Quorum Provision Defeats SDVOSB Status

Posted on April 6, 2011 by Steven Koprince

If someone asked me to play a word association game with the phrase “quorum provision,” one of my first responses might be “boring.” After all, who really cares about some arcane paragraph tucked away in a company’s governing documents, describing how many people must attend company meetings?

Well, SDVOSBs should care. If your small business is pursuing service-disabled veteran-owned small business set-aside opportunities, you better make sure your governing documents are airtight. As demonstrated in one recent SBA Office of Hearings and Appeals decision, even something as mundane and boring as a quorum provision can defeat SDVOSB status, if the provision does not allow service-disabled veterans to unconditionally control the company.

Veteran Controls Both 8(a) Company and SDVOSB—By Working 95 Hours Per Week

Posted on March 27, 2011 by Steven Koprince

In the legal profession, some firms are known to encourage a workaholic culture. I have heard tales of associates spending multiple nights sleeping (a couple hours) on office couches, being called away from the Thanksgiving dinner table to work, or awoken by the proverbial “3 a.m. phone call” by a partner demanding immediate attendance at the office. The funny thing is that most of these stories come from the associates themselves—bragging about how much they work!

I work hard for my clients, but with a wonderful wife and daughter in my life, I am of the mind that some of the most important things are found outside the office. However, one small business owner, who was the subject of a recent SBA Office of Hearings and Appeals decision, might feel right at home in one of those workaholic law firms. This business owner was able to convince SBA OHA that he worked full time both for his 8(a) company and his separate service-disabled veteran-owned small business—by putting in a whopping 95 hours per week.
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GAO’s Bid Protest Jurisdiction Encompasses OPIC Procurements

Posted on March 21, 2011 by Steven Koprince

The GAO has ruled that it has jurisdiction over bid protests filed on Overseas Private Investment Corporation (“OPIC”) procurements.

In MFM Lamey Group, LLC, B-402377 (Mar. 25, 2010), the GAO rejected OPIC’s argument that its procurements fall outside GAO’s jurisdiction. GAO has jurisdiction over protests of procurements by a “federal agency.” Although OPIC is a government-owned corporation, not an agency, GAO held that the definition of “federal agency” in the Competition in Contracting Act (“CICA”) includes wholly-owned government corporations, and thus gives the GAO bid protest jurisdiction over OPIC.

Unfortunately for the protester in the MFM Lamey Group case, the jurisdictional victory was the only win it got. After holding that it had jurisdiction, the GAO went on to deny the protest.

Contradictory Discussions Question Should Have Been Protested Pre-Award

Posted on March 14, 2011 by Steven Koprince

Imagine that only days remain until your proposal is due, and your company receives a discussions letter from the agency. Reading the letter, you’re confused—one of the agency’s instructions seems to directly contradict the solicitation. What do you do?

If you’re like most contractors, the last thing on your mind is running to the GAO with a bid protest. After all, you haven’t even submitted your proposal—the last thing you want to do is upset the agency before it even evaluates your offer. So you take your best guess as to what the agency intends and submit your final proposal revision. If the agency makes award to a competitor, you can protest at that time, right?

Wrong, according to a recent GAO bid protest decision.

Agency’s FedBizOpps Slip-Up Leads to Sustained GAO Protest

Posted on February 26, 2011 by Steven Koprince

The GAO has made it clear that contractors are considered to have “constructive knowledge” of items agencies post on the FedBizOpps website. When agencies post on FedBizOpps, though, they must properly classify the posted information, or a GAO bid protest will be sustained, as was the case in TMI Management Systems, Inc., B-401530 (September 28, 2009).

Who Are You? Ambiguity as to Identity of Bond Principal Costs Joint Venture a Contract

Posted on February 23, 2011 by Steven Koprince

“Who Are You?” asks Pete Townshend, the songwriter behind the tune a later generation would come to know as “The CSI Song.” It’s a good question when it comes to self-reflection (or catching criminals), but it’s not so great when the government is asking the same thing in reference to a bid bond.

An ambiguous bid bond can cost an otherwise successful offeror to lose a contract. And as the GAO’s decision in BW JV1, LLC, B-401841 (Dec. 4, 2009) demonstrates, it is especially important for offerors submitting as joint venturers or in other teaming arrangements to carefully consider their bid bond arrangements to eliminate any potential ambiguities.

SBA Affiliation Rules and Economic Dependence: SBA OHA Backs off “70% Rule” (A Little)

Posted on February 22, 2011 by Steven Koprince

When I was young, my parents gave me my first weekly allowance. Grand total: twenty-five cents. It doesn’t sound like much now (and it wasn’t then, either—I’m not that old!) but it was still 100% of my income. I was economically dependent on my parents.

When it comes to the SBA affiliation rules, a small business need not receive 100% of its revenues from another company in order to be considered an affiliate by virtue of economic dependence. For several years, the SBA followed a hard-and-fast rule: if a small business earned 70% or more of its revenues from another company, the two businesses were automatically affiliated.

But in Size Appeal of Argus & Black, Inc., SBA No. SIZ-5204 (2011), the SBA’s Office of Hearings and Appeals backed off the bright-line 70% rule, at least a little. In a commonsense decision, SBA OHA held that in limited circumstances, applying the 70% rule would be unfair.