On August 23, 2024, the Small Business Administration (SBA) posted a proposed rule to update and clarify aspects of various SBA small business programs, including but not limited to the HUBZone Program and 8(a) Business Development Program. This proposed rule followed SBA’s July 22, 2024 notification of tribal consultation meeting and request for comments (which Crowell covered here). Continue Reading SBA Proposed Rule Would Enact Material Changes as Well as Promote Regulatory Uniformity Across Size and Status Programs
SBA Seeks Comment on Prospective Policy Change Regarding Mentor-Protégé Joint Venture Eligibility For Multiple Award Contracts
On July 22, 2024, the Small Business Administration (SBA) posted a notification of tribal consultation meeting and request for comments regarding updates to the HUBZone and 8(a) Business Development Programs. Of critical importance for any contractors participating in the SBA’s Mentor-Protégé Program, SBA is also seeking comments on prospective policy changes addressing joint venture participation in SBA’s programs. SBA has identified perceptions that:Continue Reading SBA Seeks Comment on Prospective Policy Change Regarding Mentor-Protégé Joint Venture Eligibility For Multiple Award Contracts
Why Should They Have All the Fun? DoD Instruction Expands DCSA’s FOCI Reach Beyond Cleared Contractors
On May 13, 2024, the Department of Defense (DoD) issued an instruction implementing policies and procedures that DoD will use to identify contractors (including uncleared contractors) requiring foreign ownership, control, and influence (FOCI) determinations, review related information, and address FOCI concerns. These policies and procedures were put in place pursuant to Section 847 of the 2020 National Defense Authorization Act[1] (Section 847). These FOCI requirements will, for the first time, subject many uncleared DoD contractors to rigorous disclosure requirements, scrutiny, and potential mitigation by the Defense Counterintelligence and Security Agency (DCSA). Continue Reading Why Should They Have All the Fun? DoD Instruction Expands DCSA’s FOCI Reach Beyond Cleared Contractors
The FY 2024 National Defense Authorization Act: Key Provisions Government Contractors Should Know
The National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2024, signed into law on December 22, 2023, makes numerous changes to acquisition policy. Crowell & Moring’s Government Contracts Group discusses the most consequential changes for government contractors here. These include changes that impose a new conflict of interest regime for government contractors with a connection to China, impose new restrictions and requirements, require government reporting to Congress on acquisition authorities and programs, and alter other processes and procedures to which government contractors are subject. The FY 2024 NDAA also includes the Federal Data Center Enhancement Act, the American Security Drone Act, and the Intelligence Authorization Act for FY 2024.Continue Reading The FY 2024 National Defense Authorization Act: Key Provisions Government Contractors Should Know
New Guidance on Joint Venture Classified Information Access Determinations
On October 5, 2023, the Information Security Oversight Office issued Joint Notice 2024-01: Joint Ventures and Entity Eligibility Determinations (Joint Notice) with the Small Business Administration (SBA) and in coordination with the Department of Defense (DoD) to provide government contractors with additional guidance concerning joint ventures (JVs) seeking access to classified information (an Entity Eligibility Determination (EED) or Facility Clearance (FCL)). Among other things, this Joint Notice clarifies that companies should not rely on the SBA’s regulations for the proposition that a small business JV will never need to hold an EED. Continue Reading New Guidance on Joint Venture Classified Information Access Determinations
DOJ Announces Safe Harbor for Acquirers Who Disclose Pre-Acquisition Misconduct
On October 4, 2023, Deputy Attorney General (DAG) Lisa O. Monaco announced the Department of Justice’s (DOJ) new safe harbor policy for voluntary self-disclosures made in connection with mergers and acquisitions (Safe Harbor Policy). Following other announcements from DOJ over the past two years aimed at encouraging voluntary self-disclosures, the Safe Harbor Policy was adopted because DOJ does not want to “discourage companies with effective compliance programs from lawfully acquiring companies with ineffective compliance programs.” Through this new policy, DOJ is aiming to incentivize acquirers to timely disclose misconduct discovered during the M&A process (including pre-closing diligence and post-closing integration).Continue Reading DOJ Announces Safe Harbor for Acquirers Who Disclose Pre-Acquisition Misconduct
Current Participants in the SBA 8(a) Program – Be on the Lookout for Outreach on Social Disadvantage
The Small Business Administration has begun outreach to current participants in its 8(a) Business Development Program regarding the impact of the U.S. District Court for the Eastern District of Tennessee’s July 19, 2023 decision enjoining SBA from applying a rebuttable presumption of social disadvantage to individuals of certain racial and ethnic groups.
For 8(a) Participants whose program eligibility is based upon one or more individuals that relied upon the presumption of social disadvantage based on their membership in one of the identified groups (such as Asian Pacific Americans, Black Americans, Hispanic Americans, Subcontinent Asian Americans, and Native Americans), such participants will be required to establish their individual social disadvantage by completing a social disadvantage narrative. No new 8(a) contracts can be awarded to these entities until SBA affirmatively determines that the individual(s) upon whom eligibility is based has established personal social disadvantage. Continue Reading Current Participants in the SBA 8(a) Program – Be on the Lookout for Outreach on Social Disadvantage
Venture Capital Firms and Non-Traditional Defense Technology Contractors Push for DoD Procurement Reform and Defense Industrial Base Expansion
On June 23, 2023, a coalition of companies, including venture capital firms like Kleiner Perkins, General Catalyst and Founders Fund, and start-up defense technology companies, published an open letter to the Department of Defense (DoD), addressed to Secretary Lloyd J. Austin, petitioning DoD to consider procurement reform to help “overcome barriers to innovation.” The group asserts these barriers create “antiquated methods for developing requirements and selecting technologies that have drastically limited” DoD’s access to “the best commercial innovation.” In particular, the coalition endorsed adopting four recommendations pulled from a report by The Atlantic Council, a non-partisan international affairs think tank.
First, the letter suggests that DoD modernize to align with the 21stcentury industrial base. The letter acknowledges that DoD has already taken a strong step in this direction by establishing the Defense Innovation Unit (DIU), which reports directly to Secretary Austin and whose mission is to accelerate the adoption of commercial technology. The coalition also encouraged DoD to provide DIU with additional staffing and resources to tap into the non-traditional defense industrial base, reinforce “buy before build” commercial practices, and help DoD speed up validation and approval of needs and funding. Continue Reading Venture Capital Firms and Non-Traditional Defense Technology Contractors Push for DoD Procurement Reform and Defense Industrial Base Expansion
SBA OIG Believes at Least 20% of EIDL and PPP Loans Disbursed Are Potentially Fraudulent
On June 27, 2023, the Small Business Administration (SBA) Office of Inspector General (OIG) reported its estimate that SBA disbursed over $200 billion of potentially fraudulent COVID relief, including Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans. These possibly fraudulent loans represent at least 17% of all EIDL and PPP funds—or 21%
When it Comes to Joint Venture Experience, Perfection May Be Hard to Attain(X)
On January 23, 2023, in AttainX, the Government Accountability Office (GAO) sustained the protest of an award to an 8(a) joint venture based on, among other reasons, a finding that the agency’s evaluation of the joint venture’s experience was inconsistent with the Small Business Administration (SBA) regulations concerning joint ventures (JVs), citing 13 C.F.R. § 125.8(e) and 13 C.F.R. § 124.513(f).
The protest involved a General Services Administration (GSA) solicitation for IT services to maintain and modernize the USDA Farm Loan Programs systems and applications. The solicitation required offerors to submit a description of their “similar experience” on other contracts. In response, an 8(a) joint venture (MiamiTSPi) submitted two experience examples:
- One experience example had been performed by both the 8(a) managing venturer, MTS, and the small business minority venturer, TSPi, but as a different 8(a) certified joint venture, MTSPi LLC.
- The second experience example had been performed by only TSPi, the non-8(a) small business minority venturer.
GSA evaluated MiamiTSPi as Acceptable under the “similar experience” factor and ultimately made award to MiamiTSPi. Disappointed offeror AttainX protested, arguing, among other things, that even though GSA had only rated MiamiTSPi as Acceptable under “similar experience” as opposed to a higher rating, GSA unreasonably neglected to evaluate the risk associated with the fact that the experience examples submitted by MiamiTSPi were not performed by the joint venture proposed as the prime contractor nor performed individually by the “managing member” of the joint venture.Continue Reading When it Comes to Joint Venture Experience, Perfection May Be Hard to Attain(X)