CVE Verification Pointer: Remember to Provide Truthful Information

In government contracting—as in life—it’s important to be honest. And in our experience, most government contractors are honest. Where a contractor is dishonest or untruthful, it can face significant sanctions.

So it was in a recent SBA Office of Hearings and Appeals decision, in which the OHA considered the cancellation of an entity’s SDVOSB status. In CVE Appeal of Afily8 Government Solutions, LLC, SBA No. CVE-125-A (2019), the OHA affirmed the cancellation of Afily8’s SDVOSB verification based on concerns that Afily8 did not provide truthful information to the VA’s Center for Verification and Evaluation.

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Task Order Size Protests: Too Little, Too Late, Says SBA OHA

So, your company has made it past the first big hurdle and got on a GSA schedule. You see a small business task order pop up that you believe your company would be perfect for, but another company gets the award. Based on information you have heard or read, you believe something fishy may be going on and the awarded company may be a big fish that found its way into the small pond. But can you timely protest the task order award?

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SBA Denies 8(a) Status Based on Applicant’s Ability to Successfully Overcome Gender-Based Discrimination in Her Field

OHA recently affirmed the 8(a) status denial of a 100% woman-owned small business performing in the historically male-dominated renewable energy field. The applicant—who SBA called an “advocate” and “mentor” to women in the industry—detailed specific instances of gender-based-discrimination that plagued her education, employment, and career. But SBA was unmoved, instead focusing its analysis on the applicant’s triumph over these obstacles—apparently an indication that she was not socially disadvantaged in the first place. Unfortunately, this perplexing holding does fall in line with many past SBA denials of women-owned companies for 8(a) status.

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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.

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OHA: Owners Did Not Have Enough Managerial Experience to Qualify Concern as a WOSB

SBA’s socio-economic set-aside programs mandate compliance with multiple control requirements. An important one stipulates that a woman owner of a WOSB (or a veteran for a SDVOSB or a disadvantaged owner for an 8(a) business) must have the “managerial experience of the extent and complexity to run the concern.”

But what, exactly, does this requirement entail? A recent OHA case provides some important guidance.

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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.

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