GAO: SBA’s Class Waiver Supported VA SDVOSB Set-Aside Decision

Last month, Steve wrote about a new Class Deviation rule adopted by the VA that, in effect, would limit the VA’s use of class waivers as part of its decision to restrict competition to SDVOSBs (or otherwise issue solicitations as sole source awards). But in an apparent contradiction to this Class Deviation rule, GAO recently denied a challenge to an SDVOSB set-aside decision for a manufacturing solicitation, based in large part on SBA’s adoption of a class waiver for the particular NAICS code.

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VA Class Deviation Restricts SDVOSB Nonmanufacturers

The VA has adopted a Class Deviation to the VAAR, severely restricting the ability of VA Contracting Officers to request waivers of the nonmanufacturer rule–and, even more troubling, suggesting that Contracting Officers need not apply the statutory SDVOSB and VOSB preferences even when the SBA has already granted a class waiver.

You may be wondering “does the VA’s Class Deviation comply with Kingdomware?”  Good question.

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Nonmanufacturer Rule Class Waivers: SBA OHA Explains How They Work

Under the nonmanufacturer rule, a class waiver applies to a procurement only if the NAICS code, Product Service Code and NAICS code descriptor match the item being procured.

Contrary to a common misconception, a nonmanufacturer rule class waiver is not authorized on the basis of the NAICS code alone.  In a recent size appeal decision, the SBA Office of Hearings and Appeals concisely explained how nonmanufacturer rule class waivers work.

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