Large businesses’ subcontracting plans would be subject to stricter compliance standards under a SBA proposed rule introduced December 29.
The intent of the new regulations is to compel prime contractors to make good faith efforts to comply with their subcontracting plans by implementing reporting mechanisms and harsher penalties for fraudulent actions or actions made in bad faith. Small businesses subcontractors are likely to agree that these are positive changes.
A large business was appropriately awarded a “Marginal” score for small business participation based on the large business’s history of failing to meet its small business subcontracting goals.
In a recent bid protest decision, the GAO held that the procuring agency properly assigned the large business a low score based on the large business’s history of unmet subcontracting goals, even though the large business apparently pledged to subcontract a significant amount of work to small businesses under the solicitation in question.
A discrepancy in a business’s subcontracting plan may have cost the offeror its shot at a position on the enterprise acquisition gateway for leading-edge solutions II IDIQ contract.
As demonstrated in a recent GAO bid protest, the business was downgraded on the small business participation factor because of a discrepancy in its proposal regarding subcontracting with SDVOSBs. Without the discrepancy, the large business might have landed a slot on EAGLE II.
Five subcontractors and two individuals have paid the government nearly $1.9 million to resolve allegations that they violated the False Claims Act by falsely representing themselves as small disadvantaged businesses.
According to a Department of Justice press release, the subcontractors self-certified as SDBs to their prime contractors, and those self-certifications were then passed on to the government.
It sounds like a tale from Bizarro World: under a recent Department of Homeland Security solicitation, a small business received a “Neutral” score for the small business participation factor, while its large competitor was awarded a “Good” score for the same factor.
One might think that the GAO would sustain a bid protest, especially because the small business in question planned to self-perform nearly two-thirds of the contract work. Think again. The GAO denied the protest, holding that under the solicitation, offerors could only receive small business participation credit for subcontracting to small businesses, not for self-performing at the prime contract level.
The United States Court of Federal Claims has denied a challenge to the Transportation Security Administration’s establishment of a 40% small business subcontracting goal–measured by total contract price, not total subcontracting dollars.
In Firstline Transportation Security v. The United States, No,. 12-601C (2012), Judge Thomas Wheeler rejected arguments that the TSA’s 40% small business subcontracting goal was unreasonable, contrary to the FAR, and improperly established a partial small business set-aside.
Some folks call it “October,” others prefer the more general “fall.” But in my family, this time of year is better known as “protest season.” So if you’re wondering where SmallGovCon has been the last few days, thank the government and its flurry of spending at the end of the fiscal year, which briefly led to a personal routine consisting almost entirely of of eating, sleeping (when my 1-year old daughter would allow it), and protesting.
While I have been busy protesting, the GAO has continued issuing bid protest decisions. Recently, it held that a large prime contractor was appropriately assigned a “significant weakness” due to the prime’s failure to propose meeting two of five small business subcontracting goals. I, for one, am happy to see another indication of a procuring agency putting teeth behind the small business subcontracting goals.