Does Kingdomware Apply To Non-VA FSS Orders?

Earlier this year, the United States Supreme Court issued its decision in Kingdomware Technologies v. United States. As we’ve noted, this case was a monumental win for veteran-owned small businesses—it requires the Department of Veterans Affairs to set-aside solicitations for SDVOSBs or VOSBs where two or more such offerors will submit a proposal at a fair and reasonable price, even if that solicitation is issued under the Federal Supply Schedule.

A recent GAO decision suggests, however, that Kingdomware’s impact could be felt beyond the world of VA procurements. Indeed, the Supreme Court’s rationale in Kingdomware might compel every agency to set aside any FSS order (or any other order, for that matter) valued between $3,000 and $150,000.

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Set-Aside Decision Need Not Consider Compliance with Limitation on Subcontracting

Before deciding whether to set-aside a solicitation for small businesses under FAR 19.502-2, should the contracting officer first determine whether those small business will be able to provide the needed services while, at the same time, complying with the limitation on subcontracting?

No, according to a recent GAO bid protest decision. Instead, an agency’s determination whether a small business will comply with the limitation on subcontracting should be made as part of its award decision (following the evaluation of proposals), not during its initial set-aside determination.

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SBA Final Rule: Small Business Mentor-Protégé JV Agreement Requirements

On Friday, Steven wrote about the framework of the new SBA small business mentor-protégé program. As part of this significant program addition, SBA’s final rule includes details about the requirements a small business joint venture must satisfy in order to be qualified to perform a small business set-aside. This post will briefly discuss those requirements.

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GAO: Protester Must Show Awardee’s “Specific Exception” to Subcontracting Limitation

A protester challenging an awardee’s compliance with the FAR’s limitation on subcontracting faces an uphill battle.

As explained in a recent GAO bid protest decision, an offeror’s compliance with the limitation on subcontracting is presumed; a protester, therefore, must present specific evidence demonstrating that the awardee will not comply with the limitation. In many cases–especially when the solicitation does not require offerors to provide a breakdown of costs of the work performed by the prime and its subcontractors–such evidence may be next to impossible to obtain.

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Small Business Set-Asides: Two Small Manufacturers Required

When an agency acquires manufactured products or supplies, the agency need not set aside the solicitation for small businesses under the FAR’s “rule of two” unless the agency has a reasonable expectation of receiving offers from small businesses offering the products of two or more small manufacturers.

A recent GAO bid protest decision highlights a little-known provision of the FAR, which provides that the “rule of two” does not apply to acquisitions for manufactured products over $150,000 where two or more small business nonmanufacturers are likely to submit offers, but the small business nonmanufacturers will not offer the products of two or more small business manufacturers.

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Nonmanufacturer Rule Violation Leads To Default Termination

A procuring agency appropriately terminated a small business set-aside contract for default when the SBA determined, after contract award, that the prime contractor was not complying with the nonmanufacturer rule.

A recent decision of the Armed Service Board of Contract Appeals involved a very interesting factual situation, in which the small business in question told the SBA that it planned to perform the contract in compliance with the nonmanufacturer rule, but then failed to do so.  This failure, according to the ASBCA, justified a default termination.

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GAO: Rule of Two Not Satisfied Where Businesses Do Not Manufacture Products

Where an agency buys manufactured goods, the FAR’s Rule of Two is satisfied when two or small business manufacturers of the end products exist. It is not enough, as GAO recently held, for two or more small business distributors of manufactured products to exist.

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