Most of SBA’s socioeconomic programs (woman-owned small business, veteran-owned small business, HUBZone) have a requirement for the contractor to go through a recertification process, or program examination, every three years. 8(a) Participants have an annual review process, so they are reviewed even more frequently. But between these routine program recertifications, there is a possibility that the SBA will choose to perform an additional program examination to “verify the accuracy” of certification. And, as one SDVOSB firm found out, failing to cooperate with these interim program examinations can lead to decertification—a fate that no small business wants to risk.
Continue readingCategory Archives: SBA OHA Decisions
Includes decisions of the SBA Office of Hearings and Appeals, including size appeal decisions, service-disabled veteran-owned small business appeal decisions, NAICS code appeal decisions, and women-owned small business appeal decisions.
SBA: Ostensible Subcontractor Affiliation Arises from Improper Limitations on Subcontracting in Proposal
The SBA ostensible subcontractor affiliation rule has long confused contractors and their attorneys alike because its standards were not very clear. It was based on whether, in a small business contract, a subcontractor performs the “primary and vital requirements of a contract” or the prime contractor was “unusually reliant” on the subcontractor. SBA’s Office of Hearings and Appeals filled in the gaps on these terms. But in 2023, SBA updated its definition for these rules, declaring that if a small business prime contractor (other than under a general construction contract) met the limitations on subcontracting, it basically was not violating the ostensible subcontractor rule. A recent case looked at a circumstance where a small business prime contractor was not meeting the limitations on subcontracting.
Continue readingOstensibly OK: SBA Decision on Ostensible Subcontractor Rule Gives Contractors Some Clear Guidelines
In a recent post, we looked at the implications of BA OHA’s reasoning in In & Out Valet Co., SBA No. VSBC033-P, 2024 (June 12, 2024) on the full-time devotion requirement. Today we look at the impact of that case on another of SBA’s rules that has implications for both small businesses and for companies in the 8(a) Program, Women-Owned Small Business Program (WOSB), and the Service-Disabled Veteran-Owned Small Business Program (SDVOSB)–the ostensible subcontractor rule. The rule requires contractors not to rely too heavily on a subcontractor in the performance of a contract set aside under an SBA socioeconomic program. In practice, this standard may be confusing to a lot of hopeful contractors. What, after all, constitutes “undue reliance?” How reliant is too reliant? OHA’s reasoning in this recent decision helps clarify their application of the regulations, with results that may have far-reaching implications.
Continue readingSBA Confirms GSA Schedule-Holders Who Outgrow Size Standard Can Still Get Awarded Set-Aside TOs and Options
Many contractors utilize a GSA schedule contract to provide the Government with their products and/or services. After all the effort it takes to get on a GSA schedule contract, a contractor would certainly not want to lose its chance at a small business task orders issued under it, just because it’s circumstances have changed since it first got the schedule contract as a small business. In a recent decision, the SBA’s Office of Hearings and Appeals (“OHA”) confirmed that even if a business changes size after being awarded a GSA schedule contract, it can still compete for small business task orders from a Blanket Purchase Agreement (“BPA”) awarded under it.
Continue readingSomewhat Appealing: Which SBA Certifications Can You Appeal From?
The U.S. Small Business Administration (SBA) runs four socioeconomic programs aimed at providing equal opportunity to participate in federal contracting. And one would think that all of them have similar options if a contractor is denied certification. One would be wrong. SBA’s Office of Hearings and Appeals (OHA) recently dismissed an appeal for lack of jurisdiction, showcasing the different options in the various programs. The contractor was decertified from the Women Owned Small Business Program (WOSB). Its owners ran afoul of an important distinction in OHA’s appeals jurisdiction, particularly the substantial difference between appealing a competitor’s protest of a contractor’s SBA certification and the government’s initial denial of a program certification. This provides an excellent opportunity to assess the regulatory differences in appellate jurisdiction between the four programs, with an eye toward successfully navigating future encounters with the OHA.
Editor’s Note: Special thanks to our law clerk Will Orlowski for his immense help in drafting this post.
Continue readingAnother One Bites the Dust: Incomplete Joint Venture Agreement Fails Once Again
Once again, an initial awardee has had its award revoked because of a noncompliant joint venture agreement addendum. We see it happen regularly at SmallGovCon. And the decision in Colt-Sunbelt Rentals JV, LLC is yet another data point highlighting that SBA requires strict adherence to the joint venture agreement requirements in 13 C.F.R. § 125.8. Here, an incomplete joint venture agreement and its addendum resulted in a finding of affiliation which resulted in Colt-Sunbelt losing its small business status for the contract at issue.
Continue readingEven Rules have their Limits, Says SBA OHA about the Nonmanufacturer Rule
In a recent size appeal, the SBA OHA made it clear that the nonmanufacturer rule has it limits, and will not apply depending on the dollar value of the acquisition. OHA reminded contractors that the nonmanufacturer rule applies only to acquisitions over the simplified acquisition threshold.
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