Ostensible Subcontractor Affiliation: SBA Proposes Exception For “Similarly Situated” Entities

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.

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GAO Task Order Jurisdiction: No Exception For “Bridge” Order

The GAO lacked jurisdiction to consider the protest of a “bridge” task order valued under $10 million, even though the original order related to the bridge exceeded the $10 million threshold.

In a recent bid protest decision, the GAO held that it had no legal basis to consider the value of the original order in determining whether it had jurisdiction to decide a protest related to a bridge order.

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Family Relationships & Affiliation: SBA Proposes Clarifications

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.

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SBIR Program: SBA OHA Explains The Ownership Requirements

A firm will not qualify as a small business for a Small Business Innovation Research (SBIR) grant if it does not meet the SBIR program’s regulatory ownership and control requirements–and those requirements can be confusing.

In a recent size appeal decision, the SBA Office of Hearings and Appeals explained how the SBIR program’s ownership and control requirements work in practice.

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SDVOSB’s ESOP Caused Ineligibility, Says SBA OHA

A SDVOSB’s Employee Stock Ownership Plan caused the company to be ineligible under the SBA’s SDVOSB rules because the service-disabled veteran did not own 51% of the ESOP class of stock.

A recent SBA Office of Hearings and Appeals decision should serve as a cautionary tale to any SDVOSB contemplating establishing an ESOP–or any other ownership structure consisting of multiple classes of stock.

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