Ostensible Subcontractor Rule: SBA 8(a) Mentor-Protege “Shield” Does Not Apply

The SBA 8(a) mentor-protege affiliation “shield” does not prevent a mentor and protege from being affiliated under the so-called ostensible subcontractor rule, according to a recent decision of the SBA Office of Hearings and Appeals.

In Size Appeal of InGenesis, Inc., SBA No. SIZ-5436 (2013), SBA OHA held that the broad exception from affiliation for 8(a) proteges and their mentors does not prevent the SBA from deeming the companies affiliated under the ostensible subcontractor rule.

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GAO: Task Order Discussions Must Identify Weaknesses

An agency must identify weaknesses or deficiencies in an offeror’s proposal when the agency conducts discussions as part of a task order competition, according to a recent GAO bid protest decision.

In Mission Essential Personnel, LLC, B-407474, B-407493 (Jan. 7, 2013), the GAO held that a procuring agency erred by failing to inform an offeror of two weaknesses or deficiencies in its proposal.  The GAO concluded that discussions must include this information even when the procurement is a task order competition conducted under FAR part 16.

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VA CVE Verification: Federal Court Rules Veteran Can “Control” SDVOSB Remotely

In an important decision impacting many SDVOSB verification applicants, the U.S. Court of Federal Claims has held that the VA’s SDVOSB regulations did not prevent a service-disabled veteran from controlling his company remotely.

In KWV, Inc. v. United States, No. 12-882C (2013), the Court held that a veteran could control his Rhode Island-based construction company by electronic means, even though the veteran spent half of the year residing in Florida.

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Small Business Outscored By Large Company On Small Business Participation Factor

It sounds like a tale from Bizarro World: under a recent Department of Homeland Security solicitation, a small business received a “Neutral” score for the small business participation factor, while its large competitor was awarded a “Good” score for the same factor.

One might think that the GAO would sustain a bid protest, especially because the small business in question planned to self-perform nearly two-thirds of the contract work.  Think again.  The GAO denied the protest, holding that under the solicitation, offerors could only receive small business participation credit for subcontracting to small businesses, not for self-performing at the prime contract level.

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8(a) Company Misses Key Personnel Requirements–But Wins Contract Anyway

An 8(a) company failed to satisfy a solicitation’s experience and key personnel requirements, but the 8(a) company walked away with a $23.9 million contract anyway–thanks to the SBA.

The GAO’s bid protest decision in Coastal Environmental Group, Inc., B-407563, B-407563.3, B-407563.4 (Jan. 14, 2013) demonstrates the power of the SBA under its certificate of competency program to second-guess procuring agencies’ determinations with respect to corporate experience, the resumes of key personnel, and other responsibility matters.

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Court: “Long Term” Contract Did Not Guarantee Option Years

The government was not required to exercise option years in a “long term” contract to lease aircraft, according to a recent decision of the U.S. Court of Federal Claims.

In Sundowner 102 LLC v. United States, No. 12-304C (2013), the Court held that the use of the words “long term” in a contract did not limit the government’s discretion to decline to exercise option years.

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GAO Task Order Jurisdiction: “Scope” Exception Is Narrow

As I have previously written, the GAO lacks authority to hear bid protests of task orders valued at less than $10 million, except if the protester can show that the order increases the scope, period, or maximum value of the contract against which the order was issued.

In a recent bid protest decision, the GAO held that the “scope” exception applies only if the task order changes the underlying scope of work–denying the protester’s argument that any task order that is not evaluated in accordance with the contract’s requirements necessarily goes beyond the contract’s scope.

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