It is a fairly standard business practice to divide profits according to ownership ratio. And a joint venture made up of only small business venturers only pursuing small business set-asides can follow this business practice—or any business practice—to divide up its profits (limited only by any applicable state, local, or Tribal law). But SBA does have specific and strict requirements for allocating the profits of any joint venture (1) between a small business protégé and its SBA-approved large business mentor, and (2) that qualifies for and pursues socioeconomic set-asides (i.e., 8(a) Program, WOSB/EDWOSB, HUBZone, VOSB/SDVOSB) and includes non-similarly situated entities.
Continue readingAuthor Archives: Nicole Pottroff
Executive Order for Nondisplacement of Federal Workers Rescinded
Indeed, Executive Order (EO) No. 14055, Nondisplacement of Qualified Workers Under Service Contracts, was only one of many predecessor EOs rescinded by the Trump administration shortly after taking office. But its removal has significant impacts on federal government contracting. As explained in EO No. 14055, its requirements sought to promote skilled worker retention in the federal workforce by placing requirements on contractors (and subcontractors) to provide the service employees from predecessor service contracts an essential right of first refusal of employment in successor or follow-on contracts. But EO No. 14055 has now been officially rescinded as part of the new administration’s stated policy to lift any orders it felt were “replacing hard work, merit, and equality with a divisive and dangerous preferential hierarchy.”
Continue readingStrategies for Dealing with a Government Shutdown
Shuttering of the government (or parts of the government) following appropriations lapses has become an increasingly common phenomenon in recent times. Continuing resolutions have become a recurring stopgap measure. Funding lapses interrupt the usual predictability of government operations, which harms both agencies and federal contractors that are left in limbo with stop work orders.
Unfortunately, unlike many other topics, the FAR has little say when it comes to procedures for contractors to follow during or following a government shutdown. It seems that the FAR’s authors didn’t really envision the government shutting down as a normal occurrence. Recovering expenses incurred as a consequence of government shutdowns can be challenging.
Here are some pointers.
Continue readingUpdate: SBA Proposed Rule Would Require “Rule of Two” Application to Multiple Award Contract Task and Delivery Orders (Part I)
SBA’s recently proposed rule seeks to officially broaden the reach of its “Rule of Two”–a government contracting requirement fundamental to supporting our nation’s small business infrastructure, policies, and goals. I emphasize “officially” because, even though this is technically a proposed change to SBA’s rules, it is really more of a “regulatory implementation” of judicial law than anything (don’t worry, we will go into more detail on this point later). Specially, SBA’s proposed rule would require the Rule of Two’s application to task orders and delivery orders under most standard multiple award contracts (MAC). This Part I blog will briefly explain what the Rule of Two is and detail SBA’s proposed update to it. But keep your eyes out for the soon-to-follow Part II blog on this topic. There, we will dig in deeper to the relevant history of (including the court case linked above), the sources and policies behind, and the potential implications for SBA’s proposed Rule of Two update.
Continue readingVeterans Day: Thank You for Your Service
Today, at SmallGovCon, we would like to take this opportunity to honor all the veterans and active-duty military for their service.
The first celebration using the term Veterans Day occurred in Birmingham, Alabama, in 1947. Raymond Weeks, a World War II veteran, organized “National Veterans Day,” which included a parade and other festivities, to honor all veterans. The event was held on November 11, then designated Armistice Day.
Armistice Day, commemorating the end of World War I in 1918, when major hostilities officially ceased on the eleventh hour of the eleventh day of the eleventh month. Later, U.S. Representative Edward Rees, from our home state of Kansas, proposed a bill that would change Armistice Day to Veterans Day.
Today, Veterans Day is a time to reflect on the contributions of millions of men and women who have defended their country, often enduring incredible hardship and separation from their families. It’s a moment for communities nationwide to show gratitude and respect, whether through parades, ceremonies, or personal acts of kindness toward veterans.
Thank you for your service, Veterans!
Are Mentor-Protégé Joint Ventures Just Too Successful, Asks SBA
SBA recently issued a proposed rule purportedly concerning the HUBZone Program and its regulations–but actually, covering a bevy of other discussions and proposed changes relating to size, SBA’s other small business socioeconomic programs, and even teaming. Specifically, regarding teaming, SBA revealed that it has apparently decided to take a deeper look into the immense success of mentor-protégé joint venture teaming. It is also requesting comments on this concern, as well as potential policy changes for joint venturing in SBA programs, more generally.
Continue readingCommon Misconceptions: SBA’s Mentor-Protégé Program (Part II – Participation Rules & Limits)
The SBA’s Small Business Mentor-Protégé Program (MPP) is arguably one of the federal government’s most successful undertakings when it comes to supporting our nation’s small business policies, economy, and contracting goals. It fosters the development of small business protégés, allowing many different forms of mentor assistance. It includes opportunity for eligible protégés and their mentors to joint venture (JV) for set-aside contracts—often otherwise off-limits to mentors that don’t qualify for the set-aside status/size standard and/or to protégés incapable of competing for or performing such contracts on their own. MPP JV awards may also incentivize federal government customers—simultaneously getting closer to meeting their set-aside quotas and getting the know-how, qualifications, resources, and personnel of more experienced (typically larger) contractors.
While it’s easy to see why this program enjoys immense popularity amongst small and large businesses alike, confusion consistently shrouds SBA’s MPP, nevertheless (hence the need for a two-parter here). In this article, we’ll skip over the “basics” of SBA’s MPP (which you can read all about here) and instead, jump right into the last few common misconceptions surrounding the program (you can read about the first few in Part I).
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