Tag Archives: Limitations on Subcontracting

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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Limitation On Subcontracting Information Was Permissible “Clarification,” Says GAO

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A procuring agency did not engage in impermissible discussions by allowing a small business to verify its intent to comply with the applicable limitation on subcontracting.

In a recent bid protest decision, the GAO held that the information regarding the small business’s compliance with the subcontracting limits was a permissible “clarification,” and did not require the agency to open discussions with all offerors in the competitive range.

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Limitations on Subcontracting Clause Allows Small Business Subcontractors, Says GAO

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The FAR’s limitations on subcontracting clause allows the prime contractor to count small business subcontractors toward the prime’s own performance requirement, according to the GAO.

In a recent bid protest decision, the GAO confirmed that the National Defense Authorization Act of 2013 permits prime contractors to meet the requirements of the limitations on subcontracting clause by including work performed by “similarly situated” subcontractors.

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Ostensible Subcontractor Rule: Management Ain’t Enough to Comply

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When it comes to the SBA’s ostensible subcontractor rule, managing a contract, by itself, is not enough to avoid affiliation.

As demonstrated in a recent decision of the SBA Office of Hearings and Appeals, a small business and its subcontractor violate the ostensible subcontractor rule whenever the subcontractor will perform the primary and vital work required under the prime contract–even if the small business will perform the management function.

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Limitations on Subcontracting and GAO Bid Protests

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GAO bid protests regarding a competitor’s compliance with the applicable limitation on subcontracting can be difficult to win.

As the GAO held in a recent bid protest decision, unless the competitor’s proposal “on its face” should have led the procuring agency to recognize that the limitation on subcontracting would be violated, the agency is free to assume that the offeror intends to comply.  Of course, as was the case in the recent decision, it doesn’t hurt the protested company to specifically state that it will comply with the limitation on subcontracting.

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Strange But True: Small Business Protests Small Business Set-Aside

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Recently, I brought you the story of a contractor protesting its own award.

Now, in the same “strange but true” category comes a GAO bid protest decision in which a small business argued that the procuring agency should not have set aside the procurement for small businesses.

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8(a) Contractor Terminated For Subcontracting Limit Violations

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A contractor was recently terminated from the SBA’s 8(a) Program for failing to comply with the subcontracting limits applicable to its 8(a) contracts.

The SBA Office of Hearings and Appeals upheld the termination, writing that the SBA had properly terminated the 8(a) contractor for “willfully violating SBA regulations.”  SBA OHA rejected the contractor’s argument that it was exempt from the subcontracting limits under the so-called non-manufacturer rule.

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