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 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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8(a) Mentor-Protégé Agreements and Graduation: The Beat Goes On?

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After a participant in the SBA’s 8(a) Program graduates, can its mentor-protégé agreement be reapproved for another full year?  Surprisingly, the answer may be “yes.”  At least, this is what happened in the Armed Services Board of Contract Appeals’ decision in HMRTECH2 LLC, ASBCA No. 56829 (2009).  However, subsequent rule changes indicate that the benefits of any such post-graduation re-approval will be limited to contracts obtained prior to graduation.

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Veteran Controls Both 8(a) Company and SDVOSB—By Working 95 Hours Per Week

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In the legal profession, some firms are known to encourage a workaholic culture.  I have heard tales of associates spending multiple nights sleeping (a couple hours) on office couches, being called away from the Thanksgiving dinner table to work, or awoken by the proverbial “3 a.m. phone call” by a partner demanding immediate attendance at the office.  The funny thing is that most of these stories come from the associates themselves—bragging about how much they work!

I work hard for my clients, but with a wonderful wife and daughter in my life, I am of the mind that some of the most important things are found outside the office.  However, one small business owner, who was the subject of a recent SBA Office of Hearings and Appeals decision, might feel right at home in one of those workaholic law firms.  This business owner was able to convince SBA OHA that he worked full time both for his 8(a) company and his separate service-disabled veteran-owned small business—by putting in a whopping 95 hours per week.
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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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