The limitations on subcontracting would undergo sweeping changes under a recent SBA proposal.
On December 29, the SBA issued a proposed rule to enact the changes implemented by Congress in the National Defense Authorization Act of 2013–including a thorough re-write of the way that compliance with the subcontracting limits is calculated and enforced.
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.
The FAR’s limitations on subcontracting clause allows the prime contractor to count small business subcontractors toward the prime’s own performance requirement, according to the GAO.
In a recent bid protest decision, the GAO confirmed that the National Defense Authorization Act of 2013 permits prime contractors to meet the requirements of the limitations on subcontracting clause by including work performed by “similarly situated” subcontractors.
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.
True or false: the FY 2013 National Defense Authorization Act requires the SBA to create a mentor-protege program for all small businesses?
Contrary to published information issued by at least three large law firms, the answer is “false.” In fact, although the NDAA authorizes the SBA to create a mentor-protege program for all small businesses, it does not require the SBA to create such a program.
Moreover, the erroneous statement that the NDAA requires the SBA to adopt a mentor-protege program for all small businesses is just one of three pieces of misinformation being circulated by one or more of these law firms. Let’s take a quick look at the text of Section 1641 of the NDAA itself and put the confusion to rest.