8(a) Fraudster Hit With 42-Month Prison Sentence

A federal judge has sentenced a Maryland man to 42 months in prison for fraudulently obtaining contracts under the 8(a) Program.

According to a Department of Justice press release, after Vernon J. Smith III serves his prison sentence, he will be subject to three years of supervised release.  And on top of the prison sentence, the federal judge ordered Smith to pay more than $7 million in restitution and forfeiture.

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SBA Proposed Rule Would Allow PTAC and SBDC Size Status Opinions

Small Business Development Centers and Procurement Technical Assistance Centers would be permitted to issue advisory small business size status opinions under a proposed rule published last week by the SBA.

The proposed rule, which implements a section of the 2013 National Defense Advisory Act, establishes a “safe harbor” from fraudulent misrepresentation penalties for a small business that obtains an advisory size opinion from a SBDC or PTAC.  But the proposed rule acknowledges that SBDCs and PTACs are not required to provide such advisory opinions–and that new funding will not be awarded for this purpose.

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Proposal Re-Evaluation: Protester’s Scores Could Be Lower Than In Original Evaluation

When a procuring agency re-evaluates proposals in response to a protest, the agency need not stick with the results of the original evaluation.

As demonstrated in a recent GAO bid protest decision, when an agency re-evaluates proposals, it is expected that the re-evaluation could result in different findings and conclusions–including new conclusions that are not favorable to the protester.

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SBA OHA: 42%-49% Of Revenues Did Not Create Economic Dependence Affiliation

A small business was not affiliated with its largest customer under the SBA’s economic dependence affiliation rule, even though the small business earned as much as 49% of its revenues from the alleged affiliate–and even though the small business’s SEC Annual Report stated that the small business was dependent on its customer.

SBA OHA’s decision indicates that receiving less than 70% of revenues from an alleged affiliate may not, absent other indicia of affiliation, establish affiliation under the economic dependence rule.

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Rule Of Two: Small Business’s Notification Of Interest Was Too Late

A small business’s expression of interest in a solicitation came too late to affect the agency’s set-aside decision under the so-called “rule of two,” even though there was no indication that the small business knew about the requirement early enough to affect the set-aside decision.

In a recent bid protest decision, the GAO held that an agency was not required to consider a small business’s expression of interest when that expression of interest occurred after the RFQ was released.  Although the GAO may have been correct as a matter of law, the result is still discouraging, because nothing in the GAO’s decision indicated that the small business knew (or should have known) of the requirement before the agency issued the RFQ.

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SDVOSB Gets Attorneys’ Fees In SBA OHA Case

A service-disabled veteran-owned small business was awarded its attorneys’ fees for successfully appealing the SBA’s decision that the company was not an eligible SDVOSB.

In what seems to be the first decision of its kind, the SBA Office of Hearings and Appeals held that the prevailing party in a SDVOSB appeal may be entitled to recover attorneys’ fees under the Equal Access to Justice Act.

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SBA Affiliation Rules: Family Ties Plus Business Ties May Equal Affiliation

The SBA affiliation rules are not always intuitive, and perhaps no SBA affiliation rule is as little understood as the so-called “identity of interest” rule under 13 C.F.R. 121.103(f).

Identity of interest affiliation can arise in several ways, including when close family members also have business ties.  As demonstrated in a recent SBA Office of Hearings and Appeals decision, a close family relationship between two business owners, plus significant business ties, may cause affiliation between the businesses.

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