agencies do so, but not always–and the GAO has upheld agencies’ reasonable discretion in this regard. But soon, agencies will be required to consider such past performance–sometimes, anyway. In the 2021 National Defense Authorization Act, Congress amended the underlying statute to provide: With respect to evaluating an offer for a prime contract made by a small business concern that previously participated in a joint venture with another business concern (whether or not such other business concern was a small business concern), the Administrator shall establish regulations— (A) allowing the small business concern to elect to use the past performance of the joint venture if the small business concern has no relevant past performance of its own; (B) requiring the small business concern, when making an election under subparagraph (A)— (i) to identify to the contracting officer the joint venture of which the small business concern was a member; and (ii) to inform the contracting officer what duties and responsibilities the small business concern carried out as part of the joint venture; and (C) requiring a contracting officer, if the small business concern makes an election under subparagraph (A), to consider the past performance of the joint venture when evaluating the past performance of the small business concern, giving due consideration to the information provided under subparagraph (B)(ii). This rule isn’t effective yet. As you can see from the quoted section, Congress directed the Administrator (of the SBA) to write regulations implementing it. But once the SBA does so, small businesses without a record of relevant past performance will be able to elect to use past performance gained as a joint venturer–and Contracting Officers will be required to consider it. We’ll see how the final SBA rule shakes out, but under the NDAA, the right to use a joint venture’s past performance is limited to cases in which the small business has no relevant past performance of its own. Assuming this carries through to the SBA regulation, a small business with some relevant past performance would not have the right to bolster its past performance by also including performance gained as a joint venturer–though, of course, the agency would retain reasonable discretion to consider such performance. 4. Contracting Officers Must Consider the Past Performance of Small Business Subcontractors (Sometimes) What about subcontractors? As discussed in #1 the FAR says only that Contracting Officers “should” consider their past performance in appropriate cases. But the SBA’s regulations require procuring agencies to consider subcontractors’ past performance in limited cases. The SBA’s regulation at 13 C.F.R. 125.2 says: Capabilities, past performance, and experience. When an offer of a small business prime contractor includes a proposed team of small business subcontractors and specifically identifies the first-tier subcontractor(s) in the proposal, the head of the agency must consider the capabilities, past performance, and experience of each first tier subcontractor that is part of the team as the capabilities, past performance, and experience of the small business prime contractor if the capabilities, past performance, and experience of the small business prime does not independently demonstrate capabilities and past performance necessary for award. As you can see, this regulation is rather limited. It applies only when four factors are met: (1) the prospective prime contractor is a small business; (2) the prospective prime does not independently demonstrate the past performance “necessary for award; (3) the subcontractor is a first-tier sub; and (4) the subcontractor is itself a small business. Limited as it is, this regulation can be very helpful to small businesses in appropriate cases. Like the joint venture regulations we discussed in #2, Contracting Officers aren’t always aware of 13 C.F.R. 125.2(g), so small businesses should be prepared to raise the matter if necessary. 5. Affiliation, Alone, Is Insufficient to Use Another Entity’s Past Performance Contractors often assume that they are entitled to use the past performance of corporate affiliates, such as parent companies, subsidiaries and sister companies. But FAR 15.305 doesn’t mention affiliates–and the GAO has held that mere affiliation does not allow a procuring agency to consider the affiliate’s past performance. In one case addressing this topic, the GAO summarized the law as follows: [W]here an agency observes apparent affiliation between companies but lacks evidence establishing the nature of the relationship in the procurement at issue, the potential for variations in the extent and nature of the relationship between two affiliated companies means that it is not reasonable for that agency simply to infer that the relationship will affect contract performance, or even to accept an offeror’s general representation that the performance of an affiliated company–positive or negative–should be attributed to that offeror. Before the agency can properly attribute the past performance of an affiliate to an offeror, it generally must have a factual basis showing the planned relationship between the companies on the contract at issue. Where, as here, the record before the agency does not indicate the involvement of the affiliate in performance of the contract, the agency cannot simply attribute the affiliate’s past performance to the offeror. In other words, affiliation alone does not allow an offeror to use the affiliate’s past performance. Instead, the agency can only consider an affiliate’s past performance when the agency has evidence that the affiliate will be involved in the performance of the contract–such as a subcontractor. Note that when an an affiliate will be involved in the contract, this doesn’t suddenly mean that the agency must consider the affiliate’s past performance. Instead, we’re back into territory often governed by FAR 15.305 and the SBA rules we have covered, which may allow the agency the discretion to decline to consider such past performance. A Few Final Words Contractors often assume that they are entitled to use the past performance of joint venture members, subcontractors, and affiliates. But the rules are actually much more complex. For contractors planning upcoming acquisition strategies, it’s very good to know when the agency must consider past performance, when the agency merely “should” consider it and when (in the case of mere affiliation), the agency cannot consider it. Need help with a government contracting legal matter? Email us or 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 Five Things You Should Know: Past Performance of Subcontractors, Joint Venture Partners, and Affiliates first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  4. HUBZone companies will get some additional time to plan for the unfreezing of the HUBZone maps by SBA. SBA has just issued a direct final rule that will extend the HUBZone map freeze from December 31, 2021, to June 30, 2023. In an earlier rule, SBA had indicated that it would freeze current HUBZone designations until the results of the 2020 Census are available, as required under the 2018 NDAA. SBA said it would “‘freeze’ the HUBZone maps with respect to qualified census tracts, qualified non-metropolitan counties, and redesignated areas” until December 31, 2021. That date was merely an estimate of when 2020 census would be available and analyzed by SBA. SBA has now “learned that the data necessary to update the HUBZone map to reflect the 2020 census results will not be available to SBA until December 2022” so the deadline of June 30, 2023 will give SBA enough time to digest the data. The amendment will simply replace the current December 31, 2021 date set forth in the definitions of the terms HUBZone small business concern or certified HUBZone small business concern and redesignated area that are located at 13 C.F.R. § 126.103. This is great news for HUBZone companies that were potentially going to lose their status because of the changes in the HUBZone maps. Be sure to mark the new June 30, 2023 date on your calendar so you can plan for it, but now you will have a lot more time to plan. Questions about this post? Email us or give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Alert: SBA Will Freeze HUBZone Maps Until June 30, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  5. SBA has been hard at work this past year updating its 8(a) Business Development Program rules and policies. And we have been doing our best here at SmallGovCon to keep you posted. Many of our blog posts focused on SBA’s monumental November 2020 “rule overhaul,” which implemented several 8(a) rule changes. But given the sheer magnitude of information in that final rule, it is pretty easy to lose track of which updates might affect you, as a potential 8(a) applicant or current 8(a) participant. There were also some pretty important changes to the 8(a) Program just prior to and subsequent to SBA’s November 2020 final rule. Suffice it to say, there is a lot to process! So, we thought a quick summary blog on some of the most significant changes to the 8(a) Program of late might help you in that endeavor. Without further ado, here are five things you should know about SBA’s recent 8(a) Program updates. As an initial matter, please keep in mind that this blog does not provide an exhaustive list of the rule changes in SBA’s November 2020 final rule that may affect 8(a) Program admission or participation. It is merely a simplified discussion of some of the big picture changes that have already received a lot of attention in the government contracting community. 1. SBA’s economic disadvantage thresholds went up in July 2020 (and retirement accounts are out for everyone). On July 15, 2020, the initial eligibility thresholds for net worth, adjusted gross income, and fair market value of all assets went up–and quite a bit too! SBA’s new rules increased: the net worth threshold from $250,000 to $750,000; the threshold for “adjusted gross income averaged over the three preceding years” from $250,000 to $350,000; and the fair market value of all assets threshold from $4 million to $6 million! You can read more about SBA’s economic disadvantage threshold increase here. This is a significant threshold increase with a potential meteor-sized impact on the 8(a) Program. It will make far more people economically eligible for the 8(a) Program, opening the door to many more applicants. Moreover, it simplifies the initial versus continuing economic disadvantage analyses–as those thresholds are now the same. Finally, under SBA’s July 2020 economic disadvantage rule changes, “retirement accounts will now be excluded from calculations of an economically disadvantaged individual’s net worth, irrespective of the individual’s age.” This is a big deal too, particularly for older applicants who often had to count those accounts prior to this rule, which you can read more about here. 2. SBA’s 8(a) joint venture approval requirements changed–for the better (or at least for the more convenient). SBA’s prior requirement that all 8(a) joint venture agreements must be approved by the SBA prior to award of any 8(a) work has been significantly relaxed. Now, SBA only requires that 8(a) joint ventures be approved prior to the award of any 8(a) sole-source awards. That means an 8(a) joint venture can now be awarded competitive 8(a) awards without having to wait (often for quite some time) for SBA to approve their agreement. This same logic applies to any addendums to the joint venture agreement for the purpose of pursuing additional projects. Only those addendums seeking 8(a) sole-source awards need prior approval (and this is regardless of which type of award the initial joint venture agreement sought). Specifically, SBA’s updated rules for 8(a) joint ventures state the following regarding prior approval: (1) When a joint venture between one or more 8(a) Participants seeks a sole source 8(a) award, SBA must approve the joint venture prior to the award of the sole source 8(a) contract. SBA will not approve joint ventures in connection with competitive 8(a) awards (but see § 124.501(g) for SBA’s determination of Participant eligibility). (2) Where a joint venture has been established for one 8(a) contract, the joint venture may receive additional 8(a) contracts provided the parties create an addendum to the joint venture agreement setting forth the performance requirements for each additional award (and provided any contract is awarded within two years of the first award as set forth in § 121.103(h)). If an additional 8(a) contract is a sole source award, SBA must also approve the addendum prior to contract award. While, on its face, this change may not seem too impactful, it will make life much easier–and quicker–for 8(a) joint ventures not focused on any soles-source work. Also, it will certainly lighten the SBA Business Development Office’s load. So we may even see some big picture trickle-down effects of that. For more information on this change, check out our prior blog. 3. Earlier this year, SBA extended the 8(a) Program term for some participants due to the pandemic. In January 2021, SBA issued its rule extending certain 8(a) Program terms by a full year, as directed by Congress. That rule became effective immediately (on January 13). SBA gave all 8(a) Program participants that were in the program on March 13, 2020, through September 9, 2020, this COVID-19-hardship-driven-extension. It clarified that participants who were terminated, graduated early, or voluntarily withdrew during that period were not eligible. This extension was automatic for those participating in the 8(a) Program as of January 13, 2021, unless they declined. It also said: “Firms that were participating in the 8(a) program as of March 13, 2020, but then graduated or otherwise left the program before January 13, 2021 can be readmitted, but notify SBA within 60 days of January 13, 2021 and meet the 8(a) eligibility requirements.” As to how this would play out for the eligible 8(a) Program participants, SBA said that the extension period would be added to the participant’s transitional stage of the 8(a) Program, and the business activity target for that extension would remain at 50 percent non-8(a) business. Read more about this change in our prior blog on the topic. 4. SBA has eased up on the 8(a) Program’s “immediate family member” restrictions. As part of SBA’s November 2020 new rule, SBA finally eased up on its restrictions for participating in the 8(a) Program for those who have immediate family members who have previously received 8(a) benefits. Before this change, SBA’s rule had an outright prohibition that said: “An individual may not use his or her disadvantaged status to qualify a concern if that individual has an immediate family member who is using or has used his or her disadvantaged status to qualify another concern for the 8(a) BD program.” And although it allowed a potential waiver if several additional conditions were met, it was no easy feat (especially for relatives whose companies were in the same or similar line of business). Now, the new rule doesn’t make family participation irrelevant. But it does ease up a bit. It now says that an individual “may not use his or her disadvantaged status to qualify a concern if that individual has an immediate family member who is using or has used his or her disadvantaged status to qualify another concern for the 8(a) BD program” and one of four circumstances exist: (i) The concerns are connected by any common ownership or management, regardless of amount or position; (ii) The concerns have a contractual relationship that was not conducted at arm’s length; (iii) The concerns share common facilities; or (iv) The concerns operate in the same primary NAICS code and the individual seeking to qualify the applicant concern does not have management or technical experience in that primary NAICS code. Further, SBA acknowledged in its commentary on the new rule that it believes “requiring no connections is a bit extreme.” SBA said: If two brothers own two totally separate businesses, one as a general construction contractor and one as a specialty trade construction contractor, in normal circumstances it would be completely reasonable for the brother of the general construction firm to hire his brother’s specialty trade construction firm to perform work on contracts that the general construction firm was doing. So, most would argue that this is a significant step in the right direction. Now, 8(a) applicants and participants won’t have to meet the extremely high bar of showing “no connection” with current or past 8(a) participants controlled by their immediate family members. SBA will instead generally determine whether the two firms appear to be operating too closely, based on some of the bigger picture connections (shared control, owneship, etc.) We covered many more details of this update to SBA’s rules in a prior blog as well. 5. There is no longer a separate 8(a) Mentor-Protégé Program (but don’t freak out, the consolidated Mentor-Protégé Program has you covered). Last, but certainly not least, SBA did away with having separate Mentor-Protégé Programs (and governing rules) for 8(a) mentor-protégé relationship and well, everyone else. Specifically, SBA’s 8(a) Mentor-Protégé Program was officially consolidated into SBA’s All-Small Mentor-Protégé Program in order to eliminate regulatory duplications and alleviate confusion between these programs. This change was also implemented through SBA’s November 2020 final rule. Most also call this a smart move, especially given the fact that 8(a) participants could actually participate in either program anyway. It also allowed SBA to clean up the rules a bit–which were substantively pretty similar to begin with. But what did this landmark consolidation mean for those in the 8(a) Mentor-Protégé Program? Whelp, supposedly not a whole lot. While there are no detailed procedures listed in the new rule or consolidated regulations, SBA’s commentary assured us all that its intent was to grandfather those new relationships in under SBA’s new all-encompassing Mentor-Protege Program. Read more about the programs’ consolidation here and here. * * * For a few other recent changes to the 8(a) Program rules that didn’t quite make the cut for this blog, check out our prior blog on SBA’s updated bona fide place of business requirement for 8(a) construction work and keep an eye out for more 8(a) Program blog posts sure to be coming your way! Questions about this post? Email us or give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post 5 Things You Should Know: SBA’s Recent 8(a) Program Updates first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  6. I am pleased to announce that John Holtz has joined our team of government contracts attorney-authors here at SmallGovCon. John is an associate attorney with Koprince Law LLC, where his practice focuses on federal government contracts law. Before joining our team, John practiced law in a variety of areas, including litigation and corporate counsel matters, and developed a wide berth of experience that provided adaptability and resourcefulness to help clients navigate the world of government contracts, be it on a transactional basis or in litigation. Check out John’s full biography to learn more about our newest author, and don’t miss his first SmallGovCon post on ownership and control of a woman-owned small business. The post SmallGovCon Welcomes John Holtz first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  7. A company learned the hard way that just because their business is majority owned by a woman, it doesn’t mean they are a Women-Owned Small Business (WOSB) in the eyes of the SBA. The question is one of both ownership and control. The case is SBA No. WOSB-113. In December 2016, Joint Information Network (JIN) submitted an offer for a contract to provide software engineering and database services in support of the U.S. Navy Naval Information Warfare Center (NIWC). The contract was to be awarded directly to a WOSB on a sole source basis. The contracting officer (CO) awarded JIN the $30 million contract in January 2017. The contract period for performance ended April 17, 2020, but, as of this decision, the contract was not closed. When JIN submitted the offer, it was a partnership owned 60% by Ms. Jihong Jin and 40% by her father, Dr. Yahne Jin, per a partnership agreement from April 2016. The partnership agreement also stated that no partner could enter into a contract for JIN without the approval of the other partner. In other words, while Jihong was the majority owner, her and Yahne had to agree in order to have JIN sign any agreements. In April 2019, the agreement was modified to give Jihong only 51% ownership, but status as sole Managing Partner, giving her full control of JIN. In October 2020, based on a report from the NIWC’s Office of Inspector General, the CO initiated a protest of JIN’s WOSB status, stating that JIN was not at least 51% owned and controlled by one or more women who are U.S. citizens. In February 2021, the SBA’s Director of Government Contracting (DGC) officially determined that JIN was not an eligible WOSB for the contract, stating that while JIN was majority owned by a woman, it was not controlled by a woman at time of proposal submission and performance of the contract. We touched on a similar case back in 2017. JIN appealed, arguing that the company had represented itself in good faith, believing Jihong’s majority ownership and her having the highest position in the company was enough to indicate she had control. They further argued that Jihong had final say and was the only individual managing the business’ daily operations and decisions. Furthermore, when JIN became aware of the potential issue even before the protest, the owners had modified their partnership agreement to give Jihong sole control in April 2019. In its decision on the appeal, the SBA’s Office for Hearings and Appeals (OHA) turned to 13 CFR § 127.200 through 13 § CFR 127.202. The OHA noted that for a company to qualify as a WOSB, the business must be “not less than 51 percent unconditionally and directly owned and controlled by one or more women who are United States citizens.” “Owned and controlled” are treated as distinct and separate requirements, 13 § CFR 127.202 specifically states: “In the case of a partnership, one or more women, or in the case of an EDWOSB, economically disadvantaged women, must serve as general partners, with control over all partnership decisions.” A woman must also hold the highest officer position in the business and have the experience needed to do such properly. The regulation further requires that men cannot exercise actual control or have the power to control the business if it wishes to be eligible for WOSB status. In other words, women must own the business and be in control both on paper and in practice. The OHA concluded that “Dr. Yanhe Jin legally had the power to control (JIN), as (the agreement) required the assent of both Managing Partners of the firm for all business decisions.” The partnership agreement in place required the assent of both Jihong and Yahne, a man, for all business decisions. While this was later rectified by the April 2019 partnership agreement, “at the time (JIN) submitted its offer in response to the subject procurement on December 16, 2016 and until April 10, 2019, Dr. Yanhe Jin had the power to control (JIN), which the regulations explicitly prohibit.” As a result, the OHA affirmed the DGC’s decision finding JIN ineligible for WOSB status at the time the contract was awarded. The lesson is clear: “Owned and controlled” isn’t redundant language, it is two separate requirements. The women must not merely have majority ownership, they must be able to control the business by their own decisions without the input of a man. Having a woman as a general partner alone does not make a business eligible for WOSB status. Along with being a small business, she must directly own and actually control the business. Need help with a government contracting legal matter? Email us or 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: Ownership and Control are Not the Same in the WOSB Program first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  8. SBA’s regulations for service-disabled veteran-owned small businesses create a rebuttable presumption that a service-disabled veteran doesn’t control the company if the veteran is unable to work normal business hours in the company’s industry. The rule sounds reasonable at first blush, but as a recent SBA Office of Hearings and Appeals case demonstrates, the SBA may apply the presumption even to a one-person start-up with no contracts. Not many people can afford to quit their day jobs before their businesses truly get off the ground–creating a real conundrum for SDVOSB start-ups. For the sake of fairness, the SBA’s Normal Business Hours rule needs fixing, pronto. Here’s how to do it. SBA OHA’s decision in CVE Protest of Hamhed, LLC, SBA No. CVE-180-P (2021) involved a VA SDVOSB set-aside RFQ seeking food service workers for the VA Montana Health Care System. After evaluating quotations, the VA identified YUFS, Inc. as the apparent awardee. YUFS was, apparently, a start-up with no contracts. It had only one employee, its owner and President, Dr. Akubum Yufanyiabonge. Dr. Yufanyiabonge, a service-disabled veteran, held a full-time job outside YUFS. Dr. Yufanyiabonge’s full-time job was with the U.S. Army, and FAR 3.6 prohibits Contracting Officers from knowingly awarding contracts to companies controlled by government employees. Dr. Yufanyiabonge’s bidding on government contracts while employed by the government might have been unwise–but as we’ll see, OHA’s decision did not turn on where he was employed, but when he worked for that employer. A competitor, Hamhed, LLC, filed a CVE status protest with OHA, challenging YUFS’ SDVOSB eligibility. Hamhed alleged that YUFS would be unusually reliant on its subcontractor to perform the contract. During OHA’s evaluation of the protest, OHA noticed that Dr. Yufanyiabonge appeared to hold employment outside YUFS. So OHA, on its own volition, asked YUFS to explain how it complied with SBA’s “Normal Business Hours” rule, 13 C.F.R. 125.13(k). That rule states: Normal business hours. There is a rebuttable presumption that a service-disabled veteran does not control the firm when the service-disabled veteran is not able to work for the firm during the normal working hours that businesses in that industry normally work. This may include, but is not limited to, other full-time or part-time employment, being a full-time or part-time student, or any other activity or obligation that prevents the service-disabled veteran from actively working for the firm during normal business operating hours. YUFS “did not file a substantive response to OHA’s Order.” But information from the case file, submitted during YUFS’ CVE application, showed that Dr. Yufanyiabonge “works for YUFS Monday through Thursday from 5:00 p.m. until midnight, and on Fridays and Saturdays from 6:00 a.m. to 5:00 p.m.” During the CVE application, “YUFS did not attempt to persuade CVE that such hours are typical of businesses in YUFS’s industry.” YUFS’ failure to substantively address OHA’s question was fatal: OHA held that YUFS “has not rebutted the presumption at 13 C.F.R. § 125.13(k).” OHA sustained the protest and held that YUFS was ineligible to qualify as an SDVOSB. Perhaps if YUFS had explained that, for example, Dr. Yufanyiabonge could not afford to simply quit his day job to work full-time for a start-up, OHA would have been sympathetic. (Note: I have no information regarding Dr. Yufanyiabonge’s finances–that’s just an example of the sort of statement that many service-disabled veterans likely would make in a similar situation). But perhaps OHA wouldn’t have been so understanding. While there’s no way to no for sure, one very important thing is clear from the Hamhed decision: the SBA will, in fact, apply the “Normal Business Hours” rule even to a one-person start-up with no contracts, in which the service-disabled veteran is the only owner, officer and employee. In my experience, most service-disabled veterans cannot afford to simply give up their salary and employment benefits to work full-time for a start-up business, at least not until that business starts generating revenues. It’s often said that it can take 18 months for a company to win its first government contract. That’s a loooong time to go without a paycheck. It seems pretty clear to me that the Normal Business Hours rule needs to be adjusted to make it fairer to start-ups. But how? One way might be to adopt a looser rule for start-ups, such as firms in their first eighteen months. But a one-size-fits all cutoff would still cause problems–not every new contractor succeeds at the same pace. I think a better approach would be to focus on the concept underlying all of 13 C.F.R. 125.13–control. The point of 13 C.F.R. 125.13 shouldn’t to impose ticky-tack requirements, but to ensure that the benefits of SDVOSB status flow only to companies controlled by service-disabled veterans. If no non-veteran can plausibly be said to control the company, who cares if the veteran doesn’t work normal hours? This is essentially the approach OHA took in a case called ProSphere Tek, Inc., which my colleague Shane McCall blogged about a few months ago. In ProSphere Tek, OHA held that the CVE had erred by denying a company’s SDVOSB application because the CVE “did not identify any non-service-disabled veteran persons or entities that have any involvement in [the applicant’s] operations, and did not describe any mechanism through which non-service-disabled veteran persons or entities could potentially control [the applicant].” It’s no surprise that OHA didn’t follow the same approach in Hahmed because the regulation at issue in ProSphere Tek specifically discusses non-veteran control, while the Normal Business Hours rule doesn’t. But from a policy perspective, it seems clear to me that the Normal Business Hours presumption also should be rebutted when there is no reason to believe that the veteran’s inability to work normal hours doesn’t allow for non-veteran control. I hope SBA will think twice about how the Normal Business Hours rule is applied, and amend the rule to be fairer to start-ups. The policy underpinning OHA’s ProSphere Tek decision would be a great place to start. Need help with a government contracting legal matter? Email us or 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’s SDVOSB “Normal Business Hours” Rule Needs Fixing–Here’s How first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  9. If April showers bring May flowers, Lawrence, Kansas should be a kaleidoscope of color next week. The rain was so heavy at one point our street became a river for a few hours. The sun is shining today, however, and you can almost see the grass growing. It’s time to fire up the lawn mower and the grill and enjoy the longer, warmer days. Just like the weather, there have been a few changes in federal government contracting, this week. Here are a few newsworthy articles, including an update on minimum wage increases for federal contractors, a new loan program for restaurants, and updates on the President’s Made in America policies. Have a great weekend! Biden to sign $15 minimum wage for federal contract workers [FedNewsNet] US Department of Labor Recovers $500K in Back Wages for 68 Workers After Builder’s Failure to Ensure Subcontractors’ Compliance Leads to Violations [DOL] SBA Administrator Guzman Announces Application Opening for $28.6 Billion Restaurant Revitalization Fund [SBA] Biden administration wants government to be standard bearer for union relations [FedNewsNet] Why GSA’s Schedule program might not be getting as much attention from vendors as it deserves [FedNewsNet] Biden Names First ‘Made in America’ Office Director [GovExec] Former federal CIO applauds additional TMF funding [FedScoop] FCC explores ‘additional consequences’ for banned IT vendors to secure supply chains [FedNewsNet] Executive Order on Increasing the Minimum Wage for Federal Contractors [WhiteHouse] Qui Tam: The False Claims Act and Related Federal Statutes [CRS] The post SmallGovCon Week in Review: April 26-30, 2021 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  10. SBA regulations prohibit agencies from requiring the same past performance record from both mentor and protégé entities. The regulations explicitly prohibit this type of requirement. In a recent GAO decision, it sustained the protest where an agency required all members in a joint venture to submit the same past experience examples in their proposal. The GAO’s decision in Innovate Now, LLC, B-419546 (April 26, 2021), involved a protest of the terms of an RFP issued by the Air Force for engineering, professional and administrative support services. It is important to note that this protest challenged the RFP itself, not after award. As we have discussed previously, if the challenge is to terms of the RFP, you cannot wait until award is made to protest these issues, or else GAO will say the challenge is untimely and dismiss it. Let’s move to the merits of the decision: can an agency requiring a protégé meet the same requirements as its mentor? We have all seen instances where an entry level job requires three to five years of experience. This frustrating reality often extends into the government contracting realm, where solicitations require extensive experience, which is difficult to come by if you are not an established company. Enter the SBA’s Mentor-Protégé Program (MPP), where smaller businesses can have an approved mentor to obtain needed experience, creating a mentor-protégé agreement (MPA). Much of the time, these MPAs create a joint venture to combine resources and experience to secure contracts and to allow the protégé can gain experience. The joint venture will then submit a proposal. One benefit of the joint venture model is to utilize the past experience of the mentor, in order for the protégé (and the joint venture) to meet solicitation requirements. The RFP in this case required a joint venture to submit at least one example for each member meeting specific requirements. The protester argued that the RFP violated SBA regulations by improperly requiring the protégé to meet the same requirements applicable to all other offerors. GAO focused on 13 C.F.R. § 125.8(e), taking particular interest in this language, “[a] procuring activity may not require the protégé firm to individually meet the same evaluation or responsibility criteria as that required of other offerors generally.” GAO found, regardless of the agency explanation, that the SBA regulation was clear. GAO also took the time to point out the purpose of creating joint ventures in these scenarios is to improve the ability of protégé firms to successfully compete for federal contracts. GAO then dug into the SBA commentary accompanying the regulations, where SBA said it was unreasonable to require a protégé concern itself to have experience on par with a large business mentor. As GAO will sometimes do, it solicited the input from the SBA directly, which responded that protégés cannot be held to the same experience requirements as mentors or other offerors. The RFP required, “a minimum of at least one work sample must be submitted for each member of the joint venture[.]” The key phrase GAO took issue with is “each member”–which extended requirements to the protégé. GAO found requiring each member, including protégés, to meet the same criteria was inappropriate. The agency could possibly have avoided this issue if it had just referred to the JV itself. If the agency made the experience section a blanket requirement that a JV could meet collectively, it likely would suffice at GAO. The takeaway from this decision is: GAO agreed that protégé firms are not required to have the requisite experience in a joint venture. Carefully reviewing solicitation terms (and considering filing a protest prior to the proposal deadline) is an important consideration for overall success in the government contracting landscape. Protégé firms can breathe a slight sigh of relief with this decision. It looks like GAO and SBA are on the same page, allowing protégés to gain experience without unnecessary barriers. Need help with a government contracting legal matter? Email us or 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: Solicitation Cannot Require a Protégé Have the Same Experience as its Mentor first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  11. If you’re setting up your first joint venture under the SBA’s rules, you may be tempted to download the SBA’s template joint venture agreement and use it as-is. But, as of the date of this post, the SBA’s template joint venture agreement is outdated–and it also has some other quirks and potential problems you should know about. If you’re planning to use the SBA’s joint venture template, read this first. Outdated Provisions If you’ve been following my posts on SmallGovCon (and I hope you have!), you’ll recall that I have recently written about substantive changes the SBA made to the joint venture regulations in November 2020. For mentor-protégé joint ventures attempting to comply with the regulations under 13 C.F.R. 125.8, I believe that two of these changes–to the mandatory JV requirements governing bank accounts and recordkeeping, respectively–are substantive changes sufficiently at odds with the “old,” pre-November regulations such that a joint venture agreement will be non-compliant unless it includes these updates. As of the date of this post, these changes are not included in the SBA’s template. The November 2020 regulations also made some other changes, not only to the small business joint venture regulations under 13 C.F.R. 125.8, but the separate joint venture regulations for the for 8(a), SDVOSB/VOSB, HUBZone and EDWOSB/WOSB programs. For instance, the SBA’s new regulations eliminate the term “Project Manager” in favor of the more-inclusive “Responsible Manager.” These other changes may not be significant enough to render a joint venture non-compliant if it doesn’t enact them–but why take any risks? Included, but Non-Required, Provisions Beyond the potential problems posed by the November 2020 rules, the SBA’s joint venture template doesn’t specify when a particular item is required by the regulation and when it is not. And the template is chock-full of provisions that sound like they’re probably required by law, but actually aren’t. Here are a few that caught my eye: Ownership Split. The SBA’s joint venture template includes a 51%/49% ownership split in favor of the Managing Venturer. And, in my experience, that’s how it’s done in the vast majority of “SBA-style” joint ventures. But, assuming we’re talking about a two-party joint venture in which only one party has the “right” qualification, such as small business size or 8(a) status, (and in the interest of keeping this post relatively simple, I’m not going to get into multi-party JVs) 51% is the floor for the Managing Venturer’s ownership and 49% is the ceiling for the non-Managing Venturer’s ownership. It’s perfectly fine for a joint venture to adopt a 60%/40% split, or 70%/30%, and so on. But you wouldn’t know that from the template. Losses. The joint venture agreement says that profits and losses will be shared in proportion to the venturers’ performance of work. This, too, is typical, but the regulations only require that profits be split proportionate with workshare. The venturers are free to adopt another formula for the split of any losses. Source of Labor. The template joint venture agreement says that “the joint venture will allow for a blended pool of labor employees of both parties,” and that the Managing Venturer “will have the first right to refuse employment during the performance phase of the Contract.” Contrast this with the regulatory requirement, which is merely that the joint venture agreement contain a provision “specifying the responsibilities of the parties with regards to . . . source of labor.” Nothing requires a joint venture agreement to adopt “blended pools” or a right of first refusal for the Managing Venturer (which, if I’m the non-Managing Venturer, I would be pretty darn wary about, because it sounds like the Managing Venturer could use my qualifications to help win a contract, then exercise its first-refusal right to perform 100% of the contract). Negotiation of the Contract. The template joint venture agreement says that the Project Manager shall be responsible for negotiating the contract with the agency. But the regulations just state that the joint venture agreement must contain a provision “specifying the responsibilities of the parties with respect to . . . negotiation of the contract.” That’s it–nothing more is required; the parties are free to work out the details on their own. I think it’s wise (and in keeping with the Managing Venturer’s overall role) to have the Managing Venturer lead negotiations. But who the heck says it has to be the Project Manager doing so on behalf of the Managing Venturer? Nobody, that’s who! Mediation. The template joint venture agreement says that if the joint venturers have a dispute, they will submit it to mediation. (Although the so-called “mediation” appears to be binding, which would mean it is actually arbitration). The SBA’s joint venture regulations do not require the parties to agree to mediation (or arbitration). This provision is entirely optional. Other Potentially Confusing/Problematic Provisions I have also noticed a few provisions in the template joint venture agreement that may confuse venturers: Project Manager. The template indicates that the Project Manager (now called the Responsible Manager under the post-November rules) is an employee of the Managing Venturer. But the rules also allow the PM to be a contingent hire of the Managing Venturer, something that isn’t evident from the template. Bank Account. The template does not specify who must be named as signatories on the joint venture’s bank account, but the SBA’s regulations state that the account “must require the signature or consent of all parties to the joint venture for any payments made by the joint venture to its members for services performed.” Resources. The template says that major equipment, facilities and other resources “will be furnished as detailed in Appendix A,” but does not provide an Appendix A! I suspect some joint venturers will simply forget that they need to create an Appendix A and populate it with this information, including a “detailed schedule of cost or value, where practical.” The template also does not indicate that there are other options for meeting this requirement if the underlying contract is an IDIQ. Contract Performance. The regulations require that a joint venture agreement contain a provision specifying each party’s responsibilities “with regard to . . . contract performance.” To my eye, the template does not seem to include a provision satisfying this requirement. It does have a provision addressing contract oversight, but that’s only one piece of performance. (A “Contract Oversight” paragraph, meanwhile, isn’t required by the regulations). A Few Final Thoughts I think it’s great that the SBA has provided the public with a starting point for a joint venture agreement. But I am concerned that the now-outdated template may lull small businesses into a false sense of security. No matter what your starting point–even an SBA template–there is absolutely no substitute for carefully crosswalking your joint venture agreement against the appropriate, current, SBA regulation. That’s the only 100% sure way to know that you’re in compliance–and avoid adopting terms that might appear mandatory, but are anything but. Need help with a government contracting legal matter? Email us or 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 If You Plan to Use the SBA’s Template Joint Venture Agreement, Read This First first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  12. There are many things to know about responding to size protests. One could probably fill a book with the information-(actually I did, for those who want a real deep dive!). But if you need to know just the basics, here are five things you should know about size protests that can help you be prepared if your company is facing a size protest. 1. The response time is short. Normally, your company only gets three business days to respond. So, be sure to work quickly to put together as much information as possible in that short amount of time to respond to the size protest allegations and any additional questions from SBA, while also completing the Form 355. It’s also a good idea to have these records (such as tax returns or employee count documents) handy so that you can respond quickly. 2. But you can ask for an extension. The SBA Area Office will often grant an extension and allow you to submit your response electronically. Indeed, the SBA’s rules state that SBA may grant an extension. It used to be that the SBA Area Office would require a paper copy of the response, but many Area Offices will accept submission by electronic means. Regardless, be sure to reach out to the Area office as soon as possible to request a specific extension and to confirm that electronic submission is allowed. While not required, the Area Office will often grant these short extension requests. 3. Be sure to demonstrate why your business is small. Your size protest response should generally show why your business is small. This means establishing that the company is small by (a) describing all affiliates or showing there are none and (b) providing a calculation of size based on receipts or employees (e.g. showing the math in a table or list). This also means responding to the allegations of the protest and showing why they are factually inaccurate or that, even if accurate, the facts don’t make your company other than small. For instance, if the protest alleges that certain companies are affiliates under SBA’s affiliation rules, your response should explain why those companies are not affiliates. It often makes sense for the protested company to include a sworn declaration, as SBA’s rules state that “SBA will give greater weight to specific, signed, factual evidence than to general, unsupported allegations or opinions.” 13 CFR § 121.1009. So, including a declaration from a company owner is a great way to counter any protest allegations from a protester that cannot be explained easily through existing documentation that will be submitted to SBA. For example, maybe the protester has alleged that someone with the last name of the company’s owner is also the company’s sister and that the alleged sister’s company’s are affiliates. It may be hard to provide a document showing you don’t have a sister, but that can be accomplished through a sworn declaration. 4. Answer all the questions from SBA, to avoid the dreaded adverse inference. SBA’s rules allow it to assume the worst if a company fails to respond to any particular question. If the company responding to the size protest “fails to submit a completed SBA Form 355, responses to the allegations of the protest, or other requested information within the time allowed by SBA, or if it submits incomplete information, SBA may presume that disclosure of the information required by the form or other missing information would demonstrate that the concern is other than a small business.” 13 CFR § 121.1008. Therefore, be sure to respond to all allegations, questions, and blanks on the Form 355. If any request is not applicable, you can explain that to the Area Office, but be sure to do so for each item. 5. The size determination will arrive quickly. Normally, the Area Office will issue its size determination within 15 business days of when it receives the size protest and related information from the contracting officer. Normally, a contracting officer will wait the 15 business days before continuing with award of the contract, unless the “the contracting officer determines in writing that an award must be made to protect the public interest.” 13 CFR § 121.1009. So, your company will know fairly quickly what the outcome is. And if the outcome is not good, there is an appeal process, but the appeal process (also described in my book) is a subject for another day. A size protest response goes quickly, but it’s not too bad. There you have it, five things that can make responding to a size protest a little less stressful. It’s a tight turnaround, but knowing how the process works can make it a smoother process. Need help with a government contracting legal matter? Email us or 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 Five Things You Should Know: Responding to Size Protests first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  13. As you move into the weekend, be on the lookout for the Pink Moon. It’s not really pink though, the name comes from the herb moss pink, also known as creeping phlox, so NASA tells me. This is one of the earliest flowers of spring. So even if you don’t actually see a pink moon, it still means spring is here. Along with the moon, be sure to check out these government contracting updates, including a report on SBA review of PPP loans, changes to beta.SAM, and calls for emerging technologies for DoD. CMMC: Some Frequently Asked Questions [NatDefMag] Design Changes Coming Soon to beta.SAM [NextGov] COVID-19 Loans:SBA Has Begun to Take Steps to Improve Oversight and Fraud Risk Management [GAO] Six Language Recruiters Indicted for Recruiting Unqualified Linguists for Deployment with U.S. Armed Forces in Afghanistan [DOJ] COVID-19 successes set new expectations for federal acquisition community [FedNewsNet] Bill to strengthen IG independence seeks to correct ‘unconscionable’ long-term vacancies [FedNewsNet] NITAAC CIO-SP4 is Coming Soon [NITAAC] New bottleneck emerges in DOD’s contractor cybersecurity program, concerning assessors [FedScoop] Survey: Large Contractors More Concerned Than Small Contractors About DOD’s Cybersecurity Certification Program [NextGov] Riverside, California Construction Firm Pays $2.5 Million to Settle Allegations of Exploiting Service-Disabled Veteran-Owned Small Business Program, DOJ Reports [GoldRushCam] The U.S. government needs access to commercial technologies to drive innovation [FedScoop] After years of complaints, House committee considering changes to VA accountability office [FedNewsNet] US Department of Labor Investigation Finds Three Florida Mail-Hauling Contractors in Violation of Federal Contract Requirements [DOL] Mathematics Professor and University Researcher Indicted for Grant Fraud [DOJ] Coronavirus Roundup: Vaccines Sent to All State Department Posts Abroad; SBA Makes Progress on Oversight and Fraud Detection for Pandemic Programs [GovExec] Introducing the Emerging Technologies Institute [NatDefMag] The post SmallGovCon Week in Review: April 19-April 23 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  14. Many small business clients of mine have been approached by or considered acquisition by a larger firm. Well, if this sort of sale or merger would turn a small business into a large business, the small business should pay close attention to a little-publicized change stemming from SBA’s Mentor-Protégé Consolidation rule that came out last fall. The new rule could result in a company losing out on an otherwise successful bid. It’s fairly common for a small business to be purchased by a larger business. But what is the effect of such an acquisition on the small business? Well, the basic rule is that size is determined at the offer date. As SBA put it in the recent rule: “If a concern grows to be other than small between the date of offer and the date of award (e.g., another fiscal year ended and the revenues for that just completed fiscal year render the concern other than small), it remains small for the award and performance of that contract.” That would make sense because generally “SBA determines the size status of a concern, including its affiliates, as of . . . its initial offer or response which includes price.” 13 CFR § 121.404(a). However, there is now an exception if the small business is part of a merger, sale, or acquisition that makes the company no longer small. As a typical example, consider a small business that is acquired by a business that is large for the NAICS code assigned to the solicitation. Under the new rule, the small business would have to recertify its size, and could possibly lose the award depending on the timing of the acquisition. So, small businesses must pay close attention to this new timing rule. SBA justified the rule by stating that “recertification should be required when it occurs close in time to a concern’s offer, but agrees that it would not be beneficial to discourage legitimate business transactions that arise months after an offer is submitted.” Here is the language from the new rule, now found at 13 CFR § 121.404(g). The new rule provides: If the merger, sale or acquisition occurs after offer but prior to award, the offeror must recertify its size to the contracting officer prior to award. If the merger, sale or acquisition (including agreements in principal) occurs within 180 days of the date of an offer and the offeror is unable to recertify as small, it will not be eligible as a small business to receive the award of the contract. If the merger, sale or acquisition (including agreements in principal) occurs more than 180 days after the date of an offer, award can be made, but it will not count as an award to small business. Note that the new rule requires recertification in every case where the merger, sale, or acquisition occurs after offer but prior to award. So, a recertification will be required if award has not been made yet. But a small business could lose the award if the transaction occurred before the 180-day mark. Small businesses must be very careful in reviewing the timing for an acquisition or merger if the business has submitted pending offers for federal solicitations. In addition, remember that the present effect rule means that SBA will consider an acquisition or merger to have occurred when there is an agreement in principle, in some cases even if the final agreement has not been signed. Combining this new 180-day recertification rule and the present effect rule means companies need to be extra careful when considering an acquisition or merger. Need help with a government contracting legal matter? Email us or 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 Are You a Small Business Being Acquired by a Large Business? Check Your Pending Bids first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  15. In January 2022, the rules regarding calculating small business size status for federal procurements will change dramatically. Companies operating under receipts-based size standards will be required to use their last five completed fiscal years–not three. And businesses operating under employee-based size standards will be made to use their last 24 months of payroll, instead of 12. These changes will benefit growing businesses, allowing stay small longer by including older numbers in their averages. But the new size rules–what Congress has termed a small business “runway extension”–actually penalize some businesses, forcing them to stay large longer, and freezing these companies out of the very small business set-aside opportunities that could help reverse their declining fortunes. That can’t be what Congress intended! Fortunately, the SBA has come up with a simple, elegant solution to the problem, and I think Congress should codify it before January. The Runway Extension Act(s) and The “Shrinking Business” Problem In case you’ve been busy doing other things (like running a business) instead of focusing on statutory and regulatory changes, it may be helpful to briefly summarize how we got here, along with an example of the major problem Congress has dumped in the laps of shrinking businesses. So let’s hop in our DeLorean, set the dials for December 2018, and fire up 1.21 gigawatts. In the waning days of the year, Congress passed a bill called the “Small Business Runway Extension Act of 2018.” The bill amended the Small Business Act (the statute underpinning SBA’s regulations) by requiring the use of a five-year average in calculating size under receipts-based NAICS codes. Congress’s stated intent was, essentially, to allow businesses to stay small longer, thus increasing the number of companies eligible for small business set-aside contracts (and socioeconomic contracts like 8(a) and WOSB). When a business is growing, the Runway Extension Act works exactly as intended. Here’s an example: EXAMPLE #1 – Growing Small Business (“GrowCo”) NAICS Code: 541310 (Architectural Services) Size Standard: $8.0 million FY 2016: $2 million; FY 2017: $3 million; FY 2018: $7 million; FY 2019: $10 million; FY 2020: $15 million Average (Three-Year Lookback): $10.7 million Average (Five-Year Lookback): $7.4 million Nicely done, Congress! Our booming business, GrowCo, is still small under the 5-year standard even though it would have “sized out” under a three-year standard. So far, so good. But what about a shrinking company? EXAMPLE #2 – Declining Large Business (“ShrinkCorp”) NAICS Code: 541310 (Architectural Services) Size Standard: $8.0 million FY 2015: $20 million; FY 2017: $10 million; FY 2018: $7 million; FY 2019: $3 million; FY 2020: $2 million Average (Three-Year Lookback): $4 million Average: (Five-Year Lookback): $8.4 million Uh-oh. Poor ShrinkCorp! Using a three-year average, this declining business is merely half as large as the size standard. But once we force the company to continue counting revenues back from its long-gone 2015 glory days, ShrinkCorp doesn’t qualify as small. The Runway Extension Act only addressed receipts-based size standards, but Congress recently adopted a similar “runway extension” for employee-based size standards. I could go through a similar example, but SmallGovCon readers are smart and I don’t want to waste your time. You get the point: whether it’s a receipts-based size standard or an employee-based size standard, growing companies benefit from the lengthened calculation periods; shrinking companies are penalized. And, of course, even in the best of times, not all businesses are growing–and the pandemic hit many small businesses especially hard. The SBA’s (Temporary) Solution In 2019, the SBA issued a final rule implementing the receipts-based Runway Extension Act. The SBA’s rule allows a business to choose whether to use a three-year or five-year size standard. By allowing businesses to choose which standard to apply, the SBA’s rule completely solves the problem. Under the SBA’s rule, a company like ShrinkCorp can simply select the three-year standard, and voila–small! Elegant in its simplicity! The problem is that the SBA’s solution is temporary: it lasts only until January 6, 2022. After that, the SBA will begin using the five-year period exclusively. Meaning that come January, businesses like ShrinkCorp are gonna be in some trouble. And while there’s no good time to inadvertently penalize shrinking companies, the tail end of a pandemic seems particularly unfortunate. A Congressional Solution? If you have followed the Runway Extension Act saga, you may recall that SBA has claimed that the Act doesn’t apply to it. In other words, SBA says that it is voluntarily adopting the five-year standard, basically just to be neighborly–but it doesn’t have to do so. Following that logic, one might assume that SBA could decide by itself to extend the choice it offered in the 2019 rule. In my mind, there is little doubt that Congress intended and expected the Runway Extension Act to apply to the SBA. (In fact, the stated purpose of the Act was to “lengthen the time in which the Small Business Administration (SBA) measures size through revenue . . .”) In fairness to the SBA, though, Congress didn’t do the best job drafting the Runway Extension Act to effectuate that intent, and a federal judge recently agreed with the SBA’s take. But Congress got the last laugh: as part of the 2021 National Defense Authorization Act, it changed the underlying statute to make it crystal clear that the mandatory five-year period will apply to the SBA no later than January 2022. (As will the 24-month period). I occasionally have a bone to pick with the SBA, and when that happens, I’m not shy about saying so. But sometimes (many times!), the SBA gets it completely right. Allowing the choice between three-year and five-year periods is one of those times! SBA’s temporary solution allows growing businesses to stay small longer, without unnecessarily penalizing shrinking businesses. Simple and fair. Since I do not believe that the SBA has authority to extend its temporary solution, it’s up to our elected officials to protect declining businesses, including the many that have been severely harmed by the pandemic. Congress should amend the Small Business Act to permanently codify the three-or-five-year choice the SBA now allows. And Congress should allow a similar choice between 12-month and 24-month periods for companies operating in employee-based NAICS codes. I’ve got my fingers crossed. Need help with a government contracting legal matter? Email us or 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 Congress Should Codify–and Expand–SBA’s Solution to the “Runway Extension” Small Business Size Calculation Problem first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  16. Lately, I’ve been enjoying attending my daughter’s soccer games on the weekend. It’s nice getting out into the fresh air. Hope you are able to enjoy some fresh air this weekend as well. But before you do, check out the latest updates in government contracting. This week saw some important updates in the federal contracting world. These included new details about the GSA administrator, a potential increased emphasis on evaluation of past performance, and DOD’s innovation ecosystem. DISA director favors outsourcing IT services to contractors [C4ISRNET] Questions for the GSA administrator nominee, on what the job will actually involve [FedNewsNet] DOD Modernization Can’t Happen Alone, Defense Official Says [DOD] CMMC: Some Frequently Asked Questions [NatDefMag] GSA streamlines vendor requirements to further leverage industry resources and capabilities in support of U.S. Government’s COVID-19 response efforts [GSA] GSA, DHS making big push to address shortcomings in contractor assessments [FedNewsNet] GSA planning to lend tech, acquisition expertise to support scaling TMF [FedScoop] DOD’s innovation ecosystem is growing, but strict compliance is a barrier [Fedscoop] San Diego Woman Pleads Guilty to Conspiracy to Launder Almost $600,000 from Department of Defense Bribery Scheme [DOD] Manufacturer Sentenced for Conspiring to Manufacture and Sell Counterfeit Goods [DOD] The post SmallGovCon Week in Review: April 12-April 16 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  17. An agency’s past performance evaluation may consider whether the prime contractor and a proposed subcontractor have worked together previously–even if the solicitation is silent about such consideration. In a recent bid protest decision, the GAO held that there was nothing improper about an agency’s determination that the awardee’s prior working history with its subcontractor decreased performance risk. The GAO’s decision in VxL Enterprises, Inc., B-419467.2 (Mar. 8, 2021) involved a DHS solicitation for armed protective security officer services throughout Oklahoma. The solicitation contemplated the award of a single IDIQ contract against which the agency would make fixed-price task orders. The solicitation established a best-value evaluation scheme, under which the DHS would consider past performance, management approach, and price. Past performance was the most important evaluation factor. Where an offeror intended to use a subcontractor, the solicitation allowed the submission of the subcontractor’s past performance references. Triple Canopy, Inc. submitted a proposal. Triple Canopy submitted six past performance references–three for itself and three for its major subcontractor. In its evaluation the agency “noted that one past performance reference provided evidence that Triple Canopy and its proposed subcontractor had worked together in a manner similar to their proposed relationship for the performance of this requirement.” The agency believed that Triple Canopy’s experience working with its subcontractor would reduce performance risk. The agency assigned Triple Canopy a “Highly Acceptable” rating for the past performance factor and named Triple Canopy as the awardee. An unsuccessful competitor, VxL Enterprises, LLC, filed a GAO bid protest challenging DHS’s decision. VxL alleged that the agency had made several errors in its evaluation of past performance. Among its allegations, VxL contended that it was improper for DHS to consider Triple Canopy’s history of working with its subcontractor. VxL stated that doing so amounted to an “unstated evaluation criterion,” because the solicitation was silent about any such consideration. The GAO made short work of this argument. “An agency’s consideration of how a proposed team would function together is reasonable and logical, even where a solicitation does not expressly state a preference for contractor/subcontractor teams that have previously performed similar requirements,” the GAO wrote. It continued: “[w]e thus see nothing unreasonable in the agency’s finding that the prior working relationship of Triple Canopy and its proposed subcontractor would reduce performance risk in this procurement.” The GAO denied VxL’s protest. Past performance is an essential ingredient in many acquisitions, and the importance of past performance has been magnified by the recent FAR final rule curtailing lowest-price technically-acceptable procurements. As the VxL Enterprises case shows, where a prime contractor and subcontractor have previous experience working together, the agency has the discretion to consider that working relationship as part of its past performance evaluation–even if the solicitation doesn’t specifically mention it. Need help with a government contracting legal matter? Email us or 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 Past Performance: Agency Can Consider Whether Prime & Subcontractor Have Worked Together Previously first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  18. Eligibility to bid for construction contracts in the 8(a) program can be a maze to navigate for small businesses. The lifeblood for these companies is identifying and becoming eligible to bid for these prized solicitations. As a new 8(a) entity, or one looking to branch out, you may be wondering how to establish a bona fide place of business. In order to qualify for construction contracts in the 8(a) program, offerors are required to have a bona fide place of business (or BFPOB) within the established geographic area. This post will walk you through when and how to request a determination from the SBA, and when to expect a decision. Before we get to the five things, one important resource for the 8(a) Program to review when questions arise is the SBA standard operating procedure. But, if you don’t have time to read all 300 pages, and the corresponding regulations, we will walk you through the process. The bona fide place of business must meet certain requirements. First, what are the major regulations and corresponding definitions for establishing an 8(a) bona fide place of business? 13 C.F.R. § 124.3 defines bona fide place of business as “a location where a Participant regularly maintains an office which employs at least one full-time individual within the appropriate geographical boundary.” Hold on to your questions about what this means in real world terms, I will address it later. 13 C.F.R. § 124.501 states, “an 8(a) business must have a bona fide place of business in the applicable geographic area if the procurement is for construction.” This sends off alarm bells that any 8(a) entity wanting to submit an offer for an 8(a) construction set-aside needs to establish a bona fide place of business in the geographic area. Looking at these two regulations, along with the SBA standard operating procedure, lays out in detail the major definitions and regulations you need to know to set yourself up for success. 2. A business has to request approval of its bona fide place of business. As always, look at the regulations and the standard operating procedure first. 13 C.F.R. § 124.501(k) establishes the procedure for submitting a request to establish a bona fide place of business. The request must be sent to the SBA office servicing the 8(a) participant. We get a lot of question about what this means: the home office for the 8(a) company, or where the new BFPOB will be? The answer, is to file the request with the home SBA district office for the 8(a) entity. The SBA office will then forward the request to the SBA office servicing the area where the BFPOB is located, if it is different than the 8(a) participant’s location. When the request to establish a BFPOB is solicitation-specific, it must be received at least 20 working days prior to the date proposals are due. But the request does not have to be in connection with a specific solicitation and, in that case, the request can be submitted at any time. 3. The SBA district office needs proof that the BFPOB is established. The SBA district office will look for whether the 8(a) entity regularly maintains an office within the appropriate geographic boundary. Construction trailers and temporary structure will not suffice in establishing an office. Regularly maintaining an office means conducting business activities as an ongoing business concern from a fixed location on a daily basis. In order to show this is occurring, the SBA wants to see that this is a location where third-parties conduct business with the 8(a) entity. Including lease agreements, bills, correspondence, licenses, and filings from the office location will boost the chances of the SBA approving the BFPOB. A primary place of business can qualify as a BFPOB; it does not have to be a new location. Also, an entity can have multiple BFPOBs. But each BFPOB must be approved before it can be utilized to qualify for a procurement. Not only must an entity have the office space, but it must have at least one full-time individual employed at the location. How a person is considered full-time seems intuitive, but the SBA has a few rules to follow. The person must conduct the activities of the 8(a) entity during normal business hours. The person cannot be an independent contractor, and must not work for any other business during normal business hours. The SBA will look for employment agreement(s), payroll records, tax documents, and benefits. The rule of thumb is to have a full-time employee, exclusively employed by the 8(a) entity, working in the BFPOB. Trying to skirt the rules on these requirements can land your business in hot water with the SBA. 4. BFPOB approval has short deadlines. If the 8(a) entity does not have a current approved BFPOB in the geographic area of the solicitation, a request to establish a BFPOB must be submitted at least 20 working days before initial offers that include price are due. If it is not for a specific contract, the SBA will issue its decision within 30 days of receiving the request. The SBA is supposed to conduct a site visit to the BFPOB site within 10 working days of receiving the request. But SBA can push back the deadline. The SBA will then issue a formal determination within 5 working days of the site visit. However, the SBA may not respond at all, which can leave 8(a) companies feeling left out in the cold. The regulations, when this happens, tell the 8(a) company it can assume the SBA has accepted the request. However, this only allows the 8(a) company to submit an offer for a procurement. The SBA still must formally accept the request prior to award of a contract. If the SBA determines late in the process to deny the BFPOB request, this could be a bitter pill to swallow. Assuming the SBA approves the request, the effective date is established when the SBA determines the BFPOB met the requirements at the location. The BFPOB can be changed without prior SBA approval, but the 8(a) entity must notify SBA and provide documentation within 30 days of the move demonstrating the new BFPOB meets requirements. 5. What are the takeaways, and are there exceptions? The SBA has made clear that, for 8(a) construction requirements, an entity must have a BFPOB in the geographical area. This applies to both sole source, and competitive procurements. The SBA standard operating procedure seems to leave the door open for an 8(a) sole source to not have a BFPOB when it is nominated by the SBA. However, given recent comments by the SBA, I think the standard operating procedure will eventually be updated to close this door. 13 C.F.R. § 124.501(g)(4) states that in order for an award to be made, the Participant must show it “[h]as a bona fide place of business in the applicable geographic area if the procurement is for construction.” In November 2020, the SBA commented on the location for a bona fide place of business. The SBA said, “[a]s such this final rule defines bona fide place of business to be the geographic area serviced by the SBA district office, a Metropolitan Statistical Area, or a contiguous county to (whether in the same or different state) where the work will be performed.” A good example for those of us in the Midwest is Kansas City (Kansas and Missouri), where the city stretches across state lines. In these instances, the SBA allows for a geographical area to include both sides of a state line, assuming it meets the criteria. Generally, the SBA will confine the geographical area to a single state or county. The geographical area will be determined on a solicitation by solicitation basis by each SBA area office. The takeaway, if you are looking to apply for and receive 8(a) construction contracts, is to get your ducks in a row early. SBA understands this can be a chicken-or-egg consideration for small businesses. Establishing a BFPOB more than 20 working days ahead of a solicitation is a tall task, however, utilizing the roadmap above, you can speed up the process. Need help with a government contracting legal matter? Email us or 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 5 Things to Know About an 8(a) Bona Fide Place of Business first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  19. SBA guidance on Certify.SBA.Gov suggests that an 8(a) Program applicant’s social disadvantage narrative should be “three pages or less.” While we are definitely in the habit of recommending small business contractors to follow SBA’s guidance most of the time, we simply cannot climb aboard the “three-page” ship. In fact, we have significant concerns that submitting a one to three page narrative could potential “sink” your 8(a) application (at a minimum, requiring you to make extensive and time-consuming revisions later on). For those of you unfamiliar, any applicant for SBA’s 8(a) Business Development Program that is not part of a designated group that SBA presumes to be socially disadvantaged under 13 C.F.R. § 124.103 must submit a “social disadvantage narrative” as part of its application. Socially disadvantaged individuals, according to SBA “are those who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups and without regard to their individual qualities[,]” which “must stem from circumstances beyond their control.” Section B of SBA’s social disadvantage regulation lists the designated groups that SBA presumes to be socially disadvantaged, including Black Americans, Hispanic Americans, Native Americans, and Asian Pacific Americans, among many others. While Section C provides the alternative method for establishing social disadvantage, stating: An individual who is not a member of one of the groups presumed to be socially disadvantaged in paragraph (b)(1) of this section must establish individual social disadvantage by a preponderance of the evidence. Such individual should present corroborating evidence to support his or her claim(s) of social disadvantage where readily available. Section C of the regulation then goes on to provide a litany of requirements for establishing social disadvantage via one of these narratives. To supplement these regulatory requirements, SBA has also provided further guidance on social-disadvantage narrative-writing via its 8(a) Application Helpful Tips Slides, Standard Operating Procedure for the Office of Business Development, 8(a) application guidance on Certify.SBA.Gov, and various other policy statements. To top it all off, providing even more guidance on SBA’s standards for these narratives are the many years of SBA Office of Hearings and Appeals (OHA) decisions reviewing initial 8(a) Program denials on the basis that the narrative failed to establish social disadvantage for one reason or another. While we are not going to run through all of the rules and standards from each of these sources here, check out our previous blog on drafting these narratives, as well as our YouTube tutorial on the subject, for more detailed information about SBA’s and SBA OHA’s standards and requirements. For the purposes of this blog, it will suffice to understand that, in order to meet all of SBA’s rules and standards, these narratives must be extensively detailed and highly formulaic. SBA has a long list of requirements, not just for the narrative in general, but also for each incident of social disadvantage alleged. And you generally need several incidents to establish social disadvantage. In a nutshell, to meet the “preponderance of the evidence” standard of review, the applicant has to show a “pattern of discrimination” and “chronic” (or constantly recurring) social disadvantage–indicating that one or two instances isn’t going to cut it. SBA also asks for instances that occurred during the applicant’s education, employment, and/or business history. While SBA guidance says that failure to provide instances under all of these categories is not detrimental, it also says: “Evidence relating to all three areas should be addressed, if applicable, to the individual’s case[.]” But the story doesn’t end there. SBA requires that each alleged incident describe in detail: “When and where each incident occurred”; “Who committed the act”; and “How the incident took place[.]” Additionally, SBA requires, for each instance of social disadvantage, that the applicant include sufficient “facts and evidence that by themselves establish that the individual has suffered social disadvantage that has negatively impacted his or her entry into or advancement in the business world.” This means that every single instance of alleged discriminatory conduct must be accompanied by two things in order for the instance to qualify as social disadvantage: (1) a detailed explanation of the negative impact the instance had on the applicant’s entry into or advancement in the business world; and (2) an explanation for why the applicant believes or knows that the incident was motivated by bias. In SBA’s own words: SBA may disregard a claim of social disadvantage where a legitimate alternative ground for an adverse employment action or other perceived adverse action exists and the individual has not presented evidence that would render his/her claim any more likely than the alternative ground. Based on SBA’s extremely high bar for social disadvantage narratives–which does not even touch on all of SBA’s standards and guidance–we generally anticipate well-written narratives to land in the ballpark of 10-15 pages. This is pretty consistent with our experience in drafting and reviewing these narratives too. So you can imagine our concern with SBA’s guidance on the Certify.SBA.Gov website suggesting that a “[n]arrative should be three pages or less.” Interestingly, this is the only indication in all of SBA’s regulations and guidance (that we are aware of) that these narratives should be so drastically limited in length. In fact, the three-page maximum suggestion only shows up during the application process itself. It can be found under the “Social Narrative” tab under the “Basis of Disadvantage” section where the applicant ultimately uploads the narrative. This raises a few questions, at least on our end, as to where this guidance is coming from, what it is based on, and what the driving policy is behind it–especially given its apparent contradiction to the rest of SBA’s rules and guidance on social disadvantage narratives. And frankly, until we hear more on this “suggestion,” or SBA provides really any other guidance to support it, we remain skeptical about it. In the end, applicants should keep in mind that these social disadvantage narratives are very much the make-or-break for many 8(a) applications. As such, in drafting and reviewing these narratives here at Koprince, we prioritize (above all else) providing: (i) a sufficient amount of instances to demonstrate chronic social disadvantage; (ii) enough detail to establish discrimination/bias as the cause of each; and (iii) a thorough and developed analysis of the long term impact of each. While we will never recommend that anyone ignore the SBA’s guidance, we will caution our 8(a) applicant readers out there to be careful in prioritizing a “short” narrative over any of these components (or any other SBA rules and guidance). If you have ever applied to the 8(a) Program yourself or know someone who has, you will likely know that SBA is notorious for requesting more detail and more information–very rarely does it ask you for less. Keep that in mind. Interested in utilizing our expertise in writing one of these social disadvantage narratives or reviewing one prior to submission, or needing general help with the 8(a) Program or any other government contracting legal matter? Email us or 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 Suggests Three Pages or Fewer for Social Disadvantage Narratives–But Really? first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  20. For small and large businesses alike, joint venturing and prime/subcontractor teaming on federal contracts can bring powerful benefits. But the rules governing teaming and JVs can be complex, and in focusing on compliance, sometimes best practices can get lost in the shuffle. On April 20 through 22, please join me and Nicole Pottroff for a special, three-part course on joint ventures and prime/subcontractor teaming, hosted by Govology. We’ll cover the key compliance rules in plain English, dispel common myths, and discuss best practices to help your teaming documents go beyond bare-bones compliance. It’s easy to register: just click here. We hope to see you starting on April 20! The post Event: Three-Part Series on Joint Ventures & Prime/Subcontractor Teams first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  21. As I drove into work today, the redbuds are in full bloom. The purple flowers are the first to appear, after a long, cold winter and it’s a pretty sight and a sure sign that spring is here. Hope you are able to enjoy some nice spring weather this weekend and immerse yourself in the beauty in your part of the world. But before you start the weekend, catch up on some key news in the federal contracting world. This included contractors anticipating the next big spending bill, new picks for leaders at DoD acquisition and GSA, and DoD seeing increased interest in its Defense Innovation Unit. Contractors are already organizing as they anticipate the next big spending bill [FedNewsNet] DoD initiates CMMC review — big deal or perfunctory? [FedNewsNet] Audit of DoD Hotline Allegation Concerning U.S. Army Communications-Electronics Command Billings to Customers [DOD] Bidder Pleads Guilty to Rigging Bids at Online Auctions for Surplus Government Equipment [DOJ] State of the market: Marketing communications in FY21 [FedNewsNet] Navy planning 4 major tests for network integration in 2021[FedScoop] DIU’s Mike Brown is Biden’s pick to head DOD acquisition [Fedscoop] Creating opportunities for small businesses [FedNewsNet] Biden Taps Former Missouri Secretary of State to Lead GSA [Govexec] Commercial Interest Grows in Defense Innovation Unit [NatDefMag] SBA Launches Portal to Begin Accepting Shuttered Venue Operators Grant Applications on April 8 [SBA] The post SmallGovCon Week in Review: April 5-April 9 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  22. SBA has issued its regulatory agenda for what rules it plans to roll out later this year. Here is a rundown of the key rules. SBA recently released its semiannual Regulatory Agenda, which is a summary of current and projected regulatory actions, and invited the public to comment. Below, I summarize some of the key proposals. Alternative Size Standards for Loans. SBA has proposed “an alternative size standard for loan applicants that do not meet the small business size standards for their industries.” Congress in 2010 established an alternative size standard for loan programs, which was a maximum of $15 million in tangible net worth and $5 million in average net income. Now (only 11 years later), it is on SBA’s to-do list to establish an alternative size standard. Note: this alternative size standard does not apply to size purposes for federal contracts, only for loans. A proposed rule is expected May 2021. Size Standards Updates for Certain Sectors. SBA is reviewing size standards for a number of industries. Agriculture, Forestry; Mining, Oil and Gas Extraction; Utilities; Construction; Transportation; Information; Finance and Insurance; and Real Estate and Rental and Leasing: if you are in one of these industries, be on the lookout for SBA to increase (or possibly decrease) size standards for these areas. The final rule is expected in September 2021. In addition, SBA will update size standards for certain sectors in July 2021, including Professional, Scientific and Technical Services; Management of Companies; and Administrative and Support, Waste Management and Remediation Services. Manufacturing and Wholesale Trade and Retail Trade: proposed rule expected in May 2021. Educational Services; Health Care and Social Assistance; Arts, Entertainment and Recreation; Accommodation and Food Services; Other Services: final rule expected October 2021. Monetary Size Standards: will be adjusted for inflation with a final rule expected May 2021. Credit for Lower Tier Subcontracting. The 2020 NDAA requires SBA to alter the method and means of accounting for lower tier small business subcontracting. SBA is still in the early stages of implementing this change so they provided no real details, and notes that there is no legal deadline. Small Business Timber Set-Aside Program. SBA is considering adjusting how standards for this program should be calculated. A Final Rule is expected November 2021 (I have to admit this is not a program I was familiar with). Small Business Size Standards: Runway Extension Act for Loan Programs: SBA is considering how to apply The Small Business Runway Extension Act–changing the look-back period from three to five years for receipts-based size standards–to size standards for in SBA’s business loan, disaster loan, and SBIC programs, with a proposed rule expected November 2021. * * * These proposed rules don’t feel quite as important as the big slate of rules changes that SBA has implemented over the past few months, such as mentor-protégé consolidation. But these are still important updates. Stay tuned to SmallGovCon for our discussion of how SBA implements these rules. Need help with a government contracting legal matter? Email us or 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’s Plans For New Rules in 2021 and Beyond first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  23. My colleague Steven Koprince and I will be providing a Government Contracts Legal Update 2021 in cooperation with The University of Texas at San Antonio Institute for Economic Development PTAC. We will provide a comprehensive update on the most important government contracting legal changes of late 2020 and the first months of 2021. The event will take place on April 13 from 1:00 PM – 2:30 PM (CDT). Be sure to check out the registration link if you are interested! The post Event: Government Contracts Update with UTSA PTAC first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  24. Hard to believe it, but March has come and gone and now we’re one quarter of the way through 2021! As you try and figure out where the year has gone this weekend, peruse these government contracting updates that reflect on what has occurred and what could happen during the rest of 2021. Some of the key stories this week included a DOD review of CMMC, the PPP Extension Act, and an extension on for expiring SAM.gov registrations. NEW: GSA Providing Automatic 180-Day Extension of Expiring Entity Registrations in SAM.gov [GSA] Former Contracting Officer Sentenced for Bribery Conspiracy [DOJ] FAS’s Packaged Office Furniture Program Limits Opportunities for Better Prices and Taxpayer Savings [GSA] The International Rescue Committee (“IRC”) Agrees to Pay $6.9 Million To Settle Allegations That It Performed Procurement Fraud by Engaging in Collusive Behavior and Misconduct on Programs Funded by the United States Agency for International Development [DOJ] THE Pandemic and VA’S Medical Supply Chain: Evaluating the Year-Long Response and Modernization [VA] Employees Terminated for Accepting Gifts from Amtrak Contractor [Oversight] SBA Administrator Isabella Casillas Guzman’s Statement on President Biden signing the PPP Extension Act of 2021 into law [SBA] CMMC is under an internal DOD review [Fedscoop] What government needs to know about accelerators [Fedscoop] Former Contracting Officer Sentenced for Bribery Conspiracy [DOJ] The post SmallGovCon Week in Review: March 29-April 2 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  25. Koprince Law LLC, a boutique federal government contracts firm in Lawrence, KS, is pleased to announce that that Nicole Pottroff has now been elevated to partner status with the firm! Nicole’s legal practice focuses exclusively on representing federal government contractors. Among her many professional accomplishments, Nicole recently co-authored the totally revamped “Koprince Law LLC GovCon Handbook Volume 4: Second Edition – The 8(a) Program.” She is as comfortable with 8(a) narratives as complex subcontracts. And she is a fierce advocate for her clients in thorny contracting situations and protests. This step is a recognition of the legal excellence, client-focused mindset, and attention to detail that has made Nicole an outstanding counselor in the field of government contracting. Congratulations to Nicole! Nicole Pottroff can be reached at npottroff@koprince.com. The post Koprince Law Announces Nicole Pottroff as Partner first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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