SmallGovCon Week in Review: August 8-12, 2022

It’s Friday, and that means its time for another round of SmallGovCon updates as you ease on into your weekend. I’m excited to be heading to Norman, Oklahoma next week for the ICBS 2022 show. I’ll be speaking about local opportunities related to the Infrastructure Act. Hope to see you there!   https://www.icbsshow.com/.

Have a great one and enjoy these last few weekends of summer!

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SBA Issues 2021 Small Business Scorecard, Small Businesses Contracting Over $154 Billion!

The SBA recently released the Government Wide Small Business Procurement Scorecard for fiscal year 2021. This annual scorecard details information on the various categories of small businesses recognized by the SBA, including whether SBA met its goals related to small business federal contractors. Specifically, the scorecard is used to assess “how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals,” to “provide accurate and transparent contracting data,” and “report agency-specific progress.” SBA met or exceeded its goals in the majority of categories despite the fact that the overall number of small businesses decreased. Below, we take a look at the process, the numbers, and discuss which groups are, and which are not, receiving the greatest benefits.

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FAR Proposed Rule: Incumbent Service Workers Need to be Hired

Once again, the incumbent service worker rule has had its pendulum swing back to the hiring of incumbent workers, reflecting a “general policy of the Federal Government that service contracts which succeed contracts for the same or similar services, and solicitations for such contracts, shall include a non-displacement clause.” This proposed rule would insert a contract clause requiring contractors who are awarded a service contract with an incumbent on it, to offer employment to the incumbent contractor employees, for performance of the contract. This is of course quite the shift from current regulations, but it also places many new contract compliance requirements on contractors awarded a new contract as they try and stand up performance.

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Don’t Ignore NAICS Code Changes: New Rule a Reminder to Contractors

While many industries have existed since time immemorial, new industries are created and old industries fade all the time. A mere twenty-five years ago, there was no such thing as social media and video rental stores were all the rage. Now the former is a multi-billion-dollar industry, and the latter is basically extinct. In recognition of the changes that we experience over time, the U.S. Office of Management and Budget routinely revises the North American Industry Classification Systems (NAICS), which the SBA in turn incorporates as the new applicable NAICS codes. More importantly for contractors, this includes a change in size standards for businesses. In early July 2022, the SBA proposed a rule doing just that which would apply effective October 1, 2022, which we will explore in this post.

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Small Business Committee Raises Concerns to SBA About Certification Speed, Category Management

Last week, the U.S. House of Representatives Small Business Committee held a hearing to discuss how the SBA will meet Small Business Contracting goals, and specifically how the SBA can meet its goals related to socioeconomic programs. The committee challenged the Office of Government Contracting & Business Development to show how they will help grow participation in SBA’s small business development programs, and small business participation in federal contracting as a whole. The Small Business Committee raised questions related to inflation, increasing socio-economic program participation, and SBA technology updates.

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Department of Defense Unveils Plan to Address Effects of Inflation on Contracts

Inflation. A word no one likes, but it is something that is currently impacting nearly every facet of our lives. Gas prices continue to rise, grocery costs are through the roof, and everyday living expenses are taking more hard-earned money from our country’s workers than ever before. However, consumers are not the only ones feeling the effects. Costs and expenses of running a business have increased dramatically as well, and those in the federal contracting world are no exception. Questions from both contractors and contracting officers (CO) prompted the Department of Defense (DOD) release new guidance on May 25, 2022, conveying how it plans to handle inflation through economic price adjustments (EPA) as well as when the use of EPAs is appropriate. However, the guidance also discourages flexibility for increased costs based on inflation.

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