When a small business sells products to the government under a contract designated with a manufacturing NAICS code, the small business either must be the “manufacturer” of the products, or separately qualify under the nonmanufacturer rule. The nonmanufacturer rule, in turn, requires the prime contractor to have no more than 500 employees, whereas manufacturers may fall under larger size standards–some as big as 1,500 employees.
But what about an unpopulated joint venture that doesn’t itself manufacture any products, relying on the individual venturers to manufacture the solicited goods? Does it also have to comply with the 500-employee size standard under the nonmanufacturer rule? Or can the joint venture be deemed the “manufacturer” of the products in question?
Updating your joint venture agreement is essential to maintaining compliance with SBA’s regulations and failing to update could cost you contracts.
In Stacqme, LLC, SBA No. SIZ-5976 (Dec. 10, 2018), the SBA Office of Hearings and Appeals held that a mentor-protege joint venture’s failure to update its JV agreement caused the agreement to be non-compliant with the SBA’s rules, and meant that the joint venture was ineligible for an SDVOSB set-aside contract.
Let’s suppose that you, a small business, were previously awarded a long-term contract set aside for small businesses. But over the past few years, business has been good and you’ve outgrown the size standard assigned to the contract. Can you still be awarded a task order under the contract? Yes–if the contracting officer doesn’t require you to recertify your size in connection with the task order request, and no contract-specific terms–like mandatory off-ramps–say otherwise.
This important principle recently played out in DNT Solutions, LLC et al., SBA No. SIZ-5962 (2018).
Following a size determination, any person adversely affected by that determination may file an appeal with the SBA’s Office of Hearings and Appeals. To be timely, the appeal has to be filed within 15 calendar days from the date the person receives the determination. If not timely-filed, the appeal will be dismissed.
This 15-day deadline is strict. The OHA doesn’t have the power to extend it, even if good reason exists to do so. In fact, the OHA’s recent decision in Sentient Digital, Inc. dba Entrust Government Solutions, SBA No. SIZ-5963 (2018) makes clear that this deadline applies even when an agency changes its decision to terminate a contract following an adverse size determination.
Government contractors often assume that a foreign-owned company cannot qualify as a small business under the SBA’s government contracting size rules.
Not so. As demonstrated by a recent SBA Office of Hearings and Appeals size appeal decision, a foreign-owned entity can qualify as a small business, provided that it has a physical location in the United States and contributes to the U.S. economy.
When you hear “15 days,” what’s the first thing that comes to mind? Perhaps, you pay your employees every 15 days. Maybe your birthday or favorite holiday happens to be in 15 days. Or if you’re like me, you might think that 15 days is two days fewer than Thirteen Days, a great movie about the Cuban Missile Crisis.
Whatever your brain conjures up, don’t forget this: 15 days is the time limit to appeal an SBA size determination. Period. And nothing the contracting officer says can change it.
Generally, a size protest must be filed within five business days of when the protester receives notice of the identity of the awardee. But there are some nuances to this rule, such as whether a corrective action will extend the deadline and whether the clock starts running upon notice of the prospective awardee or the actual contract award date (Hint: notice of awardee).
But when does the 5-day protest period start to run in the context of a Blanket Purchase Agreement issued under a GSA Schedule contract? A recent SBA Office of Hearings and Appeals decision is a reminder that the award of a BPA does not trigger a new 5-day period to file a size protest.