An 8(a) small business was found to be affiliated with its large subcontractor under the ostensible subcontractor rule based in part on the fact that the large subcontractor was providing mentoring services to the small business–even though the SBA had rejected a proposed mentor-protege agreement between the companies.
An honest mistake made in a company’s 8(a) Program application may not support termination of the company from the 8(a) Program.
In a recent decision, the SBA’s Office of Hearings and Appeals held that the SBA could not validly terminate an 8(a) participant for submitting false information in the 8(a) application because the SBA had not considered whether the 8(a) participant honestly, and reasonably, believed that she was not required to report the information.
The SBA has proposed to establish a government-wide mentor-protege program available to all small businesses.
In a proposed rule released yesterday, the SBA proposed to establish a single, “universal” mentor-protege program, open to all small businesses, not just those with certain socioeconomic designations. And critically, the SBA’s proposed mentor-protege program would allow SBA-approved mentor-protege joint ventures to qualify as “small” for any federal government prime contract or subcontract–a benefit currently available only to 8(a) companies.
The SBA was not required to conduct an “adverse impact” analysis before placing a procurement under the 8(a) program because the company requesting the adverse impact analysis was not a small business under the incumbent contract.
In a recent bid protest decision, the GAO held that the incumbent contractor–which, according to the SBA, had violated the ostensible subcontractor affiliation rule–was not entitled to insist on an adverse impact analysis.