Congress Expected to Reject Section 809 Panel Recommendation to Eliminate Small Business Set-Asides

As we wrote about, the Section 809 Panel had recommended that Congress eliminate most small business set-asides for DoD acquisitions. The Panel suggested replacing small business set-asides with a five percent small business price preference. It looks like Congress heard our concerns—and those voiced throughout industry—and will reject this suggestion.

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Proposed FAR Update to Allow Small Business Set-Asides for Contracts Outside USA

Traditionally, small business set-asides are not utilized in Federal contracts performed outside the United States. The SBA allows for contracts performed outside the United States to use set-asides or sole-source awards, but the FAR does not reflect this. Recently, the Department of Defense, General Services Administration, and NASA have proposed an update the FAR that would reflect the allowance of small business set-asides and sole-source awards in contracts performed outside of the United States. 

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“Eliminate Most DoD Small Business Set-Asides,” Says Section 809 Panel

The Section 809 Panel has recommended that Congress eliminate most small business set-asides for DoD acquisitions. The Panel would replace the longstanding set-aside system with a meager five percent small business price preference.

For small government contractors, this recommendation is the policy equivalent of a five-alarm fire. Small contractors may need to fight hard to save the set-aside system.

Get ready for a battle.

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5 Things You Should Know: NAICS Code Appeals

NAICS code appeals are a useful tool in any small business government contractor’s toolbox. If successful, an appeal can dramatically change a procurement’s competitive landscape—either by limiting the pool of eligible offerors, or expanding it.

Even still, NAICS code appeals are underutilized among contractors. So I wanted to take just a few minutes to walk through the basics of NAICS codes appeals, in case your business ever needs to file one.

Here are 5 Things You Should Know about NAICS appeals:

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Small Business Set-Asides Not Required Under NETCENTS-2, Says GAO

The Air Force’s large NETCENTS-2 IDIQ vehicle did not require orders to be set-aside under the small business pool, except for orders valued between the micro-purchase threshold and simplified acquisition threshold.

In a recent decision, the GAO held that although the NETCENTS-2 contract in question says that Contracting Officers “should” perform a “rule of two” small business set-aside analysis for orders valued over the simplified acquisition threshold, it does not require that such an analysis be performed–meaning that Contracting Officers can validly award such orders to large businesses, even if two or more small business NETCENTS-2 holders exist.

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SBA OHA Provides Clarity on the Nonmanufacturer Rule

To be eligible for a small business set-aside procurement seeking a manufactured product, an offeror has to either be the product’s manufacturer or otherwise qualify under the nonmanufacturer rule.

Determining whether a business qualifies—either as the manufacturer or nonmanufacturer—can be a fact-intensive and confusing task. But it’s a vitally important one, as the penalty for not qualifying can be the loss of an awarded contract.

Recently, however, the SBA Office of Hearings and Appeals provided important clarity on how a small business might qualify as a nonmanufacturer.

Let’s take a look.

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GAO: 8(a) Sole-Source Set-Aside Proper Notwithstanding Prior Intent

As a general rule, the SBA is prohibited from accepting a solicitation into the 8(a) Business Development Program if the procuring agency previously expressed publicly a clear intent to award the contract as a small business set-aside.

On its face, this restriction seems clear. In practice, it can be anything but—the inquiry usually focuses on whether the agency’s prior intent was definitive enough to count.

In SKC, LLC, B-415151 (Nov. 20, 2017), GAO provided important clarity about this restriction.

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