Large businesses’ subcontracting plans would be subject to stricter compliance standards under a SBA proposed rule introduced December 29.
The intent of the new regulations is to compel prime contractors to make good faith efforts to comply with their subcontracting plans by implementing reporting mechanisms and harsher penalties for fraudulent actions or actions made in bad faith. Small businesses subcontractors are likely to agree that these are positive changes.
The ostensible subcontractor affiliation rule would be modified to include an exception for “similarly situated” entities serving as subcontractors, if a recent rule change proposed by the SBA goes into effect.
Under the SBA’s proposal, a small business would be exempt from ostensible subcontractor affiliation with another small business for a small business set-aside contract, an 8(a) participant with another 8(a) participant for an 8(a) set-aside contract, and so on.
The SBA’s regulations regarding affiliation between companies controlled by close family members would be clarified under a proposed rule introduced on December 29.
Under the SBA’s current affiliation regulations, companies controlled by family members may be presumed to be affiliated, but the regulation leaves it to the SBA Office of Hearings and Appeals to determine how close the family relationship must be for the presumption to apply. The proposed rule would clarify exactly when the presumption applies.
The limitations on subcontracting would undergo sweeping changes under a recent SBA proposal.
On December 29, the SBA issued a proposed rule to enact the changes implemented by Congress in the National Defense Authorization Act of 2013–including a thorough re-write of the way that compliance with the subcontracting limits is calculated and enforced.
Last week, I joined Guy Timberlake of the American Small Business Coalition for another segment of the popular “GovConChat” podcast series.
Guy and I discussed the impact of the 2015 National Defense Authorization Act on small contractors, including provisions (or a lack thereof) involving SDVOSBs, WOSBs, and reverse auctions. Guy and I also chatted about a recent allegation of HUBZone fraud stemming from a contractor’s alleged use of a “virtual office” as its supposed HUBZone location.
It’s always a pleasure speaking to Guy, who brings a great perspective to the issues (as well as a memorable voice tailor-made for podcasts). Check out the full podcast by following this link, and be sure to check out the GovConChat archives for Guy’s conversations with other movers and shakers in federal procurement.
Just in time for the holidays, there is good news for WOSBs–sole source contracts are coming!
If you have followed SmallGovCon over the past week, you have seen a few posts about changes made to the 2015 National Defense Authorization Act since the bill was initially passed by the House in May. But one piece of the original House bill has remained intact: the final 2015 NDAA allows WOSBs and EDWOSBs to receive sole source contracts.
With little fanfare, Congress just passed legislation eliminating the ability of WOSBs to self-certify for purposes of WOSB set-aside contracts.
The 2015 National Defense Authorization Act rewrites the portion of the Small Business Act governing WOSB set-asides, deleting what I have called the “trust but verify” option: the ability for putative WOSBs to self-certify as such, then back up their self-certifications by submitting supporting documentation to the WOSB Document Repository. Instead, the 2015 NDAA would appear to require a formal certification in order for a small business to be awarded a WOSB set-aside contract.