GAO: HUBZone Price Preference Not Optional

Posted on July 19, 2011 by Steven Koprince

When a contract contains FAR 52.219-4, the so-called “HUBZone price preference” clause, a procuring agency must apply the HUBZone price preference by adding a factor of 10 percent to the price of all other offerors, except HUBZone firms and otherwise successful small businesses.

For procuring agencies, applying the HUBZone price preference is not optional. In Explo Systems, Inc., B-404952 (July 8, 2011), the GAO sustained a bid protest because the procuring agency failed to apply the HUBZone price preference.

A Victory for Common Sense: GAO Refuses to Allow Agency To Elevate Form Over Substance

Posted on July 18, 2011 by Steven Koprince

Good news for contractors: the GAO has ruled that an agency evaluation cannot be based on unimportant or meaningless distinctions, in which the agency appears to care more about the form of an offeror’s proposal than its substance. In Engineering Management & Integration, Inc., B-400356.4 (May 21, 2009), the GAO sustained a protest of a Department of Education contract award, holding that the agency improperly elevated form over substance in its evaluation.

GAO: Agencies May Request Size Recertification on Long-Term IDIQs

Posted on July 17, 2011 by Steven Koprince

Ordinarily, a business is “small” for purposes of a set-aside government contract if it falls below the applicable size standard (determined by NAICS code) on the date of its initial offer. The same policy holds true on long-term indefinite delivery/indefinite quantity contracts: if a business is small for the initial IDIQ award, it is small for subsequent task orders—unless the procuring agency asks for recertification, and the contractor has grown in the interim.

SBA Affiliation Rules and Unanimity Provisions: Some SBA OHA Guidance

Posted on July 16, 2011 by Steven Koprince

A company’s minority owners often insist that certain actions be approved unanimously or on a supermajority basis, giving the minority owner the ability to control (or at least veto) those actions.

But small government contractors must tread very carefully when it comes to unanimity or supermajority provisions in their bylaws, operating agreements, or other governing documents. Although the SBA permits unanimity or supermajority provisions regarding certain “extraordinary” corporate actions, other unanimity or supermajority provisions may result in a finding that the minority owner exercises undue negative control over the company, leading to affiliation problems with other companies controlled by that minority owner.

The decision of the SBA’s Office of Hearings and Appeals in Size Appeal of DHS Systems, Inc., SBA No. SIZ-5211 (2011) offers some guidance as to which provisions pass muster under the SBA affiliation rules, and which do not.

GAO: Post-Award Modifications Unfair; Protest Sustained

Posted on July 12, 2011 by Steven Koprince

An agency cannot make material changes to a solicitation after selecting a contractor for award without going back and giving all offerors the opportunity to compete on the revised solicitation. In Diebold, Inc., B-404823 (June 2, 2011), the GAO sustained a bid protest because the agency failed to allow the protester to compete on the revised solicitation.

GAO: SDVOSBs Preferred Over Veteran-Owned Businesses for VA Procurements

Posted on July 10, 2011 by Steven Koprince

Unlike most agencies, the Department of Veterans Affairs offers contracting preferences for businesses owned by veterans who are not service-disabled. However, as the GAO confirmed in Buy Rite Transport, B-403729, B-403768 (Oct. 15, 2010), even at the VA, service-disabled veteran-owned small businesses are preferred over veteran-owned small businesses.

SDVOSB Eligibility: Veteran “Controls” Company Despite Living 900 Miles From Headquarters

Posted on July 9, 2011 by Steven Koprince

A service-disabled veteran “controlled” his company within the meaning of the SBA’s service-disabled veteran-owned small business regulations, despite living more than 900 miles from the company’s headquarters, according to a SDVOSB appeal decision of the SBA’s Office of Hearings and Appeals.

In SDVOSB Appeal of Command Languages, Inc., SBA No. VET-149 (2009), the SDVOSB performed contracts around the world, leading SBA OHA to conclude that the service-disabled veteran’s physical location was largely irrelevant to his ability to control his company.