Georgia Tech Procurement Assistance Center

Highlights from the stalled SBA Reauthorization and Improvement Act of 2019

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Last month, Senator Marco Rubio, Chairman of the Senate Committee on Small Business and Entrepreneurship, released the Chairman’s mark to the Small Business Administration (SBA) Reauthorization and Improvement Act of 2019 (the “SBA Reauthorization Act”).  This legislation aims to modernize and streamline SBA programs, and would be the first comprehensive reauthorization of the Small Business Act in nearly twenty years.  Although the legislation appears stalled, it is likely that many of these initiatives will find their way into future policy initiatives.  Here are a few potential changes to track in the SBA Reauthorization Act:

  • Creation of a Centralized Certification Office.  With a few exceptions, small business programs are based on self-certification by each firm.  This legislation would create a centralized certification office for firms wishing to participate in the SBA’s Socially and Economically Disadvantaged Business Development Program (8(a)), Women-Owned Small Business Program (WOSB), Service-Disabled Veteran-Owned Small Business Program (SDVOSB), and Historically Underutilized Business Zone Program (HUBZone).  This would increase certainty for Government officials relying on size representations and reduce the number of speculative size and status protests.  However, it may also create logistical and funding complications for the SBA due to the sheer volume of applications.
  • Increased Sole Source Authority.  To increase the use of sole source awards for small businesses, the legislation would increase the contract-value limit on sole-source awards for the HUBZone, WOSB, and SDVOSB programs – from $6.5 and $7 million to $10 million for manufacturing contracts, and $4 million to $8 million for all other contracts.
  • Increased Venture Capital Investment in WOSBs.  The legislation would allow women-owned and minority-owned firms to accept venture capital and equity investments that would exceed 50 percent ownership of the firm, so long as those venture capital and equity investment firms are themselves women-owned or minority-owned.  This would allow WOSB and 8(a) entities to accept needed investments and still maintain their program status.

Continue reading at:  Morrison & Foerster

DoD wants more leeway in TINA sole-source cost and pricing requirements

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Ellen Lord, the Defense Department’s new undersecretary for acquisition, technology and logistics, appeared before the Senate two weeks ago to give her first progress report on the department’s implementation of congressional acquisition reform.

In passing, she made a new reform request of her own: a potentially-fundamental change to the way DoD handles sole-source procurements.

Since 1962, when Congress passed the Truth in Negotiations Act (TINA), the government has generally been required to demand that contractors provide it with their cost and pricing data when that company is the only bidder that can fulfill the military’s requirements. The rationale is that without a competition between vendors, the government needs some insight into its contractor’s actual costs to make sure it’s not getting gouged.

Keep reading this article at: https://federalnewsradio.com/dod-reporters-notebook-jared-serbu/2017/12/pentagon-wants-more-leeway-on-truth-in-negotiations-act/

 

Companies barely had to compete for half of the federal contracts awarded in Puerto Rico so far

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Now that Puerto Rico is moving into recovery and rebuilding after the Hurricane Maria disaster, billions of dollars in federal disaster spending are flowing to the island.  Estimates put hurricane damage at $95 billion, and Puerto Rican Gov. Ricardo Rosselló is asking various federal agencies for $94 billion in grants.

With this much public money on the line, monitoring how U.S. tax dollars are spent in the recovery will be crucial to prevent waste, fraud, and shoddy work. The best way to do that is by awarding contracts through the open bidding process, which allows the largest number of businesses a chance to compete to offer the best deal. These types of contracts generally require more scrutiny and oversight than no-bid deals.

So far, competitive bidding hasn’t been a top priority for federal agencies responding to Hurricane Maria. Nearly half of the 540 federal contracts signed so far (as of November 16), totaling $252 million, were awarded outside the open bidding process, according to federal procurement data.

Keep reading this article at: https://www.vox.com/policy-and-politics/2017/11/17/16618476/puerto-rico-federal-contracts

SBA hopes to cut back on the hoop jumping for government contractors, WOSBs

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The Small Business Administration is closing in on a proposed rule that will lighten the load for both its contracting officers, and the women-owned small businesses (WOSB) looking to work with the federal government.

Sean Crean, director of SBA’s Office of Government Contracting, said SBA is about 30-60 days away from putting a rule out for public comment, establishing a WOSB certification process.

“What will eventually happen, after this process is complete, we will implement a policy where contracting officers no longer have to go into an electronic file cabinet, they’ll be able to rely on the fact that SBA has now got an approved certified firm and it’ll be on parity with the other certification programs that we have like HUBzone, as well as the 8(a) program,” Crean said during said last week during the ChallengeHER event in Washington, hosted by SBA, Women Impacting Public Policy (WIPP), and American Express OPEN. “And then their choices as a contracting officer become very simple.”

The certification issue dates back to the National Defense Authorization Act of 2015, when Congress said it wanted two things for WOSBs, Crean said: certification for this type of small business, and for WOSBs to have sole-source contract opportunities available to them.

Keep reading this article at: https://federalnewsradio.com/contracting/2017/10/sba-hopes-to-cut-back-on-the-hoop-jumping-for-government-contractors-wosbs/

Government may slip a sole-source award past an unaware contractor

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Contractors would be wise to keep a close watch on FedBizOpps.gov, otherwise they run the risk missing the chance to protest a sole source award.

When an agency decides to make an award without competition, it often must publish a Justification and Approval (referred to simply as a “J&A”) on FedBizOpps explaining why a competition would not meet the agency’s needs. A potential competitor seeking to protest such an award at the GAO must file the protest before 10 days have passed from publication of the J&A, otherwise the protest may be untimely. A competitor that is not paying attention could be out of luck.

GAO dismissed a protest of a sole source award earlier this month where the protestor missed the cutoff by just one day. The protest, Western Star Hospital Authority, Inc., B-414198.2 (June 7, 2017) involved an Army procurement for ambulance services for the U.S. Army at Fort Dix, New Jersey.

The work was originally competed, and Western Star Hospital Authority, Inc. submitted a proposal. The Army rejected Western Star’s proposal, saying that Western Star had not proposed pricing for all CLINs, as required by the solicitation.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/eagle-eye-government-may-slip-a-sole-source-award-past-an-unaware-contractor/

FAR Council clarifies 8(a) sole source justification requirements for high value contracts

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The Federal Acquisition Regulatory Council (FAR Council) has issued a proposed rule to clarify contracting officer and agency responsibilities when justifying sole source awards exceeding $22 million dollars made through the Small Business Administration’s 8(a) program.  The revisions directly address recommendations from a December 2012 Government Accountability Office (GAO) report titled, “Slow Start to Implementation of Justifications for 8(a) Sole-Source Contracts,” which, among other things, highlighted agency “confusion” about the existing justification requirements in the FAR.

The 8(a) sole source justification requirement for high value contracts is a statutory mandate, established by Section 811 of the FY 2010 National Defense Authorization Act, presumably to ensure that these high value awards are in the government’s best interest.  While the FAR Council published implementing regulations in April 2012, as noted in the 2012 GAO report, a number of agencies had difficulty complying with the new requirements, which differ from those governing other sole source justifications.

In subsequent GAO reports (published in September 2014 and in June 2016) reviewing the number of DoD issued 8(a) awards exceeding $20 million dollars, GAO identified a significant decline in high value sole source awards to 8(a) firms since implementation of the justification requirement in the Federal Acquisition Regulation (FAR).  Some agency officials at least partly attributed these declines to the new regulations.  GAO also noted a corresponding increase in the number of competitively awarded high value 8(a) contracts.

To see key aspects of the proposed rule and read more, so to: https://www.insidegovernmentcontracts.com/2016/11/far-council-clarifies-8a-sole-source-justification-requirements-high-value-contracts/

Justice Department grantee faulted for sole-source youth mentoring contracts

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Justice Dept. seal - CopyIn allocating more than $200 million in grant money aimed at mentoring Indian tribal youth, Justice Department grantees over five years relied too much on sole-source contracts and provided lax enforcement of rules against contractor lobbying and conflicts of interest, a watchdog found.

The department’s Office of Justice Programs, as part of its Office of Juvenile Justice and Delinquency Prevention, awarded the Boys and Girls Clubs of America $201.6 million from 2008-2013 to administer national and tribal mentoring programs. The after-school clubs provide a “safe place, caring adult mentors, friendship and high-impact youth development programs,” mostly to American Indians at risk of joining gangs, as noted in a report released on Thursday of last week by the Justice Department’s Office of Inspector General.

The Boys and Girls Clubs—the largest recipients of those grants—in turn sub-awarded 45 contracts to 14 vendors, totaling about $3.1 million.

Keep reading this article at: http://www.govexec.com/contracting/2016/09/justice-department-grantee-faulted-sole-source-youth-mentoring-contracts/131796

Company owner going to prison for tax fraud involving 8(a) and DBE eligibility

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Financial Fraud Enforcement Task Force - DOJThe former president and majority stockholder of an Idaho construction company was sentenced to five years in prison this week following her plea of guilty to filing a false tax return and her conviction by a jury of conspiracy to defraud the United States, wire fraud, mail fraud, false statements, interstate transportation of property taken by fraud, conspiracy to obstruct justice, and obstruction of justice.

Elaine Martin, 69, of Meridian, Idaho, was the president of construction company MarCon, Inc.  In September 2013, after a 26-day jury trial, Martin was convicted of tax and fraud charges and sentenced to 84 months in prison.  In August 2015, the U.S. Court of Appeals for the Ninth Circuit vacated Martin’s sentence and her tax conviction and remanded for resentencing and further proceedings on the tax charge.  Today, Martin pleaded guilty to filing a false tax return and U.S. District Judge B. Lynn Winmill of the District of Idaho sentenced her to 60 months in prison on both the tax and fraud charges.  In addition to the prison term, Judge Winmill ordered Martin to pay restitution to the Internal Revenue Service (IRS) and Idaho Department of Transportation in the amount of $131,400.48, costs of prosecution in the amount of $22,859.60 and a forfeiture money judgment of $3,084,038.05, amounts Martin previously paid.

In the plea agreement, Martin admitted that she willfully signed false and fraudulent corporate income tax returns for Marcon Inc. for tax years 2005 and 2006.  Martin also admitted that she caused these tax returns to be false and fraudulent by keeping the unreported income off of the books and that she falsely told an IRS revenue agent, who was conducting a civil audit of Marcon, that all of Marcon’s gross receipts were deposited into its Wells Fargo operating account, when in fact, Martin was diverting and depositing gross receipts into Marcon’s Bank of Cascades account.  Martin withheld the records for Marcon’s Bank of Cascades from the individual who prepared her and Marcon’s tax returns for tax years 2005 and 2006.  Martin admitted that the total tax loss was $73,678.

Martin also admitted to conspiring to defraud the SBA 8(a) Program and the U.S. Department of Transportation, Disadvantaged Business Enterprise (DBE) Program, by submitting fraudulent tax returns and making false statements concerning her finances that caused Marcon to qualify and/or remain eligible for these programs.  Martin further admitted that her behavior affected the award of contracts pursuant to the 8(a) Program and DBE Programs.  For example, Marcon’s status as an Idaho DBE affected how and what DBE goals were set for particular construction projects and helped Marcon maintain a virtual monopoly in its geographic region between 2000 and 2006.  Marcon participated in the SBA 8(a) Program pursuant to direct negotiations with the awarding agency, rather than through fair and open competition.  Martin admitted that during the relevant time period, she would not have been awarded the 33 contracts at issue in the case but for the fraud.

As part of the plea agreement that Martin entered into today, she waived her right to further appeal.

This case is an outgrowth of the Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov.

Source: http://www.justice.gov/opa/pr/former-idaho-construction-company-president-sentenced-prison-fraud-scheme

GAO: Out-of-scope delivery order modification was improper

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An agency may not procure new services under an existing GSA Schedule delivery order if the new services exceed scope of the original delivery order.

Peace CorpsIn a recent decision, Onix Networking Corp., B-411841 (Nov. 9, 2015), the GAO sustained a protest where the agency acquired a new type of software by modifying an existing delivery order for software license extensions because the acquisition exceeded the scope of the initial delivery order. According to the GAO, the out-of-scope modification amounted to an improper sole source contract.

The Onix Networking decision involved a modification to a GSA Schedule delivery order held by En Pointe Gov, Inc. The delivery order, which was awarded in 2013, called for En Pointe (a licensed Microsoft reseller) to provide software licenses, software maintenance services, and technical support services to the Peace Corps’s existing suite of Microsoft products.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/gao-out-of-scope-delivery-order-modification-was-improper/

Marines could do a better job on small biz contracts, IG says

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Marine Corps Systems Command is failing to adequately ensure small business contractors get access to defense contracts, according to an Inspector General’s report.

Marine CorpsThe report found that the Quantico, Virginia-based command had not ensured small business contractors had opportunities to subcontract on 12 prime contracts valued at $221 million, offered no compliance tracking on four contracts, did not follow up on large businesses not meeting small business-goals and awarded contracts without subcontracting plans.

“As a result, small businesses may have been denied subcontracting opportunities that large businesses were required to make a good faith effort to provide,” the report said. “In addition, MCSC contracting officials did not determine whether the prime contractors are making good faith efforts to comply with negotiated subcontracting goals and whether liquidated damages should be assessed.”

Keep reading this article at: http://www.federaltimes.com/story/government/acquisition/2015/11/16/marines-could-do-better-job-small-biz-contracts-ig-says/75874242/

 

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