Category Archives: 8(a) Program

Posts dealing with the 8(a) business development program, including 8(a) admissions and eligiblity, requests for reconsideration, ongoing eligibility and compliance, and related matters.

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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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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8(a) Joint Ventures and SBA Size Protests: SBA OHA Narrows The Scope of Review

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When the SBA Area Office reviews a SBA size protest against a SBA-approved 8(a) joint venture, the SBA Area Office must confine itself strictly to size issues.  According to a recent decision of the SBA Office of Hearings and Appeals, in conducting its review of a SBA size protest, the SBA Area Office cannot examine whether the joint venture complies with the 8(a) program’s regulations.

Although the distinction between size and 8(a) issues may sound like a technicality, it can make the difference between a sustained SBA size protest and an unsuccessful one.  As a result, this SBA OHA decision provides an extra layer of protection to SBA-approved 8(a) joint ventures–any makes filing a successful SBA size protest against an approved 8(a) joint venture that much more difficult.

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8(a) Mentor-Protege Joint Ventures: SBA OHA Confirms Broad Exception from Affiliation

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I find Google Trends, which catalogs “hot searches” on any given day, rather fascinating.  Half of the hot searches seem related to one celebrity or another, but others reveal that many folks are spending their time Googling such things as “zombie apocalypse” and “national doughnut day.”  Does anyone remember what office workers actually did all day before the Internet?

If Google Trends had a government contracts subsection, “joint ventures” would be one of the trendiest of search terms.  Joint ventures are a hot topic these days, for small and large government contractors alike.  8(a) joint ventures are perhaps the trendiest of all, thanks to a special exception from the ordinary SBA affiliation rules.  In a recent SBA size appeal decision, SBA OHA confirmed that this exception from the affiliation rules is broad, even allowing an 8(a) mentor-protege joint venture–potentially–to violate the so-called “three in two” rule.

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The FAR’s Limitations on Subcontracting and IDIQ Contracts

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Here’s a question I get with some frequency: “do I have to comply with the FAR’s subcontracting limitations for every task or delivery order?”  You will be happy to learn that the GAO, at least, has answered this question “no.”

Although the FAR Limitations on Subcontracting clause, FAR 52.219-14, does not address IDIQs, task or delivery orders, the GAO has held that the subcontracting limitation FAR clause “applies to the contract as a whole and does not require that each delivery order placed under the contract satisfy the requirements of the clause.”  Spectrum Security Servs., Inc., B-297320.2 (Dec. 29, 2005).  According to the GAO in the Spectrum Security Services bid protest, the “contract as a whole” means that where a solicitation provides for the price evaluation of base and option years, the entire contract—both base and all priced options—will be reviewed to determine whether the offer complies with the subcontracting limits.

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Mystery, Intrigue and OCIs: Anonymous Source Sinks Contractor’s Bid

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It sounds more like a scene from “All the President’s Men” than the factual background of a GAO bid protest.  In McTech Corporation, B-406100, B-406100.2 (Feb. 8, 2012), an anonymous caller tipped off a procuring agency that McTech had an apparent organizational conflict of interest, leading to McTech’s exclusion from the competition.  The resulting GAO bid protest didn’t bring down a presidential administration, but it does provide a cautionary tale on the intersection of SBA mentor-protégé agreements and OCIs.

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8(a) Mentor-Protege Joint Ventures and Subcontracts: An Underused Practice?

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The revised 8(a) program regulations adopted in March 2011 contained so many significant changes that some of them seem to have gotten lost in the shuffle.  One of these unheralded changes allows a joint venture comprised of an 8(a) mentor firm and its SBA-approved protégé to joint venture as a small business for federal subcontracts.  It’s a major change because under the old rule, SBA 8(a) mentor-protege joint ventures could only joint venture as “small” for prime contracts.

So,  why aren’t more 8(a) firms taking advantage of this new mentor-protege joint venturing capability?

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