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Back in 2017, in the 2018 National Defense Authorization Act (NDAA), Congress passed a limited program for GAO protests of Department of Defense contracts where certain large contractors would have to reimburse the DoD for the cost of processing unsuccessful GAO protests. We reviewed that rule here. Congress repealed that provision with the 2021 NDAA. Now, the “losing protester pays” system is back with a vengeance. The 2025 NDAA creates a similar provision, but now the language appears to apply to all businesses that bring an unsuccessful GAO protest on a DoD contract. Coupled with enhanced pleading standards and an increase to the task order value jurisdiction requirement, this will make GAO protests of DoD contracts more burdensome on federal contractors. With that said, it is important to note: The 2025 NDAA only orders that the GAO and DoD produce a proposal that addresses the above for review by Congress. It does not absolutely mandate that the government then adopt said proposal. We look at these changes in this post. Section 885 The 2025 NDAA came into effect on December 23, 2024. This bill, as it is each year, is massive, but we are going to focus on Section 885, “Proposal for Payment of Costs for Certain Government Accountability Office Bid Protests.” This provision notes that, within six months of the passing of the 2025 NDAA, the head of GAO and the Secretary of Defense must prepare a proposal for some new rules for GAO protests of DoD contracts. Note that the use of term proposal leaves some room for the committee to consider, alter, or reject said proposal prior to enactment. First, the elephant in the room: the proposal must include a process for an unsuccessful protester to pay the government and the awardee’s costs in a GAO bid protest of a DoD contract. The provision explains that GAO and DoD must prepare a chart of the average costs that the government incurs for a protest of a DoD contract relative to the value of that contract. In other words, the government has to figure out how much it loses on average from a protest for larger contracts as opposed to smaller contracts and basically create a sliding scale. Then the GAO and DoD have to determine the lost profit rate that results from a protest for DoD contract awardees that are protested, during the period of stay for the protest. Finally, GAO and DoD must come up with a system for how an unsuccessful protester will need to pay these costs to the government and awardee, based on the charts they produce. What’s notable here is that, unlike the old system that was repealed, it does not matter what size the protester is: This applies to small businesses as it does large businesses. Second, this proposal must include “enhanced pleading standards.” The language in the 2025 NDAA on this matter is quite vague: The process for enhanced pleading standards described in this subsection is a process under which the Comptroller General shall apply enhanced pleading standards, as developed by the Comptroller General in coordination with the Secretary of Defense, to an interested party with respect to a covered protest submitted by such interested party for which such interested party is seeking access to administrative records of the Department of Defense, prior to making a determination with respect to such access. There is no description as to what these enhanced pleading standards will entail, just that, apparently, it increases the burden for protesters seeking access to administrative records of the DoD. It is safe to say it will be more difficult to get DoD records in GAO protests once these standards are prepared, but, how much more difficult is not clear at this time unfortunately. Given that in some cases it was already difficult to get records at GAO, this might not change the average protester’s experience in a GAO protest. Finally, the task order jurisdiction bar for GAO protests of DoD task orders is increasing from $25,000,000 to $35,000,000. This amends 13 U.S.C. § 3406. Under that statute, you can only bring a protest of a DoD task order to GAO (and cannot bring such a protest at COFC) if A) the task order is valued over the figure in the statute or B) if the protest is that the order goes beyond the scope, period of performance, or maximum value of the underlying main contract. What this means is that if the task order in question has a value of less than $35,000,000, GAO will not hear any protests of that award unless the protest is that the order essentially goes beyond the underlying contract. We have explored how this rule works, both for DoD awards and for civilian awards (which have a threshold of $10,000,000 and fall under 41 U.S.C. § 4106) in some previous posts. Observations One important thing to note first: This all only applies to DoD contracts. If the contract in question isn’t from DoD or the military, these changes will not affect such contracts. So, if and when these rules are finalized, do not panic if the contract you’re looking at protesting is from, say, the Department of Agriculture or the Department of the Interior. With that observation out of the way, we must respectfully question the plan to have protesters pay the costs of unsuccessful GAO protests of DoD contracts. First, the fact it applies to all businesses regardless of size means this system will be far more burdensome on small businesses than large businesses, as the latter can much more easily afford such costs. This will disproportionately discourage small businesses from protesting. Similarly, we note that this cost rule does not discriminate based on how valid the protest is. When it comes to recovering costs for a successful protest, GAO only awards those to a protester when the protest is “clearly meritorious.” This is a high standard that basically means that if the government’s position was nonetheless reasonable despite losing, no costs will be awarded to the protester. But, with this new rule, even protests that raise serious arguments on previously undecided issues will be treated the same as frivolous protests when it comes to forcing the protester to pay if the protest is unsuccessful. Coupled with the unclear “enhanced pleading standards” and higher task order jurisdiction bar, this feels like the use of a sledgehammer to crush an ant. Again, one final reminder: The 2025 NDAA only orders that the GAO and DoD produce a proposal that addresses the above for review by Congress. It does not absolutely mandate that the government then adopt said proposal. As such, there is a possibility that Congress reviews said proposals and rejects or alters the same. When this proposal is submitted, we advise contractors to get their thoughts to Congress as soon as possible to get a say on the same. Questions about this post? Email us. Legal assistance needed for a federal government contracting issue? Call us at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Making Unsuccessful Protesters Pay? Enhanced Pleading Standards? A Look at Proposed Changes to GAO Protest Rules Under the 2025 NDAA first appeared on SmallGovCon - Government Contracts Law Blog.View the full article -
The FAR Council recently published a final rule dealing with small business certification issues, effective on January 17, 2025. SBA had updated its recertification rules as discussed in this SmallGovCon.com blog. This final rule came about to ensure that certain parts of the FAR and SBA rules are consistent. The change? Adding additional circumstances that require an awardee to rerepresent its size and/or socioeconomic status for orders placed under a multiple-award contract (MAC) per FAR 52.219-28(c) Postaward Small Business Program Rerepresentation. With this revision, a contractor that represented its status before contract award, will be required to rerepresent its size and/or socioeconomic status for an order placed under a MAC, in circumstances where rerepresentation was not previously required, to ensure that orders set aside for small businesses are awarded to qualified small businesses. This means that an entity that no longer qualifies as small under the applicable NAICS code associated with an order, or that no longer qualifies for a particular socioeconomic category, will not be eligible for orders placed under certain multiple-award contracts where the MAC was not originally restricted to the same small business certification as the order. The prior language of FAR 52.219-28(c) only required rerepresentation of size and/or socioeconomic status when the contracting officer requested it for task orders under MACs set aside for any of the SBA’s programs mentioned in FAR 19.000(a)(3). FAR 52.219-28(c) will now state the following: If the Contractor represented its status as any of the small business concerns identified at 19.000(a)(3) prior to award of this contract, the Contractor shall rerepresent its size and socioeconomic status according to paragraph (f) of this clause or, if applicable, paragraph (h) of this clause, for the NAICS code assigned to an order (except that paragraphs (c)(1) through (3) of this clause do not apply to an order issued under a Federal Supply Schedule contract at subpart 8.4)— (1) Set aside exclusively for a small business concern identified at 19.000(a)(3) that is issued under an unrestricted multiple-award contract, unless the order is issued under the reserved portion of an unrestricted multiple-award contract ( e.g., an order set aside for a woman-owned small business under a multiple-award contract that is not set-aside, unless the order is issued under the reserved portion of the multiple-award contract); (2) Issued under a multiple-award contract set aside for small businesses that is further set aside for a specific socioeconomic category that differs from the underlying multiple-award contract ( e.g., an order set aside for a HUBZone small business concern under a multiple-award contract that is set aside for small businesses); (3) Issued under the part of the multiple-award contract that is set aside for small businesses that is further set aside for a specific socioeconomic category that differs from the underlying set-aside part of the multiple-award contract ( e.g., an order set aside for a WOSB concern under the part of the multiple-award contract that is partially set aside for small businesses); and (4) When the Contracting Officer explicitly requires it for an order issued under a multiple-award contract, including for an order issued under a Federal Supply Schedule contract (see 8.405-5(b) and 19.301-2(b)(2)). Due to this change, contracting officers will be required to verify the size and/or socioeconomic status of a small business concern prior to issuing an order under multiple-award contracts, but only in those specific situations subject to this rule. However, this will not affect the common scenario where the order and the MAC have the same small business set-aside, such as where both are SDVOSB. And, notably, the agencies will no longer be able to continue counting awards of task orders on MACs towards their small business or socioeconomic contracting goals when awarded to an awardee that does not meet the size and/or socioeconomic status at the time of offer submission for the task order. This change has the potential to cause contracting officers to set-aside contracts to look further into the future when choosing awardees. For example, there may be a negative impact on awarding contracts to participants that are nearing completion of their time in the 8(a) Program, because the agency would no longer be able to count the award to an 8(a) Program participant after the awardee graduates from the 8(a) program. This could also affect awards to contractors that are close to the size limit on the contract, because any order awarded after the awardee exceeds the size limit of the contract would not count towards the agency’s small business subcontracting goal. Items of note: This revision expands rerepresentation requirements to acquisitions at or below the simplified acquisition threshold ($250k), acquisitions for commercial products (including commercially available off-the-shelf items), and acquisitions for commercial services. This revision only applies to solicitations for contracts issued on or after the effective date of the final rule. That means, awardees of any solicitation that is issued prior to January 17, 2025 for a MAC will not be required to rerepresent their size and/or status. Exceeding the size limit, or losing a socio-economic status after initial awards of the MAC will not disqualify an offeror from award of an order except in the specific scenarios outlined above. “A small business concern awarded a multiple-award contract that was set aside for small businesses may continue to perform under such a contract as a small business concern throughout for the life of those contracts (e.g., for the base period and up to four additional option years).” Contracting officers will still have the discretion to require verification of size and/or socioeconomic status on orders for MACs that fall outside of this rule. This will apply to competitive acquisitions set aside under and of the SBA’s programs, including small business, 8(a) Program participants, HUBZone small businesses, SDVOSBs, WOSBs, and EDWOSBs. It does not apply to GSA Schedules, as the rule states: “except for an order issued under a Federal Supply Schedule contract.” This rule has no impact on sole-source awards. It will be interesting to see if this amendment causes any changes in the way that MACs are awarded, whether for an initial award or for orders. There is certainly potential for a negative affect on offerors close to size limits, or in danger of losing their socioeconomic status. But there is also great potential for this to ensure that awards set aside for small businesses or any socioeconomic status go to businesses that meet those requirements. It will be interesting to see how long it takes for the updated SBA rule to make its way into the FAR. What are your thoughts? Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post DoD, GSA, and NASA Establish New Size and Status Rerepresentation Rules first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Happy Friday, Readers! We hope you had a great week and are ready for the weekend. We are looking forward to our weather finally warming up and melting off some of this snow in the next few days. The respite from the very cold temperatures will be a nice change. Have a good weekend in your neck of the woods! This week in federal government contracting… SBA Administrator Guzman Outlines New MySBA Digital Experience Transforming How Business Owners Interact with SBA A regular Federal Drive guest departs for a job in the new administration Trump will require agency plans to slash workforce as he lays out hiring freeze details Military contractor to pay $1.2 million to United States to settle False Claims Act allegations GovCon Index Marks 1st Weekly Win in 2025, Posts 7th Consecutive Daily Gain Hiring Freeze GSA will ‘recommit’ to ‘founding purpose,’ says acting administrator Contractors and agencies alike await a new Trump reality Trump administration directs all federal diversity, equity and inclusion staff be put on leave Ending Illegal Discrimination and Restoring Merit-Based Opportunity Trump revives executive order aiming to strip some federal employees of civil service protections OPM creates email account to report suspected diversity and inclusion initiatives The post SmallGovCon Week in Review: January 20-24, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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SBA’s recently proposed rule seeks to officially broaden the reach of its “Rule of Two”–a government contracting requirement fundamental to supporting our nation’s small business infrastructure, policies, and goals. I emphasize “officially” because, even though this is technically a proposed change to SBA’s rules, it is really more of a “regulatory implementation” of judicial law than anything (don’t worry, we will go into more detail on this point later). Specially, SBA’s proposed rule would require the Rule of Two’s application to task orders and delivery orders under most standard multiple award contracts (MAC). This Part I blog will briefly explain what the Rule of Two is and detail SBA’s proposed update to it. But keep your eyes out for the soon-to-follow Part II blog on this topic. There, we will dig in deeper to the relevant history of (including the court case linked above), the sources and policies behind, and the potential implications for SBA’s proposed Rule of Two update. To many, SBA’s proposed rule may not appear to give rise to the need for a lengthy history lesson nor some extensive analysis of the potential implications and impact. Certainly, what SBA is proposing here is not a novel idea. The question of whether the Rule of Two should be applied to MACs has actually been a hot topic for some time, and not just at SBA, also at the Government Accountability Office (GAO) and (as noted above)in our federal courts. But rest assured, in the brief time since this proposed rule’s issuance, we at SmallGovCon have had the wheels turning. So again, we will be covering this in a two-part blog–both to ensure we are always promptly and thoroughly providing important regulatory updates to our readers, and in the interest of blog brevity (which we certainly value here too). So, this Part I will summarize the existing Rule of Two requirements and exactly what the SBA is proposing. And Part II will cover the relevant history at play here, along with a bigger picture analysis of the potential implications and impacts. If you simply cannot wait for Part II, understandable; in the meantime, please check out this article regarding the proposed Rule of Two update and some of the concerns already being raised in the industry–it even quotes yours truly. The general small business Rule of Two is similarly codified at both FAR 19.502-2 and 13 C.F.R. § 125.2(f) (the SBA regulation proposed to change here). Both of these rules are divided into two sections based on the value of the contract. In the FAR’s Rule of Two, section (a) requires the government to set aside for small business all contracts with an anticipated value between the micro-purchase threshold (MPT) and the simplified acquisition threshold (SAT)–currently, meaning $10,000-$250,000–“unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery.” Section (b), worded slightly differently, requires the government to set aside for small business all contracts with an anticipated value greater than the SAT–currently, meaning over $250,000–whenever the contracting officer has “a reasonable expectation that”: (1) “[o]ffers will be obtained from at least two responsible small business concerns”; and(2) the “[a]ward will be made at fair market prices.” For contracts above the SAT, it actually says, “[t]otal small business set-asides shall not be made unless such a reasonable expectation exists[.]” But for SBA’s regulation implementing the Rule of Two, the division is a bit nonsensical. Section (1) covers contracts with an anticipated dollar value between the MPT and SAT and Section (2) covers those exceeding the SAT. But both sections require such contracts be set aside “for small business concerns when there is a reasonable expectation that offers will be obtained from at least two small business concerns that are competitive in terms of quality and delivery and award will be made at fair market prices.” This current SBA rule does talk about setting aside MACs and orders under MACs. But it does not place any hard requirements on the government to apply the Rule of Two. It merely says that agencies can set such work aside at their discretion (either the MAC itself, orders thereunder, or all of the above), and solicitation’s can note that the contracting agencies reserve the right to apply the Rule of Two if appropriate. Thus, SBA’s new proposed rule does offer quite a significant change. In its rule-making commentary, SBA summarizes its proposed Rule of Two changes as follows: This proposed rule would apply the Rule of Two to multiple award contract task and delivery orders, with some exceptions. Under the Rule of Two, unless an exception applies, an agency must set aside the award for small businesses where there is a reasonable expectation of receiving offers from two or more small-business contract holders under the multiple award contract that are competitive in terms of price, quality, and delivery. Documentation requirements apply where the agency decides not to move forward with a set-aside order. SBA explains the purpose of the proposed rule change, noting that it would “expand the use of the small-business Rule of Two in multiple-award contracting and make other regulatory revisions to encourage the use of small businesses when creating new multiple-award contracts.” The SBA commentary then covers several anticipated exceptions to the proposed rule, “such as orders under the Federal Supply Schedule, or where an exception to fair opportunity or an agency-specific exception applies.” It also covers the procedural requirements for MACs to which the Rule of Two applies but, for some reason, will not or cannot be used. In that regard, it says: When an agency is unable to set aside an order over the micro-purchase threshold and an exception does not apply, the contracting officer must document their rationale and provide the documentation to the agency’s small business specialist or the Office of Small and Disadvantaged Business Utilization (OSDBU) or, for the Department of Defense, the Office of Small Business Programs (OSBP). And it notes that such required documentation would be reviewed by an SBA procurement center representative, which “may submit recommendations to increase small business opportunities.” As we will discuss further in the Part II blog on this topic, this proposed rule change is not something SBA issued on a whim–it is the result and implementation of several different sources of government authority, including, but not limited to, agency memorandums, executive orders, federal court decisions, GAO decisions, etc. SBA’s proposed rule change is intended to both “advance[] equity in Federal procurement practices” and “create more contract opportunities for small businesses, particularly small disadvantaged businesses (SDBs).” But we also very much understand the ability for a rule change like this one to simultaneously negatively impact certain businesses (and even, potentially, certain agencies). That said, if you have any feedback you’d like for SBA to consider in its rulemaking procedures–prior to issuing any final rule for this one–now is the time to reach out and be heard. SBA’s commentary states that any comments on the proposed rule “must be received on or before December 24, 2024.” It explains that those interested may submit their comments via: (1) the Federal eRulemaking Portal: https://www.regulations.gov, which contains the instructions for submitting comments; or (2) Mail (for paper, disk, or CD–ROM submissions), which should be addressed to: Donna Fudge, Lead Procurement Policy Analyst, Office of Policy Planning and Liaison, U.S. Small Business Administration, 409 Third Street SW, Washington, DC 20416. SBA also provides instructions for commenters to please include in any submissions the agency name or Regulatory Information Number (RIN) for this rulemaking, which is RIN 3245–AH95, Docket Number SBA–2024–0002. SBA even offers an option to submit comments while still protecting any confidential information, stating: If you wish to submit confidential business information (CBI) as defined in the User Notice at https://www.regulations.gov, please submit the comments to Donna Fudge and highlight the information that you consider to be CBI and explain why you believe this information should be held confidential. According to SBA, all comments received will be posted on https://www.regulations.gov for anyone wishing to review them. And finally, SBA invites anyone with questions or seeking more information on this rulemaking to reach out to Donna Fudge (information above) at donna.fudge@sba.gov, or by phone, at (202) 205–6363. Again, keep your eyes open for Part II of this blog if you would like a deeper discussion of the history behind this proposed rule change and the potential implications it may have. Questions about this post? Email us Need legal assistance for a federal government contracting matter, 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 Update: SBA Proposed Rule Would Require “Rule of Two” Application to Multiple Award Contract Task and Delivery Orders (Part I) first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Recently, GAO sustained a bid protest, finding that the awardee did not meet the material requirements of the solicitation. The GAO held that the requirements of the solicitation included an agency’s answer during the question and answer (Q&A) period. In ATP Gov, LLC, the United States Air Force (the Agency) issued a solicitation for portable satellite terminals, related equipment, and associated services. Two of the solicitation’s requirements are relevant here. First, the terminals were required to “provide auto-tracking/auto-acquire functionality” that offerors would verify through demonstration. Second, the terminal assembly was required to be Wideband Global Satellite Communications (WGS) certified. The certification would be verified upon inspection. During the Q&A period, one offeror sought clarification on the timeline for the WGS certification. The offeror asked, “[d]oes the terminal need to [be] WGS certified at time of proposal submission?” The Agency responded, “Yes.” The awardee proposed a base terminal that was WGS certified at the time of proposal submissions. However, the terminal would need modifications to provide the required auto-tracking capability. The Agency found that the awardee’s proposal met the solicitation’s requirements at the time of submission. ATP Gov, LLC (the protester) filed a protest, claiming that the awardee’s proposed terminal did not meet the material requirements of the solicitation because modifications to the terminal would require WGS re-certification. Understanding the protester’s argument requires a bit of a breakdown of the facts. But–stay with me here. Consider this your brain exercise for the day! Protester’s Argument If the awardee’s terminal is not modified, then it will not be able to later meet the solicitation’s requirement for auto-tracking capabilities. If the terminal is modified, then WGS re-certification is required. If WGS re-certification is required, then the awardee’s proposed terminal was not WGS certified at the time of proposal submission, as required by the Q&A. The main point of contention in this protest was the relationship between the material requirements in the solicitation and the Agency’s answer during the Q&A period. Requirements Solicitation required auto-tracking capability verified through demonstration Solicitation required WGS certification verified upon inspection Agency’s answer during Q&A required WGS certification at the time of proposal submission The Agency argued that the solicitation was silent on when the terminal was required to be WGS certified. Rather, the solicitation only noted that the WGS certification would be verified by inspection. The Q&A, the Agency stated, did not change the solicitation’s underlying requirement that the certification was only required at the time of inspection. If the solicitation only required verification by inspection, then the awardee’s proposed base terminal was acceptable because it did not have to be WGS certified at the time of submission. GAO found the Agency’s reading of the solicitation and its requirements unreasonable, stating: “[t]he agency’s answer formed part of the solicitation and clearly explained to offerors that the solicitation’s requirements that the terminal assembly be WGS certified must be met at the time of proposal submission.” GAO made it clear that Q&As amount to amendments to the solicitation, and thus form part of the solicitation’s requirements. Further, GAO found that the Q&A was not inconsistent with the solicitation. The terminal was required to be certified both at the time of submission AND would be verified through inspection. Ultimately, GAO concluded that the Agency made an award to an offeror that was ineligible for award because the awardee’s proposed modified terminal assembly was not certified at the time of proposal submission. Therefore, it did not meet the material requirements of the solicitation. We’ve made it through the facts and reached a simpler – but informative – lesson: An agency’s response during the Q&A period could include crucial information for meeting material requirements of a solicitation – even if it wasn’t included in the original solicitation document. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post GAO Says: Solicitation + Q&A = Material Requirements first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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When contractors think of GAO Bid Protests, most think of the process from the perspective of the protester. However, the contract awardee is not without a voice in the bid protest process at GAO. While the agency will generally defend the contract award decision regardless, the awardee itself can also have a seat at the table. In this installment in our “Why File” series, we will explore why a contractor would want to file an intervention in a GAO Bid Protest. First, what even is an intervenor in a GAO bid protest? The GAO’s bid protest regulations define “intervenor” as: “an awardee if the award has been made or, if no award has been made, all bidders or offerors who appear to have a substantial prospect of receiving an award if the protest is denied.” So, you can “intervene” in a Bid Protest if you are an awardee or could get an award if the bid protest is denied (i.e., the protester loses). You typically cannot intervene when a protester challenges solicitation terms, though. That brings us to the question on everyone’s mind, why file as an intervenor at GAO? There are a multitude of reasons a contractor would file as an intervenor at GAO, but the biggest reasons are: Access to Documents; Ability to File Pleadings; and Ability to Assist Agency Counsel. Access to Documents As you likely know, typically, bid protests will contain protective orders. Thus, most, if not all, of the pleadings and information involved in the bid protest will not be releasable to the public, at least not without redactions. However, if a contractor who has been designated for an award, (or is in line for an award), wants to view confidential protest-related information, the contractor can file an intervention request with GAO. Intervenor attorneys can then apply to be admitted to the protective order. Once GAO admits the intervenor counsel to the protective order, admitted counsel can review all the documents and filings immediately without redactions. Of course, they can’t share those documents or protected information with their clients or those not admitted, but they will be able to represent the intervenor’s interests with the full information involved. Without intervening, this would not be possible. File Pleadings An intervenor is not just a silent participant. Under GAO regulations, intervenors (along with the agency) can ask for dismissal of a protest . GAO regulations also don’t limit who can file comments on the agency report, simply saying “Comments on the agency report shall be filed within 10 days after the agency has filed the report.” This gives the intervenor the ability to argue for dismissal of the protest, and a way to directly argue against the protest allegations and in support of the agency’s evaluation in the comments stage of the bid protest. Consequently, not only does an intervenor have a seat at the table, but they also have the ability to directly combat the protester in filings. Absent intervention, an awardee or potential awardee has no right to be heard in the protest. Assisting Agency Counsel Finally, while not as direct as filing a pleading in response to the protest, intervenors can still impact the agency as it works to protect its award decision. Intervenors, once admitted to the protective order, can discuss the protest with agency counsel. The goal of these communications is to discuss arguments against the protest, previous filings, protest grounds, the planned agency report, and overall bid protest strategy. This often will allow the agency to focus on arguments it deems the strongest, and potentially have the intervenor spend more time on additional portions of the protest the agency may not have as much time to work on by itself. Or, the intervenor can simply provide its opinion to the agency on potential next steps from the perspective of a contractor. The bottom line is, that when there is an intervenor, the defense of the agency’s contract award decision now has even more parties to help brainstorm and fight against the protest, as well as to provide awardee’s input on arguments. While these are all great advantages and reasons to file as an intervenor at GAO, there are some other items to keep in mind. First is timing. Often, intervenors will wait too long to file, and miss out on the timelines to file pleadings, such as comments or dismissals. So, intervening is something that can squander its advantages if you wait too long to be an intervenor. Additionally, this concept is not unique to GAO bid protests. The United States Court of Federal Claims (COFC) also includes the ability to intervene, and those intervenors also get to access filings and agency documents, and to draft pleadings. Hopefully, next time you hear that your contract award may be protested at GAO, you can now answer the question of “why should we file as an intervenor?” And once you answer that question, if you do want to intervene, make sure to reach out to a federal contracting attorney, such as ourselves, to discuss the process further and get your seat at the bid protest table. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Why File: A GAO Bid Protest Intervention first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Happy Friday! We hope you had a great week. We are already halfway through January and looking forward to see if the Chiefs can finish the three-peat! The federal landscape has been busy, with updates spanning Buy America, small business dollars, and procurement complications, including Polaris protests. You can read more about these topics in the articles below. Have a great weekend! Buy America Requirements for Manufactured Products GSA awards $210 million contract for new energy conservation measures at multiple facilities in the National Capital Region Small businesses receive record $183B in fed contracts from Biden-Harris Administration Minnesota Construction Company Agrees to Pay $5.9M to Resolve False Claims Act Violations 4 Steps to Boost Government Efficiency Through Process Automation FACT SHEET: The Biden-Harris Administration Advanced Gender Equity and Equality at Home and Abroad GSA secures landmark agreement with Microsoft to enhance federal IT acquisition Polaris protests hit double digits The post SmallGovCon Week in Review: January 13-17, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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If you’re interested in winning more B2G business through the bid process, but need some answers, join this live forum and talk about this market with people who have helped hundreds of companies win government contracts. This month’s co-hosts are Koprince McCall Pottroff’s own Nicole Pottroff and Stephanie Ellis. The event host, Nick Bernardo, President & Founder of MyGovWatch.com, has over 20 years of experience helping companies of all sizes figure out how to find, compete for, and actually win government contracts. Sign up now to join this free opportunity to speak with experts including some of your favorite SmallGovCon authors. Anyone who joins and asks a question qualifies for a 30-day free MyGovWatch trial to hear about relevant bids and RFPs. Register here. https://us06web.zoom.us/webinar/register/WN_NRuUzYXuQE2KzI9VhHvbnQ#/registration The post Event! MyGovWatch Live: The B2G Roundtable, January 22, 2025, 12:00pm CDT first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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It’s Friday and time for another week in review! We hope you have had a great week and are safe from the extreme weather conditions the country seems to be experiencing right now. We are still digging out from the blizzard sent our way by the polar vortex. We also hope that our readers in California are safe and well. Our thoughts go out to all of you that are dealing with those devastating wildfires. This week in federal government contracting news had some interesting stories including withdrawals of federal regulations on contractor greenhouse gas emissions and pay equity, as well as opportunities for federal contractors in 2025. Federal Acquisition Regulation: Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk; Withdrawal Defense Contracting: DOD is Taking Steps to Restrict Mandatory Arbitration, but Additional Action Needed US government contractor to pay $1m over allegations of fraudulent bids Congress, GSA Focus on VA Acquisition Pay Equity and Transparency in Federal Contracting DOJ Issues Solicitation for Potential $36M FPMS Software Contract GSA Awards Polaris IT Contract to 102 Small Businesses MyGovWatch Live The B2G Roundtable Key Opportunities for GovCons in DOD’s FY25 Budget What to expect at the General Services Administration under Trump Two Federal Agencies Propose Cybersecurity Workforce Framework in Contracting Rules The post SmallGovCon Week in Review: January 6-10, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Steven Koprince, Govology legal analyst and retired founder of Koprince McCall Pottroff will be presenting this webinar. In this course he provides a big-picture overview of small business certifications in the government marketplace and you will learn about various federal small business certification programs, including Small Business Self Certification, Small Disadvantaged Business (SDB) & 8(a), Service-Disabled Veteran-Owned Small Business (SDVOSB), Veteran-Owned Small Business (VOSB), Historically Underutilized Business Zones (HUBZone), Woman-Owned Small Business (WOSB), and Economic Disadvantaged Woman-Owned Small Business (EDWOSB). This course has been updated to reflect recent changes set forth in two SBA regulations released in late 2024. He will also touch on state and local certification programs and provide information on additional training and resources you can use to develop a deeper understanding and get help with any federal, state, and small business certification program. Register here. The post Govology Webinar: An Introduction to Government Small Business Certifications (2025 Update), January 21, 2025, 1:00 pm EST first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Thanks to Michael LeJeune for hosting me on his podcast, Game Changers for Government Contractors. It’s always great talking to Michael and this is a very pertinent topic for a lot of contractors. The Rule of Two is undergoing some changes in proposed rules and federal contractors need to be aware of those changes. In this episode, I discuss what the Rule of Two is, how it impacts small business set-asides, and the recent changes affecting task orders under multiple award contracts (MACs). We also discuss valuable insights on the differences between the SBA’s Rule of Two and the VA’s version, key exceptions, and how small businesses can respond if they see non-compliant procurements. If you’re a small business looking to leverage the Rule of Two to win more contracts, this episode is packed with actionable strategies and expert advice to help you navigate these changes effectively. To listen on your favorite podcast platform, click below: FA: https://federal-access.com/ep-352-understanding-the-small-business-rule-of-two/ Apple Podcasts: https://apple.co/3y4sNdA Spotify: https://spoti.fi/3SPTZoB To watch, click here: https://youtu.be/xDeoiIEpBeI Questions? Email us. Need legal assistance? Call us at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Game Changers for Government Contractors: Understanding the Small Business Rule of Two first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Happy New Year, SmallGovCon readers! As we look forward to the new updates, decisions, and commentary in 2025, it’s also a good time to reflect on the important and well-read posts from 2024. This post revisits our most popular blog posts from 2024. Below, we summarize the blogs written in 2024 that were the most visited as well as the perennial favorites from years past that were the most viewed in 2024. It’s a good chance to look back on the important articles from 2024, and those topics of continuing interest to federal contractors. Here are the top 10 blog posts that were posted in 2024. As usual, our readers were interested in changes to SBA’s rules, including changes to the HUBZone Program, WOSB Program, and related small business changes, as well as our Common Misconceptions and Back to Basics series focusing on issues such as the SBA mentor-protege program and similarly situated entities. Top Posts Published in 2024 News Flash: SBA Issues Proposed Rule with HUBZone and Small Business Changes. This post looked at an SBA rule that is going into effect on January 16, 2025, and included changes to both the Historically Underutilized Business Zone (HUBZone) Program and other small business updates including certification rules after an acquisition. SBA Issues Final Rule to Streamline WOSB Program Rules. This post looked at rules intended to take the WOSB regulations and make them more consistent with the other types of set-aside programs offered by the SBA. The SBA published its Final Rule, effective January 3, 2025. SBA Confirms GSA Schedule-Holders Who Outgrow Size Standard Can Still Get Awarded Set-Aside TOs and Options. This decision confirmed that, even if a business changes size after being awarded a GSA schedule contract, it can still compete for small business task orders from a Blanket Purchase Agreement awarded under its GSA schedule contract. This outcome has been altered in some cases under the rule discussed in number 1 of this list. Common Misconceptions: SBA’s Mentor-Protégé Program (Part II – Participation Rules & Limits). The MPA program is a very popular topic for our readers and this post explains many aspects of it. It included this common misconception: “An SBA-approved protégé may not have an additional SBA mentor-protégé agreement in place at the same time.” SBA Proposed Rule: Joint Venture Past Performance. This proposed rule discussed how SBA thinks agencies should review past performance for joint ventures. GAO Says: SBA’s Rules for Mentor-Protégé Joint Venture Experience Evaluations May Limit Solicitation Terms. This decision provided further guidance on the interplay of solicitation terms for experience evaluations and SBA’s rules for evaluating mentor-protégé joint ventures’ experience. GAO: Don’t Slip Up on SAM Registration, Even for One Day. This decision looked at the trap of having your SAM registration lapse during a procurement. The rule this decision discusses has been updated in a FAR rule change discussed here. The new rule said that “the offeror must be registered at time of offer submission and at time of contract award, but would not be required to be registered at every moment in between those two points.” 8(a) Program’s Two Years in Business Rule: Requirement or Suggestion? This post took a closer look at the potential for success requirement’s two year business revenue rule, and any alternatives. Back to Basics: Similarly Situated Entities. Contractors are wise to know what a similarly situated entity is, and this blog walks them through the definition. Apparent Conflict: Appearance of Impropriety Enough to Exclude a Contractor from Federal Contract. If the federal agency finds an appearance of impropriety, that is enough, and no actual impact to the procurement need be found. A recent case discussed this important conflict rule for federal contractors. Top Posts Viewed in 2024 from All Time “In Scope” vs. “Out of Scope” Modifications: GAO Explains The Difference. This is the famous inflatable craft decision from 2017. In it, GAO explained with some detail on how far an agency can modify a contract before it becomes, essentially, a new contract that can be protested at GAO. FedBizOpps is Almost Gone. There must be a lot of folks nostalgic for FedBizOpps and not so happy with sam.gov, based on the popularity of our post saying goodbye to FBO. Back to Basics: Teaming Agreements. Teaming agreements are not well-defined in the FAR. This post walks you through the key basics for putting a teaming agreement together, and when you need one. Back to Basics: Limitations on Subcontracting. A post from 2022 that is becoming very popular. With the renewed focus on limitations on subcontracting, it’s always good to know how to stay compliant. SAM Registration: What The Heck Is An “Immediate Owner?”. The SAM definition of “immediate owner” still creates questions for a lot of federal contractors. FAR Final Rule: Increased Micro-Purchase and Simplified Acquisition Thresholds. The FAR was updated to increase the micro-purchase threshold and the simplified acquisition threshold, effective August 31, 2020. Based on recent inflation trends, these numbers are going up, as discussed in our post here. News Flash: SBA Issues Proposed Rule with HUBZone and Small Business Changes. This is the most popular post from 2024 and made it into this top 10 list as well. SBA Issues Final Rule to Streamline WOSB Program Rules. This post is also from 2024. Back to Basics: Veteran-Owned Businesses and SDVOSB Eligibility. This post from 2022 has plenty of good information on the basics of the SBA’s programs for veteran-owned businesses. Stay tuned to our blog for many more updates on SDVOSBs and VOSBs. SBA Confirms GSA Schedule-Holders Who Outgrow Size Standard Can Still Get Awarded Set-Aside TOs and Options. Also a popular post from 2024. All of our attorney-authors at SmallGovCon are excited about bringing you the best commentary and news in federal contracting for 2024. I’m sure there will be much to talk about. Make sure to keep up to date on SmallGovCon for all the latest. Questions about this post? Email us. Need legal assistance? Call us at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Year in Review: Top SmallGovCon Posts of 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Many of the SBA’s small business programs have restrictions on what are commonly referred to as “extraordinary circumstances” or “extraordinary actions.” It’s a topic that we have discussed many times before, including this blog post discussing a case at SBA’s Office of Hearings and Appeals, reviewing extraordinary circumstances in the context of control and operating agreements. SBA often discusses extraordinary circumstances in the context of joint venture control, where the managing venturer must control decisions except for those considered to be extraordinary. But there is a different meaning in the context of an entity seeking certification under an SBA socioeconomic program, where the qualifying individual must have control over all actions and circumstances except for those determined to be extraordinary. This post will focus on the latter situation. And, as any knowledgeable small business federal government contractor can attest to, knowing what actions are and are not extraordinary, is very important to maintain eligibility for the SBA’s programs. Unfortunately, as many small business federal government contractors can also likely attest to, it is not as simple as looking at a regulation to know whether a certain action or circumstance is extraordinary or not. After all, across the SBA’s programs, including the WOSB, SDVOSB, and 8(a) programs, it is not exactly black and white. Thankfully, SBA seems to have acknowledged that fact, as evidenced by the upcoming final rule that, as part of many revisions, directly updates this issue. Knowing what actions are and are not considered extraordinary is extraordinarily important. (Ha! see what I did there?) Why? Well, it all comes down to control. When looking at the SBA’s programs, the qualifying individual, meaning the person upon whom eligibility for any given SBA program is based, must have control over the business. This is a basic building block of all SBA programs which is stated in 13 C.F.R. § 124.106 for 8(a) Program participants, 13 C.F.R. § 127.202 for WOSBs, and 13 C.F.R. § 128.203 for SDVOSBs. The HUBZone program is based on location and employees, not the qualifying individual, so it works differently. Well, SBA will now clear up some of the uncertainty with its new rule, effective January 16, 2025. The old version of 13 C.F.R. § 121.103(a)(3) states: [c]ontrol may be affirmative or negative. Negative control includes, but is not limited to, instances where a minority shareholder has the ability, under the concern’s charter, by-laws, or shareholder’s agreement, to prevent a quorum or otherwise block action by the board of directors or shareholders. With the upcoming change, 13 C.F.R. § 121.103(a)(3) will include a list of what is considered extraordinary circumstances: Control may be affirmative or negative. Negative control includes, but is not limited to, instances where a minority shareholder has the ability, under the concern’s charter, by-laws, or shareholder’s agreement, to prevent a quorum or otherwise block action by the board of directors or shareholders. However, SBA will not find that a minority shareholder has negative control where such minority shareholder has the authority to block action by the board of directors or shareholders regarding the following extraordinary circumstances: (i) Adding a new equity stakeholder or increasing the investment amount of an equity stakeholder; (ii) Dissolution of the company; (iii) Sale of the company or all assets of the company; (iv) The merger of the company; (v) The company declaring bankruptcy; (vi) Amendment of the company’s corporate governance documents to remove the shareholder’s authority to block any of (a)(3)(i) through (v); and (vii) Any other extraordinary action that is crafted solely to protect the investment of the minority shareholders, and not to impede the majority’s ability to control the concern’s operations or to conduct the concern’s business as it chooses. The addition of (c)(i)-(vii) helps to clear up some questions that have been lingering about what a minority shareholder is permitted to do, and what SBA considers negative control. SBA will be updating the WOSB and 8(a) program rules, and clarifying the SDVOSB rule, along these same lines, in sections 124.106(h), 127.202(h) and 128.203(j)(6). Similar to the small business rule, here is what the new 8(a) rule will say at 13 C.F.R. § 124.106(h): (h) Exception for extraordinary circumstances. SBA will not find that a lack of control exists where a socially and economically disadvantaged individual does not have the unilateral power and authority to make decisions regarding the following extraordinary circumstances: (1) Adding a new equity stakeholder or increasing the investment amount of an equity stakeholder; (2) Dissolution of the company; (3) Sale of the company or all assets of the company; (4) The merger of the company; (5) The company declaring bankruptcy; (6) Amendment of the company’s corporate governance documents to remove the shareholder’s authority to block any of paragraphs (h)(1) through (5) of this section; (7) Any other extraordinary action that is crafted solely to protect the investment of the minority shareholders, and not to impede the majority’s ability to control the concern’s operations or to conduct the concern’s business as it chooses. Thankfully, these actions appear to be in line with what earlier OHA decisions have held. In its commentary, SBA agreed with a comment asking “that SBA adopt language stated in OHA size appeal cases that super majority provisions crafted to protect the investment of the minority shareholders, and not to impede the majority’s ability to control the concern’s operations or to conduct the concern’s business as it chooses should be permitted.” This appears to bring in the various decisions over the years that have defined extraordinary actions. I know that I, for one, appreciate the new transparency as it gives small business federal government contractors a clear line to follow in a topic that was, at best, a bit foggy. These changes will go into effect on January 16, 2025. Questions about this post? Email us Need legal assistance for a federal government contracting matter, 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 Less Extraordinary: Revised SBA Rule Gives Clear Guidance on Extraordinary Circumstances first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Happy Friday and Happy New Year to all of our SmallGovCon readers! We hope you all had a wonderful holiday season and are looking forward to 2025. As we look forward to the new year and close out the old, there are sure to be lots of developments in the federal contracting space. So, as you batten down the hatches for the polar vortex, it’s time for a nice, warm fire, maybe some hot cocoa and the latest in federal contracting news. Stories included a new law on custom software, and rules on small business representation and debarments. What will 2025 bring for CISA? Agencies required to share custom software under new law Federal Acquisition Regulation: Rerepresentation of Size and Socioeconomic Status Federal Acquisition Regulation: Improving Consistency Between Procurement and Nonprocurement Procedures on Suspension and Debarment Congressional and Presidential Transition IG Raises Further Concerns with Collection of Tax Debt by Contractors Biden Orders Agencies to Close January 9 as Day of Mourning for Carter DOJ Issues Final Rule for Enhancing Data Security EO NIH’s acquisition arm launches online educational courses for IT contracts Here comes AI: How federal contractors are preparing DoD’s multi-billion dollar moving contract faces another legal challenge The post SmallGovCon Week in Review: December 30-January 3, 2025 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Both GAO and the federal agencies take proposal deadlines with the utmost seriousness. We have discussed a few other examples of late proposals being denied by GAO before. Now, we have another one. This time, the protester put forth the argument that its lateness was not its fault. Rather, it was caused by issues with the agency’s proposal receipt system. Unfortunately for the protester, GAO did not accept this argument. Here, we will go into how it arrived at that decision. In NAG Marine, B-422899 (Comp. Gen. Dec. 12, 2024), the Naval Warfare Center (Navy) issued a solicitation on July 1, 2024, for engineering and technical services for designing and delivering Repair Service Consoles. Proposals were due by 3:00 p.m. Eastern Time on August 26, 2024. Proposals were to be submitted through DOD Safe, the Department of Defense’s document delivery system. With that, the solicitation noted: “An offer uploaded (“Dropped-Off”) to DoD SAFE is considered to be timely when this automatic system-generated notification email is received by the designated Contracting Officer prior to the due date/time set for receipt of offers.” In other words, a proposal would not be considered submitted until the CO receives this notification email. Now, the solicitation did also contain FAR 52.215-1. That clause notes the following: Any proposal, modification, or revision received at the Government office designated in the solicitation after the exact time specified for receipt of offers is “late” and will not be considered unless it is received before award is made, the Contracting Officer determines that accepting the late offer would not unduly delay the acquisition; and…[t]here is acceptable evidence to establish that it was received at the Government installation designated for receipt of offers and was under the Government’s control prior to the time set for receipt of offers… If an emergency or unanticipated event interrupts normal Government processes so that proposals cannot be received at the office designated for receipt of proposals by the exact time specified in the solicitation, and urgent Government requirements preclude amendment of the solicitation, the time specified for receipt of proposals will be deemed to be extended to the same time of day specified in the solicitation on the first work day on which normal Government processes resume. The protester, NAG Marine, attempted to submit its proposal in two parts. The CO received the notification email for the first part at 3:01 PM EST. At 3:05 PM, NAG Marine emailed the CO to explain they had started the process 30 minutes earlier, but kept getting error messages. Nonetheless, the CO responded that the proposal was late since the notification email came in after 3:00 PM EST. NAG Marine protested, arguing that the proposal was in the Navy’s control before the deadline and, alternatively, that system issues were the reason the proposal was late. GAO rejected both arguments. First, with regards to the argument that the proposal was in the government’s control, GAO noted that “the government control exception does not apply to electronic submissions.” That issue was fairly straightforward (we note that the Court of Federal Claims has sometimes come to a different result, but GAO has been steadfast in this holding). The second argument by NAG Marine, that system issues caused the proposal to be late, required a more in-depth response. GAO observed that the agency did a little investigating into the claimed system issues. The agency first went to the DISA help desk, which could see whether DOD Safe was properly operating at the time in question. The help desk found the servers were all working properly at that time. The Navy also contacted DOD Safe’s Special Services Line of Business to see if DOD Safe was not working in some manner. This division of DOD Safe responded that there were no issues from 1:00 PM to 4:00 PM on August 26, 2024. As such, GAO stated that this was insufficient to excuse the late proposal. It was certainly possible that NAG Marine had encountered a glitch, but a single contractor having an issue with the system was not enough to be considered an interruption of “normal Government processes.” As it explained: “A finding by our Office of a systemic failure of an online government portal requires more than occasional malfunctioning of the system.” As such, GAO denied the protest. This is a hard lesson, no doubt. It may seem unfair that NAG Marine was prevented from submitting its proposal by a glitch and that wasn’t enough to excuse it. Of course, the problem there is that, unless it’s something where the government knows its servers are down or that a systemic issue exists, it is exceedingly difficult, if not impossible, to verify such a claim. The key thing to take away from this: Do not wait until the last moment. You don’t know what issues you might run into. The earlier you attempt submission, the better chance that you’ll get your submission in. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post A Glitch In Time? GAO Denies Late Proposal Protest for Lack of Systemic Outages with Agency System first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Happy Holidays from all of us at SmallGovCon. Throughout the year, we’ve enjoyed bringing you the best updates and analysis out there for small business federal contractors and their partners. We wish all of you a great end to 2024 and have a great holiday season! The post Happy Holidays to All, Big and Small, from SmallGovCon! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Shuttering of the government (or parts of the government) following appropriations lapses has become an increasingly common phenomenon in recent times. Continuing resolutions have become a recurring stopgap measure. Funding lapses interrupt the usual predictability of government operations, which harms both agencies and federal contractors that are left in limbo with stop work orders. Unfortunately, unlike many other topics, the FAR has little say when it comes to procedures for contractors to follow during or following a government shutdown. It seems that the FAR’s authors didn’t really envision the government shutting down as a normal occurrence. Recovering expenses incurred as a consequence of government shutdowns can be challenging. Here are some pointers. Recent Shutdown Impacts The counter-intuitive reality of federal shutdowns is that they are expensive. For example, according to a report published by the White House Office of Management and Budget (OMB), the 2013 shutdown was estimated to reduce Gross Domestic Product growth by between $2 and $6 billion. With respect to the federal contractor workforce, the report summarized as follows: The shutdown resulted in over 10,000 stop work orders for contracts and numerous temporary layoffs among the federal contractor community. Federal acquisition regulations allow contractors to request equitable adjustments for certain cost impacts associated with having to put operations on hold (e.g., costs of maintaining idle facilities, unabsorbed overhead). There could be thousands of requests from contractors seeking to be reimbursed for costs incurred as a result of these suspensions. As the OMB report explained, Federal contractors are frequently given stop work orders for the duration of the shutdown, yet those same contractors usually must stand ready to resume work as soon as the federal government reopens its doors. Consequently, contractors typically will be incurring costs despite not performing work to ensure their staff and equipment is ready to go back to work at any time. A Congressional Research Service report after the 2018-19 shutdown looked at the effect on contractors. This report noted that “the Antideficiency Act significantly limits an affected agency’s ability to solicit and award new contracts, to obligate new funds to existing contracts, and to perform essential contract administration functions.” In addition, the Antideficiency Act also might restrict an agency’s ability to obligate new funds under existing contracts. This stricture potentially could implicate an agency’s ability: (i) to exercise options to purchase additional goods or services under existing contracts; (ii) to modify contracts in ways that would increase the government’s cost under contracts; (iii) to allow performance on certain multiyear contracts, whose terms can span more than one year; and (iv) to obligate additional funds for cost-reimbursement contracts that are funded incrementally.. . . [T]he Antideficiency Act generally prohibits nonexcepted personnel authorized to approve options, modifications, and similar actions from exercising those authorities during a funding lapse. Reimbursement of Expenses The state of near immediate readiness begs the question: Can contractors be reimbursed for expenses incurred during a government shutdown? The answer: It depends. The FAR is uncharacteristically silent with respect to procedures during and after federal government shutdowns. Instead, FAR clauses addressing delays and funding limitations have been pressed into service to provide some guidance for how agencies and federal contractors can proceed following a shutdown. These provisions, however, were not originally designed to address funding lapse issues, and sometimes offer imperfect solutions. Due to the lack of FAR guidance, it has largely been up to the courts and administrative bodies to apply the FAR’s current provisions to address costs associated with a shutdown. In a 1978 case, S.A. Healy Co. v. United States, 216 Ct. Cl. 172 (1978), a contractor claimed it was entitled to an equitable adjustment following a funding lapse related to the construction of tunnels for an aqueduct in Utah. That funding lapse was due, in part, to the agency failing to seek appropriate funds for the program. The government countered that it was insulated from liability due to a clause in the Reclamation Project Act of 1939, which allowed the Secretary of the agency to enter into contracts, but limited government liability to the extent of available appropriations. The Court of Claims concluded the Agency’s interpretation of Reclamation Project Act of 1939 was overly broad and would place all risk of Congressional non-appropriation on the shoulders of contractors. Clearly unimpressed, the Court stated, “[i]f defendant wants construction contractors who have studied in the school of Machiavelli, it should so state in its invitations for bids.” As such, the funding lapse was treated as work suspension, which was compensable under the contract’s equitable adjustment clauses. While the handling of appropriations lapses has evolved since S.A. Healy, the case nevertheless appears to have set the tone for subsequent federal procurement lapses. Thus, it is relatively settled law that federal contractors will be able to recover some costs during the shutdown; however, extent of those costs depends on the specific terms of the underlying contract. In one example, a contractor was able to obtain compensation following the most recent shutdown. In Amaratek, ASBCA No. 59149, 51-1 BCA ¶ 35,808, the Army obtained laboratory services for the Yuma Proving Ground. In terms of payment, the contract divided the period of performance into 12 service units of one month each. Due to the 2013 government shutdown, the contractor only performed for 6 days during the month of October. Consequently, the Army proportionally reduced payment for the month of October. On appeal, the ASCBA agreed with the contractor that it was entitled to full compensation for the month of October despite only performing 6 days of work. In its decision, the ASBCA distinguished the unique circumstances of Amaratek from other cases where the performance was measured in discrete units, which could be directly accounted for during the shutdown. These cases were completely unlike Amaratek’s case because the performance unit was months. As such, the fact that the Army received any work during October 2013 obligated it to pay the full contract price for that month. As a more general matter, contractors may typically claim the direct costs associated with staying prepared to return to work; however, lost profits typically are not compensable. For example, in L&L Excavating & Land Clearing, LLC v. Dept. of Agric., CBCA 3911, 14-1 BCA ¶ 35,723, a contractor was not entitled to recover lost profits or income attributable to government shutdown delays because the contract included provisions that would allow the government to extend the term of performance for “acts of the Government which interrupt the purchaser in active operations for ten or more consecutive days during a normal operating season.” Under this provision, however, the contractor was expressly precluded from recovering expectancy damages or anticipated profits. Consequently, when the contractor attempted to recovered these costs in connection with the 2013 shutdown, the claim was denied. Notably, the ASBCA similarly found research and development termination costs separately claimed in Amaratek to constitute lost profits, which were not compensable. As with most things related to the government shutdown, there are few generally applicable rules regarding cost recovery. While there appears to be consensus that lost profits will not be compensable, the recovery of other costs will depend on the specific terms of the contract. The lack of clarity in this area is unhelpful for government contractors, many of whom will incur additional expenses consulting with counsel to determine where particular shutdown costs could be claimed. As noted at the outset of this blog, shutdowns are expensive, and should be limited as much as possible. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. Editor’s note: We are reissuing our recurring post on government shutdowns with a few updates. The post Strategies for Dealing with a Government Shutdown first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Every five years, the government is required by 41 U.S.C. § 1908 to adjust the statutory acquisition thresholds for inflation, such as the Micro-Purchase Threshold, Simplified Acquisition Threshold, and others. It just so happens that the last such adjustment occurred back in 2020. As such, the government is once again looking to increase these thresholds in light of the inflation that has occurred over the past five years. In this post, we will look at the proposed increases. Read more: Proposed Increases to Micro-Purchase, Simplified Acquisition, and Other Thresholds On November 29, 2024, the FAR Council (DoD, GSA, and NASA), issued their proposed rule to adjust acquisition-related thresholds for inflation. Here are some of the proposed new thresholds for the FAR. The Micro-Purchase Threshold would be increased from $10,000 to $15,000. The Simplified Acquisition Threshold would be increased from $250,000 to $350,000. The threshold for limiting competition to eligible 8(a) awards would be increased from $25 million to $30 million (mainly impacting entity-owned 8(a) companies). The ceiling for simplified procedures for certain commercial products and commercial services under FAR 13.500 would be increased from $7.5 million to $9.5 million. The prime contractor subcontracting plan (FAR 19.702) floor will increase from $750,000 to $950,000. 8(a) sole source authority under FAR 19.805-1 would increase from $4.5 to $5.5 million for most acquisitions and from $7 million to $8.5 million for manufacturing acquisitions. This would impact most all 8(a) Participants. These are not necessarily the final figures that will be utilized. The FAR Council notes that the figures are based on a consumer price index for March 2025 of 323.193 (although we are not sure what this number consists of). If the actual consumer price index differs, the figures may be adjusted. Furthermore, the FAR Council welcomes comment by January 28, 2025, if you want to make your thoughts heard on this matter. The increase in the Micro-Purchase Threshold is expected to allow for increased use of purchases without competition, as micro-purchases may be awarded without soliciting competitive quotations, if the contracting officer or individual appointed considers the price to be reasonable. If the proposed Micro-Purchase Threshold was in place from FY2022 through FY2024, it would have affected nearly 50,000 awards. Those micro-purchases, though, do not have to be set aside for small businesses. However, increasing the Simplified Acquisition Threshold should result in more small business purchases. Purchases “above the micro-purchase threshold, but not over the simplified acquisition threshold, shall be set aside for small businesses” if there are two or more small business offerors expected to compete. FAR 19.502-2. Similar to the Micro-Purchase Threshold change, if the proposed Simplified Acquisition Threshold was in place from FY2022 through FY2024, it would have affected about 5,000 awards. In summary, the increases proposed are nothing unexpected, but still are important to note. This will allow for more contracts to be awarded under the Micro-Purchase and Simplified Acquisition Thresholds. Those acquisitions are more streamlined, so if you often perform contracts with values that hover around these figures, be alert. Questions about this post? Email us. Need legal assistance, call 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Proposed Increases to Micro-Purchase, Simplified Acquisition, and Other Thresholds first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Hello, blog readers! Well, everyone is on pins and needles to see if the federal government will face a shut down. As you may have heard, the House rejected the proposed government funding, so now we wait to see if the third proposal will be agreed upon today to keep things going. Stay tuned! In other news, our office is very excited about the Bluey movie–can’t wait for 2027! And now, more on that and other news from the federal government, including cybersecurity updates, AI, and updates to subcontracting rules. House rejects Trump-backed plan on government shutdown, leaving next steps uncertain Three Plead Guilty in Conspiracy Scheme Involving Bribery of Government Contracting Officer Census Bureau Releases New Data on Minority-Owned, Veteran-Owned and Women-Owned Businesses Contractors prepare for really, really late 2025 appropriations Making government text messaging more effective with Notify.gov House AI task force releases final report, eyes future work with Trump administration CISA delivers new directive to agencies on securing cloud environments Government Contracting: Subcontracting Program GSA Unveils 2nd Group of OASIS Plus Unrestricted Contract Awardees Breaking down barriers: The challenges of federal micro-purchases for small businesses House Bill to Block DOD Contracts With China-Linked Entities ‘You’re already wasting money’: Warner says feds pulled away from jobs to handle shutdown prep The post SmallGovCon Week in Review: December 16-20, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Often contractors will protest an award, then learn that the contract at issue was cancelled by the government due to corrective action. When that occurs, contractors of course feel as if their concerns were not resolved, or the protested other parties were let off the proverbial hook. The U.S. Court of Federal Claims recently explained that if that happens, there is no procurement left to protest, even if there are related research and development projects or actions continuing within the Government. In Advanced Simulation Technology Inc. v. The United States, 173 Fed. Cl. 587 (Nov. 4, 2024), the U.S. Court of Federal Claims (COFC) heard a bid protest in which a protested procurement saw its contract and orders cancelled due to corrective action, but the protester wanted to continue protesting. In this case, there was a Department of Defense procurement for improvements to its Digital Radio Management System (DRMS). Under that procurement, an IDIQ sole-source contract was awarded to a contractor named Bowhead. There were two delivery orders issued to Bowman under that IDIQ contract. In relation to this award, contractor ATSi filed a bid protest. During that process, the government took corrective action, cancelling the contract, initially leaving in place the delivery orders. Later, the Government cancelled these delivery orders as well. The Government subsequently moved (i.e., asked) the COFC to dismiss the remaining claims of ATSi. In response, ATSI asked to amend its complaint or move its protest to another court (essentially trying to keep a protest going). A key point is that during all this the Government continued to conduct research and development related to DRMS. ATSi argued that this R&D effort “established the requisite connection to a procurement or proposed procurement.” Basically, ATSi argued the R&D efforts show that the procurement need continues or is tantamount to a proposed procurement. Therefore, they have a procurement to protest. The COFC noted that this R&D has been going on for over twenty years, with no RFIs or solicitations issued. Thus, any choice by the Government to continue R&D efforts “does not amount to a procurement that is ripe for a bid protest.” The COFC stated that “there is no concrete evidence that the government has bought any products, intends to solicit any goods or services, or otherwise has undertaken any concrete procurement actions.” R&D is not the same as a protest-able procurement. COFC also made it clear that believing that the Government will want to buy a product from a protested contractor, is not enough to file a bid protest. Anticipation is not enough, especially when there is no procurement. ATSi argued this, and the COFC held that it is unclear if such a bid protest based on anticipated award (with no procurement) would be a pre-bid or post-award protest. Even if a contractor believes that the Government has “made the decision to develop” or taken the initial steps of preparing a solicitation, that is not enough for a bid protest. In fact, the COFC notes that “even if the government issues a new solicitation, the court cannot assume that the resolicitation will incorporate the same statutory violations” alleged in the previous bid protest(s). Simply put, without a contract or solicitation at issue, there is not much for the COFC to look at or do, even if a contractor feels the wheels are in motion for a subsequent award. Finally, ATSi tried to argue that the Government’s use of outside contractors to help develop DRMS is enough to be a protest-able procurement. ATSi pointed to an outside contractor posting a job announcement for DRMS engineers, and the Government’s award to an outside contractor (Bowman) which ATSi protested as evidence that a procurement is present. The COFC found this argument as “too vague” to support a complaint and protest. If a contractor feels there is something to be protested about hiring staff outside the protested contract, it would need to file a separate protest related to that hiring. That way the contractors involved could be given the opportunity to intervene. So, there needs to be a procurement, not simply a job posting, to protest, and then it would need to be a protest in which that other contractor may participate. The COFC’s ruling basically boils down to one thing: without a current procurement or contract, you likely can’t file a bid protest. There could be actions taken by the government related to a procurement contractors expect, outside contractors doing some associated work, and even cancelled contracts, but without that procurement or contract present, there likely is no bid protest to be pursued. Of course, there could be other issues at play that are appropriate for other actions, but those often are handled via different avenues than a bid protest. If you are considering a bid protest, to avoid wasting your time prematurely (or after the fact), be sure to check for a procurement or contract at issue, and reach out to Federal government contract attorneys, such as ourselves. Then these pitfalls can be spotted, and costly litigation, without a satisfactory conclusion potentially avoided. Questions about this post? Email us. Need legal assistance? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post No Protesting Canceled Contracts, Says COFC first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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SBA will be releasing the final rule for the HUBZone Program Updates and Clarifications, and Clarifications to Other Small Business Programs on December 17, 2024. As we have discussed, this rule made a lot of changes to the HUBZone program. But it also updated a lot of other small business rules. Below are the details on some of these significant changes. This rule will be effective on January 16, 2025. For an overview of the proposed rule, check out this post. Here are some of the main items covered in the proposed rule, along with our prior blogs discussing those changes. Where SBA changed the proposed rule based on comments, I’ve noted it below. MPAs Too Effective? Are Mentor-Protégé Joint Ventures Just Too Successful, Asks SBA. “SBA is seeking input on the perception that mentor-protégé joint ventures are winning an inordinate number of orders issued under small business multiple award contracts and seeks suggestions on how to incentivize a more equitable marketplace for individual small businesses who compete against mentor-protégé joint ventures for multiple award, small business contracts.” Interestingly, I couldn’t fine any particular summary of what comments SBA received on this topic. Does this mean SBA is waiting to provide any feedback until a later ruling? We will wait and see and update you on SmallGovCon. Section 125.12: Size and Status Recertification SBA Proposed Rule: New Size and Status Recertification Standard. SBA will be implementing its strategy to include new 13 C.F.R. § 125.12, which sets forth disqualifying size and status events, which would render a business “ineligible for future set-aside or reserved awards, including awards of set-aside or reserved orders against pre-existing unrestricted or set-aside multiple award contracts” if it causes the business to be other than small. In addition, “for a multiple award small business set-aside or reserve, a concern that recertified as other than small or other than the required small business program would be ineligible to receive options.” Comments were mixed on these changes. Some “were concerned that contract holders on multiple award contracts would not be eligible for orders set aside for small business or set aside for a specific type of small business after disqualifying recertifications.” Others said that allowing “a firm that was purchased by a very large business to remain an eligible contract holder on a small business multiple award contract would” was unfair. In response, the SBA added a one-year delay to this part of the rule: “the final rule adds a new § 125.9(g) that would delay the effective date of ineligibility for orders and options on underlying small business multiple award contracts due to disqualifying recertifications for one year after the effective date of this final rule.” Thus, “a firm that has a disqualifying size or status recertification due to a merger, acquisition or sale that occurs prior to one year after the effective date of this final rule will remain eligible for orders issued under an underlying small business multiple award contract.” In addition, “the final rule will make ineligible only those contract holders that have disqualifying recertifications involving a merger, acquisition or sale with a large business.” So, the rule would not apply to businesses with a transaction where both companies “individually qualify as small before” before the transaction. HUBZone Rules Our original coverage on this topic included a two-part examination of HUBZone Changes (Part 1 and Part 2). Below are some of updates to the proposed rules. There are many more, so please make sure to consult the entire final rule. As part of this rule change, SBA wants to increase the requirement that HUBZone employees work a minimum of 40 hours per month to 80 hours per month.” After reviewing over 80 comments, “the feedback indicated a strong desire for SBA to reconsider the 80-hour rule or provide more nuanced alternatives that balance the goals of the HUBZone program with the practicalities of running small businesses and supporting diverse employees.” So, “SBA has considered the comments received and decided to maintain the 40-hour threshold at this time.” But “this final rule generally requires an individual to work at least 10 hours per week during the 4-week period preceding the date of review.” With respect to meaningful work, “SBA reiterates its position that the HUBZone program was intended to create meaningful employment opportunities in underserved areas. SBA will continue to require individuals to perform some work in order to be considered employees for HUBZone purposes and may require relevant documentation to ensure this requirement is being met.” A “proposed § 126.601(a) would require a firm to be both a certified HUBZone small business and one that continues to be eligible as of the date of its offer for a HUBZone contract. In light of this change, the rule also proposes to amend § 126.500 to require firms to recertify to SBA every three years, rather than annually.” “The final rule adopts the 90-day residency requirement set forth in the proposed rule. SBA believes that 90 days strikes a good balance between ensuring that individuals actually reside in a specified location and allowing firms seeking HUBZone certification to avail themselves of a streamlined application process.” “Based on the comments received, SBA has decided not to limit firms to only one Legacy HUBZone Employee. Instead, this final rule provides that a HUBZone small business concern may have up to four Legacy HUBZone Employees at a given time, but must have at least one other HUBZone employee in order for any employee to count as a Legacy HUBZone resident employee.” SBA is also adjusting the threshold of 20 percent of employees for ‘attempt to maintain’ currently in § 126.500(a)(2) with 35 percent.” SBA is allowing a one-year grace period for attempting to maintain compliance after a firm is awarded a HUBZone contract. “After the grace period, then such firm would have to be back up to 35% HUBZone residency at the time of any recertification. SBA proposed that the grace period be 12 months following the award of a HUBZone contract.” However, it is a rolling 12-month period: and the new “language allows each additional HUBZone award to trigger a new 12-month grace period from the date of award of the additional HUBZone contract.” JV Past Performance Joint Venture Past Performance. In response to comments, SBA “agrees that the guidance provided is intended to ensure that procuring activities do not require the same full level of past performance and experience of protégé joint venture members as they do of other offerors generally. This logically means that if a procuring activity requires past performance of a protégé joint venture partner, it must be at a reduced level.” Also, the “final rule also adds a provision to the regulatory text providing that if a procuring activity requires a protégé joint venture partner to demonstrate some successful performance and/or experience on fewer previous contracts of lower values than that required of other offerors generally, successful performance by the protégé firm on the contracts it identifies shall be rated equivalently to successful performance by the mentor.” Other Items Receipts calculation. SBA can look beyond tax returns. “The final rule clarifies that SBA will consider a firm’s tax returns in every case and that SBA will generally rely solely on those tax returns” and “specifies that SBA may consider other relevant information beyond the submitted tax returns where there is reasonable basis to believe the tax filings are false.” VetCert Appeal. “[T]his rule changes the time to file an appeal for the VetCert program to 45 days.’ 8(a) Program Changes. SBA adopted many of the changes as proposed. This rule is long, about 230 pages in the pdf version. Make sure to read through the rule thoroughly if you think there are areas that could affect your business. We will continue to update our readers on how these updated play out in interacting with the SBA and other federal agencies. Questions about this post? Or need help with a government contracting legal issue? Email us. 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 News Flash: SBA Releases Final HUBZone Rule Update, Other Small Business Changes first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Hello and happy Friday! We’ve been getting some chilly temperatures here in the Midwest and it’s beginning to feel a lot like Christmas. The lights are up downtown and the city is looking very festive! We hope you are enjoying the holiday season in your neck of the woods. We also finished up our last webinar of the season, the 2024 Government Contracting Year-End Review with Govology. Check it out to learn all the updates from 2024 to get ready for 2025. This week in federal government contracting news saw updates on big picture contracting goals for DoD and software rules for federal contractors. Military Departments Should Take Steps to Facilitate Speed and Innovation 6 ways for you to manage through disruption GSA Unveils List of OASIS Plus Unrestricted Contract Awardees 5 Ways Government IT Contractors Can Come Out Ahead in 2025 House Passes Bill Requiring Agencies to Share Custom Source Codes GSA closes in on enterprisewide software deal with Microsoft House, Senate Democrats urge Biden to bump civilian federal pay raise up to 4.5% Improving Contracting Outcomes Act of 2024 Homeland Security: Actions Needed to Address Acquisition Workforce Challenges and Data Alaska Native Corporation UIC acquires defense contractor in largest deal to date The post SmallGovCon Week in Review: December 9-13, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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When a contractor believes an agency assigned the wrong North American Industry Classification System (NAICS) code to a solicitation, it can file an appeal with the SBA’s Office of Hearings and Appeals (OHA). However, for OHA to correct the NAICS code, the contractor must show the contracting officer’s assignment was clearly erroneous. As we’ve discussed, counting just those NAICS code appeals decided on the merits, about 45% were granted, per a GAO report. In recent NAICS appeal Dellew Corp., SBA No. NAICS-6314 (Nov. 1, 2024), OHA examined whether the contracting officer clearly erred in assigning NAICS code 561210, Facility Support Services, to a procurement. The Defense Information Systems Agency (DISA) issued a task order looking for a contractor to provide facility maintenance for a one-year base period and up to four option years. DISA issued the Request for Quotations (RFQ) seeking work for facility maintenance and assigned NAICS code 561210. The RFQ sought the following services: Preventative Maintenance (PM) service and repair related to heating, ventilation, air conditioning (HVAC) air handling units (AHUs), fan terminal units (FTUs), variable air volumes (VAVs), package computer room air conditioning units (PACs), roof top unit, heat pump unit, hot water boilers, exhaust fans, pumps, unit heaters (UHs), cabinet unit heaters (CUH), controls, piping, ductwork, evaporative coolers, and water treatment, uninterrupted power supply (UPS) & batteries, phone switch batteries, power distribution units (PDUs), water detection, site monitoring software, and all above mentioned equipment and associated parts of those systems. Dellew Corporation (Dellew) appealed this NAICS code assignment, arguing that NAICS code 561210 did not describe the principal purpose of the procurement. Instead, Dellew believed NAICS code 238220 Plumbing, Heating, and Air-Conditioning was the proper code. OHA noted that NAICS code 561210 for facility maintenance applies when a contractor performs “a combination of services”–including “maintenance”–to support the operation of a client’s facilities, such as a military base. The support services the contractor provides under this code are not involved in the core business or activities of the client. For code 561210 to be applicable, the work must fall within at least three different NAICS industries, and no single NAICS code may account for 50% of the work described. 13 C.F.R. § 121.201 n. 12. Dellew challenged the assigned code’s applicability, arguing more than 50% of the work described was within code 238220. This NAICS code consists of “establishments primarily engaged in installing and servicing plumbing, heating, and air conditioning equipment,” including “new work, additions, alterations, maintenance, and repairs.” When filing a NAICS code appeal, the appellant has the burden of proving that the contracting officer’s NAICS code assignment was based upon clear error of fact or law. 13 C.F.R. § 134.314. OHA has stated that the SBA regulations do not require the contracting officer to assign the perfect NAICS code nor will OHA reverse a NAICS code “merely because OHA would have selected a different code.” In its review of the services listed in the RFQ, OHA found a variety of support tasks were requested, including HVAC system maintenance, maintenance of “uninterrupted power supply & batteries, phone switch batteries, [and] power distribution units,” and management and maintenance of certain “site monitoring software.” OHA concluded these services fell within at least three different NAICS codes, and no clear evidence indicated that any single NAICS code accounted for 50% or more of the value of the procurement. OHA concluded that NAICS code 561210 was a reasonable choice for the procurement. Even though the RFQ described services within the definition of NAICS code 238220, Dellew failed to prove NAICS code 238220 accounted for a majority of the contract value. Therefore, Dellew did not meet the burden of proving NAICS code 561210 was erroneous. Appealing a NAICS code designation can be a useful tool for contractors. But before deciding to file an appeal, ask yourself (or a friendly government contracts attorney) if the assigned NAICS code was unreasonable. Even though you might disagree with the chosen NAICS code for a specific procurement, OHA will not overturn the assignment unless you can demonstrate that the selection was clearly erroneous. Since a NAICS appeal can have a powerful effect on the size standard, it’s still a useful tool. Questions about this post? Email us. Need legal assistance, call 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post NAICS Code Appeal: OHA Says Agency’s Assignment of Code Doesn’t Have to be Perfect first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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In June, we reported on a Notice of Proposed Rulemaking that applied to the SBA’s Woman-Owned Small Business/Economically Disadvantaged Woman-Owned Small Business (WOSB) regulations. These proposed rules were intended to take the WOSB regulations and make them more consistent with the other types of set-aside programs offered by the SBA. Now, following the required period for comments from the general public, the SBA has published its Final Rule which will be effective January 3, 2025. Read ahead to find out more! Outside Employment The qualifying individual’s limitation on outside employment has always been something that applied to the WOSB, 8(a), and SDVOSB programs. And it still does. After all, if the qualifying individual is focusing all of its efforts on outside ventures, it’s difficult for that person to have control of the applicant/participant. However, what was allowed and what was considered “outside employment” was not consistent between the SBA’s 8(a), WOSB/EDWOSB, and VOSB/SDVOSB programs. Once effective, WOSB rules at 13 C.F.R. § 127.202(c)(1)-(c)(2) will be consistent with 13 C.F.R. § 128.203(i), which discusses SDVOSB outside employment. 13 C.F.R. § 127.202(c) will now state: (1) A woman or economically-disadvantaged woman generally must devote full-time to the business concern during its normal hours of operations. The woman or economically-disadvantaged woman who holds the highest officer position of the business concern may not engage in outside employment that prevents her from devoting sufficient time and attention to the business concern to control its management and daily operations. (2) Where a woman or economically disadvantaged woman claiming to control a business concern devotes fewer hours to the business than its normal hours of operation, SBA will assume that she does not control the business concern, unless the concern demonstrates that she has ultimate managerial and supervisory control over both the long-term decision making and day-to-day management and administration of the business. SBA will also add a new provision at 13 C.F.R. § 127.202(c)(3) that addresses beginning outside employment after the concern is already certified as a WOSB. That states: Any qualifying woman or economically disadvantage woman who seeks to engage in outside employment after certification must notify SBA of the nature and anticipated duration of the outside employment and demonstrate to SBA that the outside employment will not prevent her from controlling the business concern. This is a new requirement that is not yet accounted for in either the WOSB/EDWOSB or VOSB/SDVOSB programs but is included in a similar fashion in the 8(a) Business Development Program regulations. Certification Documentation Another change to the WOSB regulations focuses on the certification process. The SBA will add a new section, 13 C.F.R. 127.303(a)(1)(iii), to discuss documentation that the SBA will accept to prove WOSB/EDWOSB status. If a WOSB or EDWOSB applicant is certified under the Veteran Small Business Certification Program, it may submit “documentation of its VOSB or SDVOSB certification or most recent recertification in support of its application for WOSB certification. If the concern is also seeking EDWOSB certification, the concern must also submit documentation demonstrating that it is owned and controlled by one or more women who are economically disadvantaged in accordance with § 127.203(b)(3).” Application Acceptance The final rule also revises the language in 13 C.F.R. § 127.304(a), which currently states, “SBA will advise each applicant within 15 calendar days after the receipt of an application whether the application is complete and suitable for evaluation and, if not, what additional information or clarification is required to complete the application.” The revision will break 13 C.F.R. § 127.304(a) into smaller subsections and remove the requirement that SBA notify applicants within 15 days of submission as to whether it needs additional information as follows: (a) The SBA’s Director of Government Contracting (D/GC) or designee is authorized to approve or decline applications for certification. SBA must receive all required information and supporting documents before it will begin processing a concern’s application. SBA will not process incomplete applications. (1) SBA will advise each applicant after the receipt of an application whether the application is complete and suitable for evaluation and, if not, what additional information or clarification is required to complete the application. (2) SBA will make its determination within ninety (90) calendar days after receipt of a complete package, whenever practicable. It will be interesting to see if the removal of the 15-calendar day requirement results in any substantive change to how long applicants are notified of their application’s completeness. Third-Party Certification SBA makes a change to its third-party certifier process as well. Initially, the third-party certifier was responsible for uploading “all documents used to determine that a concern is approved for certification” to certify.sba.gov. 13 C.F.R. § 127.356(c). But SBA is changing that requirement, shifting the responsibility from the third-party certifier to the concern revising 13 C.F.R. § 127.356(c) to say, “[t]he concern must ensure that all documents necessary to determine its eligibility for certification by an approved certifier are uploaded in https://certify.sba.gov or any successor system.” Proposal Submission for Pending Applications Additionally, 13 C.F.R. § 127.504(a) currently allows WOSB/EDWOSB applicants to submit offers on a WOSB/EDWOSB set-aside contract while its WOSB/EDWOSB application is pending so long as (1) the WOSB/EDWOSB submitted a complete application for certification to the SBA or to a third-party certifier; and (2) the WOSB/EDWOSB has not received a negative determination. Yet there is no indication of what is considered a “pending” application, though an application was generally considered “pending” when it was marked on the SBA’s Dynamic Small Business Search as such. The final rule helps to clarify what is “pending,” adding that “[a]n application is pending upon notification from SBA that the application is deemed complete and has sufficient documentation for full analysis” to the end of 13 C.F.R. § 127.504(a). Once effective, applicants will need to be notified by the SBA that its application is complete and has sufficient documentation. It will be interesting to see how long it takes SBA to notify applicants of a complete application. Especially when you take into consideration the fact that SBA removed the requirement in 13 C.F.R. § 127.304(a) that currently requires the SBA to notify applicants within 15 days of application submission whether their application is complete or not. Status Protests Finally, SBA revises its rule on WOSB/EDWOSB status protests creating new notification responsibilities for concerns that upon final determination are determined to not meet the requirements of a WOSB/EDWOSB. A new section, 13 C.F.R. § 127.604(f)(5), will require concerns to notify contracting officers and update its SAM registration in the case of a status protest that results in decertification within two business days of a final determination. Additionally, a concern that self-certifies as a WOSB/EDWOSB following a negative final determination in a status protest “may be in violation of criminal laws, including section 16(d) of the Small Business Act, 15 U.S.C. 645(d).” As you can see, a number of changes are coming to the WOSB/EDWOSB rules. While most help align the WOSB/EDWOSB rules with the other SBA program rules, some expand SBA’s discretion further (lookin’ at you, pending application rules). Regardless, SBA’s efforts to streamline the various SBA program rules are a good step in the right direction. Questions about this post? Email us. Need legal assistance, call 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post SBA Issues Final Rule to Streamline WOSB Program Rules first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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Happy December! How’s the holiday shopping going so far? It seems the shopping time is even shorter than ever with Thanksgiving being so late this year. Oh boy! And the calendar is busy with so many events happening in December, it’s difficult to choose. This Saturday is the 24th annual Old-Fashioned Christmas Parade here in Lawrence, Kansas, featuring horse drawn buggies. We also hope you have some fun holiday plans this weekend and try not to stress about that shopping list. But the federal contracting world was busy as well and has not quite settled down for its slumber. This week in federal government contracting news saw new WOSB rules, claim appeal stats from the CBCA annual report, and updates from the new administration. Women-Owned Small Business Federal Contract Program Updates and Clarifications OMB Guidance Seeks to Help Improve Federal Procurement Forecasts Pentagon has a new way to tackle disconnect between financial and acquisition systems The Civilian Board of Contract Appeals Annual Reports Time to stick a fork in this bogged down procurement As the Acquisition World Turns: OFPP turns heat up on primes White House Cites Steps to Boost Small Business Portion of Contract Spending CIO-SP4 court challenges swell to 26 companies House passes agency software licensing bill Trump chooses former Sen. Kelly Loeffler for SBA Empowering responsible AI: How expanded AI training is preparing the government workforce Promotion to the ultimate behind-the-scenes agency job Increasing Small Business Subcontracting Participation in the Federal Marketplace The post SmallGovCon Week in Review: December 2-6, 2024 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article