On December 17, 2024, the Small Business Administration (SBA) published a final rule amending multiple aspects of all of the SBA’s small business size and status programs. Among other notable changes, SBA (1) introduced a new rule that changes the impact of a recertification as other than small or as other than the relevant small business status following a merger or acquisition, and (2) introduced a standardized set of permissible negative controls for minority shareholders in all types of small businesses, thereby significantly expanding the controls investors may have in service-disabled veteran-owned small businesses (SDVOSBs), women-owned small businesses (WOSBs), and participants in the SBA’s 8(a) Business Development Program.
Continue Reading Brace for Impact: Final SBA Rule Changes to Recertification and Negative Controls Will Reverberate in GovCon M&A and Investment Market
DOJ Settles PPP Case Based on Economic Necessity Certification
On December 18, 2024, the U.S. Attorney’s Office for the Western District of Texas announced a $680,000 False Claims Act (FCA) settlement with Lafayette RE Management LLC (Lafayette) in connection with the real estate investment firm’s receipt of a Paycheck Protection Program (PPP) loan at the height of the pandemic. Crowell has previously reported on DOJ’s steady pursuit of PPP cases which have resulted in FCA settlements based on issues such as affiliation (discussed here) and ineligibility under the program’s rules (discussed here), but the Lafayette settlement is the first time that the government has intervened in a case based on the economic necessity certification that all PPP borrowers had to make on the initial loan application.
Continue Reading DOJ Settles PPP Case Based on Economic Necessity Certification“Et ‘two,’ GAO?”:Recent Sustain on the Rule of Two Reminds Agencies of the Importance of Accurate Market Research
For the first time in nearly a decade, GAO in Knudsen Systems, Inc. sustained a protest challenging an agency’s decision to set aside a procurement for small businesses. The decision involves the so-called “Rule of Two”: under FAR 19.502-2(b), agencies must set aside for small businesses a procurement with an anticipated dollar value of more than $150,000 where the agency’s market research demonstrates there is a reasonable expectation at least two responsible small business offerors can meet the agency’s requirements at a fair market price.
Continue Reading “Et ‘two,’ GAO?”:Recent Sustain on the Rule of Two Reminds Agencies of the Importance of Accurate Market ResearchCalifornia Dental Offices Settle FCA Allegations Regarding Second-Draw PPP Loans for $6.3M
On August 8, 2024, the U.S. Attorney’s Office for the Central District of California announced a $6.3 million False Claims Act settlement with West Coast Dental Administrative Services LLC (formerly West Coast Dental Services Inc.) and its founders and former owners due to seven improper second-draw Paycheck Protection Program loans received by West Coast Dental and affiliated dental offices.
Continue Reading California Dental Offices Settle FCA Allegations Regarding Second-Draw PPP Loans for $6.3MFCA Complaint Based on PPP Information Pulled from PandemicOversight.gov Website Barred
On August 5, 2024, in United States ex rel. Relator LLC v. Howard D. Kootstra and Golden Empire Mortgage, Inc., Case No. 1:22-cv-00924-TLN-CDB (E.D. Cal.), the District Court for the Eastern District of California granted a motion to dismiss allegations that a mortgage lender made false or fraudulent statements on its Paycheck Protection Program (PPP) application in violation of the False Claims Act where the relator could not overcome the FCA’s public disclosure bar.
Continue Reading FCA Complaint Based on PPP Information Pulled from PandemicOversight.gov Website BarredSpecial Edition of the Fastest 5 Minutes
SBA Proposed Rule to Update Various SBA Small Business Programs
This special edition covers the SBA’s August 2024 proposed rule to update and clarify various small business programs, and is hosted by Yuan Zhou and Olivia Lynch. Crowell & Moring’s “Fastest 5 Minutes” is a biweekly podcast that provides a brief summary of significant government
SBA Proposed Rule Would Enact Material Changes as Well as Promote Regulatory Uniformity Across Size and Status Programs
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 ProgramsSBA 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 Contracts501(c)(4) HOA to Pay Over $2M to Resolve FCA Allegations in Connection with PPP Loan
The San Diego Union-Tribune reports that a homeowners association (HOA) in California has reached an agreement with the Department of Justice (DOJ) to resolve allegations that the HOA obtained approximately $1.5 million in loans through the Paycheck Protection Program (PPP) that the HOA was not entitled to receive due to its status as a 501(c)(4) organization. The HOA reportedly will pay $2,037,451 to resolve the allegations. Of that amount, $244,494 will go to Wade Riner—the relator who initiated the action by filing a complaint under seal pursuant to the qui tam provisions of the False Claims Act (FCA). According to the Tribune’s reporting, Riner has filed dozens of similar FCA suits across the country.
Continue Reading 501(c)(4) HOA to Pay Over $2M to Resolve FCA Allegations in Connection with PPP LoanNew 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