Category Archives: Service-Disabled Veteran-Owned Small Businesses

GAO Bid Protests Rise 5% In FY 2012

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Contractors filed 2,475 GAO bid protests in Fiscal Year 2012, a five percent increase from the prior year, according to the GAO’s annual bid protest report to Congress.  The GAO’s annual report indicated that “sustain” decisions were up slightly from the prior year, while the overall “effectiveness rate” of protests–a combination of sustain decisions and agency corrective actions–held steady at 42%.

Meanwhile, the VA was the only procuring agency to ignore GAO recommendations–something the VA did repeatedly in the Aldevra line of cases.

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Happy Veterans Day From SmallGovCon

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If you click the “service-disabled veteran-owned small businesses” tab on the right, you will find a list of SmallGovCon blog posts on CVE verification, affiliation, joint ventures, and the like.  And don’t let me stop you from reading; this is a legal blog, after all.

But before you scroll through the latest SBA OHA or GAO decision, take a moment to think about that phrase, which can be tossed around rather casually in the industry these days: “service-disabled veteran.”  Let’s not lose sight of the fact that, whether or not you are a veteran, the service-disabled veteran-owned small business program is worthy of our support because it is one small but important way for our country to say “thank you” to those who risked so much, and gave so much, on behalf of us all.

So, to my service-disabled veteran readers and my veteran readers: thank you.  And Happy Veterans Day.

SDVOSB Fraud: Justice Department Indicts Construction Company Owner

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The U.S. Department of Justice has indicated David E. Gorski, an owner of Legion Construction, Inc., for alleged service-disabled veteran-owned small business fraud.  The indictment alleges that Gorski, a non-veteran, fraudulently represented that Legion was a SDVOSB to win federal SDVOSB set-aside contracts, and used genuine service-disabled veterans as figureheads in an attempt to avoid detection.

VetBizCentral, an organization providing various services to veteran entrepreneurs, has posted a full copy of the Gorski indictment on its website.  The allegations are well worth a closer look.

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GAO: VA Must Prioritize SDVOSBs for Simplified Acquisitions

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The U.S. Department of Veterans Affairs’ award of a contract to a small business under simplified acquisition procedures was improper because it appeared that a number of service-disabled veteran-owned small businesses could have filed the requirement, according to a recent GAO bid protest decision.

Unlike the ongoing Aldevra cases, in which the VA has purposefully continued making awards to non-SDVOSBs under the Federal Supply Schedule in the face of repeated GAO decisions stating that the practice is illegal, the GAO’s decision in Phoenix Environmental Design, Inc., B-407104 (Oct. 26, 2012), suggests that the VA simply did not understand how the agency’s own set-aside rules are supposed to work, at least in the context of a simplified acquisition.

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False SDVOSB Certifications Land New York Man Behind Bars

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False SDVOSB certifications have earned a New York man nearly three and a half years in prison.

In May, I brought you the story of John White’s conviction for false SDVOSB certifications, and noted that sentencing was yet to come.  Well, last week the federal judge handed down a sentence, and Mr. White is no longer a free man.

According to a U.S. Department of Justice press release, White was sentenced to 41 months in prison for defrauding the government by falsely claiming to be a service-disabled veteran.  White’s company was awarded three SDVOSB set-aside contracts and one VOSB set-aside contract as a result of the fraud.  When the government began investigating White’s company, White tried to recruit an actual service-disabled veteran to pose as the company’s majority owner.

John White will now have a few years in the Big House to consider the consequences of falsely stealing the honor of our nation’s service-disabled veterans and falsely stealing four contracts intended for those veterans.  If the DOJ has has any sense of irony, it will ship him to a federal facility where genuine SDVOSBs are on-site providing services.

SDVOSBs, VA CVE Verification, and the “Full-Time Management” Rule: Unfair to Start-Ups

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If you are a service-disabled veteran hoping to start a new SDVOSB, the VA’s Center for Veterans Enterprise has a message for you: quit your day job.

Yes, you heard that right.  Under one of the the VA’s SDVOSB eligibility rules (38 C.F.R. § 74.4(c)(3) to be precise), “one or more veterans or service-disabled veterans who manage the applicant or participant must devote full-time to the business during normal working hours of firms in the same or similar line of business.”

The VA currently interprets this so-called “full-time management” rule to essentially bar a SDVOSB from receiving verification if a service-disabled veteran manager does not work 40 hours per week for the SDVOSB.  If the veteran holds a second job, the VA CVE ordinarily denies verification, stating that the veteran cannot be working full-time for the SDVOSB if he or she is also working another job.

“Wait a second,” several service-disabled veterans have told me in surprise, “my company is brand new.  There won’t be 40 hours of work to do until I win a contract.  In the meantime, I need my current job to pay the bills.  Isn’t there a special rule for my situation?”

The answer, unfortunately, is “no.”  But there should be a special rule, because in my opinion, the full-time management requirement unfairly and needlessly penalizes SDVOSB start-ups.

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VA SDVOSB Protests: VA OSDBU Has Sole Jurisdiction

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SDVOSB protests relating to VA set-aside procurements may only be decided by the VA Office of Small and Disadvantaged Business Utilization.  In a recent decision, the SBA Office of Hearings and Appeals confirmed that the SBA currently lacks jurisdiction to decide SDVOSB protests under VA set-aside procurements.

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