SBA Takes Action Following OIG Investigation of Suspension and Debarment Process

On September 18, 2019, SBA’s Office of Inspector General released an Audit Report summarizing a recent audit of SBA’s Suspension and Debarment Process. The purpose of the audit was to determine whether SBA “had sufficient controls in place to prevent suspended or debarred entities from receiving federal contracts through SBA’s preference contracting programs and small business loans.”

Through its investigation, OIG discovered SBA lent and awarded millions of dollars to businesses otherwise ineligible to receive these funds under SBA’s suspension and debarment guidelines. While SBA disagreed with some of OIG’s findings, SBA did agree to take some steps to address OIG’s findings and recommendations.

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The 8(a) Program: Our New Handbook is Available

The 8(a) program can be a powerful accelerator for those small businesses eligible to participate; however, these benefits come with substantial strings attached.

The latest volume of the Koprince Law LLC GovCon Handbooks series discusses this unique and heavily-regulated program.

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SBA Denies 8(a) Status Based on Applicant’s Ability to Successfully Overcome Gender-Based Discrimination in Her Field

OHA recently affirmed the 8(a) status denial of a 100% woman-owned small business performing in the historically male-dominated renewable energy field. The applicant—who SBA called an “advocate” and “mentor” to women in the industry—detailed specific instances of gender-based-discrimination that plagued her education, employment, and career.

But SBA was unmoved, instead focusing its analysis on the applicant’s triumph over these obstacles—apparently an indication that she was not socially disadvantaged in the first place. Unfortunately, this perplexing holding does fall in line with many past SBA denials of women-owned companies for 8(a) status.

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Missing Password Doesn’t Sink CIO-SP3 Proposal

A Maryland contractor nearly lost a contract with $20 billion ceiling because of a password protected encrypted document.

After much back and forth, and for somewhat obscure reasons, GAO said that it was unreasonable for the agency to ask for the password and then not use it.

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SBA Poised to Increase 8(a) Income and Net Worth Eligibility Standards

We recently discussed at length the SBA’s proposed rule to get rid of WOSB self-certification and revise some of the other WOSB certification rules. Well, it seems like SBA is crossing a lot of things off its to-do list, because in that same proposed rule, SBA also proposes to “to make the economic disadvantage requirements for the 8(a) BD program consistent to the economic disadvantage requirements for women-owned firms seeking EDWOSB status” and to “eliminate the distinction in the 8(a) BD program for initial entry into and continued eligibility for the program.”

If the rule is approved, the dollar amounts for initial 8(a) economic disadvantage eligibility would increase quite a bit, making more people economically eligible. Read on for the details on this proposed change.

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DoD Proposes Aligning DFARS 8(a) Nonmanufacturer Rule with Existing SBA Regulations

The DoD recently issued proposed revisions to the DFARS 8(a) nonmanufacturer rule, found in 48 C.F.R. § 252.219-7010. The proposed revisions would update the admittedly “outdated text regarding the nonmanufacturer rule with updated text” that reflects SBA’s May 2016 final rule implementing the Fiscal Year 2013 National Defense Authorization Act.

While the changes are only for 8(a) concerns, the differences between the existing DFARS and proposed change are significant nonetheless.

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Section 809 Panel Recommends Changing “Once 8(a), Always 8(a)” Rule

Under the so-called “once 8(a), always 8(a)” rule set forth in the FAR and SBA regulations, when a procurement has been accepted by the SBA for inclusion in the 8(a) Program, any follow-on contract generally must remain in the 8(a) Program, unless the SBA agrees to release it for non-8(a) competition.

Now, the Section 809 Panel has proposed a modest, but potentially important change to the “once 8(a), always 8(a)” rule–a change that would allow for acquisitions to be removed from the 8(a) Program without the SBA’s explicit consent.

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