Author Archives: Steven Koprince

Who Are You? Ambiguity as to Identity of Bond Principal Costs Joint Venture a Contract

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“Who Are You?” asks Pete Townshend, the songwriter behind the tune a later generation would come to know as “The CSI Song.”  It’s a good question when it comes to self-reflection (or catching criminals), but it’s not so great when the government is asking the same thing in reference to a bid bond.

An ambiguous bid bond can cost an otherwise successful offeror to lose a contract.  And as the GAO’s decision in BW JV1, LLC, B-401841 (Dec. 4, 2009) demonstrates, it is especially important for offerors submitting as joint venturers or in other teaming arrangements to carefully consider their bid bond arrangements to eliminate any potential ambiguities.

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SBA Affiliation Rules and Economic Dependence: SBA OHA Backs off “70% Rule” (A Little)

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When I was young, my parents gave me my first weekly allowance.  Grand total: twenty-five cents.  It doesn’t sound like much now (and it wasn’t then, either—I’m not that old!) but it was still 100% of my income.  I was economically dependent on my parents.

When it comes to the SBA affiliation rules, a small business need not receive 100% of its revenues from another company in order to be considered an affiliate by virtue of economic dependence.  For several years, the SBA followed a hard-and-fast rule: if a small business earned 70% or more of its revenues from another company, the two businesses were automatically affiliated.

But in Size Appeal of Argus & Black, Inc., SBA No. SIZ-5204 (2011), the SBA’s Office of Hearings and Appeals backed off the bright-line 70% rule, at least a little.  In a commonsense decision, SBA OHA held that in limited circumstances, applying the 70% rule would be unfair.

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Applying for 8(a) Certification? Address Potential SBA Affiliation Problems First

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Affiliation under the SBA’s rules typically becomes a problem when a small business submits an offer on a set-aside procurement, and a competitor files an SBA size protest, challenging eligibility.  But the SBA will examine affiliation issues in other contexts, including when a small business submits an application for the SBA’s 8(a) Business Development Program.

As one unfortunate contractor recently learned, if you do not solve any affiliation problems before you submit your 8(a) application, the SBA may not only reject your 8(a) Program application, but deem you a large business, ineligible to obtain small business set-aside contracts in your primary NAICS code.

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No Sick Notes at the SBA: Illness Doesn’t Extend SBA Filing Deadlines

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Like many others who went to school in the 1980s, Ferris Bueller was one of my personal heroes.  Ferris took the idea of faking sick from school and turned it into an art form, complete with a moving mannequin in the bed, canned messages playing when the doorbell rang, and even a before-its-time hacking of the school computers to change his attendance records.  And of course, Ferris spent his day off tooling around in a Ferrari, attending a Chicago Cubs game (nice taste, Ferris!), and bringing The Beatles back into style.  What kid wouldn’t want to skip school for that?

Sick days–whether real or not–are a time-honored part of school.  Unfortunately, as one contractor learned the hard way, sick notes may not work at the SBA.

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C’mon, Prove It: Contractor Rejected Because It Cannot Prove Agency Received Proposal

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When a contractor submits its proposal information to an agency, the contractor should be careful to preserve evidence—a fax receipt, “sent” email, or, better yet, a FedEx or certified mail confirmation, showing that the agency received it.  Otherwise, as the GAO held in Industrial Construction & Trading Co., B-403849 (Dec. 13, 2010), the contractor is out of luck if the agency says it did not receive the document.

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SBA OHA: Ostensible Subcontractor Rule Shouldn’t “Close the Door” to New Businesses

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A small business’s relative inexperience should not be the primary basis for a determination that the small business is affiliated with its subcontractor under the “ostensible subcontractor” rule, according to the SBA’s Office of Hearings and Appeals.  SBA OHA’s decision in Size Appeal of Fischer Business Solutions, LLC, SBA No. SIZ-5075 (2009), held that the SBA’s Area Office improperly relied upon a small business’s lack of experience in a particular field to find it affiliated with its subcontractor.

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Contractors May File GAO Bid Protests on BPA Task Orders Under $10 Million

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The GAO’s authority to hear bid protests of task orders is generally limited to instances in which the task order at issue is valued over $10 million.  However, the GAO recently held that the limit doesn’t apply to task orders issued under Blanket Purchase Agreements (“BPAs”).  Contractors competing for task order awards under BPAs should be aware that they may file bid protests with the GAO, even where a task order is valued at far less than $10 million.

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