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/

Small is big in DoD business systems contracts … and that’s a good thing

Thirty-six years ago, a young computer programmer working out of his parents’ garage was looking for investments so he could create the world’s most user-friendly personal computer. “The programmer in question is the late Steve Jobs, and the fund that helped seed Apple in its infancy was part of the Small Business Investment Company (SBIC) program – the SBA’s investment arm,” said the December 19, 2014 SBA Blog.

Until recently, the Air Force struggled to meet SBA “negotiated” small business goals (SBA Agency Small Business Contracts Data), but there have been steady improvements due to a number of factors, such as implementation of the AF Small Business Improvement Plan. On January 20, the headquarters of the Air Force Materiel Command announced they’d met small business goals for the first time in nine years.

From my perspective as a member of the Air Force for 31 years who has been working on small business contracts for the Air Force the past two years, I have observed the following 10 factors driving the recent success of small business in the Air Force and other services/agencies:

Defense budgets are puckered up. Our Department of Defense (DoD) is painfully trying to balance the needs for research and development, modernizing major weapon systems, increasing personnel costs, heavy deployment requirements and soaring sustainment costs and risks for weapon systems and infrastructure. Amidst all the sequestration, continuing resolutions for funding, budget cuts and racking and stacking priorities, DoD still confronts greater requirement vs. resource deltas than ever before.

Keep reading this article at: http://www.hstoday.us/blogs/guest-commentaries/blog/new-small-is-big-in-dod-business-systems-contracts-and-that-s-a-good-thing/cd9ad5f0c912386bd3f76e9be0ba3296.html

Congress moves forward on measures for small business contractors

Under the direction of former Chairman Sam Graves (R-Mo.), the House Small Business Committee over the past six years made overhauling the federal contracting process one of its top priorities, spearheading a number of initiatives intended to funnel more work – and by extension, taxpayer money – to small businesses. When Graves stepped down from the panel at the end of last year, it was unclear whether that effort would continue, or at least whether it would remain near the top of the committee’s to-do list.

Instead, it’s like he never left.

Now led by Rep. Steve Chabot (R-Ohio), the small business committee has picked up right where Graves left off. Chabot and crew recently held a series of hearings on a number of challenges facing small contractors, and last week, the panel marked up and approved a comprehensive package of changes stemming from those conversations.

“We know that when small businesses compete for federal work, it creates jobs, improves the quality of work, and saves taxpayers’ money,” Chabot said when rolling out the proposal, calling the proposed bill – dubbed the Small Contractors Improve Competition Act – “a commonsense approach to make sure that Washington is working with Main Street.”

Keep reading this article at: http://www.washingtonpost.com/news/on-small-business/wp/2015/03/27/congress-moves-forward-on-measures-for-small-business-contractors/

Small business federal contracting would change under House bill

The chairman of the House Small Business Committee introduced a bill that would include more categories for small businesses to get federal contracts.

The bill (H.R. 1481), introduced by Rep. Steve Chabot (R-Ohio), would increase the number of industries small businesses can compete for contracts as well as identifying new ways to attract small businesses in those new industry categories.

“Small business contracting policies are intended to make sure we have a broad spectrum of small firms working with the government across industries, and when those policies are undermined, it is imperative that we find appropriate solutions,” Chabot says in a March 20 statement.

Keep reading this article at: http://www.fiercegovernment.com/story/small-business-federal-contracting-would-change-under-chabot-bill/2015-03-22