Georgia Tech Procurement Assistance Center

OHA: Prime-subcontractor teams are different than Joint Ventures for size purposes

By

The ostensible subcontractor rule says that, for a small business or socioeconomic set-aside such as 8(a), the small business prime contractor must perform the primary and vital parts of the contract and can’t be unduly reliant on a subcontractor.  If the small business is found to violate the rule, the size of the small prime contractor and the large subcontractor are grouped for size purposes, which can result in loss of award.  But the ostensible subcontractor rule is different from SBA’s joint venture rules because SBA rules (and other federal law) distinguish between a prime-sub team and a joint venture.  In a recent decision, OHA reversed a determination that a small business prime was affiliated with a subcontractor where the Area Office mixed up the analysis of the ostensible subcontractor rule and the joint venture rules.

Continue reading at:  SmallGovCon

CVE verification pointer: remember to provide truthful information

By

In government contracting—as in life—it’s important to be honest.  And in our experience, most government contractors are honest.  Where a contractor is dishonest or untruthful, it can face significant sanctions.

So it was in a recent SBA Office of Hearings and Appeals decision, in which the OHA considered the cancellation of an entity’s SDVOSB status.  In CVE Appeal of Afily8 Government Solutions, LLC, SBA No. CVE-125-A (2019), the OHA affirmed the cancellation of Afily8’s SDVOSB verification based on concerns that Afily8 did not provide truthful information to the VA’s Center for Verification and Evaluation.

Continue reading at:  SmallGovCon

SBA OHA: for calculating receipts, look to tax returns

By

To calculate a company’s size under a receipts-based NAICS code, the SBA will add the company’s total income to its costs of goods sold, as those amounts are reported on its tax returns.  In fact, the SBA’s regulations are clear that it must use these reported amounts to determine a company’s size status.

What happens, then, when a company’s taxes show “income” that might not really reflect money in the company’s accounts?  The SBA’s Office of Hearings and Appeals recently considered this question, and affirmed a company’s ineligibility based on the income reported in its tax returns.

Continue reading at:  SmallGovCon Blog

 

SBA denies 8(a) status based on applicant’s ability to successfully overcome gender-based discrimination in her field

By

OHA recently affirmed the 8(a) status denial of a 100% woman-owned small business performing in the historically male-dominated renewable energy field.  The applicant—who SBA called an “advocate” and “mentor” to women in the industry—detailed specific instances of gender-based-discrimination that plagued her education, employment, and career.  But SBA was unmoved, instead focusing its analysis on the applicant’s triumph over these obstacles—apparently an indication that she was not socially disadvantaged in the first place.  

Continue reading at:  SmallGovCon

SBA OHA: Owners did not have enough managerial experience to qualify concern as a WOSB

By

SBA’s socio-economic set-aside programs mandate compliance with multiple control requirements.  An important one stipulates that a woman owner of a WOSB (or a veteran for a SDVOSB or a disadvantaged owner for an 8(a) business) must have the “managerial experience of the extent and complexity to run the concern.”

But what, exactly, does this requirement entail?  A recent OHA case provides some important guidance.

In C & E Industrial Service, Inc., SBA No. WOSB-112 (Apr. 8, 2019), a WOSB was awarded a contract for rebuilding four parking lots at the White Sands Missile Range in New Mexico.  An unsuccessful offeror filed a protest alleging that the women owners did not, in fact, own C&E.  It also alleged that the women owners were not qualified to lead a construction firm.  (Although the protest and subsequent proceedings at SBA and OHA discussed ownership and control issues, here we’ll focus solely on the control issues.)

Continue reading at:  SmallGovCon blog

SBA OHA: Joint venture agreement must explain venturers’ responsibilities

By

Joint venture agreements continue to be a hot topic among small business federal contractors.  For good reason: if the agreement is properly prepared, a joint venture allows two companies (including, in the case of an approved mentor and protégé, a large business) to augment their capabilities and jointly bid on a federal project.

But to avail themselves of this benefit, the venturers must first prepare a joint venture agreement that complies with the SBA’s requirements.  Sometimes, this task can be quite tricky.  And as a recent decision of the SBA’s Office of Hearings and Appeals shows, the failure to have a compliant joint venture agreement can cost the joint venture an award.

Continue reading at:  SmallGovCon

New OHA decision regarding class waivers of the non-manufacturer rule creates uncertainty

By

Those familiar with Federal procurements know the general rule: If you submit a proposal against a solicitation despite disagreeing with one of its provisions, you usually waive the right to challenge that provision in the future.  That rule applies to bid protests at both the Government Accountability Office (“GAO”) and the Court of Federal Claims.  In Size Appeal of Cypher Analytics, Inc. d/b/a Crown Point Systems, SBA No. SIZ-5986 (2019), the Small Business Administration’s (“SBA”) Office of Hearings and Appeals (“OHA”) recently showed that the general rule does not necessarily apply to SBA size protests.

Continue reading the article at: Government Contracts Insights

New decisions clarify small business minority shareholder protections

By

One of the easiest small business affiliation rules to apply is that a person that owns “50 percent or more of a concern’s voting stock … controls or has the power to control the concern.” (13 C.F.R. § 121.103(c)(1))

It is far more difficult, however, for minority owners that own less than 50 percent of a concern’s voting stock to determine what, if any, controls they can have over a small government contractor without jeopardizing their small business status.

The Small Business Administration (SBA) has long held that minority owners may have negative controls to protect their investment without creating affiliation as long as the negative controls do not create control over day-to-day business operations.

In recent cases, SBA’s Office of Hearings and Appeals (OHA) has further clarified what specific arrangements may comply with that rule.

Generally, a minority owner will be found to control a concern if it can veto or block important business actions.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=759238

SBA’s OHA clarifies negative control restrictions – But do the new SDVOSB regulations limit its impact?

By

Between new regulations from the Small Business Administration (SBA) and decisions from the SBA’s Office of Hearings and Appeals (OHA), the limits of acceptable actions by small business owners set on maintaining their small business size status continues to change.

Most recently, OHA issued a noteworthy decision that clarifies restrictions on negative control of small businesses, including what actions it considers “extraordinary actions” and what actions are ordinary actions related to the daily control of a company. OHA’s decision in Size Appeal of Southern Contracting Solutions III, LLC, SBA No. SIZ-5956 (2018) is helpful in understanding the parameters of permissible negative control since OHA provided its clearest list to date of “extraordinary actions” and “ordinary” actions essential to the daily operation of the company.

However, it is important to note that the impact of the ruling, as far as service-disabled veteran-owned small businesses (SDVOSBs), will be limited in light of the new SBA and VA regulations.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=750078

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

By

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/

Contracting News

Read More

Contracting Tips

Read More

GTPAC News

Read More

Georgia Tech News

Read More