A New Jersey woman has been arrested and charged with procurement fraud for allegedly falsely certifying that her company was a SDVOSB.
According to a Department of Justice press release, Miriam Friedman falsely claimed that her father-in-law, a retired veteran, owned and operated the business. According to the DOJ, Friedman’s father-in-law not only had minimal involvement in the business, but is not service-disabled.
Perhaps no single aspect of federal government contracting causes more confusion than the fact that the government currently runs two SDVOSB programs: one under the VA’s rules and the other under the SBA’s.
The current system can lead to inconsistent results, such as a company being a “SDVOSB” for purposes of VA contracts, but not those issued by other agencies (or vice versa). As SmallGovCon readers know, I am on record as stating that the “two SDVOSB programs” approach is idiotic and ought to be scrapped. (Okay, maybe I wasn’t on record with the word “idiotic” before. I guess I am now.)
But while I cross my fingers and hope that Congress will simplify things, SDVOSBs are stuck with the current system. And, as a recent SBA Office of Hearings and Appeals case demonstrates, SDVOSBs should be aware of the important differences between the two SDVOSB programs.
The U.S. Court of Federal Claims has ordered the VA to pay attorneys’ fees to Miles Construction, LLC stemming from the Court’s February decision that the company’s “right of first refusal” provision did not render it ineligible for the VA’s SDVOSB program.
In ordering the VA to pay attorneys’ fees, the Court held that the VA’s defense of its broad interpretation of “unconditional ownership” was not substantially justified–but also suggested that the Court might not reach the same result under the SBA’s SDVOSB rules.
A service-disabled veteran, who owned 80% of this business and served as its highest officer, “controlled” the company within the meaning of the SBA’s SDVOSB regulations, according to a recent decision of the SBA Office of Hearings and Appeals.
SBA OHA’s commonsense decision overturned an earlier SBA determination that the veteran’s majority ownership and officer position did not amount to “control.”
As the end of the fiscal year nears, keeping up with the news may be the last thing on the minds of small government contractors.
So, in case you missed it, this week’s SmallGovCon Week in Review features a dispute over the VA’s SDVOSB contracting practices, the Federal Times‘ take on procurement reforms proposed by the Professional Services Council, a thoughtful blog by Guy Timberlake on small business goals, and much more.
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.
A SDVOSB joint venture was not eligible for award of a SDVOB set-aside contract because its joint venture agreement called for certain decisions to be made by supermajority vote.
As explained by the SBA Office of Hearings and Appeals in its decision finding the SDVOSB joint venture ineligible, the supermajority provision undermined the regulatory requirement that a SDVOSB joint venture be managed by an eligible SDVOSB.