Author Archives: Steven Koprince

8(a) Mentor-Protege Joint Venture Shielded From “Three-In-Two” Rule Affiliation

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According to the SBA Office of Hearings and Appeals, an 8(a) mentor-protege joint venture may be entitled to an affiliation “shield,” even if the joint venture violates the so-called “three-in-two” rule by receiving more than three contracts over a two-year period.

SBA OHA’s decision in Size Appeal of Magnum Opus Technologies, Inc., SBA No. SIZ-5372 (2012), should reassure 8(a) proteges and their mentors that if the SBA District Office has approved a contract award to an 8(a) mentor-protege joint venture, the joint venturers are very unlikely to be found affiliated as a result of that contract award.

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SBA OHA: Contractors Must Be Permitted To Contest Affiliation

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If you have ever gotten a traffic ticket, you know the ticket typically presents you with two options: send in your fine (essentially admitting guilt), or appear in court and contest the ticket.  The second option is available because in our democracy, a citizen accused of wrongdoing–even a minor traffic infraction–has the right to contest the charges.

The same is true when it comes to SBA size protests.  According to a recent decision by the SBA Office of Hearings and Appeals, a contractor cannot be found affiliated with another company unless the contractor is given the opportunity to respond to the particular basis of affiliation at issue.

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New SmallGovCon Features: Upcoming Events and Past Presentations

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Despite what you might think if you read SmallGovCon regularly, blogging is not my favorite way of communicating information about legal developments in the world of government contracting (although I do love blogging!)

Hands-down, I prefer getting out and meeting contractors and others in the industry, face-to-face.  That is why I travel around the country, speaking at industry days, conferences, and conventions.  In the past year alone, I have spoken at events from Annapolis to Seattle (and many places in between) and I have several more events on tap in the months to come.

To help readers keep up with my speaking schedule, I am pleased to announce that SmallGovCon now features an Upcoming Events page.  On this page, you can see where, when, and on what topic I will be speaking.  If I will be in your area, please do not hesitate to contact me in advance and we can arrange to get a cup of coffee, or sit down for a more formal meeting.

Now, I understand that unlike the Grateful Dead, I do not have legions of fans following me around the country.  So if you will not be able to attend one of my events, you can now view slides from the event after it occurs on the SmallGovCon Past Presentations page (assuming permission is granted by the event sponsor).

Please enjoy the new SmallGovCon features, and I hope to see you at an industry event soon.

Price Realism: GAO Rejects “Incumbent Knows Best” Argument

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When an incumbent contractor loses a follow-on contract to a lower-priced competitor, the incumbent sometimes complains that after successfully performing the contract, it “knows what it takes” to get the job done, and that based on its experience, the competitor’s price is unrealistically low.

It is a perfectly logical argument, with one big problem: it can be very difficult to convince the GAO that an incumbent knows better than the procuring agency what constitutes a realistic fixed price for a contract.  The difficulty in succeeding with such an “incumbent knows best” price realism protest is demonstrated in a recently released GAO bid protest decision, Resource Ltd., B-406492, B-406492.2 (June 6, 2012).

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SBA OHA: SBA Cannot Belatedly Oppose Size Appeal

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No matter your political persuasion, it’s hard to forget the image of Senator John Kerry windsurfing in the famous 2004 Bush-Cheney ad.  The ad attacked Kerry for supposedly changing his mind too often–“flip-flopping,” in political parlance.

It turns out that the dangers of flip-flopping are not limited to politics.  In a recent SBA size appeal decision of the SBA Office of Hearings and Appeals, SBA OHA held that if the SBA’s Office of Government Contracting, or OGC elects not to formally oppose a SBA size appeal, it cannot later change its mind and ask SBA OHA to revisit the size appeal decision.  Because the SBA OGC does not formally oppose most SBA size appeals, SBA OHA’s decision forces the SBA OGC to make up its mind quickly about whether it will play a role in the SBA size appeal process.

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8(a) Contractor Fraudulently Evades 8(a) Sole Source Threshold–With Procuring Agency’s Knowledge

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A soon-to-graduate 8(a) contractor submitted a fraudulent proposal designed to evade the 8(a) Program’s sole source limits, with the full knowledge of the procuring agency in question, according to a decision issued by the U.S. Court of Federal Claims.

As described in Veridyne Corporation v. United States, No. 06-150C (Fed.Cl. 2012),Veridyne Corporation greatly underestimated the cost of a contract in order to slip it under the 8(a) Program’s sole source threshold, but the scheme eventually collapsed, leaving Veridyne liable for false claims and procurement fraud–and leaving the procuring agency in question with egg on its face and a lot of explaining to do.

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Event: SDVOSB Joint Venturing, Teaming and Subcontracting (El Paso, TX)

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I am excited to announce that I will be speaking on “SDVOSB Teaming, Joint Venturing, and Subcontracting” at the 7th Annual Veterans Business Conference in El Paso, Texas.  The conference will be held August 15, 2012 at the Wyndham Airport Hotel.

Joint venturing and teaming can make a SDVOSB more competitive, but can also be complex and risky.  In this presentation, I will demystify the SDVOSB teaming process.  For SDVOSB prime contractors, I will explain how to put together strong and effective joint venture agreements, teaming agreements and subcontracts, avoid common compliance mistakes, and deal with the day-to-day challenges of managing a relationship with a large subcontractor.  And for SDVOSB subcontractors, I will discuss how to negotiate a better deal with a large prime contractor and earn a reputation as the first company a large prime calls when it needs a SDVOSB subcontractor.

In addition to speaking, I will be on the trade show floor at the Petefish, Immel, Heeb & Hird, LLP booth, where I will answer attendees’ questions and sign copies of my book, The Small-Business Guide to Government Contracts.

Many thanks to Joseph Conway and the El Paso Contract Opportunities Center for inviting me to be a part of this great event.  For more information, visit the El Paso Contract Opportunities Center website.