The SBA’s non-manufacturer rule allows a drop shipper to qualify as a small business, so long as the drop shipper takes legal ownership of the items in question, according to the SBA Office of Hearings and Appeals. In an important decision interpreting recent amendments to the non-manufacturer rule, SBA OHA rejected the argument that a company must take physical possession of the items in question in order to qualify as a non-manufacturer–which would have essentially prohibited drop shipments.
Contractor Alters Agency’s Pricing Table, Gets Bounced From Competition
During the NFL’s recent replacement referee debacle, the rules of the game sometimes seemed to be in flux. San Francisco coach Jim Harbaugh, for instance, convinced the replacement refs to give him two extra challenges by playing dumb about how the challenge process works. But with the “real” referees back on the field, NFL teams now know that they once again need to play by the rules.
When it comes to proposals, contractors, too, need to play by the rules. An agency solicitation sets forth the ground rules of the competition, and varying from those stated rules can result in an unacceptable offer–as one contractor recently discovered when it attempted to amend the solicitation’s pricing table.
Newly Organized Concern Affiliation Rule: GovCon Manager Not a “Key Employee”
The SBA’s newly organized concern affiliation rule is designed to prevent former officers, directors, principal stockholders or “key employees” of a large business from evading the SBA size rules by spinning off a new company.
But who is a “key employee” for purposes of the newly organized concern affiliation rule? As demonstrated in a recent SBA Office of Hearings and Appeals decision, the mere fact that an employee has the word “manager” in his or her title does not necessarily make that person a key employee under the newly organized concern rule.
SBA OHA Size Appeals: The Critical Difference Between “Filing” and “Serving”
SBA size appeals must be filed with the SBA Office of Hearings and Appeals and a copy given to (or “served”) on another SBA Office, the Office of Government Contracting (known as SBA OGC). Both steps must be taken, because as one small contractor recently discovered, serving a SBA size appeal on the SBA OGC is not the same as filing the size appeal with SBA OHA.
Idaho Man Pleads Guilty to HUBZone Fraud Charge
An Idaho man has pleaded guilty to a HUBZone fraud charge. According to a U.S. Department of Justice press release, last week, Patrick Large, the owner of Quality Tile and Roofing Inc., pleaded guilty to one count of wire fraud resulting from a HUBZone scheme.
Large admitted defrauding the government by falsely representing the location of two employees, apparently in order to satisfy the SBA’s “principal office” requirement for HUBZone firms. Based on Large’s representation, the SBA admitted Quality Tile to the HUBZone program. Quality Tile subsequently won a HUBZone set-aside contract valued at approximately $220,000.
As part of the guilty plea, Large agreed to pay $150,000 in restitution. However, he still faces the possibility of additional penalties, including prison time. He is scheduled to be sentenced on January 8, 2013.
SBA Size Protests Cannot Be Filed With The GAO
SBA size protests must be filed with the contracting officer, who then forwards the size protest to the SBA Area Office for review. The U.S. Government Accountability Office lacks jurisdiction to consider size protests, and filing a SBA size protest with the GAO will be ineffective, as one contractor recently discovered.
False SDVOSB Certifications Land New York Man Behind Bars
False SDVOSB certifications have earned a New York man nearly three and a half years in prison.
In May, I brought you the story of John White’s conviction for false SDVOSB certifications, and noted that sentencing was yet to come. Well, last week the federal judge handed down a sentence, and Mr. White is no longer a free man.
According to a U.S. Department of Justice press release, White was sentenced to 41 months in prison for defrauding the government by falsely claiming to be a service-disabled veteran. White’s company was awarded three SDVOSB set-aside contracts and one VOSB set-aside contract as a result of the fraud. When the government began investigating White’s company, White tried to recruit an actual service-disabled veteran to pose as the company’s majority owner.
John White will now have a few years in the Big House to consider the consequences of falsely stealing the honor of our nation’s service-disabled veterans and falsely stealing four contracts intended for those veterans. If the DOJ has has any sense of irony, it will ship him to a federal facility where genuine SDVOSBs are on-site providing services.