Two Washington, D.C. area government contractors have agreed to pay the government for their respective roles in defrauding the U.S. Small Business Administration (SBA) in schemes to fraudulently obtain government contracts set aside for small businesses. These two cases highlight the importance of small business compliance and the submission of accurate and complete certifications. Continue Reading Small Business Fraud Leads to Large Monetary Liability in Recent Cases
Teaming Arrangements under the FAR
Under Federal Acquisition Regulation (FAR) 9.6, a contractor teaming arrangement is when:
- Two or more companies form a partnership or joint venture to act as a potential prime contractor; or
- A potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified government contract or acquisition program.
Both of these arrangements have the potential to help small businesses increase the number of solicitations they can confidently bid on, but both also come with their own set of limitations to consider.
Veteran-owned small businesses have long faced inconsistencies between the regulations of the Small Business Administration (SBA) and those of the Department of Veterans Affairs (VA). For example, these inconsistencies can lead to companies qualifying as a Service-Disabled Veteran-Owned Small Business (SDVOSB) under VA standards yet but not SBA standards—or vice versa. This issue came to a head recently at the U.S. Court of Federal Claims (COFC) in Veterans Contracting Group, Inc. v. United States.
In a decision issued on December 15 and made public on December 21, the COFC restored a company’s ability to pursue contracts set aside for small businesses owned by disabled veterans by the VA. The decision came a day after the COFC reluctantly backed the SBA’s determination that the same company did not qualify for set-aside contracts under its rules. These conflicting decisions show the struggle the COFC and contractors face when dealing with inconsistent small business rules from two agencies.
The Government recently indicted an Army veteran for allegedly using his status as a service-disabled veteran to help a company qualify as a service-disabled veteran-owned small business and falsely obtain nearly $40 million in healthcare facility construction task orders from the Department of Defense.
The indictment is an indication that the government is continuing to aggressively pursue small businesses that fail to comply with set-aside requirements, and is a reminder that businesses benefiting from small business programs must be fully compliant with the complex regulations governing those socio-economic programs. It is also a reminder that the consequences of failing to meet those requirements are real – the Army veteran, Joseph Dial Jr., is facing over a century in prison.
In an unsealed opinion on October 30, 2017, U.S. Court of Federal Claims Judge Nancy Firestone held that a company, which should have been deemed ineligible from bidding, was allowed to proceed with a contract award because cancelling the deal would be too harmful to the government.
I will be presenting the session SBA’s All Small Mentor-Protégé Program (One Year In) at the 2017 Annual Government Contracting Seminar in Knoxville, TN. The seminar will discuss the components you need to help ensure successful and compliant contracting in today’s challenging environment.
Session topics include:
- Overview of the All Small Program
- Application, Approval and Appeals
- Benefits and Obligations
- Joint Ventures
- Lessons Learned
The seminar will be held on Wednesday, November 8, 2017 from 8:00 a.m. to 4:30 p.m. EDT. It is being hosted by PDS Consulting Solutions and Strategic Consulting Solutions. Click here for more information and registration.
In an article posted by Bloomberg BNA, I discussed the success of the Small Business Administration’s (SBA) expanded mentor protege program one year post launch. Until October 2016, the mentor-protégé program was only available to just one category of disadvantaged businesses. But last year, the SBA expanded the program so all small businesses could participate and partner with larger government contractors in bidding for work.
“The first year has been a real success story for the SBA,” I stated in the article. “It’s been a long-awaited program.” I commended the SBA saying “The program’s leaders should be commended for keeping application wait times short; for getting the application and approval system entirely online; for working with companies on their applications to help improve their chances; and for raising awareness about the program.”
The full article, “Mentor Program Spawns 300 Partnerships in First Year, SBA Says,” was posted by Bloomberg BNA on October 10, 2017, and is available online (subscription required).
We provided insight on opportunities in government contracting for women-owned small business (WOSB) owners in a September 22, 2017, article in the Nashville Business Journal.
Tennessee is among the 10 fastest-growing states for women-owned companies and currently has approximately 64,000 women-owned businesses. The U.S. Small Business Administration’s (SBA) women-owned small business program aims to provide eligible businesses a better shot at securing government contracting opportunities, and since it began in 2011, the program has been updated to eliminate barriers to entry, such as the removal of contract caps on set-aside awards and the authority to award sole-source contracts. These improvements helped lead the government to meet and exceed its 5% contracting goal to women-owned small businesses for the first time in fiscal year 2015.
Last month, the U.S. District Court for the Eastern District of Washington denied a motion to limit damages against a government contractor, United States ex rel. Savage v. Washington Closure Hanford LLC, where the government sought several categories of damages for alleged False Claims Act (FCA) violations. With a case centered on a nuclear waste company falsely certifying compliance with small business plan participation requirements, the Court ruled that damages would not be limited to remedies provided in the contract.
On Thursday, August 17, 2017, I will be in Tampa, Florida taking part in the Prime Focus Executive Event. I will present a session on the All Small Mentor-Protégé Program, highlighting the opportunities of this expanded program for both large and small businesses. During my session, I will explain how SBA-approved mentor/protégé relationships allow small businesses to benefit from significant support from large business mentors without being deemed to be affiliated. I will also offer best practices for large business mentors to enter into joint ventures with protégés and compete for work set aside for small businesses.
This program is hosted by CWU Inc. and Solvability, Inc.