Affiliation is a broad and often confusing concept that commonly arises in the context of government contracting. In this YouTube video, I walk you through the basics of affiliation, including the main types of affiliation and the implications of being found affiliated.
Stay tuned to our blog for additional overviews of important government contracting concepts. And if you need more personalized assistance or advice regarding affiliation or any of your government contracting needs, please call us at Koprince Law. We are always here to help.
Following a size determination, any person adversely affected by that determination may file an appeal with the SBA’s Office of Hearings and Appeals. To be timely, the appeal has to be filed within 15 calendar days from the date the person receives the determination. If not timely-filed, the appeal will be dismissed.
So you’ve teamed with an ineligible incumbent contractor to bid on some government work and, to try and maintain continuity, the incumbent would like to retain project management functions. “No big deal,” you think, “I’ll just create a management position to oversee the project manager.”
Actually, it could be a big deal if you’re trying to avoid ostensible subcontractor affiliation. Among the four key factors for determining ostensible subcontractor affiliation is whether the management previously served with the subcontractor under the incumbent contract. And according to a recent SBA Office of Hearings and Appeals decision, creating a figurehead management position to oversee the project manager won’t negate this indicia of ostensible subcontractor affiliation.
The GAO lacks jurisdiction to consider a challenge to a contract awardee’s size status, including questions of whether the awardee is affiliated with its subcontractor under the ostensible subcontractor rule.
In a recent bid protest decision, the GAO confirmed that it will not adjudicate an allegation of ostensible subcontractor affiliation.
Under the SBA’s ostensible subcontractor affiliation rule, hiring incumbent employees can be evidence of affiliation, but the importance of that staffing plan in an affiliation analysis depends on what role the incumbent contractor will play in the awardee’s performance of the contract.
In a recent size appeal decision, the awardee proposed to hire 85% of its personnel from the incumbent contractor, but the incumbent wasn’t proposed as a subcontractor–in fact, the incumbent was the company protesting the awardee’s small business size. Under these circumstances, the SBA Office of Hearings and Appeals held, the awardee’s hiring of incumbent employees did not establish ostensible subcontractor affiliation.