Georgia Tech Procurement Assistance Center

Court enforces “presumed loss” rule in 8(a) fraud case

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Presumed LossIn a Memorandum Opinion issued on June 17, 2016, the U.S. District Court for the District of Columbia applied the so-called “presumed loss” rule to assess the full contract value as the measure of the government’s loss for purposes of sentencing an individual convicted of misusing the SBA’s 8(a) program to win set-aside contracts.  (See United States v. Singh, Criminal Action No. 15-173 (RBW) (D.D.C. Jun 17, 2016).

This appears to be the first published court decision enforcing the controversial rule since its passage by Congress as part of the Small Business Jobs Act of 2010.

As brief background, prior to the 2010 Jobs Act, the Government had difficulty proving damages under the False Claims Act where a contractor misrepresented its size or socio-economic status to win set-aside government contracts. Practically speaking, the Government rarely suffers any actual economic harm in such cases. The fact that an ineligible firm improperly receives a contract set aside for small businesses may violate public policy, but it rarely increases the price of the contract.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=514216 

FAR Council adds new layer to small business subcontracting rules

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On January 20, 2016, the FAR Council published a proposed rule calling for changes to the Federal Acquisition Regulation (FAR) Parts 19 and 52 that address payments to small business subcontractors.

The FARThe proposed changes, which are intended to implement regulations adopted by the Small Business Administration (SBA) in 2013, will expand the range of small business-related obligations imposed on prime contractors.

The proposed rule stems from the Small Business Jobs Act of 2010, which, as noted in a previous post, called for regulations governing prime contractors’ compliance with their small business subcontracting plans. Among the Act’s requirements was that prime contractors notify their contracting officer if they pay a “reduced price” or make an “untimely payment” to a small business subcontractor.  Although the SBA adopted regulations implementing this statutory directive in July 2013, the Far Council is taking on the task for the first time.

Keep reading this article at: http://www.natlawreview.com/article/far-council-adds-new-layer-to-small-business-subcontracting-rules

Comments on the proposed rule must be submitted by March 21, 2016.  Comments should reference “FAR Case 2014-004” and may be submitted by mail, email, or online. 

Proposed contract bundling changes aim to increase small business contracting

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As required by the Small Business Jobs Act of 2010, on June 3, 2015, the FAR Council introduced a proposed change to the FAR contract bundling requirements. 80 Fed. Reg. 31,561-01. The proposed rule aims to improve small business participation in federal contracting by clarifying existing FAR regulations that discourage agency utilization of contracting bundling. The proposed rule would require increased reporting, parses the definitions of “bundling” and “consolidating” of contracts, and requires agencies to publicly justify their decisions to bundle requirements or consolidate contract vehicles. This definitional distinction between bundling of requirements and consolidation of contracts is intended to discourage agencies from combining unrelated requirements or contracts into a single award.

Under the proposed rule, agencies that bundle contracts or requirements in excess of $2 million will face greater notification and reporting requirements. If an agency wants to bundle two existing contracts, it must first notify small businesses at least 30 days beforehand of its intent to bundle its contracts. Agencies will also be required to provide public notice of the agency’s bundling policy and a list of and rationale for any bundled requirements for which the agency solicited offers or issued an award. If adopted, the proposal’s enhanced notification requirements may afford small business contractors an opportunity to protest an agency’s improperly bundled contracts.

Keep reading this article at: http://www.mondaq.com/unitedstates/x/415754/Government+Contracts+Procurement+PPP/Proposed+Contract+Bundling+Changes+Aim+To+Increase+Small+Business+Contracting

New rules proposed for mentor-protégé, HUBZone, 8(a) and other SBA programs

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On February 5, 2015, the Small Business Administration (SBA) published a proposed rule in the Federal Register for the purpose of amending existing regulations in order to implement provisions of the Small Business Jobs Act of 2010 and the FY13 National Defense Authorization Act.

Based on these two statutes, SBA is proposing a Governmentwide mentor-protégé program for all small business concerns, consistent with SBA’s existing mentor-protégé program for Participants in the 8(a) Business Development (BD) program. The proposed rule also would make minor changes to the mentor protégé provisions for the 8(a) BD program in order to make the mentor-protégé rules consistent across agency boundaries.

Similarly, SBA is also proposing to amend 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. Finally, SBA’s proposed rule would make several additional changes to current size, 8(a) Office of Hearings and Appeals, or HUBZone regulations, concerning ownership and control, changes in primary industry designations, standards of review, interested party status, and other matters.

Comments on the proposed rule are due on April 6, 2015.

The proposed rule can be seen here: Federal Register Vol. 80 No. 24 Part III Feb. 5 2015

An analysis of the proposed rule can be found here: Analysis of SBA’s Proposed Rule to Create a New Mentor-Protege Program for All Small Businesses – 02.06.2015

GAO rejects protest of GSA’s massive office supply contract

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The Government Accountability Office (GAO)  denied the protests of the GSA’s Office Supplies 3 (OS3) strategic sourcing contract, leaving the protesters dismayed and in shock.

In issuing their decision Monday, GAO’s lawyers found the General Services Administration (GSA) did indeed meet the requirements under the Small Business Jobs Act to evaluate the economic impact of OS3 on small businesses.

GAO’s decision comes despite the fact that the Small Business Administration in April ruled that GSA’s analysis was faulty. SBA found GSA’s analysis didn’t fully consider the negative impact OS3 could have on small firms.

But GAO stated the Small Business Jobs Act doesn’t require agencies to develop a “more detailed” or “quantified cost-benefit analysis” and therefore GSA’s determination met the letter of the law.

“GSA conducted market research and considered alternatives to the procurement approach set forth in the solicitation,” GAO’s Susan Poling, GAO’s general counsel, said in the opinion. “Further, the agency prepared a consolidation analysis which recognized that there was a potential for a reduction in sales for small business contractors who did not receive awards under the OS3 solicitation. The agency concluded, however, that the benefits to be gained through OS3 outweigh the potential negative impact to small business concerns. We find that GSA’s analysis addressed the relevant requirements of the SB Jobs Act, and therefore find no basis to sustain the protest.”

GAO addressed SBA’s ruling in the protest decision. Lawyers say SBA’s procurement center representative’s disagreement with GSA’s analysis wasn’t a basis for GAO to conclude the evaluation was unreasonable.

Keep reading this article at: http://www.federalnewsradio.com/index.php?nid=851&sid=3638981

Little guys complain they’re tossed aside as big contractors absorb cuts

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Computer Frontiers Inc.’s owner thought she’d gotten a break when Stanley Inc. agreed to team up with the small technology company in the U.S. government market.

Instead, Barbara Keating says she feels betrayed. Canada’s CGI Group Inc., after buying Stanley, touted the relationship to win orders in the past three years under a State Department visa-processing contract valued at as much as $2.8 billion. Then it mostly cut the small business out of the deal, sending some work overseas, according to a federal lawsuit.

“We were a big part of winning the contract,” Keating said in a phone interview. “We definitely thought we’d all grow together because of this relationship. But that obviously didn’t happen.”

Large companies are increasingly reducing subcontractors’ roles to help cope with $1.2 trillion in automatic federal spending cuts that began in March, according to attorneys and contracting specialists. Those grievances have reached U.S. officials, who want to know when vendors won’t be working with small businesses that helped them get the work.

“We went to many different parts of the country and met with companies, and in almost every city there was someone that said this was an issue,” said Ken Dodds, director of policy, planning and liaison for the U.S. Small Business Administration.

The Small Business Jobs Act of 2010 demanded that the government start requiring contractors that operate under a subcontracting plan to notify agencies when they’re not using small businesses that were part of their bids, Dodds said. A regulation to implement that part of the law hasn’t been approved.

Keep reading this article at: http://www.bloomberg.com/news/2013-11-07/little-guys-said-tossed-aside-as-contractors-absorb-cuts.html

New SBA rule mandates notification if contractors don’t use small business subcontractors

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A new rule set to go into effect Aug. 15, 2013 directs prime contractors to notify  contracting officers if they don’t use small business subcontractors that were  integral to producing a bid proposal.

In the Small Business Administration’s discussion of the final  rule, the agency says a prime contractor must represent that it will  make a good faith effort to utilize the small business subcontractors used in  preparing its bid or proposal.

The rule, authority for which comes from the Small Business Jobs Act of 2010,  spells out three conditions of small business involvement in a prime contract  bid, any one of which trigger the notification requirement: the prime  specifically references a small business in a bid or proposal; the small  business has entered into a written agreement with the prime to perform specific  work as a subcontractor under the contract should the prime win; or the small  business drafted portions of the proposal or submitted pricing or technical  information that appears in the bid or proposal.

Keep reading this article at: http://www.fiercegovernment.com/story/new-sba-rule-mandates-notification-if-contractors-dont-use-small-business-s/2013-07-19

 

New rule implements ‘presumption of loss’ over small business misrepresentation

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A new rule goes into effect Aug. 27, 2013 implementing a “presumption of loss” of the entire dollar value of any contract given to small businesses that  misrepresent their status.

The rule makes the basis of damages for a civil lawsuit equal to the value of the full  contract.

The government will consider any misrepresentation to be intentional after a  business registers itself as small in any federal database or submits a bid for  a contract as a small business.

The rule, which implements provisions from the 2010 Small Business Jobs Act, does limit liability in cases of unintentional error, technical  malfunction, “or other similar situations.” The Small Business Administration  found 200 firms that misrepresented their size in 2010.

Keep reading this article at: http://www.fiercegovernment.com/story/new-rule-implements-presumption-loss-over-small-business-misrepresentation/2013-07-08?utm_medium=nl&utm_source=internal 

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