2017 NDAA Modifies Ownership and Control Criteria for SDVOSBs

Steven Koprince

Steven Koprince

The 2017 National Defense Authorization Act makes some important adjustments to the criteria for ownership and control of a service-disabled veteran-owned small business.

The 2017 NDAA modifies how the ownership criteria are applied in the case of an ESOP, specifies that a veteran with a permanent and severe disability need not personally manage the company on a day-to-day basis, and, under limited circumstances, permits a surviving spouse to continue to operate the company as an SDVOSB.

As I discussed in a separate blog post last week, the SBA and VA currently operate separate SDVOSB programs, and each agency has its own definition of who qualifies as an SDVOSB. The 2017 NDAA consolidates these definitions by requiring the VA to use the SBA’s criteria for ownership and control.

In addition to consolidating the statutory definitions, the 2017 NDAA makes three important changes to the ownership and control criteria themselves.

First, the 2017 NDAA specifies that stock owned by an employee stock ownership plan, or ESOP, is not considered when the SBA or VA determines whether service-connected veterans own at least 51 percent of the company’s stock. This portion of the 2017 NDAA essentially overturns a 2015 decision by the SBA Office of Hearings and Appeals, which held that a company was not an eligible SDVOSB because the service-disabled veteran did not own at least 51% of the company’s ESOP class of stock. (The Court of Federal Claims ultimately upheld OHA’s decision later that year).

Second, the 2017 NDAA continues to provide that “the management and daily business operations” of an eligible SDVOSB ordinarily must be controlled by service-disabled veterans. However, the 2017 NDAA states that if a veteran has a “permanent and severe disability,” the “spouse or permanent caregiver of such veteran” may run the company. This provision is very similar to the one currently used by the SBA in its regulations; the VA does not currently have a provision whereby a spouse or permanent caregiver may operate an SDVOSB.

But Congress goes a step beyond the SBA’s current regulations. In a separate paragraph, the 2017 NDAA states that a company may qualify as an SDVOSB if it is owned by a veteran “with a disability that is rated by the Secretary of Veterans Affairs as a permanent and total disability” and who is “unable to manage the daily business operations” of the company. In such a case, the statute does not specify that the company must be run by the spouse or permanent caregiver. In other words, for veterans with permanent and total disabilities, the statute appears to allow control by others, such as (perhaps) non-veteran minority owners. Historically, the SBA and VA have been very skeptical of undue control by non-veteran minority owners, so it will be interesting to see how the agencies interpret and apply this new statutory provision.

Third, the 2017 NDAA states that a surviving spouse may continue to operate a company as an SDVOSB when a veteran dies, provided that: (1) the surviving spouse acquires the veteran’s ownership interest; (2) the veteran had a service connected disability “rated as 100 percent disabling” by the VA, or “died as a result of a service-connected disability” and (3) immediately prior to the veteran’s death, the company was verified in the VA’s VetBiz database. When the three conditions apply, the surviving spouse may continue to operate the company as an SDVOSB for up to ten years, although SDVOSB status will be lost earlier if the surviving spouse remarries or relinquishes ownership in the company.

This provision is very similar to the one currently found in the VA’s regulations. At present, the SBA does not have any provisions whereby a surviving spouse can continue to operate an SDVOSB.

That said, the statutory provision–just like the current VA regulation–is quite narrow. In my experience, there is a common misconception that a surviving spouse is always entitled to continue running a company as an SDVOSB. In fact, a surviving spouse is only able to do so when certain strict conditions are met. In many cases, the veteran in question was not 100 percent disabled and didn’t die as a result of a service-connected disability (or the surviving spouse is unable to prove that the service-connected disability caused the veteran’s death). And in those cases, the surviving spouse is unable to continue claiming SDVOSB status, both under the VA’s current rules and the 2017 NDAA.

2017 NDAA: The National Defense Authorization Act for Fiscal Year 2017 has been approved by both House and Senate, and will likely be signed into law soon. It includes some massive changes as well as some small but nevertheless significant tweaks sure to impact Federal procurements in the coming year. For the next few days, SmallGovCon will delve into the minutia to provide context and analysis so that you do not have to. Visit smallgovcon.com for the latest on the government contracting provisions of the 2017 NDAA.


This post originally appeared at http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/sdvosb-programs-2017-ndaa-modifies-ownership-control-criteria/#sthash.YtzkeoT5.dpuf and was reprinted with permission.


 


Four Common Mistakes When Providing Business References

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This is a guest post by Debbie Ouellet of EchelonOne Consulting.

There will be many times in your business life when you’ll be asked by a prospective client to provide references. These can include when you’re responding to an RFP (request for proposal), pitching to a new client or in the final rounds of a vendor selection process.

The client’s ‘ask’ will almost always sound something like this: “Please provide us with references from similar clients for whom you’ve provided similar services.”

Here are four common mistakes business owners make when providing references:

Mistake #1: Just providing name and contact information.

When you only provide name, title, phone number and email address as your reference information, you’re leaving it up to your potential client to do all the work. They have no information about what services you provided to your reference and therefore nothing to base their questions on.

Instead, include a brief description of the project you implemented along with the contact information. That will help paint a picture of your experience and provide a guide map for your busy client to use to pose questions and prepare for his call to your reference.

Mistake #2: Focusing on what you did.

I’m amazed at the number of times that I see references where their description of their project reads like a menu of services from their website. There is a mountain of difference between the technical aspects of ‘what you did’ for your reference and ‘how you helped’ them.

Be sure to include a short description of the main problem that you solved for your reference. Sure, you can include some of the services that you provided in order to solve that problem. The key is to write this piece from your reference’s point of view. How did they benefit and what were the positive results?

Mistake #3: Not connecting the dots.

Your potential client is busy. They also don’t live in your head or have the skill sets that you bring to the table. Don’t assume that the connection between your reference’s project and the one you’re vying for that seems obvious to you is also obvious to your client. Or that they’ll take the time to think it through and figure it out.

Connect the dots for your client by explaining briefly how the reference’s project is similar to the one you’re proposing. Even projects that aren’t similar on the surface can be similar in other aspects. For example, perhaps the referenced project also had a tight timeline and budget and you provided innovative solutions to meet these tough demands.

Mistake #4: Not asking permission.

In today’s business world of privacy laws and restrictions, this last point should be obvious. You are not at liberty to share another person’s name and contact information without their permission to do so. And, it’s simply good manners to ask permission first.

Even if you’ve been given permission in the past to use reference information, it’s good practice to give your reference a heads-up that they may be contacted. That way they’re expecting the call or email and will make a point of responding.

Summing it up:

  1. Include a brief description of your project along with the reference contact information.
  2. Focus more on ‘how you helped’ than ‘what you did.’
  3. Connect the dots so that your client can visualize the similarities.
  4. Ask permission before you provide the reference information.

Having a great customer reference is always a leg-up whenever you’re pitching to a new client. By taking a little care in how you craft the reference information, you’ll increase its effectiveness.


Debbie Ouellet of EchelonOne Consulting is a Canadian RFP consultant and business writer. She helps business owners win new clients and grow their business by helping them to plan and write great RFP responses, business proposals, web content and marketing content. You can find out more about Debbie at www.echelonone.ca/.

This post originally appeared at https://www.echelonone.ca/four-common-mistakes-when-providing-business-references and was adapted and reprinted with permission.


Thoughts on the Incoming Administration

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As I write this post, we have a new administration that will be sworn in shortly. As you read this post, this has already happened. There is a lot more to come in terms of making sure all the cabinet positions get appointed and that people fill the government activities all the way down the line. This is obviously a big deal, since they have 4,000 positions to fill, and got 86,000 online applications and 4,000 referrals.

So in the meantime, I thought I would offer a few words for all of us to think about what we’re doing here. This new administration has established some specific priorities, and we can expect there will be as slight shift in priority from the civil sector over to homeland security and defense.

There may be some serious chaos as they get themselves sorted, get people in place, and get everything built. As with any major change, it’s bound to be unsettling and difficult. Probably the worst effect will be that the usual slippage in awards and RFP release that we ordinarily see in the federal procurement process will be exacerbated by the actual transition.

I’m convinced that overall this change can be very good for all of us in federal contracting. Although defense contractors and homeland security may do slightly better in the long run, there’s going to be a lot of activity across the board, and an uptick in that attention.

Interestingly enough, I had certainly hoped that the latest NDAA had done away with LPTA pricing (watch for future posts about what NDAA 2017 means for small business), but recent presidential direct intervention in cost overrun decisions on weapons systems tells me that we may see some LPTA activity erupt as everybody sorts out what this administration is looking for.

Hang in there, this is a natural course of events. There’s nothing unusual or worse about this group of folks from the last group of folks. And we’ll be doing this together. And I will keep blogging and tell you everything I can about what I know. And hopefully we’ll all prosper together.


Five Rules for Bidding on Contracts

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© sebra – Fotolia.com

This is a guest post by Debbie Ouellet of EchelonOne Consulting.

Winning a new contract can have a huge impact on the financial health of your business. If you want to improve your chances of winning when responding to requests for proposals (RFPs), here are five rules to help you along.

  1. Stop. Think. Plan.

One of the biggest mistakes that I see when companies bid on contracts is that they start out something like this. The RFP document comes in and someone books a meeting of the people involved in the response. They carve out the questions to different people, assign one person to write the response and everyone goes off to do their part.

While that’s not bad as step two, too often the first most important step is missed. The first step should always be to ask yourself, “What’s it going to take to win this contract?” Start by understanding what your strategy to win is. How will you position your solution and your company in the response? When you do that first, it will impact how you answer questions, and how you present and price your solution. You’ll also come up with a stronger RFP response and increase your chances of winning.

  1. Lose your ego.

Your client doesn’t care about how big you are, how great your widget is, or how many awards you’ve won. What they really want to know is:

  • how you’re going to make their job easier
  • how you’ll help them solve that nagging problem
  • or carve away at costs so that they can meet their budget

Sure; you’ll get around to talking about yourself, but never lead with it. Make the focus of your proposal all about your client and how your solution is going to help them.

  1. Forget the fluff.

There is always the temptation, especially when the timing of an RFP (request for proposal) coincides with a busy time in your business, to copy and paste content from marketing material as part of your response.

You’ll tell yourself that it saves time. And somewhere amongst all that wonderful marketing lingo, it does answer the question posed in the RFP. Though it may save time for you, it adds time for the reader (i.e., the decision maker).

Let’s face it; that’s not the best way to make a good impression on the person who will be deciding whether you should be awarded the contract. Chances are that they may even miss the answer because it’s buried so deep within the marketing material.

  1. Never bad-mouth the competition.

It’s fine to make general statements about how your product out-performs its competitors. However, never bad-mouth your competition, especially by name. Besides being in poor taste, trashing the competition makes you sound desperate. It will also cause the reader to pause and question your business ethics.

  1. Don’t expect them to do the math.

If you’re presenting an idea that will save money, or involves a different approach to costing, spell it out in your response. Never expect the person reading the RFP proposal to do the math and figure it out. If you don’t do the math for them, one of three things will happen:

  1. They’ll be too busy and not bother. A competitor made it clear what was involved, so they’ll go with them.
  2. They’ll misunderstand and calculate incorrectly. You’ll either not win the bid because it came in too high (according to their calculations), or you’ll spend a lot of time back-tracking because they thought they were getting a better deal than you intended.
  3. They’ll do the math (grudgingly) and get it right. Chances are, however, that since you’ve made them do the work, that they’ll go deeper and perhaps start to nit-pick details and pricing when they wouldn’t have, had you simply provided them with the information upfront.

Debbie Ouellet of EchelonOne Consulting is a Canadian RFP consultant and business writer. She helps business owners win new clients and grow their business by helping them to plan and write great RFP responses, business proposals, web content and marketing content. You can find out more about Debbie at www.echelonone.ca.

This post originally appeared at https://www.echelonone.ca/5-rules-for-bidding-on-contracts and was adapted and reprinted with permission.


Bid Protests – Timeliness Tips

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This is a guest post by Jerry Miles of Deale Services, LLC.

Think twice before delaying a pre-award debriefing

A recent GAO case reiterates the idea that offerors must “diligently pursue” their protest options and be mindful of timeline issues that are raised when a pre-award debriefing is requested. See VMD Systems Integrators, Inc., B-412729, 2016 WL 1085374 (Comp. Gen. Mar. 14, 2016).

While offerors may request that a debriefing be delayed until after award, FAR 15.505(a)(2) specifically warns that delayed debriefings “could affect the timeliness of any protest filed subsequent to the debriefing.” The offeror in VMD should have heeded this warning.

In VMD, the protestor was eliminated from the competitive range but chose to delay a pre-award debriefing until after the award. In that debriefing it learned that it may have been treated unequally in its elimination from the competitive range. The offeror protested but the GAO declined the protest, holding that at the time it chose to delay the debriefing the protester could have learned of the alleged unequal treatment.

By choosing to receive a post-award, “it effectively chose not to protest its exclusion from the competitive range.” Because more than 10 days had passed since the time the protester elected to delay the debriefing, the GAO dismissed the protest.

From the timing perspective, protest grounds are viewed broadly

The GAO’s recent decision in REB ROWE Services, LLC; General Services Administration–Reconsideration, B-410001.6; B-410001.7 (Apr. 4, 2016), demonstrates this point with respect to timeliness rules in a supplemental protest.

In that case, REB ROWE Services, LLC, the awardee, and the General Services Administration asked the GAO to reconsider its decision in Alcazar Trades, Inc.; Sparkle Warner JV, LLC, B-410001.4; B-410001.5, April 1, 2015, 2015 CPD ¶ 123, in which the GAO sustained a protest by Alcazar Trades, Inc. (“ATI”), arguing that ATI’s price realism allegation was untimely raised.

In denying the request, the GAO took a broad view of the initial protest grounds, holding that “whether ATI couched its challenges to the government estimate as an argument about price realism, or about adequate staffing, the essential elements in dispute were the same.”

Further, the GAO stated “[w]hile the agency and REB ROWE accurately charge that ATI applied the label of ‘price realism’ to its challenges only when it filed its comments on the agency report, we conclude that the protester had essentially raised, before it filed its comments, all of the elements that eventually led us to sustain the protest because the agency performed a flawed review of price realism.”

Remember the automatic stay

Most of us know that the automatic stay under the Competition in Contracting Act is a significant factor in choosing to protest at the GAO. While in order to be timely, a protester must file within 10 days of the contract award or 5 days of the required debriefing, it is important to remember that the stay is not triggered until the GAO provides notice to the agency.

In fact, the GAO has one business day in which to provide such notice. Thus, although a protest may be timely if filed within 10 days of the award or 5 days of the debriefing, the stay will not be awarded unless the protest is filed at least one day earlier than this filing deadline.

Jerry Miles of Deale Services, LLC (http://www.dealeservices.com) is a government contracts attorney and business consultant with experience working as corporate counsel for a Fortune 500 government contractor and as a private practitioner for over one hundred small, midsize and large businesses. In addition to being the owner of a law firm, Mr. Miles regularly advises clients on teaming agreements, joint ventures, subcontracting, government contract disputes, bid protests, international contracting matters and corporate compliance.

This post originally appeared at http://www.dealeservices.com/uncategorized/bid-protests-timeliness-tips/ and was adapted and reprinted with permission.


RFP Templates – By Saving Time, Can You Lose a Bid?

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This is a guest post by Debbie Ouellet of EchelonOne Consulting. Note from Bill: Here in the States, you might hear the term “boilerplate” instead of template.

I’m often asked by sales professionals if I can help them write powerful RFP (Request for Proposal) response templates that will help them win every upcoming bid. It’s true, responding to RFPs can be time-consuming and stressful. That’s especially true for many sales and operations professionals who work on RFP responses while still being expected to deliver in their full-time jobs. And, templates save time and ensure a standardized look and approach to a response.

A template response can help you save time, but lose the bid

Though going the template route sounds like a time saver, you’ll find that the end product won’t give you the kind of results you want.

You’ll end up with a lower win ratio and have to bid on even more contracts in order to meet your sales targets.

Don’t misunderstand – templates for standard questions often found in RFPs, like requests to show your quality assurance program or problem resolution process, are a good thing and should be used.

But the key pieces like your solution, executive summary and related experience need to be written specifically for the RFP and the project. Even resumes for key team members often need to be edited to highlight the experience that is relevant to the RFP requirements.

Here’s why: Most RFP decision makers see a lot of responses and can smell a template response a mile away. You stand a much greater chance of winning a contract when the decision makers feel that you really understand them and their needs. Your solution needs to address their problem, not the average customer’s problem. A template response won’t do that for you. That’s especially true when you’re asked to provide a technical solution to a complex problem.

Other ways to save time when responding to RFPs

If you want to save time in the RFP process, you may want to consider your “bid, no bid” process to make sure that the contracts you’re going after are a good fit to begin with. Only respond to bids where you have a good story to tell, can meet all mandatory requirements and the potential payout is worth the effort needed to respond. Then you can spend quality time creating great solutions and presenting them convincingly.

Debbie Ouellet of EchelonOne Consulting is a Canadian RFP consultant and business writer. She helps business owners win new clients and grow their business by helping them to plan and write great RFP responses, business proposals, web content and marketing content. You can find out more about Debbie at www.echelonone.ca/.

This article originally appeared at https://www.echelonone.ca/rfp-templates-by-saving-time-can-you-lose-a-bid and was reprinted with permission.


Recovering Your Bid Protest Costs

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This is a guest post by Jerry Miles of Deale Services LLC.

After all of your hard work winning a bid protest, a recent Government Accountability Office (“GAO”) opinion suggests that the work is not yet over. More than that, it suggests that you should have started your work early on in the bid protest process.

In Cascadian American Enterprises—Costs, B-412208.6, July 5, 2016, the GAO addressed this issue head on, to disastrous effect on the contractor. CAE was a small business which won a protest against the Army Corps of Engineers in a small business set-aside procurement.

To support its request to the GAO to recommend the amount it should be reimbursed by the agency, CAE attached a one-page invoice, with three line items, in the amount of $53,160. This included “234 hours for ‘Protest Sept. 30, 2015-Feb. 5, 2016,’ at a rate of $150 per hour for a total of $35,100, and 120 hours for ‘Response to Agency Report,’ at a rate of $150 per hour for a total of $18,000. Id. The third line item was for “Miscellaneous material costs [for $60].”

Several times, the agency responded that the request for reimbursement was not adequately documented to allow the agency to determine its reasonableness and made request for more information and an explanation of the hours expended on the protest. CAE responded to each request with slightly more detail.

The GAO reiterated previous rulings that “a protester seeking to recover its protest costs must submit evidence sufficient to support its claim that those costs were incurred and are properly attributable to filing and pursuing the protest.”

Noting that the burden of proof is on the protester, the GAO states that “[at] a minimum, claims for reimbursement must identify and support the amounts claimed for each individual expense (including cost data to support the calculation of claimed hourly rates), the purpose for which that expense was incurred, and how the expense relates to the protest before our Office.”

In denying the claim for reimbursement, the GAO noted that, even though CAE was a sole proprietorship, “CAE has nonetheless failed to provide any documentation or detail sufficient to support the claimed 321 hours spent on the protest.” GAO further noted that “CAE’s owner asserts that he ‘did not take any notes about the time spent on which day doing what’ and therefore provides mostly generalized statements.” In addition, the GAO stated that the claim failed to provide cost data to “establish that the claimed hourly rates reflect actual rates of compensation.”

Takeaways from this decision

Beginning with the moment you start to consider protesting a procurement, take contemporaneous notes regarding all protest-related tasks you perform so that you can provide substantiation of the hours you claim to have worked on the protest. This should not only be done by you and, of course, by your attorneys, but also all others working on the matter.

Include specific cost data in your claim. That is, include support for the cost of each expense and demonstrate support for your hourly rates expended on the protest. Notate how each expense relates to the claim for reimbursement.

This post originally appeared on the Deale blog at http://www.dealeservices.com/uncategorized/bid-protest-recovering-protest-costs/ and was reprinted with permission.


Sole Source Contracts for Women-Owned Small Businesses

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As GSA Interact reported on their blog, several new FAR rules will impact small business.

According to the Federal Register, “DoD, GSA, and NASA have adopted as final, with a minor edit, an interim rule amending the Federal Acquisition Regulation (FAR) to implement regulatory changes made by the Small Business Administration (SBA) that provide for authority to award sole source contracts to economically disadvantaged women-owned small business concerns and to women-owned small business concerns eligible under the Women-Owned Small Business (WOSB) Program.”

The Federal Register also notes that the rule puts the WOSB Program “on a level playing field with other SBA Government contracting programs with sole source authority and provided an additional, needed tool for agencies to meet the statutorily mandated goal of 5 percent of the total value of all prime contract and subcontract awards for WOSBs.” 

Of all the SBA contracting programs, the 8(a) set-aside rules were always the best for sole sourcing. Fundamentally, if a KO (contracting officer) was willing (at the program office’s behest) to accept/write a Justification and Approval (J&A), the sole source went through. As well, many times this same authority was extended to 8(a) companies on multiple-award vehicles, so that the covered programs could use the vehicle to do sole sourcing as well.

This new regulation and FAR/DFAR change creates a similar dynamic for EDWOSBs – which is huge, because there are many EDWOSB companies ready for this, and because the 8(a) sole sourcing has come under pressure, particularly after some of the issues that arose in large sole sourcing for Alaskan Native Companies (ANCs) and some less than ethical/legal behavior by companies trying to take advantage of the program. In fact, the 8(a) program seems to have largely been replaced with “small disadvantaged” status, much to the chagrin of many of my friends who have 8(a) status.

This is definitely a major change, considering the 328 EDWOSBs and 974 WOSBs who could have received sole source awards between April 1, 2011 (the implementation date of the WOSB Program) and September 1, 2015.


SBA Proposed Rule Will Allow Size Standard Appeals

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This is a guest post by Candace Shields of SmallGovCon.

The SBA’s Office of Hearings and Appeals will have authority to hear petitions for reconsideration of SBA size standards under a proposed rule recently issued by the SBA.

Once the proposal becomes a final rule, anyone “adversely affected” by a new, revised or modified size standard would have 30 days to ask OHA to review the SBA’s size standard determination.

By way of background, when a federal agency issues a solicitation, it ordinarily is required to designate one–and only one–NAICS code based on the primary purpose of the contract. Each NAICS code carries a corresponding size standard, which is the upper perimeter a business must fall below to be considered as small under any solicitation designated with that NAICS code.

The size standard is measure by either average annual receipts or number of employees, and varies by industry. So, for example, under current law, NAICS code 236220 (Commercial and Institutional Building Construction) carries a $36.5 million receipts-based size standard. The SBA’s size standards are codified in 13 C.F.R. 121.201 and published in an easier-to-read format in the SBA’s Size Standards Table.

Importantly, size standards are not static. The SBA regularly reviews and adjusts size standards based on the “economic characteristics of the industry,” as well as “the impact of inflation on monetary-based size standards.” In 2014, for example, the SBA upwardly adjusted many receipts-based size standards based on inflation.

The size standards selected by the SBA can have major competitive repercussions. If the SBA chooses a lower size standard for a particular industry, many businesses won’t qualify as “small.” If the SBA selects a higher size standard, some smaller businesses will have trouble effectively competing with larger (but still “small”) competitors.

Despite the importance of size standards in the competitive landscape, there is not an SBA administrative mechanism for a business to challenge or appeal a size standard selected by the SBA (although judicial review is possible). Now, that is about to change. In the 2016 National Defense Authorization Act, Congress vested OHA with jurisdiction to hear petitions challenging the SBA’s size standard selection.

In response to the authority vested in OHA by the 2016 NDAA, the SBA’s proposed rule that sets out the procedural rules for OHA’s reconsideration of size standards petitions. While adhering closely to the procedural rules for SBA size challenges, the new rules for petitions for reconsideration of size standards lay out specific procedural regulations for filing a petition of reconsideration of size standards. The proposed rule addresses the issues of standing, public notification, intervention, filing documentation, finality, and effect on solicitations. The proposed rule also includes size standard petitions as part of SBA’s process for establishing size standards.

Here are some key proposed provisions worth noting:

  • Proposed Section 134.902(a) grants standing to any person “adversely affected” by a new, revised, or modified size standard. That section would also provide that the adversely affected person would have 30 calendar days from the date of the SBA’s final rule to file its petition with OHA. This section of the rule confirms that OHA’s review will be limited to cases in which the SBA actually adopts or modifies a size standard; petitioners will not have authority to challenge preexisting size standards.
  • Proposed Section 134.902(b) would provide that a business entity is not “adversely affected” unless it conducts business in the industry associated with the size standard being challenged and either qualified as a small business concern before the size standard was revised or modified or would be qualified as a small business concern under the size standard as revised or modified.
  • Proposed Section 134.904(a) outlines the technical requirements of filing a Petition. This includes things like including a copy of the final rule and a narrative about why SBA’s size standard is alleged to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with applicable law.
  • Proposed Section 134.906 would permit interested persons with a direct stake in the outcome of the case to intervene and obtain a copy of the Petition.
  • Proposed Section 134.909 sets forth the standard of review as “whether the process employed by SBA to arrive at the size standard ‘was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.” As if that language wasn’t enough, the section clarifies that the petitioner bears the burden of proof.
  • Proposed Section 134.914 would require OHA to issue a decision within 45 days “as practicable.”
  • Proposed Section 134.917 would require SBA to rescind the challenged size standard if OHA grants a Petition. The size standard in effect prior to the final rule would be restored until a new final rule is issued.
  • Proposed Section 134.917 would state that “because Size Standard Petition proceedings are not required to be conducted by an Administrative Law Judge, attorneys’ fees are not available under the Equal Access to Justice Act.
  • Proposed Section 134.918 clarifies that filing a petition with OHA is optional; an adversely affected party may, if it prefers, go directly to federal court.

Given the importance of size standards in government contracting–and given the resources it often takes to pursue legal action in federal court–an internal SBA administrative process for hearing size standard challenges will be an important benefit for contractors. It is important to note that SBA’s proposed rule is merely proposed; OHA won’t hear size standard challenges until a final rule is in place.

Public comments on the rule are due December 6, 2016. To comment, follow the instructions on the first page of the proposed rule.

This post originally appeared at http://smallgovcon.com/statutes-and-regulations/sba-proposed-rule-will-allow-sba-oha-size-standard-appeals/ – sthash.MmEI71yW.dpuf and was reprinted with permission.


Consolidation and Bundling

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When federal agencies bundle or consolidate requirements, it can exclude small businesses from qualifying for the work. A new FAR rule effective October 31, 2016  (one of many that will impact small businesses) will address this.

According to the Federal Register, consolidation or consolidated requirement means “a solicitation for a single contract, a multiple-award contract, a task order, or a delivery order to satisfy:

i. Two or more requirements of the Federal agency for supplies or services that have been provided to or performed for the Federal agency under two or more separate contracts, each of which was lower in cost than the total cost of the contract for which offers are solicited; or
ii. Requirements of the Federal agency for construction projects to be performed at two or more discrete sites.

Bundling, they explain, is “a subset of consolidation that combines two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract, a multiple-award contract, or a task or delivery order that is likely to be unsuitable for award to a small business concern (even if it is suitable for award to a small business with a Small Business Teaming Arrangement) due to:

i. The diversity, size, or specialized nature of the elements of the performance specified;
ii. The aggregate dollar value of the anticipated award;
iii. The geographical dispersion of the contract performance sites; or
iv. Any combination of the factors described in paragraphs (i), (ii), and (iii) of this definition.

The summary notes that, “There are currently approximately 307,846 small business registrants that can potentially benefit from the implementation of this rule. This rule does not impose any new reporting, recordkeeping or other compliance requirements.”

OK, that’s a lot of technical and legal mumbo-jumbo. The essence here is a few different things. First, in their definition of small business teaming arrangements, this provision recognizes the Mentor-Protégé JV, Contractor Teaming Arrangements (CTAs), and normal JV provisions for use in a contract bundling provision. This is important because often JVs and CTAs are considered “higher risk” in large contract actions, and this provision both defines the various potential arrangements and encourages them.

And secondly, this provides more detail and restrictions to the contract bundling and consolidation routine that so many agencies go through, and which serve as an anti-small business process because of the size of the resulting requirement. This provision explicitly recognizes the small business team types as being valid and therefore limits some of the anti-small business prejudice that becomes prevalent.

As small businesses, we’d like as little consolidation and bundling as we can get. Since this rule better defines how the government can do this, and limits who can do it and how, there will be less of it, and that’s a good thing.


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