Georgia Tech Procurement Assistance Center

SBA reiterates that VetBiz verification is not required for non-VA SDVOSB contracts

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Despite a longstanding and very common misconception, the VA’s SDVOSB verification requirement doesn’t apply to non-VA SDVOSB contracts.

As the SBA Office of Hearings and Appeals recently reiterated, it was “simply not correct” to believe that a company was required to be verified in VetBiz to be awarded a non-VA SDVOSB contract.

Confusingly, the federal government currently runs two SDVOSB programs: one under the VA’s rules and the other under the SBA’s.

Keep reading this article at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/vetbiz-verification-not-required-for-non-va-sdvosb-contracts-sba-oha-reiterates/

SBA sneaks in rule on small business recertification

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The Small Business Administration (SBA) issued a Direct Final Rule on March 26, 2018 that appears to address a specific holding of SBA’s Office of Hearings and Appeals (OHA) related to small business recertification rules.

This rule went into effect on May 25, 2018.

In the recently issued Analytic Strategies, Inc., SBA No. VET-268, decision, OHA held that a service-disabled veteran-owned small business concern (SDVO SBC) that recertifies its status pursuant to an acquisition or merger remains eligible for set-aside task orders under an indefinite delivery, indefinite quantity contract (IDIQ), unless the contracting officer specifically requires recertification in connection with a specific task order. This holding affirmed the widely understood interpretation of the regulations. SBA opposed this interpretation of the rule in Analytic Strategies. For more information on this case, see an earlier blog post on Analytic Strategies.

What Is the Change?

In March 2018, SBA announced what it terms as a “technical correction” under a Direct Final Rule that may be an attempt to cast doubt on the Analytic Strategies decision. This new rule, however, may prove too much as it would apply to many of the small business programs administered by SBA and not just SDVO SBCs. On the other hand, if SBA’s goal was to make contractors that have recertified their status ineligible for future set aside task orders, it is not clear this rule does it.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=701646

SBA’s hearings and appeals office provides clarity on nonmanufacturer rule

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To be eligible for a small business set-aside procurement seeking a manufactured product, an offeror has to either be the product’s manufacturer or otherwise qualify under the nonmanufacturer rule.

Determining whether a business qualifies — either as the manufacturer or nonmanufacturer — can be a fact-intensive and confusing task. But it’s a vitally important one, as the penalty for not qualifying can be the loss of an awarded contract.

Recently, however, the SBA Office of Hearings and Appeals provided important clarity on how a small business might qualify as a nonmanufacturer.

Let’s take a look.

Keep reading this article at: http://smallgovcon.com/sbaohadecisions/sba-oha-provides-clarity-on-the-nonmanufacturer-rule/

Court upholds ‘draconian and perverse’ SBA SDVOSB ownership rules

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The SBA’s strict SDVOSB ownership rules can produce “draconian and perverse” results, but are nonetheless legal, according to a federal judge.

In a recent decision, the U.S. Court of Federal Claims condemned the SBA’s SDVOSB unconditional ownership requirements, while holding that the SBA was within its legal rights to impose those requirements on the company in question.

The Court’s decision emphasizes the important differences between the SBA and VA SDVOSB programs, because the Court held that although the company in question didn’t qualify as an SDVOSB under the SBA’s strict rules, it was eligible for VA SDVOSB verification under the VA’s separate eligibility rules.

The Court’s decision in Veterans Contracting Group, Inc. v. United States, No. 17-1188C (2017), is the third in a series of ongoing battles between the SBA and a self-certified SDVOSB.  The cases involved an Army Corps of Engineers IFB for the removal of hazardous materials and the demolition of buildings at the St. Albans Community Living Center in New York.  The Corps set aside the IFB for SDVOSBs under NAICS code 238910 (Site Preparation Contractors).

Keep reading this article at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/court-upholds-draconian-and-perverse-sba-sdvosb-ownership-rules/

Breaking News: On Jan. 30, 2018, the SBA released its proposed consolidated rule for SDVOSB eligibility.  See details here: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/sba-proposes-consolidated-sdvosb-eligibility-rules/

Federal court interprets SDVOSB “unconditional ownership” less strictly than SBA

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The Court of Federal Claims recently issued an opinion that defines “unconditional ownership” of an SDVOSB in a more relaxed manner than the SBA, creating a split of authority on the issue.

The Court, rejecting SBA precedent, held that certain restrictions on ownership of an SDVOSB by a service-disabled veteran are acceptable under the SBA’s unconditional ownership regulations. In particular, the SDVOSB company can retain a right of first refusal that would allow it to purchase the shares of the veteran upon death, incompetency, or insolvency, and that right does not result in a violation of the unconditional ownership requirement.

With the Court and the SBA’s administrative judges staking out different positions, what should SDVOSBs do?

In Veterans Contracting Group, Inc. v. United States, No. 17-1015C, (Fed. Cl. Aug. 22, 2017), the Court examined the same facts that the SBA Office of Hearings and Appeals did in a recent decision addressed in the SmallGovCon blog post of September 19, 2017.  And, examining the very same facts, the Court reached the opposite conclusion.

Keep reading this article at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/federal-court-interprets-sdvosb-unconditional-ownership-less-strictly-than-sba/

Familial relationship affiliation: SBA treats spouses as ‘one party’

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The author of this article, Steve Koprince, is also author of the book entitled “The Small-Business Guide to Government Contracts.”

One common way that contractors attempt to avoid affiliation is by limiting a particular individual to a minority ownership interest (often 49%).

But as a recent SBA Office of Hearings and Appeals case demonstrates, when a company’s owners are spouses (or other close family members), the SBA may disregard the legal ownership split, and treat the family members as one person for purposes of the affiliation rules.

OHA’s decision in Size Appeal of Gregory Landscape Services, Inc., SBA No. SIZ-5817 (2017) involved an Army solicitation seeking grounds maintenance at Fort Rucker, Alabama.  The solicitation was issued as a WOSB set-aside under NAICS code 561730 (Landscaping Services), with a corresponding $7.5 million size standard.

After opening bids, the Air Force announced that Gregory Landscaping Services, Inc. was the apparent awardee.  An unsuccessful competitor then filed a size protest.  Although the size protest was untimely, the SBA saw potential merit to the protester’s allegations.  The SBA adopted the size protest and initiated a size determination.

Keep reading this article at: http://smallgovcon.com/sbaohadecisions/familial-relationship-affiliation-sba-treats-spouses-as-one-party/

Kingdomware doesn’t require recertification for GSA Schedule SDVOSB set-aside orders

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The Supreme Court’s landmark ruling in Kingdomware Technologies, Inc. v. United States does not require SDVOSBs to recertify their eligibility in connection with individual GSA Schedule task orders.

In a recent decision, the SBA Office of Hearings and Appeals held that Kingdomware doesn’t affect the SBA’s SDVOSB eligibility regulation for multiple-award contracts, which specifies that if a company qualifies as an SDVOSB at the time of the initial offer for a multiple-award contract, it ordinarily qualifies as an SDVOSB for all orders issued under the contract.

OHA’s decision in Redhorse Corporation, SBA No. VET-263 (2017) involved a GSA RFQ seeking transition ordering assistance in support of the Network Services Program.  The RFQ contemplated the award of a task order under the GSA Professional Services Schedule.  The order was set aside for SDVOSBs under NAICS code 541611 (Administrative Management and General Consulting Services).  The GSA contracting officer did not request that offerors recertify their SDVOSB eligibility in connection with the order.

After evaluating quotations, the GSA announced that Redhorse Corporation was the apparent awardee.  An unsuccessful competitor subsequently filed a protest challenging Redhorse’s SDVOSB status.  The SBA Director of Government Contracting sustained the protest and found Redhorse to be ineligible for the task order.

Keep reading this article at: http://smallgovcon.com/sbaohadecisions/kingdomware-doesnt-require-recertification-for-gsa-schedule-sdvosb-set-aside-orders

Ostensible subcontractor rule: SBA OHA confirms ‘four key factors’ to avoid

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In determining whether a prime contractor and subcontractor are affiliated under the ostensible subcontractor rule, the SBA is supposed to consider the totality of the relationship between the parties.  But when it comes to determining whether the ostensible subcontractor rule has been violated, not all components of the prime/subcontractor relationship are created equal.

In a recent decision, the SBA Office of Hearings and Appeals confirmed that there are “four key factors” that are strongly suggestive of ostensible subcontractor affiliation–especially if the subcontractor will perform a large percentage of the overall contract work.

OHA’s decision in Size Appeal of Charitar Realty, SBA No. SIZ-5806 (2017) involved a GSA solicitation for custodial, landscaping and grounds maintenance at two federal courthouses.  The solicitation was issued as an 8(a) set-aside under NAICS code 561720 (Janitorial Services), with a corresponding $18 million size standard.  The solicitation required, among other things, that offerors provide at least three past performance references, completed over the last three years, for similar work.

Keep reading this article at: http://smallgovcon.com/sbaohadecisions/ostensible-subcontractor-rule-oha-confirms-four-key-factors-to-avoid/

Offeror with ‘relatively weak proposal’ can file size protest, says SBA’s OHA

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SBA sealAn offeror with a “relatively weak proposal” can nonetheless file a size protest challenging the small business eligibility of the prospective awardee, provided that the protester was not found technically unacceptable or otherwise incapable of being selected for award.

In a recent size appeal decision, the SBA Office of Hearings and Appeals held that the mere fact that the protester was evaluated as “less than satisfactory” on four out of five non-price factors did not justify dismissing the protester’s size protest for lack of standing.

OHA’s decision in Size Appeal of TMC Global Professional Services, SBA No. SIZ-5792 (2016) involved a DOE NNSA solicitation for the Design, Integration, Construction, Communication, and Engineering 2 (DICCE2) procurement in support of DOE’s nuclear smuggling detection and deterrence efforts.  The solicitation was issued as a small business set-aside under NAICS code 237990 (Other Heavy and Civil Engineering Construction), with a corresponding $36.5 million size standard.

Keep reading this article at: http://smallgovcon.com/sba-size-protests/offeror-with-relatively-weak-proposal-can-file-size-protest-says-sba-oha/

SAM profile mistake leads to possible lost contract

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SAM logoSmall business owners have lots of items on their to-do lists. In addition to actually running the business, there are many administrative tasks required to make sure that you meet the applicable small business size standards and maintain those standards year-after-year (in order to avoid, or at least minimize, vulnerability to an SBA size protest).

Among the (sometimes admittedly) tedious tasks associated with remaining eligible for small business contract awards is registering in the required government databases. Over the past five years, this process has been considerably streamlined by the rollout of the System for Award Management (www.SAM.gov). SAM is a no-cost, government website where contractors must register and provide certain identifying information about their business.

One of the areas covered by a SAM profile is a business’s size – and specifically whether it qualifies as “small” under the applicable size standards.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=522310

Remember: SAM.gov registration is free, and help with SAM is free, too.  

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