Georgia Tech Procurement Assistance Center

Reminder: If pricing is too high, VA “rule of two” might not apply

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The VA Rule of Two, while a powerful motivator for setting procurements aside for service-disabled veteran-owned small businesses, does have its limits.

One of those exceptions was discussed in a recent ruling from the United States Court of Appeals for the Federal Circuit. The court confirmed that the VA may convert a service-disabled veteran-owned small business set-aside solicitation to a small business set-aside if the SDVOSB bids it receives are too high in price.

The VA Rule of Two, described in 38 U.S.C. 8127(d), requires the VA to set aside an acquisition for SDVOSBs when two or more verified and capable SDVOSBs are identified, provided the contracting officer has a reasonable expectation that two or more of those SDVSOBs will submit offers and that the award can be made at a fair and reasonable price that provides best value to the United States.

Continue reading at:  SmallGovCon

Veterans: How to get started in government contracting

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Are you a veteran?  Do you own a small business?  Then you have an advantage over [non-Veteran Owned small businesses].  Specifically: Veteran-owned businesses have preference when bidding on government contracting jobs with the Department of Veterans Affairs.  Each year, the VA sends about $3 billion to small businesses.  Are you a plumber?  An engineer?  A landscaper?  [Then the VA may want to do business with your company.]

So what’s the catch?  To actually get [Verified with the VA as a Veteran-owned small business (“VOSB”) or Service-disabled Veteran Owned small business (“SDVOSB”)], you will have to navigate [a difficult paperwork process].

But do not worry: I have been through the process.  I am here to help you.

Continue reading at:  Clearance Jobs

CVE verification pointer: remember to provide truthful information

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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

Congressional, executive, and legal developments for government contractors to consider

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Regulatory Developments

On June 24, 2019, the U.S. Small Business Administration (“SBA”) finally issued a proposed rule in response to the 2018 Small Business Runway Extension Act, which increased the time period over which receipts are averaged for purposes of calculating a concern’s size from three years to five.  The proposed rule specifies that it will go into effect only after the effective date of a final rule, confirming SBA’s intention to continue to apply the three-year averaging period to any certification submitted prior to the effective date of the final rule.

On May 20, 2019, the U.S. Department of Veterans Affairs (“VA”) issued a class deviation from Department of Veterans Affairs Acquisition Regulation (“VAAR”) 808.002, Priorities for Use of Government Supply Sources, and VAAR Subpart 808.6, Acquisition from Federal Prison Industries, Inc., the two provisions implementing the FAR Part 8 mandatory source priority of AbilityOne Procurement List and Federal Prison Industries contractors.  The class deviation effectively gives Veterans First providers priority over AbilityOne providers in all VA contract opportunities should two or more veteran-owned small businesses (“VOSBs”) or service-disabled veteran-owned small businesses (“SDVOSBs”) be capable of performing the contract at a reasonable price.  The newly implemented class deviation preempts the AbilityOne priority in all VA procurements in favor of a Veterans First priority.  However, “if an award is not made to an eligible . . . VOSB under VAAR Subpart 819.70, the priority use of AbilityOne applies, and supplies and services on the Procurement List are mandatory sources.”  The class deviation was immediately effective and to be implemented in all VA contracts.

On June 11, 2019, the House Armed Services Committee published the draft 2020 National Defense Authorization Act (“NDAA”).  Notable potential changes include a reduction in the monetary threshold for enhanced DoD post-award debriefing rights and a grant of permanent authority for DoD’s Mentor-Protégé Program.  The 2018 NDAA implemented “Enhanced Post-Award Debriefing Rights” for certain DoD procurements.  This change required defense agencies to provide the agency’s written source selection award determination for all small business contracts valued between $10 and $100 million, and all defense contracts valued over $100 million.  Section 828 of the draft 2020 NDAA would reduce the monetary threshold for these enhanced debriefings to only $50 million, significantly increasing the number of procurements for which they must be provided.  Section 881 of the draft NDAA permanently authorizes the DoD Mentor-Protégé Program and requires that the DoD’s Office of Small Business Programs establish mentor-protégé performance goals and periodic reviews.

Continue reading at:  Venable LLP

VA fails again to apply the ‘rule of two’

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In June 6, 2019, the Government Accountability Office (GAO) issued a decision in the matter of Veterans4You, Inc., deciding that the Department of Veterans Affairs (VA) must apply the “Rule of Two” even when it procures goods and services through other government agencies.

In the VA context, the Rule of Two is the commonly known name for a statutory provision of a 2006 amendment to the Veterans Benefits, Health Care, and Information Technology Act requiring that “the [VA] shall award contracts on the basis of competition restricted to small business concerns owned and controlled by veterans” where the VA “has a reasonable expectation that two or more [such concerns] will submit offers,” and “the award can be made at a fair and reasonable price that offers best value to the United States.”  As discussed in an alert in 2018, VA has struggled to reconcile this mandate with myriad other mandates establishing preferential sources for government procurements.

Continue reading at:  Pillsbury

VA agrees that rule of two has priority over AbilityOne Procurement List

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In its most recent attempt to strike the appropriate balance between the Veterans First and AbilityOne programs, the U.S. Department of Veterans Affairs (“VA”) issued on May 20, 2019 a class deviation to the VA Acquisition Regulations (“VAAR,” 48 C.F.R. Chapter 8), instructing contracting officers to conduct a “Rule of Two” analysis before procuring from the AbilityOne Procurement List.

The Rule of Two is set forth in the Veterans Benefits Act of 2006 (“VBA”), 38 U.S.C. § 8127(d), which established the Veterans First program.  The Rule of Two requires that VA contracting officers determine whether two or more veteran-owned small businesses (“VOSBs”), including service-disabled veteran-owned small businesses, are capable of meeting the VA’s requirements at reasonable prices.  If two or more qualified VOSBs can satisfy the VA’s needs, the VA must procure those goods through those VOSBs that are awarded contracts.  The VBA also allows contracting officers to grant sole-source contracts to VOSBs under limited circumstances (38 U.S.C. §§ 8127(b)-(c)).

The new VA class deviation revises VAAR 808.002, Priorities for Use of Government Supply Sources, and subpart 808.6, Acquisition from Federal Prison Industries, Inc.—the two provisions that implement for the VA the FAR Part 8 mandatory source priority generally enjoyed by AbilityOne Procurement List and Federal Prison Industries vendors across government procurements.  The deviation instructs that the Veterans First priority displaces the AbilityOne priorities for “all VA contracts,” but that “if an award is not made to an eligible . . . VOSB under VAAR subpart 819.70, the priority use of AbilityOne applies and supplies and services on the Procurement List are mandatory sources.”  In this respect, the new VA class deviation reconciles the VA’s priorities for veterans and the separate, government-wide priority for AbilityOne nonprofit companies.

Continue reading at:  Government Contracts and Investigations Blog

GTPAC launches Veterans verification video

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The Georgia Tech Procurement Assistance Center (“GTPAC”) has created a new free training resource for Veteran small business owners.  GTPAC, with the support of the Defense Logistics Agency (“DLA”), has produced a free video that provides a detailed explanation of how Veterans can get their small business verified as a Veteran-Owned Small Business (“VOSB”) or Service-disabled Veteran-Owned Small Business (“SDVOSB”) under the U.S. Department of Veterans Affairs’ (“VA”) Vets First Verification Program.

SDVOSBs and VOSBs receive certain preferences in the federal procurement process, including SDVOSB and VOSB set-aside contracts, sole-source awards (for SDVOSBs), and subcontracting opportunities with federal prime contractors, who are often required to utilize SDVOSBs and VOSBs in their subcontracting plans.

“This video is a great resource for helping VOSBs and SDVOSBs understand the verification process at VA, and how they can benefit from getting verified,” said Andrew E. Smith, Program Manager of the Georgia Tech Procurement Assistance Center, he continued, “We take great pride in assisting our Veteran small business clients here in Georgia, and want them to take full advantage of the opportunities that are available to them.”

Each year, the federal government awards billions of dollars in contracts to VOSBs and SDVOSBs.  Federal prime contractors also frequently subcontract work to VOSBs and SDVOSBs when performing large government contracts.

GTPAC hopes this video helps Veterans understand the verification process, and makes that process a little bit easier.

Additional resources including links to key VA Verification websites is available on the Veterans Verification Video page.

VA using SBA’s SDVOSB eligibility rules starting Oct. 1st

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The VA will begin using the SBA’s eligibility rules to verify service-disabled veteran-owned small businesses (SDVOSBs) and veteran-owned small businesses (VOSBs) beginning October 1, 2018.

In a final rule published Sept. 24th in the Federal Register, the VA confirms that the SBA’s eligibility requirements will apply beginning next week–but in my eyes, one very important question remains unanswered.

As regular SmallGovCon readers know, the differences between the government’s two SDVOSB programs have caused major headaches for veterans.  Because the two sets of regulations have different eligibility requirements, a company may be an eligible SDVOSB under one set of rules, but not the other.

In 2016, Congress addressed the problem.  As part of the 2017 NDAA, Congress directed the VA to verify SDVOSBs and VOSBs using the SBA’s regulatory definitions regarding small business status, ownership, and control.  Congress told the SBA and VA to work together to develop joint regulations governing SDVOSB and VOSB eligibility.  The VA published a proposed rule earlier this year to eliminate its separate SDVOSB and VOSB eligibility requirements.

Keep reading this article at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/va-will-use-sba-sdvosb-eligibility-rules-starting-october-1-2018/

Former company owner sentenced for $13.7 million ‘rent-a-vet’ scheme

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A former operator of a Kansas City construction company, Patriot Company, Inc., was sentenced in federal court last week for his role in a “rent-a-vet” scheme to fraudulently obtain more than $13.7 million in federal contracts.

Jeffrey K. Wilson was sentenced to 18 months in federal prison without parole. Under the terms of his plea agreement, Wilson has also consented to the federal civil forfeiture of approximately $2.1 million.

On Jan. 31, 2018, Wilson pleaded guilty to one count of government program fraud. Co-defendant Paul R. Salavitch pleaded guilty to a misdemeanor charge of making a false writing and awaits sentencing.

Wilson, who is not a veteran, managed the day-to-day operations and the long-term decision-making of Patriot Company from September 2005 to January 2014. Wilson and Salavitch falsely certified that Salavitch, who is a service-disabled veteran, was involved in the day-to-day operations of Patriot Company. Salavitch’s purported active management qualified Patriot Company to obtain set-aside contracts to which it was not entitled.

Wilson admitted he used Salavitch’s veteran and service-disabled veteran status in a “rent-a-vet” scheme to obtain 20 government contracts for which Patriot Company received more than $13.7 million.  As a result of the fraud scheme, legitimate veteran-owned-and-run businesses were not awarded these contracts. In one instance, according to court documents, Wilson brazenly challenged the government’s award of a set-aside contract to a service-disabled veteran bidder and Patriot Company fraudulently obtained that contract.

Wilson’s plea agreement cites 20 contracts with the U.S. Department of Veterans Affairs and the U.S. Army, which were fraudulently obtained by Wilson, Salavitch and Patriot Company. The contracts, which ranged as high as $4.3 million, included construction projects in Missouri, South Dakota, Texas, Nebraska, Oklahoma, Michigan, Indiana, Tennessee, Iowa, Illinois and North Dakota.

In September 2013, the Veterans Administration conducted an unannounced site visit of Patriot Company. The site inspector discovered that Salavitch was working 40 miles away at his full-time job as a federal employee with the Department of Defense in Leavenworth, Kansas.

Wilson did not stop violating the law even after the government’s site visit.  Instead, Wilson and Salavitch fought cancellation of Patriot Company’s status. In November 2013, Salavitch falsely certified to the Missouri Division of Purchasing and Materials Management that Patriot Company was a legitimate service-disabled veteran-owned small business when he knew it was not because he did not actively run the company. In December 2013, the Veterans Administration de-certified Patriot Company.

This case was investigated by the Department of Veterans Affairs – Office of Inspector General – Criminal Investigation Division, and the General Services Administration – Office of Inspector General.

Source: https://www.justice.gov/usao-wdmo/pr/former-company-owner-sentenced-137-million-rent-vet-scheme

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/ 

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