Introducing SmallGovCon Guest Perspectives

As we begin a new year with important legal ramifications for small businesses, I am pleased to introduce a new SmallGovCon series offering viewpoints on those legal issues from thought leaders throughout the government contracting community.

The new feature, Guest Perspectives, kicks off today with a guest post by Kevin J. Allis, the director of the Native American Contractors Association.  The post, titled “Section 811 Stifles Native American Growth,” is well worth a read.

If you are interested in the possibility of contributing to Guest Perspectives, please contact me.

Guest Perspective: Section 811 Stifles Native American Economic Growth

By Kevin J. Allis

While an eleventh hour agreement avoided the “fiscal cliff,” it did not fully resolve potential spending cuts.  The agreement delayed the sequester, but its impacts are still being felt by contractors, particularly by small businesses.  These entities are at the end of the planning process, and delaying a resolution only prolongs uncertainty.

For Native contractors, there is little to be happy about, and much that raises significant concerns.  The consequences of the uncertainty in the federal contracting environment caused by the still looming possibility of sequestration, coupled with the enormously harmful effects of Section 811 of the National Defense Authorization Act for FY2010 (“NDAA”), are painting a potentially very dreary picture for these companies and the communities they serve.

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VA SDVOSB Reconsideration Success Rate At 48%–And Other Highlights From The GAO SDVOSB Report

VA SDVOSB reconsideration requests were approved in 48% of cases resulting in a decision, according to a GAO report released on Monday.

In the lengthy report, which weighs in at 63 pages, the GAO broadly concludes that the VA CVE has made progress when it comes to the verification of SDVOSBs, but has a ways to go in order for the SDVOSB verification process to be quick, effecient and effective.

This broad conclusion is not in the least bit surprising to anyone who has followed the evolution of the VA SDVOSB verification program.  However, the report is also packed with a great deal of interesting information about SDVOSB verification at the VA–including statistics on applications, reconsideration success rates, and more.

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SBA Affiliation Rules: No Exception For Non-Profits (Usually)

Under the SBA affiliation rules, there is no broad exception from affiliation with a non-profit, according to a recent SBA Office of Hearings and Appeals decision.

In Size Appeal of Asklepion Pharmaceuticals, LLC, SBA No. SIZ-5410 (2012), SBA OHA held that the SBA Area Office properly found a company affiliated with several non-profits, causing the company to be ineligible as a small business.

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Late SBA Size Protest Response Sinks Contractor’s Small Business Eligibility

No matter a company’s actual size, the company will be deemed an ineligible large business if it fails to timely respond to a SBA size protest.

Just ask American Blanching Company, which was recently found ineligible for a small business set-aside contract because it did not respond to a SBA size protest within the short size protest response window.

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8(a) Fraud: Proposal Claimed Past Performance Of Fake NASA Contract

A proposal submitted on behalf of an 8(a) company claimed that the company had performed a $3 million NASA contract even though no such contract existed, according to a recent report issued by the SBA Office of Inspector General.  As alleged in the SBA OIG report, the same honesty-challenged 8(a) company claimed to have 33 employees, even though it never had more than two.

Perhaps it is little wonder that the company in question is alleged to have passed through nearly 100% of its work on several 8(a) set-asides to its non-8(a) subcontractor.

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GAO: Ostensible Subcontractor Rule Not Part of Set-Aside Decision

When deciding whether to set aside a solicitation for small businesses, procuring agencies need not consider whether prospective small business offerors can perform the contract without violating the SBA’s ostensible subcontractor rule.

This was the ruling of the GAO in a recent bid protest decision, in which the GAO held that a procuring agency had properly set aside a contract for small businesses without prior consideration of the ostensible subcontractor rule.  The GAO’s decision aligns with the one discussed in yesterday’s post, in which the GAO held that an a procuring agency need not consider the individual capabilities of potential small business offerors to meet all solicitation requirements before setting aside a solicitation.

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