Indeed, Executive Order (EO) No. 14055, Nondisplacement of Qualified Workers Under Service Contracts, was only one of many predecessor EOs rescinded by the Trump administration shortly after taking office. But its removal has significant impacts on federal government contracting. As explained in EO No. 14055, its requirements sought to promote skilled worker retention in the federal workforce by placing requirements on contractors (and subcontractors) to provide the service employees from predecessor service contracts an essential right of first refusal of employment in successor or follow-on contracts. But EO No. 14055 has now been officially rescinded as part of the new administration’s stated policy to lift any orders it felt were “replacing hard work, merit, and equality with a divisive and dangerous preferential hierarchy.”
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New Consolidated SDVOSB Eligibility Requirements: the Good, the Bad, and the Downright Ugly
New, consolidated SDVOSB eligibility regulations kicked in on October 1. The new regulations replace the old VA and SBA rules, which provided separate eligibility standards for SDVOSBs.
Veterans have long been confused by the fact that the Government operated two separate SDVOSB programs, each with its own standards. The consolidated rule will eliminate that confusion, and that’s a very good thing. There are also several other pieces of the new SDVOSB eligibility rule that veterans should like–but also some that aren’t so great, or that require further clarification as to how they’ll be applied.
We provided a broader overview of the new regulations earlier last week. Now it’s time for me to get on my soapbox. Without further ado, here’s my list of the good, bad, and the downright ugly from the new SDVOSB regulations.
SBA OHA Confirms Strict SDVOSB “Unconditional Ownership” Requirements
Provisions in a company’s Shareholders Agreement, requiring the service-disabled veteran to sell his shares back to the company in the event of the veteran’s death or incapacity, were contrary to the SBA’s SDVOSB regulations.
According to a recent SBA Office of Hearings and Appeals decision, these provisions prevented the veteran from having unconditional ownership over the company, because he could not dispose of his shares as he chose. In reaching its conclusion, SBA OHA wrote that Court of Federal Claims decisions allowing such provisions under the VA’s SDVOSB program didn’t apply to SBA–meaning that SDVOSBs verified by the VA might be ineligible for non-VA SDVOSB contracts.
What a mess.