The organizational documents for a business seeking certification under a SBA socio-economic program can play an important part in a company demonstrating its eligibility under the SBA’s requirement for control by the company’s owners, such as a service-disabled veteran or disadvantaged owner. Unlike some of the SBA’s requirements for eligibility, the manner in which a program applicant or participant might run afoul of this requirement are not always obvious. Typical provisions in the organizational documents that, under “non-SBA” circumstances may seem innocuous, may unintentionally undermine the disadvantaged owner’s requirement of showing of unconditional ownership and control.
In a recent OHA decision regarding Service-Disabled Veteran-Owned Small Business (SDVOSB) eligibility, (CVE Protest of: Randy Kinder Excavating, Inc. d/b/a RKE Contractors, Protester Re: E&L Construction Group, LLC), an unsuccessful bidder filed a protest of a set-aside contract award, alleging that the company was not unconditionally controlled by the disadvantaged owner. After considering a variety of arguments, OHA issued a decision based on a handful of provisions in the respondent’s operating agreement.
The VA’s “rule of two” for service-disabled veteran-owned small businesses provides a powerful contracting preference. Thanks to the rule of two, the VA awarded 23.39% of prime contracting dollars to SDVOSBs in Fiscal Year 2019, compared to 4.39% governmentwide.
But the rule of two has its limits. Importantly, before issuing an SDVOSB set-aside, the Contracting Officer must have a reasonable belief that “the award can be made at a fair and reasonable price that offers best value to the United States.” And, as a powerful federal court recently held, the fact that an SDVOSB’s prices have been accepted by the GSA under the Federal Supply Schedule program does not require the VA to accept those prices as fair and reasonable in a rule of two analysis.
The House and Senate have agreed to eliminate service-disabled veteran-owned small business self-certification and adopt a government-wide SDVOSB certification requirement, while transferring control of the certification process from the VA to the SBA.
The Conference Report on the 2021 National Defense Authorization Act would require government-wide SDVOSB certification (eventually) and transfer control of the the Center for Verification and Evaluation from the VA to the SBA. Assuming the President signs the bill into law (which, unlike the typical NDAA, remains to seen), SDVOSB self-certification–which is still the law for non-VA contracts–is on its way out.
A federal court has ruled that the VA violated the SDVOSB Rule of Two, as well as a more recent statute, by moving SDVOSB set-aside requirements to the AbilityOne program.
If you think you heard this before, you’re not going crazy or living your own personal Groundhog Day. The court’s ruling is just the latest in a long-running debate about how the VA should balance the SDVOSB and AbilityOne contracting preferences.
The SBA’s FY2019 Small Business Procurement Scorecard came out recently and revealed some interesting trends in the dollars and cents of small business contracting. While there are a lot of positives for small businesses, not all the numbers are great. Read on for the details!
Under the VA’s Rule of Two, the VA is required to set aside solicitations for veteran-owned businesses if there is a reasonable expectation of receiving offers from two or more such businesses capable of performing the required work at a fair and reasonable price. But how reasonable does the VA’s expectation have to be in a given procurement?
GAO recently reviewed the reasonableness of VA’s efforts and found them lacking.
The SBA has published a final rule that would allow for quite the change to small business set-aside multiple award contracts (MACs) and orders issued under them. This final rule amends the SBA’s regulations to authorize task and delivery orders issued under a small business set-aside MAC, to be set-aside for HUBZone businesses, 8(a) businesses, SDVOSBs, or WOSBs.
While agencies had set aside orders under MACs before, SBA has now clarified its regulations to allow socioeconomic set-asides of orders under small business set-aside MACs.