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.

Continue reading

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.

Continue reading

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!

Continue reading

SmallGovCon Week In Review April 8 – April 12, 2019

Happy Friday, everyone! It’s a beautiful day in Lawrence, as we seemed to have dodged the bullet with the massive mid-April winter storm that’s affected our friends up north. No matter where you’re located, we hope you’ve had a great week, too.

Before we head out for the weekend, it’s time for the Week In Review. In this week’s edition, we’ll take a look at the nominee to head the SBA, VA contracting goals, a new DoD rule to implement the nonmanufacturer rule to 8(a) contracts, and more.

Have a great weekend!

Continue reading

Runway Extension Act Update: SBA Says Three-Year Reporting Period Still Applies

In late 2018, Congress passed the Small Business Runway Extension Act, which had a single purpose: change the three-year average annual receipts calculation period (for determining small business eligibility) to a five-year calculation period.

Small businesses, for the most part, have been watching with bated breath for the SBA to comply with the Runway Extension Act. But as we’ve previously written, the SBA has thus far refused to do so (albeit under shifting rationale).

Now, the SBA has cemented its position against applying the Runway Extension Act—according to the SBA, “[b]usinesses must continue to report their annual receipts based on a 3-year average until the SBA amends its regulations.”

I’m not convinced the SBA has it right.

Continue reading

GAO: Past Performance Should Relate to Solicited Services

Past performance is an important evaluation factor in many solicitations. Essentially, it allows an agency to guess as to the likelihood of an offeror’s successful performance under a solicitation by looking to its history of performance on similar projects in the past.

GAO recently confirmed it is “axiomatic” that past performance examples should align with the solicitation’s requirements. If an offeror submits unrelated examples, it risks a downgraded past performance score.

Continue reading