SmallGovCon Week in Review: April 26-30, 2021

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If April showers bring May flowers, Lawrence, Kansas should be a kaleidoscope of color next week. The rain was so heavy at one point our street became a river for a few hours. The sun is shining today, however, and you can almost see the grass growing. It’s time to fire up the lawn mower and the grill and enjoy the longer, warmer days.

Just like the weather, there have been a few changes in federal government contracting, this week. Here are a few newsworthy articles, including an update on minimum wage increases for federal contractors, a new loan program for restaurants, and updates on the President’s Made in America policies. Have a great weekend!

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GAO: Solicitation Cannot Require a Protégé Have the Same Experience as its Mentor

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SBA regulations prohibit agencies from requiring the same past performance record from both mentor and protégé entities.  The regulations explicitly prohibit this type of requirement.

In a recent GAO decision, it sustained the protest where an agency required all members in a joint venture to submit the same past experience examples in their proposal.

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SBA’s SDVOSB “Normal Business Hours” Rule Needs Fixing–Here’s How

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SBA’s regulations for service-disabled veteran-owned small businesses create a rebuttable presumption that a service-disabled veteran doesn’t control the company if the veteran is unable to work normal business hours in the company’s industry.

The rule sounds reasonable at first blush, but as a recent SBA Office of Hearings and Appeals case demonstrates, the SBA may apply the presumption even to a one-person start-up with no contracts. Not many people can afford to quit their day jobs before their businesses truly get off the ground–creating a real conundrum for SDVOSB start-ups.

For the sake of fairness, the SBA’s Normal Business Hours rule needs fixing, pronto. Here’s how to do it.

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SmallGovCon Week in Review: April 19-April 23

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As you move into the weekend, be on the lookout for the Pink Moon. It’s not really pink though, the name comes from the herb moss pink, also known as creeping phlox, so NASA tells me. This is one of the earliest flowers of spring. So even if you don’t actually see a pink moon, it still means spring is here.

Along with the moon, be sure to check out these government contracting updates, including a report on SBA review of PPP loans, changes to beta.SAM, and calls for emerging technologies for DoD.

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Are You a Small Business Being Acquired by a Large Business? Check Your Pending Bids

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Many small business clients of mine have been approached by or considered acquisition by a larger firm. Well, if this sort of sale or merger would turn a small business into a large business, the small business should pay close attention to a little-publicized change stemming from SBA’s Mentor-Protégé Consolidation rule that came out last fall. The new rule could result in a company losing out on an otherwise successful bid.

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Congress Should Codify–and Expand–SBA’s Solution to the “Runway Extension” Small Business Size Calculation Problem

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In January 2022, the rules regarding calculating small business size status for federal procurements will change dramatically. Companies operating under receipts-based size standards will be required to use their last five completed fiscal years–not three. And businesses operating under employee-based size standards will be made to use their last 24 months of payroll, instead of 12.

These changes will benefit growing businesses, allowing stay small longer by including older numbers in their averages. But the new size rules–what Congress has termed a small business “runway extension”–actually penalize some businesses, forcing them to stay large longer, and freezing these companies out of the very small business set-aside opportunities that could help reverse their declining fortunes. That can’t be what Congress intended!

Fortunately, the SBA has come up with a simple, elegant solution to the problem, and I think Congress should codify it before January.

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