In determining whether a prime contractor and subcontractor are affiliated under the ostensible subcontractor rule, the SBA is supposed to consider the totality of the relationship between the parties. But when it comes to determining whether the ostensible subcontractor rule has been violated, not all components of the prime/subcontractor relationship are created equal.
In a recent decision, the SBA Office of Hearings and Appeals confirmed that there are “four key factors” that are strongly suggestive of ostensible subcontractor affiliation–especially if the subcontractor will perform a large percentage of the overall contract work.
Affiliation under the ostensible subcontractor rule is determined at the time of proposal submission–and can’t be “fixed” by later changes.
In a recent size appeal decision, the SBA Office of Hearing and Appeals confirmed that a contractor’s affiliation with its proposed subcontractor could not be mitigated by changes in subcontracting relationships after final proposals were submitted.
Ostensible subcontractor affiliation can arise for many reasons–but a small business may be in grave danger of affiliation with its subcontractor when four specific factors are present.
In a recent size appeal decision, the SBA Office of Hearings and Appeals held that a small prime contractor was unusually reliant on its large subcontractor where “four key factors” indicated that the small prime contractor was bringing little to the table but its small business status.
The prime contractor’s management of a contract wasn’t enough to avoid ostensible subcontractor affiliation where the subcontractor would provide the labor, equipment, and facilities for performing the work.
In a recent size appeal decision, the SBA Office of Hearings and Appeals confirmed that, where the subcontractor will provide the goods or services that the agency “actually seeks to acquire,” the subcontractor may be deemed an ostensible subcontractor under the SBA’s affiliation rules.
A SBA size determination, in which the SBA found a contractor to be an eligible small business for purposes of a particular procurement, was irrelevant to the question of whether the same contractor would violate the limitation on subcontracting under a different solicitation.
In a recent bid protest decision, the GAO (correctly) rejected the procuring agency’s argument that a recent SBA size determination was evidence that a contractor would comply with the subcontracting limitation.
Ostensible subcontractor affiliation was not created when the small prime contractor proposed to hire its subcontractor’s current employee to serve as the prime contractor’s project manager.
In a recent size appeal decision, the SBA Office of Hearings and Appeals held that, where the prime contractor would retain supervision and control of contract performance, the prime contractor was not dependent on its subcontractor for contract management.
To determine whether ostensible subcontractor affiliation exists between a prime contractor and its subcontractor, the SBA must use the prime contractor’s final proposal revision.
In a recent size appeal decision, the SBA Office of Hearings and Appeals overturned an SBA Area Office affiliation determination that did not contemplate an offeror’s final proposal.