SBA Affiliation Rules: President Controlled Company Despite Removal Provision

A company’s President was deemed to control the company for purposes of the SBA affiliation rules, even though the company’s majority shareholder had the unilateral right to remove the President from office at any time.

In a recent size appeal decision, the SBA Office of Hearings and Appeals held that a company’s President exercised “critical influence” over the company, and that the President’s influence was not rendered illusory simply because the 100% owner could remove the President from office.

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8(a) Program: Is The SBA “Searching For Reasons To Deny” Women?

The SBA’s course of conduct in reviewing the 8(a) applications of companies owned by women “gives the distinct impression that the SBA is simply searching for reasons to deny every claim” of social disadvantage made by women applicants.

These strong words come from a recent SBA Office of Hearings and Appeals decision, in which OHA again overturned the SBA’s denial of a woman-owned business’s 8(a) application.

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Forming Eight JVs Did Not Create Affiliation Between JV Members

An 8(a) protege and its mentor were not affiliated with one another, despite forming eight joint ventures over a four-year period–and winning 15 contracts with those joint ventures.

In a recent size appeal case, the SBA Office of Hearings and Appeals upheld the decision of the SBA Area Office, which found that the mentor and protege were not affiliated despite their substantial history of joint venturing.

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GAO Task Order Protests: Protester’s Price Does Not Establish Jurisdiction

The GAO’s jurisdiction over task order protests turns on whether the award price of the task order exceeds $10 million–not whether the protester’s proposed price exceeds $10 million.

In a recent bid protest decision, the GAO held that it lacked jurisdiction over a task order protest because the award price was under $10 million, even though the protester had proposed a price of approximately $11.4 million.

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8(a) Subcontracting Limitations: Compliance Oversight Lacking

Compliance with the limitations on subcontracting are not adequately being monitored by the contracting officers responsible for 8(a) contracts, according to a recent GAO report.

After reviewing a representative sample of ten 8(a) contracts, the GAO determined that contracting officers effectively monitored subcontracting limit compliance on two of those contracts.  In other cases, agency contracting officers failed to effectively monitor compliance, even in situations presenting a heightened risk of potential violations–such as where ineligible incumbents were serving as subcontractors.

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Thank You, HUBZones!

I am back in Lawrence after a trip to the Washington area, where I spoke at the National HUBZone Conference.  My conference presentation focused on the special rules for joint venturing and teaming on HUBZone set-aside contracts.

Thank you to Mark Crowley and the HUBZone Council for inviting me to be a part of this year’s National HUBZone Conference.  Thank you also to the clients, old friends, and new connections who made the conference especially worthwhile.  And thank you, too, to all those who attended my seminar and asked so many great questions.

After speaking at four government contracts conferences since August, I am beginning to feel a bit like a road warrior.  My next conference travels will take me to Wichita, Philadelphia, and New Mexico.  If we haven’t connected at an event yet this year, I hope to see you there.

Affiliate’s Schedule Contract Didn’t Count, Says Court

An offeror was not entitled to hold itself out as having a Federal Supply Schedule contract by virtue of its relationship with an affiliated company that held the FSS contract.

In a recent bid protest decision, the Court of Federal Claims held that a FSS award was improper where the awardee’s affiliate–but not the awardee itself–held the proper FSS contract.

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