Small Business Regulations and Programs

I authored an article for Bloomberg BNA outlining the details of the Small Business Administration’s (SBA) new Limitation on Subcontracting rule. This new rule limits the definition of a “similarly situated entity” to first-tier subcontractors. As I point out in the article, “[w]ith the option to team with other similarly situated entities, working essentially as…

Opportunities for small businesses continue to grow as the Department of Defense (DoD) released a proposed rule of changes to its current, pilot mentor-protégé program. The proposed rule, released on Friday, September 23, comes just one month after the Small Business Administration’s (SBA) final rule establishing a government-wide mentor-protégé program for all small business concerns. While the DoD’s proposal is not as expansive as the changes within the SBA’s mentor-protégé program, it will likely further increase small business contracting opportunities within the federal marketplace.  This post, along with the comparison chart below, highlight some of the similarities and differences between the programs.
Continue Reading Navigating the Proposed Changes to DoD’s Mentor-Protégé Program Alongside the SBA’s New “All Small” Mentor-Protégé Program

In an article published by SmallBizDaily, Bass, Berry & Sims attorneys Todd Overman and Sylvia Yi provided insight on the regulatory improvements to the SBA’s Women Owned Small Business (WOSB) Program that helped the federal government finally achieve its goal of awarding five percent of its annual contracts to WOSBs. As Todd and Sylvia point…

The Women Owned Small Business (WOSB) Program moved its certification process from the General Login System (GLS) to the SBA One Contracting Portal at certify.sba.gov in March 2016. This has streamlined the certification process for WOSBs and Economically Disadvantaged WOSBs (EDWOSBs). The website features a checklist to prepare for certification, an “Am I Eligible?” tool, and email notifications for expiration and renewal notices.
Continue Reading Everyone Bookmark certify.sba.gov

On Friday, July 22, 2016, the Small Business Administration (SBA) released a Final Rule (Final Rule) establishing a government-wide mentor-protégé program for all small business concerns, designed to increase opportunities in the federal market place and improve development for small businesses. This expansion implements the authority Congress gave SBA in the 2013 National Defense Authorization Act to create mentor-protégé programs for Service-Disabled Veteran Owned Small Businesses (SDVOSB), HUBZone small businesses, women-owned small businesses (WOSB), and small businesses.

    The new program, which enables these categories of small businesses to benefit from the SBA-approved mentor-protégé arrangements previously only available to certified 8(a) small disadvantaged businesses, goes into effect on August 24, 2016, and will be implemented with the help of a newly formed unit within the SBA Office of Business Development devoted solely to processing and reviewing mentor-protégé applications and agreements. Instead of creating four new and separate programs covering each of the small business contracting programs (i.e., small business, SDVOSB, WOSB, and HUBZone), SBA chose to create a single program for all small business concerns modeled after the existing 8(a) Business Development (BD) mentor-protégé program, which will continue to operate as a separate program. Alongside these regulations, the Final Rule revises guidelines for joint venture agreements between a mentor and a protégé.

Opening the mentor-protégé program to new categories of small businesses creates significant opportunities for both large and small businesses. Because of the expected avalanche of applications from companies wishing to participate in this program, an overview of which is provided below, businesses that anticipate submitting applications for approval of mentor-protégé agreements should do so as soon as possible after the program goes into effect.Continue Reading Mentor-Protégé Expansion Creates Opportunities for all Government Contractors Large and Small

In another example of the government’s efforts to root out fraud in government procurement programs, on July 5, U.S. District Judge Reggie B. Walton sentenced Virginia businessman, Tarsem Singh, to 15 months in prison followed by three years of supervised release for conspiracy to commit major fraud on the United States. In December of 2015, Singh pleaded guilty to executing a scheme to defraud the Small Business Administration (SBA) and the General Services Administration (GSA) through fraudulent procurement of more than $8.5 million in federal government contracts through SBA’s 8(a) program. Created to help small, disadvantaged businesses engage in federal procurement, the 8(a) program requires that qualifying businesses are at least 51% owned and controlled by a socially and economically disadvantaged U.S. citizen.

From 2000 to 2009, Singh was the vice president of “Company A,” a construction company specializing in renovating and altering buildings. From 2000 through 2009, Company A was certified under the 8(a) program and lawfully received approximately $23 million in contracts from the GSA. The real trouble began in 2009, when Company A graduated from the 8(a) program and, on the same day, entered into a Mentor-Protégé Agreement with “Company B.” With monetary support and guidance from Company A, Company B was certified under the 8(a) program and was ultimately awarded 26 federal contracts under the program. According to the government’s calculations and Judge Walton’s Memorandum Opinion, the contracts awarded to Company B totaled more than $8.5 million.Continue Reading Business Owner Sentenced to 15 Months for Defrauding SBA’s 8(a) Program Through Use of “Shell” Company to Receive 8(a) Contracts

Today, one week following the Supreme Court’s unanimous decision requiring the U.S. Department of Veterans Affairs (VA) to set-aside contracts and Federal Supply Schedule (FSS) orders for eligible veteran-owned businesses under the Rule of Two, the Senate Committee on Small Business and Entrepreneurship held a hearing on how the decision will affect VA procurement going forward. Chairman David Vitter (R-LA) orchestrated the two-panel hearing alongside Senator Jeanne Shaheen (D-NH). Chairman Vitter made clear that the Senate wanted to understand how the Kingdomware decision will affect veteran-owned businesses and how to ensure that the VA is implementing the statute’s proper interpretation.

The first panel featured Thomas J. Leney, the Executive Director for the VA, and John A. Shoraka, an Associate Administrator of Government Contracting and Business Development for the U.S. Small Business Administration (SBA). Speaking on behalf of the VA, Leney stated that the VA is committed to implementing the Supreme Court’s decision and has already started its review of current procurements. According to Leney, to enforce the decision, the VA is working on creating formal rules and new policy guidelines to regulate how veteran-owned businesses are considered under the Rule of Two. The Supreme Court clarified that the Rule of Two requires setting aside contracts for every competitive VA acquisition, including FSS orders, when two or more eligible veteran-owned concerns will submit offers and an award can be made at a fair and reasonable price. While his remarks emphasized the VA’s approach moving forward, Leney struggled to respond to Senator Vitter’s inquiry into why the VA has spent years improperly applying the Rule of Two to veteran-owned small businesses. While the VA was unable to set a hard cutoff date for when it can assure that all awards will comply with the guidelines of the decision, Senator Vitter set a July 15, 2016, deadline for the VA to issue an update to the Committee to demonstrate their improved procurement methods. According to the chairman, a delay in implementing the Rule of Two would be equivalent to resisting the decision of the Supreme Court – even a three month delay would be unwarranted.Continue Reading Senate Hearing: Ramifications of the Supreme Court’s Kingdomware Decision

In a unanimous decision issued today, the U.S. Supreme Court held that the U.S. Department of Veterans Affairs (VA) is required to set-aside contracts for every competitive acquisition, including Federal Supply Schedule (FSS) orders, when two or more eligible veteran-owned concerns will submit offers and an award can be made at a fair and reasonable price.  This ruling effectively increases the number of contracts (whether standalone or FSS orders) that will be set aside exclusively for veteran-owned small businesses (VOSBs) and service disabled veteran-owned small businesses (SDVOSBs) because the VA is statutorily prohibited from competitively awarding contracts to non-VOSB concerns when that requirement can be met.

In 2006, Congress passed the Veterans Benefits, Health Care, and Information Technology Act (VA Act), which established requirements for the VA to meet VOSB contracting goals.  38 U.S.C. §§ 8127-28 (2006).  The “Rule of Two,” at Section 8127(d), requires the VA to set aside competitive contracts for VOSBs if the contracting officer has a reasonable expectation that two or more VOSBs will submit offers and that the award can be made at a fair and reasonable price.

Since 2011, the U.S. Government Accountability Office (GAO) has consistently held that the VA is statutorily required to apply the Rule of Two to any competitive acquisition.  However, as the GAO issues “recommendations,” the VA has publicly disagreed with and declined to follow the GAO’s interpretation of the VA Act.  Accordingly, the GAO notified Congress of the VA’s declination to follow GAO recommendations.Continue Reading SCOTUS Says: Veterans Affairs Must Prefer Veterans

The SBA is proposing to change the SBIR and STTR Policy Directives in a series of clarifying amendments that provide a new layer of certainty regarding the future of SBIR contractors’ data rights and potential Phase III awards.

SBIR contractors are currently entitled to an “SBIR/STTR protection period” of four years (five years for DoD SBIR contracts) from the last deliverable during which the awardee retains the rights in data. This protection period is extended upon each subsequent related award, which can leave the contractor and the government (and potential acquiring entities) unsure of the actual length of the protection period. To provide clarity around the time period, SBA is proposing an SBIR/STTR protection period of 12 years without extensions. This is a suggested minimum, and agencies would have the discretion to adopt a longer period. Under a proposed fixed period, the value of a SBIR contractor’s data is more readily determined without an ever-changing timeframe of data rights.Continue Reading How Will Proposed Changes to SBIR Rules Impact Valuation of SBIR Contractors?

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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