In Part I of this two-part blog, we covered an SBA proposed rule that would require agencies to apply the Rule of Two to most standard multiple award contracts (MACs) and task and delivery orders thereunder. In that blog, we covered the Rule of Two generally and the basics of SBA’s proposed changes to it. Well, as promised, this Part II blog is going to dig in a bit deeper to this proposed rule, its driving policies, and its potential impacts. But a whole lot has changed in the federal government contracting landscape (even since Part I of this blog). So, I will also address the elephant in the room (as best I can) by providing information regarding the big questions, “will the proposed rule stand a chance–and will there even still be a Rule of Two–under the new administration?“
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Update: SBA Proposed Rule Would Require “Rule of Two” Application to Multiple Award Contract Task and Delivery Orders (Part I)
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 a bit deeper to the Rule of Two, the policies driving it, and the potential implications for SBA’s proposed Rule of Two update.
Continue readingGAO: Small Task Order Protesters Can Protest Scope of Task Order
Congress has made it pretty tough to file a protest against a task order. For one thing, task order protests can generally only occur at the Government Accountability Office (GAO). For another, if a task order dollar value is too small, it can’t be protested at all. A recent case confirms that the exceptions to the restrictions on task order protests are quite narrow. However, a protest can allege that a task order increases the scope, period, or maximum value of the contract under which it is issued. Here, the protester did that. GAO had jurisdiction, but still denied the protest.
Continue readingException to the Rule: Evaluating Price at IDIQ Versus Order Level Is a Limited Exception
A recent COFC decision yielded some important insights about government contracting. We already wrote about some joint venture aspects of the decision. But the decision also touched on whether GSA’s solicitation violated federal procurement law by excluding price as an evaluation factor at the indefinite delivery indefinite quantity (IDIQ) level for a procurement.
Continue readingSBA New Rule: Guidelines for Compliance with Limitations on Subcontracting in 13 C.F.R. 125.6
13 C.F.R. § 125.6 sets out the limitations on subcontracting for all small business set-asides (including 8(a), SDVOSB/VOSB, HUBzone, and WOSB/EDWOSB set asides.) These limitations on subcontracting are crucial for any small business federal contractor to be familiar with, and we have discussed how they work here. But, while the regulation does provide for certain legal penalties for violations of these limitations, up until SBA’s recent rule change, it didn’t provide for any direct consequences for a company’s past performance (although conceivably an agency could mention limitations on subcontracting as part of a CPARS review). Furthermore, SBA now will require that compliance with the limitations be looked at on an order-by-order basis for multi-agency set aside contracts where more than one agency can issue orders under the contract, and for full and open contracts where the task order is set aside for small businesses. All this is effective May 30, 2023, and we explore these changes here.
Continue readingGAO Sustains Protest Where Agency Fails to Properly Justify “Brand Name Only” Requirement
When an agency restricts a solicitation to a single brand-name, the agency must appropriately justify its decision, even where the solicitation is competed among holders of a governmentwide acquisition contract.
In a recent case, the GAO sustained a protest, holding that an agency violated the FAR by failing to properly justify its brand-name restriction.
Continue readingSmall Business Being Acquired by a Large Business? For Multiple Award Contracts, the 180-Day Rule Doesn’t Apply to Task Orders, says GAO
You may recall a post of ours back in April 2021, where we discussed a little-known change to SBA’s size determination rules that occurred in October 2020. SBA created an exception, at 13 C.F.R. § 121.404(g)(2)(iii), to the usual “size is determined at offer date” rule. Now, prior to award, when a small business is part of a merger or acquisition after it makes an offer on a solicitation, the business has to recertify its size, and depending on when that acquisition occurred, if the business is now large, it may lose its award.
However, the rule is for better or worse not that straightforward, as a small business learned in a recent GAO decision. Because a part of the rule says that task order awards in such cases may not be treated as small business awards, GAO concluded that such awards are still allowed.
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