Reverse auctions once again in lawmakers’ crosshairs

Lawmakers are marshaling arguments to restrict the contracting tool called a reverse auction, criticizing agency reliance on a practice dominated by a single private firm at a Thursday hearing of the House Small Business subcommittee.

Rep. Richard Hanna, R-N.Y., who has introduced H.R. 1444 to limit reverse auctions, said that allowing contractors to bid electronically with increasingly lower prices to provide goods and services creates “a race to the bottom” that neither assures quality nor helps channel work to small businesses. “When reverse auctions are used properly, they can save taxpayer dollars,” Hanna said. “Unfortunately, some agencies have used reverse auctions in a manner that evades vigorous competition and contractor protections.”

Use of the tool at agencies such as the Veterans Affairs Department is dominated by a single Vienna, Va.-based firm called FedBid, which has become controversial for its lobbying practices. The Office of Federal Procurement Policy has been collecting data on the practice, but has yet to issue guidance, noted the panel’s ranking member, Rep. Nydia Velazquez, D-N.Y.

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SBA seeks comment on mentor protégé program, small business size rules, government contracting

The U.S. Small Business Administration (SBA) is proposing to amend its regulations to implement provisions of the Small Business Jobs Act of 2010 and the National Defense Authorization Act for Fiscal Year 2013.  Based on authorities provided in these two statutes, the proposed rule would:

  • Establish a Government-wide mentor-protégé program for all small business concerns, consistent with SBA’s mentor-protégé program for participants in SBA’s 8(a) Business Development program.
  • Make minor changes to the mentor-protégé provisions for the 8(a) program in order to make the mentor-protégé rules for each of the programs as consistent as possible.
  • Amend the current joint venture provisions to clarify the conditions for creating and operating joint venture partnerships, including the effect of such partnerships on any mentor-protégé relationships.
  • Make several additional changes to current size, 8(a) Office of Hearings and Appeals and HUBZone regulations, concerning among other things, ownership and control, changes in primary industry, standards of review and interested party status for some appeals.

SBA’s proposed rule, and a discussion of its provisions appears at:!documentDetail;D=SBA-2015-0001-0001.

SBA is seeking comments on the proposed rule, and comments must be received on or before April 6, 2015.


Approximately 600 small contractors will lose their set-aside status in 2015 — and might not know it

Nearly 600 small businesses will lose a set-aside status in 2015 — and the Small Business Administration isn’t so sure they even realize it yet.

That was among the findings from a report released by the Government Accountability Office Feb. 13 assessing the SBA’s contracting program for small businesses located in designated, highly underutilized business zones, or HUBZones.

Areas are designated as HUBZones based on demographic data including unemployment and poverty rates. The problem, according to the GAO, is the SBA lacks an effective way to communicate program changes to small businesses that participate in the program, which allows them to bid on contracts set aside for small businesses located in HUBZones. And because areas can lose their qualifying status due to changes in economic conditions, resulting in a three-year transition period before the status is stripped entirely, communication with participating small businesses is crucial.

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Deadline for comments is Feb. 27 on proposed rule affecting small business federal contracts

Are you a small business owner doing business with the government?  As previously reported here, the Small Business Administration (SBA) recently published a proposed rule to implement Section 1651 of the National Defense Authorization Act of 2013 (NDAA), proposing to change several key areas that could impact you:

  • The performance requirements applicable to small business and socioeconomic program set aside contracts and small business subcontracting.
  • The nonmanufacturer rule and affiliation rules.
  • The performance requirements for joint ventures.

From the SBA’s point of view, the proposed regulations should benefit small businesses by allowing small business concerns to use similarly-situated subcontractors in the performance of a set-aside contract, thereby expanding the capacity of small business prime contractors and potentially enabling small businesses to compete for and win larger contracts. SBA also believes the proposed rules will strengthen the small business subcontracting provisions, which may result in more subcontract awards to small business concerns. The proposed regulations also seek to address or clarify issues that are ambiguous or subject to dispute, thereby providing clarity to federal contracting officers as well as small business concerns.

Have comments? Visit the Federal Register online for information and to submit your comments by February 27, 2015.

Task order size status based on proposal date, not award date

A contractor was eligible for award of a small business set-aside task order because the contractor was “small” as of the date of its task order proposal–even though the contractor outgrew the size standard by the time the task order was awarded.

In a recent bid protest decision, the GAO held that a contractor may qualify for the award of a set-aside task order based on the date of its initial proposal, even in cases where the agency is prohibited from taking small business credit for the award.

The GAO’s decision in Research and Development Solutions, Inc., B-410581.2 (Jan. 14, 2015) involved a Navy task order solicitation for technical and engineering services.  The solicitation was issued as a small business set-aside under the SeaPort-e IDIQ contract vehicle.

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Clayton County Water Authority holds monthly vendor workshops

The Clayton County (GA) Water Authority has a contract preference program for small local businesses.  In addition, businesses currently certified as a small business with City of Atlanta, DeKalb County, or Clayton County may be provisionally certified as a small local business with the Water Authority.

To learn more about Clayton County Water Authority contract opportunities and their small business program, you may wish to attend one of their monthly vendor orientation workshops.

The vendor workshops are held each month in the Water Authority’s Community Use Room located at 1600 Battle Creek Road, Morrow, GA 30260. By attending, you can learn about the Water Authority’s new Small Local Business Certification Program and upcoming opportunities, and hear from guest speakers and other business resources that may benefit your company.

Upcoming 2015 Workshop dates are:

Feb 18th – 2 pm      March 12th – 5pm     April 16th – 9 am

May 19th – 5pm      June 16th – 2 pm       July 16th – 5 pm

Aug 12th – 9 am      Sept 16th – 5 pm        Oct 21st – 2 pm

Nov 12th – 5 pm

Download the workshop flyer here: Clayton County Small Business Workshops 2015

Register to attend workshops at:




GTPAC event supports Georgia small businesses, federal agencies, and large prime contractors alike

The Georgia Tech Procurement Assistance Center (GTPAC) hosted an event on January 22, 2015 designed to bring clients, federal agencies, and large prime contractors together in order to allow everyone to discuss working together in the future. More than 300 vendors attended, and they participated in over 400 one-on-one matchmaking appointments.

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Attendees at the Jan. 22 GTPAC-hosted small business event used a smartphone app to check-in and make matchmaking appointments.

Management of this large gathering — including the massive amount of appointment-making needed for the event — was made possible through the use of a new technology application developed by the IVSN Group LLC for GTPAC.   The app featured automated appointment-making capability on smart phones, tablets, laptops and PCs.  Once registered, each vendor representative received automatic confirmation via the app and email.  Confirmations included a bar code that attendees utilized to print their own name tags at the event’s check-in desk.

Breaks between workshop sessions allowed attendees to actively collaborate and network.
Breaks between workshop sessions allowed attendees to actively collaborate and network.

The event, entitled “Building Partnerships and Collaborating for Success,” was held in the auditorium and break-out rooms at the Georgia Tech Research Institute in Midtown Atlanta.  The GTPAC team used IVSN’s new technology on-site to expedite extra registrations, and to supplement the one-on-one appointments.  Helpful messages were “pushed” through the app to attendees throughout the day.  Any attendees who did not download the app in advance used a QR code on display in multiple locations at the event to allow them to download the app on-site.

Attendees were given access to a QR code in order to download an app that displayed the agenda, speaker profiles, presentation materials, and other resources.
Attendees were given access to a QR code in order to download an app that displayed the agenda, speaker profiles, presentation materials, and other resources.

Here’s a summary of what was accomplished:

  • All pre-registrants were given instruction on how to come prepared with an elevator speech and a written capabilities statement.
  • GTPAC’s program director Joe Beaulieu acted as emcee of the event with speakers from the CDC, EPA, and VA – and featuring the Regional Administrator of GSA, the Regional Director of SBA, and the Executive Director of the National Contract Management Association (NCMA).
  • Training seminars were held on the subjects of proposal-writing, project management, government contracting strategic planning, and business development.
  • All attendees benefited from individual matchmaking appointments with buyers from nine federal agencies, the State of Georgia, the City of Atlanta, and six major federal prime contractors, including big names like IBM, Lockheed Martin, and Northrup Grumman.
  • Scores of the small businesses in attendance also took advantage of this occasion to receive contract-related counseling from the team of GTPAC counselors who were on hand.
  • All of the day’s program elements and related resources were made available on an app which was downloaded by attendees to their mobile devices, laptops and PCs.
More than 300 Georgia business people got a chance to meet one-on-one with government contract decision-makers.
More than 300 Georgia business people got a chance to meet one-on-one with government contract decision-makers.

Presenting sponsors of the event were the Atlanta Chapter of the National Contract Management Association and the Small Business Administration. Supporting sponsors included Axiom Corporation, IVSN Group, and Unitech America.

Presently, GTPAC is soliciting event evaluations from all participants and plans to use the resulting feedback to improve future events and refine the event management app.

Copies of all presentations made at the event can be downloaded below.  They are listed in alphabetical order:

Federal officials like GSA's Torre Jessup (pictured here) briefed Georgia business reps on upcoming contracting opportunities.
GSA’s regional administrator Torre Jessup (pictured here) briefed Georgia business reps on upcoming contracting opportunities.  SBA regional director Cassius Butts also addressed an audience that packed the Georgia Tech Research Institute’s auditorium.




Four charged in grant fraud scheme

Four persons have been charged with conspiracy and fraud for obtaining money from small business owners for grant funding and services that they never provided or intended to provide, announced U.S. Attorney Daniel G. Bogden for the District of Nevada and Laura A. Bucheit, Special Agent in Charge of the FBI for Nevada.

Jason Demko, 38, Lorraine Riddiough, 66, Lissette Alvarez, 27, all of Las Vegas, and Mark Jones, 32, of Barberton, Ohio, are charged in a criminal indictment with one count of conspiracy to commit mail fraud and wire fraud, five counts of wire fraud, and criminal forfeiture.   They appeared on January 27, 2015 before Magistrate Judge Ferenbach and pleaded not guilty to the charges, and were released on personal recognizance bonds pending a March 16, 2015 trial date.  Demko was scheduled to appear before U.S. Magistrate Judge Cam Ferenbach on January 28, 2015 for an arraignment.

“Unfortunately, advance fee fraud schemes are very common,” said U.S. Attorney Bogden. “The con artist will ask for money up front before any tangible service or product is provided, and it will be very difficult to get your money back once you have turned it over to the scammers.”

“These arrests emphasize the FBI’s continued commitment to investigate financial crimes,” said Special Agent in Charge Bucheit. “It also serves as a reminder for consumers to protect themselves, and remember if it seems too good to be true, it almost always is.”

According to the indictment and other court records, from about January 2013 to February 2014, the defendants allegedly made false and fraudulent representations and promises to small business owners to persuade and induce them to pay initial fees, usually between $2,500 and $5,000 for goods and services they thought would help them obtain grants for their businesses. The business owners were told that the total cost for obtaining a grant was between $10,000 and $15,000, depending on the total amount of funding requested, and that the remaining fees would not be charged until the owners received 100 percent of the grant funding.  Among other things, the defendants falsely stated that they represented a company named Foundation Processing Center in Wilmington, Del., when in fact, they represented JCD Business Services in Las Vegas; falsely stated that only certain clients had qualified for grants, when in fact anyone who paid the fees were qualified by the defendants; and stated that they had obtained grants for other clients, when in fact they had not done so.  The defendants also re-solicited clients for additional fees, including business plans, when they knew that the plans were not going to assist the clients in obtaining any grants.  The defendants knew that the true purpose of their solicitations was to obtain funds to personally enrich themselves.

If convicted, the defendants face a maximum of 20 years in prison and a $250,000 fine on all counts.

This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.  For more information about the task force visit:

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.


Most contracting occurs where government lacks privity

Of the over $500 billion per year spent contracting for everything from computers to carriers, the vast majority of money ultimately awarded and performed by contractors happened without a contract directly from the government. Therefore, there is usually no business relationship (privity) between the government and the contractor doing work for its benefit.

How that can be? What’s going on?

In fact, while the government awards a prime contract for products and services, most often many of the prime’s deliverables from that contract will be subcontracted out to one or many large and small business firms.

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DoD seeks 10-year extension of small business mentoring program

The Defense Department intends to request a 10-year extension of a program that improves the ability of socioeconomically disadvantaged small businesses to compete for defense contracts, the program’s manager said yesterday.

The Small Business Mentor-Protege Program began in 1991 as a way to foster small businesses and improve technology transfer between the Defense Department and industry, Robert Stewart said in a DoD News interview.

Despite having been in existence for nearly 25 years, the program is still categorized as a pilot and must be reauthorized in a National Defense Authorization Act every few years, he said.

Stewart said that through regular outreach with industry representatives, his office has learned that the periodic reauthorizations give the impression that the program isn’t permanent. This has a chilling effect on participation — particularly as the reauthorization period approaches, he said.

“Whenever we’re about a year, year and a half out from an authorization — since it’s a pilot program and it’s still crafted in language as a pilot program — industry does what’s called a chilling-off,” Stewart said. From the perspective of a business owner, he said, “If I’m not sure something’s going to be reauthorized, I’m going to be less apt to put business development dollars into helping facilitate small business.”

Extending the program’s authorization period would provide stability, reassure industry and save the department money, he said.

How to Participate

Small businesses seeking to become prime contractors with the department first choose a mentor from one of the more than 50 larger companies participating in the program, he explained. Part of that selection process is ensuring that the strategic goals of the two companies align, Stewart noted.

“We try to put them in a position to be as successful as possible,” he said.

The larger company provides training and mentorship, and in exchange, receives credit toward their small business contracting goals, Stewart said. If the training is provided through a procurement technical assistance center, a small business development center, minority institution or a historically black college or university, they can claim up to four times the amount spent for credit toward their actual small business participation levels.

The agreements may not last longer than three years, and once an agreement is fulfilled, the small business graduates from the program and is able to serve as a prime contractor for DoD contracts.

“Now you have a small business who’s a prime contractor [and] whose overhead is significantly lower than your traditional government contractors,” Stewart said. “They can do the exact same work, sometimes faster, sometimes cheaper, oftentimes better than larger, more cumbersome agencies or entities.”

This is a win-win situation for industry and the Defense Department, Stewart said. Larger businesses now have a pool of capable, responsive partners with which to team up and seek defense contracts, while small businesses gain better-trained employees and, by piggybacking on the capabilities of their larger partner, they can compete for contracts that they otherwise wouldn’t have been able to support.

“It works out in a lot of areas,” he said. “We’re helping grow the manufacturing-industrial base by ensuring that we’re going through our [procurement technical assistance centers], small business development centers, minority institutions and [Historically Black Colleges and Universities], but also identifying tech transfer companies that allow the United States government to be able to fight the threat that the Googles, the Amazons, the Microsofts, the Oracles face every day.”

The Way Ahead

“One of the things that we’re looking for going forward … [is that] we want to focus on the evaluation and criteria and factors to drive contracting commands across the DoD enterprise to utilize Mentor-Protege as a way to meet those subcontracting small business participation goals,” Stewart said.

To accomplish this, he said, the Office of Small Business Programs plans to develop a defense acquisition regulation that would give participants in the Mentor-Protege Program greater weight during the bid solicitation process.

“You’re going to get credit toward being already involved in DoD — you know DoD’s business, you’ve already got an established working relationship with the DoD,” Stewart said.