Small Business Programs & Advisory Services

BLOG: A Thank You to the Small Business Administration: SBA Takes a Stand on OIG's Approach to Suspension and Debarment

October 16, 2019
By Isaias "Cy" Alba IV
The ability to suspend and debar contractors is a tool the federal government can deploy when necessary to protect it from unscrupulous contractors. Critically, it is not intended to be used punitively. The reason for this is clear, especially when dealing with small businesses: if you debar or suspend a company without evidence that it is not a responsible contractor, you risk destroying part of the United States' industrial base and numerous jobs that Americans rely on without good cause. Too often the Inspector Generals look to "shoot first and ask questions later" when it comes to suspension and debarment, taking a "guilty until proven innocent" approach. This approach can have catastrophic effects for small businesses. Luckily, the Small Business Administration's ("SBA") suspension and debarment officials understand this risk and have taken to heart the underlying principles, enshrined in law, that all government contractors are innocent until proven guilty.

BLOG: Small Businesses and the FCA: Are More FCA Cases Against Small Businesses on the Horizon?

September 19, 2019
By Timothy F. Valley
On August 20, 2019, the U.S. Department of Justice announced that it had reached a $20 million settlement with Luke Hillier (Hillier), the majority owner and former CEO of a Virginia-based defense contractor, ADS, Inc. (ADS), to resolve "allegations that he violated the False Claims Act (FCA) by fraudulently obtaining federal set-aside contracts reserved for small businesses that his company was ineligible to receive . . . ." The resolution of the claims against Hillier follows ADS's payment of a separate $16 million settlement on related claims, as well as an additional $225,000 paid by Charles Salle, the former general counsel of ADS, to resolve claims arising from his role in the alleged scheme. Combined, the $36 million total settlement is believed to be the largest FCA recovery in history based on allegations of small business contracting fraud. Given the size of the collective settlement and the nature of the allegations against Hillier and ADS, small businesses everywhere—particularly government contractors—should anticipate a potential increase in the frequency of small business fraud-related FCA cases.

BLOG: Protégé Subcontract Revenues from Mentor Hold No Basis for Economic Dependence

September 18, 2019
By Patrick T. Rothwell and Anna R. Wright
An important benefit of a mentor-protégé agreement (MPA) is that no determination of affiliation may be found between a protégé and its mentor solely because of assistance provided under the agreement. A recent decision of the Small Business Administration (SBA) Office of Hearings and Appeals (OHA), Avar Consulting, Inc., upheld a size determination which found that a protégé was not affiliated with its SBA-approved mentor through economic dependence, even though the revenues it received from the mentor constituted over 70% of the revenues it received between formation and the date of size self-certification. A small business government contractor that anticipates future affiliation with a business under the 70% economic dependence rule should consider entering into an SBA-approved small business MPA with that business to prevent future revenues it receives from the business from being considered when economic dependence is assessed.

BLOG: Late Is Late—Even on the GSA Schedule

September 9, 2019
By Kathryn V. Flood and Anna R. Wright
In a recent blog, we discussed the "late is late" rule in government contracting which has been the cause of many protests and much consternation among government contractors. However, the Government Accountability Office (GAO) and the Court of Federal Claims (COFC) have consistently held that it is proper for an agency to reject a late offer, even if the offer is only slightly late. Recently, COFC applied this rule to a General Services Administration (GSA) Schedule purchase—specifically in Criterion Systems, Inc. v. United States,[1] in which the court held that an offer that was a mere 90 seconds late, was too late to be considered for award. No matter the type of procurement or the agency involved, government contractors should be careful to submit all their materials ahead of the scheduled deadline.

BLOG: GAO Defers to SBA on When Runway Extension Act Applies

August 20, 2019
By Emily J. Rouleau
Last year, Congress passed—and President Trump signed—the Small Business Runway Extension Act (the "Runway Extension Act" or the "Act"), which changed the time period for determining a company's size based on average annual receipts from the previous three years to the previous five years. This summer, the Small Business Administration ("SBA") finally published its proposed rule to amend its regulations and change the period of measurement for receipts-based size calculations from three years to five years. As my colleague Megan Connor noted in her blog, SBA was slow to implement the change imposed by the Runway Extension Act because it believes the Runway Extension Act amended a section of the Small Business Act that does not apply to SBA. Now, the Government Accountability Office ("GAO") has deferred to SBA's interpretation, days before comments to SBA's proposed rule are due. While GAO's decision may signal that offerors may need to continue to calculate their average annual receipts based on the previous three year, this is an open and developing issue, especially until SBA finalizes a rule implementing the Runway Extension Act.
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