Author Archives: Steven Koprince

Small Business Violates Ostensible Subcontractor Rule, Wins Contract Anyway

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The SBA’s ostensible subcontractor rule has tripped up many small businesses over the years.  The rule states that a small prime contractor is affiliated with its subcontractor when the prime is unusually reliant upon the subcontractor and/or the subcontractor will perform the primary and vital portions of the contract work.

It is worth remembering, however, that the ostensible subcontractor rule only matters if affiliation between the prime contractor and subcontractor would cause a size standard problem.  If the sizes of the prime contractor and its ostensible subcontractor, added together, do not exceed the size standard, a violation of the ostensible subcontractor rule doesn’t matter.

That is what happened in one recent decision of the SBA Office of  Hearings and Appeals, in which a small prime contractor had an ostensible subcontractor–but was declared an eligible small business anyway.

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Joint Venture Between Small Business, Large Company Not “Small”

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Go on, go on.  Call me Captain Obvious for writing this post if you must, but the question actually comes up quite often: can a small business joint venture with a large business and qualify as “small” for purposes of a federal small business set-aside contract?

The answer, as confirmed in a recent SBA Office of Hearings and Appeals SBA size appeal decision, is “no,” unless the joint venturers are participants in the SBA’s 8(a) mentor-protege program.  Unfortunately for the joint venturers in Size Appeal of BY&R Contractors, LLC & West Coast Contractors of Nevada, Inc. JV, SBA No. SIZ-5349 (2012) not only were they not an 8(a) mentor and protege, but neither company was even an 8(a) participant.

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GAO Has Jurisdiction Over BPA Modification Protests

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The GAO has jurisdiction to decide protests challenging modifications to blanket purchase agreements, according to a recent GAO protest decision.  In Crewzers Fire Crew Transport, Inc., B-406601 (July 11, 2012), the GAO rejected a procuring agency’s argument that BPA modifications are a matter of contract administration, and thus outside the GAO’s protest jurisdiction.

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Explaining HUBZone Eligibility And The 35% Residency Requirement

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In order to qualify as a HUBZone business, 35% of a company’s employees must reside in a HUBZone (though not necessarily the same HUBZone where the business has its principal office).  But what happens if a business slips below the 35% requirement?  After all, employees come and go all the time.

Here’s how it works.

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Small Business Wins SBA OHA Size Appeal–But Contract Not Reinstated

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A SBA size protest can be a matter of life and death for a small business, which may find it impossible to effectively compete if it is found “other than small.”  If a protested contractor loses a size protest, it is not necessarily the end of the road: it has the option of filing a size appeal with the SBA Office of Hearings and Appeals.

Winning a SBA OHA size appeal often results in “small” status once again, but a SBA OHA victory may have its limits.  As one contractor recently discovered, if the procuring agency terminates a contract award following an adverse SBA size protest decision, the agency is not required to reinstate the contract if the contractor subsequently prevails in its SBA OHA size appeal.

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From 1,500 Employees To $25.5 Million: Successful NAICS Code Appeal Shakes Up Competition

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A successful NAICS code appeal can be a powerful competitive game changer.  Case in point: the recent decision of the SBA Office of Hearings and Appeals in NAICS Appeal of Delphi Research, Inc., SBA No. NAICS-5377 (2012).

In the Delphi Research NAICS code appeal, a contractor questioned the procuring agency’s decision to assign a NAICS code carrying a 1,500-employee size standard.  SBA OHA agreed with the appellant, rewriting the solicitation to exclude companies with more than $25.5 million in average annual receipts–in essence, a much lower size standard.

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Agency Gets SBA Size Standard Wrong; SBA OHA Dismisses Late NAICS Code Appeal

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Know your SBA size standards.  That’s the lesson to be drawn from the decision of the SBA Office of Hearings and Appeals in NAICS Appeal of Ash Stevens, Inc., SBA No. NAICS-5368 (July 12, 2012).

In the Ash Stevens NAICS code appeal, the solicitation erroneously stated that the SBA size standard associated with a particular NAICS code was much larger than is actually the case.  By the time the agency corrected its mistake, SBA OHA held that it was too late for a contractor to challenge the NAICS code.

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