SBA to include overseas contracts in rating agencies

The Small Business Administration will begin to include overseas contracts as part of the baseline used to rate agency performance against small business contracting goals.

SBA logoCurrently about $100 billion a year in federal contracts — including contracts that support overseas projects — aren’t considered when the agency calculates small businesses’ share of procurement dollars annually. It’s been a bone of contention among the small business community, which argues that all awarded contracts should factor into individual ratings, as well as the overall goal of federal government to allocate 23 percent of contracts to small businesses.

“Overseas contracts, we couldn’t find a justification to continue to exclude that,” said John Shoraka, associate administrator of government contracting and business development at the SBA, during a keynote session at a procurement conference hosted by the Montgomery County Chamber of Commerce. “So coming into 2016, we’re working with the Office of Federal Procurement Policy, Defense, USAID and State on including those contracts in the base.”

Keep reading this article at: http://www.bizjournals.com/washington/blog/fedbiz_daily/2015/05/sba-to-include-overseas-contracts-in-rating.html

GAO investigation into small business contracting fraud called for

This article was written by Lloyd Chapman, president of the American Small Business League. 

California Rep. Janice Hahn (D) has drafted an amendment to H.R. 1481 that would call for a new GAO investigation into fraud and abuses in federal small business contracting programs. In a March 25 hearing, Hahn Fraud Waste Abusequestioned whether the 23 percent of all federal contracts the SBA claimed were awarded to small businesses actually went to legitimate small businesses based on research done by my staff at the American Small Business League. She referenced firms such as Disney, Apple, Chevron, and Bank of America have been the actual recipients of federal contracts in FY2011 and FY2012 that the SBA claimed had been awarded to small businesses.

Keep reading this article at: http://thehill.com/blogs/congress-blog/economy-budget/241026-congress-should-back-gao-investigation-into-small-business

 

WOSB sole source contracts — one step closer

Women-Owned Small Business sole source contracts have moved one step closer to becoming a reality.

SBA logoOn May 1, 2015, the SBA issued a proposed rule implementing the WOSB sole source authority contained in the 2015 National Defense Authorization Act.  The relative speed with which the proposed rule was issued suggests that WOSBs could begin receiving sole source awards later this year.

The proposed rule provides that EDWOSBs may receive sole source awards in industries designated by the SBA as “underrepresented” by women.  WOSBs may receive sole source awards in industries designated as “substantially underrepresented.”  The industry-by-industry limitations are the same as those applicable to competitive EDWOSB and WOSB set-asides.

Keep reading this article at: http://smallgovcon.com/women-owned-small-business-program/wosb-sole-source-contracts-one-step-closer/

SBA urges GSA to delay implementation of proposed transactional data reporting requirement

On May 4, 2015, the Office of Advocacy of the U.S. Small Business Administration wrote the General Services Administration (GSA) regarding a proposed rulemaking for the collection of transactional data on Federal Schedule and non-Federal Schedule contracts.

GSA’s proposed rule involves the creation of a Common Acquisition Platform (CAP), an online marketplace to identify best-in-class contracts issued by GSA or other agencies.  The proposed rule would impose a Contractor Access Fee (80 Federal Register 11620, March 4, 2015).  The regulation proposed by GSA would create an immediate government-wide transactional data reporting requirement for non-Federal Supply Schedule (FSS) contracts. The requirement would be phased-in for FSS contracts.

The Office of Advocacy wrote GSA on May 4, 2015, regarding the proposed regulation and recommended postponing the rulemaking to conduct a formal stakeholder outreach process throughout the country.  Specifically, SBA’s Advocacy Office:

  • Urged GSA to conduct a more detailed impact assessment of this proposed rule on small businesses and take into consideration the rate of small business participation in the acquisition process and not just focus on the percentage of dollars being awarded to small businesses.
  • Would like GSA to examine the potential unintended consequences of this rule on small business resellers.  Most small businesses that are on a GSA schedule are value added resellers to the same original equipment makers who are also on GSA schedules.  Because of the lack of data in the Initial Regulatory Flexibility Analysis (IRFA), it is unclear how GSA will balance the potential conflict between these two business entities.

See Advocacy’s complete comments at  https://www.sba.gov/category/advocacy-navigation-structure/legislative-actions/regulatory-comment-letters.

For more information, contact SBA’s Major Clark at 202-205-7150 or major.clark@sba.gov.

WOSB self-certification elimination: The SBA weighs in

In this article, attorney Steve Koprince explains the current status of the federal woman-owned small business (WOSB) certification program.

The SBA has acknowledged that Congress eliminated WOSB self-certification in the 2015 NDAA – but suggests that WOSB self-certification may continue until the SBA adopts a regulatory framework for a formal certification program.

sba-logoIn a proposed rule released May 1, 2015, the SBA adopts a pragmatic approach that nonetheless may be legally problematic given that Congress did not authorize a continuation of WOSB self-certification pending SBA regulatory action.

The SBA’s proposed rule focuses primarily on the new WOSB sole source program.  However, the SBA also acknowledges that the 2015 NDAA eliminated WOSB self-certification.  The SBA writes:

SBA recognizes that Section 825 also created a requirement that a firm be certified as a WOSB or EDWOSB by a Federal Agency, a State government, SBA, or a national certifying entity approved by SBA. This statutory requirement appears to apply to both sole source and set asides under the WOSB Program, and may require substantial resources. Establishing a certification requirement and process will require a more prolonged rulemaking before SBA can establish such a program. In our view, there is no evidence that Congress intended to halt the existing WOSB Program until such time as SBA establishes the infrastructure and issues regulations implementing the statutory certification requirement. Instead, we maintain that the new WOSB sole source authority can and should be implemented as quickly as possible, using existing program rules and procedures, while SBA proceeds with implementing the certification requirement through a separate rulemaking.

certifiedI admit that I am sympathetic to the SBA, which may have been caught off-guard (as was I) by Congress’s elimination of WOSB self-certification.  As I noted in my December post on the topic, the WOSB self-certification provision was not included in the original NDAA bills passed by either the House or Senate.  Instead, it was adopted at the last minute, and with little or no debate, as part of the final conference version of the 2015 NDAA.  The SBA is also correct that it likely would require substantial resources to adopt a SBA-run WOSB self-certification program – which I believe would be the best approach over the long run.

Keep reading this article at: http://smallgovcon.com/women-owned-small-business-program/wosb-self-certification-elimination-the-sba-weighs-in/

Follow-on contract to competitive 8(a) award can be sole sourced

An 8(a) contract was properly awarded on a sole source basis to a tribally-owned entity, even though the contract was a follow-on to a competitive 8(a) set-aside award.

In a recent decision, the GAO deferred to the SBA’s interpretation of the 8(a) program regulations–which, according to the SBA, allow such sole source awards.

GAO-GovernmentAccountabilityOffice-SealThe GAO’s decision in Agency Management Concepts, Inc., B-411206, B-411206.2 (April 21, 2015) involved a Department of State procurement for lock and lock services.  Beginning in 2003, DOS generally procured the requirement through the 8(a) program.  The most recent contract for the services (before the award at issue in this protest) was procured as a competitive 8(a) set-aside.

Advanced Management Concepts, Inc. was an active 8(a) program participant.  After learning that the incumbent contractor had graduated from the 8(a) program, AMC contacted DOS to express its interest in the requirement.  AMC was informed that DOS intended to make a sole source award to a tribally-owned concern, and that the SBA had accepted and approved the sole source offering letter.

AMC then file a GAO bid protest.  AMC alleged that DOS was required to compete the requirement among 8(a) program participants, rather than award it on a sole source basis.  AMC cited several sections of 13 C.F.R. § 124.506, an 8(a) program regulation, in support of its protest.  AMC contended that these regulatory sections prohibit the SBA from accepting a requirement on a sole source basis when that requirement has previously been competed among 8(a) program participants.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/8a-program-follow-on-to-competitive-award-can-be-sole-sourced/

GAO doubles down on FedBid ruling

The GAO has sustained a second protest based upon FedBid’s suspension of a contractor from its system.

For the second time in less than one week, the GAO held that the contractor’s suspension from FedBid–and resulting inability to bid on a contract–was improper because the matter was not referred to the SBA under the SBA’s Certificate of Competency procedures.

GAO-GovernmentAccountabilityOffice-SealThe GAO’s decision in Latvian Connection, LLC, B-410981 (April 6, 2015) involved a Department of the Interior RFQ for the fabrication and installation of mobile shelving system components.  The procurement was conducted through FedBid’s electronic reverse auction system.

Latvian Connection, LLC, wished to compete for the award.  However, in July 2014, FedBid suspended Latvian Connection’s FedBid user account.  The FedBid suspension notice stated, in part: “System and Business Integrity: Latvian Connection has taken actions to repeatedly and purposely interfere with FedBid’s business relationships.”

Since Latvian Connection’s FedBid account was suspended, it was unable to compete for the procurement.  Latvian Connection filed a GAO protest.  It argued, in part, that its exclusion from the competition was a negative responsibility determination, which should have been referred to the SBA.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/gao-doubles-down-on-fedbidcoc-ruling/

Florida company pays $250K to resolve alleged False Claims Act violations involving HUBZone status

Florida-based Air Ideal Inc. and its majority owner, Kim Amkraut, have agreed to pay the United States $250,000 to resolve allegations that they made false statements to the Small Business Administration (SBA) to obtain certification as a Historically Underutilized Business Zone (HUBZone) company, the Justice Department announced April 8, 2015.  Under the settlement, the defendants must also pay five percent of Air Ideal’s gross revenues over the next five years.

“When companies falsely claim eligibility for government contracts set aside for HUBZone businesses, they not only misuse taxpayer funds, but they also deprive HUBZone communities of the benefits of the program,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “This settlement shows that there is a stiff price to pay for obtaining government contracts through false statements.”

“The HUBZone program is an important tool in the government’s effort to strengthen our economy by encouraging businesses to grow in underutilized and disadvantaged areas,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida.  “We will not tolerate contractors who use deception to undermine its objectives and effectiveness.”

The purpose of the HUBZone program is to stimulate job growth in areas that have historically had low business investment.  Under the HUBZone program, companies that maintain their principal office in a designated HUBZone and meet certain other requirements can apply to the SBA for certification as a HUBZone small business company.  HUBZone companies can then use this certification when bidding on government contracts.  In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.

The United States’ complaint alleged that Air Ideal and Amkraut originally applied to the HUBZone program in 2010 by claiming that Air Ideal’s principal office was located in a designated HUBZone.  The complaint further alleged that, in fact, this location was a “virtual office” where no Air Ideal employees worked, and that Air Ideal was actually located in a non-HUBZone location.  Allegedly, the defendants not only misrepresented the location of Air Ideal’s principal office to the SBA, but also submitted to the SBA a fabricated lease agreement and other fabricated documents for its purported HUBZone office.  The complaint further alleged that during the government’s investigation of this case, the defendants fabricated another version of its agreement for the virtual office and submitted that false document to the government.

The complaint alleged that Air Ideal used its fraudulently-procured HUBZone certification to obtain contracts from the U.S. Coast Guard, U.S. Army, U.S. Army Corps of Engineers and the U.S. Department of the Interior.  Each of those contracts had been set aside exclusively for HUBZone companies.  The government’s complaint asserted claims against Air Ideal and Amkraut under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

The settlement resolves allegations brought in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act by Patricia Hopson, who is employed in the construction industry.  Under the act, a private citizen can sue on behalf of the United States and share in any recovery.  The United States is entitled to intervene in the lawsuit, as it did here.  As part of the resolution, Ms. Hopson will receive $42,500.

This matter was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Middle District of Florida, in conjunction with the SBA’s Office of Inspector General (OIG) and Office of General Counsel, the Department of Homeland Security’s Office of Inspector General, and the Defense Criminal Investigative Service.

The case is U.S. ex rel. Hopson v. Air Ideal, Inc. and Kim Amkraut, No. 6:13-cv-775-Orl-37GJK (M.D. Fla.).

Source: http://www.justice.gov/opa/pr/florida-company-and-owner-agree-resolve-alleged-false-claims-act-violations-regarding

Agencies gave SBA the wrong data for small business research contract spending

Most agencies submitted incorrect data about Small Business Innovation Research programs for fiscal 2013, so the Small Business Administration can’t fully determine compliance with spending requirements for the programs, says an April 15 Government Accountability Office report.

Agencies are required to submit the actual amount obligated for research and development, which is generally conducted by nonfederal employees outside of federal facilities. Those obligations are the basis for calculating the agencies’ spending requirements for small business programs, the report says.

Keep reading this article at: http://www.fiercegovernment.com/story/agencies-gave-sba-wrong-data-small-business-research-contract-spending/2015-04-16

GAO: Small business FedBid suspension was improper

The suspension of a small business’s FedBid account was improper because the matter was not referred to the SBA under the SBA’s certificate of competency procedures.

In an important decision for small businesses participating in reverse auctions, the GAO recently held that FedBid could not properly suspend a small business’s user account for a supposed lack of “business integrity,” thereby causing the small business to be ineligible to bid on a federal solicitation, without a referral to the SBA.

The GAO’s decision in Latvian Connection, LLC, B-410947 (Mar. 31, 2015) involved a Department of State solicitation for first aid kits and related medical supplies.  DOS conducted the solicitation as a reverse auction on FedBed.  The solicitation was set aside for small businesses.

Latvian Connection, LLC, wished to compete for the award.  However, in July 2014, FedBid suspended Latvian Connection’s FedBid user account.  The FedBid suspension notice stated, in part: “System and Business Integrity: Latvian Connection has taken actions to repeatedly and purposely interfere with FedBid’s business relationships.”

Keep reading this article at: http://smallgovcon.com/gaobidprotests/small-businesss-fedbid-suspension-was-improper-says-gao/