NAICS Codes and GSA Schedule Orders: An Important Exception

A Contracting Officer must designate the NAICS code which best describes the principal purpose of the product or service being acquired, right?

Not always.  As demonstrated in a recent SBA Office of Hearings and Appeals decision, when it comes to picking a NAICS code for a GSA Schedule task order, a Contracting Officer’s choices can be quite limited–and the “best” NAICS code might not be chosen.

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Subcontracting Ambiguity Results in Proposal Downgrade

In a recent case, a federal court held that a procuring agency properly downgraded an offeror’s proposal because the proposal was ambiguous as to how much of the contract work the offeror intended to subcontract.

According to the Court, even though the amount to be subcontracted was small in any event, the ambiguity meant that the procuring agency reasonably questioned whether the offeror understood the requirements of the solicitation.

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8(a) Program Fraud: Contractor Indicted; Government Seeks $9 Million

An Idaho contractor has been indicted on federal charges stemming from allegations that she fraudulently lowered her personal net worth in order to enable her company to be certified in the SBA 8(a) Program and the Department of Transportation’s Disadvantaged Business Enterprise Program.

According to a Department of Justice press release, the 8(a) and DBE fraud netted the contractor upwards of $9 million–and the Government wants its money back.

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8(a) Contractor Terminated For Subcontracting Limit Violations

A contractor was recently terminated from the SBA’s 8(a) Program for failing to comply with the subcontracting limits applicable to its 8(a) contracts.

The SBA Office of Hearings and Appeals upheld the termination, writing that the SBA had properly terminated the 8(a) contractor for “willfully violating SBA regulations.”  SBA OHA rejected the contractor’s argument that it was exempt from the subcontracting limits under the so-called non-manufacturer rule.

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8(a) Program Fraud: Contractor Pleads Guilty in Case That “Has It All”

A Florida resident has pleaded guilty in an 8(a) Program fraud case that seemingly has it all in terms of small business violations, from affiliation to subcontracting limits.

According to a press release issued by the U.S. Attorney’s Office for the Eastern District of Virginia, Michael Dunkel has pleaded guilty on charges of major government fraud, and faces the potential of significant prison time when sentencing occurs this fall.

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GAO: 8(a) Company Not Entitled To High Past Performance Score Based On Sub’s Experience

A procuring agency appropriately refused to give an 8(a) participant the highest-possible past performance score, despite the 8(a) company’s plan to subcontract to the successful incumbent contractor.

In a recent GAO bid protest decision, the GAO held that in evaluating past performance, the agency properly focused on the experience of the 8(a) prime, which was required to perform at least 51% of the contract work and manage the contract.

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