CVE Verification Pointer: Remember to Provide Truthful Information

In government contracting—as in life—it’s important to be honest. And in our experience, most government contractors are honest. Where a contractor is dishonest or untruthful, it can face significant sanctions.

So it was in a recent SBA Office of Hearings and Appeals decision, in which the OHA considered the cancellation of an entity’s SDVOSB status. In CVE Appeal of Afily8 Government Solutions, LLC, SBA No. CVE-125-A (2019), the OHA affirmed the cancellation of Afily8’s SDVOSB verification based on concerns that Afily8 did not provide truthful information to the VA’s Center for Verification and Evaluation.

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SBA’s 2018 Small Business Procurement Scorecard: Over $120 Billion Awarded to Small Businesses

Earning federal contracts is a powerful tool to help small companies grow their business. To help make sure that small businesses have a seat at the table, the Small Business Act sets prime contracting goals for small businesses (along with each socio-economic category). 15 U.S.C. § 644(g). And each year, the SBA issues a scorecard grading the government’s compliance with those goals.

Just a couple days ago, the SBA released its scorecard for the 2018 fiscal year. All told, the scorecard paints a rosy picture of small business contracting.

Let’s take a look.

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Preparing for Contract Performance . . . and Guarding Against Problems

Congratulations! After a hard bidding process, your company has earned an award. But though this award process might’ve been long and tough, potential issues are still ahead.

In our practice, we often hear stories of soured relationships with the government during contract performance. Adverse performance issues can come at a hefty cost—in terms of money, time, and reputation.

Here are some suggestions to help guard against performance disputes with the government.

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SBA OHA: For Calculating Receipts, Look to Tax Returns

To calculate a company’s size under a receipts-based NAICS code, the SBA will add the company’s total income to its costs of goods sold, as those amounts are reported on its tax returns. In fact, the SBA’s regulations are clear that it must use these reported amounts to determine a company’s size status.

What happens, then, when a company’s taxes show “income” that might not really reflect money in the company’s accounts? The SBA’s Office of Hearings and Appeals recently considered this question, and affirmed a company’s ineligibility based on the income reported in its tax returns.

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SBA OHA: Joint Venture Agreement Must Explain Venturers’ Responsibilities

Joint venture agreements continue to be a hot topic among small business federal contractors. For good reason: if the agreement is properly prepared, a joint venture allows two companies (including, in the case of an approved mentor and protégé, a large business) to augment their capabilities and jointly bid on a federal project.

But to avail themselves of this benefit, the venturers must first prepare a joint venture agreement that complies with the SBA’s requirements. Sometimes, this task can be quite tricky. And as a recent decision of the SBA’s Office of Hearings and Appeals shows, the failure to have a compliant joint venture agreement can cost the joint venture an award.

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SmallGovCon Week In Review April 22 – April 26, 2019

Happy Friday, everyone! I’m back in the office after presenting at a HUBZone workshop sponsored by the Oklahoma Bid Assistance Network (Oklahoma’s PTAC). It was a great day, discussing HUBZone eligibility, compliance, and updates. For great events in your area, be sure to connect with your local PTAC!

Before we all head out for the weekend, let’s review the week in government contracting. In this edition of the Week In Review, we’ll look at efforts to speed up small business payments, the role of automation in government contracting, and more contractors behaving badly . . . .

Have a great weekend!

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