IT’S EASY FOR A SMALL BUSINESS TO APPEAL A DENIED CLAIM

Most small (and even some large) businesses don’t realize how easy it is to appeal a denied claim to either the Armed Services Board of Contract Appeals (“ASBCA”) or the Civilian Board of Contract Appeals (“CBCA”), depending on the agency that awarded the contract.  You don’t even need an attorney to do it. The first thing you need is a written claim submitted to the contracting officer (“CO”), requesting a decision.  41 U.S.C. § 7103.  A claim is a written demand that the government pay you money as a matter of right, or adjust or interpret contract terms.  FAR 2.101.  The CO normally has 60 days to issue a final decision on your claim, but if the CO fails to issue a decision, the claim … Continue reading

THE OSTENSIBLE SUBCONTRACTOR RULE, THE “TEAM,” AND AVOIDING PROBLEMS

The Small Business Administration (“SBA”) adjudicates size protests, typically where one company protests that another company is not small on a procurement that is set-aside for small business only.  An important part of the SBA size regulations is the “ostensible subcontractor rule,” which states that: An ostensible subcontractor is a subcontractor that performs primary and vital requirements of a contract, or of an order under a multiple award schedule contract, or a subcontractor upon which the prime contractor is unusually reliant.  All aspects of the relationship between the prime and subcontractor are considered, including, but not limited to, the terms of the proposal (such as contract management, technical responsibilities, and the percentage of subcontracted work), agreements between the prime and subcontractor (such as bonding assistance … Continue reading

OSTENSIBLE SUBCONTRACTORS: HOW TO KNOW IF YOU ARE ONE

One of the fundamental principles in the Small Business Administration (“SBA”) size regulations is that in determining a company’s size, “SBA counts the receipts, employees, or other measure of size of the concern whose size is at issue and all of its domestic and foreign affiliates….”  13 CFR §121.103 (a)(6).  This issue is often important in the case of prime contractor/subcontractor relationships in a set-aside contract.  A subcontractor who is “not small” may have too much importance in contract execution and may become an “ostensible subcontractor.”  This will mean that it will be considered to be affiliated with, and cause the small business prime contractor to be “not small.”  A recent SBA case extensively explained the ostensible subcontractor rule.  Size Appeal of Modus Operandi, Inc., SBA … Continue reading

LAPSED SBA MENTOR-PROTÉGÉ AGREEMENT MAKES JOINT VENTURE FIRMS AFFILIATED AND NO LONGER “SMALL”

In North Star Magnus Pacific Joint Venture, SBA No. SIZ-5715, Feb. 17, 2016, the Small Business Administration (“SBA”) Office of Hearings and Appeals (“OHA”) considered a size protest of a joint venture consisting of a large business and a small business that, at one time, had an SBA mentor-protégé agreement.  Because the agreement had lapsed, OHA held that the joint venture was “not small” and not eligible for the procurement. Generally, when two firms form a joint venture to perform a contract, the two firms will be considered affiliates for purposes of that contract, even though one firm may be small and in the 8(a) program. 13 C.F.R. §121.103(h).  (Usually, joint ventures are examined only with respect to the particular procurement they bid on).  When … Continue reading

Federal News Radio: Government Contracting Myth No. 3: The Contracting Officer Really Isn’t Our Customer

Federal News Radio is republishing our Ten Myths of Government Contracting series, accompanied by an interview with the author, Tim Sullivan, Partner, Thompson Coburn, LLP. Below is the audio from the interview on Myth No. 3, “The Contracting Officer Really Isn’t Our Customer.” If you’d like to listen directly on the Federal News Radio website, visit here.

FY 2013, NDAA Authorizes Mentor Protege Program for All Small Businesses Among Significant Small Business Contracting Changes

Guest Authors: Richard B. Oliver, John W. Heath, & J. Matthew Carter, McKenna Long & Aldridge.  Originally posted at http://www.mckennalong.com/publications-advisories-3153.html   The Fiscal Year 2013 National Defense Authorization Act (“NDAA”), signed by President Obama on January 2, 2013, makes numerous significant changes in the federal government’s small business contracting programs. Most importantly, the NDAA authorizes the Small Business Administration (“SBA”) to establish a mentor-protégé program for all small business concerns. Among other changes, the NDAA revises the rules for limits on subcontracting for small business set-asides, eliminates the dollar limitations for set-aside contracts for women-owned small businesses, and creates a small business Ombudsman to serve at DCAA. By authorizing the use of the mentor-protégé program for all small business concerns, NDAA section 1641 effectively alters the … Continue reading

New SBA Size Standards: When Will They Become Final?

Recently, the Small Business Administration (SBA) published a new rule setting size standards for the North American Industry Classification System (NAICS) codes known as NAICS 2012.  See 77 Fed. Reg. 49,991 (Aug. 20, 2012).  The rule, which has an effective date of October 1, 2012, will affect 199 industry codes, most of which are in the manufacturing sector.  Given that Federal solicitations are required to state both the applicable NAICS code and the size standard that has been established by the SBA for that NAICS code so that offerors can correctly represent themselves as “small” business concerns (or as large businesses), the effective date for new size standards is important for both government and industry.  But the SBA’s dilatory rulemaking in this case, plus impending … Continue reading