Georgia Tech Procurement Assistance Center

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

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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

5 questions answered about size protests

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Wouldn’t you like to know five things about size protests and appeals?

Matthew Schoonover, partner at Koprince Law LLC, recently wrote an interesting article about size protests, specifically answering five questions you need to know about.  These are the questions he posed:

  1. What is a size protest?
  2. Who can challenge a company’s size?
  3. How are size protests decided?
  4. Can I appeal an adverse size determination?
  5. What else should I know about size protests and appeals?

Click here to read the answers to these questions: http://smallgovcon.com/five-things/size-protests-and-appeals/

Yes, an agency can change the NAICS code from one iteration of a contract to the next

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Click image above to open SBA’s Size Standards table.

As the incumbent contractor, you’re excited to bid on the successor contract.  The day it’s posted, you dash to fbo.gov, pull up the solicitation, and breathe a sigh of relief: the contract is still exclusively a small business set-aside.

But wait!  Under the assigned NAICS code your business doesn’t fall below the size standard.

Can the agency change the NAICS code from one iteration of the contract to another?  Sure, so long as the selected NAICS code meets the regulatory standard.

In NAICS Appeal of STG, Inc., SBA No. NAICS-5936 (2018), OHA considered a solicitation, issued by the Department of the Army, for “[n]on-personal information technology (IT) services and support requirements.” The contracting officer assigned the procurement NAICS code 541513, Computer Facilities Management Services, which carries a $27.5 million size standard. STG, the incumbent contractor, disagreed with that selection. It contended that the NAICS code, assigned to the existing contract, was the correct one, namely NAICS code, 517110 (now NAICS code 517311), Wired Telecommunications Carriers, with a 1,500-employee size standard.

Keep reading this article at: http://smallgovcon.com/uncategorized/yes-an-agency-can-change-the-naics-code-from-one-iteration-of-a-contract-to-the-next/

Meeting the definition of a small business concern — A checklist

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This is a  Checklist for existing or prospective federal government contractors to determine whether they can meet the definition of a small business concern (SBC) under the Small Business Act (SBA).

This Checklist includes the definitional thresholds and size standards for SBCs.

This Checklist can also be used to determine if an SBC can qualify under a specific small business category, including:

  • the 8(a) Business Development Program,
  • a Veteran-Owned Small Business (VOSB),
  • a Service-Disabled Veteran-Owned Small Business (SDVOSB),
  • a Women-Owned Small Business (WOSB),
  • an Economically Disadvantaged Women-Owned Small Business (EDWOSB), and
  • a Historically Underutilized Business Zone (HUBZone) SBC.

See the Checklist and related details at: https://www.jdsupra.com/legalnews/meeting-the-definition-of-a-small-42284/ 

SBA rejects major changes in size standard methodology

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The SBA has rejected several recommendations for major changes in how the SBA calculates small business size status.

In commentary published in the Federal Register on April 27th, the SBA rejected (among other things) recommendations that it use average employee count to evaluate the sizes of construction firms and that other firms’ sizes be measured by profits or net worth instead of average annual receipts.

The SBA’s commentary accompanied the publication of the SBA’s revised Size Standards Methodology White Paper, which is now available on the SBA’s website.  The White Paper explains how the SBA establishes, reviews, and modifies its small business size standards.

Keep reading this article at: http://smallgovcon.com/statutes-and-regulations/sba-rejects-major-changes-in-size-standard-methodology/

NAICS code appeals: One size does not fit all

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The federal government sets aside many contracts for small businesses, but not all small business set-asides are created equal.

Instead, different size standards define small business status for different procurements.  The size standards vary from industry to industry, so a given firm may be a small business for one procurement at the same time it may be other-than-small for a different procurement for seemingly similar goods or services.

To keep order, the Small Business Administration (SBA) maintains a manual of industrial codes – called North American Industry Classification System (NAICS) codes – that are assigned to particular classes of manufacturing and service industries.  Each NAICS code is associated with a particular size standard that changes over time.  Some size standards are based on a firm’s revenues and are expressed as dollar values – a firm is small if its average annual receipts do not exceed the specified number of dollars.  Others are based on the size of a firm’s workforce – a firm is small if its average number of employees does not exceed the figure associated with the particular NAICS code in question.

For each procurement in excess of the micro-purchase threshold (currently $3,500 for most acquisitions), the contracting officer, per FAR 19.303, must designate within the solicitation a single NAICS code that best corresponds to the goods or services the agency is soliciting.   The chosen NAICS code establishes the size standard for that procurement.  If the procurement is a small business set-aside, the size standard can determine (in large part) whether a particular offeror is eligible for award.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=629604

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/

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/

Lesson learned the hard way: Insufficient experience information sinks offeror’s proposal

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GAO-GovernmentAccountabilityOffice-SealAn offeror’s failure to provide the type of past performance information mandated by a solicitation led to the offeror’s elimination from consideration for a  major GSA contract.

A recent GAO bid protest decision highlights the importance of fully reading and adhering to a solicitation’s requirements–including those involving the type of past performance or experience information required.

GAO’s decision in Dougherty & Associates, Inc., B-413155.9 (Sept. 1, 2016) involved the GSA “HCaTS” solicitation, which contemplated the award of multiple IDIQ contracts to provide Human Capital and Training Solutions across the federal government. The solicitation was divided into two Pools based on the offeror’s small business size status. The GSA established a target of 40 awards for each Pool.

The solicitation provided for award based on best-value, and included a requirement for past experience, which stated:

Keep reading this article at: http://smallgovcon.com/gaobidprotests/insufficient-experience-information-sinks-offerors-proposal/

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