SBA’s recently proposed rule seeks to officially broaden the reach of its “Rule of Two”–a government contracting requirement fundamental to supporting our nation’s small business infrastructure, policies, and goals. I emphasize “officially” because, even though this is technically a proposed change to SBA’s rules, it is really more of a “regulatory implementation” of judicial law than anything (don’t worry, we will go into more detail on this point later). Specially, SBA’s proposed rule would require the Rule of Two’s application to task orders and delivery orders under most standard multiple award contracts (MAC). This Part I blog will briefly explain what the Rule of Two is and detail SBA’s proposed update to it. But keep your eyes out for the soon-to-follow Part II blog on this topic. There, we will dig in deeper to the relevant history of (including the court case linked above), the sources and policies behind, and the potential implications for SBA’s proposed Rule of Two update.
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Back to Basics: Limitations on Subcontracting
One of the common questions small business contractors ask themselves when planning performance of a contract is “how much of this work are we allowed to subcontract?” Trying to answer this question inevitably leads contractors to one of the most commonly used and frequently misunderstood rules in federal contracting, the Limitations on Subcontracting. In this post, we will break down some of the basics of this rule, and hopefully clear up any basic misunderstandings regarding it.
Continue readingSBA Issues 2021 Small Business Scorecard, Small Businesses Contracting Over $154 Billion!
The SBA recently released the Government Wide Small Business Procurement Scorecard for fiscal year 2021. This annual scorecard details information on the various categories of small businesses recognized by the SBA, including whether SBA met its goals related to small business federal contractors. Specifically, the scorecard is used to assess “how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals,” to “provide accurate and transparent contracting data,” and “report agency-specific progress.” SBA met or exceeded its goals in the majority of categories despite the fact that the overall number of small businesses decreased. Below, we take a look at the process, the numbers, and discuss which groups are, and which are not, receiving the greatest benefits.
Continue readingThe FAR will Soon Allow Small Business Set-Asides Outside the US
Small business federal contractors may soon want to think about getting new luggage. The FAR will be updated to allow for–but not require–small business set-asides in overseas procurements. This has the potential to open up a substantial number of contracting opportunities to small businesses who have the capabilities to compete. The final rule will be effective May 26, 2022. Here are some of the key details to know about.
Continue readingLimitations on Subcontracting Part 1: What They Are and How They Apply
Congratulations! Your woman-owned small business (WOSB), Sun Corp, has just been awarded a contract. This particular contract was set aside for WOSBs, meaning only WOSBs may be considered for award. Small Corp is a relatively new company, and you have determined that you will need some help to successfully complete performance of the contract. As luck would have it, you are acquainted with the owner of Moon Corp, and Moon Corp is in the business of doing the exact type of work that Sun Corp needs help with. While diligently reading through the contract prior to its execution, you notice the following language:
Performance of this contract must comply with the subcontracting limitations set forth in FAR 19.505 and 13 C.F.R. § 125.6.
What do you do?
Continue readingFive Things You Should Know: NAICS Code Appeals
NAICS codes are limited in what they can challenge, but can have a powerful effect on a procurement. A NAICS code appeal can challenge the size limit attached to a specific government procurement. This can level the playing field by limiting to smaller businesses, or expand the size of businesses that are able to compete. So, it’s good to know a NAICS code appeal works.
Continue readingSolicitation Omits NAICS Code and Size Standard–But Agency Still Rejects Large Business’s Bid
An offeror’s bid was rejected because the offeror wasn’t a small business–even though the solicitation didn’t contain a NAICS code or corresponding size standard.
It sounds like a successful bid protest waiting to happen, but GAO didn’t see it that way. Instead, GAO dismissed the protest because the offeror should have protested the defective solicitation terms before it submitted its bid, instead of waiting to see how the competition played out.
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