Tag: Small Business Administration

Veteran-Owned Small Business Certification Moves from VA to SBA

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Merle M. DeLancey, Jr. and Patrick F. Collins ●

Effective January 1, 2023, the certification process for veteran-owned small businesses (“VOSBs”) and service-disabled veteran-owned small businesses (“SDVOSBs”) will be transferred from the Department of Veterans Affairs (“VA”) to the Small Business Administration (“SBA”). Except for implementation transitioning discussed below, to be eligible for sole-source and set-aside acquisitions, VOSBs and SDVOSBs will need to be certified by the SBA.

Previously, VOSB and SDVOSB verifications were made by the VA’s Center for Verification and Evaluation (“CVE”). To be eligible for VA contracts, VOSBs/SDVOSBs had to be verified by the CVE; there was no government-wide certification program, and firms seeking SDVOSB sole-source or set-aside contracts outside the VA only needed to self-certify their status pursuant to Section 36 of the Small Business Act, 15 U.S.C. 657f.

On November 29, 2022, the SBA published a final rule implementing Section 862 of the FY 2021 National Defense Authorization Act (“NDAA”) transferring authority for VOSB/SDVOSB certifications from the VA to the SBA. The final rule consolidates the eligibility requirements for the Veteran Small Business Certification Program, and the SBA is assuming control of VOSB/SDVOSB certification for purposes of nearly all small business federal contracting. SBA also published a Frequently Asked Questions (“FAQ”) page regarding the final rule.

Continue reading “Veteran-Owned Small Business Certification Moves from VA to SBA”

New SBA Rule on Small Business Past Performance Also Has Implications for Large Businesses

Merle M. DeLancey Jr. ●

The U.S. Small Business Administration (“SBA”) recently issued a final rule that creates new opportunities for small businesses to submit relevant past performance, and new requirements for large/other than small prime contractors to provide past performance reviews to first-tier small business subcontractors.

The final rule is intended to help small businesses overcome the hurdle of having minimal past performance to use in competitive procurements. The rule creates new mechanisms to permit small businesses to use the past performance of a joint venture in which it was a member, or to use its performance as a first-tier subcontractor. The new rule takes effect on August 22, 2022.

Continue reading “New SBA Rule on Small Business Past Performance Also Has Implications for Large Businesses”

Paycheck Protection Program Audits Are Upon Us—Borrowers Prepare!

Merle M. DeLancey Jr., Craig Stetson*, and Jennifer A. Short

In our last post on this topic, we touched on how the acceptance, use, and forgiveness of Paycheck Protection Program (“PPP”) loans can be viewed in the context of a Defense Contract Audit Agency (“DCAA”) audit. This post focuses on audits and investigations involving PPP loans. Close scrutiny of PPP loans is not a prediction; it is reality. The Small Business Administration (“SBA”) has announced it will audit all PPP loans in excess of two million dollars following a lender’s submission of a borrower’s loan forgiveness application, and it reserves the right to “spot check” any PPP loan of a lesser amount at its discretion. The Department of Justice has already charged multiple individuals with PPP fraud. And this is just the beginning of what many think will be a tidal wave of enforcement activity involving PPP loans.

Overview of the PPP

The PPP is the largest relief measure for small businesses under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The government has made available nearly one trillion dollars in PPP relief funds through four separate funding measures ($349 billion via the CARES Act; $310 billion via the PPP and Health Care Enhancement Act; $284 billion via the Consolidated Appropriations Act of 2021; and $7.25 billion via American Rescue Plan Act of 2021).

The PPP makes available guaranteed SBA loans to small business that meet certain eligibility requirements. In addition, PPP loans can be forgiven fully if used properly to cover specified business expenses such as payroll, rent, utilities, mortgage interest, and other limited uses. As of April 11, 2021, the SBA had approved more than 9.5 million loans totaling more than $755 billion using more than 5,400 lenders.

Continue reading “Paycheck Protection Program Audits Are Upon Us—Borrowers Prepare!”

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

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”

New Rules Affecting Veteran-Owned Small Businesses (Important to Large Businesses, Too)

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)”

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