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.
On May 25, 2023, the General Services Administration (GSA) and Small Business Administration (SBA) announced the launch of the 8(a) Multiple Award Schedule (MAS) Pool Initiative.
This Initiative advances President Biden’s commitment to equity and, in particular, the administration’s goal to increase contracts to small disadvantaged businesses (SBD).
Under the Initiative, GSA is establishing an 8(a) MAS Pool that will include new and existing MAS 8(a) contractors who are current, active 8(a) Program participants and whose contracts have been accepted into the pool by SBA. …
This week’s episode covers the proposed Secure Software Self-Attestation Common Form issued by CISA, OFCCP’s issuance of a modified version of its initial proposed revisions to the Scheduling Letter and Itemized Listing, and a Civilian Board of Contract Appeals decision about jurisdiction and timeliness, and is hosted by Peter Eyre and Yuan Zhou. Crowell &…
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.…
Major changes to the way small business contractors obtain, and agencies evaluate, past performance references are set to arrive on August 22, 2022. On July 22, 2022, the Small Business Administration (SBA) published a final rule implementing provisions of Section 868 of National Defense Authorization Act for Fiscal Year 2021. The rule provides two new methods for small business contractors to obtain past performance ratings upon which they may then rely when submitting offers on prime contracts with the Federal Government.
First, a small business offeror may rely on the past performance of a joint venture of which it is a member, as long as the small business was involved in performance of the joint venture’s contract(s). To that end, when submitting a proposal, the small business must: (1) identify the joint venture; (2) specify the joint venture’s contract(s) the small business elects to rely upon; and (3) detail the duties and responsibilities the small business carried out as part of the joint venture. Provided these requirements are met, the procuring agency shall (per 13 C.F.R. § 125.11) consider the past performance of the joint venture when evaluating the past performance of the small business concern.
In its recent decision, CVE Appeal of First State Manufacturing, Inc., SBA No. CVE-184-A (2021), the Small Business Administration Office of Hearing and Appeals (OHA) denied an appeal of a decision by the Department of Veterans Affairs Center for Verification and Evaluation (CVE) to cancel First State Manufacturing, Inc.’s verification of service-disabled veteran-owned small business (SDVOSB) status. CVE issued its Notice of Verified Status Cancellation based on concerns of present responsibility related to a consent judgment entered into merely a month before to resolve a False Claims Act (FCA) lawsuit against First State that required First State to pay over $393,000. Prior to the FCA lawsuit, First State’s Vice President for Marketing/Contract Administration and Chief Executive Vice President/Chief Financial Officer were criminally charged, pled guilty, and were sentenced to prison terms for bribing an Amtrak official to win federal Government contracts. In the appeal before OHA, First State argued that CVE erred in cancelling its verified SDVOSB status for two reasons: (1) the FCA consent judgment was based upon an underlying FCA settlement agreement that did not admit liability or wrongdoing by First State; and (2) the Federal Railway Administration, which oversees Amtrak funding, determined that First State was “presently responsible,” and that the likelihood of future harm to the Government did not warrant suspension or debarment. First State further argued that as the Federal Railway Administration is the agency with the potential injury, its determination of present responsibility should have been given greater deference by CVE.
Continue Reading False Claims Act Consent Judgment Prompts Termination of SDVOSB Status Even Without an Admission of Liability
On February 25, 2021, the U.S. Attorney’s Office for the Southern District of Illinois announced a settlement to resolve allegations that a contractor that was not an eligible participant in the Small Business Administration’s 8(a) Business Development Program violated the False Claims Act by controlling a joint venture that claimed 8(a) status and won an…
Far too often, investors, including venture capital companies, assume that as long as they do not retain the largest shareholder interest in a company, that they cannot create affiliation problems impacting what is a key to companies’ initial success in government contracting: small business status. Wrong. A recent U.S. Small Business Administration (SBA) Office of Hearings and Appeals (OHA) decision makes this a stark reality, upholding a determination that an apparent awardee in a set-aside procurement is other-than-small based on affiliation arising from its mere 4.16 percent stock ownership interest in another company.
If a contractor has ever thought about certifying its size as small under a particular NAICS code, hopefully they reviewed the SBA regulations on affiliation in advance. The analysis of whether a company is small in size does not start and end with the receipts or number of employees for that company, but is instead considered as a spiderweb of connections with other individuals and entities. In order to determine a concern’s size, SBA counts not only the receipts or employees of the concern but also the receipts or employees of each of the concern’s domestic and foreign affiliates.
Concerns and entities are affiliates of each other when one controls or even has the power to control the other, or a third party or parties controls or has the power to control both. 13 C.F.R. § 121.103(a). In determining affiliation, there are numerous factors that the SBA must consider – including, ownership, management, and previous relationships with or ties to other concerns. SBA’s analysis concerns the totality of the circumstances; the absence of any single factor will not be considered dispositive.
Continue Reading Investors Beware: Minority Ownership Interests Can Create Affiliation and Defeat Small Business Size Status
On December 29, 2014, the Small Business Administration issued long overdue proposed amendments to its regulations (with 60 days for comments) to implement many of the provisions of the National Defense Authorization Act of 2013 relevant to small business contracting.
Most notable is the complete overhaul of the calculation of the limitations on subcontracting requirement. The amendment proposes a major shift in the way the calculation is performed. The current method requires the prime contractor to be responsible for the specified percentage of cost of performing the contract (with variations depending on whether it is a contract for services, supplies, construction, or specialty trade construction). The amendment proposes shifting the calculation from this cost-based approach to the amount paid to the prime, which must be more than the specified percentage paid to other than “similarly situated” subcontractors. The proposed revision is intended to be easier to calculate, but complexities remain.
Continue Reading Significant Changes on the Horizon to Key SBA Regulations, Including the Limitations on Subcontracting
Contracting programs like the 8(a) Business Development Program, the Service-Disabled Veteran-Owned Small Business Concerns Program, and the Woman-Owned Small Business Program present tremendous opportunities for small businesses to grow and thrive by providing access to potentially lucrative government contracts with limited competition (“set aside” contracts). But easily and often overlooked compliance issues may, by operation…