GAO: Large Prime Deserved “Significant Weakness” For Unmet Small Business Goals

Posted on October 10, 2012 by Steven Koprince

Some folks call it “October,” others prefer the more general “fall.” But in my family, this time of year is better known as “protest season.” So if you’re wondering where SmallGovCon has been the last few days, thank the government and its flurry of spending at the end of the fiscal year, which briefly led to a personal routine consisting almost entirely of of eating, sleeping (when my 1-year old daughter would allow it), and protesting.

While I have been busy protesting, the GAO has continued issuing bid protest decisions. Recently, it held that a large prime contractor was appropriately assigned a “significant weakness” due to the prime’s failure to propose meeting two of five small business subcontracting goals. I, for one, am happy to see another indication of a procuring agency putting teeth behind the small business subcontracting goals.

GAO: Contractor Cannot Claim “Experience” From Novated Contract

Posted on October 4, 2012 by Steven Koprince

Michael Jackson famously bought the publishing rights to most of the Beatles’ songs, but purchasing the Beatles’ music didn’t mean that Jackson could claim to have appeared on the Ed Sullivan Show in 1964.

As the GAO recently held, a similar principle applies in government contracting: simply buying another company’s government contract does not necessarily entitle the new contractor to lay claim to the other company’s experience.

Non-Manufacturer Rule: SBA OHA OK’s Drop Shipments

Posted on October 3, 2012 by Steven Koprince

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

Posted on October 2, 2012 by Steven Koprince

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”

Posted on October 1, 2012 by Steven Koprince

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”

Posted on September 26, 2012 by Steven Koprince

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

Posted on September 25, 2012 by Steven Koprince

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.