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.

SBA Size Protests Cannot Be Filed With The GAO

Posted on September 25, 2012 by Steven Koprince

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

Posted on September 24, 2012 by Steven Koprince

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.

Worst SBA Size Appeal Ever? Large Business Files Off-Topic Document with SBA OHA

Posted on September 24, 2012 by Steven Koprince

“No, we’re not a small business, but we could really, really use that small business set-aside contract.”

That, in essence, was the content of a document recently filed with the SBA Office of Hearings and Appeals, which SBA OHA charitably treated as a formal size appeal. Reading this case left me scratching my head and wondering: was this the worst SBA size appeal ever filed?

8(a) Mentor-Protege Agreements Cannot Be Protested, Says SBA OHA

Posted on September 21, 2012 by Steven Koprince

8(a) mentor-protege agreements cannot be protested by competitors, according to a recently-issued decision by the SBA’s Office of Hearings and Appeals. In Size Appeal of Professional Performance Development Group, Inc., SBA No. SIZ-5398 (2012), SBA OHA held that the SBA’s decision to approve an 8(a) mentor-protege agreement is outside the scope of the SBA size protest process.