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.

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SBA wants to know how ‘big data’ affects small business

The Small Business Administration is trying to figure out where big data meets small business.

SBA logoWhile large businesses have been using large volumes of data to make better business decisions, “with greater access and availability of cost-effective technology, small businesses are doing the same,” according to a recent solicitation for research.

For instance, small businesses and retailers can use online transaction history, analyzed in aggregate, to make decisions about sales and marketing programs, better understand customer behavior and predict the number of staffers they’ll need, according to SBA.

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Sorry, subcontractor: No SBA size appeal for you

When the SBA found a subcontractor to be affiliated with its prime contractor under the ostensible subcontractor rule, the subcontractor could not appeal the SBA’s finding to the SBA Office of Hearings and Appeals.

SBA sealIn a recent size appeal decision, OHA held that a subcontractor lacks the ability to file a size appeal because the subcontractor is not directly affected by the size determination.

OHA’s decision in Size Appeal of Doss Aviation, Inc., SBA No. SIZ-5648 (2015) involved a Department of Defense set-aside solicitation.  After award was made to Hughes Group LLC, the SBA Area Office conducted a size determination.  The SBA Area Office determined that Hughes Group was not an eligible small business due to affiliation with a large subcontractor, Doss Aviation, Inc., under the ostensible subcontractor affiliation rule.

Doss Aviation filed a size appeal.  OHA responded by asking Doss to explain why, as a subcontractor, it had standing to file a size appeal.  OHA directed Doss to previous OHA size decisions, in which OHA held that an alleged affiliate, whose own size was not at issue in the size determination, has no “direct stake” in the outcome of a size appeal, and thus lacks standing to initiate a size appeal.

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Learn more about “affiliation” and the “ostensible subcontractor” rule at:


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.”

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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.

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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.

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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

For more information, contact SBA’s Major Clark at 202-205-7150 or

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.

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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.

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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.

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