New rule allows sole source awards to women-owned small businesses

The Small Business Administration (SBA) published a rule today (Sept. 14, 2015) allowing sole source awards to Women-Owned Small Businesses (WOSBs) or Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) in appropriate circumstances.

SBA logo smallThe new rule changes existing SBA regulations in order to conform to section 825 of the FY15 National Defense Authorization Act (NDAA).

The rule is effective October 14, 2015.  The Federal Acquisition Regulations (FAR) will need to be amended to include the sole source authority so that there is no conflict between the SBA’s rules and the FAR.

The sole source authority can only be used where a contracting officer (CO) conducts market research in an industry where a WOSB or EDWOSB set-aside is authorized, and the CO cannot identify two or more WOSBs or EDWOSBs that can perform at a fair and reasonable price, but identifies one WOSB or EDWOSB that can perform. In addition, the sole source authority for WOSBs and EDWOSBs is limited to contracts valued at $6.5 million or less for manufacturing contracts and $4 million or less for all other contracts.

The rule is published in the Federal Register at:

SBA’s 8(a) certification workshop is Oct. 15 in Atlanta

The Georgia District Office of the U.S. Small Business Administration (SBA) is conducting a workshop entitled “8(a) Business Development Certification Step by Step” on Thursday, Oct. 15, 2015.

The workshop will be held from 10 am until 1 pm at the SBA’s offices located at 233 Peachtree Street, Suite 1900, Peachtree Center – Harris Tower, Atlanta, GA, 30303.

The 8(a) Business Development program is a part of the SBA’s efforts to promote equal business access for socially and economically disadvantaged individuals including Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, subcontinent Asian Americans, and, in some cases, women business owners. Companies with an 8(a) Certification can benefit from the wide-range of services offered including government contracting opportunities, access to capital, management and technical assistance, and much more.

Pre-registration is required and can be accomplished at:

The event is co-sponsored by The University of Georgia Small Business Development Center, Office of Minority Business Development.

Supreme Court case shines light on veteran-owned business certification, but contractors want more due diligence

Service-disabled, veteran-owned small businesses are anxiously waiting on a U.S. Supreme Court ruling expected in October to determine whether the U.S. Department of Veterans Affair is doing its part to help vets get government contracts.

But as SDVOSBs (as I’ll call them from here on out) wait for the high court’s decision in Kingdomware v. U.S. Kingdomware v. U.S., higher-level discussions on the certification process for SDVOSBs have been quiet, despite the community’s continued calls for a change.

Right now, there are two sets of rules governing contract set-aside awards for SDVOSBs among federal agencies.

CVE badgeFrom one end, there is the Department of Veterans Affairs’ way. Operating under a “veterans first” mandate outlined in the Veterans Benefits, Health Care, and Information Technology Act of 2006, the VA subjects all SDVOSBs to an extensive 90-day, multi-step verification process with the Center for Veterans Enterprise to ensure that they are, in fact, an SDVOSB eligible for those contract set-asides.

Then there is nearly every other agency, not including the Federal Aviation Administration, that requires no formal certification. SDVOSBs vying for contracts in all other agencies need only to submit a self-certification of their status along with their bids.

Keep reading this article at:

SBA: White House focus, SES visibility help agencies meet small business goals

The government’s success in meeting mandatory small business contracting goals two years running is due largely to White House focus and new requirements that program managers in the Senior Executive Service pay greater attention to the acquisition process, the Obama administration’s small-business development chief said on Tuesday.

SBA logo smallMany call set-asides for small business “not a handout but a hand-up, but I say it’s a matter of survival for the federal government as a whole,” said John Shoraka, associate administrator of government contracting and business development at the Small Business Administration (SBA). He spoke to contractors gathered for American Express OPEN’s all-day summit with agency acquisition officials working with small businesses that are women- or minority owned or economically disadvantaged.

Outlining the government’s efforts to institutionalize the success of meeting the goal of steering 23 percent of contract dollars to small business, Shoraka said, “I’ve told my staff I could write a book saying that America’s secret weapon is small business procurement — when small business is engaged, the industrial base is preserved. It’s win-win, because companies hire employees, which has impact on the economy.”

Keep reading this article at:

Business owner sentenced for fraudulently obtaining $2.6 million in government contracts

Yogesh K. Patel, age 48, of Gaithersburg, Maryland, was sentenced August 3, 2015 to 21 months in prison followed by three years of supervised release for conspiring to commit wire fraud in connection with a scheme to fraudulently obtain more than $2.6 million in federal government contracts through a Small Business Administration (SBA) program designed to assist disadvantaged businesses.  Patel also was ordered to forfeit $554,541.07.

SBA logo smallAccording to his plea agreement and court documents, Patel owned 91% of United Native Technologies, Inc. (UNTI), which purported to perform information technology services to the government and commercial clients.  In 2005, Patel applied for and was granted certification as a socially and economically disadvantaged owned business under SBA’s program.  In addition to a broad scope of assistance from SBA, participants in the program can receive sole source government contracts that are reserved for socially disadvantaged owned companies.

In 2007, Patel met co-defendant Wesley Burnett at a business conference in Costa Rica. Burnett, who was not a member of any economically or socially disadvantaged group, had experience constructing and maintaining barriers at military and government installations.  Patel and Burnett agreed that they would use UNTI to bid on SBA set aside contracts for barrier-related work. Burnett would perform the work under the contracts and would pay Patel 4.5 percent of the value of the contracts. In preparing a bid for a contact at Andrews Air Force, which was ultimately awarded to UNTI, Burnett and Patel exchanged emails in June 2011 in which they made statements indicating that they knew this arrangement was illegal.

In 2011, Patel met another individual identified as N.P., and they agreed to a fraudulent pass-thru arrangement similar to the one Patel had entered into with Burnett.

From October 2010 to July 2013, UNTI was fraudulently awarded $2,682,430 in set-aside U.S. government contracts.

In 2011, 2012 and 2013, Patel falsely certified to the SBA that no outside entity or individual provided financial support to UNTI when in fact Burnett and N.P. provided financial support to UNTI; and that Patel ran UNTI full-time, when in fact he did not because he was receiving disability compensation from the Social Security Administration in each of those years.

From November 2012 to October 2013, Patel received $973,407.37 in government funds under the fraudulently obtained set-aside contracts.  Patel kept a portion of these funds and turned the majority of them over to Burnett.  Prior to November 2012, payments under contracts went to Burnett, who provided a portion of the funds to Patel.

Wesley Burnett, age 46, of Hermosa Beach, California, previously pleaded guilty to his role in the scheme.  Burnett was sentenced to 42 months in prison and ordered to forfeit $694,893.99.

The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs.  The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.

The SBA’s Office of Inspector General (OIG), the U.S. Air Force Office of Special Investigations, and the Department of the Interior’s OIG participated in the investigation.

Queue set up for SBA 7(a) loans until more money is found

The Small Business Administration (SBA) has instituted a waiting list for its flagship 7(a) loans because the program hit its annual lending cap of $18.75 billion on Thursday (July 23, 2015).

SBA logo smallSBA officials, lenders and small business groups are urging Congress to raise the program’s authorization to $23.5 billion in order to free up loans for small businesses. Demand for the program is high because the government-guaranteed loans are the primary source of long-term loans, which feature lower monthly payments, for small businesses.

Keep reading this article at:

Owners of phony disadvantaged business to pay $7.8 million to settle false claim allegations

LB&B Associates Inc. and its principals, Lily A. Brandon and F. Edward Brandon, have agreed to pay the government $7.8 million to resolve allegations that they made false statements to obtain contracts through the Small Business Administration’s (SBA’s) 8(a) Business Development Program for Small Disadvantaged Businesses, the Justice Department announced July 6, 2015.   LB&B is a North Carolina corporation headquartered in Columbia, Maryland.

Justice Dept. seal“The purpose of the 8(a) Program is to assist small disadvantaged businesses to compete in the American economy,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division.  “The Justice Department is committed to making sure that those who participate in 8(a) contracts do so honestly and fairly.”

“The basic purpose of this federal program is undermined when contractors falsely claim to be a small or disadvantaged business,” said Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia.  “This $7.8 million settlement demonstrates our commitment to protecting the integrity of this important program.  Working with relators and federal investigators, we will do all that we can to act against those who illegitimately bill the American taxpayers.”

The government alleged that in seeking certification under SBA’s 8(a) Program, LB&B falsely represented that Lily Brandon – who satisfied the criteria for a socially and economically disadvantaged person under the program – controlled the operations of LB&B, when she did not.  Securing 8(a) certification allowed LB&B to obtain 8(a) set aside contracts from various government agencies.  Throughout the performance of these contracts, Lily Brandon allegedly failed to exercise actual control over LB&B’s operations, a key component to qualifying for the set aside contracts.

“This case shows the lengths we will go to protect the integrity of SBA’s 8(a) program,” said General Counsel Melvin F. Williams Jr. of the SBA.  “Both the Justice Department and SBA are prepared to do what it takes to make certain that the program helps folks who are really disadvantaged, and for whom it is intended to assist.”

The civil settlement resolves a lawsuit filed by Steven O. Sansbury and James T. Buechler, former employees of LB&B, under the whistleblower provision of the False Claims Act, which permits private parties, known as relators, to file suit on behalf of the government for false claims and to share in any recovery.  The act permits the government either to intervene in and take over the whistleblowers’ suit, or to allow the whistleblowers to pursue the action.  In addition to alleging LB&B’s improper receipt of 8(a) set aside contracts, Mr. Sansbury and Mr. Buechler alleged that LB&B made false claims in connection with contracts it obtained pursuant to the SBA’s Mentor-Protégé Program, which allows participants to obtain set aside contracts following LB&B’s graduation from the 8(a) Program.  The United States intervened in the whistleblowers’ 8(a) claims but not the Mentor-Protégé claims.  The settlement resolves both claims, and Mr. Sansbury and Mr. Buechler will recover a total of $1.5 million of the settlement.

The settlement with LB&B was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office of the District of Columbia, the SBA’s Office of Inspector General and SBA’s Office of General Counsel.

The civil lawsuit was filed in the District of Columbia and is captioned United States ex rel. Sansbury, et al.  v. LB&B Associates, Inc., et al., No. 07-cv-00251 (D. D.C.).

The claims resolved by this settlement are allegations only, and there has been no determination of liability.


Government small business data includes billions to Fortune 500 firms

An analysis by the American Small Business League (ASBL) has uncovered 179 Fortune 500 firms and their subsidiaries received federal small business contracts in fiscal year 2014. The study was based on the most recent information available from the Federal Procurement Data System (FPDS).

The largest recipient of federal small business contracts was Verizon. Some of the other firms that received federal small business contracts in recent years include: Chevron, Apple, General Electric, AT&T, CVS, Hewlett Packard, UPS, Bank of America, Home Depot, Target, Microsoft, Wells Fargo, Pepsi, Coca-Cola, Boeing, Oracle, Raytheon, Lockheed Martin, General Dynamics, Northrop Grumman, Honeywell International, BAE Systems, Rolls-Royce, Sears and John Deere.

The ASBL research is consistent with the recent investigative report released by Public Citizen titled “Slighted: Accounting Tricks Create False Impression That Small Businesses Are Getting Their Share of Federal Procurement Money, and the Political Factors That Might Be at Play.”

ABC, CBS, NBC, CNN, CNBC, MSNBC, Fox News and RTTV along with dozens of stories in many of the largest newspapers in the country have all reported on the fraud and abuse in federal small business contracting programs.

As early as 2003, the Government Accountability Office uncovered over 5,300 large businesses were receiving federal small business contracts.

On June 26, the Pentagon and the SBA ignored the results of the May 6 Public Citizen report and held a joint meeting to claim 24.99 percent of all federal contracts were awarded to small businesses. Billions in contracts to Fortune 500 firms and their subsidiaries were included in that number.

sba-logoThe research by ASBL, Public Citizen and federal investigators has found the SBA’s data to be significantly inflated in two ways. The SBA uses a rule they fabricated called the “exclusionary rule” to use a much lower federal acquisition budget in calculating the percentage of awards to small businesses. The SBA also unlawfully created a “five year rule” to include billions of dollars in contracts to Fortune 500 companies and their subsidiaries in their small business data.

Both the “exclusionary rule” and the “five year rule” have no basis in law and are in direct conflict with the provisions of the Small Business Act. The Small Business Act defines a small business as having no more than 1500 employees and requires small businesses receive “not less than 23 percent of the total value of all prime contract awards for each fiscal year.

The House Small Business Committee unanimously adopted an amendment to call for a new GAO investigation into fraud in federal small business contracting programs, based on research done by Chapman’s ASBL.

Senate Small Business Committee Chairman, David Vitter, has demanded that SBA Administrator Maria Contreras-Sweet provide him with a complete list of all firms that received federal small business contacts in fiscal year 2014 for an upcoming hearing on the issue.


SBA says government beat small business contracting goal for 2nd consecutive year

The federal government awarded 25 percent of its prime contracting dollars to small businesses in fiscal 2014, according to the Small Business Administration (SBA).

SBA logoThat marks the second consecutive year that federal agencies have met the government’s 23 percent small business contracting goal, something rarely achieved in the past.

There are some caveats: some contracts, such as contracts awarded for overseas work, are excluded from the base of contracts considered in this goal report. If they were included, the small business share of total contracts likely would be lower. Plus, there are bound to be cases where contracts that were awarded to large businesses were mistakenly counted as small business contracts.

Keep reading this article at:

Skeptical Senate chairman asks SBA for list of every contractor it counted as a small business

A Senate chairman has asked the Small Business Administration to provide him with a list of every company that was counted toward the federal government’s small business contracting goal in 2014.

Last year, the SBA reported the government had met its goal of awarding small businesses 23 percent of all federal contracting dollars for the first time in eight years.

Senate Committee on Small Business and Entrepreneurship

“We’re expecting even better results when we release the 2014 scorecard in the coming weeks,” SBA Administrator Maria Contreras-Sweet said May 8, during a White House event honoring National Small Business Week award winners.

But a report by Public Citizen (see questioned the accuracy of the SBA’s procurement report for 2013. It found that contracts awarded to giant federal contractors such as Lockheed Martin were counted as small businesses in the SBA’s numbers. This is just the latest example of flaws in the SBA’s contracting data though the years.

Keep reading this article at: