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On July 19, 2023, the U.S. District Court for the Eastern District of Tennessee issued an important decision where it declared that the Small Business Administration’s (SBA) rebuttable presumption of social disadvantage, which is used in admitting many small-disadvantaged businesses to the SBA’s 8(a) program, violated the equal protection rights of a government contractor and enjoined the use of the rebuttable presumption in administering the 8(a) program. The decision will likely have an immediate impact on businesses that have pending applications or are intending to apply for admission into the 8(a) program, and may have further impacts upon the 8(a) program down the road. Read more here.
In a recent decision, the Government Accountability Office (GAO) found the General Services Administration (GSA) improperly awarded a lease to a firm whose proposal failed to comply with a material solicitation requirement. Despite this finding, GAO did not recommend that GSA terminate the lease—leaving the protester only to possibly recover its “proposal preparation costs, as well as the costs of filing and pursuing its protest, including reasonable attorneys’ fees.” GAO’s decision presents an important question to disappointed offerors considering protesting a government lease award: is it worth it? Read more here.
Defense Federal Acquisition Regulation Supplement (DFARS): Restriction on Acquisition of Personal Protective Equipment and Certain Items From Non-Allied Foreign Nations (DFARS Case 2022-D009), Department of Defense (DOD)
DOD is adopting as final, with changes, an interim rule amending the DFARS to implement a section of the National Defense Authorization Act for FY2022 that restricts the acquisition of personal protective equipment and certain other items from the Democratic People’s Republic of North Korea, the People’s Republic of China, the Russian Federation, and the Islamic Republic of Iran. The final rule is available here and is effective July 20, 2023.
Defense Federal Acquisition Regulation Supplement (DFARS): Source Restrictions on Auxiliary Ship Components (DFARS Case 2020-D017), Department of Defense (DOD)
DOD is issuing a final rule amending the DFARS to implement a section of the National Defense Authorization Act for FY2020 that requires certain auxiliary ship components to be procured from a manufacturer in the national technology and industrial base. The final rule is available here and is effective July 20, 2023.
Defense Federal Acquisition Regulation Supplement (DFARS): Repeal of Major Automated Information Systems Provisions (DFARS Case 2017-D028), Department of Defense (DOD)
DOD is issuing a final rule amending the DFARS to implement a section of the National Defense Authorization Act for FY2017 that repealed major automated information systems provisions. The final rule is available here and is effective July 20, 2023.
Defense Federal Acquisition Regulation Supplement (DFARS): Modification to the National Technology and Industrial Base (DFARS Case 2023-D005), Department of Defense (DOD)
DOD is issuing a final rule amending the DFARS to implement a section of the National Defense Authorization Act for FY2023 that adds New Zealand to the definition of the national technology and industrial base. The final rule is available here and is effective July 20, 2023.
Small Business Size Standards: Adjustment of Monetary-Based Size Standards, Disadvantage Thresholds, and 8(a) Eligibility Thresholds for Inflation, Small Business Administration (SBA)
The SBA issues a final rule on three interim final actions adopted in the November 17, 2022, rule. See the list below. The final rule is available here and is effective July 19, 2023.
- finalizes an additional 13.65% inflation increase to the industry-based monetary small business size standards to account for the inflation that occurred since the last adjustment to size standards for inflation in 2019;
- finalizes inflation adjustments to three program-specific monetary size standards: the size standards for sales or leases of government property, the size standards for stockpile purchases, and the alternative size standard based on tangible net worth and net income for the Small Business Investment Company (SBIC) program; and
- finalizes inflation adjustments to the economic disadvantage thresholds applicable to the 8(a) Business Development and Economically-Disadvantaged Women-Owned Small Business programs and the dollar limit for combined total 8(a) contracts.
Small Business Size Standards: Adjustment of Alternative Size Standard for SBA’s 7(a) and Certified Development Company (CDC)/504 Loan Programs for Inflation; and Surety Bond Limits: Adjustments for Inflation, Small Business Administration (SBA)
The SBA will propose amendments to its size eligibility criteria for Business Loans, CDC loans under Title V of the Small Business Investment Act (504) and economic injury disaster loans. For the SBA 7(a) Business Loan Program and the 504 program, the amendments will provide an alternative size standard for loan applicants that do not meet the small business size standards for their industries. The Small Business Jobs Act of 2010 established alternative size standards that apply to both programs until SBA’s Administrator establishes other alternative size standards. For the disaster loan program, the amendments will provide an alternative size standard for loan applicants that do not meet the small business size standard for their industries. SBA loan program alternative size standards do not affect other federal government programs, including federal procurement. More information is available here.
Small Business Investment Company (SBIC) Investment Diversification and Growth, Small Business Administration (SBA)
On October 19, 2022, the SBA published a notice of proposed rulemaking to revise the regulations for the SBIC program to significantly reduce barriers to program participation for new SBIC fund managers and funds investing in underserved communities and geographies, capital intensive investments, and technologies critical to national security and economic development. The proposed rule introduced an additional type of SBIC to increase program investment diversification and patient capital financing for small businesses, modernize rules to lower financial barriers to program participation, and incorporate the statutory requirements of the Spurring Business in Communities Act of 2017, which was enacted on December 19, 2018. This final rule implements proposed regulatory changes as modified to address comments SBA received. The published final rule is available here and is effective August 17, 2023.
Small Business Administration (SBA) Deadline Approaching for Pennsylvania and New York Small Businesses Affected by Drought to Apply for Working Capital Disaster Loans
The SBA is reminding small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations that August 21, 2023, is the filing deadline for federal Economic Injury Disaster Loan applications due to drought that occurred from July 1 through October 1, 2022. Read more here.
Small Business Administration (SBA) Announces Two $150,000 Grants to Fund Women’s Business Centers in Oregon and Washington, D.C.
The SBA announced on July 14, 2023, the availability of $300,000 for two grant opportunities for established and aspiring Women’s Business Center host organizations to provide outcome-oriented business services for women entrepreneurs in Oregon and Washington, D.C. Each location will be awarded one grant of up to $150,000. The deadline to apply is August 24, 2023. Read more here.
Biden-Harris Administration Sets Record-Breaking $163 Billion in Federal Procurement Opportunities to Small Businesses, Small Business Administration (SBA)
SBA Administrator Guzman announced that the Biden-Harris Administration exceeded its small business contracting goal of 23% in FY2022, awarding an all-time high 26.5% of federal contract dollars to small businesses. This historic level amounts to a $162.9 Billion investment in the small business economy—an $8.7 Billion increase from the previous fiscal year. Ten federal agencies earned an “A+” for their agencies’ achievements in small business contracting, and an additional ten agencies received an “A” grade. The federal government, overall, earned an “A” on this year’s government-wide scorecard. Read more here.
Biden-Harris Administration Introduces New Entrepreneurship Training Course for Military Spouses, Small Business Administration (SBA)
The SBA launched a new business training program tailored to military spouses entitled “The Military Spouse Pathway to Business Program.” The program supports the recent White House Executive Order 14100, which strengthens economic opportunity for military and Veteran spouses, caregivers, and survivors. Read more here.
National Research Advisory Council; Reestablishment, Department of Veterans Affairs (VA)
On July 18, 2023, pursuant to the Federal Advisory Committee Act, notice is hereby given that the Secretary of Veterans Affairs intends to reestablish the National Research Advisory Council for a two-year period from the filing date of the charter’s reestablishment. The Secretary determined that the Committee is necessary and in the public interest. The Committee advises the Secretary of Veterans Affairs and the Under Secretary for Health and makes recommendations on the nature and scope of research and development sponsored and/or conducted by the Veterans Health Administration. The notice is available here.
Department of Veterans Affairs (VA): Information on Professional Services Contracting Data and Conflict of Interest Regulations, Government Accountability Office (GAO)
GAO submitted a statement providing information on analysis of data on contract obligations made by the VA for services associated with professional, administrative, and management support, and special studies and analysis. GAO was also asked to summarize portions of the Federal Acquisitions Regulation and VA Acquisitions Regulation related to organizational and personal conflicts of interest. More information is available here. The full report is available here.
Department of Veterans Affairs (VA) Opposed to New Electronic Health Record Requirements, but Open to More Major Acquisition Review, Government Executive
VA officials told lawmakers they oppose proposed oversight standards for VA’s new electronic health record modernization program. VA officials pushed back against legislation that would impose stringent requirements on VA’s beleaguered electronic health record modernization program, but voiced support for a proposal to increase oversight of major acquisition projects moving forward. Read more here.
Homeland Security Acquisition Regulation (HSAR); Safeguarding of Controlled Unclassified Information (CUI); Correction, Department of Homeland Security (DHS)
The Office of Chief Procurement is correcting a final rule titled Safeguarding of Controlled Unclassified Information. The final rule amended the HSAR to address requirements for the safeguarding of CUI. The corrected final rule is available here and is effective July 21, 2023.
Defense Software Acquisitions: Changes to Requirements, Oversight, and Tools Needed for Weapon Programs
The Government Accountability Office (GAO) is making three recommendations to Department of Defense (DOD), including that for all programs using Agile for software development, DOD incorporate Agile principles into policies and guidance used for requirements processes as well as oversight; and that DOD establish an overarching plan—and identify resources—to enable the adoption of modern engineering tools across programs. DOD partially concurred with all three recommendations and identified some planned actions that would address elements of the recommendations. However, GAO noted additional steps DOD needs to take to fully address the recommendations. More information is available here. Highlights are available here. The full GAO report is available here.
Pentagon Contracts in European NATO Region Set to Top Last Year, Bloomberg Government
Department of Defense (DOD) unclassified contract work performed in European NATO countries continues to climb in FY2023 and is likely to exceed last year’s $7.5 Billion total. Read more here (subscription required).
The Senate is on a Bipartisan Glidepath Toward Avoiding a Shutdown, Schumer Says, Government Executive
The Senate continues to advance spending bills without controversy and with bipartisan support, offering hope that lawmakers will avoid a lapse in appropriations this fall. Read more here.
Leading the Defense Counterintelligence and Security Agency May Be a Job No One Wants – But It’s An Important One, Government Executive
A critical role in the national security community will soon become open. Director of the Defense Counterintelligence and Security Agency William Lietzau announced his plans to retire in an email announcement to staff on July 19. Lietzau says the departure will not be abrupt but hopes to give the agency adequate time to find a replacement before he makes his retirement from federal service. Read more here.
Upcoming Government Contracts Presentations
Clocking in with PilieroMazza: Labor and Employment News for Government Contractors: I-9 Physical Inspections Required by August 30, PilieroMazza Podcast, Sarah L. Nash and Nichole D. Atallah. Click here to listen to the podcast.
New Union Contract Offers Hope for Better Labor Relations at the Social Security Administration (SSA), Government Executive
The SSA and the nation’s largest federal employee union announced they reached a preliminary agreement to update a portion of their collective bargaining agreement and extend the deal until 2029, in what labor leaders hope will be the first step to repairing the long-fraught relationship between the union and agency management. Read more here.
General Services Administration (GSA) Awards City Pair Airline Contracts, Projects Over $2 Billion in Taxpayer Savings
Eight airlines received FY2024 GSA contracts for airline passenger transportation of federal government travelers through the agency’s City Pair Program. Overall, the program is estimated to support about $2.4 Billion in taxpayer savings for FY2024 related to federal workers on official travel. Read more here.
Proposed Funding Cuts Could Prevent Agencies from Meeting Their Missions, Employee Groups Say, Government Executive
Controversial plans to deeply slash spending at the Internal Revenue Service, the Department of Justice, and the Office of Personnel Management have drawn the ire of the federal employees who work at or rely on those agencies. They say the cuts would harm mission delivery. Read more here.
Upcoming Labor & Employment Presentations
Electronic Health Records (EHR) Vendor NextGen Healthcare Inc. to Pay $31 Million to Settle False Claims Act (FCA) Allegations, Department of Justice (DOJ)
NextGen agreed to pay $31 Million to resolve allegations that it violated the FCA by misrepresenting the capabilities of certain versions of its EHR software and providing unlawful remuneration to its users to induce them to recommend NextGen’s software. Read more here.
Southwest Border: Award and Management of Barrier Construction Contracts
The Government Accountability Office made five recommendations in prior reports related to the deployment and contracting process for border barrier construction. The Department of Homeland Security (DHS) and Department of Defense concurred and fully addressed four. For the recommendation related to analyzing costs associated with future barrier segments, DHS noted that it conducts cost estimates as part of the acquisitions process. DHS also noted related steps, such as use of cost estimates in the acquisitions process. More information is available here. Highlights are available here. The full report is available here.
Federal Management Regulation (FMR); FMR Case 2023-102-1, Sustainable Siting, General Services Administration (GSA)
GSA is amending FMR Part 102-83 to promote economy and efficiency in the planning, acquisition, utilization, and management of federal facilities. The rule will implement Executive Order (EO) 14057 (Catalyzing Clean Energy Industry and Jobs Through Federal Sustainability), EO 14091 (Further Advancing Racial Equity and Support for Underserved Communities Through the Federal Government), and EO 14096 (Revitalizing Our Nation’s Commitment to Environmental Justice for All). It will ensure all new federally owned and leased location decisions reduce emissions across federal workplaces by ensuring that all new construction, modernization projects, and leases implement numerous equitable, energy efficient, sustainable, and climate-resilient building practices for federal facilities. More information is available here.