SBA’s regulations provide that an 8(a) program participant that no longer is owned or controlled by socially and economically disadvantaged person can be terminated from the 8(a) program. But the decision to terminate is not one to be made lightly: SBA must make sure that it not only has evidence in support of its termination decision, it must also explain how that evidence demonstrates its conclusions.
This requirement was at issue in a recent court decision that found an SBA 8(a) program termination decision to be based on “numerous erroneous assumptions” and “unsupported conclusions, not substantial evidence.”
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.
A NAICS code appeal can be filed even after a SBA District Office accepts the procurement for competition in the 8(a) Business Development (BD) Program.
In a recent decision, SBA Office of Hearings and Appeals rejected the argument that acceptance of a procurement into the 8(a) Program results in the approval of the NAICS code assigned to that procurement, thus preventing subsequent NAICS code appeals. Had SBA OHA reached the opposite conclusion, the decision might have effectively excluded 8(a) contracts from the reach of traditional NAICS code appeals.
Compliance with the limitations on subcontracting are not adequately being monitored by the contracting officers responsible for 8(a) contracts, according to a recent GAO report.
After reviewing a representative sample of ten 8(a) contracts, the GAO determined that contracting officers effectively monitored subcontracting limit compliance on two of those contracts. In other cases, agency contracting officers failed to effectively monitor compliance, even in situations presenting a heightened risk of potential violations–such as where ineligible incumbents were serving as subcontractors.
A procuring agency appropriately refused to give an 8(a) participant the highest-possible past performance score, despite the 8(a) company’s plan to subcontract to the successful incumbent contractor.
In a recent GAO bid protest decision, the GAO held that in evaluating past performance, the agency properly focused on the experience of the 8(a) prime, which was required to perform at least 51% of the contract work and manage the contract.