Carolyn R. Cody-Jones
The New Law
Shortly after passage by the Senate, President Trump signed the Small Business Runway Extension Act, P.L. No. 115-324, into law on December 17, 2018. The new law amends the Small Business Act to adjust the look-back period for calculating a company’s size based on average annual gross receipts from three years to five years.
Proponents of the law have lauded the assistance it will provide to growing small businesses, which in the past have been unceremoniously closed out of small business set-aside procurements before they have the resources to compete with larger government contractors. The longer look-back period benefits companies with lower revenue in prior years by allowing them to include those earlier years in calculating the company’s average annual receipts. The longer period also allows additional years of gross revenue to balance out a unique year of significant growth or income. Critics, however, worry this will hurt small businesses that must now compete with “larger” small businesses that remain eligible for small business set-aside procurements for longer. Continue reading “Small Business Runway Extension Act Adjusts Look-back Period from Three to Five Years for Calculating Size Determinations, but SBA May Not Immediately Implement the Law”
Merle M. DeLancey Jr.
On October 17, 2018, the Federal Circuit ruled that the Department of Veteran Affairs (“VA”) must give priority to veteran-owned small businesses (“VOSB”) when awarding contracts. PDS Consultants Inc. v. U.S., et al., Nos. 17-2379 and 17-2512, 2018 WL 5019735 (Fed. Cir. Oct. 17, 2018). At first blush, no one would argue with the foregoing statement. But, this mandate became less clear when the VA was faced with awarding a contract to a VOSB or following an otherwise mandatory requirement for all federal agencies to buy a specific list of items made by nonprofits employing the blind and significantly disabled.
Here is the source of confusion. More than 40 years ago, Congress enacted the Javits-Wagner-O’Day Act (“JWOD”), which required federal agencies to buy certain items and services from nonprofits that employ the blind or people with other significant disabilities. Today, this mandatory procurement policy is implemented through the AbilityOne program. In 2006, Congress passed the Veterans Benefits, Health Care, and Information Technology Act (“VBA”). As the U.S. Supreme Court stated in Kingdomware, the VBA made it mandatory in almost every procurement for the VA to follow the “Rule of Two.” The “Rule of Two” requires the VA to award a contract to a VOSB whenever at least two VOSBs can perform the work at a reasonable price. Continue reading “In Department of Veterans Affairs Procurements, Veteran-Owned Businesses Trump All Other Contractors”
Merle M. DeLancey Jr.
Effective October 1, 2018, verification of Veteran-Owned Small Businesses (“VOSBs”) and Service-Disabled Veteran-Owned Small Businesses (“SDVOSBs”) now rests with the Small Business Administration (“SBA”). (See, VA Veteran-Owned Small Business (VOSB) Verification Guidelines.) Previously, the SBA and the Department of Veterans Affairs (“VA”) had concurrent jurisdiction over VOSB/SDVOSB “ownership” and “control” determinations. This led to the confusing and inconsistent results. Now, the VA will no longer vet (pun intended) contractors to determine if they are eligible VOSBs or SDVOSBs. Exclusive authority to verify these businesses is now with the SBA. The new rule clarifies the VA verification process and makes VA and SBA regulations concerning VOSB and SDVOSB joint ventures consistent. The new rule stems from the Fiscal Year 2017 National Defense Authorization Act, Public Law 114-840, which called for the SBA and VA to eliminate inconsistent regulatory interpretations of “ownership” and “control” requirements for VOSBs and SDVOSBs. Continue reading “New Rules Affecting Veteran-Owned Small Businesses (Important to Large Businesses, Too)”
Justin A. Chiarodo and Stephanie M. Harden
Hurricane Harvey’s damage to Texas and other areas is virtually unprecedented and is already estimated to be in the tens of billions of dollars. And Hurricane Irma, hurtling towards Florida, could likewise cause catastrophic damage. Though every disaster presents unique recovery challenges, a common theme in disaster relief efforts is the key role of the Federal Emergency Management Administration (“FEMA”) and a federal law known as the Stafford Act. Contractors eager to assist with relief and rebuilding efforts should pay close attention to the legal landscape underpinning the public funding behind disaster relief efforts, particularly given the scrutiny these efforts will receive in the wake of Hurricane Katrina. Continue reading “Disaster Relief Contracting: How to Avoid the Pitfalls”
The Senate’s markup of the 2018 National Defense Authorization Act (“NDAA”) adds new language to 10 U.S.C. § 2304 that would give the Secretary of Defense authority to waive provisions of law that result in only one responsible bidder for a contract for purposes of expanding competition. However, the new provision, which appears in Section 811 of the bill and which, if enacted, would be part of a new subsection (m) added to 10 U.S.C. § 2304, contains a significant carve-out such that it would not permit the Secretary of Defense to impose additional competition in connection with the Small Business Administration’s 8(a) program.
Continue reading “NDAA Section 811: New Waiver Authority—What Does It Mean?”
Justin A. Chiarodo and Christian N. Curran
After a long wait and much anticipation, the Small Business Administration (“SBA”) issued its final rule expanding the mentor-protégé program to all small businesses on July 25, 2016. The new rule broadly expands upon the existing 8(a) mentor-protégé program, and is projected to result in $2 billion in federal contracts to program participants. Though the final rule largely tracks the February 2015 proposed rule, which we previously wrote about here, the final rule does make some key changes, including changes regarding size certification and reporting. As the new rule goes into effect on August 24, 2016, contractors both large and small should prepare now to take advantage of what the newly expanded program has to offer. Continue reading “SBA Final Rule Expanding Mentor-Protégé Program to Take Effect This Month”
Lyndsay A. Gorton
Late last month, the Supreme Court heard oral arguments in Kingdomware Technologies, Inc. v. United States, which concerns the extent to which the Veterans Benefits, Health Care, and Information Technology Act of 2006 (“Veterans Act of 2006”) limits the ability of the Department of Veterans Affairs (“VA”) to use contracting vehicles like the Federal Supply Schedule (“FSS”). The ruling may have a major impact on VA procurements and warrants close attention from contractors serving the VA.
The Veterans Act of 2006 requires the VA to award contracts to Veteran-Owned Small Businesses (“VOSB”) and Service-Disabled Veteran-Owned Small Businesses (“SDVOSB”) where a contracting officer “has a reasonable expectation that two or more small business concerns owned and controlled by veterans will submit offers and that the award can be made at a fair and reasonable price that offers best value to the United States.” (This is often referred to as the “Rule of Two.”) In 2012, Kingdomware Technologies, Inc. (“Kingdomware”) successfully protested to GAO that the Rule of Two prevented the VA from making an FSS award to a non-VOSB. The VA declined to follow GAO’s recommendation. Kingdomware continued to press its case at the Court of Federal Claims, but both the court and Federal Circuit sided with the VA. Continue reading “Kingdomware Technologies, Inc. v. United States May Have Profound Impacts on Veterans Affairs Procurements”