Tag Archives: 8(a) program

8(a) Subcontracting Limitations: Compliance Oversight Lacking

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Compliance with the limitations on subcontracting are not adequately being monitored by the contracting officers responsible for 8(a) contracts, according to a recent GAO report.

After reviewing a representative sample of ten 8(a) contracts, the GAO determined that contracting officers effectively monitored subcontracting limit compliance on two of those contracts.  In other cases, agency contracting officers failed to effectively monitor compliance, even in situations presenting a heightened risk of potential violations–such as where ineligible incumbents were serving as subcontractors.

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8(a) Fraud: Contractor Fraudulently Obtained $52 Million, Says DOJ

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A Maryland man has pleaded guilty in an 8(a) fraud case involving a company that received more than $52 million in 8(a) contracts to which it was not entitled.

According to a Department of Justice press release, Vernon Smith pleaded guilty to charges that he (not the company’ s disadvantaged majority owner) exercised complete control over the company’s day-to-day management and long term decision making.

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8(a) Program Mentor To Pay $928,000 False Claims Act Settlement

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An 8(a) Program mentor has agreed to pay a False Claims Act settlement of $928,000.  The settlement stems from the government’s claims that the mentor abused the 8(a) mentor-protege program.

According to a Department of Justice press release, the mentor firm performed eight 8(a) prime contracts on behalf of its protege–without an SBA-approved joint venture.  The government also contended that the mentor’s extensive role resulted in the protege firm failing to meet the applicable limitation on subcontracting.

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SBA: SDVOSB, HUBZone, WOSB Mentor-Protege Programs May Arrive In 2014

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The SBA will “make it a priority” to adopt regulations establishing mentor-protege programs for SDVOSBs, HUBZones, and WOSBs in the next 12 months, according to the SBA’s most recent semiannual regulatory agenda.

The regulatory agenda states that the three new mentor-protege programs are expected to be “similar” to the 8(a) mentor-protege program, which suggests that the special joint venturing benefits currently available only to 8(a)s may become available to SDVOSBs, HUBZones and WOSBs, as well.

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8(a) Program: OHA Judge Slams SBA For Claim It Cannot Play DVDs

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The SBA’s claim that it could not access information provided by an 8(a) program applicant in DVD format was “not credible,” according to a recent 8(a) program appeal ruling issued by the SBA Office of Hearings and Appeals.

In Sunrise Staffing, SBA No. BDPE-499 (2013), the SBA OHA–in an unusually sharply-worded opinion–rejected the SBA’s excuses for not reviewing relevant information provided by the 8(a) program applicant, and granted the applicant’s 8(a) appeal.

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SBA 8(a) Program: Termination For “Full Time Employment” Violation Upheld

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A participant in the SBA’s 8(a) Program was appropriately terminated because the company’s disadvantaged owner took another full-time job without the SBA’s permission.

The recent SBA Office of Hearings and Appeals decision upholding the termination is an important reminder of the limitations on outside employment for 8(a) owners–as well as a reminder of the importance to 8(a) firms of ongoing honesty and forthrightness with the SBA.

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