8(a) Program Fraud: Contractor Will Pay $7.8 Million

A former 8(a) program participant has agreed to pay nearly $8 million to settle allegations of 8(a) program fraud.

According to a Department of Justice press release, LB&B Associates Inc. will pay $7.8 million to resolve claims that it improperly obtained 8(a) certification (and 8(a) contracts) even though it was not controlled by a disadvantaged individual.

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8(a) Program Denial: Federal Lawsuit Available, Says SBA OHA

An 8(a) Program applicant may challenge the SBA’s denial of its application in federal court if the SBA Office of Hearings and Appeals lacks jurisdiction to hear the case.

According to a recent OHA decision, although OHA’s own jurisdiction in 8(a) denial matters is limited, a rejected applicant “is not utterly without recourse” because relief can be sought in court.

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8(a) Program: Follow-On To Competitive Award Can Be Sole Sourced

An 8(a) contract was properly awarded on a sole source basis to a tribally-owned entity, even though the contract was a follow-on to a competitive 8(a) set-aside award.

In a recent decision, the GAO deferred to the SBA’s interpretation of the 8(a) program regulations–which, according to the SBA, allow such sole source awards.

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8(a)’s Unapproved Mentor-Protege Arrangement Leads To Affiliation

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.

The recent decision of the SBA Office of Hearings and Appeals in Size Appeal of Brown & Pipkins LLC, SBA No. SIZ-5621 (2014) is a warning to 8(a) firms about the potential dangers of accepting mentoring services outside the confines of a SBA-approved mentor-protege agreement.

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8(a) Program: “Honest Mistake” Not Grounds For Termination

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.

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Mentor-Protege For All: SBA Proposes “Universal” Mentor-Protege Program

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.

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SBA “Adverse Impact” Analysis Not Required For Large Business

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.

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