This is a guest post by Steven Koprince of SmallGovCon.
The VA cannot buy products or services using the AbilityOne List without first applying the “rule of two” and determining whether qualified SDVOSBs and VOSBs are available to bid.
Today’s decision [originally printed on May 30, 2017] of the U.S. Court of Federal Claims in PDS Consultants, Inc. v. United States, No. 16-1063C (2017) resolves–in favor of veteran-owned businesses–an important question that has been lingering since Kingdomware was decided nearly one year ago. The Court’s decision in PDS Consultants makes clear that at VA, SDVOSBs and VOSBs trump AbilityOne.
The Court’s decision involved an apparent conflict between two statutes: the Javits-Wagner-O’Day Act, or JWOD, and the Veterans Benefits, Health Care, and Information Technology Act of 2006, or VBA.
As SmallGovCon readers know, the VBA states that (with very limited exceptions), the VA must procure goods and services from SDVOSBs and VOSBs when the Contracting Officer has a reasonable expectation of receiving offers from two or more qualified veteran-owned companies at fair market prices. Last year, the Supreme Court unanimously confirmed, in Kingdomware, that the statutory rule of two broadly applies.
The JWOD predates the VBA. It provides that government agencies, including the VA, must purpose certain products and services from designated non-profits that employ blind and otherwise severely disabled people. The products and services subject to the JWOD’s requirements appear on a list known as the “AbilityOne List.” An entity called the “AbilityOne Commission” is responsible for placing goods and services on the AbilityOne list.
But which preference takes priority at VA? In other words, when a product or service is on the AbilityOne list, does the rule of two still apply? That’s where PDS Consultants, Inc. enters the picture.
The AbilityOne Commission added certain eyewear products and services for four Veterans Integrated Service Networks to the AbilityOne List. VISNs 2 and 7 had been added to the AbilityOne List before 2010. VISNs 2 and 8 were added to the AbilityOne list more recently.
PDS filed a bid protest at the Court, arguing that it was improper for the VA to obtain eyewear in all four VISNs without first applying the rule of two. The VA initially defended the protest by arguing that AbilityOne was a “mandatory source,” and that when items were on the AbilityOne List, the VA could (and should) buy them from AbilityOne non-profits instead of SDVOSBs and VOSBs.
But in February 2017, just two days before oral argument was to be held at the Court, the VA switched its position. The VA now stated that it would apply the rule of two before procuring an item from the AbilityOne list “if the item was added to the List on or after January 7, 2010,” the date the VA issued its initial regulations implementing the VBA. For items added to the AbilityOne List beforehand, however, no rule of two analysis would be performed.
(As an aside–the VA seems to be making a habit of switching its positions in these major cases).
The parties agreed that the VA’s new position mooted PDS’s challenges to VISNs 6 and 8, which would now be subject to the rule of two. But what about VISNs 2 and 7? PDS pushed forward, challenging the VA’s position that it could issue new contracts in those VISNs without performing a rule of two analysis. PDS argued, in effect, that nothing in the VBA allowed products added to the AbilityOne List before 2010 to somehow be “grandfathered” around the rule of two.
Judge Nancy Firestone agreed with PDS:
The court finds that the VBA requires the VA 19 to perform the Rule of Two analysis for all new procurements for eyewear, whether or not the product or service appears on the AbilityOne List, because the preference for veterans is the VA’s first priority. If the Rule of Two analysis does not demonstrate that there are two qualified veteran-owned small businesses willing to perform the contract, the VA is then required to use the AbilityOne List as a mandatory source.
Judge Firestone pointed out that under the VBA, “the VA must perform a Rule of Two inquiry that favors veteran-owned small businesses and service-disabled veteran-owned small businesses ‘in all contracting before using competitive procedures’ and limit competition to veteran-owned small businesses when the Rule of Two is satisfied.”
Citing Kingdomware, Judge Firestone wrote that “like the [GSA Schedule], the VBA also does not contain an exception for obtaining goods and services under the AbilityOne program.” Judge Firestone concluded:
[T]he VA has a legal obligation to perform a Rule of Two analysis under the VBA when it seeks to procure eyewear in 2017 for VISNs 2 and 7 that have not gone through such analysis – even though the items were placed on the AbilityOne List before enactment of the VBA. The VA’s position that items added to the List prior to 2010 are forever excepted from the VBA’s requirements is contrary to the VBA statute no matter how many contracts are issued or renewed.
Judge Firestone granted PDS’s motion for judgment and ordered the VA not to enter into any new contracts for eyewear in VISNs 2 and 7 from the AbilityOne List “unless it first performs a Rule of Two analysis and determines that there are not two or more qualified veteran-owned small businesses capable of performing the contracts at a fair price.”
The apparent conflict between JWOD, on the one hand, and the VBA, on the other, was one of the major legal issues left unresolved by Kingdomware. Now, as we approach the one-year anniversary of that landmark decision, the Court of Federal Claims has delivered another big win for SDVOSBs and VOSBs.
This post originally appeared on the SmallGovCon blog at http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/another-big-win-for-vets-sdvosbs-trump-abilityone-at-va-court-rules/#sthash.7trmkUf9.dpuf and was reprinted with permission.
This is a guest post by Louisa Jaffe, CEO/President of TAPE, LLC.
Benjamin Franklin invented bi-focal glasses – do you know why? Because he said he wanted to be able to see his food and his dinner companions without changing glasses. Today I am encouraging you to channel your own inner Benjamin Franklin. That is to say, let your own innovative ideas out of your brain and into your business.
For many years, I have had an idea percolating about a training product and learning methodology. Recently, I asked myself how I could bring it into manifestation and now I am doing just that. It is still in the research and development stage so I will let you know more about it in the future. I only mention it to say do not think as I did for all of those years, “Somebody ought to invent something better.” If you have a better idea about how to do something, act now to create a new process or a new product or at least a new product concept.
The world has never been more starving than it is now for new ways to do things. And with technology, the possibilities are infinitely greater than ever before. America is a great place to manifest innovative thinking. The United States Patent and Trademark Office is the only Federal agency created in the Constitution. It may be tempting to think that the young generations coming up understand technology (and therefore innovation) better than those who have been here longer. But technology is a tool and not inherently innovative by itself.
Innovation requires perspiration
So much information is available to us at the click of a keyboard that sometimes we forget to access our most valuable knowledge base of all, our own imagination. Thomas Edison, the most patented inventor in the history of the US Patent office famously said, “Genius is one percent inspiration, ninety nine percent perspiration.” Flipping that around, imagination and a good idea are the one percent of genius. We should not tell ourselves that if we have a good idea that probably someone else has it too just because it came to our minds very easily, perhaps effortlessly. No one may have ever thought of our good idea or ideas before.
But don’t forget that 99% of genius is perspiration. That means that we also have to go through the mundane and, at times, difficult part of bringing the good idea into manifestation. That part can seem to stop us – it can be very challenging and, at times, seemingly impossible.
Walt Disney was a pioneer and innovator in the cartoon/film/entertainment industry. The story is that he was virtually penniless and had sunk his family’s fortune into making the first full-length feature cartoon film, Snow White. When released, it became a financial success and launched Disney’s business and his own “fairy tale” of a career, with Snow White becoming the first fantasy character to get her own star on Hollywood’s Walk of Fame and the movie winning an Academy Award. If he had given up in despair, deciding success was too elusive, just too difficult and too expensive, then the world would not have the entertainment giant that has made us all smile.
Innovation is up to us
We all have creativity. We all have good ideas. We were willing to put in the perspiration to start and develop our businesses. Let’s not stop there. Let’s look around our world and ask what would make things better and create the way forward? What steps would we have to take, what funds would we have to raise to manifest that idea?
When I was growing up, there was a single frame cartoon in the newspaper called, There Oughta Be a Law! Well if any of us have ever thought, “They ought to do this process a different way,” or “someone should invent something that could do this or that,” we might want to stop and ask ourselves, what exactly it should be that “someone else” should invent. “There ought to be an invention!” could be our new rally cry. We may never become as famous as Thomas Edison but if we can use our creativity to invent even one small new way of doing things, it is a start that could lead to a whole new line of revenue. Nurture that idea. It might become worth a fortune someday.
This post was originally published on the TAPE blog at http://tape-llc.com/2017/05/innovation-act-now/and was reprinted with permission.
This is a guest post from Tonya Buckner of BucknerMT Management & Technology, Inc.
One of my fellow scholars from the Goldman Sachs 10,000 Small Business Program called me recently to inquire about the difference between the 8(a) Program versus GSA Schedule, and why BucknerMT recently elected to get a GSA Schedule instead of pursuing the 8(a) Program. Below is what I shared with her:
8(a) Program versus GSA Schedule
It is important to understand that the 8(a) Program and GSA Schedule serve two totally different purposes. The first is a business development program to assist in growing your business and the second is a negotiated contracting vehicle for the government to purchase their services.
Both are great tools to grow your business. In fact, the SBA encourages 8(a) contractors to consider participating in the GSA Schedules program to increase their sales.
As you determine the next step for your business, here are a few things for you to consider:
- The 8(a) Business Development Program is a business assistance program designed to assist small disadvantaged businesses compete in the marketplace. It is a two-phased program over nine years – a four-year developmental stage and a five-year transition stage.
- 8(a) program participants are consistently encouraged to “ensure you build a pipeline prior to entering the program.” Meaning, it is to critical to build relationships with both potential clients who may use your services, as well as graduating 8(a) companies who are potential partners. The goal is to maximize your time in the program.
- Having a GSA Schedule contract simplifies the acquisitions process because terms and pricing are negotiated up front. That makes it the contracting officer’s vehicle of choice. Getting a GSA contract gives you that prestige of being an approved vendor.
- The greatest benefits of being a schedule holder are that there is less competition, access to exclusive eBuy opportunities, and the average award period is two weeks. As well, GSA Schedules can be negotiated for as many as 20 years with step increases in rates.
- As a GSA holder, you will receive a listing in GSA Advantage and GSA eLibrary. However, you must also actively market your schedule to potential buyers, i.e., put it on your Capability Statement and all of your company’s digital media, and notify current and potential clients, your peers, OSDBUs, etc. We also shared our news in a blog post.
Both the 8(a) program and a GSA Schedule are great tools to grow your business. We are positioning BucknerMT for the 8(a) program, however we made a business decision to pursue the GSA IT70 Schedule first. This decision allowed us to position ourselves for prime opportunities and, most importantly, it is the method by which our target clients purchase their services. In the meantime, we are focusing on building our pipeline to maximize our time once we are in the 8(a) program.
Lastly, it is critical to understand and remember that both the 8(a) program and the GSA Schedule give you a license to fish, but neither guarantee opportunities. Working with the government is complex, but if you are willing to put in the effort, it is also very rewarding.
Tonya Buckner of BucknerMT Management & Technology, Inc. is the Chief Executive Officer at Buckner Management & Technology, BucknerMT and TAPE are teaming together to find new business for our two companies.
I asked Tonya to contribute some thoughts about life as a subcontractor:
Last week at a BrewtonMos Procurement Readiness luncheon, TAPE CEO/President Louisa Jaffe spoke on a panel and shared the following pearls of wisdom:
- Be passionate
- Have a clear vision and mission
- Clearly define your brand early
- Learn about contracting
- Master the proposal development process
- Start with vision
I just finished reading Three Feet from Gold by Sharon Lechter, a book about turning your obstacles into opportunities. The premise of the book is in line with what Mrs. Jaffe shared today:
- Have passion for what you do
- Find your own personal success formula
- Choose good counsel, and above all:
- Never give up
Although the above relates to entrepreneurs in general, I believe it is that entrepreneurship spirit that also allows you to be a successful subcontractor. For specific lessons about being a subcontractor, I’ll close with the “BucknerMT 20 Commandments,” which is a list we created based on our own experience as a subcontractor. We use them as internal guiding principles.
- Always remember when you are working with the client, you represent the prime so do everything in your power to make them shine.
- Be comfortable with being uncomfortable. You have to stretch yourself past your comfort zone.
- Constantly look for value you can contribute to your teaming partners (e.g., participate in proposal efforts and/or bring new business opportunities).
- While subcontracting, strategically position yourself for prime opportunities.
- Focus on building your corporate reputation while building the past performance.
- Focus on providing high quality business solutions.
- Understand the culture, clients, leadership and systems.
- Be committed to excellence.
- Strive to foster and maintain positive relationships with each and every client (both internal and external).
- Equip yourself to succeed in business (develop/maintain a growth plan).
- Consistently seek innovative ways to assist your client in meeting goal.
- Make continual education/training a priority.
- Never compromise your principles.
- Set a corporate financial base in which you want to maintain. Try not to put all your eggs in one basket; the work is NOT guaranteed!
- Be flexible.
- Be ready.
- Be reliable.
- Be responsive.
- Be patient.
BucknerMT Management & Technology, Inc. (BucknerMT, Inc.) is a verified service-disabled veteran-owned small business (SDVOSB) and woman-owned small business (WOSB). From service strategy to continual service improvement, BucknerMT have deep domain knowledge and experience in information technology and supply chain management.
Since 2007, BucknerMT have supported the Department of Defense (DoD) and the Defense Information Systems Agency (DISA) by providing services that include engineering, integrating, and sustaining critical military platforms and systems.
This is a guest post by Staci Redmon of SAMS.
Women entrepreneurs own 10.6 million businesses in the U.S., and employ 19.1 million people, who account for $2.5 trillion in sales. But according to the Kauffman Foundation, women represent only 35 percent of startup business owners, even though they represent about 46 percent of the workforce and more than 50 percent of college students.
So why aren’t there more women entrepreneurs?
One study, conducted by the University of North Carolina and the Wharton School at the University of Pennsylvania (and reported by National Public Radio) looked at 90,000 entrepreneurial projects launched on the crowdfunding website, Kickstarter. The study found that men are much more likely to be overconfident than women. When their project failed, they were much more likely to keep trying, while women tended to give up. Also, when women succeeded, they were more likely to feel that they just got lucky, while men feel that they are “geniuses.”
There is help for women entrepreneurs just starting out. The SBA set up its 8(a) Business Development Program to assist economically-disadvantaged women-owned small businesses (EDWOSBs) to compete for federal contracts in industries where women-owned small businesses are underrepresented. Women and minority-owned businesses can get access to specialized business training, counseling, marketing assistance, and high-level executive development. The SBA also offers guaranteed loans and bonding assistance for being involved in the program. SAMS has benefited from its SBA designation, and has also become part of the Mentor-Protégé Program which helps other women entrepreneurs through one-on-one mentorship.
Building a business is not easy, and many women cite the same characteristics as helping them to achieve their dream.
Gayle King of CBS news talks about persistence as a trait helped propel her to achieve her goal. She advises would-be entrepreneurs to “surround yourself with people that are better than you, because it forces you to up your game. Most importantly, never take no for an answer.”
When Staci Redmon founded SAMS, it was important to her to develop core values, which still remain at the heart of the company. These are commitment to employees, commitment to the client, and commitment to the community.
Staci started SAMS out of sheer frustration. As a veteran and a civil servant, she watched as vital equipment for our warfighters was denied funding. She used her determination and commitment to service members to fuel her drive to create an organization with the vision to measure impact not by the bottom line, but by the difference it could make. Since its founding, SAMS has won numerous awards and has been hailed repeatedly as one of the fastest growing companies in Virginia.
Another entrepreneur, JK Rowling, also relied on persistence to overcome adversity. Her literary agency sent the book to 12 different publishers before it was accepted. Rowling says, “I stopped pretending to myself that I was anything other than what I was and began to direct all my energy into the only work that mattered to me. I was set free.”
As women entrepreneurs continue to pursue their dreams, the path to success, while never easy, becomes clearer and less uncertain by following in the footsteps of those who came before.
You can find more about SAMS and Staci’s 2020 Vision for the Future on our website http://www.getsamsnow.com.
This article originally appeared at http://getsamsnow.com/blog-post/whats-preventing-women-becoming-entrepreneurs/ and was adapted and reprinted with permission.
In a webinar called “Wired! How can I do that?” Judy Bradt of Summit Insight painted a picture I’m sure many of you would find familiar. You saw something on www.fbo.gov that looked like the perfect opportunity – work you could do, that matched your experience, yet somebody else won the job.
How? They got the opportunity wired for them.
It was such a great topic I asked her to tell us more.
I’ve heard you say that proposals require “perfection on every page” – why?
Contracting officers can only consider offers that are full responsive. That means not only answering every question, but providing the correct information in the format and order required, to exactly the right person, by the right time, to the right place. Any ONE failure can disqualify your entire effort – often, an investment of THOUSANDS of dollars and weeks of time. That’s right: the contracting officer won’t even be able to look at it, no matter how great your price, and how perfect your experience.
Why is it important for a contractor to have a bid/no bid checklist in place?
It comes down to win rate. In a perfect world, you’d win every time. If you can’t win every time, you want to win as often as possible. Your company’s bid/no-bid checklist sums up the signs that you have a high probability of winning. An opportunity with all the winning signs is your top priority to bid. The income you get from the winning bid also has to cover the cost of all the losing bids. The fewer losers you write, the more money you get to keep!
What are three things our competitors are doing to win?
- They’re building relationships with all the decision makers inside the account.
- They’re only bidding projects where they have past performance that strongly resembles the kind of work the buyer needs done.
- They’ve been in there talking to the buying team a long time before the requirement hits the street, shaping the buyer’s idea of them as a low-risk supplier.
You have a 10-step scorecard to identify what a team needs to win more federal business. Can my readers get a copy?
The scorecard is part of the Government Contracts Made Easier: The Strategy Workbook. This is a 64-page fillable PDF that you can use and update again and again, and share within your company. The list price is $69.95, but if you contact me, I’ll send it to you with my compliments.
Thanks, Judy! To hear more of Judy’s excellent tips and strategies, join her for a complimentary webinar, Top Tactics to Meet Federal Buyers. It’s coming up soon on April 18th, so be sure to register now.
This is a guest post by Judy Bradt of Summit Insight.
Ever hear people complain that you’ve gotta have connections to win a contract? Well, they’re right! Here are the five kinds of connections you need to get on the fast track to growing federal business!
- Connect with passion.How excited are you about the difference you make for your federal buyers when they choose you instead of your competition? Bring the team together and refresh your key differentiators. Know how your past performance clearly shows your unique value to every federal buyer who is a true prospect. If you’re not special, you shouldn’t be there. If you are special, you need to know why, and articulate that in ways that each unique player cares about most. When you’re charged up about that, you’ll have the substance as well as the energy and determination to build the interest, enthusiasm and trust of your prospects on the road to “yes.”
- Connect with data. Past contract data is one of your best clues to the decision-makers you need to meet. Use my favorite super-powered tool, the Federal Procurement Data System, to dig in and figure out where your best prospects are. Then concentrate your efforts in those two or three agencies. Once you start making calls, one leads to another. The effort in each target agency, to develop each relationship, expands significantly once people start to open up to you. Expect to focus intense, methodical efforts on the right players, in the right layers, in your target agencies. Go deep.
- Connect with intelligence.Ever meet someone you were determined you wanted to date? And you wanted to make the perfect first impression? You asked their friends about what they enjoyed, how they like to spend their time, so you could start a conversation and propose a date with confidence! You might not have succeeded the first time, but you kept finding ways to woo your sweetie until he or she said “yes!” Think of wooing federal buyers the same way – the more you find out about them, the easier the conversations get. Beyond choosing your focus agencies, dip back into the data for what it tells you about your federal buyer, who they do business with, and how they buy. You can have that first conversation with a lot more confidence because you’re going in knowing things about them that they don’t expect.
- Re-connect with people you know. Invite your trusted friends, best clients and close contacts out for conversation and coffee. Let them know that you want to grow your federal business. You’ll find they’re eager to help you, with everything from references and resources to actual introductions! You just need to know what to ask them.
- Connect with new people.Want to win more federal business? That takes the courage, time, and money to go out and talk to a lot more people you’ve never met. Does the thought of going out and meeting new people and talking to them feel uncomfortable? Good news: you’re human. Just about everybody finds this challenging at least some of the time! The other four connections make that a lot easier.
Always remember: It’s the connection between that people opens the gate.
This is a guest post by Steven Koprince of SmallGovCon. Please note that this blog post was originally published on December 5, 2016, before the Act was signed by the President on December 23, 2016.
The 2017 National Defense Authorization Act will essentially prevent the VA from developing its own regulations to determine whether a company is a veteran-owned small business.
Yes, you heard me right. If the President signs the current version of the 2017 NDAA into law, the VA will be prohibited from issuing regulations regarding the ownership, control, and size status of an SDVOSB or VOSB–which are, of course, the key components of SDVOSB and VOSB status. Instead, the VA will be required to use regulations developed by the SBA, which will apply to both federal SDVOSB programs: the SBA’s self-certification program and the VA’s verification program.
In my experience, the typical SDVOSB believes that VA verification applies government-wide, and relies on that VetBiz “seal” as proof of SDVOSB eligibility for all agencies’ SDVOSB procurements. But contrary to this common misconception, there are two separate and distinct SDVOSB programs. The SBA’s self-certification program (which is the “original” SDVOSB set-aside program) is authorized by the Small Business Act, which is codified in Title 15 of the U.S. Code and implemented by the SBA in its regulations in Title 13 of the Code of Federal Regulations. The VA’s separate program is codified in Title 38 of the U.S. Code and implemented by the VA in its regulations in Title 38 of the Code of Federal Regulations.
There are some important differences between the two programs. For example, the VA requires that the service-disabled veteran holding the highest officer position manage the company on a full-time basis; the SBA’s regulations do not. Following a 2013 Court of Federal Claims decision, the VA allows certain restrictions of a veteran’s ability to transfer his or her ownership, but that decision doesn’t necessarily apply to the SBA, which has held that “unconditional means unconditional,” as applied to transfer restrictions. And of course, the VA’s regulations require formal verification; the SBA’s call for self-certification.
Despite these important differences, the two programs are largely similar in terms of their requirements. However, last year, the VA proposed a major overhaul to its SDVOSB and VOSB regulations. The VA’s proposed changes would, among other things, allow non-veteran minority owners to exercise “veto” power over certain extraordinary corporate decisions, like the decision to dissolve the company. The SBA has not proposed corresponding changes. In other words, were the VA to finalize its proposed regulations, the substantive differences between the two SDVOSB programs would significantly increase, likely leading to many more cases in which VA-verified SDVOSBs were found ineligible for non-VA contracts.
That brings us back to the 2017 NDAA. Instead of allowing the VA and SBA to separately define who is (and is not) an SDVOSB, the 2017 NDAA establishes a consolidated definition, which will be set forth in the Small Business Act, not the VA’s governing statutes. (The new statutory definition itself contains some important changes, which I will be blogging about separately).
The 2017 NDAA then amends the VA’s statutory authority to specify that “[t]he term ‘small business concern owned and controlled by veterans’ has the meaning given that term under . . . the Small Business Act.” A similar provision applies to the term “small business concern owned and controlled by veterans with service-connected disabilities.”
Congress doesn’t stop there. The 2017 NDAA further amends the VA’s statute to specify that companies included in the VA’s VetBiz database must be “verified, using regulations issued by the Administrator of the Small Business Administration with respect to the status of the concern as a small business concern and the ownership and control of such concern.” At present, the relevant statutory section merely says that companies included in the database must be “verified.” Finally, the 2017 NDAA states that “The Secretary [of the VA] may not issue regulations related to the status of a concern as a small business concern and the ownership and control of such small business concern.”
So there you have it: the 2017 NDAA consolidates the statutory definitions of veteran-owned companies, and calls for the SBA–not the VA–to issue regulations implementing the statutory definition. The 2017 NDAA requires the VA to use the SBA’s regulations, and expressly prohibits the VA from adopting regulations governing the ownership and control of SDVOSBs. These prohibitions, presumably, will ultimately wipe out the two regulations with which many SDVOSBs and VOSBs are very familiar–38 C.F.R. 74.3 (the VA’s ownership regulation) and 38 C.F.R. 74.4 (the VA’s control regulation).
Because both agencies will be using the SBA’s rules, the SBA Office of Hearings and Appeals will have authority to hear appeals from any small business denied verification by the VA. This is an important development: under current VA rules and practice, there is no option to appeal to an impartial administrative forum like OHA. Intriguingly, the 2017 NDAA also mentions that OHA will have jurisdiction “[i]f an interested party challenges the inclusion in the database” of an SDVOSB or VOSB. It’s not clear whether this authority will be limited to appeals of SDVOSB protests filed in connection with specific procurements, or whether competitors will be granted a broader right to protest the mere verification of a veteran-owned company.
So when will these major changes occur? Not immediately. The 2017 NDAA states that these rules will take effect “on the date on which the Administrator of the Small Business Administration and the Secretary of Veterans Affairs jointly issue regulations implementing such sections.” But Congress hasn’t left the effective date entirely open-ended. The 2017 NDAA provides that the SBA and VA “shall issue guidance” pertaining to these matters within 180 days of the enactment of the 2017 NDAA. From there, public comment will be accepted and final rules eventually announced. Given the speed at which things like these ordinarily play out, my best guess is that these changes will take effect sometime in 2018, or perhaps even the following year.
The House approved the 2017 NDAA on December 2. It now goes to the Senate, which is also expected to approve the measure, then send it to the President. In a matter of weeks, the 180-day clock for the joint SBA and VA proposal may start ticking–and the curtain may start to close on the VA’s authority to determine who owns or controls a veteran-owned company.
This post originally appeared on the SmallGovCon blog http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/sdvosb-programs-2017-ndaa-sharply-curtails-vas-authority/ and was reprinted with permission.
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.
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:
- Include a brief description of your project along with the reference contact information.
- Focus more on ‘how you helped’ than ‘what you did.’
- Connect the dots so that your client can visualize the similarities.
- 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.