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  1. A few months ago, we explored SBA’s new rule that made changes to the 8(a) program, the limitations on subcontracting rules, and the ostensible subcontractor rule. There was another aspect of that new rule that also makes some needed clarification on how contracting officers can limit 8(a) competitions, and we want to briefly explore that here. Multiple-Certifications Rule Prior to the new rule, there was a fair bit of uncertainty on whether the regulations and statutes permitted contracting officers to limit an 8(a) competition to 8(a) participants that also have one or more other certifications (for example, an 8(a) participant that is also in the HUBZone program). While 13 C.F.R. § 125.2(e)(6)(i) already contains a rule prohibiting such in the context of orders under multiple-award contracts, this still left a gap for regular contracts and task orders under single IDIQs. For its part, SBA has historically prohibited such multiple-certification requirements for 8(a) contracts. That said, the regulations governing the 8(a) program, 13 C.F.R. part 124, were silent on the matter. As such, 13 C.F.R. § 124.501 has been amended to reflect this. It now reads in relevant part: “A procuring activity cannot restrict an 8(a) competition (for either a contract or order) to require SBA socioeconomic certifications other than 8(a) certification (i.e., a competition cannot be limited only to business concerns that are both 8(a) and HUBZone, 8(a) and WOSB, or 8(a) and SDVOSB) or give evaluation preferences to firms having one or more other certifications.” Similar provisions were inserted into 13 C.F.R. § 126.609 for the HUBZone program, 13 C.F.R. § 127.503 for the WOSB program, and 13 C.F.R. § 128.404 for the SDVOSB Program. It’s also worth noting now that 13 C.F.R. § 124.501(b) allows an agency to award an 8(a) sole source order against a multiple award contract that was not itself set aside for the 8(a) Program: “8(a) contracts may either be sole source awards or awards won through competition with other Participants. In addition, for multiple award contracts not set aside for the 8(a) BD program, a procuring agency may award an 8(a) sole source order or set aside one or more specific orders to be competed only among eligible 8(a) Participants. Such an order may be awarded as an 8(a) award where the order was offered to and accepted by SBA as an 8(a) award and the order specifies that the performance of work and/or non-manufacturer rule requirements apply as appropriate.” Bona Fide Place of Business Requirement On top of all this, SBA examined the current moratorium on the “bona fide place of business requirement” under 13 C.F.R. § 124.501(k) that states that “[i]n order to be awarded a sole source or competitive 8(a) construction contract, a Participant must have a bona fide place of business within the applicable geographic location determined by SBA.” Presently, there is a moratorium on the enforcement of this rule from the COVID pandemic, which ends September 30, 2023. SBA is still debating what to do about that moratorium. Several commenters suggested the elimination of the rule, but SBA disagrees with this as it is required by the Small Business Act. That said, SBA did make some changes. First, it clarified that if an 8(a) participant has a bona fide place of business in a state, it is eligible for a construction contract anywhere in that entire state. 13 C.F.R. § 124.501(k). The old text only noted that such a participant “may” be eligible. Furthermore, where a participant is currently performing a contract in a state, it is considered to have a bona fide place of business in that state for additional contracts. 13 C.F.R. § 124.501(k)(4). SBA also added a provision that states: “A Participant may establish a bona fide place of business through a full-time employee in a home office. An individual designated as the full-time employee of the Participant seeking to establish a bona fide place of business in a specific geographic location need not be a resident of the state where he/she is conducting business.” 13 C.F.R. § 124.501(k)(5)-(6). Finally, although this was already how SBA interpreted the rule would apply, it decided to put it expressly in the regulation: “For an 8(a) construction contract requiring work in multiple locations, a Participant is eligible if: (i) For a single award contract, the Participant has a bona fide place of business where a majority of the work (as identified by the dollar value of the work) is anticipated to be performed; and (ii) For a multiple award contract, the Participant has a bona fide place of business in any location where work is to be performed.” 13 C.F.R. § 124.501(k)(9). Thoughts These changes from SBA, mostly put into place what was already being practiced, but nonetheless help by making the practice an express requirement. The bona fide place of business rule, in particular, has caused problems for some 8(a) firms, so it’s nice to see a little more flexibility in that rule. We think these changes are appropriate but likely shouldn’t change too much in terms of how 8(a) contracts are governed. Questions about this post? Email us. Need legal assistance? call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post 8(a) Rule Update: Agencies Can’t Limit 8(a) Competition to Participants with Additional Certifications, SBA Clarifies Bona Fide Place of Business for Construction Contracts first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  2. The San Antonio Business Opportunity Counsel will be hosting this workshop that will include a day of training, networking, speakers and exhibitors in beautiful San Antonio, Texas. I’m excited for the opportunity to be the keynote speaker and will be presenting on Mentor Protege, Teaming and Joint Venture Agreements. For more information on this event please visit www.saboc.org. Hope to see you there! The post Event: “Small Business is BIG Business in Government Procurement” Training Workshop, August 15, 2023 San Antonio first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  3. Happy Friday, Readers! As we move into a new month this week, big things are happening in the world of federal government contracting, from the impacts of recent federal court decisions on SBA’s 8(a) Program–to the ever-developing conversations about artificial intelligence and social media (and the benefits, limitations, and concerns surrounding each). But amidst many a changing landscape, some things certainly remain constant–the likelihood of facing severe consequences for dishonesty and fraud at the federal government level, for one. Read about all of these topics and many more in the articles below. And have a great weekend! Unlocking the Value of IDIQ Contracts: Evaluating their Worth in Government Procurement Contractors are also combing through the House and Senate defense authorization bills Stolen Valor Among Small Businesses Lying About Being Veteran-Owned Targeted by Iowa Senator That Supreme Court affirmative action decision is already affecting federal contracting Biden-⁠Harris Administration Announces Plan to Maximize Purchases of Sustainable Products and Services as Part of the President’s Investing in America Agenda Tech officials caution on data security in public sector AI applications GSA considers changing the way it pays for cloud software PSC Comments on Federal Contractor TikTok Prohibition How to keep new policy from making procurement less efficient Final Revision: Federal Contractor Identification Box for Form LM-10 Filers The SBA: 70 Years Of Helping Small Businesses Thrive Defense contractor sentenced to prison for providing fraudulent parts to military The post SmallGovCon Week in Review: July 31 – August 4, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  4. The SBA’s Office of Government Contracting and Business Development, the office that handles the 8(a) Business Development Program applications, has just confirmed that SBA has “temporarily paused” the submission of new 8(a) Program applications in light of the recent decision by the federal district court of the Eastern District of Tennessee. As we recently blogged about here, on July 19, 2023, the federal district court of the Eastern District of Tennessee enjoined SBA’s 8(a) Program from applying the rebuttable presumption of social disadvantage to members of designated groups (based generally on race/ethnicity). As we discussed in that blog, we anticipate this decision will have significant effects on the 8(a) Program–though the timing, extent, and permanency of those effects is still very much up for speculation and debate at this point in time. That said, SBA has confirmed that it has temporarily paused the submission of new 8(a) Program applications until further notice. In that regard, SBA said: Due to a recent court injunction, the SBA has temporarily paused new 8(a) application submissions at this time. Companies that are currently in the 8(a) program or have pending applications will receive further guidance from SBA as we complete review of this legal decision. So, SBA appears to be taking the “wait until we tell you otherwise” approach to new 8(a) Program applications. But the above-quote also mentions that SBA plans to update current 8(a) Program participants with further guidance. And as we stated in the prior blog, we are all anxiously awaiting more information on the potential implications the decision could have on both applicant and current 8(a) Program participants. We understand that SBA has imposed this “pause” in order to make revisions to the applicant questionnaire–and take other necessary steps–to analyze and comply with the federal district court of the Eastern District of Tennessee’s decision and order. But that is really all we know at this time. Stay tuned for further updates. 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 SBA Puts “Temporary Pause” on New 8(a) Program Application Submissions first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  5. SBA, like other agencies, publishes a semiannual Regulatory Agenda to provide an update on the various rules it has coming up as well as a timeline for when they will be published or become final. While SBA doesn’t have to meet these timeframes, it’s always good to check in on what SBA has been working on when the final rules will come out. This agenda includes an update on increased size standards, along with some other important rules. Here is a summary of the upcoming rules and what we think could most impact federal contractors. Be sure to comment on these rules if you have an opinions on them. Here are highlights from the agenda, along with a summary. Proposed Rules Affiliation in Small Business Procurement Programs; Women-Owned Small Business Program: SBA will be amending its affiliation rules and Women-Owned Small Business program rules to match up with the 8(a) Program and SDVOSB rules more closely. “These revisions will ensure consistent requirements for ownership and control across SBA’s procurement programs.” The proposed rule is expected September 2023. Small Business Size Standards: Adjustment of Alternative Size Standard for SBA’s Loan Programs for Inflation: This only impacts small business loans, not procurement. But for the small business loan programs (EIDL and 7(a)), SBA will an alternative size standard for loan applicants that do not meet the small business size standards for their industries. The proposed rule is expected August 2023 Final Rule Stage National Defense Authorization Act of 2020, Credit for Lower Tier Subcontracting and Other Amendments. The SBA will be issuing a final rule, mainly impacting 13 CFR 125.3, to address how the 2020 NDAA required “SBA to alter the method and means of accounting for lower tier small business subcontracting.” This is a fairly limited change for subcontracting plan credit and SBA expects the final rule to come out in September 2023. The proposed rule was released in December 2022. It set a $750,000 threshold above which a subcontracting plan is required. Also note that “commercial plans and comprehensive subcontracting plans therefore are not eligible to use lower-tier subcontracting credit” and can only rely on first-tier subcontracts. Also, “prime contractors are required to maintain records of the procedures used to substantiate the credit they elect to receive for lower-tier subcontracting.” Small Business Size Standards: Adjustment of Monetary Based Size Standards, Disadvantage Thresholds, and 8(a) Eligibility Thresholds for Inflation: SBA has listed this in its regulatory agenda, even though the interim rule changing these standards was effective December 2022 and the final rule was released in June 2023. Regardless, it’s good to see that SBA increased standards for receipts-based size standards, and economic thresholds for the 8(a) and EDWOSB programs. We discussed this rule on the blog here. There are a number of important changes summarized here that are going to have proposed rules issued or scheduled to go into effect over the next few months. The big takeaway is that there are not that many rules on the horizon. However, with the recent court decision impacting the rebuttable presumption for the 8(a) Program, as we discussed, SBA may be coming up with some new regulations for the 8(a) Program and issuing those soon. We’ll keep you updated on SmallGovCon once the final versions of these rules are released, so stay tuned. Questions about this post, Email us. Need legal assistance with a GAO protest? Give us a call at 785-200-8919. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post On Deck for SBA Regulations in 2023: Affiliation and WOSB Rule Changes first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  6. Happy Friday! It’s time for another edition of WIR. I’d like to start off by thanking the El Paso Community College’s Contract Opportunities Center APEX Accelerator and the always-lively Pablo Armendariz for hosting me and allowing me to speak at the Procurement and Contracting Symposium, in El Paso, Texas, earlier this week. It was a wonderful event for discussions around federal government contracting. I met some new folks and got to talk to many people with great excitement for the federal contracting world. We hope you find the following articles informative and have a great weekend. Among the stories this week are a very large false claim settlement, and news about FAR and legislative updates. A big pay day for a whistleblower from a major government contractor [FedNewsNet] How regulations not meant for contractors, sometimes end up complicating their business [FedNewsNet] INSIDER EXCLUSIVE: How healthy is the prime-sub relationship? [WashTech] Implementing GAO’s Open Matters and Recommendations Could Produce Billions in Financial Benefits and Improve Government Operations [GAO] Biden selects NSA veteran as national cyber director nominee [NextgovFCW] Booz Allen to pay $377M over improper billing allegations [NextGovFCW] Federal Contractor Agrees to Pay $7 Million to Settle False Claims Act Allegations [DoJ] US government contractor says MOVEit hackers accessed health data of ‘at least’ 8 million individuals [TechCrunch] Women-Owned Small Businesses Struggle to Get Contracts, Capital [BLaw] Companies Must Disclose Government Contracts on Persuader Form [BLaw] FISMA reform bill advances in Senate [FedScoop] 13 Contractors Win $950 Million Contract to Support Joint All Domain Command and Control [CLJobs] Gilbane-Turner JV misses initial diversity goals on Bills Stadium [ConstDive] FAR: Semiannual Regulatory Agenda [FAR] The post SmallGovCon Week in Review: July 24-28, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  7. The SBA published its annual Government Wide Small Business Procurement Scorecard for fiscal year 2022, and it appears that nearly every type of small business set-aside by the SBA, with the continued exception for Woman-Owned Small Businesses and HUBZone businesses, either met or exceeded their goal. Overall, agencies exceeded their goals for the year, earning an overall score of “A” due to meeting the small business contracting goals with 104.05% of the total goal. In case you have never heard of these scorecards in the past, the annual scorecard details information on the various categories of small businesses recognized by the SBA. Specifically, the scorecard is used to assess “how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals,” to “provide accurate and transparent contracting data,” and “report agency-specific progress.” Congress sets annual goals for federal agencies to meet when awarding contracts and subcontracts to small businesses. These goals include governmentwide goals, as well as agency specific goals, which are determined pursuant to 15 U.S.C. § 644(g). To determine these goals, each included agency submits proposed goals based on SBA’s review of agency year-to-date performance prior to the beginning of the fiscal year. SBA then evaluates each agency’s proposal, and either notifies the agency that its proposal is acceptable, or negotiates with the agency to reach a goal that is acceptable. In total, there are 24 agencies total. You can find a list of all included agencies as well as more detailed information on how the process works here. Following each fiscal year, SBA reviews information from the various agencies to determine whether goals were met and assigns each agency a “grade” based on how well it performed. So, where were the most federal contracting dollars spent? Overall, there was $162.9 billion of federal contracting dollars directed toward small business prime contractors. This represented 26.5% of federal contracting dollars spent in 2022, whether small or other, and 69.13% of the $305.3 billion federal contracting dollars spent on small business prime contractors of all categories, and exceeded the goal of 23%. Notably, even though this exceeded the small business contracting goal of 23% set for 2022, it fell short of 2021 numbers by .73%. The next-largest grouping was once again small disadvantaged businesses, including those in the 8(a) Program, which received $69.9 billion, or 11.38% of all federal contracting dollars, surpassing its goal of 11%. In third place came service-disabled veteran owned small businesses (SDVOSB), which also exceeded its 3% goal for the year with $28.1 billion, or 4.57% of all federal contracting dollars. Unfortunately, women owned small businesses (WOSB) and HUBZone businesses, in a continuing trend over the past decade, fell short of their goals. WOSB’s goal for fiscal year 2022 came in at $28.1 billion, or 4.57%, a small percentage short of its 2021 achievement, and nearly half a percentage under its 5% goal. This means that agencies, as a whole, did not reach their WOSB goal for the tenth year in a row. Finally, HUBZone businesses, though not meeting their goal, was closer to meeting its goal than WOSBs, coming in at $16.3 billion, or 2.65% in fiscal year 2021. This is the 11th year in a row that HUBZone goals have not been achieved. The overall number of small businesses continued to decrease as well. Small businesses that do not fit into another category, which decreased 5.85% in 2021, fell another 4.22% in 2022. The category with the largest decrease was, surprisingly, SDVOSBs, which despite their historical trend of gains, sustained a 2.52% decrease. HUBZone decreased by 2.07%, and WOSBs decreased by 2.43%. The only increase was in the small disadvantaged business category, which increased by a measly .09%. Overall, the agency-specific score cards show that general agency performance is strong and, despite small decreases to the number of contractors in all but one category, agencies are overall performing on target with the small business contracting goals. While 2021 had increases in nearly all categories, potentially due to an economy recovering from the COVID-19 pandemic, it is possible that this is an indicator of a market coming into equilibrium after the roller coaster of an economy felt globally over the past three years. However, there are still a few outliers, both on the good side and the bad. The Department of Veterans Affairs was the lowest scoring agency, with a score of 79.88%, followed by the Department of Health and Human Services, which received a score of 87.83%. Interestingly, the worst offender in 2021 became the highest-scoring agency in 2022. The Department of Housing and Urban Development (HUD) which received a “C” in 2021, received an “A+” in 2022, with a score of 152.3%. Taken as a whole, more agencies met their goals in the 2022 fiscal year than in 2021. More federal contracting dollars were directed towards small businesses as well, demonstrating a generally positive overall outlook. Questions about this post? Email us. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post $162B in Small Business Contracts: SBA Releases Small Business Scorecards for FY 2022 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  8. On July 19, 2023, the federal district court of the Eastern District of Tennessee issued a decision regarding a case involving the rebuttable presumption of social disadvantage in place under the 8(a) Business Development Program. Ultima Servs. Corp. v. U.S. Dep’t of Agric., 220CV00041DCLCCRW, 2023 WL 4633481, at *1 (E.D. Tenn. July 19, 2023). This decision found that this presumption is unconstitutional as it violates the right to equal protection. This, understandably, has caused a great deal of confusion and concern for current and potential 8(a) Program participants. In this post, we will not be providing our opinion on the correctness of the court’s decision (or analyze it from a policy perspective), as we will leave that to attorneys who specialize in constitutional law. Instead, we will go over the decision, what it means, and what it could affect down the road. The Presumption The first thing we need to go over is the presumption in question. Part of the requirement for entry and staying in the 8(a) Program is that the majority owner(s) of the company in question be “socially disadvantaged.” 13 C.F.R. § 124.103. This means that such individuals are considered to have been subjected to prejudice and discrimination for some sort of inherent personal characteristic, most notably race and ethnicity. 13 C.F.R. § 124.103 goes on to note that there is a rebuttable presumption that certain peoples are socially disadvantaged. These include African Americans, Hispanic Americans, Native Americans, Asian-Americans, and Pacific Islander Americans. The regulation goes into more detail on these groups at 13 C.F.R. § 124.103(b)(1). But all you need to understand from this is that, if a person is a member of one of these groups, they are presumed to be socially disadvantaged under the rule. It does not mean they are the only people who can be found socially disadvantaged. We regularly assist clients who seek to get into—and often do get into—the program due to other features of their identities such as their disabilities, their gender, and other such characteristics. But for those cases, SBA requires a narrative from the applicant explaining how they are socially disadvantaged. When the presumption applies, no such narrative is generally required. Ultima Servs. Corp. v. U.S. Dep’t of Agric. In 2018, the USDA decided to not exercise options on a contract it awarded to Ultima Services Corporation (“Ultima”) and instead sole source that work to 8(a) companies. Ultima couldn’t challenge the refusal to exercise the option, but it could challenge the 8(a) Program itself as being discriminatory. As such, it brought an argument that the 8(a) Program discriminates against those who do not fall into SBA’s list of presumed socially disadvantaged groups, attacking the rebuttable presumptions itself. This argument was made under the Equal Protection clause of the Fourteenth Amendment of the U.S. Constitution. While we are not constitutional law lawyers, we briefly explain it here. The court observed that “[t]he Fifth Amendment’s incorporation of the Fourteenth Amendment’s Equal Protection Clause prevents the government from ‘making distinctions that (1) burden a fundamental right; (2) target a suspect class; or (3) intentionally treat one individual differently from others similarly situated without any rational basis.’” The 8(a) Program does specifically provide a benefit to one group (racial minorities) over others. Where the government makes a distinction based on race, courts will examine the rule under what’s called “strict scrutiny.” As the court noted, laws will be upheld under strict scrutiny “only if they are [(1)] narrowly tailored measures that further [(2)] compelling governmental interests.” These two concepts have been heavily litigated for decades and entire journals have been written to explain and explore what each mean, but, to simplify, the government has to both show it has a really good reason for its law (compelling interest) and that there isn’t some sort of more-neutrally applicable alternative that could achieve the goal (narrowly tailored). In the end, the court found that the rebuttable presumption of the 8(a) Program was neither narrowly tailored nor furthered a compelling governmental interest, and therefore, violates the Constitution. The court’s reasoning on the matter of compelling interest is that, while SBA’s evidence included “expert reports and agency studies regarding disparities that (Minority Business Enterprises) face nationally,” they did not “identify a specific instance of discrimination which they seek to address with the use of the rebuttable presumption.” In other words, the government’s argument is based on the systemic disparities minority-owned businesses face, and, based on Shaw v. Hunt, 517 U.S. 899, 909, 116 S. Ct. 1894, 1902, 135 L. Ed. 2d 207 (1996), such “societal discrimination,” as opposed to specific instances of discrimination, is not enough for a compelling governmental interest. As for finding the presumption not narrowly tailored, the court claims that the rebuttable presumption is rebuttable in name only: Indeed, Klein, an employee of Defendant SBA, testified that “[t]here’s no process for a third party to question someone’s social disadvantage as part of the application process.” [Doc. 65-7, pg. 29]. As the Sixth Circuit in Vitolo noted, “[because] proving someone else has never experienced racial or ethnic discrimination is virtually impossible, this ‘presumption’ is dispositive.” Furthermore, the court stated that SBA had not shown the specific objectives of the presumption and that because of “SBA’s failure to review race-neutral alternatives in the wake of the Supreme Court’s precedents, the Court cannot conclude that ‘no workable race-neutral alternative would achieve the compelling interest.’” After discussing the impact of the presumption on federal contracting as a whole, the court stated Defendants’ assertion that the rebuttable presumption presents only a slight burden because a minor amount of all national federal contracting dollars is eligible for small businesses offers cold comfort. Ultima operates within a specific set of industries and the Mississippi contract, as well as others like it, represent a substantial amount of revenue. National statistics do not lessen the burden that the rebuttable presumption places on Ultima. Defendants have failed to show that the use of the rebuttable presumption in the 8(a) program is narrowly tailored. What Does This Mean? The first thing to get out of the way: The court’s decision is not currently that the 8(a) Program violates the Constitution. This has been the greatest concern of many contractors. The court’s decision here specifically states only that the SBA now isn’t allowed to use the “rebuttable presumption of social disadvantage” for the 8(a) Program. The 8(a) Program still exists. The 8(a) Program itself was not challenged here. That said, it is unclear at this time what other impacts this decision—and future ones that may be based on it—could have on the 8(a) Program. On that note, we see nothing expressly in the decision stating that those who have already been admitted to the 8(a) Program through the rebuttable presumption will need to reapply or that their status in the program is in jeopardy. While there have been a few observers who have said otherwise, we are doubtful that the injunction would require the reapplication of all present participants who used the presumption. Such an after-the-fact requirement would itself present legal and constitutional concerns (such as the difficulty of imposing court decisions retroactively), and we would anticipate that SBA is going to try to see to it that the decision has as little impact on the current state of affairs as possible. If you are already in the 8(a) Program, we would say for now, just keep an eye out on any further news. If you are not an 8(a) Program participant and are applying or have applied, and the rebuttable presumption would have applied to you, again, there are some other things to note. One is that this decision was by a federal district court, not the Supreme Court. In other words, this matter is likely not over. It is a virtual certainty that the federal government will challenge this decision at the Sixth Circuit Court of Appeals. There may in the meantime be further injunctions and holds that change things during the pendency of the decision. We will keep you updated on those if they arise. Second, you can still apply to the 8(a) Program even if the rebuttable presumption would have applied to you. The ruling is that the presumption no longer may be applied in its current formulation, it is not that admission of minority-owned businesses into the program is not allowed. The difference is now that SBA will likely require some form of a narrative of social disadvantage from you as well, explaining how you have experienced discrimination and bias that has held you back in your education, career, and business history. But we certainly do not take this lightly. This is a major change that could impact many, both regarding the success of their applications and the cost, time, and resources required to submit it. SBA has historically required a great deal of detail from these narratives, but with this decision, if it persists, we are curious whether SBA might go easier on its review of these narratives in order to further the goals of the 8(a) Program. The result could, in fact, be that admission into the 8(a) Program becomes easier for everyone as a result of the court’s decision. That all being said, for now, minority-owned businesses seeking entry into the 8(a) Program can no longer rely on the benefit of the rebuttable presumption of social disadvantage. We would recommend that if you are applying for admission, you prepare a narrative of social disadvantage or a licensed attorney assist you in the preparation of such a narrative. If you have already applied, we think it would be prudent for now to just keep an eye out for further instructions from SBA, and only prepare a narrative if asked, as we know that the preparation of a narrative can be time-consuming, which further can create more expense for you if you hire outside help to assist with it. 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 Initial Challenge to 8(a) Presumption of Social Disadvantage for Certain Minority Groups Succeeds: What This Means for Now first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  9. Hello and Happy Friday! We hope you had great week and are finishing the week strong today. The SBA and Whitehouse announced that the current administration exceeded its small business goal with a record breaking $163 Billion in federal procurement opportunities. That’s an $8.7 billion increase from the previous year, which is great news for small businesses. You can read more about this and other newsworthy articles below. Have a great weekend. Biden-Harris Administration Sets Record-Breaking $163 Billion in Federal Procurement Opportunities to Small Businesses [GlobeNewsWire] Acquisition Excellence: HUD Receives an “A+” Grade on SBA’s Annual Small Business Procurement Scorecard [HuD] TUESDAY: SBA Administrator Guzman, NASA Administrator Nelson to Announce New Federal Contracting Records Set by the Biden-Harris Administration at NASA [NewsWires] Statement from President Joe Biden on Record Procurement from Small Business [Whitehouse] No shortage of ideas for reforming Defense Department acquisition [FedNewsNet] Agencies making ‘substantial progress’ toward higher small, disadvantaged contracting goal [FedNewsNet] DHS is the Largest Federal Agency to Receive 14 Consecutive “A” Grades on SBA’s Annual Small Business Procurement Scorecard [DHS] Small Business Size Standards: Adjustment of Monetary-Based Size Standards, Disadvantage Thresholds, and 8(a) Eligibility Thresholds for Inflation [FedReg] Maryland Defense Contractor Sentenced to Almost Four Years in Federal Prison for Procurement Fraud [DoJ] Electronic Health Records Vendor NextGen Healthcare Inc. to Pay $31 Million to Settle False Claims Act Allegations [DoJ] The post SmallGovCon Week in Review: July 17-21, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  10. On behalf of CMS (Centers for Medicaid & Medicare Services), the National Contract Management Association (NCMA) and the Professional Services Council (PSC) will host a 90-minute virtual industry-led discussion, with our very own Nicole Pottroff as a presenter. The webinar will provide an in-depth look and interactive conversation regarding CMS procurement protests–the common factors and considerations contractors take into account when deciding whether to protest CMS procurement decisions, when to protest them, where to protest them, etc.–and what actions CMS program and contract officials could take during the procurement process to reduce the likelihood of a preventable protest and help ensure fair and transparent competitions and acquisitions. Topics may include: • Current protest trends at CMS and comparisons to HHS and other civilian agencies; • Recompetes v. new requirements – understanding the incumbent advantage and how to ensure fairness for all; • Joint Venture (JV) and Mentor-Protégé JV arrangements and small business set aside decisions; • Price realism / avoiding the “race to the bottom”; • Best value trade off decisions v. Lowest Price Technically Acceptable (LPTA) evaluations; • Different types of evaluation methodologies (e.g., oral presentations, coding challenges, self-score cards, etc.); • What makes a quality debrief; and • Industry answers to Government questions regarding protests. Please register here for this informative event. The post Webinar: CMS Reverse Industry Day, August 3, 2023, 10:00am EDT first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  11. Something we frequently hear, when talking to those involved in the federal contracting industry, is that just when you think you have a handle on all the different ways federal contracting is run, you find out about another new program, authority, protest, guidance, regulation, or any other possible wrinkle of federal contracting. One prime example of this is that many individuals getting into federal contracting will often be surprised that the FAR is not the only standard that may drive how a procurement activity is handled. As we have blogged about in the past, “Other Transaction Authority” can come into play on certain procurements. The Department of Defense (“DoD”) utilizes this unique type of procurement authority and releases an “Other Transaction Guide” to dictate how this authority will be used. But with all things, only change is guaranteed, and any contractor who thought they knew this unique procurement authority’s ins and outs will need to take another look, as the DoD has just released a revised “Other Transactions Guide” based on industry guidance and regulatory changes. As discussed in our previous blog, since 1989, the DoD has had an “Other Transaction Authority” (“OTA”), which the DoD has utilized for certain types of procurements more and more over time. The authority for the OTA comes from 10 U.S.C. § 4021 and 4022, and states that the DoD and military may use OTA for research and prototypes “directly relevant to enhancing the mission effectiveness of personnel of the Department of Defense or improving platforms, systems, components, or materials proposed to be acquired or developed by the Department of Defense, or to improvement of platforms, systems, components, or materials in use by the armed forces.” Basically, the OTA is a way for the DoD to get emerging military technology and prototypes outside of the typical FAR procurement framework. As part of the OTA, the DoD periodically releases something called the “Other Transaction Guide” (“OTG”) discussing all the different aspects of the OTA, how contracting staff are supposed to execute actions under the OTA, and even discuss some of what the DoD phrases as “myths” about the OTA. This OTG gives a great “peek behind the curtain” of the OTA processes used by the DoD. However, despite this transparency there have been criticisms and concerns regarding the OTA expressed over time. Of note, GAO has looked at this authority repeatedly, such as in January of 2016, and then most recently in September of 2022. In its most recent review, the GAO looked at “Other Transaction Agreements” and specifically how the DoD could improve planning for Consortia Awards (basically awards or agreements executed through the OTA to groups of organizations that are focused on certain areas of development or research). In the review, the GAO provided six (6) specific recommendations in which the DoD could improve Consortia awards under the OTA. Which brings us to today. This month (July 2023), it appears the DoD must have heard the GAO loud and clear, releasing a memorandum that simultaneously issued a new OTG that “addresses changes in statute and regulations, and DoD Inspector General and Government Accountability Office recommendations.” The new OTG will also provide “additional administrative guidance and best practices for reporting, funding, definitions, participation and validation of nontraditional defense contractors, and considerations for use of the OT consortia business model.” While we do love to discuss all aspects of Federal Contracting in detail, we here at SmallGovCon are also very aware that this is simply a blog, and not a place for legal treatises. Therefore, we will only focus on some of the areas in the OTG that hit on the GAO’s recommendations, as the DoD has seemingly called that out as a focus of their revisions. However, we recommend any contractors interested or involved in the DoD’s OTA, to take the opportunity to be acquainted with the newly revised OTG, as it can be quite the change of pace when compared to your “run of the mill” FAR procurement, and as the memorandum by the DoD suggests, contains quite a few changes within the OTG outside of those related to the GAO’s review. The GAO’s six recommendations for the new OTG basically boil down to the GAO wanting the DoD to track awards, dollars, agreements, processes, negotiations, and personnel related to consortia agreements executed under the OTA, and a desire for more information to be public regarding them. The GAO found that of the twenty-eight (28) consortia that received awards or agreements for prototyping efforts under the OTA from 2019-2021 (representing $24 billion, nearly two-thirds of all DoD’s prototype OTA dollars obligated), most were established since 2014, and were only managed by one of four organizations. GAO expressed concern that the DoD does not have enough data regarding consortia awards, nor a systemic approach for tracking consortia awards, and DoD contracting staff have limited information available to them when planning consortia awards. GAO appears to hope that their six recommendations will help alleviate these concerns within the DoD’s OTA framework. Presumably in response to the GAO, this new OTG now devotes an entire Appendix at the end of the OTG to discuss “Use of Consortia in Prototype and Production Other Transaction Agreements.” In that appendix, the DoD discusses a list of “considerations” that contracting staff should consider during the process of “contemplating, awarding and administering” an agreement to a consortia under the OTA. Additionally, the DoD in this appendix generally requires that consortia participants who are awarded an OTA agreement, or that receive funding, to be registered on SAM with a UEI. The DoD goes on to state that any award under the OTA must be reported in the Federal Procurement Data Systems (FPDS), and where there are indirect individual awards under the umbrella of a consortium agreement, the “Government should establish an OT Indefinite Delivery Vehicle (IDV) version of a contract action report”. Finally the DoD goes on to discuss annual data collections, points of contact, competition, approval, training, and issues unique to “consortium managers.” These actions by the DoD in this new OTG would seem to indicate that the DoD at least heard some of the GAO’s requests and is now attempting to address them. That being said, as of the time of this blog post’s writing, the GAO still has all of its six recommendations listed as “Open” indicating that the GAO may still be examining whether the DoD has fully met its recommendations. As the OTG represents the public facing documentation of another unique contracting process (the OTA), this new revised OTG should be read by any contractors who are interested in possibly doing business with the DoD under this unique contracting ability or that are currently doing business with the DoD under the OTA. As shown in their responsive changes to the GAO’s documentation, this new version of the OTG holds many updates that will need to be considered by contractors, currently utilizing the OTA with the DoD, or those that are simply interested in possibly securing work with the DoD under the OTA. Questions about this post? Email us. Need legal assistance? call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post DoD Revises its Other Transactions Guide first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  12. Steven Koprince, Govology Legal Analyst and retired founder of Koprince McCall Pottroff (and all around cool dude) will be presenting this webinar providing a big-picture overview of small business certifications in the government marketplace. In this webinar, 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 Economically Disadvantaged Woman-Owned Small Business (EDWOSB). Steve 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. If interested in this informative webinar, please register here. The post Govology Webinar: An Introduction to Government Small Business Certifications (2023 Update) July 25, 2023, 1:00pm EDT first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  13. Happy Friday! Our SmallGovCon authors and attorneys were busy this week. Aside from our normal updates, Nicole Pottroff and John Holtz presented a 3-Part Series for Govology, this week, on compliant and effective teaming agreements, joint ventures and subcontracts. This is always a popular webinar and there was a lot of great information shared as well as a lot of great questions. If you were not able to attend, please check out Govology’s upcoming webinar events at Govology.com. It’s a wonderful source of helpful information for federal government contractors. This week in federal government contracting, CIO-SP4 is going back to the drawing board and an update on Alliant 3. NITAAC to take corrective action on CIO-SP4 after GAO sustains 125 protests [FedNewsNet] New legislation designed to protect military families from financial fraud [FedNewsNet] Pentagon offers new explanation for why it cancelled huge travel modernization project [FedNewsNet] Navy tech bridges connecting small businesses with its needs [FedNewsNet] Verification of a Firm’s Status as a Service-Disabled Veteran-Owned Small Business Concern[OSD] This memorandum issues the updated Department of Defense (DoD) Other Transactions (OT) Guide and rescinds the version published in November 2018. [OSD] Oversight Committee Passes Bills to Root out Waste, Fraud, and Abuse, Improve Federal Government Efficiency [Oversight] Is GSA’s Alliant 3 vehicle tilted too much to small, very large contractors? [FedNewsNet] ABC (Associated Builders & Contractors) Applauds House Committee’s Passage of the Fair and Open Competition Act [ABC] A look at the Pentagon buying strategy for artificial intelligence [FedNewsNet] GSA debuts new search tool to support Native Governments and Businesses [GSA] CIO-SP4 acquisition arm commits to corrective action after 119 bid protests sustained [FedScoop] Congress to DoD: anticompetitive mergers in the defense industry, and their impact on contracting costs and national security [Congress] The post SmallGovCon Week in Review: July 10-14, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  14. It’s here–the first ever SBA Office of Hearings and Appeals (OHA) HUBZone appeal decision! Sure, it is a very short decision and a dismissal–in fact, one reiterating some of the limitations of the new appeal avenue. But that doesn’t make it any less important. This is still SBA OHA’s first ever HUBZone appeal decision, only made possible by the SBA’s recent issuance of a new rule allowing HUBZone appeals (again, in limited circumstances). Let’s take a closer look. That’s right! The SBA’s OHA has issued its first ever Historically Underutilized Business Zone (HUBZone) appeal decision. OHA’s decision in New Source Corp., SBA No. HUB-101, 2023 (June 27, 2023), was a pretty short read, ultimately resulting in OHA’s dismissal of the appeal. But it will still go down in history as a first, nonetheless. Before we get into the decision, let’s talk a little about recently implemented SBA rule and the new OHA HUBZone appeal avenue it created. We previously blogged on this new SBA rule both here and here. So, I won’t go too far into the weeds since you can read all the juicy details in our prior blogs. But in a nutshell, as of May 2023, OHA has jurisdiction to hear appeals from adverse status determination protests for certified HUBZone small businesses. But notably, this jurisdiction is limited. The new rule expressly limits OHA’s newfound jurisdiction for HUBZone appeals to “[a]ppeals from HUBZone status protest determinations under” SBA’s HUBZone Program regulations. So, OHA still lacks jurisdiction to hear other types of HUBZone appeals, including those from HUBZone certification application denials and HUBZone Program terminations. In fact, OHA’s first official HUBZone appeal decision, issued on June 27, 2023, reiterates OHA’s limitations when it comes to HUBZone appeals. As OHA explains in its decision, the Appellant in New Source Corp. sent OHA an email aiming to “appeal” SBA’s decision to decertify it from the SBA’s HUBZone Program. But OHA found this “appeal email” to be deficient for a number of reasons. So, it ordered the Appellant to show cause why the appeal should not be dismissed. Relying on an important limitation to the new OHA HUBZone appeal process, OHA said: [T]he appeal did not appear to pertain to a HUBZone status protest, nor was the appeal accompanied by a copy of any formal protest determination made by the Director of SBA’s Office of HUBZone (D/HUB) in connection with a HUBZone status protest. Furthermore, Appellant did not represent itself as either the protested concern or the protestor for a HUBZone procurement affected by a HUBZone protest. As a result, OHA apparently lacks subject matter jurisdiction over this dispute. The appeal was also found deficient for: being unsigned; not being served to the D/HUB and other required parties; not alleging any error by the D/HUB; and being sent by the Appellant’s “Marketing Director,” which OHA noted may not even be permitted to represent the Appellant in an OHA appeal. In response to OHA’s show cause notice, the Appellant attempted to correct some of these deficiencies (i.e., providing an official appeal petition signed by its President alleging “negligence” and “lack of assistance and responsiveness from HUBZone support staff”–with some supporting documentation). But it did not address the biggest deficiency: OHA’s lack of subject matter jurisdiction over general HUBZone decertifications. Without subject matter jurisdiction, OHA had to dismiss the appeal. Again, SBA’s new rule provides an avenue for HUBZone appeals strictly limited to appeals from adverse status determination protests for certified HUBZones. And as OHA notes in the excerpt above, this generally requires that an appellant be either the protested concern or the protester in such a status determination protest to have standing for the appeal. So, even though the contents of this decision don’t seem particularly memorable, it is still OHA’s first ever HUBZone appeal decision. And it reiterates an important limitation on OHA’s HUBZone appeal jurisdiction. So for those reasons, we at SmallGovCon are pretty stoked to see it anyway. We are hoping this is the first in a long line of OHA HUBZone appeal decisions that serve to bring more transparency and consistency to SBA’s HUBZone Program. Questions about this post? Email us. Need legal assistance? call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post First OHA HUBZone Appeal Debuts on the Docket first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  15. Federal contractors, be sure to ask your kids or a young person what TikTok is (if you don’t already know), because those providing services to the federal government now have to take steps to ban it from employee’s devices in certain situations. A recent FAR rule has now implemented Congress’s ban on use of TikTok on government devices. The Consolidated Appropriations Act, 2023, enacted the No TikTok on Government Devices Act (the Act) and OMB provided additional implementing guidance. “The rule revises the FAR to implement the prohibition on having or using the social networking service TikTok or any successor application or service developed or provided by ByteDance Limited or an entity owned by ByteDance Limited.” TikTok will be banned on: Information technology owned or managed by the Government, Any information technology used or provided by the contractor under a contract, This includes equipment provided by contractor employees, and “applies to devices regardless of whether the device is owned by the Government, the contractor, or the contractor’s employees ( “e.g., employee-owned devices that are used as part of an employer bring your own device (BYOD) program).” However, a “personally-owned cell phone that is not used in the performance of the contract is not subject to the prohibition.” Timing Contracting officers must include new clause FAR 52.204–27, Prohibition on a ByteDance Covered Application on the following timeframe: In new solicitations issued on or after June 2, 2023 In solicitations issued before June 2, 2023, if award of the contract occurs after June 2, 2023, and the clause should be included by amendment by July 3, 2023. Contracting officers must modify existing indefinite-delivery contracts to include the FAR clause by July 3, 2023, for future orders. If exercising an option or modifying a contract or task or delivery order to extend the period of performance, contracting officers must include the clause. Implementation The clause applies to contracts at or below the Simplified Acquisition Threshold and can even apply to purchases below the micro-purchase threshold if the contract may use TikTok such as a social media-related contract. It also applies to contracts for the acquisition of commercial products and commercial services. Interestingly, the government forecasts that the rule will not be difficult for contractors to implement, as it is not very complicated compared to some bans such as the “prohibition on contracting for certain telecommunications and video surveillance services or equipment, which requires reviewing a contractor’s supply chain to uncover any prohibited equipment or services.” For this rule, there is no required supply chain review nor is there any reporting requirement. Rather, the rule requires contractors to update internal policies and IT rules to “include the prohibition on having or using a covered application, and that implementation of the prohibition may also require employee communications or training on this new requirement. It will be particularly important for contractors to clearly explain to their employees when a covered application is prohibited on a personal device used in performance of a Federal contract.” IT Equipment is defined broadly, as equipment “used by a contractor under a contract with the executive agency” that requires use of the equipment “to a significant extent in the performance of a service or the furnishing of a product.” But the ban does not include “equipment acquired by a Federal contractor incidental to a Federal contract.” The ban applies “on any information technology used or provided by the contractor under a contract, including equipment provided by the contractor’s employees, unless an exception is granted in accordance with OMB Memorandum M–23–13.” The clause must be inserted in subcontracts as well. The OMB memo has a few more details on the exceptions. These fall into the categories of national security, law enforcement, and security research. These exceptions must be approved by agency heads. So, contractors must now take steps to bar TikTok from devices that will be used in federal contract performance by updating procedures and policies. Questions about this post? Email us. Need legal assistance? call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Clock Now Ticking on Federal Contractor TikTok Ban first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  16. Happy Friday! We hope you had a nice 4th of July and a great week. It was another scorcher here in Kansas, on the 4th, but thankfully our temperatures are much cooler to finish out the week. Here’s hoping you can find time to rest and relax this weekend and perhaps, read a few articles we thought were interesting from the federal government contracting world. Enjoy! In this week’s edition, the federal fiscal fourth quarter is upon us! Busy federal fourth quarter to bleed into just as crazy first quarter of 2024 [FedNewsNet] DAU trains 3,000 acquisition employees on data skills as DoD seeks greater AI readiness [FedNewsNet] That rumbling you hear is the end of the fiscal year approaching [FedNewsNet] GSA debuts new search tool to support Native Governments and Businesses [GSA] DAF Embracing Secretary Kendall’s 7 Operational Imperatives With 3 Major Contract Opportunities [GovConWire] Leidos, Booz Allen Lose $1.3 Billion Treasury Contract Protest [BLaw] Procurement trends in 2023 [FedNewsNet] Veteran-Owned Small Business and Service-Disabled, Veteran-Owned Small Business-Certification; Correction [FedReg] Technology Modernization Fund awards $50.5M to agencies for cybersecurity, CX investments [FedScoop] White House hosts AI-focused listening session with union leaders [FedScoop] GAO sustains 98 bid protests filed over CIO-SP4 solicitation [FedScoop] White House $3.1 billion homeless program includes help for vets [FedTimes] The post SmallGovCon Week in Review: July 3-7, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  17. Well, summer is certainly here. You only need to step outside to be able to tell. And with the arrival of summer, the long-awaited end to the HUBZone map freeze just occurred on June 30, 2023. The new map took effect the following day, July 1, 2023. If you’re in the HUBZone program, or are considering certification in the HUBZone program, you might have some questions as to what this means for you. In this post, we’ll explore what the changes will bring. In the 2018 National Defense Authorization Act, at Section 1701, Congress included language that provided that no changes should be made to any HUBZone designations for any given area until the results of the 2020 Census were available. In essence, the SBA then issued a rule stating this freeze was to last until December 31, 2021. As you may recall, circumstances made completing the 2020 Census fairly difficult. As such, as we discussed back in May 2021, SBA extended the freeze until June 30, 2023. Well, as of now, the freeze has lifted. With that said, of course, what does this mean in general, and more importantly, what does this mean for you? General Impact For those of you who are unfamiliar with the HUBZone program, the idea behind the program is basically to give a boost to what SBA describes as “historically underutilized business zones in an effort to increase employment opportunities, investment, and economic development in such areas.” In other words, it is tailored to help businesses located in the parts of the country that generally see lower income, higher unemployment, and more generally difficult economic conditions. Of course, whether a certain county or census tract is undergoing such difficult conditions is subject to change over time. As such, HUBZone designation for a county or census tract needs to be allowed to be changed over time to ensure that if an area does improve, it is no longer getting the assistance it no longer needs. As such, SBA will periodically review and update the designations accordingly. The changes mean my business no longer would qualify! What does this mean? If the changes in the HUBZone designations are such that your business no longer meets the HUBZone requirements, either because your principal office is no longer in a HUBZone or because now less than 35% of your employees do not reside in a HUBZone, do not panic. There’s a couple things to consider here. First, as SBA notes, you will keep your HUBZone status regardless until your next recertification date. Second, as stated in 13 C.F.R. § 126.619, if you were a certified HUBZone concern at the time you submitted your initial offer on a contract, you are generally going to be considered a HUBZone concern for the duration of that contract. This also means you can still go for task orders generally for the duration of the underlying contract. The exceptions are 1) if the contracting officer request a new HUBZone certification for a given order under a Multiple Award Contract, and 2) if the Multiple Award Contract is not a HUBZone contract itself, but the order you’re going for is set aside for HUBZone, you must be certified at the time you submit your offer for the order. Exception: The Legacy Employee Rule If the HUBZone map changes mean that less than 35% of your employees reside in HUBZones, you may still be eligible for HUBZone recertification. First, there’s the legacy employee rule under 13 C.F.R. § 126.200. If the following are true: An employee resided in a HUBZone for at least 180 days prior to the company’s certification date (or a recertification date, in case they weren’t HUBZone at certification but resided in a HUBZone later) Said employee continued to live in a HUBZone for at least 180 days immediately after that certification or recertification date The employee has remained continuously employed with the company since that time (working at least 40 hours per month) And the certification date or recertification date in question occurred after December 26, 2019. Then, that employee is considered a HUBZone resident even if they no longer live in a HUBZone. One thing, however, is that you will need to indicate at your recertification that you are using the legacy employee rule if you otherwise would have fewer than 35% of your employees as HUBZone residents. This will require additional documentation to support your position, which SBA runs down here. Exception: The Attempt to Maintain Rule If your business is currently performing a HUBZone contract, there is another rule that may protect you if at least 20% of your employees are still HUBZone residents but less than 35% are. 13 C.F.R. § 126.200(e)(1) notes that “At the time of application, a concern must certify that it will ‘attempt to maintain’ having at least 35% of its employees reside in a HUBZone during the performance of any HUBZone contract it receives.” 13 C.F.R. § 126.103 provides that “[a]ttempt to maintain means making substantive and documented efforts, such as written offers of employment, published advertisements seeking employees, and attendance at job fairs and applies only to concerns during the performance of any HUBZone contract. A certified HUBZone small business concern that has less than 20% of its total employees residing in a HUBZone during the performance of a HUBZone contract has failed to attempt to maintain the HUBZone residency requirement.“ In other words, if at least 20% of your employees are HUBZone residents, SBA may allow you to recertify if you can show that you have been trying to maintain the 35% requirement. Note, this only applies if you are presently performing a HUBZone contract. We discuss this rule more here. Exceptions: Long-Term Investment Rule All that is great, but what if your principal office is now no longer in a HUBZone area? There is a rule that may protect you depending on your circumstances. 13 C.F.R. §126.200(c)(1) provides that if you purchased your principal office or entered a long-term lease for the office in a HUBZone after December 26, 2019, it will be treated as being in a HUBZone for ten years from the certification date or recertification date that follows the execution of the lease or deed so long as you maintain that ownership or lease. We explored this rule more here, and SBA’s FAQ also has details. Conclusion This won’t be the last time the HUBZone map changes. The next major change will be in 2028, and there will be changes in the meantime for things such as expiring redesignated areas and for disaster situations. So, keep an eye on SBA’s HUBZone map, they should provide details if any changes are forthcoming. Questions about this post? Email us Need legal assistance call at 785-200-8919. Looking for the latest government contracting legal news? Sign up for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post The Thaw: Dealing with the End of the HUBZone Map Freeze first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  18. If you are in to podcasts, law firm blogs, or legal marketing, check out my appearance on the Legally Contented podcast with Wayne Pollock. Here is the YouTube version, and below are links to the audio podcast on your format of choice. In this podcast, we discuss how blogging can make attorneys better attorneys balancing breaking news-type blog posts with substantive blog posts–and lots more. It was a great experience discussing SmallGovCon with Wayne. Hope you enjoy it. https://podcasts.apple.com/us/podcast/legally-contented/id1612322032 https://open.spotify.com/show/3WfCyY0cbL1Mc4SfBWbr30 https://music.amazon.com/podcasts/b370b4d4-59df-47a8-8bff-4f786ed06222/legally-contented The post SmallGovCon Featured on Legally Contented Podcast first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  19. Happy Friday! We hope you have had a productive week. We are having a heat wave here in Kansas, with the heat index getting up to 106 degrees, and we know it’s even higher in other parts of the country. I think I speak for everyone here when I say we are grateful for air conditioning. We hope you are staying cool and healthy in your neck of the woods and looking forward to the weekend. This week in federal government contracting news saw movement on the 2024 NDAA as well as calls for enhanced security on federal cyber projects. Veteran-Owned Small Business and Service-Disabled, Veteran-Owned Small Business —Certification; Correction [FedReg] Former Department of Energy Employee Pleads Guilty to Accepting Bribes from Long Island Businessman in Exchange for Nearly $1 Million in Federal Contracts [DoJ] Reimagining Public Food Procurement in the 2023 Farm Bill [EESI] House, Senate committees approve 2024 NDAA, including 5.2% pay raise [FedNewsNet] White House directs agencies to prioritize ‘secure by design’ in 2025 budgets [FedNewsNet] Treasury Releases Analysis of the Boom in U.S. Construction of Manufacturing Facilities Driven by Invest in America Agenda [DoT] Homeland Security Acquisition Regulation; Safeguarding of Controlled Unclassified Information [FedReg] Transparency in numbers: Federal contractors must be held accountable for their diversity efforts [GovExec] The post SmallGovCon Week in Review: June 26-30, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  20. For large and small contractors alike, teaming agreements, joint venture agreements, and subcontracts can be essential to winning and successfully performing federal government contracts. In this three-part series, government contracts attorneys Nicole Pottroff and John Holtz will explain how to develop, negotiate and administer agreements that are both compliant and effective. The presentations will cover both the key rules (such as flow-downs and ostensible subcontractor affiliation) and best practices for agreements that go beyond the bare minimum legal requirements. Hope you will join us! Register here. The post Govology Webinar: Compliant and Effective Teaming Agreements, Joint Ventures & Subcontracts – 3-Part Series (2023 Update) July 11-13, 2023, 1:00pm EDT first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  21. While every federal government contractor is likely familiar with bid protests, whether directly involved in one or not, it is far less likely that those same contractors are as familiar with NAICS code appeals. This is probably due to the infrequent nature of NAICS code appeals, with roughly 20 being filed each year. However, even if so few are filed annually, they tend to have a relatively high success rate, with appeals decided on the merits being decided in favor of the Appellant about 50% of the time. Below, I will take a look at a recent NAICS code appeal to help demonstrate what the Small Business Administration’s (SBA) Office of Hearings and Appeals (OHA) takes into account when reviewing NAICS code appeals, and why you, as a contractor, should review a solicitation’s classification to potentially give you a leg up. The NAICS code appeal in Laredo Technical Services is, by all means, a relatively straightforward NAICS code appeal, as far at those things go. The solicitation sought a contractor to provide 41 radiology technologists for placement in the Department of Veterans Affairs’ medical facilities. The Contracting Officer assigned NAICS code 561320—Temporary Help Services—to the solicitation, which has a size standard of $34 million. Laredo Technical Services, Inc., SBA No. NAICS-6216 (2023). Laredo Technical Services, Inc., the appellant in this case, challenged the Contracting Officer’s decision to assign NAICS code 561320 to the solicitation, believing that the solicitation should have been assigned NAICS code 621399—Offices of All Other Miscellaneous Health Practitioners—with a size standard of $10 million. Or, in the alternative, NAICS 621512—Diagnostic Imaging Centers—with a size standard of $19 million. So, why is the NAICS code important? Well, to put it simply, each solicitation has a NAICS code, and each NAICS code has a size standard. Those size standards are either based on annual average receipts, which range from $2.25M to $47M, or number of employees, which range from 100 to 1,500. And a business that earns $47M annually, or that has 1,500 employees, is almost guaranteed to have more resources than one who earns $2.25M, or that has 100 employees, making the larger, more profitable business more likely to win awards. One way the SBA works to make federal contracting more equitable among small businesses is by narrowing eligible bidders through size standards. This means that a $47M business cannot compete against a $2M business on a federal contract for corn farming, because the size standard for corn farming contracts is $2.5 million. Thus, the $47M business is deemed too large to compete, and the $2M business is only required to compete with other small businesses that are $2.5M and under. The same logic applies for small businesses that file a NAICS code appeal trying to recategorize the solicitation to a larger NAICS code, allowing a bigger (relatively speaking) small business to be eligible to compete for a solicitation it was initially too large for. Back to the instant size appeal, Laredo claimed that 621399 was the appropriate NAICS code because the procurement was for radiological services on-site within the VA facilities, not radiological centers or laboratories off-site without the VA facilities. Furthermore, the RFP stated that the contractor and contractor’s technologists would not be considered VA employees, but rather independent contractors, and the services sought by the solicitation was for non-personal services. To reach a decision, SBA looked to the three potential NAICS codes mentioned in the appeal, beginning with the NAICS code assigned by the Contracting Officer. SBA stated, “[t]he NAICS code chosen by the CO, 561320, Temporary Help Services, covers establishments primarily engaged in supplying workers to clients’ businesses for limited periods of time to supplement the working force of the client. The individuals provided are employees of the temporary help services establishment. However, these establishments do not provide direct supervision of their employees at the clients’ work sites.” Here, SBA agreed with Laredo that 561320 was not the proper NAICS code for the work anticipated by the solicitation, stating that 561320 is clearly for contractors providing workers for limited periods of time, while the solicitation focused on workers for “up to three years.” Accordingly, SBA then looked to the NAICS codes proposed by Laredo to determine whether either of those best described the “principal purpose of the products or services being required.” First, SBA looked at Laredo’s preferred NAICS code: 621399. Here, SBA noted, “[t]he NAICS code advocated by Appellant, 621399, Offices of All Other Miscellaneous Health Practitioners, is comprised of establishments of independent health practitioners (except physicians; dentists; chiropractors; optometrists; mental health specialists; physical, occupational, and speech therapists; audiologists; and podiatrists). These practitioners operate private or group practices in their own offices (e.g., centers, clinics) or in the facilities of others, such as hospitals or HMO medical centers.” SBA determined that 621399 was not the proper NAICS code either, stating that Laredo’s assertion that the location of performance should be taken into account when determining NAICS codes was incorrect, and that the location of performance was not relevant in making the determination. Finally, SBA looked to the third option: 621512. SBA explained that NAICS code 621512 included “establishments known as diagnostic imaging centers primarily engaged in producing images of the patient generally on referral from a health practitioner…[this includes] ‘CAT (computerized axial tomography) scanner centers’, ‘[c]omputer tomography (CT-SCAN) centers’, ‘[d]iagnostic imaging centers (medical)’, ‘[l]aboratory testing services, medical radiological or X-ray’, ‘[m]agnetic resonance imaging (MRI) centers’, ‘[m]ammogram (i.e., breast imaging) centers’, ‘[m]edical radiological laboratories’, ‘MRI (magnetic resonance imaging) centers’, and ‘[r]adiological laboratory services, medical’.” SBA reasoned that the professional radiology technologists sought by the solicitation would perform “the full range of radiology imaging care,” including x-rays, MRIs, ultrasounds, and CAT scans for VA inpatients and outpatients. Accordingly, the agency was directed to amend the NAICS code from 561320, Temporary Help Services, which has a size standard of $34M, to 621512, Diagnostic Imaging Centers, with a size standard of $19 . As the infamous words of Mick Jagger said, “You can’t always get what you want. But if you try sometimes you’ll find you get what you need.” And what Laredo needed here, was a different NAICS code. Questions about this post, joint ventures, affiliation, or any other government contracting matter? Email us. Need legal assistance? Call us at 785-200-8919. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post Recent NAICS Code Appeal Demonstrates Contractor Strategy to Limit Competition first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  22. Koprince McCall Pottroff LLC is a premier small business and federal government contracts firm in Lawrence, Kansas. The management team is pleased to announce that Gregory Weber has been promoted to the role of Senior Associate Attorney. Greg quickly integrated himself into the fabric of our firm, and working with federal contractors has become second nature to him. In response to the announcement, Greg said, “I am thrilled to be given this opportunity to further help our clients and work within the federal contracting community. Koprince McCall Pottroff has a great tradition of excellence and I am proud to be a part of it.” Greg draws on his experience working for a number of large organizations. In those roles, he became adept at communicating complicated legal and regulatory concepts to clients. This skill translated nicely into the federal contracting world. Greg is hardworking to a fault and always puts providing client value and outstanding client communications at the top of his list. He is equally skilled at litigation (including at SBA, ODRA, and the Court of Federal Claims) and transactional matters (including small business, socioeconomic certifications, and teaming relationships). Greg is a great attorney and advocate for the federal contractors that our firm serves. The promotion is well deserved! The post Koprince McCall Pottroff LLC Announces Gregory Weber as Senior Associate Attorney! first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  23. A common path for many federal contractors to bid on and perform a federal contract is through a joint venture (“JV”). Utilizing a JV can provide some great opportunities for two (or sometimes more) businesses to share resources and boost each others’ performance on a contract. Additionally, it can be a great tool for contractors to utilize both JV partners’ experience and to jointly gain more experience. There are even widespread SBA regulations requiring agencies to “consider” both JV partners’ experience in an evaluation. However, there has still been quite a bit of back and forth regarding how agencies are supposed to evaluate a JV’s experience, and specifically what it means to “consider” each JV partners’ individual experience, particularly in situations where only one JV partner submits the experience. In May of 2023, GAO issued a decision that provided at least some clarification on how an agency should consider each JV partner’s experience, and the impact of not doing so. One of the many factors that may appeal to contractors, looking at utilizing a JV for contract proposal and performance, is the ability to work with a JV partner that may have more relevant experience, and thus, open the door for bidding on projects that require more specified prior experience from offerors. But despite SBA’s implementation of widespread joint venture rules regarding the evaluation of a JV’s past performance, (which I will get to shortly), there has still been some debate within the federal contracting industry. There also have been multiple bid protests, that question exactly how an agency’s evaluation of a JV’s experience would need to consider both JV partners’ experience, rather than just the JV itself or just one JV partner. Due to this confusion, GAO in MiamiTSPi, LLC – Reconsideration, decided to quell the waters and provide some guidance about what an agency is expected to analyze when evaluating a JV’s experience. This GAO holding is due to a request for reconsideration, which in turn is based on a previous case where GAO found that the agency did not properly review the experience of a JV. In this reconsideration, GAO upheld the previous decision and articulated the expectations for how experience in a JV is meant to be evaluated. The solicitation at the heart of this issue was an RFQ, for IT services at the USDA’s Farm Loan Program, which anticipated issuing a fixed price task order and award based off a best-value tradeoff, with “similar experience” being the most important factor in the tradeoff. The RFQ told offerors that the agency “would consider the extent of the contractor’s experience in providing like or similar services in accordance with original project deadlines.” Initially, the award on this RFQ was made to a JV called MiamiTSPi, but that award was protested on the basis that “the agency’s evaluation did not comply with applicable SBA regulations, which require the agency to ‘consider work done . . . by each partner to the joint venture as well as any work done by the joint venture previously” citing 13 C.F.R. § 125.8(e). GAO in that initial bid protest found the record showed the JV submitted two projects to demonstrate experience, and both experience examples came only from one party of the JV. GAO sustained the protest because it found that the record did not show “any type of acknowledgement of the fact that the only experience examples submitted” for this procurement were from one of the JV’s partners, thus “indicating that the evaluators never even considered the limited nature of the experience examples.” The JV then filed a request for reconsideration, leading to the GAO reconsideration decision. The request for reconsideration argued that GAO “failed to consider the portion of the SBA regulations that prohibits the agency from negatively evaluating the 8(a) partner of the joint venture for its lack of relevant experience.” In the request for reconsideration of the decision, GAO makes it quite clear what standard agencies must be held to when evaluating a JV’s submitted experience. GAO in its decision points to 13 C.F.R. § 124.513(f) which states “[t]he partners to the joint venture in the aggregate must demonstrate the past performance, experience, business systems, and certifications necessary to perform the contract” and “procuring activity must consider work done and qualifications held individually by each partner to the joint venture as well as any work done by the joint venture itself previously.” The GAO further pushed back on the reconsideration argument, holding that when reading the entirety of 13 C.F.R. § 124.513(f), the rule “directs agencies to ‘consider work done and qualifications held individually by each partner to the joint venture’ and in that consideration, prohibits agencies from requiring the protégé or 8(a) participant partner to individually meet the same criteria as the mentor or non-8(a) partner.” GAO also mentioned that the SBA, in creating these same regulations, explained that the “rules require a small business protégé to have some experience in the type of work to be performed under the contract” but it would be unreasonable for the protégé to be held to the same level of experience of a mentor in a JV. Additionally, GAO explained that while the regulations don’t require a specific degree of consideration, “it is clear that the agency must consider to some degree the experience of both partners of the joint venture.” The GAO, after distinguishing other similar cases, articulated that their holding, in this reconsideration, showed there was no error of law in the underlying bid protest when “concluding that the agency’s evaluation of MiamiTSPi’s quotation was unreasonable and inconsistent with the SBA regulations” as the record showed that the agency did not “consider the experience of each partner to the joint venture in evaluating the experience of the joint venture.” While this reconsideration holding, and underlying bid protest, revolved around SBA’s 8(a) Program regulations, it represents a holding that could impact all small business joint ventures (given the similar regulatory language in SBA’s small business joint venture regulations and other socioeconomic status joint venture regulations). While agencies are generally given deference in their evaluations of an offeror’s experience, in this reconsideration GAO has somewhat carved away at that deference. As you know, the regulatory interpretation of how to “consider” joint venture experience has been somewhat unclear, but through this ruling the GAO has now issued clear guidance in one of the many situations that could arise when a joint venture submits experience in a proposal (i.e., a joint venture has only one partner submit experience, while the other submits no experience). In that specific situation, GAO expects for both joint venture partners to submit experience, and for the agency to evaluate both of those joint venture partners’ experience. Consequently, going forward if a joint venture finds itself in a situation in which it submits a proposal, with only one partner of the joint venture providing experience, it is likely that a bid protest may be on its way. Questions about this post, joint ventures, affiliation, or any other government contracting matter? Email us. Need legal assistance? Call us at 785-200-8919. Looking for the latest government contracting legal news? Sign up here for our free monthly newsletter, and follow us on LinkedIn, Twitter and Facebook. The post GAO: Each JV Partner’s Experience Must Be Considered first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  24. I’m very excited to be speaking at the Procurement & Contracting Symposium held at EPCC Administrative Services Center (ASC) in El Paso, Texas on July 25. The wonderful Pablo Armendariz is putting this one together. I’ll be providing a comprehensive update on the most important government contracting legal changes. It’s going to be a great opportunity for Federal, state, and local government agencies, buyers, prime and subcontractors, suppliers, providers, and the regional business community to meet and participate in informative training sessions as well as receive government contracting guidance, updates, and upcoming forecasts. I hope to see you there! Here is the event link, for additional information. The post Event Announcement: Procurement & Contracting Symposium hosted by Texas El Paso APEX Accelerators, July 25, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
  25. Happy Friday and happy Summer Solstice! It’s officially summer and the temperatures here in Lawrence, Kansas sure feel like it. We have been in the 90’s this week and we are certainly grateful for air conditioning (and maybe even looking forward to winter). We hope our readers have some fun summer vacation plans and find time to rest and relax a bit this weekend. Wear your sunscreen and stay hydrated! In federal government news this week, budget talks and the draft NDAA are being worked on, while agencies focus on cybercrime and customer experience, among other things. Agency efforts to cut redundant programs save $600B over 13 years, GAO says [FedNewsNet] Budget talks for 2024 are rocking, raising talk of a government you-know-what [FedNewsNet] DHS launching new ‘customer experience’ directorate this month [FedNewsNet] DOD, GSA, NASA Field Comments on Proposed Information Collection Related to Contract Financing [ExecGov] Defense Bill Calls for Return of Contracting-Out Studies [Fedweek] Procurement Rules Aren’t the Sustainability Answer: Larry Allen [BGov] Smart contractors are preparing for what could be a solid fourth quarter [FedNewsNet] DoD IG calls for full investigation into 21 missing shipping containers in Kuwait [FedNewsNet] Lawmakers float grant program to get service dogs to struggling vets [FedTimes] GAO Sees Need for More Coordination among Agencies on Cybercrime [FedWeek] How to use 8(a) on GSA contracts [GSA] Record $705 Billion In FY 2022 Federal Contracts Awarded, Per 12th Annual BGOV200 Federal Industry Leaders Analysis [PRNewswire] Contract Dollars Rebounded Last Year, 65% Went to 200 Companies [BLaw] House defense bill adds special Ukraine IG, Taiwan cyber cooperation [FedTimes] The post SmallGovCon Week in Review: June 19-23, 2023 first appeared on SmallGovCon - Government Contracts Law Blog.View the full article
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