SDVOSBs, VA CVE Verification, and the “Full-Time Management” Rule: Unfair to Start-Ups

Posted on September 18, 2012 by Steven Koprince

If you are a service-disabled veteran hoping to start a new SDVOSB, the VA’s Center for Veterans Enterprise has a message for you: quit your day job.

Yes, you heard that right. Under one of the the VA’s SDVOSB eligibility rules (38 C.F.R. § 74.4(c)(3) to be precise), “one or more veterans or service-disabled veterans who manage the applicant or participant must devote full-time to the business during normal working hours of firms in the same or similar line of business.”

The VA currently interprets this so-called “full-time management” rule to essentially bar a SDVOSB from receiving verification if a service-disabled veteran manager does not work 40 hours per week for the SDVOSB. If the veteran holds a second job, the VA CVE ordinarily denies verification, stating that the veteran cannot be working full-time for the SDVOSB if he or she is also working another job.

“Wait a second,” several service-disabled veterans have told me in surprise, “my company is brand new. There won’t be 40 hours of work to do until I win a contract. In the meantime, I need my current job to pay the bills. Isn’t there a special rule for my situation?”

The answer, unfortunately, is “no.” But there should be a special rule, because in my opinion, the full-time management requirement unfairly and needlessly penalizes SDVOSB start-ups.

GAO: Agency Improperly Adjusted Contractor’s Proposed Level of Effort

Posted on September 14, 2012 by Steven Koprince

In today’s tight budgetary climate, performance-based acquisitions and similar techniques to maximize efficiency seem to be on the rise. Performance-based acquisitions can offer unique opportunities for contractors to develop innovative approaches to meet an agency’s needs while minimizing costs.

In a recent GAO bid protest decision, one offeror proposed fewer labor hours–and a different labor mix–than the awardee, resulting in a lower overall price. Nevertheless, without explanation, the procuring agency in question unilaterally raised the offeror’s labor hours to match the hours proposed by the awardee, resulting in a corresponding increase in evaluated price. The GAO was none too pleased with the agency’s action, sustaining the offeror’s bid protest.

Email Attachment Problem, Spelling Mistake Doom Proposal

Posted on September 13, 2012 by Steven Koprince

Our firm experienced a strange email outage yesterday: I could receive incoming email messages through my Outlook account, but anything I tried to send bounced back. After several bounce backs, I began emailing clients and other contacts from a gmail account (if you were on the receiving end, my apologies for the temporary lack of a professional email address, but it’s better than ignoring you, right?)

All this is to say that I can sympathize with McKesson Technologies, which experienced technical difficulties (as well as an unfortunate spelling problem) when trying to submit a proposal by email. Although the agency awarded McKesson the contract anyway, a competitor filed a GAO bid protest, and that was the end of McKesson’s award.

GAO Protester: Gloves Are Not “Clothing”

Posted on September 12, 2012 by Steven Koprince

File this one in the “A for effort” category. In a GAO bid protest, a contractor recently complained that it was unfairly excluded from a competition because the gloves sought by the agency were not “clothing” covered by a domestic preference law. Not surprisingly, the GAO’s response was, “nice try.”

SBA OHA: Tribal Companies Entitled to Broad Affiliation Exceptions

Posted on September 11, 2012 by Steven Koprince

Indian tribes, their holding companies, and companies owned by those holding companies are entitled to broad exceptions from the ordinary SBA affiliation rules, according to a recent SBA Office of Hearings and Appeals size appeal decision.

SBA OHA’s decision in Size Appeal of Roundhouse PBN, LLC, SBA No. SIZ-5383 (2012), holds that the SBA cannot use non-applicable affiliation rules to circumvent the regulatory exception from affiliation between tribal companies. In its ruling, SBA OHA also sidestepped an interesting tribal size question: did Congress truly intend for some tribal companies to be “small” for 8(a) program purposes, but “other than small” for all other government contracts?

As you can probably tell, the Roundhouse PBN case is not your run-of-the-mill SBA OHA size appeal decision, meaning a slightly longer-than-normal blog post is in order. Let’s dive right in.

Thank You, HUBZones!

Posted on September 10, 2012 by Steven Koprince

Last week, I had the honor of returning to Washington, DC and giving a presentation at the National HUBZone Conference on best practices for remaining HUBZone compliant. The presentation addressed critical ongoing HUBZone compliance issues, including the principal office rule, 35% employee residency rule, and other HUBZone eligibility rules.

Many thanks to Mark Crowley and the HUBZone Council for inviting me to be part of the conference. And a big “thank you” to my engaged audience of HUBZone companies, which asked many great questions and probably could have kept going all morning if there had been time. Finally, thanks to my sister Karen, for allowing me to use her apartment in Van Ness as my personal HUBZone Conference hotel and introducing me to Comet Ping Pong while I was in town.

If your company is HUBZone certified, but you weren’t able to make it to this year’s National HUBZone Conference, never fear. My presentation slides are now up on the Past Presentations page. Enjoy!

SBA OHA: Agencies Cannot Delay NAICS Code Selection

Posted on September 10, 2012 by Steven Koprince

Perhaps the Department of Education took a cue from Congress, which has a reputation for kicking the can down the road, delaying major decisions until after elections (or month-long recesses). In a recent SBA Office of Hearings and Appeals NAICS code appeal decision, ED decided to forego picking a NAICS code until after contract award.

SBA OHA was having none of it, and ED’s own lawyers even agreed–an agency’s NAICS code designation cannot be delayed until contract award.