SBA: Most Construction Size Standards Should Remain As-Is

Posted on July 18, 2012 by Steven Koprince

The SBA has released its proposed size standard changes under NAICS Sector 23, which covers the construction industry. The bottom line: if you were hoping for a SBA size standard increase, chances are, you’ll have to hope that the SBA changes its mind between now and the issuance of the final rule.

The SBA proposed only two increases in Sector 23: NAICS code 237210 (Land Subdivision) would jump from a $7 million size standard to a $25.5 million size standard, and NAICS code 237990 (Dredging and Surface Cleanup Activities) would increase from $20 million to $30 million. The remaining NAICS codes under Sector 23 would retain their current size standards.

The SBA is accepting comments on the proposed Sector 23 size standard rule through September 17.

8(a) Sole Source Contracts: Little Explanation Necessary

Posted on July 18, 2012 by Steven Koprince

Agencies have broad discretion when it comes to issuing 8(a) sole source contract awards. Although a procuring agency must provide the SBA with some justification as to why it selected a particular 8(a) company for a sole source contract, that justification can be very brief. And, as the GAO held in a recent bid protest decision, an 8(a) sole source contract justification need not explain why the 8(a) awardee was superior to another 8(a) company interested in the same contract.

GAO Sustains An Aldevra Protest (Again)

Posted on July 17, 2012 by Steven Koprince

The original Rocky was popular with audiences and critics alike, rating as the highest-grossing film of 1976 and picking up three Oscars, including Best Picture. But by the time the franchise reached Rocky V in 1990, the ongoing sequels had become something of a joke. In a Washington Post review, critic Desson Howe opened with: “Moments after that brutal bout with Dolph Lundgren in “Rocky IV” — and you did watch “Rocky IV,” didn’t you? — Sly Stallone mistakes his wife for his dead boxing coach. This is not a good sign, even for the Rockster.”

Like the Rocky series, the fight between Aldevra and the VA keeps spawning sequels. For service-disabled veteran-owned small businesses, the good news is that Aldevra has won yet another GAO bid protest, challenging the VA’s refusal to consider a SDVOSB set-aside before procuring equipment from the GSA Schedule. The bad news is that the sequels keep coming, with no sign that the VA will back down.

Agency Awards HUBZone Set-Aside to Federal Prison Industries

Posted on July 16, 2012 by Steven Koprince

When is a HUBZone set-aside not really a HUBZone set-aside? According to one GAO bid protest decision, when Federal Prison Industries (also known as UNICOR) submits an offer.

In Tennier Industries, Inc., B-403946.2 (June 29, 2012), the Defense Logistics Agency set-aside a procurement for HUBZone contractors, but awarded the contract to Federal Prison Industries rather than a HUBZone company. One might think that the GAO would sustain a bid protest. Instead, the GAO held that the award to FPI was A-OK.

OMB Pushes Prompt Payment To Small Subcontractors

Posted on July 13, 2012 by Steven Koprince

Small subcontractors sometimes find themselves facing a cash flow crunch when they take on new work. Under some subcontract payment clauses, a small subcontractor might not be entitled to payment until 30 days or more after the prime contractor receives payment from the government for the subcontractor’s work. Even subcontracts with more generous payment terms often require small subcontractors to make significant up-front investments in terms of employee salaries, materials, and the like before receiving payment.

The Office of Management and Budget apparently recognizes that there is a problem, because yesterday OMB issued a memorandum entitled “Providing Prompt Payment to Small Business Subcontractors,” setting forth three steps the government is taking to address the matter. One of these steps–if it comes to fruition–may even have some “teeth.”

8(a) Mentor-Protege Joint Venture Shielded From “Three-In-Two” Rule Affiliation

Posted on July 13, 2012 by Steven Koprince

According to the SBA Office of Hearings and Appeals, an 8(a) mentor-protege joint venture may be entitled to an affiliation “shield,” even if the joint venture violates the so-called “three-in-two” rule by receiving more than three contracts over a two-year period.

SBA OHA’s decision in Size Appeal of Magnum Opus Technologies, Inc., SBA No. SIZ-5372 (2012), should reassure 8(a) proteges and their mentors that if the SBA District Office has approved a contract award to an 8(a) mentor-protege joint venture, the joint venturers are very unlikely to be found affiliated as a result of that contract award.

SBA OHA: Contractors Must Be Permitted To Contest Affiliation

Posted on July 12, 2012 by Steven Koprince

If you have ever gotten a traffic ticket, you know the ticket typically presents you with two options: send in your fine (essentially admitting guilt), or appear in court and contest the ticket. The second option is available because in our democracy, a citizen accused of wrongdoing–even a minor traffic infraction–has the right to contest the charges.

The same is true when it comes to SBA size protests. According to a recent decision by the SBA Office of Hearings and Appeals, a contractor cannot be found affiliated with another company unless the contractor is given the opportunity to respond to the particular basis of affiliation at issue.