Author Archives: Steven Koprince

The SBA Affiliation Rules, Trustees, and Negative Control: A Cautionary Tale

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Small government contractors ask me, with some frequency, whether placing a company’s stock in a trust will protect the company from affiliation under the SBA affiliation rules.

I typically answer this question with one of my own: “who will control the trust?”  I tell them that if the same people who currently control the company will continue to control it once the stock is placed in trust, the mere act of placing the company’s stock in the trust is unlikely to shield the company from affiliation with other companies controlled by those same people.

A recent size appeal decision of the SBA Office of Hearings and Appeals confirms that the ordinary SBA affiliation rules typically still apply when a company’s ownership is placed in trust.  In fact, in this size appeal decision, the company in question lost out on a contract because one of the trustees had so-called “negative control” over the company–essentially, the ability to veto the decisions of the other trustee.

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GAO Protests: Unfair “Pop Quiz” Leads to Sustain Decision

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My least favorite college class was a physics course, supposedly for non-majors, which I took only to meet my graduation requirements.  One week, we spent a great deal of class time going over some rather complex material in the main textbook.  The following week, the professor gave a pop quiz–on completely different material, which I (along with many of my classmates) had not read very closely.  Needless to say, I thought the whole thing was rather unfair.

A recent GAO bid protest decision brought back those unpleasant memories.  In Rocamar Engineering Services, Inc., B-406514 (June 20, 2012), an agency gave an extra test to an unprepared contractor–and only that contractor.  Fortunately, unlike my grade in that physics course, the result of this unfair pop quiz was overturned, by way of a sustained GAO protest.

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WOSB Control Requirements: More Than Meets the Eye

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Back in the ’80s, I spent many a weekday afternoon watching The Transformers (the cheesy original cartoons, not the abysmal movies that followed much more recently).  The tagline of the show, which was about a bunch of robots that can transform into vehicles, was “more than meets the eye.”

“More than meets the eye” is also a good way to think about the requirements for the still relatively young women-owned small business program.  Google the phrase “women-owned small business program requirements” and you’ll come up with any number of articles stating that a viable women-owned small business must be “at least 51% unconditionally owned and controlled” by women.

While this is certainly true, these articles rarely explain exactly what the SBA has in mind when it comes to “unconditional” ownership and control.  Under the WOSB regulations, the truth, especially on the “control” front, may surprise you.

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Book Signing and Networking Sponsored by The American Small Business Coalition

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If you will be in the DC metro area next Wednesday afternoon, you are invited to a networking and book signing event sponsored by The American Small Business Coalition.

I will be on hand to answer your questions about government contracting rules and regulations, and sign copies of my book, The Small-Business Guide to Government Contracts.  If you already have a copy, please bring it and I will apply my John Hancock; if not, you can purchase a copy when you register for the event.

A big thank you to Guy Timberlake and the ASBC for sponsoring what should be a wonderful event.  See you there!

Discussions: Who Needs ‘Em?

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The Canadian band Barenaked Ladies (if my blog readership spikes today, I will suspect it’s from folks seeking something else by Googling that term) have a song called “Who Needs Sleep?”  As the father of a 10-month old, the chorus–“Who needs sleep?  Well you’re never gonna get it”–describes my life pretty accurately.

If BNL had been singing about federal procurements instead of slumber, the band might have used a similar chorus: “Who needs discussions?  Well you’re never gonna get ’em.”  As a pair of recent GAO bid protest decisions demonstrate, there is generally no requirement that a procuring agency engage in discussions with offerors, and it’s evident why many agencies avoid them: discussions remain fertile ground for sustained GAO bid protests.

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SBA Size Protests and the Brooks Act

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The so-called “Exception Paradox” is one of those un-winnable logic games.  It goes something like this, “if every rule has an exception, then doesn’t the rule that every rule has an exception have an exception, too?”

These are the sorts of brain teasers that sometimes kept me busy in grade school (what can I say, I wasn’t a very cool fourth grader).  Fortunately, when it comes to SBA size protests, the SBA Office of Hearings and Appeals has made it easy to understand an exception to one common rule.  In a recent decision, SBA OHA held that the ordinary rule governing when an offeror is deemed “small” for a particular federal procurement does not apply to a SBA size protest filed in connection with an architect-engineer competition conducted under the federal Brooks Act and FAR 36.6.

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GAO Confirms: AbilityOne Trumps SDVOSB for VA Set-Asides

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The VA has been on the receiving end of a number of GAO bid protest decisions, the most recent issued just a few weeks ago, holding that the VA is acting illegally by ordering off the Federal Supply Schedule without first determining whether the procurement at issue can be set-aside for service-disabled veteran owned small businesses.  But the GAO’s recommendations, and the outrage from the veteran community (which, in my opinion, is very well-deserved), have not stopped the VA from pushing ahead with its “FSS First” acquisition strategy.

Now, the VA has pushed SDVOSBs even further toward the back of the line.  The VA has determined that the Javits-Wagner-O’Day, or JWOD Act, which calls for agencies to make certain purchases from nonprofits listed by the Committee for Purchase for People who are Blind or Severely Disabled (also known as the “AbilityOne” program), trumps SDVOSB set-asides for items on the Committee’s list.

And this time, the VA agrees with the GAO.

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