On September 18, 2017, the Senate passed its version of the National Defense Authorization Act (“NDAA”) which authorizes nearly $700 billion in defense spending for Fiscal Year 2018 and contains significant procurement reform provisions. One of those reforms deals with new Department of Defense (“DoD”) debriefing requirements.
On October 16, 2017, the U.S. Supreme Court denied the petition for a writ of certiorari filed by Rothe Development, Inc. in Rothe Development, Inc. v. Department of Defense & Small Business Administration. Rothe, a non-minority-owned federal contractor, challenged the SBA’s 8(a) Program, a program which gives benefits to small business concerns owned and controlled by socially and economically disadvantaged individuals. Rothe alleged that the statutory basis of the 8(a) Program denies it, a company not owned or controlled by socially and economically disadvantaged individuals, equal protection of the law, in violation of the equal protection component of the Due Process Clause of the Fifth Amendment.
Recently, the SBA Office of Hearings and Appeals issued a decision, Veterans Contracting Group, Inc., SBA No. VET-265 (2017), which reaffirmed the SBA SDVOSB Program’s requirement that an SDVOSB be 51-percent unconditionally and directly owned by one or more service-disabled veterans (“SDV”). 13 C.F.R § 125.12(a), (d). More specifically, OHA upheld an SBA determination that a concern named Veterans Contracting Group, Inc. (“VCS” or the “Company”) did not meet SDVOSB eligibility requirements due to certain provisions in a shareholders agreement among VCS’ owners which placed impermissible conditions on the SDV’s ownership interest in VCS.
It’s protest season. Or, maybe it is always protest season. In any event, the best defense for a size or status protest is always to be prepared before the protest is filed. That means regularly assessing potential affiliations that could affect your size and status. With that in mind, I want to share some information about how affiliation can arise through loans. Specifically, loans from a private party (i.e., an individual or a company, not a bank). SBA will generally look more favorably on the terms of a loan when the party loaning the money is a traditional lender like a bank. But, when the source of the funds is not a traditional lender, you have to be more careful to ensure the loan does not create an affiliation between the lender and the lendee.
Having just presented on data rights issues to a number of government contracting officers and procurement professionals, as well as private sector contract management personnel, during the 2017 National Contract Management Association World Congress, it became clear that many people are confused (and rightly so) about what is happening with regard to the segregation and reintegration rules.