8(a) Fraud: Contractor Fraudulently Obtained $52 Million, Says DOJ

A Maryland man has pleaded guilty in an 8(a) fraud case involving a company that received more than $52 million in 8(a) contracts to which it was not entitled.

According to a Department of Justice press release, Vernon Smith pleaded guilty to charges that he (not the company’ s disadvantaged majority owner) exercised complete control over the company’s day-to-day management and long term decision making.

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8(a) Program Mentor To Pay $928,000 False Claims Act Settlement

An 8(a) Program mentor has agreed to pay a False Claims Act settlement of $928,000.  The settlement stems from the government’s claims that the mentor abused the 8(a) mentor-protege program.

According to a Department of Justice press release, the mentor firm performed eight 8(a) prime contracts on behalf of its protege–without an SBA-approved joint venture.  The government also contended that the mentor’s extensive role resulted in the protege firm failing to meet the applicable limitation on subcontracting.

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8(a) Task Orders: No Automatic Size Recertifications

Submitting a proposal for a task order under an 8(a) Government Wide Acquisition Contract does not result in automatic recertification of the offeror’s small business size status.

In a recent decision, the SBA Office of Hearings and Appeals held that unless the Contracting Officer expressly requires recertification, an offeror’s size for an 8(a) set-aside task order is governed by that offeror’s size status for the underlying GWAC.

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SBA OHA: 8(a) Mentor-Protege JV Affiliation Exception Applies To Non-8(a) Contracts

The SBA 8(a) mentor-protege joint venture exception from affiliation applies to non-8(a) contracts, so long as the joint venture meets the 8(a) regulatory requirements.

In a recent size appeal decision, the SBA Office of Hearings and Appeals held that the SBA Area Office erred by deeming a mentor and its protege affiliated for purposes of a non-8(a) contract, without considering whether the joint venture qualified for the mentor-protege exception to the ordinary SBA affiliation rules.

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SBA: SDVOSB, HUBZone, WOSB Mentor-Protege Programs May Arrive In 2014

The SBA will “make it a priority” to adopt regulations establishing mentor-protege programs for SDVOSBs, HUBZones, and WOSBs in the next 12 months, according to the SBA’s most recent semiannual regulatory agenda.

The regulatory agenda states that the three new mentor-protege programs are expected to be “similar” to the 8(a) mentor-protege program, which suggests that the special joint venturing benefits currently available only to 8(a)s may become available to SDVOSBs, HUBZones and WOSBs, as well.

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8(a) Program: Switch To LLC Leads To Termination

A participant in the SBA’s 8(a) program must obtain the SBA’s prior approval before switching its business structure–or else.

Case in point: recently, an 8(a) participant was terminated from the 8(a) program because it switched its corporate structure from a corporation to a limited liability company without the SBA’s prior approval.

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SBA 8(a) Program: Participant Terminated For Missing Annual Report

When it comes to the regulations governing small government contractors, lateness can lead to tough consequences.  For instance, responding late to a small business size protest might cause the SBA to conclude that the contractor is a large business, and a late proposal submission can get a bid tossed out.

Lateness can also lead to severe consequences within the SBA 8(a) program.  In a recent decision, the SBA Office of Hearings and Appeals held that the SBA properly terminated an 8(a) program participant because the participant had failed to submit a complete 8(a) annual report–months after the deadline had passed.

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